Document:

exv10w3

 

Exhibit 10.3

THIS FIRST AMENDING AGREEMENT dated as of the 20th day of November, 2007

BETWEEN:

MAD CATZ, INC.

as Borrower

- and -

WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL)

as Lender and US Collateral Agent

     WHEREAS Borrower, Lender and US Collateral Agent entered into a second amended and restated
loan agreement dated October 30, 2006 (as amended, modified, supplemented, extended, renewed,
restated and replaced from time to time, the “Loan Agreement”) pursuant to which certain credit
facilities were established in favour of Borrower;

     AND WHEREAS Guymont Services SA, as trustee of The Winkler Atlantic Trust, as owner (the
“Owner”) of Winkler Atlantic Holdings Limited (the “Company”), and Mad Catz Interactive, Inc. (the
“Purchaser”), the parent of Borrower, have entered into a share sale and purchase agreement dated
November 14, 2007 whereby Purchaser has agreed to purchase (the “Purchase”) from the Owner, free of
all Liens, the entire issued share capital of Company and its wholly-owned subsidiaries Saitek
Industries Limited (“Saitek US”), Saitek Elektronik Vertriebs GmbH, Saitek PLC, Saitek SA and
Saitek Industries Limited (collectively with the Company, the “Purchased Entities”);

     AND WHEREAS the parties hereto wish to enter into this First Amending Agreement to amend
certain terms and conditions of the Loan Agreement including, without limitation, to make the
Purchased Entities “Obligors” under the Loan Agreement and include the inventory and accounts of
Saitek US in the borrowing base under the Loan Agreement;

     NOW THEREFORE THIS FIRST AMENDING AGREEMENT WITNESSES THAT in consideration of the covenants
and agreements contained herein and for other good and valuable consideration, the parties hereto
agree to amend the Loan Agreement as provided herein:

Section 1 General

          In this First Amending Agreement, unless otherwise defined or the context otherwise requires,
all capitalized terms shall have the respective meanings specified in the Loan Agreement.

 

 

Section 2 To be Read with Loan Agreement

          This First Amending Agreement is an amendment to the Loan Agreement. Unless the context of
this First Amending Agreement otherwise requires, the Loan Agreement and this First Amending
Agreement shall be read together and shall have effect as if the provisions of the Loan Agreement
and this First Amending Agreement were contained in one agreement. The term “Agreement” when used
in the Loan Agreement means the Loan Agreement as amended by this First Amending Agreement,
together with all amendments, modifications, supplements, extensions, renewals, restatements and
replacements thereof from time to time.

Section 3 No Novations

          Nothing in this First Amending Agreement, nor in the Loan Agreement when read together with
this First Amending Agreement, shall constitute a novation, payment, re-advance or reduction or
termination in respect of any Obligations.

Section 4 Amendments to Loan Agreement

	(a)	 	Section 1.2 (“Accounts”) of the Loan Agreement is hereby deleted and replaced with
the following:

“1.2 “Accounts”

“Accounts” shall mean all present and future rights of Borrower, MCE, MCC and Saitek US to payment
for goods sold or leased or for services rendered, which are not evidenced by instruments or
chattel paper, and whether or not earned by performance.”

	(b)	 	The preamble and paragraphs (a), (e), (g), (j) and (o) of Section 1.14 (“Eligible
Accounts”) of the Loan Agreement are hereby deleted and replaced with the following:

“1.14 “Eligible Accounts”

“Eligible Accounts” shall mean Accounts created by Borrower, MCE, MCC or Saitek US which are and
continue to be acceptable to Lender based on the criteria set forth below. In general, Accounts
shall be Eligible Accounts if:

     (a) such Accounts arise from the actual and bona fide sale and delivery of goods by Borrower,
MCE, MCC or Saitek US or rendition of services by Borrower, MCE, MCC or Saitek US in the ordinary
course of their respective businesses which transactions are completed in accordance with the terms
and provisions contained in any documents related thereto;

     (e) the chief executive office of the account debtor with respect to such Accounts is located
in Canada, the United States of America or the United Kingdom or, if the chief executive office of
the account debtor is not located in Canada, the United States of America or the United Kingdom,
the Account is payable in Canadian Dollars, US Dollars, Pounds Sterling or Euro, and, at Lender’s
option, if: (i) the account debtor has delivered to Borrower, MCE, MCC or Saitek US, as applicable,
an irrevocable letter of credit issued or confirmed by a bank satisfactory to Lender and payable
only in the United States of America in the currency in which the Account is

 

 

denominated, sufficient to cover such Account, in form and substance satisfactory to Lender
and, if required by Lender, the original of such letter of credit has been delivered to Lender or
Lender’s agent and the issuer thereof notified of the assignment of the proceeds of such letter of
credit to Lender, or (ii) such Account is subject to credit insurance payable to Lender issued by
an insurer and on terms and in an amount acceptable to Lender, or (iii) such Account is otherwise
acceptable in all respects to Lender (subject to such lending formula with respect thereto as
Lender may determine);

     (g) the account debtor with respect to such Accounts has not asserted a counterclaim, defense
or dispute and does not have, and does not engage in transactions which may give rise to, any right
of setoff against such Accounts (but the portion of the Accounts of such account debtor in excess
of the amount at any time and from time to time owed by Borrower, MCE, MCC or Saitek US, as
applicable, to such account debtor or claimed owed by such account debtor may be deemed Eligible
Accounts);

     (j) neither the account debtor nor any officer or employee of the account debtor with respect
to such Accounts is an officer, employee or agent of or affiliated with Borrower, MCE, MCC or
Saitek US directly or indirectly by virtue of family membership, ownership, control, management or
otherwise;

     (o) such Accounts are owed by account debtors whose total indebtedness to Borrower, MCE, MCC
or Saitek US does not exceed the credit limit with respect to such account debtors as determined by
Lender from time to time (but the portion of the Accounts not in excess of such credit limit may
still be deemed Eligible Accounts); and”

	(c)	 	Section 1.15 (“Eligible Inventory”) of the Loan Agreement is hereby deleted and
replaced with the following:

“1.15 “Eligible Inventory”

     “Eligible Inventory” shall mean Inventory consisting of finished goods held for resale in the
ordinary course of the business of Borrower, MCE or Saitek US and raw materials (including
electronic chips) for such finished goods, in each case which are acceptable to Lender in its
absolute discretion based on the criteria set forth below. In general, Eligible Inventory shall
not include (a) work-in-process; (b) components which are not part of finished goods; (c) spare
parts for equipment; (d) packaging and shipping materials; (e) supplies used or consumed in
Borrower’s, MCE’s or Saitek US’s business; (f) Inventory at premises which are not owned and
controlled by Borrower, MCE or Saitek US, unless US Collateral Agent has received an agreement in
writing from the person in possession of such Inventory and/or the owner or operator of such
premises in form and substance satisfactory to US Collateral Agent acknowledging US Collateral
Agent’s first priority Lien in the Inventory, waiving or subordinating Liens by such person against
the Inventory and permitting US Collateral Agent access to, and the right to remain on, the
premises so as to exercise US Collateral Agent’s rights and remedies and otherwise deal with the
Collateral, or unless such Inventory is Approved In-Transit Inventory; (g) Inventory subject to a
Lien in favor of any person other than US Collateral Agent and/or Lender except those permitted in
this Agreement; (h) bill and hold goods; (i) unserviceable, obsolete or slow moving Inventory; (j)
Inventory which is not subject to the

 

 

first priority, valid and perfected Lien of US Collateral Agent and/or Lender; (k) damaged and/or
obsolete and/or defective Inventory; (l) Inventory purchased or sold on consignment; and (m)
Inventory subject to a license agreement or other arrangement with a third party which, in Lender’s
determination, restricts the ability of Lender to exercise its rights under this Agreement with
respect to such Inventory unless such third party has entered into an Acceptable Liquidation
Agreement or Lender has otherwise agreed to allow such Inventory to be eligible in Lender’s sole
discretion. General criteria for Eligible Inventory may be established and revised from time to
time by Lender. Any Inventory which is not Eligible Inventory shall nevertheless be part of the
Collateral and subject to the Lien of Lender and/or US Collateral Agent.”

	(d)	 	Section 1.23 (“Excess Availability”) of the Loan Agreement is hereby deleted and
replaced with the following:

“1.23 “Excess Availability”

“Excess Availability” shall mean the amount in US Dollars, as determined by Lender, calculated at
any time, equal to: (a) the lesser of: (i) the amount of the Revolving Loans available to Borrower
as of such time (based on the applicable lending formulas multiplied by the Net Amount of Eligible
Accounts, the Value of Eligible Inventory and Net Orderly Liquidation Value, as determined by
Lender) and subject to the sublimits and Availability Reserves from time to time established by
Lender hereunder and (ii) the Maximum Credit, minus (b) the sum of: (i) the amount of all
then outstanding and unpaid Obligations with respect to Revolving Loans, plus (ii) the
aggregate amount of all due but unpaid tax obligations, and trade payables of Borrower, MCE, MCC,
MCII and Saitek US that are past due more than sixty (60) days.”

	(e)	 	Section 1.30 (“Information
Certificates”) of the Loan Agreement is hereby deleted and
replaced with the following. In addition, the Information Certificates constituting Exhibit A
to the Loan Agreement are hereby replaced with the Information Certificates of Borrower and
each Obligor attached hereto as Schedule A.

“1.30 “Information Certificates”

“Information Certificates” shall mean, collectively, the Information Certificates of Borrower and
each Obligor constituting Exhibit A hereto as updated or provided from time to time, each
containing material information with respect to such Person, its business and assets provided by or
on behalf of such Persons to Lender in connection with the preparation of this Agreement and
amendments, modifications, supplements, extensions, renewals, restatements and replacements thereof
from time to time and the other Financing Agreements and the financing arrangements provided for
herein.”

	(f)	 	Section 1.33 (“Inventory") of the Loan Agreement is hereby deleted and replaced with
the following:

“1.33 “Inventory”

“Inventory” shall mean all of Borrower’s, MCE’s and Saitek US’s now owned and hereafter existing or
acquired raw materials, work in process, finished goods and all other inventory of whatsoever kind
or nature, wherever located.”

 

 

	(g)	 	Section 1.48 (“Obligor”) of the Loan Agreement is hereby deleted and replaced with
the following:

“1.48 “Obligor”

“Obligor” shall mean any guarantor, endorser, acceptor, surety or other person liable on or with
respect to the Obligations or who is the owner of any property which is security for the
Obligations including, without limitation, MCII, MCC, MCE, Mad Catz Limited, FX Unlimited, Inc.,
MCIA, Winkler Atlantic Holdings Limited, Saitek US, Saitek Elecktronik Vertriebs Gmbh, Saitek Plc,
Saitek SA and Saitek Industries Limited, other than Borrower.”

	(h)	 	Section 1.59 (“Royalty Reserve”) of the Loan Agreement is hereby deleted and replaced
with the following:

“1.59 “Royalty Reserve”

“Royalty Reserve” shall mean an amount equal to all accrued and unpaid royalty obligations owing by
Borrower, MCE and Saitek US as set forth on the most recent Royalty Reserve Report, adjusted up or
down as of any date of determination by Lender in its sole discretion based on Lender’s findings
that such royalty obligations owing by Borrower, MCE and/or Saitek US have increased or decreased
since the date of such Royalty Reserve Report.”

	(i)	 	Section 1.60 (“Royalty Reserve Report”) of the Loan Agreement is hereby deleted and
replaced with the following:

“1.60 “Royalty Reserve Report”

“Royalty Reserve Report” shall mean a report for the period since the date hereof (for the initial
report) or the date of the last such report (for subsequent reports) delivered in accordance with
Section 6.1 hereof which shall set forth (i) each license of intellectual property for which
Borrower, MCE and/or Saitek US is licensee and for which it pays royalties, (ii) the licensor of
each such license, (iii) the aggregate accrued and unpaid royalty obligations owing under each such
license and (iv) the date such accrued and unpaid royalty obligations are due under each such
license. Each Royalty Reserve Report shall be certified by the chief financial officer of the
Borrower as being complete and accurate.”

	(j)	 	Section 1 (“Definitions”) of the Loan Agreement is hereby amended by adding the
following definition in its proper alphabetical order:

“1.60A “Saitek US”

“Saitek US” shall mean Saitek Industries Limited, a corporation incorporated under the laws of the
State of Delaware.”

	(k)	 	Sections 5.3(a) and (c) (“Collection of Accounts”) of the Loan Agreement are hereby
deleted and replaced with the following:

 

 

“5.3 Collection of Accounts

     (a) Borrower shall establish and maintain, at its expense, blocked accounts (“Blocked
Accounts”), with such banks as are acceptable to Lender into which Borrower shall, in accordance
with Lender’s instructions, promptly deposit all payments on Accounts and all payments constituting
proceeds of Inventory or other Collateral in the identical form in which such payments are made,
whether by cash, check or other manner. Upon the occurrence and during the continuation of an
Event of Default, Lender may, and Borrower shall upon Lender’s request, direct Borrower’s, MCE’s,
MCC’s and Saitek US’s account debtors to directly remit all payment on Accounts to the Blocked
Accounts. The banks at which the Blocked Accounts are established shall enter into an agreement,
in form and substance satisfactory to Lender, providing that all items received or deposited in the
Blocked Accounts are the property of Lender, that the depository bank has no lien upon, or right to
setoff against, the Blocked Accounts, the items received for deposit therein, or the funds from
time to time on deposit therein and that the depository bank will wire, or otherwise transfer, in
immediately available funds, on a daily basis, all funds received or deposited into the Blocked
Accounts to such bank account of Lender as Lender may from time to time designate for such purpose
(“Payment Account”). Borrower agrees that all payments made to such Blocked Accounts or other
funds received and collected by Lender, whether on the Accounts or as proceeds of Inventory or
other Collateral or otherwise shall be the security of Lender and/or US Collateral Agent.

     (c) Borrower and all of its U.S., U.K., Canadian, German, French and Chinese affiliates and
subsidiaries, and the shareholders, directors, employees and/or agents of Borrower and each such
affiliate and subsidiary shall, acting as trustee for Lender, receive, as the security of Lender
and/or US Collateral Agent, any monies, checks, notes, drafts or any other payment relating to
and/or proceeds of Accounts or other Collateral which come into their possession or under their
control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in
the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Lender, but
in no event shall any of the foregoing monies, checks, notes, drafts or any other such payment be
commingled with such Person’s other funds. Borrower agrees to reimburse Lender on demand for any
amounts owed or paid to any bank at which a Blocked Account is established or any other bank or
person involved in the transfer of funds to or from the Blocked Accounts arising out of Lender’s
payments to, or indemnification of, such bank or person (other than to the extent that such amount
arises directly from Lender’s or such other party’s negligence or willful misconduct). The
obligation of Borrower to reimburse Lender for such amounts pursuant to this Section 5.3 shall
survive the termination of this Agreement.”

	(l)	 	Section 6.1 (“Collateral Reporting”) of the Loan Agreement is hereby deleted and
replaced with the following:

“6.1 Collateral Reporting

     Borrower shall provide Lender with the following documents in a form satisfactory to Lender:
(a) on a regular basis as required by Lender, a schedule of Accounts, sales made, credits issued
and cash received; (b) on a monthly basis within twenty (20) days after each month end or more
frequently as Lender may request, (i) perpetual inventory reports, (ii) inventory reports by
category, including a separate itemized detailed breakdown of all Inventory that is in transit,

 

 

(iii) agings of accounts payable and (iv) a Royalty Reserve Report, (c) upon Lender’s request, (i)
copies of customer statements and credit memos, remittance advices and reports, and copies of
deposit slips and bank statements, (ii) copies of shipping and delivery documents, and (iii) copies
of purchase orders, invoices and delivery documents for Inventory and Equipment acquired by
Borrower, MCE and Saitek US; (d) agings of accounts receivable on a monthly basis within twenty
(20) days after each month end or more frequently as Lender may request; (e) no later than thirty
(30) days after the end of each fiscal year of Borrower, financial projections for the next fiscal
year, prepared on a monthly basis; and (f) such other reports as to the Collateral as Lender or US
Collateral Agent shall reasonably request from time to time. If any of Borrower’s records or
reports of the Collateral are prepared or maintained by an accounting service, contractor, shipper
or other agent, Borrower hereby irrevocably authorizes such service, contractor, shipper or agent
to deliver such records, reports, and related documents to Lender and to follow Lender’s
instructions with respect to further services at any time that an Event of Default exists.”

	(m)	 	Sections 6.2 (a) and (c) (“Accounts Covenants”) of the Loan Agreement are hereby
deleted and replaced with the following:

“6.2 Accounts Covenants

     (a) Borrower shall notify Lender promptly of: (i) any material delay in any of Borrower’s,
MCE’s, MCC’s or Saitek US’s performance of any of its obligations to any account debtor or the
assertion of any claims, offsets, defenses or counterclaims by any account debtor, or any disputes
with account debtors, or any settlement, adjustment or compromise thereof, (ii) all material
adverse information in Borrower’s knowledge relating to the financial condition of any account
debtor and (iii) any event or circumstance which, to Borrower’s knowledge, would cause Lender to
consider any then existing Accounts as no longer constituting Eligible Accounts. No credit,
discount, allowance or extension or agreement for any of the foregoing shall be granted to any
account debtor without Lender’s consent, except in the ordinary course of Borrower’s, MCE’s, MCC’s
or Saitek US’s business in accordance with practices and policies previously disclosed in writing
to Lender. So long as no Event of Default exists, Borrower, MCE, MCC or Saitek US shall settle,
adjust or compromise any claim, offset, counterclaim or dispute with any account debtor. At any
time that an Event of Default exists, Lender shall, at its option, have the exclusive right to
settle, adjust or compromise any claim, offset, counterclaim or dispute with account debtors or
grant any credits, discounts or allowances.

     (c) With respect to each Account: (i) the amounts shown on any invoice delivered to Lender or
schedule thereof delivered to Lender shall be true and complete in all material respects, (ii) no
payments shall be made thereon except payments immediately delivered to Lender pursuant to the
terms of this Agreement, (iii) no credit, discount, allowance or extension or agreement for any of
the foregoing shall be granted to any account debtor except as reported to Lender in accordance
with this Agreement and except for credits, rebates, price protection programs, early payment
incentives, discounts, allowances or extensions made or given in the ordinary course of Borrower’s,
MCE’s, MCC’s or Saitek US’s business in accordance with practices and policies previously disclosed
to Lender, (iv) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes
existing or asserted with respect thereto except as reported to Lender in accordance with the terms
of this Agreement, (v) none of the transactions

 

 

giving rise thereto will violate any applicable federal, state or provincial laws or
regulations applicable to Borrower or any Obligor, all documentation relating thereto will be
legally sufficient under such laws and regulations and all such documentation will be legally
enforceable in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency or similar laws affecting creditors’ rights and the discretion of the court as to the
granting of equitable remedies.”

	(n)	 	Section 6.3 (“Inventory Covenants”) of the Loan Agreement is hereby deleted and
replaced with the following:

“6.3 Inventory Covenants

With respect to the Inventory: (a) Borrower shall at all times maintain inventory records
satisfactory to Lender, keeping correct and accurate records itemizing and describing the kind,
type, quality and quantity of Inventory, cost therefor and daily withdrawals therefrom and
additions thereto; (b) Borrower shall conduct a physical count of the Inventory at least once each
year, but at any time or times as Lender may request while an Event of Default exists, and promptly
following such physical inventory shall supply Lender with a report in the form and with such
specificity as may be satisfactory to Lender concerning such physical count; (c) Borrower shall
not, and shall cause MCE and Saitek US not to, remove any Inventory from the locations set forth or
permitted herein, without the prior written consent of Lender, except for sales of Inventory in the
ordinary course of Borrower’s, MCE’s or Saitek US’s business and except to move Inventory directly
from one location set forth or permitted herein to another such location; (d) Borrower shall, at
its expense, at Lender’s request but, no more than once in any three (3) month period if an Event
of Default does not exist, and at any time or times as Lender may request after and while Event of
Default exists, deliver or cause to be delivered to Lender written reports or appraisals as to the
Inventory in form, scope and methodology acceptable to Lender and by an appraiser acceptable to
Lender, addressed to Lender or upon which Lender is expressly permitted to rely; (e) Borrower
shall, and shall cause MCE and Saitek US to, produce, use, store and maintain the Inventory, with
all reasonable care and caution and in accordance with applicable standards of any insurance and in
conformity with applicable laws (including the requirements of the Federal Fair Labor Standards Act
of 1938, as amended and all rules, regulations and orders related thereto); (f) Borrower assumes
all responsibility and liability arising from or relating to the production, use, sale or other
disposition of the Inventory; (g) Borrower shall not, and shall cause MCE and Saitek US not to,
sell Inventory to any customer on approval, or any other basis which entitles the customer to
return or may obligate Borrower, MCE or Saitek US to repurchase such Inventory, except in the
ordinary course of business or unless such Inventory is not Eligible Inventory; (h) Borrower shall,
and shall cause MCE and Saitek US to, keep the Inventory in good and marketable condition; and (i)
Borrower shall not, and shall cause MCE and Saitek not to, without prior written notice to Lender,
acquire or accept any Inventory on consignment or approval.”

	(o)	 	Section 7.1 (“Corporate Existence, Power and Authority; Subsidiaries”) of the Loan
Agreement is hereby deleted and replaced with the following:

 

 

“7.1 Corporate Existence, Power and Authority; Subsidiaries

     Borrower and each Obligor has been duly incorporated or organized and is validly existing
under the laws of its jurisdiction of incorporation or organization, as the case may be, and is
duly qualified or registered as a foreign or extra-provincial corporation in all provinces, states
or other jurisdictions where the nature and extent of the business transacted by it or the
ownership of assets makes such qualification necessary, except for those jurisdictions in which the
failure to so qualify or register would not have a Material Adverse Effect. The execution,
delivery and performance of this Agreement, the other Financing Agreements and the transactions
contemplated hereunder and thereunder are all within Borrower’s and each Obligor’s corporate
powers, have been duly authorized and are not in contravention of law or the terms of Borrower’s or
any Obligor’s certificate of incorporation, by-laws, or other organizational documentation, or any
indenture, agreement or undertaking to which Borrower or any Obligor is a party or by which
Borrower or any Obligor or their respective property are bound except to the extent that certain
Collateral may not be assignable by law. This Agreement and the other Financing Agreements
constitute legal, valid and binding obligations of Borrower and each Obligor, as applicable,
enforceable in accordance with their respective terms, except as the same is limited by bankruptcy,
insolvency or similar laws affecting creditors’ rights generally, and the discretion of the court
as to the granting of equitable remedies. Borrower and each Obligor does not have any subsidiaries
except as set forth on the Information Certificates.”

	(p)	 	Section 7.3 (“Chief Executive Office; Collateral Locations and License Agreements”)
of the Loan Agreement is hereby deleted and replaced with the following:

“7.3 Chief Executive Office; Collateral Locations and License Agreements

     The chief executive office of Borrower and Borrower’s Records concerning Accounts are located
only at the address set forth below and its only other places of business and the only other
locations of Collateral, if any, are the addresses set forth in the Information Certificates,
subject to the right of Borrower to establish new locations in accordance with Section 8.2 below.
The Information Certificates correctly identify the chief executive office of each Obligor and all
other places of business and other locations, if any, at which any Obligor maintains any
Collateral. The Information Certificates also correctly identify any of such locations which are
not owned by Borrower or any Obligor and sets forth the owners and/or operators thereof and to the
best of Borrower’s knowledge, the holders of any mortgages on such locations. Schedule 7.3 hereof
lists each license agreement to which Borrower, MCE and/or Saitek US is a party.”

	(q)	 	Schedule 8.9 (“Existing Indebtedness”) of the Loan Agreement is hereby deleted and
replaced with Schedule 8.9 attached hereto.

	(r)	 	Section 9.1 (“Events of Default”) of the Loan Agreement is hereby amended by adding
the following new Section 9.1(p):

          “(p) a Serious Event (as defined in the Consideration Loan Note Instrument dated November 20,
2007 (as amended, modified, supplemented, extended, renewed, restated and replaced from time to
time, the “Consideration Loan Note Instrument”) made by MCII) or any other default occurs under or
in connection with the Consideration Loan Note Instrument

 

 

and Lender may not rely on or enjoy the benefit of the provisions of any intercreditor or
subordination agreement between Lender and any noteholder under the Consideration Loan Note
Instrument and related notes;”

Section 5 Representations and Warranties

          In order to induce Lender to enter into this First Amending Agreement, Borrower represents and
warrants to Lender as follows, which representations and warranties shall survive the execution and
delivery hereof:

	 	(a)	 	the representations and warranties set forth in Section 7 of the Loan
Agreement continue to be true and correct as of the date hereof;
	 
	 	(b)	 	the execution, delivery and performance of this First Amending Agreement and
the transactions contemplated hereunder are all within Borrower’s corporate powers,
have been duly authorized and are not in contravention of law or the terms of
Borrower’s certificate of incorporation, by-laws or other organizational documentation,
or any indenture, agreement or undertaking to which Borrower is a party or by which
Borrower or its property is bound;
	 
	 	(c)	 	Borrower has duly executed and delivered this First Amending Agreement;
	 
	 	(d)	 	this First Amending Agreement constitutes a legal, valid and binding obligation
of Borrower, enforceable against it by Lender in accordance with its terms;
	 
	 	(e)	 	no Event of Default exists;
	 
	 	(f)	 	Borrower is in compliance with the covenants contained in Section 5,
Section 6 and Section 8 of the Loan Agreement; and
	 
	 	(g)	 	the corporate structure chart attached hereto as Schedule B shows all
of the subsidiaries and affiliates of Borrower following the closing of the Purchase
and each such Person’s full and correct legal name and jurisdiction of incorporation.

Section 6 Conditions Precedent

          This First Amending Agreement shall not be effective until each of the following conditions
has been met to the satisfaction of Lender or has been waived in writing (in whole or in part) by
Lender, in each case in its sole discretion:

	 	(a)	 	Lender has received, in form and substance satisfactory to Lender, a copy
(original or photocopy, at the discretion of Lender) of each of the following:

	 	(i)	 	this First Amending Agreement executed by Borrower and the
other Obligors party hereto;

 

 

	 	(ii)	 	the documents, agreements, instruments, registrations,
certificates, resolutions and opinions set forth in the closing agenda attached
hereto as Schedule C;
	 
	 	(iii)	 	all consents, waivers, acknowledgements and other agreements
from third parties which Lender may deem necessary or desirable in order to
give effect to the provisions or purposes of this First Amending Agreement;
	 
	 	(iv)	 	such other documents, agreements, instruments, registrations,
certificates, resolutions and opinions as are reasonably required by Lender;

	 	(b)	 	Borrower has paid all fees, expenses and disbursements, including, without
limitation, legal fees, incurred by or payable to Lender in connection with this First
Amending Agreement;
	 
	 	(c)	 	all requisite corporate actions and proceedings in connection with this First
Amending Agreement shall have been completed;
	 
	 	(d)	 	no Event of Default exists;
	 
	 	(e)	 	no material adverse change shall have occurred with respect to Borrower or any
Obligor since the date of Lender’s latest field examination and no change or event
shall have occurred which would have a material adverse effect on Borrower or any
Obligor; and
	 
	 	(f)	 	the Purchase has been completed on terms and conditions acceptable to the
Lender in its sole discretion.

Section 7 Expenses

          Borrower shall pay all fees, expenses and disbursements including, without limitation, legal
fees, incurred by or payable to Lender in connection with the preparation, negotiation, completion,
execution, delivery and review of this First Amending Agreement and all other documents and
instruments arising therefrom and/or executed in connection therewith.

Section 8 Continuance of Loan Agreement and Security

          The Loan Agreement and Financing Agreements, as amended by this First Amending Agreement,
shall be and continue in full force and effect and is hereby confirmed and the rights and
obligations of all parties thereunder shall not be affected or prejudiced in any manner except as
specifically provided for in this First Amending Agreement. It is agreed and confirmed that after
giving effect to this First Amending Agreement, all security delivered by Borrower and each Obligor
secures the payment of all of the Obligations including, without limitation, the obligations
arising under the Loan Agreement, as amended by the terms of this First Amending Agreement.

 

 

Section 9 Counterparts

          This First Amending Agreement may be executed in any number of separate original or facsimile
counterparts, each of which shall be deemed an original and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.

Section 10 Governing Law

          The validity, interpretation and enforcement of this First Amending Agreement and any dispute
arising out of the relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the laws of the State of California.

[SIGNATURE PAGE FOLLOWS]

 

 

          IN WITNESS WHEREOF the parties hereto have executed this First Amending Agreement as of the
day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	US COLLATERAL AGENT AND LENDER	 	 	 	BORROWER	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WACHOVIA CAPITAL FINANCE CORPORATION
(CENTRAL)	 	 	 	MAD CATZ, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Niall Hamilton	 	 	 	By:	 	/s/ Darren Richardson	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	Name: Niall Hamilton	 	 	 	 	 	Name: Darren Richardson	 	 
	 
	 	Title: Senior Vice President	 	 	 	 	 	Title: President and CEO	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address:	 	 	 	Address:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	150 South Wacker Drive	 	 	 	7480 Mission Valley Road, Suite 101	 	 
	Chicago, Illinois 60606	 	 	 	San Diego, California 92108	 	 
	Fax: (312) 332-0424	 	 	 	Fax: 619-683-9839 and 619-683-2813	 	 

Each of the undersigned Obligors hereby:

	 	(a)	 	acknowledges, confirms and agrees that such Obligor’s Financing Agreements (as
each of the same may have been amended, modified, supplemented, extended, renewed,
restated or replaced) remain in full force and effect as at the date hereof in respect
of the Obligations under the Loan Agreement; and
	 
	 	(b)	 	acknowledges and confirms that such Obligor has received a copy of the Loan
Agreement and this First Amending Agreement and understands the terms thereof.

Dated as of the 20th day of November, 2007.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	MAD CATZ INTERACTIVE, INC.	 	 	 	1328158 ONTARIO INC.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Darren Richardson	 	 	 	By:	 	/s/ Darren Richardson
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	Name:	 	Darren Richardson	 	 	 	 	 	Name:	 	Darren Richardson
	 
	 	Title:	 	President and CEO	 	 	 	 	 	Title:	 	President and CEO

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	MAD CATZ (EUROPE) LIMITED	 	 	 	MAD CATZ LIMITED
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Darren Richardson	 	 	 	By:	 	/s/ Darren Richardson
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	Name:	 	Darren Richardson	 	 	 	 	 	Name:	 	Darren Richardson
	 
	 	Title:	 	Director	 	 	 	 	 	Title:	 	Director
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	FX UNLIMITED, INC.	 	 	 	MAD CATZ INTERACTIVE ASIA LIMITED
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Darren Richardson	 	 	 	By:	 	/s/ Darren Richardson
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	Name:	 	Darren Richardson	 	 	 	 	 	Name:	 	Darren Richardson
	 
	 	Title:	 	President and CEO	 	 	 	 	 	Title:	 	Directorexv10w4

 

Exhibit 10.4

Execution Copy

PLEDGE AND SECURITY AGREEMENT

     THIS PLEDGE AND SECURITY AGREEMENT (“Pledge Agreement”), dated November 20, 2007, is by
Winkler Atlantic Holdings Limited, a British Virgin Islands corporation (“Pledgor”), to and in
favor of WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL), an Illinois corporation (“Pledgee”).

WITNESSETH:

     WHEREAS, Pledgor is now the direct and beneficial owner of all of the issued and outstanding
shares of capital stock of Saitek Industries Limited, a Delaware corporation (“Issuer”) as
described on Exhibit A annexed hereto and made a part hereof (the “Pledged Securities); and

     WHEREAS, Pledgee and Mad Catz, Inc. (“Borrower”) have entered into financing arrangements
pursuant to which Pledgee may make loans and advances and provide other financial accommodations to
Borrower as set forth in the Second Amended and Restated Loan Agreement, dated as of October 30,
2006, by and between Pledgee and Borrower (as amended, modified, supplemented, extended, renewed,
restated or replaced from time to time, the “Loan Agreement”), as amended by the First Amending
Agreement dated as of the dated hereof between Pledgee and Borrower (as amended, modified,
supplemented, extended, renewed, restated or replaced from time to time, the “First Amending
Agreement”), and other agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto, including, but not limited
to, this Pledge Agreement (all of the foregoing, together with the Loan Agreement, as the same now
exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced,
being collectively referred to herein as the “Financing Agreements”); and

     WHEREAS, in order to induce Pledgee to enter into the First Amending Agreement and to make
loans and advances and provide other financial accommodations to Borrower pursuant thereto, Pledgor
has agreed to secure the payment and performance of the Obligations (as hereinafter defined) to
Pledgee and to accomplish same by (i) executing and delivering to Pledgee this Pledge Agreement,
(ii) delivering to Pledgee the Pledged Securities which are registered in the name of Pledgor,
together with appropriate powers duly executed in blank by Pledgor, and (iii) delivering to Pledgee
any and all other documents which Pledgee deems necessary to protect Pledgee’s interests hereunder;

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Pledgor hereby agrees as follows:

	 	1.	 	GRANT OF SECURITY INTEREST

     As collateral security for the prompt performance, observance and indefeasible payment in full
of all of the Obligations (as hereinafter defined), Pledgor hereby assigns, pledges, hypothecates,
transfers and sets over to Pledgee and grants to Pledgee a security interest in and lien upon (a)
the Pledged Securities, together with all cash dividends, stock dividends, interests, profits,
redemptions, warrants, subscription rights, stock, securities options, substitutions, exchanges and
other distributions now or hereafter distributed by Issuer or which may hereafter be delivered to
the possession of Pledgor or Pledgee with respect thereto, (b) Pledgor’s records with respect to the foregoing, and (c) the
proceeds of all of the foregoing (all of the foregoing being collectively referred to herein as the
“Pledged Property”).

 

 

	 	2.	 	OBLIGATIONS SECURED

     The security interest, lien and other interests granted to Pledgee pursuant to this Pledge
Agreement shall secure the prompt performance and payment in full of any and all obligations,
liabilities and indebtedness of every kind, nature and description owing by Pledgor to Pledgee
and/or its affiliates, including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether arising under
this Pledge Agreement, the Loan Agreement, the other Financing Agreements or otherwise, whether now
existing or hereafter arising, whether arising before, during or after the initial or any renewal
term of the Loan Agreement or after the commencement of any case with respect to Pledgor under the
United States Bankruptcy Code or any similar statute (including, without limitation, the payment of
interest and other amounts which would accrue and become due but for the commencement of such
case), whether direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated, secured or unsecured, and however acquired by
Pledgee (all of the foregoing being collectively referred to herein as the “Obligations”).

	 	3.	 	REPRESENTATIONS, WARRANTIES AND COVENANTS

     Pledgor hereby represents, warrants and covenants with and to Pledgee the following (all of
such representations, warranties and covenants being continuing so long as any of the Obligations
are outstanding):

     (a) The Pledged Securities are duly authorized, validly issued, fully paid and non-assessable
capital stock of Issuer and constitute Pledgor’s entire interest in Issuer and are not registered,
nor has Pledgor authorized the registration thereof, in the name of any person or entity other than
Pledgor or Pledgee.

     (b) The Pledged Property is directly, legally and beneficially owned by Pledgor, free and
clear of all claims, liens, pledges and encumbrances of any kind, nature or description, except for
the pledge and security interest in favor of Pledgee and the pledges and security interests
permitted under the Loan Agreement.

     (c) The Pledged Property is not subject to any restrictions relative to the transfer thereof
and Pledgor has the right to transfer and hypothecate the Pledged Property free and clear of any
liens, encumbrances or restrictions.

     (d) The Pledged Property is duly and validly pledged to Pledgee and no consent or approval of
any governmental or regulatory authority or of any securities exchange or the like, nor any consent
or approval of any other third party, was or is necessary to the validity and enforceability of
this Pledge Agreement.

     (e) Pledgor authorizes Pledgee to: (i) store, deposit and safeguard the Pledged Property,
(ii) perform any and all other acts which Pledgee in good faith deems reasonable and/or necessary
for the protection and preservation of the Pledged Property or its value or Pledgee’s security
interest therein, including, without limitation, transferring, registering or arranging for the
transfer or registration of the Pledged Property to or in Pledgee’s own name and receiving the
income therefrom as additional security for the Obligations and (iii) pay any charges or expenses which Pledgee deems necessary for the
foregoing purpose, but without any obligation to do so. Any obligation of Pledgee for reasonable
care for the Pledged Property in Pledgee’s possession shall be limited to the same degree of care
which Pledgee uses for similar property pledged to Pledgee by other persons.

 

 

     (f) If Pledgor shall become entitled to receive or acquire, or shall receive any stock
certificate, or option or right with respect to the stock of Issuer (including without limitation,
any certificate representing a dividend or a distribution or exchange of or in connection with
reclassification of the Pledged Securities) whether as an addition to, in substitution of, or in
exchange for any of the Pledged Property or otherwise, Pledgor agrees to accept same as Pledgee’s
agent, to hold same in trust for Pledgee and to deliver same forthwith to Pledgee or Pledgee’s
agent or bailee in the form received, with the endorsement(s) of Pledgor where necessary and/or
appropriate powers and/or assignments duly executed to be held by Pledgee or Pledgee’s agent or
bailee subject to the terms hereof, as further security for the Obligations.

     (g) Pledgor shall not, without the prior consent of Pledgee, directly or indirectly, sell,
assign, transfer, or otherwise dispose of, or grant any option with respect to the Pledged
Property, nor shall Pledgor create, incur or permit any further pledge, hypothecation, encumbrance,
lien, mortgage or security interest with respect to the Pledged Property.

     (h) So long as no Event of Default (as hereinafter defined) has occurred and is continuing,
Pledgor shall have the right to vote and exercise all corporate rights with respect to the Pledged
Securities, except as expressly prohibited herein, and to receive any cash dividends payable in
respect of the Pledged Securities.

     (i) Pledgor shall not permit Issuer, directly or indirectly, to issue, sell, grant, assign,
transfer or otherwise dispose of, any additional shares of capital stock of Issuer or any option or
warrant with respect to, or other right or security convertible into, any additional shares of
capital stock of Issuer, now or hereafter authorized, unless all such additional shares, options,
warrants, rights or other such securities are made and shall remain part of the Pledged Property
subject to the pledge and security interest granted herein.

     (j) Pledgor shall pay all charges and assessments of any nature against the Pledged Property
or with respect thereto prior to said charges and/or assessments being delinquent.

     (k) Pledgor shall promptly reimburse Pledgee on demand, together with interest at the rate
then applicable to the Obligations set forth in the Loan Agreement, for any charges, assessments or
expenses paid or incurred by Pledgee in its discretion for the protection, preservation and
maintenance of the Pledged Property and the enforcement of Pledgee’s rights hereunder, including,
without limitation, attorneys’ fees and legal expenses incurred by Pledgee in seeking to protect,
collect or enforce its rights in the Pledged Property or otherwise hereunder.

     (l) Pledgor shall furnish, or cause to be furnished, to Pledgee such information concerning
Issuer and the Pledged Property as Pledgee may from time to time reasonably request in good faith,
including, without limitation, current financial statements.

     (m) Pledgee may notify Issuer or the appropriate transfer agent of the Pledged Securities to
register the security interest and pledge granted herein and honor the rights of Pledgee with
respect thereto.

     (n) Pledgor waives: (i) all rights to require Pledgee to proceed against any other person,
entity or collateral or to exercise any remedy, (ii) the defense of the statute of limitations in
any action upon any of the Obligations, (iii) any right of subrogation or interest in the
Obligations or Pledged Property until all Obligations have been paid in full, (iv) any rights to
notice of any kind or nature whatsoever, unless specifically required in this Pledge Agreement or
non-waivable under any applicable law, and (v) to the

 

 

extent permissible, its rights under Section 9-112 and 9-207 of the Uniform Commercial Code. Pledgor agrees that the Pledged Property, other
collateral, or any other guarantor or endorser may be released, substituted or added with respect
to the Obligations, in whole or in part, without releasing or otherwise affecting the liability of
Pledgor, the pledge and security interests granted hereunder, or this Pledge Agreement. Pledgee is
entitled to all of the benefits of a secured party set forth in Section 9-207 of the New York
Uniform Commercial Code.

	 	4.	 	EVENTS OF DEFAULT

     All Obligations shall become immediately due and payable, without notice or demand, at the
option of Pledgee, upon the occurrence of any Event of Default, as such term is defined in the Loan
Agreement (each an “Event of Default” hereunder).

	 	5.	 	RIGHTS AND REMEDIES

     At any time an Event of Default exists or has occurred and is continuing, in addition to all
other rights and remedies of Pledgee, whether provided under this Pledge Agreement, the Loan
Agreement, the other Financing Agreements, applicable law or otherwise, Pledgee shall have the
following rights and remedies which may be exercised without notice to, or consent by, Pledgor
except as such notice or consent is expressly provided for hereunder:

     (a) Pledgee, at its option, shall be empowered to exercise its continuing right to instruct
the Issuer (or the appropriate transfer agent of the Pledged Securities) to register any or all of
the Pledged Securities in the name of Pledgee or in the name of Pledgee’s nominee and Pledgee may
complete, in any manner Pledgee may deem expedient, any and all stock powers, assignments or other
documents heretofore or hereafter executed in blank by Pledgor and delivered to Pledgee. After
said instruction, and without further notice, Pledgee shall have the exclusive right to exercise
all voting and corporate rights with respect to the Pledged Securities and other Pledged Property,
and exercise any and all rights of conversion, redemption, exchange, subscription or any other
rights, privileges, or options pertaining to any shares of the Pledged Securities or other Pledged
Property as if Pledgee were the absolute owner thereof, including, without limitation, the right to
exchange, in its discretion, any and all of the Pledged Securities and other Pledged Property upon
any merger, consolidation, reorganization, recapitalization or other readjustment with respect
thereto. Upon the exercise of any such rights, privileges or options by Pledgee, Pledgee shall
have the right to deposit and deliver any and all of the Pledged Securities and other Pledged
Property to any committee, depository, transfer agent, registrar or other designated agency upon
such terms and conditions as Pledgee may determine, all without liability, except to account for
property actually received by Pledgee. However, Pledgee shall have no duty to exercise any of the
aforesaid rights, privileges or options (all of which are exercisable in the sole discretion of
Pledgee) and shall not be responsible for any failure to do so or delay in doing so.

     (b) In addition to all the rights and remedies of a secured party under the Uniform
Commercial Code or other applicable law, Pledgee shall have the right, at any time and without
demand of performance or other demand, advertisement or notice of any kind (except the notice
specified below of time and place of public or private sale) to or upon Pledgor or any other person
(all and each of which demands, advertisements and/or notices are hereby expressly waived to the
extent permitted by applicable
law), to proceed forthwith to collect, redeem, recover, receive, appropriate, realize, sell, or
otherwise dispose of and deliver said Pledged Property or any part thereof in one or more lots at
public or private sale or sales at any exchange, broker’s board or at any of Pledgee’s offices or
elsewhere at such prices and on such terms as Pledgee may deem best. The foregoing disposition(s)
may be for cash or on credit or for future delivery without assumption of any credit risk, with
Pledgee having the right to purchase all or any

 

 

part of said Pledged Property so sold at any such sale or sales, public or private, free of any right or equity of redemption in Pledgor, which right
or equity is hereby expressly waived or released by Pledgor. The proceeds of any such collection,
redemption, recovery, receipt, appropriation, realization, sale or other disposition, after
deducting all costs and expenses of every kind incurred relative thereto or incidental to the care,
safekeeping or otherwise of any and all Pledged Property or in any way relating to the rights of
Pledgee hereunder, including attorneys’ fees and legal expenses, shall be applied first to the
satisfaction of the Obligations (in such order as Pledgee may elect and whether or not due) and
then to the payment of any other amounts required by applicable law, including Section 9-504(1)(c)
of the Uniform Commercial Code, with Pledgor to be and remain liable for any deficiency. Pledgor
shall be liable to Pledgee for the payment on demand of all such costs and expenses, together with
interest at the then applicable rate set forth in the Loan Agreement, and any attorneys’ fees and
legal expenses. Pledgor agrees that five (5) days prior written notice by Pledgee designating the
place and time of any public sale or of the time after which any private sale or other intended
disposition of any or all of the Pledged Property is to be made, is reasonable notification of such
matters.

     (c) Pledgor recognizes that Pledgee may be unable to effect a public sale of all or part of
the Pledged Property by reason of certain prohibitions contained in the Securities Act of 1933, as
amended, as now or hereafter in effect or in applicable Blue Sky or other state securities law, as
now or hereafter in effect, but may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things, to acquire such
Pledged Property for their own account for investment and not with a view to the distribution or
resale thereof. If at the time of any sale of the Pledged Property or any part thereof, the same
shall not, for any reason whatsoever, be effectively registered (if required) under the Securities
Act of 1933 (or other applicable state securities law), as then in effect, Pledgee in its sole and
absolute discretion is authorized to sell such Pledged Property or such part thereof by private
sale in such manner and under such circumstances as Pledgee or its counsel may deem necessary or
advisable in order that such sale may legally be effected without registration. Pledgor agrees
that private sales so made may be at prices and other terms less favorable to the seller than if
such Pledged Property were sold at public sale, and that Pledgee has no obligation to delay the
sale of any such Pledged Property for the period of time necessary to permit Issuer, even if Issuer
would agree, to register such Pledged Property for public sale under such applicable securities
laws. Pledgor agrees that any private sales made under the foregoing circumstances shall be deemed
to have been in a commercially reasonable manner.

     (d) All of the Pledgee’s rights and remedies, including, but not limited to, the foregoing
and those otherwise arising under this Pledge Agreement, the Loan Agreement and the other Financing
Agreements, the instruments comprising the Pledged Property, applicable law or otherwise, shall be
cumulative and not exclusive and shall be enforceable alternatively, successively or concurrently
as Pledgee may deem expedient. No failure or delay on the part of Pledgee in exercising any of its
options, powers or rights or partial or single exercise thereof, shall constitute a waiver of such
option, power or right.

	 	6.	 	JURY TRIAL WAIVER; OTHER WAIVERS

AND CONSENTS; GOVERNING LAW

     (a) The validity, interpretation and enforcement of this Pledge Agreement and the other
Financing Agreements and any dispute arising out of the relationship between the parties hereto,
whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State
of California (without giving effect to principles of conflicts of law).

 

 

     (b) Pledgor irrevocably consents and submits to the non-exclusive jurisdiction of the
California State Courts located in the District of California and the United States District Court
for the Southern District of California and waives any objection based on venue or forum
non conveniens with respect to any action instituted therein arising under this
Pledge Agreement or any of the other Financing Agreements or in any way connected with or related
or incidental to the dealings of the parties hereto in respect of this Pledge Agreement or any of
the other Financing Agreements or the transactions related hereto or thereto, in each case whether
now existing or hereafter arising, and whether in contract, tort, equity or otherwise, and agrees
that any dispute with respect to any such matters shall be heard only in the courts described above
(except that Pledgee shall have the right to bring any action or proceeding against Pledgor or its
property in the courts of any other jurisdiction which Pledgee deems necessary or appropriate in
order to realize on the Pledged Property or to otherwise enforce its rights against Pledgor or its
property).

     (c) Pledgor hereby waives personal service of any and all process upon it and consents that
all such service of process may be made by certified mail (return receipt requested) directed to
its address set forth herein and service so made shall be deemed to be completed five (5) days
after the same shall have been so deposited in the U.S. mails, or, at Pledgee’s option, by service
upon Pledgor in any other manner provided under the rules of any such courts. Within thirty (30)
days after such service, Pledgor shall appear in answer to such process, failing which Pledgor
shall be deemed in default and judgment may be entered by Pledgee against Pledgor for the amount of
the claim and other relief requested.

     (d) PLEDGOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (i) ARISING UNDER THIS PLEDGE AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF PLEDGOR AND PLEDGEE IN RESPECT
OF THIS PLEDGE AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED
HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT,
TORT, EQUITY OR OTHERWISE. PLEDGOR HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT PLEDGOR OR PLEDGEE MAY
FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS PLEDGE AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE
OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     (e) Pledgee shall not have any liability to Pledgor (whether in tort, contract, equity or
otherwise) for losses suffered by Pledgor in connection with, arising out of, or in any way related
to the transactions or relationships contemplated by this Pledge Agreement, or any act, omission or
event occurring in connection herewith, unless it is determined by a final and non-appealable
judgment or court order binding on Pledgee, that the losses were the result of acts or omissions
constituting gross negligence or willful misconduct. In any such litigation, Pledgee shall be
entitled to the benefit of the rebuttable presumption that it acted in good faith and with the
exercise of ordinary care in the performance by it of the terms of this Pledge Agreement.

	 	7.	 	MISCELLANEOUS

     (a) Pledgor agrees that at any time and from time to time upon the written request of
Pledgee, Pledgor shall execute and deliver such further documents, including, but not limited to,
irrevocable proxies or stock powers, in form satisfactory to counsel for Pledgee, and will take or
cause to be taken such further acts as Pledgee may request in order to effect the purposes of this
Pledge Agreement and

 

 

perfect or continue the perfection of the security interest in the Pledged
Property granted to Pledgee hereunder.

     (b) Beyond the exercise of reasonable care to assure the safe custody of the Pledged Property
(whether such custody is exercised by Pledgee, or Pledgee’s nominee, agent or bailee) Pledgee or
Pledgee’s nominee agent or bailee shall have no duty or liability to protect or preserve any rights
pertaining thereto and shall be relieved of all responsibility for the Pledged Property upon
surrendering it to Pledgor or foreclosure with respect thereto.

     (c) All notices, requests and demands to or upon the respective parties hereto shall be in
writing and shall be deemed to have been duly given or made: if delivered in person, immediately
upon delivery; if by telex, telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service with instructions to
deliver the next business day, one (1) business day after sending; and if by registered or
certified mail, return receipt requested, five (5) days after mailing. All notices, requests and
demands upon the parties are to be given to the following addresses (or to such other address as
any party may designate by notice in accordance with this Section):

	 	 	 	 	 
	 
	 	If to Pledgor:	 	7480 Mission Valley Road, Suite 101
	 
	 	 	 	San Diego, California
	 
	 	 	 	92108
	 
	 	 	 	Attention: Whitney Peterson
	 
	 	 	 	Telephone No.:                     
	 
	 	 	 	Telecopy No.: (619) 683-9829
	 
	 	 	 	 
	 
	 	If to Pledgee:	 	Wachovia Capital Finance Corporation (Central)
	 
	 	 	 	150 South Wacker Drive, Suite 2200
	 
	 	 	 	Chicago, Illinois 60606-4202
	 
	 	 	 	Attention:  Portfolio Manager

     (d) All references to the plural herein shall also mean the singular and to the singular
shall also mean the plural. All references to Pledgor, Pledgee and Issuer pursuant to the
definitions set forth in the recitals hereto, or to any other person herein, shall include their
respective successors and assigns. The words “hereof,” “herein,” “hereunder,” “this Pledge
Agreement” and words of similar import when used in this Pledge Agreement shall refer to this
Pledge Agreement as a whole and not any particular provision of this Pledge Agreement and as this
Pledge Agreement now exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced. An Event of Default shall exist or continue or be continuing until such
Event of Default is waived in accordance with Section 7(g) hereof. All references to the term
“Person” or “Persons” herein shall mean any individual, sole proprietorship, partnership,
corporation (including, without limitation, any corporation which elects subchapter S status under
the Internal Revenue Code of 1986, as amended), limited liability corporation, limited liability
participation, business trust, unincorporated association, joint stock company, trust, joint
venture or other entity or any government or any agency, instrumentality or political subdivision
thereof.

     (e) This Pledge Agreement, the other Financing Agreements and any other document referred to
herein or therein shall be binding upon Pledgor and its successors and assigns and inure to the
benefit of and be enforceable by Pledgee and its successors and assigns.

     (f) If any provision of this Pledge Agreement is held to be invalid or unenforceable, such
invalidity or unenforceability shall not invalidate this Pledge Agreement as a whole, but this
Pledge Agreement shall be construed as though it did not contain the particular provision held to
be invalid or

 

 

unenforceable and the rights and obligations of the parties shall be construed and
enforced only to such extent as shall be permitted by applicable law.

     (g) Neither this Pledge Agreement nor any provision hereof shall be amended, modified, waived
or discharged orally or by course of conduct, but only by a written agreement signed by an
authorized officer of Pledgee. Pledgee shall not, by any act, delay, omission or otherwise be
deemed to have expressly or impliedly waived any of its rights, powers and/or remedies unless such
waiver shall be in writing and signed by an authorized officer of Pledgee. Any such waiver shall
be enforceable only to the extent specifically set forth therein. A waiver by Pledgee of any
right, power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any
such right, power and/or remedy which Pledgee would otherwise have on any future occasion, whether
similar in kind or otherwise.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

     IN WITNESS WHEREOF, Pledgor has executed this Pledge Agreement as of the day and year first
above written.

	 	 	 	 	 
	 	WINKLER ATLANTIC HOLDINGS LIMITED

 	 
	 	/s/ Stewart Halpern
 	 
	 	Name:  	Stewart Halpern 	 
	 	Title:  	Chief Financial Officer 	 
	 

 

 

EXHIBIT A

TO

PLEDGE AND SECURITY AGREEMENT

	 	 	 	 	 	 	 	 	 
	Issuer	 	 	Certificate No.	 	 	Shares

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]