Document:

exv10w22

Exhibit 10.22

Third Amended and Restated Loan Agreement

between

WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL)

as Lender and US Collateral Agent

and

MAD CATZ, INC.

as Borrower

and

THE OBLIGORS NAMED HEREIN

as Obligors

June 23, 2009

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	SECTION 1 DEFINITIONS
	 	 	2	 
	1.1 “Acceptable Liquidation Agreement”
	 	 	3	 
	1.2 “Accounts”
	 	 	3	 
	1.3 “Acquisition”
	 	 	3	 
	1.4 “Adjusted Libor Rate”
	 	 	3	 
	1.5 “Agent”
	 	 	4	 
	1.6 “Amendment to Consideration Loan Note Instrument and Promissory Note”
	 	 	4	 
	1.7 “Approved In-Transit Inventory”
	 	 	4	 
	1.8 “Availability Reserves”
	 	 	4	 
	1.9 “Bankruptcy Code”
	 	 	4	 
	1.10 “Blocked Accounts”
	 	 	4	 
	1.11 “Borrower General Security Agreement”
	 	 	5	 
	1.12 “Business Day”
	 	 	5	 
	1.13 “Canadian Collateral Agent”
	 	 	5	 
	1.14 “Code”
	 	 	5	 
	1.15 “Collateral”
	 	 	5	 
	1.16 “Completion Note”
	 	 	5	 
	1.17 “Consideration Loan Note Instrument”
	 	 	5	 
	1.18 “Default”
	 	 	6	 
	1.19 “EBITDA”
	 	 	6	 
	1.20 “Eligible Accounts”
	 	 	6	 
	1.21 “Eligible Inventory”
	 	 	8	 
	1.22 “EMU Legislation”
	 	 	9	 
	1.23 “Environmental Laws”
	 	 	9	 
	1.24 “Equipment”
	 	 	9	 
	1.25 “ERISA”
	 	 	9	 
	1.26 “ERISA Affiliate”
	 	 	9	 
	1.27 “Euro”
	 	 	9	 
	1.28 “Event of Default”
	 	 	9	 
	1.29 “Excess Availability”
	 	 	10	 
	1.30 “Financing Agreements”
	 	 	10	 
	1.31 “Fiscal Quarter”
	 	 	10	 
	1.32 “Fixed Charge Coverage Ratio”
	 	 	10	 
	1.33 “Funding Bank”
	 	 	11	 
	1.34 “GAAP”
	 	 	11	 
	1.35 “Gameshark Software”
	 	 	11	 
	1.36 “Governmental Authority”
	 	 	11	 
	1.37 “Hazardous Materials”
	 	 	11	 
	1.38 “High Selling Period”
	 	 	12	 
	1.39 “HK Hive Up Deed”
	 	 	12	 

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

- ii -

	 	 	 	 	 
	 	 	Page
	1.40 “Inactive Subsidiaries”
	 	 	12	 
	1.41 “Information Certificates”
	 	 	12	 
	1.42 “Intellectual Property”
	 	 	12	 
	1.43 “Intellectual Property Security Agreements”
	 	 	12	 
	1.44 “Intercreditor Agreement”
	 	 	13	 
	1.45 “Interest Period”
	 	 	13	 
	1.46 “Interest Rate”
	 	 	13	 
	1.47 “Inventory”
	 	 	14	 
	1.48 “Letter of Credit Accommodations”
	 	 	14	 
	1.49 “Libor Rate”
	 	 	14	 
	1.50 “Libor Rate Loans”
	 	 	14	 
	1.51 “License Agreements”
	 	 	14	 
	1.52 “Lien”
	 	 	14	 
	1.53 “Low Selling Period”
	 	 	15	 
	1.54 “Material Adverse Change”
	 	 	15	 
	1.55 “Material Adverse Effect”
	 	 	15	 
	1.56 “Maximum Credit”
	 	 	15	 
	1.57 “Maximum Letter of Credit Facility”
	 	 	15	 
	1.58 “MCC”
	 	 	15	 
	1.59 “MCE”
	 	 	15	 
	1.60 “MCII”
	 	 	15	 
	1.61 “MCIA”
	 	 	16	 
	1.62 “Merger”
	 	 	16	 
	1.63 “Net Amount of Eligible Accounts”
	 	 	16	 
	1.64 “Net Orderly Liquidation Value”
	 	 	16	 
	1.65 “Obligations”
	 	 	16	 
	1.66 “Obligor”
	 	 	17	 
	1.67 “Participating Member State”
	 	 	17	 
	1.68 “Payment Account”
	 	 	17	 
	1.69 “Permitted Inter-Company Debt”
	 	 	17	 
	1.70 “Person”
	 	 	17	 
	1.71 “Pounds Sterling”
	 	 	17	 
	1.72 “PPSA”
	 	 	17	 
	1.73 “Prime Rate”
	 	 	18	 
	1.74 “Prime Rate Loans”
	 	 	18	 
	1.75 “Priority Payables Reserve”
	 	 	18	 
	1.76 “Records”
	 	 	18	 
	1.77 “Revolving Loans”
	 	 	18	 
	1.78 “Royalty Reserve”
	 	 	18	 
	1.79 “Royalty Reserve Report”
	 	 	19	 
	1.80 “Saitek HK”
	 	 	19	 
	1.81 “Secured Parties”
	 	 	19	 
	1.82 “Software”
	 	 	19	 
	1.83 “Software Inventory”
	 	 	19	 
	1.84 “Solvent”
	 	 	19	 
	1.85 “Swap Agreement”
	 	 	20	 

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

- iii -

	 	 	 	 	 
	 	 	Page
	1.86 “Termination Date”
	 	 	20	 
	1.87 “Testing Period”
	 	 	20	 
	1.88 “UCC”
	 	 	20	 
	1.89 “UK Hive Up Agreement”
	 	 	20	 
	1.90 “United Kingdom”
	 	 	20	 
	1.91 “US Collateral Agent”
	 	 	20	 
	1.92 “US Reference Bank”
	 	 	20	 
	1.93 “Value”
	 	 	21	 
	1.94 “WAHL”
	 	 	21	 
	 
	 	 	 	 
	SECTION 2 CREDIT FACILITIES
	 	 	21	 
	2.1 Revolving Loans
	 	 	21	 
	2.2 Letter of Credit Accommodations
	 	 	23	 
	2.3 Availability Reserves
	 	 	25	 
	 
	 	 	 	 
	SECTION 3 INTEREST AND FEES
	 	 	25	 
	3.1 Interest
	 	 	25	 
	3.2 Intentionally Deleted
	 	 	27	 
	3.3 Closing Fee
	 	 	27	 
	3.4 Servicing Fee
	 	 	27	 
	3.5 Unused Line Fee
	 	 	27	 
	3.6 Currency of Payments
	 	 	27	 
	3.7 Increased Costs and Changes in Law
	 	 	27	 
	 
	 	 	 	 
	SECTION 4 CONDITIONS PRECEDENT
	 	 	30	 
	4.1 Conditions Precedent to Revolving Loans and Letter of Credit
Accommodations
	 	 	30	 
	 
	 	 	 	 
	SECTION 5 COLLECTION AND ADMINISTRATION
	 	 	30	 
	5.1 Borrower’s Loan Account
	 	 	30	 
	5.2 Statements
	 	 	31	 
	5.3 Collection of Accounts
	 	 	31	 
	5.4 Payments
	 	 	32	 
	5.5 Authorization to Make Revolving Loans
	 	 	33	 
	5.6 Use of Proceeds
	 	 	33	 
	 
	 	 	 	 
	SECTION 6 COLLATERAL REPORTING AND COVENANTS
	 	 	33	 
	6.1 Collateral Reporting
	 	 	33	 
	6.2 Accounts Covenants
	 	 	34	 
	6.3 Inventory Covenants
	 	 	35	 
	6.4 Equipment Covenants
	 	 	36	 
	6.5 Power of Attorney
	 	 	36	 
	6.6 Right to Cure
	 	 	37	 
	6.7 Access to Premises
	 	 	38	 
	 
	 	 	 	 
	SECTION 7 REPRESENTATIONS AND WARRANTIES
	 	 	38	 
	7.1 Corporate Existence, Power and Authority; Subsidiaries
	 	 	38	 

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

- iv -

	 	 	 	 	 
	 	 	Page
	7.2 Financial Statements; No Material Adverse Change
	 	 	39	 
	7.3 Chief Executive Office; Collateral Locations
	 	 	39	 
	7.4 Priority of Liens; Title to Properties
	 	 	39	 
	7.5 Tax Returns
	 	 	39	 
	7.6 Litigation
	 	 	40	 
	7.7 Compliance with Other Agreements and Applicable Laws
	 	 	40	 
	7.8 Bank Accounts
	 	 	40	 
	7.9 Accuracy and Completeness of Information
	 	 	40	 
	7.10 Employee Benefits
	 	 	41	 
	7.11 Environmental Compliance
	 	 	41	 
	7.12 Survival of Warranties; Cumulative
	 	 	42	 
	7.13 Inactive Subsidiaries
	 	 	42	 
	7.14 Intellectual Property
	 	 	42	 
	7.15 Solvent
	 	 	43	 
	7.16 Transfer of Assets of Saitek HK
	 	 	43	 
	7.17 Transfer of Assets of Saitek PLC
	 	 	43	 
	 
	 	 	 	 
	SECTION 8 AFFIRMATIVE AND NEGATIVE COVENANTS
	 	 	44	 
	8.1 Maintenance of Existence
	 	 	44	 
	8.2 New Collateral Locations
	 	 	44	 
	8.3 Compliance with Laws, Regulations, Etc.
	 	 	44	 
	8.4 Payment of Taxes and Claims
	 	 	46	 
	8.5 Insurance
	 	 	46	 
	8.6 Financial Statements and Other Information
	 	 	46	 
	8.7 Sale of Assets, Consolidation, Merger, Amalgamation, Dissolution, Etc.
	 	 	49	 
	8.8 Encumbrances
	 	 	49	 
	8.9 Indebtedness
	 	 	50	 
	8.10 Loans, Investments, Guarantees, Etc.
	 	 	51	 
	8.11 Dividends and Redemptions
	 	 	52	 
	8.12 Transactions with Affiliates
	 	 	52	 
	8.13 Fixed Charge Coverage Ratio
	 	 	53	 
	8.14 Intellectual Property
	 	 	53	 
	8.15 Additional Bank Accounts
	 	 	53	 
	8.16 Compliance with ERISA
	 	 	53	 
	8.17 Costs and Expenses
	 	 	54	 
	8.18 Further Assurances
	 	 	55	 
	8.19 Change of Control
	 	 	55	 
	8.20 Software Expenditures
	 	 	55	 
	8.21 Inactive Subsidiaries
	 	 	55	 
	8.22 Corporate Structure Chart
	 	 	55	 
	8.23 Swap Agreements
	 	 	56	 
	 
	 	 	 	 
	SECTION 9 EVENTS OF DEFAULTS AND REMEDIES
	 	 	56	 
	9.1 Events of Default
	 	 	56	 
	9.2 Remedies
	 	 	58	 

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

- v -

	 	 	 	 	 
	 	 	Page
	SECTION 10 JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
	 	 	60	 
	10.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver
	 	 	60	 
	10.2 Waiver of Notices
	 	 	62	 
	10.3 Amendments and Waivers
	 	 	62	 
	10.4 Waiver of Counterclaims
	 	 	62	 
	10.5 Indemnification
	 	 	62	 
	 
	 	 	 	 
	SECTION 11 TERM OF AGREEMENT; MISCELLANEOUS
	 	 	63	 
	11.1 Term
	 	 	63	 
	11.2 Notices
	 	 	64	 
	11.3 Partial Invalidity
	 	 	64	 
	11.4 Successors
	 	 	64	 
	11.5 Entire Agreement
	 	 	65	 
	11.6 Headings
	 	 	65	 
	11.7 Judgment Currency
	 	 	65	 
	11.8 Amended and Restatement; No Novation
	 	 	65	 
	11.9 Confirmation of Existing Security and Existing Security held for Obligations
	 	 	66	 

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

INDEX TO EXHIBITS AND SCHEDULES

	 	 	 
	Exhibit A

	 	Fixed Charge Coverage Ratio
	 
	 	 
	Exhibit B

	 	Information Certificates of Borrower and Obligors
	 
	 	 
	Exhibit C

	 	Closing Checklist
	 
	 	 
	Exhibit D

	 	Corporate Structure Chart
	 
	 	 
	Schedule 7.4

	 	Existing Liens
	 
	 	 
	Schedule 7.7

	 	Non-Compliance with Agreements
	 
	 	 
	Schedule 7.8

	 	Bank Accounts
	 
	 	 
	Schedule 7.14

	 	License Agreements and Material Intellectual Property
	 
	 	 
	Schedule 7.16

	 	MCIA Fixed Assets
	 
	 	 
	Schedule 8.6(g)

	 	Form of Compliance Certificate
	 
	 	 
	Schedule 8.9

	 	Existing Indebtedness
	 
	 	 
	Schedule 8.10

	 	Existing Loans, Advances and Guarantees

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

THIRD AMENDED AND RESTATED LOAN AGREEMENT

          This Third Amended and Restated Loan Agreement dated as of June 23, 2009 (this “Agreement”) is
entered into by and between Wachovia Capital Finance Corporation (Central), formerly known as
Congress Financial Corporation (Central), an Illinois corporation (as lender, “Lender”; and as US
collateral agent for and on behalf of the Secured Parties, “US Collateral Agent”), Mad Catz, Inc.,
a Delaware corporation (“Borrower”), and the Obligors signatories to this Agreement.

W I T N E S S E T H:

          WHEREAS Lender entered into certain financing arrangements with Borrower pursuant to which
Lender made loans and provided other financial accommodations to Borrower on the terms and
conditions set forth in a loan agreement dated September 25, 2000 (the “Original Loan Agreement”)
made between Lender, US Collateral Agent and Borrower;

          AND WHEREAS Lender, US Collateral Agent and Borrower amended the Original Loan Agreement and,
for ease of reference, restated such amended Original Loan Agreement in a first amended and
restated loan agreement dated September 5, 2001 (the “First Amended and Restated Loan Agreement”)
between Lender, US Collateral Agent and Borrower;

          AND WHEREAS Lender, US Collateral Agent and Borrower amended or extended, as the case may be,
the First Amended and Restated Loan Agreement pursuant to:

	 	(a)	 	an amending agreement dated June 18, 2002;
	 
	 	(b)	 	a second amending agreement dated January 22, 2003;
	 
	 	(c)	 	a renewal/extension letter dated July 23, 2003;
	 
	 	(d)	 	an acknowledgment letter dated September 22, 2003;
	 
	 	(e)	 	a renewal/extension letter dated July 27, 2004;
	 
	 	(f)	 	an amending and extension letter dated August 31, 2005;
	 
	 	(g)	 	a third amending agreement dated August 9, 2006;
	 
	 	(h)	 	an extension letter dated September 20, 2006;
	 
	 	(i)	 	an extension letter dated September 28, 2006; and
	 
	 	(j)	 	an extension letter dated October 16, 2006,

(the foregoing amendments and extensions together with the First Amended and Restated Loan
Agreement, the “Amended First Amended and Restated Loan Agreement”);

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 - 2 - 

          AND WHEREAS Lender, US Collateral Agent and Borrower amended and restated, without novation,
the Amended First Amended and Restated Loan Agreement in a second amended and restated loan
agreement dated October 30, 2006 (as amended in a first amending agreement dated November 20, 2007
and in a letter dated March 18, 2009, the “Second Amended and Restated Loan Agreement”) made
between Lender, US Collateral Agent and Borrower;

          AND WHEREAS pursuant to an agreement of merger dated April 3, 2008 Saitek Industries Ltd. and
Borrower effected the Merger;

          AND WHEREAS Lender, US Collateral Agent, Borrower and Obligors have, without novation, agreed
to amend and restate the Second Amended and Restated Loan Agreement as hereinafter provided;

          AND WHEREAS Lender, US Collateral Agent, Borrower and each Obligor have confirmed to each
other that the security, guarantees and other agreements previously provided by Borrower and each
Obligor in connection with the Original Loan Agreement, the First Amended and Restated Loan
Agreement, the Amended First Amended and Restated Loan Agreement and the Second Amended and
Restated Loan Agreement remain in full force and effect, and continue as security for the
indebtedness and the obligations of Borrower and each Obligor to Lender under this Agreement and
the other Financing Agreements;

          NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

SECTION 1 DEFINITIONS

          All terms used herein which are defined in Article 1 or Article 9 of the UCC
shall have the meanings given therein unless otherwise defined in this Agreement. All references
to the plural herein shall also mean the singular and to the singular shall also mean the plural
unless the context otherwise requires. All references to Borrower, Lender and Agents 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
Agreement” and words of similar import when used in this Agreement shall refer to this Agreement as
a whole and not any particular provision of this Agreement and as this Agreement now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. The word
“including” when used in this Agreement shall mean “including, without limitation”. References
herein to any statute or any provision thereof include such statute or provision as amended,
revised, re-enacted, and/or consolidated from time to time and any successor statute thereto
together with all rules, regulations and interpretations thereunder or related thereto. An Event
of Default shall exist or continue or be continuing until such Event of Default is waived in
accordance with Section 10.3 hereof or is cured in a manner satisfactory to Lender, if such
Event of Default is capable of being cured as determined by Lender. Any accounting term used
herein unless otherwise defined in this Agreement shall have the meanings customarily given to such
term in accordance with GAAP. The term “US Dollars” and the sign

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 - 3 - 

“$” mean lawful money of the United States of America. The term “Canadian Dollars” and the
sign “CDN$” mean lawful money of Canada. For purposes of this Agreement, the following terms shall
have the respective meanings given to them below:

1.1 “Acceptable Liquidation Agreement”

“Acceptable Liquidation Agreement” shall mean, with respect to any license of Intellectual Property
between Borrower or any Obligor, as licensee, and the licensor of such Intellectual Property which
pertains to any Collateral, (i) an agreement in form and substance satisfactory to Lender or
(ii) an amendment to such license agreement in form and substance satisfactory to Lender, in each
case permitting Lender to exercise its rights under the Financing Agreements with respect to such
Collateral.

1.2 “Accounts”

“Accounts” shall mean all present and future rights of Borrower, MCE and MCC 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.

1.3 “Acquisition”

“Acquisition” shall mean any transaction whereby Borrower will acquire assets, shares or other
equity interests, or a combination thereof, of a business identified by Borrower as a strategic
acquisition target pursuant to terms and conditions acceptable to Lender and in respect of which
Borrower has received the prior written consent of Lender.

1.4 “Adjusted Libor Rate”

“Adjusted Libor Rate” shall mean, with respect to each Interest Period for any Libor Rate Loan, the
rate per annum (rounded upwards, if necessary, to the next one-sixteenth (1/16th) of one
percent (1%)) determined by dividing:

	 	(a)	 	the Libor Rate for such Interest Period by:
	 
	 	(b)	 	a fraction equal to:

	 	(i)	 	one (1); minus
	 
	 	(ii)	 	the Reserve Percentage.

For purposes hereof, “Reserve Percentage” shall mean the reserve percentage, expressed as a
decimal, prescribed by any United States or foreign banking authority for determining the reserve
requirement which is or would be applicable to deposits of US Dollars in a non-United States or an
international banking office of the US Reference Bank, used to fund a Libor Rate Loan or any Libor
Rate Loan made with the proceeds of such deposit, whether or not the US Reference Bank actually
holds or has made any such deposits or loans. The Adjusted Libor Rate shall be adjusted on and as
of the effective day of any change in the Reserve Percentage.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 - 4 - 

1.5 “Agent”

“Agent” shall collectively mean Canadian Collateral Agent and US Collateral Agent.

1.6 “Amendment to Consideration Loan Note Instrument and Promissory Note”

“Amendment to Consideration Loan Note Instrument and Promissory Note” shall mean the amendment to
consideration loan note instrument and promissory note dated June 23, 2009 between MCII and Guymont
Services SA as trustee of The Winkler Atlantic Trust.

1.7 “Approved In-Transit Inventory”

“Approved In-Transit Inventory” shall mean Inventory that is owned and insured by Borrower or MCE
and is in transit from and is under the control of MCIA to premises located in North America or
Europe that are owned or controlled by Borrower and in respect of which Lender has received
sufficient documentation, including bills of lading and shipping contracts, in each case assigned
to Lender, to confirm the foregoing; provided that the maximum value of such
Inventory that is Eligible Inventory does not exceed $6,000,000 at any time during the High Selling
Period and does not exceed $4,000,000 at any time during the Low Selling Period.

1.8 “Availability Reserves”

“Availability Reserves” shall mean, as of any date of determination, the Royalty Reserve and such
amounts as Lender may from time to time establish and revise reducing the amount of Revolving Loans
and Letter of Credit Accommodations which would otherwise be available to Borrower under the
lending formula(s) provided for herein: (a) to reflect events, conditions, contingencies or risks
(including anticipated seasonal variations in dilution of Accounts) which, as determined by Lender,
do or may affect either (i) the Collateral or any other property which is security for the
Obligations or its value, (ii) the assets, business or prospects of Borrower or any Obligor or
(iii) the Liens and other rights of Lender and/or Agents in the Collateral (including the
enforceability, perfection and priority thereof) or (b) to reflect Lender’s belief that any
collateral report or financial information furnished by or on behalf of Borrower or any Obligor to
Lender is or may have been incomplete, inaccurate or misleading in any material respect or (c) to
reflect outstanding Letter of Credit Accommodations as provided in Section 2.2 hereof or
(d) in respect of any state of facts which Lender determines constitutes an Event of Default or
may, with notice or passage of time or both, constitute an Event of Default (including rents or
other payments due and unpaid or which Lender reasonably expects will not be paid when due) or (e)
to reflect Lender’s estimate of the amount of any Priority Payables Reserve.

1.9 “Bankruptcy Code”

“Bankruptcy Code” shall mean the United States Bankruptcy Code (11 U.S.C. § 101, et seq.).

1.10 “Blocked Accounts”

“Blocked Accounts” shall have the meaning set forth in Section 5.3 hereof.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 - 5 - 

1.11 “Borrower General Security Agreement”

“Borrower General Security Agreement” shall mean the amended and restated general security
agreement dated November 30, 2001 given by Borrower (and certain U.S. affiliates of Borrower named
therein) in favor of US Collateral Agent in respect of the Obligations, as it now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

1.12 “Business Day”

“Business Day” shall mean a day (other than a Saturday, Sunday or statutory holiday in Ontario,
Illinois, New York or London) on which Lender’s Chicago and Toronto office, the U.S. Reference
Bank’s main office and banks in New York City, Toronto and London are open for business in the
normal course.

1.13 “Canadian Collateral Agent”

“Canadian Collateral Agent” shall mean Wachovia Capital Finance Corporation (Canada), formerly
known as Congress Financial Corporation (Canada), in its capacity as collateral agent for the
Secured Parties.

1.14 “Code”

“Code” shall mean the Internal Revenue Code of 1986.

1.15 “Collateral”

“Collateral” shall mean, collectively, “Collateral” as such term is defined in the Borrower General
Security Agreement and in the Intellectual Property Security Agreements and all assets and
properties of Borrower and each Obligor in respect of which Lender and/or an Agent is or has been
granted a Lien pursuant to any Financing Agreement.

1.16 “Completion Note”

“Completion Note” shall mean the completion note dated August 1, 2008 issued by MCII in favour of
The Winkler Atlantic Trust in the principal amount of $847,286 as amended by the Amendment to
Consideration Loan Note Instrument and Promissory Note and as hereafter amended, modified,
supplemented, extended, renewed, restated or replaced.

1.17 “Consideration Loan Note Instrument”

“Consideration Loan Note Instrument” shall mean the consideration loan note instrument constituting
$14,500,000 7.5% convertible unsecured loan notes 2010 and certificate no. 1 representing
$14,500,000 nominal amount of loan notes issued thereunder each dated November 20, 2007 made by
MCII in favour of Guymont Services SA as trustee of The Winkler Atlantic Trust as amended by the
Amendment to Consideration Loan Note Instrument and Promissory Note and as hereafter amended,
modified, supplemented, extended, renewed, restated or replaced.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 - 6 - 

1.18 “Default”

“Default” shall mean an event, circumstance or omission which, with any of the giving of notice, a
lapse of time or a failure to remedy the event, circumstance or omission within a lapse of time,
would constitute an Event of Default.

1.19 “EBITDA”

“EBITDA” shall mean, as to any Person, with respect to any period, an amount equal to the net
income or net loss of such Person before interest, taxes, depreciation, amortization, goodwill
impairment and any other non-cash non-operating charges as approved by Lender.

1.20 “Eligible Accounts”

“Eligible Accounts” shall mean Accounts created by Borrower, MCE or MCC 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 or MCC or rendition of services by Borrower, MCE or MCC 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;

     (b) such Accounts are not unpaid more than ninety (90) days after the date of the original
invoice for them and are not unpaid more than sixty (60) days past the due date thereof;

     (c) such Accounts comply with the terms and conditions contained in Section 6.2(c) of
this Agreement;

     (d) such Accounts do not arise from sales on consignment, guaranteed sale, sale and return,
sale on approval, or other terms under which payment by the account debtor may be conditional or
contingent;

     (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 or MCC, 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);

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     (f) such Accounts do not consist of progress billings, bill and hold invoices or retainage
invoices, except as to bill and hold invoices, unless Lender shall have received an agreement in
writing from the account debtor, in form and substance satisfactory to Lender, confirming the
unconditional obligation of the account debtor to take the goods related thereto and pay such
invoice;

     (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 or MCC, as applicable, to
such account debtor or claimed owed by such account debtor may be deemed Eligible Accounts);

     (h) there are no facts, events or occurrences which would impair the validity, enforceability
or collectability of such Accounts or reduce the amount payable or delay payment thereunder;

     (i) such Accounts are subject to the first priority, valid and perfected Lien of Lender and/or
Agents and any goods giving rise thereto are not, and were not at the time of the sale thereof,
subject to any Liens except those permitted in this Agreement;

     (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 or MCC
directly or indirectly by virtue of family membership, ownership, control, management or otherwise;

     (k) the account debtors with respect to such Accounts are not any foreign government, the
United States of America, any State, political subdivision, department, agency or instrumentality
thereof, unless, if the account debtor is the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, upon Lender’s request, the Federal
Assignment of Claims Act of 1940, as amended or any similar State or local law, if applicable, has
been complied with in a manner satisfactory to Lender or a letter of credit has been provided with
respect thereto on terms and conditions satisfactory to Lender;

     (l) there are no proceedings or actions which are threatened or pending against the account
debtors with respect to such Accounts which might result in any material adverse change in any such
account debtor’s financial condition;

     (m) such Accounts of a single account debtor or its affiliates do not constitute more than
twenty-five percent (25%) of all otherwise Eligible Accounts or, with respect to each of Gamestop
and Walmart, such Accounts do not constitute more than forty-five percent (45%) and forty percent
(40%), respectively, or such higher percentage as may be agreed by Lender, of all otherwise
Eligible Accounts or, with respect to such other account debtors as may from time to time be
approved in writing by Lender on a case by case basis, such Accounts do not constitute more than
such percentage in excess of twenty-five percent (25%) as may be agreed by Lender of all otherwise
Eligible Accounts (but in each case the portion of the Accounts not in excess of such percentage
may be deemed Eligible Accounts);

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     (n) such Accounts are not owed by an account debtor who has Accounts unpaid more than ninety
(90) days after the date of the original invoice for them which constitute more than fifty percent
(50%) of the total Accounts of such account debtor;

     (o) such Accounts are owed by account debtors whose total indebtedness to Borrower, MCE or MCC
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

     (p) such Accounts are owed by account debtors deemed creditworthy at all times by Lender, as
determined by Lender.

General criteria for Eligible Accounts may be established and revised from time to time by Lender.
Any Accounts which are not Eligible Accounts shall nevertheless be part of the Collateral and
subject to the Lien of Lender and/or Agents.

1.21 “Eligible Inventory”

“Eligible Inventory” shall mean Inventory consisting of finished goods held for resale in the
ordinary course of the business of Borrower or MCE 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 or
MCE’s business; (f) Inventory at premises which are not owned and controlled by Borrower or MCE,
unless Lender 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 Lender
acknowledging Agents’ first priority Lien in the Inventory, waiving or subordinating Liens by such
person against the Inventory and permitting Lender and/or Agents access to, and the right to remain
on, the premises so as to exercise Lender’s and/or Agents’ 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 Agents 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 Agents 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 and/or Agents to exercise
their rights under this Agreement and the Financing Agreements 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 Agents.

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1.22 “EMU Legislation”

“EMU Legislation” shall mean legislative measures of the Council of European Union for the
introduction of, change over to or operation of the Euro.

1.23 “Environmental Laws”

“Environmental Laws” shall mean with respect to any Person all federal (United States of America
and Canada), state, provincial, district, local, municipal and foreign laws, statutes, rules,
regulations, ordinances, orders, directives, permits, licenses and consent decrees relating to
health, safety, hazardous, dangerous or toxic substances, waste or material, pollution and
environmental matters, as now or at any time hereafter in effect, applicable to such Person and/or
its business and facilities (whether or not owned by it), including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination, chemicals, or hazardous,
toxic or dangerous substances, materials or wastes into the environment (including ambient air,
surface water, ground water, land surface or subsurface strata) or otherwise relating to the
generation, manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals, or hazardous, toxic or dangerous substances,
materials or wastes.

1.24 “Equipment”

“Equipment” shall mean all of Borrower’s now owned and hereafter acquired equipment, machinery,
computers and computer hardware and software (whether owned or licensed), vehicles, tools,
furniture, fixtures, all attachments, accessions and property now or hereafter affixed thereto or
used in connection therewith, and substitutions and replacements thereof, wherever located.

1.25 “ERISA”

“ERISA” shall mean the United States Employee Retirement Income Security Act of 1974.

1.26 “ERISA Affiliate”

“ERISA Affiliate” shall mean any person required to be aggregated with Borrower or any of its
affiliates under Sections 414(b), 414(c), 414(m) or 414(o) of the
Code.

1.27 “Euro”

“Euro” means the single currency to which the Participating Member States of the European Union
have converted.

1.28 “Event of Default”

“Event of Default” shall mean the occurrence or existence of any event or condition described in
Section 9.1 hereof.

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1.29 “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 (excluding
Software Inventory), the Net Orderly Liquidation Value of Eligible Inventory
(excluding Software Inventory), the Value of Software Inventory and the Net
Orderly Liquidation Value of Software Inventory, all 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 and Letter of Credit Accommodations, plus (ii) the aggregate amount of all
due but unpaid tax obligations, and trade payables of Borrower, MCE, MCC and MCII that are past due
more than sixty (60) days.

1.30 “Financing Agreements”

“Financing Agreements” shall mean, collectively, this Agreement, the Borrower General Security
Agreement, the Intellectual Property Security Agreements and all notes, guarantees, security
agreements and other agreements, documents and instruments previously executed or now or at any
time hereafter executed and/or delivered by Borrower or any Obligor in connection with this
Agreement, the Original Loan Agreement, the First Amended and Restated Loan Agreement, the Amended
First Amended and Restated Loan Agreement and the Second Amended and Restated Loan Agreement
excluding any Swap Agreements, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

1.31 “Fiscal Quarter”

“Fiscal Quarter” shall mean any of the following three (3) month periods in any fiscal year of
Borrower: April 1 to June 30, July 1 to September 30, October 1 to December 31 and January 1 to
March 31.

1.32 “Fixed Charge Coverage Ratio”

“Fixed Charge Coverage Ratio” shall mean, with respect to MCII and its subsidiaries on a
consolidated basis for any Testing Period, determined in accordance with GAAP, the quotient of, for
each Testing Period:

     (a) EBITDA minus unfunded capital expenditures minus the sum of taxes paid in the period for
which the test relates and taxes due in the period for which the test relates but which

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have not been paid at the time of the test (less tax refunds in cash received by MCII and its
subsidiaries in the period for which the test relates) minus distributions and dividends;
divided by:

     (b) interest paid and interest due within the period that the test is being done but which has
not been paid at the time of the test plus any principal due, excluding any balance outstanding
under this Agreement.

For the avoidance of doubt, Lender and Borrower agree that the compliance certificate attached
hereto as Exhibit A accurately details the method for calculating the Fixed Charge Coverage
Ratio.

1.33 “Funding Bank”

“Funding Bank” shall have the meaning set forth in Section 3.7 hereof.

1.34 “GAAP”

“GAAP” shall mean generally accepted accounting principles in Canada or the United States of
America, as applicable, as in effect from time to time as set forth in the opinions and
pronouncements of the relevant Canadian or American public and private accounting boards and
institutes which are applicable to the circumstances as of the date of determination consistently
applied.

1.35 “Gameshark Software”

“Gameshark Software” shall mean the video game enhancement software sold by Borrower and certain
Obligors that enables video game players to access and take full advantage of the secret codes,
short cuts, hints and cheats incorporated by video game publishers into their video game offerings.

1.36 “Governmental Authority”

“Governmental Authority” shall mean any government, parliament, legislature, municipal or local
government, or any regulatory authority, agency, commission or board of any government, parliament,
legislature, municipal or local government or any court or (without limitation to the foregoing)
any other law, regulation or rule-making entity (including any central bank, fiscal or monetary
authority regulating banks), having jurisdiction in the relevant circumstances, or any Person
acting under the authority of any of the foregoing (including any arbitrator).

1.37 “Hazardous Materials”

“Hazardous Materials” shall mean any hazardous, toxic or dangerous substances, materials and
wastes, including hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials,
biological substances, polychlorinated biphenyls, pesticides, herbicides and any other kind and/or
type of pollutants or contaminants (including materials which include hazardous constituents),
sewage, sludge, industrial slag, solvents and/or any other similar substances,

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materials, or wastes and including any other substances, materials or wastes that are or become
regulated under any Environmental Law (including any that are or become classified as hazardous or
toxic under any Environmental Law).

1.38 “High Selling Period”

“High Selling Period” shall mean the period from and including July 1 through and including
November 30.

1.39 “HK Hive Up Deed”

“HK Hive Up Deed” shall mean the Hive Up Deed relating to the transfer of the business and assets
of Saitek Industries Limited dated October 1, 2008 between MCIA and Saitek HK.

1.40 “Inactive Subsidiaries”

“Inactive Subsidiaries” shall mean collectively Xencet US Inc., Singapore Holdings Inc., Saitek
PLC, Saitek HK and Mad Catz Limited and “Inactive Subsidiary” shall mean any one of them.

1.41 “Information Certificates”

“Information Certificates” shall mean, collectively, the Information Certificates of Borrower and
each Obligor constituting Exhibit B hereto as updated or provided from time to time, each
containing material information with respect to such Person, its business, assets and properties
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.

1.42 “Intellectual Property”

“Intellectual Property” shall mean Borrower’s and each Obligor’s now owned and hereafter arising or
acquired: patents, patent rights, patent applications, copyrights, works which are the subject
matter of copyrights, copyright applications, copyright registrations, trademarks, trade names,
trade styles, trademark and service mark applications, and licenses and rights to use any of the
foregoing; all extensions, renewals, reissues, divisions, continuations, and continuations-in-part
of any of the foregoing; all rights to sue for past, present and future infringement, if any, of
the foregoing; all rights to inventories, trade secrets, formulae, processes, compounds, drawings,
designs, blueprints, surveys, reports, manuals, and operating standards; goodwill (including
goodwill associated with any trademark or the license of any trademark); customer and other lists
in whatever form maintained; trade secret rights, copyright rights, rights in works of authorship,
domain names and domain name registration and software and contract rights relating to computer
software programs, in whatever form created or maintained.

1.43 “Intellectual Property Security Agreements”

“Intellectual Property Security Agreements” shall mean, collectively, (i) the Trademark Security
Agreement dated as of September 25, 2000 and executed by Borrower in favor of US

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Collateral Agent, (ii) the Patent Security Agreement dated as of September 25, 2000 and executed by
Borrower in favor of US Collateral Agent, and (iii) the Copyright Security Agreement dated as of
September 25, 2000 and executed by Borrower in favor of US Collateral Agent, as each now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

1.44 “Intercreditor Agreement”

“Intercreditor Agreement” shall mean the intercreditor agreement dated November 14, 2007 between
Guymont Services SA as trustee of The Winkler Atlantic Trust, MCII and Lender as amended and
restated pursuant to the amended and restated intercreditor agreement dated June 23, 2009, as the
same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

1.45 “Interest Period”

“Interest Period” shall mean, for any Libor Rate Loan, a period of one (1), two (2), three (3) or
six (6) months duration as Borrower may elect, the exact duration to be determined in accordance
with the customary practice of Lender; provided, that, Borrower may not elect an
Interest Period which will end after the Termination Date or the then current term of this
Agreement.

1.46 “Interest Rate”

“Interest Rate” shall mean:

     (a) for Prime Rate Loans, the Prime Rate plus two percent (2%) per annum;

     (b) for Libor Rate Loans, the Adjusted Libor Rate for the applicable Interest Period plus
three and one-half percent (3.5%) per annum;

provided that the Interest Rate shall mean, at Lender’s option, without notice:

     (a) for Prime Rate Loans, the Prime Rate plus five percent (5%) per annum; and

     (b) for Libor Rate Loans, the Adjusted Libor Rate for the applicable Interest Period plus six
and one-half percent (6.5%) per annum,

(i) on the non-contingent Obligations for (A) the period from and after the date of termination
hereof until such time as Lender has received full and final payment of all such Obligations, and
(B) the period from and after the date of the occurrence of an Event of Default for so long as such
Event of Default is continuing as determined by Lender (notwithstanding entry of any judgment
against Borrower) and (ii) on the Revolving Loans at any time outstanding in excess of the amounts
available to Borrower under Section 2 hereof (whether or not such excess(es), arise or are
made with or without Lender’s knowledge or consent and whether made before or after an Event of
Default).

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1.47 “Inventory”

“Inventory” shall mean all of Borrower’s and MCE’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.

1.48 “Letter of Credit Accommodations”

“Letter of Credit Accommodations” shall mean the letters of credit, merchandise purchase or other
guarantees denominated in Canadian Dollars or US Dollars which are from time to time either
(a) issued or opened by Lender for the account of Borrower or any Obligor or (b) with respect to
which Lender has agreed to indemnify the issuer or guaranteed to the issuer the performance by
Borrower or any Obligor of its obligations to such issuer.

1.49 “Libor Rate”

“Libor Rate” shall mean, with respect to the Interest Period for a Libor Rate Loan, the rate of
interest per annum (expressed as a percentage on the basis of a 360-day year) being the rate
published as the London interbank offered rate in The Wall Street Journal, Eastern Edition, on the
day which is two (2) Business Days before the first day of such Interest Period for offering
deposits in US Dollars for a period comparable to the applicable Interest Period and, if for any
reason, the London interbank offered rate is not available in the Wall Street Journal, Eastern
Edition, then the Libor Rate will be the rate of interest per annum (expressed as a percentage
calculated on the basis of a 360-day year) equal to the average (rounded upward to the nearest
whole multiple of 1/16 of one percent (1%) per annum) of the rates per annum which leading banks in
the London interbank markets are offering deposits in US Dollars and for a comparable amount of the
proposed Libor Rate Loan and for a period equal to the relevant Interest Period appearing on the
Reuters Screen LIBO Page (at or about 11:00 a.m. London time) on the day which is two (2) Business
Days before the first day of such Interest Period; provided however that
the Libor Rate shall at no time be less than one and one-half percent (1.5%) per annum

1.50 “Libor Rate Loans”

“Libor Rate Loans” shall mean any Revolving Loans or portions thereof denominated in US Dollars and
upon which interest is payable based on the Libor Rate in accordance with the terms hereof.

1.51 “License Agreements”

“License Agreements” shall have the meaning set forth in Section 7.14 hereof.

1.52 “Lien”

“Lien” shall mean any mortgage, deed of trust, pledge, fixed or floating charge, lien, security
interest, hypothec or encumbrance or security arrangement of any nature whatsoever, whether arising
by written or oral agreement or by operation of law, including any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the
effect of, security.

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1.53 “Low Selling Period”

“Low Selling Period” shall mean the period from and including December 1 through and including June
30.

1.54 “Material Adverse Change”

“Material Adverse Change” shall mean, where used in relation to the affairs of Borrower or any
Obligor, a change in the business, operations or capital of Borrower or such Obligor, as
applicable, that, in the opinion of Lender, has or could be expected to have a Material Adverse
Effect.

1.55 “Material Adverse Effect”

“Material Adverse Effect” shall mean (i) a material adverse effect on the assets or property of
Borrower, any Obligor, their respective subsidiaries or the business or operations of any of them
or all of them, taken as a whole, (ii) a material adverse effect on the condition or prospects,
financial or otherwise, of Borrower, any Obligor and their respective subsidiaries or any of them
or all of them, taken as a whole, (iii) a material adverse effect on the ability of Borrower or any
Obligor to perform and discharge any of its obligations under the Financing Agreements, or (iv) a
material adverse effect on the priority, effectiveness or enforceability of any Lien granted by
Borrower or any Obligor in favor of Agents and/or Lender or the ability of Lender and/or Agents to
enforce any Obligation or realize upon any Collateral or any other property securing the
Obligations.

1.56 “Maximum Credit”

“Maximum Credit” shall mean the amount of $30,000,000.

1.57 “Maximum Letter of Credit Facility”

“Maximum Letter of Credit Facility” shall mean the amount of $1,000,000.

1.58 “MCC”

“MCC” shall mean 1328158 Ontario Inc., a corporation incorporated under the laws of the Province of
Ontario.

1.59 “MCE”

“MCE” shall mean Mad Catz Europe Limited, a company incorporated and existing under the laws of
England and Wales.

1.60 “MCII”

“MCII” means Mad Catz Interactive, Inc., a corporation existing under the federal laws of Canada.

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1.61 “MCIA”

“MCIA” shall mean Mad Catz Interactive Asia Limited, a company incorporated under the laws of Hong
Kong.

1.62 “Merger”

“Merger” means the merger of Saitek Industries Ltd. with Borrower to continue as Borrower effective
April 3, 2008.

1.63 “Net Amount of Eligible Accounts”

“Net Amount of Eligible Accounts” shall mean the gross amount in US Dollars of Eligible Accounts
less (a) sales, excise or similar taxes included in the amount thereof and (b) returns, discounts,
claims, credits and allowances of any nature at any time issued, owing, granted, outstanding,
available or claimed with respect to such Eligible Accounts; provided that the
amounts deducted under clause (a) shall not duplicate items for which Availability Reserves have
been established by Lender.

1.64 “Net Orderly Liquidation Value”

“Net Orderly Liquidation Value” shall mean the amount in US Dollars to be realized from any orderly
liquidation of Inventory, net of all liquidation costs, including deductions for all commissions
and taxes, as evidenced by an appraisal of such Inventory conducted, at the cost of Borrower by
Hilco Appraisal Services, LLC or such other appraiser as is acceptable to Lender, such appraisal to
be in form, scope and methodology acceptable to Lender and addressed to Lender or upon which Lender
is permitted to rely.

1.65 “Obligations”

“Obligations” shall mean any and all Revolving Loans, Letter of Credit Accommodations and all other
obligations, liabilities and indebtedness of every kind, nature and description owing by Borrower
or any Obligor to Lender, any Agent, their respective affiliates and/or owing to any financial
institution under or in connection with a Swap Agreement, including principal, interest, charges,
fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or
otherwise, arising under this Agreement, the other Financing Agreements and any Swap Agreement,
whether now existing or hereafter arising, whether arising before, during or after the initial or
any renewal term of this Agreement or after the commencement of any proceeding with respect to
Borrower or any Obligor under the Bankruptcy Code or any similar statute in any jurisdiction
(including the payment of interest and other amounts which would accrue and become due but for the
commencement of such proceeding, whether or not such amounts are allowed or allowable in whole or
in part in such proceeding), 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 Lender, any Agent, their respective affiliates and/or any financial institution under
or in connection with a Swap Agreement.

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1.66 “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 MCII, MCC, MCE, FX Unlimited, Inc., MCIA, WAHL and Saitek Elecktronik
Vertriebs GmbH, other than Borrower.

1.67 “Participating Member State”

“Participating Member State” shall mean each state so described in any EMU Legislation.

1.68 “Payment Account”

“Payment Account” shall have the meaning set forth in Section 5.3 hereof.

1.69 “Permitted Inter-Company Debt”

“Permitted Inter-Company Debt” shall mean indebtedness owing by Borrower to any Obligor, by any
Obligor to Borrower and/or by any Obligor to another Obligor provided that:

     (a) such indebtedness is incurred in the ordinary course of business of Borrower and/or such
Obligor, as applicable, consistent with past practice;

     (b) all promissory notes and security agreements (if any) executed by Borrower or any Obligor
in respect of such indebtedness shall be assigned to Agents in form and content satisfactory to
Agents; and

     (c) if requested by Lender, such indebtedness is subordinated and postponed pursuant to
subordination agreements in form and content satisfactory to Lender.

1.70 “Person”

“Person” or “person” shall mean any individual, sole proprietorship, partnership, limited
partnership, corporation (including any corporation which elects subchapter S status under the
Code), limited liability company, limited liability partnership, business trust, unincorporated
association, joint stock corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.

1.71 “Pounds Sterling”

“Pounds Sterling” shall mean, at any time of determination, the then official currency of the
United Kingdom.

1.72 “PPSA”

“PPSA” shall mean the Personal Property Security Act (Ontario).

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1.73 “Prime Rate”

“Prime Rate” shall mean the rate from time to time publicly announced by the US Reference Bank, or
its successors, as its prime rate, whether or not such announced rate is the best rate available at
such bank.

1.74 “Prime Rate Loans”

“Prime Rate Loans” shall mean any Revolving Loans or portions thereof denominated in US Dollars and
on which interest is payable based on the Prime Rate in accordance with the terms hereof.

1.75 “Priority Payables Reserve”

“Priority Payables Reserve” shall mean, at any time, the full amount of the liabilities at such
time which have a trust imposed to provide for payment or Lien ranking or capable of ranking senior
to or pari passu with Liens securing the Obligations on any of the Collateral under Federal,
provincial, State, county, municipal, or local law including to claims for unremitted and
accelerated rents, taxes, wages, vacation pay, workers’ compensation obligations, government
royalties or pension fund obligations, together with the aggregate value, determined in accordance
with GAAP, of all Eligible Inventory which Lender considers may be or may become subject to a right
of a supplier to recover possession thereof under any Federal, provincial, State, county, municipal
or local law, where such supplier’s right may have priority over the Liens securing the Obligations
including Eligible Inventory subject to a right of a supplier to repossess goods pursuant to the
Bankruptcy Code or any applicable bankruptcy, reorganization or insolvency legislation.

1.76 “Records”

“Records” shall mean all of Borrower’s and each Obligor’s present and future books of account of
every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading and
other shipping evidence, statements, correspondence, memoranda, credit files and other data
relating to the Collateral or any account debtor, together with the tapes, disks, diskettes and
other data and software storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of Borrower or any Obligor with respect to the foregoing
maintained with or by any other person).

1.77 “Revolving Loans”

“Revolving Loans” shall mean the loans now or hereafter made by Lender to or for the benefit of
Borrower on a revolving basis (involving advances, repayments and readvances) as set forth in
Section 2.1 hereof.

1.78 “Royalty Reserve”

“Royalty Reserve” shall mean an amount equal to all accrued and unpaid royalty obligations owing by
Borrower and MCE 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

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findings that such royalty obligations owing by Borrower and/or MCE have increased or decreased
since the date of such Royalty Reserve Report.

1.79 “Royalty Reserve Report”

“Royalty Reserve Report” shall mean a report for the period since the date of the last such report
delivered in accordance with Section 6.1 hereof which shall set forth (i) each license of
Intellectual Property for which Borrower and/or MCE 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.

1.80 “Saitek HK”

“Saitek HK” shall mean Saitek Industries Limited, a corporation incorporated in Hong Kong.

1.81 “Secured Parties”

“Secured Parties” shall collectively mean Lender, Agents, their respective affiliates, any
financial institution under or in connection with a Swap Agreement and any other person to which
Obligations are owed or who is the beneficiary of or under a guarantee of the Obligations.

1.82 “Software”

“Software” shall mean all software and computer programs (regardless of form or format, DVD, disc
or otherwise) and all packaging, containers, artwork, end-user guides or instructions, user manuals
and related materials concerning the use and operation of such software and computer programs other
than Gameshark Software.

1.83 “Software Inventory”

“Software Inventory” shall mean all Eligible Inventory consisting of Software.

1.84 “Solvent”

“Solvent” shall mean, with respect to any Person on a particular date, that on such date (a) the
fair value of the assets and property of such Person is greater than the total amount of
liabilities, including contingent liabilities, of such Person; (b) the present fair salable value
of the assets and properties of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute and matured;
(c) such Person does not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person’s ability to pay as such debts and liabilities mature; and (d) such Person is
not engaged in a business or transaction, and is not about to engage in a business or transaction,
for which such Person’s property would constitute an unreasonably small capital. The amount of
contingent liabilities (such as litigation, guarantees and pension plan liabilities) at any time
shall be computed as the amount which, in light of all the facts and circumstances existing at the
time,

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represents the amount which can be reasonably be expected to become an actual or matured liability.

1.85 “Swap Agreement”

“Swap Agreement” shall mean any swap agreement (as defined in 11 U.S.C. §101), interest rate swap,
cap or collar agreement, interest rate future or option contract, currency swap agreement, currency
future or option contract and other similar hedge or swap agreement between Borrower or any Obligor
(or, with the prior written consent of Lender, in its sole discretion, Agents, or Lender or any of
their respective affiliates on behalf of Borrower or any Obligor) as one counterparty and Agents,
Lender or any of their respective affiliates (even if that counterparty should subsequently cease
to be Agents, Lender or an affiliate thereof) and/or another financial institution as to the other
counterparty; provided that the prior written consent of Lender is obtained (such
consent to be provided in Lender’s sole discretion) as to such other financial institution and the
Swap Agreement entered into with such other financial institution.

1.86 “Termination Date”

“Termination Date” shall have the meaning set forth in Section 11.1(a).

1.87 “Testing Period”

“Testing Period” shall mean any trailing four (4) Fiscal Quarters.

1.88 “UCC”

“UCC” shall mean the Uniform Commercial Code.

1.89 “UK Hive Up Agreement”

“UK Hive Up Agreement” shall mean the Hive Up Agreement relating to the transfer of the business
and assets of Saitek PLC dated August 1, 2008 between MCE and Saitek PLC.

1.90 “United Kingdom”

“United Kingdom” shall mean the United Kingdom of Great Britain and Northern Ireland.

1.91 “US Collateral Agent”

“US Collateral Agent” shall mean Wachovia Capital Finance Corporation (Central), formerly known as
Congress Financial Corporation (Central), in its capacity as collateral agent for itself, as
Lender.

1.92 “US Reference Bank”

“US Reference Bank” shall mean Wachovia Bank, National Association or such other major bank in the
United States as Lender may from time to time designate in its discretion.

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1.93 “Value”

“Value” shall mean, as determined by Lender, with respect to Inventory, the lower of (a) cost
computed on a first-in-first-out basis in accordance with GAAP and (b) net realizable value.

1.94 “WAHL”

“WAHL” shall mean Winkler Atlantic Holdings Limited, a company incorporated under the laws of the
British Virgin Islands.

SECTION 2  CREDIT FACILITIES

2.1 Revolving Loans

     (a) Subject to and upon the terms and conditions contained herein, Lender agrees to make
Revolving Loans to Borrower from time to time in amounts requested by Borrower up to the amount
equal to the lesser of:

	 	(i)	 	the Maximum Credit; and
	 
	 	(ii)	 	the sum of:

	 	(A)	 	seventy-five percent (75%) of the Net Amount of
Eligible Accounts;

plus

	 	(B)	 	the lesser of :

	 	(1)	 	(X) for any date of determination
during the Low Selling Period, the lesser of (i) eighty-five
percent (85%) of the Net Orderly Liquidation Value of Eligible
Inventory (excluding Software Inventory) and (ii) fifty-five
percent (55%) of the Value of Eligible Inventory (excluding
Software Inventory); or (Y) for any date of determination during
the High Selling Period, the lesser of (i) eighty-five percent
(85%) of the Net Orderly Liquidation Value of Eligible Inventory
(excluding Software Inventory) and (ii) sixty percent (60%) of
the Value of Eligible Inventory (excluding Software Inventory);
and
	 
	 	(2)	 	$15,000,000 (less the amount, if
any, determined in accordance with Section 2.1(a)(ii)(C)
below),

plus

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	 	(C)	 	the lesser of (i) twenty-five percent (25%) of
the Value of Software Inventory, (ii) eighty-five percent (85%) of the
Net Orderly Liquidation Value of Software Inventory and (iii)
$1,000,000,

minus

	 	(D)	 	any Availability Reserves.

     (b) Lender may, in its discretion, from time to time, upon not less than five (5) days prior
written notice to Borrower, (i) reduce the lending formula with respect to Eligible Accounts to the
extent that Lender determines that: (A) the dilution with respect to the Accounts for any period
(based on the ratio of (1) the aggregate amount of reductions in Accounts other than as a result of
payments in cash to (2) the aggregate amount of total sales) has increased in any material respect
or may be reasonably anticipated to increase in any material respect above historical levels or as
a result of seasonal variations, or (B) the general creditworthiness of account debtors has
declined or (ii) reduce the lending formula(s) with respect to Eligible Inventory to the extent
that Lender determines that: (A) the number of days of the turnover of the Inventory for any period
has changed in any material respect or (B) the Net Orderly Liquidation Value of the Eligible
Inventory, or any category thereof, has decreased, or (C) the nature and quality of the Inventory
has deteriorated. In determining whether to reduce the lending formula(s), Lender may consider
events, conditions, contingencies or risks which are also considered in determining Eligible
Accounts, Eligible Inventory or in establishing Availability Reserves.

     (c) Except in Lender’s discretion, the aggregate amount of the Revolving Loans and the Letter
of Credit Accommodations outstanding at any time shall not exceed the Maximum Credit. In the event
that the outstanding amount of any component of the Revolving Loans, or the aggregate amount of the
outstanding Revolving Loans and Letter of Credit Accommodations, exceeds the amounts available
under the lending formulas, the sublimits for Letter of Credit Accommodations set forth in
Section 2.2(d) hereof or the Maximum Credit, as applicable, such event shall not limit,
waive or otherwise affect any rights of Lender in that circumstance or on any future occasions and
Borrower shall, upon demand by Lender, which may be made at any time or from time to time,
immediately repay to Lender the entire amount of any such excess(es) for which payment is demanded.

     (d) For purposes only of applying the sublimit on Revolving Loans based on Eligible Inventory
pursuant to Section 2.1(a)(ii)(B)(2) hereof, Lender may treat the then undrawn amounts of
outstanding Letter of Credit Accommodations for the purpose of purchasing Eligible Inventory as
Revolving Loans to the extent Lender is in effect basing the issuance of the Letter of Credit
Accommodations on the Value of the Eligible Inventory being purchased with such Letter of Credit
Accommodations. In determining the actual amounts of such Letter of Credit Accommodations to be so
treated for purposes of the sublimit, the outstanding Revolving Loans and Availability Reserves
shall be attributed first to any components of the lending formulas in Section 2.1(a)
hereof that are not subject to such sublimit, before being attributed to the components of the
lending formulas subject to such sublimit.

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2.2 Letter of Credit Accommodations

     (a) Subject to and upon the terms and conditions contained herein, at the request of Borrower,
Lender agrees to provide or arrange for Letter of Credit Accommodations for the account of Borrower
containing terms and conditions acceptable to Lender and the issuer thereof. Any payments made by
Lender to any issuer thereof and/or related parties in connection with the Letter of Credit
Accommodations shall constitute additional Revolving Loans to Borrower pursuant to this Section
2.2.

     (b) In addition to any charges, fees or expenses charged by any bank or issuer in connection
with the Letter of Credit Accommodations, Borrower shall pay to Lender a letter of credit fee at a
rate equal to two and one-half percent (2.5%) per annum on the daily outstanding balance of the
Letter of Credit Accommodations for the immediately preceding month (or part thereof), payable in
arrears as of the first day of each succeeding month, except that Borrower shall pay to Lender such
letter of credit fee, at Lender’s option, without notice, at a rate equal to five and one-half
percent (5.5%) per annum on such daily outstanding balance for: (i) the period from and after the
date of termination hereof until Lender has received full and final payment of all Obligations
(notwithstanding entry of a judgment against Borrower) and (ii) the period from and after the date
of the occurrence of an Event of Default for so long as such Event of Default is continuing as
determined by Lender. Such letter of credit fee shall be calculated on the basis of a three
hundred sixty (360) day year and actual days elapsed and the obligation of Borrower to pay such fee
shall survive the termination of this Agreement.

     (c) No Letter of Credit Accommodations shall be available unless on the date of the proposed
issuance of any Letter of Credit Accommodations, the Revolving Loans available to Borrower (subject
to the Maximum Credit, the Maximum Letter of Credit Facility and any Availability Reserves) are
equal to or greater than: (i) if the proposed Letter of Credit Accommodation is for the purpose of
purchasing Eligible Inventory and all negotiable documents of title with respect to such Eligible
Inventory have been consigned to the issuer of the Letter of Credit Accommodation, the sum of
(A) the percentage equal to one hundred (100%) percent minus the then applicable percentage set
forth in Section 2.1(a)(ii)(B) above of the Value of such Eligible Inventory, plus
(B) freight, taxes, duty and other amounts which Lender estimates must be paid in connection with
such Inventory upon arrival and for delivery to one of Borrower’s locations for Eligible Inventory
within the United States of America and (ii) if the proposed Letter of Credit Accommodation is for
any other purpose, an amount equal to one hundred (100%) percent of the face amount thereof and all
other commitments and obligations made or incurred by Lender with respect thereto. Effective on
the issuance of each Letter of Credit Accommodation, an Availability Reserve shall be established
in the applicable amount set forth in Section 2.2(c)(i) or Section 2.2(c)(ii)
hereof.

     (d) Except in Lender’s discretion, the amount of all outstanding Letter of Credit
Accommodations and all other commitments and obligations made or incurred by Lender in connection
therewith shall not at any time exceed the Maximum Letter of Credit Facility. At any time an Event
of Default exists or has occurred and is continuing, upon Lender’s request, Borrower will either
furnish cash collateral to secure the reimbursement obligations to the issuer in connection with
any Letter of Credit Accommodations or furnish cash collateral to Lender and/or US Collateral Agent
for the Letter of Credit Accommodations, and in either case, the

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

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Revolving Loans otherwise available to Borrower shall not be reduced as provided in
Section 2.2(c) hereof to the extent of such cash collateral.

     (e) Borrower shall indemnify and hold Lender harmless from and against any and all losses,
claims, damages, liabilities, costs and expenses which Lender may suffer or incur in connection
with any Letter of Credit Accommodations and any documents, drafts or acceptances relating thereto,
including any losses, claims, damages, liabilities, costs and expenses due to any action taken by
any issuer or correspondent with respect to any Letter of Credit Accommodation. Borrower assumes
all risks with respect to the acts or omissions of the drawer under or beneficiary of any Letter of
Credit Accommodation and for such purposes the drawer or beneficiary shall be deemed Borrower’s
agent. Borrower assumes all risks for, and agrees to pay, all foreign, Federal, State and local
taxes, duties and levies relating to any goods subject to any Letter of Credit Accommodations or
any documents, drafts or acceptances thereunder. Borrower hereby releases and holds Lender
harmless from and against any acts, waivers, errors, delays or omissions, whether caused by
Borrower, by any issuer or correspondent or otherwise with respect to or relating to any Letter of
Credit Accommodation. The provisions of this Section 2.2(e) shall survive the payment of
Obligations and the termination of this Agreement.

     (f) Nothing contained herein shall be deemed or construed to grant Borrower any right or
authority to pledge the credit of Lender in any manner. Lender shall have no liability of any kind
with respect to any Letter of Credit Accommodation provided by an issuer other than Lender unless
Lender has duly executed and delivered to such issuer the application or a guarantee or
indemnification in writing with respect to such Letter of Credit Accommodation. Borrower shall be
bound by any interpretation made by Lender, or any other issuer or correspondent under or in
connection with any Letter of Credit Accommodation or any documents, drafts or acceptances
thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of
Borrower. Lender shall have the sole and exclusive right and authority to, and Borrower shall not
at any time while an Event of Default exists, (A) approve or resolve any questions of
non-compliance of documents, (B) give any instructions as to acceptance or rejection of any
documents or goods, (C) execute any and all applications for steamship or airway guarantees,
indemnities or delivery orders, (D) grant any extensions of the maturity of, time of payment for,
or time of presentation of, any drafts, acceptances, or documents, or (E) agree to any amendments,
renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of
any of the applications, Letter of Credit Accommodations, or documents, drafts or acceptances
thereunder or any letters of credit included in the Collateral. Lender may take such actions
either in its own name or in Borrower’s name.

     (g) Any rights, remedies, duties or obligations granted or undertaken by Borrower to any
issuer or correspondent in any application for any Letter of Credit Accommodation, or any other
agreement in favor of any issuer or correspondent relating to any Letter of Credit Accommodation,
shall be deemed to have been granted or undertaken by Borrower to Lender. Any duties or
obligations undertaken by Lender to any issuer or correspondent in any application for any Letter
of Credit Accommodation, or any other agreement by Lender in favor of any issuer or correspondent
relating to any Letter of Credit Accommodation, shall be deemed to have been undertaken by Borrower
to Lender and to apply in all respects to Borrower.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

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2.3 Availability Reserves

          All Revolving Loans otherwise available to Borrower pursuant to the lending formulas and
subject to the Maximum Credit, the Maximum Letter of Credit Facility and other applicable limits
hereunder shall be subject to Lender’s continuing right to establish and revise Availability
Reserves, upon not less than five (5) days’ prior written notice to Borrower.

SECTION 3 INTEREST AND FEES

3.1 Interest

     (a) Borrower shall pay to Lender interest on the outstanding principal amount of the
non-contingent Obligations at the applicable Interest Rate.

     (b) Interest shall be payable by Borrower to Lender monthly in arrears not later than the
first day of each calendar month and shall be calculated on the basis of a three hundred sixty
(360) day year and actual days elapsed. The interest rate shall increase or decrease by an amount
equal to each increase or decrease in the Prime Rate effective on the first day of the month after
any change in such Prime Rate is announced. The increase or decrease shall be based on the Prime
Rate in effect on the last day of the month in which any such change occurs. All interest accruing
hereunder on and after an Event of Default or termination hereof shall be payable on demand. In no
event shall charges constituting interest payable by Borrower to Lender exceed the maximum amount
or the rate permitted under any applicable law or regulation, and if any part or provision of this
Agreement is in contravention of any such law or regulation, such part or provision shall be deemed
amended to conform thereto.

     (c) A certificate of an authorized signing officer of Lender as to each amount and/or each
rate of interest payable hereunder from time to time shall be conclusive evidence of such amount
and of such rate, absent manifest error.

     (d) For greater certainty, whenever any amount is payable under this Agreement or any
Financing Agreement by Borrower as interest or as a fee which requires the calculation of an amount
using a percentage per annum, each party to this Agreement acknowledges and agrees that such amount
shall be calculated as of the date payment is due without application of the “deemed reinvestment
principle” or the “effective yield method”. As an example, when interest is calculated and payable
monthly, the rate of interest payable per month is one-twelfth (1/12th) of the stated rate of
interest per annum.

     (e) Any Libor Rate Loans shall automatically convert to Prime Rate Loans upon the last day of
the applicable Interest Period unless Lender has received and approved a request to continue such
Libor Rate Loan at least three (3) Business Days prior to such last day in accordance with the
terms hereof. Any Libor Rate Loans shall, at Lender’s option, upon notice by Lender to Borrower,
be subsequently converted to Prime Rate Loans upon the occurrence of any Default or Event of
Default which is continuing and otherwise upon the Termination Date. Borrower shall pay to Lender,
upon demand by Lender (or Lender may, at its option, charge any loan account of Borrower), any
amounts required to compensate Lender for any loss, costs or expense incurred by Lender as a result
of the conversion of Libor Rate Loans to Prime Rate

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

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Loans pursuant to any of the foregoing. Upon the occurrence of a Default or an Event of
Default that is continuing, or if Borrower repays or prepays a Libor Rate Loan on a day other than
the last day of the applicable Interest Period, Borrower shall indemnify Lender for any loss or
expense suffered or incurred by Lender including any loss of profit or expenses Lender incurs by
reason of the liquidation or redeployment of deposits or other funds acquired by it to effect or
maintain any and all Libor Rate Loans or any interest or other charges payable to lenders of funds
borrowed by Lender in order to maintain such Libor Rate Loans together with any other charges,
costs or expenses incurred by Lender relative thereto.

     (f) So long as no Default or Event of Default shall have occurred and be continuing, Borrower
may from time to time request Libor Rate Loans or may request that Prime Rate Loans be converted to
Libor Rate Loans or that any existing Libor Rate Loans continue for an additional Interest Period.
Such request from Borrower shall specify the amount of the Libor Rate Loans or the amount of the
Prime Rate Loans to be converted to Libor Rate Loans or the amount of the Libor Rate Loans to be
continued (subject to the limits set forth below) and the Interest Period to be applicable to such
Libor Rate Loans. Subject to the terms and conditions contained herein, three (3) Business Days
after receipt by Lender of such a request from Borrower, such Libor Rate Loans shall be made or
Prime Rate Loans shall be converted to Libor Rate Loans or such Libor Rate Loans shall continue, as
applicable; provided, that:

	 	(i)	 	no Default or Event of Default shall exist or have occurred and
be continuing;
	 
	 	(ii)	 	no party hereto shall have sent any notice of termination of
this Agreement;
	 
	 	(iii)	 	Borrower shall have complied with such customary procedures as
are generally established by Lender for all customers and specified by Lender
to Borrower from time to time for requests by Borrower for Libor Rate Loans;
	 
	 	(iv)	 	no more than six (6) Interest Periods (for all outstanding
Libor Rate Loans) may be in effect at any one time;
	 
	 	(v)	 	the aggregate amount of the Libor Rate Loans must be in an
amount not less than Five Million US Dollars ($5,000,000) or an integral
multiple of One Million US Dollars ($1,000,000) in excess thereof;
	 
	 	(vi)	 	not more than eighty percent (80%) of the Obligations may be
comprised of Libor Rate Loans at any time; and
	 
	 	(vii)	 	Lender shall have determined that the Interest Period or
Adjusted Libor Rate is available to Lender and can be readily determined as of
the date of the request for such Libor Rate Loan by Borrower.

     Any request by Borrower for Libor Rate Loans or to convert Prime Rate Loans to Libor Rate
Loans or to continue any existing Libor Rate Loans shall be irrevocable. Notwithstanding anything
to the contrary contained herein, Lender shall not be required to

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purchase US Dollar deposits in the London interbank market to fund any Libor Rate Loans, but
the provisions hereof shall be deemed to apply as if the Lender had purchased such deposits to fund
the Libor Rate Loans.

3.2 Intentionally Deleted

3.3 Closing Fee

          Borrower shall pay to Lender as a closing fee the amount of $150,000, which shall be fully
earned as of and payable on the date hereof.

3.4 Servicing Fee

          Borrower shall pay to Lender a monthly servicing fee in an amount equal to $2,000 per month in
respect of Lender’s services for each month (or part thereof) while this Agreement remains in
effect and for so long thereafter as any of the Obligations are outstanding, which monthly fee
shall be fully earned as of and payable in advance on the date of closing hereof and on the first
day of each month thereafter.

3.5 Unused Line Fee

          Borrower shall pay to Lender a monthly unused line fee at a rate equal to one-half of one
percent (0.5%) per annum calculated on the amount by which the Maximum Credit exceeds the average
daily principal balance of the outstanding Revolving Loans and Letter of Credit Accommodations
during the immediately preceding month (or part thereof) during which this Agreement is in effect
and for so long thereafter as any of the Obligations are outstanding, which fee shall be payable on
the first day of each month.

3.6 Currency of Payments

          Unless otherwise specified by Lender, all interest, fees and other payments by Borrower
hereunder shall be in the currency in which such Obligations are denominated.

3.7 Increased Costs and Changes in Law

	 	(a)	 	If, after the date hereof, either:

	 	(i)	 	any change in, or in the interpretation of, any law or
regulation is introduced, including with respect to reserve requirements,
applicable to Lender or any banking or financial institution from whom Lender
borrows funds or obtains credit (a “Funding Bank”);
	 
	 	(ii)	 	a Funding Bank or Lender complies with any future guideline or
request from any central bank or other Governmental Authority;
	 
	 	(iii)	 	a Funding Bank or Lender determines that the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any

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	 	 	 	Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof has or would have the effect
described below or a Funding Bank or Lender complies with any request or
directive regarding capital adequacy (whether or not having the force of law
where customarily complied with by responsible financial institutions) of
any such Governmental Authority, central bank or comparable agency, and such
adoption, change or compliance has, or would have, the direct or indirect
effect of reducing the rate of return on Lender’s capital as a consequence
of its obligations hereunder to a level below that which Lender could have
achieved but for such adoption, change or compliance (taking into
consideration the Funding Bank’s or Lender’s policies with respect to
capital adequacy) by an amount deemed by Lender to be material,

and the result of any of the foregoing events described in clauses (i),
(ii) and (iii) is, or results in, an increase in the cost to Lender
of funding or maintaining the Loans and/or Letter of Credit Accommodations, then
Borrower shall from time to time upon demand by Lender pay to Lender additional
amounts sufficient to indemnify Lender against such increased cost on an after-tax
basis (after taking into account applicable deductions and credits in respect of the
amount indemnified). A certificate as to the amount of such increased cost shall be
submitted to Borrower by Lender and shall be conclusive, absent manifest error.

	 	(b)	 	If, prior to the first day of any Interest Period:

	 	(i)	 	Lender shall have determined (which determination shall be
conclusive and binding upon Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Adjusted Libor Rate for such Interest Period;
	 
	 	(ii)	 	Lender has determined that the Adjusted Libor Rate determined
or to be determined for such Interest Period will not adequately and fairly
reflect the cost to Lender of making or maintaining Libor Rate Loans during
such Interest Period; or
	 
	 	(iii)	 	US Dollar deposits in the principal amounts of the Libor Rate
Loans to which such Interest Period is to be applicable are not generally
available in the London interbank market,

          Lender shall give notice thereof to Borrower as soon as practicable thereafter (which notice
shall be withdrawn whenever such circumstances no longer exist). If such notice is given: (A) any
Libor Rate Loans requested to be made on the first day of such Interest Period shall be made as
Prime Rate Loans; (B) any Revolving Loans that were to have been converted on the first day of such
Interest Period to or continue as Libor Rate Loans shall be converted to or continued as Prime Rate
Loans; and (C) each outstanding Libor Rate Loan shall be converted, on the last day of the
then-current Interest Period thereof, to Prime Rate Loans. Until such notice has been withdrawn by
Lender, no further Libor Rate Loans shall be made or

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

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continued as such, nor shall Borrower have the right to convert Prime Rate Loans to Libor Rate
Loans.

     (c) Notwithstanding any other provision herein, if the adoption of, or any change in, any law,
treaty, rule or regulation or final, non-appealable determination of an arbitrator or a court or
other Governmental Authority or in the interpretation or application thereof occurring after the
date hereof shall make it unlawful for Lender to make or maintain Libor Rate Loans as contemplated
by this Agreement:

	 	(i)	 	Lender shall promptly give written notice of such circumstances
to Borrower (which notice shall be withdrawn whenever such circumstances no
longer exits);
	 
	 	(ii)	 	the commitment of Lender hereunder to make Libor Rate Loans,
continue Libor Rate Loans as such and convert Prime Rate Loans to Libor Rate
Loans shall forthwith be cancelled and, until such time as it shall no longer
be unlawful for Lender to make or maintain Libor Rate Loans, Lender shall then
only have a commitment to make Prime Rate Loans when a Libor Rate Loan is
requested; and
	 
	 	(iii)	 	the Revolving Loans then outstanding as Libor Rate Loans, if
any, shall be converted automatically to Prime Rate Loans on the respective
last days of the then current Interest Periods with respect to such Revolving
Loans or within such earlier period as required by law.

          If any such conversion of a Libor Rate Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, Borrower shall pay to Lender such amounts, if
any, as may be required pursuant to Section 3.7(d) below.

     (d) Borrower shall indemnify Lender and shall hold Lender harmless from any loss or expense
which Lender may sustain or incur as a consequence of:

	 	(i)	 	default by Borrower in making a borrowing of, conversion into
or extension of Libor Rate Loans after Borrower has given a notice requesting
the same in accordance with the provisions of this Agreement;
	 
	 	(ii)	 	the making of a prepayment or conversion of any Libor Rate
Loans on a day which is not the last day of an Interest Period with respect
thereto.

          With respect to Libor Rate Loans such indemnification may include an amount equal to the
greater of: (i) the excess, if any, of (1) the amount of interest which would have accrued on the
amount so prepaid or converted, or not so borrowed, converted or extended, for the period from the
date of such prepayment or conversion or of such failure to borrow, convert or extend to the last
day of the applicable Interest Period (or, in the case of a failure to borrow, convert or extend,
the Interest Period that would have commenced on the date of such failure), in each case at the
applicable rate of interest for such Libor Rate Loans provided for herein over (2) the
amount of interest (as determined by Lender) which would have accrued to Lender on such amount by
placing such amount on deposit for a comparable period with leading banks in the

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London interbank market and (ii) an amount equal to the interest that would have been payable
if the Libor Rate Loans had been a Prime Rate Loan. This covenant shall survive the termination or
non-renewal of this Agreement and the payment of the Obligations.

     (e) In the event that Borrower has hedged a Libor Rate Loan with an interest rate swap with
Lender or any of its affiliates under which Borrower is to make its payments based on a fixed rate
and Lender or any of its affiliates is to make its payments based on a rate equal to the Libor
Rate, then the fallback rate (being the Prime Rate in the circumstances described in this
Section 3) on any given day while the swap with Lender or any of its affiliates is in
effect will be the sum of (i) the fallback floating rate payable by Lender or any of its affiliates
that is in effect under the interest rate swap for that day (without regard to any interest rate
spread added thereto under the terms of the interest rate swap) plus (ii) the percentage spread in
the definition of Interest Rate applicable to Libor Rate Loans.

SECTION 4 CONDITIONS PRECEDENT

4.1 Conditions Precedent to Revolving Loans and Letter of Credit Accommodations

          This Agreement shall not be effective until each of the agreements or actions set out in the
Closing Checklist attached hereto as Exhibit C have been executed, delivered or completed,
as the case may be, to the satisfaction of Lender or waived in writing (in whole or in part) by
Lender in its sole discretion and each of the following is a condition precedent to Lender
continuing to make Revolving Loans and/or provide Letter of Credit Accommodations to Borrower
hereunder:

     (a) all representations and warranties contained in this Agreement and in the other Financing
Agreements shall be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of the making of each such
Revolving Loan or providing each such Letter of Credit Accommodation and after giving effect
thereto, except with respect to those representations and warranties that were or are expressly
made as of a particular date and except to the extent that there are changes with respect to
matters referenced in such representations and warranties after the date thereof that do not and
will not otherwise cause a Default or Event of Default hereunder, and

     (b) no Default or Event of Default shall exist or have occurred and be continuing on and as of
the date of the making of such Revolving Loan or providing each such Letter of Credit Accommodation
or after giving effect thereto.

SECTION 5  COLLECTION AND ADMINISTRATION

5.1 Borrower’s Loan Account

          Lender shall maintain one or more loan account(s) on its books in which shall be recorded
(a) all Revolving Loans, Letter of Credit Accommodations and other Obligations and the Collateral,
(b) all payments made by or on behalf of Borrower and (c) all other appropriate

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debits and credits as provided in this Agreement, including fees, charges, costs, expenses and
interest. All entries in the loan account(s) shall be made in accordance with Lender’s customary
practices as in effect from time to time.

5.2 Statements

          Lender shall render to Borrower each month a statement setting forth the balance in Borrower’s
loan account(s) maintained by Lender for Borrower pursuant to the provisions of this Agreement,
including principal, interest, fees, costs and expenses. Each such statement shall be subject to
subsequent adjustment by Lender but shall, absent manifest errors or omissions, be considered
correct and deemed accepted by Borrower and conclusively binding upon Borrower as an account stated
except to the extent that Lender receives a written notice from Borrower of any specific exceptions
of Borrower thereto within thirty (30) days after the date such statement has been mailed by
Lender. Until such time as Lender shall have rendered to Borrower a written statement as provided
above, the balance in Borrower’s loan account(s) shall be presumptive evidence of the amounts due
and owing to Lender by Borrower.

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 and Obligors shall, in
accordance with Lender’s instructions, promptly deposit all payments on Accounts and all payments
constituting proceeds of Inventory or other Collateral; provided that, prior to the
occurrence and continuation of an Event of Default, Obligors agreement to deposit hereunder shall
be limited to payments and proceeds received by such Obligor in Canada, the United States and the
United Kingdom. Upon the occurrence and during the continuation of an Event of Default, Lender
may, and Borrower and each Obligor shall upon Lender’s request, direct Borrower’s, and each
Obligor’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 and each Obligor 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 subject to the security of Lender and/or
Agents.

     (b) For purposes of calculating the amount of the Revolving Loans available to Borrower, such
payments will be applied (conditional upon final collection) to the Obligations on the Business Day
of receipt by Lender of immediately available funds in a Payment Account provided such payments and
notice thereof are received in accordance with Lender’s usual and customary practices as in effect
from time to time and within sufficient time to credit Borrower’s loan account on such day, and if
not, then on the next Business Day. For the purposes of calculating interest on the Obligations,
such payments or other funds received will be applied

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(conditional upon final collection) to the Obligations on the date of receipt of immediately
available funds by Lender in the applicable Payment Account provided such payments or other funds
and notice thereof are received in accordance with Lender’s usual and customary practices as in
effect from time to time and within sufficient time to credit Borrower’s loan account on such day,
and if not, then on the next Business Day. If Lender receives funds in a Payment Account at any
time at which no Obligations are outstanding or in excess of such outstanding Obligations, Lender
shall transfer such funds to Borrower at such account as Borrower may direct; provided
that Borrower shall, at Lender’s request, deposit such funds to an account maintained at
the bank at which the Payment Accounts are maintained and, prior to such transfer, shall execute
and deliver to Lender a cash collateral agreement in form and substance satisfactory to Lender
providing to Lender and/or Agents a first priority Lien over such account.

     (c) Borrower and each Obligor and the shareholders, directors, employees and/or agents of
Borrower and each Obligor shall, acting as trustee for Lender, receive, as the security of Lender
and/or Agents, 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 Borrower’s or an Obligor’s other funds; provided that, prior to the occurrence
and continuation of an Event of Default, Obligors (and the shareholders, directors, employees
and/or agents of such Obligor) agreement to deposit and remit hereunder shall be limited to monies,
checks, notes, drafts or any other payment and proceeds received by such Obligor in Canada, the
United States and the United Kingdom. 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.

5.4 Payments

          All Obligations shall be payable to the Payment Accounts as provided in Section 5.3 or
such other place as Lender may designate from time to time. Lender may apply payments received or
collected from Borrower or for the account of Borrower (including the monetary proceeds of
collections or of realization upon any Collateral) to such of the Obligations, whether or not then
due, in such order and manner as Lender determines. Payments and collections received in any
currency other than US Dollars or Canadian Dollars will be accepted and/or applied at the sole
discretion of Lender. At Lender’s option, all principal, interest, fees, costs, expenses and other
charges provided for in this Agreement or the other Financing Agreements may be charged directly to
the loan account(s) of Borrower. Borrower shall make all payments to Lender on the Obligations
free and clear of, and without deduction or withholding for or on account of, any setoff,
counterclaim, defense, duties, taxes, levies, imposts, fees, deductions, withholding, restrictions
or conditions of any kind. If after receipt of any payment of, or proceeds of Collateral applied
to the payment of, any of the Obligations, Lender is required to surrender or return such payment
or proceeds to any Person for any reason, then the Obligations

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intended to be satisfied by such payment or proceeds shall be reinstated and continue and this
Agreement shall continue in full force and effect as if such payment or proceeds had not been
received by Lender. Borrower shall be liable to pay to Lender, and does hereby indemnify and hold
Lender harmless for the amount of any payments or proceeds surrendered or returned. This
Section 5.4 shall remain effective notwithstanding any contrary action which may be taken
by Lender in reliance upon such payment or proceeds. This Section 5.4 shall survive the
payment of the Obligations and the termination of this Agreement. Any payment of the Obligations
or termination of this Agreement shall not affect Borrower’s or an Obligor’s obligation to continue
making payments under any Swap Agreement, which shall remain in full force and effect
notwithstanding such payment or termination, subject to the terms of such Swap Agreement.

5.5 Authorization to Make Revolving Loans

          Lender is authorized to make the Revolving Loans and provide the Letter of Credit
Accommodations based upon telephonic instructions or instructions sent by courier, telecopier or by
e-mail received from anyone purporting to be an officer of Borrower or other authorized person or,
at the discretion of Lender, if such Revolving Loans are necessary to satisfy any Obligations. All
requests for Revolving Loans or Letter of Credit Accommodations hereunder shall specify the date on
which the requested advance is to be made or Letter of Credit Accommodations established (which day
shall be a Business Day) and the amount of the requested Revolving Loan or Letter of Credit
Accommodations. Requests received after 11:00 a.m. Chicago time on any day shall be deemed to have
been made as of the opening of business on the immediately following Business Day. All Revolving
Loans and Letter of Credit Accommodations under this Agreement shall be conclusively presumed to
have been made to, and at the request of and for the benefit of, Borrower when deposited to the
credit of Borrower or otherwise disbursed or established in accordance with the instructions of
Borrower or in accordance with the terms and conditions of this Agreement.

5.6 Use of Proceeds

          All Revolving Loans made or Letter of Credit Accommodations provided by Lender to Borrower
pursuant to the provisions hereof shall be used by Borrower only for general operating, working
capital and other proper corporate purposes of Borrower not otherwise prohibited by the terms
hereof.

SECTION 6 COLLATERAL REPORTING AND COVENANTS

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

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delivery documents, and (iii) copies of purchase orders, invoices and delivery documents for
Inventory and Equipment acquired by Borrower and MCE; (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 Agents shall reasonably request from time to time. If
any of Borrower’s or any Obligor’s records or reports of the Collateral are prepared or maintained
by an accounting service, contractor, shipper or other agent, Borrower and each Obligor 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.

6.2 Accounts Covenants

     (a) Borrower shall notify Lender promptly of: (i) any material delay in any of Borrower’s,
MCE’s or MCC’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 or MCC’s business in
accordance with practices and policies previously disclosed in writing to Lender. So long as no
Event of Default exists, Borrower, MCE or MCC 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.

     (b) Without limiting the obligation of Borrower to deliver any other information to Lender,
Borrower shall promptly report to Lender any return of Inventory by any one account debtor if the
Inventory so returned in such case has a value in excess of $250,000. At any time that Inventory
is returned, reclaimed or repossessed, the Account (or portion thereof) which arose from the sale
of such returned, reclaimed or repossessed Inventory shall not be deemed an Eligible Account. In
the event any account debtor returns Inventory when an Event of Default exists, Borrower and each
Obligor shall, upon Lender’s request, (i) hold the returned Inventory in trust for Lender,
(ii) segregate all returned Inventory from all of its other property, (iii) dispose of the returned
Inventory solely according to Lender’s instructions, and (iv) not issue any credits, discounts or
allowances with respect thereto without Lender’s prior written consent.

     (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

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programs, early payment incentives, discounts, allowances or extensions made or given in the
ordinary course of Borrower’s, MCE’s or MCC’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.

     (d) Lender shall have the right at any time or times, in Lender’s name or in the name of a
nominee of Lender, to verify the validity, amount or any other matter relating to any Account or
other Collateral, by mail, telephone, facsimile transmission or otherwise.

     (e) Borrower and each Obligor shall deliver or cause to be delivered to Agents, with
appropriate endorsement and assignment, with full recourse to Borrower, all chattel paper and
instruments which such Person now owns or may at any time acquire immediately upon such Person’s
receipt thereof, except as Lender may otherwise agree.

     (f) Lender and/or Agents may, at any time or times that an Event of Default exists, (i) notify
any or all account debtors that the Accounts have been assigned to Agents and that Agents have a
Lien therein and Lender may direct any or all accounts debtors to make payment of Accounts directly
to Lender, (ii) extend the time of payment of, compromise, settle or adjust for cash, credit,
return of merchandise or otherwise, and upon any terms or conditions, any and all Accounts or other
obligations included in the Collateral and thereby discharge or release the account debtor or any
other party or parties in any way liable for payment thereof without affecting any of the
Obligations, (iii) demand, collect or enforce payment of any Accounts or such other obligations,
but without any duty to do so, and Lender and/or Agents shall not be liable for their failure to
collect or enforce the payment thereof nor for the negligence of their agents or attorneys with
respect thereto and (iv) take whatever other action Lender and/or Agents may deem necessary or
desirable for the protection of their interests. At any time that an Event of Default exists, at
Lender’s and/or an Agent’s request, all invoices and statements sent to any account debtor shall
state that the Accounts and such other obligations have been assigned to Agents and are payable
directly and only to Lender and Borrower, MCE and MCC shall deliver to Lender such originals of
documents evidencing the sale and delivery of goods or the performance of services giving rise to
any Accounts as Lender and/or Agents may require.

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, Borrower’s or MCE’s 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

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physical count; (c) Borrower and MCE shall not 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 or MCE’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 and MCE shall 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);
(f) Borrower and MCE assume all responsibility and liability arising from or relating to the
production, use, sale or other disposition of the Inventory; (g) Borrower and MCE shall not sell
Inventory to any customer on approval, or any other basis which entitles the customer to return or
may obligate Borrower or MCE to repurchase such Inventory, except in the ordinary course of
business or unless such Inventory is not Eligible Inventory; (h) Borrower and MCE shall keep the
Inventory in good and marketable condition; and (i) Borrower and MCE shall not, without prior
written notice to Lender, acquire or accept any Inventory on consignment or approval.

6.4 Equipment Covenants

          With respect to the Equipment: (a) upon Lender’s request, Borrower shall, at its expense, at
any time or times as Lender may request while an Event of Default exists, deliver or cause to be
delivered to Lender written reports or appraisals as to the Equipment in form, scope and
methodology reasonably acceptable to Lender and by an appraiser acceptable to Lender; (b) Borrower
shall keep the Equipment in good order, repair, running and marketable condition (ordinary wear and
tear excepted); (c) Borrower shall use the Equipment with all reasonable care and caution and in
accordance with applicable standards of any insurance and in conformity with all applicable laws;
(d) the Equipment is and shall be used in Borrower’s business and not for personal, family,
household or farming use; (e) Borrower shall not remove any Equipment from the locations set forth
or permitted herein, except to the extent necessary to have any Equipment repaired or maintained in
the ordinary course of the business of Borrower or to move Equipment directly from one location set
forth or permitted herein to another such location and except for the movement of motor vehicles
used by or for the benefit of Borrower in the ordinary course of business; (f) the Equipment is now
and shall remain personal property and Borrower shall not permit any of the Equipment to be or
become a part of or affixed to real property; and (g) Borrower assumes all responsibility and
liability arising from the use of the Equipment.

6.5 Power of Attorney

          Borrower and each Obligor hereby irrevocably designates and appoints Lender and Agents (and
all persons designated by Lender and Agents) as Borrower’s and such Obligor’s true and lawful
attorney-in-fact, and authorizes Lender and Agents, in Borrower’s, such Obligor’s, Lender’s or an
Agent’s name, to:

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     (a) at any time while an Event of Default exists (i) demand payment on Accounts or other
proceeds of Inventory or other Collateral, (ii) enforce payment of Accounts by legal proceedings or
otherwise, (iii) exercise all of Borrower’s and such Obligor’s rights and remedies to collect any
Account or other Collateral, (iv) sell or assign any Account upon such terms, for such amount and
at such time or times as Lender and Agents deem advisable, (v) settle, adjust, compromise, extend
or renew an Account, (vi) discharge and release any Account, (vii) prepare, file and sign
Borrower’s or such Obligor’s name on any proof of claim in bankruptcy or other similar document
against an account debtor, (viii) notify the post office authorities to change the address for
delivery of Borrower’s or such Obligor’s mail to an address designated by Lender and/or Agents, and
open and dispose of all mail addressed to Borrower and Obligors, and (ix) do all acts and things
which are necessary, in Lender’s or Agents’ determination, to fulfill Borrower’s and Obligors’
obligations under this Agreement and the other Financing Agreements; and

     (b) at any time (i) take control in any manner of any item of payment or proceeds thereof,
(ii) have access to any lockbox or postal box into which Borrower’s or such Obligor’s mail is
deposited, (iii) endorse Borrower’s or such Obligor’s name upon any items of payment or proceeds
thereof and deposit the same in Lender’s account for application to the Obligations, (iv) endorse
Borrower’s or such Obligor’s name upon any chattel paper, document, instrument, invoice, or similar
document or agreement relating to any Account or any goods pertaining thereto or any other
Collateral, (v) sign Borrower’s or such Obligor’s name on any verification of Accounts and notices
thereof to account debtors and (vi) execute in Borrower’s or such Obligor’s name and file any UCC,
PPSA or other financing statements or amendments thereto.

          Borrower and each Obligor hereby releases Lender and Agents and their officers, employees and
designees from any liabilities arising from any act or acts under this power of attorney and in
furtherance thereof, whether of omission or commission, except as a result of Lender’s or an
Agent’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable
order of a court of competent jurisdiction.

6.6 Right to Cure

          Lender may, at its option, (a) cure any default by Borrower or any Obligor under any agreement
with a third party or pay or bond on appeal any judgment entered against Borrower or any Obligor,
(b) discharge taxes or Liens at any time levied on or existing with respect to the Collateral and
(c) pay any amount, incur any expense or perform any act which, in Lender’s judgment, is necessary
or appropriate to preserve, protect, insure or maintain the Collateral and the rights of Agents
and/or Lender with respect thereto. Lender may add any amounts so expended to the Obligations and
charge Borrower’s account therefor, such amounts to be repayable by Borrower on demand. Lender
shall be under no obligation to effect such cure, payment or bonding and shall not, by doing so, be
deemed to have assumed any obligation or liability. Any payment made or other action taken by
Lender under this Section 6.6 shall be without prejudice to any right to assert an Event of
Default hereunder and to proceed accordingly.

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6.7 Access to Premises

          From time to time as requested by Lender, at the cost and expense of Borrower or any Obligor,
(a) Lender or its designee including Agents shall have complete access to all of Borrower’s and
each Obligor’s premises during normal business hours and after reasonable notice to Borrower and
such Obligor, or at any time and without notice to Borrower or such Obligor if an Event of Default
exists, for the purposes of inspecting, verifying and auditing the Collateral and all of Borrower’s
or such Obligor’s books and records including the Records, and (b) Borrower and each Obligor shall
promptly furnish to Lender such copies of such books and records including the Records or extracts
therefrom as Lender may request, and (c) Lender or its designee including Agents may use during
normal business hours such of Borrower’s or any Obligor’s personnel, equipment, supplies and
premises as may be necessary for the foregoing and, if an Event of Default exists, for the
collection of Accounts and realization of other Collateral.

SECTION 7 REPRESENTATIONS AND WARRANTIES

          Borrower and each Obligor hereby represents and warrants to Lender the following (which shall
survive the execution and delivery of this Agreement), the truth and accuracy of which are a
continuing condition of the making of Revolving Loans and providing Letter of Credit Accommodations
by Lender to Borrower:

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 or properties 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 to which it is a party constitute legal, valid and binding obligations of
Borrower and each Obligor 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 a court as to the granting of equitable remedies. Borrower does not have any
subsidiaries or affiliates except as set forth on the corporate structure chart attached hereto as
Exhibit D, which corporate structure chart is accurate and complete. The exact legal name
of Borrower and each Obligor is as set forth on the signature page of this Agreement and its
Information Certificate. Other than the acquisition by MCII of the entire share capital of WAHL in
November 2007, the Merger and the transactions

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effected as set out in Sections 7.15 and 7.16, Borrower and each Obligor has
not, during the past five (5) years, been known by or used any other corporate or fictitious name
or been a party to any merger or consolidation, or acquired all of substantially all of the assets
and properties of any Person, or acquired any of its assets and properties out of the ordinary
course of business, except as set forth in its Information Certificate. Borrower and each Obligor
is an organization of the type and organized in the jurisdiction set forth in its Information
Certificate.

7.2 Financial Statements; No Material Adverse Change

          All financial statements relating to Borrower or any Obligor which have been or may hereafter
be delivered by or on behalf of Borrower or such Obligor to Lender have been or will be prepared in
accordance with GAAP (when identified as such) and fairly present in all material respects the
financial condition and the results of operations of Borrower or such Obligor as at the dates and
for the periods set forth therein. Except as disclosed in any interim financial statements
furnished by or on behalf of Borrower or any Obligor to Lender prior to the date of this Agreement,
there has been no Material Adverse Change with respect to Borrower or any Obligor since the date of
the most recent audited financial statements furnished by or on behalf of Borrower or any Obligor
to Lender prior to the date of this Agreement.

7.3 Chief Executive Office; Collateral Locations

          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 its Information Certificate,
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 each 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 and each Obligor’s knowledge, the holders of any mortgages on such locations.

7.4 Priority of Liens; Title to Properties

          The Liens granted to Agents and/or Lender under this Agreement and the other Financing
Agreements constitute valid and perfected first priority Liens in and upon the Collateral subject
only to the Liens indicated on Schedule 7.4 hereto (except to the extent that Lender
requires the discharge thereof prior to the advance of the initial Revolving Loans hereunder) and
the other Liens permitted under Section 8.8 hereof. Borrower and each Obligor has good and
marketable title to all of its assets and properties subject to no Liens of any kind, except those
granted to Agents and/or Lender and such others as are specifically listed on Schedule 7.4
hereof (except to the extent that Lender requires the discharge thereof prior to the advance of the
initial Revolving Loans hereunder) or permitted under Section 8.8 hereto.

7.5 Tax Returns

          Borrower and each Obligor has filed, or caused to be filed, in a timely manner all tax
returns, reports and declarations which are required to be filed by it (without requests for

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extension except as previously disclosed in writing to Lender). All information in such tax
returns, reports and declarations is complete and accurate in all material respects. Borrower and
each Obligor has paid or caused to be paid all taxes due and payable or claimed due and payable in
any assessment received by it, except taxes the validity of which are being contested in good faith
by appropriate proceedings diligently pursued and available to Borrower and each Obligor and with
respect to which adequate reserves have been set aside on its books. Adequate provision has been
made for the payment of all accrued and unpaid federal, state, county, local, foreign and other
taxes whether or not yet due and payable and whether or not disputed.

7.6 Litigation

          Except as set forth on the Information Certificates, there is no present investigation by any
Governmental Authority pending, or to the best of Borrower’s and each Obligor’s knowledge
threatened, against or affecting Borrower or any Obligor, their assets, properties or business and
there is no action, suit, proceeding or claim by any Person pending, or to the best of Borrower’s
knowledge threatened, against Borrower or any Obligor or their assets, properties or goodwill, or
against or affecting any transactions contemplated by this Agreement, which if adversely determined
against Borrower or any such Obligor would result in any Material Adverse Change in, or would have
a Material Adverse Effect on, Borrower or any Obligor.

7.7 Compliance with Other Agreements and Applicable Laws

          Except as disclosed in Schedule 7.7 hereto, neither Borrower nor any Obligor is in
default in any material respect under, or in violation in any material respect of any of the terms
of, any agreement, contract, instrument, lease or other commitment to which it is a party or by
which it or any of its assets or properties are bound and Borrower and each Obligor is in
compliance in all material respects with all applicable provisions of laws, rules, regulations,
licenses, permits, approvals and orders of any foreign, federal, state, provincial or local
Governmental Authority.

7.8 Bank Accounts

          All of the deposit accounts, investment accounts or other accounts in the name of or used by
Borrower or any Obligor maintained at any bank or other financial institution are set forth on
Schedule 7.8 hereto, subject to the right of Borrower or any Obligor to establish new
accounts in accordance with Section 8.15 hereof.

7.9 Accuracy and Completeness of Information

          All information furnished in writing by or on behalf of Borrower or any Obligor to Lender in
connection with this Agreement or any of the other Financing Agreements or any transaction
contemplated hereby or thereby including all information on the Information Certificates is true
and correct in all material respects on the date as of which such information is dated or certified
and does not omit any material fact necessary in order to make such information not misleading.
Since March 31, 2009, no event or circumstance has occurred which has had or could reasonably be
expected to have a Material Adverse Effect on Borrower or any Obligor which has not been fully and
accurately disclosed to Lender in writing.

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7.10 Employee Benefits

     (a) Borrower has not engaged in any transaction in connection with which Borrower or any of
its ERISA Affiliates could be subject to either a civil penalty assessed pursuant to Section
502(i) of ERISA or a tax imposed by Section 4975 of the Code, including any accumulated
funding deficiency described in Section 7.10(c) hereof and any deficiency with respect to
vested accrued benefits described in Section 7.10(d) hereof.

     (b) No liability to the Pension Benefit Guaranty Corporation has been or is expected by
Borrower to be incurred with respect to any employee benefit plan of Borrower or any of its ERISA
Affiliates. There has been no reportable event (within the meaning of Section 4043(b) of
ERISA) or any other event or condition with respect to any employee pension benefit plan of
Borrower or any of its ERISA Affiliates which presents a risk of termination of any such plan by
the Pension Benefit Guaranty Corporation.

     (c) Full payment has been made of all amounts which Borrower or any of its ERISA Affiliates is
required under Section 302 of ERISA and Section 412 of the Code to have paid under
the terms of each employee benefit plan as contributions to such plan as of the last day of the
most recent fiscal year of such plan ended prior to the date hereof, and no accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, exists with respect to any employee benefit plan, including any penalty or
tax described in Section 7.10(a) hereof and any deficiency with respect to vested accrued
benefits described in Section 7.10(d) hereof.

     (d) The current value of all vested accrued benefits under all employee benefit plans
maintained by Borrower that are subject to Title IV of ERISA does not exceed the current value of
the assets of such plans allocable to such vested accrued benefits, including any penalty or tax
described in Section 7.10(a) hereof and any accumulated funding deficiency described in
Section 7.10(c) hereof. The terms “current value” and “accrued benefit” have the meanings
specified in ERISA.

     (e) Neither Borrower nor any of its ERISA Affiliates is or has ever been obligated to
contribute to any “multiemployer plan” (as such term is defined in Section 4001(a)(3) of
ERISA) that is subject to Title IV of ERISA.

7.11 Environmental Compliance

     (a) Neither Borrower nor any Obligor has generated, used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous Materials, on or off its premises
(whether or not owned by it) in any manner which at any time violates in any material respect any
applicable Environmental Law or any license, permit, certificate, approval or similar authorization
thereunder and the operations of Borrower and each Obligor comply in all material respects with all
Environmental Laws and all licenses, permits, certificates, approvals and similar authorizations
thereunder.

     (b) There has been no investigation, proceeding, complaint, order, directive, claim, citation
or notice by any Governmental Authority or any other person nor is any pending, or to the best of
Borrower’s and each Obligor’s knowledge threatened, with respect to any non-

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compliance with or violation of the requirements of any Environmental Law by Borrower or any
Obligor or the release, spill or discharge, threatened or actual, of any Hazardous Material or the
generation, use, storage, treatment, transportation, manufacture, handling, production or disposal
of any Hazardous Materials or any other environmental, health or safety matter, which affects
Borrower or any Obligor or their business, operations or assets or any properties at which Borrower
or any Obligor has transported, stored or disposed of any Hazardous Materials.

     (c) Neither Borrower nor any Obligor has any material liability (contingent or otherwise) in
connection with a release, spill or discharge, threatened or actual, of any Hazardous Materials or
the generation, use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials.

     (d) Borrower and each Obligor has all licenses, permits, certificates, approvals or similar
authorizations required to be obtained or filed in connection with the operations of Borrower and
each Obligor under any Environmental Law and all of such licenses, permits, certificates, approvals
or similar authorizations are valid and in full force and effect.

7.12 Survival of Warranties; Cumulative

          All representations and warranties contained in this Agreement or any of the other Financing
Agreements shall survive the execution and delivery of this Agreement and shall be deemed to have
been made again to Lender on the date of each additional borrowing or other credit accommodation
hereunder, except with respect to, and to the extent that, such representations and warranties are
expressly made as of a particular date or there are changes with respect to the matters referenced
in such representations and warranties after the date made that do not and will not otherwise cause
a Default or Event of Default hereunder and such representations and warranties shall be
conclusively presumed to have been relied on by Lender regardless of any investigation made or
information possessed by Lender. The representations and warranties set forth herein shall be
cumulative and in addition to any other representations or warranties which Borrower or any Obligor
shall now or hereafter give, or cause to be given, to Lender.

7.13 Inactive Subsidiaries

          No Inactive Subsidiary has (a) any assets (other than Xencet US Inc. which owns all of the
issued and outstanding shares of Singapore Holdings Inc.), (b) has any liabilities or (c) engages
in any material business activities. Borrower and each applicable Obligor has taken action to
wind-up and dissolve Saitek PLC, Saitek HK and Mad Catz Limited in accordance with applicable law.

7.14 Intellectual Property

          To the best of Borrower’s or any Obligor’s knowledge, Borrower and each Obligor owns or
licences or otherwise has the right to use all Intellectual Property necessary for the operation of
its business as presently conducted. As of the date hereof, neither Borrower nor any Obligor has
any Intellectual Property registered, or subject to pending applications, in the United States
Patent and Trademark Office, the Canadian Intellectual Property Office or any similar office or
agency in the United States of America or Canada, any State or Province

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thereof, any political subdivision thereof or in any other country, other than those described
in the Information Certificates. To the best of Borrower’s or any Obligor’s knowledge, no event
has occurred which permits or would permit after notice or passage of time or both, the revocation,
suspension or termination of such rights. To the best of Borrower’s or any Obligor’s knowledge, no
slogan or other advertising device, product, process, method, substance or other Intellectual
Property or goods bearing or using any Intellectual Property presently contemplated to be sold by
or employed by Borrower or any Obligor infringes any patent, trademark, service mark, trade name,
copyright, license or other Intellectual Property owned by any other Person presently and no claim
or litigation is pending or threatened against or affecting Borrower or any Obligor contesting its
right to sell or use any such Intellectual Property (other than those claims or litigation that
Borrower has notified Lender of in writing or otherwise disclosed in publicly required filings).
The Information Certificates and Schedule 7.14 attached hereto set forth all of the
material agreements or other material arrangements of Borrower and any Obligors pursuant to which
Borrower or any Obligor has a license or other right to use any trademarks, logos, designs,
representations or other Intellectual Property owned by another Person as in effect on the date
hereof and the dates of the expiration of such agreement or other arrangements of Borrower and any
Obligor as in effect on the date hereof (collectively, together with such agreement or other
arrangement as may be entered into by Borrower or any Obligor after the date hereof, collectively,
the “License Agreements” and individually, a “License Agreement”) other than over-the-counter
shrink-wrapped or “click-wrapped” software. No trademark, service mark, copyright or other
Intellectual Property at any time used by Borrower or any Obligor which is owned by another Person,
or owned by Borrower or any Obligor but subject to any Lien in favour of any Person other than
Lender, is affixed to any Eligible Inventory, except (a) to the extent permitted under the terms of
the License Agreements; and (b) to the extent the sale of Inventory to which such Intellectual
Property is affixed is permitted to be sold by Borrower or any Obligor under applicable law. The
material intellectual property of Borrower and Obligors is the Saitek, Mad Catz and Joytech names
registered in China, Hong Kong, the United States of America, Canada, Germany, France and the
United Kingdom.

7.15 Solvent

          Borrower and each Obligor is Solvent.

7.16 Transfer of Assets of Saitek HK

          Saitek HK transferred all of its assets and properties to MCIA and MCIA acquired all of such
assets and properties on October 1, 2008 pursuant to the terms and conditions of the HK Hive UP
Deed free and clear of all Liens and all conditions to such transfer and acquisition have been
satisfied. Schedule 7.16 attached hereto is an accurate and complete description of the
fixed assets of MCIA as of the date hereof.

7.17 Transfer of Assets of Saitek PLC

          Saitek PLC transferred all of its assets and properties to MCE and MCE acquired all of such
assets and properties on August 1, 2008 pursuant to the terms and conditions of the UK Hive UP
Agreement free and clear of all Liens and all conditions to such transfer and acquisition have been
satisfied.

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SECTION 8  AFFIRMATIVE AND NEGATIVE COVENANTS

8.1 Maintenance of Existence

          Borrower and each Obligor shall at all times preserve, renew and keep in full, force and
effect its corporate existence and rights and franchises with respect thereto and maintain in full
force and effect all permits, licenses, trademarks, tradenames, approvals, authorizations, leases
and contracts necessary to carry on the business as presently or proposed to be conducted.
Borrower and each Obligor shall give Lender thirty (30) days prior written notice of any proposed
change in its corporate name, which notice shall set forth the new name and Borrower or such
Obligor shall deliver to Lender a certified copy of the Articles of Amendment (or other similar
document appropriate for the particular jurisdiction) of Borrower or such Obligor providing for the
name change immediately following its filing. Borrower and each Obligor shall not change its chief
executive office or its mailing address or organizational identification number (or it does not
have one, shall not acquire one) unless Lender shall have received not less than thirty (30) days
prior written notice of such proposed change, which notice shall set forth such information with
respect thereto as Lender may require and Lender shall have received such agreements and opinions
as Lender may reasonably require in connection therewith. Borrower and each Obligor shall not
change its type of organization, jurisdiction or organization or other legal structure.

8.2 New Collateral Locations

          Borrower or any Obligor may open any new location within Canada and continental United States
of America provided Borrower or such Obligor (a) gives Lender thirty (30) days prior written notice
of the intended opening of any such new location and (b) Borrower or such Obligor, as applicable,
executes and delivers, or causes to be executed and delivered, to Lender such agreements,
documents, and instruments as Lender may deem necessary or desirable to protect its and Agents’
interests in the Collateral at such location, including UCC, PPSA and other financing statements
and such other evidence as Lender may require for the perfection of Agents’ or Lender’s first
priority Liens where required by Lender.

8.3 Compliance with Laws, Regulations, Etc.

     (a) Borrower and each Obligor shall, at all times, comply in all material respects with all
laws, rules, regulations, licenses, permits, approvals and orders applicable to it and duly observe
all requirements of any federal, state, provincial or local Governmental Authority, including all
statutes, rules, regulations, orders, permits and stipulations relating to environmental pollution
and employee health and safety, including all of the Environmental Laws except for any matter that
Borrower or an Obligor is contesting in good faith by appropriate proceedings diligently pursued
and which is not reasonably expected to have a Material Adverse Effect on Borrower or any Obligor.

     (b) Borrower and each Obligor shall establish and maintain, at its expense, a system to assure
and monitor its continued compliance with all Environmental Laws in all of its operations, which
system shall include annual reviews of such compliance by employees or agents of Borrower or such
Obligor, as applicable, who are familiar with the requirements of the

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Environmental Laws. Copies of all environmental surveys, audits, assessments, feasibility
studies and results of remedial investigations shall be promptly furnished, or caused to be
furnished, by Borrower and each Obligor to Lender. Borrower and each Obligor shall take prompt and
appropriate action to respond to any non-compliance with any of the Environmental Laws and shall
regularly report to Lender on such response.

     (c) Borrower and each Obligor shall give both oral and written notice to Lender immediately
upon its receipt of any notice of, or its otherwise obtaining knowledge of, (i) the occurrence of
any event involving the release, spill or discharge, threatened or actual, of any Hazardous
Material or (ii) any investigation, proceeding, complaint order, directive, claims, citation or
notice with respect to: (A) any non-compliance with or violation of any Environmental Law by
Borrower or any Obligor or (B) the release, spill or discharge, threatened or actual, of any
Hazardous Material or (C) the generation, use, storage, treatment, transportation, manufacture,
handling, production or disposal of any Hazardous Materials that does not comply with Environmental
Laws, or (D) the violation of any other environmental, health or safety matter, which may have a
Material Adverse Effect on Borrower or any Obligor or their business, operations or assets or any
properties at which Borrower or any Obligor transported, stored or disposed of any Hazardous
Materials.

     (d) Without limiting the generality of the foregoing, whenever Lender determines that there is
non-compliance, or any condition which requires any action by or on behalf of Borrower or any
Obligor in order to avoid any material non-compliance, with any Environmental Law, Borrower and
each Obligor shall, at Lender’s request and Borrower’s or each Obligor’s expense: (i) cause an
independent environmental engineer acceptable to Lender to conduct such tests of the site where
Borrower’s or such Obligor’s non-compliance or alleged non-compliance with such Environmental Laws
has occurred and prepare and deliver to Lender a report as to such non-compliance setting forth the
results of such tests, a proposed plan for responding to any environmental problems described
therein, and an estimate of the costs thereof and (ii) provide to Lender a supplemental report of
such engineer whenever the scope of such non-compliance, or Borrower’s or such Obligor’s response
thereto or the estimated costs thereof, shall change in any material respect.

     (e) Borrower and each Obligor shall indemnify and hold harmless Lender and Agents and their
respective directors, officers, employees, agents, invitees, representatives, successors and
assigns (collectively, “Indemnified Persons”), from and against any and all losses, claims,
damages, liabilities, costs, and expenses (including legal fees and expenses) incurred by any
Indemnified Person, directly or indirectly arising out of or attributable to the use, generation,
manufacture, reproduction, storage, release, threatened release, spill, discharge, disposal or
presence of a Hazardous Material, including the costs of any required or necessary repair, cleanup
or other remedial work with respect to any property of Borrower or any Obligor and the preparation
and implementation of any closure, remedial or other required plans; provided that
such indemnity shall not apply to the extent that any such cost incurred by an Indemnified Person
arises from the willful misconduct or gross negligence of any Indemnified Person.

     (f) All covenants and indemnifications in this Section 8.3 shall survive the payment
of the Obligations and the termination of this Agreement.

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8.4 Payment of Taxes and Claims

          Borrower and each Obligor shall duly pay and discharge all taxes, assessments, contributions
and governmental charges upon or against it or its assets or properties, except for taxes,
assessments, contributions or governmental charges the validity of which are being contested in
good faith by appropriate proceedings diligently pursued and available to Borrower or such Obligor
and with respect to which adequate reserves have been set aside on its books. Borrower shall be
liable for any tax or penalties imposed on Lender as a result of the financing arrangements
provided for herein and Borrower agrees to indemnify and hold Lender harmless with respect to the
foregoing, and to repay to Lender on demand the amount thereof, and until paid by Borrower such
amount shall be added and deemed part of the Revolving Loans; provided, that,
nothing contained herein shall be construed to require Borrower to pay any income or franchise
taxes attributable to the income of Lender from any amounts charged or paid hereunder to Lender.
The foregoing indemnity shall survive the payment of the Obligations and the termination of this
Agreement.

8.5 Insurance

          Borrower and each Obligor shall, at all times, maintain with financially sound and reputable
insurers insurance with respect to the Collateral against loss or damage and all other insurance of
the kinds and in the amounts customarily insured against or carried by corporations of established
reputation engaged in the same or similar businesses and similarly situated. Said policies of
insurance shall be satisfactory to Lender as to form, amount and insurer. Borrower and each
Obligor shall furnish certificates, policies or endorsements to Lender as Lender shall require as
proof of such insurance, and, if Borrower or an Obligor fails to do so, Lender is authorized, but
not required, to obtain such insurance at the expense of Borrower and such Obligor. All policies
shall provide for at least thirty (30) days prior written notice to Lender of any cancellation or
reduction of coverage and that Lender may act as attorney for Borrower and each Obligor in
obtaining, and at any time an Event of Default exists or has occurred and is continuing, adjusting,
settling, amending and canceling such insurance. Borrower and each Obligor shall cause Lender to
be named as a loss payee and an additional insured (but without any liability for any premiums)
under such insurance policies and Borrower and each Obligor shall obtain non-contributory lender’s
loss payable endorsements to all insurance policies in form and substance satisfactory to Lender.
Such lender’s loss payable endorsements shall specify that the proceeds of such insurance shall be
payable to Lender as its interests may appear and further specify that Lender shall be paid
regardless of any act or omission by Borrower, any Obligor or any of their respective affiliates.
At its option, Lender may apply any insurance proceeds received by Lender at any time to the cost
of repairs or replacement of Collateral and/or to payment of the Obligations, whether or not then
due, in any order and in such manner as Lender may determine or hold such proceeds as cash
collateral for the Obligations.

8.6 Financial Statements and Other Information

     (a) Borrower and each Obligor shall keep proper books and records in which true and complete
entries shall be made of all dealings or transactions of or in relation to the Collateral and the
business of Borrower, each Obligor and their respective subsidiaries (if any) in accordance with
GAAP and Borrower shall furnish or cause to be furnished to Lender:

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	 	(i)	 	within forty-five (45) days after the end of each fiscal
month:

	 	(A)	 	monthly unaudited financial statements of each
of Borrower, MCE and MCC;
	 
	 	(B)	 	monthly unaudited consolidated financial
statements of MCII (which shall include Borrower, Obligors and their
respective subsidiaries),

	 	 	 	(including in each case balance sheets, statements of income and loss,
statements of cash flow and statements of shareholders’ equity), all in
reasonable detail, fairly presenting in all material respects the financial
position and the results of the operations of MCII, Borrower, MCE, MCC,
Obligors and their respective subsidiaries, if any, as of the end of and
through such fiscal month;
	 
	 	(ii)	 	within one hundred and twenty (120) days after the end of each
fiscal year of MCII, audited consolidated financial statements of MCII (which
shall include Borrower, Obligors and their respective subsidiaries) (including
in each case balance sheets, statements of income and loss, statements of
changes in financial position and statements of shareholders’ equity), and the
accompanying notes thereto, all in reasonable detail, fairly presenting in all
material respects the financial position and the results of the operations of
the applicable Person and its subsidiaries as of the end of and for such fiscal
year, together with the unqualified opinion of independent chartered
accountants, which accountants shall be an independent accounting firm selected
by MCII and reasonably acceptable to Lender, that such financial statements
have been prepared in accordance with GAAP, and present fairly in all material
respects the results of operations and financial condition of the applicable
Person and its subsidiaries as of the end of and for the fiscal year of MCII
then ended; and
	 
	 	(iii)	 	no later than thirty (30) days after the end of each fiscal
year of Borrower, annual financial projections for the next fiscal year of
Borrower, which shall be approved by Lender (which approval shall not be
unreasonably withheld or delayed) and shall include a projected balance sheet,
income statement and statement of cash flow, prepared on a monthly basis for
such fiscal year, proposed budgets for operating and capital expenditures,
acquisitions and related financing costs for Borrower, details of all
management salaries and bonuses, projections with respect to projected total
consolidated EBITDA of MCII for such fiscal year and such other information as
may be requested by Lender.

     (b) Borrower shall promptly notify Lender in writing of the details of (i) any material loss,
damage, investigation, action, suit, proceeding or claim relating to the Collateral or any other
assets or property which is security for the Obligations or any loss, damage, investigation,

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action, suit, proceeding or claim which would result in any Material Adverse Change in
Borrower or any Obligor and (ii) the occurrence of any Default or Event of Default.

     (c) Borrower shall promptly after the sending or filing thereof furnish or cause to be
furnished to Lender copies of all reports which Borrower or any Obligor sends to its shareholders
generally and copies of all reports and registration statements which Borrower or any Obligor files
with any securities commission or securities exchange.

     (d) Borrower shall furnish or cause to be furnished to Lender such budgets, forecasts,
projections and other information respecting the Collateral and the business of Borrower or any
Obligor, as Lender may, from time to time, reasonably request and Lender is hereby authorized to
deliver a copy of any financial statement or any other information relating to the business of
Borrower or any Obligor to any court or other Governmental Authority as required by law or to any
participant or assignee or prospective participant or assignee, provided that each such participant
or assignee executes a confidentiality agreement acceptable to Lender which confidentiality
agreement shall in any event provide that such participant or assignee shall maintain the
confidential nature of such information in the same manner as such information is required to be
maintained by Lender. Borrower and each Obligor hereby irrevocably authorizes and directs all
accountants or auditors to deliver to Lender, at Borrower’s or such Obligor’s expense, copies of
the financial statements of Borrower or such Obligor and any reports or management letters prepared
by such accountants or auditors on behalf of Borrower or such Obligor and to disclose to Lender
such information as they may have regarding the business of Borrower or such Obligor, subject to
any applicable confidentiality restrictions in favor of third parties or any legal privileges that
have not been waived and which are not within the control of Borrower or such Obligor to waive.
Any documents, schedules, invoices or other papers delivered to Lender may be destroyed or
otherwise disposed of by Lender one (1) year after the same are delivered to Lender, except as
otherwise designated by Borrower or any Obligor to Lender in writing.

     (e) Borrower shall within five (5) days after the end of each month provide a certificate of
the chief financial officer of Borrower, in form and content satisfactory to Lender, certifying
that Borrower has paid in full (i) all rent and other amounts due and payable with respect to any
premises leased or occupied by Borrower or any Obligor during such month; and (ii) all payments and
other amounts due and payable with respect to any employee benefit plan or pursuant to any material
contract during such month.

     (f) Notwithstanding the foregoing, or any other provision in any Financing Agreement, Borrower
and Obligors shall not be required to disclose any information reports or other documents or
material to the extent that such disclosure would breach any applicable laws and the ability to
avoid such breach is not within the control of Borrower or any Obligor.

     (g) Borrower shall, within thirty (30) days after the end of each month, provide a compliance
certificate, in substantially the form attached hereto as Schedule 8.6(g), to Lender with
respect to compliance by Borrower with the financial covenants set forth in Sections 8.13
and 8.20 and such other matters relating to Borrower and Obligors as Lender may from time
to time request.

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8.7 Sale of Assets, Consolidation, Merger, Amalgamation, Dissolution, Etc.

          Borrower and each Obligor shall not, directly or indirectly, without the prior written consent
of Lender:

     (a) merge or amalgamate with any other Person or permit any other Person to merge or
amalgamate with it;

     (b) sell, assign, lease, transfer, abandon or otherwise dispose of any shares or indebtedness
to any other Person or any of its assets to any other Person except for:

	 	(i)	 	sales of Inventory in the ordinary course of business; and
	 
	 	(ii)	 	the disposition of worn-out or obsolete Equipment or Equipment
no longer used in its business so long as (A) if an Event of Default exists,
any proceeds are paid to Lender and (B) such sales do not involve Equipment
having an aggregate fair market value in excess of $250,000 for all such
Equipment disposed of in any fiscal year);

     (c) form or acquire any subsidiaries;

     (d) wind up, liquidate or dissolve; or

     (e) agree to do any of the foregoing.

     Notwithstanding the foregoing, nothing in this Agreement or in any of the Financing Agreements
shall prohibit MCII from selling or issuing its securities, and unless an Event of Default has
occurred and is continuing, none of the proceeds resulting from any such sale or issuance of
securities, whether in the form of cash or otherwise, shall constitute security for any of the
Obligations or any obligation of any Obligor under any Financing Agreement.

8.8 Encumbrances

          Borrower and each Obligor shall not create, incur, assume or suffer to exist any Lien of any
nature whatsoever on any of its assets or properties, including the Collateral, except:

     (a) Liens of Agents and Lender;

     (b) Liens securing the payment of taxes, either not yet overdue or the validity of which are
being contested in good faith by appropriate proceedings diligently pursued and available to
Borrower or any Obligor, as applicable, and with respect to which adequate reserves have been set
aside on its books;

     (c) non-consensual statutory Liens (other than Liens securing the payment of taxes) arising in
the ordinary course of Borrower’s or any Obligor’s business, as applicable, to the extent: (i) such
Liens secure indebtedness which is not overdue or (ii) such Liens secure indebtedness relating to
claims or liabilities which are fully insured and being defended at the sole cost and expense and
at the sole risk of the insurer or being contested in good faith by

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appropriate proceedings diligently pursued and available to Borrower or such Obligor, as
applicable, in each case prior to the commencement of foreclosure or other similar proceedings and
with respect to which adequate reserves have been set aside on its books;

     (d) zoning restrictions, easements, licenses, covenants and other restrictions affecting the
use of real property which do not interfere in any material respect with the use of such real
property or ordinary conduct of the business of Borrower or such Obligor, as applicable, as
presently conducted thereon or materially impair the value of the real property which may be
subject thereto;

     (e) purchase money security interests in Equipment (including capital leases) and purchase
money mortgages on real estate not to exceed, individually, $250,000 and, in the aggregate,
$1,000,000 at anytime outstanding for Borrower and Obligors so long as such security interests and
mortgages do not apply to any assets or property of Borrower or any Obligor other than the
Equipment or real estate so acquired, and the indebtedness secured thereby does not exceed the cost
of the Equipment or real estate so acquired, as the case may be;

     (f) the Liens set forth on Schedule 7.4 hereto (except to the extent that Lender
requires the discharge thereof prior to the advance of the initial Revolving Loans pursuant to this
Agreement); and

     (g) Liens to secure Permitted Inter-Company Debt.

8.9 Indebtedness

          Borrower and each Obligor shall not incur, create, assume, become or be liable in any manner
with respect to, or permit to exist, any obligations or indebtedness except:

     (a) the Obligations;

     (b) trade obligations and normal accruals in the ordinary course of business not past due more
than sixty (60) days, or with respect to which Borrower or such Obligor, as applicable, is
contesting in good faith the amount or validity thereof by appropriate proceedings diligently
pursued and available to Borrower or such Obligor, as applicable, and with respect to which
adequate reserves have been set aside on its books;

     (c) purchase money indebtedness (including capital leases) to the extent not incurred or
secured by Liens (including capital leases) in violation of any other provision of this Agreement;

     (d) the indebtedness set forth on Schedule 8.9 hereto;

     (e) Permitted Inter-Company Debt;

     (f) the indebtedness pursuant to the Consideration Loan Note Instrument;

     (g) the indebtedness pursuant to the Completion Note; and

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     (h) the indebtedness under or in connection with any Swap Agreement consented to in writing by
Lender pursuant to Section 8.23;

provided that:

     (i) with respect to such indebtedness in Sections 8.9(d) and (e), Borrower or
Obligors, as applicable, may only make regularly scheduled payments of principal and interest in
respect of such indebtedness in accordance with the terms of the agreement or instrument evidencing
or giving rise to such indebtedness as in effect on the date of this Agreement, subject to any
subordination agreement among Lender, Borrower, Obligors and the holder of any such indebtedness,
as applicable;

     (j) with respect to the indebtedness pursuant to the Consideration Loan Note Instrument and
the Completion Note, Borrower or Obligors, as applicable, may only make payments of principal and
interest in respect of such indebtedness in accordance with the terms of the Intercreditor
Agreement; provided that Lender consents to Borrower or Obligors, as applicable,
making up to $50,000 (not $44,880.71 as set out in the Intercreditor Agreement) under Section
1(b) of the Intercreditor Agreement subject to all the other terms of such section and the
Intercreditor Agreement;

     (k) other than with respect to Swap Agreements, Borrower or Obligors, as applicable, shall not
directly or indirectly, (A) amend, modify, alter or change the terms of such indebtedness or any
agreement, document or instrument related thereto as in effect on the date hereof, or (B) redeem,
retire, defease, purchase or otherwise acquire such indebtedness, or set aside or otherwise deposit
or invest any sums for such purpose; and

     (l) Borrower shall furnish to Lender all notices or demands in connection with such
indebtedness received by or on behalf of Borrower or any Obligor, as applicable, promptly after the
receipt thereof, or sent by or on behalf of Borrower or any Obligor, as applicable, concurrently
with the sending thereof, as the case may be.

8.10 Loans, Investments, Guarantees, Etc.

          Borrower and each Obligor shall not, directly or indirectly, make any loans or advance money
or property to any person, or invest in (by capital contribution, dividend or otherwise) or
purchase or repurchase the shares or indebtedness or all or a substantial part of the assets or
property of any person, or guarantee, assume, endorse, or otherwise become responsible for
(directly or indirectly) the indebtedness, performance, obligations or dividends of any Person or
agree to do any of the foregoing, except:

     (a) endorsement of instruments for collection or deposit in the ordinary course of business;

     (b) investments in: (i) short-term direct obligations of the Canadian Government or the United
States Government, (ii) negotiable certificates of deposit issued by any bank satisfactory to
Lender, payable to the order of Borrower or such Obligor or to bearer and delivered to Lender, and
(iii) commercial paper rated Al or P1; provided, that, as to any of the foregoing,
unless waived in writing by Lender, Borrower and each Obligor shall take such

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actions as are deemed necessary by Lender and Agents to perfect the Lien of Agents and/or
Lender in such investments;

     (c) Acquisitions;

     (d) travel advances, employee relocation loans and other employee loans and advances in the
ordinary course of business of Borrower;

     (e) the loans, advances and other guarantees set forth on Schedule 8.10 hereto;

     (f) any unsecured guarantees issued in the ordinary course of business by Borrower or Obligors
to their suppliers, vendors and lessors with respect to the obligations of Borrower or Obligors, as
the case may be, to such suppliers, vendors and lessors; and

     (g) loans that constitute Permitted Inter-Company Debt;

provided, that, as to such loans, advances and guarantees, (i) Borrower and each
Obligor shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such
loans, advances or guarantees or any agreement, document or instrument related thereto, or (B) as
to such guarantees, redeem, retire, defease, purchase or otherwise acquire the obligations arising
pursuant to such guarantees, or set aside or otherwise deposit or invest any sums for such purpose,
and (ii) Borrower and each Obligor shall furnish to Lender all notices or demands in connection
with such loans, advances or guarantees or other indebtedness subject to such guarantees either
received by Borrower, each Obligor or on its behalf, promptly after the receipt thereof, or sent by
Borrower, each Obligor or on its behalf, concurrently with the sending thereof, as the case may be.

8.11 Dividends and Redemptions

          Borrower shall be entitled from time to time to pay such dividends or redeem or repurchase
shares if Borrower has Excess Availability of not less than $500,000 after giving effect to each
such payment of dividends, redemption amount or repurchase amount and if no Event of Default exists
at the time of, or will occur as a result of, any such payment of dividends, redemption amount or
repurchase amount. Except as expressly permitted pursuant to the preceding sentence, Borrower and
each Obligor shall not, directly or indirectly, declare or pay any dividends on account of any of
its shares now or hereafter outstanding, or set aside or otherwise deposit or invest any sums for
such purpose, or redeem, retire, defease, purchase or otherwise acquire any shares of any class (or
set aside or otherwise deposit or invest any sums for such purpose) for any consideration other
than common shares or apply or set apart any sum, or make any other distribution (by reduction of
capital or otherwise) in respect of any such shares or agree to do any of the foregoing.

8.12 Transactions with Affiliates

          Borrower and each Obligor shall not, directly or indirectly, (a) purchase, acquire or lease
any asset or property from, or sell, transfer or lease any asset or property to, any officer,
director, agent or other person affiliated with Borrower or such Obligor, except in the ordinary
course of and pursuant to the reasonable requirements of Borrower’s or such Obligor’s business

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and upon fair and reasonable terms no less favorable to Borrower or such Obligor than Borrower
or such Obligor would obtain in a comparable arm’s length transaction with an unaffiliated person
or (b) make any payments of management, consulting or other fees for management or similar
services, or of any indebtedness owing to any officer, employee, shareholder, director or other
person affiliated with Borrower or such Obligor except (i) payments in respect of Permitted
Inter-Company Debt provided that such payments are permitted pursuant to, and made in accordance
with, the terms of the applicable subordination agreement executed by Borrower and/or such Obligor,
as applicable, in favor of Lender in respect thereof and (ii) reasonable compensation to officers,
employees and directors for services rendered to Borrower or such Obligor in the ordinary course of
business.

8.13 Fixed Charge Coverage Ratio

          MCII shall maintain a Fixed Charge Coverage Ratio of not less than 1.5:1.0 for each Testing
Period calculated at the end of each Fiscal Quarter; provided that, for the Fiscal
Quarters ending June 30, 2009 and September 30, 2009 only, the amount of $676,000, being the
aggregate amounts related to the Walmart pricing adjustment issue ($376,000) and the Immersion
royalty settlement ($300,000), will be included in the EBITDA calculation when determining
compliance with this Section 8.13.

8.14 Intellectual Property

          In the event Borrower or any Obligor obtains or applies for any material Intellectual Property
rights or obtains any material licenses with respect thereto, Borrower and such Obligor shall
immediately notify Lender thereof and shall provide to Lender copies of all written materials
including applications and licenses with respect to such Intellectual Property rights. At Lender’s
request, Borrower and such Obligor shall promptly execute and deliver to Lender and Agents an
intellectual property security agreement granting to Agents a perfected Lien in such intellectual
property rights in form and substance satisfactory to Lender.

8.15 Additional Bank Accounts

          Borrower and each Obligor shall not, directly or indirectly, open, establish or maintain any
deposit account, investment account or any other account with any bank or other financial
institution, other than the Blocked Accounts and the accounts set forth in Schedule 7.8
hereto, except: (a) as to any new or additional Blocked Accounts and other such new or additional
accounts which contain any Collateral or proceeds thereof, with the prior written consent of Lender
and subject to such conditions thereto as Lender may establish, and (b) as to any accounts used by
Borrower or any Obligor to make payments of payroll, taxes or other obligations to third parties,
after prior written notice to Lender.

8.16 Compliance with ERISA

          (a) Borrower shall not with respect to any “employee benefit plans” maintained by Borrower or
any of its ERISA Affiliates: (i) terminate any of such employee benefit plans so as to incur any
liability to the Pension Benefit Guaranty Corporation established pursuant to ERISA, (ii) allow or
suffer to exist any prohibited transaction involving any of such employee benefit plans or any
trust created thereunder which would subject Borrower or such ERISA

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Affiliate to a tax or penalty or other liability on prohibited transactions imposed under
Section 4975 of the Code or ERISA, (iii) fail to pay to any such employee benefit plan any
contribution which it is obligated to pay under Section 302 of ERISA, Section 412
of the Code or the terms of such plan, (iv) allow or suffer to exist any accumulated funding
deficiency, whether or not waived, with respect to any such employee benefit plan, (v) allow or
suffer to exist any occurrence of a reportable event or any other event or condition which presents
a material risk of termination by the Pension Benefit Guaranty Corporation of any such employee
benefit plan that is a single employer plan, which termination could result in any liability to the
Pension Benefit Guaranty Corporation or (vi) incur any withdrawal liability with respect to any
multiemployer pension plan.

     (b) As used in this Section 8.16, the terms “employee benefit plans”, “accumulated
funding deficiency” and “reportable event” shall have the respective meanings assigned to them in
ERISA, and the term “prohibited transaction” shall have the meaning assigned to it in Section
4975 of the Code and ERISA.

8.17 Costs and Expenses

          Borrower shall pay to Lender on demand all costs, expenses, filing fees and taxes paid or
payable in connection with the preparation, negotiation, execution, delivery, recording,
administration, collection, liquidation, enforcement and defense of the Obligations, Lender’s and
Agents’ rights in the Collateral, this Agreement, the other Financing Agreements and all other
documents related hereto or thereto, including any amendments, supplements or consents which may
hereafter be contemplated (whether or not executed) or entered into in respect hereof and thereof,
including: (a) all costs and expenses of filing or recording (including UCC and PPSA financing
statement and other similar filing and recording fees and taxes, documentary taxes, intangibles
taxes and mortgage recording taxes and fees, if applicable); (b) all insurance premiums, appraisal
fees and search fees; (c) costs and expenses of remitting loan proceeds, collecting checks and
other items of payment, and establishing and maintaining the Blocked Accounts and Payment Accounts,
together with Lender’s customary charges and fees with respect thereto; (d) charges, fees or
expenses charged by any bank or issuer in connection with the Letter of Credit Accommodations; (e)
costs and expenses of preserving and protecting the Collateral; (f) costs and expenses paid or
incurred in connection with obtaining payment of the Obligations, enforcing the Liens of Agents
and/or Lender, selling or otherwise realizing upon the Collateral, and otherwise enforcing the
provisions of this Agreement and the other Financing Agreements or defending any claims made or
threatened against Agents and/or Lender arising out of the transactions contemplated hereby and
thereby (including preparations for and consultations concerning any such matters); (g) all
out-of-pocket expenses and costs heretofore and from time to time hereafter incurred by Lender
during the course of periodic field examinations of the Collateral and Borrower’s operations, plus
a per diem charge at the rate of $1,200 per person per day for Lender’s examiners in the field and
office; provided that such field examinations shall be limited to no more than once
in any four (4) month period if an Event of Default does not exist with no such restriction if an
Event of Default exists; and (h) the fees and disbursements of counsel (including legal assistants)
to Lender and Agents in connection with any of the foregoing.

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8.18 Further Assurances

          At the request of Lender at any time and from time to time, Borrower and each Obligor shall,
at its expense, duly execute and deliver, or cause to be duly executed and delivered, such further
agreements, documents and instruments, and do or cause to be done such further acts as may be
necessary or proper to evidence, perfect, maintain and enforce the Liens of Agents and Lender and
the priority thereof in the Collateral and to otherwise effectuate the provisions or purposes of
this Agreement or any of the other Financing Agreements. Lender may at any time and from time to
time request a certificate from an officer of Borrower representing that all conditions precedent
to the making of Revolving Loans and providing Letter of Credit Accommodations contained herein are
satisfied. In the event of such request by Lender, Lender may, at its option, cease to make any
further Revolving Loans or provide any further Letter of Credit Accommodations until Lender has
received such certificate and, in addition, Lender has determined that such conditions are
satisfied. Where permitted by law, Borrower and each Obligor hereby authorizes Lender to execute
and file one or more UCC, PPSA or other financing statements or notices signed only by Lender or
Agents’ representative.

8.19 Change of Control

          Borrower shall promptly provide Lender with written notice if, at any time, any person shall
own more than twenty percent (20%) of the outstanding voting securities of MCII.

8.20 Software Expenditures

          Borrower and each Obligor shall not make or incur any expenditures with respect to the
development of Software during any fiscal year of Borrower in the aggregate in respect of Borrower
and each Obligor in excess of $1,000,000 without the prior written consent of Lender.

8.21 Inactive Subsidiaries

          (a) Borrower and each Obligor shall not allow or permit any Inactive Subsidiary to, and shall
ensure that each Inactive Subsidiary does not (a) acquire any assets or properties, (b) incur any
liabilities or (c) engage in any material business activities.

          (b) Borrower and each Obligor shall diligently cause Saitek PLC, Saitek HK and Mad Catz
Limited to wind-up and dissolve and Borrower shall provide evidence of same to Lender promptly upon
each such wind-up and dissolution.

8.22 Corporate Structure Chart

          Borrower and each Obligor shall not allow or permit any change to the ownership structure of
Borrower and its affiliates from that set out in the corporate structure chart attached hereto as
Exhibit D other than the dissolution and winding-up of Saitek PLC, Saitek HK and Mad Catz
Limited in accordance with Section 8.21(b).

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8.23 Swap Agreements

          Borrower and each Obligor shall not enter into any Swap Agreement without the prior written
consent of Lender (such consent to be provided in Lender’s sole discretion).

SECTION 9 EVENTS OF DEFAULTS AND REMEDIES

9.1 Events of Default

          The occurrence or existence of any one or more of the following events are referred to herein
individually as an “Event of Default”, and collectively as “Events of Default”:

     (a) (i) Borrower fails to pay when due any of the Obligations or the Borrower or any Obligor
fails to pay when due any amount owing under any Financing Agreement, or (ii) Borrower or any
Obligor fails to perform any of the material terms, covenants, conditions or provisions contained
in this Agreement or any of the other Financing Agreements (other than as described in Section
9.1(a)(i)), or (iii) Borrower or any Obligor fails to perform any of the terms, covenants,
conditions or provisions contained in this Agreement or any other Financing Agreement (other than
as described in Section 9.1(a)(i) or Section 9.1(a)(ii)) and such failure continues
for more than ten (10) days after the Borrower receives written notice thereof from Lender;

     (b) any representation, warranty or statement of fact made by Borrower or any Obligor to
Lender or Agents in this Agreement, the other Financing Agreements or any other agreement,
schedule, confirmatory assignment or otherwise shall when made or deemed made be false or
misleading in any material respect;

     (c) any Obligor (i) revokes, terminates or fails to perform any of the material terms,
covenants, conditions or provisions of any guarantee, endorsement or other agreement of such party
in favor of Lender or Agents; or (ii) revokes, terminates or fails to perform any of the terms,
covenants, conditions or provisions of any guarantee, endorsement or other agreement of such party
in favor of Lender or Agents (other than as described in Section 9.1(c)(i)) and such
default continues for more than ten (10) days after Borrower receives written notice thereof from
Lender;

     (d) any judgment for the payment of money is rendered against Borrower or any Obligor in
excess of $2,000,000 in the aggregate and shall remain undischarged or unvacated for a period in
excess of thirty (30) days or execution shall at any time not be effectively stayed, or any
judgment other than for the payment of money, or injunction, attachment, garnishment or execution
is rendered against Borrower or any Obligor or any of their assets or properties;

     (e) any Obligor (being a natural person or a general partner of an Obligor which is a
partnership) dies or Borrower or any Obligor, which is a partnership, limited liability company,
limited partnership, limited liability partnership or a corporation, dissolves or suspends or
discontinues doing business;

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     (f) Borrower or any Obligor becomes insolvent, makes an assignment for the benefit of
creditors proposes to make, makes or sends notice of a bulk sale (as defined by applicable laws of
the United States of America or Canada) or calls a meeting of its creditors or principal creditors;

     (g) a petition, case or proceeding under the bankruptcy laws of the United States, Canada or
similar laws of any foreign jurisdiction now or hereafter in effect or under any insolvency,
arrangement, reorganization, moratorium, receivership, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction now or hereafter in effect (whether at law or in
equity) is filed or commenced against Borrower or any Obligor or all or any part of its assets or
properties and such petition or application is not dismissed within sixty (60) days after the date
of its filing or Borrower or any Obligor shall file any answer admitting or not contesting such
petition or application or indicates its consent to, acquiescence in or approval of, any such
action or proceeding or the relief requested is granted sooner;

     (h) a petition, case or proceeding under the bankruptcy laws of the United States, Canada or
similar laws of any foreign jurisdiction now or hereafter in effect or under any insolvency,
arrangement, reorganization, moratorium, receivership, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction now or hereafter in effect (whether at a law or
equity) is filed or commenced by Borrower or any Obligor for all or any part of its assets or
properties including if Borrower or any Obligor shall:

	 	(i)	 	apply for or consent to the appointment of a receiver, trustee
or liquidator of it or of all or a substantial part of its assets or
properties; or
	 
	 	(ii)	 	be unable, or admit in writing its inability, to pay its debts
as they mature, or commit any other act of bankruptcy; or
	 
	 	(iii)	 	make a general assignment for the benefit of creditors; or
	 
	 	(iv)	 	file a voluntary petition or assignment in bankruptcy or a
proposal seeking a reorganization, compromise, moratorium or arrangement with
its creditors; or
	 
	 	(v)	 	take advantage of any insolvency or other similar law
pertaining to arrangements, moratoriums, compromises or reorganizations, or
admit the material allegations of a petition or application filed in respect of
it in any bankruptcy, reorganization or insolvency proceeding; or
	 
	 	(vi)	 	take any corporate action for the purpose of effecting any of
the foregoing;

     (i) any default by Borrower or any Obligor under any agreement, document or instrument
relating to any indebtedness for borrowed money owing to any person other than Lender or under the
Consideration Loan Note Instrument or the Completion Note, or any capitalized lease obligations,
contingent indebtedness in connection with any guarantee, letter of credit, indemnity or similar
type of instrument in favor of any person other than Lender, in any case in an amount in excess of
$1,000,000, which is not remedied within ten (10) days after Borrower receives written notice
thereof from Lender;

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     (j) any material default by Borrower or any Obligor under any material contract, lease,
license or other obligation to any person other than Lender, any other default by Borrower or any
Obligor under any material contract, lease, license or other obligation to any person other than
Lender if such default continues for more than ten (10) days after Borrower receives written notice
thereof from Lender, or any termination of, or failure to renew or extend, any material lease for
real property occupied by Borrower or any Obligor;

     (k) any change in the ownership of Borrower or any Obligor (other than MCII) unless previously
approved in writing by Lender;

     (l) the charging of Borrower or any Obligor under any criminal statute, or commencement or
threatened commencement of criminal or civil proceedings against Borrower or any Obligor, pursuant
to which statute or proceedings the penalties or remedies sought or available include forfeiture of
any of the assets or properties of Borrower or such Obligor;

     (m) a Material Adverse Change in Borrower or any Obligor after the date hereof;

     (n) an event of default under any of the other Financing Agreements;

     (o) a breach of, or failure to comply with, any material term of any intercreditor agreement
or subordination agreement (including the Intercreditor Agreement) with respect to Borrower or any
Obligor by any party thereto other than Lender, or any breach of, or failure to comply with, any
other term of any intercreditor agreement or subordination agreement (including the Intercreditor
Agreement) with respect to Borrower or any Obligor by any party thereto other than Lender if such
default continues for more than ten (10) days after Borrower receives notice thereof from Lender;

     (p) a Serious Event (as defined in the Consideration Loan Note Instrument) occurs under the
Consideration Loan Note Instrument or any default under the Completion Note; provided
that there shall be no Event of Default under this subparagraph (p) if the Serious
Event (as defined in the Consideration Loan Note Instrument) arises under Condition 5.1.1
of the Consideration Loan Note Instrument; or

     (q) there shall be a default under any Swap Agreement.

9.2 Remedies

     (a) At any time while an Event of Default exists Lender and Agents shall have all rights and
remedies provided in this Agreement, the other Financing Agreements, the UCC, PPSA and other
applicable law, all of which rights and remedies may be exercised without notice to or consent by
Borrower or any Obligor, except as such notice or consent is expressly provided for hereunder or
required by applicable law. All rights, remedies and powers granted to Lender and Agents
hereunder, under any of the other Financing Agreements, the UCC, PPSA or other applicable law, are
cumulative, not exclusive and enforceable, in Lender’s and Agents’ discretion, alternatively,
successively, or concurrently on any one or more occasion, and shall include the right to apply to
a court of equity for an injunction to restrain a breach or threatened by Borrower or any Obligor
of this Agreement or any of the other Financing Agreements. Lender and/or Agents may, at any time
or times, proceed directly against Borrower or any Obligor to collect the

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

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Obligations (except under or in connection with any Swap Agreement) without prior recourse to
the Collateral.

     (b) Without limiting the foregoing, at any time an Event of Default exists, Lender and Agents
may, in their discretion and without limitation, (i) Lender may accelerate the payment of all
Obligations (except under or in connection with any Swap Agreement) and demand immediate payment
thereof to Lender (provided, that, upon the occurrence of any Event of Default
described in Sections 9.1(g) and 9.1(h), all Obligations (except under or in
connection with any Swap Agreement) shall automatically become immediately due and payable), (ii)
with or without judicial process or the aid or assistance of others, enter upon any premises on or
in which any of the Collateral may be located and take possession of the Collateral or complete
processing, manufacturing and repair of all or any portion of the Collateral and carry on the
business of Borrower and each Obligor, (iii) require Borrower and each Obligor, at its expense, to
assemble and make available to Lender and Agents any part or all of the Collateral at any place and
time designated by Lender and Agents, (iv) collect, foreclose, receive, appropriate, setoff and
realize upon any and all Collateral, (v) remove any or all of the Collateral from any premises on
or in which the same may be located for the purpose of effecting the sale, foreclosure or other
disposition thereof or for any other purpose, (vi) sell, lease, transfer, assign, deliver or
otherwise dispose of any and all Collateral (including entering into contracts with respect
thereto, public or private sales at any exchange, broker’s board, at any office of Lender, Agents
or elsewhere) at such prices or terms as Lender and Agents may deem reasonable, for cash, upon
credit or for future delivery, with Lender and Agents having the right to purchase the whole or any
part of the Collateral at any such public sale, all of the foregoing being free from any right or
equity of redemption of Borrower or any Obligor, which right or equity of redemption is hereby
expressly waived and released by Borrower and each Obligor, (vii) borrow money and use the
Collateral directly or indirectly in carrying on Borrower’s or each Obligor’s business or as
security for loans or advances for any such purposes, (viii) grant extensions of time and other
indulgences, take and give up security, accept compositions, grant releases and discharges, and
otherwise deal with Borrower and Obligors, debtors of Borrower and Obligors, sureties and others as
Lender and Agents may see fit without prejudice to the liability of Borrower or Obligors or
Lender’s or Agents’ right to hold and realize the Lien created under any Financing Agreement,
and/or (ix) terminate this Agreement. If any of the Collateral is sold or leased by Lender or
Agents upon credit terms or for future delivery, the Obligations shall not be reduced as a result
thereof until payment therefor is finally collected by Lender or Agents. If notice of disposition
of Collateral is required by law, five (5) days prior notice by Lender or Agents to Borrower and
Obligors designating the time and place of any public sale or the time after which any private sale
or other intended disposition of Collateral is to be made, shall be deemed to be reasonable notice
thereof and Borrower and each Obligor waives any other notice. In the event Lender or Agents
institute an action to recover any Collateral or seek recovery of any Collateral by way of
pre-judgment remedy, Borrower and each Obligor waives the posting of any bond which might otherwise
be required.

     (c) Lender may apply the cash proceeds of Collateral actually received by Lender or Agents
from any sale, lease, foreclosure or other disposition of the Collateral to payment of the
Obligations, in whole or in part and in such order as Lender may elect, whether or not then due.
Borrower and each Obligor shall remain liable to Lender for the payment of any deficiency with

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

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interest at the highest rate provided for herein and all costs and expenses of collection or
enforcement, including legal costs and expenses.

     (d) Without limiting the foregoing, upon the occurrence of a Default or an Event of Default,
and while such Default or Event of Default or event is continuing, Lender may, at its option,
without notice, (i) cease making Revolving Loans or arranging Letter of Credit Accommodations or
reduce the lending formulas or amounts of Revolving Loans and Letter of Credit Accommodations
available to Borrower and/or (ii) terminate any provision of this Agreement providing for any
future Revolving Loans or Letter of Credit Accommodations to be made by Lender to Borrower.

     (e) Borrower shall pay all costs, charges and expenses incurred by Lender, Agents or any
nominee or agent of Lender or Agents, whether directly or for services rendered (including
reasonable auditor’s costs and legal expenses) in enforcing this Agreement or any other Financing
Agreement and in enforcing or collecting Obligations and all such expenses together with any money
owing as a result of any borrowing permitted hereby shall be a charge on the proceeds of
realization and shall be secured hereby.

SECTION 10 JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

10.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver

     (a) The validity, interpretation and enforcement of this 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
Illinois (without giving effect to principles of conflicts of law) except to the extent that the
law of another jurisdiction is specified in a Financing Agreement to be the governing law for that
Financing Agreement.

     (b) Borrower, Obligors, Lender and US Collateral Agent irrevocably consent and submit to the
non-exclusive jurisdiction of the courts of Illinois and waive any objection based on venue or
forum non conveniens with respect to any action instituted therein arising under this 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 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 agree that any dispute
with respect to any such matters shall be heard only in the courts described above (except that
Lender and/or Agents shall have the right to bring any action or proceeding against Borrower,
Obligors or their property in the courts of any other jurisdiction which Lender and/or Agents deems
necessary or appropriate in order to realize on the Collateral or to otherwise enforce their rights
against Borrower, Obligors or their property).

     (c) To the extent permitted by law, Borrower and each Obligor 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 on the signature pages
hereof and service so made shall be deemed to be completed five (5) days after

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

- 61 -

the same shall have been so deposited in the US mails, or, at Lender’s or Agents’
option, by service upon Borrower or any Obligor in any other manner provided under the rules of any
such courts. Within thirty (30) days after such service, Borrower and applicable Obligor shall
appear in answer to such process, failing which Borrower and such Obligor shall be deemed in
default and judgment may be entered by Lender or Agents against Borrower or such Obligor for the
amount of the claim and other relief requested.

     (d) BORROWER, OBLIGORS, LENDER AND US COLLATERAL AGENT EACH HEREBY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OF
THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS 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. BORROWER, OBLIGORS, LENDER
AND US COLLATERAL AGENT EACH 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 BORROWER, OBLIGORS, LENDER
AND/OR US COLLATERAL AGENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS 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) Neither Lender nor Agents shall have any liability to Borrower or any Obligor (whether in
tort, contract, equity or otherwise) for losses suffered by Borrower or any Obligor in connection
with, arising out of, or in any way related to the transactions or relationships contemplated by
this Agreement or any other Financing 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 Lender and Agents, that the losses were the result of acts or omissions constituting
gross negligence or willful misconduct. In any such litigation, each of Lender and Agents 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 Agreement or any other
Financing Agreement.

     (f) Borrower and each Obligor hereby expressly waives all rights and notice and hearing of any
kind prior to the exercise of rights by Lender or Agents while an Event of Default exists, to
repossess the Collateral with judicial process or to replevy, attach or levy upon the Collateral or
other security for the Obligations. Borrower and each Obligor waives the posting of any bond
otherwise required of Lender or Agents in connection with any judicial process or proceeding to
obtain possession of, replevy, attach or levy upon the Collateral or other security for the
Obligations, to enforce any judgment or other court order entered in favor of Lender or Agents, or
to enforce by specific performance, temporary restraining order, preliminary or permanent
injunction, this Agreement or any other Financing Agreement.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

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10.2 Waiver of Notices

          Borrower and each Obligor hereby expressly waives demand, presentment, protest and notice of
protest and notice of dishonor with respect to any and all instruments and commercial paper,
included in or evidencing any of the Obligations or the Collateral, and any and all other demands
and notices of any kind or nature whatsoever with respect to the Obligations, the Collateral and
this Agreement, except such as are expressly provided for herein. No notice to or demand on
Borrower or any Obligor which Lender or Agents may elect to give shall entitle Borrower or any
Obligor to any other or further notice or demand in the same, similar or other circumstances.

10.3 Amendments and Waivers

          Neither this 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 Lender and US Collateral Agent, and as to amendments, as also signed by an authorized
officer of Borrower and each Obligor. Neither Lender nor Agents shall, by any act, delay, omission
or otherwise be deemed to have expressly or impliedly waived any of their rights, powers and/or
remedies unless such waiver shall be in writing and signed by an authorized officer of Lender or an
Agent, as applicable. Any such waiver shall be enforceable only to the extent specifically set
forth therein. A waiver by Lender or an Agent 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
Lender or an Agent would otherwise have on any future occasion, whether similar in kind or
otherwise.

10.4 Waiver of Counterclaims

          Borrower and each Obligor waives all rights to interpose any claims, deductions, setoffs or
counterclaims of any nature (other than compulsory counterclaims) in any action or proceeding with
respect to this Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.

10.5 Indemnification

          Borrower and each Obligor shall indemnify and hold Lender, Agents and their respective
directors, agents, employees and counsel, harmless from and against any and all losses, claims,
damages, liabilities, costs or expenses imposed on, incurred by or asserted against any of them in
connection with any litigation, investigation, claim or proceeding commenced or threatened related
to the negotiation, preparation, execution, delivery, enforcement, performance or administration of
this Agreement, any other Financing Agreements, or any undertaking or proceeding related to any of
the transactions contemplated hereby or any act, omission, event or transaction related or
attendant thereto, including amounts paid in settlement, court costs, and the fees and expenses of
counsel. To the extent that the undertaking to indemnify, pay and hold harmless set forth in this
Section may be unenforceable because it violates any law or public policy, Borrower and each
Obligor shall pay the maximum portion which it is permitted to pay under applicable law to Lender
and Agents in satisfaction of indemnified matters under this Section. The foregoing indemnity
shall survive the payment of the Obligations and the

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

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termination of this Agreement. To the extent that any person that is entitled to the benefit
of the indemnity set forth in this Section is not a party hereto, Lender shall hold the benefit to
which such person is entitled hereunder in trust for and on behalf of such person. Notwithstanding
the foregoing, Borrower and each Obligor shall have no obligation hereunder to the extent of any
liability resulting from the negligence or willful misconduct of Lender or other Person referred to
herein or with respect to Hazardous Materials deposited on any property after it is no longer
owned, possessed or controlled by Borrower or any Obligor.

SECTION 11 TERM OF AGREEMENT; MISCELLANEOUS

11.1 Term

     (a) This Agreement and the other Financing Agreements are effective as of the respective dates
thereof set forth on the respective first pages thereof and shall continue in full force and effect
for a term ending on October 31, 2012 (the “Termination Date”), unless sooner terminated pursuant
to the terms hereof. Lender or Borrower may terminate this Agreement and the other Financing
Agreements effective on the Termination Date by giving to the other party prior written notice;
provided, that, this Agreement and all other Financing Agreements must be
terminated simultaneously. Upon the effective date of termination of the Financing Agreements,
Borrower shall pay to Lender, in full, all outstanding and unpaid Obligations (except under or in
connection with any Swap Agreement) and shall furnish cash collateral to Lender in such amounts as
Lender determines are necessary to secure Lender from loss, cost, damage or expense, including
legal fees and expenses, in connection with any contingent Obligations, including issued and
outstanding Letter of Credit Accommodations, outstanding Swap Agreements and checks or other
payments provisionally credited to the Obligations and/or as to which Lender has not yet received
final and indefeasible payment. Such payments in respect of the Obligations and cash collateral
shall be remitted by wire transfer in US Dollars to such bank account of Lender, as Lender may, in
its discretion, designate in writing to Borrower for such purpose. Interest shall be due until and
including the next Business Day, if the amounts so paid by Borrower to the bank account designated
by Lender are received in such bank account later than 12:00 noon, Chicago time.

     (b) No termination of this Agreement or the other Financing Agreements shall relieve or
discharge Borrower and each Obligor of its respective duties, obligations and covenants under this
Agreement, the other Financing Agreements and outstanding Swap Agreements until all Obligations
have been fully and finally discharged and paid, and Agents’ and/or Lender’s continuing Lien in the
Collateral and the rights and remedies of Lender and Agents hereunder, under the other Financing
Agreements and applicable law, shall remain in effect until all such Obligations have been fully
and finally discharged and paid.

     (c) If for any reason this Agreement is terminated prior to the end of the then current term
of this Agreement, in view of the impracticality and extreme difficulty of ascertaining actual
damages and by mutual agreement of the parties as to a reasonable calculation of Lender’s lost
profits as a result thereof, Borrower agrees to pay to Lender, upon the effective date of such
termination, an early termination fee in the amount set forth below if such termination is
effective in the period indicated:

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

- 64 -

	 	 	 
	Amount	 	Period
	 
	 	 
	1.00% of Maximum Credit

	 	From the date hereof to and including the first anniversary of the date
hereof
	 
	 	 
	0.50% of Maximum Credit

	 	After the first anniversary of the date hereof to and including the second
anniversary of the date hereof
	 
	 	 
	0.25% of Maximum Credit

	 	At any time after the second anniversary of the date hereof

          Such early termination fee shall be presumed to be the amount of damages sustained by Lender
as a result of such early termination and Borrower agrees that it is reasonable under the
circumstances currently existing. In addition, Lender shall be entitled to such early termination
fee upon the occurrence of any Event of Default described in Section 9.1(g) and Section
9.1(h) hereof, even if Lender does not exercise its right to terminate this Agreement, but
elects, at its option, to provide financing to Borrower or permit the use of cash collateral under
any applicable reorganization or insolvency legislation. The early termination fee provided for in
this Section 11.1 shall be deemed included in the Obligations.

11.2 Notices

          All notices, requests and demands hereunder shall be in writing and (a) made to US Collateral
Agent and/or Lender at its address set forth below and to Borrower and each Obligor at its chief
executive office set forth below, or to such other address as one party may designate by written
notice to the others in accordance with this provision, and (b) deemed to have been given or made:
if delivered in person, immediately upon delivery; if by 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
certified mail, return receipt requested, five (5) days after mailing.

11.3 Partial Invalidity

          If any provision of this Agreement is held to be invalid or unenforceable, such invalidity or
unenforceability shall not invalidate this Agreement as a whole, but this 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.

11.4 Successors

          This Agreement and the other Financing Agreements shall be binding upon and inure to the
benefit of and be enforceable by Agents, Lender, Borrower, Obligors and their respective successors
and assigns, except that Borrower and each Obligor may not assign its rights under this Agreement
or the other Financing Agreements without the prior written consent of Lender. Agents and/or
Lender may, after written notice to Borrower, assign its rights and delegate its obligations under
this Agreement and the other Financing Agreements and further

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

- 65 -

may assign, or sell participations in, all or any part of the Revolving Loans, the Letter of
Credit Accommodations or any other interest herein to another financial institution or other
person, provided that such assignment or participation, as applicable, does not create any
withholding tax obligations of Borrower; and upon the completion of any such assignment or
participation, as applicable, such assignee or participant shall have, to the extent of such
assignment or participation, the same rights and benefits as it would have if it were Lender and/or
Agent, as applicable, hereunder, subject to the terms of such assignment or participation.

11.5 Entire Agreement

          This Agreement, the other Financing Agreements, any supplements hereto or thereto, and any
instruments or documents delivered or to be delivered in connection herewith or therewith
represents the entire agreement and understanding concerning the subject matter hereof and thereof
between the parties hereto, and supersede all other prior agreements, understandings, negotiations
and discussions, representations, warranties, commitments, proposals, offers and contracts
concerning the subject matter hereof, whether oral or written. In the event of any inconsistency
between the terms of this Agreement and any schedule or exhibit hereto, the terms of this Agreement
shall govern.

11.6 Headings

          The division of this Agreement into Sections and the insertion of headings and a table of
contents are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.

11.7 Judgment Currency

          To the extent permitted by applicable law, the obligations of Borrower in respect of any
amount due under this Agreement shall, notwithstanding any payment in any other currency (the
“Other Currency”) (whether pursuant to a judgment or otherwise), be discharged only to the extent
of the amount in the currency in which it is due (the “Agreed Currency”) that Lender may, in
accordance with normal banking procedures, purchase with the sum paid in the Other Currency (after
any premium and costs of exchange) on the Business Day immediately after the day on which Lender
receives the payment. If the amount in the Agreed Currency that may be so purchased for any reason
falls short of the amount originally due, Borrower shall pay all additional amounts, in the Agreed
Currency, as may be necessary to compensate for the shortfall. Any obligation of Borrower not
discharged by that payment shall, to the extent permitted by applicable law, be due as a separate
and independent obligation and, until discharged as provided in this Section, continue in full
force and effect.

11.8 Amended and Restatement; No Novation

          This Agreement amends and restates the Second Amended and Restated Loan Agreement. Any
provision hereof which differs from or is inconsistent with a provision of the Second Amended and
Restated Loan Agreement constitutes an amendment to the Second Amended and Restated Loan Agreement
with each such amendment being effective as and from the date hereof. The provisions of the Second
Amended and Restated Loan Agreement as amended hereby have been consolidated and restated in this
Agreement. This Agreement will

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

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not discharge or constitute a novation of any debt, obligation, covenant or agreement
contained in the Second Amended and Restated Loan Agreement or any of the other Financing
Agreements but same shall remain in full force and effect save to the extent same are amended by
the provisions in this Agreement.

11.9 Confirmation of Existing Security and Existing Security held for Obligations

     (a) Borrower and each Obligor acknowledges and confirms that, notwithstanding the execution of
this Agreement, the Merger, the terms of any Financing Agreements or any other matter, each of the
Financing Agreements to which it is a party remains in full force and effect and has not been
terminated, discharged or released and constitutes its legal, valid and binding obligation to the
extent a party thereto enforceable against it to the extent a party thereto in accordance with its
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.

     (b) Borrower and each Obligor agrees that Agents, as applicable, holds the security interests,
mortgages and charges created and granted under the Financing Agreements for and on behalf of the
Secured Parties to secure the Obligations and Lender shall apply the monetary proceeds of
collections or of realization upon any Collateral in accordance with Section 5.4 hereof.

     IN WITNESS WHEREOF, US Collateral Agent, Lender, Borrower and Obligors have caused these
presents to be duly executed 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/ Bruno Mello
	 	 	 	By:
	 	/s/ Darren Richardson	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Bruno Mello	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Assistant Vice President
	 	 	 	Title:	 	 	 	 
	 

	 	 

Wachovia Capital Finance of
Canada
	 	 	 	 	 	 

	 	 

	 	 	 
	Address:

	 	Chief Executive Office:
	 
	 	 
	141 Adelaide Street West

	 	7480 Mission Valley Road
	Suite 1500

	 	Suite 101
	Toronto, ON M5H 3L5

	 	San Diego, California 92108
	Canada

	 	USA
	 
	 	 
	Fax: (416) 364-8165

	 	Fax: (619) 683-6839

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

	 	 	 	 	 	 	 	 	 	 	 
	OBLIGOR	 	 	 	OBLIGOR	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	MAD CATZ INTERACTIVE, INC.	 	 	 	1328158 ONTARIO INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Darren Richardson
	 	 	 	By:
	 	/s/ Darren Richardson	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

	 	 	 
	Address:

	 	Address:
	 
	 	 
	PO Box 747

	 	PO Box 747
	BCE Place

	 	BCE Place
	181 Bay Street

	 	181 Bay Street
	Suite 2500

	 	Suite 2500
	Toronto, Ontario M5J 2T7

	 	Toronto, Ontario M5J 2T7
	Canada

	 	Canada
	Fax: (619) 683-6839

	 	Fax: (619) 683-6839

	 	 	 	 	 	 	 	 	 	 	 
	OBLIGOR	 	 	 	OBLIGOR	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WINKLER ATLANTIC HOLDINGS LIMITED	 	 	 	MAD CATZ EUROPE LIMITED	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Darren Richardson
	 	 	 	By:
	 	/s/ Darren Richardson	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

	 	 	 
	Address:

	 	Address:
	 
	 	 
	7480 Mission Valley Road

	 	Suite 1E
	Suite 101

	 	Gledhow Mount Mansion
	San Diego, California 92108

	 	Roxholme Grove
	USA

	 	Leeds, West Yorkshire LS7 4JJ
	Fax: (619) 683-6839

	 	United Kingdom
	 

	 	Fax: (619) 683-6839

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

	 	 	 	 	 	 	 	 	 	 	 
	OBLIGOR	 	 	 	OBLIGOR	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	MAD CATZ INTERACTIVE ASIA LIMITED	 	 	 	FX UNLIMITED, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Darren Richardson
	 	 	 	By:
	 	/s/ Darren Richardson	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

	 	 	 
	Address:

	 	Address:
	 
	 	 
	Unit Nos. 1717-1721

	 	7480 Mission Valley Road
	Level 17, Tower II

	 	Suite 101
	Grand Central Plaza

	 	San Diego, California 92108
	138 Shatin Rural Committee Road

	 	USA
	Shatin, New Territories, Hong Kong

	 	Fax: (619) 683-6839
	Fax: (619) 683-6839
	 	 

	 	 	 	 	 
	OBLIGOR	 	 
	 
	 	 	 	 
	SAITEK ELEKTRONIK VERTRIEBS GMBH	 	 
	 
	 	 	 	 
	By:

	 	/s/ Stefan Woger	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

Address:

Landsberger Strasse 400

81241 Munich

Germany

Fax: (619) 683-6839

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Exhibit A

Fixed Charge Coverage Ratio

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Exhibit B

Information Certificates of Borrower and Obligors

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Exhibit C

Closing Checklist

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Exhibit D

Corporate Structure Chart

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Schedule 7.4

Existing Liens

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Schedule 7.7

Non-Compliance with Agreements

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Schedule 7.8

Bank Accounts

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Schedule 7.14

License Agreements

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Schedule 7.16

MCIA Fixed Assets

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Schedule 8.6(g)

Form of Compliance Certificate

MAD CATZ, INC.

Date:                     ,                     .

     This Compliance Certificate (this “Certificate”) is given by MAD CATZ, INC. (“Borrower”)
pursuant to Section 8.6(g) of the Third Amended and Restated Loan Agreement dated as of
June 23, 2009 (as amended, modified, supplemented, extended, renewed, restated or replaced from
time to time, the “Loan Agreement”) between Wachovia Capital Finance Corporation (Central)
(“Lender”), Borrower and Obligors. Capitalized terms used herein without definition shall have the
meanings set forth in the Loan Agreement.

     The officer executing this Certificate is the                                          of Borrower, and as such is
duly authorized to execute and deliver this Certificate on behalf of Borrower. By so executing
this Certificate, Borrower hereby certifies to Lender that:

	 	(a)	 	the financial statements delivered with this Certificate comply with all
requirements of the Loan Agreement;
	 
	 	(b)	 	Borrower has reviewed the relevant terms of the Financing Agreements and the
condition of the Obligors and their subsidiaries;
	 
	 	(c)	 	Borrower is in compliance with all financial covenants set forth in
Sections 8.13 and 8.20 of the Loan Agreement, as demonstrated by the
calculations of such covenants set forth in the Excel spreadsheets attached hereto and
as indicated below;

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Covenant	 	 	 	Compliance
	 

	 	(i)
	 	Section 8.13 of Credit Agreement — Fixed Charge
Coverage Ratio
	 	 	 	Yes/No
	 
	 	 	 	 	 	 	 	 
	 

	 	(ii)
	 	Section 8.20 of Credit Agreement — Software
Expenditures
	 	 	 	Yes/No

	 	(d)	 	no Default or Event of Default exists, except as set forth below, which
includes a description of the nature and status and period of existence of such Default
or Event of Default and what action Borrower has taken, and is undertaking and proposes
to take with respect thereto.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

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     IN WITNESS WHEREOF, Borrower has caused this Certificate to be executed by
                                                             of Borrower this ___ day of                     , 20___.

	 	 	 	 	 	 	 
	 	 	MAD CATZ, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Schedule 8.9

Existing Indebtedness

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

 

Schedule 8.10

Existing Loans, Advances and Guarantees

See Attached.

THIRD AMENDED AND RESTATED LOAN AGREEMENTexv10w23

Exhibit 10.23

GENERAL SECURITY AGREEMENT

     This General Security Agreement (“Agreement”) dated June 23, 2009 is by Winkler Atlantic
Holdings Limited, a British Virgin Islands business company (“Debtor”), in favor of Wachovia
Capital Finance Corporation (Central), an Illinois corporation, as US Collateral Agent for and on
behalf of the Secured Parties and as Lender.

W I T N E S S E T H

     WHEREAS, US Collateral Agent and Lender have entered into a Third Amended and Restated Loan
Agreement (as defined below) with Mad Catz Inc., a Delaware corporation (“Borrower”), and Obligors
pursuant to which Lender has provided certain financial accommodations to Borrower;

     WHEREAS, Debtor has executed and delivered or is about to execute and deliver to US Collateral
Agent and Lender a guarantee (as amended, modified, supplemented, extended, renewed, restated or
replaced from time to time, the “Guarantee”) in favor of US Collateral Agent and Lender pursuant to
which Debtor absolutely and unconditionally guarantees to US Collateral Agent and Lender the
payment and performance of all now existing and hereafter arising obligations, liabilities and
indebtedness of Borrower and Obligors; and

     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

SECTION 1. DEFINITIONS

     For purposes of this Agreement, the following terms shall have the respective meanings given
to them below:

     1.1 “Accounts” shall mean all present and future rights of Debtor to payment of a monetary
obligation, whether or not earned by performance, which is not evidenced by chattel paper or an
instrument, (a) for property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of, (b) for services rendered or to be rendered, (c) for a secondary obligation
incurred or to be incurred, or (d) arising out of the use of a credit or charge card or information
contained on or for use with the card.

     1.2 “Equipment” shall mean all of Debtor’s now owned and hereafter acquired equipment,
wherever located, including machinery, data processing and computer equipment and computer hardware
and software, whether owned or licensed, and including embedded software, vehicles, tools,
furniture, fixtures, all attachments, accessions and property now or hereafter affixed thereto or
used in connection therewith, and substitutions and replacements thereof, wherever located.

     1.3 “Event of Default” shall have the meaning set forth in Section 5.1 hereof.

     1.4 “Financing Agreements” shall mean, collectively, the Third Amended and Restated Loan
Agreement, this Agreement and all notes, guarantees, security agreements and

 

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other agreements, documents and instruments now or at any time hereafter executed and/or
delivered by Borrower, Debtor or any Obligor in connection with the Third Amended and Restated Loan
Agreement, the Original Loan Agreement, the First Amended and Restated Loan Agreement, the Amended
First Amended and Restated Loan Agreement and the Second Amended and Restated Loan Agreement
excluding any Swap Agreements, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

     1.5 “Guaranteed Obligations” shall have the meaning given to it in the Guarantee.

     1.6 “Information Certificate” shall mean the Information Certificate of Debtor constituting
Exhibit A hereto containing material information with respect to Debtor, its business and
assets provided by or on behalf of Debtor to Lender and US Collateral Agent in connection with the
preparation of this Agreement and the other Financing Agreements and the financing arrangements
provided for herein.

     1.7 “Inventory” shall mean all of Debtor’s now owned and hereafter existing or acquired goods,
wherever located, which (a) are leased by Debtor as lessor; (b) are held by Debtor for sale or
lease or to be furnished under a contract of service; (c) are furnished by Debtor under a contract
of service; or (d) consist of raw materials, work in process, finished goods or materials used or
consumed in its business.

     1.8 “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, other than Borrower and Debtor.

     1.9 “Receivables” shall mean all of the following now owned or hereafter arising or acquired
property of Debtor: (a) all Accounts; (b) all interest, fees, late charges, penalties, collection
fees and other amounts due or to become due or otherwise payable in connection with any Account;
(c) all payment intangibles of Debtor and other contract rights, chattel paper, instruments, notes,
and other forms of obligations owing to Debtor, whether from the sale and lease of goods or other
property, licensing of any property (including Intellectual Property or other general intangibles),
rendition of services or from loans or advances by Debtor or to or for the benefit of any third
person (including loans or advances to any affiliates or subsidiaries of Debtor) or otherwise
associated with any Accounts, Inventory or general intangibles of Debtor (including choses in
action, causes of action, tax refunds, tax refund claims, any funds which may become payable to
Debtor in connection with the termination of any employee benefit plan and any other amounts
payable to Debtor from any employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds thereof, casualty or any
similar types of insurance and any proceeds thereof and proceeds of insurance covering the lives of
employees on which Debtor is a beneficiary).

     1.10 “Third Amended and Restated Loan Agreement” shall mean the Third Amended and Restated
Loan Agreement dated June 23, 2009 by and between Borrower, Obligors, Debtor, US Collateral Agent
and Lender, as amended, modified, supplemented, extended, renewed, restated or replaced from time
to time.

 

- 3 -

SECTION 2. GRANT OF SECURITY INTEREST

     2.1 Grant of Security Interest. To secure payment and performance of all Guaranteed
Obligations, Debtor hereby grants to US Collateral Agent for and on behalf of the Secured Parties a
continuing security interest in, a lien upon, and a right of set off against, and hereby assigns to
US Collateral Agent for and on behalf of the Secured Parties as security, all personal property and
interests in property and fixtures of Debtor, whether now owned or hereafter acquired or existing,
and wherever located (together with all other collateral security for the Guaranteed Obligations at
any time granted to or held or acquired by US Collateral Agent, collectively, the “Collateral”)
including:

	 	(a)	 	all Accounts;
	 
	 	(b)	 	all general intangibles, including all Intellectual Property;
	 
	 	(c)	 	all goods, including Inventory and Equipment;
	 
	 	(d)	 	all chattel paper (including all tangible and electronic chattel paper);
	 
	 	(e)	 	all instruments (including all promissory notes);
	 
	 	(f)	 	all documents;
	 
	 	(g)	 	all deposit accounts;
	 
	 	(h)	 	all letters of credit, banker’s acceptances and similar instruments and
including all letter-of-credit rights;
	 
	 	(i)	 	all supporting obligations and all present and future liens, security
interests, rights, remedies, title and interest in, to and in respect of Receivables
and other Collateral, including (i) rights and remedies under or relating to
guaranties, contracts of suretyship, letters of credit and credit and other insurance
related to the Collateral, (ii) rights of stoppage in transit, replevin, repossession,
reclamation and other rights and remedies of an unpaid vendor, lienor or secured party,
(iii) goods described in invoices, documents, contracts or instruments with respect to,
or otherwise representing or evidencing, Receivables or other Collateral, including
returned, repossessed and reclaimed goods, and (iv) deposits by and property of account
debtors or other persons securing the obligations of account debtors;
	 
	 	(j)	 	all (i) investment property (including securities, whether certificated or
uncertificated, securities accounts, security entitlements, commodity contracts or
commodity accounts) and (ii) monies, credit balances, deposits and other property of
Debtor now or hereafter held or received by or in transit to Lender, US Collateral
Agent or its affiliates or at any other depository or other institution from or for the
account of Debtor, whether for safekeeping, pledge, custody, transmission, collection
or otherwise;

 

- 4 -

	 	(k)	 	all commercial tort claims, including those identified in the Information
Certificate;
	 
	 	(l)	 	to the extent not otherwise described above, all Receivables;
	 
	 	(m)	 	all Records; and
	 
	 	(n)	 	all products and proceeds of the foregoing, in any form, including insurance
proceeds and all claims against third parties for loss or damage to or destruction of
or other involuntary conversion of any kind or nature of any or all of the other
Collateral.

Notwithstanding the foregoing, the Collateral shall not include any Swap Agreement entered into by
Debtor.

     2.2 Perfection of Security Interests.

	 	(a)	 	Debtor irrevocably and unconditionally authorizes US Collateral Agent (or its
agent) to file at any time and from time to time such financing statements with respect
to the Collateral naming US Collateral Agent or its designee as the secured party and
Debtor as debtor, as US Collateral Agent may require, and including any other
information with respect to Debtor or otherwise required by part 5 of
Article 9 of the UCC of such jurisdiction as US Collateral Agent may determine,
together with any amendment and continuations with respect thereto, which authorization
shall apply to all financing statements filed on, prior to or after the date hereof.
Debtor hereby ratifies and approves all financing statements naming US Collateral Agent
or its designee as secured party and Debtor as debtor with respect to the Collateral
(and any amendments with respect to such financing statements) filed by or on behalf of
US Collateral Agent prior to the date hereof and ratifies and confirms the
authorization of US Collateral Agent to file such financing statements (and amendments,
if any). Debtor hereby authorizes US Collateral Agent to adopt on behalf of Debtor any
symbol required for authenticating any electronic filing. In the event that the
description of the collateral in any financing statement naming US Collateral Agent or
its designee as the secured party and Debtor as debtor includes assets and properties
of Debtor that do not at any time constitute Collateral, whether hereunder, under any
of the other Financing Agreements or otherwise, the filing of such financing statement
shall nonetheless be deemed authorized by Debtor to the extent of the Collateral
included in such description and it shall not render the financing statement
ineffective as to any of the Collateral or otherwise affect the financing statement as
it applies to any of the Collateral. In no event shall Debtor at any time file, or
permit or cause to be filed, any correction statement or termination statement with
respect to any financing statement (or amendment or continuation with respect thereto)
naming US Collateral Agent or its designee as secured party and Debtor as debtor.

 

- 5 -

	 	(b)	 	Debtor does not have any chattel paper (whether tangible or electronic) or
instruments as of the date hereof, except as set forth in the Information Certificate.
In the event that Debtor shall be entitled to or shall receive any chattel paper or
instrument after the date hereof, Debtor shall promptly notify US Collateral Agent
thereof in writing. Promptly upon the receipt thereof by or on behalf of Debtor
(including by any agent or representative), Debtor shall deliver, or cause to be
delivered to US Collateral Agent, all tangible chattel paper and instruments that
Debtor has or may at any time acquire, accompanied by such instruments of transfer or
assignment duly executed in blank as US Collateral Agent may from time to time specify,
in each case except as US Collateral Agent may otherwise agree. At US Collateral
Agent’s option, Debtor shall, or US Collateral Agent may at any time on behalf of
Debtor, cause the original of any such instrument or chattel paper to be conspicuously
marked in a form and manner acceptable to US Collateral Agent with the following legend
referring to chattel paper or instruments as applicable: “This [chattel
paper][instrument] is subject to the security interest of Wachovia Capital Finance
Corporation (Central) and any sale, transfer, assignment or encumbrance of this
[chattel paper][instrument] violates the rights of such secured party.”

	 	(c)	 	In the event that Debtor shall at any time hold or acquire an interest in any
electronic chattel paper or any “transferable record” (as such term is defined in
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in
effect in any relevant jurisdiction), Debtor shall promptly notify US Collateral Agent
thereof in writing. Promptly upon US Collateral Agent’s request, Debtor shall take, or
cause to be taken, such actions as US Collateral Agent may reasonably request to give
US Collateral Agent control of such electronic chattel paper under Section
9-105 of the UCC and control of such transferable record under Section 201
of the Federal Electronic Signatures in Global and National Commerce Act or, as the
case may be, Section 16 of the Uniform Electronic Transactions Act, as in
effect in such jurisdiction.

	 	(d)	 	Debtor does not have any deposit accounts as of the date hereof, except as set
forth in the Information Certificate. Debtor shall not, directly or indirectly, after
the date hereof open, establish or maintain any deposit account unless each of the
following conditions is satisfied: (i) US Collateral Agent shall have received not
less than five (5) Business Days prior written notice of the intention of Debtor to
open or establish such account which notice shall specify in reasonable detail and
specificity acceptable to US Collateral Agent the name of the account, the owner of the
account, the name and address of the bank at which such account is to be opened or
established, the individual at such bank with whom Debtor is dealing and the purpose of
the account, (ii) the bank where such account is opened or maintained shall be
acceptable to US Collateral Agent, and (iii) on or before the opening of such deposit
account, Debtor shall as US Collateral Agent may specify either (A) deliver to US
Collateral Agent a Deposit Account Control Agreement with respect to such deposit
account duly authorized, executed and delivered by Debtor and the bank at which such
deposit account is opened and maintained or

 

- 6 -

	 	 	 	(B) arrange for US Collateral Agent to become the customer of the bank with respect
to the deposit account on terms and conditions acceptable to US Collateral Agent.
The terms of this subsection (d) shall not apply to deposit accounts
specifically and exclusively used for payroll, payroll taxes and other employee wage
and benefit payments to or for the benefit of Debtor’s salaried employees.

	 	(e)	 	Debtor does not own or hold, directly or indirectly, beneficially or as record
owner or both, any investment property, as of the date hereof, or have any investment
account, securities account, commodity account or other similar account with any bank
or other financial institution or other securities intermediary or commodity
intermediary as of the date hereof, in each case except as set forth in the Information
Certificate.

          (i) In the event that Debtor shall be entitled to or shall at any time after the date hereof
hold or acquire any certificated securities, Debtor shall promptly endorse, assign and deliver the
same to US Collateral Agent, accompanied by such instruments of transfer or assignment duly
executed in blank as US Collateral Agent may from time to time specify. If any securities, now or
hereafter acquired by Debtor are uncertificated and are issued to Debtor or its nominee directly by
the issuer thereof, Debtor shall immediately notify US Collateral Agent thereof and shall as US
Collateral Agent may specify, either (A) cause the issuer to agree to comply with instructions from
US Collateral Agent as to such securities, without further consent of Debtor or such nominee, or
(B) arrange for US Collateral Agent to become the registered owner of the securities.

          (ii) Debtor shall not, directly or indirectly, after the date hereof open, establish or
maintain any investment account, securities account, commodity account or any other similar account
(other than a deposit account) with any securities intermediary or commodity intermediary unless
each of the following conditions is satisfied: (A) US Collateral Agent shall have received not less
than five (5) Business Days prior written notice of the intention of Debtor to open or establish
such account which notice shall specify in reasonable detail and specificity acceptable to US
Collateral Agent the name of the account, the owner of the account, the name and address of the
securities intermediary or commodity intermediary at which such account is to be opened or
established, the individual at such intermediary with whom Debtor is dealing and the purpose of the
account, (B) the securities intermediary or commodity intermediary (as the case may be) where such
account is opened or maintained shall be acceptable to US Collateral Agent, and (C) on or before
the opening of such investment account, securities account or other similar account with a
securities intermediary or commodity intermediary, Debtor shall as US Collateral Agent may specify
either (1) execute and deliver, and cause to be executed and delivered to US Collateral Agent, an
Investment Property Control Agreement with respect thereto duly authorized, executed and delivered
by Debtor and such securities intermediary or commodity intermediary or (2) arrange for US
Collateral Agent to become the entitlement holder with respect to such investment property on terms
and conditions acceptable to US Collateral Agent.

	 	(f)	 	Debtor is not the beneficiary or otherwise entitled to any right to payment
under any letter of credit, banker’s acceptance or similar instrument as of the date
hereof, except as set forth in the Information Certificate. In the event that Debtor

 

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	 	 	 	shall be entitled to or shall receive any right to payment under any letter of
credit, banker’s acceptance or any similar instrument, whether as beneficiary
thereof or otherwise after the date hereof, Debtor shall promptly notify US
Collateral Agent thereof in writing. Debtor shall immediately, as US Collateral
Agent may specify, either (i) deliver, or cause to be delivered to US Collateral
Agent, with respect to any such letter of credit, banker’s acceptance or similar
instrument, the written agreement of the issuer and any other nominated person
obligated to make any payment in respect thereof (including any confirming or
negotiating bank), in form and substance satisfactory to US Collateral Agent,
consenting to the assignment of the proceeds of the letter of credit to US
Collateral Agent by Debtor and agreeing to make all payments thereon directly to US
Collateral Agent or as US Collateral Agent may otherwise direct or (ii) cause US
Collateral Agent to become, at Debtor’s expense, the transferee beneficiary of the
letter of credit, banker’s acceptance or similar instrument (as the case may be).
	 
	 	(g)	 	Debtor has no commercial tort claims as of the date hereof, except as set forth
in the Information Certificate. In the event that Debtor shall at any time after the
date hereof have any commercial tort claims, Debtor shall promptly notify US Collateral
Agent thereof in writing, which notice shall (i) set forth in reasonable detail the
basis for and nature of such commercial tort claim and (ii) include the express grant
by Debtor to US Collateral Agent of a security interest in such commercial tort claim
(and the proceeds thereof). In the event that such notice does not include such grant
of a security interest, the sending thereof by Debtor to US Collateral Agent shall be
deemed to constitute such grant to US Collateral Agent. Upon the sending of such
notice, any commercial tort claim described therein shall constitute part of the
Collateral and shall be deemed included therein. Without limiting the authorization of
US Collateral Agent provided in Section 2.2(a) hereof or otherwise arising by
the execution by Debtor of this Agreement or any of the other Financing Agreements, US
Collateral Agent is hereby irrevocably authorized from time to time and at any time to
file such financing statements naming US Collateral Agent or its designee as secured
party and Debtor as debtor, or any amendments to any financing statements, covering any
such commercial tort claim as Collateral. In addition, Debtor shall promptly upon US
Collateral Agent’s request, execute and deliver, or cause to be executed and delivered,
to US Collateral Agent such other agreements, documents and instruments as US
Collateral Agent may require in connection with such commercial tort claim.
	 
	 	(h)	 	Debtor does not have any goods, documents of title or other Collateral in the
custody, control or possession of a third party as of the date hereof, except as set
forth in the Information Certificate and except for goods located in the United States
in transit to a location of Debtor permitted herein in the ordinary course of business
of Debtor in the possession of the carrier transporting such goods. In the event that
any goods, documents of title or other Collateral are at any time after the date hereof
in the custody, control or possession of any other person not referred to in the
Information Certificate or such carriers, Debtor shall promptly notify US Collateral
Agent thereof in writing. Promptly upon US Collateral

 

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	 	 	 	Agent’s request, Debtor shall deliver to US Collateral Agent a Collateral Access
Agreement duly authorized, executed and delivered by such person and Debtor.
	 
	 	(i)	 	Debtor shall take any other actions reasonably requested by Lender or US
Collateral Agent from time to time to cause the attachment, perfection and first
priority of, and the ability of Lender and US Collateral Agent to enforce, the security
interest of US Collateral Agent in any and all of the Collateral, including (i)
executing, delivering and, where appropriate, filing, financing statements and
amendments relating thereto under the UCC or other applicable law, to the extent, if
any, that Debtor’s signature thereon is required therefor, (ii) causing US Collateral
Agent’s name to be noted as secured party on any certificate of title for a titled good
if such notation is a condition to attachment, perfection or priority of, or ability of
US Collateral Agent to enforce, the security interest of US Collateral Agent in such
Collateral, (iii) complying with any provision of any statute, regulation or treaty of
the United States as to any Collateral if compliance with such provision is a condition
to attachment, perfection or priority of, or ability of US Collateral Agent to enforce,
the security interest of US Collateral Agent in such Collateral, (iv) obtaining the
consents and approvals of any governmental authority or third party including any
consent of any licensor, lessor or other person obligated on Collateral, and taking all
actions required by any earlier versions of the UCC or by other law, as applicable in
any relevant jurisdiction.

SECTION 3. REPRESENTATIONS AND WARRANTIES

Debtor hereby represents and warrants to Lender and US Collateral Agent the representations and
warranties set out in Section 7 of the Third Amended and Restated Loan Agreement (which
shall survive the execution and delivery of this Agreement), the truth and accuracy of which are a
continuing condition of the making of Revolving Loans and providing Letter of Credit Accommodations
by Lender to Borrower.

SECTION 4. AFFIRMATIVE AND NEGATIVE COVENANTS

Debtor is hereby bound by the covenants set out in Section 8 of the Third Amended and
Restated Loan Agreement. In addition:

	 	(a)	 	Debtor shall enter into its register of charges such particulars regarding the
charge created by this Agreement as are specified in Section 162 of the BVI
Business Companies Act, 2004 (as the same may be amended from time to time) or any
similar provision in any statute pursuant to which Debtor is incorporated or existing
from time to time and submit a copy of such revised register of charges to its
registered agent in the British Virgin Islands to keep at its registered office in the
British Virgin Islands; and
	 
	 	(b)	 	Debtor agrees that it shall not grant a charge over its assets and properties
ranking equally or in priority to the charge hereunder granted in favour of Agent.

 

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SECTION 5. EVENTS OF DEFAULT AND REMEDIES

     5.1 Events of Default. The occurrence or existence of any Event of Default under the
Third Amended and Restated Loan Agreement is referred to herein individually as an “Event of
Default”, and collectively as “Events of Default”.

     5.2 Remedies.

	 	(a)	 	At any time an Event of Default exists or has occurred and is continuing,
Lender and US Collateral Agent shall have all rights and remedies provided in this
Agreement, the other Financing Agreements, the UCC and other applicable law, all of
which rights and remedies may be exercised without notice to or consent by Debtor,
Borrower or any Obligor, except as such notice or consent is expressly provided for
hereunder or required by applicable law. All rights, remedies and powers granted to
Lender and US Collateral Agent hereunder, under any of the other Financing Agreements,
the UCC or other applicable law, are cumulative, not exclusive and enforceable, in
Lender’s or US Collateral Agent’s discretion, alternatively, successively, or
concurrently on any one or more occasions, and shall include, without limitation, the
right to apply to a court of equity for an injunction to restrain a breach or
threatened breach by Debtor of this Agreement or any of the other Financing Agreements.
Lender or US Collateral Agent may, at any time or times, proceed directly against
Debtor, Borrower or any Obligor to collect the Guaranteed Obligations (except under or
in connection with any Swap Agreement) without prior recourse to any Obligor, Borrower
or any of the Collateral.
	 
	 	(b)	 	Without limiting the foregoing, at any time an Event of Default exists or has
occurred and is continuing, Lender and US Collateral Agent may, in their discretion
and, without limitation:

          (i) accelerate the payment of all Guaranteed Obligations (except under or in connection with
any Swap Agreement) and demand immediate payment thereof to Lender (provided, that, upon the
occurrence of any Event of Default described in Sections 9.1(g) and 9.1(h) of the
Third Amended and Restated Loan Agreement, all Guaranteed Obligations (except under or in
connection with any Swap Agreement) shall automatically become immediately due and payable);

          (ii) with or without judicial process or the aid or assistance of others, enter upon any
premises on or in which any of the Collateral may be located and take possession of the Collateral
or complete processing, manufacturing and repair of all or any portion of the Collateral;

          (iii) require Debtor, at Debtor’s expense, to assemble and make available to Lender and US
Collateral Agent any part or all of the Collateral at any place and time designated by Lender or
Agent;

          (iv) collect, foreclose, receive, appropriate, setoff and realize upon any and all Collateral;

 

- 10 -

          (v) remove any or all of the Collateral from any premises on or in which the same may be
located for the purpose of effecting the sale, foreclosure or other disposition thereof or for any
other purpose; and/or

          (vi) sell, lease, transfer, assign, deliver or otherwise dispose of any and all Collateral
(including entering into contracts with respect thereto, public or private sales at any exchange,
broker’s board, at any office of Lender or US Collateral Agent or elsewhere) at such prices or
terms as Lender or US Collateral Agent may deem reasonable, for cash, upon credit or for future
delivery, with Lender or US Collateral Agent having the right to purchase the whole or any part of
the Collateral at any such public sale, all of the foregoing being free from any right or equity of
redemption of Debtor, which right or equity of redemption is hereby expressly waived and released
by Debtor.

If any of the Collateral is sold or leased by Lender or US Collateral Agent upon credit terms or
for future delivery, the Guaranteed Obligations shall not be reduced as a result thereof until
payment therefor is finally collected by Lender or US Collateral Agent.

If notice of disposition of Collateral is required by law, ten (10) days prior notice by Lender or
US Collateral Agent to Debtor designating the time and place of any public sale or the time after
which any private sale or other intended disposition of Collateral is to be made, shall be deemed
to be reasonable notice thereof and Debtor waives any other notice.

In the event Lender or US Collateral Agent institutes an action to recover any Collateral or seeks
recovery of any Collateral by way of prejudgment remedy, Debtor waives the posting of any bond
which might otherwise be required.

	 	(c)	 	Lender or US Collateral Agent may, at any time or times that an Event of
Default exists or has occurred and is continuing, enforce Debtor’s rights against any
account debtor, secondary obligor or other obligor in respect of any of the Accounts or
other Receivables. Without limiting the generality of the foregoing, Lender or US
Collateral Agent may at such time or times:

          (i) notify any or all account debtors, secondary obligors or other obligors in respect thereof
that the Receivables have been assigned to US Collateral Agent and that US Collateral Agent has a
security interest therein and Lender or US Collateral Agent may direct any or all account debtors,
secondary obligors and other obligors to make payment of Receivables directly to Lender or US
Collateral Agent;

          (ii) extend the time of payment of, compromise, settle or adjust for cash, credit, return of
merchandise or otherwise, and upon any terms or conditions, any and all Receivables or other
obligations included in the Collateral and thereby discharge or release the account debtor or any
secondary obligors or other obligors in respect thereof without affecting any of the Guaranteed
Obligations;

          (iii) demand, collect or enforce payment of any Receivables or such other obligations, but
without any duty to do so, and Lender and US Collateral Agent shall not be liable for their failure
to collect or enforce the payment thereof nor for the negligence of its agents or attorneys with
respect thereto; and

 

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          (iv) take whatever other action Lender or US Collateral Agent may deem necessary or desirable
for the protection of its interests.

At any time that an Event of Default exists or has occurred and is continuing, at Lender’s or US
Collateral Agent’s request, all invoices and statements sent to any account debtor shall state that
the Accounts and such other obligations have been assigned to US Collateral Agent and are payable
directly and only to Lender or US Collateral Agent and Debtor shall deliver to Lender or US
Collateral Agent such originals of documents evidencing the sale and delivery of goods or the
performance of services giving rise to any Accounts as Lender or US Collateral Agent may require.

In the event any account debtor returns Inventory when an Event of Default exists or has occurred
and is continuing, Debtor shall, upon Lender’s or US Collateral Agent’s request, hold the returned
Inventory in trust for Lender and US Collateral Agent, segregate all returned Inventory from all of
its other property, dispose of the returned Inventory solely according to Lender’s or US Collateral
Agent’s instructions, and not issue any credits, discounts or allowances with respect thereto
without Lender’s or US Collateral Agent’s prior written consent.

	 	(d)	 	To the extent that applicable law imposes duties on Lender or US Collateral
Agent to exercise remedies in a commercially reasonable manner (which duties cannot be
waived under such law), Debtor acknowledges and agrees that it is not commercially
unreasonable for Lender or US Collateral Agent:

          (i) to fail to incur expenses reasonably deemed significant by Lender or US Collateral Agent
to prepare Collateral for disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition;

          (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or, if
not required by other law, to fail to obtain consents of any governmental authority or other third
party for the collection or disposition of Collateral to be collected or disposed of;

          (iii) to fail to exercise collection remedies against account debtors, secondary obligors or
other persons obligated on Collateral or to remove liens or encumbrances on or any adverse claims
against Collateral;

          (iv) to exercise collection remedies against account debtors and other persons obligated on
Collateral directly or through the use of collection agencies and other collection specialists;

          (v) to advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature;

          (vi) to contact other persons, whether or not in the same business as Debtor for expressions
of interest in acquiring all or any portion of the Collateral;

          (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral,
whether or not the collateral is of a specialized nature;

 

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          (viii) to dispose of Collateral by utilizing Internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets;

          (ix) to dispose of assets in wholesale rather than retail markets;

          (x) to disclaim disposition warranties;

          (xi) to purchase insurance or credit enhancements to insure Lender and US Collateral Agent
against risks of loss, collection or disposition of Collateral or to provide to Lender or US
Collateral Agent a guaranteed return from the collection or disposition of Collateral; or

          (xii) to the extent deemed appropriate by Lender or US Collateral Agent, to obtain the
services of other brokers, investment bankers, consultants and other professionals to assist them
in the collection or disposition of any of the Collateral.

Debtor acknowledges that the purpose of this Section is to provide non-exhaustive indications of
what actions or omissions by Lender or US Collateral Agent would not be commercially unreasonable
in Lender’s or US Collateral Agent’s exercise of remedies against the Collateral and that other
actions or omissions by Lender or US Collateral Agent shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section. Without limitation of the foregoing,
nothing contained in this Section shall be construed to grant any rights to Debtor or to impose any
duties on Lender or US Collateral Agent that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this Section.

	 	(e)	 	For the purpose of enabling Lender or US Collateral Agent to exercise the
rights and remedies hereunder, Debtor hereby grants to Lender and US Collateral Agent,
to the extent assignable, an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to Debtor) to use, assign, license or
sublicense any of the trademarks, service-marks, trade names, business names, trade
styles, designs, logos and other source of business identifiers and other Intellectual
Property and general intangibles now owned or hereafter acquired by Debtor, wherever
the same maybe located, including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof.
	 
	 	(f)	 	Lender may apply the cash proceeds of Collateral actually received by Lender or
US Collateral Agent from any sale, lease, foreclosure or other disposition of the
Collateral to payment of the Guaranteed Obligations, in whole or in part and in such
order as Lender may elect, whether or not then due (except under or in connection with
any Swap Agreement). Debtor shall remain liable to Lender and US Collateral Agent for
the payment of any deficiency with interest at the highest rate provided for in the
Third Amended and Restated Loan Agreement and all costs and expenses of collection or
enforcement, including attorneys’ fees and legal expenses.

 

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	SECTION 6.	 	JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

     6.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

	 	(a)	 	The validity, interpretation and enforcement of this 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 internal laws of the State of Illinois
but excluding any principles of conflicts of law or other rule of law that would cause
the application of the law of any jurisdiction other than the laws of the State of
Illinois.
	 
	 	(b)	 	Debtor, Lender and US Collateral Agent irrevocably consent and submit to the
non-exclusive jurisdiction of the Circuit Court of Cook County, Illinois and the United
States District Court for the Northern District of Illinois, whichever Lender or US
Collateral Agent may elect, and waive any objection based on venue or forum non
conveniens with respect to any action instituted therein arising under this 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 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 agree that any dispute with respect to any such matters shall be
heard only in the courts described above (except that Lender and US Collateral Agent
shall have the right to bring any action or proceeding against Debtor or its property
in the courts of any other jurisdiction which they deem necessary or appropriate in
order to realize on the Collateral or to otherwise enforce their rights against Debtor
or its property).
	 
	 	(c)	 	Debtor 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 below 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 Lender’s or US Collateral Agent’s option, by service upon Debtor in any
other manner provided under the rules of any such courts. Within thirty (30) days
after such service, Debtor shall appear in answer to such process, failing which Debtor
shall be deemed in default and judgment may be entered by Lender or US Collateral Agent
against Debtor for the amount of the claim and other relief requested.
	 
	 	(d)	 	DEBTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING
AGREEMENTS OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
DEBTOR, LENDER AND US COLLATERAL AGENT IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED

 

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	 	 	 	HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. DEBTOR 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 DEBTOR, LENDER OR US COLLATERAL AGENT MAY FILE AN
ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE
OF THE CONSENT OF DEBTOR, LENDER AND US COLLATERAL AGENT TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
	 
	 	(e)	 	Lender and US Collateral Agent shall not have any liability to Debtor (whether
in tort, contract, equity or otherwise) for losses suffered by Debtor in connection
with, arising out of, or in any way related to the transactions or relationships
contemplated by this 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 Lender and US Collateral Agent that the losses were the result of acts or
omissions of Lender and US Collateral Agent constituting gross negligence or willful
misconduct. In any such litigation, each of Lender and US Collateral Agent 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
Agreement and the other Financing Agreements.

     6.2 Waiver of Notices. Debtor hereby expressly waives demand, presentment, protest
and notice of protest and notice of dishonor with respect to any and all instruments and commercial
paper, included in or evidencing any of the Guaranteed Obligations or the Collateral, and any and
all other demands and notices of any kind or nature whatsoever with respect to the Guaranteed
Obligations, the Collateral and this Agreement, except such as are expressly provided for herein.
No notice to or demand on Debtor which Lender or US Collateral Agent may elect to give shall
entitle Debtor to any other or further notice or demand in the same, similar or other
circumstances.

     6.3 Amendments and Waivers. Neither this 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 Lender and US Collateral Agent, and as to amendments,
as also signed by an authorized officer of Debtor. Lender and US Collateral Agent shall not, by
any act, delay, omission or otherwise be deemed to have expressly or impliedly waived any of their
rights, powers and/or remedies unless such waiver shall be in writing and signed by an authorized
officer of Lender or US Collateral Agent. Any such waiver shall be enforceable only to the extent
specifically set forth therein. A waiver by Lender or US Collateral Agent 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 either would otherwise have on any future occasion, whether similar in
kind or otherwise.

     6.4 Waiver of Counterclaims. Debtor waives all rights to interpose any claims,
deductions, setoffs or counterclaims of any nature (other then compulsory counterclaims) in any

 

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action or proceeding with respect to this Agreement, the Guaranteed Obligations, the
Collateral or any matter arising therefrom or relating hereto or thereto.

     6.5 Indemnification. Debtor shall indemnify and hold Lender, US Collateral Agent,
Secured Parties, and their respective directors, agents, employees and counsel (collectively,
“Indemnified Parties”), harmless from and against any and all losses, claims, damages, liabilities,
costs or expenses imposed on, incurred by or asserted against any of them in connection with any
litigation, investigation, claim or proceeding commenced or threatened related to the negotiation,
preparation, execution, delivery, enforcement, performance or administration of this Agreement, any
other Financing Agreements, or any undertaking or proceeding related to any of the transactions
contemplated hereby or any act, omission, event or transaction related or attendant thereto,
including amounts paid in settlement, court costs, and the fees and expenses of counsel. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in this Section may be
unenforceable because it violates any law or public policy, Debtor shall pay the maximum portion
which it is permitted to pay under applicable law to Indemnified Parties in satisfaction of
indemnified matters under this Section. To the extent permitted by applicable law, Debtor shall
not assert, and Debtor hereby waives, any claim against Indemnified Parties, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement, any of the other
Financing Agreements or any undertaking or transaction contemplated hereby. The foregoing indemnity
shall survive the payment of the Obligations and the termination or non-renewal of the Third
Amended and Restated Loan Agreement.

SECTION 7. MISCELLANEOUS

     7.1 Interpretative Provisions.

	 	(a)	 	All terms used herein which are defined in Article 1 or Article
9 of the UCC shall have the meanings given therein unless otherwise defined in this
Agreement.
	 
	 	(b)	 	Capitalized terms used but not defined herein shall have the meanings given to
them in the Third Amended and Restated Loan Agreement.
	 
	 	(c)	 	All references to the plural herein shall also mean the singular and to the
singular shall also mean the plural unless the context otherwise requires.
	 
	 	(d)	 	All references to Debtor, Lender, US Collateral Agent, Borrower, Secured
Parties and Indemnified Parties herein, or to any other person herein, shall include
their respective successors and assigns.
	 
	 	(e)	 	The words “hereof”, “herein”, “hereunder”, “this Agreement” and words of
similar import when used in this Agreement shall refer to this Agreement as a whole and
not any particular provision of this Agreement and as this Agreement now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

 

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	 	(f)	 	The word “including” when used in this Agreement shall mean “including, without
limitation”.
	 
	 	(g)	 	All references to the term “good faith” used herein when applicable to Lender
or US Collateral Agent shall mean, notwithstanding anything to the contrary contained
herein or in the UCC, honesty in fact in the conduct or transaction concerned. Debtor
shall have the burden of proving any lack of good faith on the part of Lender or US
Collateral Agent alleged by Debtor at any time.
	 
	 	(h)	 	An Event of Default shall exist or continue or be continuing until such Event
of Default is waived in accordance with Section 6.3 or is cured in a manner
satisfactory to Lender and US Collateral Agent, if such Event of Default is capable of
being cured as determined by Lender and US Collateral Agent.
	 
	 	(i)	 	In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”, the words “to” and “until”
each mean “to but excluding” and the word “through” means “to and including”.
	 
	 	(j)	 	Unless otherwise expressly provided herein, (i) references herein to any
agreement, document or instrument shall be deemed to include all subsequent amendments,
modifications, supplements, extensions, renewals, restatements or replacements with
respect thereto, but only to the extent the same are not prohibited by the terms hereof
or of any other Financing Agreement, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions consolidating,
amending, replacing, recodifying, supplementing or interpreting the statute or
regulation.
	 
	 	(k)	 	The captions and headings of this Agreement are for convenience of reference
only and shall not affect the interpretation of this Agreement.
	 
	 	(l)	 	This Agreement and other Financing Agreements may use several different
limitations, tests or measurements to regulate the same or similar matters. All such
limitations, tests and measurements are cumulative and shall each be performed in
accordance with their terms.
	 
	 	(m)	 	This Agreement and the other Financing Agreements are the result of
negotiations among and have been reviewed by counsel to Lender and US Collateral Agent
and the other parties, and are the products of all parties. Accordingly, this
Agreement and the other Financing Agreements shall not be construed against Lender and
US Collateral Agent merely because of Lender’s and US Collateral Agent’s involvement in
their preparation.

     7.2 Notices. All notices, requests and demands hereunder shall be in writing and
deemed to have been 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 certified mail, return receipt

 

- 17 -

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 Debtor:

	 	 7480 Mission Valley Road, Suite 101
	 

	 	 San Diego, California
	 

	 	 92108
	 

	 	 Attention: Whitney Peterson
	 

	 	 Telephone No.: (619) 683-9830
	 

	 	 Telecopy No.: (619) 683-9829
	 
	 	 
	 

	 	 - and -
	 
	 	 
	 

	 	 PO Box 92
	 

	 	 Road Town Tortola
	 

	 	 British Virgin Islands
	 

	 	 VG 1110
	 

	 	 Attention: Colette Corea Saunders
	 

	 	 Telephone No.: 284-494-2204
	 

	 	 Telecopy No.: 284-494-5535
	 
	 	 
	If to Lender and US Collateral Agent:

	 	 Wachovia Capital Finance Corporation (Central)
	 

	 	 150 South Wacker Drive, Suite 2200
	 

	 	 Chicago, Illinois 60606-4401
	 

	 	 Attention: Portfolio Manager
	 

	 	 Telephone No.: 312-332-0420
	 

	 	 Telecopy No.: 312-332-0424

     7.3 Partial Invalidity. If any provision of this Agreement is held to be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate this Agreement as a whole,
but this 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.

     7.4 Successors. This Agreement, the other Financing Agreements and any other document
referred to herein or therein shall be binding upon Debtor and its successors and assigns and inure
to the benefit of and be enforceable by Lender and US Collateral Agent and their respective
successors and assigns, except that Debtor may not assign its rights under this Agreement, the
other Financing Agreements and any other document referred to herein or therein without the prior
written consent of Lender and US Collateral Agent.

     7.5 Entire Agreement. This Agreement, the other Financing Agreements, any supplements
hereto or thereto, and any instruments or documents delivered or to be delivered in connection
herewith or therewith represents the entire agreement and understanding concerning the subject
matter hereof and thereof between the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties, commitments, proposals,
offers and contracts concerning the subject matter hereof, whether oral

 

- 18 -

or written. In the event of any inconsistency between the terms of this Agreement and any
schedule or exhibit hereto, the terms of this Agreement shall govern.

     IN WITNESS WHEREOF, Debtor has caused these presents to be duly executed as of the day and
year first above written.

	 	 	 	 	 
	 	

WINKLER ATLANTIC HOLDINGS LIMITED

 	 
	 	By:  	/s/ Darren Richardson
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Stewart Halpern
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

Exhibit A

Information Certificate

See attached.

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