Document:

EXHIBIT 10.1 SCi Licence Agreement

                                LICENCE AGREEMENT
                                -----------------

         THIS Licence  AGREEMENT (the  "Agreement") is entered into as of this [
], 2004 (the  "Effective  Date"),  by and  between  GIZMONDO  EUROPE  LTD. , its
principal  office  located  at:-  Gizmondo  Europe  Ltd, 1 Meadow  Gate  Avenue,
Farnborough Business,  Farnborough, Hants, GU14 6FG ENGLAND ("Gizmondo") and SCi
Games Limited of 14 Ivory House,  Plantation  Wharf,  London,  SW11 3TN ("SCi"),
with reference to the following facts:

                                    RECITALS
                                    --------

         WHEREAS,  SCi owns or controls the rights in and to certain interactive
software products and other intellectual property related thereto, and

         WHEREAS,  Gizmondo is engaged in the business  of, among other  things,
publishing, developing, marketing, distributing and selling wireless interactive
entertainment software products; and

         WHEREAS,  Gizmondo  desires to obtain  certain rights in and to the SCi
Materials  (as  defined  below in  Section 1 hereof)  and SCi  desires  to grant
Gizmondo such rights on the terms set forth in this Agreement.

         NOW, THEREFORE, the parties do hereby agree as follows:

1.       CERTAIN DEFINITIONS.

1.1      "Games" shall mean those  English  language  entertainment  video games
         that  have  been  published  or  will  be  published  by SCi for use on
         Microsoft's  Xbox video game system ("Xbox") and Windows based Personal
         Computers  set out in Clause 6.2 and  described in the Game  Exhibit(s)
         (defined below).

1.2      "Product"  shall mean an  application  program  created by  Gizmondo in
         accordance with this agreement or adapted or modified by Gizmondo so as
         to enable  the same to operate  as a  handheld  version  which is to be
         published  by Gizmondo  for  operation  on the Devices  pursuant to the
         terms of this Agreement.

1.3      "Game  Exhibit"  shall mean an addendum to this  Agreement that is (and
         shall be for future Games, as amended) attached hereto and incorporated
         herein  for each Game  licensed  to  Gizmondo  for  development  of the
         corresponding  Product pursuant to the terms of this Agreement and such
         Game  Exhibit.  The  format of the Game  Exhibit  is  attached  to this
         Agreement as Exhibit A. SCi may change the format of the Game  Exhibits
         at any  time,  but  not  so as to  increase  the  scope  of  Gizmondo's
         obligations under this Agreement. The Game Exhibit includes, but is not
         limited to, intellectual  property  information,  development schedule,
         and any  additional  requirements  or  limitations  on  development  or
         publication of the applicable Product.

1.4      "Game  Developer/Licensor"  shall  mean  a  third  party  developer  or
         licensor  that  developed the Game on SCi's behalf or licensed the Game
         or its elements to SCi and who retains rights in the Game.

1.5      "Game  Content"  shall  mean  without  limitation  those  copyrightable
         aspects  of the  particular  Game  that may be  perceived  by the user,
         including,  without limitation,  artwork;  sound;  graphic and/or music
         files;  audio visual  elements and  displays;  user  interface,  logos,
         trademarks, characters and names; dialog; story line; plot and data.

1.6      "SCi  Materials"   shall  mean   collectively   Games,   Game  Content,
         Documentation,  and  any  other  materials  owned  or  licensed  by SCi
         provided to Gizmondo under this Agreement.

<PAGE>

1.7      "Minimum  Product Skus" shall mean the WinCE.net  Gizmondo  versions of
         each Product.

1.8      "Territory"  shall mean the entire world for all of the Products on the
         Devices.

1.9      "Distribution   Channel(s)"   shall   mean  the   following   means  of
         distributing  software designed to operate in the wireless environment:
         over the air provisioning via Wireless Networks;  merchants,  including
         carrier  online  or  wireless  mobile  shops,  storefronts  or  portals
         (whether operated by the carrier itself or on the carrier's behalf by a
         third party service  provider)  retailers;  carrier  retail  locations;
         other retail locations where Devices are generally sold; OEM methods of
         distribution,  including embedded or bundling  transactions (subject to
         clause 2.4); and through the use or sale of SD, MMC cards, memory stick
         or other  similar  physical  media  that  enable the  delivery  of such
         wireless products to the Devices.

1.10     "Distribution  Partner"  shall  mean any  third  party,  not  including
         Gizmondo  Affiliates,  who  sub-licenses  any of the rights  granted to
         Gizmondo pursuant to this Agreement for the purpose of distributing the
         Products to End-Users subject to clause 2.4 (4).

1.11     "Documentation"  shall  mean the  user  documentation,  manuals  and/or
         written product specifications for a Game or Product, as applicable.

1.12     "Devices"  shall mean the "Gizmondo"  handheld  portable  entertainment
         device,  and  licensed or  re-branded  variants of the  Devices,  under
         manufacture or licensed from Tiger  Telematics  Gizmondo subject to any
         licensing or rebranding  being subject to SCi's prior written  approval
         (not to be unreasonably withheld or delayed).

1.13     "Gizmondo  Affiliates" shall mean the parent and those  subsidiaries of
         Gizmondo as specified in Exhibit E.

1.14     "Gold  disc"  means  a  finished  version  of any of  the  Games  in an
         appropriate format which is ready for publishing by SCi.

1.15     "Intellectual   Property   Rights"   shall  mean   patent   rights  and
         registrations  and  applications,  renewals  and  extensions  thereof ,
         copyright  (including,  but not  limited  to,  ownership  rights in all
         titles,  computer code, themes, objects,  characters,  character names,
         stories,   dialog,  catch  phrases,   locations,   concepts,   artwork,
         animation,  sounds,  musical  compositions,  audio-visual  effects  and
         methods of  operation,  moral  rights and any  related  documentation),
         copyright  registrations  and  applications,  renewals  and  extensions
         therefore,  trademark  registrations  and  applications,  renewals  and
         extensions  therefore,  rights  in trade  dress  and  packaging,  trade
         secrets  and all  other  intellectual  property  rights  recognized  by
         English and U.S. laws and applicable  foreign and  international  laws,
         treaties and conventions.

1.16     "Platform(s)"   shall   mean  the   underlying   computer   systems  or
         technologies on which Products and other  application  program(s),  are
         operated  in  conjunction  with  Devices,  expressly  limited  to short
         message service, Multi-Media Messaging and WinCe.net.

1.17     "Term"  shall mean two years from the  delivery to Gizmondo of the Gold
         Disc and subject to any variations set out in any Game Exhibit.

1.18     "End-User (s)" shall mean a person or entity that purchases or licenses
         for its use a Product  pursuant to a signed  purchase  order,  end-user
         license agreement or other similar agreement.

1.19     "Wireless Network(s)" shall mean a network that allows users of Devices
         to connect to and receive  telecommunication  transmission  services in
         the Territory.

1.20     "Wireless  Network  Operator(s)"  shall mean any person or entity  that
         offers telecommunication  transmission services to users of a Device in
         the  Territory  over a  Wireless  Network  operated  by such  person or
         entity.

1.21     "Licensed  Marks"  shall  mean  those SCI  trademarks  specified  under
         "Licensed Marks" in each Game Exhibit.

<PAGE>

1.22     "Net  Receipts"  shall mean with  respect to a  particular  Product all
         monies  actually  received by Gizmondo from the license,  sale or other
         exploitation of such Product,  after  deducting the following:  (1) any
         amounts  payable to any  Wireless  Network  Operator,  Platform  owner,
         including  deductions made by the Wireless  Network  Operator or Device
         manufacturer;  (2) the actual returns attributable to such Product; and
         (3) taxes and other  governmental  charges actually paid or incurred in
         connection  with the sale of such Product (other than the income tax of
         Gizmondo).  For the avoidance of doubt, Gizmondo Net Receipts shall not
         be deemed to include monies derived or collected from the  distribution
         of the Product to End-Users by any third parties,  but shall refer only
         to those monies  actually  received by Gizmondo from such third parties
         after such third parties have retained or withheld any markups, revenue
         share  amounts,  or license or other fees due to them  pursuant  to the
         terms of Gizmondo's agreements with such third parties.

1.23     Minimum  Guarantee"  shall mean the  non-refundable,  fully  recoupable
         against  Earned  Royalties  guarantee  payable by Gizmondo to SCi under
         clause 6.2.

2.       LICENSE.

2.1      Grant of Rights.  Subject to the terms and conditions of this Agreement
         SCi grants to  Gizmondo  the  non-transferable,  terminable,  exclusive
         right and license  during the Term for each of the Games  specified  in
         the Game Exhibit (the "License") to:

         (a) develop and produce Products based on the Game and Game Content for
         use solely on Devices running on the Platform; and

         (b) Adapt or convert (port) the version of the Game supplied by SCi (on
         Gold Disc) to operate on the Gizmondo platform and to make such changes
         adaptations  and  adjustments  as may be  required  to render  the game
         operable and attractive on the Gizmondo  handheld  subject to the prior
         written consent of SCi or its Game Licensors.

         (c) advertise,  promote, market,  distribute and sub-distribute,  sell,
         license and sub-license such Products

                  (i) in the applicable Territory
                  (ii) either directly or through any Distribution Channel; and
                  (iii) solely to End-Users,  Distribution  Partners or Wireless
                  Network Operators,

         provided that
         (1)      all such  Distribution  Partners  are  subject to SCi's  prior
                  written approval (not to be unreasonably withheld or delayed),
         (2)      sub-licenses  to  Distribution   Partners  shall  be  only  as
                  necessary to allow  Distribution  Partners to  distribute  and
                  sell the Products to End-Users in the Territory,
         (3)      Gizmondo's  agreements with such  Distribution  Partners shall
                  contain  terms that are at least as  protective  of SCi's (and
                  its Game Licensors')  rights (including,  without  limitation,
                  its approval rights) as those contained in this Agreement, and
         (4)      Gizmondo shall at all times remain  primarily liable under the
                  terms of this  Agreement  for any actions or  omissions on the
                  part of such Distribution Partners. In converting the Games to
                  Products,  Gizmondo  may make such changes to the Games as are
                  required to accommodate the  capabilities  and requirements of
                  the Devices, Platforms and Wireless Networks.

         In  connection  with the  foregoing  License,  SCi  further  grants  to
         Gizmondo the limited right and license to the  applicable  Intellectual
         Property  Rights  in the Games or the  Games  Content  to carry out the
         purpose and intent thereof.

         Notwithstanding anything to the contrary, for purposes of this Section,
         nothing  herein  shall  prevent SCi from  publishing  the Game on other
         video games,  computer  systems,  hand held devices,  mobile devices or
         technologies  or from  publishing  any SCi game products other than the
         Games licensed to Gizmondo hereunder on the Platforms.

<PAGE>

2.2      Retained Rights.  For the avoidance of any doubt, the rights granted to
         Gizmondo in Section 2.1 shall be specifically  limited to the Platforms
         and shall not extend to any other platform  including,  but not limited
         to,  any of  the  following:  (a)  traditional  entertainment  software
         console platforms,  such as Sony PlayStation,  PlayStation 2, Sony PSP,
         Microsoft  Xbox,  and Nintendo  GameCube,  and all  successors  to such
         products;  (b) desktop,  laptop computer  systems,  such as PC Windows,
         Macintosh,  Linux or Lindows operating  systems  including  multiplayer
         online; (c) other hand-held electronic  dedicated gaming devices,  such
         as Nintendo  Game Boy Color and Game Boy  Advance,  Nintendo  DS, Tiger
         Electronic  hand-held games and mobile phones; (d) pay-per-play  arcade
         systems  and  other   forms  of   location-based   entertainment;   (e)
         interactive toys; (f) television, whether via cable, satellite, set-top
         boxes or other  on-demand  service and (g) any other device whether now
         known or subsequently developed .

2.3      Limited Publication  Rights.  Parties agree that Gizmondo has the right
         to publish on the  Devices  only.  Distribution  rights for any and all
         future  personal media players are subject to mutual  approval and good
         faith negotiations on the parts of both parties

2.4      OEM's.  Subject to SCi's prior written  approval  Gizmondo may install,
         pre-load or embed Products on the Device prior to sale,  subject to SCi
         receiving an  equivalent  Earned  Royalty as it would have had the Game
         been sold at retail at full retail price.

2.5      SCi  hereby  grants  to  Gizmondo  a  non-exclusive,  non-transferable,
         royalty-free,  personal  license  to  use  the  Licensed  Marks  and  a
         sublicense or the applicable third party game studio logos as specified
         in the  Game  Exhibits  during  the  Term,  according  to the  branding
         specifications in Exhibit C and other conditions  herein, and solely in
         connection with the development and  distribution of the Products based
         on the Games.  Subject to compliance by SCi with its warranties in this
         Agreement relating to the quality of the SCi Materials, Gizmondo agrees
         to  maintain  the  quality  of Product at a level that meets or exceeds
         standards of quality and performance generally accepted in the wireless
         gaming industry, and that is at least commensurate with the quality set
         forth in Section 4.5 and Exhibit B to this  Agreement.  Gizmondo agrees
         to fully  correct  and  remedy any  deficiencies  in its use of the SCi
         Licensed Marks or the Product within a reasonable  time upon receipt of
         notice  from  SCi.  Gizmondo  shall  cease any  further  use of the SCi
         Licensed Marks upon expiration or termination of this Agreement.

2.6      All rights to the SCi Licensed  Marks not expressly  granted herein are
         reserved by SCi. Gizmondo  acknowledges SCi's sole ownership of the SCi
         Licensed Marks, and all associated  goodwill,  and that SCi retains all
         right, title, and interest in such Licensed Marks. All goodwill arising
         from use of such  Licensed  Marks by  Gizmondo  will  inure to the sole
         benefit of SCi.  Gizmondo  will not use the SCi  Licensed  Marks in any
         manner that will  diminish or otherwise  damage SCi's  goodwill in such
         Licensed Marks. Gizmondo will not adopt, use, or register any corporate
         name, trade name, trademark, domain name, service mark or certification
         mark, or other  designation that violates SCi's rights in such Licensed
         Marks. SCi shall have the sole right to, and in its sole discretion may
         control any action concerning the SCi Licensed Marks.

3.       OWNERSHIP OF INTELLECTUAL PROPERTY.

3.1      Ownership  of Games and  Related  Rights.  Subject to the terms of this
         Agreement,  SCi (or as applicable,  its Game  Licensors),  shall at all
         times be and remain the sole and  exclusive  owner of the Games and all
         Intellectual  Property Rights pertaining thereto.  Without limiting the
         generality of the foregoing,  nothing in this Agreement shall be deemed
         to grant or assign to Gizmondo any proprietary or ownership interest or
         Intellectual  Property Rights in or to the Games other than the license
         rights set forth herein.

3.2      Gizmondo  Ownership  of Products  and Related  Rights.  Notwithstanding
         Section 2 hereof,  SCi  acknowledges  and agrees  that it has no right,
         title  and/or  interest in and to the  Products  and in and to the work
         product and other materials originally developed or created by Gizmondo
         either before or pursuant to this  Agreement to develop and produce the
         Products,  which  do not  involve,  include,  embody  or  constitute  a
         derivative  work of, and are not otherwise based on, any portion of the

<PAGE>

         software code  compromising  the Games,  including  (a) all  originally
         created  or  licensed  computer  software,   code,   routines,   tools,
         algorithms and other technology contained in or used in the development
         of  the  Products,  (b)  all  originally  created  art,  sound,  music,
         graphics,  and other assets and designs  embodied in the Products,  (c)
         the  technical  and/or  maintenance   documentation,   if  any,  of  or
         concerning the Products,  and (d) the related  instruction  manuals and
         packaging,  if  any,  for the  Products  (collectively,  the  "Gizmondo
         Materials").  Gizmondo (or as applicable,  its licensors) shall own all
         rights, title and interest, including all Intellectual Property Rights,
         in and to the Gizmondo Materials,  to the extent the Gizmondo Materials
         do not involve, include, embody or constitute a derivative work of, and
         are not otherwise based on, any portion of the SCi Materials.

3.3      No Reverse  Engineering.  Versions of the Game(s) provided to Gizmondo,
         unless otherwise specified in the applicable Game Exhibit,  shall be in
         their compiled  object code format and Gizmondo shall make no effort to
         discover or otherwise learn the source code for each Game. On a case by
         case basis, SCi may provide Gizmondo with source code for a Game in the
         event Gizmondo  demonstrates a good cause reason to require source code
         to complete a Product,  however,  prior to any  delivery of source code
         (at such time as mutually  agreed upon by the parties),  if the Product
         is  based  on a Game  developed  by a third  party,  Gizmondo  shall be
         required  to  execute  such Game  Developer's  nondisclosure  agreement
         and/or license agreements (the "Game Developer Documents") as requested
         by such Game  Developer.  Gizmondo  may  utilize  and study the design,
         performance  and  operation  of the Games  solely for the  purposes  of
         developing a Product.  Notwithstanding  the  foregoing,  Gizmondo shall
         not,  directly or indirectly,  reverse engineer or aid or assist in the
         reverse  engineering of all or any part of the Games except and only to
         the extent that such activity is expressly  permitted by applicable law
         notwithstanding  this  limitation.  In the event  applicable law grants
         Gizmondo the right to reverse engineer the Games  notwithstanding  this
         limitation,  Gizmondo  shall  provide SCi with written  notice prior to
         such reverse engineering  activity,  information  sufficient  regarding
         Gizmondo's intended method of reverse engineering,  its purpose and the
         legal  authority  for such  activity  and shall afford SCi a reasonable
         period of time before initiating such activity in order to evaluate the
         activity  and/or  challenge the reverse  engineering  activity with the
         appropriate legal authorities. Gizmondo shall refrain from such reverse
         engineering activity until such time as any legal challenge is resolved
         in Gizmondo's favor.  Notwithstanding  anything to the contrary, in the
         event  Gizmondo  chooses  to  reverse  engineer  any Game  without  SCi
         consent,  SCi may immediately  terminate this Agreement with no further
         obligation  to  Gizmondo.   Reverse   engineering   includes,   without
         limitation,  decompiling,  disassembly, sniffing, peeling semiconductor
         components, or otherwise deriving source code.

4.       DEVELOPMENT OF THE PRODUCTS.

4.1      SCi agrees to use its reasonable  endeavors to complete the development
         of the Games by the  dates  set out at  Schedule  F and to  deliver  to
         Gizmondo all  appropriate  materials to support porting of the Games to
         the  Devices,  provided  that SCi shall not be obliged  to deliver  any
         assets where such delivery is  prohibited  under the terms of any third
         party agreement.

4.2      In the event that SCi fails or is unable for any reason to deliver  the
         Gold Disc in relation to any of the Games then SCi and  Gizmondo  shall
         agree to  substitute  such Game with another game in the SCi current or
         forthcoming publication catalogue.

4.3      At its  discretion  but  subject  to the  approval  of SCi and its Game
         Licensors as set out in this  Agreement,  Gizmondo shall be entitled to
         port the Games to the Device or to develop the Products in either event
         at its sole cost and expense,  pursuant to the terms and  conditions of
         this Agreement. Except as expressly provided in this Agreement Gizmondo
         shall  assume  full   responsibility  for  the  creation,   development
         adaptation and production of the Products, which shall include, without
         limitation,  (a) designing creating adapting or modifying the technical
         specifications  for the Products,  (b) creating  modifying  adapting or
         emulating all computer code for the Products,  (c) creating adapting or
         modifying all audio and visual assets for the Products  except for such
         assets as may be reused and as are contained in the SCi Materials,  (d)
         acquiring and/or licensing any and all other  technology,  software and
         hardware needed for purposes of creating adapting  modifying  emulating
         and distributing  the Products,  and (e) conducting  quality  assurance
         testing of the Products.

<PAGE>

4.4      Third Party  Development.  In the event that  Gizmondo  seeks to hire a
         third party developer to develop a Product as specified  herein ("Third
         Party Developer"), Gizmondo shall, subject to SCi approval as specified
         herein,  enter into written agreements with such Third Party Developers
         that contain language substantially  equivalent to Section 3 and in any
         event are as protective of SCi's  Intellectual  Property  Rights as the
         terms  of  this  Agreement.   Gizmondo  shall  cause  all  Third  Party
         Developers  to  execute  SCi's  and/or  the  Game  Developer/Licensor's
         Nondisclosure  Agreement (and other relevant documents,  if requested).
         Any act or omission by any Third Party  Developer  shall be deemed that
         of Gizmondo for the purposes of this  Agreement  and Gizmondo  shall be
         jointly  and  severally  liable  for such acts or  omissions.  SCi must
         approve in writing all Third Party  Developers and development  work on
         any Product by such Third Party Developer as shall not begin until such
         written approval has been provided.

4.5      Completion  of  Products.  Gizmondo  agrees  to  use  its  commercially
         reasonable  efforts to complete the Products  within a reasonable  time
         after being supplied with the Gold Discs for each of the Games.

4.6      Progress Reports. For the purpose of facilitating SCi's approval of the
         Products as set forth in Section 4.6,  Gizmondo  shall submit  progress
         reports in connection with each "build" of the Product.  Gizmondo shall
         submit for SCi's  review and approval the final builds (as such term is
         commonly understood in the entertainment software industry) of the each
         Product.  Sci shall  consider  all such reports in good faith and shall
         provide reasonable assistance to Gizmondo in relation to the compliance
         with the reasonable quality standards of Sci.

4.7      Standard of  Development.  Gizmondo agrees that: (a) the Products shall
         be of the standard  customary to  high-quality  entertainment  software
         products  in  the  wireless/handheld   industry,  and  of  such  style,
         appearance, and according to the Quality Standards listed in Exhibit B;
         (b) the  Products  shall be  developed,  produced,  distributed,  sold,
         licensed,  advertised  and serviced in accordance  with all  applicable
         laws; and (c) the policy of sale, distribution,  and/or exploitation by
         Gizmondo shall be of the equivalent  standard customary to high-quality
         entertainment software products in the Wireless/Handheld industry.

4.8      Approvals.
         ----------

         4.8.1    Gizmondo  agrees  to submit  the  Products  and all  marketing
                  materials to be utilized in connection  with the  advertising,
                  marketing and promotion of the Products, to SCi for SCi's (and
                  its Game  Licensors')  prior approval or  disapproval  for the
                  purpose of SCi or it's Game Licensors determining whether such
                  "Products"   and  all   marketing   materials   maintain   the
                  agreed-upon   design   specifications  and  quality  standards
                  applicable  for such  items.  Gizmondo  will  comply  with the
                  obligations  required by SCi's Game  Licensors  with regard to
                  the Products and marketing  materials and will not release any
                  Product  or  marketing  materials  without  SCi's  or its Game
                  Licensors' prior written consent.

         4.8.2    Gizmondo  shall  submit  "builds"  of each  Product  for SCi's
                  approval at the following stages:

                  (i)      Prototype  Design  Document:  Outline of the  planned
                           deliverables  and expectations for a Prototype of the
                           Product.  This may be  preceded  by a "high  concept"
                           document submitted for approval
                  (ii)     Prototype Phase: as defined in Section 4.6.3 below
                  (iii)    Full Product Design document: Detailed description of
                           game concept and level design for each Platform
                  (iv)     First playable version:  First indication of what the
                           end user experience will be;
                  (v)      Code Complete version: All features implemented.  All
                           future software work dedicated to fixing bugs;
                  (vi)     Release Candidate  version:  Version submitted to SCi
                           of Product for release approval;

<PAGE>

                  (vii)    Commercial  Release  version:  Final  version that is
                           actually published.

         4.8.3    Prototype.  The Prototype should feature a playable experience
                  that can be used with a relatively  high degree of accuracy to
                  make  predictions  about the viability of the actual  Product.
                  The  deliverables  as outlined  below should be of  sufficient
                  quality and depth to achieve this purpose and inclusive of the
                  following at a minimum:

                  (i)   Prototype Binary

                        -   Primary  gameplay  and  display  engine for a target
                            Platform  agreed to by SCi  (WinCe.net) is viewable.
                            Performance optimizations have not been performed.
                        -   Primary gameplay elements are playable (e.g.,  drive
                            the  car,  place a unit,  move  the  character).  No
                            tuning has been performed. Secondary functionalities
                            (e.g., extra vehicle behavior,  extensive  character
                            moves) are not inclusive.
                        -   Key Playable Experience:  Binary able to demonstrate
                            the core mechanic or primary feature of the game.
                        -   Binary is  sufficiently  stable to review  the above
                            described elements.
                        -   Realized  character  art that is  representative  of
                            what will be seen in the final Product, which covers
                            at least the main character.  The art is to be shown
                            in WinCe.net format.

                  (ii)  Initial Design Document (GDD)

                        -   Core gameplay functionality  described sufficient to
                            understand the primary  gameplay  elements and their
                            gameplay  interactions.   Competitive  features  and
                            player proxy are also described.
                        -   Projected list of platform feature differences.
                        -   Projected list of tools and  technologies  needed to
                            realize the game as described.
                        -   Mitigated  Risks:   Gizmondo's  perceived  risks  in
                            taking this  particular  approach and thus not being
                            able to deliver in terms of originality, fun, etc.

                  (iii) Additional  Documentation  including  a  description  of
                        Prototype's features; what works and what doesn't.

         4.8.4    Once  SCi  gives  an  approval  for  submitted  materials  and
                  information about the proposed  Product,  it cannot retract or
                  modify that  approval and Gizmondo will have the right to rely
                  on such approval in proceeding to the  subsequent  development
                  stages  based  on  the  approved  materials  and  information,
                  provided there are no material  deviations,  modifications  or
                  other changes from the submitted materials and information.

         4.8.5    SCi shall use  reasonable  efforts to approve,  and to procure
                  that  SCi's  Game  Licensor's  approve,   "builds"  and  other
                  submissions submitted by Gizmondo within fifteen (15) business
                  days after receipt,  which approval shall not be  unreasonably
                  withheld,   provided  such  "builds"  and  other   submissions
                  maintain the  agreed-upon  design  specifications  and quality
                  standards  applicable for such items.  In the event SCi or its
                  Game Licensors  neither approves nor disapproves the submitted
                  material   within  such  fifteen  (15)  business  day  period,
                  Gizmondo  shall provide  written notice to SCi and SCi and its
                  Game Licensors shall have an additional five (5) business days
                  to approve or disapprove the submitted material.  In the event
                  SCi and/or its Game  Licensors  fail to approve or  disapprove
                  within such five (5) business  days,  the  submitted  material
                  shall be deemed  approved  unless  SCi  notifies  Gizmondo  in
                  writing  during such period that it has not received  approval
                  from  one or more of its  Game  Licensors  in  which  case the
                  submitted  material  will  not be  approved  until  such  Game
                  Licensor has given its approval and all applicable time limits

<PAGE>

                  in this  Agreement  shall  be  correspondingly  extended.  The
                  commercial  release  version of the Product and all  marketing
                  materials  must be approved by the  written  signature  of the
                  person(s)  designated by SCi in the Game Exhibit. In the event
                  SCi and/or its Game Licensors disapprove of a deliverable, SCi
                  shall provide Gizmondo with sufficient information in which to
                  discern  the  nature of the  disapproval  and  Gizmondo  shall
                  modify the deliverable prior to resubmission.  Gizmondo agrees
                  to make such changes as will be reasonably required to correct
                  any deficiencies  noted by SCi or its Game Licensors  promptly
                  upon receipt of such notice.  This  procedure will be repeated
                  with each submission  until SCi determines that its request(s)
                  for changes has been met. No  distribution  of any Products or
                  related  materials  may  occur  without  SCi's  and  its  Game
                  Licensors' prior written approval. Once approved, the Products
                  and related materials shall not deviate from the form in which
                  such items were approved.

4.9      Hardware.  Gizmondo  shall provide such  hardware and carrier  service,
         and/or  comparable  method of access to the Products as is necessary to
         facilitate SCi's review and approval of the Products.

4.10     Defects  Correction.  Gizmondo shall be responsible  for correcting all
         bugs and errors  found in the  Products as needed to have the  Products
         approved by SCi as specified herein and deemed ready for "code release"
         (i.e.,  the Product is in final form,  without any significant  bugs or
         errors,  and is  ready  to be  reproduced  into  units  for sale in the
         Territory).

4.11     SCi Materials. For each Game, SCi agrees to deliver to Gizmondo the SCi
         Materials as may be specified in the Game Exhibit for such Game.

4.12     Copyright  Acknowledgment.   Gizmondo  shall  include  the  appropriate
         copyright and trademark  acknowledgement in the credit screen, package,
         manual, marketing and promotional materials and paid advertisements for
         the Product as identified on the Game Exhibit.

4.13     Gizmondo  will  display  and  not  remove  or  alter  any   trademarks,
         copyrights  or notices  pertaining to the Games as provided by SCi, and
         reproduce  such  trademarks,  copyrights  and notices in all applicable
         advertising and marketing materials for the Products, including but not
         limited to applicable ratings symbols for each Products.  Gizmondo will
         comply  with  all   Entertainment   Software   Ratings  Board  ("ESRB")
         requirements and procedures, and equivalent applicable requirements and
         procedures of similar  ratings  organizations  in other  countries,  in
         connection  with its  distribution  and marketing of the Products.  The
         content and game play of the Product shall not  materially  differ from
         the  applicable  Game such that the Product  would  receive a different
         content rating than the Game in any jurisdiction.

4.14     Credit.
         ------

         4.14.1   Each  Product  shall be  co-branded  equally  with the SCi and
                  Gizmondo   brands  and  the  Game  developer  and  SCi's  Game
                  Licensor(s)  (if  applicable),  and bear the same title as the
                  Game. Use of SCi brands and logos will conform to the Branding
                  Specifications attached hereto as Exhibit C.

         4.14.2   Subject to the limitations  stated in Sections 4.6 and 11, the
                  parties shall  mutually  agree to a press  release  concerning
                  Gizmondo's publication of the Products that shall identify SCi
                  as the  original  publisher  of each of the  Games,  the  Game
                  Developer/Licensor  of each  applicable  Game, and Gizmondo as
                  the publisher of the Products.  The press  releases shall also
                  be subject to SCi's Game Licensor's approval where relevant.

         4.14.3   Subject to the  approval of SCi and its Game  Licensors  as to
                  all aspects of the  display or  presentation  of the  Licensed
                  Marks,   Gizmondo   shall   provide  SCi  with  the  trademark
                  attribution supplied to Gizmondo by SCi and give credit to SCi
                  and any Game  Licensors  on the back of the Product  packaging
                  and within the  Products in all areas where credit is given to
                  Gizmondo. Examples of such "in-game" credit include SCi's name
                  and logo in the splash screen upon "boot-up",  within the game
                  manual,  and in the credit  section of each Product.  Gizmondo
                  shall also include SCi's and any Game Licensor's name and logo
                  on  all   marketing   and   promotional   materials  and  paid

<PAGE>

                  advertisements in a manner that clearly  identifies SCi as the
                  publisher of the Game. Trademark  attribution for each Product
                  shall be included  in each Game  Exhibit or as provided by SCi
                  from time to time under this Agreement. In addition,  Gizmondo
                  shall grant credit to Game Developer/Licensor as follows or as
                  otherwise instructed by SCi on the Game Exhibit:

                  o    Game Developer/Licensor's name and logo within the manual
                       for the Product
                  o    Game Developer/Licensor's name within the credit  section
                       of the Product

         4.14.4   The  Products   shall   reference  all  credit  and  copyright
                  information  found in the original Games with the exception of
                  additions   or   deletions   agreed  to  in  writing  by  SCi.
                  Notwithstanding  the foregoing,  Gizmondo shall have the right
                  to credit the Third Party  Developers of the Products or third
                  parties who assist in the  development or  distribution of the
                  Products  provided  that such  credit is  consistent  with the
                  presentation of credits contained in the applicable Game.

5.       CERTIFICATION; TESTING.

5.1      Certification  And Testing.  Gizmondo shall,  as required,  submit each
         Product  for  testing  and  certification  by  an  appropriate  testing
         facility,   in-house   Quality   Assurance   department   or   Gizmondo
         certification  department.  All testing fees shall be paid by Gizmondo.
         In the event any  Product is not  certified  due to its failure to meet
         applicable  standards  set-forth  by the  certifying  entity  or  body,
         Gizmondo  shall at its sole  expense,  make such  revisions and further
         modifications until such time as the Product is certified.

5.2      Technical Support.  Gizmondo or a party designated by Gizmondo shall be
         responsible for all customer support for the Product.  SCi acknowledges
         that  Gizmondo  may  rely  on  its  Wireless   Network   Operators  and
         Distribution Partners to provide support,  subject to the terms of this
         Agreement. Gizmondo will, through clear and conspicuous language in the
         Product and on the packaging and documentation for the Product,  notify
         users of Products how to obtain  technical  support for the Product and
         that SCi is not responsible for providing support for such Product. SCi
         shall, however, at its own expense use reasonable commercial endeavours
         to provide  Gizmondo with such support in relation to the SCi Materials
         as Gizmondo may  reasonably  require for the purpose of performing  its
         obligations under this Clause provided that the information required by
         Gizmondo is readily available to SCi and/or its Game Developers.

6.       FINANCIAL TERMS.

6.1      Product  Price.  Gizmondo  shall  promptly  inform  SCi of  all  prices
         applicable to the  distribution  and sale of the Products (the "Product
         Price")  provided that the Product Price is  substantially  the same as
         similar quality  products and subject to SCi's prior written  approval,
         not to be  unreasonably  withheld.  In addition,  Gizmondo,  a hardware
         manufacturer,  Merchant or a Distribution  Partner shall have the right
         subject  to any  approval  rights of  Gizmondo,  if any,  to reduce the
         Product Price or offer discounts to third parties.

6.2      Minimum Guarantee.  Gizmondo shall pay SCi a Minimum Guarantee totaling
         seven hundred and fifty  thousand  pounds  (750,000  GBP)  allocated by
         Product as follows:

         Game Title                          Minimum Guarantee
         ----------                          -----------------

         The  Great Escape                      40,000 GBP
         Conflict 1                             94,000 GBP
         Conflict 2                             94,000 GBP
         Conflict 3                             94,000 GBP
         Conflict 4                             94,000 GBP
         Highlander                             40,000 GBP
         Richard Burns Rally                    40,000 GBP
         Carmageddon TDR 2000                   40,000 GBP
         Carmageddon TV                         94,000 GBP
         Midway                                 40,000 GBP
         Reservoir Dogs                         40,000 GBP
         Roll Call                              40,000 GBP

<PAGE>

         The  Minimum  Guarantee  shall  be paid to SCi on the  Effective  Date.
         Subject to the provisions of this Agreement,  the Minimum Guarantee for
         each  Product  shall be  non-refundable  but fully  recoupable  against
         Earned Royalties for each Product.

6.4      With respect to each Product,  Gizmondo  agrees to pay to SCi an earned
         royalty (the "Earned Royalty or Royalties") of 50% of Net Receipts.

6.5      Royalty Statements.  Gizmondo will provide royalty statements including
         quarterly  unit  sales and  revenue  reporting  of  sell-in to Sci with
         detail by stock-keeping  unit (SKU), for each geographic  region in the
         Territory,  with such  reports  delivered to Sci within forty five (45)
         days after the end of each fiscal quarter after the  commercial  launch
         of any Product with Earned  Royalties  shown  thereby to be due to Sci.
         Payment of Earned  Royalties shall be in pounds sterling within fifteen
         (15)  business  days of receipt of  corresponding  invoice and shall be
         paid according to the procedure  identified in the attached  Exhibit D.
         The royalty  statement  shall be based upon units  distributed  and not
         returned  for the quarter  then ended,  and shall  contain  information
         sufficient  to discern how the royalty  payment  was  computed.  Earned
         Royalties are payable on the number of physical  copies or downloads of
         the Products sold less the number of returns. Gizmondo may maintain and
         withhold  from payment  Earned  Royalties  shown to have accrued on any
         statement reasonable reserves (not exceeding 15%) of the Earned Royalty
         payable in respect of each fiscal  quarter in respect of Products which
         may be returned  ("Returns")  and will  subsequently  make  adjustments
         based on the number of Products  actually  returned,  provided that any
         unused  reserve  shall be  released  within the second  fiscal  quarter
         following that in which it was first maintained

6.6      Audits.  For at least two years after the Term,  Gizmondo will maintain
         accurate  books and records that report the sales of each Product.  Sci
         shall  have the right to  designate  an  independent  certified  public
         accountant  on  Sci's  behalf  (who  shall  not  be  compensated  on  a
         contingent fee basis), at Sci's own expense, to examine those books and
         records  solely for the purpose of  verifying  the  accuracy of royalty
         statements  rendered by Gizmondo  hereunder.  Sci's accountant may only
         make such examination during regular business hours and upon reasonable
         notice  and  in  a  manner  that  is  not  unreasonably  disruptive  to
         Gizmondo's  business.  Each  examination  will take  place at the place
         Gizmondo normally keeps the books and records to be examined. Sci shall
         be limited to one (1) such  examination  each twelve (12) months  while
         the applicable Product is being commercially  exploited by Gizmondo and
         for 12 months  thereafter.  Gizmondo shall have no obligation to permit
         Sci,  nor shall Sci have any  right,  to examine  Gizmondo  `s books or
         records  relating  to any  particular  statement  more than once unless
         there is an unresolved  issue.  Sci  acknowledges  that Gizmondo claims
         that  Gizmondo's  books and records contain  confidential  trade secret
         information.   Neither  Sci  nor  Sci's  independent  certified  public
         accountant or other  representatives  shall  communicate at any time or
         use on behalf of any  other  person,  firm or  corporation  other  than
         representatives of Sci any facts or information obtained as a result of
         any such examination of Gizmondo's books and records. Further, prior to
         the  commencement of any examination of Gizmondo's books and records in
         accordance  with the  provisions of this  Section,  Sci shall cause the
         independent certified public accountant engaged by Sci to sign a letter
         and/or agreement in a form approved by Gizmondo which  acknowledges his
         or her agreement  (and the agreement of his or her firm) to be bound by
         the  foregoing.  The  rights  granted  to Sci  in  this  Section  shall
         constitute  Sci's sole and exclusive right to examine Gizmondo `s books
         and records.  If Sci  establishes as a result of an audit  conducted by
         Sci that there is an underpayment in the royalty payments due to Sci of
         five per cent (5%) or more for the period  covered  by the audit,  then
         Gizmondo  shall  pay  to  Sci,  upon  settlement  of the  audit,  Sci's
         accountable   auditor's   fees   actually   paid   together   with  the
         underpayment.

<PAGE>

6.7      In the event  that  Gizmondo  is late in making  any  payment or if Sci
         establishes  as a result of an audit  conducted by Sci that there is an
         underpayment in the royalty payments due to Sci of five percent (5%) or
         more for the period  covered by the audit,  then Gizmondo  shall pay to
         Sci interest  from the due date of such monies until the day payment is
         received at the rate of 8% such  interest to run from day to day and to
         accrue after as well as before any judgment.

7.       MARKETING AND DISTRIBUTION

7.1      At Gizmondo's  sole expense and subject to Sci's approvals as set forth
         in Section 4, Gizmondo  shall  prepare and execute a marketing  plan in
         support of the sales effort for the Products.  Gizmondo  shall spend on
         its  marketing,  and  promotional  efforts for each Product,  an amount
         commensurate  with  amounts  spent by  Gizmondo  on its other  top-tier
         products. Gizmondo shall use commercially reasonable efforts to market,
         promote and distribute the Window's  mobile versions of the Products in
         the Territory on no less favorable terms as Gizmondo markets,  promotes
         and distributes other  interactive  games distributed by Gizmondo.  Sci
         shall have approval of the marketing plan, to be obtained prior to, and
         as a  condition  of, a  Product  being  certified  by Sci as ready  for
         release to manufacturing.

7.2      EULA.  Gizmondo shall include an End User License Agreement (EULA) with
         the Products in paper or electronic  form. The EULA shall indicate that
         Gizmondo is the  licensor  of the  Product and the  supplier of Product
         warranties  and support.  The  Products  shall be licensed to End Users
         under terms as protective of Sci's Intellectual  Property Rights as the
         terms  specified  herein,  except in no event  will the EULA  grant any
         rights to End Users  beyond  the  right to use the  Product  as a game.
         Product support  information shall include,  at a minimum Gizmondo's or
         other  designated  partner or operator web site and e-mail  address for
         end users to use to obtain  support for the  Product.  Sci must approve
         any  material  changes  to the EULA in writing  that may  affect  Sci's
         rights under this Agreement.

7.3      Undertaking  Penetration in Distribution  Channels.  Gizmondo shall use
         its  commercially  reasonable  efforts  to  cause  the  Products  to be
         distributed  in at  least  ninety  percent  (90%)  of the  Distribution
         Channel  in  which  Gizmondo  normally  distributes  consumer  software
         products in the applicable Territory

7.4      Gizmondo grants to Sci the unlimited right to copy, use during the Term
         and distribute to Sci employees and contractors  the Gizmondo  versions
         of Products for  reference,  promotions and the like but not for resale
         or commercial exploitation

7.5      Gizmondo  shall  provide to Sci at least (i) thirty (30) free copies of
         each  retail  version  of a Product  for each  Platform  from the first
         manufacturing run of such Product; and (ii) thirty (30) free simulators
         to be able to play non retail  versions of a Product for each  platform
         upon  commercial  release.  Sci shall  notify  Gizmondo  regarding  any
         commitment  it may have to  provide  copies  to any Game  Licensor  and
         Gizmondo shall provide Sci with such copies.

7.6      Gizmondo  will provide Sci with three (3)  pre-production  units of the
         Device and fifteen (15)  commercial  retail versions of the Device when
         each such Device first becomes available.

7.7      Gizmondo  shall  include on its website or webpage for a Product a link
         to the applicable Game website or webpage as designated by Sci.

7.8      Sci shall use  commercially  reasonable  efforts in its  discretion  to
         cross promote the Products based on the Games.

8.       TERMINATION.

8.1      Term.  This  Agreement  will  continue in full force and effect for the
         Term unless terminated earlier as set forth below.

<PAGE>

8.2      Termination for Cause. A party hereto which is not in default or breach
         of this Agreement may terminate this Agreement as it relates to a given
         Game  licensed  hereunder  by written  notice to the other party at any
         time prior to its original  expiration  date (as may be extended)  upon
         the  occurrence  of any of the  following  events  (each an  "Event  of
         Default"):

         27   The   breach  or  default  of  any   material   term,   agreement,
              representation, warranty, covenant or obligation set forth in this
              Agreement as to such Game,  related materials or Products and such
              breach or default  continues  uncured  for a period of thirty (30)
              calendar days  following  the receipt by the breaching  party of a
              written notice thereof; or

         (ii)     If either party becomes insolvent,  files or has filed against
                  it a petition under any bankruptcy law (which, if involuntary,
                  is unresolved  after sixty (60) 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

         Notwithstanding  the  foregoing,  the  parties  agree that a good faith
         disagreement  as to the amount of any payments due under this Agreement
         will not be considered a breach of this Agreement.

8.3      Partial  Termination for Loss of Product  Distribution  Rights.  In the
         event Sci loses the right to grant to Gizmondo  the rights with respect
         to any Sci Materials,  Sci may immediately terminate the rights granted
         to  Gizmondo  for  such Sci  Materials  and the  associated  Product(s)
         without  effect  on the  rights  related  to other  Sci  Materials  and
         associated  Product(s),  and, if so indicated by Sci due to its loss of
         rights,  without a Sell Off  Period  for such  affected  Product(s)  as
         specified  in Section 8.5. If any Minimum  Guarantees  for the affected
         Product(s) have yet to be fully recouped by Gizmondo,  Sci will replace
         the  affected  Product(s)  with  comparable  product(s)  acceptable  to
         Gizmondo.

8.4      Enforcement Right Without  Termination.  Without limiting the foregoing
         or anything to the  contrary  contained  herein,  SCI's  breach of this
         Agreement  shall not cause this  Agreement and the rights  hereunder to
         terminate unless Gizmondo  specifically  elects in writing to terminate
         the  Agreement.  Without  limiting  the  foregoing  or  anything to the
         contrary  contained  herein,  Gizmondo's breach of this Agreement shall
         not cause this Agreement and the rights  hereunder to terminate  unless
         Sci specifically elects in writing to terminate the Agreement.

8.5      Effect of Expiration or Termination.  The parties agree that in case of
         expiration  or early  termination  of this  Agreement,  except  if such
         termination is due to a breach of this Agreement by Gizmondo:

         27   Gizmondo  shall have (i) one  hundred  eighty  (180) days from the
              date of expiration or termination to sell packaged retail versions
              of  the  Product  already  in  inventory  prior  to  the  date  of
              termination; and (ii) ninety (90) days from the date of expiration
              or  termination  to  continue  to offer  download  versions of the
              Product via electronic distribution (each period collectively, the
              "Sell Off Period");

         (ii)     Except as otherwise set forth in this  Agreement,  the parties
                  shall have no further  obligations  to one another  under this
                  Agreement.

8.6      Survival of Certain Obligations. Subject to the terms of this Agreement
         to the  contrary,  Sections  2.7, 3, 6.6 and 9 through 14 shall survive
         the termination or expiration of this Agreement.

9.       REPRESENTATIONS, WARRANTIES AND COVENANTS.

9.1      Representations,  Warranties  and  Covenants  of Sci.  Sci  represents,
         warrants and  covenants  that:  (i) Sci is duly  incorporated,  validly
         existing and in good  standing  under the laws of the  jurisdiction  in
         which it is incorporated, and that it has the full rights, power, legal
         capacity and authority to enter into this  Agreement,  and to carry out

<PAGE>

         the terms  hereof;  (ii) this  Agreement  has been executed by its duly
         authorized   representative  and  is  a  valid,   legally  binding  and
         enforceable  obligation  of Sci;  (iii) Sci is either  the owner of the
         Games, the Sci Materials including the Game Content, the Licensed Marks
         (in  countries  of the  Territory  in which  such  Licensed  Marks  are
         registered,  as  specified  in the  applicable  Game  Exhibit)  and all
         Intellectual  Property  Rights  therein or has procured  all  necessary
         rights and  licenses  from the owners of such  rights to enter into and
         carry out the terms of this Agreement;  (iv) the Games and Game Content
         have not been  sold,  assigned,  leased,  licensed  or in any other way
         disposed  of by Sci or  mortgaged,  pledged or  encumbered  by Sci in a
         manner that would  violate the  exclusive  license  granted to Gizmondo
         hereunder;  and (v) Sci will comply in all material  respects  with all
         applicable laws, statutes and regulations in performing its obligations
         under this Agreement.

9.2      Representations  and  Warranties  of  Gizmondo.   Gizmondo  represents,
         warrants and covenants that:

         (i)      It is duly incorporated, validly existing and in good standing
                  under   the   laws  of  the   jurisdiction   in  which  it  is
                  incorporated,  and that it has the full rights,  power,  legal
                  capacity and  authority to enter into this  Agreement,  and to
                  carry out the terms hereof;

         (ii)     this  Agreement  has  been  executed  by its  duly  authorized
                  representative and is a valid, legally binding and enforceable
                  obligation of Gizmondo;

         (iii)    Gizmondo  has the  full  rights,  power,  legal  capacity  and
                  authority to enter into this  Agreement,  and to carry out the
                  terms  hereof;  and materials  furnished by Gizmondo,  if any,
                  under  this  Agreement,  do not or will not  infringe  upon or
                  otherwise violate the rights of any third party;

         (iv)     Gizmondo  will  comply  in  all  material  respects  with  all
                  applicable laws,  statutes and regulations in distributing the
                  Products under this Agreement;

         (v)      Gizmondo  has full  power  and  authority  to  enter  into and
                  perform this Agreement  without approval from any governmental
                  entity or third party, and that such ability is not limited or
                  restricted by any agreements or understanding between Gizmondo
                  and any other person or company;

         (vi)     Gizmondo and its  affiliated  companies  have the know-how and
                  experience  to develop the  Products and are  otherwise  fully
                  capable of performing the obligations under this Agreement, or
                  will engage  Third Party  Developers  approved by Sci who have
                  such know-how, experience and capability;

         (vii)    Gizmondo  shall  maintain  sufficient  insurance  coverage  to
                  enable it to meet its  obligations  created by this  Agreement
                  and by law. Without limiting the foregoing,  Gizmondo warrants
                  that such  insurance  shall  include  the  following  lines of
                  coverage  to  the  extent  the  Agreement   creates  exposures
                  generally  covered  by these  insurance  policies:  Commercial
                  General Liability, product liability and Employer's Liability.

          (viii)  The  Products,  computer  code,  technology,  information  and
                  materials  created,  developed or used by Gizmondo pursuant to
                  this Agreement, other than the Game Content, will not infringe
                  upon or misappropriate the Intellectual Property Rights or any
                  other legal rights of any third  party,  and should any aspect
                  of  thereof,   or  such  other  computer   code,   technology,
                  information  or  materials  created or  developed  by Gizmondo
                  pursuant to this Agreement,  become,  or, in Sci's  reasonable
                  opinion,  is likely to become,  the object of any infringement
                  or misappropriation  claim or suit, Gizmondo will use its best
                  efforts to procure,  at Gizmondo's  expense,  the right to use
                  such computer  code,  technology,  information or materials in
                  all respects, or to replace or modify the affected material to
                  make  it  non-infringing,  and  if  it is  unable  to do so at
                  reasonable  expense,  it shall be  entitled to  surrender  its
                  rights  under this  Agreement  with  respect to the Product or
                  Products in question.

<PAGE>

10.      INDEMNIFICATION.

10.1     Indemnification by Sci. Sci hereby agrees to indemnify, defend and hold
         harmless  Gizmondo  from  and  against  any  and  all  suits,   losses,
         liabilities,  damages, awards, claims, settlements, costs and expenses,
         including  reasonable  attorneys'  fees,  arising  out of or  otherwise
         relating  to a breach  by Sci of its  warranties,  representations  and
         covenants contained in this Agreement.

10.2     Indemnification  by  Gizmondo.  Gizmondo  hereby  agrees to  indemnify,
         defend  and  hold  harmless  Sci  against  any and all  suits,  losses,
         liabilities,  damages, awards, claims, settlements, costs and expenses,
         including  reasonable  attorneys'  fees,  arising  out of or  otherwise
         relating to a breach by Gizmondo of its warranties, representations and
         covenants contained in this Agreement.

10.3     Limitation On Indemnification. Notwithstanding this Section 10, neither
         party shall have  obligation  to  indemnify  the other if the Claim for
         which  indemnification  is  sought  arises  out  of a  breach  of  this
         Agreement  or of a  representation,  warranty or  covenant  made by the
         party seeking indemnification.

10.4     Notice of Claim. In the event either party wishes to assert a claim for
         indemnification  hereunder (the "Indemnified  Party"), it shall deliver
         written   notice  (a  "Claims   Notice")   to  the  other   party  (the
         "Indemnifying Party"), specifying the facts constituting the basis for,
         and the amount (if known) of the claim asserted.

10.5     Right to Contest Claims of Third Parties.

         10.5.1   If an Indemnified Party asserts,  or may in the future seek to
                  assert, a claim for  indemnification  hereunder because of any
                  action,  cause of action or suit  brought  by any person not a
                  party to this  Agreement (a "Third Party  Claimant")  that may
                  result in a loss with respect to which the  Indemnified  Party
                  would be entitled to indemnification  pursuant to this Section
                  (an "Asserted Liability"), the Indemnified Party shall deliver
                  to  the  Indemnifying  Party  a  Claims  Notice  with  respect
                  thereto,  which Claims  Notice shall,  in accordance  with the
                  provisions of Section 10.4 hereof, be delivered as promptly as
                  practicable  after an action in connection  with such Asserted
                  Liability is commenced against the Indemnified Party.

         10.5.2   The  Indemnifying  Party  shall have the right,  upon  written
                  notice to the  Indemnified  Party,  to  investigate,  contest,
                  defend or settle any Asserted  Liability  that may result in a
                  loss with respect to which the  Indemnified  Party is entitled
                  to indemnification pursuant to this Section; provided that the
                  Indemnified  Party may, at its option and at its own  expense,
                  participate  in  the  investigation,  contesting,  defense  or
                  settlement   of   any   such   Asserted    Liability   through
                  representatives and counsel of its own; and, provided further,
                  that the  Indemnifying  Party  shall not settle  any  Asserted
                  Liability unless such settlement  provides as an unconditional
                  term an  immediate  release of the  Indemnified  Party for all
                  liability  with respect to such  Asserted  Liability,  and the
                  Indemnified  Party has  consented  to the other  terms of such
                  settlement.  If  requested  by  the  Indemnifying  Party,  the
                  Indemnified  Party  will,  at the sole cost and expense of the
                  Indemnifying Party,  cooperate with reasonable requests of the
                  Indemnifying  Party and its counsel in contesting any Asserted
                  Liability,  including,  if  appropriate  and  related  to  the
                  Asserted  Liability  in question,  in making any  counterclaim
                  against  the  Third  Party  Claimant,  or any  cross-complaint
                  against any Person  (other than the  Indemnified  Party or its
                  Affiliates).  If the Indemnifying Party fails to undertake the
                  defense of the Asserted  Liability  reasonably  promptly,  the
                  Indemnified  Party may, at its option and at the  Indemnifying
                  Party's  expense,  to  do  so  in  such  manner  as  it  deems
                  appropriate;  provided,  however,  that the Indemnified  Party
                  shall not settle or  compromise  any  Asserted  Liability  for
                  which it seeks  indemnification  hereunder  without  the prior
                  written consent of the Indemnifying  Party (which shall not be
                  unreasonably withheld or delayed).

<PAGE>

         10.5.3   The  Indemnifying  Party may  participate in (but not control)
                  the defense of any Asserted  Liability that it has not elected
                  to defend with its own counsel and at its own expense.

         10.5.4   The  Indemnifying  Party and the Indemnified  Party shall make
                  mutually  available to each other all relevant  information in
                  their   possession   not   protected   under   confidentiality
                  agreements  relating to any Asserted  Liability (except to the
                  extent   that  such   action   would   result  in  a  loss  of
                  attorney-client privilege or would violate any applicable law)
                  and shall cooperate with each other in the defense thereof.

10.6     EXCEPT  FOR THE  PARTIES'  INDEMNIFICATION  OBLIGATIONS  SET  FORTH  IN
         SECTION 10, IN NO EVENT SHALL  EITHER  PARTY BE LIABLE FOR  INCIDENTAL,
         EXEMPLARY,  PUNITIVE,  SPECIAL OR CONSEQUENTIAL  DAMAGES OF ANY KIND OR
         THE LOSS OF ANTICIPATED PROFITS INCURRED OR SUFFERED BY THE OTHER PARTY
         ARISING  FROM ANY  BREACH OF THIS  AGREEMENT.  IN NO EVENT  WILL  SCI'S
         AGGREGATE LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNT OF FEES PAID
         TO SCI HEREUNDER.  NOTHING IN THIS EXCLUSION  SHALL EXCLUDE  LIABIILITY
         FOR FRAUD.

11.      CONFIDENTIALITY.

11.1     The parties to this Agreement  recognize  that, in connection  with the
         performance of this  Agreement,  each of them may disclose to the other
         information  about the disclosing  party's business or activities which
         the disclosing  party considers  proprietary and  confidential.  All of
         such proprietary and  confidential  information of the disclosing party
         (which shall include, without limitation, this Agreement, all business,
         financial  and  technical   information  of  a  party,   identities  of
         customers,  clients or  licensees,  proprietary  software  code and any
         other information  whether oral or written which is not generally known
         or available to the public) is hereinafter referred to as "Confidential
         Information."

11.2     The party who receives any Confidential  Information agrees to maintain
         the confidential status for such Confidential  Information,  not to use
         any  such  Confidential  Information  for any  purpose  other  than the
         purpose for which it was originally  disclosed to the receiving  party,
         and not to disclose any of such  Confidential  Information to any third
         party.

11.3     All terms and conditions of this Agreement shall be deemed Confidential
         Information  as  defined  herein.  In  the  event  Gizmondo   transfers
         Confidential   Information   to  other  parties   (e.g.,   Third  Party
         Developers)  as allowed  under this  Agreement,  that party shall enter
         into  agreements  with such  parties  which  protect  the  Confidential
         Information  of Sci to no less a degree  than it is  protected  herein.
         Without  limiting  the  foregoing,  all  terms and  conditions  of this
         Agreement shall be considered  confidential  and shall not be disclosed
         (except to either  party's  attorneys or  accountants on a need-to-know
         basis) without the prior written consent of the other party.

11.2     Press-Release.  The parties shall issue a press release announcing this
         relationship provided that such press release shall be subject to their
         mutual approval

11.3     Injunctive Relief. Each party further  acknowledges and agrees that, in
         the event of a breach or threatened  breach of this Section,  the other
         party may have no adequate remedy in money or damages and, accordingly,
         shall be entitled to seek  preliminary,  permanent and other injunctive
         relief.

11.4     Non-Impairment. Nothing in this Agreement will affect any obligation of
         either  party  to  maintain  the  confidentiality  of a  third  party's
         confidential  information.  Nothing in this  Agreement  will impair the
         right of either party to use, develop or market technologies,  ideas or
         products  similar  to those  of the  other  party so long as such  use,
         development or marketing does not infringe on the Intellectual Property
         Rights of the other party.

<PAGE>

12.      PROTECTION OF PROPRIETARY RIGHTS.

12.1     Third Party Infringement. If either party hereto becomes aware that any
         Product or Game Content  governed by this Agreement has been or will be
         infringed,  such  party  shall  promptly  notify  the other  thereof in
         writing and the parties  shall  promptly  seek to mutually  determine a
         joint  course of action  with  respect to said  infringement.  If joint
         action is undertaken,  the expenses incurred by each party will be paid
         off the top from any recovery  received in connection  with such action
         and the remainder of such  recovery  shall then be split by the parties
         in  proportion  to their  expenses for such  action.  If,  however,  no
         mutually  acceptable  basis for joint  action is agreed  upon  within a
         reasonable period of time and Gizmondo  reasonably believes that action
         is required to protect its rights,  Gizmondo may take action in its own
         name and Sci shall  cooperate,  including with respect to the issues of
         standing and venue, with Gizmondo in connection with the prosecution of
         such action at Sci's expense and reasonable  request.  If, however,  no
         mutually  acceptable  basis for joint  action is agreed  upon  within a
         reasonable  period  of time  and  Gizmondo  fails to take  action  in a
         reasonable  amount of time  thereafter,  Sci may take action in its own
         name, and Gizmondo shall cooperate, including with respect to issues of
         standing and venue, with Sci in connection with the prosecution of such
         action at Sci's expense and reasonable request. The party who commences
         any such unilateral  action shall be entitled to recover its actual out
         of pocket  costs and  expenses  associated  with such  action  with the
         balance retained by Gizmondo and deemed Net Receipts.

12.2     Third Party Claims. Gizmondo will promptly notify Sci in writing of any
         legal  proceeding  instituted,  or written claim or demand asserted by,
         any third party against  Gizmondo with respect to the  infringement  of
         any  Intellectual  Property Right,  which is alleged to result from the
         license,  sale or use of the Game  Content  by  Gizmondo.  Such a claim
         shall be deemed a breach of Sci's representations and warranties.

13.      MISCELLANEOUS.

13.1     Public  Announcements.  Neither party will make any public announcement
         in relation to this Agreement  without the express  written  consent of
         the other.

13.2     Assignment.  Gizmondo  may not assign  this  Agreement  or any  portion
         thereof,  to any third party other than Gizmondo  Affiliates unless Sci
         expressly  consents to such  assignment in writing,  such consent shall
         not be unreasonably withheld.

13.3     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 all 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  (5)  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 (30) days.

13.4     Severability. In the event that any provision in this Agreement will be
         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.

13.5     Notice.  Any notice  herein  required or  permitted to be given will be
         given in writing and may be delivered  personally to any officer of Sci
         or Gizmondo,  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  Section.  A notice  will be deemed  given
         three (3) days after deposit if by express courier, five (5) days after

<PAGE>

         deposit if by regular mail, or upon transmission if by facsimile.

          If to Gizmondo:

          With a copy to:    Gizmondo Europe Ltd
                             1 Meadow Gate Avenue
                             Farnborough Business Park
                             Farnborough
                             Hants
                             GU14 6FG
                             ENGLAND
                             Attention: Global Operations Manager, Gizmondo Ltd.

          If to Sci:         Sci Games Limited
                             11 Ivory House
                             Plantation Wharf
                             London SW11 3TN

                             Fax No:  020 7924 3419
                             Attn:    Head of Legal

13.6     Independent   Contractors.   The   parties   hereto   are   independent
         contractors.  Sci 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 be entitled to receive any benefits provided by the
         other party to such party's  employees.  Neither Gizmondo nor Sci 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 attorneys' fees.

13.7     Governing  Law  and  Venue.  This  Agreement  shall  be  construed  and
         controlled  by  English  law and the  parties  shall be  subject to the
         non-exclusive 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 attorney's fees, costs and other expenses

13.8     Headings   and   Presumptions.   The   headings  of  the  sections  and
         sub-sections  of this Agreement are provided for  convenience  only and
         will not be used to limit or construe the  contents of this  Agreement.
         As this  Agreement is a negotiated  agreement  reviewed by each party's
         legal counsel and there will be no presumption for or against one party
         on the ground that the other party was  responsible  for preparing this
         Agreement or any part of it.

13.9     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.

13.10    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.

13.11    Complete  Agreement,  Waiver, and Modification.  This Agreement and the
         Schedule  attached  hereto   constitutes  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

<PAGE>

         binding   unless  it  is  in   writing   and   signed   by   authorized
         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.

<PAGE>

ACCEPTED AND AGREED TO:

FOR AND ON BEHALF OF                            FOR AND ON BEHALF OF
GIZMONDO EUROPE LTD.                            SCI GAMES LIMITED

By:  _________________________                  By:  _________________________

Its: _________________________                  Its: _________________________

Date: ________________________                  Date: ________________________

<PAGE>

                                    EXHIBIT A
                                    ---------

                               GAME EXHIBIT FORMAT
                               -------------------

Game Title and Version:

Developer:

Product:

Platform:

U.K. Release Date:

U.S Release Date:

Projected Sales Figures:

Countries of Licensed Mark Registration:

Rights Restrictions:

Third Party Approvals:

Content provided to Gizmondo (code, third party content, music, etc):

Licensed Marks:

Game Title Presentation

Studio Logo

Sci Attributions:

Third Party Credit Obligations:

Development Schedule:

<PAGE>

                                    EXHIBIT B
                                    ---------

                                QUALITY STANDARDS
                                -----------------

(1)      The  Product  shall  appear,  operate  and  perform in all  substantial
         respects  consistent with the final design  specifications  approved by
         Sci for the Product.

(2)      The  Product  shall be of similar  quality and  playability  to that of
         other games published by Gizmondo on the same platform.

(3)      The Product  shall  qualify for an ESRB  rating or  equivalent  content
         rating no more restrictive than the rating designated for the Game.

(4)      In developing the Product,  Gizmondo shall ensure that the Product runs
         on and is fully  compatible  with the latest  version of the applicable
         Platform,  and  Gizmondo  shall  comply  with Sci's logo  certification
         requirements  for  applications  through the  Designed  for Windows for
         WinCe.net logo programs.

<PAGE>

                                    EXHIBIT C

                             BRANDING SPECIFICATIONS
                             -----------------------

Branding Specifications:

1.       Gizmondo  may  use  the  Licensed  Marks  only  on  Product  packaging,
         documentation and marketing  materials in accordance with the Agreement
         and specifications below.

2.       Gizmondo  may use the  Licensed  Marks in the  manner set forth on each
         game  exhibit  showing the  specific  artwork  used in relation to that
         title. Artwork for each title is listed under "Game Title Presentation"
         and artwork for the Studio is listed under "Studio Logo."

3.       Gizmondo's  name,  logo or trademark must appear on any materials where
         the Licensed Marks are used and must clearly identify the source of the
         Products as Gizmondo.

4.       Licensed  Marks may not be used in any manner that  expresses  or might
         imply Sci's affiliation,  sponsorship,  endorsement,  certification, or
         approval, other than as contemplated by the Agreement.

5.       Except as expressly  licensed in the Agreement,  Licensed Marks may not
         be included in any non-Sci trade or business name, domain name, product
         or  service  name,  logo,  trade  dress,   design,   slogan,  or  other
         trademarks.

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

7.       Gizmondo  shall mark the first and most  prominent  use of the Licensed
         Marks in the Product,  including on packaging  and in  advertising  and
         marketing materials, with the trademark symbols provided by Sci on each
         Game Exhibit or other appropriate trademark designations set forth from
         time to time by Sci.

Additional specifications for use of the logos:

1.       To properly state the logos, a minimum  clearance between the logos and
         other elements must be maintained. 1/8 inch of minimum clearance should
         be kept between each logo and other elements on all sides of the logos.
         The  logo  may  not be used  as a  feature  or  design  element  in any
         materials.

2.       Gizmondo  may use the logos only as provided  by Sci.  Except for size,
         Gizmondo may not alter the logos in any manner,  including proportions,
         colors,  elements,  etc.,  or animate,  morph or otherwise  distort its
         perspective or two-dimensional appearance.

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

4.       Use only approved Sci logo artwork.

5        The logos must always be accompanied by the applicable trademark symbol
         ((TM)or(R)).

6        The logos must only appear in a horizontal position.

7        Sci shall  notify to Gizmondo any other  requirements  specified by its
         Game Licensors.

<PAGE>

                                    EXHIBIT D
                                    ---------

                   FINANCIAL REPORTING AND CONTACT INFORMATION
                   -------------------------------------------

         Gizmondo Information                         SCI Information
----------------------------------------- --------------------------------------
Name:                                     Name:
Gizmondo Ltd.                             Sci Games Limited
----------------------------------------- --------------------------------------
Street Address and/or post office box:    Street Address and/or post office box:
1 Meadow Gate Avenue, Farnborough         11 Ivory House, Plantation Wharf
Business Park
----------------------------------------- --------------------------------------
City and State / Province:                City and State / Province:
Farnborough ,Hants                        London

----------------------------------------- --------------------------------------
Country and Postal Code:                  Postal Code:
GU14 6FG, ENGLAND                         SW11 3TN

----------------------------------------- --------------------------------------
Accounting Contact Name and title:        Attention:

Balbinder Singh                           Callum Jay
Global Operations Manager                 Financial Controller

----------------------------------------- --------------------------------------
Phone Number:                             Phone Number:
(01)0252 557 100                          020 7350 5240

----------------------------------------- --------------------------------------
Fax Number:                               Fax Number:
(01) 0252 557 101                         020 7924 3419
----------------------------------------- --------------------------------------
E-Mail Address:                           E-Mail Address (if applicable):

bally@tigertelematics.com                 callumj@sci.co.uk

----------------------------------------- --------------------------------------
Additional Contact Name and title:        With a Copy of the Notice To:

Gizmondo Europe Ltd                       Rob Murphy
1 Meadow Gate Avenue                      Sci Games Limited
Farnborough Business                      11 Ivory House
Farnborough                               Plantation Wharf
Hants                                     London
GU14 6FG                                  SW11 3TN
Attention:
Steve.Carrol@tigertelematics.com;
Paul.Hilton@tigertelematics.com

----------------------------------------- --------------------------------------
Additional Contact Phone Number:          Additional Contact Phone Number:
(01)0252 557 100                          020 7350 5240

----------------------------------------- --------------------------------------
Additional Contact Fax Number:            Additional Contact Fax Number:
(01) 0252 557 101
                                          020 7924 3419
----------------------------------------- --------------------------------------
Additional Contact E-Mail Address:        Additional Contact E-Mail Address:
                                          robm@sci.co.uk
----------------------------------------- --------------------------------------
Accounts Payable Contact Name:

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

Gizmondo shall remit payment to the following  account (or such other account(s)
as Sci may specify in writing):

<PAGE>

Barclays Bank
27 Soho Square
London
W1D 3QR

Account no. 20805319
Sort code. 20 - 78 - 98
IBAN: GB90BARC207898 20805319
SWIFT: BARCGB22

Remittance detail for wire transfers must also be sent either by fax or e-mail:

<PAGE>

                                    EXHIBIT E
                                    ---------

                              GIZMONDO'S AFFILIATES
                              ---------------------

<PAGE>

                                   SCHEDULE F
                                   ----------

                              GAME COMPLETION DATES
                              ---------------------

--------------------------------------- ----------------------------------------
GAME                                    DATE OF RELEASE OF GAME BY SCI
--------------------------------------- ----------------------------------------

--------------------------------------- ----------------------------------------
The  Great Escape                       Released
--------------------------------------- ----------------------------------------
Conflict 1                              Released
--------------------------------------- ----------------------------------------
Conflict 2                              Released
--------------------------------------- ----------------------------------------
Conflict 3                              Released
--------------------------------------- ----------------------------------------
Conflict 4                              November 2005
--------------------------------------- ----------------------------------------
Highlander                              TBC
--------------------------------------- ----------------------------------------
Richard Burns Rally                     Released
--------------------------------------- ----------------------------------------
Carmageddon TDR 2000                    Released
--------------------------------------- ----------------------------------------
Carmageddon TV                          October 2005
--------------------------------------- ----------------------------------------
Midway                                  June 2005
--------------------------------------- ----------------------------------------
Reservoir Dogs                          March 2006
--------------------------------------- ----------------------------------------
Roll Call                               October 2005
--------------------------------------- ----------------------------------------EX-10.1

INCENTIVE STOCK OPTION AGREEMENT

The Shaw Group Inc.

2001Employee Incentive Compensation Plan

This Incentive Stock Option Agreement (“Agreement”) dated as of    , 200   (the
date on which the option evidenced hereby was granted) is entered into between The Shaw Group Inc.
(the “Company”) and    (the “Optionee”), pursuant to the The Shaw Group Inc. 2001
Employee Incentive Compensation Plan (the “Plan”).

THE PARTIES HERETO AGREE AS FOLLOWS:

1. Grant of Option. In consideration of the services performed and to be performed by
the Optionee, the Company hereby grants to the Optionee an option (the “Option”) under the Plan to
purchase a total of    of the Company’s no par value common stock (the “Common Stock”), upon
the following terms and conditions:

(a) The Option is granted under and pursuant to the Plan, a copy of which is attached hereto
as Exhibit A and incorporated herein by reference, and the Option is subject to all of the
provisions thereof. In case of conflict between one or more provisions of this Agreement and one
ore more provisions of the Plan, the provision(s) of the Plan shall govern. Capitalized terms used
herein without definition shall have the same meanings given such terms in the Plan. The Optionee
represents and warrants that he or she has read the Plan and is fully familiar with all the terms
and conditions of the Plan and agrees to be bound thereby.

(b) The Option is an incentive stock option or ISO (as defined in the Plan) that is intended
to be governed by Section 422 of the Internal Revenue Code, as amended (the “Code”).

(c) The Exercise Price of the Option is $  per share (the fair market value per share on
the date of grant of the Option).

2. Exercise of Option.

(a) With the exception of the Optionee’s death, disability or retirement, the ramifications of
which are expressly provided for in the Plan, and subject to earlier expiration of this Option as
set forth below and in the Plan, the Option shall not be exercisable for more than a percentage of
the aggregate number of shares subject to the Option determined by the number of full years from
the date of this Agreement to the date of exercise in accordance with the following schedule:

	 	 	 	 	 
	Number of Full Years	 	Percentage of Shares that may be Purchased

(b) Notwithstanding any other provision of this Agreement or the Plan, the Option shall not be
exercised prior to the date on which the shareholders of the Company approve the adoption of the
Plan. The Option may not be exercised unless, at the date of exercise (i) a registration statement
under the Securities Act of 1933, as amended, relating to the Shares covered by the Option shall be
in effect, or (ii) an exemption from registration is applicable to the shares in the opinion of
counsel for the Company.

3. Termination of Option. Except as otherwise provided herein, the Option shall
terminate:

(a) upon the expiration of ten (10) years from the date of this Agreement, or if sooner,

(b) three (3) months after termination of employment of the Optionee, unless employment is
terminated (i) as a result of death, disability or retirement, in which case the right of the
Optionee or his or her representative to purchase shares of Common Stock hereunder shall expire as
of the first anniversary following such termination, or (ii) for “Cause” (as defined in the Plan)
in which case the Option shall immediately terminate and no longer be exercisable.

In no case shall the Option continue to vest during the limited period of exercisability following
the Optionee’s termination of employment provided for in (b)(i) above. During such period, the
Option may only be exercised with respect to the number of shares for which it was exercisable at
the time of such termination of employment.

4. Rights Prior to Exercise of Option. The Optionee shall have no rights as a
stockholder with respect to the shares of Common Stock subject to the Option until the exercise of
his or her rights hereunder and the issuance and delivery to Optionee of a certificate or
certificates evidencing such shares.

5. Miscellaneous.

(a) No Representations or Warranties. Neither the Company nor the Committee nor any
of their representatives or agents has made any representations or warranties to the Optionee with
respect to the income tax or other consequences of the transactions contemplated by this Agreement,
and the Optionee is in no manner relying on the Company, the Committee or any of their
representatives or agents for an assessment of such tax or other consequences.

(b) Employment. Nothing in this Agreement nor in the Plan nor in the granting of the
Option shall confer on the Optionee any right to or guarantee of continued employment with the
Company or any of its Affiliates or in any way limit the right of the Company or any of its
Affiliates to terminate the employment of the Optionee at any time.

(c) Investment. The Optionee hereby agrees and represents that the Option and any
purchase of the shares of Common Stock under the Option is for the Optionee’s own account for
investment purposes only and not with a view of resale or distribution unless such shares acquired
pursuant to the Option are registered under the Securities Act of 1933, as amended.

(d) Stock Issuance. The exercise by the Optionee of the Option granted herein will
not become final nor will shares of Common Stock be issued pursuant thereto unless such exercise
fully complies with the requirements of the Plan and all applicable federal, state and local laws.

(e) Necessary Acts. The Optionee and the Company hereby agree to perform any further
acts and to execute and deliver any documents, which may be reasonably necessary to carry out the
provisions of this Agreement.

(f) No Transfer. The Option may not be assigned, encumbered or transferred, except by
will or the laws of descent and distribution in the event of death of the Optionee or pursuant to a
qualified domestic relations order pursuant to the Code or the Employee Retirement Security Act of
1974, as amended.

(g) Severability. The provisions of this Agreement are severable and if any one or
more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part,
the remaining provisions, and any partially enforceable provision to the extent enforceable in any
jurisdiction, shall nevertheless be binding and enforceable.

(h) Waiver. The waiver by the Company of a breach of any provision of this Agreement
by the Optionee shall not operate or be construed as a waiver of any subsequent breach by the
Optionee.

(i) Binding Effect; Applicable Law. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns, and the Optionee and any heir, legatee,
legal representative or assignee as specified in Section 5(f) above of the Optionee. This
Agreement shall be interpreted under and governed by and constructed in accordance with the laws of
the State of Louisiana.

IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement effective as of
the date first above written.

COMPANY:

THE SHAW GROUP INC.

    

By: Gary P. Graphia

Title: Secretary and General Counsel

OPTIONEE:

Signature of Optionee

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