Exhibit 10.9

                              DATED 4th August 2005
                              ---------------------



                           (1) Gizmondo Europe Limited

                      (2) Game Factory Publishing Limited














________________________________________________________________________________

                         GAME CONCEPT LICENCE AGREEMENT
                           (WITH DEVELOPMENT SERVICES)
________________________________________________________________________________






                                     MANCHES
                                   Manches LLP
                                  Aldwych House
                                   81 Aldwych
                                     London
                                    WC2B 4RP


<PAGE>

THIS AGREEMENT is made the 4th day of August 2005.


BETWEEN:


(1)     GIZMONDO EUROPE LIMITED a company incorporated in England and Wales with
        company registration number 04620348 and whose registered office is at 1
        Meadow Gate Avenue,  Farnborough Business Park, Farnborough,  Hampshire,
        GU14 6RG (the "Gizmondo"); and


(2)     GAME FACTORY  PUBLISHING  LIMITED (a company  registered  in England and
        Wales under company number  04470659),  whose registered  office is at 6
        Albermarle Street, London W15 4HG ("Gamefactory").

RECITALS:

(A)     Gizmondo is engaged in the business of, among other things, publishing,
        developing, marketing, distributing and selling wireless interactive
        entertainment software products.

(B)     Gamefactory  has produced the Concept (as defined in clause 1 below) and
        the Concept Materials (as defined in clause 1 below).

(C)     Gizmondo  desires to obtain an exclusive  licence of and the Gamefactory
        desires so to grant such a licence of the Concept and Concept  Materials
        to Gizmondo on the terms and conditions of this Agreement.

(D)     Gamefactory will provide Gizmondo with certain  development  services in
        respect of certain of Games  comprising  the  Concept,  on the terms and
        conditions set out herein.


IT IS AGREED:

 1.     DEFINITIONS

        In this Agreement:

        1.1.    except  where the  context  otherwise  requires,  the  following
                capitalised words shall have the following meanings:


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        "Agreement" means this agreement and any schedules attached to it;

        "Business  Day" means a day on which banks in England are generally open
        for business, other than a Saturday and Sunday;

        "Code"  means both machine  readable  programming  statements  (commonly
        referred to as object code, which can be directly executed by a computer
        without  translation  by other  computer  programs)  and human  readable
        programming  statements  (commonly  referred to as source code, which is
        computer code that is sufficient to enable a reasonably  skilled  person
        to assess,  analyse,  review,  complete,  maintain  and/or  enhance  the
        program to which that code relates, without the help of any other person
        or  reference  to any other  program or  materials),  including  without
        limitation  any and all code,  other  programs  or  materials  which are
        essential for enabling the use of the same on any Gizmondo Device;

        "Commencement Date" means the date of this Agreement;

        "Competing Game" means any Game which: (a) is the same or similar to the
        Gizmondo  Game  Product;  or (b) which uses or is related to,  concerns,
        embodies,  derives from or is otherwise associated with the Concept, the
        Concept IP and/or the Concept Materials;

        "Concept" means Gamefactory's ideas (whether or not fully developed) for
        a  number  of  Games,  as  more  particularly  described  and set out in
        Schedule One to this Agreement;

        "Concept IP" means any and all Intellectual  Property Rights  throughout
        the Territory subsisting in the Concept and/or the Concept Materials;

        "Concept Materials" means any and all Content,  Documentation,  Code and
        other materials which use,  relate to, concern,  embody,  derive from or
        are otherwise associated with the Concept,  including without limitation
        all those matters set out in Schedule Two to this Agreement;

        "Confidential  Information"  means  information  about  Gizmondo  and/or
        Gizmondo's  Affiliates' business or activities which it or they consider
        proprietary  and  confidential,   including  without  limitation,   this
        Agreement,  the  Licence of the  Concept,  the  Concept  IP, the Concept
        Materials,  any Gizmondo Game Product prior to its publication and issue
        to the public with Gizmondo's consent, any Gizmondo Game Product Sequels
        prior to their  publication  and  issue to the  public  with  Gizmondo's
        consent,  any  Merchandise  prior  to  its  issue  to  the  public  with
        Gizmondo's  consent,  any of  Gizmondo's  and/or  Gizmondo's  Affilites'
        Intellectual  Property Rights,  and all related business,  financial and
        technical  information,  identities of customers,  clients or licensees,
        proprietary software code (whether object,  source or otherwise) and any
        other  information  whether oral or written which is not generally known
        or available to the public;

        "Content" means in whatever medium, and without limitation,  any and all
        artwork,  drawings,  sketches,  text, sound, graphic and/or music files,
        audio visual elements and/or displays, user interfaces, designs, brands,
        trade dress,  packaging,  logos, trade and/or service marks,  characters
        and names,  titles,  scenes,  settings and  features,  dialog,  scripts,
        themes, story and/or plot lines and any and all other data;

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        "Development  Fee" means the  development  fee of one hundred and thirty
        five thousand pounds  sterling  payable in accordance with Schedule Five
        in  respect  of each  Gizmondo  Game  Product  to which the  development
        services in Schedule Four applies;

        "Documentation"  means in whatever medium, and without  limitation,  any
        and all documentation, manuals, reports, papers, disks and other storage
        devices,  specifications,  diagrams, tables, indices and other workings,
        including  without  limitation  any and all which  relate to the Content
        and/or the Code;

        "End-Users"  means any person or entity that  purchases  or licences for
        its use a Gizmondo  Game Product  pursuant to a signed  purchase  order,
        enduser license agreement or other similar agreement;

        "Force Majeure Event" has the meaning given to it in clause 13.2; "Game"
        means an entertainment and/or video game;

        "Gamefactory's  Associates" means, as the context shall require, any and
        all  directors,  officers,  employees,  agents,  servants  and/or  other
        associates of the Gamefactory;

        "Gamefactory's    Software"   means   Gamefactory's   generic   modules,
        algorithms,  processes,  methodologies, and games engines, including the
        source  code  embodying  the  foregoing,  that:  (a) were  independently
        developed by or for the  Developer  without  reference to or reliance on
        any  of  Gizmondo's  or  Gizmondo's  Affiliates'  Intellectual  Property
        Rights;  and  (b)  do  not  contain  any  of  Gizmondo's  or  Gizmondo's
        Affiliates' Intellectual Property Rights;

        "Gizmondo  Affiliates" means the company Gizmondo Europe Limited itself,
        its  Affiliates,  and Gizmondo  Europe  Limited group (where such a term
        "group" includes all worldwide holding and subsidiary companies in which
        Gizmondo  Europe  Limited  or a  successor  in  interest  (or one of its
        holding or  subsidiary  companies)  owns at least fifty percent (50%) or
        more of the shares or over which Gizmondo  EuropeLimited  (or one of its
        holding or subsidiary companies) exercises direct or indirect management
        control,  even  though it may own less than fifty  percent  (50%) of the
        shares and is prevented by law from owning a greater shareholding);

        "Gizmondo Device" means the GIZMONDO handheld multi-entertainment gaming
        device,  and  licensed  or  re-branded  variants  of the  same,  and any
        adaptations,  replacements  or new versions  thereof,  and/or any of the
        same  manufactured  or licensed  for  manufacture  from  Gizmondo or any
        Gizmondo Affiliates;

        "Gizmondo Game Product" means a Game created by or on behalf of Gizmondo
        for use on a Gizmondo Device and which is directly developed and derived
        from the Concept,  the Concept Materials and the Concept IP, pursuant to
        the operation of this Agreement;

        "Gizmondo Game Product Sequel" means any Game created by or on behalf of
        Gizmondo  and which is  developed  and derived  from the  Gizmondo  Game
        Product  and/or any  Content of the  Gizmondo  Game  product  (including
        without limitation any spin-off and/or tie-in).

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        "Intellectual  Property  Rights"  means any and all  rights in or to any
        intellectual   property  rights,   whether  currently  in  existence  or
        otherwise  and  whether  vested  or  contingent,  in any and all  medium
        (whether in existence now or created in the future),  including  without
        limitation  copyright,  rights in databases,  database rights, moral and
        publicity rights,  design rights,  registered  designs,  patents,  trade
        marks,  service marks, trade names, trade dress, logos, signs,  business
        or trading names or other designations,  domain names, confidential data
        or  information  or  trade  secrets,  utility  models  and  mask  works,
        inventions,  ideas,  discoveries  and  know-how,  and  all  similar  and
        associated  rights,  whether  registered  or  which  may be  capable  of
        registration  or otherwise  (including  without  limitation  any and all
        applications  for,  rights  to  apply  for and  rights  to sue for  past
        infringement of any of the foregoing,  all whether vested now or arising
        in the future),  and in each case for their full term including  without
        limitation all extensions,  reversions,  revivals and renewals  thereof,
        throughout the world;

        "Initial Term" means two years from the Commencement Date;

        "Licence"  means the exclusive  licence and related rights to reproduce,
        prepare  derivative  works,  publicly  display,   publicly  perform  and
        distribute the Game, including, without limitation, the Concept, Concept
        IP, the Concept  Materials and any Game name comprising any of the same,
        and any  improvements  of any of the foregoing,  in connection  with the
        development,  manufacture,  marketing,  sale, lease, rental,  licensing,
        sublicensing, distribution, and other use or exploitation of any and all
        versions of the same in such formats and/or media as are compatible with
        any mobile, handheld, portable and/or wireless device or product (or any
        successor or derivative  product)  throughout  the Territory  during the
        term of this Agreement;

        "Licence Fee" means the licence fee provisions set out in Schedule Three
        to this Agreement;

        "Merchandise"  means any and all goods and/or  services which uses or is
        related to, concerns,  embodies, derives from or is otherwise associated
        with the Gizmondo Game Product and/or any Gizmondo Game Product  Sequels
        and/or any Intellectual  Property Rights subsisting in either or both of
        them, including without limitation:  (a) stationary,  books,  magazines,
        guides and other  publications (in whatever medium),  cartoons and other
        animations  or  drawings,   programmes,   television  or  means  of  the
        dissemination of material,  films and motion  pictures,  video and other
        recordings,  audio, theatrical and/or other entertainment productions or
        features; (b) toys, games, gift and novelty items, figures and figurines
        and  other  playthings,  trinkets,  souvenirs,  fabrics,  furniture  and
        furnishings,  clothing and apparel,  headwear,  footwear,  jewellery and
        fashion  accessories,  health and beauty  aids,  household  and domestic
        goods, food, drinks; and (c) goods relating to the Gizmondo Game Product
        that are  produced  as  give-away  items or  prizes in  connection  with
        promotions,  and in each case of (a) to (c) all their packaging, and all
        goods other than those  listed in (a) to (c) of a similar or  dissimilar
        nature;

        "Net  Receipts"  means the gross  revenue  actually  received in cleared
        funds by Gizmondo from its exploitation (or exploitation  which Gizmondo
        has  authorised)  of the Gizmondo Game Product,  to the extent only that
        such a Gizmondo Game Product has been published and released to the

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        public with Gizmondo's consent,  (excluding without limitation any funds
        received  from any  exploitation  of the Gizmondo Game Product by way of
        Merchandise  and/or any  exploitation  whatsoever  of any Gizmondo  Game
        Product  Sequels)  after  deducting:  (a) the  Payment;  (b) any amounts
        payable to any  wireless  network,  transmission  and/or  communications
        platform  owner,   provider  and/or   operator;   (c)  taxes  and  other
        governmental   charges  and  fees  (including   without  limitation  any
        withholding  tax and VAT);  (d) any sums payable to any  relevant  third
        party Gizmondo;  (e) the development  costs associated with the Gizmondo
        Game  Product;  (f) the costs  associated  with  marketing and otherwise
        advertising  the Gizmondo Game  Product;  (g) any returns and bad debts;
        and (h) any other costs,  fees and expenses  which should  reasonably be
        deducted so as to derive the actual net receipts  from the  exploitation
        of the Gizmondo  Game  Product,  This  definition  shall not include any
        funds derived or collected  from the  distribution  of the Gizmondo Game
        Product to End-Users by any third parties,  but shall include only those
        funds  actually  received by and  cleared for use by Gizmondo  from such
        third  parties  after such third  parties  have  retained,  deducted  or
        otherwise  withheld any mark-ups,  revenue share amounts,  or license or
        other fees due to them  pursuant to the terms of  Gizmondo's  agreements
        with such third parties;

        "Payment"  means the sum of one million  five  hundred  thousand  pounds
        sterling;

        "Term" means that period of time from the  Commencement  Date until this
        Agreement is terminated in accordance  with clauses 11.3 or 11.5 of this
        Agreement; and

        "Territory" means the world.

        1.2.    the headings are for  convenience  only and shall not affect its
                construction.

        1.3.    in the  event of any  inconsistency  between  the  terms of this
                Agreement  and the  schedules  hereto,  the terms of the body of
                this Agreement shall take precedence.

        1.4.    references  to any  clause,  sub-clause  or  schedules  are to a
                clause or  subclause  of, or  schedule  to, this  Agreement  and
                references  to the parties are to the parties of this  Agreement
                and shall,  where relevant,  be deemed to be references to or to
                include, as appropriate, their respective successors,  assignees
                or transferees.

        1.5.    if any  obligation,  including an  obligation  to make  payment,
                falls to be  performed  on any day which is not a Business  Day,
                the  obligation  shall  be  performed  on  the  next  succeeding
                Business Day.

        1.6.    references to any statutory provision shall be deemed to include
                such provisions as amended from time to time whether before, on,
                or (in the case of re-enactment or consolidation only) after the
                date of this Agreement.

        1.7.    references  to  a  "person"  include  any  individual,  company,
                corporation,  firm,  partnership,   association,   organisation,
                institution,  trust or agency,  whether or not having a separate
                legal personality.

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        1.8.    save where  otherwise  expressly  stated,  the words  "company",
                "subsidiary undertaking" and "holding company" have the meanings
                given to them by the Companies Act 1985.

2.      LICENCE OF RIGHTS

        2.1.    In  consideration  of the payment by Gizmondo to the Gamefactory
                of the Payment (the sufficiency of which is hereby  acknowledged
                by the  Gamefactory),  to be paid in accordance with paragraph 6
                of Schedule Three,  the  Gamefactory  hereby grants a Licence to
                Gizmondo of:

                2.1.1.  the Concept;

                2.1.2.  the Concept IP; and

                2.1.3.  the Concept Materials.

        2.2.    By virtue of the operation of clause 2.1 the Gamefactory  hereby
                acknowledges and agrees that:

                2.2.1.  all right, title and interest in and to the Concept, the
                        Concept  IP  and  the  Concept  Materials  is  hereafter
                        licensed Gizmondo  throughout the Territory on the terms
                        of the Licence;

                2.2.2.  it no any right to either  itself or license  others the
                        Concept, the Concept IP and the Concept Materials in any
                        manner  contrary  to the  Licence  and  nothing  in this
                        Agreement  gives it any right (or any right to authorise
                        or  procure  third  parties)  to use,  deal with  and/or
                        exploit  any of the same  contrary  to such a Licence or
                        any of Gizmondo's or Gizmondo's Affiliates' Intellectual
                        Property Rights.  Without  limitation,  a breach of this
                        clause shall be  considered  to be a material  breach of
                        this Agreement by the Gamefactory;

                2.2.3.  it shall  execute  and/or do such  acts and shall  cause
                        Gamefactory's  Associates to execute and/or do such acts
                        as  may be  requested  by  Gizmondo  to  perfect  and/or
                        evidence   Gizmondo's  right,   title  and  interest  as
                        referred to in clause 2.2.1; and

                2.2.4.  Gizmondo shall be free to use, deal with and exploit the
                        Licence in respect of the  Concept,  the  Concept IP and
                        the Concept Materials as it sees fit (including  without
                        limitation  the matters set out in or  envisaged by this
                        Agreement and the development,  production, manufacture,
                        maintenance,     localise,    promotion,    advertising,
                        marketing,    publishing,    sale,   rental,    lending,
                        distribution,  issue to the  public  by  whatever  means
                        (whether  in  existence  now or created in the  future),
                        license  and other  exploitation  of any  Gizmondo  Game
                        Product and/or any Gizmondo Game Product Sequel) without
                        reference to the  Gamefactory  and that  nothing  herein
                        shall or is intended to restrict any such use,  dealings
                        or exploitation.

3.      DELIVERY OF CONCEPT MATERIALS


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        3.1.    On the  execution  of  this  Agreement  (or to  the  extent  not
                reasonably  possible,  within two  Business  Days),  Gamefactory
                shall at its cost and expense  deliver or cause to be  delivered
                to such address within the Territory as Gizmondo shall stipulate
                all the Concept Materials.

4.      FUTURE OPTIONS AND EXCLUSIVITY

        4.1.    During the Initial Term,  Gamefactory shall offer Gizmondo first
                refusal to obtain a licence on the same or similar  terms of the
                Licence  over any and all  Games  and/or  concepts  for any such
                Games, which Gamefactory and/or Gamefactory's  Associates intend
                to and/or may  develop.  In the event that any such Games and/or
                concepts  therefor are so  developed,  Gamefactory  shall notify
                Gizmondo  immediately  of the same  (such a notice to be in such
                detail  as may be  reasonably  adequate  to enable  Gizmondo  to
                consider the same fully).

        4.2.    In the event that Gizmondo  receives  such a notice  pursuant to
                clause 4.1, it shall have three months from  Gizmondo's  receipt
                of such a notice to consider the same.  Should  Gizmondo wish to
                acquire  any such  Games  and/or  concepts  therefor  which  are
                specified  in  such  a  notice,   then  Gizmondo   shall  notify
                Gamefactory  within  such a three  month  period and the parties
                shall as soon as reasonably  practicable enter into an agreement
                in  respect of the same on terms  which are  similar to those of
                this Agreement.

        4.3.    Prior to  notifying  Gizmondo  pursuant to clause 4.1 and during
                Gizmondo's   consideration   of  the  subject   matter  of  such
                notification  pursuant  to  clause  4.2,  Gamefactory  shall not
                itself use, deal with or exploit, or disclose, notify, engage in
                discussions  with,  enter into an  agreement  with or  otherwise
                transfer,  sell,  assign or licence to any third  party any such
                Games and/or concepts therefore,  Without limitation,  breach of
                this clause shall be considered to be a material  breach of this
                Agreement by Gamefactory.

        4.4.    Notwithstanding  clauses 4.1 to 4.3, during the Initial Term or,
                should it occur,  for one year from the date the  Gizmondo  Game
                Product  has been  published  and  released  to the public  with
                Gizmondo's  consent  in all  its  intended  release  territories
                (whichever  period is the shorter),  the  Gamefactory  shall not
                directly or indirectly  market,  sell or issue to the public any
                Competing Game.

5.      CONCEPT DEVELOPMENT

        5.1.    Gizmondo shall  consider in good faith the Concept,  the Concept
                IP  and  the  Concept  Materials  with a view  to  developing  a
                Gizmondo  Game  Product  from the same  (whether  in whole or in
                part) in its exclusive  discretion and at its exclusive  option,
                and without (if  Gizmondo so  determines)  any  reference  to or
                input from whatsoever or howsoever from the Gamefactory.

        5.2.    Notwithstanding   clauses   5.1  and   11.4,   the   Gamefactory
                acknowledges and agrees that:

                5.2.1.  all right,  title and  interest  in and to any  Gizmondo
                        Game  Product,  Gizmondo  Game  Product  Sequels and any
                        Merchandise  shall, as between the parties,  be owned by
                        Gizmondo

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                        throughout  the  Territory  and  that  as a  consequence
                        nothing  in this  Agreement  gives it any  right (or any
                        right to  authorise  or procure  third  parties) to use,
                        deal  with  and/or  exploit  any  of the  same.  Without
                        limitation,  a breach of this clause shall be considered
                        to  be  a   material   breach  of  this   Agreement   by
                        Gamefactory; and

                5.2.2.  nothing in this clause 5 or this  Agreement  requires or
                        creates any obligation on or expectation for Gizmondo to
                        so  create  any such a  Gizmondo  Game  Product  (or any
                        Gizmondo  Game  Product  Sequel  or  Merchandise)  or to
                        expend  any time,  resources  or funds in respect of the
                        same, or to publish and release to the public any of the
                        same.

        5.3.    Gamefactory  shall  provide  certain  development   services  to
                Gizmondo  for Gizmondo  Game  Products in respect of the matters
                licensed to Gizmondo  pursuant to clause 2.1 above, on the terms
                of Schedule Four.

6.      PRODUCTION, MARKETING, SALE AND PROMOTION


        6.1.    Gizmondo,  as the licensee of the  Concept,  the Concept IP, the
                Concept Materials on the terms of the Licence, the Gizmondo Game
                Product (if any) and the  Gizmondo  Game Product  Sequels  shall
                have the exclusive right, in its exclusive discretion and at its
                exclusive  option,  and without (if Gizmondo so determines)  any
                reference  to  or  input  from   whatsoever  or  howsoever  from
                Gamefactory, to:

                6.1.1.  without limitation,  pursuant to Gizmondo's rights which
                        arise by virtue of the operation of clause 2.1, develop,
                        localise,  produce,   manufacture,   maintain,  promote,
                        advertise,    market,   publish,   sell,   rent,   lend,
                        distribute, promote, communicate and issue to the public
                        by whatever  means  (whether in existence now or created
                        in  the  future),   any  Gizmondo  Game  Product  and/or
                        Gizmondo Game Product Sequels; and

                6.1.2.  to develop, localise,  produce,  manufacture,  maintain,
                        promote,  advertise,  market, publish, sell, rent, lend,
                        distribute, promote, communicate and issue to the public
                        by whatever  means  (whether in existence now or created
                        in  the  future),  license  and  otherwise  exploit  any
                        Merchandise.

        6.2.    Notwithstanding  clause 6.1,  Gamefactory  shall at its own cost
                cooperate  and  provide  Gizmondo  with  all  reasonable  prompt
                assistance,  on  Gizmondo's  request,  in respect of the matters
                referred to in that clause 6.1.

7.      LICENCE FEE PAYMENTS


        7.1.    In the event that  Gizmondo  produces a  Gizmondo  Game  Product
                which is published and is communicated  and issued to the public
                with  Gizmondo's  consent,  then,  provided the  Gamefactory has
                complied and  continues  to comply in full with its  obligations
                under this Agreement,  Gizmondo shall pay to the Gamefactory the
                Licence Fee as calculated,  at such times,  with such statements
                and  maintaining  such records and otherwise in accordance  with
                and as set out in Schedule Three.

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<PAGE>

        7.2.    Should Gizmondo decide to cease (in whole or in part) any of its
                exploitation of the Concept,  the Concept IP, Concept Materials,
                Gizmondo  Game  Product,   Gizmondo  Game  Product   Sequels  or
                Merchandise in response to a third party claim,  demand or legal
                action brought, made or threatened, the subject matter of which,
                if true,  would  constitute a breach by the  Developer of any of
                its warranties,  representations,  obligations  and/or covenants
                contained in this Agreement, then Gizmondo may (at its exclusive
                option,  without any recourse to  Gamefactory),  without waiving
                any other legal rights and remedies which it may have,  withhold
                the payment to  Gamefactory  of any payments or other monies due
                to  Gamefactory  (whether  under this  Agreement or  otherwise),
                pending resolution of the third party claim, demand or action.

        7.3.    Notwithstanding  clause 7.1 Gamefactory  acknowledges and agrees
                that  nothing in this  clause 7 or this  Agreement  requires  or
                creates any  obligation  on or  expectation  for  Gizmondo to so
                create any such a Gizmondo  Game Product (or any  Gizmondo  Game
                Product Sequel or Merchandise) or to expend any time,  resources
                or funds in respect of the same,  or to publish  and  release to
                (or,  once  started,  to continue to publish and release to) the
                public  any of the  same,  and that as a result no  Licence  Fee
                whatsoever  may be payable (and once  commenced  the Licence Fee
                may cease to be payable) to Gamefactory by Gizmondo.

8.      CONFIDENTIALITY

        8.1.    Gamefactory  shall  maintain  the  confidential  status for such
                Confidential   Information,   not  use  any  such   Confidential
                Information  for any purpose other than the purpose for which it
                was originally  disclosed to it and as  specifically  set out in
                writing to it by  Gizmondo  on each  occasion,  and shall not to
                disclose  any of  such  Confidential  Information  to any  third
                party.

        8.2.    Notwithstanding the generality of clause 8.1,  Gamefactory shall
                not make any public statement or press release concerning any of
                the Confidential  Information,  including without limitation the
                negotiation  or  conclusion  or  terms  of this  Agreement,  the
                Licence  of  the  the  Concept,  the  Concept  IP,  the  Concept
                Materials,  any Gizmondo Game Product, any Gizmondo Game Product
                Sequels or any Merchandise.

        8.3.    Gamefactory  acknowledges  and  agrees  that,  in the event of a
                breach or  threatened  breach of this clause 8, Gizmondo (or any
                Gizmondo  Affiliate)  may have no  adequate  remedy  in money or
                damages and, accordingly, shall be entitled to seek preliminary,
                permanent and other injunctive relief.

9.      WARRANTIES AND INDEMNITIES


        9.1.    Each party represents and warrants to the other party that:

                9.1.1.  it has full  power  and  authority  to enter  into  this
                        Agreement  and to  perform  its  obligations  under this
                        Agreement;

                9.1.2.  it  will  comply  in  al  material   respects  with  all
                        applicable  laws,  statues and regulations in performing
                        its obligations under this Agreement; and

                                       10
<PAGE>

                9.1.3.  this Agreement constitutes a valid and binding agreement
                        enforceable in accordance with its terms.

        9.2.    Gamefactory  hereby further  represents and warrants to Gizmondo
                that   (Gamefactory   acknowledging   and  agreeing  that  these
                representations  are a material inducement for Gizmondo to enter
                into this Agreement):

                9.2.1.  it has the exclusive right, title and interest to enable
                        the licence to Gizmondo of all those  rights,  materials
                        and  other  matters  set out in and in  accordance  with
                        clause  2.1 and that there is no legal  obstacle  to the
                        transfer, sale and assignment of such rights,  materials
                        and other matters.  Without limitation, a breach of this
                        clause shall be  considered  to be a material  breach of
                        this Agreement by the Gamefactory;

                9.2.2.  there  is  no  outstanding  claim,  or  knowledge  of  a
                        potential claim, against any right, title or interest of
                        any kind whatsoever in and to the Concept, Concept IP or
                        Concept Materials.  Without limitation, a breach of this
                        clause shall be  considered  to be a material  breach of
                        this Agreement by the Gamefactory;

                9.2.3.  to the fullest extent permissible by applicable laws, it
                        hereby  provides  a full  waiver  of any and  all  moral
                        rights (or similar rights) in the Concept, Concept IP or
                        Concept Materials throughout the Territory;

                9.2.4.  to the fullest extent permissible by applicable laws, it
                        has  obtained a full waiver of any and all moral  rights
                        (or similar  rights)  throughout  the Territory from all
                        those  involved  in the  Concept,  Concept IP or Concept
                        Materials     (including    without    limitation    the
                        Gamefactory's Associates);

                9.2.5.  it  has  not  transferred,   sold,  assigned,  licensed,
                        rented,   lent,   used  as  any  security  or  otherwise
                        encumbered  or otherwise  impaired  any right,  title or
                        interest  in or to the  Concept,  Concept  IP or Concept
                        Materials in a manner that  conflicts with the operation
                        of this  Agreement  (including  without  limitation  the
                        operation of clause Z.1). Without  limitation,  a breach
                        of this  clause  shall be  considered  to be a  material
                        breach of this Agreement by the Gamefactory;

                9.2.6.  subject to the  operation  of the  provisions  of clause
                        12.1, it will not  hereafter  attempt or purport to use,
                        deal with,  exploit,  transfer,  sell, assign,  license,
                        rent, lend, use as any security or encumber or otherwise
                        impair  any  right,  title  or  interest  in or  to  the
                        Concept,  Concept  IP or Concept  Materials  in a manner
                        that  conflicts  with the  operation  of this  Agreement
                        (including  without  limitation  the operation of clause
                        2.1);

                9.2.7.  save  to  the  extent  permitted  by  applicable  law or
                        expressly  permitted by Gizmondo or a Gizmondo Affiliate
                        (as  appropriate),  it will  not  hereafter  attempt  or
                        purport to use,  deal  with,  exploit,  transfer,  sell,
                        assign,  license,  rent,  lend,  use as any  security or
                        otherwise  encumber or otherwise impair any right, title
                        or  interest in or to any  Gizmondo  Game  Product,  any
                        Gizmondo Game Product Sequels, any Merchandise, any of

                                       11
<PAGE>

                        Gizmondo's  and/or  Gizmondo's  Affilites'  Intellectual
                        Property Rights;

                9.2.8.  the Concept, Concept IP or Concept Materials:

                a)      are  original  and do  not  and  will  not  infringe  or
                        misappropriate the Intellectual Property Rights or other
                        legal  rights  of  any  third  parties  anywhere  in the
                        Territory.  Without limitation,  a breach of this clause
                        shall be  considered  to be a  material  breach  of this
                        Agreement by Gamefactory; and

                b)      do not contain  anything which is obscene,  blasphemous,
                        defamatory and/or likely (by reason of their content) to
                        expose Gizmondo  and/or any of Gizmondo's  Affiliates to
                        any  civil  or  criminal  proceedings  anywhere  in  the
                        Territory.  Without limitation,  a breach of this clause
                        shall be  considered  to be a  material  breach  of this
                        Agreement by Gamefactory;

                9.2.9.  all Code forming part of the Concept  Materials are free
                        from material programming bugs and/or defects.  Gizmondo
                        is in breach  or  default  of any term,  representation,
                        warranty,   covenant  or  obligation  set  out  in  this
                        Agreement; and

                9.2.10. the Concept,  the Concept IP and Concept  Material  are,
                        other than to the extent expressly set out in writing to
                        Gizmondo prior to the  Commencement  Date,  accurate and
                        complete,   and  have  been   prepared   using  all  the
                        reasonable   skill   and  care   expected   at  a  level
                        commensurate with best industry practice and comply with
                        all applicable laws in the Territory.

        9.3.    Gamefactory hereby agrees to indemnify, defend and hold harmless
                Gizmondo on demand  from and against any and all suits,  losses,
                liabilities,  damages,  awards, claims,  settlements,  costs and
                expenses,  including  reasonable  legal  fees,  costs  and other
                expenses,  arising out of or  otherwise  relating to a breach by
                Gamefactory  of  its  warranties,  representations,  obligations
                and/or covenants contained in this Agreement.  Such an indemnity
                shall extend to Gizmondo's Affiliates.

        9.4.    Gizmondo's overall liability under or pursuant to this Agreement
                and the matters envisaged by this Agreement,  howsoever arising,
                shall not exceed the sum of  (pound)5,000  (five thousand pounds
                sterling).

10.     INFRINGEMENT

        10.1.   In the event  that  Gamefactory  learns  of any  claim  (whether
                actual or  threatened)  alleging  that the Concept,  Concept IP,
                Concept  Materials,  any Gizmondo Device,  any Game produced for
                any Gizmondo  Device,  any Gizmondo Game  Product,  any Gizmondo
                Game Product Sequels, any Merchandise,  any of Gizmondo's and/or
                Gizmondo's Affilites'  Intellectual Property Rights infringes or
                misappropriates any third party's  Intellectual  Property Rights
                or other rights,  or that any of the same are being infringed or
                misappropriated  by any  third  party,  then  Gamefactory  shall
                promptly  notify  Gizmondo.   Gamefactory  shall  not  make  any
                admissions or other statement concerning any of the same without
                Gizmondo's specific written consent.

                                       12
<PAGE>

        10.2.   Gizmondo  shall  have  the  exclusive  right,  in its  exclusive
                discretion and at its exclusive option, and without (if Gizmondo
                so  determines)  any  reference to or input from  whatsoever  or
                howsoever from  Gamefactory,  to commence  and/or defend a legal
                action  or  negotiate  a  settlement  relating  to  any  alleged
                infringement by the Concept,  Concept IP, Concept Materials, any
                Gizmondo Device,  any Game produced for any Gizmondo Device, any
                Gizmondo Game Product,  any Gizmondo Game Product  Sequels,  any
                Merchandise,  any of  Gizmondo's  and/or  Gizmondo's  Affilites'
                Intellectual Property Rights.

        10.3.   Notwithstanding  clause 10.3, at its own cost Gamefactory  shall
                give  Gizmondo  assistance  and  cooperation  in any such  legal
                action  referred to in clause 10.2 where such an action concerns
                (in  whole  or  in  part)  the  Concept,   Concept  IP,  Concept
                Materials,  any Gizmondo Game Product, any Gizmondo Game Product
                Sequels or any Merchandise,  including without limitation,  such
                assistance and cooperation extends to providing and/or executing
                necessary documents and evidence to enable Gizmondo,  in its own
                name and/or on behalf of  Gamefactory  or  jointly,  to bring or
                defend the legal  action.  Gizmondo  shall be entitled to retain
                any  recovery  or  damages  collected  as a result of such legal
                action or negotiated settlement. No settlement by Gizmondo shall
                impose  a  monetary   liability  on  the   Gamefactory   without
                Gamefactory's consent to such a settlement.

11.     TERM AND TERMINATION


        11.1.   This Agreement shall continue for the Term.


        11.2.   Gizmondo  may  terminate  this  Agreement  (in whole or in part)
                immediately on written notice to Gamefactory,  in which case the
                terms of clause 12.12 shall apply, in the event that:

                11.2.1. Gamefactory  is  in  breach  or  default  of  any  term,
                        representation, warranty, covenant or obligation set out
                        in this  Agreement and such breach or default  continues
                        uncured  (in the event  that  they can be  cured)  for a
                        period of fourteen  calendar days  following the receipt
                        by  Gamefactory   from  Gizmondo  of  a  written  notice
                        thereof;

                11.2.2. Gamefactory  is in breach  or  default  of any  material
                        term, representation,  warranty,  covenant or obligation
                        set out in this Agreement; or

                11.2.3. Gamefactory  becomes  insolvent  (or in the  case  of an
                        individual  or any  one of  them),  files  or has  filed
                        against it a petition  under any  bankruptcy law (which,
                        if  involuntary,  is  unresolved  after  sixty  calendar
                        days),    proposes   any    dissolution,    liquidation,
                        composition,      financial      reorganization,      or
                        recapitalization with creditors,  makes an assignment or
                        trust  mortgage for the benefit of the  creditors,  or a
                        receiver  trustee,   custodian,   or  similar  agent  is
                        appointed  or  takes  possession  with  respect  to  any
                        property or business of such party.

12.     CONSEQUENCES OF TERMINATION

        12.1.   In the event of a notice coming within the terms of clause 11.2,
                then  Gizmondo  shall notify the  Gamefactory  which clauses (if
                any) of this


                                       13
<PAGE>

                Agreement  continue to apply or whether the Agreement as a whole
                shall be terminated.  Without  limiting the foregoing,  Gizmondo
                may demand (at its option) the immediate  return by the Gizmondo
                of any and all Confidential Information.

13.     GENERAL PROVISIONS

        13.1.   Assignment.  Gamefactory  may not assign this  Agreement  or any
                portion  thereof,  to any third party unless Gizmondo  expressly
                consents to such assignment in writing.

        13.2.   Force Majeure. Neither party will be responsible for any failure
                to perform its respective  obligations  under this Agreement due
                to causes beyond its  reasonable  control (each a "Force Majeure
                Event"),   including,   but  not  limited  to,  strikes,  riots,
                embargoes,  war,  acts of  terrorism,  acts of civil or military
                authorities,  fire, floods, explosion,  earthquakes,  accidents,
                network  catastrophes,  acts of God, and ail other delays beyond
                the party's reasonable  control,  provided that such party gives
                prompt  written  notice of such Force Majeure Event to the other
                party within five Business Days. The time for  performance  will
                be  extended  for a period  equal to the  duration  of the Force
                Majeure Event, but in no case longer than thirty calendar days.

        13.3.   Severability,  In the event that any provision in this Agreement
                will he subject  to an  interpretation  under  which it would be
                void or  unenforceable,  such provisions will be construed so as
                to  constitute  it a  valid  and  enforceable  provision  to the
                fullest extent  possible,  and in the event that it cannot be so
                construed,  it will,  to that  extent,  be  deemed  deleted  and
                separable  from the other  provisions of this  Agreement,  which
                will  remain in full force and effect and will be  construed  to
                effectuate its purposes to the maximum legal extent.

        13.4.   Notice. Any notice herein required or permitted to be given will
                be given  in  writing  and may be  delivered  personally  to any
                officer  of  Gizmondo  or  Gamefactory,  or as  appropriate,  by
                express courier,  registered or certified mail (postage and fees
                prepaid,  with  return  receipt  requested),   or  by  facsimile
                transmission  to the address set forth  below.  Either party may
                from time to time  specify or change the address for such notice
                by giving  written  notice  thereof  to the  other  party in the
                manner  provided  in this clause  13.4.  A notice will be deemed
                given three  calendar days after deposit if by express  courier,
                five  calendar  days after  deposit if by regular  mail, or upon
                transmission if by facsimile.

                If to Gizmondo:  to the address set out at the beginning of this
                Agreement, addressed to the Managing Director with a copy to the
                Company Secretary; and

                If to the  Gamefactory:  to the address set out at the beginning
                of this  Agreement,  addressed to the Managing  Director  with a
                copy to the Company Secretary.

        13.5.   Independent  Contractors.  The  parties  hereto are  independent
                contractors.   Gamefactory   will   not  be   entitled   to  any
                compensation  except as  provided in the  Agreement.  Each party
                shall be responsible for payment of its employees' compensation,
                disability benefits, unemployment insurance, and for withholding
                income taxes and social security. Neither party shall

                                       14
<PAGE>

                be entitled to receive any benefits  provided by the other party
                to such party's  employees.  Neither  Gizmondo  nor  Gamefactory
                shall be  deemed to be  partners  or  agents  of the  other.  In
                addition to the parties' other  indemnification  obligations set
                forth herein,  each party agrees to indemnify and hold the other
                and its  directors,  officers and  employees  harmless  from and
                against any claims,  liabilities or obligations asserted against
                any of them for not withholding taxes or making unemployment and
                worker  compensation  payments and the like, as a result of such
                party's  independent  contractor  status.  Such  indemnification
                shall  include any penalties  and interest  assessed  thereon as
                well as the payment of  reasonable  legal fees,  costs and other
                expenses.

        13.6.   Governing Law and Venue.  This Agreement  shall be construed and
                controlled  by English law and the  parties  shall be subject to
                the  nonexclusive  jurisdiction  of the English  Courts.  In any
                action  or suit to  enforce  any  right  or  remedy  under  this
                Agreement or to interpret any provision of this  Agreement,  the
                prevailing  party shall be  entitled  to recover its  reasonable
                legal fees and expenses fees, costs and other expenses

        13.7.   Counterparts.  This  Agreement may be executed in  counterparts,
                each of which  will be  deemed  an  original  Agreement  for all
                purposes and which collectively will constitute one and the same
                Agreement.

        13.8.   Remedies.  Unless  expressly set forth to the  contrary,  either
                party's election of any remedies  provided for in this Agreement
                will not be exclusive of any other remedies available  hereunder
                or otherwise at law or in equity.

        13.9.   Complete Agreement, Waiver, and Modification. This Agreement and
                the  Schedules  attached  hereto  constitute  the  complete  and
                exclusive  understanding between the parties with respect to the
                subject  matter  hereof,  superseding  all  prior  negotiations,
                preliminary    agreements,    correspondence,    proposals    or
                understandings,  both written or oral. No waiver or modification
                of any provision of this  Agreement will be binding unless it is
                in writing and signed by authorised  representatives  of each of
                the  parties,  No  waiver of a breach  hereof  will be deemed to
                constitute a waiver of a further breach, whether of a similar or
                dissimilar nature.

        13.10.  Survival of terms on  termination.  In addition to those  rights
                specified elsewhere in this Agreement,  the following rights and
                obligations  survive  any  expiration  or  termination  of  this
                Agreement  to the  degree  necessary  to permit  their  complete
                fulfilment or discharge:

                13.10.1.the rights and  obligations  of the parties with respect
                        to any Gizmondo  Game Product units that have been sold,
                        once the  Gizmondo  Game  Product has been  released and
                        issued to the public with Gizmondo's consent; and

                13.10.2.any cause of action  or claim of either  party,  accrued
                        or to  accrue,  because  of any breach or default by the
                        other party.

        13.11.  Rights of third  parties.  This Agreement is not intended by the
                parties to give rise to any right which is enforceable by virtue
                of the Contracts (Rights of Third Parties) Act 1999, save to the
                extent that such third parties are Gizmondo's Affiliates.


                                       15
<PAGE>

                             SCHEDULE ONE - CONCEPT


1.      Anastasia
2.      Cheerio's
3.      Dominion Wars
4.      The Silver Surfer
5.      TinTin
6.      DS9: The Fallen
7,      M&M's
8.      Miss Spider
9.      New Millennium Encyclopaedia
10.     Outlaw Golf
11.     Outlaw Volleyball
12.     Real War
13.     Shattered Light
].4.    Starship: BORG
15.     Starship Creator
16.     Starship Titanic
17.     Typing Tutor
18.     Weather Control
19.     Wing Commander


                                       17
<PAGE>


                        SCHEDULE TWO -- CONCEPT MATERIALS

Any  and  all  materials  as  may  be  reasonably  requested  by  Gizmondo  from
Gamefactory  in respect of the rights granted to Gizmondo  hereunder,  including
without limitation:

1.      all  marketing  and  promotional  materials  for  or in  respect  of the
        Concept;

2.      all original and other Content in respect of the Concept; and

3.      all printed and other materials in respect of the Concept.









                                       18
<PAGE>

                     SCHEDULE THREE - LICENCE FEE PAYMENTS

4.      Licence Fee currency

            o   L (Pounds sterling)

5.      Licence Fee amount and calculation

            o   25%  of  Net  Receipts,   which  excludes  always  any  and  all
                Commercial Setting Receipts

            o   The  licence  Fee shall be  calculated  within  forty  five (45)
                calendar  days after the end of each  fiscal  quarter  after the
                commercial  launch  of the Game by  Gizmondo  and  shall  notify
                Developer of that amount,  taking into  account  retentions  and
                adjustments calculated in accordance with paragraph 2.3 below.

            o   For the purposes of this paragraph, "Net Receipts" means:

                the gross revenue actually received in cleared funds by Gizmondo
                with respect to units of Gizmondo  Game Product Sold by Gizmondo
                (or any of its Affiliates) and/or sublicenses of the Licence and
                related  rights granted to it pursuant to this  Agreement,  save
                for (without  limitation)  any of the same derived from Bundling
                and/or Merchandise, after deducting:

                a)  the Payment;

                b)  any amounts  payable to any wireless  network,  transmission
                    and/or   communications   platform  owner,  provider  and/or
                    operator;

                c)  taxes and other  governmental  charges  and fees  (including
                    without limitation any withholding tax and VAT);

                d)  any sums payable to any relevant third-party licensor;

                e)  any costs  associated with any  development,  manufacturing,
                    distribution,   advertising,   marketing   and  other  costs
                    deriving  from  bringing  any  relevant  product  to  market
                    (including  without  limitation  costs  of  goods,  which is
                    commonly referred to as COGS);

                f)  any returns and bad debts ; and

                g)  any other costs,  fees and expenses which should  reasonably
                    be deducted so as to derive  Gizmondo's  actual Net Receipts
                    from exercise of the Licence and related  rights  granted to
                    it hereunder; and

                where this  definition  shall not include  any funds  derived or
                collected from the  distribution  of any units of any version of
                the Gizmondo Game Product to End-Users by any third parties, but
                shall include only those funds actually  received by and cleared
                for use by  Gizmondo  from such third  parties  after such third
                parties  have  retained,  deducted  or  otherwise  withheld  any
                mark-ups, revenue share amounts, or license or other fees due to
                them  pursuant  to  the  terms  of   Gizmondo's   agreements  or
                arrangements with such third parties.

                                       19
<PAGE>

            o   For the  purposes  of this  paragraph,  "Sold"  means only those
                units  of  the  Gizmondo  Game  Product  (whether   physical  or
                electronic  copies)  sold and in  respect  of which  revenue  is
                actually received in cleared funds by Gizmondo, and then only to
                the extent  that such a unit of the  Gizmondo  Game  Product has
                been  published  and  released  to the  public  with  Gizmondo's
                consent,  after deducting:  (a) the Payment; and (b) any returns
                and bad debts.  This  definition  shall not  include  either any
                units  provided to third  parties or  End-Users  free of charge,
                whether for reference,  promotional purposes or as give-aways or
                otherwise,  or any units distributed by third-party licensees or
                sublicensees  to third  parties or  End-Users to the extent that
                Gizmondo does not receive cleared funds.

            o   For the purposes of this Schedule,  "End-Users" means any person
                or entity that  purchases  or licences for its use a unit of the
                Gizmondo  Game  Product  pursuant  to a signed  purchase  order,
                end-user license agreement or other similar agreement.

            o   For  the  purposes  of  this  paragraph,  "Bundling"  means  any
                arrangement whereby consumers are presented with an incentive to
                purchase a unit of the Gizmondo Game Product in connection  with
                some other Gizmondo product or service. Such an expression shall
                expressly  include both hard bundling  arrangements  (namely the
                packaging of a unit of the Gizmondo  Game Product for sale as an
                integrated unit with another Gizmondo product) and soft bundling
                arrangements (namely a means by which consumers obtain a unit of
                the Gizmondo Game Product at a reduced  price,  or without cost,
                in connection with the purchase of another  Gizmondo  product or
                service).

            o   For  the  purposes  of  this  paragraph,   "Commercial   Setting
                Receipts"  means  any  and  all  revenue  actually  received  by
                Gizmondo from its exploitation  (or exploitation  which Gizmondo
                has  authorised) of the Licence and related rights granted to it
                pursuant to this Agreement, through:

                o   devices in coin-activated commercial settings; and/or

                o   devices in non-coin-activated commercial settings, including
                    without  limitation   commercial  airlines,   cruise  ships,
                    trains, buses and coaches,  trains, hotels and other leisure
                    facilities,  whereby  consumers  are charged on a per use or
                    other basis; and/or

                o   any  rental  and/or  lending  and/or  similar  programme  or
                    arrangement  operated  by or on  behalf of  Gizmondo  or any
                    Gizmondo Affiliate or any third party.

6.      Retentions of licence fees and adjustments

            o   Gizmondo may maintain and withhold from each licence fee payment
                a  reasonable  amount  of  licence  fees  accrued,  as a reserve
                against  bad debt and  returns  (such  reasonable  amount not to
                exceed 20% in each relevant fiscal quarter).

            o   Gizmondo will subsequently make adjustments in subsequent fiscal
                quarter  licence fee  calculations  based on the number of units
                actually  returned  or for which  there are bad debts,  provided
                that any unused


                                       20
<PAGE>


                reserve  shall be  released  within  the second  fiscal  quarter
                following that in which it was first established.

            o   The parties  recognise  that payments to Gamefactory by Gizmondo
                under  this  Agreement  may  be  subject  to  taxes  imposed  by
                governments  having taxing  authority over this Agreement or any
                payments to be made  pursuant to this  Agreement.  To the extent
                necessary  Gizmondo may  withhold,  deduct or reduce any licence
                fees or any other  payments  under this  Agreement in respect of
                the same  and to the  extent  that is  reasonable  will  provide
                Gamefactory with copies of any relevant tax document  evidencing
                the same.

7.      Time for payment of licence fees and  adjustments

            o   Gizmondo shall pay to Gamefactory the amount calculated pursuant
                to paragraphs 2.2 and 2.3 above,  within fourteen  Business Days
                of its receipt from Gamefactory of an appropriate VAT invoice.

8.      Licence Fee statements

            o   Together  with  each  payment  of  a  licence  fee  pursuant  to
                paragraph 2.4 above,  Gizmondo shall provide  Gamefactory with a
                summary statement for the relevant period indicating to what the
                relevant payment relates and how the relevant licence fee amount
                was calculated.

9.      Bank account details

            o   Those bank account  details of Gamefactory as Gamefactory  shall
                notify to Gizmondo from time to time.



                                       21
<PAGE>

                      SCHEDULE FOUR - DEVELOPMENT SERVICES


1.      DEVELOPMENT LICENCE

        1.1.   In  consideration  of Gamefactory  complying with its obligations
               set out in this Agreement, Gizmondo hereby grants the Gamefactory
               a   terminable,   personal,   non-transferable,   non-assignable,
               non-exclusive,  royalty free,  limited licence (without the right
               to sub-license and/or sub-contract) to use the rights licensed to
               Gizmondo by virtue of clause 2.1 of this Agreement and such other
               Intellectual  Property Rights as may be agreed with Gizmondo from
               time to time ("Underlying Game Rights"):

                1.1.1.  in the  Territory,  only at  Gamefactory's  location (as
                        such as  location  is  agreed  from  time  to time  with
                        Gizmondo) ("Gamefactory's Location");

                1.1.2.  only for the purpose of the Gamefactory's  provision of,
                        and  only  whilst  the  Gamefactory  is  providing,  its
                        services to  Gizmondo as set out in  paragraph 3 of this
                        Schedule  Four,  to bring about the design,  development
                        and programming of the applicable  Gizmondo Game Product
                        for the Concepts:

                a)      Anastasia
                b)      Silver Surfer
                c)      Tin Tin
                d)      Cheerios
                e)      Dominion Wars
                f)      D59: The fallen
                g)      M&Ms
                h)      Outlaw Golf
                i)      Real War
                j)      Weather Control; and

                1.1.3.  which  does not  include  any right for the  Gamefactory
                        either  itself or  through  others to  design,  develop,
                        program,  publish or distribute any product developed in
                        whole or in part on, using or concerning any such rights
                        (or any part thereof),

               where such a limited  licence is subject always to Gizmondo's own
               licensors'  restrictions  (as may be  communicated to Gamefactory
               from time to time) and the right for Gizmondo to terminate such a
               licence  immediately  on written  notice to the  Gamefactory  (in
               which  case,   notwithstanding   any  other  provisions  of  this
               Agreement, the relevant rights licensed to Gamefactory under this
               paragraph  and all copies  thereof  must be  returned to Gizmondo
               immediately and Gamefactory's limited licence thereof shall cease
               immediately also).

        1.2.   In consideration of the payment by Gizmondo to Gamefactory of the
               Development Fee (the sufficiency of which is hereby  acknowledged
               by the Gamefactory),  to be paid in accordance with Schedule Six,
               Gamefactory  hereby  transfers,  sells and  assigns  to  Gizmondo
               absolutely  with full title  guarantee  throughout  the Territory
               (where, to the extent necessary,  this shall operate as a current
               assignment of future rights):

                1.2.1.  any and all Code in the Gizmondo Game Product; and


                                       22
<PAGE>

                1.2.2.  any and all Intellectual Property Rights in the Gizmondo
                        Game Product,

                which may arise pursuant to Gamefactory's  provision of services
                under this  Schedule  (or have  arisen in  contemplation  of the
                matters set out in this Schedule) save for any of  Gamefactory's
                Software  (which shall be subject to the licence  provisions  in
                paragraph 5.5 below).

        1.3.    Without   limitation  (and  without  prejudice  to  any  of  the
                Gamefactory's  obligations  under this Agreement),  by virtue of
                such the matters set out in  paragraph  1.2,  Gizmondo  (whether
                itself,   through   Gizmondo's   Affiliates   or   through   any
                sub-developers   or   sub-contractors)   to,   anywhere  in  and
                throughout  the world (and in whatever  languages),  without any
                reference to the Gamefactory:

                1.3.1.  make such changes,  adaptations  and/or  adjustments  as
                        Gizmondo may  consider  necessary or desirable to render
                        the Gizmondo Game Product fully  operable on or with the
                        Gizmondo   Device   and/or   attractive   to   End-Users
                        (including  without  limitation whether such changes are
                        necessary or desirable to accommodate  the  capabilities
                        and requirements of the Device,  any software therein or
                        therefore,    or    any    relevant    telecommunication
                        transmission  networks on which or with which the Device
                        may be used or associated);

                1.3.2.  produce, localise, copy, manufacture, package, maintain,
                        promote,  advertise,  market, publish, sell, rent, lend,
                        distribute,  issue or communicate to the public,  all by
                        whatever  means  (whether in existence now or created in
                        the future),  license (whether by way or  sub-licensing,
                        sub-contracting  or otherwise) and otherwise exploit the
                        Gizmondo  Game  Product for use on or with the  Gizmondo
                        Device (including  without  limitation  producing and/or
                        copying  gold  discs/gold   masters  of  the  applicable
                        Gizmondo Game Product); and

                1.3.3.  produce, localise, copy, manufacture, package, maintain,
                        promote,  advertise,  market, publish, sell, rent, lend,
                        distribute,  issue to the public,  all by whatever means
                        (whether  in  existence  now or created in the  future),
                        license (whether by way or sublicensing, sub-contracting
                        or otherwise) and otherwise exploit Merchandise.

        1.4.    Gamefactory   agrees   that  all   developers   engaged  by  the
                Gamefactory to develop any Gizmondo Game Product pursuant to the
                operation   of  this   Agreement   shall  be  employees  of  the
                Gamefactory, who must sign an 'Employee Agreement' substantially
                in the form set out in Schedule Six, in each case prior to their
                so working on the  Gizmondo  Game  Product.  All such  `Employee
                Agreements' shall be provided to Gizmondo on demand.

        1.5.    Notwithstanding  all of the  foregoing or anything  else in this
                Agreement,  Gamefactory  acknowledges  and agrees  that  nothing
                herein  requires or creates any obligation on or expectation for
                Gizmondo  to  exploit  any  rights   provided  it  hereunder  by
                Gamefactory,  to exploit any Gizmondo Game Product, or to expend
                any time,  resources or funds in respect of any of the same,  or
                to publish and  release to the public any units of the  Gizmondo
                Game Product  (or,  once  started,  to continue to do any of the
                same).


                                       23
<PAGE>

2.      GAME DEVELOPMENT

        2.1.    Gamefactory shall design,  develop and program the Gizmondo Game
                Products referred to in paragraph 1.1.2 above in accordance with
                the game  design/technical  requirement  document as the parties
                shall   agree   (the   parties   acting    reasonably)    ("Game
                Design/Technical  Requirement Document"), based on and using the
                Underlying Game Rights, at Gamefactory's  Location, for the Game
                to be solely compatible with and playable on the Gizmondo Device
                (including  without  limitation  the  version  thereof as at the
                Commencement Date as well as the forthcoming socalled widescreen
                version thereof, in each case ensuring backwards compatibility),
                including, but without limitation, making revisions requested by
                Gizmondo  throughout such a design,  development and programming
                process,  all in accordance  with the delivery  dates set out in
                Schedule  Five,  The parties  hereby agree that the  Gamefactory
                shall be  solely  responsible  for the  purchase  of any and all
                development  equipment  and/or tools necessary to so develop the
                applicable Gizmondo Game Products,  save for the matters set out
                in paragraph 3 below.  Gamefactory shall also be responsible for
                providing all labour necessary to so develop the same.

        2.2.    Gamefactory  shall use the full-time  efforts of all  developers
                engaged by the  Gamefactory to develop the Game, and Gamefactory
                may  only so use  such  developers  who  have  signed  'Employee
                Agreement'  pursuant to the  operation of  paragraph  1.4 above.
                Such   developersmay   only  be  changed  or  substituted   with
                Gizmondo's  prior written  consent.  Gamefactory  represents and
                warrants to Gizmondo that all such  developers  are employees of
                the Gamefactory and that each of them has so signed an 'Employee
                Agreement'   Gamefactory  may  not  use  freelance   developers,
                consultants  or any third  party  contractors  to so develop the
                Game without  Gizmondo's prior written consent.  Should Gizmondo
                so  consent,  such  consent  shall  be  subject  to any such use
                freelance developers, consultants or any third party contractors
                signing an  agreement  acceptable  to  Gizmondo  which,  without
                limitation,  will provide for all  intellectual  Property Rights
                arising from their relevant work to be owned by the  Gamefactory
                (whereby it will be subject to the  operation of  paragraph  1.4
                above),  as well as imposing  restrictions on them regarding the
                use and disclosure of Gizmondo's Confidential Information.

        2.3.    Gamefactory  shall keep Gizmondo fully and effectively  informed
                and advised of the  development of the applicable  Gizmondo Game
                Products, including, without limitation:

                2.3.1.  providing to Gizmondo  such matters and materials as are
                        required  pursuant to the  operation of Schedule Six, in
                        accordance with their relevant delivery dates;

                2.3.2.  providing  Gizmondo  with such copies of the  applicable
                        Gizmondo  Game  Products  at  their  relevant  stage  of
                        development,  on a medium acceptable to Gizmondo, as may
                        be requested by Gizmondo;

                2.3.3.  informing  Gizmondo of any  developments  or issues that
                        arise  that may  impact  (a)  Gamefactory's  ability  to
                        comply   with  any  term  of  this   Agreement   or  (b)
                        Gamefactory's ability to comply with the delivery of any
                        matters or materials or meet any  requirement as set out
                        in Schedule Six, in accordance with their


                                       24
<PAGE>

                        relevant Delivery Dates or (c) the Gamefactory's ability
                        to comply with any of Gizmondo's requests hereunder.

        2.4.    Gizmondo   shall  have  the  right,   at  any  time  during  the
                development of the applicable  Gizmondo Game Products,  to visit
                the  Gamefactory's   premises   (including   without  limitation
                Gamefactory's  Location)  for  the  purpose  of  inspecting  and
                evaluating the progress and quality of the  applicable  Gizmondo
                Game Products,  provided that  Gamefactory is given at least one
                Business Day's notice, and such a visit occurs during a Business
                Day.

        2.5.    On or before each  Delivery  Date or within two Business Days of
                Gizmondo's  request  (as  applicable),   the  Gamefactory  shall
                deliver to the Gizmondo for Gizmondo's approval:

                2.5.1.  such matters and  materials as are required  pursuant to
                        the  operation  of  Schedule  Six or a Gizmondo  request
                        pursuant to the operation of clause 2.3.2 above; and

                2.5.2.  a  detailed  projected   development  schedule  for  the
                        applicable  Gizmondo Game Products for the entire period
                        following  that  relevant   Delivery  Date  or  Gizmondo
                        request pursuant to the operation of clause 2.3.2 above;
                        and

                2.5.3.  such  other   details  and   documentation   as  may  be
                        reasonably requested by Gizmondo.

        2.6.    Following Gamefactory's  compliance with paragraph 2.5, Gizmondo
                will evaluate the relevant  matters and materials  within thirty
                days  from  receipt  of  all  such  matters  and  materials,  to
                determine   whether   Gizmondo   wishes  to  continue  with  the
                development  of the  applicable  Gizmondo  Game  Products or, at
                Gizmondo's   sole   discretion,    terminate   this   Agreement.
                Notwithstanding  any such  termination (or anything else set out
                in this Agreement):

                2.6.1.  all the matters and  materials  developed  up until such
                        date of  termination  shall be subject to paragraph 1.2;
                        and

                2.6.2.  Gizmondo shall have the right (at its exclusive  option)
                        to develop or have  developed  the  applicable  Gizmondo
                        Game  Products,   without  further   obligation  to  the
                        Gamefactory.

        2.7.    Upon  Gamefactory's  completion of the applicable  Gizmondo Game
                Products,  Gamefactory shall submit to the Gizmondo by the final
                Delivery  Date final  versions of the  applicable  Gizmondo Game
                Products, in triplicate, on a medium acceptable to Gizmondo, for
                Gizmondo's  evaluation.  Gamefactory  shall  promptly  make such
                revisions  as requested  by  Gizmondo,  whereby the  Gamefactory
                shall  submit to the  Gizmondo  new  versions of the  applicable
                Gizmondo Game Products, in triplicate, on a medium acceptable to
                Gizmondo, for Gizmondo's  evaluation,  whereby this process will
                continue until either Gizmondo approves the applicable  Gizmondo
                Game Products or Gizmondo  rejects the applicable  Gizmondo Game
                Products  as not being in  compliance  with this  Agreement  (in
                which  case the  Gamefactory  shall be deemed to be in breach of
                this Agreement)  Gizmondo will notify the Gamefactory in writing
                when  Gizmondo  has so approved  the  applicable  Gizmondo  Came
                Products  (whereby  such  approval in no way reduces or obviates
                any of Gamefactory's obligations under this Agreement).

                                       25
<PAGE>

        2.8.    Notwithstanding  any of the  foregoing or anything  else in this
                Agreement, the Gamefactory acknowledges that:

                2.8.1.  Gizmonodo has high  standards of quality for games to be
                        played on the Gizmondo  Device and that  Gamefactory may
                        be  required  to  submit  revisions  to  the  applicable
                        Gizmondo Game Products at  Gizmondo`s  sole  discretion;
                        and

                2.8.2.  notwithstanding Gamefactory's requirement to comply with
                        the   Game   Design/Technical    Requirement   Document,
                        Gamefactory  shall comply with  Gizmondo's  then current
                        standards and guidelines  for game content,  quality and
                        branding in developing  (including,  without limitation,
                        Gizmondo's  game  certification   requirements  for  the
                        Gizmondo Device).

        2.9.    Notwithstanding  any of the  foregoing or anything  else in this
                Agreement,  Gamefactory  acknowledges  and  agrees  that it must
                deliver to the Gizmondo,  on a medium acceptable to Gizmondo,  a
                final version of the  applicable  Gizmondo  Game Products  which
                complied   with  (as  a  minimum,   the  Game   Design/Technical
                Requirement  Document) that is fully  developed,  bug-tested and
                ready for  manufacturing  by no later  than 12  months  from the
                Commencement  Date.  Concurrently  therewith,  Gamefactory shall
                deliver  also to the  Gizmondo a complete  set of all  materials
                which embody and represent the Intellectual  Property Rights and
                Code in respect of the same, in a form acceptable to Gizmondo.

        2.10.   As  requested  by  Gizmondo  from  time to time  and in a format
                requested by Gizmondo,  Gamefactory  shall provide to Gizmondo a
                complete  set of  back-up  tapes  or  disks  for the  applicable
                Gizmondo  Game  Products  during  their  development  hereunder.
                Notwithstanding  the foregoing,  Gamefactory shall implement and
                maintain its own reliable and effective procedures for:

                2.10.1. the  reconstruction of lost or altered data or programs;
                        and

                2.10.2. the  back-up  of data and  programs  on a  frequent  and
                        regular basis.

        2.11.   At Gizmondo's  request (and at no  additional  cost to Gizmondo,
                save for the Development Fee), Gamefactory shall:

                2.11.1. convert  the  format  of the  applicable  Gizmondo  Game
                        Products  for the  purposes  of  compatibility  with all
                        versions and variations of the Gizmondo Device;

                2.11.2. convert any text  displayed in the  applicable  Gizmondo
                        Game Products from one language into different languages
                        (provided  that  Gizmondo   shall  be  responsible   for
                        delivering  to  the   Gamefactory   the  text  for  such
                        different languages); and

                2.11.3. make  such  other  version   specific   changes  in  the
                        applicable  Gizmondo Game Products,  including,  but not
                        limited  to  audio  changes,   as  my  be  requested  by
                        Gizmondo,  for the  purpose  of  making  the  applicable
                        Gizmondo Game Products culturally and/or  linguistically
                        acceptable in different countries.


                                       26
<PAGE>


        2.12.   When any applicable  Gizmondo Game Products  conversion referred
                to under paragraph 2.11 above has been completed (where it shall
                be so completed by Gamefactory promptly, but in any event within
                20  Business  Days  from  Gizmondo's  written  request  for such
                conversion),  Gamefactory  shall  deliver  to  Gizmondo  a final
                version of such converted applicable Gizmondo Game Products,  on
                the medium as requested by Gizmondo,  for Gizmondo's evaluation.
                Gizmondo shall notify  Gamefactory of any revisions which may be
                required to any of such delivered converted  applicable Gizmondo
                Game Products.

        2.13.   Throughout Gamefactory's design,  development and programming of
                the Game pursuant to this paragraph 3, Gamefactory  shall effect
                and maintain adequate security measures to safeguard the product
                of  its  work  from  unauthorised  access,  use  or  copying  or
                disclosure to third parties.

        2,14.   Gamefactory  shall keep accurate and up-to-date  written records
                on  Gamefactory's  compliance  with the  matters set out in this
                paragraph 2 as Gizmondo may from time to time reasonably require
                or, in default of any specific requirement by Gizmondo,  then in
                accordance  with  good  data  development  and  data  processing
                practice and shall allow Gizmondo on request to inspect and take
                copies  of such  records  from  time to  time,  pursuant  to the
                operation of paragraph 2.4 above.

        2.15.   Notwithstanding  the provisions of paragraph 1,1 (and Gizmondo's
                right  to  termination   the  limited   licence   thereunder  in
                accordance with its terms),  following Gamefactory's  completion
                of the final version of the applicable Gizmondo Game Products as
                referred  to in  and  following  its  delivery  to  Gizmondo  in
                accordance  with  paragraph 2.9, and  notwithstanding  any other
                provisions of this Agreement, the Underlying Game Rights and all
                copies  thereof  Must be returned to  Gizmondo  immediately  and
                Gamefactory's  limited licence  thereof shall cease  immediately
                also.

3.      GIZMONDO DEVELOPMENT TOOLS

        3.1.    Gamefactory  acknowledges  that its  receipt,  use and return of
                Gizmondo's  software  and other  development  tools  required to
                enable  a   reasonably   skilled   programmer   to   develop  an
                entertainment  game for use on the  Gizmondo  Device  ("Gizmondo
                Development  Tools") shall be subject to the terms of Gizmondo's
                'Standard  Development Kit Licence Agreement'.  Gamefactory must
                enter into such an agreement with Gizmondo before it may receive
                and use any such  Gizmondo  Development  Tools,  which  (without
                prejudice to the terms of such an agreement) may only be so used
                for the purposes of this Agreement.

4.      EXCLUSIVITY

        4.1.    Notwithstanding  any other provision of this  Agreement,  whilst
                providing  its services  pursuant to this  Schedule  Gamefactory
                shall not directly or  indirectly  design,  develop,  programme,
                distribute,  market,  advertise, sell or issue or communicate to
                the public any Competing Game.

5.      INTELLECTUAL PROPERTY RIGHTS AND CREDITS

        5.1.    As  between  the  parties  hereto,  all of the  Underlying  Game
                Rights,  the Gizmondo  Development Tools and the Gizmondo Device
                provided by  Gizmondo  and (where  permitted  under the terms of
                this Agreement) any copies of the made by Gamefactory, including
                all Intellectual Property

                                       27
<PAGE>

                Rights  therein or  relating  thereto  are and shall  remain the
                property of Gizmondo.

        5.2.    Gamefactory   agrees  that   (notwithstanding   the   assignment
                provisions in paragraph 1.2 above):

                5.2.1.  as  between  the  parties  hereto,  all right  title and
                        interest (including without limitation copyright and all
                        Intellectual   Property  Rights  and  other  proprietary
                        rights)  worldwide in and to the Underlying Game Rights,
                        the Gizmondo  Development Tools and the Device,  and all
                        improvements  thereof,   shall  belong  exclusively  and
                        absolutely to Gizmondo  (save that nothing  herein shall
                        be taken to preclude  Gamefactory  from  challenging the
                        validity  of  any   Intellectual   Property   Rights  of
                        Gizmondo) (and to the extent necessary this clause shall
                        operate  as an  assignment  of  such  copyright  and all
                        Intellectual   Property  Rights  and  other  proprietary
                        rights in respect of the  foregoing  by  Gamefactory  to
                        Gizmondo,  where this shall operate where  required as a
                        current assignment of future rights); and

                5.2.2.  nothing  in this  Agreement  shall be deemed to grant or
                        assign  to  Gamefactory  any  proprietary  or  ownership
                        interest  in or  to  the  Underlying  Game  Rights,  the
                        Gizmondo  Development  Tools,  the  Device  or any other
                        Intellectual   Property   Rights  of   Gizmondo  or  the
                        Gizmonodo  Affiliates,  other than the  licensed  rights
                        specifically   set  out  in  this  Agreement,   and  the
                        Gamefactory  hereby  recognises that no such other grant
                        or assignment is given to it,

        5.3.    Gizmondo may in its  exclusive  discretion  and at its exclusive
                option, and without (if Gizmondo so determines) any reference to
                or input from whatsoever or howsoever from Gamefactory, take all
                such steps as it deems  necessary  and/or  desirable to protect,
                defend and exploit  any other  Intellectual  Property  Rights of
                Gizmondo and/or any Gizmondo Affiliate.

        5.4.    Gamefactory will not at any time:

                5.4.1.  do or cause to be done any act or thing which contesting
                        or in any way imparing or intending to impair Gizmondo's
                        or  any  of  Gizmondo's   Affiliates'  (or  any  of  the
                        licensors')   Intellectual  Property  Rights  (including
                        without limitation any Intellectual Property Right which
                        may subsist in the Underlying Game Rights);

                5.4.2.  represent that it has any right, title or interest in or
                        to any of Gizmondo's  or any of  Gizmondo's  Affiliates'
                        (or any of the licensors')  Intellectual Property Rights
                        (including without limitation any Intellectual  Property
                        Right which may subsist in the Underlying Game Rights);

                5.4.3.  directly or indirectly reverse engineer or aid or assist
                        or  authorise   or  encourage   others  in  the  reverse
                        engineering  of  any  party  of  Gizmondo's  or  any  of
                        Gizmondo's   Affiliates'  (or  any  of  the  licensors')
                        Intellectual   Property   Rights  in  any  Device,   the
                        Underlying Game Rights,  the Gizmondo  Development Tools
                        or any  element  or  part  thereof  (without  limitation
                        'reverse


                                       28
<PAGE>

                        engineering'  means (a) the x-ray  electronic  scanning,
                        and/or physical or chemical  stripping of  semiconductor
                        components;  and/or (b) the disassembly,  decompilation,
                        decryption,  simulation,  debugging  or code  tracing of
                        object code or executable code),

                save that  such  restrictions  shall  only  apply to the  extent
                permissible  by applicable law and nothing herein shall be taken
                to preclude the Gamefactory from challenging the validity of any
                Intellectual  Property  Rights of Gizmondo or any of  Gizmondo's
                Affiliates.

        5.5.    Gamefactory   hereby   grants   to   Gizmondo,    a   perpetual,
                non-exclusive,  royalty  free,  worldwide  licence and rights to
                use,  sub-license,  reproduce and  manufacture  the  Gamefactory
                Software as  Gizmondo  may deem  appropriate  for the purpose of
                producing,   localising,  copying,   manufacturing,   packaging,
                maintaining,   promoting,  advertising,  marketing,  publishing,
                selling,    renting,   lending,    distributing,    issuing   or
                communicating  to the public,  all by whatever means (whether in
                existence now or created in the future),  licensing  (whether by
                way  or   sub-licensing,   sub-contracting   or  otherwise)  and
                otherwise exploiting the applicable Gizmondo Game Products,  any
                applicable   Gizmondo   Game   Product   Sequels  or  any  other
                Intellectual  Property  Rights of  Gizmondo  which  are  related
                thereto.

6.      INFRINGEMENT

        6.1.   In the event that Gamefactory learns of any claim (whether actual
               or  threatened)  alleging that the  Underlying  Game Rights,  the
               Game, any Game Sequel,  Game PI, Game Materials,  any Device, any
               game produced for any Device, any of Gizmondo's and/or Gizmondo's
               Affiliates' and/or Gizmondo's  Licensers'  Intellectual  Property
               Rights   infringes   or   misappropriates   any   third   party's
               Intellectual  Property Rights or other rights, or that any of the
               same are being infringed or  misappropriated  by any third party,
               then  the  Gamefactory  shall  promptly  notify  Gizmondo.   Fine
               Gamefactory  shall  not make any  admissions  or other  statement
               concerning any of the same without  Gizmondo's  specific  written
               consent.

        6.2.   As between the parties,  Gizmondo shall have the exclusive right,
               in its exclusive  discretion and at its exclusive option (whether
               in its own name or that of the Gamefactory or both),  and without
               (if  Gizmondo  so  determines)  any  reference  to or input  from
               whatsoever or howsoever from the Gamefactory,  to commence and/or
               defend a legal action or  negotiate a settlement  relating to any
               alleged  infringement  by or of the Underlying  Game Rights,  the
               Game, any Game Sequel,  Game PI, Game Materials,  any Device, any
               game produced for any Device, any of Gizmondo's and/or Gizmondo's
               Affiliates' and/or Gizmondo's  Licensers'  Intellectual  Property
               Rights.

        6.3.   Notwithstanding  anything  else in this  Agreement  (and  without
               prejudice  to the  warranties  provided  under this  Agreement to
               Gizmondo),   at   Gizmondo's   reasonable   cost   (provided  the
               Gamefactory has complied in full with its obligations  under this
               Agreement and continues to assist Gizmondo  promptly  pursuant to
               the  operation  of this  clause  7), the  Gamefactory  shall give
               Gizmondo  assistance  and  cooperation  in any such legal  action
               referred to in clause 7.2,  including  without  limitation,  such
               assistance and cooperation  extends to providing and/or executing
               necessary  documents and evidence to enable Gizmondo,  in its own
               name

                                       29
<PAGE>

               and/or on behalf of the Gamefactory or jointly,  andor with or on
               behalf of any of Gizmondo'  Licensors'  names, to bring or defend
               the legal  action.  As between  the  parties,  Gizmondo  shall be
               entitled to retain any recovery or damages  collected as a result
               of such legal action or negotiated  settlement.  No settlement by
               Gizmondo  shall impose a monetary  liability  on the  Gamefactory
               without the Gamefactory's consent to such a settlement.

7.      WARRANTIES AND INDEMNITIES

        7.1.    Notwithstanding  any other warranties or indemnities given under
                this  Agreement,   Gamefactory  hereby  further  represents  and
                warrants  to  Gizmondo  that   (Gamefactory   acknowledging  and
                agreeing that these  representations  are a material  inducement
                for Gizmondo to enter into this Agreement):

                7.1.1.  it has the exclusive right, title and interest to enable
                        the  transfer,  sale and  assignment  to Gizmondo of all
                        those rights, materials and other matters set out in and
                        in  accordance  with  paragraph  1.2 and the  licence in
                        accordance with paragraph 5.5 and that there is no legal
                        obstacle to the dealing with such rights,  materials and
                        other  matters.  Without  limitation,  a breach  of this
                        clause shall be  considered  to be a material  breach of
                        this Agreement by the Gamefactory;

                7.1.2.  there  is  no  outstanding  claim,  or  knowledge  of  a
                        potential claim, against any right, title or interest of
                        any kind whatsoever in and to any such rights assignment
                        to  Gizmondo  and/or to any of  Gamefactory's  Software.
                        Without  limitation,  a breach of this  clause  shall be
                        considered to be a material  breach of this Agreement by
                        the Gamefactory;

                7.1.3.  to the fullest extent permissible by applicable laws, it
                        hereby  provides  a full  waiver  of any and  all  moral
                        rights (or  similar  rights) in the rights  assigned  to
                        Gizmondo under the operation hereof;

                7.1.4.  to the fullest extent permissible by applicable laws, it
                        has  obtained a full waiver of any and all moral  rights
                        (or similar rights)  throughout the world from all those
                        involved in the the  applicable  Gizmondo  Game Products
                        (including without limitation  Gamefactory's  developers
                        referred to in paragraph 1.4)

                7.1.5.  it  has  not  transferred,   sold,  assigned,  licensed,
                        rented,   lent,   used  as  any  security  or  otherwise
                        encumbered  or otherwise  impaired  any right,  title or
                        interest  in or  to  the  rights  assigned  to  Gizmondo
                        hereunder or  Gamefactory's  Software,  in a manner that
                        conflicts   with  the   operation   of  this   Agreement
                        (including   without   limitation   the   operation   of
                        paragraphs   1.2,  1.3  and/or  5.5   hereof).   Without
                        limitation,  a breach of this clause shall be considered
                        to  be a  material  breach  of  this  Agreement  by  the
                        Gamefactory;

                7.1.6.  it will not  hereafter  attempt or purport to use,  deal
                        with, exploit,  transfer,  sell, assign,  license, rent,
                        lend,  use as any  security  or  encumber  or  otherwise
                        impair any right, title or

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<PAGE>

                        interest  in or  to  the  rights  assigned  to  Gizmondo
                        hereunder  or the  Gamefactory's  Software,  in a manner
                        that  conflicts  with the  operation  of this  Agreement
                        (including   without   limitation   the   operation   of
                        paragraphs   1.2,  1.3  and/or  5.5   hereof).   Without
                        limitation,  a breach of this clause shall be considered
                        to  be a  material  breach  of  this  Agreement  by  the
                        Gamefactory;

                7.1.7.  save  to  the  extent  permitted  by  applicable  law or
                        expressly  permitted by Gizmondo or a Gizmondo Affiliate
                        (as  appropriate)   (whether  under  this  Agreement  or
                        otherwise),  it will not hereafter attempt or purport to
                        use,  deal  with,  exploit,   transfer,   sell,  assign,
                        license,  rent,  lend,  use as any security or otherwise
                        encumber  or  otherwise  impair  any  right,   title  or
                        interest in or to any of  Gizmondo's  and/or  Gizmondo's
                        Affilites' Intellectual Property Rights

                7.1.8.  the rights assigned to Gizmondo hereunder, Gamefactory's
                        Software and the applicable Gizmondo Game Products:

                a)      are  original  and do  not  and  will  not  infringe  or
                        misappropriate the Intellectual Property Rights or other
                        legal rights of any third parties anywhere in the world.
                        Without  limitation,  a breach of this  clause  shall be
                        considered to be a material  breach of this Agreement by
                        the Gamefactory;

                b)      do not contain  anything which is obscene,  blasphemous,
                        defamatory and/or likely (by reason of their content) to
                        expose Gizmondo  and/or any of Gizmondo's  Affiliates to
                        any civil or criminal proceedings anywhere in the world.
                        Without  limitation,  a breach of this  clause  shall be
                        considered to be a material  breach of this Agreement by
                        the Gamefactory; and

                c)      are complete, are suitable for commercial production and
                        distribution   and  issue  to  the  public   (and  other
                        exploitation  pursuant the operation of paragraphs  1.2,
                        1.3  and/or  5.5  hereof)  by  Gizmondo  for  use on the
                        GizmondoDevice,  conform  to the  Game  Design/Technical
                        Requirements Document;

                d)      do not contain any Content or other content which is not
                        covered  by  the  Game   Design/Technical   Requirements
                        Document,  including,  without  limitation,   subliminal
                        political,  cultural,  religious,  or sexual messages or
                        meanings;

                7.1.9.  all Code forming part of the rights assigned to Gizmondo
                        hereunder,  the  applicable  Gizmondo  Game Products and
                        Gamefactory's    Software   are   free   from   material
                        programming bugs and/or defects;

                7.1.10. the rights assigned to Gizmondo hereunder, Gamefactory's
                        Software and the applicable Gizmondo Game Products,  are
                        accurate  and  complete,  and  have  been  and  will  be
                        prepared  using  all  the  reasonable   skill  and  care
                        expected  at a level  commensurate  with  best  industry
                        practice  and  comply  with all  applicable  laws in the
                        world; and

                7.1.11. Gamefactory and Gamefactory's  developers referred to in
                        paragraph 1.4 have the know-how, skill and experience to

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<PAGE>

                        design,  develop and program the the rights  assigned to
                        Gizmondo  hereunder,   Gamefactory's  Software  and  the
                        applicable  Gizmondo  Game  Products  (all in accordance
                        with the  terms  of this  Agreement,  including  without
                        limitation  paragraph 3) and are otherwise fully capable
                        of performing its obligations  under this Agreement,  in
                        accordance   with  the  terms  and  conditions  of  this
                        Agreement.

        7.2.    Gamefactory  hereby agrees to indemnify,  defend (subject always
                to paragraph 6 above) and hold harmless  Gizmondo on demand from
                and against  any and all suits,  losses,  liabilities,  damages,
                awards,  claims,  settlements,  costs  and  expenses,  including
                reasonable legal fees, costs and other expenses,  arising out of
                or  otherwise  relating  to  a  breach  by  Gamefactory  of  its
                warranties,   representations,   obligations   and/or  covenants
                contained in this  Agreement.  Such an indemnity shall extend to
                Gizmondo's  Affiliates  and  Gizmondo's  licensors.  This clause
                shall survive the expiry or  termination  of this  Agreement for
                whatever reason.

8.      TERMINATION OF ANY MATTER REFERRED TO IN THIS SCHEDULE

        8.1.    Without  prejudice to anything  else set out in this  Agreement,
                Gizmondo  may  terminate  any  particular   development  service
                provided  by  Gamefactory   immediately  on  written  notice  to
                Gamefactory if at any time before the Gamefactory's  delivery to
                Gizmondo of the 'Gold  Master' (as referred to in Schedule  Six)
                if Gizmondo is dissatisfied  with the progress and/or quality of
                the design,  development  and/or  programming  of the applicable
                Gizmondo   Game  Product   pursuant  to  paragraph  3.  On  such
                termination the provisions of clause 8.2 shall apply,

        8.2.    In the event of a notice  coming  within the terms of  paragraph
                8.1 above (but without prejudice to any other rights or remedies
                which  Gizmondo may have against  Gamefactory  for the breach or
                non-performance of any of the terms of this Agreement):

                8.2.1.  Gamefactory  must  deliver  to  Gizmondo,  on  a  medium
                        acceptable  to  Gizmondo,  the  latest  version  of  the
                        applicable   Gizmondo  Game  Product   together  with  a
                        complete set of the relevant  materials therefor and any
                        other  materials  which  embody and  represent  the Code
                        therefor   and/or  any   Intellectual   Property  Rights
                        therein,  in a form  acceptable  to Gizmondo,  which are
                        then in existence; and

                8.2.2.  Gamefactory shall also return forthwith to Gizmondo,  in
                        respect of the  applicable  Gizmondo Game  Product,  the
                        Underlying  Game  Rights (and  copies  thereof)  and all
                        other   materials  and  other   matters   embodying  any
                        Intellectual  Property  Rights  and any  and  all  other
                        property (and all copies thereof) on any media belonging
                        to  Gizmondo   and/or   Gizmondo's   Affiliates   and/or
                        Gizmondo's licensors or received from any third party on
                        behalf of them that was provided to Gamefactory under or
                        in  contemplation  of  the  matters  referred  to in the
                        Schedule,  which is in the  Gamefactory's  possession or
                        under its  control  and the  Gamefactory  shall  confirm
                        promptly in writing to Gizmondo  that it has complied in
                        all respects with this  paragraph  8.2.2 if requested to
                        do so by Gizmondo;


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<PAGE>

                8.2.3.  provide   that  all  such   materials   referred  to  in
                        paragraphs  8,2.1 and 3.2.2 above have been delivered to
                        Gizmondo,   Gizmondo  shall  pay  to  Gamefactory   sums
                        properly due to the  Gamefactory  for work  completed in
                        accordance  with  Agreement by the  Gamefactory up until
                        that date of  termination  in respect of the  applicable
                        Gizmondo  Game  Product,  but only to the  extent  as is
                        reasonable   taking  into  account  any  payments  which
                        Gizmondo has already paid; and

                8.2.4.  that proportion of the applicable  Development Fee which
                        remains to be paid shall no longer be due and payable to
                        Gamefactory  by  Gizmondo  and  that  proportion  of the
                        applicable  Development  Fee which has already been paid
                        to the  Gamefactory  by  Gizmondo  shall  be  repaid  to
                        Gizmondo  immediately  (subject only to paragraph  8.2.3
                        above).














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<PAGE>

                         SCHEDULE FIVE - DEVELOPMENT FEE

The total  Development Fee in respect of each Gizmondo Game Product will be paid
in accordance with the following milestones:

Payment number     Payment amount         Milestone             Gamefactory's
--------------     --------------         ---------             --------------
                                                                Delivery Date
                                                                -------------

1.                 50% of relevant        Commencement
                   Development  Fee,      Date
                   payable to the
                   relevant account
                   referred to in
                   paragraph 6 of
                   Schedule Three.

2.                 50% of relevant        Delivery to           No more than 12
                   Development Fee,       Gizmondo of the       months from the
                   payable to the         Gizmondo approved     Commencement
                   relevant account       'Gold Master' for     Date
                   referred to in         relevant Gizmondo
                   paragraph 6 of         Game Product
                   Schedule Three.










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<PAGE>


                        SCHEDULE SIX - EMPLOYEE AGREEMENT

          (This is an important legal document - - read it carefully.)

THE THREE PARTIES TO THIS EMPLOYEE AGREEMENT ARE:

Gizmondo Europe Limited ("Gizmondo"),  the undersigned developer  ("Developer"),
and the undersigned employee of the Developer ("Employee").

AGREEMENT:

THE PARTIES HEREBY AGREE AS FOLLOWS:
Definitions:

(i)     "Agreement"  refers to the agreement  between Gizmondo and the Developer
dated [] regarding the  development of the video game currently with the working
title "[ ]" (the "Game").

(ii)    "Intellectual  Property Rights" means all legal rights pertaining to the
Game, as well as any Game  prototypes  or  conversions,  including,  but without
limitation,  the Game's  source and object code,  any and all  intellectual  and
industrial property rights of whatever nature, anywhere in the world, subsisting
in and to the Game,  whether  recorded or registered or  registerable or applied
for in any manner or otherwise,  whether currently in existence or otherwise and
whether vested or contingent,  including without limitation, patents, registered
designs,  trade marks,  service marks,  logos,  signs, trade dress,  business or
trading names or other  designations,  design rights,  copyright,  semiconductor
topography  rights,  utility models and mask works,  database rights,  rights in
databases, know-how, domain names, trade secrets, inventions, ideas, discoveries
and know-how,  applications for and the right to apply for any of the foregoing,
together  with any  rights to sue for past  infringement,  and all  other  legal
rights anywhere in the world protecting such intangible  property,  in each case
for their  full term (and all  extensions,  reversions,  revivals  and  renewals
thereof);

(iii)   "Gizmondo's Confidential  Information" means the Game, together with any
and all technical,  financial and/or other information  relating to the business
or affairs of or emanating  (directly or indirectly) from Gizmondo or concerning
the Game which is (a) either non public, confidential, proprietary in nature, or
comprises a compilation of the same which is otherwise  public but which is in a
form not  publicly  known  and/or (b)  disclosed  and/or made  available  to the
Developer  and/or any employee of the Developer  orally and/or in written,  hard
copy and/or  electronic  form,  on diskettes  and/or on any other  storage media
(whether known now or invented hereafter), where the foregoing:

        (a) shall include, without limitation,  any oral or written instructions
        given to the  Developer  and/or any of its employees by Gizmondo and any
        acts or omissions  conducted by the Developer  arising from instructions
        given to the Developer; and

        (b)  shall   include,   without   limitation,   any  and  all  analyses,
        compilations,  forecasts,  studies  and/or other  documents  prepared by
        Developer and/or any of its employees which contain or otherwise reflect
        any of the foregoing; and


                                       35
<PAGE>


        (c)  shall  include,  without  limitation,  any  technical,  commercial,
        financial,  marketing,  business or other data, know-how,  trade secrets
        and other  information  of  whatever  nature  given by  Gizmondo  to the
        Developer  (and/or its employees)  (whether  before or after the date of
        the  Agreement) in relation to the Agreement and relating to Gizmondo or
        their respective  businesses or affairs (whether written or oral, in any
        form or medium, whether known now or invented hereafter); but

        (d) shall not, however, include any of the foregoing which the Developer
        can  show  (a) is  already  known  to the  Developer  and/or  any of its
        employees  otherwise  than as a consequence of a breach of the Agreement
        or any  other  agreement  (whether  or not made with  Gizmondo),  (b) is
        generally available to the public other than as a result of a disclosure
        or other default by the Developer and/or any of its employees, (c) is or
        becomes  available to the Developer  and/or any of its employees  from a
        source  other  than  Gizmondo,  which  source  is  not  prohibited  from
        disclosing  such  information  by any legal,  contractual  or  fiduciary
        obligation to Gizmondo or (d) is independently  developed or acquired by
        the  Developer  and/or  any  of  its  employees   independently  of  any
        Confidential Information provided by;

1.      The  Employee  agrees that the  Intellectual  Property  Rights are owned
        solely by Gizmondo.  To the fullest  extent  possible  under  applicable
        laws,  the Employee  hereby waives any and all moral rights in and/or to
        the Intellectual  Property Rights.  At the request of Gizmondo and at no
        expense to the Employee,  Employee shall sign all documents and take all
        reasonable  steps to assist  Gizmondo in confirming that Gizmondo is the
        sole owner of the Intellectual  Property Rights and/or confirming such a
        waiver.

2.      At no  time  shall  the  Employee  disclose  or use  any  of  Gizmondo's
        Confidential  Information or make any public  statement or  announcement
        which  concerns the Game or the  Agreement,  except the Employee may use
        Gizmondo's  Confidential  Information in connection  with the Employee's
        development of the Game under the terms and conditions of the Agreement.
        This shall not apply to information which is required to be disclosed by
        an  authorised   governmental   or  judicial  entity  under  a  suitable
        protective  order,  provided that Employee shall notify Gizmondo as soon
        as possible prior to such disclosure.

3.      Gizmondo  may  enforce  this  Employee  Agreement   including  obtaining
        injunctive relief or damages.

4.      Gizmondo  may assign this  Employee  Agreement  (or any part of it). The
        Employee shall not assign this Employee Agreement (or any part of it).

5.      Both the  Developer  and the  Employee  represent  to Gizmondo  that the
        Employee is an employee of the  Developer and that he/she is not engaged
        by the  Developer  on a freelance  or  consultancy  basis.  The Employee
        represents  that  he/she is of legal age,  has read the  foregoing,  and
        understands its contents.



                                       36
<PAGE>


6.      This Employee  Agreement  shall be governed by, subject to and construed
        under the laws of England and Wales.

The  undersigned  parties have signed this  Employee  Agreement on the dates set
forth below.

GIZMONDO EUROPE LIMITED                      EMPLOYEE:

By: ______________________________           By: ______________________________

Printed Name: ____________________           Printed Name: ____________________

Title: ___________________________           Title: ___________________________

Date: ____________________________           Date: ____________________________


DEVELOPER:___________________

By: ______________________________

Printed Name: ____________________

Title: ___________________________

Date: ____________________________









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