EXHIBIT 10.26

 

XENON GAME PERIPHERAL LICENSING AGREEMENT

 

 

This Xenon Game Peripheral Licensing Certification Agreement (the “Agreement”)
is made and entered into on                             , (the “Effective Date”)
by and between Madcatz Inc. (“Company”), a California corporation with its
principal place of business at 7480 Mission Valley Road, Suite 101, San Diego,
California 92108 and Microsoft Corporation, a Washington, U.S.A. corporation
with its principal place of business at One Microsoft Way, Redmond, Washington
98052 (“Microsoft”).

 

 

1. Definitions. The following terms as used herein will have the following
meanings:

 

1.1      “Approved Vendor” is a supplier for Xenon Chip(s) as set forth in
Exhibit F that is approved by Microsoft in writing to sell such the Xenon
Chip(s) to third parties.

 

1.2      “Branding Specifications” means the specifications in Exhibit B-2, and
such other branding specifications as Microsoft may hereafter provide from time
to time, for using the Xenon Logos as licensed herein.

 

1.3      “Certification Specifications” means the then-current Xenon peripheral
and interface specifications that are used by Microsoft or the Certification
Testing Center to verify the compatibility of the Proposed Product(s) with the
Xenon console.

 

1.4      “Certification Testing Center” means the entity(ies) designated by
Microsoft on Exhibit D and any update to Exhibit D, to verify Proposed
Product(s) for Xenon compatibility in compliance with the Certification
Specifications.

 

1.5      “End-User” means a retail customer or purchaser of the Licensed
Product.

 

1.6      “Firmware” means that proprietary Microsoft firmware instantiated on a
silicon chip and designed to allow the chip to operate within the Xenon console
platform.

 

1.7      “Licensed Product(s)” means those Proposed Product(s) which meet the
Xenon Certification Specifications, have passed the Xenon certification process
in Section 6 and meet the Quality Standards and Microsoft Standards in
accordance with the terms of this Agreement. Licensed Product(s) must be of the
type listed in Exhibit E and may not be products listed under the Excluded
Product heading on Exhibit E as it is subsequently updated by mutual written
agreement of the parties.

 

1.8      “Microsoft Materials” means the Technical Documentation, Firmware and
Necessary Claims.

 

1.9      “Microsoft Standards” means Microsoft’s restricted substances
specifications, Vendor Code of Conduct and Microsoft’s social and environmental
compliance specification as released to Company prior to execution and delivery
of this Agreement and as updated by Microsoft from time to time.

 

1.10    “Microsoft IP” means (a) any and all Necessary Claims held by Microsoft
or any of its Affiliates during the Term of the Microsoft License; and (b) any
and all copyright and trade secret rights that Microsoft or any of its
Affiliates may have in the Microsoft Materials during the Term of the Microsoft
License.

 

1.11    “Necessary Claims” means claims: (a) of a patent or patent application
that Microsoft now or hereafter owns or otherwise has the right to license to
Company, without the payment of any royalty or other amounts to any unaffiliated
third party; and (b) that are necessarily infringed by implementation of the
Security Feature. For purposes of the foregoing, a claim is a “Necessary Claim”
only when it is not possible to avoid infringement, because there is no
technically reasonable, non-infringing alternative. Further, notwithstanding the
foregoing, “Necessary Claims” do not include any claims: (1) other than those
set forth above, even if contained in the same patent or patent application as
Necessary Claims; (2) to any enabling technologies that may be necessary to make
or use any product (or a portion thereof) or combination that implements the
Security Feature (such as hardware, semiconductor manufacturing, compiler,
object-oriented, operating system, protocol, programming

 

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interface or networking technologies); (3) covering the implementation of other
published specifications that may be referenced in the Microsoft Materials; or
(4) to the extent such claim covers any product (or portion thereof) or
combination, the purpose or function of which is not included in the Security
Feature.

 

1.12    “Product Package” means the retail container package containing the
Licensed Product and other materials that are included with the Licensed
Product.

 

1.13    “Proposed Product” means a pre-release version of Company’s peripheral
device which meets the Xenon Certification Specifications, and that is submitted
to Microsoft or its Certification Testing Center for verifying its compatibility
for use with the Xenon game system.

 

1.14    “Quality Standards” means the standards of workmanship, overall quality
and performance generally accepted in the video game console peripheral
industry.

 

1.15    “Security Feature” means Microsoft’s proprietary protocol used to
validate authentic devices on the Xenon platform as implemented in a Xenon Chip
or other implementation method designated by Microsoft in writing.

 

1.16    “Technical Documentation” means the specifications, reference code and
other technical documentation listed as “Technical Documentation” in the
attached Exhibit A or otherwise delivered by Microsoft for Company’s use under
this Agreement.

 

1.17    “Term” means the term of the Agreement set forth in Section 15(a) unless
earlier terminated in accordance with Section 15.

 

1.18    “Territory” means those countries set forth on Exhibit E.

 

1.19    “Xenon” means the second generation Microsoft Xbox video game and
entertainment console.

 

1.20    “Xenon Certified Logo” means the Xenon Certified Logo as provided by
Microsoft to Company and set forth in Exhibit B-1 for use on the Product Package
and related promotional materials, advertising and documentation for Licensed
Product(s) in accordance with the terms of this Agreement.

 

1.21    “Xenon Product Jewel Logo” means the stylized Xenon (“X”) as provided by
Microsoft to Company and set forth in Exhibit B-1 for use on Licensed Product(s)
in accordance with the terms of this Agreement.

 

1.22    “Xenon Logos” means the Xenon Certified Logo and the Xenon Product Jewel
Logo, collectively.

 

1.23    “Xenon Chip(s)” means that application specific integrated circuit or
circuits made only by Approved Suppliers that instantiates the Firmware and/or
the Security Feature.

 

All other initially capitalized terms will have the meanings hereinafter
assigned to them.

 

2. Xenon Development Kit License.

 

Company shall, as a pre-requisite to submission of any Proposed Product for
verification under this Agreement, obtain from Microsoft one or more Xenon
Development Kits (Peripherals) for third party peripheral manufacturers (“PXDK”)
for the fee set forth in Section 5. Company’s use of the PXDK will be subject to
the separate PXDK license agreement available separately from Microsoft.

 

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3. Licenses.

 

3.1      Xenon Security Feature. Microsoft, on behalf of itself and its
affiliates, hereby grants to Company a personal, nonexclusive, nontransferable,
royalty-bearing, nonsublicensable license, under the Microsoft IP, to do in the
Territory the following: (a) make and use a reasonable number of copies of the
Technical Documentation, but only as necessary for the development of an
independent Licensed Product that conforms to the specifications included in the
Technical Documentation; (b) make derivative works based on source code supplied
in the Technical Documentation, if any, for incorporation into Licensed Product;
(c) incorporate object code supplied in the Technical Documentation and object
code derivatives of source code supplied in the Microsoft Materials into the
Licensed Product; (d) use and distribute Firmware, if any, only as incorporated
in Licensed Product by its implementation in Xenon Chip(s) made by and purchased
from Authorized Vendors, (e) sell, offer for sale, import and distribute,
directly or indirectly Licensed Product that implements the Security Feature.
Except as specifically provided in (b), (c) and (d) of this Section 3.1, the
license grant above does not include any right to disclose or incorporate into
any Licensed Product or any other product any copy of, or derivative work based
upon, any Technical Documentation or Firmware or portion thereof.

 

3.2      Xenon Chip(s). The license granted in Section 3.1 includes the right
for Company to purchase the Xenon Chip(s) from an Approved Vendor for use with
the Licensed Product(s), upon such pricing and other terms to be agreed upon
between Company and the Approved Vendor. Microsoft reserves the right to require
additional design or other specifications relating to the Xenon Chip(s) and/or
to add or decrease security requirements, including, without limitation,
implementation of the Security Feature without using the Xenon Chip(s).

 

3.3      Restricted Software. The license grants above does not include any
right to, and Company shall not use any software subject to an Excluded License
to make any derivative of any Microsoft Materials or offer, sublicense or
distribute any code supplied in the Microsoft Materials or derivative of any
such code in conjunction with any software subject to an Excluded License.
“Excluded License” means the GNU General Public License (GPL), Lesser/Library
GPL (LGPL), Community Public License (CPL) or any license for software where the
license includes terms providing that: (a) a licensee of the software is granted
access to the source code for the software concerned and authorized to modify or
make derivative works of the source code for the software; and (b) the licensee
is authorized to distribute the derivative works only if subsequent licensees
are granted a license under substantially similar license terms with respect to
distribution rights and the terms described in (a) above.

 

3.4      Reservation of Rights. All rights not expressly granted in this
Agreement are reserved. No additional rights whatsoever (including, without
limitation, any implied licenses) are granted by implication, estoppel or
otherwise. Without limiting the generality of the foregoing, the license grant
in 3.1 above does not include, and Microsoft does not grant, any right under any
patent or intellectual property right other than the Microsoft IP. Microsoft
owns all right title and interest in the Microsoft Materials. Microsoft may in
its sole discretion (i) choose not to implement the Security Feature on the
Xenon platform and/or (ii) choose not to implement Firmware in Xenon Chips. If
either of the two occurs events, the license grant in Section 3.1 above will not
include the license in subsection (d) and either party will have the right to
terminate the agreement as set forth in Section 15.2.

 

3.5      Foundry Products. The license grants above do NOT include any rights to
make, use, sell, offer for sale, import or distribute Licensed Product designed
by or for a third party without substantial input from Company, and
manufactured, reproduced, sold, leased, licensed or otherwise transferred from
Company to that third party (or to customers of, or as directed by, that third
party) on essentially an exclusive basis.

 

3.6      Reverse Engineering:

 

(a)      Company shall not reverse engineer, decompile, disassemble, or
otherwise access the source code for any portion of the Security Feature or
Firmware except (i) as permitted by applicable law which cannot be waived by
this subsection, or (ii) as authorized by separate agreement by Microsoft or a
Microsoft affiliate.

 

(b)      Company shall use commercially reasonable efforts in Company’s industry
to design Licensed Products to prevent third parties from reverse engineering,
decompiling or disassembling any portion of the Security

 

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Feature and/or Firmware and to prevent end users from discovering the source
code of any component of the underlying Security Feature and/or Firmware.

 

4. License of Xenon Logos

 

4.1      Xenon Certified Logo. Microsoft will provide Company with the required
Xenon Certified Logo artwork. Upon approval of the Licensed Product under
Section 6.3 and subject to payment of the license fees and royalties set forth
in Section 5, Microsoft grants to Company a non-exclusive, fully paid-up,
non-transferable, revocable, personal license to use the Xenon Certified Logo
during the Term in the Territory only on Company’s Product Package and related
promotional materials, advertising and documentation in connection with the
marketing, sales and distribution of the Licensed Product, according to the
Branding Specifications and the other terms and conditions set forth herein.
Company is not authorized or licensed, to include the Xenon Certified Logo on
the Licensed Product itself or on any labels affixed to the Licensed Product or
as part of any warranties made by the Company. All rights not expressly granted
herein are reserved to Microsoft.

 

4.2      Xenon Product Jewel Logo. In addition to the license granted in 4.1,
Microsoft grants to Company a non-exclusive, fully paid-up, non-transferable,
revocable, personal license during the Term in the Territory only to place the
Xenon Product Jewel Logo on Licensed Product(s), according to the Branding
Specifications and the other terms and conditions set forth herein. Company is
not authorized or licensed to include the Xenon Product Jewel Logo on any
promotional materials or advertising in connection with the marketing, sales and
distribution of the Licensed Product(s), or as part of any warranties made by
the Company. The Xenon Product Jewel Logo is licensed to Company solely for
placement on the Licensed Product(s) as set forth herein. All rights not
expressly granted herein are reserved to Microsoft.

 

4.3      Company will deliver to Microsoft for Microsoft’s review and approval,
the Product Package and any other materials that use or refer to the Xenon Logos
or any other Microsoft name, in advance of any manufacture, distribution or
publication of the same, for purposes of determining that the use of the Xenon
Logos comply with the Branding Specifications and that the Licensed Product(s)’
Product Package complies with the Licensed Product Packaging Template. All
requests for approval hereunder will be submitted to:

 

  Scott Loomis, Xenon Peripherals Program Manager

  Microsoft Corporation, One Microsoft Way, Redmond, WA 98052, USA

  e-mail: xbox3pp@xbox.com

 

4.4      Company agrees to incorporate Microsoft’s comments or edits, if any,
prior to publication, manufacture or distribution of any of the foregoing.
Company will at all times during the Term be responsible for manufacturing,
assembling, publishing and/or distributing the Product Package and associated
materials and will make no changes after receiving Microsoft’s final approval of
the same without first obtaining Microsoft’s written approval of such change.

 

4.5      Microsoft will respond to Company’s request for approval within a
commercially reasonable period of time. Microsoft’s approval or rejection of the
request from Company will be delivered via U.S. Mail or e-mail to:

 

  Company Contact: Sean Parry

  Address: 7480 Mission Valley Road, Suite 101, San Diego, California 92108

  e-mail: sparry@madcatz.com

 

4.6      Company is granted no right to permit any third party to use the Xenon
Logos in any manner without Microsoft’s prior written consent and any attempt to
do so will be void. Company’s license to use the Xenon Logos in association with
Licensed Product(s), will not extend to the merchandising or sale of related or
promotional products under such Xenon Logos.

 

4.7      Company will not use Xenon Logos in connection with any activity that
(i) disparages Microsoft or its products or services; (ii) violates or infringes
any intellectual property of Microsoft; or (iii) violates any local, state,
federal, country, or international regulation or law.

 

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4.8      Company’s use of the Xenon Logos will comply with the Branding
Specifications and will conform in all respects to the Product Package finally
approved by Microsoft as required hereunder. Company will not use the Xenon
Logos in association with any third party trademarks in a manner that might
suggest co-branding or otherwise create potential confusion as to source or
sponsorship of the Licensed Product(s) or ownership of the Xenon Logos without
written consent (via e-mail is sufficient). Upon notice or other discovery of
any non-conformance with the requirements or prohibitions of this section,
Company will promptly remedy such non-conformance and notify Microsoft of the
non-conformance and remedial steps taken.

 

4.9      Upon notice or other discovery of any non-conformance of the Licensed
Product with the Quality Standards, Microsoft Standards or Certification
Specifications (including receipt of any bona fide End-User claims or complaints
pertaining to consumer product safety matters), Company will promptly notify
Microsoft and remedy such non-conformance in all such units or Product Package
regardless of where such are in the chain of distribution, and Company will
notify Microsoft of the non-conformance and remedial steps taken.

 

4.10      Company will assist Microsoft in protecting and maintaining
Microsoft’s rights in the Xenon Logos worldwide, including preparation and
execution of documents necessary to register the Xenon Logos at Microsoft’s
expense, and giving immediate notice to Microsoft of potential infringement of
the Xenon Logos, in any country. Microsoft will have the sole right to and in
its sole discretion may commence, prosecute or defend, and control any action
concerning the Xenon Logos. Company will not during the Term contest the
validity of, or by act or omission jeopardize, or take any action inconsistent
with, Microsoft’s rights or goodwill in the Xenon Logos in any country,
including attempted registration of the Xenon Logos, or use or attempt
registration of any mark confusingly similar thereto.

 

4.11      Company acknowledges Microsoft’s sole ownership of the Xenon Logos
worldwide and all associated goodwill. Nothing in this Agreement or in the
performance thereof, or that might otherwise be implied by law, will operate to
grant Company any right, title, or interest in or to the Xenon Logos other than
as specified in the limited license granted herein. Company’s use of the Xenon
Logos will inure solely to the benefit of Microsoft. Company hereby assigns and
will assign in the future to Microsoft all rights it may acquire by operation of
law or otherwise in the Xenon Logos, including all applications or registrations
therefore, along with the goodwill associated therewith.

 

5. Payments

 

5.1      License Fees/Advance Royalties.

 

(a)      PXDK License Fee. Company will pay Microsoft [***] within thirty (30)
days of ordering PXDK as consideration for the license of the PXDK to Company.

 

(b)      Security Feature Fee. On an annual basis, Company will pay Microsoft
the fees for each applicable Territory as set forth on Exhibit C for the license
of the Security Feature and subject to the additional terms set forth on such
Exhibit. The first fee payment will be due within thirty (30) days after the
Effective Date and will cover the time period commencing on the Effective Date
and ending December 31, 2006. Thereafter, the annual fee will be due on or
before January 31 of each successive year of the Term. The Security Feature Fee
is above and beyond the actual cost of the Security Chip that Licensee will
purchase from the Approved Vendor. All such fees will be paid before manufacture
of the units of Licensed Product for which the fee applies. The advance license
fees payable under this Section 5.1 are not refundable except as set forth in
Section 15.2.

 

(c)      Xenon Logo Guarantee. On an annual basis, Company will pay Microsoft
the guaranteed royalty for each applicable Territory as set forth on Exhibit C
for the license of the Xenon Logos and subject to the additional terms set forth
on such Exhibit. The first fee payment will be due within thirty (30) days after
the Effective Date and will cover the time period commencing on the Effective
Date and ending December 31, 2006. Thereafter, the annual fee will be due on or
before January 31 of each successive year of the Term. The guaranteed royalty
payable under this Section 5.1 is not refundable except as set forth in Section
15.2 but shall be applied as a credit against the royalties payable under
Section 5.2.

 

[*] CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS
DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

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5.2      Royalties.

 

(a)      Licensed Product Royalties. In consideration of the Xenon Logo license
rights granted Company for the Licensed Products, Company will pay to Microsoft
royalties in the amounts set forth on Exhibit C. The royalty amount will be
calculated based on Company’s actual wholesale gross invoice amount billed to
customers for the Licensed Products, less any Security Feature Fee, freight
charges, bona fide returns, VAT, Price Reductions (defined below), or similar
sales taxes (“Net Sales Price”), for each unit of Licensed Product manufactured
by or for Company hereunder, including units for Company’s own use and whether
or not Company receives payment for such units. The royalty obligation is
triggered on the shipment of Licensed Product(s) to customers. A Price Reduction
means a credit issued by Company to resellers and distributors for the
difference between the price they originally paid to Company for product held in
inventory and the reduced price due to a price promotion.

 

(b)      Royalty Reports and Payments. Company will make quarterly royalty
reports to Microsoft within (i) forty-five (45) days after the end of each
calendar quarter during the Term; (ii) fifteen (15) days after termination of
this Agreement in the event there is no “Sell Off Period” as referenced in
Section 15.4; or (iii) in the event there is a “Sell Off Period” as referenced
in Section 15.4, within fifteen (15) days after the end of each calendar month
during the Sell Off Period and a final report and payment within fifteen (15)
days of the end of the Sell Off Period. The royalty report will include monthly
sales information and be in a reasonable form as defined by Microsoft. For each
calendar quarter, Company will remit payment(s) in accordance with the Sections
below in United States Dollars at the same time as submission of the royalty
report.

 

(c)      Place of Payment. Microsoft will address invoices for royalty payments
owed by Company to:

 

  Company Contact: Mike Guerrero

  Address: 7480 Mission Valley Road, Suite 101, San Diego, California 921

  e-mail: mguerrero@madcatz.com

 

The statements and payments required pursuant to this Section will be delivered
by Company to:

 

Reports:  Quarterly royalty reports should be sent via email to:

    

Microsoft Licensing, GP (MLGP)

    

Xenon Accounting Services

    

Email: mslipubx@microsoft.com

    

Fax: (1) 775/826-0531

    

Fax (alternative): 1-775-826-0506

 

Payments will be sent via wire transfer in U. S. Dollars only, to:

Bank of America

1401 Elm Street

Dallas, TX 75202 U.S.A.

Beneficiary: Microsoft Licensing, GP

Account #: 3750891058

ABA #: 111000012

SWIFT #: BOFAUS3N

Or such other address of account as Microsoft may specify from time to time.

 

5.3      Audit. During the Term and for a period of at least three (3) years
thereafter, Company shall keep and maintain, complete and accurate books and
records relating to its performance (and any of its manufacturer’s performance)
under this Agreement. Upon reasonable advance written notice from Microsoft,
Company shall make such books and records available for audit by Microsoft’s
internal audit team or an independent certified public accounting firm (together
with independent technical personnel if and as reasonably required for such
accountant to perform the audit) designated by Microsoft and approved by
Company, which approval shall not be unreasonably withheld. Unless otherwise
agreed by Microsoft and Company, any such audit shall be conducted during
regular business hours, at Company’s principal place of business, not more
frequently

 

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than once in any period of twelve (12) consecutive months and in a manner that
does not unreasonably interfere with Company’s normal course of business. If any
audit reveals an overpayment, then Company will receive a credit, in the amount
of such overpayment, that will be applied only against future royalties payable
under this Section 5.3. If any audit reveals an underpayment, then Company will
pay Microsoft the amount of the underpayment, together with interest as provided
for in Section 5.4, within forty-five (45) days after the date of the auditor’s
report. Further, if any audit reveals an underpayment of more than seven percent
(7%) of the royalties owed for the Royalty Period(s) subject to the audit, then
Company will promptly reimburse Microsoft, upon request, for all costs and
expenses reasonably incurred by Microsoft to conduct the audit. Any such audit
will be paid for by Microsoft unless material discrepancies are disclosed.
“Material” will mean the lesser of $10,000 or five percent (5%) of the royalties
due to Microsoft within the audit period. If material discrepancies re
disclosed, Company agrees to pay Microsoft for the costs associated with the
audit, as well as reimburse Microsoft for all under-reported amounts, plus
interest at a rate of 12% per annum.

 

5.4      Delinquent Payment. Any license fee, royalty or other amount not paid
when due and otherwise in accordance with this Section 3 shall bear interest at
the rate of one percent (1%) per month or the highest rate permitted by
applicable usury law, whichever is less, calculated on a daily basis and
compounded on the first day of each calendar month, from the date due until the
date received by Microsoft in accordance with Section 5.3. This Section 5.4 does
not authorize late payments, and the payment of interest hereunder shall not be
lieu of or prejudice any other right or remedy that Microsoft may have on
account of Company’s failure to make any payment in accordance with this Section
5.

 

5.5      Taxes

 

(a)      Company shall be responsible for the billing, collecting and remitting
of sales, use, value added, and other comparable taxes due with respect to the
exercise of the License and any other activities of Company and its Subsidiaries
under this Agreement (including, without limitation, the collection of
revenues). Microsoft is not liable for any taxes (including, without limitation,
any penalties or interest thereon) that Company or any of its Subsidiaries is
legally obligated to pay in connection with this Agreement, the exercise of the
License or any other activities of Company and its Subsidiaries under this
Agreement. Company is not liable for any income taxes that Microsoft is legally
obligated to pay with respect to any amounts paid to Microsoft by Company under
this Agreement.

 

(b)      All royalties and fees exclude any taxes, duties, levies, fees, excises
or tariffs imposed on any of Company’s activities in connection with this
Agreement. Company shall pay to Microsoft any applicable taxes that are owed by
Company solely as a result of entering into this Agreement and which are
permitted to be collected from Company by Microsoft under applicable law, except
to the extent that Company provides to Microsoft a valid exemption certificate
for such taxes. Company agrees to indemnify, defend and hold Microsoft harmless
from any taxes (including, without limitation, sales or use taxes paid by
Company to Microsoft) or claims, causes of action, costs (including, without
limitation, reasonable attorneys’ fees) and any other liabilities of any nature
whatsoever related to such taxes.

 

(c)      If, after a determination by foreign tax authorities, any taxes are
required to be withheld on payments made by Company to Microsoft, Company may
deduct such taxes from the amount owed Microsoft and pay them to the appropriate
taxing authority; provided, however, that Company shall promptly secure and
deliver to Microsoft an official receipt for any such taxes withheld or other
documents necessary to enable Microsoft to claim a U.S. Foreign Tax Credit.
Company will make certain that any taxes withheld are minimized to the extent
possible under applicable law.

 

(d)      This tax section shall govern the treatment of all taxes arising as a
result of or in connection with this Agreement notwithstanding any other section
of this Agreement.

 

6. Product Review and Certification.

 

6.1      Review of Proposed Product. Company will identify a single contact
person for all business development activity relating to Proposed Products.
Company will submit its plans for Proposed Products to

 

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Microsoft for review with Xenon hardware and software game categories. Feedback
regarding the category fit of any Proposed Product may be provided by Microsoft
in its sole discretion, to maintain consistent and compatible Xenon peripheral
products. Company’s plan will be in writing, and will include at least (to the
extent applicable): (i) detailed description of the design, technical and
marketing suitability of the Proposed Product, (b) expected suggested retail
pricing of the Proposed Product, and (c) estimated annual sales volumes by world
region of the Proposed Product(s) based upon assumptions provided by Company.

 

6.2      Authorization of Security Feature and Xenon Chip(s). Upon Microsoft’s
approval of the plan for each Proposed Product, Company may request sample Xenon
Chips from the Approved Vendor in quantities approved by Microsoft. Company will
use the sample Xenon Chips solely for Proposed Product development and
certification testing per Microsoft’s Technical Documentation and Certification
Specifications. Upon such approval, Company may also initiate discussions with
the Approved Vendor to reach agreement on supply of security chip including
price, schedule and other purchase order requirements. Such agreement will
include an authorization from Company for Approved Vendor to release information
to Microsoft about the number of Xenon Chips purchased.

 

6.3 Certification of Proposed Product

 

(a)      Microsoft will at all times control requirements for Xenon
certification testing. Modifications to the Certification Specifications and
Branding Specifications may be implemented by Microsoft at any time during the
Term, but will not be retroactive to any Licensed Product already certified by
Microsoft or Certification Testing Center. Prior to the first commercial launch
of the Xenon console, Microsoft will perform all Proposed Product certification.
Thereafter, Microsoft may designate as necessary a Certification Testing Center
to conduct Proposed Product certification testing.

 

(b)      Company will, at its sole cost and expense, deliver to Microsoft or
Microsoft’s Certification Testing Center a minimum of 5 units of the Proposed
Product for certification. Company represents and warrants that all of the
Proposed Products submitted are representative of product ready for release for
general distribution, that Company has adequately and extensively tested the
Proposed Products using the PXDK test equipment required by Microsoft, that
there are no errors in the Proposed Products, and that the Proposed Products are
subject to Company’s ongoing support, error detection and correction. If
requested by Microsoft, Company will also provide Microsoft or the Certification
Testing Center with copies of all End User installation and technical reference
manuals for the Proposed Product(s), as well as any other documentation
reasonably requested by Microsoft for operating the Proposed Product(s) and/or
conducting the certification activities.

 

(c)      The Proposed Product(s) will be reviewed for compliance with the
Certification Specifications in effect at the time of review. Company will be
responsible for supplying any necessary documentation to operate the Proposed
Product(s) for verification purposes and for designating a single contact person
for technical assistance. If the certification is provided by a Certification
Testing Center, Company will pay all verification fees required by the
Certification Testing Center and will execute any additional contracts required
by the Certification Testing Center. Microsoft is not liable for any damage to
the Proposed Product(s) while in transit to and on Microsoft’s premises or that
of the Certification Testing Center.

 

(d)      If a Proposed Product fails to meet the Certification Specifications,
Microsoft or the Certification Testing Center will provide Company with a
written report indicating the reasons for such failure but will not provide
recommendations for improvements to the Proposed Product. Company will promptly
replace, repair, or withdraw the Proposed Product from further certification
testing. Microsoft will not refund any advance license fees paid for a Proposed
Product that does not pass certification testing.

 

(e)      Company will schedule all certification testing at least three (3)
weeks in advance or shorter time as agreed to by Microsoft or the Certification
Testing Center. Certification will be performed by Microsoft or the
Certification Testing Center subject to the availability of its resources and
staff. Microsoft will report to Company on status of testing within two weeks of
Company’s submission, but nothing in this Section will require Microsoft to
complete testing within such time.

 

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(f)      In addition to meeting the Certification Specifications and passing the
Xenon certification testing, all Proposed Products will be of a quality at least
commensurate with the quality of products distributed by Company before the
Effective Date and will meet or exceed the Quality Standards and Microsoft
Standards. On an annual basis, a Company officer will certify compliance with
the Microsoft Standards in writing in a form substantially similar to that
attached in Exhibit G as updated from time to time by notice from Microsoft. In
the event Microsoft rejects the Proposed Product for failure to comply with the
Quality Standards or Microsoft Standards, Company will correct and then resubmit
the Proposed Product to Microsoft, or withdraw the Proposed Product from any
further certification testing. Microsoft will not refund any advance license
fees paid for a Proposed Product that does not pass certification testing or
meet the Quality Standards or Microsoft Standards.

 

6.4  Approval to Deliver Xenon Chip(s). Upon final approval of each Licensed
Product, Microsoft will notify the Approved Vendor of such approval, the Company
name, the Licensed Product and number of Xenon Chip(s) licenses prepaid by
Company pursuant to Section 5.1(b). The Approved Vendor will not ship volumes of
the Xenon Chip(s) that exceed the amounts approved by Microsoft in its initial
approval or any later updates to that approval for additional pre-payments by
Company.

 

6.5  Control of Xenon Chip(s). Company must provide to Microsoft a detailed plan
for secure handling, storage, and scrap of Xenon Chip(s) ninety (90) days prior
to their first receipt of Xenon Chip(s). The detailed plan must include full
material handling, storage and scrap procedures in place at all Company’s
manufacturing facilities where Xenon Chip(s) is delivered, stored, and utilized
in Licensed Products. Microsoft has the right to require additional handling,
storage and scrap procedures to ensure adequate controls of Xenon Chip(s).

 

6.6  Prohibition on Unauthorized Manufacture or Distribution.

 

(a)      In no event will Company manufacture or distribute a Proposed Product,
or manufacture or distribute a product in the categories of Licensed Products or
Excluded Products set forth on Exhibit E that Company claims to be compatible
with the Xenon console, without such product being a Licensed Product under the
terms of this Agreement.

 

(b)      Microsoft may, at its sole discretion, post information regarding the
Licensed Product(s) on the applicable Microsoft website(s) provided that Company
continues to provide End-User support for the Licensed Product(s) pursuant to
Section 11 below, and Company has not requested that Microsoft exclude the
Licensed Product(s) from such posting.

 

7. No Restriction on Independent Development

 

Nothing in this Agreement will be construed as restricting Microsoft’s ability
to acquire, license, develop, manufacture or distribute for itself, or have
others acquire, license, develop, manufacture or distribute any software,
firmware, or hardware with the same or similar functionality as the Proposed
Product(s), or Licensed Product(s), or to market and distribute such other
technology and products.

 

8. Product Manufacturing

 

Company is solely responsible for manufacturing, designing, testing, labeling
(including all warnings, use instructions and regulatory compliance),
warehousing, distributing, promoting, selling and if necessary recalling the
Licensed Product(s), and ensuring that all commercially released versions of the
Licensed Product(s) now and in the future are free of defects in material,
manufacture and design, and comply with all applicable domestic and
international regulations, standards and other laws and standards governing
restricted substances, product safety and consumer protections. In no event will
Microsoft be deemed to have any such responsibilities with regard to the
Licensed Product(s). In particular, under any recycling, collection, recovery,
reuse, disposal and/or waste management legislation, Company agrees that it is
solely responsible for all Licensed Products(s) as a producer and that Microsoft
has no responsibility therefore. Company hereby indemnifies Microsoft in the
event that its failure to comply with its responsibilities as a producer or any
of its acts or omissions leads to a claim or action being made against Microsoft
for Licensed Products under such legislation. Company will provide Microsoft
with the name and

 

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address of the manufacturer(s) of the Licensed Product(s) and the location of
its/their manufacturing facilities, and will provide Microsoft with no less than
30 days prior written notice in the event of any changes of such manufacturer.
Company will institute manufacturing processes and tests so as to ensure that
all units of the Licensed Product(s) manufactured by or for Company meet the
Quality Standards and Microsoft Standards, comply with all applicable
regulations, standards and other laws and are in compliance with the version of
the Proposed Product approved by Microsoft under Section 6.2 of this Agreement.
Company agrees to provide Microsoft with samples of the Licensed Product(s) from
time to time for purposes of verifying that they continue to meet the
Certification Specifications and Quality Standards.

 

9. Permission to Demonstrate

 

Company hereby grants permission to Microsoft during the Term, (i) to use and
display Licensed Product(s) at conventions, events, trade shows, press
briefings, and the like; and (ii) to use, depict, broadcast, and otherwise
display the Licensed Product(s) in advertising and promotional material relating
to Xenon and related Microsoft products and services, as Microsoft may
reasonably deem appropriate.

 

10. Confidentiality and Press Announcements.

 

10.1      Non-Disclosure Agreement. Microsoft and Company agree that the terms
of the Non-Disclosure Agreement (“NDA”) executed by the parties on
                             are incorporated herein by this reference. Further,
the parties agree that all terms and conditions of this Agreement will be deemed
Microsoft Confidential Information as defined therein. In the event that any
independent contractor of Company will require access to Microsoft Confidential
Information for the purposes of Company’s obligations under this Agreement,
Company will enter into written confidentiality agreements with such independent
contractors which are at least as protective of the Microsoft Confidential
Information as is the NDA.

 

10.2      Press Releases. Microsoft and Company agree that Company’s initial
press release or communication to the press and/or public regarding this
Agreement and any subsequent press releases to be published by Company which
refer to Microsoft or Xenon, will be mutually agreed upon prior to Company’s
release to the public. Company’s requests for approval and Microsoft’s reply
thereto will be sent to:

 

Scott Loomis, Xenon Peripherals Program Manager

Microsoft Corporation, One Microsoft Way, Redmond, WA 98052, USA

e-mail: xbox3pp@xbox.com.

 

10.3      Mandated Disclosure of this Agreement. Notwithstanding Sections 10.1
and 10.2, the parties acknowledge that this Agreement, or portions thereof, may
be required under applicable law to be disclosed as part of or an exhibit to
either party’s required public disclosure documents. If either party is advised
by its legal counsel that such disclosure is required, it will notify the other
in writing and the parties will jointly seek confidential treatment of this
Agreement to the maximum extent reasonably possible, in documents approved by
both parties and filed with the applicable governmental or regulatory
authorities, and/or Microsoft will prepare a redacted version of this Agreement
for such filing.

 

10.4      Access to Xenon Game Publishers. Notwithstanding anything to the
contrary contained in the PXDK license between Microsoft and Company, Microsoft
agrees that Company may work with publishers and developers of Xenon platform
game products, under terms and conditions to be agreed upon by Company and such
publisher/developer, for Company’s potential creation of Proposed Products that
will maximize such publishers’/developers’ Xenon game products. Nothing in this
Agreement will prohibit Company from distributing Company’s Licensed Product(s)
as a packaged set together with any third party’s Xenon-compatible game
products.

 

11. End User Warranties.

 

Company will be solely responsible for the distribution, marketing, sales,
maintenance, and End User warranties of the Licensed Product(s), and for
providing technical and all other support to distributors and End Users of the
Licensed Product(s). Company will provide all distributors and End Users of the
Licensed Product(s) with

 

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Company’s contact information (including without limitation Company’s street
address and telephone number, and the applicable individual/group responsible
for customer support). Such distributor and End User support will be consistent
with the then-applicable video game peripherals industry standards. Company
acknowledges and agrees that Microsoft will have no responsibilities whatsoever
for any of the foregoing and that Company will be solely responsible for any and
all End User warranty claims.

 

12. Company Warranties to Microsoft. Company warrants and represents that:

 

12.1      It has the full power and authority to enter into this Agreement; and

 

12.2      The Licensed Product(s) and Product Package comply with all relevant
domestic and international regulations, standards, and other laws, including
without limitation those pertaining to environmental, restricted substances,
recycling, disposal, reuse, waste management, labor, worker safety, product
safety and consumer protections applicable to the Licensed Product(s) and
Product Packaging, and Company expressly acknowledges that Microsoft has not
undertaken and has no duty to test, verify or otherwise ensure that the Licensed
Product(s), or Product Package complies with such regulations, standards, and
laws;

 

12.3      The Licensed Products comply with the Quality Standards, Microsoft
Standards and the Certification Specifications and the Licensed Products,
Product Package and all marketing materials comply with the Branding
Specifications.

 

12.4      Company has and will maintain throughout the Term and for at least two
(2) years thereafter, a comprehensive general liability insurance policy with
respect to the Licensed Product(s) in an amount not less than U.S.$2,000,000.00
per occurrence. Microsoft will be a named insured on said policy and Company
will provide to Microsoft a Certificate of Insurance evidencing Microsoft’s
status as an additional insured within 30 days of execution of this Agreement
and only at Microsoft’s request a copy of said policy. Company will provide
Microsoft with thirty (30) days prior written notice in the event of any policy
cancellation or a material change in the terms or provisions of such policy.

 

12.5      Notwithstanding anything to the contrary contained in this Agreement,
in the event Microsoft learns of a material variance in the Licensed Product’s
compliance with the Quality Standards, Microsoft Standards or Certification
Specifications or Company’s warranty in Section 12.2, Microsoft may terminate
this Agreement in accordance with Section 15.3(a).

 

13.       Microsoft Warranties to Company and Disclaimer of Warranties.
Microsoft warrants and represents that: (a) it has the full power to enter into
this Agreement; and (b) it has not previously and will not grant any rights to
any third party that are inconsistent with the rights granted to Company herein.
EXCEPT AS EXPRESSLY STATED IN SECTION 13, MICROSOFT PROVIDES ALL MATERIALS,
LICENSES AND SERVICES HEREUNDER ON AN “AS IS” BASIS, AND MICROSOFT DISCLAIMS ALL
OTHER EXPRESS OR IMPLIED WARRANTIES UNDER THE APPLICABLE LAWS OF ANY COUNTRY
REGARDING THE MATERIALS, LICENSES AND SERVICES, INCLUDING ANY IMPLIED WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTY OF
NON-INFRINGEMENT OR WITH REGARD TO THE SCOPE, COVERAGE, VALIDITY OR
ENFORCEABILITY OF ANY NECESSARY CLAIMS OR THAT ANY NECESSARY CLAIMS OR OTHER
INTELLECTUAL PROPERTY RIGHTS APPLY WORLDWIDE. THE ENTIRE RISK AS TO THE QUALITY,
USE, OR PERFORMANCE OF ANY MATERIALS PROVIDED BY MICROSOFT HEREUNDER REMAINS
WITH COMPANY.

 

14.       Indemnity/Limitation of Liability.

 

14.1      Company’s Indemnity of Microsoft. Company will defend, indemnify and
hold harmless Microsoft and Microsoft’s affiliates and subsidiaries, and their
respective directors, officers, employees, agents, customers and distributors of
each of the foregoing from and against any and all claims, actions, demands,
legal proceedings, liabilities, damages, losses, judgment, authorized
settlements, costs and expenses, including without

 

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limitation actions by private parties or governmental agencies and reasonable
attorney’s fees, arising out of or in connection with any actual or alleged:

 

(i)      claim that, if assumed to be true, would constitute a breach of a
Company warranty, representation or covenant set forth in this Agreement; and/or

 

(ii)      claim relating to the Proposed Product(s), Licensed Product(s),
Product Package or the marketing thereof (except to the extent that Microsoft is
obligated to indemnify Company for trademark infringement claims under14.3),
including without limitation: (A) claims of actual or alleged infringement by
Company, a Proposed Product, a Licensed Product, and/or Product Package, of any
patent, copyright, trade secret, mask work right, trademark or other proprietary
right of any third party except to the extent that such infringement arises from
the Xenon Logos, the Firmware or the Security Feature; (B) claims by any third
party that a Proposed Product, Licensed Product, and/or Product Package has
caused any injury or bodily harm (including death) or has damaged real property
or personal property or the environment; (C) claims based on a violation by
Company of, or failure of Proposed Product, Licensed Product, and/or Product
Package to comply with, any applicable law or regulation; (D) claims by or on
behalf of any subcontractor, supplier, employee or agent of Company; and/or (E)
claims related to Company’s use of the Xenon Logos in a manner not authorized
under this Agreement.

 

14.2      In the event Microsoft becomes aware of any such claim, Microsoft
shall: (i) reasonably promptly notify Company thereof; and (ii) provide Company
with reasonable cooperation in the defense thereof. Unless such claim or the
defense thereof could give rise to criminal liability or could have a material
effect on Microsoft’s business in the jurisdiction of such proceeding, Microsoft
will not settle any such claim without Company’s consent, which will not be
unreasonably withheld. Microsoft will have the right to approve the counsel
selected by Company to defend any such claim (such approval not to be
unreasonably withheld) and will also have the right to have its own counsel
participate in the defense of any such claim at Microsoft’s own expense.
Notwithstanding the foregoing, and without prejudice to Company’s
indemnification obligations or Microsoft’s other rights hereunder, Microsoft
will be entitled (using its own counsel and without the consent of Company) to
control the defense of, and settle, any claim if Company does not, upon
Microsoft’s demand, acknowledge in writing Company’s full responsibility to
indemnify therefor.

 

14.3      Microsoft’s Indemnity of Company. Microsoft will defend, indemnify and
hold Company and Company’s affiliates, directors, officers, employees,
licensees, agents and independent contractors harmless from and against any
costs, damages and fees reasonably incurred by Company, including but not
limited to fees of attorneys and other professionals, that are attributable to
any third-party claim that the Xenon Logos infringe the trademark of such third
party in those countries in which Microsoft distributes the Xenon video game
consoles.. Company will provide Microsoft reasonably prompt notice in writing of
any such claims and provide Microsoft with reasonable information and
assistance, at Microsoft’s expense, to help Microsoft to defend such claims.

 

14.4      EXCLUSION OF INCIDENTAL, CONSEQUENTIAL AND CERTAIN OTHER DAMAGES. To
the maximum extent permitted by applicable law, in no event will Microsoft, its
affiliates, subsidiaries, licensors or its suppliers be liable for any special,
incidental, indirect, or consequential damages whatsoever under this Agreement
(including, but not limited to, damages for loss of profits or confidential or
other information, for business interruption, for personal injury, for failure
to warn, for failure to meet any duty including of good faith or of reasonable
care, for negligence, and for any other pecuniary or other loss whatsoever) even
if Microsoft has been apprised of the likelihood of such damages.

 

14.5      Limitation of Liability and Remedies. Notwithstanding any damages that
Company might incur for any reason whatsoever (including, without limitation,
all damages referenced above and all direct or general damages), the entire
liability of Microsoft, its affiliates, licensors and any of its suppliers under
any provision of this Agreement and Company’s exclusive remedy for all of the
foregoing, will be limited to the cumulative sum of all license fees and royalty
payments received by Microsoft from Company under this Agreement. The foregoing
limitations, exclusions and disclaimers will apply to the maximum extent
permitted by applicable law, even if any remedy fails its essential purpose.

 

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15. Term and Termination.

 

15.1      Term. The term of this Agreement will commence on the Effective Date
and unless terminated earlier as provided in Section 15.2 or 15.3, will continue
until two (2) years after the Effective Date. Thereafter the Term will
automatically renew for successive one-year periods until the last year
Microsoft distributes the Xenon version console unless either party gives
written notice of its intent not to renew no less than 90 days prior to the
expiration of the initial or any subsequent renewal term.

 

15.2      Termination without Cause.

 

Either party may terminate this Agreement without cause upon ninety (90) days’
prior written notice and receive a refund of unused prepaid royalties or license
fees if (a) Microsoft decides not to implement the Security Feature in the Xenon
platform; or (b) a third party makes available for implementation technology
that allows peripheral devices in the categories of Licensed Products listed on
Exhibit E to operate with the Xenon console without violation of the Necessary
Claims.

 

15.3      Termination for Cause.

 

(a)      Microsoft may terminate this Agreement for cause immediately in the
event that the PXDK license between Microsoft and Company is terminated or in
the event of any breach by Company of the license provisions in Section 3.
Microsoft may terminate this Agreement for cause in the event of any of the
following: (i) if Company is in material breach or default of any
representation, warranty, covenant or agreement hereunder or fails to continue
to perform its obligations hereunder, which breach or default is not cured
within thirty (30) days of written notice from Microsoft; or (ii) if Company
becomes insolvent, upon thirty (30) days written notice from Microsoft; or (iii)
if Company becomes the subject of any proceeding under any bankruptcy,
insolvency or liquidation law, whether domestic or foreign and whether voluntary
or involuntary, which is not resolved favorably to Company within sixty (60)
days of commencement thereof; or (iv) if Company becomes subject to property
attachment, court injunction or court order which has a material adverse effect
on its operations.

 

(b)      Company may terminate this Agreement upon thirty (30) days written
notice to Microsoft if Microsoft becomes the subject of any proceeding under any
bankruptcy, insolvency or liquidation law, whether domestic or foreign and
whether voluntary or involuntary, which is not resolved favorably to Microsoft
within sixty (60) days of commencement thereof.

 

15.4      Effect of Termination; Sell-off Rights. In the event of any
termination of this Agreement and subject to any Sell-off Period, Company will
immediately (i) cease manufacture and distribution of the Licensed Product, (ii)
cease all use of the Xenon Logos and Microsoft Materials, (iii) cancel all
purchase orders for Xenon Chips, (iv) destroy all tooling that contains Xenon
Logos or only the parts of such tooling that contain Xenon Logos if destruction
of such tooling is not commercially reasonable, (v) dispose of Product Packages
at Company’s expense as directed by Microsoft in its sole discretion, and (vi)
return all unused Xenon Chips. Notwithstanding the foregoing, upon the
expiration or termination of this Agreement pursuant to a notice of non-renewal
under Section 15.1 or under Section 15.2 above, or in the event this Agreement
is terminated by Company under Section 15.3(b), Company will have the right to
continue to sell or otherwise dispose of Licensed Product which is in Company’s
inventory on the date of such termination or expiration, such right to continue
for six (6) months after such expiration or termination (the “Sell-off Period”),
provided that Company will not manufacture amounts of Licensed Product in
anticipation of such termination or expiration which is in excess of orders
expected to be received prior to the termination or expiration date. Company
will immediately destroy any inventory units of Licensed Product remaining after
the Sell-off Period. Any and all sales or other dispositions of the Licensed
Product made under the provisions of this Section 15.4, including such during
any Sell-Off Period, will be subject to all of the provisions of this Agreement.
Sales by Company to End Users and distributors prior to any termination or
expiration of this Agreement will not be abridged or diminished by any
expiration or termination of this Agreement.

 

15.5      Return of Materials. Upon the expiration or termination of this
Agreement, each party will promptly return to the other all Confidential
Information and other materials of the other that were held by each under the
terms of this Agreement.

 

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15.6      Survival. The provisions of Sections 1, 4.11, 5.3, 7, 8, 10, 11, 12,
13, 14, 15, and 16 will survive any termination or expiration of this Agreement.

 

16. Miscellaneous.

 

16.1      Governing Law; Attorneys’ Fees.

 

(a)      This Agreement will be construed and controlled by the laws of the
State of Washington, and Company further consents to jurisdiction by the state
and federal courts sitting in the State of Washington. The parties agree that
the U. N. Convention on Contracts for the International Sale of Goods does not
apply to this Agreement. Process may be served on either party by U.S. Mail,
postage prepaid, certified or registered, return receipt requested, or by such
other method as is authorized by the Washington Long Arm Statute. This Section
16 does not prevent Microsoft from seeking injunctive relief with respect to a
violation of intellectual property rights or confidentiality obligations in any
appropriate jurisdiction.

 

(b)      If either Microsoft or Company employs attorneys to enforce any rights
arising out of or relating to this Agreement, the prevailing party will be
entitled to recover reasonable attorneys’ fees.

 

16.2      Notices and Requests.

 

All notices and requests in connection with this Agreement will be deemed given
as of the day they are received either by messenger, delivery service, or in the
U.S. mail, postage prepaid, certified or registered, return receipt requested,
and addressed as follows:

 

Company:   MAD Catz, Inc.     7580 Mission Valley Rd     Suite 101     San
Diego, CA 92108-4406 Attention:   Sean Parry Phone:   (619) 683-9830 Fax:  
(619) 683-9839

with a cc to:

 

    Microsoft:   MICROSOFT CORPORATION     One Microsoft Way     Redmond, WA
98052-6399 Attention:   Scott Loomis with a cc to:   MICROSOFT CORPORATION    
One Microsoft Way     Redmond, WA 98052-6399 Phone:   (425) 882-8080 Fax:  
(425) 936-7329 Attention:   Law & Corporate Affairs

 

or to such other address as the party to receive the notice or request so
designates by written notice to the other.

 

16.3      Assignment. This Agreement, and any rights or obligations hereunder
will not be assignable by Company by contract or by operation of law without
first obtaining Microsoft’s written consent. An assignment will be deemed to
include without limitation (a) a merger of Company with another party, whether
or not Company is the

 

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surviving entity, (b) the acquisition of more than twenty percent (20%) of any
class of Company’s voting stock by another party, or (d) the sale or other
transfer of more than fifty percent (50%) of Company’s assets (whether in a
single transaction or series of transactions) any of which results in the
assumption of management control by another corporation or its nominees.
Microsoft may assign this Agreement in whole or in part to any affiliate or
subsidiary (direct or indirect) or in connection with any merger, reorganization
or consolidation. Subject to the limitations of this Section 16, this Agreement
will inure to the benefit of and be binding upon the parties, their successors,
administrators, heirs, and permitted assigns. Any attempted transfer or
assignment in violation of this Section will be void; and, in the event of any
such assignment or attempted assignment by Company, Microsoft shall have the
right to immediately terminate the Agreement.

 

16.4      Independent Contractors. This Agreement is intended solely as a
license agreement, and no partnership, joint venture, agency, or other form of
agreement or relationship is intended.

 

16.5      Enforceability/Waiver. If any provision of this Agreement will be held
by a court of competent jurisdiction to be illegal, invalid or unenforceable,
the remaining provisions will remain in full force and effect. No waiver of any
breach of any provision of this Agreement will constitute a waiver of any other
breach of the same or any other provision hereof, and no waiver will be
effective unless made in writing and signed by an authorized representative of
the waiving party.

 

16.6      Government Approvals. Company shall, at its own expense, obtain and
arrange for the maintenance in full force and effect of all foreign and domestic
governmental and regulatory approvals, consents, licenses, authorizations,
declarations, filings, and registrations as may be necessary or advisable for
the performance of all of the terms and conditions of the Agreement including,
but not limited to, foreign exchange approvals, import and offer agent licenses,
fair trade approvals and all approvals which may be required to realize the
purposes of the Agreement.

 

16.7      Injunctive Relief. The parties agree that Company’s threatened or
actual unauthorized use of the Xenon Logos or Microsoft Materials, whether in
whole or in part, will result in immediate and irreparable damage to Microsoft
for which there is no adequate remedy at law, and in such event Microsoft will
be entitled to appropriate injunctive relief, without the necessity of posting
bond or other security.

 

16.8      Entire Agreement/Modification. The parties hereto acknowledge that
they have read this entire Agreement and understand it, and they agree to be
bound by all its terms and conditions. They further agree that this Agreement,
the NDA and all exhibits hereto constitute a single, integrated written contract
expressing the entire agreement between the parties with respect to the subject
matter hereof and all prior and contemporaneous communications and negotiations,
whether written or oral, have been and are merged and integrated into, and are
superseded by, this integrated written agreement. No covenants, agreements,
representations or warranties of any kind whatsoever have been made by any party
hereto, except as specifically set forth in this integrated written contract.
This Agreement will not be modified except by a written agreement of even date
herewith or subsequent hereto signed on behalf of Company and Microsoft by their
duly-authorized representatives.

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the dates indicated below.

 

MICROSOFT CORPORATION       MAD CATZ, INC One Microsoft Way       7580 Mission
Valley Rd Redmond, WA 98052       Suite 101         San Diego, CA 92108-4406

 

 

 

 

 

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

     

 

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By (Signature)       By (Signature)

 

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

     

 

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Name (Print)       Name (Print)

 

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

     

 

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Title       Title

 

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Date       Date

 

 

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EXHIBIT A

 

 

MICROSOFT MATERIALS

 

Technical Documentation:

 

  1. Xenon Controller Requirements

  2. Xenon Controller XUSB Specification

  3. Xenon Controller Certification Requirements

  4. XNA common controller WindowXP driver [in object code only]

  5. Xenon Controller Security Interface Specification

 

 

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EXHIBIT B-1

 

XENON LOGOS

 

Xenon Product Jewel Logo

 

 

[to be supplied at a later date]

 

 

Xenon Certified Logo

 

 

[to be supplied at a later date]

 

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EXHIBIT B-2

 

Branding Specifications

 

  •   Company may use the Xenon Certified Logo on the Product Package as
instructed by Microsoft for Licensed Product(s), and End-User documentation
(excluding the warranty accompanying the Licensed Product), and marketing
materials for the Licensed Product(s), and in no other manner.

 

  •   Company may use the Xenon Product Jewel Logo solely on Licensed Product
casing and no other product casing or other materials.

 

  •   Company’s name, logo, or trademark must appear on any materials where the
Xenon Logos are used, and must be larger and more prominent than the Xenon
Logos.

 

  •   The Xenon Logos may not be used in any manner that expresses or might
imply Microsoft’s affiliation, sponsorship, endorsement, certification, or
approval, other than as contemplated by this Agreement.

 

  •   The Xenon Logos may not be included in any non-Microsoft trade name,
business name, domain name, product or service name, logo, trade dress, design,
slogan, or other trademark.

 

  •   Company may use the Xenon Logos only as provided by Microsoft
electronically or in hard copy form. Except for size subject to the restrictions
herein, the Xenon Logos may not be altered in any manner, including proportions,
colors, elements, and so on, or animated, morphed, or otherwise distorted in
perspective or dimensional appearance.

 

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

 

  •   The Xenon Logos may not be imitated.

 

  •   The Xenon Logos may not be used as a design feature in any materials.

 

  •   The Xenon Logos must stand alone. A minimum amount of empty space must
surround any Xenon Logo, separating it from any other object, such as type,
photography, borders, edges, and so on. The required area of empty space around
the Xenon Logos is 1/2x, where x equals the height of the Xenon Logo.

 

  •   Use the trademark symbol (“™”) at the upper right corner or baseline
immediately following the name “[Xenon].” This symbol should be used at the
first or most prominent mention. Please be sure to spell [Xenon] or Xbox as one
word, with no hyphen and with no spaces between “X” and “box.” Capitalization
convention is to capitalize the “X” and lowercase the rest of the name. [“Xenon”
is a placeholder for the final product name.]

 

  •   Each use of the Xenon Logos must include the notice: “[Xenon] and the
[Xenon] logo(s) are trademarks of Microsoft Corporation in the United States
and/or other countries and are used under license from Microsoft.” [“Xenon” is a
placeholder for the final product name.]

 

  •   The official descriptor for the Xenon console is “video game and
entertainment console,” i.e., “Xenon™ video game and entertainment console.” Use
the appropriate descriptor immediately after first mention of the name in text
and at first mention in each chapter of documentation that references the name;
thereafter the trademark should appear with an appropriate descriptor about 50%
of the time. Other appropriate descriptors may be used for related products,
such as “controller” or “game.” For example:

 

Xenon™ video game and entertainment console

Xenon™ controller

Xenon™ game

 

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  •   Do not use the Xenon trademark in a possessive or plural form.

 

Examples:

DO say:

       Cool new features available in the Xenon video game console     

DON’T say:

                   Xenon’s cool new features     

DO say:

       They ordered two Xenon video game consoles     

DON’T say:

                   They ordered two Xenones     

 

 

  •   Do not abbreviate Xbox. Neither “XB” nor the letter “X” by itself should
be used as a substitute for “Xbox” or used to represent or to imply an
association with “Xbox.” The following are a few Dos and Don’ts to guide you in
selecting an appropriate name for Licensed Product. Product names, codenames,
taglines/sell lines, and marketing copy should also be consistent with these
guidelines.

 

 

  •   DON’T use “X” followed by a generic term (e.g., Xtennis or X-Tennis).

Exceptions: Established product names that are being adapted for the Xenon video
game console or existing brands in other areas of use (e.g. X-Men; X-Files).

  •   DON’T use “X” as a suffix or version identifier (e.g. Motocross Madness X
or MotoX).

  •   DON’T create a coined term for a peripheral device that begins with the
letter “X.” (e.g. X-O-Skeleton).

  •   DON’T use a stylized “X” that resembles the Xenon logo, e.g.,

DON’T use similar colors

DON’T use a similar shape

DON’T use the same font style

  •   DON’T create taglines/sell lines or marketing copy that emphasize the
letter “X” (e.g. Come see the ultimate Xcitement/eXcitement … Xenon).

 

 

Notwithstanding the above guidelines, it is OK to use “X” in a product name in
the following circumstances:

 

  •   As a prominent element of a word that contains the letter “X,” provided
that “X” does not resemble the Xbox logo.

  •   The “X” is part of an established product name that is being adapted for
the Xenon console or is an existing brand in other areas of use (outside of
gaming).

  •   “X” is a portion of an actual word (i.e., not a coined term) e.g.
Xylophone or Boxer, or a commonly used term, e.g. Xtreme.

  •   “X” is used as part of an acronym (e.g., TTX) where the “X” does not
represent “Xenon”

  •   You may use “PXDK” in text as an abbreviation for the “Xenon Development
Kit (Peripheral)” after the term has been defined, i.e., “Xenon Development Kit
(Peripheral)(“PXDK”).”

 

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EXHIBIT C

 

FEES

 

1. [***]

 

 

[*] CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS
DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

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EXHIBIT D

 

 

Certification Testing Centers

 

 

[to be supplied at a later date]

 

 

 

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EXHIBIT E

 

Authorized Licensed Products, Excluded Products, Territory

 

 

1. Licensed Game Peripheral Products

  •   Wired game pads

  •   Wired steering wheels (FFB not included at this time)

  •   Wired arcade sticks

  •   Wired flight stick (joystick)

  •   Wired dance pad

 

2. Excluded Products

  •   Light guns

  •   Cheat cards

  •   Memory units

  •   Wireless Products

  •   Hard Drives

 

For purposes of this Agreement, “Wireless Products” means devices that use a
radio to connect to the Xenon game console rather than electrical or physical
connection through cabling and includes devices that connect through a dongle
and that use a radio to connect from the dongle to the device.

 

3. Territory

 

  •   North America

  •   Europe and Rest of World

 

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EXHIBIT F

 

APPROVED VENDORS

 

[to be supplied at a later date]

 

Xenon Chip Identification Number    Contact Information    Approved Vendor     
                                                      

 

 

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LOGO [g45739image02.jpg]

 

EXHIBIT G

 

Certificate of Compliance

 

Supplier Certificate of Compliance (CoC)

 

 

    Supplier Information

 

 

Company Name:

 

  

 

Address:

 

 

SRSM (Supplier Restricted Substance Mngr):

 

  

 

Title:

 

 

SRSM Phone:

 

  

 

Email:

 

 

As a Supplier of licensed products, components or materials to Microsoft, we
have received a copy of Microsoft “Restricted Substances for Hardware Products
(H00594)” specification, have personnel qualified to understand the technical
requirements of this specification, and have taken adequate due diligence
measures to ensure compliance with H00594 restricted substances requirements.

 

If flame retardant substances are present in circuit boards, cable assemblies,
connectors, plugs, jacks or external plastics specify the substance and where
used. If 94V0 rated plastics are used, specify where used. If polyvinyl chloride
(PVC) is present in the product (except for external cables and wire
insulation), specify the substance and where used.

 

If none of the above substances are present, specify “NOT USED” on line 1 below.
(Use additional sheet if necessary):

 

SUBSTANCE (List Flame Retardant Chemical or PVC)         WHERE USED (in Product)
                                                                        

 

 

    Product Information

 

 

Product Names & Number:

 

  

 

Device (ex. Gamepad, Steering wheel):

 

 

PNs / EIPNs / SKUs:

 

  

 

Time Period (minimum 12 months):

 

    

 

From:                     To:

 

 

I certify that the supplied product (see above) conforms fully to the
requirements of the Microsoft “Restricted Substances for Hardware Products
(H00594)” specification and that no banned Ozone Depleting Chemicals (per the
Montreal Protocol) are used in the manufacture of Microsoft products.

 

    Supplier Electronic Signature

 

 

SRSM:

 

  

 

Date:

 

 

 

 

 

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