Activision Blizzard (ATVI)

Relationships and Transactions with Vivendi and its Affiliates

Combination of Activision and Vivendi Games and Post-Closing Tender Offer

        On July 9, 2008, the parties to the Business Combination Agreement dated December 1, 2007 (the "Business Combination Agreement")—Activision Blizzard (then known as Activision, Inc.), Sego

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Merger Corporation, Vivendi, VGAC and Vivendi Games—consummated the Combination. In that transaction:

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a wholly owned subsidiary of ours merged with Vivendi Games, and VGAC, a wholly owned subsidiary of Vivendi and the former sole stockholder of Vivendi Games, received approximately 591,000,000 newly issued shares of our Common Stock; and



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VGAC purchased approximately 126,000,000 newly issued shares of our Common Stock.

Following the consummation of the Combination, Vivendi and its subsidiaries owned approximately 54% of the issued and outstanding shares of our Common Stock.

        Upon the consummation of the Combination, our Certificate of Incorporation and Bylaws were amended and restated to provide for, among other things, (1) the change of our name to Activision Blizzard, Inc., (2) the change of our fiscal year end to December 31, (3) an increase in the authorized number of shares of our Common Stock, (4) certain majority and minority stockholder protections and (5) certain changes to the structure of our Board. As a result of these amendments, among other things, Vivendi is entitled to appoint a majority of our Board. For more information about our corporate governance, see "Corporate Governance Matters" above and "—Investor Agreement" below.

        In accordance with the terms of the Business Combination Agreement, on July 16, 2008, we commenced a tender offer to purchase up to 293,000,000 shares of our Common Stock at a price of $13.75 per share. The tender offer expired on August 13, 2008. We purchased 171,832 shares of our Common Stock for an aggregate of approximately $2.3 million as a result of the tender offer and retired and cancelled those shares.

        The transactions with Vivendi described below were entered into in connection with the Combination before Vivendi and we were related parties.

Credit Facility Provided by Vivendi

        On April 29, 2008, we entered into a senior unsecured credit agreement with Vivendi, which we and Vivendi amended in connection with the consummation of the Combination. Pursuant to the credit agreement, as amended, Vivendi provided us with:

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a term loan credit facility (the "Tranche A Facility") in an aggregate amount of up to $400 million to be applied to fund that portion of the tender offer described above, if any, in excess of $3.628 billion;



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a term loan credit facility (the "Tranche B Facility") in an aggregate amount of up to $150 million, of which we may borrow up to the lesser of (1) the amount required to repay certain indebtedness of Vivendi Games and (2) the amount required to purchase shares of our Common Stock in the tender offer described above after we exhaust all unrestricted cash on hand; and



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a revolving credit facility (the "Revolving Facility") in an aggregate amount of up to $475 million at any time to be used for general corporate purposes.

        Borrowings under each of the new credit facilities bear interest by reference to LIBOR (and under limited circumstances, at Vivendi's election, a "Base Rate"). The applicable margin with respect to loans bearing interest by reference to LIBOR is (1) 0.85% per annum for loans under the Tranche A Facility and (2) 1.20% per annum for loans under the Tranche B Facility and the Revolving Facility. The applicable margin with respect to loans bearing interest with reference to the Base Rate, if any, is 1.0% lower than the margin applicable to LIBOR borrowings. We did not borrow any amounts under any of these facilities in 2008. The Tranche A Facility and the Tranche B Facility terminated following the completion of the tender offer described above since these facilities were not used to fund the

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purchase of shares in the tender offer. The Revolving Facility will terminate and any amounts outstanding will be payable in full on March 31, 2011. Any unused amounts under the Revolving Facility are subject to a commitment fee of 0.42% per annum. We paid Vivendi an aggregate of $969,792 during the nine month period ended December 31, 2008 with respect to these credit facilities.

        The credit facilities are subject to customary negative covenants, in each case subject to certain exceptions, qualifications and baskets, including limitations on: indebtedness; liens; investments, mergers, consolidations and acquisitions; transactions with affiliates; issuance of preferred stock by subsidiaries; sale and leaseback transactions; restricted payments; and certain restrictions with respect to subsidiaries.

Voting and Lock-Up Agreements

        On December 1, 2007, in connection with entering into the Business Combination Agreement, we and Vivendi entered into voting and lock-up agreements with Mr. Kotick, our Chief Executive Officer, and Mr. Kelly, the Co-Chairman of our Board. Among other things, these agreements governed the voting of Messrs. Kotick and Kelly on the Combination and restricted transfers by each of more than a third of his Activision, Inc. shares and other Activision, Inc. equity securities until 120 days after the consummation of the Combination. These agreements also provide Messrs. Kotick and Kelly with certain registration rights which were effective as of the consummation of the Combination, including the right to require us to file a registration statement with the SEC relating to the sale of their securities and the right to participate in any proposed registered public offering of our securities.

Investor Agreement

        In connection with the consummation of the Combination, on July 9, 2008, we, Vivendi, VGAC and Vivendi Games entered into an investor agreement. The investor agreement contains various agreements among the parties regarding, among other things:

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Vivendi's and VGAC's agreement to vote their respective shares of our Common Stock in favor of (1) the nominees proposed for election as directors of Activision Blizzard by the Independent Nominating Committee, subject to certain limited exceptions, and (2) the nominees proposed for election as directors of Activision Blizzard by the Executive Nominating Committee, in each case, as long as such nominees are nominated in accordance with our Certificate of Incorporation and Bylaws (for more information, see "Corporate Governance Matters—Special Nominating Subcommittees" above);



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our agreement to reimburse Vivendi for stock-settled equity award expenses and to make payments in respect of the exercise of cash-settled equity awards, in each case as they relate to certain equity awards granted by Vivendi and its controlled affiliates to Vivendi Games' employees prior to consummation of the Combination;



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our agreement to provide Vivendi with our quarterly consolidated financial statements, to use reasonable best efforts to comply with Vivendi's consolidation and financial reporting process and to provide to Vivendi such financial and tax-related information with respect to us and our subsidiaries as is reasonably necessary in order for Vivendi to comply with certain reporting obligations and regulatory requirements;



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our grant of certain registration rights to Vivendi and its affiliates, including demand and piggyback registration rights and our agreement to indemnify certain parties for certain liabilities in connection with such registrations;



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Vivendi's and VGAC's agreements to provide us with at least five business days notice of their intention to enter into any agreement to consummate a "control block sale" (as such term is defined in the investor agreement) and to provide certain other information related thereto; and

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Vivendi's and VGAC's agreements to vote their respective shares of our Common Stock to ratify those actions taken by the Activision, Inc. stockholders at the 2007 annual meeting of Activision, Inc. stockholders.

For more information about the investor agreement, see our current report on Form 8-K filed with the SEC on July 15, 2008.

        In accordance with the investor agreement and the employment agreement between us and Jean-Francois Grollemund dated July 16, 2008, effective as of the consummation of the Combination we have agreed to reimburse, on a quarterly basis, Vivendi or any of its controlled affiliates for contributions made by Vivendi or any of its controlled affiliates to the French social security system in respect of the employment of Jean-Francois Grollemund (but in no event in excess of the maximum amount of the social security contributions required under applicable law). During the period from July 9, 2008 until December 31, 2008, we paid to Vivendi $33,588 for reimbursement of such social security contributions in accordance with the investor agreement.

Tax Sharing Agreement

        Also in connection with the consummation of the Combination, on July 9, 2008, we entered into a tax sharing agreement with Vivendi Games and Vivendi Holding I Corp., a subsidiary of Vivendi ("VHIC"). The tax sharing agreement sets forth various agreements among the parties relating to, among other things:

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the joining of Activision Blizzard and/or certain of our subsidiaries in the filing of certain consolidated, combined or unitary income or franchise tax returns that VHIC may elect or be required to file;



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the payment by us and our subsidiaries to VHIC of amounts representing certain tax liabilities attributable to us and our subsidiaries;



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the payment by VHIC to us of (or the offsetting of certain of our obligations to pay VHIC with) amounts in respect of fifty percent of the tax liability associated with certain distributions that may be made by non-U.S. subsidiaries of Vivendi Games to us (or certain of our U.S. subsidiaries) during the five year period following the consummation of the Combination;



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VHIC's indemnification of us for certain tax liabilities imposed on us arising in periods prior to the consummation of the Combination in respect of Vivendi Games or its subsidiaries or resulting from VHIC's failure to pay the Vivendi group's tax liabilities and our indemnification of VHIC for certain tax liabilities imposed on the Vivendi group for our failure to pay our tax liabilities;



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the control of certain tax contests with certain taxing authorities; and



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the resolution of certain tax disputes between the parties.

        In addition, the agreement specifies certain procedural matters that will apply in any tax contest with any taxing authority. For more information about the tax sharing agreement, see our current report on Form 8-K filed with the SEC on July 15, 2008.

Cash Management Services Agreement

        On June 19, 2008, we entered into a cash management services agreement with Vivendi effective as of the consummation of the Combination on July 9, 2008, pursuant to which Vivendi provides certain treasury-related services to certain of our subsidiaries. The agreement has a term of three years, subject to possible extensions, and may be terminated by either party on not less than three months prior written notice. Vivendi charges us a fee based on Vivendi's estimated cost of providing these

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services and we reimburse Vivendi for its out-of-pocket expenses incurred in connection with the services. We also license software from Vivendi on a royalty-free basis in connection with certain of these services. We paid Vivendi an aggregate of $241,258 during the nine month period ended December 31, 2008 in accordance with the cash management services agreement.

Office Space Arrangement with Bruce Hack

        In accordance with an employment agreement between us and Bruce Hack dated December 1, 2007, effective as of the consummation of the Combination we furnished Mr. Hack with office facilities and staff support at our executive offices in both Los Angeles and New York. We reimbursed Vivendi, which provided the office space in New York, an aggregate of $151,900 during the period from July 9, 2008 until December 31, 2008 for its out-of-pocket expenses incurred in connection with the provision of such office facilities and staff support.