DATED

DEFINITIONS AND INTERPRETATION

GUARANTEE AND INDEMNITY

COVENANT TO PAY

GRANT OF SECURITY

FIXED SECURITY

FLOATING CHARGE

CONVERSION OF FLOATING CHARGE

CONTINUING SECURITY

LIABILITY OF SECURITY OBLIGORS RELATING TO SECURITY ASSETS

ACCOUNTS

REPRESENTATIONS

UNDERTAKINGS BY THE SECURITY OBLIGOR

POWER TO REMEDY

WHEN SECURITY BECOMES ENFORCEABLE

ENFORCEMENT OF SECURITY

RECEIVER

POWERS OF RECEIVER

APPLICATION OF PROCEEDS

SET-OFF

DELEGATION

FURTHER ASSURANCES

POWER OF ATTORNEY

PAYMENTS

STAMP DUTY

COSTS AND EXPENSES

CURRENCIES

INDEMNITY

MISCELLANEOUS

RIGHT OF APPROPRIATION

NOTICES

PARTIAL INVALIDITY

RELEASE

COUNTERPARTS

GOVERNING LAW

JURISDICTION OF ENGLISH COURTS

SCHEDULE 1

Security Obligors

SCHEDULE 2

Guarantee

SCHEDULE 3

DETAILS OF SECURITY ASSETS

Part 1 - Specified Real Property

Part 2 - Specified P&M

Part 3 - Charged Securities

Part 4 - Intellectual Property

Part 5 - Inventory Insurances

Part 6 - P&M Insurances

Part 7 - Real Property Insurances

EXECUTION PAGE

FAUNUS GROUP INTERNATIONAL, INC. a Delaware corporation, whose office is at 80 Broad Street, 22^nd Floor, New York, NY 10004 (“FGI”); and

THE COMPANIES LISTED IN SCHEDULE 1 (SECURITY OBLIGORS) to this Deed (the “Security Obligors”).

DEFINITIONS AND INTERPRETATION

Definitions

terms defined in, or construed for the purposes of, the Master Facilities Agreement (as defined below) have the same meanings when used in this Deed (unless the same are otherwise defined in this Deed); and

the following terms have the following meanings:

any patents, trade marks, service marks, designs, business names, copyrights, design rights, moral rights, inventions, confidential information, know-how and other intellectual property rights and interests whether registered or unregistered; and

the benefit of all applications and rights to use such assets of the relevant Security Obligor;

the benefit of all rights, guarantees, Security Interests and remedies relating to any of the foregoing (including, without limitation, negotiable instruments, indemnities, reservations of property rights, rights of tracing and unpaid vendor’s liens and similar associated rights); and

all proceeds of any of the foregoing;

all buildings and fixtures (including trade fixtures) and fixed P&M at any time thereon;

all easements, rights and agreements in respect thereof; and

the benefit of all covenants given thereof;

all dividends, distributions and other income paid or payable on the relevant Securities or Charged Securities or on any asset referred to in paragraph (b) of this definition;

all rights, monies or property accruing or offered at any time in relation to such Securities or Charged Securities whether by way of redemption, substitution, exchange, bonus or preference, under option rights or otherwise;

all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full;

the Master Facilities Agreement has been terminated according to its terms; and

FGI has no further commitment, obligation or liability under or pursuant to the Finance Documents;

all buildings and fixtures (including trade fixtures) and fixed P&M at any time thereon;

all easements, rights and agreements in respect thereof; and

the benefit of all covenants given in respect thereof; and

Interpretation

Unless a contrary indication appears, any reference in this Deed to:

a “Client”, a “Security Obligor” or “FGI” shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

“this Deed”, the “Master Facilities Agreement”, any other “Finance Document” or any other agreement or instrument shall be construed as a reference to this Deed, the Master Facilities Agreement, such other Finance Document or such other agreement or instrument as varied, amended, supplemented, extended, restated, novated and/or replaced in any manner from time to time (however fundamentally and even if any of the same increases the obligations of any member of the Group or provides for further advances);

“assets” includes any present and future properties, revenues and rights of every description and includes uncalled capital;

An Event of Default that is “continuing” shall be construed as meaning an Event of Default that has not been waived in writing by FGI, to the satisfaction of FGI and any waiver given by FGI shall only apply to the specific occurrence of the specific event referred to in such waiver;

“including” or “includes” means including or includes without limitation;

“Secured Obligations” includes obligations and liabilities which would be treated as such but for the liquidation or dissolution of or similar event affecting any member of the Group;

a provision of law is a reference to that provision as amended or re-enacted; and

the singular includes the plural and vice versa.

References to clauses, paragraphs and schedules are to be construed, unless otherwise stated, as references to clauses, paragraphs and schedules of and to this Deed and references to this Deed include its schedules.

Clause and schedule headings are for convenience only and shall not affect the construction of this Deed.

Each undertaking of any Security Obligor contained in this Deed must be complied with at all times during the Security Period.

The terms of the other Finance Documents and of any side letters between any of the parties thereto in relation to any Finance Document are incorporated in this Deed to the extent required to ensure that any disposition of the property contained in this Deed is a valid disposition in accordance with section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989.

If FGI reasonably considers that an amount paid by any Security Obligor to FGI under a Finance Document is capable of being avoided or otherwise set aside on the liquidation or administration of the Security Obligor, then that amount shall not be considered to have been irrevocably paid for the purposes of this Deed.

The Security Obligor agrees to be bound by this Deed notwithstanding that any other Security Obligor which was intended to sign or be bound by this Deed did not so sign or is not bound by this Deed.

The Parties intend that this document shall take effect as a deed notwithstanding the fact that a Party may only execute this document under hand.

Third party rights

GUARANTEE AND INDEMNITY

Guarantee and indemnity

guarantees in favour of FGI punctual performance by each member of the Group of all its obligations under the Finance Documents;

undertakes in favour of FGI that whenever a member of the Group does not pay any amount when due under, or in connection with, any Finance Document, the Security Obligors shall immediately on demand pay that amount as if it were the principal obligor; and

indemnifies FGI immediately on demand against any cost, loss or liability suffered by FGI, if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which FGI would otherwise have been entitled to recover.

Limitation of guarantee

COVENANT TO PAY

Covenant to pay

Default interest

Any amount which is not paid under this Deed when due shall bear interest (both before and after judgment and payable on demand) from the due date until the date on which such amount is unconditionally and irrevocably paid and discharged in full on a daily basis at the rate and in the manner agreed in the Finance Document under which such amount is payable and, in the absence of such agreement, at the Default Rate from time to time.

Default interest will accrue from day to day and will be compounded at such intervals as FGI states are appropriate.

GRANT OF SECURITY

Nature of security

in favour of FGI;

with full title guarantee in accordance with the Law of Property (Miscellaneous Provisions) Act 1994; and

as continuing security for payment of the Secured Obligations.

Qualifying floating charge

FIXED SECURITY

Fixed charges

by way of first legal mortgage the Specified Real Property;

by way of first fixed charge:

all Real Property and all interests in Real Property not charged by clause 5.1(a);

all licences to enter upon or use land and the benefit of all other agreements relating to land; and

the proceeds of sale of all Real Property other than Specified Real Property;

by way of first fixed charge all Specified P&M;

by way of first fixed charge the benefit of all contracts, licences and warranties relating to the Specified P&M;

by way of first fixed charge all P&M (not charged by clauses 5.1(a), 5.1(b) or 5.1(c)) and the benefit of all contracts, licences and warranties relating to the same;

by way of first fixed charge:

all computers, vehicles, office equipment and other equipment (not charged by clause 5.1(c)); and

the benefit of all contracts, licences and warranties relating to the same,

by way of first fixed charge the Charged Securities;

by way of first fixed charge all Securities Rights from time to time accruing to the Charged Securities;

by way of first fixed charge all rights which a Security Obligor may have at any time against any clearance or settlement system or any custodian in respect of any Charged Securities;

by way of first fixed charge all Securities (not charged by clause 5.1(g)),

by way of first fixed charge (A) all Securities Rights from time to time accruing to those Securities and (B) all rights which a Security Obligor may have at any time against any clearance or settlement system or any custodian in respect of any Securities;

in respect of the Client only, by way of first fixed charge all Non-Vesting Receivables and their proceeds now or in the future owing to the Client;

in respect of the Client only, by way of first fixed charge all Related Rights relating to any Non-Vesting Receivables;

in respect of the Client only, by way of first fixed charge all Other Proceeds;

by way of first fixed charge the Intellectual Property (if any) specified in part 4 of schedule 3 (Details of Security Assets);

by way of first fixed charge all Intellectual Property (if any) not charged by clause 5.1(o);

to the extent that any Assigned Asset is not effectively assigned under clause 5.2 (Security assignments), by way of first fixed charge, such Assigned Asset;

by way of first fixed charge (to the extent not otherwise charged or assigned in this Deed):

the benefit of all licences, consents, agreements and authorisations held or used in connection with the business of each Security Obligor or the use of any of its assets; and

any letter of credit issued in favour of a Security Obligor and all bills of exchange and other negotiable instruments held by it; and

by way of first fixed charge all of the goodwill and uncalled capital of each Security Obligor.

Security assignments

the proceeds of the sale of any Specified Real Property;

the proceeds of the sale of any Specified P&M;

the proceeds of the sale of any Charged Securities;

the proceeds of the sale of any Intellectual Property specified in part 4 of schedule 3 (Details of Security Assets);

the Inventory Insurances, all claims under the Inventory Insurances and the proceeds of the Inventory Insurances;

the P&M Insurances, all claims under the P&M Insurances and the proceeds of the P&M Insurances;

the Real Property Insurances, all claims under the Real Property Insurances and the proceeds of the Real Property Insurances;

the Insurances, all claims under the Insurances and all proceeds of the Insurances; and

Other Receivables (not assigned under clauses 5.2(a) to 5.2(h) (inclusive) above).

Assigned Assets

FLOATING CHARGE

assets and undertakings (wherever located) which are not effectively charged by way of first fixed mortgage or charge or assigned pursuant to clause 5.1 (Fixed charges), clause 5.2 (Security assignments) or any other provision of this Deed; and

(whether or not effectively so charged or assigned) heritable property and all other property and assets in Scotland.

CONVERSION OF FLOATING CHARGE

Conversion by notice

FGI may, by written notice to a Security Obligor, convert the floating charge created under this Deed into a fixed charge as regards all or any of the assets of that Security Obligor specified in the notice if:

An Event of Default has occurred and is continuing; or

FGI (acting reasonably) considers any Security Assets (whether or not those specified in the notice) to be in danger of being seized or sold under any form of distress, attachment, execution or other legal process or to be otherwise in jeopardy.

Automatic conversion

in relation to any Security Asset which is subject to a floating charge if:

a Security Obligor creates (or attempts or purports to create) any Security Interest on or over the relevant Security Asset without the prior written consent of FGI; or

any third party levies or attempts to levy any distress, execution, attachment or other legal process against any such Security Asset; and

over all Security Assets of a Security Obligor which are subject to a floating charge if an administrator is appointed in respect of the relevant Security Obligor or FGI receives notice of intention to appoint such an administrator.

Partial conversion

CONTINUING SECURITY

Continuing security

Additional and separate security

Right to enforce

LIABILITY OF SECURITY OBLIGORS RELATING TO SECURITY ASSETS

ACCOUNTS

REPRESENTATIONS

General

No Security Interests

as created by this Deed; and

as permitted by the Master Facilities Agreement.

No avoidance

Ownership of Security Assets

No proceedings pending or threatened

Charged Securities

All Securities (including any Charged Securities) are fully paid.

If any Charged Securities are listed in part 3 of schedule 3 (Details of Security Assets) those Charged Securities constitute the entire share capital owned by the relevant Security Obligor in the relevant company.

Time when representations made

All the representations and warranties in this clause 11 are made by each Security Obligor on the date of this Deed and are also deemed to be made by each Security Obligor on the date of each Notification.

Each representation or warranty deemed to be made after the date of this Deed shall be deemed to be made by reference to the facts and circumstances existing at the date the representation or warranty is deemed to be made.

UNDERTAKINGS BY THE SECURITY OBLIGOR

Master Facilities Agreement

gives the warranties and representations set out at paragraphs 6(a) to 6(f) inclusive, 6(h) to 6(k) inclusive, 6(n) and 6(p) (General Warranties and Representations) of the Master Facilities Agreement;

gives the covenants set out at paragraph 7 (General Covenants) of the Master Facilities Agreement; and

Restrictions on dealing

create or permit to subsist any Security Interest on any Security Assets except a Security Interest which is permitted by the Master Facilities Agreement;

incur or permit to subsist any Financial Indebtedness other than Permitted Financial Indebtedness;

sell, transfer, lease, lend or otherwise dispose of (whether by a single transaction or a number of transactions and whether related or not) the whole or any part of its interest in any Security Asset except for the sale at full market value of stock in trade in the usual course of trading as conducted by the relevant Security Obligor at the Commencement Date or of obsolete P&M where such P&M is replaced with P&M of equivalent or higher value.

Security Assets generally

permit FGI (or its designated representatives), on reasonable written notice:

access during normal office hours to any documents and records relating to the Security Assets; and

to inspect, take extracts from, and make photocopies of, the same,

notify FGI of every notice, order, application, requirement or proposal given or made by any competent authority:

in relation to any Security Asset specified in schedule 3 (Details of Security Assets), immediately upon receipt; and

within 14 days of receipt of every notice, order, application, requirement or proposal given or made in relation to any Security Assets other than Security Asset specified in schedule 3 (Details of Security Assets)

duly and punctually pay all rates, rents, Taxes, and other outgoings owed by it in respect of the Security Assets; and

in addition to any provisions of the Master Facilities Agreement or this Deed relating to specific Security Assets:

comply in all material respects with all obligations in relation to the Security Assets under any present or future law, regulation, order or instrument or under any bye-laws, regulations or requirements of any competent authority or other approvals, licences or consents;

comply with all material covenants and obligations affecting the Security Assets (or their manner of use);

not, except with the prior written consent of FGI, enter into any onerous or restrictive obligation affecting any Security Asset;

provide FGI with all information which it may reasonably request in relation to the Security Assets; and

not do, cause or permit to be done anything which may in any way depreciate, jeopardise or otherwise prejudice the value or marketability of any Security Asset (or make any omission which has such an effect).

Specified P&M

Specified Real Property

Charged Securities

In relation to any Charged Securities, each Security Obligor shall, immediately upon execution of this Deed or (if later), as soon as is practicable after its acquisition of any such Charged Securities in certificated form, by way of security for the Secured Obligations:

deposit with FGI or, as FGI may direct, all certificates and other documents of title or evidence of ownership to such Charged Securities and their Securities Rights; and

execute and deliver to FGI pre-stamped instruments of transfer in respect of such Charged Securities (executed in blank and left undated) and/or such other documents as FGI shall require to enable it (or its nominees) to be registered as the owner of or otherwise to acquire a legal title to such Charged Securities and their Securities Rights (or to pass legal title to any purchaser).

In relation to any Charged Securities, each Security Obligor shall:

promptly give notice to any custodian of any agreement with the relevant Security Obligor in respect of any such Charged Securities and all present and future Securities Rights accruing to all or any of such Charged Securities, in a form FGI may require; and

use its reasonable endeavours to ensure that the custodian acknowledges that notice in a form FGI may require.

Without prejudice to the rest of this clause 12.6, FGI may, at the expense of the relevant Security Obligor, take whatever action is required for the dematerialisation or rematerialisation of any Charged Securities and all present and future Securities Rights accruing to all or any of such Charged Securities.

Each Security Obligor shall promptly pay all calls or other payments which may become due in respect of Charged Securities and all present and future Securities Rights accruing to all or any of such Charged Securities.

Each Security Obligor shall immediately upon a request from FGI comply with the provisions of this clause 12.6 in relation to any Securities other than the Charged Securities and their Securities Rights.

Rights in respect of Securities, Charged Securities and Securities Rights

Until an Event of Default occurs, each Security Obligor shall be entitled to:

receive and retain all dividends, distributions and other monies paid on or derived from its Securities and its Charged Securities; and

exercise all voting and other rights and powers attaching to its Securities and its Charged Securities, provided that it must not do so in a manner which (A) has the effect of changing the terms of the Securities or the Charged Securities (or any class of them) or of any Securities Rights or (B) which is prejudicial to the interests of FGI.

At any time following the occurrence of an Event of Default which is continuing, FGI may complete the instrument(s) of transfer for all or any Securities or Charged Securities on behalf of the relevant Security Obligor in favour of itself or such other person as it may select.

At any time when any Securities or Charged Securities are registered in the name of FGI or its nominee, FGI shall be under no duty to:

ensure that any dividends, distributions or other monies payable in respect of such Securities or Charged Securities are duly and promptly paid or received by it or its nominee; or

verify that the correct amounts are paid or received; or

take any action in connection with the taking up of any (or any offer of any) Securities Rights in respect of or in substitution for any such Securities or Charged Securities.

Dealings with and realisation of Non-Vesting Receivables and Other Proceeds

The Client shall only deal with Non-Vesting Receivables and the proceeds thereof and the Related Rights thereto in accordance with the Master Facilities Agreement.

The Client agrees that the Other Proceeds shall be dealt with as if they were the proceeds of Receivables assigned or purportedly assigned to FGI in accordance with the terms of the Master Facilities Agreement.

Intellectual Property

do all acts as are reasonably practicable to maintain, protect and safeguard (including, without limitation, registration with all relevant authorities) its Intellectual Property and not discontinue the use of any of its Intellectual Property; and

take all such reasonable steps, including the commencement of legal proceedings, as may be necessary to safeguard and maintain the validity, reputation, integrity, registration or subsistence of its Intellectual Property.

Proceeds of the sale of certain Charged Securities, Specified P&M, Real Property and Intellectual Property

Insurance

In relation to any Insurance, the Security Obligor shall at all times:

effect and maintain insurances at its own expense with insurers previously approved by FGI in writing providing cover against all risks which are normally insured against by other prudent companies owning or possessing similar assets and

carrying on similar businesses and be in such amounts as would in the circumstances be prudent for such companies and shall include, an entitlement to receive the full replacement value from time to time of any Security Assets destroyed or otherwise becoming a total loss and have FGI as co-insured and sole first loss payee;

ensure that the Insurance is on such terms and contains such clauses as FGI may reasonably require and in particular, but without limitation, on terms that the relevant insurer will inform FGI:

of any cancellation, alteration, termination or expiry of any Insurance at least 30 days before it is due to take effect;

of any default in the payment of any premium or failure to renew the Insurance at least 30 days before the renewal date;

of any act, omission or event of which the insurer has knowledge which may make any Insurance void, voidable or unenforceable (in whole or in part).

promptly pay all premiums relating to the Insurances;

supply to FGI immediately upon issue copies of each Insurance policy document, together with the current premium receipts relating to it;

not do or permit to be done or omit to do anything which may render any Insurance void, voidable or unenforceable (in whole or in part) and will not vary, amend or terminate any Insurance policy.

If at any time the Security Obligor defaults in effecting or keeping up the Insurances, or in producing any Insurance policy or premium receipt to FGI on demand, FGI may take out or renew such policies of insurance in any sum which FGI may reasonably think expedient. All monies which are expended by FGI in doing so shall be deemed to be properly paid by FGI and shall be reimbursed by the Security Obligor on demand together with interest at the Default Rate.

In relation to the proceeds of Insurances:

the Security Obligor will notify FGI if any claim arises or may be made under the Insurances;

unless FGI provides its prior written consent to the contrary, FGI shall have the sole right to settle or sue for any such claim and give any discharge for insurance monies; and

all claims and monies received or receivable under any Insurances must be applied in replacing or restoring the

Security Asset damaged or destroyed or (after the occurrence of an Event of Default which is continuing) in repayment of outstanding Prepayments in such order as FGI sees fit.

POWER TO REMEDY

Power to remedy

Mortgagee in possession

Monies expended

WHEN SECURITY BECOMES ENFORCEABLE

When enforceable

Statutory powers

Enforcement

ENFORCEMENT OF SECURITY

General

Powers of FGI

(or if so requested by a Security Obligor by written notice at any time may) appoint any person or persons to be a receiver or receiver and manager of all or any part of the Security Assets and/or of the income of the Security Assets; and/or

appoint or apply for the appointment of any person who is appropriately qualified as administrator of a Security Obligor; and/or

exercise all or any of the powers conferred on mortgagees by the Act (as amended or extended by this Deed) and/or all or any of the powers which are conferred by this Deed on a Receiver, in each case without first appointing a Receiver or notwithstanding the appointment of any Receiver; and/or

exercise (in the name of the relevant Security Obligor and without any further consent or authority of the relevant Security Obligor) any voting rights and any powers or rights which may be exercised by the person(s) in whose name the Charged Investments are registered, or who is the holder of any of them.

Redemption of prior mortgages

redeem any prior Security Interest against any Security Asset; and/or

procure the transfer of that Security Interest to itself; and/or

settle and pass the accounts of the holder of any prior Security Interest and any accounts so settled and passed shall be conclusive and binding on the relevant Security Obligor.

Privileges

No liability

Neither FGI nor any Receiver shall be liable (i) in respect of all or any part of the Security Assets or (ii) for any loss or damage which arises out of the exercise or the attempted or purported exercise of, or the failure to exercise any of, its or his respective powers (unless such loss or damage is caused by its or his gross negligence or wilful misconduct).

Without prejudice to the generality of clause 15.5(a), neither FGI nor any Receiver shall be liable, by reason of entering into possession of a Security Asset, to account as mortgagee in possession or for any loss on realisation or for any default or omission for which a mortgagee in possession might be liable.

Protection of third parties

whether the Secured Obligations have become payable; or

whether any power which FGI or the Receiver is purporting to exercise has become exercisable; or

whether any money remains due under any Finance Document; or

how any money paid to FGI or to the Receiver is to be applied.

RECEIVER

Removal and replacement

Multiple Receivers

Remuneration

Payment by Receiver

Agent of Security Obligors

POWERS OF RECEIVER

General powers

all the powers which are conferred by the Act on mortgagees in possession and receivers appointed under the Act;

(whether or not he is an administrative receiver) all the powers which are listed in schedule 1 of the Insolvency Act 1986; and

all powers which are conferred by any other law conferring power on receivers.

Additional powers

to take possession of, collect and get in all or any part of the Security Assets and/or income in respect of which he was appointed;

to manage the Security Assets and the business of the relevant Security Obligor as he thinks fit;

to redeem any security and to borrow or raise any money and secure the payment of any money in priority to the Secured Obligations for the purpose of the exercise of his powers and/or defraying any costs or liabilities incurred by him in such exercise;

to sell or concur in selling, leasing or otherwise disposing of all or any part of the Security Assets in respect of which he was appointed

without the need to observe the restrictions imposed by section 103 of the Act. Fixtures may be severed and sold separately from the Real Property containing them, without the consent of the relevant Security Obligor. The consideration for any such transaction may consist of cash, debentures or other obligations, shares, stock or other valuable consideration (and the amount of such consideration may be dependent upon profit or turnover or be determined by a third party). Any such consideration may be payable in a lump sum or by instalments spread over such period as he thinks fit;

to alter, improve, develop, complete, construct, modify, refurbish or repair any building or land and to complete or undertake or concur in the completion or undertaking (with or without modification) of any project in which the relevant Security Obligor was concerned or interested before his appointment (being a project for the alteration, improvement, development, completion, construction, modification, refurbishment or repair of any building or land);

to carry out any sale, lease or other disposal of all or any part of the Security Assets by conveying, transferring, assigning or leasing the same in the name of the relevant Security Obligor and, for that purpose, to enter into covenants and other contractual obligations in the name of, and so as to bind, the relevant Security Obligor;

to take any such proceedings (in the name of the relevant Security Obligor or otherwise) as he shall think fit in respect of the Security Assets and/or income in respect of which he was appointed (including proceedings for recovery of rent or other monies in arrears at the date of his appointment);

to enter into or make any such agreement, arrangement or compromise as he shall think fit;

to insure, and to renew any insurances in respect of, the Security Assets as he shall think fit (or as FGI shall direct);

to appoint and employ such managers, officers and workmen and engage such professional advisers as he shall think fit (including, without prejudice to the generality of the foregoing power, to employ his partners and firm);

to form one or more Subsidiaries of the relevant Security Obligor, and to transfer to any such Subsidiary all or any part of the Security Assets;

to operate any rent review clause in respect of any Real Property in respect of which he was appointed (or any part thereof) and to apply for any new or extended lease; and

to:

give valid receipts for all monies and to do all such other things as may seem to him to be incidental or conducive to any other

power vested in him or necessary or desirable for the realisation of any Security Asset;

exercise in relation to each Security Asset all such powers and rights as he would be capable of exercising if he were the absolute beneficial owner of the Security Assets; and

use the name of the relevant Security Obligor for any of the above purposes.

APPLICATION OF PROCEEDS

Application

first, in satisfaction of, or provision for, all costs, charges and expenses incurred, and payments made by FGI or any Receiver and of all remuneration due to the Receiver in connection with this Deed or the Security Assets;

secondly, in or towards satisfaction of the remaining Secured Obligations; and

thirdly, in payment of any surplus to the relevant Security Obligor or other person entitled to it.

Contingencies

SET-OFF

Set-off

FGI may (but shall not be obliged to) set off any obligation (contingent or otherwise under the Finance Documents or which has been assigned to FGI) against any obligation (whether or not matured) owed by FGI to any Security Obligor, regardless of the place of payment, booking branch or currency of either obligation.

If the obligations are in different currencies, FGI may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

If either obligation is unliquidated or unascertained, FGI may set off in an amount estimated by it in good faith to be the amount of that obligation.

Time deposits

this Security has become enforceable; and

no Secured Obligation is due and payable,

DELEGATION

FURTHER ASSURANCES

Further action

creating, perfecting or protecting the Security Interests intended to be created by this Deed; and

facilitating the realisation of any Security Asset or the exercise of any right, power or discretion exercisable by FGI or any Receiver or any of its or his delegates or sub-delegates in respect of any Security Asset,

Specific security

POWER OF ATTORNEY

PAYMENTS

Payments

in immediately available funds to the credit of such account as FGI may designate; and

without (and free and clear of, and without any deduction for or on account of):

any set-off or counterclaim; or

except to the extent compelled by law, any deduction or withholding for or on account of Tax.

Gross-up

Master Facilities Agreement

STAMP DUTY

pay all present and future stamp, registration and similar Taxes or charges which may be payable, or determined to be payable, in connection with the execution, delivery, performance or enforcement of this Deed or any judgment given in connection therewith; and

indemnify FGI and any Receiver on demand against any and all costs, losses or liabilities (including, without limitation, penalties) with respect

to, or resulting from, its delay or omission to pay any such stamp, registration and similar Taxes or charges.

COSTS AND EXPENSES

Transaction and amendment expenses

the negotiation, preparation, printing, execution, registration, perfection and completion of this Deed, the Security or any document referred to in this Deed; or

any actual or proposed amendment or extension of, or any waiver or consent under, this Deed.

Enforcement and preservation costs

CURRENCIES

Conversion

Currency indemnity

INDEMNITY

anything done or omitted in the exercise or purported exercise of the powers contained in this Deed;

the Security Assets or the use or occupation of them by any person; or

any breach by a Security Obligor of any of its obligations under this Deed.

MISCELLANEOUS

Appropriation and suspense account

FGI may apply all payments received in respect of the Secured Obligations in reduction of any part of the Secured Obligations as it thinks fit. Any such appropriation shall override any appropriation by any Security Obligor.

All monies received, recovered or realised by FGI under, or in connection with, this Deed may at the discretion of FGI be credited to a separate interest bearing suspense account for so long as FGI determines (with interest accruing thereon at such rate, if any, as FGI may determine for the account of the relevant Security Obligor) without FGI having any obligation to apply such monies and interest or any part thereof in or towards the discharge of any of the Secured Obligations.

New accounts

Changes to the Parties

No Security Obligor may assign any of its rights under this Deed.

FGI may assign or transfer all or any part of its rights under this Deed. Each Security Obligor shall, immediately upon being requested to do so by FGI, enter into such documents as may be necessary or desirable to effect such assignment or transfer.

Memorandum and articles

Amendments and waivers

Calculations and certificates

Waiver, rights and remedies

RIGHT OF APPROPRIATION

NOTICES

Communications in writing

Addresses

Delivery

Subject to clause 30.3(b) below, any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

if by way of fax or electronic means, when received in legible form; or

if by way of letter, when it has been left at the relevant address or five Business Days following the day on which it was despatched by first class mail postage prepaid,

and, if a particular department or officer is specified with the execution of any Party below, if addressed to that department or officer.

Any communication or document to be made or delivered to FGI will be effective only when actually received by FGI and then only if it is expressly marked for the attention of the department or officer identified with the execution of FGI below (or any substitute department or officer as FGI shall specify for this purpose).

English language

Electronic communications

Save where stated to the contrary, any communication to be made between FGI and a Security Obligor under or in connection with this Deed may be made by electronic mail or other electronic means, and FGI and the Security Obligors agree:

that, unless and until notified to the contrary, this is to be an accepted form of communication;

to notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

to notify each other of any change to their address or any other such information supplied by them.

Any electronic communication made between FGI and a Security Obligor will be effective only when actually received in readable form and in the case of any electronic communication made by a Security Obligor to FGI only if it is addressed in such a manner as FGI shall specify for this purpose.

PARTIAL INVALIDITY

RELEASE

COUNTERPARTS

GOVERNING LAW

JURISDICTION OF ENGLISH COURTS

The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute regarding the existence, validity or termination of this Deed) (a “Dispute”).

The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

This clause 35 is for the benefit of FGI only. As a result, FGI shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, FGI may take concurrent proceedings in any number of jurisdictions.

Company name

Company number

Registered Office

Mad Catz Europe Limited

04017563

c/o Needle Partners Limited

Grove House

Mansion Gate Drive

Leeds

England

LS7 4DN

Mad Catz GmbH

HRB 104004

Landsbergerstraße
400,81241
München

Mad Catz SAS

317 371 136 R.C.S.
NANTERRE

13 Rue Camille Desmoulins 92441 Issy Les Moulineaux Cedex

CONTINUING GUARANTEE

REINSTATEMENT

the liability of each Security Obligor under this Deed shall continue as if the payment, discharge, avoidance or reduction had not occurred; and

FGI shall be entitled to recover the value or amount of that security or payment from each Security Obligor, as if the payment, discharge, avoidance or reduction had not occurred.

WAIVER OF DEFENCES

any time, waiver or consent granted to, or composition with, the Client, any Security Obligor or other person;

the release of the Client or any Security Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, the Client, any Security Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Security Obligor or any other person;

any amendment, novation, supplement, extension (whether of maturity or otherwise), restatement or replacement (in each case, however fundamental and of any nature whatsoever including, without limitation, which results in any increase in any amount due or owing under any Finance Document or in the rate of interest or any other sum payable under any Finance Document) of a Finance Document or any other document or security;

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

any insolvency, administration or similar proceedings.

IMMEDIATE RECOURSE

APPROPRIATIONS

refrain from applying or enforcing any other monies, security or rights held or received by FGI in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Security Obligor shall be entitled to the benefit of the same; and

hold in an interest-bearing suspense account any monies received from any Security Obligor or on account of any Security Obligor’s liability under this Deed,

DEFERRAL OF GUARANTORS’ RIGHTS

to be indemnified by the Client or a Security Obligor;

to claim any contribution from the Client, a Security Obligor or any other guarantor or any of its assets in respect of any of the Client’s or a Security Obligor’s obligations under the Finance Documents;

to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of FGI under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by FGI;

to bring any legal or other proceedings for an order requiring the Client or a Security Obligor to make any payment, or perform any obligation, in respect of

which any Security Obligor has given a guarantee, undertaking or indemnity under this Deed;

to exercise any right of set-off against the Client or any Security Obligor; and/or

to claim or prove as a creditor in the Client or any Security Obligor in competition with FGI.

ADDITIONAL SECURITY

Executed as a deed, but not delivered until
the first date specified on page 1, by
FAUNUS  GROUP INTERNATIONAL, INC.
acting by:

)

)

)

)

)

President

/s/ [ILLEGIBLE]

Vice President

/s/ [ILLEGIBLE]

Address:

80 Broad Street, 22^nd Floor, New York, NY 10004, United States of America

Facsimile No:

+1-212-248-3404

Attention:

Guy Joseph Albertelli

Signed as a deed, but not delivered until the first date specified on page 1, by MAD CATZ EUROPE LIMITED acting by a director in the presence of:

/s/ Darren Richardson

Director

Signature

:/s/ Darren Richardson

Name

: Darren Richardson

Occupation

: Director

Address

: 1-2 Shenley Pavilions

Chalkdell Drive

Shenley Wood, Milton Keynes

U.K.

Signed as a deed, but not delivered until the first date specified on page 1, by MAD CATZ GMBH acting by a director in the presence of:

/s/ Darren Ricahrdson

Director

Signature

:/s/ Darren Richardson

Name

: Darren Richardson

Occupation

: Director

Address

: Lands Bergerstrasse 400

91241 Munchen, Germany

Signed as a deed, but not delivered until the first date specified on page 1, by MAD CATZ SAS acting by a director in the presence of:

/s/ Darren Richardson

Director

Signature

:/s/ Darren Richardson

Name

: Darren Richardson

Occupation

: Director

Address

: 13 rue Camille

Desmoulins, 92441

Issy les Moulineaux

France