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                                                                    EXHIBIT 10.8

                           CHANGE OF CONTROL AGREEMENT

This Change of Control Agreement (this "Agreement"), dated as of _______________
is between CENTERSPAN COMMUNICATIONS CORPORATION, an Oregon corporation (the
"Company"), and ________________________________ (the "Executive").

         The Board of Directors of the Company (the "Board") has determined that
it is in the best interests of the Company and its stockholders to ensure that
the Company will have the continued dedication of the Executive, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined in
Appendix A to this Agreement, which is incorporated herein by this reference) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive arising from the personal uncertainties and risks
created by a pending or threatened Change of Control, to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, to encourage the
Executive's willingness to serve a successor in an equivalent capacity, and to
provide the Executive with reasonable compensation and benefits arrangements in
the event that a Change of Control results in the Executive's loss of equivalent
employment.

         In order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

1.       EMPLOYMENT

         1.1        CERTAIN DEFINITIONS

                  (a) "EFFECTIVE DATE" shall mean the first date during the
Change of Control Period (as defined in Section 1.1(b)) on which a Change of
Control occurs.

                  (b) "CHANGE OF CONTROL PERIOD" shall mean the period
commencing on the date of this Agreement and ending on the second anniversary of
such date; provided, however, that commencing on the date one year after the
date of this Agreement, and on each annual anniversary of such date (such date
and each annual anniversary thereof shall be hereinafter referred to as the
"Renewal Date"), the Change of Control Period shall be automatically extended so
as to terminate two years from such Renewal Date unless the Company gives prior
notice to the Executive that the Renewal Date shall not occur and the Change of
Control Period shall not be extended.

         1.2        EMPLOYMENT PERIOD

         The Company hereby agrees to continue the Executive in its employ or in
the employ of its affiliated companies, and the Executive hereby agrees to
remain in the employ of the Company or its affiliated companies, in accordance
with the terms of this Agreement, for a period commencing on the Effective Date
and ending on the second anniversary of such date (the "Employment Period").

         1.3        POSITION AND DUTIES

         During the Employment Period, the Executive's position, authority,
duties and responsibilities shall be at least reasonably commensurate in all
material respects with the most

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significant of those held, exercised and assigned at any time during the 90-day
period immediately preceding the Effective Date.

         1.4        LOCATION

         During the Employment Period, the Executive's services shall be
performed at the Company's headquarters on the Effective Date or any office
which is subsequently designated as the headquarters of the Company and 40 miles
or less from such location.

         1.5        EMPLOYMENT AT WILL

         The Executive and the Company acknowledge that, except as may otherwise
be expressly provided under any other written employment agreement between the
Executive and the Company, the employment of the Executive by the Company or its
affiliated companies is "at will" and may be terminated by either the Executive
or the Company or its affiliated companies at any time. Moreover, if prior to
the Effective Date the Executive's employment with the Company or its affiliated
companies terminates, then the Executive shall have no further rights under this
Agreement.

2.       ATTENTION AND EFFORT

         During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive will devote all of
his productive time, ability, attention and effort to the business and affairs
of the Company and the discharge of the responsibilities assigned to him
hereunder, and will use his best efforts to perform faithfully and efficiently
such responsibilities. It shall not be a violation of this Agreement for the
Executive to (a) serve on corporate, civic or charitable boards or committees,
(b) deliver lectures, fulfill speaking engagements or teach at educational
institutions, and (c) manage personal investments, so long as such activities do
not significantly interfere with the performance of the Executive's
responsibilities in accordance with this Agreement. It is expressly understood
and agreed that to the extent any such activities have been conducted by the
Executive prior to the Employment Period, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
during the Employment Period shall not thereafter be deemed to interfere with
the performance of the Executive's responsibilities to the Company.

3.       COMPENSATION

         During the Employment Period, the Company agrees to pay or cause to be
paid to the Executive, and the Executive agrees to accept in exchange for the
services rendered hereunder by him, the following compensation:

         3.1        SALARY

         The Executive shall receive an annual base salary (the "Annual Base
Salary"), at least equal to the annual salary established by the Board or the
Compensation Committee of the Board (the "Compensation Committee") for the
fiscal year in which the Effective Date occurs. The Annual Base Salary shall be
paid in substantially equal installments and at the same intervals as the
salaries of other officers of the Company are paid.

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4.       BENEFITS

         4.1        BENEFIT PLANS; VACATION

         During the Employment Period, the Executive shall be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in such fringe benefit programs as shall be provided to other
executives of the Company and its affiliated companies from time to time during
the Employment Period by action of the Board (or any person or committee
appointed by the Board to determine fringe benefit programs and other
emoluments), including, without limitation, paid vacations; any incentive,
savings and retirement plan, practice, policy or program; and all welfare
benefit plans, practices, policies and programs (including, without limitation,
medical, prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and programs).

         4.2        EXPENSES

         During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable employment expenses incurred by
him in accordance with the policies, practices and procedures of the Company and
its affiliated companies in effect for the executives of the Company and its
affiliated companies during the Employment Period.

5.       TERMINATION

         Employment of the Executive during the Employment Period may be
terminated as follows but, in any case, the nondisclosure and noncompetition
provisions set forth in Section 8 hereof shall survive the termination of this
Agreement and the termination of the Executive's employment with the Company:

         5.1        BY THE COMPANY OR THE EXECUTIVE

         Upon giving Notice of Termination (as defined below), the Company may
terminate the employment of the Executive with or without Cause (as defined
below), and the Executive may terminate his employment for Good Reason (as
defined below) or for any reason, at any time during the Employment Period.

         5.2        AUTOMATIC TERMINATION

         This Agreement and the Executive's employment during the Employment
Period shall terminate automatically upon the death or Total Disability of the
Executive. The term "Total Disability" as used herein shall mean the Executive's
inability (with or without such accommodation as may be required by law and
which places no undue burden on the Company), as determined by a physician
selected by the Company and acceptable to the Executive, to perform the duties
set forth in Section 1.3 hereof for a period or periods aggregating 120 calendar
days in any 12-month period as a result of physical or mental illness, loss of
legal capacity or any other cause beyond the Executive's control, unless the
Executive is granted a leave of absence by the Board. The Executive and the
Company hereby acknowledge that the Executive's presence and ability to perform
the duties specified in Section 1.3 hereof is of the essence of this Agreement.

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         5.3        NOTICE OF TERMINATION

         Any termination by the Company or by the Executive during the
Employment Period shall be communicated by Notice of Termination to the other
party given in accordance with Section 10 hereof. The term "Notice of
Termination" shall mean a written notice which (a) indicates the specific
termination provision in this Agreement relied upon and (b) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated. The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.

         5.4        DATE OF TERMINATION

         During the Employment Period, "Date of Termination" means (a) if the
Executive's employment is terminated by reason of death, at the end of the
calendar month in which the Executive's death occurs, (b) if the Executive's
employment is terminated by reason of Total Disability, immediately upon a
determination by the Company of the Executive's Total Disability, and (c) in all
other cases, five days after the date of mailing of the Notice of Termination.
The Executive's employment and performance of services will continue during such
five-day period; provided, however, that the Company may, upon notice to the
Executive and without reducing the Executive's compensation during such period,
excuse the Executive from any or all of his duties during such period.

6.       TERMINATION PAYMENTS

         In the event of termination of the Executive's employment during the
Employment Period, all compensation and benefits set forth in this Agreement
shall terminate except as specifically provided in this Section 6.

         6.1 TERMINATION BY THE COMPANY FOR OTHER THAN CAUSE OR BY THE EXECUTIVE
             FOR GOOD REASON

         If the Company terminates the Executive's employment other than for
Cause or the Executive terminates his employment for Good Reason prior to the
end of the Employment Period, the Executive shall be entitled to:

                  (a)      receive payment of the following accrued obligations
(the "Accrued Obligations"):

                           (i)      the Executive's Annual Base Salary through
         the Date of Termination to the extent not theretofore paid;

                  (b)   for eighteen months after the Date of Termination, the
Company shall continue its group health insurance benefits and other group
insurance programs (such as life, disability, etc.) to the Executive and/or the
Executive's family at least equal to those which would have been provided to
them in accordance with the Company plans that would have been available to
Executive if the Executive's employment had not been terminated; PROVIDED,
HOWEVER, that if the Executive becomes reemployed with another employer and is
eligible to receive health or other

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group insurance benefits under another employer-provided plan, the health and
other group insurance benefits described herein shall be secondary to those
provided under such other plan during such applicable period of eligibility
(such continuation of such benefits for the period herein set forth shall be
hereinafter referred to as the "Welfare Benefit Continuation");

                  (c) an amount as severance pay equal to 100% of the Annual
Base Salary for the fiscal year in which the Date of Termination occurs; and

                  (d) Executive shall be entitled to reasonable, pre-approved
Company-paid outplacement assistance, including job counseling and referral
services, for a period of six (6) months following the date of termination of
employment at an aggregate cost of not more than $6,000.

         For purposes of the continuation health coverage required under Section
4980B of the Internal Revenue Code ("COBRA"), the date of the "qualifying event"
giving rise to Executive's COBRA election period (and that of his "qualifying
beneficiaries") shall be the last date on which the Executive receives Welfare
Benefit continuation under this Plan.

         6.2        TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON

         If the Executive's employment shall be terminated by the Company for
Cause or by the Executive for other than Good Reason during the Employment
Period, this Agreement shall terminate without further obligation to the
Executive other than the obligation to pay to the Executive his Annual Base
Salary through the Date of Termination.

         6.3        TERMINATION BECAUSE OF DEATH OR TOTAL DISABILITY

         If the Executive's employment is terminated by reason of the
Executive's death or Total Disability during the Employment Period, this
Agreement shall terminate automatically without further obligations to the
Executive or his legal representatives under this Agreement, other than for
payment of Accrued Obligations (which shall be paid to the Executive's estate or
beneficiary, as applicable in the case of the Executive's death), and the timely
payment or provision of the Welfare Benefit Continuation.

         6.4        PAYMENT SCHEDULE AND LIMITATION

         All payments under this Section 6 shall be made to the Executive at the
same intervals as such payments were made to him immediately prior to
termination.

         If either the Company or the Executive receives confirmation from the
Company's certified public accounting firm, or such other accounting firm
retained as independent certified public accountants for the Company, that any
payment by the Company under this Section 6 would be considered to be an "excess
parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended, or any successor statute then in effect, then the
aggregate payments by the Company pursuant to this Section 6 shall be reduced to
an amount which is $1.00 less than the smallest sum which would be deemed to be
such an "excess parachute payment" and, if permitted by applicable law, such
reduction shall be made to the last payment due hereunder; PROVIDED, FURTHER,
that, if permitted by applicable law, no such adjustment shall be made in any
year in which the Executive authorizes a reduction in the payment otherwise due
the Executive hereunder by an amount equal to any loss to be incurred by the
Company because such payments would not be

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deductible by the Company as a business expense for income tax purposes for the
reason that such payments constitute an "excess parachute payment" in that year.

         6.5        CAUSE

         For purposes of this Agreement, "Cause" means cause given by the
Executive to the Company and shall mean the occurrence of one or more of the
following events:

                  (a)      Any act of dishonesty by Executive intended to result
in substantial gain or personal enrichment of the Executive;

                  (b)      Executive personally engaging in knowing and
intentional illegal conduct which is injurious to the reputation of the Company
or its affiliates;

                  (c)      Executive's continued failure to substantially
perform the duties and obligations of his employment which are not remedied
within thirty (30) days after notice thereof from the Board of Directors or
Chief Executive Officer of the Company to Executive;

                  (d)      Executive being convicted of a felony, or committing
an act of dishonesty or fraud against, or the misappropriation of property
belonging to, the Company or its affiliates;

                  (e)      Executive's engagement in repeated substance abuse
which impairs his ability to perform the duties and obligations of Executive's
employment or impairs the reputation of the Company;

                  (f)      Executive personally engaging in any act of moral
turpitude that impairs the reputation of the Company;

                  (g)      Executive knowingly and intentionally breaching in
any material respect the terms of this Agreement (or any confidentiality
agreement of invention or proprietary information agreement with the Company);

                  (h)      Executive's commencement of employment with another
employer while he is an employee of the Company; or

                  (i)      Any material breach by Executive of any material
provision of this Agreement which continues uncured for thirty (30) days
following notice thereof.

         6.6        GOOD REASON

         For purposes of this Agreement, "Good Reason" means the occurrence of
any of the following events or conditions and the failure of the Company to cure
such event or condition within 30 days after receipt of written notice by the
Executive:

                  (a)      a change in the Executive's status, title, position
or responsibilities (including reporting responsibilities) that, in the
Executive's reasonable judgment, represents a substantial reduction in the
status, title, position or responsibilities as in effect immediately prior
thereto; the assignment to the Executive of any duties or responsibilities that,
in the Executive's reasonable judgment, are materially inconsistent with such
status, title, position or responsibilities; or any removal of the Executive
from or failure to reappoint or reelect the Executive to any of such

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positions (other than as a member of the board of directors), except in
connection with the termination of the Executive's employment for Cause, for
Disability or as a result of his or her death, or by the Executive other than
for Good Reason;

                  (b)      a reduction in the Executive's annual base salary;

                  (c)      the Company's requiring the Executive (without the
Executive's consent) to be based at any place outside a 35-mile radius of his or
her place of employment prior to a Change of Control, except for reasonably
required travel on the Company's business that is not materially greater than
such travel requirements prior to the Change of Control;

                  (d)      the Company's failure to (i) continue in effect any
material compensation or benefit plan (or the substantial equivalent thereof) in
which the Executive was participating at the time of a Change of Control,
including, but not limited to, the Plan, or (ii) provide the Executive with
compensation and benefits substantially equivalent (in terms of benefit levels
and/or reward opportunities) to those provided for under each material employee
benefit plan, program and practice as in effect immediately prior to the Change
of Control;

                  (e)      any material breach by the Company of its obligations
to the Executive under this Agreement; or

                  (f)      any purported termination of the Executive's
employment or services for Cause by the Company that does not comply with the
terms of this Agreement.

         6.7        NO DUTY TO MITIGATE

         The Executive shall not be required to mitigate the amount of any
payment contemplated by this Agreement, nor shall any such payment be reduced by
any earnings that the Executive may receive from any other source.

7.       REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS

         In order to induce the Company to enter into this Agreement, the
Executive represents and warrants to the Company as follows:

         7.1        HEALTH

         The Executive is in good health and knows of no physical or mental
disability which, with or without any accommodation which may be required by law
and which places no undue burden on the Company, would prevent him from
fulfilling his obligations hereunder. The Executive agrees, if the Company
requests, to submit to periodic medical examinations by a physician or
physicians designated by, paid for and arranged by the Company. The Executive
agrees that the examination's medical report shall be provided to the Company.

         7.2        NO VIOLATION OF OTHER AGREEMENTS

         The Executive represents that neither the execution nor the performance
of this Agreement by the Executive will violate or conflict in any way with any
other agreement by which the Executive may be bound.

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8.       NONDISCLOSURE; NONCOMPETITION; RETURN OF MATERIALS

         The Company and the Executive hereby reaffirm the Employee Invention
and Nondisclosure Agreement previously executed by the Executive (attached as
Exhibit A to this Agreement), and expressly incorporated herein as part of this
Agreement. Consistent with the Employee Invention and Nondisclosure Agreement,
Executive agrees that at no time during the Employment Period or within one year
thereafter will Executive become involved in any activity or with any business
entity anywhere in the world which directly or indirectly competes with any
product or service of the Company or its affiliates.

         All documents, records, notebooks, notes, memoranda, drawings or other
documents made or compiled by the Executive at any time, or in his possession,
including any and all copies thereof, shall be the property of the Company and
shall be held by the Executive in trust and solely for the benefit of the
Company, and shall be delivered to the Company by the Executive upon termination
of employment or at any other time upon request by the Company.

         The Executive understands that the Company will be relying on this
Agreement in continuing the Executive's employment, paying him compensation,
granting him any promotions or raises, or entrusting him with any information
which helps the Company compete with others.

9.       NOTICE AND CURE OF BREACH

         Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than clause (b), (c) or (d) of Section 6.6 hereof,
before such action is taken, the party asserting the breach of this Agreement
shall give the other party at least ten days' prior written notice of the
existence and the nature of such breach before taking further action hereunder
and shall give the party purportedly in breach of this Agreement the opportunity
to correct such breach during the ten-day period.

10.      FORM OF NOTICE

         Every notice required by the terms of this Agreement shall be given in
writing by serving the same upon the party to whom it was addressed personally
or by registered or certified mail, return receipt requested, at the address set
forth below or at such other address as may hereafter be designated by notice
given in compliance with the terms hereof:

         If to the Executive:             _____________________________________
                                          _____________________________________
                                          _____________________________________

         If to the Company:               CenterSpan Communications Corporation
                                          7175 N.W. Evergreen Parkway, Suite 400
                                          Hillsboro, Oregon  97124

or such other address as shall be provided in accordance with the terms hereof.
Except as set forth in Section 5.4 hereof, if notice is mailed, such notice
shall be effective upon mailing.

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11.      ASSIGNMENT

         This Agreement is personal to the Executive and shall not be assignable
by the Executive. The Company may assign its rights hereunder to (a) any
corporation resulting from any merger, consolidation or other reorganization to
which the Company is a party or (b) any corporation, partnership, association or
other person to which the Company may transfer all or substantially all of the
assets and business of the Company existing at such time. All the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns.

         The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean CenterSpan Communications Corporation and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

12.      WAIVERS

         No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance shall not constitute a waiver
thereof in any other instance or circumstance. All rights and remedies shall be
cumulative and not exclusive of any other rights or remedies.

13.      AMENDMENTS IN WRITING

         No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, shall in any event be effective unless the same shall be in
writing, specifically identifying this Agreement and the provision intended to
be amended, modified, waived, terminated or discharged and signed by the Company
and the Executive, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by the Company and the Executive.

14.      APPLICABLE LAW

         This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the State of Oregon, without regard to
any rules governing conflicts of laws.

15.      SEVERABILITY

         If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, including, without
limitation, the duration of such provision, its geographical scope or the extent
of the activities prohibited or required by it, then, to the full extent

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permitted by law, (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover shall have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.

16.      ENTIRE AGREEMENT

         This Agreement on and as of the date hereof constitutes the entire
agreement between the Company and the Executive with respect to the subject
matter hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between the Company and the Executive with respect
to such subject matter are hereby superseded and nullified in their entireties,
with the exception of the Employee Invention and Nondisclosure Agreement
referenced in Section 8.

17.      WITHHOLDING

         The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.

18.      COUNTERPARTS

         This Agreement may be executed in counterparts, each of which
counterpart shall be deemed an original, but all of which together shall
constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.

                                       EXECUTIVE

                                       _________________________________________

                                       CENTERSPAN COMMUNICATIONS
                                       CORPORATION

                                       By  _____________________________________
                                           Its__________________________________

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                                  APPENDIX A TO

                       CHANGE OF CONTROL AGREEMENT BETWEEN

                    CENTERSPAN COMMUNICATIONS CORPORATION AND

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

         For purposes of this Agreement, a "Change of Control" shall mean:

         (a) A "Board Change" which, for purposes of this Agreement, shall have
occurred if a majority (excluding vacant seats) of the seats on the Company's
Board are occupied by individuals who were neither (i) nominated by a majority
of the Incumbent Directors nor (ii) appointed by directors so nominated. An
"Incumbent Director" is a member of the Board who has been either (i) nominated
by a majority of the directors of the Company then in office or (ii) appointed
by directors so nominated, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person (as hereinafter defined) other than the
Board; or

         (b) The acquisition by any Person (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of (i) 20% or more of
either (A) the then outstanding shares of Common Stock of the Company (the
"Outstanding Company Common Stock") or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"), in the case
of either (A) or (B) of this clause (i), which acquisition is not approved in
advance by a majority of the Incumbent Directors, or (ii) 33% or more of either
(A) the Outstanding Company Common Stock or (B) the Outstanding Company Voting
Securities, in the case of either (A) or (B) of this clause (ii), which
acquisition is approved in advance by a majority of the Incumbent Directors;
PROVIDED, HOWEVER, that the following acquisitions shall not constitute a Change
of Control: (x) any acquisition by the Company, (y) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (z) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the conditions described in
clauses (i), (ii) and (iii) of subsection (c) of this Appendix A are satisfied;
or

         (c) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, unless, immediately following such
reorganization, merger or consolidation, (i) more than 60% of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same proportion as
their ownership

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immediately prior to such reorganization, merger or consolidation of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, (ii) no Person (excluding the Company, any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, 33% or more of the Outstanding Company Common Stock or the
Outstanding Voting Securities, as the case may be) beneficially owns, directly
or indirectly, 33% or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors, and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such reorganization, merger or
consolidation were the Incumbent Directors at the time of the execution of the
initial agreement providing for such reorganization, merger or consolidation; or

         (d) Approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all the assets of the Company, other than to a
corporation with respect to which immediately following such sale or other
disposition, (A) more than 60% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Company Common Stock
and the Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding the Company, any employee benefit plan (or related trust) of the
Company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 33% or more of
the Outstanding Company Common Stock or the Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 33%
or more of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors and (C) at least a majority of the members of the board of directors
of such corporation were approved by a majority of the Incumbent Directors at
the time of the execution of the initial agreement or action of the Board
providing for such sale or other disposition of assets of the Company.

                                      -2-<PAGE>

                                                                    EXHIBIT 10.9

                   SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT

THIS SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT ("Agreement"), dated effective
May 28, 1998 ("Effective Date"), is by and between INTEL CORPORATION, a Delaware
corporation with an office at 2111 NE 25th Avenue, Hillsboro, Oregon ("Intel")
and THRUSTMASTER, INC. an Oregon corporation with an office at 7175 NW Evergreen
Parkway, #400, Hillsboro, Oregon ("Thrustmaster").

                                    RECITALS

A.   Intel is a manufacturer of microprocessors, software and systems. Intel is
     developing certain technologies (as further defined in Section 1.6 the
     "Intel Software") that will enable audio communication for multiple parties
     connected via an Internet server to engage in multi-player audio-enabled PC
     games and other audio-enabled group activities.

B.   Thrustmaster is a manufacturer of software communications solutions for
     personal computers.

C.   Intel desires to license the Intel Software to Thrustmaster in order to
     develop the market segment for audio-enabled online PC Gaming, and
     Thrustmaster desires to license the Intel Software from Intel in order to
     extend the capabilities of Thrustmaster's product line.

D.   The parties now wish to set forth the terms and conditions under which,
     INTER ALIA, (i) Intel will license the Intel Software to Thrustmaster (ii)
     Thrustmaster will develop and license to Intel certain Thrustmaster
     Software that will be developed by Thrustmaster for use in conjunction with
     the Intel Software, and (iii) Intel will receive warrants to purchase
     shares of Thrustmaster common stock in form attached hereto as Exhibit E.

NOW THEREFORE, based on the Recitals and the terms and conditions herein, and
for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties agree as follows:

                                    AGREEMENT

SECTION 1.  DEFINITIONS

In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:

1.1      "Derivative Work" means a work based upon one or more preexisting
         works, such as a translation, abridgment, condensation, modification,
         or any other form in which a work may be recast, transformed, or
         adapted.

1.2      "Embed" means to incorporate the Intel Software into a PC application
         such that the user is not required to use a window outside that PC
         application to select a feature provided by the Intel Software.

1.3      "Intel Derivatives" means any Derivative Works of the Thrustmaster
         Software created by Intel.

1.4      "Intel Documentation" means manuals and other materials supplied to
         Thrustmaster by Intel, in any medium, relating to build environment,
         design, maintenance, installation, operation, or training relating to
         the Intel Software.

1.5      "Intel's Intellectual Property Rights" means copyrights in the Intel
         Software as delivered and, to the minimum extent necessary to exercise
         the copyright license, (i) claims of patents and patent

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         applications that read on inventions incorporated in the Intel Software
         as delivered and (ii) trade secrets in the Intel Software as delivered.
         "Intel's Intellectual Property Rights" do not include any patent or
         patent application claims relating to semiconductors, chipsets or
         semiconductor manufacturing technology.

1.6      "Intel Software" means Intel -Registered Trademark- Multi-Point Audio
         Software, Intel-Registered Trademark- Launch & Connect Software and
         PreseNce Software components as more fully described in Exhibit A, and
         includes any bug fix or updates for such Software as may be provided by
         INTEL at its discretion, all as delivered by Intel to Thrustmaster
         hereunder.

1.7      "Licensed Products" means any software developed by Thrustmaster (other
         than the Thrustmaster Software) that incorporates the Intel Software,
         and is (i) distributed by Thrustmaster with the Thrustmaster Hardware
         or Thrustmaster Headsets or (ii) available via download from any
         Thrustmaster or other websiteor (iii) bundled with software developed
         by PC application independent software vendors or (iv) distributed as
         stand-alone products via retail channels or (v) bundled with hardware
         developed by PC independent hardware vendors or PC original equipment
         manufacturers. The term "Licensed Products" shall include Thrustmaster
         Hardware and Thrustmaster Headsets when bundled with the Intel
         Software.

1.9      "Maintenance Release" means any release or `patch' to an existing
         software release designed primarily to correct bugs or errors in
         previous releases or to maintain compatibility with general purpose
         software applications, web browsers, operating systems, hardware or
         commonly used formats.

1.10     "Major Release" means a significantly enhanced, improved, or revised
         release of software, including but not limited to any substitute or
         replacement thereof, other than a Maintenance Release and a Minor
         Release. A Major Release is customarily signified in the software
         industry by a new, larger digit to the left of the decimal point in a
         version number, such as x.1, where "x" denotes the Major Release
         number.

1.12     "Minor Release" means a moderate improvement or enhancement to an
         existing software release, other than a Major Release or a Maintenance
         Release. A Minor Release is customarily signified in the software
         industry by a change in the digit that appears to the right of the
         decimal point following the version number, such as 1.x, where "x"
         denotes the Minor Release number.

1.13     "New Release" means Minor Releases and Major Releases.

1.14     "Object Code" means the machine-readable and machine-executable
         computer programming code that is compiled and/or assembled from the
         Source Code.

1.15     "Pre-Release" means any Alpha, Beta or other version of a software or
         hardware product that is distributed internally and externally on a
         limited basis for testing and evaluation purposes and that is not
         designated as a product release by the developing party.

1.16     "Retail Purchase" means actual purchase of a Licensed Product by an
         ultimate end-user. The Retail Purchase numbers reported to Intel by
         Thrustmaster will be a percentage of total units shipped less returns
         as reported in Thrustmaster's quarterly and/or audited annual financial
         statements, e.g., 10Q, 10K.

1.18     "Source Code" means computer-programming code, in human-readable format
         and in electronic form, from which Object Code is compiled or
         assembled.

1.19     "Thrustmaster Documentation" means manuals and other materials supplied
         to Intel by Thrustmaster, in any medium, relating to build environment,
         design, maintenance, installation, operation, or training relating to
         the Thrustmaster Software.

1.20     "Thrustmaster Hardware" means PC game controllers and related products
         designed,

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         developed, and manufactured by or for Thrustmaster for the PC
         game market segment and sold under the Thrustmaster name.

1.21     "Thrustmaster Headsets" means headsets designed, developed and
         manufactured by or for Thrustmaster and sold under the Thrustmaster
         name.

1.22     "Thrustmaster Intellectual Property Rights" means copyrights in the
         Licensed Products and Thrustmaster Software and, to the minimum extent
         necessary to exercise the copyright license, (i) claims of patents and
         patent applications that read on inventions incorporated in the
         Licensed Products and Thrustmaster Software as delivered and (ii) trade
         secrets in the Licensed Products and Thrustmaster Software as
         delivered.

1.23     "Thrustmaster Software" means software developed by Thrustmaster for
         the purposes of creating Internet communication and community solutions
         that is more fully described in Exhibit B. Thrustmaster Software will
         not include the Intel Software, in whole or in part. All software
         developed by Thrustmaster that contains the Intel Software as permitted
         by this Agreement is a "Licensed Product".

1.24     "Warrants" means the warrants, in form attached hereto as Exhibit E, to
         purchase 200,000 shares of Thrustmaster common stock, with a price per
         share determined in accordance with Section E of this Agreement.

SECTION 2.  THRUSTMASTER OBLIGATIONS

2.1      Licensed Product Road Map Documentation. Thrustmaster shall provide
         Intel documentation, to the satisfaction of Intel, demonstrating
         Thrustmaster's road map for distribution of the Intel Software as
         permitted by this Agreement. The road map documentation shall contain
         marketing data, product information, technical information, and such
         other information, as the parties shall agree ("Road Map
         Documentation"). Thrustmaster shall provide Intel the initial Road Map
         Documentation within two (2) weeks of execution of this Agreement.
         Thrustmaster shall provide Intel updates to the Road Map Documentation
         with the reports submitted to Intel as described in Exhibit C.2.

2.2      Licensed Products. Thrustmaster shall use best efforts to integrate the
         Intel Software into or adapt the Intel Software for use with Licensed
         Products. Thrustmaster shall use best efforts to market, promote and
         distribute the Licensed Products as permitted by this Agreement and
         meet the marketing and distribution requirements and milestones set
         forth in and reported according to Exhibit C attached hereto and
         incorporated herein by this reference. If Intel, at its discretion,
         elects to put out a Maintenance Release or New Release of the Intel
         Software and elects to provide the same to Thrustmaster under the terms
         and conditions of this Agreement, Thrustmaster shall use reasonable
         commercial efforts to stop distributing the then current version of the
         Intel Software within ninety (90) days of receiving the Maintenance
         Release or New Release of the Intel Software, and distribute the
         Maintenance Release or New Release in a New Release of the Licensed
         Products.

2.3      Thrustmaster shall deliver the Thrustmaster Software to Intel in source
         and object code form for Intel's use in accordance with the license
         grant set forth in Section 4.7 and 4.8. Thrustmaster shall provide
         Intel all Thrustmaster Documentation for Intel to compile the
         Thrustmaster Software Object Code from Source Code.

2.5      Pre-Release Intel Software. Thrustmaster shall evaluate all Pre-Release
         Intel Software provided by Intel to Thrustmaster and provide Intel
         written evaluation reports no later than two

                                       3

<PAGE>

         weeks after delivery of the Pre-Release Intel Software to Thrustmaster.
         Thrustmaster's evaluation shall include evaluation of Pre-Release Intel
         Software compatibility with the top five major PC sound cards. The top
         five major PC sound cards shall be measured and determined by
         independently reported sales out data.

2.6      Pre-Release/Licensed Products. Thrustmaster shall provide Intel copies
         of all Pre-Release Licensed Products, both Source Code and Object Code,
         as soon as the Releases are made or otherwise available, subject to the
         license restrictions herein. Thrustmaster shall use commercially
         reasonable efforts to incorporate any suggestions made by Intel in
         regard to the Licensed Products.

2.7      New Release/Maintenance Release. Thrustmaster shall provide Intel all
         New Releases/ Maintenance Releases of the Licensed Products subject to
         the license restrictions herein.

2.8      PC Game Independent Software Vendors. Thrustmaster shall use best
         efforts to engage independent software vendors, and obtain their
         written commitment to bundle Licensed Products with compatible PC game
         software applications in accordance with the milestones set forth in
         and reported according to Exhibit C. As between Intel and Thrustmaster,
         these distribution milestones shall be deemed to be Thrustmaster's
         obligation.

2.9      Warrants. Upon execution of this Agreement, Thrustmaster shall issue to
         and deliver to Intel the Warrants at a purchase price per share equal
         to the best price given to any investor in Thrustmaster's private
         placement round being conducted on or about August, 1999. If
         Thrustmaster is unable to raise private financing by the Effective Date
         of this Agreement, Thrustmaster shall issue and deliver to Intel the
         Warrants at a purchase price per share equal to a 15% discount on the
         average closing price for Thrustmaster shares for the five (5) business
         days preceding the Effective Date of this Agreement. Intel's
         obligations under this Agreement and Thrustmaster's license rights are
         expressly conditioned on Thrustmaster's delivery of the Warrants to
         Intel. Intel shall have the right to exercise the Warrants upon
         delivery thereof to Intel or any time thereafter at Intel's discretion
         as set forth in the Warrants. No breach of this Agreement shall be
         considered a breach of the Warrants, but a breach of the terms of the
         Warrants by Thrustmaster shall be considered a material breach of this
         Agreement by Thrustmaster.

2.10     Thrustmaster shall use commercially reasonable efforts to ensure all
         Licensed Products comply with the compatibility requirements in Exhibit
         H of this Agreement.

2.11     Board Observer. Thrustmaster shall, at Intel's request, take any and
         all corporate action necessary to allow Intel to have a non-voting
         observer attend Thrustmaster's board of directors meetings. The rights
         of the Intel observer shall be consistent with those customary in the
         industry and as Intel and Thrustmaster may agree. The observer position
         shall be open for Intel's continued use and participation in all
         Thrustmaster Board of Director meetings and activities for as long as
         Intel holds greater than fifty (50) percent of such Thrustmaster
         Warrants or any Thrustmaster stock converted there from and issued
         herein.

2.12     Non-Solicitation. Thrustmaster covenants and agrees that it will not
         directly or indirectly solicit the services or employment of any Intel
         Architecture Labs green badge contractor or blue badge employee without
         the express prior written consent of Intel. This Section 2.12 shall
         survive any termination or expiration of this Agreement for a period of
         one (1) year.

2.13     Necessary Licenses. Thrustmaster shall obtain any and all licenses from
         third parties that

                                       4

<PAGE>

         Thrustmaster deems necessary to distribute the Intel Software and all
         other software licensed from Intel whether pursuant to this Agreement
         or otherwise.

SECTION 3.  INTEL OBLIGATIONS

3.1      Intel Software. Intel shall use reasonable commercial efforts to (i)
         release the first code drop of the Intel Multi-Point Audio Software in
         Source Code and the Intel Launch & Connect Software and Presence
         Software components in Object Code to Thrustmaster no later than the
         Effective Date (ii) release the final code drop of the Intel
         Multi-Point Audio Software in Source Code by October 18, 1999 and (iii)
         release the final code drop of the Intel Launch & Connect Software and
         Presence Software components in Source Code by September 17, 1999 to
         Thrustmaster.

3.2      Intel Training. Intel will, at a mutually agreeable time, provide 2-3
         days of training to Thrustmaster technical representatives on the Intel
         Software at Intel's Hillsboro, OR facilities.

3.3      Pre-Release Intel Software. Intel shall provide Thrustmaster with
         copies of Pre-Release Intel Software, when and as selected by Intel at
         its discretion, but no later than 1 week after such Pre Release Intel
         Software is released to a third party Thrustmaster competitor in the
         on-line gaming market. Thrustmaster may use the Alpha and Beta releases
         for internal, non-commercial purposes only, and shall not disclose or
         distribute them to any third party except as expressly agreed in
         writing by Intel. Thrustmaster shall provide Intel feedback on
         Pre-Release Intel Software as set forth in Section 2.5.

3.4      Maintenance Releases. If Intel at its discretion elects to do a
         Maintenance Release of the Intel Software, and Intel elects to make
         such Maintenance Release available to other similarly situated
         licensees of the Intel Software, Intel will provide such Maintenance
         Release to Thrustmaster.

SECTION 4.  LICENSES

4.1      Intel Software Source Code. Subject to the terms and conditions of this
         Agreement, Intel hereby grants to Thrustmaster a worldwide,
         non-exclusive, non-transferable, non-sublicensable license under
         Intel's Intellectual Property Rights to use the Intel Software Source
         Code to the extent and as delivered pursuant to Section 3.1, for
         internal use only, solely for the purposes of (i) integrating the Intel
         Software Object Code into the Licensed Products, (ii) adapting the
         Intel Software so that the Intel Software Object Code can be used and
         distributed in conjunction with the Licensed Products, (iii) creating
         Derivative Works of the Intel Software for incorporation into Licensed
         Products in Object Code form or (iv) providing technical support for
         the Thrustmaster Software and Licensed Products. Thrustmaster shall
         provide and hereby grants Intel a worldwide, unrestricted license, with
         rights to sublicense, with written approval from Thrustmaster which
         shall not be unreasonably withheld, under Thrustmaster's intellectual
         property rights in all Derivative Works of the Intel Software prepared
         by Thrustmaster, to use, make, copy, publicly perform, publicly
         display, sell, offer to sell, distribute and import such Derivative
         Works; provided that Intel will not need written approval for bug fixes
         and similar basic improvements to the Intel Software made by
         Thrustmaster.

4.3      Intel Software Object Code. Subject to the terms and conditions of this
         Agreement, Intel hereby grants to Thrustmaster a worldwide,
         non-exclusive, non-transferable license to reproduce, distribute
         through multiple levels of distribution under end user license
         agreements no less restrictive than that attached as Exhibit F,
         publicly display and publicly perform the Intel Software, only in
         Object Code form and only incorporated into or distributed with
         Licensed

                                       5

<PAGE>

         Products.

4.4      Sublicense. Subject to Intel's prior written approval, which shall not
         be unreasonably withheld, Thrustmaster shall have the right to
         sublicense the Intel Software, in Object Code form only, to independent
         software vendors and only for incorporation into or distribution with
         software applications that incorporate or are compatible with the Intel
         Software; provided that such independent software vendors (i) agree to
         be bound by license terms at least as restrictive as those set forth in
         this Agreement as determined by Intel, (ii) shall have no rights to
         further sublicense the Intel Software, (iii) agree to provide a
         reasonable number of their Intel Software compatible software
         applications to Intel for marketing and promotional purposes on terms
         similar to those set forth in Section 4.6. Thrustmaster covenants and
         agrees to enforce the sublicense agreements at its sole cost and
         expense and at Intel's reasonable request.

4.5      Intel Documentation. Subject to the terms and conditions of this
         Agreement, Intel hereby grants to Thrustmaster a worldwide,
         non-exclusive, non-sublicensable copyright license under Intel's
         copyrights in the Intel Documentation to use and reproduce the Intel
         Documentation for internal use only, solely for the purposes of (i)
         integrating the Intel Software Object Code into the Licensed Products,
         (ii) adapting the Intel Software so that the Intel Software Object Code
         can be used and distributed in conjunction with Licensed Products,
         (iii) developing the Thrustmaster Software or (iv) providing technical
         support for the Thrustmaster Software and Licensed Products.

4.6      Restrictions on Thrustmaster. Thrustmaster shall not assign,
         sub-license, lease, or in any other way transfer, use, perform, display
         or disclose the Intel Software, including any New Release or
         Maintenance Release, to any third party or reproduce or distribute any
         part of the Intel Software except as specifically provided in this
         Agreement. Thrustmaster agrees that it will not use the Intel Software
         to create, license, or sell a home intercom based stand-alone product,
         or a product with the primary purpose of enabling home intercom-type
         communication between PCs until 12/31/00, and the license grants
         contained in this Agreement shall not be construed in any way contrary
         to this restriction.

4.7      Thrustmaster Software Source Code. Thrustmaster hereby grants to Intel
         under Thrustmaster Intellectual Property Rights a perpetual, worldwide,
         non-exclusive, royalty-free license to use and reproduce the
         Thrustmaster Software Source Code and create Intel Derivatives for
         internal use only. The Intel Derivatives and all intellectual property
         rights therein shall be the property of Intel subject to Thrustmaster's
         ownership of the Thrustmaster Software.

4.8      Thrustmaster Software Object Code. Thrustmaster hereby grants to Intel
         a worldwide, non-exclusive, royalty-free license to use, reproduce,
         publicly display, and publicly perform the Thrustmaster Software and
         Intel Derivatives in Object Code form.

4.9      Thrustmaster Documentation. Thrustmaster hereby grants to Intel under
         Thrustmaster's copyrights in the Thrustmaster Documentation a
         worldwide, non-exclusive, royalty-free copyright license to use,
         reproduce, make Intel Derivatives, perform and display the Thrustmaster
         Documentation for internal use only.

4.10     Licensed Products. Thrustmaster hereby grants to Intel a non-exclusive,
         worldwide, royalty free license to use, reproduce a reasonable number
         of copies, distribute a reasonable number of copies, publicly perform
         and publicly display the Licensed Products for promotional purposes to
         demonstrate the Intel Software, the Thrustmaster Software included in
         the Licensed Products, and other relevant Intel products.

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<PAGE>

4.11     Restrictions on Intel. Intel shall not assign, sub-license, lease, or
         in any other way transfer, use, perform, display or disclose the
         Thrustmaster Software, including any New Release or Maintenance
         Release, to any third party or reproduce or distribute any part of the
         Thrustmaster Software except as specifically provided in this
         Agreement.

SECTION 5.  PROPRIETARY RIGHTS

5.1      Intel General. The Intel Software, including all New Releases and
         Maintenance Releases (whether prepared by Intel or any third party),
         and all intellectual property rights therein, in whole or in part, and
         all copies of the Intel Software, including all New Releases and
         Maintenance Releases, are and shall remain owned by and be the sole and
         exclusive property of Intel, subject only to Thrustmaster's ownership
         of the Thrustmaster Software, Thrustmaster Derivative Works and the
         license rights granted to Thrustmaster by Intel under this Agreement.

5.2      Thrustmaster General. The Thrustmaster Software, including all New
         Releases and Maintenance Releases (whether prepared by Thrustmaster or
         any third party), and all intellectual property rights therein, in
         whole or in part, and all copies of the Thrustmaster Software,
         including all New Releases and Maintenance Releases, are and shall
         remain owned by and be the sole and exclusive property of Thrustmaster,
         subject only to Intel's ownership of the Intel Software, Intel
         Derivatives and the license rights granted to Intel by Thrustmaster
         under this Agreement.

5.3      Intel Software Source Code Control Restrictions. Thrustmaster shall not
         disclose or otherwise make any part of the Intel Software Source Code,
         (whether or not modified by Thrustmaster), available, in any form, to
         any person other than Thrustmaster employees whose job performance
         requires such access in order to prepare Licensed Product(s) and
         Maintenance Release(s) as permitted by this Agreement. The Intel
         Software Source Code shall at all times be under the direct control of
         the individual identified in attached Exhibit G or such other
         individual that the parties may agree from time to time; provided,
         however, that any such individual shall have primary responsibility for
         the preparation of Licensed Products and Maintenance Releases as
         permitted by this Agreement. All use of the Intel Software Source Code
         and all copies thereof shall be confined to the location identified in
         attached Exhibit G. Thrustmaster shall not move the Intel Software
         Source Code to any other location without the express written consent
         of Intel. The Intel Software Source Code and all copies thereof shall
         be conspicuously labeled "Intel Confidential." Thrustmaster shall
         instruct all employees on these obligations with respect to use,
         copying, protection, and confidentiality of Intel Software Source Code.
         Even after this Agreement terminates, the obligations of this section
         shall remain in effect until the Intel Software Source Code rightfully
         becomes publicly known.

5.4      Thrustmaster Software Source Code Control Restrictions. Except as
         expressly permitted by the terms of this Agreement, Intel shall not
         disclose or otherwise make any part of the Thrustmaster Software Source
         Code, (whether or not modified by Intel), available, in any form, to
         any person other than Intel employees and contractors. The Thrustmaster
         Software Source Code and all copies thereof shall be conspicuously
         labeled "Thrustmaster Confidential." Intel shall instruct all employees
         and contractors on these obligations with respect to use, copying,
         protection, and confidentiality of Thrustmaster Software Source Code.
         Even after this Agreement terminates, the obligations of this section
         shall remain in effect until the Thrustmaster Software Source Code
         rightfully becomes publicly known.

5.5      No Other Rights in Intel Property. No rights or licenses are granted by
         Intel to Thrustmaster

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<PAGE>

         under this Agreement, expressly, by estoppel or by implication, with
         respect to any proprietary information or patent, copyright, trade
         secret or other intellectual property right owned or controlled by
         Intel, except as expressly provided in this Agreement.

5.6      No Other Rights in Thrustmaster Property. No rights or licenses are
         granted by Thrustmaster to Intel under this Agreement, expressly, by
         estoppel or by implication, with respect to any proprietary information
         or patent, copyright, trade secret or other intellectual property right
         owned or controlled by Thrustmaster, except as expressly provided in
         this Agreement.

SECTION 6.  TECHNICAL SUPPORT AND UPDATES

6.1      Thrustmaster. Thrustmaster shall provide all technical and other
         support at all levels for its customers, the Thrustmaster Software and
         all Licensed Products in a manner consistent with the terms and
         conditions of this Agreement.

6.2      Intel. Intel will provide Thrustmaster commercially reasonable
         technical support of the Intel Software until 11/1/99 or up to the
         first shipment of Licensed Products to an outlet where the Licensed
         Products are available for Retail Purchase or internet download,
         whichever is sooner; provided, however, that Intel shall have no
         obligation to assign more than one (1) engineer to providing the
         support at any one time during this period. Following the first
         shipment of Licensed Products to an outlet where it is available for
         Retail Purchase, Intel shall have no further obligation to provide
         Thrustmaster support for the Intel Software through the term of this
         Agreement or thereafter. INTEL SHALL NOT BE REQUIRED TO PROVIDE ANY
         OTHER TECHNICAL OR OTHER SUPPORT, ASSISTANCE, INSTALLATION, TRAINING OR
         OTHER SERVICES EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT. INTEL
         SHALL NOT BE REQUIRED TO PROVIDE ANY MAINTENANCE RELEASES, NEW
         RELEASES, UPDATES, ENHANCEMENTS OR EXTENSIONS TO THE INTEL SOFTWARE OF
         ANY KIND OR PROVIDE ANY TECHNICAL SUPPORT FOR THE LICENSED PRODUCTS AND
         THRUSTMASTER SOFTWARE.

SECTION 7.  MARKETING AND PROMOTION

7.1      Thrustmaster. Thrustmaster shall use best efforts to market and
         distribute Licensed Products as set forth in and reported according to
         Exhibit C.

7.2      Press Release. The parties will issue a press release describing the
         Intel-Thrustmaster cooperation in relation to the Intel Software at
         such time as the parties may agree after execution of this Agreement.
         Text of the press release will be subject to the prior review and
         approval of Intel and Thrustmaster.

SECTION 8.  COPYRIGHTS, ATTRIBUTION, TRADEMARK

8.1      Copyrights. The Intel Software and the Thrustmaster Software are
         copyrighted and are protected by United States copyright laws and
         international treaty provisions. Thrustmaster shall not remove or
         obscure any of Intel's or its vendors' copyright notices or other
         proprietary notices from the Intel Software and Intel shall not remove
         or obscure any of Thrustmaster's or its vendors' copyright notices or
         other proprietary notices from Thrustmaster Software.

8.2      Attribution. Each Licensed Product shall display "Portions Copyright
         1999 Intel Corporation" in "About" boxes of Licensed Products.
         Thrustmaster and its licensees shall display "Intel-Registered
         Trademark- Multi-Point Audio, Launch & Connect, and Presence
         technologies by Intel Corporation" (or such other

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<PAGE>

         attribution that Intel may reasonably request) in 10 point or larger
         type in start-up or "splash" screens of Licensed Products. Intel shall
         at its discretion provide Thrustmaster with an Intel-Registered
         Trademark- Optimizer logo bit-map for this attribution, which
         Thrustmaster shall, if requested by Intel, employ in the Licensed
         Products and packaging of the Licensed Products as reasonably requested
         by Intel. All use of the Intel-Registered Trademark- Optimizer logo
         shall be in accordance with the license terms, guidelines, restrictions
         and requirements set forth in attached Exhibit D and as may be provided
         by Intel to Thrustmaster from time to time. Thrustmaster shall, if
         requested to employ the Intel Optimizer Logo, execute the license
         agreement in the form contained in Exhibit D.

8.3      Trademarks. No rights or licenses are granted by this Agreement,
         expressly or by implication, to use any Intel trademark or trade name,
         or any word or mark similar thereto, in connection with any products
         manufactured, used or sold by Thrustmaster, or as part of
         Thrustmaster's corporate, firm or trade name, or for any other purpose,
         except as expressly provided for in this Agreement. No rights or
         licenses are granted by this Agreement, expressly or by implication, to
         use any Thrustmaster trademark or trade name, or any word or mark
         similar thereto, in connection with any products manufactured, used or
         sold by Intel, or as part of Intel's corporate, firm or trade name, or
         for any other purpose, except as expressly provided for in this
         Agreement.

SECTION 9.  NO WARRANTIES; LIMITED LIABILITY

9.1      INTEL SOFTWARE AS IS. INTEL MAKES NO WARRANTY OF ANY KIND REGARDING THE
         INTEL SOFTWARE AND ANY SUPPORT, INPUT, RECOMMENDATIONS, ASSISTANCE OR
         OTHER CONTRIBUTIONS OF ANY KIND THAT INTEL MAY MAKE TO THRUSTMASTER IN
         REGARD TO THE THRUSTMASTER SOFTWARE. THE INTEL SOFTWARE IS LICENSED TO
         THRUSTMASTER ON AN "AS IS" BASIS. INTEL SPECIFICALLY DISCLAIMS ANY
         IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT OF ANY
         INTELLECTUAL PROPERTY RIGHT AND FITNESS FOR A PARTICULAR PURPOSE.

9.2      THRUSTMASTER SOFTWARE AS IS. THRUSTMASTER MAKES NO WARRANTY OF ANY KIND
         REGARDING THE THRUSTMASTER SOFTWARE AND ANY SUPPORT, INPUT,
         RECOMMENDATIONS, ASSISTANCE OR OTHER CONTRIBUTIONS OF ANY KIND THAT
         THRUSTMASTER MAY MAKE TO THE INTEL SOFTWARE. THRUSTMASTER SOFTWARE IS
         LICENSED TO INTEL ON AN "AS IS" BASIS. THRUSTMASTER SPECIFICALLY
         DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT OF
         ANY INTELLECTUAL PROPERTY RIGHT AND FITNESS FOR A PARTICULAR PURPOSE.

9.3      LIMITED LIABILITY. EXCEPT FOR THRUSTMASTER'S DUTY TO INDEMNIFY, DEFEND
         AND HOLD INTEL HARMLESS WITHOUT LIMITATION PURSUANT TO SECTION 13 OF
         THIS AGREEMENT, AND EXCEPT FOR A MATERIAL BREACH BY THRUSTMASTER OF THE
         INTEL SOFTWARE SOURCE CODE CONTROL RESTRICTIONS CONTAINED IN THIS
         AGREEMENT, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL,
         INCIDENTAL OR CONSEQUENTIAL DAMAGE OF ANY KIND. IN NO EVENT SHALL A
         PARTY OTHERWISE BE LIABLE TO THE OTHER UNDER THIS AGREEMENT IN AN
         AMOUNT EXCEEDING THE CASH PAYMENTS RECEIVED BY IT FROM THE OTHER PARTY.
         As used in this Section 9.3, the term "CASH PAYMENTS" shall not include
         the Warrants or any value obtained by Intel therefrom.

SECTION 10.  TERM AND TERMINATION

                                       9

<PAGE>

10.1     Term. The term of this Agreement shall commence on the Effective Date
         and shall continue for [CONFIDENTIAL PORTION OMITTED AND FILED
         SEPARATELY WITH THE SEC] years thereafter. This Agreement may be
         extended for such additional term and under such conditions as the
         parties may mutually agree in a duly executed writing.

10.2     Termination. Subject to Section 10.4, either party may terminate this
         Agreement and the perpetual licenses granted by it herein for cause in
         the event of a material breach of the terms of this Agreement or the
         perpetual license by the other party, provided that the non-breaching
         party gives written notice of such material breach to the breaching
         party and the breaching party has not cured such material breach within
         thirty (30) days of receipt of such notice.

10.3     Failure to Meet Milestones.

         10.3.1   If Thrustmaster fails to meet any of the distribution
                  milestones set for [CONFIDENTIAL PORTION OMITTED AND FILED
                  SEPARATELY WITH THE SEC] as set forth in and reported
                  according to Exhibit C, Intel has the right to terminate this
                  Agreement and the license rights granted to Thrustmaster by
                  Intel in this Agreement pursuant with section 10.4 of this
                  Agreement.

10.4     Effect of Termination.

         10.4.1   Licenses. The licenses granted by Intel to Thrustmaster and by
                  Thrustmaster to Intel pursuant to Section 4 of this Agreement
                  may only be revoked for uncured material breach of the license
                  terms as provided in this Agreement. Each party reserves the
                  right to verify the other party's compliance with this
                  Agreement and the licenses granted herein by reasonable means,
                  and each party agrees to cooperate with the other in that
                  regard. In the event that a party is in material breach of any
                  of the licenses granted herein, the non-breaching party has
                  the right to terminate all license rights granted to the
                  breaching party herein upon thirty (30) days written notice to
                  the breaching party if the breaching party fails to correct
                  such material breach within the thirty (30) day notice period.
                  For the purpose of this Section 10, however, Thrustmaster
                  shall be deemed to be in uncured material breach of this
                  Agreement and its license rights if Thrustmaster fails to meet
                  the milestones set forth in and reported according to Exhibit
                  C as described in Section 10.3.1.

         10.4.2   If Thrustmaster's license to distribute the Intel Software
                  terminates pursuant to Section 10.1 or Section 10.3,
                  Thrustmaster shall have the right to distribute finished goods
                  inventory of the Licensed Products for ninety (90) days beyond
                  the termination date.

         10.4.3   If Intel terminates this Agreement or any license herein
                  because of Thrustmaster's uncured material breach,
                  Thrustmaster will turn over any Thrustmaster Software pointer,
                  which determines the URL that hosts the multipoint audio
                  conference for end users, to Intel, and hereby assigns and
                  transfers all of its ownership and other rights in the same to
                  Intel.

         10.4.4   Other. Sections 2.9, 4 (except to the extent a license is
                  terminated for uncured material breach as provided in this
                  Agreement), 5, 6.1, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17
                  shall survive any termination or expiration of this Agreement.

SECTION 11.  CONFIDENTIALITY AND NON-DISCLOSURE

                                       10

<PAGE>

11.1     Source Code. The Intel Software Source Code constitutes proprietary,
         confidential, and trade secret information of Intel, and the
         Thrustmaster Software Source Code constitute proprietary, confidential,
         and trade secret information of Thrustmaster. Each of the parties shall
         ensure that the Source Code of the other party receives at least the
         same degree of confidentiality that is accorded to its own Source Code.
         Except as expressly permitted by this Agreement, neither party shall
         disclose the other party's Source Code to any third party absent prior
         written approval from the other party and a prior written
         confidentiality and nondisclosure agreement with each such third party
         that is satisfactory to the other party at its sole discretion. This
         provision is supplemented by Section 5.3 of this Agreement.

11.2     CNDA. Except as expressly provided herein, this Agreement and all
         disclosures relating thereto, shall be governed by corporate
         nondisclosure agreement ("CNDA") number 23300. In addition, this
         Agreement and the terms thereof are confidential and shall not be
         disclosed to any third party without the prior written consent of the
         non-disclosing party. Notwithstanding anything else in this Agreement
         or the CNDA to the contrary, either party is free to use residuals of
         the confidential information of the other party for any purpose,
         including use in development, manufacture, promotion, sale and
         maintenance of its own products and services. The term "residuals" as
         used herein means information in nontangible form retained in the
         unaided memories of persons who have access to the confidential
         information.

SECTION 12.  NOTICES

All notices required or permitted to be given hereunder shall be in writing,
shall make reference to this Agreement, and shall be delivered by hand, or
dispatched by prepaid nationally recognized overnight air courier or by
registered or certified airmail, postage prepaid, addressed as follows:

Such notices shall be deemed served on the earlier of: (i) actual receipt by
addressee, (ii) two (2) days after deposit with a nationally recognized
overnight air courier or (iii) five (5) days after appropriate mailing. Either
party may give written notice of a change of address and, after notice of such
change has been received, any notice or request shall thereafter be given to
such party at such changed address.

SECTION 13.  INDEMNITY

Thrustmaster shall defend, indemnify, and hold Intel harmless from and against
any loss, cost, liability, damages and expense (including reasonable attorney
fees) arising from any action or claim brought or threatened against
Thrustmaster or Intel or their customers alleging that the Thrustmaster Software
or any Licensed Product infringes any patent, copyright, trademark, trade
secret, or other intellectual property right of any third party provided that
Intel (i) promptly notifies Thrustmaster in writing of any such suit or
proceeding brought against it, (ii) provides Thrustmaster at its sole discretion
with sole control over the defense or settlement of such suit or proceeding, and
(iii) provides reasonable information and assistance in the defense and/or
settlement of any such claim or action brought against it. Without limiting
Thrustmaster's duty to defend and hold Intel harmless, Thrustmaster's indemnity
obligation hereunder shall not apply to any successful suit or proceeding
brought directly against Intel based solely upon a claim that the Intel Software
or a part thereof (except any Thrustmaster modification) alone and not in
combination with any other technology or product, constitutes a direct
infringement of any United States patent, copyright, trademark, trade secret, or
other intellectual property right of any third party; provided that Thrustmaster
(i) promptly notifies Intel in writing of any such suit or proceeding if Intel
has not itself received notice thereof, (ii) provides Intel at its sole
discretion and at its own expense with sole control over the defense or
settlement of such suit or proceeding, (iii) provides reasonable information and
assistance in the defense and/or

                                       11

<PAGE>

settlement of any such claim or action, and (iv) a court of competent
jurisdiction (after appropriate appeals have been filed) concludes that
Intel's direct actions regarding the Intel Software, or a part thereof
(except any Thrustmaster modification), alone and not in combination with any
other technology or product constitutes a direct infringement of any United
States patent issued prior to the Effective Date, copyright, trademark, trade
secret, or other intellectual property right of any third party and that
Intel has direct liability to such third party. The exception to
Thrustmaster's indemnity obligation in this Section 13 is specifically
intended to cover the limited situation where Intel is found by a court of
competent jurisdiction to be directly liable to a third party for direct (as
opposed to any indirect) infringement and is not in any way intended to
otherwise limit Thrustmaster's liability to Intel or to any third party in
regard to Licensed Products or any part thereof. Intel shall have no
obligation of any kind to defend, indemnify or hold Thrustmaster harmless
from any claim brought against Thrustmaster that may implicate the Intel
Software, but Intel will provide Thrustmaster reasonable information and
assistance in regard to the defense or settlement of any such claim. The
parties agree that this Section 13 is consistent with the intent of the
indemnity provision in the parties' first agreement relating to multi-point
audio.

SECTION 14.  FORCE MAJEURE

Neither party shall be liable for any failure to perform due to unforeseen
circumstances or causes beyond that party's reasonable control, including, but
not limited to, acts of God, war, riot, embargoes, acts of civil or military
authorities, delay in delivery by vendors, fire, flood, earthquake, accident,
strikes, inability to secure transportation, facilities, fuel, energy, labor or
materials. In the event of force majeure, the time for delivery or other
performance will be extended for a period equal to the duration of the delay
caused thereby.

SECTION 15.  ASSIGNMENT, SALE OR TRANSFER

Neither party shall transfer or assign any of its rights under this Agreement to
any person except as expressly permitted herein. Any attempt to assign any
rights, duties or obligations hereunder without the other party's written
consent, which shall not be unreasonably withheld, shall be void.

SECTION 16.  RELATIONSHIP OF THE PARTIES

This Agreement shall not be construed to create a partnership, joint venture or
other agency relationship between the parties. Neither party hereto will be
deemed the agent or legal representative of the other for any purpose whatsoever
and each party will act as an independent contractor with regard to the other in
its performance under this Agreement. Nothing herein will authorize either party
to create any obligation or responsibility whatsoever, express or implied, on
behalf of the other or to bind the other in any manner, or to make any
representation, commitment or warranty on behalf of the other.

SECTION 17.  MISCELLANEOUS

17.1     Export Restrictions. The Intel Software, the Thrustmaster Software and
         the Licensed Products may be controlled for export purposes by the U.S.
         Government. Neither party shall export, either directly or indirectly,
         any such material without first obtaining any required license or other
         approval from the U.S. Department of Commerce or any other agency or
         department of the United States Government as required. The parties
         agree to provide reasonable cooperation to one another in connection
         with obtaining any such licenses or approvals.

17.2     Governing Law. Any claim arising under or relating to this Agreement
         shall be governed by the

                                       12

<PAGE>

         internal substantive laws of the State of Delaware, without regard to
         principles of conflict of laws. Any dispute arising out of this
         Agreement shall be brought in, and the parties consent to personal and
         exclusive jurisdiction of and venue in, the state and federal courts
         within Washington or Multnomah County, Oregon.

17.3     Integration. This Agreement, together with the and the CNDA, constitute
         the entire agreement between Thrustmaster and Intel relating to the
         subject matter hereof. This Agreement shall only be amended by a
         writing signed by both parties.

17.4     Headings. The headings to the paragraphs and subparagraphs of this
         Agreement are to facilitate reference only, do not form a part of this
         Agreement, and will not in any way affect the interpretation thereof.

17.5     Severability. The terms and conditions of this Agreement are severable.
         If any paragraph, provision, or clause in this Agreement shall be found
         or be held to be invalid or unenforceable in any jurisdiction in which
         this Agreement is being performed, the remainder of this Agreement
         shall be valid and enforceable and the parties shall use good faith to
         negotiate a substitute, valid and enforceable provision that most
         nearly effects the parties' intent in entering into this Agreement.

17.6     Remedies. The rights and remedies provided in this Agreement are in
         addition to any other rights and remedies provided at law or in equity.

17.7     Injunctive Relief. Both parties agree that damages alone would be
         insufficient to compensate the licensing party for a breach of source
         code control and non-disclosure provisions of this Agreement,
         acknowledges that irreparable harm would result from such a breach of
         this Agreement, and consents to the entering of an order for injunctive
         relief to prevent such a breach or further breach and the entering of
         an order for specific performance to compel performance of such
         obligations under this Agreement.

17.8     Counterparts.  This Agreement may be executed in counterparts.

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

INTEL CORPORATION                        THRUSTMASTER, INC.

By:  /s/ Craig Kinnie                    By:   /s/ Ronald Resnick
    -------------------------               -------------------------------
  Craig Kinnie                             Ronald Resnick
-----------------------------             ---------------------------------
Printed Name                              Printed Name

Title:   Vice President                 Title:  VP - Marketing
      -----------------------                 -----------------------------

Date:  5/27/98                     Date:   5/28/98
     ------------------------           -----------------------------------

                                       13

<PAGE>

                                    EXHIBIT A

                    DESCRIPTION OF SOFTWARE AND DOCUMENTATION

DESCRIPTION

     1. INTEL-Registered Trademark- MULTI-POINT AUDIO SOFTWARE COMPONENT:

     Windows* 95 and Windows* 98 compatible software that allows the user, in
     conjunction with some method to exchange IP addresses, the ability to
     create and join an internet telephony conference with the user limit to be
     determined by the container application.

     2. DISTRIBUTED PRESENCE COMPONENT:

     Windows* 95 and 98 compatible software that allows an application, in
     conjunction with a Microsoft Internet Locator Service Server, the ability
     to advertise the presence of one or more local users and to monitor the
     presence of peers on each local user's peer list.

     3. INTEL-Registered Trademark- LAUNCH & CONNECT SOFTWARE COMPONENT:

     Windows* 95 and 98 compatible software that allows a controlling
     application to dynamically enumerate applications/protocols in common
     between two endpoints, launch and then automatically connect a selected
     application/protocol at the two endpoints or to a third party server.

SOFTWARE

The following components are included in the Software licensed to Thrustmaster
hereunder:

     The INTEL-Registered Trademark- MULTI-POINT AUDIO COMPONEnt component will
     include the following:
     1. A COM based client component API.
     2. API documentation.
     3. Sample test application.
     The DISTRIBUTED PRESENCE COMPONENT will include the following:
     1. A COM based client component API.
     2. API documentation.
     3. Sample test application.

     This INTEL-Registered Trademark- LAUNCH & CONNECT COMPONENT  will include
     the following:
     1. A COM based client component API.
     2. API and usage documentation.
     3. Sample test application.
     4. Launching support for a limited set of H323 phone applications, games
     that support Microsoft's DirectPlayLobby Application Programming Interface,
     and applications that conform to the Launch & Connect native launching API.

                                       14

<PAGE>

                                    EXHIBIT B

                        DESCRIPTION OF LICENSED PRODUCTS

Software that provides a meeting and launching capability for the Intel
Software.

The Thrustmaster Software may include the following:
1.       A HTTP server hosting a web page
2.       An Internet location server
3.       A buddy list or other presence detection utility

                                       15

<PAGE>

                                    EXHIBIT C

                                   MILESTONES

C.1 Thrustmaster shall achieve the following Licensed Products download
milestones:

                           Licensed Products Downloads and/or Retail Purchases
         Date              Cumulative Total

         [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC]

C.2      Thrustmaster shall report the cumulative totals above within thirty
         (30) days of the specific milestone date together with such data and
         supporting documentation as Intel shall reasonably request.

C.3      Thrustmaster shall achieve the following milestones regarding
         distribution of the Licensed Products in the PC gaming markets:
         * Sign [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC]
         agreements with ISVs or internet game related sites for distribution of
         the Licensed Products to on-line gaming users by [CONFIDENTIAL PORTION
         OMITTED AND FILED SEPARATELY WITH THE SEC]
         * Sign [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC]
         total agreements with ISVs or internet game related sites for
         distribution of the Licensed Products to on-line gaming users by
         [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC].
         Thrustmaster agrees to maintain at least [CONFIDENTIAL PORTION OMITTED
         AND FILED SEPARATELY WITH THE SEC] agreements with ISVs or internet
         game related sites through [CONFIDENTIAL PORTION OMITTED AND FILED
         SEPARATELY WITH THE SEC].

C.4      The milestone dates set forth in the Exhibit C are based on the
         assumption that Intel will deliver the Intel Software to Thrustmaster
         on the date set forth in Section 3.1. If actual delivery of the Intel
         Software to Thrustmaster under Section 3.1 is a date later than that
         specified in Section 3.1, the [CONFIDENTIAL PORTION OMITTED AND FILED
         SEPARATELY WITH THE SEC] milestone shall be reduced to match
         Thrustmaster's actual Retail Purchases through [CONFIDENTIAL PORTION
         OMITTED AND FILED SEPARATELY WITH THE SEC], and subsequent quarterly
         cumulative milestones shall be reduced to reflect the [CONFIDENTIAL
         PORTION OMITTED AND FILED SEPARATELY WITH THE SEC] Retail Purchases
         adjustment.

                                       16

<PAGE>

                                    EXHIBIT D

                INTEL OPTIMIZER LOGO TRADEMARK LICENSE AGREEMENT

THIS INTEL OPTIMIZER LOGO TRADEMARK LICENSE AGREEMENT ("Agreement") is made by
Intel Corporation having offices at ____________________( "Intel") and
Thrustmaster, Inc., having offices at ______________________________
("Licensee").

WHEREAS, Intel and Licensee have entered into that certain Software Development
and License Agreement dated ________ ("Software License") wherein Intel licensed
to Licensee certain multi-point audio remote server software (as defined in the
Software License, the "Intel Software") for distribution, including but not
limited to distribution with Licensee's PC game controllers and headsets (as
defined in the Software License, the "Licensed Products").

WHEREAS, the Software License provides that Thrustmaster shall, at Intel's
request, use the Intel Optimizer Logo as set forth in this Agreement in
conjunction with distribution of the Intel Software with Licensed Products;

WHEREAS, Intel has a specific Intel Optimizer Logo (as defined below, the
"Licensed Logo") that is associated with specific optimized code (as defined
below, the "Optimized Code") that is part of the Intel Software; and

WHEREAS, Intel has now requested Thrustmaster to use the Licensed Logo in
conjunction with the distribution of the Optimized Code with Licensed Products
and Thrustmaster has agreed to do the same;

NOW THEREFORE, in consideration of the mutual covenants and promises contained
in this Agreement, and for other good and valuable consideration receipt of
which is hereby acknowledged, the parties agree as follows:

1.       DEFINITIONS.

In addition to the definitions set forth in the Recitals, the following terms
have the following meanings:

         1.1      "Licensed Logo" means the Logo set forth in Exhibit A hereto,
                  said Logo including the INTEL trademark, and the OPTIMIZER
                  designation.
         1.2      "Licensed Name" means the name "Intel-Registered Trademark-
                  Optimizer [Party Line] or such other name that Intel may
                  designate at its discretion".
         1.3      "Licensed Marks" means the Licensed Logo and the Licensed
                  Name.
         1.4      "Intel Marks" means the Licensed Marks, the INTEL trademark
                  and trade name, and any other marks belonging to Intel.
         1.5      "Optimized Code" means those specific Intel Software files
                  identified on attached Exhibit B, as delivered to Licensee
                  under the Software License. The Optimized Code is the software
                  that is specifically associated with the Licensed Logo under
                  this Agreement

2.       LICENSE GRANT. Subject to Licensee's full compliance with the
         terms of this Agreement, Intel hereby grants to Licensee a
         non-exclusive, non-transferable, royalty-free, revocable
         license to use the Licensed Marks in connection with Licensed
         Products solely to indicate that the Licensed Products contain
         the Optimized Code.

3.       PRODUCT QUALITY.

                                       17

<PAGE>

         3.1      The Licensed Marks shall be used only on and in connection
                  with Licensed Products that contain the Optimized Code and
                  that meet the quality and performance standards customary
                  in the software industry.
         3.2      Licensee shall make no alterations or modifications to the
                  Optimized Code with which the Licensed Marks are used
                  except as necessary to integrate the Optimized Code into
                  Licensed Products; provided that such modification does not
                  affect the performance and functionality of the Optimized
                  Code. For the purpose of this Agreement, Licensee agrees
                  that it will not change, modify, or alter the Optimized
                  Code in any other way. If Licensee makes any other
                  modification to the Optimized Code, this Agreement,
                  including but not limited to Licensee's right to use the
                  Licensed Marks, shall terminate immediately with respect to
                  the modified Optimized Code.
         3.3      Licensee shall comply with all applicable laws and
                  regulations in the manufacture, assembly, marketing, and
                  sale of Licensed Products with which the Licensed Marks are
                  used.

4.       PROPER USAGE.
         4.1 Licensee shall comply with the usage and other requirements set
         forth in Exhibit A hereto.
         4.2 Licensee shall comply with any additional usage guidelines for the
         Licensed Marks provided by Intel from time to time. Licensee shall not
         alter the Licensed Logo in any way, and shall use the camera-ready or
         electronic artwork of the Licensed Logo provided by Intel.
         4.3 Licensee shall display Licensed Marks only in a positive manner.

5. RIGHT TO INSPECT.
                  5.1 Intel shall have the right at its discretion to review,
                  inspect, and test any Licensed Product with which the Licensed
                  Marks are used, as well as associated users manuals,
                  collateral, advertising, and promotional materials, including
                  web sites, to determine compliance with the terms of this
                  Agreement. Upon reasonable notice, Licensee shall cooperate
                  fully in providing Intel access to such Licensed Products and
                  materials.
                  5.2 Licensee will deliver to Intel two (2) copies of each
                  Licensed Product, including source and object code for the
                  Optimized Code as contained in such Licensed Product, at least
                  forty five (45) days prior to the commercial release of such
                  Licensed Product for the purpose of Intel verifying at its
                  discretion that the Optimized Code has not been modified
                  inconsistent with the provisions of this Agreement. As used in
                  this Section 5.2, "Licensed Product" shall include all major,
                  minor and maintenance releases of a Licensed Product, each of
                  which shall be separately submitted to Intel as set forth in
                  this Section 5.2 unless otherwise agreed by Intel in writing.
                  Licensee may submit pre-release versions of Licensed Product
                  in order to meet the requirements of this Section 5.2 if the
                  Optimized Code is not modified in the final release. Intel
                  will use commercially reasonable efforts to review the
                  Optimized Code as included in the Licensed Product and notify
                  Licensee whether the Licensed Product can carry the Intel
                  Marks as permitted under this Agreement. If Intel fails to
                  give notice within fifteen (15) days of its receipt of the
                  Licensed Product that is subject to review, Licensee may use
                  the Licensed Marks with such Licensed Product unless and until
                  such right is terminated as permitted by this Agreement.

6. PROTECTION OF INTEREST.
                  6.1 ACKNOWLEDGMENT OF RIGHTS. Licensee acknowledges Intel's
                  exclusive rights to the Intel Marks and all goodwill
                  associated therewith, and acknowledges that any and all use of
                  the Intel Marks by Licensee inures to the sole benefit of
                  Intel. Licensee shall not challenge Intel's exclusive rights
                  in and to the Intel Marks, and shall not do anything that
                  might harm the reputation or goodwill of Intel or the Intel
                  Marks.

                                       18

<PAGE>

                  Licensee shall take no action inconsistent with Intel's
                  rights in the Intel Marks. If at any time Licensee acquires
                  any rights in, or registration(s) or application(s) for the
                  Intel Marks by operation of law or otherwise, Licensee will
                  immediately and at no expense to Intel assign such rights,
                  registrations, and/or applications to Intel, along with any
                  and all associated goodwill.
                  6.2 ENFORCEMENT. In the event that Licensee becomes aware of
                  any unauthorized use of the Intel Marks by a third party,
                  Licensee shall promptly notify Intel in writing and shall
                  cooperate fully, at Intel's expense, in any enforcement of
                  Intel's rights against such third party. The right to enforce
                  Intel's rights in the Intel Marks rests entirely with Intel
                  and shall be exercised at Intel's sole discretion; Licensee
                  shall not commence any action or claim to enforce Intel's
                  rights in the Intel Marks.

7.       DISCLAIMER BY INTEL. INTEL MAKES NO REPRESENTATIONS OR WARRANTIES OF
         ANY KIND RESPECTING THE INTEL MARKS, INCLUDING THE VALIDITY OF INTEL'S
         RIGHTS IN THE INTEL MARKS IN ANY COUNTRY, AND HEREBY EXPRESSLY
         DISCLAIMS ANY AND ALL WARRANTIES THAT MIGHT OTHERWISE BE IMPLIED BY
         APPLICABLE LAW.

8.       RELATIONSHIP BETWEEN THE PARTIES. No agency, partnership, joint
         venture, franchise, or employment relationship is created between Intel
         and Licensee as a result of this Agreement. Neither party is authorized
         to create any obligation, express or implied, on behalf of the other
         party.

9.       WAIVER: The failure of either party to enforce at any time the
         provisions of this Agreement shall in no way be construed to be a
         present or future waiver of such provisions, nor in any way affect the
         ability of any party to enforce each and every provision thereafter.

10.      INDEMNITY: Licensee agrees to indemnify, defend, and hold Intel
         harmless from all loss, cost liability and expense incurred by Intel
         and any of its subsidiaries or affiliated entities that arise out of a
         claim concerning Licensee's manufacturing, use or sale of Licensed
         Products incorporating the Intel Software except as specifically set
         forth in the Software License and except where such claims are based
         solely on Licensee's permitted use of the Licensed Marks. Intel agrees
         to provide Licensee with prompt notice of any such claims and shall
         provide Licensee with reasonable assistance (at Licensee's expense) in
         defense or settlement of such claims as set forth in the Software
         License.

11.      LIMITATION OF LIABILITY: NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
         SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, EVEN IF SUCH PARTY HAS
         BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

12.      TERM AND TERMINATION:

           12.1 Term: This Agreement shall remain in effect until its
                expiration or termination as provided herein
           12.2 Expiration: This Agreement will expire in the event that
                Licensee ceases to do business for any reason or in the event
                the Software License is terminated for any reason.
           12.3 Termination: Either party may terminate this Agreement with or
                without cause upon thirty (30) days advance written notice.
                Either party may terminate this Agreement for breach by the
                other party upon written notice. Opportunity to cure the breach
                may be given, but is not required under this Agreement.
           12.4 Effect of Expiration or Termination: Upon any termination or
                expiration of this Agreement, Licensee shall immediately cease
                use of the Licensed Marks and Intel Marks,

                                       19

<PAGE>

                even if Licensee continues to rightfully distribute the Intel
                Software as permitted in the Software License.12.5 Continuing
                Obligations: Obligations of the parties under the provision of
                paragraphs 1, 5, 6, 7, 8,10, 11, 12.4, 13, 14, 16 shall remain
                in force notwithstanding the termination of expiration of this
                Agreement.

13.      ASSIGNMENT: This Agreement shall be binding upon and inure to the
         benefit of the successor and permitted assignees of the parties hereto.
         The rights granted to Licensee and Licensee's obligations hereunder are
         personal. Licensee shall not assign this Agreement or any right or
         obligation hereunder, whether in conjunction with a change in
         ownership, merger, acquisition, the sale or transfer of all, or
         substantially all or any part of Licensee' business or assets or
         otherwise, either voluntarily, by operation of law, or otherwise,
         without the prior written consent of Intel, which Intel may give or
         withhold at its sole discretion. Any such purported assignment or
         transfer shall be deemed a material breach of this Agreement and shall
         be null and void.

14.      CHOICE OF LAW AND JURISDICTION: The validity, construction and
         performance of this Agreement shall be governed by the laws of the
         State of Delaware and the United States of America, without reference
         to conflict of laws principles. Any dispute arising out of this
         Agreement shall be brought in, and the parties consent to personal and
         exclusive jurisdiction of and venue in, the state and federal courts
         within Santa Clara County, California.

15.      EQUITABLE RELIEF: Licensee agrees that damages alone would be
         insufficient to compensate Intel for a breach of this Agreement,
         acknowledges that irreparable harm would result from a breach of this
         Agreement, and consents to the entering of an order for injunctive
         relief to prevent a breach or further breach or any further action
         which could cause some loss or dilution of Intel's goodwill,
         reputation, or rights in any Intel Marks, and the entering of an order
         for specific performance to compel performance of any obligations under
         this Agreement.

16.      SEVERABILITY: If any provision of this Agreement is determined by a
         court of competent jurisdiction to be invalid, illegal or
         unenforceable, such determination shall not affect the validity of the
         remaining provisions unless Intel determines at its discretion that the
         court's determination causes this Agreement to fail in any of its
         essential purposes.

17.      ENTIRE AGREEMENT: This Agreement, together with the Software License,
         constitutes the entire agreement between the parties concerning the
         subject matter hereof and supersedes all proposals, oral or written,
         all negotiations, conversation, and/or discussions between the parties
         relating to this Agreement and all past courses of dealing or industry
         customs. This Agreement may not be modified except in a wiring signed
         by authorized representative of both parties.

18.      NOTICES. Notices shall be given as set forth in the Software Agreement.

IN WITNESS WHEREOF, the parties by their duly authorized representatives, hereby
execute this Amendment to the Agreement.

INTEL CORPORATION                          THRUSTMASTER, INC.

--------------------------------            --------------------------------
Signature                                  Signature

--------------------------------            --------------------------------
Printed Name                               Printed Name

                                       20

<PAGE>

--------------------------------            --------------------------------
Title                                      Title

--------------------------------            --------------------------------
Date                                        Date

                                       21

<PAGE>

                                    EXHIBIT E

                                    WARRANT

THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK
ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("THE ACT") AND MAY NOT BE SOLD, OFFERED FOR
SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT
UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, THAT REGISTRATION IS NOT
REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE SALE OF SUCH SECURITIES
IS MADE PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 144.

             WARRANT TO PURCHASE COMMON STOCK OF THRUSTMASTER, INC.
                             (SUBJECT TO ADJUSTMENT)

NO. ____

THIS CERTIFIES THAT, for value received, Intel Corporation, or its permitted
registered assigns ("HOLDER"), is entitled, subject to the terms and conditions
of this Warrant, at any time or from time to time after 5:00 p.m. PST December
4, 1998 (the "EFFECTIVE DATE"), and before 5:00 p.m. Pacific Time, five (5)
years from the Effective Date (the "EXPIRATION DATE"), to purchase from
Thrustmaster, Inc. an Oregon corporation (the "Company") Eighty-eight thousand
nine hundred and eighty eight (88988) shares of Warrant Stock (as defined in
Section 1 below) of the Company at a price per share of Four and thirteen
sixteenths dollars (US$4 13/16) (the "Purchase Price"). Both the number of
shares of Warrant Stock purchasable upon exercise of this Warrant and the
Purchase Price are subject to adjustment and change as provided herein. This
Warrant is issued pursuant to that certain Software Development and License
Agreement dated as of the Effective Date between the Company and Holder. This
Warrant replaces the warrant issued and delivered to Holder by the Company
effective as of May 28, 1998.

         1.                   CERTAIN DEFINITIONS.

As used in this Warrant the following terms shall have the following respective
meanings: "FAIR MARKET VALUE" of a share of Warrant Stock as of a particular
date shall mean: (a) if traded on a securities exchange or the Nasdaq National
Market, the Fair Market Value shall be deemed to be the average of the closing
prices of the Common Stock of the Company on such exchange or market over the 5
business days ending immediately prior to the applicable date of valuation; (b)
if actively traded over-the-counter, the Fair Market Value shall be deemed to be
the average of the closing bid prices over the 30-day period ending immediately
prior to the applicable date of valuation; and (c) if there is no active public
market, the Fair Market Value shall be the value thereof, as agreed upon by the
Company and the Holder; provided, however, that if the Company and the Holder
cannot agree on such value, such value shall be determined by an independent
valuation firm experienced in valuing businesses such as the Company and jointly
selected in good faith by the Company and the Holder (with the fees and expenses
of the valuation firm paid for by the Company.
"HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
"REGISTERED HOLDER" shall mean any Holder in whose name this Warrant is
registered upon the books and records maintained by the Company.

                                       22

<PAGE>

"WARRANT" as used herein, shall include this Warrant and any warrant delivered
in substitution or exchange therefor as provided herein.
"WARRANT STOCK" shall mean the Common Stock of the Company and any other
securities at any time receivable or issuable upon exercise of this Warrant.

         2.                    EXERCISE OF WARRANT

                                  2.1. Payment.

Subject to compliance with the terms and conditions of this Warrant and
applicable securities laws, this Warrant may be exercised, in whole or in part
at any time or from time to time, on or before the Expiration Date by the
delivery (including, without limitation, delivery by facsimile) of the form of
Notice of Exercise attached hereto as EXHIBIT 1 (the "Notice of Exercise"), duly
executed by the Holder, to the Company, and as soon as practicable after such
date, surrendering (a) this Warrant, and (b) payment, (i) in cash (by check) or
by wire transfer, (ii) by cancellation by the Holder of indebtedness of the
Company to the Holder; or (iii) by a combination of (i) and (ii), of an amount
equal to the product obtained by multiplying the number of shares of Common
Stock being purchased upon such exercise by the then effective Purchase Price
(the "Exercise Amount"), except that if Holder is subject to HSR Act
Restrictions (as defined in Section 2.5 below), the Exercise Amount shall be
paid to the Company within five (5) business days of the termination of all HSR
Act Restrictions.

                            2.2. Net Issue Exercise.

In lieu of the payment methods set forth in Section 2.1(b) above, the Holder may
elect to exchange all or some of the Warrant for shares of Warrant Stock equal
to the value of the amount of the Warrant being exchanged on the date of
exchange. If Holder elects to exchange this Warrant as provided in this Section
2.2, Holder shall tender to the Company the Warrant for the amount being
exchanged, along with written notice of Holder's election to exchange some or
all of the Warrant, and the Company shall issue to Holder the number of shares
of the Warrant Stock computed using the following formula:

                  X = Y (A-B)
                      -------
                         A

Where X = the number of shares of Warrant Stock to be issued to Holder; Y = the
number of shares of Warrant Stock purchasable under the amount of the Warrant
being exchanged; A = the Fair Market Value of one share of the Company's Warrant
Stock; and B = the Purchase Price. All references herein to an "exercise" of the
Warrant shall include an exchange pursuant to this Section 2.2.

                           2.3. "Easy Sale" Exercise.

In lieu of the payment methods set forth in Section 2.1(b) above, when permitted
by law and applicable regulations (including Nasdaq and NASD rules), the Holder
may pay the Purchase Price through a "same day sale" commitment from the Holder,
whereby the Holder irrevocably elects to exercise this Warrant and to sell a
portion of the Shares so purchased to pay for the Purchase Price and the Holder
commits upon sale of such Shares to forward the Purchase Price directly to the
Company.

                   2.4. Stock Certificates; Fractional Shares.

As soon as practicable on or after such date, the Company shall issue and
deliver to the person or persons entitled to receive the same a certificate or
certificates for the number of whole shares of Warrant Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share equal to such
fraction of the current Fair Market Value of one whole share of Warrant Stock as
of the date of exercise of this Warrant. No fractional shares or scrip
representing fractional shares shall be issued upon an exercise of this Warrant.

                                       23

<PAGE>

                                  2.5. HSR Act.

The Company hereby acknowledges that exercise of this Warrant by Holder may
subject the Company and/or the Holder to the filing requirements of the HSR Act
and that Holder may be prevented from exercising this Warrant until the
expiration or early termination of all waiting periods imposed by the HSR Act
("HSR Act Restrictions"). If on or before the Expiration Date Holder has sent
the Notice of Exercise to Company and Holder has not been able to complete the
exercise of this Warrant prior to the Expiration Date because of HSR Act
Restrictions, the Holder shall be entitled to complete the process of exercising
this Warrant in accordance with the procedures contained herein notwithstanding
the fact that completion of the exercise of this Warrant would take place after
the Expiration Date or the completion of the IP0.

               2.6. Partial Exercise; Effective Date of Exercise.

In case of any partial exercise of this Warrant, the Company shall cancel this
Warrant upon surrender hereof and shall execute and deliver a new Warrant of
like tenor and date for the balance of the shares of Warrant Stock purchasable
hereunder. This Warrant shall be deemed to have been exercised immediately prior
to the close of business on the date of its surrender for exercise as provided
above.

         3.                   VALID ISSUANCE: TAXES.

All shares of Warrant Stock issued upon the exercise of this Warrant shall be
validly issued, fully paid and non-assessable, and the Company shall pay all
taxes and other governmental charges that may be imposed in respect of the issue
or delivery thereof.

         4.      ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.

The number of shares of Warrant Stock issuable upon exercise of this Warrant (or
any shares of stock or other securities or property receivable or issuable upon
exercise of this Warrant) and the Purchase Price are subject to adjustment upon
occurrence of the following events:

                  4.1. Adjustment for Stock Splits, Stock Subdivisions or

Combinations of Shares. The Purchase Price of this Warrant shall be
proportionally decreased or increased (as applicable) and the number of shares
of Warrant Stock issuable upon exercise of this Warrant (or any shares of stock
or other securities at the time issuable upon exercise of this Warrant) shall be
proportionally increased or decreased (as applicable) to reflect any stock split
or subdivision, or combination or reverse stock split, respectively, of the
Company's Warrant Stock.

         4.2 Adjustment for Dividends or Distributions of Stock or Other
                            Securities or Property.

In case the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other
distribution with respect to the Warrant Stock (or any shares of stock or other
securities at the time issuable upon exercise of the Warrant) payable in (a)
securities of the Company or (b) assets (excluding cash dividends paid or
payable solely out of retained earnings), then, in each such case, the Holder of
this Warrant on exercise hereof at any time after the consummation, effective
date or record date of such dividend or other distribution, shall receive, in
addition to the shares of Warrant Stock (or such other stock or securities)
issuable on such exercise prior to such date, and without the payment of
additional consideration therefor, the securities or such other assets of the
Company to which such Holder would have been entitled upon such date if such
Holder had exercised this Warrant on the date hereof and had thereafter, during
the period from the date hereof to and including the date of such exercise,
retained such shares and/or all other additional stock available by it as
aforesaid during such period giving effect to all adjustments called for by this
Section 4.

                             4.3. Reclassification.

If the Company, by reclassification of securities or otherwise, shall change any
of the securities as to which purchase rights under this Warrant exist into the
same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with

                                       24

<PAGE>

respect to the securities that were subject to the purchase rights under this
Warrant immediately prior to such reclassification or other change and the
Purchase Price therefore shall be appropriately adjusted, all subject to
further adjustment as provided in this Section 4.

      4.4. Adjustment for Capital Reorganization, Merger or Consolidation.

In case of any capital reorganization of the capital stock of the Company (other
than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), or any merger or consolidation of the Company
with or into another corporation, or the sale of all or substantially all the
assets of the Company then, and in each such case, as a part of such
reorganization, merger, consolidation, sale or transfer, lawful provision shall
be made so that the Holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified herein and
upon payment of the Purchase Price then in effect, the number of shares of stock
or other securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 4. The foregoing provisions of this Section 4.4 shall similarly
apply to successive reorganizations, consolidations, mergers, sales and
transfers and to the stock or securities of any other corporation that are at
the time receivable upon the exercise of this Warrant.

         5.             CERTIFICATE AS TO ADJUSTMENTS.

In each case of any adjustment in the Purchase Price, or number or type of
shares issuable upon exercise of this Warrant, the Company shall promptly send a
certificate to the Holder detailing the computation of the adjustment.

         6.                 LOSS OR MUTILATION.

Upon receipt of evidence reasonably satisfactory to the Company of the ownership
of and the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to it, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor as the lost, stolen, destroyed or mutilated Warrant.

         7.              RESERVATION OF COMMON STOCK.

The Company hereby covenants that at all times there shall be reserved for
issuance and delivery upon exercise of this Warrant such number of shares of
Common Stock or other shares of capital stock of the Company as are from time to
time issuable upon exercise of this Warrant and, if and when necessary, will
take all steps necessary to amend its charter documents to provide sufficient
reserves of shares of Warrant Stock. All such shares shall be duly authorized,
and when issued upon such exercise, shall be validly issued, fully paid and
non-assessable, free and clear of all liens and encumbrances, except
encumbrances or restrictions arising under federal or state securities laws.

         8.                  TRANSFER AND EXCHANGE.

Subject to the terms and conditions of this Warrant and compliance with all
applicable securities laws, this Warrant and all rights hereunder may be
transferred to any Registered Holder parent, subsidiary or affiliate, in whole
or in part, upon notice to the Company and surrender of this Warrant and the
payment of any necessary transfer tax or other governmental charge imposed upon
such transfer.

         9.                 RESTRICTIONS ON TRANSFER.

The Holder, by acceptance hereof, agrees that, absent an effective registration
statement filed

                                        25
<PAGE>

with the SEC under the Securities Act of 1933, as amended (the "1933 Act"),
covering the disposition or sale of this Warrant or the Warrant Stock issued
or issuable upon exercise hereof and registration or qualification under
applicable state securities laws, such Holder will not sell, transfer,
pledge, or hypothecate any or all such Warrants or Warrant Stock unless
either (i) the Company has received an opinion of counsel, in form and
substance reasonably satisfactory to the Company, to the effect that such
registration is not required in connection with such disposition or (ii) the
sale of such securities is made pursuant to SEC Rule 144.

         10.            COMPLIANCE WITH SECURITIES LAWS.

By acceptance of this Warrant, the holder hereby represents, warrants and
covenants that any shares of stock purchased upon exercise of this Warrant or
acquired upon conversion thereof shall be acquired for investment only and not
with a view to, or for sale in connection with, any distribution thereof; that
the Holder is able to bear the economic risk of holding such shares as may be
acquired pursuant to the exercise of this Warrant for an indefinite period; that
the Holder understands that the shares of stock acquired pursuant to the
exercise of this Warrant or acquired upon conversion thereof will not be
registered under the 1933 Act and will be "restricted securities" within the
meaning of Rule 144 under the 1933 Act; and that all stock certificates
representing shares of stock issued to the Holder upon exercise of this Warrant
or upon conversion of such shares may have affixed thereto an appropriate legend
reflecting such restricted nature.

         11.         NO RIGHTS OR LIABILITIES AS STOCKHOLDER.

This Warrant shall not entitle the Holder to any voting rights or other rights
as a stockholder of the Company.

         12.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company hereby represents and warrants to Holder that the statements in the
following paragraphs of this Section 12 are all true and correct:

              12.1. Organization, Good Standing and Qualification.

The Company is a corporation duly organized, validly existing and in good
standing under, and by virtue of, the laws of the State of Oregon and has all
requisite corporate power and authority to own its properties and assets and to
carry on its business as now conducted and as presently proposed to be
conducted. The Company is qualified to do business as a foreign corporation in
each jurisdiction where failure to be so qualified would have a material adverse
effect on its financial condition, business, prospects or operations.

                       12.2. Due Authorization; Consents.

All corporate action on the part of the Company, its officers, directors and
shareholders necessary for (a) the authorization, execution and delivery of, and
the performance of all obligations of the Company under this Warrant, and (b)
the authorization, issuance, reservation for issuance and delivery of all of the
equity securities issuable upon exercise of this Warrant (and, if applicable,
the Common Stock issuable upon conversion thereof). This Warrant constitutes a
valid and binding obligation of the Company enforceable in accordance with its
terms, subject, as to enforcement of remedies, to applicable bankruptcy,
insolvency, moratorium, reorganization and similar laws affecting creditors'
rights generally and to general equitable principles. All consents, approvals
and authorizations of, and registrations, qualifications and filings with, any
federal or state governmental agency, authority or body, or any third party,
required in connection with the execution, delivery and performance of this
Warrant and the consummation of the transactions contemplated hereby and thereby
have been obtained.

                         12.3. Valid Issuance of Stock.

The outstanding shares of the capital stock of Company are duly and validly
issued, fully paid and non-assessable.

                                        26
<PAGE>

                    12.4. SEC Reports; Financial Statements.

The Company has duly filed with the SEC the Company's annual report on Form 10-K
for the year ended December 31, 1997, and its quarterly reports on Form 10-Q for
the quarter ended March 31, 1998, (collectively, the "Company SEC Reports"). As
of their respective filing dates, the Company SEC Reports complied in all
material respects with the requirements of the Securities Exchange Act of 1934,
as amended, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
in which they were made, not misleading, except to the extent corrected by a
subsequently filed document with the SEC. Each of the consolidated financial
statements (including, in each case, any related notes) contained in the Company
SEC Reports complied as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto, was prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
to such financial statements or, in the case of unaudited statements, as
permitted for by Form 10-Q) and presented fairly, in all material respects, the
consolidated financial position of the Company and its subsidiaries as at the
respective dates and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements are subject to normal and recurring year-end adjustments which are
not expected to be material in amount.

                          12.5. Governmental Consents.

All consents, approvals, orders, authorizations or registrations,
qualifications, designations, declarations or filings with any US., federal or
state governmental authority on the part of Company required in connection with
the consummation of the transactions contemplated herein shall have been
obtained prior to and be effective as of the Effective Date.

                                12.6. Disclosure.

No representation or warranty by the Company in this Warrant contains or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances in which they are made,
not misleading.

         13.                               NOTICES.

All notices and other communications from the Company to the Holder shall be
given in writing via certified mail, return receipt requested, hand delivery or
overnight delivery to 2200 Mission College Boulevard, Mail Stop SC4-210, Santa
Clara, California 95052, Attention: Treasurer.

         14.                          LAW GOVERNING.

This Warrant shall be construed and enforced in accordance with, and governed
by, the laws of the State of Oregon.

         15.                          NO IMPAIRMENT.

The Company will not, by amendment of its Articles of Incorporation or bylaws,
or through reorganization, consolidation, merger, dissolution, issue or sale of
securities, sale of assets or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant.

         16.                 NOTICES OF RECORD DATE.

In case (a) the Company shall take a record of the holders of its Warrant Stock,
for the purpose of entitling them to receive any dividend or other distribution,
or any right to subscribe for or purchase any shares of stock of any class or
any other securities or to receive any other right; (b) of any consolidation,
merger or reorganization of the Company, any reclassification of the capital
stock of the Company, or any conveyance of all or substantially all of the
assets of the Company

                                       27
<PAGE>

to another corporation in which holders of the Company's stock are to receive
stock, securities or property of another corporation; (c) of any voluntary
dissolution, liquidation or winding-up of the Company; or (d) of any
redemption or conversion of all outstanding Common Stock or Warrant Stock;
then, and in each such case, the Company will mail or cause to be mailed to
the Registered Holder of this Warrant a notice specifying, as the case may
be, (i) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, or (ii) the date on which such transaction
or event is to take place, and the time, if any is to be fixed, as of which
the holders of record of Warrant Stock, shall be entitled to exchange their
shares of Warrant Stock for securities or other property deliverable upon
such event or transaction. Such notice shall be delivered at least thirty
(30) days prior to the date therein specified.

         17.                           SEVERABILITY.

If any term, provision, covenant or restriction of this Warrant is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.

         18.                     INFORMATION RIGHTS.

The Company shall deliver to each holder of this Warrant or any securities
issued (directly or indirectly) upon exercise hereof, upon request, copies of
the Company's reports on Forms 10-K, 10-Q, and 8-K and Annual Reports to
Shareholders promptly after such documents are filed with the SEC.

         19.             NO INCONSISTENT AGREEMENTS.

The Company will not on or after the date of this Warrant enter into any
agreement with respect to its securities which is inconsistent with the rights
granted to the Holders of this Warrant or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to holders of the
Company's securities under any other agreements, except rights that have been
waived.

         20.        SATURDAYS, SUNDAYS AND HOLIDAYS.

If the Expiration Date falls on a Saturday, Sunday or legal holiday, the
Expiration Date shall automatically be extended until 5:00 p.m. the next
business day.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                 28
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the
Effective Date.

----------------------------------- -----------------------------------------
INTEL CORPORATION                   THRUSTMASTER, INC.

By:                                 By:
   ----------------------------        -----------------------------------

-------------------------------     --------------------------------------
Printed Name                        Printed Name

-------------------------------     --------------------------------------
Title                               Title

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

SIGNATURE PAGE TO WARRANT

                                 29
<PAGE>

                                    EXHIBIT F

              INTEL SOFTWARE LICENSE AGREEMENT (FINAL, SINGLE USER)

              IMPORTANT - READ BEFORE COPYING, INSTALLING OR USING.

DO NOT USE OR LOAD THIS SOFTWARE AND ANY ASSOCIATED MATERIALS (COLLECTIVELY, THE
"SOFTWARE") UNTIL YOU HAVE CAREFULLY READ THE FOLLOWING TERMS AND CONDITIONS. BY
LOADING OR USING THE SOFTWARE, YOU AGREE TO THE TERMS OF THIS AGREEMENT. IF YOU
DO NOT WISH TO SO AGREE, DO NOT INSTALL OR USE THE SOFTWARE.

LICENSE. You may copy the Software onto a single computer for your personal,
noncommercial use, and you may make one back-up copy of the Software, subject to
these conditions:

    1. You may not copy, modify, rent, sell, distribute or transfer any part of
       the Software except as provided in this Agreement, and you agree to
       prevent unauthorized copying of the Software.

    2. You may not reverse engineer, decompile, or disassemble the Software.

    3. You may not sublicense or permit simultaneous use of the Software by more
       than one user.

    4. The Software may include portions offered on terms in addition to those
       set out here, as set out in a license accompanying those portions.

OWNERSHIP OF SOFTWARE AND COPYRIGHTS. Title to all copies of the Software
remains with Intel or its suppliers. The Software is copyrighted and protected
by the laws of the United States and other countries, and international treaty
provisions. You may not remove any copyright notices from the Software. Intel
may make changes to the Software, or to items referenced therein, at any time
without notice, but is not obligated to support or update the Software. Except
as otherwise expressly provided, Intel grants no express or implied right under
Intel patents, copyrights, trademarks, or other intellectual property rights.
You may transfer the Software only if the recipient agrees to be fully bound by
these terms and if you retain no copies of the Software.

LIMITED MEDIA WARRANTY. If the Software has been delivered by Intel on physical
media, Intel warrants the media to be free from material physical defects for a
period of ninety days after delivery by Intel. If such a defect is found, return
the media to Intel for replacement or alternate delivery of the Software as
Intel may select.

EXCLUSION OF OTHER WARRANTIES. EXCEPT AS PROVIDED ABOVE, THE SOFTWARE IS
PROVIDED "AS IS" WITHOUT ANY EXPRESS OR IMPLIED WARRANTY OF ANY KIND INCLUDING
WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR
PURPOSE. Intel does not warrant or assume responsibility for the accuracy or
completeness of any information, text, graphics, links or other items contained
within the Software.

LIMITATION OF LIABILITY. IN NO EVENT SHALL INTEL OR ITS SUPPLIERS BE LIABLE FOR
ANY DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, BUSINESS
INTERRUPTION, OR LOST INFORMATION) ARISING OUT OF THE USE OF OR INABILITY TO USE
THE SOFTWARE, EVEN IF INTEL HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
SOME JURISDICTIONS PROHIBIT EXCLUSION OR LIMITATION OF LIABILITY FOR IMPLIED
WARRANTIES OR CONSEQUENTIAL OR INCIDENTAL DAMAGES, SO THE ABOVE LIMITATION MAY
NOT APPLY TO YOU. YOU MAY ALSO HAVE OTHER LEGAL RIGHTS THAT VARY FROM
JURISDICTION TO JURISDICTION.

TERMINATION OF THIS AGREEMENT. Intel may terminate this Agreement at any time if
you violate its terms. Upon termination, you will immediately destroy the
Software or return all copies of the Software to Intel.

APPLICABLE LAWS. Claims arising under this Agreement shall be governed by the
laws of California, excluding its principles of conflict of laws and the United
Nations Convention on Contracts for the Sale of Goods. You may not export the
Software in violation of applicable export laws and regulations. Intel is not
obligated under any other agreements unless they are in writing and signed by an
authorized representative of Intel.

GOVERNMENT RESTRICTED RIGHTS. The Software is provided with "RESTRICTED RIGHTS."
Use, duplication, or disclosure by the Government is subject to restrictions as
set forth in FAR52.227-14 and DFAR252.227-7013 ET SEQ. or its successor. Use of
the Software by the Government constitutes acknowledgment of Intel's proprietary
rights therein. Contractor or Manufacturer is Intel Corporation, 2200 Mission
College Blvd., Santa Clara, CA 95052.

                                       30
<PAGE>

                                    EXHIBIT G

              THRUSTMASTER MANAGEMENT OF INTEL SOFTWARE SOURCE CODE

1.0      Thrustmaster manager responsible for Intel Software Source Code: Loren
         Winzeler
2.0      Location of Intel Software Source Code: source servers; hard media
         locked in fire safe (Corporate HQ)

                                       31
<PAGE>

                                    EXHIBIT H

                      ENSURING COMPATABILITY BETWEEN INTEL
                     MULTI-POINT AUDIO DERIVED APPLICATIONS

The Intel Multi-point Audio SDK can be integrated with many types of
applications to provide multi-participant audio conferencing. Follow these
directions to ensure that the applications you build are compatible with each
other as well as all other applications that have been built using Intel
Multi-point Audio.

FOR INSTALL /UNINSTALL COMPATIBILITY

IF YOU ARE USING THE INTEL MULTI-POINT AUDIO SDK AS RELEASED

All applications using this release of the Intel Multi-point Audio SDK
unmodified (no source level changes) should follow these steps to ensure that
they do not conflict with other applications also using this SDK.

1)   File Locations for Intel Multi-point Audio core files

     Files that implement Intel Multi-point Audio core functionality must be
     placed in a well known directory common to all applications that use it.
     Because files in this directory are shared by multiple applications,
     standard MS Windows shared file reference counting should be used when
     installing and uninstalling these files. Also, check file creation times to
     ensure that you never copy over any of the core files with an older
     version.

     The common shared directory for this release of the Intel Multi-point Audio
SDK is:

            < Program Files > \Common Files\Intel\Multi-Point
            Audio 1.6

         Note: < Program Files > is a variable location
               maintained by Windows system and is not always C:\Program Files

The list of core files can be found in the section below entitled INTEL
MULTI-POINT AUDIO CORE FILES.

2)   Registry Settings

     Registry settings required to configure Intel Multi-point Audio are unique
     to each application that uses the SDK. To ensure that applications
     configurations do not change or conflict with each other, Multi-point Audio
     registry subkeys and entries are placed under a registry key unique to that
     application. This is accomplished with the following three steps.

     a)   The application writer determines an application identifier to be used
          to distinguish this application's registry entries. Because this
          identifier is used as portion of a registry key, it may contain
          forward-slash characters ("\") to delimit subkeys. We recommend that
          the identifier contain a company name, a product name, and a version
          number, i.e "MyCompany\ThisProduct\v1.0". This name can contain single
          but not multiple embedded spaces in the name. Ie "My Company "is okay,
          but "My    Company" is not.

     b)   Write your application setup software to place Intel Multi-point Audio
          required registry entries in the following registry location:

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         HKEY_LOCAL_MACHINE\Software\Intel\ < application id >

         Or, to use our example,

         HKEY_LOCAL_MACHINE\Software\Intel\MyCompany\ThisProduct\v1.0\...

 Note: to editor we might want a reference to the "installation design doc" part
 of the document
Where all the current registry entries are listed.

     c)   In your application, call the MPA Init() method passing your
          identifier as the parameter. This will allow the Intel Multi-point
          Audio subsystem to find the correct configuration values for your
          application. The following code fragment illustrates this.

                  //Create an instance of the MultiPointAudio control
                  HRESULT hr = m_spMpa.CoCreateInstance(CLSID_MpaCtrl);

                  ...
                  < other COM related initialization >
                  ...

                  m_spMpa- > Init(_bstr_t("MyCompany\ThisProduct\v1.0"));

IF YOU HAVE MADE SOURCE CODE CHANGES TO INTEL MULTI-POINT AUDIO

Integrators that have made source code level changes to the Intel Multi-point
Audio subsystem need to ensure that any changes they have made do not
inadvertently affect the operation of applications using the original,
unmodified Multi-point Audio SDK. Following these steps will ensure
compatibility with existing and future applications using Intel Multi-point
Audio .

1.   Change the Class ID Global Unique Identifiers (GUIDs) for Multi-point Audio
     implemented COM components. Also, change Interface ID GUIDs for any
     interfaces that have been modified. See instructions for changing
     Multi-point Audio GUIDs in section < TBD > .

2.   Define a new common file location for Intel Multi-point Audio core files.
     To ensure that this location is unlikely to be used by other Intel
     Multi-point Audio integrators, we recommend using your company name and an
     SDK version number as part of the location directory path. For example:

3.   < Program Files > \Common Files\MyCompany\Multi-Point Audio 1.6.1

4.   Ensure that applications using this variation of Multi-point Audio follow
     the same compatibility rules defined above for Multi-point Audio SDK
     integrators. Core files should be placed in the newly defined common
     directory, and all required registry entries should be unique to the
     application.

FOR RUNTINE COMPATABILITY

If you want to ensure that your application will execute and run correctly at
the same time other Multi-point Audio applications are running, follow these
steps.

1.   ServerPort usage - When your application hosts a conference, ensure that
     the ServerPort property is set to a non default value (default is 24386.)
     It is safest to set the ServerPort

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     property to zero (0), which will cause a unique port ID value to be
     assigned. You will need to ensure that all clients of this conference are
     using the same ServerPort property value as the host. This may be done by
     sending to the other participants the actual ServerPort value read after
     your application receives the HostConferenceAccepted event. Applications
     way also reserve a port id for their exclusive use with the Internet
     Assigned Numbers Authority (http://www.iana.org/numbers.html#P) and use
     this as a fixed ServerPort value to be used on both host and client
     applications.

2.   ConferenceListenPort usage - When your application hosts a conference,
     ensure that the ConferenceListenPort property is set to a non default value
     (default is 1720.) It is best to set the ConferenceListenPort property to
     zero (0), which will cause a unique port ID value to be assigned. Unlike
     the ServerPort property value, there is no need to pass this value from the
     host to clients. Multi-point Audio passes it internally.

     Setting the ConferenceListenPort property to the default values allows the
     Multi-point Audio subsystem to inter-operate with H.323 based internet
     phone applications.

INTEL MULTI-POINT AUDIO CORE FILES:
         Audmsp32.dll
         MPA.dll
         Ppm.dll
         SM.dll
         api.dll
         arscli.dll
         autoreg.dll
         avserp32.dll
         callcont.dll
         cclock.dll
         confmgr.dll
         cstrain.dll
         dr.dll
         gki.dll
         h245.dll
         h245ws.dll
         icas.exe
         irrcm.dll
         isdm2.dll
         isreghlp.dll
         mallmsp.dll
         marsrdr.dll
         mixmsp.dll
         mpap.dll
         mpas.dll
         msm.dll
         netmmerr.dll
         ossapi.dll
         ossdmem.dll
         rci.dll
         refobj.dll
         sessnmgr.dll
         soedper.dll
         strmsp.dll
         vcrmsp32.dll

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