Document:

Amended and Restated Employment Agreement of Vincent J. Bitetti

 Exhibit 10.16 
  
 Execution Copy 
  
 AMENDED AND RESTATED 
 EMPLOYMENT AGREEMENT 
  
 This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”),
dated as of January 28, 2003 (the “Effective Date”), is entered into by and among TDK Mediactive, Inc. (formerly known as Sound Source Interactive, Inc.), a Delaware corporation (“TMI/DE”) and TDK Mediactive, Inc. (formerly known
as Sound Source Interactive, Inc.), a California corporation (“TMI/CA”) (TMI/DE and TMI/CA collectively, “Employer”), and Vincent J. Bitetti (“Executive”). 
  
 R E C I T A L S 
  
 WHEREAS, Executive has served as Chief Executive Officer of Employer since 1988; 
  
 WHEREAS, Employer and Executive entered into that certain Employment Agreement dated as of November 27, 2000 (the
“Prior Agreement”); 
  
 WHEREAS, Employer and Executive
mutually desire to enter into this Agreement and thereby amend and restate the Prior Agreement in its entirety; 
  
 WHEREAS, Executive continues to possess an intimate knowledge of the business and affairs of Employer, its policies, methods, personnel, opportunities and
problems; 
  
 WHEREAS, Employer desires to assure itself of
Executive’s continued employment by Employer and to compensate him for such efforts; and 
  
 WHEREAS, Executive is desirous of committing himself to serve Employer on the terms herein provided. 
  
 A G R E E M E N T 
  
 NOW, THEREFORE, in consideration of the covenants herein contained, the parties hereto hereby agree as follows: 
  
 1. Employment; Certain Obligations of Executive. 
  
 (a) Employment Position. Executive is hereby employed as the Chief
Executive Officer of Employer. Executive, subject to the direction and control of the Board of Directors of Employer (the “Board”), shall have all the duties typical of a chief executive officer, as those duties may from time to time be
established, changed, increased or decreased by the Board. Executive shall also have such other powers and duties as may be from time to time assigned to him by the Board; provided, however, that in no event shall the Board require Executive to
perform duties not in keeping with his position as an executive officer of Employer. Executive hereby accepts such employment, all subject to the terms and conditions herein contained. 
  

 (b) Full time and Attention. Executive hereby agrees that during the period of his employment
hereunder he shall devote substantially all of his business time, attention and skills to the business and affairs of Employer and its subsidiaries during the normal business hours of Employer. Notwithstanding the foregoing, Executive may engage in
activities permitted by Section 8(b), subject to the limitations set forth in such Section. 
  
 (c) Key Man Life Insurance. If requested by Employer, Executive shall cooperate with Employer to secure a key man life insurance policy or policies on the life of Executive, naming Employer as beneficiary, in
such amount or amounts as determined by Employer in its discretion. 
  
 2. Place Of Performance. In connection with his employment by Employer, Executive shall be based at Employer’s principal executive offices. 
  
 3. Compensation. 
  
 (a) Base Salary. Employer shall pay to Executive, and Executive shall accept, for all services which may be rendered by him pursuant to this
Agreement, a base salary (“Base Salary”) as hereinafter set forth, payable in accordance with Employer’s payroll practices as from time to time in effect. The initial Base Salary of Executive hereunder shall be $326,240 for the
one-year period commencing on November 1, 2002 (the “Salary Effective Date”). Upon the first anniversary date of the Salary Effective Date, Executive’s Base Salary shall be increased by an amount equal to the Base Salary then in
effect multiplied by a fraction, the numerator of which shall be the difference between (a) the Consumer Price Index (as hereinafter defined) as of the first anniversary of the Salary Effective Date and (b) the Consumer Price Index as of the Salary
Effective Date, and the denominator of which shall be the Consumer Price Index as of the Salary Effective Date; provided, however, that the “fraction” set forth in this sentence shall never be zero or less. 
  
 In addition to the above, on or prior to the first anniversary date of the
Salary Effective Date, the Base Salary for the following one-year period may, in the sole discretion of the Board, be increased in excess of the amount of any Consumer Price Index adjustment hereunder, based upon an evaluation of the performance of
Executive during the prior one-year period. 
  
 For purposes of
this Agreement, the “Consumer Price Index” as of any particular date means the Consumer Price Index for the Major Metropolitan Area of Los Angeles-Riverside-Orange County, California, as reported in the Monthly Labor Review (published by
the Bureau of Labor Statistics of the United States Department of Labor) in respect of the month immediately preceding such particular date. In the event that the Consumer Price index is not available, a successor or substitute index shall be used
for the computations herein set forth as determined in the good faith judgment of the Board. In the event that the Consumer Price Index or such successor or substitute index is not published, a reliable governmental or other nonpartisan publication
evaluating the information theretofore used in determining the Consumer Price Index shall be used for the computations herein set forth, as determined in the good faith judgment of the Board. 
  

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 Notwithstanding the foregoing, if the Board determines in its good faith judgment that Employer’s
financial condition necessitates the imposition of a salary reduction on all executive employees of Employer, then the Board, pursuant to a resolution duly adopted thereby, on not more than one occasion, may reduce Executive’s Base Salary by a
percentage equal to the percentage reduction imposed on each of the other executive employees of Employer, provided, however, that the amount of such reduction shall not exceed 10% of the Base Salary in effect immediately prior to such reduction. In
such case, the Board will review the Company’s performance on a regular basis to determine if and when the salaries can be returned to their previously existing levels. The Board will consider other forms of compensation, such as option grants,
if deemed appropriate in light of the Company’s performance. 
  
 (b) Bonus. Employer shall pay Executive bonus compensation in addition to Executive’s Base Salary based upon the Compensation Committee’s evaluation of his performance. In no event shall the aggregate
amount of bonuses payable under this paragraph exceed $150,000 in any full one-year period of the Agreement. This additional compensation shall be determined on an annual basis at the close of Employer’s fiscal year and paid to Executive within
ten days of completion of the annual audit for the fiscal year in question. 
  
 (c) Stock Options. Executive shall be granted, as of the Effective Date, options to purchase 500,000 shares of the common stock of TMI/DE pursuant to the 1995 Stock Option Plan of TMI/DE. The purchase price of
the common stock covered by the foregoing options shall be fixed as of January 28, 2003, which is the date that such grant was approved by the Compensation Committee of Employer’s Board of Directors, in accordance with the provisions of such
stock option plan. Such options shall vest as set forth below: 
  
 Options to purchase 125,000 shares shall vest as of January 28, 2003. 
  
 Options to purchase 125,000 shares shall vest as of January 28, 2004 
  
 Options to purchase 125,000 shares shall vest as of January 28, 2005. 
  
 Options to purchase 125,000 shares shall vest as of January 28, 2006. 
  
 Upon the occurrence of any Change of Control (as defined below), or upon the termination of
this Agreement prior to the Termination Date for any reason other than as set forth in Section 6(a), all such stock options, and all other stock options previously granted by Employer to Executive, which are not then vested in accordance with their
terms, shall fully vest and be fully exercisable. As used herein, a “Change in Control” shall be deemed to have occurred upon (a) the consummation of (w) the acquisition by any person or group of persons within the meaning of Section 13(d)
of the Securities Exchange Act of 1934, as amended, of the beneficial ownership of a majority of the voting equity securities of Employer, (x) any consolidation or merger of Employer in which Employer is not the continuing or surviving corporation
or pursuant to which shares of Employer’s common stock would be converted into cash, securities or other property, other than a merger of Employer in which the holders of Employer’s common stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving corporation immediately after the merger, (y) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the
assets of Employer, or (z) a tender 
  

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 offer for the common stock of Employer (other than by Employer) for all, or a majority of, the common stock of Employer,
or (b) the approval by the stockholders of Employer of any plan or proposal for the liquidation or dissolution of Employer. 
  
 (d) Automobile. In order to facilitate travel by Executive in the performance of his duties hereunder, Employer shall furnish Executive, at no
expense to him, with an automobile owned or leased by Employer; provided, however, that the total cost to Employer for the related lease/purchase payments shall not exceed $1,000 per month. The manufacturer and type of such automobile shall be
chosen by Executive. Employer shall reimburse Executive for all expenses of maintaining, insuring and operating such automobile upon the presentation of appropriate vouchers and/or receipts (to the extent that Employer does not pay such expenses
directly). At the discretion of Executive, Employer shall, in lieu of furnishing Executive with an automobile owned or leased by Employer and paying all maintenance, insurance and operation expenses in connection therewith, reimburse Executive for
all expenses he incurs in maintaining, insuring and operating one automobile owned or leased by Executive upon the presentation of appropriate vouchers and/or receipts (to the extent that Employer does not pay such expenses directly); provided,
however, that the aggregate amount of such expenses subject to reimbursement shall not exceed $1,000 per month. 
  
 (e) Expenses. During the term of his employment hereunder, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by him in performing services hereunder, provided however, that Executive properly accounts therefor in accordance with Employer’s policy relating thereto. Without limiting the generality of the foregoing, and in order to facilitate
Executive’s performance of his duties hereunder, the parties agree to the following: (i) any travel Executive undertakes in connection with the performance of his duties hereunder shall be in business class or better, and Employer shall
reimburse Executive for such expenses, (ii) Employer shall reimburse Executive for mobile phone expenses incurred by him in performing services hereunder for an amount not to exceed $600 per month, and (iii) Employer shall provide Executive, for his
use in the performance of his duties hereunder, with a computer, facsimile machine and other similar office equipment reasonably necessary to maintain an office from his residence, the aggregate cost of which shall not exceed $4,000 during any
two-year period. Employer shall reimburse Executive for up to $4,000 of legal fees and expenses incurred by him in connection with the negotiation and preparation of this Agreement. 
  
 (f) Benefit Plans. Executive shall be entitled to participate in or receive benefits under any employee benefit plan
or arrangement currently available, or made available by Employer in the future, to its executives and key management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plan or arrangement.
Employer shall not make any changes in any employee benefit plans or arrangements in effect on the date hereof or during the term of this Agreement in which Executive participates (including, without limitation, any pension and retirement plan,
supplemental pension and retirement plan, savings and profit sharing plan, stock ownership plan, stock purchase plan, stock option plan, life insurance plan, medical insurance plan, disability plan, dental plan, health-and-accident plan or
arrangement) which would adversely affect Executive’s rights or benefits thereunder, unless such change occurs pursuant to a program applicable to all executives of Employer and does not result in a proportionately greater reduction in the
rights of or benefits to Executive as compared with any other executive of 
  

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 Employer. Any payments or benefits payable to Executive hereunder in respect of any calendar year during which Executive
is employed by Employer for less than the entire such year shall, unless otherwise provided in the applicable plan or arrangement, be prorated in accordance with the number of calendar days in such calendar year during which he is so employed.

  
 (g) Vacations, Holidays and Sick Leave. Executive shall
be entitled to the number of paid holidays, personal days off, vacation days and sick leave days in each calendar year as are determined by Employer from time to time for its senior executive officers, but not less than four weeks of vacation in any
calendar year prorated in any calendar year during which Executive is employed under this Agreement for less than the entire such year. Vacation may be taken in Executive’s discretion, so long as it is not inconsistent with the reasonable
business needs of Employer. Executive shall be entitled to accrue and carry over from year to year all vacation days not taken by him up to a maximum of eight weeks; provided, however, that Employee shall cease to accrue vacation at such time, and
for as long as, his total accrued vacation is 12 weeks. 
  
 (h)
Life Insurance. In accordance with the Prior Agreement, Employer currently maintains a life insurance policy on Employee, which has a death benefit of $5,000,000 and names a party or parties designated by Employee as the beneficiary
thereunder. During the period that Executive is employed by Employer pursuant to this Agreement, subject to the limitation set forth in the last sentence of this paragraph, Employer shall continue to pay all premiums required to maintain such policy
in force. If during the period that Executive is employed by Employer pursuant to this Agreement Employee in his discretion determines that it is necessary to replace such existing policy, Employer shall purchase a new life insurance policy from a
carrier or carriers selected by Executive which has a death benefit of $5,000,000 and names a party or parties designated by Employee as the beneficiary thereunder. Notwithstanding the foregoing, if $5,000,000 of coverage is not available for a
premium of $15,000 per annum or less, Employer be obligated to purchase the maximum coverage available at a total cost to Employer not to exceed $15,000 per annum. 
  
 (i) Unreimbursed Medical Expenses. During the term of his employment hereunder, Employer shall reimburse Executive
for up to $10,000 in medical expenses incurred by Executive and his spouse that are not subject to payment or reimbursement pursuant to the terms of any medical plans maintained by Employer in which Executive is entitled to participate. 

 
 (j) Base Salary not Affected by Other Benefits. None of the
benefits to which Executive is entitled under any of the provisions of Sections 3(b)-(i) hereof shall in any manner reduce or be deemed to be in lieu of the Base Salary payable to Executive pursuant to Section 3(a) hereof. 
  
 4. Term of Employment. The employment by Employer of Executive
pursuant hereto shall commence on the Effective Date and, subject to the provisions of Section 5 hereof, shall terminate on November 27, 2004 (the “Termination Date”). 
  
 5. Premature Termination. Anything in this Agreement contained to the contrary notwithstanding: 
  

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 (a) Death. Executive’s employment hereunder shall terminate forthwith upon the death of
Executive. 
  
 (b) Disability. Employer may terminate
Executive’s employment hereunder in the event that the Board makes a good faith determination that Executive suffers from Disability so as to be unable substantially to perform his duties hereunder for (i) an aggregate of 180 calendar days
during any 12-month period or (ii) 60 consecutive calendar days during any 12-month period. As used in this Agreement, the term “Disability” shall mean the material inability, in the opinion of the Board, of Executive to render the
agreed-upon services to Employer due to physical and/or mental infirmity, which opinion is concurred in by a physician or psychiatrist selected by Executive or his duly appointed representative or guardian and reasonably acceptable to Employer.

  
 (c) Termination by Employer for Cause. Employer may
terminate Executive’s employment hereunder for Cause. For purposes of this Agreement, Employer shall have “Cause” to terminate Executive’s employment hereunder upon (i) the continued failure by Executive substantially to perform
his duties hereunder (other than any such failure resulting from Executive’s incapacity due to physical or mental illness) after demand for substantial performance is delivered by Employer specifically identifying the manner in which Employer
believes Executive has not substantially performed his duties, (ii) the engaging by Executive in misconduct which is materially injurious to Employer, monetarily or otherwise, or (iii) the violation by Executive of the provisions of Section 8 hereof
provided that such violation results in material injury to Employer. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless and until Executive shall have been offered an opportunity to be heard before
the Board, and the Board shall have made a written determination, based on such hearing or otherwise, that, in the good faith opinion of the Board, Executive conducted, or failed to conduct, himself in a manner set forth above in clause (i), (ii) or
(iii) of this Section 5(c), and specifying the particulars thereof in detail. 
  
 (d) Termination by Executive for Good Reason. Executive may terminate his employment hereunder (i) at any time, (ii) if his physical or mental health becomes impaired to an extent that makes the continued
performance of his duties hereunder hazardous to his physical or mental health or his life, provided that Executive shall have furnished Employer with a written statement from a doctor or psychiatrist to such effect or (iii) at any time for Good
Reason. As used herein, “Good Reason” shall mean the occurrence of any of the following (without Executive’s express written consent): 
  
 (1) the assignment to Executive by Employer (or its successor) of duties and responsibilities materially inconsistent with Executive’s duties and
responsibilities with Employer immediately prior to such change, except in connection with the termination of his employment by Employer for Disability or Cause or as a result of Executive’s death or in connection with the termination of his
employment by Executive other than for Good Reason; provided, however, that the assignment to Executive within six months following a Change of Control of a position lesser than that of Chief Executive Officer shall not in and of itself constitute
Good Reason if Executive continues to have executive management responsibility for a business unit comparable in size to Employer; 
  

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 (2) a reduction in Executive’s Base Salary as permitted by the last paragraph of Section 3(a) shall
not in and of itself constitute Good Reason; 
  
 (3) any failure
by Employer (or its successor) to continue to provide Executive with the opportunity to participate in benefit plans and arrangements providing benefits that are not materially less advantageous to Executive as those currently provided under the
plans and arrangements of Employer in which Executive is participating; provided, however, that if the Board determines that Employer’s financial condition necessitates the imposition of a reduction in the benefit plans and arrangements
applicable to all executive employees of Employer on a comparable basis, such reduction shall not in and of itself constitute Good Reason; or 
  
 (4) the relocation of the principal place of business of Employer (or its successor) to any place that is more than 50 miles from the location at which
Executive performed Executive’s duties prior to the relocation, except for required travel by Executive on Employer’s business. 
  
 (e) Notice of Termination. Any termination of Executive’s employment by Employer or by Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a “Notice Of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated. 
  
 (f) Date of Termination. For purposes of this Agreement, “Date of Termination” shall mean (i) if Executive’s employment is
terminated by his death, the date of his death, (ii) if Executive’s employment is terminated pursuant to Section 5(b) hereof, thirty (30) calendar days after Notice of Termination is given (provided that Executive shall not have returned to the
performance of his duties on a full-time basis during such 30-day period), (iii) if Executive’s employment is terminated pursuant to Section 5(c) or 5(d) hereof, the date specified in the Notice of Termination, and (iv) if Executive’s
employment is terminated for any other reason, the date on which a Notice of Termination is given. 
  
 (g) Orderly Transition. Upon the termination of Executive’s employment by Employer for any reason, and upon Employer’s request, Executive
shall cooperate fully with Employer for purposes of the orderly transfer of his duties, responsibilities and any then pending work to such person or persons as may be designated by Employer. Executive shall, in addition, promptly return and deliver
to Employer all materials and property which belong to Employer and which are in Executive’s possession, custody or control, including any personal computers in the possession of Executive that are furnished by Employer. 
  
 6. Payments and Benefits upon Early Termination. 
  
 (a) Early Termination by Employer for Death, Disability or Cause, or by
Executive Without Good Reason. Upon the termination of this Agreement prior to the Termination Date by Employer as a result of Executive’s death or Disability or for Cause, or by Executive for any of the reasons set forth in Section
5(d)(i)-(ii) hereof, Employer shall pay Executive: 
  

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 (i) his Base Salary through the Date of Termination at the rate in effect at the time Notice of
Termination is given, payable at the time such payments are due; and 
  
 (ii) all other amounts to which Executive is entitled, including, without limitation, expense reimbursement amounts or amounts due under any benefit plan of Employer accrued to the Date of Termination, at the time such payments are due.

  
 (b) Early Termination by Executive for Good Reason or by
Employer Other Than for Death, Disability or Cause. Upon the termination of this Agreement prior to the Termination Date either by Executive for Good Reason or by Employer for any reason other than as set forth in Section 6(a), Employer shall
pay to Executive: 
  
 (i) an amount equal to the greater of (1)
150% of his Base Salary at the rate in effect at the time the Notice of Termination is given or (2) 100% of his Base Salary payable for the remaining term of this Agreement until the Termination Date at the rate in effect at the time Notice of
Termination is given, in either case payable in a lump sum on the Date of Termination; and 
  
 (ii) all other amounts to which Executive is entitled, including, without limitation, expense reimbursement amounts or amounts due under any benefit plan of Employer accrued to the Date of Termination, at the time
such payments are due. 
  
 (c) Other Severance Payments.
Notwithstanding anything to the contrary in this Agreement, Employer hereby covenants and agrees that for so long as Executive serves as a director on the Board after the Date of Termination, Employer shall pay to Executive any compensation,
commission or other benefits awarded to nonemployee directors of Employer, including but not limited to any stock or stock options. 
  
 7. Registration Rights. 
  
 (a) Piggyback Registration. If, at any time or from time to time, TMI/DE shall determine to register any of its securities, either for its own
account or the account of security holders, other than a registration relating solely to employee benefit plans or a registration on Form S-4 relating solely to an SEC Rule 145 transaction, TMI/DE shall grant to Executive the “piggyback”
registration rights set forth in Section 1.3 of the Registration Rights Agreement (the “Rights Agreement”), dated as of September 8, 2000, entered into by and between TDK USA Corporation and Sound Source Interactive, Inc. (now known as TDK
Mediactive, Inc.) with respect to all of the common stock of TMI/DE held by or issuable to Executive pursuant to any option or other agreement between TMI/DE and Executive (collectively, the “Executive Securities”). 
  
 (c) Form S-3 Registration. TMI/DE hereby grants to Executive the S-3
registration rights set forth in Section 1.4 of the Rights Agreement with respect to Executive Securities, subject, however, to the limitations expressly set forth in such Section 1.4 of the Rights Agreement. 
  
 (d) Obligations of Executive. In consideration of the rights granted
to Executive under this Section 7, Executive agrees to be bound by the obligations of a holder of 
  

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 Registrable Securities under the Rights Agreement to the same extent and in the same manner as if he were a party
thereto. 
  
 (e) Expenses of Registration. Executive shall
have the rights set forth with respect to expenses of registration provided for under Section 1.5 of the Rights Agreement. 
  
 8. Nondisclosure; Noncompete. 
  
 (a) Confidential Information. During the term of this Agreement, and for two (2) years after Executive ceases to receive compensation hereunder,
Executive shall not, to the detriment of Employer, knowingly use for his own benefit or disclose or reveal to any unauthorized person, any trade secret or other confidential information received by Executive in the course of his employment or
engagement in any capacity by another employer which relates to Employer or to any of the businesses operated by it, including, but not limited to, any customer lists, customer needs, price and performance information, specifications, hardware,
software, devices, supply sources and characteristics, licenses and license terms, business opportunities, marketing, promotional, pricing and financing techniques, or other information relating to the business of Employer, and Executive confirms
that such information constitutes the exclusive property of Employer. However, said restriction on confidential information shall not apply to information which is: (i) generally available in the industry in which Employer operates, (ii) disclosed
in published literature, (iii) obtained by Executive from a third party that was not subject to any duty of confidentiality or nondisclosure with respect thereto, or (iv) required to be disclosed by applicable law or pursuant to a judicial or other
government order, provided, however, that Executive shall provide Employer with prompt written notice prior to any such disclosure so that Employer may seek other legal remedies to maintain the confidentiality of such confidential information, and
Executive shall fully comply with any applicable protective order or equivalent obtained by Employer relating thereto. Executive agrees that, except as otherwise expressly agreed to by Employer, he will return to Employer, promptly upon the request
of the Board or any executive officer designated by the Board, any physical embodiment of such confidential information. 
  
 (b) Noncompetition. During the term of his employment by Employer, Executive shall not engage, directly or indirectly (which includes, but is not
limited to, owning, managing, operating, controlling, being employed by, giving financial assistance to, participating in or being connected in any material way with any business or person so engaged), anywhere in the continental United States, in
any business that is similar to or competitive with the business of Employer, including, but not limited to, the business of interactive educational computer software, other interactive computer software or console-based games based on licensed
products from motion pictures and/or television shows; provided, however, that Executive’s ownership as a passive investor of less than five percent of the issued and outstanding stock of any publicly held corporation or partnership so engaged
shall not by itself be deemed to constitute such engagement by Executive. Notwithstanding the foregoing, Executive may engage, directly or indirectly, in any capacity in any business activity involving music recording, music production, music
publishing or music performance (the “Permitted Activities”), provided that his engaging in such Permitted Activities does not hinder, impede or impair (i) Executive’s performance of his duties under the Agreement or (ii) the devotion
of substantially all of Executive’s time, effort and skill to the performance of his duties under this Agreement. 
  

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 (c) Nonpredation. During the term of this Agreement, and for 24 months thereafter, Executive shall
not directly or indirectly, disrupt, damage, impair or interfere with the business or operations of Employer or any of its dealings or relationships with any of its officers, employees or other third parties. Executive also agrees that for 24 months
after the Termination Date, he will not directly or indirectly, (1) solicit the employment of or hire any employee of Employer, (2) attempt to persuade any employee to leave the employment of Employer or (3) attempt to disrupt or interfere with any
business relationship between Employer and any licensor or customer of Employer that existed during the time of Executive’s employment by Employer. 
  
 (d) Remedies. Executive recognizes that the possible restrictions on his activities which may occur as a result of his performance of his
obligations under this Section 8 are required for the reasonable protection of Employer and its investments, and Executive expressly acknowledges that damages alone will be an inadequate remedy for any breach or violation of this Section 8, and that
Employer, in addition to all other remedies at law or in equity, shall be entitled, as a matter of right, to injunctive relief, including specific performance, with respect to any such breach or violation, in any court of competent jurisdiction. If
any of the provisions of this Section 8 are held to be in any respect an unreasonable restriction upon Executive, then they shall be deemed to extend only over the maximum period of time, geographic area, and/or range of activities as to which they
may be enforceable. 
  
 (e) Nonexclusivity. The
undertakings of Executive contained in Sections 8(a), 8(b) and 8(c) hereof shall be in addition to, and not in lieu of, any obligations which he may have with respect to the subject matter hereof, whether by contract, as a matter of law or
otherwise. 
  
 9. Successors; Benefits. 
  
 (a) Successors. Employer shall require any successor of Employer
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Employer, by agreement in form and substance reasonably satisfactory to Executive, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform it if no such succession had taken place. Failure of Employer to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Executive to compensation from Employer in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, “Employer” shall mean Employer as hereinbefore defined and any successor to
its business and/or assets as aforesaid that executes and delivers the agreement provided for in this paragraph or that otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. Notwithstanding anything to the
contrary above, if this Agreement is assumed by a successor employer, then Employer itself shall be exonerated from its obligations hereunder. 
  
 (b) Benefits. This Agreement and all rights of Executive hereunder shall inure to the benefit of and be enforceable by Executive’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts would still be payable to him hereunder if he had continued to live, 
  

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 all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to
Executive’s devisee, legatee, or other designee or, if there be no such designee, to Executive’s estate. 
  
 10. Arbitration. Any controversy, dispute and/or claim in any manner arising out of or relating to this Agreement; the employment of Executive by
Employer; the meaning, application and/or interpretation of this Agreement; any breach or claimed breach of this Agreement; any voluntary or involuntary termination of this Agreement and/or any voluntary or involuntary termination of
Executive’s employment with or without good cause shall be settled solely by arbitration in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association. Judgment of any decision rendered by the arbitrator may
be entered in any court having jurisdiction thereof. Executive and Employer shall each pay the fees of his or its own attorneys, the expenses of his or its witnesses and all other expenses connected with presenting his or its case in arbitration.
All other costs of arbitration, including, without limitation, the costs of any record or transcript of the arbitration proceedings, administrative fees, the fee of the arbitrator and all other fees and costs shall be borne by Employer. The
arbitration shall take place in Los Angeles County, California. 
  
 The arbitration provisions set forth above in this Section 10 are intended by Executive and by Employer to be absolutely exclusive for any and all purposes whatsoever. 
  
 11. Miscellaneous Provisions. 
  
 (a) Federal Income Tax Withholding. Employer may withhold from any amounts payable under this Agreement all U.S.
federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling. 
  
 (b) Nonassignability. Neither this Agreement nor any right or interest hereunder shall be assignable by Executive, his beneficiaries or legal
representatives without Employer’s prior written consent; provided, however, that nothing herein shall preclude (i) Executive from designating a beneficiary to receive any benefit payable hereunder upon his death, or (ii) the executors,
administrators or other legal representatives or his estate from assigning any rights hereunder to the person or persons entitled thereunto. 
  
 (c) No Attachment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to exclusion, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null,
void and of no effect. 
  
 (d) Severability. If, for any
reason, any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, and each such other provision shall to the full extent consistent with law continue in full force
and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the rest of such provision not held so invalid, and the rest of such provision, together with all other provisions of this
Agreement, shall to the full extent consistent with law continue in full force and effect. If this Agreement is held invalid or cannot be enforced, then to 
  

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 the full extent permitted by law any prior agreement between Employer (or any predecessor thereof) and Executive shall
deemed reinstated as if this Agreement had not been executed. 
  
 (e) Execution in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement. 
  
 (f)
Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given or made as of the date delivered, if delivered personally, or three calendar days after having been
mailed, if mailed by registered or certified mail, postage prepaid, return receipt requested, as follows: 
  

	 If to Employer, to:
	 	 TDK Mediactive, Inc.
 4373 Park Terrace
Drive
 Westlake Village, CA 91361
 Attn: Mr. Shin
Tanabe

		
	 If to Executive, to:
	 	 Mr. Vincent J. Bitetti
 776 Emerson
Street
 Thousand Oaks, CA 91362

  
 or to such other address as either
party hereto shall have designated by like notice to the other party hereto (except that a notice of change of address shall only be effective upon receipt). 
  
 (g) Amendment. This Agreement may only be amended by a written instrument executed by each of the parties hereto. 
  
 (h) Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof, and supersedes and terminates all prior agreements and understandings of the parties hereto, oral and written, with respect to the subject matter hereof, including, but not limited to,
the Prior Agreement, and any and all prior employment agreements between Employer and Executive. 
  
 (i) Applicable Law. This Agreement shall be governed by the laws of the State of California applicable to contracts made and to be wholly performed
therein. 
  
 (j) Headings. The headings contained herein
are for the sole purpose of convenience of reference and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement. 
  
 (k) Waiver. The failure of either of the parties hereto to at any time enforce any of the provisions of this
Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Agreement or any provision hereof or the right of either of the parties hereto to thereafter enforce each and every
provision of this Agreement. No waiver of any breach of any of the provisions of this Agreement shall be 
  

 12 

 effective unless set forth in a written instrument executed by the party against whom or which enforcement of such waiver
is sought; and no waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach. 
  
 [SIGNATURES ON FOLLOWING PAGE] 
  

 13 

 IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the date
first above written. 
  

	 EMPLOYER:

	
	 TDK MEDIACTIVE, INC.,
 a Delaware corporation

	
	

	Shin Tanabe
	
	 TDK MEDIACTIVE, INC.,
 a California corporation

	
	

	Shin Tanabe
	
	  
 EXECUTIVE:

	
	  

	Vincent J. Bitetti

  

 14Amended and Restated Loan and Security Agreement

 Exhibit 10.18 
  
 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
  
 THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”), dated as of April 30, 2003 is made by and among TDK MEDIACTIVE, INC.,
a Delaware corporation (“TMA Delaware”), TDK MEDIACTIVE, INC., a California corporation (“TMA California”) (collectively, hereunder, “Borrower”), and TDK USA CORPORATION, a New York corporation (“Lender”).

  
 A. TMA Delaware and Lender are parties to that certain Loan
and Security Agreement dated as of March 29, 2001 (as later amended, the “Original Loan Agreement”) pursuant to which Lender agreed to loan and TMA Delaware agreed to borrow up to the original sum of Eight Million Dollars ($8,000,000), and
TMA Delaware executed in favor of Lender that Promissory Note dated March 29, 2001 (as later amended, the “Original Note”); and 
  
 B. Pursuant to that First Amendment to Loan and Security Agreement dated as of August 24, 2001, TMA Delaware and Lender agreed to amend the Original Loan
Agreement and the Original Note to increase the maximum amount of the credit extended to TMA Delaware under the Original Loan Agreement to Twenty Million Dollars ($20,000,000) and extend the latest maturity date from March 31, 2001 to March 31,
2002; and 
  
 C. Pursuant to that Second Amendment to Loan and
Security Agreement dated as of March 31, 2002, TMA Delaware and Lender agreed to extend the maturity of the Original Loan Agreement and the Original Note to April 30, 2002; and 
  
 D. Pursuant to that Third Amendment to Loan and Security Agreement dated as of April 30, 2002, TMA Delaware and Lender
agreed to increase the maximum amount of the credit that may be extended to TMA Delaware under the Original Loan Agreement to Thirty Million Dollars ($30,000,000) and to extend the maturity of the Original Loan Agreement and the Original Note to
March 31, 2003; and 
  
 E. Pursuant to that Fourth Amendment to
Loan and Security Agreement dated as of March 31, 2003, TMA Delaware and Lender agreed to extend the maturity of the Original Loan Agreement and the Original Note to April 30, 2003; and 
  
 F. The parties to this Agreement have always intended that the borrowings under the Original Agreement, as amended, and the
Original Note, as amended, be made by TMA Delaware and TMA California on a joint and several, consolidated basis and that the grants of security interests under the Original Agreement, as amended, be made on a joint and several basis. 
  
 G. Borrower has requested Lender to amend and restate the Original Loan
Agreement and the Original Note to increase the maximum amount of the credit that may be extended to Borrower under the Original Loan Agreement to Thirty-Seven 
  

 1 

 Million Dollars ($37,000,000) and to extend the maturity of the Original Loan Agreement and the Original Note to March
31, 2004; and 
  
 H. Lender is willing to amend and restate the
Original Loan Agreement and Original Note subject to the terms and conditions set forth herein. 
  
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree as
follows: 
  
 1. Subject to the terms and conditions of this
Agreement, Lender agrees to make cash advances (individually an “Advance” and collectively the “Advances”) to Borrower (with Borrower’s directing disbursement, by joint written notice to Lender, to either TMA California or
TMA Delaware, or a combination of the two) from the date hereof until March 31, 2004 (the “Maturity Date”). The aggregate principal amount of (i) all outstanding Advances, plus (ii) the outstanding undrawn balance of any outstanding
letters of credit that may be opened from time to time for the account of Lender, at Lender’s discretion, in favor of a third party for commercial transactions between Borrower (or either of them) on one hand and such third party on the other
hand (“Letters of Credit”) plus (iii) the outstanding amount that Lender has reimbursed the issuing bank in connection with any Letter of Credit but for which Lender has not been reimbursed by Borrower, shall not exceed at any one time the
sum of Thirty-Seven Million United States Dollars (US$37,000,000); provided that Lender has no obligation whatsoever to disburse any Advance that would cause the aggregate outstanding principal amount of the Advances to exceed Twenty-Five Million
United States Dollars (US$25,000,000), any disbursement in excess of that amount (“Uncommitted Advances”) being at the sole discretion of Lender but nevertheless entitled to the full benefits of this Agreement for Lender. Notwithstanding
the foregoing, if the aggregate outstanding principal balance of Advances as of the end of any month in which the Loan is outstanding exceeds the Forecasted Loan Balance for such month, then (i) Lender shall have no obligation to lend any additional
principal to Borrower while such balance exceeds the Forecasted Loan Balance and (ii) within fifteen (15) days of Borrower’s receipt of notice from Lender to do so, given at Lender’s option, Borrower shall prepay principal of the Loan in
an amount that will cause the aggregate outstanding principal balance of the Loan not to exceed such Forecasted Loan Balance. Each Advance shall be made on a day (not including Saturday or Sunday) on which Lender’s bank is open for business
(“Banking Day”) and shall be requested by Borrower in a letter signed by an authorized officer of each person constituting Borrower hereunder, and delivered to Lender at least two (2) Banking Days’ prior to the proposed date of
borrowing. Each written notice shall specify (i) the proposed date, (ii) the amount of the Advance, and (iii) the account of Borrower to which funds are to be disbursed. Each Advance must be at least $50,000, and Lender shall not be obligated to
make more than one (1) Advance in any calendar month. 
  
 2. The
Loan shall be evidenced by a promissory note in the form of Exhibit “A” attached hereto (the “Note”). Lender shall maintain on its books an account in Borrower’s name showing the amount of Advances made hereunder, to whom,

  

 2 

 repayments and reimbursements for drawings, computation and payment of interest, and other amounts due and paid
hereunder. This account shall be conclusive and binding on Borrower as to the amount at any time due to Lender except in the case of manifest error in computation. 
  
 3. Borrower shall repay the Loan in accordance with the Note. Borrower shall use the Loan only for its working capital
purposes. 
  
 4. As security for the due and punctual payment of
each sum now or hereafter due whether on the Maturity Date, by acceleration or otherwise (including the payment of amounts which would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
§362(a)) from Borrower to Lender, and for the due and punctual performance of each and every obligation now or hereafter existing of Borrower to Lender, pursuant to the provisions of this Agreement and the Note for principal, interest
(including without limitation interest which, but for the filing of a petition in bankruptcy with respect to Borrower, would accrue on such obligations), expenses or otherwise, due or to become due, liquidated or unliquidated, and arising by
operation of law or otherwise, (collectively, the “Obligations”), Borrower (and, for the avoidance of doubt, each of them) hereby grants to Lender a continuing security interest in all of the following described property and any and all
proceeds and products thereof (all such property and proceeds being hereafter referred to as the “Collateral”), whether now or hereafter existing, and in which such person constituting Borrower hereunder now has or hereafter has any right,
title or interest: 
  
 (a) Inventory, Accounts, Documents,
Equipment, Deposit Accounts, Instruments, Fixtures, General Intangibles, Chattel Paper, whether now held or hereafter acquired (including all returns, rejections and repossessions and whether raw materials, work in progress, or materials used or
consumed in Borrower’s business), whether or not such be in the actual or constructive possession of Borrower, and all insurance proceeds of any and all of the foregoing (all capitalized terms in this paragraph (a) shall have the respective
meanings assigned thereto in the California Commercial Code); 
  
 (b) Any and all of Borrower’s books and records regarding any of the foregoing Collateral; 
  
 (c) Any and all proceeds and products of any and all of the foregoing. 
  
 5. Each person constituting Borrower hereunder represents and warrants that: 
  
 (a) The execution and delivery of this Agreement has been authorized by all
necessary corporate action of it, including without limitation the approval of its independent director (or directors, if more than one) of its board of directors. 
  
 (b) It is (or, with respect to after-acquired property, will be when acquired) the legal and beneficial owner of the
Collateral free and clear of any lien, 
  

 3 

 security interest, charge or encumbrance except for the security interest created by this Agreement. Without limiting the
foregoing, it represents and warrants to Lender that the security interest of Silicon Valley Bank (dba Silicon Valley Financial Services) in assets of Borrower has been terminated. 
  
 (c) Its chief place of business and the books and records relating to the Collateral are located at the address set forth
below and it will not change any of the same without prior written notice to Lender; 
  
 4373 Park Terrace Drive, Westlake Village, California 91361 
  
 6. Each person constituting Borrower hereunder shall: 
  
 (a) prior to the first Advance, have provided evidence satisfactory to Lender that the financing statement of Lender has been filed in the Office of the Secretary of State of Delaware in first priority position and in
the Office of the Secretary of State of California in first priority position. 
  
 (b) as soon as available, but in any event within 90 days after the end of each fiscal year, provide to Lender a copy of its consolidated balance sheet as at the end of such year and the related statements of earnings
and stockholders’ equity and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, audited by an independent certified public accounting firm of nationally recognized standing;
notwithstanding the foregoing, Lender hereby agrees that the financial information filed with the Securities and Exchange Commission (the “SEC”) by Borrower pursuant to a Form 10K shall satisfy the requirement in this Section 6(b),
provided that Lender is furnished with a copy of such filing within such 90 day period; 
  
 (c) as soon as available, but in any event not later than 45 days after the end of each of the first three quarterly periods of each fiscal year, provide to Lender (A) its unaudited balance sheet as at the end of such
quarter and in comparative form the figures for the end of such quarter for the previous fiscal year, (B) its unaudited statement of earnings for such quarter and the portion of the fiscal year through the end of such quarter, and in comparative
form the figures of such quarter for the previous year and (C) its statement of cash flows for the portion of the fiscal year through the end of such quarter, and in comparative form the figures of such quarter for the previous year, certified by
its chief financial officer as fairly presenting in all material respects its assets, liabilities, financial condition and results of operations (subject to normal year-end audit adjustments); notwithstanding the foregoing, Lender hereby agrees that
the financial information filed with the SEC by Borrower pursuant to a Form 10Q shall satisfy the requirement in this Section 6(c), provided that Lender is furnished with a copy of such filing within such 45 day period; 
  
 (d) keep proper books of records and account in which full, true and correct
entries in conformity with generally accepted accounting principles, consistently applied (“GAAP”), of all dealings and transactions in relation to its business and 
  

 4 

 activities; and, upon reasonable prior notice from Lender to such person constituting Borrower hereunder and when
reasonably deemed advisable by Lender, permit (i) Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired and (ii) its
officers and employees and its independent certified public accountants to discuss with Lender its business, operations, properties and financial and other condition; 
  
 (e) promptly after the commencement thereof, give notice to Lender of all actions, attachments, suits, proceedings or other
legal process before any court or governmental department, commission, board, bureau, agency, or instrumentality, domestic or foreign, affecting such person constituting Borrower hereunder, which, if determined adversely to such person, could have a
material adverse effect on its financial condition, properties, liabilities, or operations or in any way affect the value of the Collateral or the rights and remedies of Lender in respect thereto; 
  
 (f) notify Lender within ten (10) days of any (and any change in) trade names
or fictional business names used by such person constituting Borrower hereunder; 
  
 (g) comply with (i) all applicable statutes, regulations, franchises, and orders of, and all applicable restrictions imposed by, any governmental body, in respect of the conduct of its business and the ownership of
its properties (including without limitation all environmental laws and all applicable statutes, rules, ordinances, regulations and orders relating to fair labor standards, equal employment opportunities and occupational health and safety) and (ii)
all terms of any material mortgage, indenture, contract, agreement or instrument, applicable to such person constituting Borrower hereunder or any of its properties, except in either case for such instances of non-compliance as could not reasonably
be expected to have, individually or in the aggregate, a material adverse effect on it; 
  
 (h) cause Indebtedness not to exceed Thirty-Seven Million Dollars ($37,000,000) at any time while the Loan is outstanding; 
  
 (i) maintain a Current Ratio of at least 0.70:1.00 as of June 30, 2003, 0.70:1.00 as of September 30, 2003, 0.60:1.00 as of December 31, 2003, and
0.53:1.00 as of March 31, 2004; 
  
 (j) reimburse Lender upon
demand for any and all costs, including without limitation reasonable attorneys’ and accountants’ fees, and other expenses incurred in collecting any sums payable by Borrower under any Obligation, enforcing or defending any term or
provision of this Agreement or otherwise or in the checking, custody, preservation, use, handling and collection of the Collateral (from any person whomsoever) and the negotiation, preparation, enforcement, and defense of any agreement relating
thereto; 
  

 5 

 (k) notify Lender within ten (10) days of each location at which the Collateral is or will be kept and of
any removal thereof to a new location, including without limitation each office of Borrower at which records relating to the Collateral are kept; 
  
 (l) promptly give notice to Lender of the occurrence of any Event of Default (as defined below) or any event which with the giving of notice or the lapse
of time, or both, would constitute an Event of Default, and the action such person constituting Borrower hereunder proposes to take with respect thereto; 
  
 (m) after an Event of Default shall occur and be continuing, segregate the Collateral and all proceeds of the Collateral, and hold the same in trust as
the exclusive property of Lender, and promptly deliver to Lender the Collateral received, the same to be held by Lender as Collateral hereunder or, at Lender’s option, to be applied to payment of any of the Obligations, whether or not due and
in any order; 
  
 (n) join with Lender at its request from time to
time in executing financing statements, amendments thereto and continuation statements, and execute and deliver to Lender further documents and instruments and do such other acts and things as Lender may reasonably request in order to effectuate
fully the purpose and intent of this Agreement, and for such purpose, Lender is hereby appointed as such person’s attorney-in-fact for the purposes described in this paragraph, such power of attorney being coupled with an interest and
accordingly irrevocable; 
  
 (o) account to Lender in reasonable
detail for such person’s expenditures of Advances, including without limitation its expenditures on software titles on or after the date of this Agreement using proceeds of Advances; 
  
 (p) furnish to Lender, upon request, such other information relating to such person’s affairs, operations and/or the
financial condition as Lender may from time to time reasonably request, including without limitation details of such person’s selling, general and administrative expenses, research and development expenses, and cash flows, in form satisfactory
to Lender, and each person constituting Borrower hereunder agrees that it would be reasonable for Lender’s inquiries to be to the extent of a monthly financial review, with weekly inquiries and provision of information by Borrower during peak
expenditure periods; 
  
 (q) maintain a Net Sales/Net Assets Ratio
of not less than 1.40:1.00 as of June 30, 2003, 1.20:1.00 as of September 30, 2003, 2.10:1.00 as of December 31, 2003, and 3.00:1.00 as of March 31, 2004; 
  
 (r) pay to Lender one-tenth of one percent (0.10%) of the face amount of each Letter of Credit, within fifteen (15) days of the opening of such Letter of
Credit; 
  
 (s) cause Development Payments to be incurred during
the period from April 1, 2003 through March 31, 2004, for video games that were released and/or cancelled during the fiscal year ended March 31, 2003, not to exceed $275,000; 
  

 6 

 (t) cause Development Payments to be incurred during the period from April 1, 2003 through March 31,
2004, for video games to be released during the fiscal year ended March 31, 2004, not to exceed $10,179.000; 
  
 (u) cause Development Payments to be incurred during the period from April 1, 2003 through March 31, 2004, for video games to be released during the
fiscal year ended March 31, 2005, not to exceed $2,000,000; 
  
 (v) without limiting paragraph (p) above, submit to Lender a report certified by TMA Delaware’s Chief Financial Officer not later than the fifteenth (15th) day of each month describing Borrower’s compliance, on a consolidated
basis, as to the immediately preceding month with the provisions of Sections 6(h), 6(i) and 6(q) of this Agreement (as to Sections 6(i) and 6(q) of this Agreement, as if the requirements of that Section applied as of the end of such immediately
preceding month) and, if there is any noncompliance as of the date of such report, the reasons for such noncompliance and full details of Borrower’s proposed corrective measures to bring Borrower into compliance with those requirements;

  
 (w) without limiting paragraph (p) above, submit to Lender a
report certified by TMA Delaware’s Chief Financial Officer not later than Wednesday of each week, as to the immediately preceding week, in form reasonably satisfactory to Lender, Borrower’s sell through report, on a consolidated basis; and

  
 (x) without limiting paragraph (p) above, submit to Lender a
report certified by TMA Delaware’s Chief Financial Officer not later than the fifteenth (15th) day of each month describing, as to the immediately preceding month, in form reasonably satisfactory to Lender, Borrower’s (on a consolidated
basis, in each instance) (1) cash flow (using the direct method) results compared with budget, with detailed explanation of variances from budget; (2) detailed accounts receivable aging (as of the end of such immediately preceding month); (3)
detailed inventory listing (by title) (as of the end of such immediately preceding month); (4) management report, including balance sheet (as of the end of such immediately preceding month) and profit and loss statement (as to such immediately
preceding month); and (6) Development Payments incurred during such immediately preceding month, broken down by the categories described in Subsections 6(s), 6(t) and 6(u) of this Agreement. 
  
 7. No person constituting Borrower hereunder shall, without the prior consent
of Lender: 
  
 (a) sell, lease, assign, transfer, or otherwise
dispose of any of its now owned or hereafter acquired assets in excess of $100,000 except: (1) inventory disposed of in the ordinary course of business; and (2) assets no longer used or useful in the conduct of its business; 
  
 (b) assume, guaranty, endorse, or otherwise be or become directly or
contingently responsible or liable (including, but not limited to, an agreement to purchase any obligation, stock, assets, goods, or services, or to supply or advance any 
  

 7 

 funds, assets, goods, or services, or an agreement to maintain or cause such person to maintain a minimum working capital
or net worth, or otherwise to assure the creditors of any person against loss) for obligations of any person, except (i) guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of
business and (ii) guaranties that would not have a materially adverse effect on its ability to carry out its obligations under the Loan Documents; 
  
 (c) create or suffer to exist any lien, security interest or other charge or encumbrance upon or with respect to any of the Collateral to secure debt or
other obligations of any person or entity, except for security interests in favor of Lender; 
  
 (d) enter into any agreement or commitment to acquire rights to or to otherwise develop any software product titles not identified in the product development schedule furnished to Lender coincident with the signing of
this Agreement, except for not yet identified online and/or cellular phone related projects not to exceed $150,000 in the aggregate; 
  
 (e) amend, modify, or waive any provision of that certain Warrant Agreement dated July 1, 1996 between TMA Delaware (under its prior name of Sound Source
Interactive, Inc.) and Corporate Stock Transfer Company or to redeem or call any of the warrants issued pursuant to such Warrant Agreement. 
  
 8. All such financial statements furnished by Borrower hereunder shall be complete and correct in all material respects and to be prepared in reasonable
detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as disclosed therein). 
  
 9. Except as otherwise permitted by this Agreement, neither person constituting Borrower hereunder shall: sell, assign (by operation of law or otherwise)
or otherwise dispose of, or grant any option with respect to, any of the Collateral, except that prior to the exercise of rights by Lender during the continuance of an Event of Default hereunder, such person may sell inventory and otherwise use the
Collateral in the ordinary course of its business and in accordance with its past practices. 
  
 10. Any of the following events shall constitute a default (each an “Event of Default”) under this Agreement: 
  
 (a) failure of Borrower to perform any of Borrower’s obligations under this Agreement (other than failure to pay amounts owed under the Note) that
continue unremedied for a period of thirty (30) days after notice thereof to Borrower; or 
  
 (b) failure of Borrower to pay amounts owed under the Note that continues unremedied for a period of five (5) days; 
  
 (c) Any representation or warranty made by Borrower (or either of them) in this Agreement shall prove to have been incorrect, incomplete, or misleading in
any material respect on or as of the date made; or 
  

 8 

 (d) Either person constituting Borrower hereunder (a) shall make an assignment for the benefit of
creditors, or petition or apply to any tribunal for the appointment of a custodian, receiver, or trustee for it or a substantial part of its assets; or (b) shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment
of debt, dissolution, or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or (c) shall have had any such petition or application filed or any such proceeding commenced against it in which an order for relief is
entered or an adjudication or appointment is made, and which remains undismissed for a period of sixty (60) days or more; or (d) shall take any corporate action indicating its consent to, approval of, or acquiescence in any such petition,
application, proceeding, or order for relief or the appointment of a custodian, receiver, or trustee for all or any substantial part of its properties; or (e) shall suffer any such custodianship, receivership, or trusteeship to continue undischarged
for a period of sixty (60) days or more; or (f) make any bulk sale of its property; or (g) suspend active business operations; or 
  
 (e) Either person constituting Borrower hereunder (a) fails to pay any of its Indebtedness for borrowed money in excess of $100,000 (other than the Note)
or any interest or premium thereon, when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) after the expiration of any applicable cure period, or (b) fails to perform or observe any term, covenant, or
condition on its part to be performed or observed under any agreement or instrument relating to any such Indebtedness, when required to be performed or observed, if the effect of such failure to perform or observe is to accelerate, or to permit the
acceleration of, after the giving of notice or passage of time, or both, the maturity of such Indebtedness; or any such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof. 
  
 Upon the occurrence and
during the continuance of an Event of Default under this Agreement, Lender at its option and without notice to Borrower (or either of them) may do any one or more of the following: 
  
 (i) immediately or from time to time take possession of any or all of the Collateral, wherever it may be found, using all
reasonable force to do so, or from time to time require each person constituting Borrower hereunder, at such person’s expense, to assemble any or all of the Collateral, and make it available to Lender at a place designated by Lender which is
reasonably convenient to such person and Lender; 
  
 (ii)
terminate any obligation to make further Advances or renew existing Advances hereunder; 
  
 (iii) from time to time proceed in the foreclosure of Lender’s security interest in any or all of the Collateral in any manner permitted by law or provided for herein; 
  

 9 

 (iv) sell, lease or otherwise dispose of any or all of the Collateral at public or private sale, with or
without having any or all of the Collateral at the place of sale, upon terms and in such manner as Lender may reasonably determine, and Lender may purchase any or all of the Collateral sold at any such sale; 
  
 (v) retain all or any of the Collateral in full satisfaction of the
Obligations; 
  
 (vi) appropriate, set off and apply to the
payment of any or all of the Obligations, any or all Collateral in or coming into the possession of Lender or its agents and belonging or owing to such person, without notice to it, and in such manner as Lender may in its reasonable discretion
determine; 
  
 (vii) receive, take, endorse, assign, deliver,
accept and deposit, in its or Borrower’s name (or either of their names), any or all checks, notes, drafts, remittances and other instruments and documents relating to the Collateral; 
  
 (viii) take or bring, in Lender’s or Borrower’s name (or either of
their names), all steps, actions, suits or proceedings reasonably deemed by Lender necessary or desirable to effect collection of the Collateral; 
  
 (ix) execute in such person’s name and on such person’s behalf any UCC financing statements or amendments thereto relating to the Collateral;

  
 (x) settle, compromise or release, in whole or in part, any
amounts owing on the Collateral, prosecute any action, suit or proceeding with respect to the Collateral, extend the time of payment of any and all Collateral, make allowances and adjustments with respect thereto, issue credits in Lender’s or
such person’s name; 
  
 (xi) exercise any or all other
rights or remedies available to Lender in accordance with the Uniform Commercial Code as from time to time in effect in the state in which the Collateral is located; and 
  
 (xii) exercise any or all rights of Lender pursuant to this Agreement, or now or hereafter existing at law, in equity or by
statute in such order, at such times and in such manner as Lender, may, in its reasonable judgment, determine. 
  
 If a sufficient sum is not realized from any disposition of Collateral to pay all obligations secured hereby, each person constituting Borrower hereunder hereby promises and agrees to pay Lender any deficiency upon
demand. If any of the Collateral is sold by Lender upon credit or for future delivery, Lender shall not be liable for the failure of the purchaser to pay for same and in such event Lender may resell such Collateral. To the extent permitted by law,
Lender may buy any part or all of the Collateral at any public sale (free from any right of redemption, which is expressly waived). 
  
 11. Any cash held by Lender as Collateral after and during the continuance of an Event of Default, and any cash held by Lender as Collateral and all cash
proceeds received by Lender (all such cash being “Proceeds”) in respect of any sale of, collection 
  

 10 

 from, or other realization upon all or any part of the Collateral, shall be applied promptly from time to time by Lender:

  
 First, to the payment of the reasonable costs and
expenses of such sale, collection or other realization, including reasonable compensation to Lender and its agents and counsel, and all reasonable expenses, liabilities and advances made or incurred by Lender in connection therewith; 
  
 Second, to the payment of the Obligations; and 
  
 Third, after payment in full of all Obligations, pro rata to each
person constituting Borrower hereunder or its successors or assigns, or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct, of any surplus then remaining from such Proceeds. 
  
 12. No waiver of any breach of or default under any provision of this
Agreement shall constitute or be construed as a waiver by Lender of any subsequent breach of or default under that or any other provision of this Agreement. 
  
 13. No remedy herein conferred upon Lender is intended to be exclusive of any other remedy herein or in any other agreement between the parties hereto or
by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity or by statute. 
  
 14. Lender shall not be deemed to assume any responsibility for, or obligation or duty with respect to, any part or all of
the Collateral, of any nature or kind, or any matter or proceedings arising out of or relating thereto, including without limitation any obligation or duty to take any action to collect, preserve or protect its or Borrower’s rights in the
Collateral or against any prior parties thereto, but the same shall be at Borrower’s (and each of their) sole risk at all times. Except as to gross negligence or willful misconduct, each person constituting Borrower hereunder hereby releases
Lender from any claims, causes of action and demands at any time arising out of or with respect to this Agreement, the Obligations, the use of the Collateral and/or any actions taken or omitted to be taken by Lender with respect thereto, and each
person constituting Borrower hereunder hereby agrees to hold Lender harmless from and with respect to any and all such claims, causes of action and demands. All risk or loss, damage or destruction of the Collateral shall be borne by such persons,
and not Lender. 
  
 15. Each person constituting Borrower
hereunder hereby waives presentment, notice of dishonor and protest of all instruments included in or evidencing any of the Obligations or the Collateral, and any and all other notices and demands whatsoever (except as expressly provided herein).

  
 16. After an Event of Default shall occur and be continuing,
Lender without notice to or demand on Borrower (or either of them) may, but is not obliged to, make 
  

 11 

 any payments and do any acts that Lender may consider necessary to protect Lender’s security interest in the
Collateral, and each person constituting Borrower hereunder hereby authorizes Lender to take possession of any or all of the Collateral and to pay, purchase, contest and compromise any encumbrance, charge or lien that in the reasonable judgment of
Lender is or may be prior or superior to Lender’s security interest. 
  
 17. All judicial proceedings brought against either person constituting Borrower hereunder with respect to this Agreement may be brought in any state or federal court of competent jurisdiction in Los Angeles County in
the State of California, and, by execution and delivery of this Agreement, each person constituting Borrower hereunder accepts for itself and in connection with its properties, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Each person constituting Borrower hereunder irrevocably waives any right it may have to assert the doctrine of forum
nonconveniens or to object to venue to the extent any proceeding is brought in accordance with this Section. Each person constituting Borrower hereunder hereby agrees that service upon it by mail at the address set forth in beside its
signature to this Agreement shall constitute sufficient notice. Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of Lender to bring proceedings against such person in courts of any
jurisdiction. 
  
 18. EACH PERSON CONSTITUTING BORROWER HEREUNDER
AND LENDER HEREBY AGREE TO WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OBLIGATION OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE LOAN TRANSACTION
CONTEMPLATED BY THIS AGREEMENT AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter
of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each person constituting Borrower hereunder and Lender each acknowledge that this waiver is a
material inducement to enter into a business relationship, that each has already relied on the waiver in entering into this Agreement and that each will continue to rely on the waiver in their related future dealings. Each person constituting
Borrower hereunder and Lender further warrant and represent that each has reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE EXCEPT BY MUTUAL AGREEMENT AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS CONTEMPLATED BY THIS AGREEMENT.
In the event of litigation, this Agreement may be filed as a written consent to a trial by the court. 
  

 12 

 19. Upon the payment in full of all then outstanding principal under the Note and all interest accrued
thereon, this Agreement shall terminate and be of no further force or effect (except the provisions of Section 14 of this Agreement, which shall survive), and all rights to the Collateral shall revert to Borrower, respectively, and Lender shall
promptly execute and deliver to such person such documents and instruments reasonably requested by that person as shall be necessary to evidence termination of all security interests given by it to Lender hereunder. In addition, at any time from
time to time prior to such termination if any Collateral is sold, leased, exchanged, assigned or otherwise disposed of in accordance with and as not prohibited by this Agreement, the security interests created hereby in such item (but not in any
proceeds arising from such sale or exchange) shall terminate immediately without any further action on the part of such person and such Collateral shall no longer be deemed to be “Collateral” for purposes of this Agreement and the
covenants contained herein. 
  
 20. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, such provision shall be severable from the rest of this Agreement, and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

  
 21. This Agreement cannot be changed, modified or supplemented
except in a writing signed by the party against whom enforcement of such change, modification or supplement is sought. 
  
 22. THIS AGREEMENT IS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. Unless otherwise defined herein, terms used in
Division 9 of the California Commercial Code are used herein as therein defined. 
  
 23. All notices, approvals, requests, demands and other communications hereunder shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by
telecopy to the address set forth on the signature page hereto. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt, provided that delivery by hand shall be deemed delivered on the first Banking Day after the date of receipt.

  
 24. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. 
  

 13 

 25. This Agreement is for the benefit of Lender and its successors and assigns, and in the event of an
assignment of all or any of the Obligations, the rights hereunder, to the extent applicable to the Indebtedness so assigned, may be transferred with such Indebtedness. This Agreement shall be binding on each person constituting Borrower hereunder
and its respective successors and permitted assigns, and the rights of such person hereunder shall inure to the benefit of its successors and permitted assigns. 
  

26. To the extent one of the persons constituting Borrower hereunder is deemed a guarantor or surety of the other, such person authorizes Lender
without notice to, or demand upon, it, irrespective of any change in the financial condition of Lender, and without affecting its obligations hereunder, from time to time, as often as deemed appropriate by Lender: 
  
 (a) to accelerate or postpone the time for performance of, or otherwise
modify, amend, supplement or waive, any of the obligations of the other person; 
  
 (b) to take and hold security for the performance of the obligations of the other person, and exchange, enforce, waive and release any such security; 
  
 (c) to apply such security and direct the order or manner of sale thereof as Lender in its discretion may determine; and/or

  
 (d) to release or discharge the other person or settle,
compromise with, release or substitute any one or more endorsers, guarantors and/or other obligors. 
  
 27. To the extent one of the persons constituting Borrower hereunder is deemed a guarantor or surety of the other person constituting Borrower hereunder,
such person waives: 
  
 (a) any right to require Lender to proceed
against such other person, to proceed against any other person, firm or corporation, to proceed against or exhaust any security held by Lender or to pursue any other remedy in Lender’s power; 
  
 (b) any defense arising out of the absence, impairment or loss of any or all
rights or recourse, reimbursement, contribution or subrogation or any other rights or remedies of such other person against Lender, any other person, firm or corporation, or any security, whether resulting from an election by Lender to foreclose on
any real property security by trustee’s sale rather than judicial foreclosure, or from any other election of rights or remedies by Lender, or otherwise; 
  
 (c) any defense arising by reason of any disability or other defense of such other person or by reason of any invalidity, ineffectiveness or
unenforceability of any or all of the Loan Documents, or the cessation from any cause whatsoever of any or all of the Loan Documents or Indebtedness; 
  
 (d) diligence, presentment, demand for performance, notice of nonperformance, protest, notice of protest, notice of dishonor, notice of the creation or

  

 14 

 incurring of new or additional indebtedness of Lender to such other person, notice of acceptance of this Agreement and
notices of any other kind whatsoever; 
  
 (e) any requirement
that, absent a request for such information by such person, Lender advise it of information known to Lender regarding the financial condition of such other person or any other circumstance bearing upon the risk of non-performance of the Indebtedness
which diligent inquiry would reveal, such person hereby assuming responsibility for being and keeping informed of each such condition and circumstance; 
  
 (f) the benefit of any statute of limitations affecting the Indebtedness or the enforcement hereof to the fullest extent permitted by law, such person
agreeing, without limiting the foregoing, that any circumstance which operates to toll any statute of limitations as to Borrower or Lender shall operate to toll any statute of limitations as to such person; 
  
 (g) any defense based upon any taking, modification or release of any
collateral or guaranty for any indebtedness of the other person to Lender, or any failure to perfect any security interest in or the taking of or failure to take any other action with respect to any collateral securing payment or performance of the
Indebtedness; 
  
 (h) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms of this Agreement, including without limitation, the provisions of California Civil Code Sections 2809, 2810, 2822, 2839,
2845, 2846, 2847, 2848, 2849, 2850, 2899 and 3433; 
  
 (i) any
rights or defenses based upon an offset by any person constituting Borrower hereunder against any obligation now or hereafter owed to Lender by Borrower; and 
  
 (j) any and all subrogation rights, including without limitation, (i) any right to enforce any remedy which Lender now has or may in the future have
against any other party, (ii) any and all benefit of, and any and all right to participate in, any security now or in the future held by Lender, and (iii) any right to take or receive from the other party constituting Borrower hereunder, or any
other party, directly or indirectly, in cash or other property, by set-off or in any other manner, any payment or security on account of any payment or performance by such person under this Agreement. 
  
 28. The obligations of the persons constituting Borrower hereunder shall be
joint and several, except where otherwise expressly indicated in this Agreement. 
  
 29. As used in this Agreement, the following terms shall have the following meanings: 
  
 “California Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of California. 
  

 15 

 “Capital Expenditures” means expenditures made or liabilities incurred for the
acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including the total principal portion of Capitalized Lease Obligations. 
  
 “Capitalized Lease Obligations” means any indebtedness
represented by obligations under a lease that it required to be capitalized for financial reporting purposes in accordance with GAAP, on a consolidated basis. 
  

“Cash Flow” means, for any period, EBIT, plus depreciation and amortization less Capital Expenditures for such period, on a
consolidated basis. 
  
 “Current Assets” means,
at any date, the amount at which all of the current assets of Borrower, on a consolidated basis, would be properly classified as current assets on a balance sheet of Borrower at such date in accordance with GAAP. 
  
 “Current Liabilities” means, at any date, the amount at
which all of the current liabilities of Borrower, on a consolidated basis, would be properly classified as current liabilities on a balance sheet of Borrower at such date in accordance with GAAP. 
  
 “Current Ratio” means, for any period, the ratio of Current
Assets to Current Liabilities as at the end of such period. 
  
 “Development Payments”, as to any specific period, means the actual payments made by Borrower, on a consolidated basis, during such period for developing specific game titles, accumulated and calculated consistently with
the past accounting practices of Borrower as to product development expenditures. 
  
 “EBIT” means, with respect to any fiscal period, the sum of Borrower’s consolidated net earnings (or loss) before Interest Expense and taxes for such period as determined in accordance with GAAP.

  
 “Forecasted Loan Balance” means, for any
month, the forecasted loan balance for such month as set forth in Exhibit “B” to this Agreement, on a consolidated basis. 
  
 “Indebtedness” means, at any date, and in each case on a consolidated basis (i) all indebtedness of Borrower for borrowed money
(including indebtedness of Borrower under the Note and under this Agreement) or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with
customary practices) or which is evidenced by a note, bond, debenture or similar instrument, (ii) all obligations of such persons under financing leases, (iii) all obligations of such persons in respect of acceptances issued or created for its/their
account, (iv) all liabilities secured by any lien on any property owned by Borrower even though that person has not assumed or otherwise become liable for the payment thereof and (v) contingent obligations of Borrower (and either of them) under GAAP
in respect of another Person’s indebtedness, obligations and liabilities of the type described in the foregoing clauses (i) through (iv). 
  

 16 

 “Interest Expense” means, for any period, total interest expense payable during such
period with respect to all outstanding Indebtedness of Borrower, on a consolidated basis, including all commissions, discounts and other fees and charges owed with respect to letter of credit and bankers acceptance financing, prepayment charges,
agency fees, administrative fees, commitment fees (but excluding amortization of capitalized transaction costs allocated to interest expense), payments owed under any interest rate hedging, cap or similar agreement or arrangement, all as determined
for such period in accordance with GAAP. 
  
 “Loan
Documents” means this Agreement and the Note and any other document executed or delivered by Borrower in connection herewith. 
  
 “Net Income (Loss)” means, for any period, the net income (or loss) of Borrower, on a consolidated basis, for such period taken as a
single accounting period, determined in accordance with GAAP (provided that in determining Net Income (Loss) there shall be excluded (i) the proceeds of any life insurance policy, (ii) gains and losses from the sale, exchange, transfer or
other disposition of property or assets not in the ordinary course of business, and related tax effects in accordance with GAAP, (v) any other extraordinary or non-recurring gains and losses, and related tax effects in accordance with GAAP.

  
 “Net Sales/Net Assets Ratio”, for any
calendar quarter, means the ratio of the running total of the actual sales of Borrower for the immediately preceding twelve (12) month period to the Borrower’s total accounts receivable, inventory, prepaid royalty and prepaid software
development expenses, as each is determined in accordance with GAAP, on a consolidated basis, as of the end of such calendar quarter. 
  
 “Person” means an individual or a corporation, partnership, limited liability company, trust, unincorporated organization, association or
other entity. 
  
 “Uncommitted Advances” has the
meaning assigned thereto in Section 1 of this Agreement. 
  

 17 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

  

	TDK MEDIACTIVE, INC., a Delaware corporation
		
	 By:
	 	  

	Name:	 	Shin Tanabe
	Title:	 	Its President
	
	 Address:
 4373 Park Terrace
Drive
 Westlake Village, California 91361
  
 TDK MEDIACTIVE, INC., a Cailfornia corporation

		
	 By:
	 	  

	Name:	 	Shin Tanabe
	Title:	 	Its President
	
	 Address:
 4373 Park Terrace
Drive
 Westlake Village, California 91361
  
 TDK USA CORPORATION, a New York corporation

		
	 By:
	 	  

	Name:	 	  

	Title:	 	  

	
	 Address:
  
 901 Franklin Avenue
 Garden City, New York 11530

  

 18 

 EXHIBIT A 
  

PROMISSORY NOTE 
  

 19 

 EXHIBIT B 
  

MONTHLY FORECASTED LOAN BALANCE 
 (Amounts in $) 
  

	T108	 	Apr-03	 	May-03	 	Jun-03	 	Jul-03	 	Aug-03	 	Sep-03
	 Ending Balance
	 	$28,700,000	 	$30,400,000	 	$33,100,000	 	$34,400,000	 	$34,200,000	 	$36,800,000
	T108	 	Oct-03	 	Nov-03	 	Dec-03	 	Jan-04	 	Feb-04	 	Mar-04
	 Ending Balance
	 	$36,800,000	 	$36,270,000	 	$26,970,000	 	$19,770,000	 	$19,270,000	 	$21,070,000

  

 20

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