Exhibit 10.3

CERTAIN INFORMATION INDICATED BY [***] HAS BEEN DELETED FROM THIS EXHIBIT

AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2.

PROMISSORY NOTE

 

$2,475,000.00   San Diego, California   February 27, 2014

FOR VALUE RECEIVED AND DEBT ACKNOWLEDGED, Mad Catz, Inc., a Delaware
corporation, and Mad Catz Interactive, Inc., a corporation organized under the
Business Corporation Law of Canada, and its affiliated and subsidiary companies
on the one hand (collectively referred to as the “Makers”) promises to jointly
and severally pay to the former Stockholders of Tritton Technologies, Inc., or
their successor or assigns (collectively referred to as “Holder”), according to
the schedule set forth on Exhibit A to this promissory note (this “Note”) the
sum of Two Million Four Hundred and Seventy-Five Thousand Dollars
($2,475,000.00).

1. Payments. The payments shall be made according to the schedule set forth on
Exhibit A. Payments will be due and payable in lawful money of the United States
of America. Each payment will be made to each Holder in accordance with the
percentages set forth on Exhibit A.

2. Acceleration. Subject to the provisions of Sections 3 and 4 below, if a
default occurs in the performance of any of the agreements in this note, the
entire principal sum will at once become due and payable, without notice, at the
option of the Holder of this Note. Failure to exercise such option will not
constitute a waiver of the right to exercise it in the event of any subsequent
default.

3. Limitation on Payments. Notwithstanding anything to the contrary set forth in
this Note, this Note shall not accelerate and no violation or default under this
Note shall occur or exists for failure to make any payment hereunder if the
reason the payment is not made on the appointed date or thereafter is because
Makers cannot make such payment because of any default of the banking covenants
or because the making of such payment would cause Makers to be in default or
otherwise violate the banking covenants, in each case, under (a) that certain
Fourth Amended and Restated Loan Agreement dated August 1, 2012 (as amended,
modified, supplemented, extended, renewed, restated or replaced from time to
time, the “Loan Agreement”) between Wells Fargo Capital Finance, LLC (“Wells
Fargo”), Mad Catz, Inc. (the “Borrower”) and the Obligors party thereto or
(b) that certain Consent and Waiver Agreement dated May 28, 2010 (as amended,
modified, supplemented, extended, renewed, restated or replaced from time to
time, the “Consent Agreement”) between Wells Fargo, the Borrower and the
Obligors party thereto. Even though no acceleration is permitted and no breach
or default hereunder shall occur as a result of failure to make a payment for
the reasons provided above, Makers will (1) pay simple interest in the amount of
5% per annum on the amount of any payment that is not made in the amount or on
the date specified on Exhibit A from the date such payment was supposed to have
been made and continuing until the day such payment is actually made and
(2) provide Holder with documents sufficient to reasonably demonstrate that
making such payment will cause Makers to violate the covenants and obligations
under the Loan Agreement and/or the Consent Agreement.

4. Cure. Before acceleration hereunder, Makers shall have the right to cure any
default in payment hereunder for a period of thirty (30) days following written
notice by Holder to Makers;

 

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provided, however, if any payment is not made due to the limitations on payment
described in Section 3 above, then Makers shall have the right to cure such
default for a period of five (5) business days following the date that such
limitations no longer exist. Makers will use commercially reasonable efforts to
cure any violation of such banking covenants.

5. Interest. This Note shall not bear interest

6. Attorneys’ Fees. Makers agree to pay the following costs, expenses, and
attorney’s fees paid or incurred by the Holder of this note, or adjudged by a
Court if Makers fail to make the payments and such payment is not excused by the
provisions set forth in Section 3 above: (1) reasonable costs of collection,
reasonable costs, expenses, and attorneys’ fees paid or incurred in connection
with the collection or enforcement of this Note, whether or not suit is filed;
and (2) costs of such sum as the Court may adjudge as attorneys’ fees in an
action to enforce payment of this Note or any part of it.

6. Prepayment. Makers shall have the right at any time to prepay any amount
owing, in whole or in part.

7. Default; Right to Accelerate Payment. Subject to the provisions set forth in
Sections 3 above, Makers shall be in default of this Note and this Note shall
become due and payable in the amount of the principal sum then unpaid and all
other amounts owing in connection with this Note and/or the Settlement Agreement
of even date herewith by and between Makers and Holder, at the option of the
Holder, without notice or demand, upon the occurrence or following of any of the
following:

 

  (a) If Makers fail to pay timely any of the monies due and owing under this
Note on the date the sum becomes due and payable or within thirty (30) days
thereafter; or

 

  (b) If Mad Catz Interactive, Inc. or Mad Catz, Inc. files for bankruptcy or
executes an assignment for the benefit of creditors.

8. Notice. All notices under this note shall be in writing and shall be
delivered by personal service, facsimile transmission, or by certified or
registered mail, postage prepaid, return receipt requested, to the parties. Any
written notice to any of the parties required or permitted hereunder shall be
deemed to have been duly given on the date of service if served personally or if
served by facsimile transmission (with confirmation of receipt), or seventy-two
(72) hours after the mailing. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given as
provided hereunder shall be deemed to be receipt of the notice, demand or
request sent. Notices to the parties shall be addressed as follows:

 

Makers:    Name    Mad Catz Inc.    Address    7480 Mission Valley Rd., Ste. 101
      San Diego, CA 92108       Attn: President    Facsimile    (619) 683-9839
Holder:    Name    Chris Von Huben    Address    6928 Corte Langosta      
Carlsbad, California 92009

9. Assignment. This Note may not be assigned by either party without the written
consent of the other party.

 

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10. Governing Law. The validity, interpretation, and performance of this note
shall be governed by and in accordance with the laws of the State of California.

11. Amendments. The provisions of this Note may not be amended or modified,
unless agreed to, in writing, signed by Makers and the Holder making specific
reference to the Note.

12. Severability. If any provision of this Note is found to be invalid or
unenforceable, all other provisions shall nonetheless remain in full force and
effect to the maximum extent permitted by law.

 

Makers:

Mad Catz Inc., a Delaware Corporation

By:  

/s/ Darren Richardson

 

Name

Its:  

President and CEO

 

Title

 

Mad Catz Interactive Inc., a Canadian Business Corporation By:  

/s/ Darren Richardson

 

Name

Its:  

President and CEO

 

Title

 

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CERTAIN INFORMATION INDICATED BY [***] HAS BEEN DELETED FROM THIS EXHIBIT

AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2.

Exhibit A

Fixed Payment Schedule

 

    

Month

  

Cumulative

February 2014

   —      —  

March 2014

   —      —  

Apr-2014

   —      —  

May-2014

   $***    $***

Jun-2014

   $***    $***

Jul-2014

   $***    $***

Aug-2014

   $***    $***

Sep-2014

   $***    $***

Oct-2014

   $***    $***

Nov-2014

   $***    $***

Dec-2014

   $***    $***

Jan-2015

   $***    $***

Feb-2015

   $***    $***

Mar-2015

   $***    $***

Apr-2015

   $***    $***

May-2015

   $***    $***

Jun-2015

   $***    $***

Jul-2015

   $***    $***

Aug-2015

   $***    $***

Sep-2015

   $***    $***

Oct-2015

   $***    $***

Nov-2015

   $***    $***

Dec-2015

   $***    $***

Jan-2016

   $***    $***

Feb-2016

   $***    $***

Mar-2016

   $***    $***

Apr-2016

   $***    $***

Payment Percentages

 

Chris Von Huben

     84.0606 % 

Frank Sansone

     5.3131 % 

Dan Rafferty

     5.3131 % 

PXM Design Inc

     5.3131 % 

 

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