EUROPEAN DISTRIBUTION AGREEMENT DATED MAY 19,2005

(1)

In2Games Limited (company number 03816498) of 2 ^nd Floor, 135 High Street, Rickmansworth, Hertfordshire WD3 1AR (“ In2Games ”); and

(2)

Mad Catz Europe Limited, a U.K. company, with offices at Exchange House, 494 Midsummer Boulevard, Central Milton Keynes, MK9 2EA, United Kingdom (the “ Distributor ”).

(A)

In2Games has developed a peripheral for the use with video game consoles (collectively “Peripheral”).

(B)

Distributor wishes to obtain, and In2Games wishes to grant to Distributor, the exclusive right to distribute the Peripheral in the Territory.

1.

Territory and Term

1.1

For purposes of this Agreement, the Territory shall be the United Kingdom, Ireland, France, Scandinavia, Australia, New Zealand.

1.2

The Term of this Agreement shall begin on the Peripheral Launch Date and continue in full force and effect for one year thereafter. For informational purposes, the target Launch Date for the Peripheral is August 26, 2005. The Agreement will automatically renew for an additional year if either of the following events occur: (i) Distributor purchases [***] Units by January 31, 2006 or (ii) Distributor purchases [***] Units by the first anniversary of the Launch Date. If this Agreement renews for an additional year, then the Agreement shall terminate at the end of that additional year and shall not renew for a further year (unless otherwise agreed in writing between In2Games and Distributor.

2.

Appointment of the Distributor

2.1

In2Games appoints Distributor as its exclusive distributor for the resale of the Peripheral in the Territory.

2.2

In2Games agrees that it shall not itself solicit orders for the Peripheral from any person in the Territory and shall not appoint any other person as a distributor for the resale of the Peripheral in the Territory.

2.3

The Distributor shall not:

 (a)

obtain Units for resale in the Territory from any person other than In2Games;

 (b)

seek customers, solicit orders, establish any branch or maintain any distribution depot for the Peripheral in any country which is outside the Territory but within the European Economic Area which are hereby reserved to In2Games (or its other distributors) and provided that the Distributor shall be entitled to satisfy unsolicited orders received from outside the Territory but within the European Economic Area; or

 (c)

sell the Peripheral to any customer in any country which is outside the Territory and outside the European Economic Area.

2.4

The Distributor may describe itself as an “Authorised Distributor” of In2Games for the Peripheral, but may not hold itself out as an agent of In2Games or as being entitled to bind In2Games in any way.

3.

Orders for the Peripheral

3.1

Within 14 days following the execution of this Agreement, Distributor shall place a purchase order for [***] Units. Within 14 days following execution of this Agreement, Distributor shall supply In2Games with an irrevocable and confirmed (by a bank acceptable to In2Games) Letter of Credit payable in cash pounds sterling upon the presentation of a clean bill of lading. In2Games agrees that it shall make no attempt to cash the Letter of Credit until Distributor’s purchase orders have been fulfilled and Mad Catz has taken possession of the Peripheral.

3.2

After Mad Catz has purchased [***] Units, there will no further obligation on the part of Mad Catz to supply a Letter of Credit for the Peripheral. All purchase orders over [***] Units shall be paid thirty (30) days after Mad Catz takes possession of the Peripheral.

3.3

Distributor shall place purchase orders for the Units in writing, specifying which Peripheral is being ordered. The Distributor shall be responsible for ensuring that each Order is accurate. To the extent of any inconsistency between the terms of this Agreement and any Orders or invoices issued in relation to this Agreement, this Agreement shall take priority.

3.4

Once a purchase order is placed by Distributor, In2Games will have 5 days to accept the purchase order, reject the purchase order, or partially accept the purchase order. Distributor has the option to cancel any purchase order prior to In2Games’ accepting the purchase order. In2Games will use reasonable efforts to accept (in total) all the quantities specified in Distributor’s purchase orders. Once accepted, Distributor will take possession of the Units FOB Hong Kong no later than 45 days after In2Games accepts the purchase order. If In2Games does not accept the entire purchase order, In2Games must indicate in writing whether they accept part of the purchase order. Mad Catz then has the option to accept partial fulfilment of the purchase order or cancel the purchase order entirely.

3.5

Once In2Games has accepted a purchase order, the Distributor may not cancel that purchase order or vary the number of units specified in that purchase order unless mutually agreed upon by the parties in writing.

3.6

Reference is made to section 3.6 of that certain agreement between Distributor and In2Games for the supply of the PS2 Game and is incorporated herein by reference.

4.

Returns and Price Protection

4.1

Distributor shall have the right to return defective Units for a credit against then current and future purchase orders. If the defective rate of the Peripheral is above [***] , Distributor shall have the right to a full refund of any monies paid in respect of defective Units in respect of which a credit has not been given within 30 days after a written demand for the same.

4.2

Distributor may request In2Games to agree to lower the price at which Distributor buys the Units. If Distributor makes such a request, In2Games will negotiate in good faith with Distributor regarding such request and any agreed price reduction will be applied not only to all future orders, but also retrospectively to all stock that has not been sold through at retail.

5.

Marketing and promotion

5.1

The Distributor shall:

 (a)

make clear, in all dealings with customers and prospective customers, that it is acting as a distributor of Peripheral and not as an agent of In2Games;

 (b)

provide to In2Games a copy of each of the price lists which it publishes during the Term of this Agreement, in each case promptly following the publication of the relevant price list;

 (c)

each quarter during the Term of this Agreement, provide In2Games with a report in such form as In2Games may reasonably require, specifying the number of Units which the Distributor has: (i) at their premises, and (ii) sold or delivered to customers, together with details of sell-through of Units achieved by the Distributor’s customers, during the preceding month and such other information as In2Games may reasonably require; and

 (d)

provide an after sales service for customers and end-users in relation to the Units including a telephone help-line to the reasonable satisfaction of In2Games.

6.

Prices

6.1

Each Unit shall be sold to Distributor at a Price of [***] British Pounds Sterling. In the event that In2Games provides the Peripheral to a third party at a lower price or on more favourable terms than it provides the Peripheral to Distributor, then any orders unfulfilled and orders placed by Distributor after the date on which In2Games has provided the Peripheral to that third party at such lower price or on such more favourable terms shall be deemed to be automatically revised and accepted to equal the lowest price and/or more favourable terms. In the event that Distributor shall become entitled to a lower price under this section 6.1, but has already made payment at a price in excess thereof, In2Games shall promptly refund the difference in price to Distributor.

6.2

The prices set out in sub-clause 6.1 shall be recalculated if, at the date In2Games accepts an Order the exchange rate of the Euro/Pound and/or the US Dollar/Pound fluctuates in either direction by more than 3% of the exchange rate value as at the date of this Agreement.

6.3

Subject to In2Games price protection obligations set forth in Section 4.3 above, the parties may change the Peripheral Price at any time by written agreement.

7.

Payment

7.1

Payment shall be made in accordance with Section 3 above.

8.

Intellectual Property

8.1

The Distributor shall not:

 (a)

copy, modify or adapt the Peripheral; or

 (b)

alter, remove, obscure or tamper with any trade marks, copyright or other notices, numbers, or other means of identification used on the Units; or

 (c)

use in the Territory any trade marks or trade names so resembling the Trade Marks (or any other trade mark or trade name of In2Games) as to be likely to cause confusion or deception; or

 (d)

insert any promotional lea