AGREEMENT AND RELEASE
This Agreement and Release(this ‘‘Agreement’’ or‘‘Release’’) is made and entered on this 17thday of February, 2006 (the ‘‘Effective Date’’),by and among Majesco Entertainment Company(‘‘Majesco’’) and Terminal Reality Inc.(‘‘TRI’’). The entities listed above as makingand entering this Agreement shall hereinafter be referred tocollectively as the ‘‘parties.’’
Theparties hereto agree to and do enter into this Agreement for thepurpose of settling all claims, controversies, and disputes between andamong the parties.
In consideration of the mutual promisescontained herein, the parties hereto, intending to be legally bound,hereby agree as follows:
1. RELEASE ANDDISCHARGE. For and in consideration of the promises madeherein and other good and valuable consideration, TRI forever andcompletely releases and discharges Majesco and its past, present, andfuture officers, directors, stockholders, servants, representatives,partners, assigns, agents, attorneys, employees, subsidiaries,affiliates and successors and predecessors in interest(‘‘Majesco Releasees’’) of and from any and allmanner of action, cause of action, suit, claim, and demandwhatsoever, known or unknown, in law or equity, which TRI ever had ornow has against Majesco Releasees, related or connected to, or which inany way arises out of, the design and development of the videogame titled ‘‘Demonik’’ (the‘‘Product’’), the Letter of Intent betweenMajesco and TRI, dated May 3, 2004, as amended, for the design anddevelopment of the Product or any other agreement relating to theProduct.
2. NO ADMISSION OFLIABILITY. The parties to this Agreement agree that neitherthe execution of this Release, nor the agreement to or statement of anyterms embodied herein, shall constitute an admission of wrongdoing byeither party.
a. Majesco will pay to TRI $250,000 in six monthly installmentsbeginning on the Effective Date and due on the 17th of each monththereafter, with the first five installments in the amount of $42,000and the final installment in the amount of $40,000.
b. Majesco shall grant to TRI that number of shares of Majescocommon Stock (the ‘‘Shares’’) equal to $125,000divided by the Share Price (as defined below).
For purposeshereof, the ‘‘Share Price’’ shall mean theaverage closing price of Majesco’s common stock for the 30trading days immediately prior to the Effective Date multiplied by..95.
c. Majesco will file a registration statement coveringthe Shares within 60 days of the Effective Date. Majesco will use bestefforts to cause the registration statement to become effective within120 days of the Effective Date; provided that there shall be no penaltyassociated with a failure to have such registration statement effectivewithin such time period.
d. Majesco hereby assigns andconveys to TRI all of Majesco’s rights, title and ownership inthe Demonik name, characters, copyrights, moral rights, trade names,and trademarks.
4. REPRESENTATIONS ANDWARRANTIES OF TRI
a. Investment. TRI isacquiring the Shares for its own account, not as a nominee or agent,and not with a view to, or for sale in connection with, anydistribution thereof. TRI understands that the Shares have not beenregistered under the Securities Act of 1933, as amended (the‘‘Securities Act’’), or any state securitieslaws, by reason of specific exemptions from the registration provisionsof the Securities Act and such laws that may depend upon, among otherthings, the bona fide nature of TRI’s investment intent asexpressed herein. TRI is an ‘‘accreditedinvestor’’ as defined in Rule 501 of Regulation D adoptedunder the Securities Act.
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b. Access toInformation. TRI has had adequate opportunity to askquestions of and receive answers from the Majesco and itsofficers concerning the terms and conditions of the receipt ofthe Shares. TRI has further had an opportunity to inspect and copy allmaterial documents related to Majesco, including, but not limited to,the Majesco’s certificate of incorporation and bylaws andto obtain any additional information that is necessary to verify theaccuracy of the information TRI has received.
c. Experience. TRI has substantial experience inevaluating and investing in transactions of securitiesand TRI acknowledges that it is capable of evaluating the meritsand risks of an investment in the TRI and has thecapacity to protect its own interests. Majesco represents and warrantsto the TRI that it is aware that its acceptance andreceipt of the Shares hereunder involves substantial risk andthat its financial condition and investments are such that it is in afinancial position to hold the Shares for an indefinite period of timeand to bear the economic risk of a loss of such investment.
d. Lock-up. TRI will not sell more than25% of the Shares in any 30 consecutive business day period.
5. CONFIDENTIALITY. The parties agree thatthere shall be no disclosure of the specific terms or conditions ofthis Agreement, except: (a) as required by law or by an order of acourt of competent jurisdiction, but in that case, only after providingprior written notice to the other party and their counsel to the extentpossible under the circumstances; (b) to the officers, directors,employees, agents, attorneys, insurers, immediate familymembers, or professional financial advisors and/or accountantsof the parties; and (c) as may be necessary to enforce the terms ofthis Agreement in a subsequent proceeding in which any party allegesbreach of this Agreement.
6. ENTIRE AGREEMENTAND SUCCESSORS IN INTEREST. This Agreement contains theentire agreement between the parties with regard to the matters setforth herein and therein. This Agreement may be modified only by awriting signed by the Parties, and supersedes any and all proposals,agreements and understandings between the Parties as to the subjectmatter of this Agreement, which shall be binding upon and inure to thebenefit of the successors and assigns of each of the parties.
7. REPRESENTATION OF COMPREHENSIVENESS OFDOCUMENT. In entering into this Agreement, each of theparties represent that they have read the terms of this Agreement, andthat those terms are fully understood and voluntarily accepted bythem.
8. GOVERNING LAW. This Agreementshall be construed and interpreted in accordance with the laws of theState of New Jersey.
9. COUNTERPARTS;FACSIMILES. This Agreement may be executed by facsimile inseparate counterparts and all such counterparts taken together shall bedeemed to constitute one and the same instrument. Transmission byfacsimile of an executed counterpart of this Agreement shall be deemedto constitute due and sufficient delivery of such counterpart.
10. EFFECTIVENESS. By signature below,each party represents and warrants that it has the full authority tobind the person(s), entity, or entities for whom execution of thisAgreement is purportedly made. If at any time after the date ofexecution of this Agreement, any provision of this Agreement is held tobe illegal, void or unenforceable, that provision will have no forceand effect. However, the illegality or unenforceability of thatprovision will not have any effect on, and will not impair theenforceability of, any other provision of this Agreement. However, if acourt or arbitral organization of competent jurisdiction finds that anyof the covenants and releases provided for by this Agreement is illegaland/or unenforceable, the Parties agree to execute new releases of liketenor that are legal and enforceable.
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IN WITNESS WHEREOF, the parties hereto haveexecuted this Agreement by their duly authorized officers on the datefirst above written.