<PAGE>
                                                                   EXHIBIT 10.44

                  DATED November 6, 2003

                             SUPPLEMENTAL AGREEMENT

                                  relating to a

                  (POUND)75,000,000 SYNDICATED CREDIT AGREEMENT

                             IDEAL HARDWARE LIMITED
                    BELL MICROPRODUCTS EUROPE EXPORT LIMITED
                              as Original Borrowers

                             BM EUROPE PARTNERS C.V.
                          BELL MICROPRODUCTS EUROPE BV

                      BANK OF AMERICA, NATIONAL ASSOCIATION
        as Arranger, Issuer, Swingline Lender, Agent and Security Trustee

                                       and

                    CERTAIN BANKS AND FINANCIAL INSTITUTIONS
                                   as Lenders

HAMMONDS

7 Devonshire Square Cutlers Gardens London EC2M 4YH DX 136546 Bishopsgate 2

TELEPHONE +44 (0)870 839 0000  FAX +44 (0)870 839 1001

OFFICES AND ASSOCIATED OFFICES Aosta Berlin Birmingham Brussels Hong Kong Leeds
London Madrid Manchester Milan Munich Paris Rome Turin

WEBSITE www.hammonds.com

REFERENCE DJC/SAM/AME.70-6
<PAGE>
1   INTERPRETATION.......................................................     2

2   AMENDMENTS TO THE CREDIT AGREEMENT...................................     3

3   REPRESENTATIONS AND WARRANTIES.......................................     3

4   EXPENSES AND FEES....................................................     4

5   CONFIRMATIONS........................................................     5

6   EFFECTIVE DATE.......................................................     5

7   MISCELLANEOUS........................................................     6

8   FINANCE DOCUMENT.....................................................     6

9   GOVERNING LAW AND JURISDICTION.......................................     6

SCHEDULE 1 RESTATED CREDIT AGREEMENT.....................................     7

SCHEDULE 2 FORM OF OBLIGOR'S CERTIFICATE.................................     8

SCHEDULE 3 FORM OF SUPPLEMENTAL DEED.....................................    10


                                       1
<PAGE>
THIS SUPPLEMENTAL AGREEMENT is dated                                        2004

PARTIES

(1)   IDEAL HARDWARE LIMITED and BELL MICROPRODUCTS EUROPE EXPORT LIMITED as
      Original Borrowers;

(2)   BM EUROPE PARTNERS C.V.;

(3)   BELL MICROPRODUCTS EUROPE B.V.;

(3)   BANK OF AMERICA, NATIONAL ASSOCIATION as Arranger, Agent, Swingline
      Lender, Issuer and Security Trustee; and

(4)   THE BANKS AND FINANCIAL INSTITUTIONS named in schedule 1 to the Credit
      Agreement referred to herein

WHEREAS:

(A)   By a credit agreement (the "CREDIT AGREEMENT") dated 2 December 2002 and
      made between the parties to this Supplemental Agreement the Lenders agreed
      to make to the Borrowers a revolving credit facility of up to
      (pound)75,000,000.

(B)   The Borrower has requested the Lenders to amend the Credit Agreement to
      the extent set out in this Supplemental Agreement.

NOW IT IS AGREED as follows:

1     INTERPRETATION

1.1   DEFINITIONS IN CREDIT AGREEMENT

      Unless the context otherwise requires and save as mentioned below, words
      and expressions defined in the Credit Agreement shall have the same
      meanings when used in this Supplemental Agreement.

1.2   FURTHER DEFINITIONS:

      In this Supplemental Agreement, unless the context otherwise requires:

      "EFFECTIVE DATE" means the date on which the notice referred to in Clause
      6.1 is given by the Agent;

      "SUPPLEMENTAL AGREEMENT" means this supplemental agreement;

      "SUPPLEMENTAL DEED" means the deed supplemental to the Debenture executed
      or, as the case may be, to be executed in the form or substantially in the
      form of Schedule 3 (Form of Supplemental Deed).


                                       2
<PAGE>
1.3   INTERPRETATION OF CREDIT AGREEMENT

      References in the Credit Agreement to "THIS AGREEMENT" shall, with effect
      from the Effective Date and unless the context otherwise requires, be
      references to the Credit Agreement as amended by this Supplemental
      Agreement and words such as "HEREIN", "HEREOF", "HEREUNDER", "HEREAFTER",
      "HEREBY" and "HERETO", where they appear in the Credit Agreement, shall be
      construed accordingly

1.4   INCORPORATION OF CERTAIN REFERENCES

      Clauses 1.2 to 1.13 (inclusive) of the Credit Agreement shall be deemed to
      be incorporated in this Supplemental Agreement in full, mutatis mutandis.

2     AMENDMENTS TO THE CREDIT AGREEMENT

      The parties to this Agreement agree for themselves and for their
      successors, transferees and assigns that, on and with effect from the
      Effective Date, the Credit Agreement shall be amended and restated and
      thereafter shall be read and construed for all purposes as set out in
      Schedule 1 (Restated Credit Agreement).

3     REPRESENTATIONS AND WARRANTIES

3.1   Each Obligor represents and warrants (in respect of itself and each other
      Obligor) to and for the benefit of each other party to this Supplemental
      Agreement that:

      (a)   REPRESENTATIONS AND WARRANTIES IN CREDIT AGREEMENT

            the representations and warranties set out in clauses 14.1 and 14.2
            of the Credit Agreement are true and correct as if made at the date
            of this Supplemental Agreement with reference to the facts and
            circumstances existing at such date;

      (b)   CORPORATE POWER

            it has power to execute, deliver and perform its obligations under
            this Supplemental Agreement and, if applicable, the Supplemental
            Deed; all necessary corporate, shareholder and other action has been
            taken to authorise the execution, delivery and performance of the
            same and this Supplemental Agreement constitutes, and the
            Supplemental Deed when executed and delivered by it will constitute,
            valid and legally binding obligations of such Obligor enforceable in
            accordance with their respective terms;

      (c)   NO CONFLICT WITH OTHER OBLIGATIONS

            the execution and delivery of, the performance of its obligations
            under, and compliance with the provisions of this Supplemental
            Agreement and, if applicable, the Supplemental Deed by such Obligor
            will not (i) contravene any existing applicable law, statute, rule
            or regulation or any judgment, decree or permit to which such
            Obligor is subject, (ii) conflict with, or result in any breach of
            any of the terms of, or constitute a default under, any agreement or
            other instrument to which such Obligor is a party or is subject or
            by which it or any of its property is bound, (iii) contravene or
            conflict with any provision of such Obligor's Memorandum and
            Articles of Association, Articles of Incorporation/Bye-laws/Statutes
            or other constitutional documents;


                                       3
<PAGE>
      (d)   CONSENTS OBTAINED

            every consent, authorisation, licence or approval of, or
            registration with or declaration to, governmental or public bodies
            or authorities or courts required by such Obligor to authorise, or
            required by such Obligor in connection with, the execution,
            delivery, validity, enforceability or admissibility in evidence of
            this Supplemental Agreement or the Supplemental Deed or the
            performance by such Obligor of its obligations under this
            Supplemental Agreement and the Supplemental Deed has been obtained
            or made and is in full force and effect and there has been no
            default in the observance of the conditions or restrictions (if any)
            imposed in, or in connection with, any of the same;

      (e)   NO FILINGS REQUIRED

            save for registration of the Supplemental Deed with the Registrar of
            Companies pursuant to section 395 Companies Act 1985, it is not
            necessary to ensure the legality, validity, enforceability or
            admissibility in evidence of this Supplemental Agreement or the
            Supplemental Deed that it or any other instrument be notarised,
            filed, recorded, registered or enrolled in any court, public office
            or elsewhere in the jurisdiction in which such Obligor is
            incorporated or has its principal place of business or that any
            stamp, registration or similar tax or charge be paid in any such
            jurisdiction on or in relation to this Supplemental Agreement or the
            Supplemental Deed and this Supplemental Agreement and the
            Supplemental Deed are in proper form for their enforcement in the
            courts of such jurisdiction.

3.2   Repetition

      The representations and warranties in Clause 3.1(a) to 3.1(e) inclusive
      shall be deemed to be repeated by each Obligor on and as of each date on
      which a Loan is requested or is to be made (or, as the case may be, a
      Letter of Credit is issued or requested to be issued) as if made with
      reference to the facts and circumstances existing on each such date.

4     EXPENSES AND FEES

4.1   Expenses

      Ideal shall pay to the Agent on demand all expenses (including legal fees)
      incurred by the Agent and the Arrangers in connection with the
      negotiation, preparation and execution of this Supplemental Agreement and
      the Supplemental Deed.

4.2   Amendment fee

      As consideration for entering into this Supplemental Agreement Ideal shall
      pay to the Agent for account of the Lenders a fee in the amount of
      (pound)75,000. The Agent acknowledges receipt of payment of this fee.

4.3   Collateral Management fee

      Without prejudice to the obligations of Ideal under clause 22.3 of the
      Credit Agreement, Ideal shall pay to the Agent an increased monthly
      instalment of the Collateral Management Fee in the amount of (pound)5,000
      for each of August 2003 and September 2003. The Agent acknowledges receipt
      of payment of these instalments.


                                       4
<PAGE>
5     CONFIRMATIONS

5.1   Confirmation by Unsecured Guarantors

      Each Unsecured Guarantor confirms that its obligations under clause 13 of
      the Credit Agreement shall remain in full force and effect in respect of
      the Obligors' obligations under the Credit Agreement (as amended by this
      Supplemental Agreement).

5.2   Confirmation by Lenders

      Each Lender confirms, for all purposes of the Finance Documents, its
      approval of the conversion of the following intra-group loans into an
      equivalent amount (comprising nominal value and share premium) of fully
      paid equity share capital, the Obligors warranting, by their execution of
      this Supplemental Agreement, the accuracy of the information contained in
      the table below:

<TABLE>
<CAPTION>
        LENDER                BORROWER             AMOUNT OF LOAN CONVERTED
----------------------     ---------------         ------------------------
<S>                        <C>                     <C>
Bell Microproducts Inc.          BMEP                 (euro)20,006,912

Bell Microproducts Inc.          BMEBV                (euro)11,322,587

Bell Microproducts Inc.          Ideal                (pound)13,847,519

BMEP                             Ideal                (pound)6,509,116

BMEBV                            Ideal                (pound)1,852,862
</TABLE>

6     EFFECTIVE DATE

6.1   Conditions precedent documentation

      The amendments to be made to the Credit Agreement by this Supplemental
      Agreement shall, without prejudice to Clause 6.3, take effect on and from
      the date (the "EFFECTIVE DATE") on which the Agent gives notice to Ideal
      and the Lenders that the Agent has received the following in form and
      substance satisfactory to it:

      (a)   a certificate dated the date of this Supplemental Agreement in the
            form appearing in Schedule 2 (Form of Obligor's Certificate) with
            all its attachments and the enclosures;

      (b)   the Ideal Pro-Forma Balance Sheet, certified as being true and
            accurate by the finance director of Ideal;

      (c)   the Supplemental Deed duly executed by each Charging Company,
            together with a Form M395 in respect of each Charging Company duly
            completed with the relevant details of the Supplemental Deed.

6.2   FURTHER CONDITIONS

      The Agent shall not give notice of the occurrence of the Effective Date
      under Clause 6.1 (unless expressly instructed in writing by the Majority
      Lenders to do so) if, on the date on


                                       5
<PAGE>
      which it would otherwise have done so, the Agent has received actual
      knowledge that an Event of Default has occurred and is continuing or that
      any of the representations and warranties in Clause 3.1 are untrue or
      incorrect in any material respect as at such date as if made on such date
      with respect to the facts and circumstances existing at such date.

7     MISCELLANEOUS

7.1   CONTINUATION OF CREDIT AGREEMENT

      Save as amended by this Supplemental Agreement, the provisions of the
      Credit Agreement shall continue in full force and effect and the Credit
      Agreement and this Supplemental Agreement shall be read and construed as
      one instrument.

7.2   COUNTERPARTS

      This Supplemental Agreement may be executed in any number of counterparts
      and by the different parties on separate counterparts, each of which when
      so executed and delivered shall be an original but all counterparts shall
      together constitute one and the same instrument.

8     FINANCE DOCUMENT

      This Supplemental Agreement is a Finance Document.

9     GOVERNING LAW AND JURISDICTION

      This Supplemental Agreement shall be governed by English law. The
      provisions of clause 35.2 of the Credit Agreement shall be deemed to be
      incorporated in this Supplemental Agreement as if set out in full, mutatis
      mutandis, in this Clause 9.

IN WITNESS whereof the parties hereto have caused this Supplemental Agreement to
be duly executed the day and year first above written.


                                       6
<PAGE>
                                   SCHEDULE 1

                            RESTATED CREDIT AGREEMENT


                                       7
<PAGE>
                          DATED                2002
                          -------------------------

                             IDEAL HARDWARE LIMITED
                    BELL MICROPRODUCTS EUROPE EXPORT LIMITED

                              AS ORIGINAL BORROWERS

                                       AND

                             BM EUROPE PARTNERS C.V.
                          BELL MICROPRODUCTS EUROPE BV

                      BANK OF AMERICA, NATIONAL ASSOCIATION

        AS ARRANGER, ISSUER, SWINGLINE LENDER, AGENT AND SECURITY TRUSTEE

                                       AND

                    CERTAIN BANKS AND FINANCIAL INSTITUTIONS

                                   AS LENDERS

           ---------------------------------------------------------

                                (POUND)75,000,000
                           SYNDICATED CREDIT AGREEMENT

           ---------------------------------------------------------
<PAGE>
                                    CONTENTS

CLAUSE                                                                  PAGE

1   INTERPRETATION ................................................        2

2   THE REVOLVING FACILITY ........................................       27

3   ADDITIONAL BORROWERS AND UNSECURED GUARANTORS .................       29

4   ADDITIONAL CHARGING COMPANIES .................................       30

5   CONDITIONS PRECEDENT ..........................................       31

6   UTILISATION OF THE REVOLVING FACILITY .........................       31

7   INTEREST AND INTEREST PERIODS .................................       40

8   MARKET DISRUPTION .............................................       43

9   REPAYMENT, PREPAYMENT AND CANCELLATION ........................       44

10  TAXES .........................................................       46

11  INCREASED COSTS ...............................................       48

12  ILLEGALITY ....................................................       50

13  GUARANTEE .....................................................       50

14  REPRESENTATIONS AND WARRANTIES ................................       54

15  FINANCIAL CONDITION ...........................................       59

16  COVENANTS .....................................................       63

17  DEFAULT .......................................................       79

18  DEFAULT INTEREST ..............................................       83

19  INDEMNITIES AND CURRENCY OF ACCOUNT ...........................       84

20  PAYMENTS ......................................................       86

21  SET-OFF .......................................................       89

22  FEES ..........................................................       90

23  PRO RATA SHARING ..............................................       92

24  COSTS, EXPENSES AND STAMP DUTIES ..............................       93

25  CALCULATIONS AND EVIDENCE OF DEBT .............................       94

26  THE AGENT, THE ARRANGER, THE SECURITY TRUSTEE AND THE LENDERS .       96

27  TRUSTEE PROVISIONS ............................................      101

28  ASSIGNMENTS AND TRANSFERS .....................................      106

29  TERM AND TERMINATION ..........................................      109

30  AMENDMENTS, WAIVERS AND REMEDIES ..............................      110

31  PARTIAL INVALIDITY ............................................      111

32  NOTICES .......................................................      111

33  COUNTERPARTS ..................................................      113
<PAGE>
34  DUTCH PARALLEL DEBT ...........................................      113

35  LAW AND JURISDICTION ..........................................      113

SCHEDULE

1   LENDERS AND COMMITMENTS .......................................      115

2   CONDITIONS PRECEDENT ..........................................      116

3   FORM OF OBLIGOR'S CERTIFICATE .................................      118

4   FORM OF UTILISATION NOTICE ....................................      120

5   MANDATORY COST FORMULAE .......................................      122

6   FORM OF TRANSFER CERTIFICATE ..................................      125

7   THE DORMANT COMPANIES THE CHARGING COMPANIES AND THE BABY BELLS      128

8   FORM OF ACCESSION NOTICE ......................................      130

9   DOCUMENTS TO ACCOMPANY ACCESSION NOTICE OR SUPPLEMENTAL DEED ..      131

10  THE MATERIAL CONTRACTS ........................................      133
<PAGE>
THIS AGREEMENT is made on                                                2002

BETWEEN:

(1)   IDEAL HARDWARE LIMITED a company incorporated in England and Wales with
      registered number 03969946 whose registered office is at Fountain Court,
      Cox Lane, Chessington, Surrey KT9 1SJ ("IDEAL") and BELL MICROPRODUCTS
      EUROPE EXPORT LIMITED a company incorporated in England and Wales with
      registered number 03711148 whose registered office is at Fountain Court,
      Cox Lane, Chessington, Surrey KT9 1SJ ("BMEE") (each an "ORIGINAL
      BORROWER" and together, the "ORIGINAL BORROWERS");

(2)   BM EUROPE PARTNERS C.V. a limited partnership (commanditaire vennootschap)
      established under the laws of the Netherlands, having its official seat in
      Almere, the Netherlands and its registered office at Veluwezoom 42-50,
      1327 AH Almere, the Netherlands and registered in the Commercial Register
      under number 04065637 ("BMEP");

(3)   BELL MICROPRODUCTS EUROPE B.V. a private company with limited liability
      (besloten vennootschap met beperkte aansprakelijkheid) incorporated under
      the laws of the Netherlands, having its official seat in Emmen, the
      Netherlands and its registered office at Veluwezoom 42-50, 1327 AH Almere,
      the Netherlands and registered in the Commercial Register under number
      04064633 ("BMEBV");

(4)   BANK OF AMERICA, NATIONAL ASSOCIATION acting through its London branch at
      1 Alie Street, London E1 8DE in its capacity as arranger (the "ARRANGER"),
      in its capacity as agent for the Lenders (the "AGENT"), in its capacity as
      the Lender making Swingline Loans (the "SWINGLINE LENDER"), in its
      capacity as the Lender issuing any Letter of Credit or Guarantee (the
      "ISSUER") and in its capacity as security trustee under the Security
      Documents (the "SECURITY Trustee"); and

(5)   THE BANKS AND FINANCIAL INSTITUTIONS named in Schedule 1 (the "ORIGINAL
      LENDERS").

IT IS AGREED as follows:

1     INTERPRETATION

1.1   DEFINITIONS

      Save as otherwise provided in this Agreement, the following words and
      phrases have the following meanings throughout this Agreement:

      ACCOUNT: in relation to each Trading Company, its right to payment for a
      sale or lease and delivery of goods or rendering of services;

      ACCOUNT DEBTOR: each person having any obligation on or in connection with
      an Account;

      ACCESSION NOTICE: a notice substantially in the form set out in Schedule
      8;


                                       2
<PAGE>
      ADDITIONAL BORROWER: a Group Company which has acceded to this Agreement
      as an Additional Borrower by executing and delivering to the Agent an
      Accession Notice in accordance with clause 3;

      ADDITIONAL COST RATE: has the meaning given to it in paragraph 2 of
      Schedule 5;

      ADDITIONAL MONITORING AND ADMINISTRATION FEE: the meaning given to it in
      clause 22.7;

      ADJUSTED TANGIBLE ASSETS: the meaning given to it in clause 15.4;

      ADJUSTED TANGIBLE NET WORTH: the meaning given to it in clause 15.4;

      AFFILIATE:

      (i)   a person which, directly or indirectly, controls or is controlled by
            or is under common control with, a Borrower;

      (ii)  a person which beneficially owns or holds, directly or indirectly,
            5% or more of any class of voting shares of a Borrower; or

      (iii) a person in which 5% of any class of voting shares is beneficially
            owned or held, directly or indirectly, by a Borrower;

      AGENT LOAN: the meaning given to it in clause 6.15.1;

      AGENT'S SPOT RATE OF EXCHANGE: the Agent's spot rate of exchange for the
      purchase of the relevant currency with sterling in the London foreign
      exchange market at or about 11.00 am on a particular day;

      ANNIVERSARY DATE: each anniversary of the Closing Date;

      APPLICABLE GAAP:

      (i)   save as provided in paragraph (ii) of this definition, in respect of
            any person, the generally accepted accounting principles and
            policies in the country in which such person is incorporated or
            under whose laws it is otherwise established, consistently applied;
            and

      (ii)  in connection with the preparation of the Pro-Forma Balance Sheet
            and the Management Accounts and for the purposes of determining
            compliance by BMEP with the financial ratio set out in clause 15.4,
            generally accepted accounting principles and policies in the United
            States of America, consistently applied ("US GAAP");


                                       3
<PAGE>
      APPLICABLE MARGIN:

      (i)   with effect from the Effective Date, two and one half of one per
            cent. (2.50%) per annum; and

      (ii)  thereafter, such lower figure (if any) as may be determined by the
            Agent pursuant to clause 7.6;

      APPROVED ACQUISITION CONDITIONS: each of the following conditions:

      (i)   that the relevant acquisition (the "RELEVANT ACQUISITION") is to be
            funded by the relevant Group Company (a "PURCHASER") entirely out of
            Excess Availability and that at the time of the relevant
            acquisition, the amount of Excess Availability was not less than
            (pound)5,000,000 and the projections, forecasts and other
            information supplied to the Agent pursuant to clause 15.2
            demonstrate that an average Excess Availability of not less than
            (pound)5,000,000 will be maintained for a continuous period of three
            (3) months commencing on the date of completion of the relevant
            acquisition;

      (ii)  that the costs of the relevant acquisition do not exceed
            (pound)5,000,000 (or the equivalent in any other currency) and when
            aggregated with the costs of all other Pre-Approved Acquisitions
            made or in the process of being made by that or any other purchaser
            do not or, as the case may be, will not, exceed (pound)10,000,000
            (or the equivalent in any other currency) during the term of this
            Agreement;

      (iii) that the relevant purchaser (or Ideal on its behalf) has given
            written notice to the Agent (such notice to be served not less than
            15 business days prior to the proposed date of completion of the
            relevant acquisition), such notice to include, without limitation,
            (A) the name of the company and/or a brief description of the assets
            being purchased and/or the nature of such company's business; (B) a
            breakdown of the total consideration payable (including any element
            of deferred consideration and/or the details of any earn-out or
            possible additional consideration payable); (C) the business case or
            other reason(s) underlying the relevant acquisition; (D) the basic
            terms and conditions of the relevant acquisition; (E) a brief
            business plan and a historic financial statement in relation to any
            company being purchased (to include a profit and loss account,
            balance sheet and cash flow statement relating to the immediately
            preceding 12 months);

      (iv)  in the case of any relevant acquisition of shares in a company, such
            acquisition has been approved or recommended by the board of
            directors of such company;

      (v)   that the finance director of Ideal has delivered a certificate to
            the Agent (together with such additional information or evidence as
            the Agent may have reasonably required) confirming, among other
            matters, (A) that no Default has occurred and is continuing or will
            occur as a result of the completion of the relevant acquisition or
            would have occurred if the relevant acquisition had been completed
            on the last day of the


                                       4
<PAGE>
            Financial Quarter most recently ended; (B) the level of current
            creditors' days outstanding together with confirmation that the
            largest twenty (20) trade creditors of the Group are being paid in
            accordance with the credit terms prevailing between such parties;
            and (C) that each of the foregoing conditions set out in paragraphs
            (i) to (iv) (inclusive) has been satisfied and will continue to be
            complied with as at each relevant date prescribed in this definition
            of "APPROVED ACQUISITION CONDITIONS".

      For the purpose of this definition of "APPROVED ACQUISITION CONDITIONS",
      the expression "COSTS" shall be construed to mean the total initial,
      deferred or additional consideration paid or payable to any person(s) in
      connection with any relevant acquisition, together with all reasonable
      costs, fees and expenses (including legal or other professional advisers'
      fees) properly paid or payable in connection with the relevant
      acquisition;

      APPROVED ACQUISITION DOCUMENTS: any (i) sale agreement, (ii) share
      exchange agreement, (iii) offering circular or (iv) any other documents or
      instruments (howsoever described) relating to a Pre-Approved Acquisition
      or any other acquisition of assets approved by the Agent;

      AUDIT FEE: the meaning given to it in clause 22.4;

      AUDITORS: PricewaterhouseCoopers, chartered accountants, or any other firm
      of chartered accountants of similar standing selected by Ideal and
      satisfactory to the Agent;

      AVAILABLE COMMITMENT: in relation to a Lender at any time, the Commitment
      of that Lender less the sum at such time of the Original Sterling Amount
      of (i) the aggregate amount which it has advanced and (ii) (in the case of
      the Issuer) the aggregate of its contingent liabilities under any Letters
      of Credit or Guarantees issued by it;

      AVAILABLE FACILITY: at any time, the aggregate of the Available
      Commitments;

      AVAILABLE REVOLVING FACILITY AMOUNT: at any time, in relation to the
      Revolving Facility and any proposed Utilisation thereof by any Borrower,
      the Revolving Facility Amount as reduced by the sum at such time of the
      Original Sterling Amount of:

      (i)   the aggregate principal amount of all Revolving Loans and Swingline
            Loans then outstanding;

      (ii)  the aggregate face amount of all Letters of Credit and of the
            aggregate maximum contingent liability under all Guarantees issued
            by the Issuer;

      (iii) the amount by which the Commitment of any Bank is or is due to be
            permanently cancelled or reduced in accordance with the terms of
            this Agreement;

      (iv)  all reserves for accrued interest on the Revolving Loans and
            Swingline Loans;


                                       5
<PAGE>
      (v)   all other reserves which the Agent in its discretion deems necessary
            or desirable to maintain with respect to any Borrower's account
            (including, without limitation, in respect of any day-to-day
            fluctuations in the value of sterling against any Foreign Currency
            and in respect of any liability of any Borrower under any Hedging
            Agreement or in respect of any cash management or foreign exchange
            services) and any amounts which the Agent, the Security Trustee, any
            Lender or any other Beneficiary may be obliged to pay in the future
            for the account of any Borrower;

      BABY BELLS: each of the companies listed in Part 3 of Schedule 7 and "BABY
      BELL" means any one of them;

      BENEFICIARY: each of the Agent, the Arranger, any Hedge Provider (provided
      always that such Hedge Provider is the Arranger), the Swingline Lender,
      the Issuer, the Security Trustee and any Lender;

      BORROWERS: each Original Borrower and each Additional Borrower and
      "BORROWER" means any one of them;

      BORROWING BASE CERTIFICATE: a certificate in such form as the Agent may
      from time to time reasonably require and completed by Ideal setting out,
      amongst other things, details of Accounts and with effect from the
      Inventory Eligibility Date, if applicable, Inventory (as specified in
      clause 16.4.1) and of preferential creditors so as to enable the Agent to
      determine the Available Revolving Facility Amount;

      BORROWINGS: a sum equal to the aggregate amount for the time being of the
      principal, capital or nominal amount (determined on a consolidated basis)
      of all financial indebtedness of any member of the Group (other than
      monies borrowed or raised from another member of the Group) and, without
      prejudice to the generality of the foregoing, shall be deemed to include
      the following:

      (a)   the principal amount of any debenture, bond, note, loan stock,
            preference share capital, commercial paper or similar instrument of
            any member of the Group;

      (b)   any amounts raised by any member of the Group under any bill of
            exchange (but excluding any bill drawn or accepted in the ordinary
            course of trade of the relevant member of the Group and which is
            payable at sight or not more than 90 days after sight or has a final
            maturity of not more than 90 days from the date thereof and is not
            refinancing another bill whether or not relating to the same
            underlying transaction) and the indebtedness of any member of the
            Group under any acceptance credit, bill discounting, note purchase
            or documentary credit facility;

      (c)   the aggregate amount remaining to be paid by any member of the Group
            under any credit agreement save for amounts remaining to be paid
            which cannot properly be attributed to capital in accordance with
            Applicable GAAP;


                                       6
<PAGE>
      (d)   the capitalised value (determined in accordance with Applicable
            GAAP) of the outstanding commitments of any member of the Group
            under any finance lease;

      (e)   indebtedness under any receivables purchase, factoring or
            discounting arrangement (to the extent there is any recourse against
            any member of the Group);

      (f)   the aggregate amount remaining to be paid in respect of any credit
            (other than normal trade credit which has been outstanding for a
            period of less than 90 days) granted to, or of any deferred payments
            due from, any member of the Group in respect of the acquisition or
            construction price of assets acquired or constructed or the purchase
            price of services supplied;

      (g)   indebtedness of any member of the Group in respect of any other
            transaction having the commercial effect of a borrowing or other
            raising of money entered into by it in order to finance its business
            or operations or capital requirements; and

      (h)   (without double counting) indebtedness of any member of the Group
            under any guarantee or other assurance against financial loss in
            respect of the financial indebtedness of any person.

      For the purpose of determining the amount of "BORROWINGS" at any time, any
      amount which is on a particular day outstanding or repayable in a currency
      other than sterling shall on that day be taken into account (i) if that
      day is the last day of a Financial Year or Management Accounting Period,
      at its equivalent in sterling at the rate of exchange used for the purpose
      of preparing the balance sheet forming part of the Relevant Accounting
      Information prepared as at such date and (ii) in any other case, at its
      sterling equivalent as determined by the Agent by reference to the Agent's
      Spot Rate of Exchange;

      BORROWING COSTS: in relation to any financial period, a sum equal to the
      aggregate amount of all continuing, regular or periodic costs (excluding
      any prepayment or termination fee), charges and expenses incurred by the
      Group in respect of such period (and whether paid or not) in effecting,
      servicing or maintaining Borrowings including (but without
      double-counting):

      (a)   interest (whether the same shall be payable immediately or be
            capitalised or otherwise deferred);

      (b)   any fixed or minimum premium or dividend paid or payable on the
            maturity of any Borrowings;

      (c)   consideration given whether by way of discount or otherwise in
            connection with finance by way of acceptance credit, bill
            discounting, note purchase, receivables purchase, debt factoring or
            other like arrangement; and

      (d)   the gross amount payable under any finance lease or credit agreement
            less so much as can properly be attributed to capital,


                                       7
<PAGE>
            the amount of any such costs, charges and expenses to be allocated
            to each such period over the term of any Borrowings in accordance
            with Applicable GAAP;

            CAPITAL EXPENDITURE: all payments due (whether or not paid) in
            respect of the cost of any fixed asset or any improvement,
            replacement, substitution or addition thereto, which has a useful
            life of more than one year, including, without limitation, those
            arising in connection with the direct or indirect acquisition of
            such assets by way of increased product or service charges or offset
            items or in connection with finance leases;

            CAPITAL MARKETS TRANSACTION: any direct or indirect public offering
            or private placement of any debt or equity securities of (including
            any capital contribution to) any Borrower, BMEP or BMEBV;

            CHARGING COMPANY: the companies listed in Part 2 of Schedule 7 and
            any other Group Company which has executed the Debenture or which
            has acceded to the Debenture by executing a Supplemental Deed in
            accordance with clause 4;

            "CASH OUTFLOW" means, in relation to any financial period and
            without double-counting, the aggregate for that period of:

            (i) Borrowing Costs;

            (ii) taxes paid;

            (iii) dividends paid or other distributions made;

            (iv) Capital Expenditure;

            (v) amortisation payments on Borrowings and the capital element of
            any rental payments or instalments under any credit agreement or
            finance lease;

            (vi) any expenditure which results in a corresponding release of any
            provision in the balance sheet;

            CHESSINGTON MORTGAGEE: as at the Effective Date, National
            Westminster Bank Plc as lender to Bell Microproducts Limited and as
            mortgagee of the Chessington Property in connection with such
            borrowings or such other bank or financial institution which may at
            any time refinance all or any part of such borrowings, provided that
            such bank or financial institution shall have entered into an
            intercreditor deed or other priority arrangement on terms and
            conditions mutually acceptable to such bank or financial
            institution, Bell Microproducts Limited and the Agent;

            CHESSINGTON PROPERTY: all that freehold property registered under
            title number SGL 638201 and more particularly known as land and
            buildings at Fountain Court, Cox Lane, Chessington, Surrey KT9 1SJ;

            CLOSING DATE: 2 December 2002;

            COLLATERAL: the meaning given to it in the Debenture;


                                       8
<PAGE>
            COLLATERAL MANAGEMENT FEE: the meaning given to it in clause 22.3;

            COMMITMENT: in relation to a Lender at any time, the amount in
            sterling set opposite its name in Schedule 1 (and/or, as the case
            may be, the amount in sterling specified as the portion transferred
            in the Transfer Certificate pursuant to which such Lender increased
            its Commitment or became a party to this Agreement) as the same may
            at any time be cancelled or reduced in accordance with this
            Agreement;

            COMMITMENT PERIOD: the period commencing on the Closing Date and
            ending on the date falling one month prior to the Termination Date;

            DEBENTURE: the composite guarantee and debenture creating one or
            more encumbrances in favour of the Security Trustee on behalf of the
            Beneficiaries, in form and substance satisfactory to the Agent, to
            be executed as a deed by each Charging Company to secure the
            obligations of the Obligors under the Finance Documents;

            DEFAULT: an Event of Default or any condition, act or event which
            (with the giving of notice, lapse of time, making of any
            determination, fulfilment of any condition or any combination of any
            of the foregoing) may become an Event of Default;

            DISCHARGE: a release, spill, emission, leaking, pumping, injection,
            deposit, disposal, discharge, dispersal, leaching or migration of a
            Hazardous Substance into the indoor or outdoor environment or into
            or out of any real estate or other property, including the movement
            of Hazardous Substances through or in the air, soil, surface water,
            groundwater or real estate or other property;

            DISTRIBUTION: any dividend or other distribution (whether in cash or
            in kind) in respect of share capital, including any bonus issue or
            return of capital (whether at a premium or otherwise);

            DORMANT COMPANY: a company which is a "DORMANT" company as defined
            in section 249AA Companies Act 1985 and which does not at any time
            have assets (other than intercompany indebtedness) in excess of
            (pound)5,000 (or the equivalent in any other currency) and which
            expression shall include, for the purposes of this Agreement, each
            of the companies whose names are set out in Part 1 of Schedule 7;

            EBITDA: in relation to any financial period, a sum equal to the
            IHL's Group's profit on ordinary activities before taxation (save to
            the extent that such profit is attributable to any interest
            received) after adding back Borrowing Costs, depreciation and
            amortisation and deducting any release to profits of negative
            goodwill in respect of such period but excluding:

            (a)   profits or losses on the sale or termination of an operation;

            (b)   profits or losses on the disposal of fixed assets; and

            (c)   extraordinary items;


                                       9
<PAGE>
            EC INSOLVENCY REGULATION: Council Regulation (EC) No. 11346/2000 of
            29 May 2000 on insolvency proceedings;

            EFFECTIVE DATE: means the date on which the notice referred to in
            Clause 6.1 of the Supplemental Agreement is given to the Agent;

            ELIGIBLE ACCOUNTS: the Accounts of a Borrower which the Agent in the
            exercise of its commercial discretion determines to be Eligible
            Accounts. Without limiting the discretion of the Agent to establish
            other criteria of ineligibility, Eligible Accounts shall not, unless
            the Agent in its commercial discretion elects, include any Account:

            (a)   with respect to which more than ninety (90) days have elapsed
                  since the date of the original invoice or sixty (60) days have
                  elapsed since the due date therefor;

            (b)   with respect to which any of the representations, warranties,
                  covenants and agreements contained in the Debenture are
                  incorrect or have been breached;

            (c)   with respect to which Account (or any other Account due from
                  the applicable Account Debtor), in whole or in part, a cheque,
                  promissory note, draft, trade acceptance or other instrument
                  for the payment of money has been received, presented for
                  payment, and returned uncollected for any reason;

            (d)   which represents a progress billing (as hereinafter defined)
                  or as to which the applicable Borrower has extended the time
                  for payment without the consent of the Agent (for the purposes
                  hereof, "PROGRESS BILLING" means any invoice for goods sold or
                  leased or services rendered under a contract or agreement
                  pursuant to which the Account Debtor's obligation to pay such
                  invoice is conditional upon such Borrower's completion of any
                  further performance under such contract or agreement);

            (e)   with respect to which any one or more of the following events
                  has occurred to the Account Debtor on such Account: (i) death
                  or judicial declaration of incompetency of such Account Debtor
                  who is a natural person; (ii) the filing by or against such
                  Account Debtor of a request or petition for winding-up,
                  dissolution, liquidation or bankruptcy of such person or for
                  the appointment of an administrative receiver, receiver,
                  manager or administrator in respect of such person or its
                  assets or any other bankruptcy, insolvency or similar laws of
                  the United Kingdom or any foreign jurisdiction now or
                  hereafter in effect; (iii) the making of any general
                  assignment by such Account Debtor for the benefit of its
                  creditors; (iv) the appointment of a receiver or trustee of
                  such Account Debtor or of any of the assets of the Account
                  Debtor; (v) the institution by or against such Account Debtor
                  of any other type of insolvency proceeding or of any formal or
                  informal proceeding for the dissolution or liquidation of,
                  settlement of claims against, or winding up of affairs of,
                  such Account Debtor; (vi) the non-


                                       10
<PAGE>
                  payment generally of such Account Debtor of its debts as they
                  become due; or (vii) the cessation of the business of such
                  Account Debtor as a going concern;

            (f)   if fifty per cent. (50%) or more of the aggregate sterling
                  equivalent of outstanding Accounts owed at such time by the
                  Account Debtor thereon is classified as ineligible pursuant to
                  the other provisions of this definition;

            (g)   owed by an Account Debtor which (i) does not maintain its
                  registered office or principal place of business in the United
                  States, Canada (other than the Province of Newfoundland), the
                  United Kingdom or another country within the European Union,
                  (ii) is not organised under the laws of the United States,
                  Canada, part of the United Kingdom or another country within
                  the European Union or any political subdivision, state or
                  province thereof, or (iii) is the government of any foreign
                  country or sovereign state, or of any state, province
                  municipality or other political subdivision thereof, or of any
                  department, agency, public corporation, or other
                  instrumentality thereof, except to the extent that such
                  Account is secured or payable by a letter of credit
                  satisfactory to the Agent in its discretion;

            (h)   owed by an Account Debtor which is an Affiliate or employee of
                  such Borrower or an Account which the Agent determines is an
                  Intercompany Account or an internal account;

            (i)   with respect to Accounts of a Borrower, with respect to which
                  either the perfection, enforceability or validity of the
                  security over such Account constituted by the Debenture, or
                  the Security Trustee's or the Agent's right or ability to
                  obtain direct payment to the Agent or, as appropriate, the
                  Security Trustee, of the proceeds of such Account, is governed
                  by any laws other than the local state or federal laws of the
                  United States of America (including the UCC) or the laws of
                  Canada, any part of the United Kingdom or another member of
                  the European Union;

            (j)   owed by an Account Debtor to which a Borrower or any Affiliate
                  thereof is indebted in any way, or which is subject to any
                  right of set-off or recoupment by the Account Debtor (or
                  otherwise a contra account), unless the Account Debtor has
                  entered into an agreement acceptable to the Agent to waive
                  set-off rights, or if the Account Debtor thereon has disputed
                  liability or made any claim with respect to any other Account
                  due from such Account Debtor;

            (k)   duplicates subclause (g)(iii) above;

            (l)   which represents a sale on a bill-and-hold, guaranteed sale,
                  sale and return, sale on approval, consignment or other
                  repurchase or return basis;


                                       11
<PAGE>
            (m)   which is evidenced by a promissory note or other similar
                  instrument;

            (n)   with respect to which the Agent believes, in the exercise of
                  its commercial judgment, that the prospect of collection of
                  such Account is impaired or that such Account may not be paid
                  by reason of the Account Debtor's financial inability to pay;

            (o)   which arises out of a sale not made in the ordinary course of
                  such Borrower's business;

            (p)   with respect to which the goods giving rise to such Account
                  have not been shipped and delivered to and accepted by, or
                  have been rejected or objected to by, the Account Debtor or
                  the services giving rise to such Account have not been fully
                  performed by such Borrower, and, if applicable, accepted by
                  the Account Debtor, or the Account Debtor revokes its
                  acceptance of such goods or services;

            (q)   owed by an Account Debtor or group of affiliated Account
                  Debtors which is obligated to the Borrowers, or any of them,
                  representing Accounts the aggregate unpaid balance of which
                  exceeds ten per cent. (10%) of the aggregate unpaid balance of
                  all Accounts owed to the Borrowers at such time by all of the
                  Borrowers' Account Debtors;

            (r)   which is not subject to a first priority, perfected Security
                  Interest in favour of the Security Trustee, for the benefit of
                  the Beneficiaries established in a manner satisfactory to the
                  Agent;

            (s)   owed by an Account Debtor incorporated outside the United
                  Kingdom with whom such Borrower is trading in excess of its
                  agreed credit limits;

            (t)   with respect to which such Borrower or the Agent has deemed
                  such Account as uncollectible or has any reason to believe
                  that such Account is uncollectible; and

            (u)   which the Agent determines, in its commercial discretion, is
                  ineligible for any other reason.

            The Agent will consider a request from Ideal for the inclusion of
            Accounts in excess of ten per cent. (10%) of the total Eligible
            Accounts (as described in paragraph (q)) on a case by case basis,
            upon production by Ideal of such financial or other information
            regarding the business condition (financial or otherwise) of the
            Borrowers and the Group as the Agent may require and upon Ideal
            demonstrating to the satisfaction of the Agent, an improvement in
            its trading and financial position since the Effective Date.

            If any Account at any time ceases to be an Eligible Account, then
            such Account shall promptly be excluded from the calculation of the
            Maximum Eligibility Amount and the Revolving Facility Amount;


                                       12
<PAGE>
            ELIGIBLE INVENTORY: with effect from the Inventory Eligibility Date,
            if any, Inventory valued at the lower of cost (on a FIFO basis) or
            market value, which is eligible as the basis for Revolving Loans,
            based on such criteria as the Agent may from time to time establish
            in its reasonable commercial discretion;

            ENVIRONMENTAL AUTHORISATION: any authorisation, permit, licence,
            consent, registration or other approval required by or pursuant to
            any Environmental Law;

            ENVIRONMENTAL LAWS: all applicable laws, regulations, codes of
            practice, circulars, statutory guides, guidance notes and the like
            (whether in the United Kingdom or in any other jurisdiction in which
            any Obligor carries on its business or in which its assets may be
            situated) relating to contamination, human health, safety or the
            environment including but not limited to those relating to
            Discharges, waste, nuisance, health and safety, noise, packaging or
            the manufacture, processing, use, handling, treatment, storage,
            labelling, recovery, recycling, transport or disposal of Hazardous
            Substances;

            EQUIPMENT: in relation to each Trading Company, all of its now owned
            and hereafter acquired machinery, equipment, furniture, furnishings,
            fixtures and other tangible personal property of any kind (except
            Inventory), as well as all of such types of property leased by it
            and all of its rights and interest with respect thereto under such
            leases together with all present and future additions and accessions
            thereto and replacements therefor, component and auxiliary parts and
            supplies used or to be used in connection therewith and all
            substitutes for any of the foregoing, and all manuals, drawings,
            instructions, warranties and rights with respect thereto, wherever
            any of the foregoing is located;

            EVENT OF DEFAULT: any of those events specified in clause 17.1;

            EXCESS AVAILABILITY: at any time, the amount, if any, by which the
            Revolving Facility Amount exceeds the Total Outstandings at such
            time;

            FACILITY OFFICE: in relation to a Lender at any time, the office set
            out under its name at the end of this Agreement or, in the case of a
            Transferee, in the Transfer Certificate to which it is a party as
            Transferee or, in the case of a Lender which is an assignee or other
            successor of any other Lender, the office notified to the Agent by
            the assignee or other successor on or before the date it becomes a
            Lender or such other office as such Lender may from time to time
            notify to the Agent;

            FEE LETTER: means any letter or letters dated on or about the date
            of this Agreement and/or the Effective Date between the Arranger and
            Ideal (or the Agent and Ideal) setting out any of the fees referred
            to in clause 22;

            FINANCE DOCUMENTS: this Agreement, any Fee Letter, any Accession
            Notice, any Hedging Agreement, the Security Documents and any other
            agreement, deed, notice, document or certificate designated as such
            by the Agent and Ideal;


                                       13
<PAGE>
            FINANCIAL QUARTER: any period of three months in any Financial Year,
            ending on the day which is, respectively, three, six or nine months
            after the first day of that Financial Year or on the last day of
            that Financial Year;

            FINANCIAL STATEMENTS: according to the context in which it is used,
            the Pro-Forma Balance Sheet or any financial statements required to
            be delivered to the Agent pursuant to clause 15.2 and complying with
            the provisions of clause 15.3;

            FINANCIAL YEAR: any period of twelve months ending on 31 December;

            FOREIGN CURRENCY: dollars, euros or such other currency which is
            freely transferable and freely convertible into sterling as may at
            any time be specifically agreed by the Agent;

            GROUP: BMEP and its Subsidiaries at any time (but excluding, unless
            the Agent otherwise agrees, any member of the Solutions Group) and
            "GROUP COMPANY" shall mean any one of them;

            GUARANTEE: any guarantee (which has been specifically agreed between
            the relevant Borrower and the Agent) of the obligations of any
            person issued by the Issuer at the request of that Borrower pursuant
            to the terms of clause 6.4;

            GUARANTORS: each Secured Guarantor and each Unsecured Guarantor and
            "GUARANTOR" means any one of them;

            HAZARDOUS SUBSTANCE: any radioactive emissions and any natural or
            artificial substance (whether in solid or liquid form or in the form
            of a gas or vapour and whether alone or in combination with any
            other substance) capable of causing harm to the environment, human
            health or welfare or to any organism, including (without limitation)
            any type of waste or any form of energy;

            HEDGE PROVIDER: the Arranger, any Lender or any other bank or
            financial institution of international standing whose long term
            unsecured debt securities are, on the date that it enters into any
            Hedging Agreement, rated at least A+ by S&P or A1 by Moody's;

            HEDGING AGREEMENT: any agreement or instrument between a Borrower
            and a Hedge Provider relating to the hedging of an interest rate or
            a currency exposure (including a swap, option, cap, collar or
            floor);

            IDEAL PRO-FORMA BALANCE SHEET: the pro-forma consolidated (and
            consolidating) balance sheet of the IHL Group as at 31 August 2003
            prepared by Ideal in accordance with Applicable GAAP;

            IHL GROUP: Ideal and its Subsidiaries for the time being;

            INFORMATION MEMORANDUM: the document in the form approved by Ideal
            concerning the Group which, at Ideal's request, and on its behalf,
            was prepared by the Arranger in relation to the transactions
            contemplated by this Agreement and distributed to selected financial
            institutions;


                                       14
<PAGE>
            INTERCOMPANY ACCOUNTS: all assets and liabilities, however arising,
            which are due to any Trading Company from, which are due from any
            Trading Company to, or which otherwise arise from any transaction by
            any Trading Company with, any Affiliate;

            INTEREST PERIOD: any of those periods referred to in clause 7 (by
            reference to which interest is calculated on any LIBOR Revolving
            Loan) or in clause 18.2 (by reference to which interest is
            calculated on an unpaid sum) provided that, save in respect of any
            Interest Periods relating to an unpaid sum, no Interest Period shall
            extend beyond the Termination Date;

            INVENTORY: in relation to each Trading Company, all of its now owned
            and hereafter acquired inventory, goods and merchandise, wherever
            located, to be furnished under any contract of service or held for
            sale or lease, all raw materials, work-in-progress, finished goods,
            returned goods and materials and supplies of any kind, nature or
            description which are or might be used or consumed in its business
            or used in connection with the manufacture, packing, shipping,
            advertising, selling or finishing of such goods, merchandise and
            other personal property, and all documents of title or other
            documents representing them;

            INVENTORY ELIGIBILITY DATE: the date, if any, upon which the Lenders
            shall have agreed, and the Agent shall have advised Ideal to that
            effect, that Eligible Inventory may be eligible as the basis for
            Revolving Loans;

            JURISDICTION: the jurisdiction of incorporation of the relevant Baby
            Bell;

            LATEST PROJECTIONS: (i) on the Effective Date and thereafter until
            the Agent receives new projections pursuant to clause 15.2.3, the
            projections provided by Ideal of the consolidated (and
            consolidating) monthly financial condition, results of operations
            and cash flow of Ideal and the Baby Bells for the period ending 31
            December 2005 (and showing separate projections for the period up to
            31 December 2004 and the subsequent period from 1 January 2005 until
            31 December 2005) and (ii) thereafter, the projections most recently
            received by the Agent pursuant to clause 15.2.3;

            LENDER: means:

            (i)   any Original Lender; and

            (ii)  any bank, financial institution, trust, fund or other entity
                  which has become a party to this Agreement in accordance with
                  clause 28.3,

            which in each case has not ceased to be a party to this Agreement in
            accordance with the terms of this Agreement;

            LETTER OF CREDIT: any standby letter of credit (which has been
            specifically agreed between a Borrower and the Agent) issued by the
            Issuer at the request of a Borrower pursuant to the terms of clause
            6.4;

            LETTER OF CREDIT AND GUARANTEE FEE: the meaning given to it in
            clause 22.5;


                                       15
<PAGE>
            LIBOR: in relation to any LIBOR Revolving Loan or any unpaid sum and
            any Interest Period relating to it:

            (i)   the applicable Screen Rate; or

            (ii)  (if no Screen Rate is available for the currency or Interest
                  Period of that Loan or unpaid sum) the arithmetic mean of the
                  rates (rounded up to 4 decimal places) as supplied to the
                  Agent at its request quoted by the Reference Banks to leading
                  banks in the London Interbank Market,

            at or about 11.00 a.m. in London on the Quotation Date for a period
            comparable to the relevant Interest Period;

            LIBOR REVOLVING LOAN: a revolving loan made or to be made by the
            Lenders in relation to which interest thereon is to be calculated by
            reference to LIBOR;

            LOANS: each Revolving Loan and Swingline Loan and "LOAN" means any
            one of them;

            MAJORITY LENDERS: Lenders whose Outstandings together exceed
            sixty-six and two-thirds per cent (66?%) of the Outstandings of all
            the Lenders (or, if there are no Outstandings, Lenders whose
            Commitments together exceed sixty-six and two-thirds per cent (66?%)
            of the Total Commitments) provided that, if at any time there are
            only two Lenders party to this Agreement "MAJORITY LENDERS" shall
            mean both of them together;

            MANAGEMENT ACCOUNTING PERIOD: each period of one calendar month
            ending on the last day of that month;

            MANAGEMENT ACCOUNTS: as at the date of this Agreement, the unaudited
            but consolidated and consolidating management accounts of BMEP,
            BMEBV and the Group in respect of the Management Accounting Period
            ended 31 October 2002 to be prepared in accordance with Applicable
            GAAP and in a format agreed by the Agent and thereafter those
            accounts or the then latest such accounts for successive Management
            Accounting Periods required to be delivered to the Agent pursuant to
            clause 15.2.2;

            MANDATORY COST: the percentage rate per annum calculated by the
            Agent in accordance with Schedule 5;

            MATERIAL CONTRACTS: each of the contracts details of which are set
            out in Schedule 10 and any other contract from time to time
            designated as a Material Contract by the Agent and Ideal;

            MAXIMUM ELIGIBILITY AMOUNT: the amount which is equal to the sum of:

            (a)   80% of the Net Amount of Eligible Accounts (the "ACCOUNTS
                  ADVANCE Rate"). If at any time, but not earlier than six (6)
                  months after the Closing Date, the Agent determines that the
                  Dilution Percentage for the Borrowers (as a whole) has been
                  equal to or less than 5% for a continuous period of three (3)
                  months ending on the date of such determination, the Agent, in
                  its absolute discretion (upon completing a


                                       16
<PAGE>
                  field exam and such other reviews as it deems appropriate),
                  may increase the Accounts Advance Rate to 85%. "DILUTION
                  PERCENTAGE" means the percentage figure obtained by dividing
                  (A) all credits, allowances, discounts, write-offs,
                  contra-accounts and other set-offs incurred in any month which
                  reduce the value of Accounts for the Borrowers (as a whole) by
                  (B) the gross amount of all cash received and retained in the
                  Receivables Accounts from all Accounts created by the
                  Borrowers (as a whole) in such month: notwithstanding but
                  without prejudice to the foregoing, the Agent shall have the
                  right to reduce the Accounts Advance Rate or to establish
                  reserves, if the Agent at any time determines that the
                  Dilution Percentage has increased; plus

            (b)   after the Inventory Eligibility Date, if applicable, up to 60%
                  of the value of Eligible Inventory;

            MAXIMUM REVOLVING CREDIT LINE: the amount of(pound)75,000,000 or
            such other amount as may be agreed between the Agent and Ideal;

            NET AMOUNT OF ELIGIBLE ACCOUNTS: the gross amount of Eligible
            Accounts less sales, excise or similar taxes, and less returns,
            discounts, claims, credits and allowances of any nature at any time
            issued, owing, granted, outstanding, available or claimed in respect
            of such Eligible Accounts;

            NOTICE OF CONVERSION/CONTINUATION: the meaning given to it in clause
            7.5.2;

            OBLIGORS: each Borrower, each Charging Company, each Guarantor, BMEP
            and each other member of the Group which has, or may be required by
            the Agent to have, any liability from time to time, whether actual
            or contingent, present or future, for the payment of any amounts
            outstanding or capable of becoming outstanding under any of the
            Finance Documents and "OBLIGOR" means any one of them;

            ORIGINAL STERLING AMOUNT: in relation to a Loan, the amount
            specified in sterling in the Utilisation Notice relating to that
            Loan (or, if the amount requested is denominated in a Foreign
            Currency, that amount converted into sterling at the Agent's Spot
            Rate of Exchange on the date which is three business days before the
            Utilisation Date or, if later, on the date the Agent received the
            Utilisation Notice);

            OUTSTANDINGS: in relation to a Lender at any time, the Original
            Sterling Amount of the aggregate principal amount of its share of
            all (if any) Utilisations, including (in relation to the Issuer) the
            Original Sterling Amount of the aggregate of its contingent
            liabilities in respect of any such Utilisations consisting of the
            issue of any Letters of Credit or Guarantees outstanding at that
            time;

            PARENT: Bell Microproducts Inc.;

            PARTICIPATING PROPORTION: in relation to a Lender and a sum payable
            to or by it on any date, the proportion which the Commitment of that
            Lender bears to the Total Commitments on that date;


                                       17
<PAGE>
            PERMITTED ENCUMBRANCE: any encumbrance permitted under clause
            16.3.1;

            PERMITTED INDEBTEDNESS: any indebtedness permitted under clause
            16.3.5;

            PRE-APPROVED ACQUISITION: any acquisition of any business, shares or
            other assets of any kind by any Group Company which does not require
            the prior consent or approval of the Agent or the Lenders by virtue
            of the fact that both prior to and at the time of its completion,
            each of the Approved Acquisition Conditions were satisfied;

            PRIORITY AGREEMENT: the priority agreement, in form and substance
            satisfactory to the Agent, entered or to be entered into between (1)
            Bell Microproducts Limited, (2) the Security Trustee and (3)
            National Westminster Bank Plc in its capacity as existing
            Chessington Mortgagee;

            PRO-FORMA BALANCE SHEET: the pro-forma consolidated (and
            consolidating) balance sheet of the Group and each Group Company as
            of 31 October 2002 prepared by Ideal in accordance with Applicable
            GAAP;

            QUALIFYING LENDER: a lender which either:

            (i)   is a bank as defined in section 840A of the Taxes Act which,
                  for the purposes of section 349 of the Taxes Act, is within
                  the charge to corporation tax as regards all interest payable
                  to it under this Agreement; or

            (ii)  is a lender (a "TREATY LENDER") which has the benefit of a
                  double tax treaty which provides a complete exemption from UK
                  income tax on interest; or

            (iii) is a lender (a "UK NON-BANK LENDER") which is beneficially
                  entitled to interest payable to that lender in respect of a
                  Loan under this Agreement and is:

                  (a)   a company resident in the United Kingdom for United
                        Kingdom tax purposes;

                  (b)   a partnership each member of which is a company resident
                        in the United Kingdom for United Kingdom tax purposes;
                        or

                  (c)   a company not so resident in the United Kingdom which
                        carries on a trade in the United Kingdom through a
                        branch or agency and which is required to bring that
                        interest into account in computing its chargeable
                        profits (within the meaning given by section 11(2) of
                        the Taxes Act),

            and has given a Tax Confirmation to the Borrowers;

            QUOTATION DATE: in relation to any period for which an interest rate
            is to be determined, the day on which quotations would ordinarily be
            given by prime banks in the London Interbank Market for deposits in
            the currency in relation to which such rate is to be determined for
            delivery on the first day of that period provided that, if, for any
            such period, quotations would ordinarily be


                                       18
<PAGE>
            given on more than one date, the Quotation Date for that period
            shall be the last of those dates;

            RECEIVABLES ACCOUNT: the meaning given to it in the Debenture;

            REFERENCE BANKS: such banks as may be appointed by the Agent in
            consultation with Ideal;

            REFERENCE RATE: in relation to any Loan or unpaid sum denominated in
            sterling or any Foreign Currency (as the case may be) on which
            interest is to be calculated by reference to Reference Rate, the
            Agent's reference rate for sterling or such Foreign Currency being
            the rate from time to time set by the Agent based on various factors
            including the Agent's cost of funds, desired return and general
            economic conditions and which is used as a reference point for
            pricing loans made by it in sterling or such Foreign Currency;

            REFERENCE RATE REVOLVING LOAN: a revolving loan made or to be made
            by the Lenders in relation to which interest thereon is to be
            calculated by reference to the Reference Rate;

            RELEVANT ACCOUNTING INFORMATION: the meaning given to it in clause
            15.4;

            RELEVANT AGREEMENTS: the Finance Documents, the Material Contracts
            and any Approved Acquisition Documents;

            RESERVATIONS: the principle that equitable remedies are remedies
            which may be granted or refused at the discretion of the court, the
            limitation of enforcement by laws relating to bankruptcy,
            insolvency, liquidation, reorganisation, court schemes, moratoria,
            administration and other laws generally affecting the rights of
            creditors, the time barring of claims under the Limitation Act 1980,
            the possibility that an undertaking to assume liability for or to
            indemnify against non-payment of United Kingdom stamp duty may be
            void, the unenforceability of penalty provisions and defences of
            set-off or counterclaim and similar principles arising under the
            laws of any other jurisdiction in which relevant obligations must be
            performed;

            RESTRICTED INVESTMENT: any acquisition of any assets by any Group
            Company in exchange for cash or other assets, whether in the form of
            an acquisition of shares, debt securities or other indebtedness or
            obligation, or the purchase or acquisition of any other assets, or a
            loan, advance, capital contribution or subscription, except the
            following:

            (i)   acquisitions of fixed assets to be used in the business of
                  such Group Company, so long as the acquisition costs thereof
                  constitute Capital Expenditure permitted hereunder; and

            (ii)  acquisitions of goods held for sale or lease or to be used in
                  the rendering of services by such Group Company in the
                  ordinary course of business;

            (iii) any acquisition of shares, debt securities or other
                  indebtedness or obligation, or the making of any loan,
                  advance, capital contribution or subscription by any Group
                  Company in or to any other Group


                                       19
<PAGE>
                  Company which is loss-making and solely for the purpose of
                  recapitalising such loss-making Group Company, provided always
                  that, unless (A) the funds (the "INVESTMENT FUNDS") employed
                  by the investing Group Company have been made available to it
                  wholly by the Parent (directly or through BMEP) and not by the
                  utilisation of any amounts drawn down under this Agreement and
                  (B) the investment funds are the proceeds of a new capital
                  injection (whether by way of debt or equity) into the
                  investing Group Company occurring after the Effective Date and
                  not monies already available to such investing Group Company,
                  then such capital injection by the relevant investing Group
                  Company may not exceed (pound)500,000 without the prior
                  consent of the Agent;

            (iv)  any Pre-Approved Acquisition;

            REVIEW DATE: the meaning given to it in Clause 7.6.1;

            REVOLVING FACILITY: the facility referred to in clause 2.1;

            REVOLVING FACILITY AMOUNT: the lesser of:

            (i)   the Maximum Revolving Credit Line; and

            (ii)  the Maximum Eligibility Amount;

            REVOLVING LOAN: each LIBOR Revolving Loan and each Reference Rate
            Revolving Loan made or to be made by the Lenders pursuant to the
            Revolving Facility;

            SCREEN RATE: the British Bankers Association Interest Settlement
            Rate for the relevant currency and period displayed on page 3750 of
            the Telerate screen; if the agreed page is replaced or service
            ceases to be available, the Agent may specify another page or
            service displaying the appropriate rate after consultation with
            Ideal and the Lenders;

            SECURED GUARANTOR: each Charging Company;

            SECURED OBLIGATIONS: the meaning given to it in the Debenture;

            SECURITY DOCUMENTS: the Debenture, the Priority Agreement and any
            document creating an encumbrance over any asset of any Obligor
            entered into pursuant thereto and any other security document
            granted to the Security Trustee as security for the obligations of
            the Obligors to the Beneficiaries;

            SECURITY INTEREST: collectively the encumbrances granted to the
            Security Trustee in the Collateral pursuant to the Security
            Documents or any other agreement or instrument;

            SOLUTIONS GROUP: at any time, Bell Microproducts Europe Solutions BV
            and its Subsidiaries at such time and "MEMBER OF THE SOLUTIONS
            GROUP" means any one of them;


                                       20
<PAGE>
            SUBSIDIARY: a subsidiary (as that term is defined in section 736
            Companies Act 1985) provided that, for the purposes of the
            definition of "FINANCIAL STATEMENTS", clauses 14.1.10, 14.1.22 and
            15 and the definition of "GROUP" in each such clause, the term
            "SUBSIDIARY" shall include a subsidiary undertaking (as that term is
            defined in section 258 Companies Act 1985);

            SUPPLEMENTAL AGREEMENT: the agreement supplemental to this Agreement
            dated on or about 6 November 2003 entered into by the parties
            hereto;

            SUPPLEMENTAL DEED: a deed supplemental to the Debenture,
            substantially in the form set out in schedule 9 to the Debenture,
            entered or to be entered into by a Group Company pursuant to which
            that Group Company accedes to the Debenture as a Charging Company;

            SWINGLINE LOAN: a swingline loan made or to be made by the Swingline
            Lender pursuant to clause 6.3;

            TAXES ACT: the Income and Corporation Taxes Act 1988;

            TAX CONFIRMATION: a confirmation by a person which is a Lender under
            this Agreement that the person beneficially entitled to interest
            payable to that Lender in respect of a Loan under this Agreement is
            either:

            (i)   a company resident in the United Kingdom for United Kingdom
                  tax purposes; or

            (ii)  a partnership each member of which is a company resident in
                  the United Kingdom for United Kingdom tax purposes; or

            (iii) a company not so resident in the United Kingdom which carries
                  on a trade in the United Kingdom through a branch or agency
                  and which is required to bring that interest into account in
                  computing its chargeable profits (within the meaning given by
                  section 11(2) of the Taxes Act);

            TERMINATION DATE: subject to clause 9.5, the date falling 36 months
            after the Closing Date;

            TOTAL COMMITMENTS: the aggregate at any time of the Commitments of
            all the Lenders;

            TOTAL OUTSTANDINGS: the aggregate at any time of the Outstandings of
            all the Lenders;

            TRADING COMPANY: each Group Company with Eligible Accounts and, if
            applicable following the Inventory Eligibility Date, with such
            Eligible Inventory as the Agent may agree in writing;

            TRANSFER CERTIFICATE: a certificate substantially in the form set
            out in Schedule 6 completed in accordance with clause 28;

            TRANSFEREE: a Lender or other financial institution which is a
            Qualifying Lender to which a Lender seeks to transfer rights and
            obligations under this Agreement in accordance with clause 28;


                                       21
<PAGE>
         TRUST PROPERTY: all or any of the assets, rights, powers,
         authorities and discretions at any time subject to or expressed to
         be subject to the security from time to time constituted by or
         arising pursuant to the Security Documents or vested in the Security
         Trustee or given under or pursuant to the Security Documents
         including all income and other sums at any time received or
         receivable by the Security Trustee in respect thereof;

         UNSECURED GUARANTOR: a Group Company which has acceded to this
         Agreement as an unsecured guarantor by executing and delivering to
         the Agent an Accession Notice in accordance with clause 3 and
         "UNSECURED GUARANTOR" means any one of them;

         UNUSED LINE FEE: the meaning given to it in clause 22.1;

         UTILISATION: a utilisation consisting of the drawdown of a Swingline
         Loan or Revolving Loan or the issue by the Issuer of a Letter of
         Credit or Guarantee;

         UTILISATION NOTICE: a notice of Utilisation substantially in the
         form set out in Schedule 4; and

         VAT: value added tax or any similar tax substituted therefor.

1.2      CONSTRUCTION

         Any reference in this Agreement to:

         1.2.1    the "AGENT", the "ARRANGER", the "SECURITY TRUSTEE", the
                  "ISSUER", the "SWINGLINE LENDER" or any "LENDER" shall be
                  construed so as to include their respective successors,
                  Transferees and assignees in accordance with their respective
                  interests;

         1.2.2    "THIS AGREEMENT" or to any other agreement or document shall,
                  unless the context otherwise requires, be construed as a
                  reference to this Agreement or such other agreement or
                  document as the same may from time to time be amended, varied,
                  supplemented, novated or replaced and shall include any
                  document which is supplemental to, is expressed to be
                  collateral with, or is entered into pursuant to or in
                  accordance with, the terms of this Agreement or, as the case
                  may be, such other agreement or document;

         1.2.3    the "ASSETS" of any person shall be construed as a reference
                  to all or any part of its business, operations, undertaking,
                  property, assets, revenues (including any right to receive
                  revenues) and uncalled capital;

         1.2.4    a "BUSINESS DAY" is a reference to a day (other than a
                  Saturday or Sunday) on which banks generally are open for
                  business in London and:

                  (a)   (in relation to any date for the payment or purchase of
                        a currency other than euro) in the principal financial
                        centre of the country of that currency; or


                                       22
<PAGE>
                  (b)   (in relation to any date for the payment or purchase of
                        euro) which is a TARGET Day;

         1.2.5    a "CAPITAL ADEQUACY REGULATION" shall be construed as a
                  reference to any guideline, request or directive of any
                  central bank or public authority, or any other law, rule or
                  directive or regulation, whether or not having the force of
                  law, in each case, regarding capital adequacy of any bank or
                  of any corporation controlling a bank;

         1.2.6    a document being a "CERTIFIED COPY" of another means such
                  document is certified by a duly authorised officer of the
                  relevant Obligor (or by reputable solicitors to the relevant
                  Obligor from time to time) as being a true, complete, accurate
                  and up-to-date copy of the original;

         1.2.7    a person being "CONTROLLED" by another means that that other
                  (whether directly or indirectly and whether by the ownership
                  of share capital, the possession of voting power, contract or
                  otherwise) has the power to appoint and/or remove all or the
                  majority of the members of the board of directors or other
                  governing body of that person or otherwise controls or has the
                  power to control the affairs and policies of that person;

         1.2.8    a "CREDIT AGREEMENT" shall be construed as a reference to any
                  conditional sale agreement (as defined in the Consumer Credit
                  Act 1974), hire purchase or credit sale agreement or other
                  similar agreement entered into primarily as a method of
                  financing the acquisition of the asset which is the subject of
                  such agreement;

         1.2.9    a Default which is "CONTINUING" shall be construed as a
                  reference to a Default which has not been remedied or waived;

         1.2.10   "DOLLARS" and "US$" shall mean the lawful currency of the
                  United States of America;

         1.2.11   "EMU LEGISLATION" means legislative measures of the European
                  Communities for the introduction of, changeover to or
                  operation of the euro;

         1.2.12   an "ENCUMBRANCE" shall be construed as a reference to a
                  mortgage, charge, assignment by way of security, pledge, lien,
                  hypothecation, right of set-off, reservation of title
                  arrangement, preferential right (save as arising under the
                  general law for the protection of certain classes of
                  creditors) or any trust, flawed asset or other arrangement for
                  the purpose of and having a similar effect to the granting of
                  security, or other security interest of any kind;

         1.2.13   "EURO" and "EUR" means the single currency adopted by certain
                  participating member states of the European Communities in
                  accordance with EMU legislation;


                                       23
<PAGE>
         1.2.14   a "FINANCE LEASE" shall be construed as a reference to any
                  lease or other similar agreement entered into primarily as a
                  method of financing the use of the asset which is the subject
                  of such lease or agreement;

         1.2.15   "FINANCIAL INDEBTEDNESS" shall be construed as a reference to
                  any indebtedness under or in respect of:

                  (a)   monies borrowed or raised (including by way of
                        preference share capital but excluding by way or
                        ordinary shares);

                  (b)   any debenture, bond, note, loan stock, commercial paper
                        or similar instrument;

                  (c)   any acceptance credit, bill-discounting, note purchase
                        or documentary credit facility;

                  (d)   any credit agreement or finance lease;

                  (e)   any receivables purchase, factoring or discounting
                        arrangement under which there is recourse in whole or in
                        part to any member of the Group;

                  (f)   credit (other than normal trade credit for a period not
                        exceeding 90 days) or deferred payment arrangements in
                        respect of the acquisition or construction price of
                        assets acquired or constructed or the purchase price of
                        services supplied;

                  (g)   any other transaction having the commercial effect of a
                        borrowing or other raising of money entered into by a
                        person to finance its business or operations or capital
                        requirements; or

                  (h)   (without double counting) any guarantee or other
                        assurance against financial loss in respect of the
                        indebtedness of any person arising under an obligation
                        falling within (a) to (g) above;

         1.2.16   the "FINANCIAL STATEMENTS" or the "MANAGEMENT ACCOUNTS" shall
                  be construed so as to include any notes, reports, statements
                  or other documents annexed or attached to any of them;

         1.2.17   a "GUARANTEE" shall be construed so as to include an
                  indemnity, bond, standby letter of credit and any other
                  obligation (whatever called) of any person to pay for,
                  purchase, provide funds (whether by the advance of money, the
                  purchase or subscription for shares or other securities, the
                  purchase of assets or services or otherwise) for the payment
                  of, indemnify against the consequences of default in the
                  payment of, or otherwise be responsible for, any indebtedness
                  or other obligation of any other person (and "GUARANTEED" and
                  "GUARANTOR" shall be construed accordingly);


                                       24
<PAGE>
         1.2.18   "INDEBTEDNESS" shall be construed as a reference to any
                  obligation for the payment or repayment of money, whether as
                  principal or as surety and whether present or future, actual
                  or contingent;

         1.2.19   a document expressed to be "IN THE APPROVED TERMS" is a
                  reference to a document the terms, conditions and form of
                  which have been initialled for the purpose of identification
                  by or on behalf of the Agent;

         1.2.20   something having a "MATERIAL ADVERSE EFFECT" on a person shall
                  be construed as a reference to it having a material adverse
                  effect (i) on its financial condition, business or operations
                  or on the consolidated financial condition, business or
                  operations of it and its Subsidiaries or (ii) on its ability
                  to comply with its payment obligations under any Finance
                  Document;

         1.2.21   a "MONTH" is a reference to a period starting on one day in a
                  calendar month and ending on the numerically corresponding day
                  in the next calendar month save that, where any such period
                  would otherwise end on a day which is not a business day, it
                  shall end on the next business day, unless that day falls in
                  the calendar month succeeding that in which it would otherwise
                  have ended, in which case it shall end on the preceding
                  business day provided that, if a period starts on the last
                  business day in a calendar month or if there is no numerically
                  corresponding day in the month in which that period ends, that
                  period shall end on the last business day in that later month;

         1.2.22   a "PARTICIPATING MEMBER STATE" is a reference to any member
                  state of the European Communities which adopts or has adopted
                  the euro as its lawful currency in accordance with EMU
                  legislation;

         1.2.23   a "PERSON" shall be construed as a reference to any
                  individual, firm, company, corporation, public authority or
                  any association or partnership (whether or not having separate
                  legal personality) of two or more of the foregoing;

         1.2.24   a "PUBLIC AUTHORITY" shall be construed as a reference to any
                  government of any country or sovereign state or any political
                  sub-division thereof or any department, agency, public
                  corporation or other instrumentality of any of the foregoing;

         1.2.25   a "REGULATION" shall be construed so as to include any
                  regulation, rule, by-law, official directive, requirement,
                  request or guideline (whether or not having the force of law)
                  of any governmental body, agency, department or regulatory,
                  self-regulatory or other authority or organisation;

         1.2.26   "STERLING" and "(POUND)" denotes the lawful currency of the
                  United Kingdom;


                                       25
<PAGE>
         1.2.27   the "STERLING EQUIVALENT" of (i) any amount denominated in a
                  Foreign Currency shall mean the equivalent in sterling of such
                  amount as determined by the Agent by reference to the Agent's
                  Spot Rate of Exchange and of (ii) any amount denominated in
                  sterling shall mean such sterling amount;

         1.2.28   "TARGET" is a reference to Trans-European Automated Real-time
                  Gross Settlement Express Transfer payment system;

         1.2.29   "TARGET DAY" is a reference to any day on which TARGET is open
                  for the settlement of payments in euro;

         1.2.30   "TAX" shall be construed so as to include any present and
                  future tax, levy, impost, deduction, withholding, duty or
                  other charge of a similar nature (including, without
                  limitation, any penalty or interest payable in connection with
                  any failure to pay or any delay in paying any of the same);

         1.2.31   "TAX ON OVERALL NET INCOME" of a person shall be construed as
                  a reference to tax (other than tax deducted or withheld from
                  any payment) imposed on that person by the jurisdiction in
                  which its principal office (and/or, in the case of a Lender,
                  its Facility Office) is located on (i) the net income, profits
                  or gains of that person world-wide or (ii) such of its net
                  income, profits or gains as arise in or relate to that
                  jurisdiction;

         1.2.32   an "UNPAID SUM" is a reference to an unpaid sum as that term
                  is defined in clause 18.1;

         1.2.33   the "WINDING-UP", "DISSOLUTION", "ADMINISTRATION",
                  "RECEIVERSHIP" or "BANKRUPTCY" of a person and references to
                  the "LIQUIDATOR", "ADMINISTRATOR", "RECEIVER", "ADMINISTRATIVE
                  RECEIVER", "RECEIVER AND MANAGER", "MANAGER" or "TRUSTEE" of a
                  person shall be construed so as to include any equivalent or
                  analogous proceedings or, as the case may be, insolvency
                  representative or officer under the law of the jurisdiction in
                  which such person or, as the case may be, insolvency
                  representative or officer is incorporated or constituted or of
                  any jurisdiction in which such person or, as the case may be,
                  insolvency representative or officer, carries on business.

1.3      Any reference in this Agreement to any statute or statutory provision
         shall, unless the context otherwise requires, be construed as a
         reference to such statute or statutory provision (including all
         instruments, orders or regulations made thereunder or deriving validity
         therefrom) as in force at the date of this Agreement and as
         subsequently re-enacted or consolidated.

1.4      Any reference in this Agreement to a time of day shall, save where the
         context otherwise requires, be construed as a reference to London time.


                                       26
<PAGE>
1.5      In construing this Agreement general words introduced by the word
         "OTHER" shall not be given a restrictive meaning by reason of the fact
         that they are preceded by words indicating a particular class of acts,
         matters or things and general words shall not be given a restrictive
         meaning by reason of the fact that they are followed by particular
         examples intended to be embraced by the general words.

1.6      The illegality, invalidity or unenforceability of any provision of this
         Agreement under the law of any jurisdiction shall not affect its
         legality, validity or enforceability under the law of any other
         jurisdiction nor the legality, validity or enforceability of any other
         provision of this Agreement.

1.7      This Agreement supersedes any previous agreement, whether written or
         oral, express or implied, between the Original Borrowers, the Arranger,
         the Agent, the Security Trustee and the Lenders, or any of them, in
         relation to the subject matter of this Agreement.

1.8      The headings in this Agreement are for convenience only and shall not
         affect its meaning and references to a clause, Schedule or paragraph
         are (unless otherwise stated) to a clause of, or schedule to, this
         Agreement and to a paragraph of the relevant Schedule.

1.9      This Agreement may be signed in any number of counterparts, all of
         which taken together shall constitute one and the same instrument. Any
         party may enter into this Agreement by signing any such counterpart.

1.10     Save where the context otherwise requires, the plural of any term
         includes the singular and vice versa.

1.11     Except as provided in clause 27.13, the terms of this Agreement may
         only be enforced by a party to it and the operation of the Contracts
         (Rights of Third Parties) Act 1999 is excluded. Notwithstanding such
         clause, the parties to this Agreement do not require the consent of any
         third party to rescind or vary this Agreement or any Finance Document
         at any time.

1.12     Nothing in this Agreement or envisaged hereby shall operate, whether
         directly or indirectly, to constitute a partnership between any Obligor
         and any of the Beneficiaries.

1.13     The liabilities and obligations of the Obligors under the Finance
         Documents to which each of them is expressed to be a party are and
         shall be construed as being, joint and several.

2        THE REVOLVING FACILITY

2.1      THE REVOLVING FACILITY

         Subject to the terms and conditions of this Agreement, the Lenders
         shall make available to the Borrowers a revolving credit facility (the
         "REVOLVING FACILITY") of up to (pound)75,000,000. The Revolving
         Facility (as described in clause 6 shall consist of Revolving Loans (to
         be denominated in sterling and/or, if agreed between the relevant
         Borrower and the Agent, dollars, euro or one or more other Foreign
         Currencies) to be made by the Lenders and, if


                                       27
<PAGE>
         specifically agreed by the Agent (on the instructions of the Issuer),
         Letters of Credit and/or Guarantees to be issued by the Issuer (subject
         to reimbursement by the relevant Borrower and each of the Lenders on
         the terms set out in this Agreement) and Swingline Loans (to be
         denominated in sterling and/or dollars, euros or such one or more other
         Foreign Currencies as may be agreed between the relevant Borrower and
         the Swingline Lender), to be made by the Swingline Lender (subject to
         reimbursement by the Lenders on the terms set out in this Agreement) in
         a maximum aggregate principal Original Sterling Amount not exceeding
         the Revolving Facility Amount.

2.2      PURPOSE

         The Revolving Facility is to be applied to meet each Borrower's general
         working capital purposes and each Borrower shall apply all amounts
         raised by it under this Agreement accordingly provided that none of the
         Agent, the Security Trustee or any of the Lenders shall be obliged to
         concern itself with the application of amounts raised by any Borrower
         under this Agreement.

2.3      OBLIGATIONS SEVERAL

         The obligations of each Lender under this Agreement are several. The
         failure by any Lender to perform its obligations under this Agreement
         shall not affect the obligations of any Obligor towards any other party
         to this Agreement nor shall any such other party be liable for the
         failure by such Lender to perform its obligations.

2.4      RIGHTS SEVERAL

         The rights of each Lender are several. The amount at any time owing by
         any Borrower to any party under this Agreement shall be a separate and
         independent debt from the amount owing to any other party.

2.5      FINANCIAL ASSISTANCE

         None of the proceeds of any Utilisation of the Revolving Facility under
         this Agreement may be used in any way which infringes section 151
         Companies Act 1985 or any similar or other statutory obligation whether
         in the United Kingdom or elsewhere unless the provisions of sections
         155 to 158 thereof are actually complied with.

2.6      CONTINUING OBLIGATIONS

         The obligations of any party under or in respect of clauses 10, 11, 18,
         19, 20.7, 24 and 26.9 shall continue even after the date (the
         "DISCHARGE DATE") upon which the Total Commitments have been cancelled
         or otherwise reduced to zero and the Outstandings of all the Lenders
         have been permanently repaid or prepaid, to the extent of and in
         respect of any cost, expense, loss, liability or claim indemnifiable
         under any such clause and suffered or incurred by any Beneficiary on or
         prior to the Discharge Date.


                                       28
<PAGE>
3.       ADDITIONAL BORROWERS AND UNSECURED GUARANTORS

3.1      REQUEST OR REQUIREMENT

         Ideal may request that any Group Company shall become an Additional
         Borrower or, as applicable, the Agent may require that any Group
         Company shall become an Unsecured Guarantor by giving to the Agent or,
         as applicable, to Ideal not less than 10 business days' notice. For the
         avoidance of doubt, any Additional Borrower shall, unless the Agent
         otherwise agrees, automatically be required also to become a Charging
         Company pursuant to clause 4, without the need for the Agent to serve a
         further notice in accordance with clause 4.

3.2      ACCESSION

         The Group Company in respect of which the request or, as the case may
         be, requirement is made pursuant to clause 3.1 shall become an
         Additional Borrower or, as applicable, an Unsecured Guarantor:

         3.2.1    if the Lenders approve or, as applicable, require the addition
                  of that Group Company as an Additional Borrower or, as
                  applicable, as an Unsecured Guarantor;

         3.2.2    upon Ideal delivering to the Agent a duly completed and
                  executed Accession Notice;

         3.2.3    in the case of a request to appoint an Additional Borrower, if
                  no Default has occurred or is likely to occur as a result of
                  that Group Company becoming an Additional Borrower;

         3.2.4    if the Agent has received all of the documents and other
                  evidence specified in Schedule 9 in relation to that Group
                  Company and each is in form and substance satisfactory to the
                  Agent.

         For the avoidance of doubt, no Accounts or Inventory of any Group
         Company which is to become an Additional Borrower shall be considered
         as Eligible Accounts or Eligible Inventory, unless the Agent has
         completed a field examination and such other due diligence as the Agent
         may require and such Accounts and Inventory satisfy the applicable
         conditions set forth in this Agreement.

3.3      TIMING

         The Agent shall notify Ideal and the Lenders promptly upon being
         satisfied that it has received all of the documents and other evidence
         specified in Schedule 9 in relation to the relevant Group Company and
         that each is in form and substance satisfactory to it, whereupon
         subject always to clauses 3.2.1, 3.2.2 and, in the case of a proposed
         Additional Borrower, clause 3.2.3, the relevant Group Company shall
         become an Additional Borrower or, as applicable, an Unsecured
         Guarantor.


                                       29
<PAGE>
3.4      IDEAL AS AGENT

         Each Borrower and each Unsecured Guarantor shall be deemed to appoint
         Ideal as its agent for the purposes of the Finance Documents by its
         execution of an Accession Notice. The Agent may rely on a document
         signed by Ideal as if it had been signed by any other Borrower or any
         Unsecured Guarantor. Ideal may give a good receipt for any sum payable
         by any Finance Party to any other Borrower or an Unsecured Guarantor.
         Any communication delivered to Ideal shall be deemed to have been
         delivered to each of the Borrowers and each Unsecured Guarantor. Any
         communication made by Ideal to the Agent or any other Finance Party
         shall, to the extent permissible by law, be deemed to have been made
         with the consent of each other Borrower and each Unsecured Guarantor.

3.5      REPETITION OF REPRESENTATIONS

         Delivery of an Accession Notice constitutes confirmation by the
         relevant Additional Borrower or, as applicable, Unsecured Guarantor
         that the representations and warranties set out in clause 14.1 which
         are required to be repeated pursuant to clause 14.2 are true and
         correct in all material respects in relation to it as at the date of
         delivery as if made by reference to the facts and circumstances then
         existing.

4        ADDITIONAL CHARGING COMPANIES

4.1      REQUIREMENT

         The Agent (acting on the instructions of the Lenders) may require that
         any Group Company becomes a Charging Company by giving to Ideal not
         less than 10 business days' notice, provided that any Group Company
         which has acceded to this Agreement as an Additional Borrower shall,
         unless the Agent otherwise agrees, automatically be required to become
         a Charging Company without the need for the Agent to serve a notice
         under this clause 4.

4.2      ACCESSION

         The Group Company in respect of which the requirement is made (or, in
         the case of an acceding Additional Borrower, is deemed to have been
         made) pursuant to clause 4.1 shall become a Charging Company:

         4.2.1    (other than in the case of a Group Company acceding to this
                  Agreement as an Additional Borrower (in which case, accession
                  as a Charging Company shall, unless the Agent otherwise
                  agrees, be automatic)), if the Lenders require the addition of
                  that Group Company as a Charging Company;

         4.2.2    upon Ideal delivering to the Agent a duly completed and
                  executed Supplemental Deed;

         4.2.3    if no Default has occurred or is likely to occur as a result
                  of that Group Company becoming a Charging Company; and


                                       30
<PAGE>
         4.2.4    if the Agent has received all of the following documents and
                  other evidence in relation to that Group Company specified in
                  Schedule 9 (which shall be required to be delivered within 60
                  days of receipt (or deemed receipt) of notice under clause
                  4.1) and each is in form and substance satisfactory to the
                  Agent.

4.3      TIMING

         The Agent shall notify Ideal and the Lenders promptly upon being
         satisfied that it has received all of the documents and other evidence
         specified in Schedule 9 in relation to the relevant Group Company and
         that each is in form and substance satisfactory to it, whereupon
         subject always to clauses 4.2.1 to 4.2.3 (inclusive) the relevant Group
         Company shall become a Charging Company.

4.4      IDEAL AS AGENT

         Each Charging Company shall be deemed to appoint Ideal as its agent for
         the purposes of the Finance Documents by its execution of a
         Supplemental Deed. The Agent may rely on a document signed by Ideal as
         if it had been signed by each other Charging Company. Ideal may give a
         good receipt for any sum payable by any Finance Party to each other
         Charging Company. Any communication delivered to Ideal shall be deemed
         to have been delivered to each of the Charging Companies. Any
         communication made by Ideal to the Agent shall, to the extent
         permissible by law, be deemed to have been made with the consent of
         each other Charging Company.

4.5      REPETITION OF REPRESENTATIONS

         Delivery of a Supplemental Deed constitutes confirmation by the
         relevant Charging Company that the representations and warranties set
         out in clause 14.1 which are required to be repeated pursuant to clause
         14.2 are true and correct in all material respects in relation to it as
         at the date of delivery as if made by reference to the facts and
         circumstances then existing.

5        CONDITIONS PRECEDENT

         The Lenders shall be under no obligation to make the Revolving Facility
         available under this Agreement unless the Agent has received, or the
         Lenders are satisfied that the Agent will receive at the same time as
         or immediately prior to the making available of the Revolving Facility,
         in form and substance satisfactory to it, all of the documents and
         evidence referred to in Schedule 2 (save to the extent that the Agent
         may at any time waive such receipt).

6        UTILISATION OF THE REVOLVING FACILITY

6.1      GENERAL CONDITIONS OF UTILISATION

         The Lenders shall not be obliged to make the Revolving Facility
         available and no Utilisation Notice in respect of the Revolving
         Facility shall become effective unless the provisions with respect to
         Excess Availability outlined at clause 16.2.14 are complied with;


                                       31
<PAGE>
         and either:

         6.1.1    no Default has occurred and is continuing or would occur if
                  the Revolving Facility was made available and the
                  representations set out in clauses 14.1 and 14.2 to be
                  repeated on and as of the proposed date for the making
                  available of the Revolving Facility are true and correct in
                  all material respects on and as of such date; or

         6.1.2    the Lenders have agreed (notwithstanding any such matter) to
                  make the Revolving Facility available and no notice of
                  termination of this Agreement has been given by Ideal as
                  referred to in clause 29.

6.2      REVOLVING LOANS

         Subject to the terms of this Agreement, a Revolving Loan will be made
         by the Lenders to a Borrower on its request if:

         6.2.1    not later than 11.00 am on the business day immediately prior
                  to the day which is the proposed date for the making of such
                  Revolving Loan (or three business days in the case of any
                  Revolving Loan to be denominated in a Foreign Currency), or
                  such lesser period as the Agent may agree prior to the
                  proposed date for the making of such Revolving Loan, the Agent
                  has received from the relevant Borrower a Utilisation Notice
                  in respect of such Revolving Loan;

         6.2.2    the proposed date for the making of such Revolving Loan is a
                  business day during the Commitment Period;

         6.2.3    the Original Sterling Amount of the proposed amount of such
                  Revolving Loan is a minimum amount of (pound)3,000,000 and an
                  integral multiple of (pound)1,000,000 (or, where the Revolving
                  Loan is to be made pursuant to clause 6.8.3, an amount equal
                  to the Original Sterling Amount of the aggregate principal
                  amount of the Swingline Loans then outstanding) which is less
                  than or equal to the lesser of the amount of the Available
                  Facility and the Available Revolving Facility Amount; and

         6.2.4    the proposed Interest Period in respect of such Revolving Loan
                  is a period of one, two or three months (or such other period
                  as the Agent may agree) ending on or before the Termination
                  Date.

6.3      SWINGLINE LOANS

         Subject to the terms of this Agreement, a Swingline Loan (which may be
         denominated in sterling, dollars, euro or such other Foreign Currency
         as the Swingline Lender may agree) will be made by the Swingline Lender
         to a Borrower on its request if:


                                       32
<PAGE>
         6.3.1    not later than 11.00 am on the day which is the proposed date
                  for the making of such Swingline Loan, the Agent has received
                  from the relevant Borrower a Utilisation Notice in respect of
                  such Swingline Loan;

         6.3.2    the proposed date for the making of such Swingline Loan is a
                  business day during the Commitment Period.

6.4      LETTERS OF CREDIT AND GUARANTEES

         Subject to the terms of this Agreement, if the Agent agrees with a
         Borrower (acting on the instructions of the Issuer), the Issuer shall,
         at that Borrower's request (contained in a Utilisation Notice) issue
         one or more documentary letters of credit (each a "LETTER OF CREDIT")
         or Guarantees (each a "GUARANTEE"), in each case denominated in
         sterling or any Foreign Currency as the Issuer may agree, for that
         Borrower's account. The Issuer will not issue any Letter of Credit or
         Guarantee:

         6.4.1    if the Original Sterling Amount of the maximum face amount of
                  the requested Letter of Credit or of the maximum contingent
                  liability under the requested Guarantee, in each case plus all
                  commissions, fees and charges due from the relevant Borrower
                  in connection with its issue, would cause its Available
                  Commitment or the Available Revolving Facility Amount to be
                  exceeded at such time;

         6.4.2    if the expiry date of the Letter of Credit or Guarantee would
                  be later than 30 days prior to the Termination Date or a date
                  falling more than 12 months from its date of issue;

         6.4.3    if the Original Sterling Amount of the maximum face amount of
                  the requested Letter of Credit or of the maximum contingent
                  liability under the requested Guarantee, when aggregated with
                  the Original Sterling Amount of the maximum face value of all
                  Letters of Credit and of the maximum contingent liability
                  under all Guarantees, in each case then in issue, would exceed
                  (pound)1,000,000,

         unless the Issuer has specifically agreed with that Borrower that it is
         prepared to do so.

6.5      UTILISATION NOTICES

6.5.1    Subject to the terms of this Agreement, each Utilisation Notice shall
         be irrevocable and shall oblige the relevant Borrower to borrow the
         amount so requested or, as the case may be, to give effect to the
         Utilisation so requested on the date specified in such Utilisation
         Notice upon the terms and subject to the conditions set out in this
         Agreement.

6.5.2    The first Utilisation Notice delivered hereunder shall include a
         request to draw down as part of the relevant Revolving Loan an amount
         equal to the amount of any fees then due and payable to the Arranger,
         the Agent and the Lenders and


                                       33
<PAGE>
         to such other valuers and professional advisers as shall have been
         agreed with the Agent and the Lenders as being payable therefrom and an
         authorisation and direction to the Agent to appropriate for such
         purpose the proceeds of so much of the relevant Revolving Loan as is
         required to satisfy the payment in full of such fees.

6.6      TERMINATION OF COMMITMENTS

         If it has not already been cancelled or otherwise reduced to zero prior
         to such time the Commitment of each of the Lenders shall be reduced to
         zero at close of business in London on the last day of the Commitment
         Period.

6.7      SPECIAL PROVISIONS RELATING TO REVOLVING LOANS

         The Agent, in its discretion, may elect to allow the limits of the
         Available Revolving Facility Amount to be exceeded on one or more
         occasions, provided that the Agent may never exceed the Maximum
         Revolving Credit Line. If the Agent does exceed the limits of the
         Available Revolving Facility Amount, it may not do so by an amount
         which exceeds five (5) per cent. of the amount of the Maximum Revolving
         Credit Line and if it does exceed the limits of the Available Revolving
         Facility Amount on any occasion, the Agent shall not be deemed thereby
         to have changed such limits or to be obliged to exceed such limits on
         any other occasion.

6.8      SPECIAL PROVISIONS RELATING TO SWINGLINE LOANS

6.8.1    NOTIFICATION: The Swingline Lender shall notify the Agent and the
         Lenders at the end of each week of the net amount of Swingline Loans
         then outstanding.

6.8.2    REPAYMENT OF SWINGLINE LOANS: The principal amount of the Swingline
         Loans denominated in any currency shall be repaid on a daily basis by
         the transfer of the full credit balance on each Receivables Account to
         any loan account denominated in that currency maintained by each
         Borrower with the Agent as contemplated in clause 20.8 or otherwise on
         demand by the Swingline Lender, any such credit balance denominated in
         any particular currency to be applied first to the unpaid principal
         amount of Swingline Loans denominated in the same currency and
         thereafter in or towards repayment of the unpaid principal amount of
         any Swingline Loans denominated in any other currency, the manner and
         extent of such application to be at the Agent's discretion.

6.8.3    REFUNDING OF SWINGLINE LOANS BY THE LENDERS: The Agent will not less
         than weekly and may, at any time in its sole and absolute discretion or
         upon request of the Swingline Lender, on behalf of the Borrowers (each
         of which hereby irrevocably directs the Agent to act on its behalf in
         this respect), give notice to the Lenders (including the Swingline
         Lender) requiring that they make a Reference Rate Revolving Loan to the
         relevant Borrower in an amount equal to the aggregate principal amount
         of the Swingline Loans then outstanding together with all interest
         accrued thereon but unpaid. Interest on any such Reference Rate
         Revolving Loan shall be calculated and payable in accordance with the
         provisions of clause 7.2.2.


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<PAGE>
6.8.4    APPLICATION OF REFERENCE RATE REVOLVING LOANS: Regardless of whether
         the conditions in this Agreement for the making of Revolving Loans are
         then satisfied, each Lender shall make its share of any Reference Rate
         Revolving Loan referred to in clause 6.8.3 available to the Agent for
         the benefit of the Swingline Lender on the date notice of the
         requirement for any such Reference Rate Revolving Loan is given to the
         Lenders.

6.9      SPECIAL CONDITIONS FOR ISSUE OF LETTERS OF CREDIT AND GUARANTEES

         In addition to being subject to the satisfaction of the applicable
         conditions precedent referred to in clause 5, the obligation of the
         Issuer to issue any Letter of Credit or Guarantee is subject to the
         following conditions having been satisfied in a manner satisfactory to
         the Agent:

         6.9.1    the relevant Borrower shall have delivered to the Agent, at
                  such times and in such manner as the Agent may prescribe, an
                  application in form and substance satisfactory to the Agent
                  for the issue of the Letter of Credit or Guarantee and such
                  other documents as may be required pursuant to the terms
                  thereof;

         6.9.2    the form and terms of the proposed Letter of Credit or
                  Guarantee shall be satisfactory to the Agent and the Issuer;
                  and

         6.9.3    as of the date of issue, no order of any court, arbitrator or
                  public authority shall purport by its terms to prohibit or
                  restrain the Issuer or banks generally from issuing letters of
                  credit or guarantees of the type and in the amount of the
                  proposed Letter of Credit or Guarantee (as the case may be),
                  and no law, rule or regulation applicable to the Issuer or
                  banks generally and no request or directive (whether or not
                  having the force of law) from any central bank or public
                  authority with jurisdiction over the Issuer or banks generally
                  shall prohibit, or request that the Issuer refrain from, the
                  issue of letters of credit or guarantees generally or the
                  issue of such Letter of Credit or Guarantee.

6.10     GENERAL CONDITIONS FOR ISSUE OF LETTERS OF CREDIT AND GUARANTEES

6.10.1   REQUESTS FOR ISSUE OF LETTERS OF CREDIT OR GUARANTEES: A Borrower shall
         give to the Agent four business days' prior written notice of that
         Borrower's request for the issue of any Letter of Credit or Guarantee.
         In the case of a Guarantee, such notice shall specify the maximum
         contingent liability to be guaranteed, the beneficiary in whose favour
         the Guarantee is to be issued, the effective date of issue of such
         Guarantee (which shall be a business day), details of the obligation in
         respect of which the contingent liability might arise and the date on
         which such obligation is due to mature or expire. In the case of a
         Letter of Credit, such notice shall specify the original face amount
         and currency denomination of the Letter of Credit requested, the
         effective date of issue of such Letter of Credit (which shall be a
         business day), whether such Letter of Credit may be drawn in a single
         or partial draws, the date on which such Letter of Credit is to expire
         and the beneficiary of such Letter of Credit.


                                       35
<PAGE>
6.10.2   NO EXTENSIONS OR AMENDMENT: The Issuer shall not be obliged to extend
         or amend or cause to be extended or amended any Letter of Credit or
         Guarantee it has issued.

6.10.3   EVENTS OF DEFAULT: The Issuer need not, before issuing a Letter of
         Credit or Guarantee, make any enquiry or otherwise concern itself as to
         whether any event has occurred which, under the terms hereof, would
         relieve the Issuer from its obligations to issue that Letter of Credit
         or Guarantee and accordingly none of the Borrowers nor any of the
         Lenders shall have any right to resist any claim under clause 6.12 nor
         otherwise on the ground that any such event had occurred before the
         issue of the Letter of Credit or Guarantee, provided that, before
         issuing a Letter of Credit or Guarantee, the Issuer shall inform each
         of the Lenders of any Event of Default of which it has actual notice.

6.11     COMPENSATION FOR LETTERS OF CREDIT AND GUARANTEES

         Each Borrower agrees to pay to the Agent for the account of the Issuer
         with respect to each Letter of Credit or Guarantee, the Letter of
         Credit and Guarantee Fee and such other reasonable fees and other
         charges as are charged by the Issuer for letters of credit or
         guarantees issued by it including, without limitation its standard fees
         for issuing, administering, amending, renewing, paying and cancelling
         letters of credit and guarantees and all other fees associated with
         issuing or servicing letters of credit, as and when assessed, all as
         specified in clause 22.5.

6.12     PAYMENTS PURSUANT TO LETTERS OF CREDIT AND GUARANTEES

6.12.1   DEMANDS UNDER A LETTER OF CREDIT OR GUARANTEE: If a demand for payment
         is made under a Letter of Credit or Guarantee on the Issuer, the Issuer
         shall promptly notify the Agent of such demand and pay the sum demanded
         in accordance with the terms of the relevant Letter of Credit or
         Guarantee, whereupon:

         (a)      the Agent shall not later than four hours after receipt of
                  such demand, if such demand is made prior to 1.00 pm (London
                  time) on any business day, or otherwise by 10.00 am (London
                  time) on the next succeeding business day, notify each Lender
                  of the amount of such demand and such Lender's proportion
                  thereof which such Lender shall be obliged to pay; and

         (b)      each Lender shall on the date of such notification make its
                  share of the amount demanded available to the Agent for the
                  benefit of the Issuer in immediately available funds.

         If any Lender is unable to make its share of such amount available on
         such date, it shall nevertheless do so as soon as possible thereafter
         and in any event by no later than two business days after the date
         notice of such requirement was given to it by the Agent, together with
         interest thereon from the date of such notice to the date of payment at
         the rate specified by the Agent as representing the Issuer's cost of
         funds.


                                       36
<PAGE>
6.12.2   INDEMNITY: Each Borrower agrees to indemnify and hold harmless the
         Issuer in sterling or sterling equivalent from and against all claims,
         demands, liabilities, damages, losses, costs, charges and expenses
         (including reasonable legal fees) which the Issuer may incur or sustain
         as a consequence of the issue of any Letter of Credit or Guarantee or
         the performance of its obligations thereunder (save where the same are
         caused by the Issuer's gross negligence or wilful misconduct). This is
         a continuing indemnity, extends to the ultimate balance of each
         Borrower's obligations and liabilities under clause 6 and shall
         continue in force notwithstanding any intermediate payment in whole or
         in part of those obligations or liabilities.

6.12.3   PAYMENT OF LETTER OF CREDIT OR GUARANTEE OBLIGATIONS: Without limiting
         or affecting any of the provisions of this clause 6.12, each Borrower
         agrees to reimburse the Agent and each Lender for any draw under any
         Letter of Credit or Guarantee immediately upon demand, and to pay the
         Agent the amount of all other obligations and other amounts payable to
         it under or in connection with any Letter of Credit or Guarantee
         immediately when due, irrespective of any claim, set-off, defence or
         other right which that Borrower may have at any time against the Agent,
         the Lenders, the Issuer or any other person.

6.12.4   REFERENCE RATE REVOLVING LOANS TO SATISFY REIMBURSEMENT OBLIGATIONS: If
         the Issuer honours a draw under any Letter of Credit or makes a payment
         under a Guarantee and the relevant Borrower shall not have repaid such
         amount to the Agent pursuant to clause 6.12.3, the honouring of such
         draw or the making of such payment by the Issuer shall of itself cause
         there to arise a Reference Rate Revolving Loan by the Lenders of the
         amount of such draw or payment which Reference Rate Revolving Loan that
         Borrower shall be obliged to repay immediately. In the event of
         non-payment of such Reference Rate Revolving Loan, interest thereon
         shall be calculated by reference to successive periods of such duration
         as the Agent may select at a rate per annum which is the sum of (i) two
         per cent (2%) (ii) the Applicable Margin and (iii) the Reference Rate
         and shall be paid by the relevant Borrower at the end of the period by
         reference to which it is calculated or on such other date as the Agent
         may specify by written notice to that Borrower. If not paid on the due
         date, the interest shall be added to and form part of the Reference
         Rate Revolving Loan on which interest shall accrue and be payable in
         accordance with the provisions of this clause 6.12.4.

6.13     LETTERS OF CREDIT AND GUARANTEES - ASSUMPTION OF RISK

6.13.1   AUTHORISATIONS: Each of the Borrowers and the Lenders unconditionally
         and irrevocably:

         (a)      authorise and direct the Issuer to pay any request or demand
                  for payment under and in accordance with any Letter of Credit
                  or Guarantee issued by it without requiring proof of the
                  relevant Borrower's agreement that any amount so demanded or
                  paid is or was due and notwithstanding that the relevant
                  Borrower may dispute the validity of any such request, demand
                  or payment;

         (b)      confirms that the Issuer deals in documents only and shall not
                  be concerned with the legality of any claim under any


                                       37
<PAGE>
                  Letter of Credit or Guarantee or any other underlying
                  transaction or any set-off, counterclaim or defence as between
                  the relevant Borrower and any beneficiary of any Letter of
                  Credit or Guarantee; and

         (c)      agrees that the Issuer need not have any regard to the
                  sufficiency, accuracy or genuineness of any such request or
                  demand or any certificate or statement in connection therewith
                  or any incapacity of or limitation upon the powers of any
                  person signing or issuing any such request, demand,
                  certificate or statement which appears on its face to be in
                  order and agrees that the Issuer shall not be obliged to
                  enquire as to any such matters and may assume that any such
                  request, demand, certificate or statement which appears on its
                  face to be in order is correct and properly made.

6.13.2   RIGHTS OF CONTRIBUTION AND SUBROGATION: Until all amounts which are or
         may become payable by the Obligors under or in connection with the
         Finance Documents have been irrevocably paid in full and the Agent, the
         Issuer, the Swingline Lender and/or the Lenders are under no liability
         hereunder, whether actual or contingent, no Borrower shall, by virtue
         of any payment made by it under or in connection with or referable to
         this clause 6 or otherwise be subrogated to any rights, security or
         monies held or received by the Agent, the Lenders and/or the Security
         Trustee or be entitled at any time to exercise, claim or have the
         benefit of any right of contribution or subrogation or similar right
         against any of them and each Borrower irrevocably waives all rights of
         contribution or similar rights against each of them.

6.13.3   WAIVER OF DEFENCES: Each Borrower's obligations under this clause 6
         shall not be affected by any act, omission, matter or thing which, but
         for this provision, might reduce, release or prejudice any of its
         obligations hereunder in whole or in part, including without limitation
         and whether or not known to it:

         (a)      any time or waiver granted to or composition with any
                  beneficiary or any other person;

         (b)      any taking, variation, compromise, exchange, renewal or
                  release of, or refusal or neglect to perfect, take up or
                  enforce, any rights, remedies or securities available to the
                  Issuer or other person or arising under any Letter of Credit
                  or Guarantee; or

         (c)      any unenforceability, illegality or invalidity of any Letter
                  of Credit or Guarantee to the intent that each Borrower's
                  obligations under this clause 6 shall remain in full force and
                  be construed as if there were no such effect.

6.14     SUPPORTING LETTER OF CREDIT; CASH COLLATERAL

         If, notwithstanding the provisions of this clause 6 and clause 29 any
         Letter of Credit or Guarantee is outstanding upon the termination of
         this Agreement, then upon such termination each Borrower shall deposit
         with the Security


                                       38
<PAGE>
         Trustee, at its discretion, with respect to each Letter of Credit or
         Guarantee then outstanding, in its favour and at its request either:

         6.14.1   a standby letter of credit (a "SUPPORTING LETTER OF CREDIT")
                  in form and substance satisfactory to the Agent and the
                  Security Trustee, issued by an issuer satisfactory to the
                  Lenders in an amount equal to the greatest amount for which
                  such Letter of Credit may be drawn (or, as the case may be,
                  the maximum contingent liability under such Letter of Credit
                  or Guarantee) together with all fees, expenses and charges in
                  respect thereof (together the "MAXIMUM LIABILITY") under which
                  Supporting Letter of Credit the Security Trustee is entitled
                  to draw amounts necessary to reimburse the Issuer (through the
                  Agent) for payments made by the Issuer under such Letter of
                  Credit or Guarantee; or

         6.14.2   cash in an amount equal to such maximum liability.

         Such Supporting Letter of Credit or deposit of cash shall be held by
         the Security Trustee as security for, and to provide for the payment
         of, the aggregate face amount of all Letters of Credit or, as the case
         may be, the aggregate maximum contingent liability under all
         Guarantees, remaining outstanding.

6.15     AGENT LOANS

6.15.1   AUTHORISATION: Subject to the provisions of this clause 6.15, the Agent
         is hereby authorised by each Borrower and the Lenders, from time to
         time in the Agent's reasonable discretion, after the occurrence of a
         Default or an Event of Default which is continuing unremedied or
         unwaived or at any time that any of the other conditions to the making
         available of any Loans hereunder have not been satisfied (and provided
         in any such case that it is impractical to contact the Lenders), to
         make Reference Rate Revolving Loans (but in any event not to exceed the
         Available Facility) to a Borrower on behalf of the Lenders which the
         Agent, in its reasonable business judgement, deems necessary or
         desirable (i) to preserve or protect any Collateral, (ii) to enhance
         the likelihood of, or maximise the amount of, repayment of any of the
         Outstandings or (iii) to pay any other amount chargeable to that
         Borrower pursuant to the terms of this Agreement, including without
         limitation any costs, fees and expenses (any such Reference Rate
         Revolving Loan described in this clause 6.15 being an "AGENT LOAN").

6.15.2   REVOCATION OF AUTHORISATION: The Lenders may at any time revoke the
         Agent's authorisation contained in clause 6.15.1 to make Agent Loans,
         any such revocation to be in writing and to become effective only upon
         the Agent's actual receipt thereof.

6.15.3   REPAYMENT: Agent Loans shall constitute Reference Rate Revolving Loans
         under this Agreement repayable by the relevant Borrower on demand and
         shall bear interest at the rate per annum applicable to Reference Rate
         Revolving Loans plus 2%. The Agent shall notify each Lender in writing
         of each Agent Loan that it makes.


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<PAGE>
6.15.4   SETTLEMENT: It is agreed that each Lender shall participate in each
         such Reference Rate Revolving Loan constituted by an Agent Loan in an
         amount equal to its Participating Proportion of the amount of such
         Reference Rate Revolving Loan. Notwithstanding such agreement, the
         Agent and the Lenders agree (which agreement shall not be for the
         benefit of or enforceable by the Borrowers) that in order to facilitate
         the administration of this Agreement settlement of Agent Loans shall
         take place on a periodic basis on such date or dates as the Agent may
         specify by written notice to the Lenders. On receipt of any such
         notice, each Lender shall make an amount equal to its Participating
         Proportion of the outstanding principal amount of the Agent Loans in
         respect of which settlement is requested available to the Agent in
         immediately available funds to such account of the Agent as the Agent
         may designate, not later than 2.00 pm on the proposed settlement date
         (which shall be not less than three business days following the date of
         such notice). If any such amount is not made available to the Agent by
         any Lender on such settlement date, such Lender shall pay such amount
         to the Agent on demand together with interest thereon from such
         settlement date to the date of actual payment calculated at a rate per
         annum which is the sum of (i) two per cent (2%) (ii) the Applicable
         Margin and (iii) the Reference Rate.

6.16     PARTICIPATION AND NOTIFICATION

6.16.1   PARTICIPATION BY LENDERS: Each Lender will participate through its
         Facility Office in each Utilisation hereunder, comprising the making of
         the Revolving Loans, or in any amount to be reimbursed to the Swingline
         Lender or the Issuer following any non-payment by any Borrower of any
         amount due from it in respect of a Swingline Loan or, as appropriate, a
         Letter of Credit or Guarantee, in the proportion which its Commitment
         bears to the Total Commitments immediately prior to the making
         available of that Utilisation or, as the case may be, at the time of
         any such non-payment.

6.16.2   NOTIFICATION TO LENDERS: The Agent shall, promptly after receipt by it
         of a Utilisation Notice, notify each Lender of the details of such
         notice and of the amount of that Lender's share of the Utilisation to
         be made available to the relevant Borrower.

7        INTEREST AND INTEREST PERIODS

7.1      DATES OF PAYMENT OF INTEREST

         Each Revolving Loan shall bear interest on its unpaid principal amount
         from the date made until paid in cash at a rate determined by reference
         to the Reference Rate or to LIBOR, as applicable, and the relevant
         Borrower shall pay accrued interest on each such Revolving Loan (i) in
         the case of each Reference Rate Revolving Loan, on the first day of
         each month thereafter and (ii) in the case of each LIBOR Revolving
         Loan, on the last day of each Interest Period relating to such LIBOR
         Revolving Loan.

7.2      RATE OF INTEREST

7.2.1    The rate of interest applicable to a LIBOR Revolving Loan from time to
         time during an Interest Period relating to it shall be the rate per
         annum which is the


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<PAGE>
         sum of (i) the Applicable Margin at such time, (ii) LIBOR relating to
         such LIBOR Revolving Loan for such Interest Period and (iii) the
         Mandatory Cost, if any, applicable to that LIBOR Revolving Loan.

7.2.2    The rate of interest applicable to a Swingline Loan and each Reference
         Rate Revolving Loan shall be a fluctuating rate per annum which is the
         sum of the Reference Rate and the Applicable Margin. Each change in the
         Reference Rate shall be reflected in such interest rate as of the
         effective date of such change.

7.3      INTEREST PERIODS - LIBOR REVOLVING LOANS

         Save as otherwise provided in this Agreement, the duration of each
         Interest Period relating to a LIBOR Revolving Loan shall be the period
         selected by the relevant Borrower in the Utilisation Notice relating to
         that LIBOR Revolving Loan.

7.4      MAXIMUM NUMBER OF INTEREST PERIODS

         A Borrower may not select an Interest Period in respect of any LIBOR
         Revolving Loan of such a duration that there shall at any time be more
         than five Interest Periods in existence at the same time.

7.5      CONVERSION AND CONTINUATION OF REVOLVING LOANS

7.5.1    Ideal (on behalf of the Borrowers) may, upon irrevocable written notice
         to the Agent in accordance with clause 7.5.2:

         (a)      at any time after the Outstandings in respect of Reference
                  Revolving Rate Loans are equal to or exceed an amount equal to
                  an Original Sterling Amount of (pound)20,000,000 elect, as of
                  any business day, in the case of Reference Rate Revolving
                  Loans, to convert any such Reference Rate Revolving Loans (or
                  any part thereof) in an amount or integral multiple of not
                  less than (pound)1,000,000 into LIBOR Revolving Loans;

         (b)      elect, as of the last day of the applicable Interest Period,
                  to continue any LIBOR Revolving Loans having Interest Periods
                  expiring on such day (or any part thereof) in an amount or
                  integral multiple of not less than (pound)1,000,000.

7.5.2    If any Revolving Loans are to be converted into or continued as LIBOR
         Revolving Loans, Ideal shall deliver a notice of conversion or
         continuation (a "NOTICE OF CONVERSION/CONTINUATION") to be received by
         the Agent not later than 11.00 a.m. at least 1 business day (in the
         case of any Revolving Loan denominated in sterling) and at least 3
         business days (in the case of any Revolving Loan denominated in a
         Foreign Currency), in advance of the proposed date of conversion or
         continuation specifying:

         (a)      the proposed date of such conversion or continuation;

         (b)      the aggregate amount of Revolving Loans to be converted or
                  continued; and


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<PAGE>
         (c)      the type of Revolving Loans resulting from the proposed
                  conversion or continuation.

7.5.3    If upon drawdown of any Revolving Loan or upon the expiry of any
         Interest Period applicable to any LIBOR Revolving Loan, Ideal has
         failed to select a new Interest Period to be applicable thereto or if
         any Default or Event of Default then exists, Ideal shall be deemed to
         have elected to convert such LIBOR Revolving Loan into a Reference Rate
         Revolving Loan as of the expiry date of such Interest Period.

7.5.4    During the existence of a Default or an Event of Default, Ideal may not
         elect to have a Revolving Loan converted into or continued as a LIBOR
         Revolving Loan.

7.6      MARGIN RATCHET

7.6.1    If EBITDA to Cash Outflow exceeds a ratio of 1.00:1 for the Financial
         Quarter ending 31 December 2003, the Applicable Margin shall, with
         effect from 1st February 2004, be reduced to two and one quarter of one
         per cent (2.25%) per annum. In addition, the Agent and the Lenders
         agree with the Borrowers that the level of the Applicable Margin will
         be reviewed by the Agent on the date upon which the Agent receives all
         of the signed, audited, consolidated Financial Statements of every IHL
         Group Company for the Financial Year ended 31 December 2004, required
         to be delivered pursuant to clause 15.1 (such date being, the "REVIEW
         DATE"). Each Borrower acknowledges and agrees that notwithstanding any
         extension(s) of the Termination Date which may be agreed to pursuant to
         clause 9.5, the Agent will not review the Applicable Margin and the
         Applicable Margin may not be reduced on more than one occasion. The
         Agent and the Lenders agree with Ideal and each other Borrower that,
         provided that the conditions set out in clause 7.6.2 are satisfied on
         the Review Date, the Applicable Margin shall be adjusted in accordance
         with this clause 7.6 with effect from the date determined in accordance
         with clause 7.6.5.

7.6.2    If on the Review Date, the Agent's review of the financial performance
         of the IHL Group during the immediately preceding Financial Year
         indicates that actual EBITDA achieved in such Financial Year exceeded
         the projected EBITDA for such Financial Year (as set out in the
         projections delivered to the Agent prior to the Effective Date) by an
         amount equal to or greater than twenty per cent. (20%) of such
         projected EBITDA, then the Applicable Margin shall be reduced by 0.125
         per cent per annum.

7.6.3    For the avoidance of doubt, the original or most recently adjusted
         Applicable Margin for the Revolving Facility shall continue to apply if
         the condition set out in clause 7.6.2 is not met.

7.6.4    Any decrease of the Applicable Margin pursuant to this clause 7.6 shall
         be determined by the Agent by reference to the signed, audited
         Financial Statements for the relevant period delivered to the Agent
         under clause 15.1.


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<PAGE>
7.6.5    Any adjustment of the Applicable Margin in accordance with clause 7.6.2
         shall take effect in respect of any Reference Rate Revolving Loan,
         LIBOR Revolving Loan or Swingline Loan, with effect from the Review
         Date.

7.6.6    At any time while a Default has occurred and is continuing, the
         original Applicable Margin for the Revolving Facility shall apply with
         immediate effect, notwithstanding any previous reduction of such
         Applicable Margin made pursuant to this clause 7.6 and no reduction
         shall be instituted while a Default has occurred and is continuing.

8        MARKET DISRUPTION

8.1      CIRCUMSTANCES

         If at or about 11.00 am on the Quotation Date for an Interest Period in
         respect of any LIBOR Revolving Loan the Agent (in consultation with the
         Lenders) determines it is not possible by reason of circumstances
         affecting the London Interbank Market generally (i) to determine LIBOR
         in accordance with its definition, or (ii) for the Lenders to obtain
         requisite matching deposits in the required currency in the London
         Interbank Market at the relevant time to fund their respective shares
         during such Interest Period, or (iii) for the Majority Lenders to
         obtain such deposits for such period at a cost less than or equal to
         the rate offered to the Agent in accordance with the definition of
         LIBOR, then the Agent shall forthwith notify Ideal and the Lenders and
         notwithstanding the provisions of clause 7, the Interest Period in
         respect of that LIBOR Revolving Loan and the amount of interest payable
         in respect of that LIBOR Revolving Loan during its Interest Period
         shall be determined in accordance with the following provisions of this
         clause 8.

8.2      APPLICABLE INTEREST RATE

         If clause 8.1 applies in relation to a LIBOR Revolving Loan the
         duration of the Interest Period relating to that Loan shall be one
         month or, if less, such that it shall end on the Termination Date and
         the rate of interest applicable to that LIBOR Revolving Loan during its
         Interest Period shall be the rate per annum which is the sum of (i) the
         Applicable Margin, (ii) the Mandatory Cost, if any, and (iii) the rate
         determined by the Agent (and notified to Ideal) to be that which
         expresses as a percentage rate per annum the weighted average of the
         cost to each of the Lenders of funding its share of such LIBOR
         Revolving Loan during such Interest Period from whatever sources and in
         whatever manner each such Lender may reasonably select.

8.3      REVIEW OF CIRCUMSTANCES

         So long as any alternative basis for the calculation of interest as
         provided in clause 8.2 is in force the Agent shall from time to time
         review whether or not the circumstances referred to in clause 8.1 still
         prevail with a view to returning to the normal provisions of this
         Agreement relating to the determination of the rates of interest
         applicable to any LIBOR Revolving Loan.


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<PAGE>
8.4      DISTRIBUTION OF INTEREST

         Interest on a LIBOR Revolving Loan during an Interest Period relating
         to it calculated at the rates specified in clause 8.1 or 8.2 shall be
         distributed by the Agent to the Lenders in proportion to the amounts
         which represent the cost to each Lender of funding its share of such
         LIBOR Revolving Loan during such Interest Period provided that any such
         interest which is attributable to the Applicable Margin shall be
         distributed by the Agent to the Lenders in proportion to their
         respective shares in such LIBOR Revolving Loan.

9        REPAYMENT, PREPAYMENT AND CANCELLATION

9.1      REPAYMENT OF REVOLVING LOANS

         Each Borrower shall repay each LIBOR Revolving Loan made to it,
         together with accrued but unpaid interest thereon, on the last day of
         the Interest Period applicable to that Loan. Each Borrower may repay
         each Reference Rate Revolving Loan and each Swingline Loan made to it,
         together with accrued but unpaid interest thereon, at any time. Each
         Borrower shall, in any event, repay the outstanding principal balance
         of all Revolving Loans made to it, plus all accrued but unpaid interest
         thereon, upon the termination of this Agreement for any reason. In
         addition, and without limiting the generality of each foregoing, each
         Borrower shall pay to the Agent, on demand, the amount by which the
         Original Sterling Amount of the unpaid principal balance of any
         Revolving Loans and any Swingline Loans when aggregated with the
         Original Sterling Amount of the maximum face amount of all Letters of
         Credit and the maximum contingent liability under all Guarantees then
         in issue (together "CONTINGENCY OUTSTANDINGS") at any time exceeds the
         Available Facility in respect of the Revolving Facility or the
         Available Revolving Facility Amount, the Available Facility and
         Available Revolving Facility Amount being determined for this purpose
         as if the amount of the Revolving Loans, Swingline Loans and
         contingency outstandings were zero. Subject to the other terms of this
         Agreement and to availability, Revolving Loans and Swingline Loans may
         be reborrowed.

9.2      CANCELLATION OF TOTAL COMMITMENTS

         Any Borrower may, by giving to the Agent not less than 30 business
         days' prior notice to that effect, permanently cancel the whole (but
         subject to clause 29) or any part (being a minimum amount of
         (pound)5,000,000 and an integral multiple of (pound)1,000,000) of the
         Total Commitments, provided that both on the date of such notice and
         upon the effective date of cancellation, the amount to be so cancelled
         does not exceed an amount equal to the difference between the Maximum
         Revolving Credit Line and the Total Outstandings and the Agent has not,
         pursuant to clause 6.7, permitted the limits of the Available Revolving
         Facility Amount to have been exceeded. Any such cancellation shall
         reduce the Commitment of each Lender pro rata. If a Borrower cancels
         any part (but not the whole) of the Total Commitments, Ideal shall (or
         shall procure that such other Borrower shall) pay to the Agent (for the
         rateable benefit of the Lenders), on or prior to the date of such
         cancellation:


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<PAGE>
         9.2.1    2% of the amount of the Total Commitments so cancelled, if
                  such cancellation is made on or prior to the first Anniversary
                  Date;

         9.2.2    1% of the amount of the Total Commitments so cancelled, if
                  such cancellation is made on or prior to the second
                  Anniversary Date; and

         9.2.3    0.5% of the amount of the Total Commitments so cancelled, if
                  such cancellation is made at any time after the second
                  Anniversary Date.

9.3      PREPAYMENT AND CANCELLATION OF INDIVIDUAL LENDERS

         If a Borrower becomes obliged to pay an increased amount pursuant to
         clauses 10.1 or 11.1 or any Lender claims indemnification from Ideal
         under clause 10.2 or clause 11.1 and the Agent receives from Ideal at
         least fifteen days' prior notice of the intention of the Borrowers to
         prepay such Lender's Outstandings, such Lender shall, upon receipt by
         the Agent of such notice, cease to be obliged to participate in any
         further Loans, its Commitment shall be permanently cancelled and
         reduced to zero and the each Borrower shall on the last day of each of
         the then current Interest Periods or earlier, if the Agent or such
         Lender so requires, prepay such Lender's portion of the Loan to which
         such Interest Period relates together with any applicable break costs
         payable under clause 19.2 but otherwise without premium or penalty.

9.4      NOTICES IRREVOCABLE

         Any notice of cancellation or prepayment given by a Borrower (or Ideal
         on its behalf) pursuant to clause 9.2 or clause 9.3 shall be
         irrevocable, shall specify the date upon which such prepayment is to be
         made and the amount of such prepayment and shall oblige that Borrower
         to make such prepayment on such date. A Borrower shall not be entitled
         to reborrow any amount so prepaid.

9.5      EXTENSION OF TERMINATION DATE

9.5.1    Not earlier than 90 but not later than 60 days prior to the second
         Anniversary Date (and if the Termination Date is extended in accordance
         with this clause 9.5, prior to any subsequent Anniversary Date), Ideal
         may deliver a request to the Agent (which the Agent shall promptly
         forward to the Lenders), requesting that the Lenders shall extend the
         maturity of the Revolving Facility for a further period of twelve (12)
         months from the then applicable Termination Date (as the same may be
         extended from time to time under this clause 9.5).

9.5.2    The decision whether or not to extend the Termination Date shall be in
         the absolute discretion of the Agent to determine (acting on the
         instructions of all of the Lenders) and shall be based upon such
         factors as the Agent may deem relevant (including, without limitation,
         the business condition (financial or otherwise) of the Group at the
         relevant time and after reviewing such forecasts, projections and
         financial and other information regarding the Borrowers and the Group
         as the Agent may require. The Borrowers


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<PAGE>
         acknowledge that the Agent and the Lenders shall not be under any
         obligation to extend the Termination Date.

9.5.3    If extended pursuant to this clause 9.5, references to the "TERMINATION
         DATE" in this Agreement and the other Finance Documents shall be
         construed as a reference to the Termination Date as from time to time
         extended.

10       TAXES

10.1     REQUIREMENT TO GROSS-UP

         All payments to be made by any of the Obligors to any person under this
         Agreement shall be made free and clear of and without deduction for or
         on account of tax unless such Obligor is required by law to make such a
         payment subject to the deduction or withholding of tax, in which case
         the sum payable by such Obligor in respect of which such deduction or
         withholding is required to be made shall be increased to the extent
         necessary to ensure that, after the making of such deduction or
         withholding (including any deduction or withholding applicable to
         additional sums payable under this clause), such person receives and
         retains (free from any liability in respect of any such deduction or
         withholding) a net sum equal to the sum which it would have received
         and so retained had no such deduction or withholding been made or been
         required to be made.

10.2     INDEMNITY

         Without prejudice to the provisions of clause 10.1, if any person or
         the Agent is required to make any payment on account of tax (other than
         tax on its overall net income) on or calculated by reference to the
         amount of any Loan made or to be made under this Agreement or by
         reference to any Letter of Credit or Guarantee issued under this
         Agreement and/or by reference to any sum received or receivable under
         this Agreement by such person or the Agent on its behalf (including,
         without limitation, any sum received or receivable under this clause
         10) or any liability in respect of any such payment is asserted,
         imposed, levied or assessed against such person or the Agent on its
         behalf, the relevant Obligor shall, upon demand of the Agent, promptly
         indemnify such person against such payment or liability, together with
         any interest, penalties and expenses payable or incurred in connection
         therewith provided that the foregoing shall not apply to the extent
         that the payment or liability (a) is compensated for by an increased
         payment under clause 10.1 or (b) would have been so compensated but was
         not so compensated, solely because one of the exclusions in clause 10.6
         applied.

10.3     NOTIFICATION

         A Lender intending to make a claim pursuant to clause 10.2 shall notify
         the Agent of the event by reason of which it is entitled to do so
         whereupon the Agent shall notify the relevant Obligor.


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<PAGE>
10.4     TAX RECEIPTS

         Without prejudice to the provisions of clause 10.1, if any Obligor
         makes any payment under this Agreement in respect of which it is
         required by law to make any deduction or withholding it shall pay the
         full amount to be deducted or withheld to the relevant taxation or
         other authority within the time allowed for such payment under
         applicable law and shall deliver to the Agent (no later than one week
         after the end of the time allowed for such payment under applicable
         law) an original receipt or other appropriate evidence issued by such
         authority evidencing the payment to such authority of all amounts so
         required to be deducted or withheld from such payment.

10.5     TAX CREDITS

         If any Obligor makes an increased payment under clause 10.1 for the
         account of any person and such person in its sole opinion and based on
         its own interpretation of any relevant laws or regulations (but acting
         in good faith) determines that it has received or been granted a credit
         against or relief or remission for or in respect of any tax paid or
         payable by it in respect of or calculated by reference to the deduction
         or withholding giving rise to such payment, such person shall, to the
         extent that it determines that it can do so without prejudice to the
         retention of the amount of such credit, relief, remission or payment
         and, to the extent it is reasonably identifiable and quantifiable, as
         soon as practicable pay to such Obligor an amount equal to such part or
         all of such credit, relief, remission or repayment as can be made
         available to such Obligor in such a way as to leave such person (after
         such payment) in no better or worse position than it would have been in
         if such Obligor had not been required to make such deduction or
         withholding. Nothing contained in this clause 10.5 shall interfere with
         the right of a person to arrange its tax affairs in whatever manner it
         thinks fit nor oblige any person to disclose any information relation
         to its tax affairs or any computation in respect thereof.

10.6     LIMITATION ON REQUIREMENT TO GROSS-UP

10.6.1   If any Lender ceases to be a Qualifying Lender, no Obligor shall be
         liable to pay to such Lender under clause 10.1 any amount in excess of
         the amount it would have been obliged to pay if such Lender had not
         ceased to be a Qualifying Lender provided that this clause 10.6 shall
         not apply and each Obligor shall continue to be obliged to comply with
         its obligations under clause 10 if and to the extent that after the
         date of this Agreement there shall have been any change in, or in the
         interpretation, administration or application of, any relevant law or
         double taxation treaty or any published practice or concession of any
         relevant taxing authority and as a result of such change (i) such
         Lender ceases to be a Qualifying Lender or (ii) such Obligor would be
         required to make a deduction or withholding on account of tax
         irrespective of whether the recipient of the relevant payment was or
         was not a Qualifying Lender.

10.6.2   No Obligor shall be liable to make a payment to a Lender under Clause
         10.1 if on the date on which the payment falls due the relevant Obligor
         is able to show that the payment could have been made to such Lender
         without any


                                       47
<PAGE>
         deduction or withholding had such Lender complied with its obligations
         under clause 10.7.

10.7     DOUBLE TAXATION RELIEF

         If, and to the extent that, the effect of clause 10.1 or 10.2 can be
         mitigated by virtue of the provisions of any applicable double tax
         treaty entered into by the United Kingdom (whether by a claim to
         repayment of any taxes referred to in clause 10.1 or 10.2 or otherwise)
         each Lender agrees to co-operate (to the extent reasonably required)
         with affected Obligor(s) with a view to submitting any forms required
         for the purpose of ensuring the application of such double tax treaty
         so far as relevant, provided that no Lender shall be required pursuant
         to this clause 10.7 to complete or co-operate in completing any form
         which is not substantially similar to any form in use at the date of
         this Agreement for the purpose of claiming exemption or relief from or
         repayment of taxes envisaged hereunder pursuant to a double taxation
         treaty between the United Kingdom and such Lender's jurisdiction of
         residence and which requires the Lender to undertake obligations which,
         in its reasonable opinion, are more onerous than those imposed upon it
         as at the date of this Agreement.

11       INCREASED COSTS

11.1     INCREASED COSTS AND REDUCTION OF RETURN

         If the Agent or, as the case may be, any Lender, in its sole discretion
         determines that, as a result of (i) the introduction of, or any change
         in any law or in any treaty, directive or regulation (whether or not
         having the force of law but if not having the force of law, only if
         such treaty, directive or regulation is generally applicable to banks
         and of the type with which the relevant Lender is accustomed to comply)
         or the interpretation or application thereof, in each case after the
         date hereof, or (ii) compliance with any request from or requirement
         (whether or not having the force of law but if not having the force of
         law, only if such request or requirement is generally applicable to
         banks and of the type with which the relevant Lender is accustomed to
         comply) of any central bank or other fiscal, monetary or other
         authority made or imposed after the date hereof:

         11.1.1   it incurs a cost in assuming or maintaining all or any part of
                  any Commitment under this Agreement and/or in making,
                  maintaining or funding all or any part of its Outstandings or
                  any unpaid sum and/or assuming or maintaining a contingent
                  liability under or pursuant to this Agreement (whether under
                  any Letter of Credit or Guarantee or otherwise), or that cost
                  is increased; or

         11.1.2   any sum received or receivable by it under this Agreement or
                  the effective return to it under this Agreement is reduced; or

         11.1.3   it suffers a reduction in the rate of return on its overall
                  capital below that which might reasonably have been
                  anticipated at the date of this Agreement and which it would
                  have been able to achieve but for having entered into and/or
                  performing its


                                       48
<PAGE>
                  obligations and/or assuming or maintaining a commitment or
                  contingent liability under or pursuant to this Agreement; or

         11.1.4   it makes any payment or forgoes any interest or other return
                  on or calculated by reference to the amount of any sum
                  received or receivable by it under or pursuant to this
                  Agreement; or

         11.1.5   it incurs a cost or increased cost, or suffers a reduction in
                  any amount payable to it or in the effective return on its
                  capital, or forgoes any interest or any other return as a
                  result of the introduction of, changeover to or operation of
                  the euro in the United Kingdom,

         and in any such case, the same is attributable to its liabilities or
         obligations under this Agreement, then the person concerned shall
         notify the Agent of the relevant event (setting out in reasonable
         detail the basis on which its claim has been computed) promptly upon
         its becoming aware of the same, whereupon the Agent shall notify Ideal
         and, upon demand of the Agent, Ideal shall pay, or shall procure that
         there is paid, on demand to the Agent for the account of the person
         concerned an amount sufficient to indemnify that person against the
         relevant cost, increased cost, reduction, reduction in the rate of
         return, payment or forgone interest or other return or such proportion
         thereof as is, in the opinion of such person, attributable to its
         obligations under or pursuant to this Agreement.

11.2     CAPITAL ADEQUACY

         If the Agent, or as the case may be, any Lender, in its sole discretion
         determines that (i) the introduction of, or any change in, any capital
         adequacy regulation or in the interpretation or application thereof, in
         each case after the date hereof, or (ii) compliance by such person or
         any corporation controlling it with any capital adequacy regulation,
         affects or would affect the amount of capital, reserves or special
         deposits required or expected to be maintained by such person or any
         corporation controlling it and (taking into consideration such person's
         or such corporation's policies with respect to capital adequacy)
         determines that the amount of such capital, reserves or special
         deposits is increased as a consequence of its loans, contingent
         liabilities or obligations under this Agreement then, upon demand of
         the Agent (having been so notified by such person) to Ideal, Ideal
         shall pay, or shall procure that there is paid, to the Agent for the
         account of the person concerned, from time to time as specified by the
         Agent, additional amounts sufficient to compensate such person for such
         increase.

11.3     EXCEPTIONS

         Clauses 11.1 and 11.2 do not apply to any cost, increased cost,
         reduction, reduction in the rate of return, payment or forgone interest
         or other return compensated for by (a) payment of the Mandatory Cost,
         (b) by the operation of clause 10, (c) by a change in the rate of tax
         on the overall net income of the Agent or any Lender or (d) which is
         attributable to the wilful breach by the relevant Lender or any of its
         Affiliates of any law or regulation.


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<PAGE>
12       ILLEGALITY

12.1     CONSEQUENCES OF ILLEGALITY

         If at any time it is unlawful, or contrary to any directive or request
         of any applicable central bank or other fiscal, monetary or other
         authority, or impossible for a Lender to make, fund or allow to remain
         outstanding any Loan made or to be made under this Agreement or to
         assume or remain under any obligations hereunder in relation to or
         under any Letter of Credit or Guarantee, then the Agent shall, promptly
         after becoming aware of the same, deliver to Ideal a certificate to
         that effect and:

         12.1.1   such Lender shall not thereafter be obliged to make or
                  participate in any Loan under this Agreement or (in the case
                  of the Issuer) issue any Letter of Credit or Guarantee and its
                  Commitment shall immediately be cancelled and reduced to zero;
                  and

         12.1.2   if the Agent on behalf of such Lender so requires, each
                  Borrower shall on the last day of the Interest Period for each
                  such Loan occurring after the Agent has notified Ideal or (if
                  earlier) on such date as the Agent shall have specified (being
                  no earlier than the last day upon which the Lender is legally
                  able to permit such Loans to remain outstanding) repay such
                  Lender's Outstandings together with accrued interest thereon
                  (any such repayment to be without premium or penalty or the
                  payment of any amount to be calculated in accordance with
                  clause 29.2.3) and all other amounts owing to such Lender
                  under this Agreement, and, with respect to any Letter of
                  Credit or Guarantee then outstanding, deposit with the
                  Security Trustee for the benefit of the Issuer a Supporting
                  Letter of Credit or cash, in either such case in the same
                  manner as contemplated in clause 6.14.

12.2     MITIGATION OF ADVERSE CIRCUMSTANCES

         If, in respect of any Lender, circumstances arise which would, or would
         upon the giving of notice, result in additional amounts becoming
         payable under clause 10 or clause 11.1 or result in a cancellation of
         its Commitment pursuant to clause 12.1.1 then, without in any way
         limiting, reducing or otherwise qualifying the obligations of any
         Borrower hereunder such Lender will, at the request of Ideal, consider
         means of mitigating the effects of such circumstances provided that
         such Lender shall be under no obligation to take any such action if to
         do so would or might in its opinion have an adverse effect on its
         business, operations or financial condition.

13       GUARANTEE

13.1     GUARANTEE

         Each Unsecured Guarantor, jointly and severally, unconditionally and
         irrevocably guarantees to the Beneficiaries the due and punctual
         payment, performance and discharge by the Obligors of all the monies,
         obligations and liabilities (whether present or future, actual or
         contingent) on the part of the


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<PAGE>
         Obligors to be paid, performed or discharged, whether directly or
         indirectly, under or pursuant to the terms of this Agreement and/or in
         connection with the Facility and/or otherwise under the Finance
         Documents (together in this clause 13 the "GUARANTEED OBLIGATIONS"). If
         and whenever any Obligor shall default in the payment, discharge or
         performance of any of the guaranteed obligations, each Unsecured
         Guarantor shall, upon written demand by the Agent, promptly pay,
         perform or discharge the guaranteed obligations in respect of which
         such default has been made.

13.2     INDEMNITY

         Each Unsecured Guarantor agrees to indemnify and hold harmless the
         Beneficiaries from time to time on demand for and against any loss
         incurred by any of them as a result of any of the guaranteed
         obligations being or becoming void, voidable or unenforceable for any
         reason whatsoever, whether known to such person or persons or not. The
         amount of such loss shall be the amount which the person or persons
         suffering it would otherwise have been entitled to recover from the
         Obligors.

13.3     CONTINUING SECURITY

         The obligations of each Unsecured Guarantor under this Agreement are
         continuing obligations and shall remain in force until all of the
         guaranteed obligations have been satisfied in full. The obligations of
         each Unsecured Guarantor under this Agreement shall not be (or be
         construed so as to be) discharged by any intermediate discharge or
         payment of or on account of any of the guaranteed obligations or any
         settlement of account or any other matter (other than the discharge in
         full of the guaranteed obligations).

13.4     PROTECTIVE PROVISIONS

         Neither the obligations of each Unsecured Guarantor nor the rights and
         remedies of the Beneficiaries under this Agreement, any other Finance
         Document or otherwise conferred by law shall be discharged, prejudiced
         or impaired by reason of:

         13.4.1   any variation of any of the guaranteed obligations or of the
                  terms of conditions of this Agreement, any other Finance
                  Document or of any encumbrance, guarantee or other assurance
                  held or to be held as security for the payment, performance or
                  discharge of the guaranteed obligations (any such encumbrance,
                  guarantee or other assurance together referred to in this
                  clause 13 as "RELATED SECURITY");

         13.4.2   any failure (whether intentional or not) to take, perfect or
                  realise (whether in full or in part) any related security now
                  or in the future agreed to be taken in respect of any of the
                  guaranteed obligations;

         13.4.3   any capacity or change in the constitution of any party to
                  this Agreement, any other Finance Document or to any related
                  security;


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<PAGE>
         13.4.4   any of the guaranteed obligations or any obligation of any
                  person under any related security being or becoming invalid,
                  illegal, void or unenforceable for any reason;

         13.4.5   any time or other indulgence given or agreed to be given to,
                  or any composition or other arrangement made with or accepted
                  from, any Obligor in respect of any of the guaranteed
                  obligations or any other person in respect of any of its
                  obligations under any related security;

         13.4.6   any waiver or release of any of the guaranteed obligations or
                  of any obligation of any person under any related security or
                  any failure to realise, in full or in part, the value of, or
                  any discharge or exchange of any related security;

         13.4.7   any Obligor or any other person party to this Agreement, any
                  other Finance Document or any related security being wound up,
                  going into administration or liquidation or making any
                  composition or arrangement with its creditors (whether or not
                  sanctioned by the court and whether or not the Agent has
                  agreed to such compromise or arrangement) and so that where,
                  by virtue of any compromise or arrangement, any of the
                  guaranteed obligations are transferred to any other person,
                  the guarantee and indemnity of each Unsecured Guarantor
                  contained in this Agreement shall take effect as if the
                  expression "Obligor" included such other person; or

         13.4.8   any other act, event or omission which, but for this
                  provision, would or might operate to offer any legal or
                  equitable defence for or impair or discharge any of the
                  guaranteed obligations or any obligation of any person under
                  any related security or prejudicially affect the rights or
                  remedies of the Beneficiaries or any of them under this
                  Agreement, any other Finance Document or otherwise conferred
                  by law.

13.5     INDEPENDENT OBLIGATIONS

         The obligations of each Unsecured Guarantor under this Agreement are
         additional to, and not in substitution for, any related security and
         the obligations assumed by each Unsecured Guarantor under this
         Agreement may be enforced without first having recourse to any related
         security and without making or filing any claim or proof in a
         winding-up or dissolution of any Obligor or any other person party to
         this Agreement or any related security or first taking any steps or
         proceedings against any Obligor or any such person.

13.6     NON-COMPETITION

         Until all of the guaranteed obligations have been satisfied in full, no
         Unsecured Guarantor shall:

         13.6.1   exercise any right of subrogation, indemnity, set-off or
                  counterclaim against any Obligor, any other Unsecured
                  Guarantor or any person party to any related security;


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<PAGE>
         13.6.2   claim payment of any other monies for the time being due to it
                  by any Obligor, any other Unsecured Guarantor or any person
                  party to any related security by reason of the performance by
                  it of its obligations under this Agreement or on any account
                  whatsoever or exercise any other right or remedy or enforce
                  any encumbrance, guarantee or other assurance which it has in
                  respect thereof;

         13.6.3   claim any contribution from any other Unsecured Guarantor or
                  any person party to any related security;

         13.6.4   negotiate, assign, charge or otherwise dispose of any monies,
                  obligations or liabilities now or at any future time due or
                  owing to it by any Obligor or any other Unsecured Guarantor or
                  any person party to any related security or any encumbrance,
                  guarantee or other assurance in respect thereof; or

         13.6.5   claim or prove in a winding up or dissolution of the Obligor
                  or any other Unsecured Guarantor in competition with the
                  Beneficiaries or any of them; and

         13.6.6   if any Unsecured Guarantor receives any sums in contravention
                  of this clause 13.6, it shall hold them on trust to be applied
                  promptly in or towards the satisfaction of its obligations
                  under this Agreement.

13.7     WARRANTY

         Each Unsecured Guarantor warrants that it has not taken, and agrees
         that (without the prior written consent of the Agent acting on the
         instructions of the Majority Lenders) it will not take, from any
         Obligor, any other Unsecured Guarantor or any person party to any
         related security any encumbrance, guarantee or other assurance in
         respect of or in connection with its obligations under this Agreement.
         If any Unsecured Guarantor takes any such encumbrance, guarantee or
         other assurance in contravention of this clause 13.7, it shall hold the
         same on trust for the Beneficiaries until such time as all of the
         guaranteed obligations have been satisfied in full and shall on request
         promptly deposit the same with and/or charge the same to the Agent for
         and on behalf of itself and such persons in such manner as the Agent
         may require as security for the due performance and discharge by the
         relevant Unsecured Guarantor of the guaranteed obligations

13.8     SUSPENSE ACCOUNT

         If any Obligor or any of the Unsecured Guarantors is wound up, goes
         into liquidation or makes any composition or arrangement with its
         creditors, neither the existence of the guarantee of the relevant
         Unsecured Guarantor contained in this Agreement nor any monies received
         or recovered by the Beneficiaries or any of them under to pursuant to
         this Agreement shall impair the right of such persons to prove in such
         winding-up, liquidation, composition, or arrangement for the total
         amount due from the Obligor or the relevant Unsecured Guarantor. The
         Agent may at any time and from time to


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<PAGE>
         time place and, for so long as it thinks fit, keep any monies received
         or recovered under this Agreement in a separate or suspense account, in
         such name as it thinks fit, without any intermediate obligation on its
         part to apply the same in or towards discharge of any part of such
         total amount, provided that if the monies are at any time sufficient to
         discharge the guaranteed obligations in full, they shall promptly be so
         applied.

13.9     CONDITIONAL DISCHARGE

         Any settlement or discharge between any of the Unsecured Guarantors and
         the Arranger, the Agent, the Lenders or any of them shall be
         conditional upon no security or payment to the Arranger, the Agent and
         the Lenders or any of them by any Obligor or the relevant Unsecured
         Guarantor or any other person being avoided or set aside or ordered to
         be refunded or reduced by or pursuant to any applicable law or
         regulation and, if such condition is not satisfied, the Arranger, the
         Agent and the Lenders shall each be entitled to recover from the
         relevant Unsecured Guarantor on demand the value of any such security
         or the amount of any such payment as if such settlement or discharge
         had not occurred.

14       REPRESENTATIONS AND WARRANTIES

14.1     GENERAL REPRESENTATIONS AND WARRANTIES

         Each Obligor represents and warrants (in respect of itself and each
         other Obligor) to and for the benefit of each other party to this
         Agreement that, except as disclosed to and accepted by the Agent in
         writing:

         14.1.1   STATUS: (other than in the case of BMEP) it is a limited
                  liability company duly incorporated or a corporation duly
                  organised and validly existing under the laws of its
                  jurisdiction of incorporation and BMEP is a partnership
                  properly established and validly existing under the laws of
                  the Netherlands, in each case having the power and authority
                  to own its assets and to conduct the business and operations
                  which it conducts or proposes to conduct;

         14.1.2   POWERS AND AUTHORITY: it has full power and authority to enter
                  into and perform each of the Relevant Agreements to which it
                  is or will be a party and any other document to be entered
                  into by it pursuant thereto and has taken all necessary
                  corporate or other action to authorise the execution, delivery
                  and performance of each such Relevant Agreement and each such
                  other document;

         14.1.3   AUTHORISATIONS: save for any necessary registrations which
                  will be made within the applicable registration period, all
                  actions, conditions and things required by all applicable laws
                  and regulations to be taken, fulfilled, obtained or done in
                  order (i) to enable it lawfully to enter into, exercise its
                  rights under and perform and comply with its obligations under
                  each of the Relevant Agreements to which it is or will be a
                  party and any other document to be entered into pursuant
                  thereto (ii) to ensure that those obligations are valid,
                  legally binding and enforceable in


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<PAGE>
                  accordance with their respective terms and (iii) to make each
                  of the Relevant Agreements and all such other documents
                  admissible in evidence in England and Wales and, if different,
                  its jurisdiction of incorporation have been taken, fulfilled,
                  obtained or done;

         14.1.4   NON-VIOLATION: the execution by it of and the exercise by it
                  of its rights and performance of or compliance with its
                  obligations under each of the Relevant Agreements to which it
                  is or will be a party do not and will not violate (i) any law
                  or regulation to which it or any of its assets is subject or
                  (ii), to an extent or in a manner which has or could have a
                  material adverse effect on it, any agreement to which it is a
                  party or which is binding on it or its assets or conflict with
                  its constitutional documents and in particular will not cause
                  any limit on its borrowing or other powers or the exercise of
                  such powers by its board of directors to be exceeded;

         14.1.5   OBLIGATIONS BINDING: subject to the Reservations, its
                  obligations under each of the Relevant Agreements are legal,
                  valid and binding and enforceable in accordance with their
                  respective terms;

         14.1.6   LITIGATION: save as disclosed in writing to and agreed by the
                  Agent prior to the date of this Agreement, it is not involved
                  or engaged in any litigation, arbitration or administrative
                  proceedings (whether as plaintiff or defendant) nor, to the
                  best of its knowledge is any such litigation, arbitration or
                  administrative proceedings threatened, nor are there any
                  circumstances likely to give rise to any such litigation,
                  arbitration or proceedings which in any such case may have a
                  material adverse effect on it, any other Obligor or on the
                  Group (taken as a whole);

         14.1.7   NO DEFAULT: it is not in breach of or default under any
                  agreement or arrangement (including, without limitation, under
                  any Relevant Agreement) or any statutory or legal requirement
                  to an extent or in a manner which has or could have a material
                  adverse effect on it or on any other Obligor and no Event of
                  Default has occurred and is continuing;

         14.1.8   EXISTING ENCUMBRANCES: no encumbrance exists over its present
                  or future assets except for Permitted Encumbrances;

         14.1.9   FUTURE ENCUMBRANCES: the execution by it of each of the
                  Relevant Agreements to which it is or will be a party and the
                  exercise by it of its rights and performance of or compliance
                  with its obligations thereunder will not result in the
                  existence of or oblige it to create any encumbrance over all
                  or any of its present or future assets except for Permitted
                  Encumbrances;

        14.1.10   FINANCIAL STATEMENTS:

                  (a)      its audited consolidated Financial Statements were
                           prepared in accordance with Applicable GAAP and give
                           a true


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<PAGE>
                           and fair view of the financial condition of the Group
                           at the date as of which they were prepared and the
                           results of the Group's business and operations during
                           the Financial Year then ended and (in the case of its
                           Financial Statements) disclose or reserve against all
                           liabilities (contingent or otherwise) of each Group
                           Company as at that date and all unrealised or
                           anticipated losses from any commitment entered into
                           by each Group Company and which existed on that date;

                  (b)      the Latest Projections represent its best estimate of
                           the Group's future financial performance for the
                           periods referred to in them and have been prepared on
                           the basis of the stated assumptions, which it
                           believes are fair and reasonable in the light of
                           current and reasonably foreseeable business
                           conditions;

                  (c)      the Ideal Pro Forma Balance Sheet presents fairly and
                           accurately the financial condition of the IHL Group
                           as at such date, and has been prepared in accordance
                           with Applicable GAAP;

         14.1.11  CAPITALISATION: the Adjusted Tangible Net Worth of Ideal is
                  not less than (pound)30,233,507, BMEBV's authorised share
                  capital consists of EUR90,000 of which 200 shares of EUR100
                  are validly issued and fully paid and are owned beneficially
                  by BMEP and Ideal's authorised share capital consists of
                  6,000,000 shares of (pound)1 per share, of which 4,000,000
                  shares are validly issued and fully paid and are beneficially
                  owned by BMEBV;

         14.1.12  INDEBTEDNESS: no Group Company has any indebtedness except for
                  Permitted Indebtedness;

         14.1.13  DISTRIBUTIONS: since 1 January 2002 no Distribution has been
                  declared, paid, or made upon or in respect of any shares or
                  other securities of any Group Company other than in accordance
                  with the provisions of clause 16.3.3;

         14.1.14  TITLE TO ASSETS: except for assets which are leased, it is the
                  beneficial owner free from all encumbrances (other than
                  Permitted Encumbrances) of all its other assets including,
                  without limitation, the assets reflected on the most recent
                  Financial Statements delivered to the Agent, except as
                  disposed of since the date thereof in the ordinary course of
                  trading;

         14.1.15  LABOUR DISPUTES: there is no pending or, to the best of its
                  knowledge, threatened strike, work stoppage, material unfair
                  labour practice claim, or other material labour dispute
                  against or affecting its or its employees;


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<PAGE>
         14.1.16  ENVIRONMENTAL LAWS: to the best of its knowledge and belief
                  (having made all due and reasonable enquiry) it has not
                  breached any Environmental Law and no condition exists or act
                  or event has occurred which will or might reasonably be
                  expected to give rise to any breach of, or any liability of
                  any kind under, any Environmental Law;

         14.1.17  ENVIRONMENTAL AUTHORISATIONS: to the best of its knowledge and
                  belief (having made all due and reasonable enquiry) it is in
                  possession of all Environmental Authorisations required for
                  the conduct of its business or operations (or any part
                  thereof) and it has not breached any of the terms or
                  conditions of any such Environmental Authorisation;

         14.1.18  NOTICES OF ENVIRONMENTAL BREACHES: (i) it has not received any
                  summons, complaint, order or similar written notice that it is
                  not in compliance with, or any public authority is
                  investigating its compliance with, any Environmental Law or
                  that it is or may be liable to any other person as a result of
                  a potential or actual Discharge of a Hazardous Substance and
                  (ii) none of its present or past operations is the subject of
                  any investigation by any public authority evaluating whether
                  any remedial action is needed to respond to a potential or
                  actual Discharge of a Hazardous Substance;

         14.1.19  NO DEPOSIT OF HAZARDOUS SUBSTANCES: to the best of its
                  knowledge and belief (having made all due and reasonable
                  enquiry) no Hazardous Substance has at any time been used,
                  disposed of, generated, stored, transported, dumped, released,
                  deposited, buried, discharged or emitted at, on, from or under
                  any premises owned, leased, occupied or controlled by it;

         14.1.20  LIABILITY FOR ENVIRONMENTAL CLAIMS: it has not entered into
                  any negotiations or settlement agreements with any person
                  (including, without limitation, any prior owner of its
                  property) imposing material obligations or liabilities on it
                  with respect to any remedial action in response to the
                  potential or actual Discharge of a Hazardous Substance or
                  environmentally related claim;

         14.1.21  TAXES: it has filed all tax returns and other reports required
                  to be filed and has paid all taxes imposed on it or upon any
                  of its assets that are due and payable (save for any that are
                  being contested in good faith and by appropriate action and in
                  respect of which it has provided or maintained adequate
                  reserves to meet any such liability);

         14.1.22  MATERIAL ADVERSE CHANGE: there has been no material adverse
                  change in its financial condition or the financial condition
                  of the Group (taken as a whole) since the date of the
                  Pro-Forma Balance Sheet nor in the consolidated financial
                  condition, business, assets or operations of the Group nor in
                  the Collateral since that date which will nor might reasonably
                  be expected to result in a material adverse effect;


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<PAGE>
         14.1.23  INFORMATION: all factual information delivered by it or on its
                  behalf to the Agent in connection with the business,
                  operations and assets of the Group or in connection with any
                  of the Relevant Agreements from time to time was, in each such
                  case at the date of its delivery, true and correct in all
                  material respects and not misleading and all expressions of
                  opinion, forecasts and projections have been arrived at in
                  good faith and have been based upon reasonable grounds;

         14.1.24  INFORMATION MEMORANDUM: (a) all statements of fact contained
                  in the Information Memorandum relating to the Group are, or
                  will be, true in all respects material to the Revolving
                  Facility, (b) all expressions of opinion or expectations and
                  all forecasts and projections provided in the Information
                  Memorandum, have been, or will be, arrived at in good faith
                  and have been, or will be, based upon reasonable grounds (in
                  each case as at the date at which they are, or will be, made
                  or expressed to be made and in final form), and (c) it is not
                  aware, having made all due and reasonable enquiry, of any
                  facts or circumstances that have not been disclosed to the
                  Agent, the Arranger and the Lenders which would, if disclosed,
                  be reasonably likely to affect the decision of a person
                  considering whether or not to provide finance to the
                  Borrowers;

         14.1.25  DEDUCTIONS AND WITHHOLDINGS: it is not required to make any
                  deduction or withholding from any payment it may make under
                  this Agreement;

         14.1.26  WINDING-UP: neither it nor any other Group Company has taken
                  any corporate action nor have any other steps been taken or
                  legal proceedings been started or (to the best of its
                  knowledge and belief) threatened against it or any Group
                  Company for its winding-up, dissolution or re-organisation
                  (other than for the purposes of a bona fide solvent scheme of
                  reconstruction or amalgamation previously approved in writing
                  by the Agent) or for the appointment of a receiver,
                  administrator, administrative receiver, trustee or similar
                  officer of it or of any or all of its assets.

14.2     ACCOUNTS

         Each Obligor represents and warrants to and for the benefit of each
         other party to this Agreement that, except as disclosed to and accepted
         by the Agent in writing:

14.2.1   ACCOUNTS:

         (a)      each existing Account represents, and each future Account will
                  represent, a bona fide sale or lease and delivery of goods by
                  a Trading Company, or the rendering of services by a Trading
                  Company, in the ordinary course of such Trading Company's
                  business;


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<PAGE>
         (b)      each existing Account is, and each future Account will be, for
                  a liquidated amount payable by the Account Debtor thereon on
                  the terms set forth in the invoice therefor or in the schedule
                  thereof delivered to the Agent, without set-off, deduction,
                  defence, or counterclaim;

         (c)      no payment will be received with respect to any Account, and
                  no credit, discount, or extension, or agreement therefor will
                  be granted on any Account, except as reported to the Agent in
                  accordance with this Agreement;

         (d)      each copy of an invoice delivered to the Agent will be a
                  genuine copy of the original invoice sent to the Account
                  Debtor named in it; and

         (e)      all goods described in any invoice representing a sale of
                  goods will have been delivered to the Account Debtor and all
                  services of any Trading Company described in any invoice will
                  have been performed;

14.2.2   INVENTORY: with effect from any Inventory Eligibility Date, in relation
         to each Trading Company, all of its Inventory is and will be held for
         sale or lease, or to be furnished in connection with the rendering of
         services in the ordinary course of its business and is and will be fit
         for such purpose and will be kept by it, at its own expense, in good
         and marketable condition (save for damaged or obsolete items as
         notified to and agreed by the Agent).

14.3     REPETITION

         Each of the representations and warranties in clauses 14.1 and 14.2
         will be correct and complied with on the date of this Agreement and the
         Effective Date and (other than the representations in clauses
         14.1.10(c), 14.1.13, 14.1.24 and 14.1.25) will also be correct and
         complied with on each date on which a Loan is requested or to be made
         (or, as the case may be, a Letter of Credit or Guarantee is issued or
         requested to be issued) as if repeated then by reference to the then
         existing circumstances.

15       FINANCIAL CONDITION

15.1     BOOKS AND RECORDS

15.1.1   MAINTENANCE: BMEP shall maintain, and shall procure that each Group
         Company shall maintain, at all times, books, records and accounts which
         are complete and correct in all material respects and in relation to
         which timely entries are made of their transactions in accordance with
         Applicable GAAP. BMEP shall, and shall procure that each Group Company
         shall, by means of appropriate entries, reflect in such accounts and in
         all Financial Statements proper liabilities and reserves for all taxes
         and proper provision for depreciation and amortisation of any property
         or asset and bad debts, all in accordance with Applicable GAAP. BMEP
         shall, and shall procure that each Group Company shall, maintain at all
         times books and records pertaining to any applicable Collateral in such
         detail, form and scope as the Agent shall


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<PAGE>
         reasonably require, including without limitation records of (i) all
         payments received and all credits and extensions granted with respect
         to the Accounts; (ii) the return, rejection, repossession, stoppage in
         transit, loss, damage or destruction of any Inventory; and (iii) all
         other dealings affecting the Collateral.

15.1.3   ACCESS: BMEP and/or, as applicable, Ideal shall, upon receiving not
         less than two business days' notice from the Agent (or without notice
         following a Default which is continuing), permit and procure that each
         Group Company permits the Agent or any person authorised by the Agent
         at any reasonable time to have access to its premises and books,
         records and accounts and to make extracts from and take copies of such
         books, records and accounts.

15.2     PROVISION OF FINANCIAL INFORMATION

         BMEP, BMEBV, BMEE and Ideal shall each deliver to the Agent in
         sufficient copies for each of the Lenders:

         15.2.1   FINANCIAL STATEMENTS: as soon as the same become available,
                  but in any event within 120 days after the end of each
                  Financial Year, the audited consolidated Financial Statements
                  of the Group for such Financial Year together with the audited
                  statutory accounts of each Group Company for such Financial
                  Year and to the extent that any Financial Statements have been
                  prepared in accordance with or otherwise converted to or
                  conformed with US GAAP, such Financial Statements shall be
                  accompanied by a note or similar document prepared by the
                  Auditors (or prepared by the Parent and signed by the
                  Auditors) which (a) reconciles the Financial Statements to the
                  Management Accounts delivered for the relevant Financial Year
                  pursuant to clause 15.2.2 and (b) explains, in reasonable
                  detail, any changes or adjustments made to the figures
                  contained in such Management Accounts, to comply with US GAAP;

         15.2.2   MANAGEMENT ACCOUNTS: as soon as the same become available, but
                  in any event within 25 days of the end of each Management
                  Accounting Period, its Management Accounts (incorporating,
                  without limitation, roll forward of 90 day weekly cashflow
                  forecasts showing Excess Availability for the next Management
                  Accounting Period, break-out of all intercompany balances and
                  key performance indicator reports in the form of Schedule 11)
                  as at the end of and for that Management Accounting Period
                  and, in relation to the Management Accounting Periods ending
                  on 31 March, 30 June, 30 September and 31 December in each
                  year, within 45 days of the end of such Financial Quarter a
                  consolidation of those Management Accounts showing the
                  consolidated and consolidating financial position for the
                  Financial Quarter ending on each such date and for the
                  Financial Year to date;

         15.2.3   LATEST PROJECTIONS: no sooner than 90 days and no later than
                  15 days prior to the beginning of each Financial Year,


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                  consolidated and consolidating projected balance sheets,
                  statements of income and expense and statements of cash flow
                  for the IHL Group and the Group as at the end of and for each
                  month of such Financial Year;

         15.2.4   CAPITAL EXPENDITURE: within 45 days after the end of each
                  Financial Quarter, a report of the Capital Expenditure of the
                  Group for such Financial Quarter and forecast of the projected
                  Capital Expenditure for the remainder of the then current
                  Financial Year or, in the case of the last Financial Quarter
                  in any Financial Year, for the following Financial Year;

         15.2.5   TAXES AND CLAIMS: together with the Management Accounts
                  delivered under clause 15.2.2 and a certificate signed by the
                  finance director of Ideal that all the sums referred to in
                  clause 16.2.6 have been paid in respect of the period covered
                  by such Management Accounts;

         15.2.6   GENERAL INFORMATION: at the same time as sent to its
                  shareholders or creditors generally, any circular, document or
                  other written information sent to its shareholders or
                  creditors as such or the shareholders or creditors of any
                  other Obligor; and

         15.2.7   OTHER INFORMATION: from time to time on the request of the
                  Agent, such information about the business, operations and
                  financial condition of each Group Company as the Agent may
                  reasonably require, other than any information disclosure of
                  which will cause such Group Company to breach any
                  confidentiality undertaking to which it is a party, in which
                  case it shall and shall procure that any relevant Group
                  Company shall, use all reasonable efforts to procure the
                  consent of the counterparty to such undertaking to make
                  disclosure.

15.3     FINANCIAL INFORMATION - BASIS OF PREPARATION

         BMEP, BMEBV, Ideal and BMEE shall each ensure that:

         15.3.1   TRUE AND FAIR VIEW: each set of Financial Statements delivered
                  by it or at its request pursuant to clause 15.2.1 is prepared
                  (except as stated therein) using the same accounting
                  principles and policies as were used in the preparation of the
                  Ideal Pro-Forma Balance Sheet and gives a true and fair view
                  of the financial condition of the IHL Group and of the Group,
                  as the case may be, as at the end of the period to which those
                  Financial Statements relate and of the result of their
                  respective businesses and operations during such period;

         15.3.2   AUDIT: each set of Financial Statements delivered by it or at
                  its request pursuant to clause 15.2.1 has been audited by the
                  Auditors and each set of Management Accounts delivered by it
                  pursuant to clause 15.2.2 has been certified as being correct
                  by


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                  Ideal (acting through its finance director), subject to normal
                  year-end adjustments;

         15.3.3   CERTIFICATE OF IDEAL: each set of Financial Statements
                  delivered pursuant to clause 15.2.1 and each set of Management
                  Accounts delivered by it pursuant to clause 15.2.2 in respect
                  of a Management Accounting Period ending on the last day of
                  any Financial Quarter (as consolidated for that Financial
                  Quarter) is accompanied by a certificate of Ideal (acting
                  through its finance director) setting forth in reasonable
                  detail the calculations required to establish that Ideal was
                  in compliance with its covenants set forth in clause 15.4
                  during the period covered in such Financial Statements (or, as
                  the case may be, during such Financial Quarter) and stating
                  that, except as explained in reasonable detail in such
                  certificate:

         (a)      all of the representations and warranties of each Obligor
                  contained in this Agreement and the other Finance Documents
                  are correct and complete as at the date of such certificate as
                  if made at such time; and

         (b)      no Event of Default then exists or existed during the period
                  covered by such Financial Statements or, as the case may be,
                  Management Accounts,

         and describing and analysing in reasonable detail all material trends,
         changes and developments in such Financial Statements or Management
         Accounts. If such certificate discloses that a representation or
         warranty is not correct or complete, or that a covenant has not been
         complied with, or that an Event of Default existed or exists, such
         certificate shall set forth what action Ideal or the relevant Obligor
         has taken or proposes to take with respect thereto.

15.4     FINANCIAL RATIOS

         Ideal shall ensure that, at all times, the consolidated financial
         condition of the IHL Group shall be such that Adjusted Tangible Net
         Worth shall not at any time be less than (pound)30,233,507 as
         determined as at the Effective Date by reference to the Ideal Pro-Forma
         Balance Sheet and thereafter at the end of each Financial Quarter by
         reference to the accounting information (the "RELEVANT ACCOUNTING
         INFORMATION") most recently delivered under this Agreement being (i)
         the annual audited consolidated Financial Statements delivered under
         clause 15.2.1 and (ii) each set of Management Accounts (consolidated
         and consolidating for the relevant Financial Quarter) delivered under
         clause 15.2.2.

         In this Agreement, unless the context otherwise requires:

         "ADJUSTED TANGIBLE ASSETS": means all of the IHL Group's assets except:

         (i)      deferred assets, other than prepaid insurance and prepaid
                  taxes;


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         (ii)     patents, copyrights, trademarks, trade names, franchises,
                  goodwill and other similar intangibles;

         (iii)    Restricted Investments;

         (iv)     unamortised debt discount and expense;

         (v)      assets constituting Intercompany Accounts; and

         (vi)     fixed assets to the extent of any write-up in the book value
                  thereof resulting from a revaluation effective after the date
                  of this Agreement; and

         "ADJUSTED TANGIBLE NET WORTH": means, at any date:

         (i)      the book value (after deducting related depreciation,
                  amortisation, valuation and other proper reserves as
                  determined in accordance with Applicable GAAP) at which the
                  Adjusted Tangible Assets would be shown on a consolidated
                  balance sheet of the IHL Group at such date prepared in
                  accordance with Applicable GAAP; less

         (ii)     the amount at which the IHL Group's liabilities would be shown
                  on such balance sheet, including as liabilities all reserves
                  for contingencies and other potential liabilities which would
                  be required to be shown on such balance sheet.

15.5     CHANGES IN BASIS OF PREPARATION OF RELEVANT ACCOUNTING INFORMATION

         Where any Relevant Accounting Information to be delivered under clause
         15 has been prepared in a manner which is inconsistent with the
         accounting principles or policies in accordance with which the
         Pro-Forma Balance Sheet was prepared, whether as a result of any change
         in such principles or otherwise, BMEP or Ideal shall provide to the
         Agent a written explanation of any such inconsistency, together with
         details of its effects. If any such inconsistency would be likely to
         affect the ability of the Agent to satisfy itself from the information
         delivered as Relevant Accounting Information as to compliance with the
         provisions of clause 15.4, the Agent shall have the right to adjust the
         financial ratios set out in clause 15.4 or the relevant definitions set
         out in clause 15.5 so as to reflect so far as is practicable the effect
         of any such change (provided that the effect of such adjustments,
         taking into consideration such change, shall not be such as to render
         the said financial ratios more onerous upon BMEP than as at the date of
         this Agreement).

16       COVENANTS

16.1     DURATION

         The undertakings in this clause 16 shall remain in force from the date
         of this Agreement and so long as any amount is outstanding under this
         Agreement.

16.2     POSITIVE COVENANTS

         Each Obligor undertakes that:


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         16.2.1   CONSENTS: it will, and will procure that each of the Obligors
                  will, obtain, comply with the terms of and do all that is
                  necessary to maintain in full force and effect all
                  authorisations, approvals, licences and consents required by
                  all applicable laws and regulations to enable it lawfully to
                  enter into, perform and comply with its obligations under each
                  of the Relevant Agreements to which it is or will be a party
                  and any document to be entered into pursuant thereto or to
                  ensure the legality, validity, enforceability or admissibility
                  in evidence of such Relevant Agreements and each such document
                  in England and Wales and, if different, its jurisdiction of
                  incorporation and any jurisdiction in which any of its assets
                  may be situated;

         16.2.2   INSURANCE: it will maintain, and procure that each Obligor
                  maintains, policies of insurance on and in relation to its
                  business and assets with financially sound and reputable
                  insurers acceptable to the Agent against such risks and to
                  such extent as is usual for companies carrying on a business
                  such as that carried on by it and each Obligor whose practice
                  is not to self insure;

         16.2.3   COMPLIANCE WITH LAW: it will comply, and will procure that
                  each Obligor complies, with all applicable laws and
                  regulations including, without limitation, any applicable
                  Environmental Law;

         16.2.4   ENVIRONMENTAL LAWS: it will, and will procure that each
                  Obligor will, take prompt and appropriate action to respond to
                  and remedy any non-compliance with any Environmental Law and
                  shall regularly report to the Agent on such response and
                  remedying. Without limiting the generality of the foregoing,
                  whenever Ideal gives notice to the Agent of such
                  non-compliance pursuant to clause 16.2.7 Ideal will, at the
                  Agent's request and Ideal's expense:

                  (a)      cause an independent environmental engineer
                           acceptable to the Agent to investigate and conduct
                           such tests of the site where any Obligor's
                           non-compliance or alleged non-compliance with any
                           Environmental Law has occurred and prepare and
                           deliver to the Agent a report 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

                  (b)      provide to the Agent a supplemental report of such
                           engineer whenever the scope of the environmental
                           problems, or Ideal's response thereto or the
                           estimated costs thereof, changes;

         16.2.5   CONDUCT OF BUSINESS it has, and will ensure that each Obligor
                  has, the right to conduct its business and operations as they
                  are conducted in all applicable jurisdictions and will do, and
                  will procure that each Obligor does, all things necessary
                  (including


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                  compliance with all terms and conditions of any licences and
                  consents) to obtain, preserve and keep in full force and
                  effect all rights, licences and consents) to obtain, preserve
                  and keep in full force and effect all rights, licences and
                  authorisations (including, without limitation, all
                  Environmental Authorisations) and consents as are necessary
                  for the conduct of such business and operations;

         16.2.6   PAYMENT OF TAXES AND CLAIMS: (a) it will, and will procure
                  that each Obligor will, and BMEBV will procure that each Baby
                  Bell will, duly and punctually pay and discharge (i) all taxes
                  imposed upon it or its properties (save where the same are
                  being contested in good faith and by appropriate proceedings
                  and where adequate reserves are being maintained with respect
                  thereto) and (ii) all lawful claims which, if unpaid, would by
                  law become encumbrances upon any of its properties; and

                  (b) BMEBV will procure that each Baby Bell will duly and
                  punctually pay and discharge all obligations to:

                           (i) pay all emoluments and benefits to which its
                           employees are entitled (including, without
                           limitation, all wages and salaries, sick pay,
                           maternity pay, pension contributions, bonuses,
                           commission, any liability to taxation (including
                           income tax and national insurance contributions
                           deducted or deductible from such amounts under the
                           PAYE system in the United Kingdom or such equivalent
                           taxation and social security payments)) in the
                           relevant Jurisdiction; and

                           (ii) comply with (in all material respects) all
                           statutes, regulations and collective agreements
                           relevant to the conditions of service of its
                           employees or to the relations between it and its
                           employees (or former employees, as the case may be),
                           any recognised trade union or works council and the
                           laws applicable to the employment of the employees in
                           the relevant Jurisdiction;

         16.2.7   NOTICES TO AGENT: Ideal will notify the Agent in writing of
                  the following matters at the following times (each such notice
                  to describe the subject matter thereof in reasonable detail
                  and to set out the action that Ideal or the relevant Obligor
                  has taken or proposes to take with respect thereto):

                  (a)      immediately after becoming aware of the existence of
                           any Default;


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                  (b)      immediately after becoming aware that any shareholder
                           in, or any creditor of, any Obligor has given notice
                           or taken any action with respect to a claimed default
                           by such Obligor and in circumstances where such
                           shareholder or creditor has taken or is threatening
                           to take any action or steps which will or might
                           reasonably be expected to have a material adverse
                           effect;

                  (c)      immediately after becoming aware of any material
                           adverse change in the assets, business, operations or
                           condition (financial or otherwise) of any Obligor or
                           of the Group (taken as a whole);

                  (d)      immediately after becoming aware of any pending or
                           threatened action, suit, proceeding or counterclaim
                           by any person which may have a material adverse
                           effect on any Obligor, or any pending or threatened
                           investigation by a public authority;

                  (e)      immediately after becoming aware of any pending or
                           threatened strike, work stoppage, material unfair
                           labour practice claim, or other material labour
                           dispute affecting any Obligor;

                  (f)      immediately after becoming aware of any violation of
                           any law, statute, regulation, or ordinance of a
                           public authority applicable to any Obligor or its
                           assets which may have a material adverse effect on it
                           or on such Obligor;

                  (g)      immediately after becoming aware of any violation by
                           any Obligor of any Environmental Law or immediately
                           upon receipt of any notice (including a works notice)
                           delivered pursuant to any Environmental Law or of any
                           notice that a public authority has asserted that any
                           Obligor is not in compliance with any Environmental
                           Law or that its compliance is being investigated;

                  (h)      ten (10) days prior to any Obligor changing its name
                           or the address of its registered office;

                  (i)      immediately upon becoming aware that any Group
                           Company has received a notice or other document from
                           any of its suppliers notifying such Group Company of
                           a breach by such Group Company of any supply
                           agreement to which it is a party;

         16.2.8   HEDGING: Ideal and each other relevant Borrower shall, within
                  60 days of the Closing Date or, in the case of any Additional
                  Borrower, within 60 days of the date upon which it becomes an
                  Additional Borrower, enter into such Hedging Agreements with a
                  Hedge Provider as the Agent may require (after consultation
                  with


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                  Ideal) and in such form as the Agent (acting reasonably) may
                  require;

         16.2.9   CHESSINGTON PROPERTY: Ideal shall or shall procure that Bell
                  Microproducts Limited shall promptly notify the Agent of any
                  proposed refinancing of all or any part of the financial
                  indebtedness secured by any encumbrance over the Chessington
                  Property and shall not complete such refinancing without the
                  relevant Chessington Mortgagee having entered into any
                  intercreditor deed or other priority arrangements in form and
                  substance mutually acceptable to the relevant replacement
                  Chessington Mortgagee, Bell Microproducts Limited and the
                  Agent;

         16.2.10  AMENDMENT OF MATERIAL CONTRACTS: it will not and will procure
                  that none of the Trading Companies shall amend or terminate
                  any of the Material Contracts or agree to waive any material
                  or persistent breach of any of the Material Contracts without
                  the prior written consent of the Agent;

         16.2.11  AMENDMENT TO OR BREACH OF MATERIAL CONTRACT OR STANDARD TERMS
                  OF BUSINESS: it will and will procure that each relevant
                  Trading Company will promptly (a) notify the Agent of any
                  proposed material change in, or amendment to, the standard
                  terms and conditions of business that it has entered into with
                  its suppliers or which it requires its customers to enter into
                  (including, without limitation, any material change to any
                  retention of title or similar provisions) and not agree to or
                  make any such proposed material change without the prior
                  approval of the Agent (such approval not to be unreasonably
                  withheld or delayed) and (b) notify the Agent of any material
                  or persistent breach by any such Trading Company or any other
                  person of any of the Material Contracts and, if relevant, of
                  any steps being taken or proposed to remedy such breach and
                  shall further notify the Agent of any proposal to or purported
                  repudiation or cancellation of, any of the Material Contracts;

         16.2.12  ADDITIONAL SECURITY: without prejudice to the obligations of
                  each of the Obligors pursuant to the Security Documents to
                  which each of them it is expressed to be a party, it will
                  grant or procure that there is granted to the Security
                  Trustee, such new or further security ("ADDITIONAL SECURITY")
                  over any business, shares or other assets which may be
                  acquired pursuant to any Pre-Approved Acquisition or any other
                  acquisition permitted pursuant to the Finance Documents; any
                  such additional security shall be in such form and contain
                  such terms and conditions as the Agent or the Lenders (having
                  carried out all necessary due diligence) may require having
                  regard to the nature and location of the assets in question
                  and shall be required to be effected in favour of the Security
                  Trustee within 90 days (or such later date as the Agent may
                  agree) of the date of completion of the relevant acquisition;
                  it will provide the Security Trustee with such evidence as the
                  Security Trustee may require that all applicable laws and


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                  regulations relating to the execution of such additional
                  security have been duly complied with (including any statutory
                  declarations and/or special resolutions required under
                  sections 155 and 156 Companies Act 1985; all costs and
                  expenses (including legal fees) incurred by any of the
                  Beneficiaries in preparing, negotiating and perfecting any
                  such additional security shall be for the account of Ideal;

         16.2.13  DORMANT COMPANIES: it will ensure that each of the Dormant
                  Companies remains dormant and promptly notify the Agent of any
                  proposal for any of such companies to recommence trading,
                  which they shall not be permitted to do unless Ideal has
                  received the prior written consent of the Agent;

         16.2.14  EXCESS AVAILABILITY: the Borrowers will ensure that that the
                  average daily Excess Availability (calculated for each month
                  on the last day of such month) shall be not less
                  than(pound)4,000,000; and

         16.2.15  EC INSOLVENCY REGULATION: it will maintain, and procure that
                  all other members of the IHL Group maintain, its centre of
                  main interests (within the meaning of the EC Insolvency
                  Regulation) in the United Kingdom.

16.3     NEGATIVE COVENANTS

         Each Obligor undertakes that:

         16.3.1   ENCUMBRANCES: it will not, and will ensure that no Obligor
                  will, without the prior consent of the Agent, create, agree to
                  create or permit to subsist any encumbrance on or over their
                  respective assets to secure any indebtedness of any person
                  other than the following:

                  (a)      any encumbrance on or over the assets of any Obligor
                           subsisting at the date of this Agreement and agreed
                           to by the Agent (and in the case of the encumbrances
                           held by the Chessington Mortgagee, any replacement
                           thereof) provided that, (save for indebtedness
                           secured as at the date of this Agreement by any
                           encumbrance created in favour of the Chessington
                           Mortgagee, which may be increased by up
                           to(pound)500,000), the principal, capital or nominal
                           amount secured by any such encumbrance may not be
                           increased beyond the amount currently secured by the
                           relevant encumbrance as at the date of this
                           Agreement, without the prior written consent of the
                           Agent;

                  (b)      encumbrances in favour of the Security Trustee;

                  (c)      liens or rights of set-off arising solely by
                           operation of law incurred in the ordinary course of
                           business and not in


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                           connection with the borrowing of money, for sums not
                           more than 30 days overdue;

                  (d)      encumbrances arising out of title retention
                           provisions in a supplier's standard conditions of
                           supply in respect of goods acquired by the relevant
                           person in the ordinary course of trading;

                  (e)      any other encumbrance created or outstanding with the
                           prior written consent of the Agent;

                  (f)      agreements and arrangements of the type referred to
                           in clause 16.3.5(d) to the extent that the same
                           constitute security;

                  (g)      any encumbrance over any asset (other than Accounts
                           or Inventory) acquired by any Obligor after the date
                           of this Agreement and subject to which such asset is
                           acquired provided that (1) except with the prior
                           consent of the Agent, the principal, capital or
                           nominal amount secured by such encumbrance may not be
                           increased beyond the amount secured thereby at the
                           date of such acquisition and (2) the same is
                           discharged within 90 days of the date of such
                           acquisition;

                  (h)      any encumbrance over the assets of any company which
                           becomes a Subsidiary after the date of this Agreement
                           pursuant to clause 16.3.11 provided that (1) except
                           with the prior written consent of the Agent, the
                           principal, capital or nominal amount secured by such
                           encumbrance may not be increased beyond the amount
                           secured thereby at the date of the acquisition and
                           (2) the same is discharged within 90 days of the date
                           of such acquisition;

                  provided that, in the case of any encumbrance created or
                  existing pursuant to sub paragraphs (a) and (e) above, it
                  shall be a condition to the creation of such encumbrance that
                  Ideal shall, if so requested by the Agent, procure that the
                  beneficiary of the relevant encumbrance shall accede to an
                  intercreditor deed or other priority arrangement on terms
                  acceptable to the Agent;

         16.3.2   DISPOSALS: without the prior consent of the Agent, it will
                  not, and it will ensure that no Group Company will (whether by
                  a single transaction or a number of related or unrelated
                  transactions and whether at one time or over a period of
                  time), sell, transfer, assign, lease out, lend or otherwise
                  dispose of (whether outright, by a sale and repurchase or sale
                  and leaseback arrangement or otherwise) any part of its or
                  their assets having an aggregate value in excess of
                  (pound)750,000 in any one Financial Year except, sales of
                  Inventory in the ordinary course of trading, sales to
                  Affiliates


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                  permitted under clause 16.3.8 and sales of Equipment permitted
                  under clause 16.4.11 provided that, where any matter relating
                  to any leasing, sub-leasing or other similar arrangement with
                  respect to the Chessington Property requires the consent of
                  the Agent pursuant to the terms of this clause 16.3.2, such
                  consent shall not be withheld if the relevant subject matter
                  also requires the consent of the Chessington Mortgagee and the
                  relevant Chessington Mortgagee has granted its consent to such
                  matter;

         16.3.3   DISTRIBUTIONS AND CHANGES IN CAPITAL STRUCTURE: without the
                  prior consent of the Agent, it will not, and it will ensure
                  that no Group Company will:

                  (a)      directly or indirectly declare, make or pay, or incur
                           any liability to make or pay, any Distribution, or
                           return any capital to any shareholder by way of
                           capital reduction or otherwise, provided that:

                           (i) BMEE may make Distributions or returns of capital
                           to Ideal;

                           (ii) Ideal and any one or more of the Baby Bells may
                           make Distributions or returns of capital to BMEBV;

                           (iii) BMEBV may make Distributions or returns of
                           capital to BMEP; and

                           (iv) BMEP may make Distributions or returns of
                           capital to the Parent,

                           all of which payments in aggregate (together with the
                           aggregate principal amount of all loans made pursuant
                           to clause 16.3.7(a)), do not exceed (pound)2,000,000
                           (or the equivalent in any other currency) in any
                           period of twelve (12) months commencing on the
                           Closing Date and do not exceed (pound)6,000,000 (or
                           the equivalent in any other currency) during the term
                           of this Agreement,

                  and provided further that the Agent shall have received a
                  certificate signed by the finance director of Ideal confirming
                  that:

                  (1)      each of the Obligors is in compliance with all of its
                           obligations under the Finance Documents to which it
                           is a party and no Default has occurred and is
                           continuing or will result from the payment of the
                           Distribution or return of capital proposed;

                  (2)      there is Excess Availability under the Revolving
                           Facility of not less than(pound)5,000,000 as at the
                           date of such certificate and there will be an average
                           Excess Availability of not less than (pound)5,000,000
                           both as at the proposed date of payment of the
                           relevant Distribution or


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                           return of capital and for a continuous period of six
                           (6) months thereafter; and

                  (3)      in the case of a Distribution to be paid by BMEP to
                           the Parent only, the largest twenty (20) trade
                           creditors of the Borrowers (as a whole) are being
                           paid in full when the relevant amounts become due in
                           accordance with their prevailing credit terms;

                  OR

                  (b)      make any change in the capital structure of any Group
                           Company which could have a material adverse effect on
                           any Obligor or the Group (taken as a whole)

                  For the avoidance of doubt, no Group Company may make any
                  Distribution to any member of the Solutions Group;

         16.3.4   TRANSACTIONS HAVING A MATERIAL ADVERSE EFFECT: it will not,
                  and it will ensure that no Obligor will, enter into any
                  transaction which has or might reasonably be expected to have,
                  a material adverse effect on any Obligor;

         16.3.5   INDEBTEDNESS: it will not, and it will ensure that Group
                  Company will, incur or maintain any indebtedness other than:

                  (a)      indebtedness under the Finance Documents;

                  (b)      trade payables and contractual obligations to
                           suppliers and customers incurred in the ordinary
                           course of trading;

                  (c)      indebtedness between members of the Group as
                           disclosed to and permitted by the Agent;

                  (d)      indebtedness under any finance leases disclosed to
                           the Agent prior to the date of this Agreement or
                           which are fully disclosed in the Latest Projections
                           and budgets for Capital Expenditure of the Group as
                           delivered to the Agent pursuant to clauses 15.2.3 and
                           15.2.4 and as approved by the Agent;

                  (e)      indebtedness due and owing under any foreign exchange
                           or interest-rate swap, under any option, cap, collar
                           or floor or under any other hedging agreement or
                           similar arrangement with any bank or other financial
                           institution and disclosed to the Agent prior to the
                           date of this Agreement and any replacement thereof or
                           other hedging arrangement (which is intended to hedge
                           exposure to interest rate or currency exchange
                           fluctuations and not an arrangement of a speculative
                           nature) entered into after the date of this
                           Agreement, in the case of interest rate hedging only,
                           with the prior consent of the Agent and provided
                           that, if the relevant


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                           Hedge Provider is not the Arranger, any financial
                           indebtedness due and owing under the relevant hedging
                           arrangement may not be secured without the consent of
                           the Agent (acting on the instructions of all of the
                           Lenders); or

                  (f)      indebtedness due and owing by Ideal or any of its
                           Affiliates to the Chessington Mortgagee, provided
                           that the aggregate principal amount of such
                           indebtedness may not be increased after the date of
                           this Agreement by an amount, in aggregate, exceeding
                           (pound)500,000;

                  and will not, in any event, pay any amount in respect of any
                  financial indebtedness due to the Chessington Mortgagee, save
                  in accordance with the provisions of the Priority Agreement or
                  any subsequent intercreditor deed or priority arrangement
                  approved by the Agent in accordance with this Agreement;

         16.3.6   PREPAYMENT: it will not, and it will ensure that no Group
                  Company will, voluntarily prepay or redeem any financial
                  indebtedness, save that each Borrower may make prepayments
                  under this Agreement in accordance with its terms and save
                  that any Group Company may, in the ordinary course of
                  business, make early payments to any trade creditor;

         16.3.7   LOANS AND GUARANTEES: it will not, and will ensure that no
                  Group Company will, make, roll-over or continue to remain
                  outstanding any loans, grant any credit (save in the ordinary
                  course of trading) or give any guarantee to or for the benefit
                  of any person (other than any guarantee permitted pursuant to
                  clause 16.4.13) or otherwise voluntarily assume any liability,
                  whether actual or contingent, in respect of any obligation of
                  any other person, save that

                  (a)      BMEP, BMEBV, each of the Borrowers and each of the
                           Baby Bells may make any loans or grant any credit to
                           each other or to the Parent and to any one more of
                           the Baby Bells (but, subject to paragraph (d) of this
                           clause 16.3.7, not to any member of the Solutions
                           Group) which, in the case of loans to the Parent
                           and/or BMEP and/or BMEBV, in aggregate (and taking
                           into account the aggregate amount of any
                           Distributions or returns of capital made by any such
                           persons to the Parent and/or BMEP and/or BMEBV in
                           accordance with the terms of clause 16.3.3), do not
                           exceed(pound)2,000,000 (or the equivalent in any
                           other currency) in any period of twelve (12) months
                           commencing on the Closing Date and do not
                           exceed(pound)6,000,000 (or the equivalent in any
                           other currency) during the term of this Agreement;

                  (b)      a Group Company may make loans to its employees
                           (other than its directors) provided that the
                           aggregate amount of


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                           all such loans made by all of the Group Companies
                           shall not exceed (pound)20,000; and

                  (c)      a Group Company may roll-over or continue to make
                           available (but not increase the principal amount
                           thereof, other than through the capitalisation of
                           accrued interest) any existing loans or financial
                           accommodation to any other Group Company or, subject
                           to any other applicable restrictions in this
                           Agreement, to a member of the Solutions Group (and
                           for the avoidance of doubt the aggregate amount of
                           loans and accrued interest outstanding to the
                           Solutions Group as at the date of this Agreement is
                           EUR8,302,070); and

                  (d)      BMEP may make loans or other financial accommodation
                           to one or more members of the Solutions Group,
                           provided always that BMEP is able to provide evidence
                           satisfactory to the Agent (acting reasonably),
                           whether by way of the provision of Management
                           Accounts, Financial Statements or otherwise, from
                           which the Agent is able to determine that such loans
                           or other advances will be funded wholly out of new
                           funds made available to BMEP after the Closing Date
                           by loans from the Parent or which have otherwise been
                           invested in BMEP by the Parent after the Closing Date
                           by way of the subscription for equity or other
                           capital contribution in or to BMEP and not funded by
                           any existing funds of BMEP as at the Closing Date;

         16.3.8   TRANSACTIONS WITH AFFILIATES: save to the extent permitted by
                  the foregoing sub clauses of this clause 16.3, it will not,
                  and will ensure that no Group Company will:

                  (a)      sell, transfer, distribute or pay any money or assets
                           to any Affiliate;

                  (b)      lend or advance money or assets to any Affiliate; or

                  (c)      invest in (by capital contribution or otherwise) or
                           purchase or repurchase any shares or indebtedness or
                           any assets of any Affiliate,

                  save that, if no Default has occurred and is continuing, a
                  Group Company may engage in transactions relating to the sale
                  and purchase of Inventory (but not, save as otherwise
                  permitted in this Agreement, involving any sales of Equipment
                  or other fixed assets) with an Affiliate in the ordinary
                  course of trading in amounts and upon terms fully disclosed to
                  the Agent in the Management Accounts and no less favourable to
                  that Group Company than would obtain in a comparable arm's
                  length transaction with a third party which is not an
                  Affiliate, provided that Accounts generated between the Group
                  Companies and their Affiliates shall not


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                  account for more than three per cent (3%) of the total number
                  of Accounts generated by the Borrowers and/or any other
                  Charging Companies;

         16.3.9   CHANGE OF BUSINESS OR OPERATIONS: it will ensure that there is
                  no material change in the nature of its business or operations
                  or the business or operations of the Group taken as a whole
                  (whether by a single transaction or a number of related or
                  unrelated transactions, whether at one time or over a period
                  of time and whether by disposal, acquisition or otherwise);

         16.3.10  ACCOUNTING REFERENCE DATE: it will not, without the prior
                  approval of the Agent, change, and will procure that no other
                  Group Company changes, its accounting reference date;

         16.3.11  SUBSIDIARIES: save pursuant to any Pre-Approved Acquisition or
                  otherwise with the Agent's prior written consent, it will not,
                  directly or indirectly, organise or acquire any Subsidiary
                  (other than a Dormant Company or those in existence as at the
                  date of this Agreement and which have been advised to the
                  Agent in writing);

         16.3.12  RESTRICTED INVESTMENTS: it will not, and will ensure that no
                  Group Company will make any Restricted Investment;

         16.3.13  CAPITAL EXPENDITURE: it will not, and will ensure that no
                  Group Company will, without the prior consent of the Agent,
                  make or incur any Capital Expenditure if, after giving effect
                  thereto, the aggregate amount of all Capital Expenditure by
                  the Group in any Financial Year would exceed (pound)1,500,000
                  (or the equivalent in any other currency);

         16.3.14  LEASE OR SIMILAR OBLIGATIONS: save with the prior written
                  consent of the Agent and save for any finance leases agreed
                  with the Agent pursuant to clause 16.3.5, it will not, and
                  will ensure that no Group Company will enter into any lease of
                  real or personal property as lessee or sublessee or enter into
                  any hire purchase, conditional sale or other similar
                  arrangement if, after giving effect thereto, the aggregate
                  amount of Rentals payable by the Group Companies in any
                  Financial Year in respect of such lease and all other such
                  leases, hire purchase, conditional sale or similar
                  arrangements would exceed (pound)500,000. The term "Rentals"
                  means all payments due from the lessee or sublessee under a
                  lease or all payments, liabilities or obligations due from the
                  hirer or other relevant obligor or debtor (howsoever
                  described) under any hire purchase, conditional sale or
                  similar arrangement, including, without limitation, rent,
                  service charge, utility or maintenance costs and insurance
                  premiums together with any VAT thereon;

         16.3.15  CAPITAL MARKETS: if any Borrower, BMEP or BMEBV or any other
                  Group Company shall enter into any Capital Markets Transaction
                  then, subject to the following provisions of this clause


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                  16.3.15, it shall apply or BMEP shall procure that there is
                  applied, thirty per cent (30%) of the net proceeds of such
                  Capital Markets Transaction to prepay (subject to payment of
                  any broken funding costs) a commensurate amount of the then
                  Total Outstandings, provided that, if the average Excess
                  Availability during the period of six (6) months ending on the
                  date upon which the Capital Markets Transaction is completed
                  was in excess of (pound)5,000,000, then the relevant issuer(s)
                  shall not be obliged to apply such proceeds in prepayment in
                  the manner prescribed by this clause 16.3.15; and

         16.3.16  VENDOR FINANCING: it will not and will procure that no other
                  Group Company will enter into any vendor financing programme
                  or similar arrangement for financing the acquisition of
                  Equipment, any other fixed asset or Inventory (which has not
                  already been disclosed in its budget for Capital Expenditure
                  and approved by the Agent), without the prior written consent
                  of the Agent and without the Agent being provided with such
                  information as it may require as to the terms and conditions
                  of such vendor financing programme or other arrangement and
                  assessing the impact, if any, upon the Collateral and/or the
                  encumbrances created by the Debenture.

16.4     COVENANTS RELATING TO THE COLLATERAL

         Ideal undertakes that:

         16.4.1   COLLATERAL REPORTING: it will provide the Agent, in each case
                  in respect of each Trading Company, and on a consolidated and
                  consolidating basis, with the following documents at the
                  following times in form satisfactory to the Agent:

                  (a)      on a weekly basis on each Wednesday based on figures
                           as of the previous Friday, a Borrowing Base
                           Certificate incorporating, inter alia, a schedule of
                           credit notes, a summary of collections of accounts
                           receivable, a schedule of Accounts created since the
                           last such schedule, with effect from any Inventory
                           Eligibility Date, a report of the Inventory balance
                           (by location) based on the perpetual inventory
                           reports and such further details as the Agent may
                           request;

                  (b)      upon request, copies of invoices, credit notes,
                           shipping and delivery documents;

                  (c)      monthly ageings of accounts receivable to be
                           delivered no later than the 10th day of each month in
                           respect of the immediately preceding month;

                  (d)      monthly perpetual inventory reports by category to be
                           delivered no later than the 10th day of each month in
                           respect of the immediately preceding month;


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                  (e)      on a monthly basis, a report listing the top ten (10)
                           customers of Ideal during that month, providing (i)
                           details of the level of sales made to each such
                           customer; (ii) details of any credit notes issued to
                           each such customer or any other account adjustments
                           made in respect of such customer; and (iii) the
                           amount of cash actually received from each such
                           customer during the relevant month;

                  (f)      with effect from any Inventory Eligibility Date, upon
                           request, monthly perpetual inventory reports with
                           effect from any Inventory Eligibility Date, a
                           quarterly report of all Inventory based on a physical
                           stock count;

                  (g)      monthly ageings of accounts payable no later than the
                           10th day of the following month, together with a
                           specific breakdown (in reasonable detail) of the
                           monthly ageings of accounts payable to the largest
                           ten supplier creditors of Ideal and details of the
                           Inventory held by Ideal in respect of such accounts
                           payable and each such supplier;

                  (h)      with effect from any Inventory Eligibility Date, upon
                           request, copies of purchase orders, invoices, and
                           delivery documents for Inventory and Equipment
                           acquired by that Trading Company;

                  (i)      such other reports as to the Collateral and the
                           Accounts (and each Borrower hereby authorises the
                           Agent to make enquiries of its customers in this
                           respect) as the Agent shall request from time to
                           time; and

                  (j)      certificates of an officer of Ideal certifying as to
                           the foregoing;

         16.4.2   INSPECTION: upon receiving not more than two business days'
                  notice from the Agent (or without notice following a Default
                  which is continuing), it will, and will procure that each
                  Trading Company will, permit the Agent or any person
                  authorised by the Agent to have access to its premises to
                  carry out a periodic inspection of the Collateral, the
                  regularity of such periodic inspections to be at the Agent's
                  discretion, but initially to be no more often than every 60
                  days;

         16.4.3   ACCOUNTS: it will not, and will ensure that no Trading Company
                  will, re-date any invoice or sale or make sales on extended
                  credit beyond 45 days from its standard credit terms or modify
                  any Account except with the prior written consent of the
                  Agent. If Ideal or any other Obligor becomes aware of any
                  material matter affecting any material Account (including
                  information regarding any Account Debtor's creditworthiness
                  and any information in respect of an Account Debtor against
                  whom a


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                  Trading Company has commenced, or is proposing to commence,
                  legal proceedings), it will promptly so advise the Agent;

         16.4.4   ACCEPTANCE OF NOTES OR OTHER INSTRUMENTS: it will not, and
                  will ensure that no Trading Company will, accept any note or
                  other instrument (except a cheque or other instrument for the
                  immediate payment of money) with respect to any Account
                  without the Agent's written consent. If the Agent consents to
                  the acceptance of any such note or other instrument, it shall
                  be considered as evidence of the Account and not payment
                  thereof, and Ideal will promptly deliver such note or
                  instrument to the Agent appropriately endorsed. Regardless of
                  the form of presentment, demand, notice of dishonour, protest
                  and notice of protest with respect thereto, Ideal will remain
                  liable thereon until such note or instrument is paid in full;

         16.4.5   DISPUTES WITH ACCOUNT DEBTORS: it will notify the Agent
                  promptly of all disputes and claims with Account Debtors in
                  excess of(pound)50,000 and settle or adjust them, or ensure
                  that the relevant Trading Company settles or adjusts them, at
                  no expense to the Lenders, but no discount, credit or
                  allowance shall be granted to any Account Debtor without the
                  Agent's consent, except for discounts, credits and allowances
                  made or given in the ordinary course of trading when no Event
                  of Default exists hereunder. Ideal shall send, or procure that
                  there is sent to, the Agent a copy of each credit note in
                  excess of(pound)1,000,000 as soon as issued and a list of all
                  credit notes in excess of(pound)750,000 on a weekly basis,
                  with copies of any such credit notes to be supplied to the
                  Agent at the Agent's request;

         16.4.6   RETURNS OF INVENTORY: if after the Inventory Eligibility Date,
                  an Account Debtor returns any Inventory to any Borrower or any
                  Trading Company when no Event of Default exists, then that
                  Borrower shall promptly determine the reason for such return
                  and shall issue, or procure that the relevant Trading Company
                  shall issue, a credit note to the Account Debtor in the
                  appropriate amount. Each Borrower shall immediately report to
                  the Agent any return involving an amount in excess
                  of(pound)1,000,000. Each such report shall indicate the
                  reasons for the returns and the locations and condition of the
                  returned Inventory. Whenever any Inventory is returned, the
                  related Account shall be deemed ineligible, and the Available
                  Revolving Facility Amount shall be adjusted accordingly;

         16.4.7   INVENTORY: after the Inventory Eligibility Date, it will not,
                  and will ensure that no Trading Company will, without prior
                  written notice to the Agent, acquire or accept any Inventory
                  on consignment or approval;

         16.4.8   INVENTORY - REPORTING SYSTEM: after the Inventory Eligibility
                  Date, it will maintain, and will ensure that each Trading
                  Company maintains, a perpetual inventory reporting system at
                  all


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                  times; it will conduct a physical count of the Inventory of
                  all the Trading Companies at least once per Financial Year and
                  after the occurrence of an Event of Default at such other
                  times as the Agent requests, and shall promptly, upon
                  completion, supply the Agent with a copy of such count
                  accompanied by a report of the value of such Inventory (valued
                  at the lower of cost, on a FIFO basis, or market value); no
                  Borrower will, and will ensure that no Trading Company will,
                  without the Agent's prior written consent, sell any Inventory
                  on a sale or return, sale on approval, consignment or other
                  repurchase or return basis;

         16.4.9   CONDITION OF THE EQUIPMENT: it will keep and maintain, and
                  will ensure that each Trading Company keeps and maintains, its
                  Equipment in good operating condition and repair (ordinary
                  wear and tear excepted) and will make all necessary
                  replacements;

         16.4.10  ADDITIONS TO THE EQUIPMENT: it will include information
                  regarding any material additions to or deletions from any
                  Equipment (which, in the case of any additions, are to be
                  within the agreed Capital Expenditure budget) within the
                  Management Accounts required to be delivered pursuant to
                  clause 15.2.2;

         16.4.11  DISPOSAL OF THE EQUIPMENT: it will not, and will ensure that
                  no Trading Company will, without the Agent's prior written
                  consent, sell, lease as a lessor, or otherwise dispose of any
                  Equipment provided that obsolete or unusable Equipment having
                  an orderly liquidation value no greater than (pound)500,000
                  individually and (pound)1,500,000 in the aggregate in any
                  Financial Year, may be disposed of without the Agent's
                  consent, subject to the conditions set forth below. If any of
                  the Equipment is sold, transferred or otherwise disposed of
                  with the Agent's prior written consent or as otherwise
                  permitted hereby then:

                  (a)      if such sale, transfer or disposal is effected
                           without replacement of such Equipment, or such
                           Equipment is replaced by leased Equipment, or by
                           Equipment purchased subject to a Permitted
                           Encumbrance, Ideal will, or will procure that the
                           relevant Trading Company will, deliver all of the
                           cash proceeds of any such sale, transfer or disposal
                           to the Agent, which proceeds shall be applied in or
                           towards prepayment of all sums due from the Borrowers
                           hereunder; or

                  (b)      if such sale, transfer or disposal is made in
                           connection with the purchase of replacement Equipment
                           (other than subject to a Permitted Encumbrance),
                           Ideal will use the proceeds of such sale, transfer or
                           disposal to finance the purchase of such replacement
                           Equipment which shall be free and clear of all liens,
                           claims and encumbrances, except for the Security
                           Interest and other Permitted


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                           Encumbrances and shall deliver to the Agent written
                           evidence of the use of the proceeds for such
                           purchase;

         16.4.12  CHESSINGTON MORTGAGE: it will procure that Bell Microproducts
                  Limited does not agree to or complete any refinancing of the
                  indebtedness relating to the Chessington Property unless:

                  (a)      the Agent shall be afforded a reasonable opportunity
                           (subject to any applicable confidentiality
                           constraints) to review the terms and conditions of
                           such refinancing; and

                  (b)      Ideal shall procure (or shall procure that Bell
                           Microproducts Limited shall procure) that the
                           relevant Chessington Mortgagee shall enter into an
                           intercreditor deed or priority arrangement mutually
                           acceptable to the relevant Chessington Mortgagee,
                           Bell Microproducts Limited and the Agent;

         16.4.13  CHESSINGTON PROPERTY GUARANTEE: it will not give and will
                  procure that no other Group Company shall provide any
                  guarantee, indemnity or other assurance in respect of the
                  obligations of Ideal or any relevant Affiliate to the
                  Chessington Mortgagee (other than any guarantees in existence
                  as at the date hereof) unless the obligations of each relevant
                  Group Company and the rights and recourse of the Chessington
                  Mortgagee are fully subordinated to the rights of the
                  Beneficiaries under the Finance Documents.

17       DEFAULT

17.1     EVENTS OF DEFAULT

         Each of the events set out below is an Event of Default:

         17.1.1   NON-PAYMENT: any Obligor does not pay any sum due from it
                  under any Finance Document at the time and in the manner
                  specified in the relevant Finance Document, or where the
                  non-payment results solely from technical difficulties
                  relating to the transfer of that amount from the relevant
                  Obligor to the Agent, within five (5) days of the due date;

         17.1.2   BREACH OF REPRESENTATION OR WARRANTY: any representation or
                  warranty made or deemed to be repeated by any Obligor in any
                  Finance Document or in any document delivered pursuant to it
                  is not complied with or is or proves to have been incorrect or
                  misleading in any material respect when made or deemed to be
                  repeated;

         17.1.3   BREACH OF UNDERTAKING: the Borrower fails duly to perform or
                  comply with any obligation expressed to be assumed by


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                  it in clause 2.2, 15, 16.2.8 to 16.2.9 inclusive, 16.3 or 16.4
                  or any Obligor fails duly to perform any obligation in, or
                  comply with any of the terms of, any of the Security
                  Documents;

         17.1.4   BREACH OF OTHER OBLIGATION: any Obligor fails duly to perform
                  or comply with any other obligation expressed to be assumed by
                  it in any of the Finance Documents and such failure (if
                  capable of remedy) is not remedied within ten business days
                  after the earlier of (i) the date upon which any such Obligor
                  becomes aware of such default or (ii) the date upon which the
                  Agent has notified the Borrower or, as the case may be, such
                  Obligor of such default or if any such Finance Document shall
                  terminate (other than in accordance with its terms or with the
                  written consent of the Agent) or become void or unenforceable;

         17.1.5   CROSS-DEFAULT: any indebtedness (other than indebtedness to
                  any one or more trade creditors arising in the ordinary course
                  of business which is not overdue by more than 60 days and in
                  respect of which the relevant trade creditor has not sought
                  repayment or otherwise taken steps to procure or enforce
                  repayment or in respect of which repayment has been sought and
                  the relevant Obligor is contesting in good faith by
                  appropriate means its liability to make payment thereof) of
                  any Obligor of an amount in excess of(pound)1,000,000 (or its
                  equivalent in any other currency) is not paid when due or is
                  declared to be or otherwise becomes due and payable prior to
                  its specified maturity or any creditor of any Obligor becomes
                  entitled to declare any such indebtedness due and payable
                  prior to its specified maturity;

         17.1.6   INSOLVENCY: any Obligor or Group Company is unable to pay its
                  debts as they fall due (or is deemed by law or by a court to
                  be unable to pay its debts), stops, suspends or threatens to
                  stop or suspend payment of all or any part of its indebtedness
                  or commences negotiations with any one or more of its
                  creditors with a view to the general readjustment or
                  re-scheduling of all or any part of its indebtedness or makes
                  a general assignment for the benefit of, or composition with,
                  its creditors or a moratorium is agreed or declared in respect
                  of, or affecting, all or any part of its indebtedness;

         17.1.7   ENFORCEMENT PROCEEDINGS: a distress, attachment, execution,
                  diligence or other legal process is levied, enforced or sued
                  out on or against all or any part of the assets of any Obligor
                  or Group Company and is not discharged within five business
                  days;

         17.1.8   WINDING-UP: any Obligor or Group Company takes any corporate
                  action or other steps are taken or legal or other proceedings
                  are started for its winding-up, dissolution or re-organisation
                  other than for the purposes of a bona fide, solvent scheme of
                  reconstruction or amalgamation previously approved in writing
                  by the Agent (other than a petition for winding up which the
                  Borrower has satisfied the Agent is vexatious, groundless or
                  an


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                  abuse of process and in relation to which the relevant Group
                  Company has taken steps within seven days of the petition to
                  restrain the petitioner from advertising the petition and
                  which in any event has been discharged within thirty days of
                  the petition) or for the appointment of a receiver,
                  administrator, administrative receiver, trustee or similar
                  officer of it or of any or all of its assets;

         17.1.9   ANALOGOUS PROCEEDINGS: anything analogous to or having a
                  substantially similar effect to any of the events specified in
                  clauses 17.1.6 to 17.1.8 inclusive shall occur under the laws
                  of any applicable jurisdiction;

         17.1.10  ENCUMBRANCE ENFORCEABLE: any encumbrance on or over the assets
                  of any Obligor or Group Company securing indebtedness in
                  excess of (pound)500,000 becomes enforceable and any step
                  (including the taking of possession or the appointment of a
                  receiver, manager or similar person) is taken to enforce that
                  encumbrance;

         17.1.11  EXPROPRIATION: all or any material part of the shares or
                  assets of any Obligor is seized, compulsorily acquired,
                  nationalised or otherwise expropriated or custody or control
                  of the same is assumed by any public authority or any court of
                  competent jurisdiction at the instance of any public
                  authority, except where contested in good faith by proper
                  proceedings diligently pursued where a stay of enforcement is
                  in effect;

         17.1.12  TERMINATION OF ANY GUARANTEE: any guarantee of any amounts due
                  and payable under any of the Finance Documents shall be
                  terminated, revoked or declared void or invalid;

         17.1.13  JUDGMENTS: one or more final judgments for the payment of
                  money aggregating in excess of (pound)50,000 (whether or not
                  covered by insurance) shall be rendered against any Obligor
                  and such Obligor shall fail to discharge the same within
                  thirty (30) days from the date of entry thereof or to appeal
                  therefrom;

         17.1.14  LOSS OF COLLATERAL: any loss, theft, damage or destruction of
                  any item or items of the Collateral occurs which in the
                  opinion of the Agent (i) could materially and adversely affect
                  the operation of any Borrower's or any Obligor's business or
                  the business of the Group (taken as a whole) or (ii) is
                  material in amount and is not adequately covered by insurance;

         17.1.15  CESSATION OF BUSINESS: any Obligor ceases to carry on the
                  business it carries on today or enters into any unrelated
                  business;

         17.1.16  ILLEGALITY: it is or will become unlawful for any Obligor to
                  perform or comply with any of its obligations under any
                  Relevant Agreement, or any such obligation is not or ceases to
                  be legal, valid and binding;


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         17.1.17  REPUDIATION: any Obligor repudiates, or does or causes to be
                  done anything evidencing an intention to repudiate any
                  Relevant Agreement;

         17.1.18  MATERIAL ADVERSE CHANGE: there occurs any material adverse
                  change in any Obligor's assets, business, operations or
                  condition (financial or otherwise);

         17.1.19  CHANGE OF CONTROL: any person or group of connected persons
                  which does not have control at the date of this Agreement
                  acquires control of BMEP, BMEBV or any Obligor and for this
                  purpose "CONNECTED PERSON" shall be construed in accordance
                  with section 839 Income and Corporation Taxes Act 1988.

17.2     ACCELERATION

         If at any time and for any reason (and whether within or beyond the
         control of any party to any of the Finance Documents) any Event of
         Default has occurred, then at any time thereafter, whilst such Event of
         Default is continuing, the Agent may, and shall, if so instructed by
         the Majority Lenders, by written notice to Ideal do one or more of the
         following at any time or times and in any order:

         17.2.1   reduce or cancel the Available Facility or any one or more of
                  its elements or reduce or cancel the Available Revolving
                  Facility Amount;

         17.2.2   restrict the amount of or refuse to make available any
                  Revolving Loan or Swingline Loan or to issue any Letter of
                  Credit or Guarantee;

         17.2.3   terminate this Agreement and the Revolving Facility made or to
                  be made available hereunder;

         17.2.4   declare any Revolving Loan or any Swingline Loan, all unpaid
                  accrued interest or fees and any other sum then payable under
                  this Agreement to be due and payable on demand or on such date
                  as it may specify in such notice whereupon all such monies
                  shall become so due and payable on demand or on such date (as
                  the case may be);

         17.2.5   require that the Borrower deposit with the Security Trustee
                  with respect to any Letter of Credit or Guarantee then
                  outstanding a Supporting Letter of Credit or cash, in the same
                  manner as contemplated in clause 6.14;

         17.2.6   declare the Revolving Facility to be cancelled, whereupon it
                  shall be so cancelled and the Commitment of each Lender shall
                  immediately be reduced to zero;

         17.2.7   enforce any or all of its rights or require that the Security
                  Trustee enforce any or all of its rights under any of the
                  Finance Documents or under applicable law.


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17.3     ON DEMAND FACILITY

         If, pursuant to clause 17.2.4, the Agent declares any of the Loans (or
         any other monies which may become payable hereunder) to be due and
         payable on demand of the Agent, then, at any time thereafter, the Agent
         may by written notice to Ideal call for repayment of any such Loans
         (and any other such monies) on such date as it may specify in such
         notice (whereupon the same shall become due and payable on such date
         together with all unpaid accrued interest, fees and any other sums then
         owed by the Borrowers hereunder) or withdraw its declaration with
         effect from such date as it may specify in such notice.

17.4     LETTER OF CREDIT AND GUARANTEE FEE FOLLOWING EVENT OF DEFAULT

         From the date of the occurrence of any Event of Default until such
         Event of Default is remedied to the satisfaction of the Agent, or until
         all sums payable hereunder have been satisfied or discharged in full
         and none of the Lenders is under any contingent liability hereunder or
         under any Letter of Credit or Guarantee, the Letter of Credit and
         Guarantee Fee shall be calculated at the rate per annum equal to an
         additional 2% per annum to that referred to in clause 22.5 on the
         maximum face value of any Letter of Credit or maximum contingent
         liability of the Issuer under each Guarantee then outstanding.

17.5     TERMINATION FEE

         If the Agent terminates this Agreement upon an Event of Default, Ideal
         shall pay the Agent for the account of the Lenders in their
         Participating Proportion, immediately upon termination, a fee equal to
         the early termination fee that would have been payable under clause 29
         if this Agreement had been terminated on that date pursuant to Ideal's
         election.

18       DEFAULT INTEREST

18.1     INTEREST ON UNPAID SUMS

         If any relevant Obligor does not pay any sum payable by it under this
         Agreement on its due date in accordance with the provisions of clause
         20 or if any sum due and payable by any relevant Obligor under any
         judgment of any court in connection with this Agreement is not paid on
         the date of such judgment, it shall pay interest on the balance for the
         time being outstanding (such balance being referred to in this
         Agreement as the "UNPAID SUM") for the period beginning on such due
         date or, as the case may be, the date of such judgment, in accordance
         with the provisions of this clause 18.

18.2     DEFAULT INTEREST PERIODS

         Interest under this clause 18 shall be calculated by reference to
         successive periods, each of which (other than the first, which shall
         begin on the due date for payment or, as the case may be, the date of
         judgment as referred to in clause 18.1) shall begin on the last day of
         the preceding period. Each such period shall be of such duration as the
         Agent may select.


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18.3     DEFAULT INTEREST RATES

         The rate of interest applicable to an unpaid sum from time to time
         during each period relating to that unpaid sum shall be the rate per
         annum which is the sum of (i) two per cent (2%) (ii) the Applicable
         Margin (iii) LIBOR relative to such period (or, in respect of any
         Swingline Loans or Reference Rate Revolving Loans, the Reference Rate)
         and (iv) the Mandatory Cost, if any, applicable to that unpaid sum
         provided that:

         18.3.1   if, at or about 11.00 a.m. on the Quotation Date in respect of
                  such unpaid sum, it is not possible to determine LIBOR in
                  accordance with the definition of LIBOR there shall be
                  substituted for LIBOR the rate determined by the Agent (and
                  notified to Ideal) to be the weighted average of the rates (as
                  notified to the Agent by the Lenders prior to the first day of
                  the relevant Interest Period) which represent the cost to each
                  Lender of funding its portion of such unpaid sum during such
                  period from whatever sources and in whatever manner it may
                  select; and

         18.3.2   if the unpaid sum is of the principal amount of a LIBOR
                  Revolving Loan which became due and payable other than on the
                  last day of any Interest Period relating to it, the first
                  default period applicable to that unpaid sum shall be of a
                  duration equal to the unexpired portion of that Interest
                  Period and the rate of interest applicable to it during that
                  Interest Period shall be the rate per annum equal to the sum
                  of two per cent (2%) and the rate applicable to it immediately
                  before it became due.

18.4     PAYMENT AND COMPOUNDING OF DEFAULT INTEREST

         Any interest accrued due under clause 18.3 in respect of an unpaid sum
         shall be due and payable and shall be paid by the relevant Obligor at
         the end of the period by reference to which it is calculated or on such
         other date as the Agent may specify by written notice to Ideal. If not
         paid on the due date, the interest shall be added to and form part of
         the unpaid sum on which interest shall accrue and be payable in
         accordance with the provisions of this clause 18.

19       INDEMNITIES AND CURRENCY OF ACCOUNT

19.1     GENERAL INDEMNITIES

         Ideal shall (or will procure that an Obligor will) indemnify on demand
         each of the Beneficiaries against any funding or other cost, loss
         (including any foreign exchange contract loss incurred by any of them),
         expense or liability which it may sustain or incur, directly or
         indirectly, as a result of:

         19.1.1   a Loan not being made by reason of any of the conditions set
                  out in Schedule 2 not being satisfied or any Borrower
                  cancelling or purporting to cancel a Utilisation Notice; or

         19.1.2   the occurrence of any Default; or


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         19.1.3   the receipt or recovery by it (or the Agent on its behalf) of
                  all or any part of its share of any Loan or unpaid sum other
                  than on the last day of any Interest Period relating to that
                  Loan or unpaid sum.

19.2     BREAK COSTS

         Ideal's liability under clause 19.1.3 shall include the amount (if any)
         by which (i) the additional interest which would have been payable
         under this Agreement on the amount so received or recovered had it been
         received or recovered by the relevant party on the last day of the
         relevant Interest Period exceeds (ii) the amount of interest which, in
         the opinion of the Beneficiary concerned, would have been payable to
         such Beneficiary on the last day of that Interest Period in respect of
         a deposit denominated in the currency of the Loan or unpaid sum in
         question equal to the amount so received or recovered placed by it with
         a prime bank in London for a period starting on the second business day
         following the date of such receipt or recovery and ending on the last
         day of that Interest Period. For the avoidance of doubt (but without
         prejudice to their obligations to pay break costs), neither Ideal nor
         any other relevant Obligor shall be liable to compensate any
         Beneficiary for any loss of Applicable Margin if any amount is repaid,
         prepaid or cancelled by virtue of the operation of clauses 9.3 or
         12.1.2.

19.3     CURRENCY INDEMNITY

         Any amount received or recovered by any Beneficiary in respect of any
         sum expressed to be due to it from any Obligor under any Finance
         Document in a currency other than the currency (the "CONTRACTUAL
         CURRENCY") in which such sum is so expressed to be due (whether as a
         result of, or of the enforcement of, any judgment or order of a court
         or tribunal of any jurisdiction, the winding-up of such Obligor or
         otherwise) shall only constitute a discharge to such Obligor to the
         extent of the amount of the contractual currency that the recipient is
         able, in accordance with its usual practice, to purchase with the
         amount of the currency so received or recovered on the date of receipt
         or recovery (or, if later, the first date on which such purchase is
         practicable). If the amount of the contractual currency so purchased is
         less than the amount of the contractual currency so expressed to be
         due, such Obligor shall indemnify the recipient against any loss
         sustained by it as a result, including the cost of making any such
         purchase.

19.4     INDEMNITY TO THE AGENT

         Ideal shall (or shall procure that an Obligor shall) promptly indemnify
         the Agent against any cost, loss or liability incurred by the Agent
         (other than any loss occasioned by the gross negligence or wilful
         misconduct of the Agent) as a result of:

         19.4.1   investigating any event which it reasonably believes is a
                  Default; or


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         19.4.2   entering into or performing any foreign exchange contract for
                  the purposes of any Loan being made in a Foreign Currency; or

         19.4.3   acting or relying on any notice, request or instruction which
                  it believes to be genuine, correct and appropriately
                  authorised.

19.5     NATURE OF INDEMNITIES

         Each of the indemnities in this clause 19 constitutes a separate and
         independent obligation from the other obligations in this Agreement,
         shall give rise to a separate and independent cause of action, shall
         apply irrespective of any time or indulgence granted by the Agent or
         any Lender and shall continue in full force and effect notwithstanding
         any order, judgment, claim or proof for a liquidated amount in respect
         of any sum due under this Agreement or any other judgment or order.

20       PAYMENTS

20.1     CURRENCY OF ACCOUNT AND PAYMENT

         Sterling is the currency of account and payment for all sums at any
         time due from the Borrower under or in connection with any of the
         Finance Documents (including damages) provided that (i) each repayment
         of a Loan or a part thereof shall be made in the currency in which such
         Loan is denominated at the time of that repayment; (ii) each payment of
         interest shall be made in the currency in which the sum in respect of
         which such interest is payable is denominated; (iii) each payment in
         respect of costs and expenses shall be made in the currency in which
         the same were incurred; and (iv) any amount expected to be payable in a
         currency other than sterling shall be paid in that other currency.

20.2     PAYMENTS BY THE BORROWER AND THE LENDERS

         On each date on which this Agreement requires an amount to be paid by
         any Obligor or any of the Lenders to the Agent, that Obligor or, as the
         case may be, such Lender shall make the same available to the Agent:

         20.2.1   where such amount is denominated in sterling, by payment in
                  sterling and in same day funds (or in such other funds as may
                  for the time being be customary in London for the settlement
                  in London of banking transactions in sterling) to the Agent at
                  Bank of America, NA, 1 Alie Street, London E1 8DE, sort code
                  16-50-50, Attn: Loans Service (or as the Agent may otherwise
                  specify for this purpose); or

         20.2.2   where such amount is denominated in a Foreign Currency (other
                  than euro), by payment in such Foreign Currency and in
                  immediately available, freely transferable, cleared funds to
                  such account with such bank in the principal financial centre
                  of the


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                  country of such Foreign Currency as the Agent may specify for
                  this purpose; or

         20.2.3   where such amount is denominated in euro, such sum shall be
                  made available to the Agent by payment in euro and in
                  immediately available, freely transferable, cleared funds to
                  such account with such bank in such principal financial centre
                  in such participating member state of the European Union or in
                  London as the Agent shall from time to time nominate for this
                  purpose.

20.3     PAYMENTS BY THE AGENT

         Save as otherwise provided herein, each payment received by the Agent
         for the account of another person pursuant to clause 20.2 shall be made
         available by the Agent (subject, without any liability therefor, for
         delays outside the Agent's control in crediting cleared funds) to such
         other person (in the case of a Lender, for the account of its Facility
         Office) for value the same day (provided that such payment has been
         received by the Agent by no later than 12.00 noon) by transfer to such
         account of such person with such bank in the principal financial centre
         of the country of the currency of such payment as such person shall
         have previously notified to the Agent or (in the case of a Borrower) in
         the agreed currency denomination to the account of that Borrower
         specified in the Utilisation Notice.

20.4     PAYMENTS DUE ON NON-BUSINESS DAYS

         If any payment of principal, interest, premium or other sum to be made
         hereunder becomes due and payable on a day other than a business day,
         the due date of payment shall be extended to the next succeeding
         business day and interest thereon shall be payable at the applicable
         interest rate during such extension (unless that next succeeding
         business day falls in the following calendar month in which case the
         due date of payment shall be the immediately preceding business day).

20.5     IMPRACTICABLE TO MAKE PAYMENTS

         If, at any time, it shall become impracticable (by reason of any action
         of any governmental authority or any change in law, exchange control
         regulations or any similar event) for any Obligor to make any payments
         hereunder in the manner specified in clause 20.2, then that Obligor may
         agree with each or any of the Lenders to make alternative arrangements
         for the payment direct to such Lender of amounts due to such Lender
         hereunder provided that, in the absence of any such agreement with any
         Lender, that Obligor shall be obliged to make all payments due to such
         Lender in the manner specified in this Agreement. Upon reaching such
         agreement the relevant Obligor and such Lender shall immediately notify
         the Agent and shall thereafter promptly notify the Agent of all
         payments made direct to such Lender.


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20.6     NO SET-OFF OR COUNTERCLAIM

         All payments made by an Obligor under this Agreement shall be made free
         and clear of and without any deduction for or on account of any set-off
         or counterclaim.

20.7     REFUNDING OF PAYMENTS

         Where a sum is to be paid to the Agent under this Agreement for account
         of another person, the Agent shall not be obliged to (but may) make the
         same available to that other person until it has been able to establish
         to its satisfaction that it has actually received that sum. If and to
         the extent that it does so but it proves to be the case that it had not
         actually received the sum which it paid out, then, the person to whom
         the Agent made that sum available shall on request refund it to the
         Agent and that person or (at the option of the Agent) the person by
         whom that sum should have been made available shall on request pay to
         the Agent the amount (as certified by the Agent) which will indemnify
         the Agent against any funding or other cost, loss, expense or liability
         which it may have sustained or incurred as a result of paying out that
         sum before receiving it.

20.8     DEBIT TO LOAN ACCOUNT

         The Agent is hereby authorised to debit all Swingline Loans and all
         Reference Rate Revolving Loans and interest thereon to a loan account
         or accounts denominated in the currency denomination of each such
         Swingline Loan maintained with the Agent. All fees, commissions, costs,
         expenses and other charges under or pursuant to the Finance Documents
         and all payments made and out-of-pocket expenses incurred by the Agent
         and/or the Lenders pursuant to the Finance Documents will be debited to
         such loan account(s) as of the date due from the relevant Borrower or
         the date paid or incurred by the Agent and/or the Lenders, as the case
         may be.

20.9     CHANGE OF CURRENCY TO EURO

         With effect from the date (if any) upon which sterling is converted
         into euro in accordance with EMU legislation:

         20.9.1   REDENOMINATION: each obligation under this Agreement of any
                  party to this Agreement which, up to such time, had been
                  denominated in sterling shall be redenominated into euro in
                  accordance with EMU legislation provided that, if and to the
                  extent that any EMU legislation provides that an amount
                  denominated either in euro or in sterling as a national
                  currency unit of the euro can be paid by the debtor either in
                  euro or in that national currency unit, each party to this
                  Agreement shall be entitled to pay or repay any such amount
                  either in euro or in sterling as such national currency unit;

         20.9.2   ROUNDING: without prejudice and in addition to any method of
                  conversion or rounding prescribed by any EMU legislation and
                  without prejudice to the respective liabilities for


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                  indebtedness of any Obligor to the Beneficiaries and the
                  Beneficiaries to any Obligor under or pursuant to this
                  Agreement each reference in this Agreement to a minimum amount
                  (or an integral multiple thereof) in sterling to be paid to or
                  by the Agent and/or the Lenders shall be replaced by a
                  reference to such reasonably comparable and convenient amount
                  (or an integral multiple thereof) in euro as the Agent (after
                  consultation with Ideal but without prejudice to its rights
                  under this clause 20.9.2) may from time to time specify; and

         20.9.3   CONSEQUENTIAL CHANGES: each provision of this Agreement shall
                  be subject to such reasonable changes of construction as the
                  Agent may (after consultation with Ideal but without prejudice
                  to its rights under this clause 20.9.3)from time to time
                  specify to be necessary or appropriate to reflect the
                  changeover of sterling to euro.

20.10    ORDER OF DISTRIBUTION TO LENDERS

         If the amount received by the Agent from an Obligor (or, as the case
         may be, from the Security Trustee pursuant to the exercise by the
         Security Trustee of any rights or powers it may have pursuant to the
         Security Documents) on any date is less than the total sum due under
         this Agreement on that date, the Agent shall apply that amount in or
         towards payment of the following sums in the following order:

         20.10.1  first, in or towards payment of any sum then due to the Agent
                  in its capacity as such;

         20.10.2  secondly, in or towards payment of any sum then due to the
                  Arranger in its capacity as such;

         20.10.3  thirdly, in or towards payment pro rata of any sums (other
                  than principal of or interest on the Loans) then due to the
                  Lenders (or any of them);

         20.10.4  fourthly, in or towards payment pro rata of any interest then
                  due;

         20.10.5  fifthly, in or towards payment pro rata of any principal then
                  due,

         and any such applications shall be made notwithstanding any purported
         appropriation to the contrary by any person.

21       SET-OFF

         Each Obligor authorises any other party to this Agreement at any time
         after an Event of Default has occurred and is continuing and without
         prior notice to that Obligor to apply any credit balance (whether or
         not then due) to which that Obligor is at any time beneficially
         entitled on any account at any office of that party in or towards
         satisfaction of any sum then due from it to that party under this
         Agreement and unpaid and for this purpose to purchase with the


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         monies standing to the credit of any such account such other currencies
         as may be necessary to effect such application (but so that nothing in
         this clause 21 shall be effective to create a charge). No party shall
         be obliged to exercise any of its rights under this clause which shall
         be without prejudice to and in addition to any right of set-off,
         combination of accounts, lien or other right to which it is at any time
         otherwise entitled (whether by operation of law, contract or
         otherwise).

22       FEES

22.1     UNUSED LINE FEE

         For every month during the term of this Agreement, Ideal shall (or
         shall procure that another Obligor shall) pay the Agent for the account
         of the Lenders a fee (the "UNUSED LINE FEE") in an amount equal to
         0.25% per annum, multiplied by the average daily amount by which the
         Total Commitments exceed the sum of the sterling equivalent of (i) the
         average daily outstanding amount of the Revolving Loans and Swingline
         Loans during such month (with the outstanding amount of Revolving Loans
         and Swingline Loans calculated for this purpose by applying payments
         immediately upon receipt) and (ii) the maximum contingent liability of
         the Issuer under each Letter of Credit and Guarantee or, if any demand
         is made under any Letter of Credit or Guarantee, the average daily
         amount outstanding under any account to which any such payment made
         thereunder is debited. Such fee shall be calculated on the basis of a
         year of three hundred sixty five (365) days and actual days elapsed,
         and shall be payable to the Agent on the first day of each month
         following the Closing Date and on the termination of this Agreement, in
         each case with respect to the prior month or portion thereof.

22.2     ARRANGEMENT FEE

         Ideal shall pay to the Arranger for its own account an arrangement fee
         in the amount and at the times agreed in a letter dated on or around
         the Effective Date from the Arranger to Ideal.

22.3     COLLATERAL MANAGEMENT FEE

         Ideal will pay the Agent for its own account a fee of an amount set out
         in a letter of even date addressed by the Agent to Ideal (the
         "COLLATERAL MANAGEMENT FEE"). The total amount of such fee shall be
         deemed to have accrued due and become payable in full on the Closing
         Date but the Agent agrees, subject to clause 29.3, that such fee shall
         be paid in equal instalments on the Closing Date and on the first day
         of each calendar month thereafter prior to the termination of this
         Agreement.

22.4     AUDIT FEE

         Ideal shall pay to the Agent for its own account an audit fee of
         (pound)500 per day per field examiner charge (the "AUDIT FEE") in
         respect of the periodic inspection of the Collateral required by the
         Agent in accordance with this Agreement and shall also pay on demand
         all out of pocket expenses incurred by the Agent in connection with any
         such inspection.


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22.5     LETTER OF CREDIT AND GUARANTEE FEE

         Ideal agrees to pay (or procure that the relevant Borrower shall pay)
         to the Agent for account of the Issuer a fee (the "LETTER OF CREDIT AND
         GUARANTEE FEE") equal to 2.50% per annum of the face amount of each
         Letter of Credit or maximum contingent liability under each Guarantee
         issued by the Issuer, plus all out-of-pocket costs, fees and expenses
         incurred by the Issuer (other than where such fees, costs or expenses
         are indemnified pursuant to clause 6.11.2) in connection with the
         application for, issue of, or amendment to any Letter of Credit or
         Guarantee, such Letter of Credit and Guarantee Fee to be calculated on
         the basis of a year of 365 days and actual days elapsed and to be
         payable monthly in arrears on the first day of each month following any
         month in which a Letter of Credit or Guarantee was issued and/or in
         which a Letter of Credit or Guarantee remains outstanding and, to the
         extent that it has been calculated by reference to a Letter of Credit
         or Guarantee denominated other than in sterling, shall be satisfied by
         payment of the sterling equivalent of the amount so calculated. Any
         out-of-pocket costs, fees and expenses incurred by the Issuer in
         connection with the application for, issue of, or amendment to any
         Letter of Credit or Guarantee shall be payable at the time of such
         application, issue or amendment.

22.6     AGENCY AND TRUSTEE FEES

         Ideal shall pay to the Agent and the Security Trustee each for its own
         account the agency fees or, as the case may be, the trustee fees
         specified in the letter dated on or about the date of this Agreement
         from the Agent and the Security Trustee respectively to Ideal. The full
         amount of such fees shall be deemed to have accrued due and become
         payable in full on the Closing Date but the Agent and the Security
         Trustee each agree, subject to clause 29.3, that such fees shall be
         paid in equal instalments on the Closing Date and on the first day of
         each calendar month thereafter prior to the termination of this
         Agreement.

22.7     ADDITIONAL MONITORING AND ADMINISTRATION FEE

         Without prejudice to any other rights that the Agent, the Security
         Trustee or any of the Beneficiaries may have at such time under this
         Agreement or any other Finance Document, Ideal agrees that, upon the
         appointment of a receiver, administrator, administrative receiver,
         trustee, examiner or any other similar officer or office holder of any
         Obligor or of any or all of the assets of any Obligor or upon an order
         being made for the winding-up, liquidation or dissolution of any
         Obligor (the date of such event or occurrence being the "INSOLVENCY
         DATE"), Ideal shall become liable to pay forthwith to the Agent for its
         own account, an additional monitoring and administrative fee (the
         "ADDITIONAL MONITORING AND ADMINISTRATION FEE") in an amount equal to
         one per cent. (1%) of the higher of (a) the aggregate total of all
         Accounts then due and owing from any Account Debtor to the Borrowers
         (as determined by the Agent by reference to the most recent information
         provided to it under clause 15.2 and clause 16.4) and (b) the Total
         Commitments, in each case, as at the Insolvency Date.


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23       PRO RATA SHARING

23.1     If a Beneficiary (a "RECOVERING BENEFICIARY") receives or recovers any
         amount from an Obligor other than in accordance with clause 20 and
         applies that amount to a payment due under the Finance Documents then:

         23.1.1   the Recovering Beneficiary shall, within three business days,
                  notify details of the receipt or recovery to the Agent;

         23.1.2   the Agent shall determine whether the receipt or recovery is
                  in excess of the amount the Recovering Beneficiary would have
                  been paid had the receipt or recovery been received or made by
                  the Agent and distributed in accordance with clause 20,
                  without taking account of any tax which would be imposed on
                  the Agent in relation to the receipt, recovery or
                  distribution; and

         23.1.3   the Recovering Beneficiary shall, within three business days
                  of demand by the Agent, pay to the Agent an amount (the
                  "SHARING PAYMENT") equal to such receipt or recovery less any
                  amount which the Agent determines may be retained by the
                  Recovering Beneficiary as its share of any payment to be made,
                  in accordance with clause 20.11.

23.2     REDISTRIBUTION OF PAYMENTS

         The Agent shall treat the Sharing Payment as if it had been paid by the
         relevant Obligor and distribute it between the Beneficiaries (other
         than the Recovering Beneficiary) in accordance with clause 18.9.

23.3     RECOVERING BENEFICIARY'S RIGHTS

23.3.1   On a distribution by the Agent under clause 23.2 the Recovering
         Beneficiary will be subrogated to the rights of the Beneficiaries which
         have shared in the redistribution.

23.3.2   If and to the extent that the Recovering Beneficiary is not able to
         rely on its rights under sub-clause 23.3.1 above, the relevant Obligor
         shall be liable to the Recovering Beneficiary for a debt equal to the
         Sharing Payment which is immediately due and payable.

23.4     REVERSAL OF REDISTRIBUTION

         If any part of the Sharing Payment received or recovered by a
         Recovering Beneficiary becomes repayable and is repaid by that
         Recovering Beneficiary, then:

         23.4.1   each Beneficiary which has received a share of the relevant
                  Sharing Payment pursuant to clause 23.2 shall, upon request of
                  the Agent, pay to the Agent for account of that Recovering
                  Beneficiary an amount equal to the appropriate part of its
                  share of the Sharing Payment (together with an amount as is
                  necessary to reimburse that Recovering Beneficiary for its


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                  proportion of any interest on the Sharing Payment which that
                  Recovering Beneficiary is required to pay); and

         23.4.3   that Recovering Beneficiary's rights of subrogation in respect
                  of any reimbursement shall be cancelled and the relevant
                  Obligor will be liable to the reimbursing Beneficiary for the
                  amount so reimbursed.

23.5     EXCEPTIONS

23.5.1   This clause 23 shall not apply to the extent that the Recovering
         Beneficiary would not, after making any payment pursuant to this clause
         23, have a valid and enforceable claim against the relevant Obligor.

23.5.2   A Recovering Beneficiary is not obliged to share with any other
         Beneficiary any amount which the Recovering Beneficiary has received or
         recovered as a result of taking legal or arbitration proceedings, if:

         (a)      it notified that other Beneficiary of the legal or arbitration
                  proceedings; and

         (b)      that other Beneficiary had an opportunity to participate in
                  those legal or arbitration proceedings but did not do so as
                  soon as reasonably practicable having received notice and did
                  not take separate legal or arbitration proceedings.

24       COSTS, EXPENSES AND STAMP DUTIES

24.1     INITIAL AND CONTINUING COSTS AND EXPENSES

         Ideal shall (or shall procure that an Obligor shall), from time to time
         on demand of the Agent, reimburse the Agent for all costs and expenses
         (including, without limitation, legal fees) together with VAT thereon
         incurred by it in connection with the negotiation, preparation,
         execution and administration of each of the Finance Documents and the
         completion of the transactions contemplated therein and/or any
         amendment, variation or novation of, supplement to, or waiver or
         consent in respect of, any of the Finance Documents, the cost of any
         appraisals, inspections, verifications and audits of the Collateral or
         Group's operation the costs and expenses of forwarding loan proceeds,
         of the collection of all cheques and other items of payment, of the
         establishment and maintenance of any Receivables Account or other
         account and the costs and expenses of defending any claims made or
         threatened against the Agent arising out of the transactions
         contemplated hereby.

24.2     ENFORCEMENT COSTS AND EXPENSES

         Ideal shall, from time to time on demand of the Agent, reimburse the
         Agent, the Security Trustee and each of the Lenders for all costs and
         expenses (including legal fees and a reasonable estimate of the
         allocable cost of in-house counsel and staff) together with VAT thereon
         incurred in or in connection with the termination of this Agreement or
         the preservation and/or


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         enforcement of any of the rights of any of the Beneficiaries under any
         of the Finance Documents.

24.3     STAMP DUTIES

         Ideal shall (or shall procure that an Obligor shall) pay all stamp,
         registration and other taxes to which any of the Finance Documents or
         any judgment given in connection with any of the Finance Documents is
         or at any time may be subject and shall, from time to time on demand of
         the Agent, indemnify the Agent and any other Beneficiaries against any
         liabilities, costs, claims and expenses resulting from any failure to
         pay or any delay in paying any such tax.

24.4     PROVISIONS RELATING TO PAYMENTS

         All payments to be made by Ideal (or any other Obligor) under this
         clause 24 shall be made whether or not any Loan is made or Letter of
         Credit or Guarantee is issued under this Agreement.

24.5     INDEMNITY BY BANKS

         If Ideal fails to perform any of its obligations under this clause 24,
         each Lender shall (i) in the proportion borne by its Outstandings to
         the aggregate of the Outstandings of all the Lenders; or (ii) if there
         are no Outstandings, in the proportion borne by its Commitment to the
         Total Commitments; or (iii) if there are no Outstandings and the Total
         Commitments have been cancelled at such time, in the proportion borne
         by its Commitment to the Total Commitments immediately before they were
         cancelled (in each case determined, and as at such time as may be
         specified, by the Agent), indemnify the Agent, the Security Trustee and
         the other Lenders against any loss incurred by any of them as a result
         of such failure (save for any failure caused by the gross negligence or
         wilful default of any such party) and Ideal shall forthwith reimburse
         each Lender for any payment made by it pursuant to this clause 24.5.

25       CALCULATIONS AND EVIDENCE OF DEBT

25.1     BASIS OF CALCULATION

         Interest shall accrue from day to day and shall be calculated in the
         case of sterling on the basis of a year of 365 days (or, in the case of
         dollars or euros, 360 days or, in any case where market practice
         differs, in accordance with market practice) and the actual number of
         days elapsed (not counting within any Interest Period the last day of
         that Interest Period). If the basis of accrual of interest or any other
         amount expressed in this Agreement in respect of sterling shall be
         inconsistent with any convention or practice in the London Interbank
         Market for the basis of accrual of interest or any other amount in
         respect of euro, such expressed basis shall be replaced by such
         convention or practice with effect from the date (if any) of conversion
         of sterling into euro in accordance with EMU legislation.


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25.2     FAILURE TO SUPPLY QUOTATIONS

         In on any occasion a Reference Bank or a Lender fails to supply the
         Agent with a quotation required of it under any provision of this
         Agreement, the rate for which such quotation was required shall be
         determined from those quotations which are supplied to the Agent.

25.3     LOAN ACCOUNTS

         Each Lender shall maintain in accordance with its usual practice
         accounts evidencing the amounts from time to time lent by and owing to
         it under this Agreement.

25.4     CONTROL ACCOUNT

         The Agent shall maintain on its books a control account or accounts in
         which shall be recorded (i) the amount of any Loan or unpaid sum made
         or arising under this Agreement and each Lender's share in such Loan or
         unpaid sum, (ii) the amount of all principal, interest and other sums
         due or to become due from each Borrower to each of the Lenders under
         this Agreement and each Lender's share in each such amount and (iii)
         the amount of any sum received or recovered by the Agent under this
         Agreement and each Lender's share in such amount.

25.5     LENDERS' BOOKS AND RECORDS.

         Each Obligor agrees that the Agent's and the Lenders' books and records
         showing all amounts from time to time lent by and owing to any of them
         under this Agreement and the transactions pursuant to this Agreement
         and the other Finance Documents shall be admissible in any action or
         proceeding arising therefrom, and shall constitute prima facie proof
         thereof (in the absence of manifest error), irrespective of whether any
         such obligations are also evidenced by any other instrument.

25.6     MONTHLY STATEMENTS

         The Agent will provide to Ideal a monthly statement of Loans, payments
         and other transactions pursuant to this Agreement. Such statement shall
         be deemed correct, accurate, and binding on the Obligors and as an
         account stated (except for reversals and reapplications of payments
         made as provided in clause 20.7 and corrections of errors).

25.7     CERTIFICATES

         A certificate by the Agent or any other Finance Party as to any sum
         payable by it under this Agreement or any other Finance Document shall,
         in the absence of manifest error, be conclusive for the purposes of
         this Agreement and such Finance Documents and prima facie evidence in
         any legal action or proceedings arising out of or in connection with
         this Agreement or any other Finance Documents.


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25.8     VALUE ADDED TAX

         All consideration (including interest and fees) payable under a Finance
         Document by the Borrower to a Beneficiary shall be deemed to be
         exclusive of any VAT. If VAT is chargeable, the Borrower shall pay to
         the Beneficiary (in addition to and at the same time as paying the
         consideration) an amount equal to the amount of that VAT. Where a
         Finance Document requires the Borrower to reimburse a Beneficiary for
         any costs or expenses, the Borrower shall also at the same time pay and
         indemnify that Finance Party against all VAT incurred by that Finance
         Party in respect of the costs and expenses.

26       THE AGENT, THE ARRANGER, THE SECURITY TRUSTEE AND THE LENDERS

26.1     APPOINTMENT

         Each Lender, the Arranger and the Security Trustee hereby appoints the
         Agent to act as its agent in connection with this Agreement and the
         Agent and each of the Lenders hereby appoints the Security Trustee to
         act as its trustee under and in relation to the Security Documents
         pursuant to this Agreement and to hold the Trust Property as trustee
         for the Beneficiaries on the trusts and other terms contained in the
         Security Documents and each Beneficiary hereby irrevocably authorises
         the Agent and the Security Trustee to exercise such rights, powers and
         discretions as are specifically delegated to the Agent or, as the case
         may be, the Security Trustee by the terms of this Agreement and the
         Security Documents together with all such rights, powers and
         discretions as are reasonably incidental thereto provided that the
         Agent may not begin any legal action or proceeding in the name of a
         Lender without its consent.

26.2     ROLE OF THE ARRANGER

         Except as specifically provided in the Finance Documents, the Arranger
         has no obligations of any kind to any other party under or in
         connection with any Finance Document.

26.3     RELATIONSHIPS

         The Agent in its capacity as such is agent for the Security Trustee and
         the Lenders and shall not in any respect be the agent of any Borrower
         by virtue of this Agreement. Nothing in this Agreement shall constitute
         the Agent or the Arranger a trustee or fiduciary for the Security
         Trustee, any Lender, any Borrower or any other person.

26.4     RIGHTS OF THE AGENT AND THE SECURITY TRUSTEE

         Each of the Agent and the Security Trustee may:

         26.4.1   assume that any representation made by any Obligor in
                  connection with any of the Finance Documents is true, that no
                  Event of Default has occurred and that no Obligor is in breach
                  of or default under its obligations under any of the Finance
                  Documents, in each such case unless it has actual knowledge or
                  actual notice to the contrary;


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         26.4.2   assume that the Facility Office of each Lender is that set out
                  under its name at the end of this Agreement or, in the case of
                  a Transferee, at the end of the Transfer Certificate to which
                  it is a party as Transferee or, in the case of a Lender which
                  is an assignee or other successor of another Lender or former
                  Lender, the office notified to the Agent by the assignee or
                  other successor on or before the date it becomes a Lender or,
                  if the Agent has been notified by any Lender of any change to
                  its Facility Office in accordance with the terms of this
                  Agreement, that last notified to the Agent;

         26.4.3   engage and pay for the advice or services of any lawyers,
                  accountants, surveyors or other experts whose advice or
                  services may to it seem necessary, expedient or desirable and
                  rely upon any advice so obtained;

         26.4.4   rely as to any matters of fact which might reasonably be
                  expected to be within the knowledge of an Obligor upon a
                  certificate signed by or on behalf of that Obligor;

         26.4.5   rely upon any communication, certificate, legal opinion or
                  other document believed by it to be genuine;

         26.4.6   refrain from exercising any right, power or discretion vested
                  in it as agent or, as the case may be, as trustee under any of
                  the Finance Documents unless and until instructed by the
                  Majority Lenders as to whether or not such right, power or
                  discretion is to be exercised and, if it is to be exercised,
                  as to the manner in which it should be exercised and shall in
                  all cases be fully protected when acting, or refraining from
                  acting, in accordance with instructions from the Majority
                  Lenders;

         26.4.7   refrain from acting in accordance with any instructions of the
                  Majority Lenders to protect or enforce the rights of any
                  person under any of the Finance Documents until it has been
                  indemnified (or received confirmation that it will be so
                  indemnified) and/or secured to its satisfaction against any
                  and all costs, losses, expenses (including legal fees) and
                  liabilities which it will or may expend or incur in complying
                  with such instructions;

         26.4.8   retain for its benefit and without liability to account any
                  fee or other sum receivable by it for its own account;

         26.4.9   accept deposits, lend money to, provide any advisory or other
                  services to or engage in any kind of banking or other business
                  with any Company Group and, in each case, may do so without
                  liability to account.

26.5     OBLIGATIONS OF THE AGENT AND THE SECURITY TRUSTEE

         Each of the Agent and the Security Trustee shall:


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         26.5.1   promptly (or otherwise in accordance with the terms hereof)
                  advise each Lender of the contents of any notice or document
                  received by it from any Obligor under any of the Finance
                  Documents in its capacity as Agent or, as the case may be,
                  Security Trustee, except that details of any such
                  communication relating to a particular Lender shall be advised
                  to that Lender only;

         26.5.2   promptly notify each Lender of the occurrence of any Event of
                  Default or any default by any Obligor in the due performance
                  of or compliance with its obligations under any of the Finance
                  Documents of which the Agent or, as the case may be, the
                  Security Trustee has actual knowledge or actual notice;

         26.5.3   subject to the foregoing provisions of this clause 26, (in the
                  case of the Agent) act as agent under this Agreement or (in
                  the case of the Security Trustee) act as trustee for the
                  Beneficiaries in accordance with any instructions given to it
                  by the Majority Lenders or as this Agreement may require and
                  shall be fully protected in so doing. Unless expressly
                  provided otherwise in a Finance Document, any instructions
                  given by the Majority Lenders shall be binding on each of the
                  Beneficiaries;

         26.5.4   if so instructed by the Majority Lenders, refrain from
                  exercising any right, power or discretion vested in it in its
                  capacity as Agent (under this Agreement) or in its capacity as
                  Security Trustee (under the Finance Documents);

         26.5.5   have only those duties, obligations and responsibilities,
                  which it is hereby acknowledged in the case of the Agent are
                  only of a mechanical and administrative nature, expressly
                  specified in each of the Finance Documents to which it is a
                  party.

26.6     EXONERATION

         None of the Agent, the Arranger or the Security Trustee nor any of
         their respective personnel or agents shall be:

         26.6.1   responsible for the adequacy, accuracy, completeness or
                  reasonableness of any representation, warranty, statement,
                  projection, assumption or information in any information
                  memorandum or similar document prepared in connection with any
                  proposed syndication of the Facilities, any Finance Document
                  or any notice or other document delivered under or in
                  connection with any Finance Document;

         26.6.2   responsible for the execution, delivery, validity, legality,
                  adequacy, enforceability or admissibility in evidence of any
                  Finance Document or any such notice or other document;

         26.6.3   obliged to enquire as to the occurrence or continuation of a
                  Default or Event of Default or the performance or compliance
                  by any Obligor with its obligations under any Finance
                  Documents;


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         26.6.4   bound to account to any person for any sum or the profit
                  element of any sum received by it for its own account;

         26.6.5   bound to disclose to any other person any information relating
                  to any Obligor or any Group Company, if such disclosure would
                  or might in its opinion constitute a breach of any law or
                  regulation or be otherwise actionable at the suit of any
                  person.

26.7     CREDIT ASSESSMENT

         Each Lender confirms that it has itself been, and will continue to be,
         solely responsible for making its own independent investigation and
         appraisal of the business and operations, financial condition,
         prospects, creditworthiness, status and affairs of each Borrower, each
         other Obligor and each Group Company or any other person and has not
         relied, and will not at any time rely, on the Agent, the Security
         Trustee or any other Lender:

         26.7.1   to check or enquire on its behalf into the adequacy, accuracy,
                  completeness or reasonableness of any representation,
                  warranty, statement, projection, assumption or information
                  provided by any Obligor or any other person under or in
                  connection with any Finance Document or the transactions
                  contemplated in any Relevant Agreement (whether or not such
                  information has been or is at any time hereafter circulated to
                  it by the Agent or the Security Trustee including any
                  contained in any information memorandum or similar document
                  prepared in connection with any proposed syndication of the
                  Facilities); or

         26.7.2   to assess or keep under review on its behalf the business and
                  operations, financial condition, prospects, creditworthiness,
                  status or affairs of any Borrower, other Obligor or Group
                  Company or any other person.

26.8     THE AGENT AND THE SECURITY TRUSTEE AS LENDERS

         The Agent and the Security Trustee shall each have the same rights and
         powers with respect to its Commitment and Outstandings (if any) as any
         other Lender and may exercise those rights and powers as if it were not
         also acting as the Agent or, as the case may be, the Security Trustee.

26.9     INDEMNITY

         Each Lender agrees that it shall, from time to time on demand of the
         Agent and/or Security Trustee, indemnify the Agent and/or Security
         Trustee (to the extent not reimbursed by Ideal or any other Obligor and
         without prejudice to any liability of the Borrower under this
         Agreement) (i) in the proportion borne by its Outstandings to the
         aggregate of the Outstandings of all the Lenders; or (ii) if there are
         no Outstandings, in the proportion borne by its Commitment to the Total
         Commitments; or (iii) if there are no Outstandings and the Total
         Commitments have been cancelled at such time, in the proportion borne
         by its Commitment to the Total Commitments immediately before they were
         cancelled (in each case determined, and as at such time as may be
         specified,


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         by the Agent), against all costs, claims, expenses (including legal
         fees) and liabilities which it may sustain or incur in connection with
         this Agreement or the performance of its obligations and
         responsibilities under this Agreement save to the extent that they are
         sustained or incurred by reason of the gross negligence or wilful
         misconduct of the Agent or the Security Trustee or any of its personnel
         or agents and Ideal shall (or shall procure that an Obligor shall)
         forthwith reimburse each Lender for any payment made by it pursuant to
         this clause 26.9.

26.10    RESIGNATION

26.10.1  RESIGNATION: Each of the Agent and the Security Trustee may following
         consultation with Ideal and the Lenders resign its appointment under
         any of the Finance Documents at any time by giving not less than thirty
         days' notice in writing to that effect to each of the other parties to
         this Agreement provided that such resignation shall not become
         effective until a successor to the Agent or, as the case may be, the
         Security Trustee has been appointed and accepted its appointment in
         accordance with the following provisions of this clause 26.10 and, in
         the case of the Security Trustee, all necessary documents have been
         entered into to ensure that the benefit of the Security Documents is
         held by such successor.

26.10.2  APPOINTMENT OF SUCCESSOR: If the Agent or, as the case may be, the
         Security Trustee gives notice of its resignation the Majority Lenders
         may appoint a successor. If the Majority Lenders have not within sixty
         days after such notice of resignation appointed a successor to the
         Agent or, as the case may be, the Security Trustee (which shall, in
         either such case, be a reputable and experienced bank with an office in
         London) which shall have accepted such appointment, the retiring Agent
         or, as the case may be, Security Trustee shall have the right to
         appoint such a successor itself.

26.10.3  DISCHARGE: If a successor to the Agent or, as the case may be, Security
         Trustee is appointed under the provisions of this clause 26.10 then the
         retiring Agent or, as the case may be, retiring Security Trustee shall
         be discharged from any further obligations under the Finance Documents
         but shall remain entitled to the benefit of the provisions of this
         clause 26 and its successor and each of the other parties to this
         Agreement shall have the same rights and obligations amongst themselves
         as they would have had if such successor had been a party to this
         Agreement.

26.10.4  DISCLOSURE: The retiring Agent or, as the case may be, Security
         Trustee, shall make available to its successor such documents and
         records and provide such assistance as the successor may reasonably
         request for the purpose of performing its functions under the Finance
         Documents. Notwithstanding any provision in any Finance Document to the
         contrary, neither the Agent nor the Security Trustee shall be obliged
         to disclose to any person any confidential or other information if the
         disclosure would or might in its reasonable opinion constitute a breach
         of any law or fiduciary duty.


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27       TRUSTEE PROVISIONS

27.1     DECLARATION OF TRUST

         The Security Trustee shall hold the Trust Property in trust for the
         benefit of the Beneficiaries on the terms and subject to the conditions
         set out in this Agreement and the terms of the other Finance Documents.
         Each Beneficiary hereby confirms its approval of the Finance Documents
         and any security created or to be created pursuant thereto and hereby
         authorises, empowers and directs the Security Trustee (by itself or
         such person(s) as it may nominate) to execute and enforce the same as
         trustee (and whether or not expressly in the Beneficiaries' names) on
         its behalf.

27.2     PERPETUITY PERIOD

         The perpetuity period under the rule against perpetuities (if
         applicable) shall be the period of eighty years from the date of this
         Agreement.

27.3     SUMS RECEIVED BY THE SECURITY TRUSTEE

         Pending distribution under clause 27.4, the Security Trustee shall, if
         reasonably practicable, place any sum received, recovered or held by it
         in respect of the Trust Property in an interest bearing suspense
         account with a bank or financial institution in the name of or under
         the control of the Security Trustee. The interest paid on such account
         shall be credited to the relevant account.

27.4     APPLICATION OF SUMS RECEIVED

         Subject to the other provisions of this clause 27, the Security Trustee
         shall apply all amounts standing to the credit of any account referred
         to in clause 27.3 and any other amounts realised pursuant to the
         exercise of any rights or powers it might have pursuant to any of the
         Security Documents:

         27.4.1   first, in the payment of any costs, charges and expenses of or
                  incidental to the appointment of any Receiver pursuant to the
                  Security Documents, the payment of his remuneration and the
                  payment and discharge of any other Expenses incurred by or on
                  behalf of the Receiver;

         27.4.2   secondly, in or towards payment of any debts or claims which
                  are by statute payable in preference to the Secured
                  Obligations but only to the extent to which such debts or
                  claims have such preference;

         27.4.3   thirdly, in or towards payment and discharge pro rata of any
                  Secured Obligations then due, owing or incurred to the
                  Security Trustee, in its capacity as Security Trustee (and not
                  in any other capacity) for its own account; and

         27.4.4   fourthly, in payment to the Agent to be applied by the Agent
                  in or towards payment and discharge of the balance of the
                  Secured Obligations (if any) in accordance with the provisions
                  of


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                  clause 20.10 provided that, when distributing sums in
                  accordance with this clause 27.4, the Security Trustee will
                  treat any contingent liability as an actual liability and
                  distribute to the party entitled thereto accordingly. Any such
                  party receiving sums in respect of a contingent liability
                  shall place such sums on deposit with such bank (not being a
                  bank entitled to exercise any right of set-off or combination
                  or consolidation of accounts or having the benefit of any
                  encumbrance over such deposit) and on such terms as the
                  Security Trustee may approve and, if such contingent liability
                  shall fail to mature, shall return such sums (together with
                  any interest earned thereon) to the Security Trustee for
                  distribution in accordance with the terms of this clause 27.4.

27.5     SECURITY TRUSTEE'S SOLE RIGHT TO APPROPRIATE

         No Obligor shall have the right to appropriate any payment to, or other
         sum received, recovered or held by, the Security Trustee in or towards
         payment of any particular part of the Secured Obligations and the
         Security Trustee shall have the exclusive right to appropriate any such
         payment or other sum as provided in this clause 27.

27.6     TIMING OF DISTRIBUTION

         Distributions by the Security Trustee shall be made at such times as
         the Security Trustee in its absolute discretion determines to be as
         soon as is reasonably practicable, having regard to all relevant
         circumstances, and the Security Trustee shall have no liability
         whatsoever for any loss or damage which any Beneficiary might sustain
         as a consequence of the timing of any such distribution.

27.7     DATE FOR CALCULATION OF SECURED OBLIGATIONS

         For the purpose of any distribution by the Security Trustee, the
         Security Trustee may, by notice to the Beneficiaries, fix a date (being
         not earlier than the date of such notice) as at which the amount of the
         Secured Obligations are to be calculated.

27.8     CERTIFICATE FROM BENEFICIARY

         For the purposes of determining the amount of any payment to be made to
         any Beneficiary pursuant hereto the Security Trustee shall be entitled
         to call for and rely upon (and it is the intention of the parties that
         the Security Trustee shall rely upon) a certificate from the relevant
         Beneficiary of the amount and nature of any amount due, owing or
         incurred to the relevant Beneficiary at the date fixed by the Security
         Trustee for such purpose and as to such other matters as the Security
         Trustee may deem necessary or desirable to enable it to make a
         distribution.

27.9     MISTAKEN PAYMENTS

         If the Security Trustee makes any distribution contrary to any of the
         provisions of this clause 27 or any distribution made by it otherwise
         transpires to have


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         been invalid or the Security Trustee and the person receiving such
         distribution agree that it should be refunded, the recipient shall, to
         the extent that no charge is thereby created, hold the proceeds of that
         distribution on trust to repay to the Security Trustee forthwith on
         demand. If the trust imposed by this clause 28.9 cannot be given effect
         to for whatever reason, including the possible creation thereby of a
         charge, the relevant recipient shall, if and when so requested by the
         Security Trustee, pay an amount equal to the proceeds of that
         distribution required to be held on trust to the Security Trustee.

27.10    SUPPLEMENT TO TRUSTEE ACTS 1925 & 2000

         By way of supplement to the Trustee Acts 1925 & 2000 it is expressly
         declared as follows:

         27.10.1  EXPERTS: the Security Trustee may, in relation to the Security
                  Documents, act or rely upon the opinion or advice of, or any
                  information obtained from, any lawyer, valuer, surveyor,
                  broker, auctioneer, accountant or other expert commissioned by
                  the Security Trustee and shall not be responsible to anyone
                  for any loss or damage occasioned by so acting or relying. Any
                  such opinion, advice or information may be sent or obtained by
                  letter, fax, e-mail or otherwise and the Security Trustee will
                  not be liable to anyone for acting in good faith on any
                  opinion, advice or information purporting to be conveyed by
                  such means even if it contains some error or is not authentic
                  or validly signed;

         27.10.2  CERTIFICATE OF IDEAL: the Security Trustee may call for and
                  may accept as sufficient evidence a certificate of Ideal
                  signed by any director of Ideal to the effect that any
                  particular dealing, transaction, step or thing is, in the
                  opinion of such director, suitable or expedient or as to any
                  other fact or matter upon which the Security Trustee may, in
                  the exercise of any of its rights, powers or duties hereunder,
                  require to be satisfied and the Security Trustee need not call
                  for further evidence and will not be responsible to anyone for
                  any loss or damage occasioned by acting on any such
                  certificate;

         27.10.3  INTERPRETATION OF SECURITY DOCUMENTS: the Security Trustee (as
                  between itself and each of the Beneficiaries) shall have full
                  power to determine in good faith all questions and doubts
                  arising in relation to any of the provisions of the Security
                  Documents and every such determination, whether made upon such
                  a question actually raised or implied in the acts or
                  proceedings of the Security Trustee, shall be conclusive and
                  shall (save for manifest error) bind the Security Trustee and
                  each Beneficiary;

         27.10.4  TITLE: the Security Trustee shall accept without enquiry,
                  requisition, objection or investigation such title as any
                  Borrower (or, as the case may be, any Obligor) has to the
                  Trust Property to the intent that the Security Trustee shall
                  not in any way be responsible for its inability to exercise
                  any of its rights or powers or duties hereunder or for any
                  loss or damage thereby occasioned;


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         27.10.5  PERFECTION OF SECURITY: the Security Trustee shall not be
                  liable for any failure, omission or defect in perfecting any
                  security created or purported to be created by or pursuant to
                  any of the Security Documents including (without prejudice to
                  the generality of the foregoing):

                  (a)      failure to obtain any licence, consent or other
                           authority for the execution, delivery, validity,
                           legality, adequacy, performance, enforceability or
                           admissibility in evidence of any of the Security
                           Documents or any other document;

                  (b)      failure to effect or procure registration of or
                           otherwise protect any security created or purported
                           to be created by or pursuant to any of the Security
                           Documents or any other document by registering under
                           any applicable registration laws in any territory,
                           any notice, caution or other entry prescribed by or
                           pursuant to the provisions of the said laws;

                  (c)      failure to take or require any of the Obligors to
                           take any steps to render the security created or
                           purported to be created by or pursuant to any of the
                           Security Documents effective as regards any property
                           outside England and Wales or to secure the creation
                           of any ancillary charge under the laws of any
                           territory concerned; or

                  (d)      failure to call for delivery of documents of title to
                           or require transfers, legal mortgages, charges or
                           other further assurances in relation to any of the
                           Trust Property;

         27.10.6  ACTS AND OMISSIONS: the Security Trustee shall not in
                  fulfilling its duties and discharging its responsibilities as
                  Security Trustee be liable or responsible for any loss or
                  damage which may result from anything done or omitted to be
                  done by it in accordance with the provisions of the Security
                  Documents;

         27.10.7  COMPLIANCE WITH LAWS: the Security Trustee may refrain from
                  doing anything which would or might in its opinion be contrary
                  to any law of any jurisdiction or any regulation or which
                  would or might otherwise render it liable to any person and
                  may do anything which is, in its absolute discretion,
                  necessary to comply with any such law or regulation;

         27.10.8  DEPOSIT OF SECURITY DOCUMENTS: the Security Trustee shall be
                  at liberty to place all title deeds and other documents
                  certifying, representing or constituting the title to any of
                  the Trust Property for the time being in its hands in any safe
                  deposit, safe or receptacle selected by the Security Trustee
                  or with any bankers or banking company (including the Security
                  Trustee or the Agent or any of the other Beneficiaries) or
                  company whose business includes undertaking the safe custody
                  of documents or solicitors or


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                  firm of solicitors, may pay all reasonable sums required to be
                  paid on account of or in respect of such deposit and may make
                  any such arrangements as it thinks fit for allowing any of the
                  Obligors or their respective lawyers or auditors access to or
                  possession of such title deeds and other documents when
                  necessary or convenient and the Security Trustee shall not be
                  responsible for any loss incurred in connection with any such
                  deposit, access or possession;

         27.10.9  USE OF NOMINEES: any investment of any part or all of the
                  Trust Property may, at the discretion of the Security Trustee,
                  be made or retained in the names of nominees;

         27.10.10 DELEGATION: the Security Trustee may, whenever it thinks fit,
                  delegate by power of attorney or otherwise to any person or
                  persons, or fluctuating body of persons, all or any of the
                  rights, powers, authorities and discretions vested in it by
                  any of the Finance Documents and such delegation may be made
                  upon such terms and subject to such conditions (including the
                  power to sub-delegate) and subject to such regulations as it
                  may think fit and it shall not be bound to supervise, or to be
                  in any way responsible for any loss, liability, costs, charges
                  or expenses incurred by reason of any misconduct or default on
                  the part of, any such delegate or sub-delegate (other than as
                  a result of its gross negligence or wilful misconduct); and

         27.10.11 INSURANCE: without prejudice to any other provision of any of
                  the Finance Documents, the Security Trustee shall not be under
                  any obligation to insure any of the Trust Property or to
                  require any other person to maintain any such insurance and
                  shall not be responsible for any loss or damage which may be
                  suffered by any person as a result of the lack of or
                  inadequacy or insufficiency of any such insurance.

27.11    REGISTRATION AS JOINT PROPRIETOR

         Each of the Beneficiaries hereby confirms and agrees that it does not
         wish to be registered in accordance with Rule 146 of the Land
         Registration Rules 1925 as the joint proprietor of any mortgage or
         charge created pursuant to any Finance Document and accordingly
         authorises the Security Trustee to hold such mortgage or charge in its
         sole name as agent and trustee for the Beneficiaries and hereby
         requests HM Land Registry to register the Security Trustee as the sole
         proprietor of any such mortgage or charge.

27.12    RELATIONSHIP WITH THE BENEFICIARIES

         The Security Trustee shall, for the purposes of the Finance Documents,
         be entitled to deal with each of the Beneficiaries by dealing
         exclusively with the Agent.


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27.13    INDEMNITY PROVISIONS

         The Security Trustee and every attorney, agent or other person
         appointed by it under any of the Finance Documents may indemnify itself
         or himself out of the Trust Property against all claims, demands,
         liabilities, proceedings, costs, fees, charges, losses and expenses
         incurred by any of them in relation to or arising out of the taking or
         holding of the Trust Property, the exercise or purported exercise of
         the rights, trusts, powers and discretions vested in any of them or any
         other matter or thing done or omitted to be done in connection with any
         of the Finance Documents or pursuant to any law or regulation
         (otherwise than as a result of its gross negligence or wilful
         misconduct). Any appointee referred to above may enjoy the benefit and
         enforce the terms of this clause 27.13 in accordance with the
         provisions of the Contracts (Rights of Third Parties) Act 1999.

27.14    APPOINTMENT OF ADDITIONAL SECURITY TRUSTEES

         The Security Trustee may at any time appoint any person (whether or not
         a trust corporation) to act either as a separate trustee or as a
         co-trustee jointly with it (i) if it considers such appointment to be
         in the interests of the Beneficiaries or (ii) for the purposes of
         conforming to any legal requirements, restrictions or conditions which
         the Security Trustee deems relevant for the purposes hereof and the
         Security Trustee shall give prior notice to the Obligors of any such
         appointment. Any person so appointed shall (subject to the provisions
         of the Finance Documents) have such powers, authorities and discretions
         and such duties and obligations as shall be conferred or imposed on
         such person by the instrument of appointment and shall have the same
         rights, powers, discretions and benefits under the Finance Documents as
         the Security Trustee. Save where the contrary is indicated or unless
         the context otherwise requires any reference in the Finance Documents
         to the Security Trustee shall be construed as a reference to the
         Security Trustee and each such separate trustee and co-trustee. The
         Security Trustee shall have power in like manner to remove any person
         so appointed. Such remuneration as the Security Trustee may pay to any
         person so appointed, and any costs, charges and expenses incurred by
         such person in performing its functions pursuant to such appointment,
         shall for the purposes hereof be treated as costs, charges and expenses
         incurred by the Security Trustee in performing its function as trustee
         hereunder.

28       ASSIGNMENTS AND TRANSFERS

28.1     BENEFIT OF AGREEMENT

         This Agreement shall be binding upon and enure to the benefit of each
         of the parties to it, any Transferee which becomes a party to it
         pursuant to a Transfer Certificate and each of their respective
         successors and assigns.

28.2     ASSIGNMENTS AND TRANSFERS BY AN OBLIGOR

         No Obligor shall be entitled to assign or transfer all or any of its
         rights or obligations under this Agreement.


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<PAGE>
28.3     ASSIGNMENTS AND TRANSFERS BY LENDERS

28.3.1   Any Lender may at any time with the prior consent of the Agent and
         after consultation with Ideal but without the prior consent of Ideal or
         any other party to this Agreement assign all or any of its rights under
         this Agreement to any bank or financial institution which is a
         Qualifying Lender or transfer in accordance with clause 28.4 all or any
         of its rights and obligations under this Agreement to any such
         Qualifying Lender.

28.3.2   If any Lender assigns all or any of its rights under this Agreement in
         accordance with clause 28.3.1 then, unless and until the assignee has
         agreed with the Agent, the Security Trustee and the other Lenders that
         it shall be under the same obligations towards each of them as it would
         have been under if it had been a party to this Agreement, the Agent,
         the Security Trustee and the other Lenders shall not be obliged to
         recognise such assignee as having the rights against each of them which
         it would have had if it had been a party to this Agreement.

28.4     TRANSFER CERTIFICATE

         If any Lender wishes to transfer all or any of its rights and
         obligations under this Agreement in respect of the whole or any part of
         any Commitment in respect of the Revolving Facility and/or its
         Outstandings as contemplated in clause 28.3.1, then such transfer may
         be effected by the delivery to the Agent of a duly completed and duly
         executed Transfer Certificate but only if it relates to its Commitment
         and/or its Outstandings in respect of all the Facilities in which it is
         participating at that time. Subject to clause 28.5, the Agent shall, on
         receipt of such certificate, countersign it and subject to the terms of
         that Transfer Certificate and on the date specified in that Transfer
         Certificate:

         28.4.1   each Obligor and the relevant Lender shall, to the extent
                  provided in such Transfer Certificate, each be released from
                  further obligations to each other under this Agreement and
                  their respective rights against each other shall be cancelled
                  (such rights and obligations being referred to in this clause
                  28 as "DISCHARGED RIGHTS AND OBLIGATIONS");

         28.4.2   each Obligor and the Transferee party to the relevant Transfer
                  Certificate shall each assume obligations towards, and acquire
                  rights from, each other which differ from the discharged
                  rights and obligations only insofar as such Obligor and the
                  Transferee have assumed and acquired the same in place of such
                  Obligor and that Lender;

         28.4.3   the Transferee and the other parties to this Agreement (other
                  than the Obligor) shall acquire the same rights and assume the
                  same obligations between themselves as they would have
                  acquired and assumed had such Transferee been an original
                  party to this Agreement as a Lender with the rights and
                  obligations acquired or assumed by it as a result of such
                  transfer (and, to that


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<PAGE>
                  extent, the transferor Lender and such other parties shall
                  each be released from further obligations to each other).

28.5     ACCEPTANCE AND DELIVERY OF TRANSFER CERTIFICATES

         The Agent shall not be obliged to accept any Transfer Certificate
         received by it under this Agreement on any day on or after the receipt
         by it of a Utilisation Notice and prior to the making of the relative
         Loan or issue of the relevant Letter of Credit or Guarantee. Subject
         thereto the Agent shall promptly deliver a copy of any Transfer
         Certificate received by it to Ideal.

28.6     RELIANCE ON TRANSFER CERTIFICATES

         The Agent shall be fully entitled to rely on any Transfer Certificate
         delivered to it in accordance with the provisions of this clause 28
         which is complete and regular on its face as regards its contents and
         purportedly signed on behalf of the Lender and the Transferee and shall
         have no liability or responsibility to any party as a consequence of
         placing reliance on and acting in accordance with any such Transfer
         Certificate.

28.7     REGISTER OF ASSIGNMENTS, TRANSFERS AND FEES

28.7.1   REGISTER: The Agent shall (on behalf of the Lenders) maintain at its
         address for the service of notices as specified in clause 31 a register
         in which the Agent shall, as soon as practicable following the date of
         this Agreement and thereafter on each business day following receipt by
         it of any Transfer Certificate duly completed in accordance with the
         provisions of this clause 28 or any certificate signed on behalf of
         each Lender assigning any of its rights hereunder and the person to
         whom such rights are to be assigned (provided the provisions of clause
         28.3 have been complied with) and in each such case incorporating the
         administrative details of the Transferee or assignee, record (where
         appropriate in place of the corresponding details relating to the
         transferor or assigning Lender) the names, interests and administrative
         details from time to time of the Lenders having rights and/or
         obligations under this Agreement. The Agent shall make the register
         available for inspection by any party to this Agreement during normal
         banking hours upon receipt by the Agent of reasonable prior notice to
         that effect.

28.7.2   FEES: On the date upon which the transfer or assignment takes effect in
         accordance with the terms of this Agreement and, as the case may be,
         any Transfer Certificate or assignment documents, the Transferee named
         in the Transfer Certificate or the relevant assignee shall pay to the
         Agent for its own account a transfer fee of (pound)2000.

28.8     CHANGE OF FACILITY OFFICE

         Any Lender may at any time change its Facility Office in relation to
         its Commitment and/or Outstandings by notifying the Agent of the
         address and fax details of such new office.


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<PAGE>
28.9     DISCLOSURE OF INFORMATION

         The Agent, the Security Trustee or any Lender may (on a confidential
         basis) disclose to any actual or potential assignee, Transferee,
         sub-participant or other person who may otherwise enter into or be
         proposing to enter into contractual relations with the Agent, the
         Security Trustee or such Lender (as the case may be) in relation to
         this Agreement such information about any Borrower, any other Obligor
         or any other person as it thinks fit.

28.10    INCREASED PAYMENTS FOLLOWING ASSIGNMENT OR TRANSFER

         If at the time of, or immediately after, any assignment or transfer by
         a Lender or any change in its Facility Office, circumstances are such
         that any Obligor would be obliged to pay to an assignee, Transferee
         (or, in the case of a change of Facility Office, the relevant Lender)
         under clause 10 or 11 any sum in excess of the sum (if any) which it
         would have been obliged to pay to that Lender under the relevant clause
         in the absence of that assignment, transfer or change, that Obligor
         shall not be obliged to pay that excess.

29       TERM AND TERMINATION

29.1     EXPIRY OF AGREEMENT

         This Agreement shall expire on the Termination Date unless earlier
         terminated in accordance with the terms of this Agreement.

29.2     RIGHTS TO TERMINATE

         Ideal may terminate this Agreement at any time prior to the Termination
         Date if:

         29.2.1   it gives the Agent sixty (60) days prior written notice of
                  termination;

         29.2.2   it has paid and performed in full all its obligations
                  hereunder on or prior to the effective date of termination;
                  and

         29.2.3   it pays the Agent, on or prior to the effective date of
                  termination, and in addition to any other prepayment premium
                  required hereunder and any amounts required by clauses 19.1
                  and 19.2:

                  (a)      2% of the aggregate on such date of (i) the Maximum
                           Revolving Credit Line, if such termination is made on
                           or prior to the first Anniversary Date;

                  (b)      1% of the aggregate on such date of the Maximum
                           Revolving Credit Line, if such termination is after
                           the first Anniversary Date but on or prior to the
                           second Anniversary Date; and


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<PAGE>
                  (c)      0.5% of the aggregate on such date of the Maximum
                           Revolving Credit Line, if such termination is at any
                           time after the second Anniversary Date.

29.3     EFFECT OF TERMINATION

         Upon the effective date of termination of this Agreement for any reason
         whatsoever, the Loans, all unpaid accrued interest or fees and any
         other sum then payable under this Agreement shall become immediately
         due and payable, the Commitment and the Available Commitment of each
         Lender shall be reduced to nil and each relevant Borrower shall
         immediately arrange for the cancellation of each Guarantee or Letter of
         Credit then outstanding and shall deposit with the Security Trustee
         with respect thereto a Supporting Letter of Credit or cash in the same
         manner as contemplated in clause 6.14. Notwithstanding the termination
         of this Agreement, until all such sums are paid and performed in full,
         the Agent and the Lenders shall retain all their rights and remedies
         hereunder and under all other Finance Documents.

30       AMENDMENTS, WAIVERS AND REMEDIES

30.1     AMENDMENTS

         Subject to the proviso to this clause 30.1, the Agent may if authorised
         by the Majority Lenders in writing (or to the extent expressly
         authorised by the other provisions of this Agreement or any other
         document entered into pursuant to this Agreement) on behalf of the
         Lenders amend or vary the terms of or waive breaches of or defaults
         under, or otherwise excuse performance of any provision of, or grant
         consents under, this Agreement or any such other document. Any
         amendment, variation, waiver, release or consent authorised under this
         clause 30.1 and which is effected by the Agent must be in writing and
         may be given subject to such conditions as the person giving it may
         specify and shall be binding on all the parties to this Agreement and
         the Agent shall be under no liability in respect thereof provided that
         the consent of all the Lenders in writing shall be required in respect
         of:

         30.1.1   any increase in the Total Commitments or change in the
                  Termination Date;

         30.1.2   any extension of the date for, or alteration in the amount or
                  currency of, any payment of principal, interest, fee or other
                  amounts payable under this Agreement;

         30.1.3   any change in the rate at which interest is payable under this
                  Agreement;

         30.1.4   the definition of "MAJORITY LENDERS";

         30.1.5   any release or deferment of the granting or perfecting of an
                  encumbrance or any of the Collateral except in connection with
                  any permitted disposal of Equipment or any disposal permitted
                  under clause 16.3.2) or any Security Interest or any guarantee
                  or similar undertaking provided by any person;


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<PAGE>
         30.1.6   this clause 30.1.

30.2     WAIVERS

         No failure to exercise, nor any delay in exercising, on the part of the
         Agent, the Security Trustee or any Lender, any right or remedy under
         this Agreement shall operate as a waiver thereof, nor shall any single
         or partial exercise of any right or remedy prevent any further or other
         exercise of such right or remedy or the exercise of any other right or
         remedy. The rights and remedies provided in this Agreement are
         cumulative and not exclusive of any rights or remedies provided by law.

31       PARTIAL INVALIDITY

         If, at any time, any provision of the Finance Documents is or becomes
         illegal, invalid or unenforceable in any respect under any law of any
         jurisdiction:

         31.1     it shall be ineffective only to that extent, without
                  invalidating the remainder of such Finance Document(s); and

         31.2     neither the legality, validity or enforceability of such
                  provision under the law of any other jurisdiction will in any
                  way be affected or impaired thereby.

32       NOTICES

32.1     GENERAL

         Any demand, notice or other communication or document to be made or
         delivered under or in connection with the Finance Documents shall be
         made or delivered by fax or otherwise in writing and shall be treated
         as having been served if served in accordance with clause 32.2. Each
         demand, notice, communication or other document to be made on or
         delivered to any party to the Finance Documents may (unless that other
         person has by 10 business days' written notice to the other specified
         another address or fax number) be made or delivered to that other
         person at its registered office or the address or fax number (if any)
         set out under its name at the end of this Agreement or, in the case of
         a Transferee, at the end of the Transfer Certificate to which it is a
         party as Transferee or, in the case of a Lender which is an assignee or
         other successor of another Lender or former Lender, as notified to the
         Agent by the assignee or other successor on or before the date it
         became a Lender.

32.2     MODE OF SERVICE

         Any demand, notice, communication or other document to be made or
         delivered from or to an Obligor shall be delivered to, by or through
         the Agent. Subject thereto, service of any demand, notice or other
         communication or document to be made or delivered under the Finance
         Documents may be made:

         32.2.1   by leaving it at the address for service referred to in clause
                  32.1;


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<PAGE>
         32.2.2   by sending it by pre-paid first class letter (or by airmail if
                  to or from an address outside the United Kingdom) through the
                  post to the address for service referred to in clause 32.1; or

         32.2.3   by fax to the fax number of the recipient and so that any fax
                  shall be deemed to be in writing and, if it bears the
                  signature of the server or its authorised representative or
                  agent, to have been signed by or on behalf of the server.

32.3     DEEMED SERVICE

32.3.1   Any notice or other communication or document from an Obligor (or Idea
         on its behalf) shall be irrevocable and shall not be effective until
         its actual receipt by the Agent. Any other notice, demand or other
         communication or document shall be served or treated as served at the
         following times:

         (a)      in the case of service personally or in accordance with clause
                  32.2.1, at the time of such service;

         (b)      in the case of service by post, at 9.00 am on the working day
                  next following the day on which it was posted or, in the case
                  of service to or from an address outside the United Kingdom,
                  at 9.00 am on the fourth day following the day on which it was
                  posted; and

         (c)      in the case of service by fax, if sent before 9.00 am on a
                  working day, at 11.00 am on the same day, if sent between 9.00
                  am and 5.30 pm on a working day, two hours after the time of
                  such sending or, if sent after 5.30 pm on a working day or on
                  a day other than a working day, at 9.00 am on the next
                  following working day.

32.3.2   For the purposes of this clause 32 the term "WORKING DAY" shall mean a
         day (other than a Saturday or Sunday) upon which the recipient of any
         demand, notice, communication or other document is normally open for
         business in the country of its address for service referred to in
         clause 32.1 and references to any time of day shall be construed as
         references to the time of day on such working day in that country.

32.4     PROOF OF SERVICE

         In proving service of any demand, notice, communication or other
         document served:

         32.4.1   by post, it shall be sufficient to prove that such demand,
                  notice, communication or other document was correctly
                  addressed, full postage paid and posted; and

         32.4.2   by fax, it shall be sufficient to prove that the fax was
                  followed by such machine record as indicates that the entire
                  fax was sent to the relevant number.


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<PAGE>
33       COUNTERPARTS

         Each Finance Document may be executed in any number of counterparts,
         and this has the same effect as if the signatures on the counterparts
         were on a single copy of the Finance Document.

34       DUTCH PARALLEL DEBT

         Without prejudice to the provisions of this Agreement and for the
         purpose of ensuring and preserving the validity and continuity of the
         security rights granted and to be granted by any of the Obligors under
         or pursuant to the Security Documents, each of the Beneficiaries hereby
         acknowledges and consents to BMEBV and to any other Obligor
         incorporated or established under the laws of the Netherlands (each, a
         "DUTCH OBLIGOR") that are at any time party to any Security Document,
         undertaking to pay to Bank of America, National Association, acting in
         its capacity as Security Trustee, amounts (i) equal to the amounts due
         from time to time by the Obligors to the Beneficiaries in respect of
         the Secured Obligations and (ii) due and payable at the same time as
         the corresponding amounts in respect of the Secured Obligations are or
         shall be due and payable (such payment undertaking and the obligations
         and liabilities resulting therefrom being, the "PARALLEL DEBT"). The
         Beneficiaries hereby agree that the Parallel Debt is a claim of Bank of
         America, National Association (in its capacity as Security Trustee)
         which is independent and separate from, and without prejudice to, the
         claims of Beneficiaries in respect of the Secured Obligations, and is
         not a claim which is held jointly with the Beneficiaries provided that,
         to the extent any amounts are paid to Bank of America, National
         Association under the Parallel Debt or that Bank of America, National
         Association otherwise receives monies in payment of the Parallel Debt,
         the total amount due and payable in respect of the Secured Obligations
         shall be decreased as if the said amounts were received directly in
         payment of the outstanding Secured Obligations. Bank of America,
         National Association, acting in its capacity as Security Trustee,
         hereby agrees to transfer to the Agent for the benefit of the
         Beneficiaries all proceeds that it receives or recovers from any Dutch
         Obligor in connection with any enforcement action taken under or
         pursuant to any Security Document.

35       LAW AND JURISDICTION

35.1     LAW

         This Agreement shall be governed by, and construed in accordance with,
         English law.

35.2     JURISDICTION

35.2.1   SUBMISSION: Each Obligor irrevocably agrees for the benefit of the
         other parties hereto that the courts of England shall have jurisdiction
         to hear and determine any suit, action or proceeding, and to settle any
         disputes, which may arise out of or in connection with this Agreement
         and, for such purposes, irrevocably submits to the jurisdiction of such
         courts.


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<PAGE>
35.2.2   FORUM: Each Obligor irrevocably waives any objection which it might now
         or hereafter have to the courts referred to in clause 35.2.1 being
         nominated as the forum to hear and determine any suit, action or
         proceeding, and to settle any disputes, which may arise out of or in
         connection with this Agreement and agrees not to claim that any such
         court is not a convenient or appropriate forum.

35.2.3   SERVICE OF PROCESS: BMEP and BMEBV each agree that the process by which
         any suit, action or proceeding is begun may be served on it by being
         delivered in connection with any suit, action or proceeding in England,
         to Ideal at its registered office for the time being.

35.2.4   OTHER COMPETENT JURISDICTIONS: The submission to the jurisdiction of
         the courts referred to in clause 35.2.1 shall not (and shall not be
         construed so as to) limit the right of the other parties hereto, or any
         of them, to take proceedings against any Obligor in any other court of
         competent jurisdiction nor shall the taking of proceedings in any one
         or more jurisdictions preclude the taking of proceedings in any other
         jurisdiction, whether concurrently or not.

35.2.5   CONSENT TO ENFORCEMENT: Each Obligor hereby consents generally in
         respect of any legal action or proceeding arising out of or in
         connection with this Agreement to the giving of any relief or the issue
         of any process in connection with such action or proceeding including,
         without limitation, the making, enforcement or execution against any
         property whatsoever (irrespective of its use or intended use) of any
         order or judgment which may be made or given in such action or
         proceeding.

AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.


                                      114
<PAGE>
                                   SCHEDULE 1

                             LENDERS AND COMMITMENTS

<TABLE>
<CAPTION>
              LENDER                                    COMMITMENT ((POUND))
<S>                                                          <C>
Bank of America, National Association                        75,000,000
</TABLE>


                                      115
<PAGE>
                                   SCHEDULE 2

                              CONDITIONS PRECEDENT

A     ORIGINAL DOCUMENTS TO BE COLLECTED BY THE AGENT

1     A certificate dated in the form appearing in Schedule 3 duly executed by
      each Obligor with all required enclosures.

2     The Debenture duly executed by each Obligor and all other documents to be
      delivered pursuant thereto and notice of the assignment of each of its
      Receivables Accounts and of the Policies (as therein defined) having been
      given to, and acknowledged by, the bank at which each such Receivables
      Account is to be maintained or, as appropriate, by the relevant broker or
      insurer with which or through whom such Policy is placed.

3     All share certificates in respect of shares held by each Obligor and
      charged pursuant to the Debenture together with instruments of transfer
      endorsed in blank as required by the terms of the Debenture.

4     Confirmation from Ideal that the terms of all contracts or arrangements
      under which Inventory is supplied to the Trading Companies on reservation
      of title terms have not been amended since completion of the review
      thereof by the Agent during the July/August 2002 audit.

5     Utilisation Notice in respect of the first Revolving Loan and any
      Swingline Loan in substantially the form set out in Schedule 4 duly
      executed by the relevant Borrower.

6     Policies of insurance, including credit insurance, acceptable to the Agent
      with the name of the Security Trustee endorsed as loss payee in respect of
      such policies as may be specified by the Agent and acknowledgements of
      assignment in satisfactory terms signed by underwriters of the insurance
      policies assigned by the Obligors pursuant to the Debenture.

7     In relation to each Obligor, details of each of its clearing accounts and
      each (if any) of its Receivables Accounts.

8     An opinion of Dutch counsel addressed to the Agent as to, among other
      matters, the entry into and performance by BMEP and BMEBV of the Finance
      Documents to which they are a party and legal, valid, binding and
      enforceable nature of their respective obligations thereunder.

9     The Pro-Forma Balance Sheet of BMEP.

10    The Latest Projections.

11    The Priority Agreement duly executed by the parties thereto.

12    A Warranty (in terms satisfactory to the Agent) by Ideal as to the value
      of the Inventory and the Accounts of the Trading Companies as at the
      Closing Date.


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<PAGE>
13    A report by Ideal showing, in relation to the Trading Companies, details
      of monthly ageings of accounts receivable, monthly ageings of accounts
      payable and details of all preferential creditors and of cash, if any, at
      bank as at 31 October 2002.

14    An undertaking issued by The Royal Bank of Scotland plc in favour of the
      Security Trustee agreeing, on the terms and conditions therein set out, to
      effect a daily cash sweep to the Security Trustee of all amounts standing
      to the credit of the account therein described.

B     EVIDENCE

1     Evidence as to the discharge of all indebtedness and financing facilities
      (other than Permitted Indebtedness) (including, without limitation, the
      discharge in full of the Existing Facilities) of and encumbrances (other
      than Permitted Encumbrances) over the assets of, any Group Company which
      may exist at the date of this Agreement including, without limitation, all
      encumbrances created by any Group Company in favour of National
      Westminster Bank Plc or The Royal Bank of Scotland Commercial Services
      Limited or any of their Affiliates other than the legal mortgage dated 31
      October 2000 created by Bell Microproducts Limited over the Chessington
      Property in favour of the existing Chessington Mortgagee.

2     Ideal shall have paid (to the extent then payable) all fees payable on the
      date of this Agreement including all fees and expenses of the Agent's
      legal advisers in connection with any of the Finance Documents and the
      transactions contemplated thereby.

3     The Agent being satisfied that the ageing profile and turnover of Accounts
      and Inventory has not deteriorated as against their ageing profile and
      turnover at the time of the audit thereof by the Agent.

4     There shall have occurred no material adverse change in the business or
      financial condition of any Borrower, any Obligor or the Group (taken as a
      whole) or in the Collateral since the date of the Pro Forma Balance Sheet
      and the Group has met the financial performance projections contained in
      the Latest Projections, and the Agent has received a certificate of
      Ideal's chief executive officer to such effect.

5     After taking into account any Revolving Loans or Swingline Loans to be
      made on the Closing Date and any Letters of Credit or Guarantees issued or
      to be issued on the Closing Date and with all the obligations of the
      Borrowers being current there shall be remaining an Available Revolving
      Facility Amount of at least (pound)5,000,000.

6     Evidence satisfactory to the Agent that there has been no change to the
      legal structure of Group since 1 June 2002 and that the Adjusted Tangible
      Net Worth of BMEP is not less than EUR18,467,000.

7     Evidence that Ideal has agreed to act as the agent of BMEP and BMEBV for
      the service of process in England.


                                      117
<PAGE>
                                   SCHEDULE 3

                          FORM OF OBLIGOR'S CERTIFICATE

From:         [Obligor's name and address]

To:           Bank of America, National Association
              Business Credit Unit
              1 Alie Street
              London E1 8DE

              as Agent for and on behalf of the Lenders

Attention: Carmen Bernardis

CREDIT AGREEMENT DATED |    | AND MADE BETWEEN, AMONG OTHERS, IDEAL HARDWARE
LIMITED AND BELL MICROPRODUCTS EUROPE EXPORT LIMITED AS ORIGINAL BORROWERS, BANK
OF AMERICA, NATIONAL ASSOCIATION AS AGENT, ARRANGER, ISSUER AND SECURITY TRUSTEE
AND THE LENDERS NAMED THEREIN (THE "CREDIT AGREEMENT").

This certificate is provided for the purposes of the Credit Agreement. Unless
stated otherwise, terms defined in the Credit Agreement shall have the same
meanings in this certificate. We |     |, and |      |, the secretary and a
director respectively of the [relevant Obligor] hereby certify that:

1     The copy or copies delivered herewith:

      1.1   of the memorandum and articles of association, certificate of
            incorporation and certificate(s) of incorporation on change of name
            (if any) of [relevant Obligor] marked "A";

      1.2   of a resolution of the board of directors of [relevant Obligor]
            approving the execution and delivery of the Finance Documents to
            which it is party and the performance of its obligations thereunder
            and authorising a named person or persons to sign such Finance
            Documents and any documents to be delivered by [relevant Obligor]
            pursuant thereto marked "B";

      1.3   marked "C", being copies of each law, decree, consent, licence,
            approval, registration or declaration as is, in the opinion of local
            counsel to the Agent, necessary to render the Finance Documents to
            which it is a party valid, legally binding and enforceable and to
            make each of them admissible in evidence in England and Wales and,
            if different, the [relevant Obligor's] jurisdiction of incorporation
            and any jurisdiction in which any of its assets may be situated and
            to enable [relevant Obligor] to perform its obligations under such
            Finance Documents;

      1.4   [marked "D", being copies of each Environmental Licence held by
            [relevant Obligor];]


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<PAGE>
      1.5   [marked "E", being copies of each policy of insurance maintained by
            each Borrower and each other [Obligor] [Group Company];]*

      1.6   [marked "F" are copies of each of the Material Contracts as may be
            required by the Agent; and]*

      1.7   [of the register of members and directors and secretary of [relevant
            Obligor] marked "G"],

      are in each such case true, complete and up to date copies of the
      originals.

2     The persons whose names are listed below have been authorised on behalf of
      the [relevant Obligor], and pursuant to the board resolution described
      above to execute the Finance Documents to which [relevant Obligor] is
      party and any documents or notices to be delivered by [relevant Obligor]
      pursuant thereto and the signatures set opposite their names are their
      true signatures:

NAME OF SIGNATORY                                     SIGNATURE

---------------------     ------------------------   -------------------------

---------------------     ------------------------   -------------------------

---------------------     ------------------------   -------------------------

---------------------     ------------------------   -------------------------


---------------------     ------------------------   -------------------------

Secretary

Name:                               Date

---------------------     ------------------------

Director

Name:                                                Date

[relevant Obligor]

*Ideal's certificate only


                                      119
<PAGE>
                                   SCHEDULE 4

                           FORM OF UTILISATION NOTICE

From:         [relevant Borrower]

To:           Bank of America, NA
              Business Credit Unit
              1 Alie Street
              London E1 8DE

              as Agent for and on behalf of the Lenders

Dear Sirs,

1     We refer to the agreement (as from time to time amended, varied,
      supplemented, novated or replaced, the "CREDIT Agreement") dated o
      December 2002 and made between, among others, ourselves as Borrower,
      yourselves as the Agent, Arranger and Security Trustee and the Lenders
      therein referred to. Terms defined in the Credit Agreement have the same
      meanings in this notice.

2     We hereby give you irrevocable and unconditional notice that, pursuant to
      the Credit Agreement and on [date of proposed Loan/issue of Letter of
      Credit/issue of Guarantee], we wish to:

      2.1   borrow a Swingline Loan [in the amount of(pound)] [in the Original
            Sterling Amount of(pound)] [in [specify agreed Foreign Currency]];

      2.2   borrow a [Reference Rate/LIBOR] Revolving Loan [in the amount
            of(pound)] [in the Original Sterling Amount of(pound)] [in [specify
            agreed Foreign Currency]] having an initial Interest Period of | |
            months;

      2.3   [have a Letter of Credit issued in favour of |  | for [(pound)/other
            currency amount] maturing not later than |    | and in respect of
            [specify details]];

      2.4   [have a Guarantee issued in favour of |     | for [(pound) /other
            currency amount] maturing not later than |     | and in respect of
            [specify details]],

      [in each case] upon the terms and subject to the conditions contained in
      the Credit Agreement.

      3     We confirm that, as at today's date, the representations set out in
            clauses 14.1 and 14.2 of the Credit Agreement are true and that no
            Default has occurred or is foreseen by us.


                                      120
<PAGE>
Yours faithfully,

----------------------------

for and on behalf of

[RELEVANT BORROWER]


                                      121
<PAGE>
                                   SCHEDULE 5

                             MANDATORY COST FORMULAE

1     The Mandatory Cost is an addition to the interest rate to compensate
      Lenders for the cost of compliance with (a) the requirements of the Bank
      of England and/or the Financial Services Authority (or, in either case,
      any other authority which replaces all or any of its functions) or (b) the
      requirements of the European Central Bank.

2     On the first day of each Interest Period (or as soon as possible
      thereafter) the Agent shall calculate, as a percentage rate, a rate (the
      "ADDITIONAL COST RATE") for each Lender, in accordance with the paragraphs
      set out below. The Mandatory Cost will be calculated by the Agent as a
      weighted average of the Lenders' Additional Cost Rates (weighted in
      proportion to the percentage participation of each Lender in the relevant
      Loan) and will be expressed as a percentage rate per annum.

3     The Additional Cost Rate for any Lender lending from a Facility Office in
      a participating member state will be the percentage notified by the Lender
      to the Agent. This percentage will be certified by that Lender in its
      notice to the Agent to be its reasonable determination of the cost
      (expressed as a percentage of that Lender's participation in all Loans
      made from that Facility Office) of complying with the minimum reserve
      requirements of the European Central Bank in respect of loans made from
      that Facility Office.

4     The Additional Cost Rate for any Lender lending from a Facility Office in
      the United Kingdom will be calculated by the Agent as follows:

      4.1   in relation to a sterling Loan:

                           AB + C(B - D)Ex0.01
                           ------------------- per cent per annnum
                                 100-(A+C)

      4.2   in relation to a Loan in any currency other than sterling:

                           Ex0.01
                           ------ per cent per annnum
                            300

      Where:

      A     is the percentage of Eligible Liabilities (assuming these to be in
            excess of any stated minimum) which that Lender is from time to time
            required to maintain as an interest free cash ratio deposit with the
            Bank of England to comply with cash ratio requirements.

      B     is the percentage rate of interest (excluding the Margin and the
            Mandatory Cost and, if the Loan is an unpaid sum, the additional
            rate of interest specified in clause 18.3) payable for the relevant
            Interest Period on the Loan.


                                      122
<PAGE>
      C     is the percentage (if any) of Eligible Liabilities which that Lender
            is required from time to time to maintain as interest bearing
            Special Deposits with the Bank of England.

      D     is the percentage rate per annum payable by the Bank of England to
            the Agent on interest bearing Special Deposits.

      E     is the rate of charge payable by that Lender to the Financial
            Services Authority pursuant to the Fees Regulations (but, for this
            purpose, ignoring any minimum fee required pursuant to the Fees
            Regulations) and expressed in pounds per (pound)1,000,000 of the Fee
            Base of that Lender.

5     For the purposes of this Schedule:

      5.1   "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the meanings
            given to them from time to time under or pursuant to the Bank of
            England Act 1998 or (as may be appropriate) by the Bank of England.

      5.2   "FEES REGULATIONS" means the Banking Supervision (Fees) Regulations
            in force from time to time or such other law or regulation as may be
            in force from time to time in respect of the payment of fees for
            banking supervision; and

      5.3   "FEE BASE" has the meaning given to it, and will be calculated in
            accordance with, the Fees Regulations.

6     In application of the above formulae, A, B, C and D will be included in
      the formulae as percentages (ie 5 per cent will be included in the formula
      as 5 and not as 0.05). A negative result obtained by subtracting D from B
      shall be taken as zero. The resulting figures shall be rounded to four
      decimal places.

7     Each Lender shall supply any information required by the Agent for the
      purpose of calculating its Additional Cost Rate. In particular, but
      without limitation, each Lender shall supply the following information in
      writing on or prior to the date on which it becomes a Lender:

      7.1   its jurisdiction of incorporation and the jurisdiction of its
            Facility Office; and

      7.2   any other information that the Agent may reasonably require for such
            purpose.

      Each Lender shall promptly notify the Agent in writing of any change to
      the information provided by it pursuant to this paragraph.

8     The percentages or rates of charge of each Lender for the purpose of A, C
      and E above shall be determined by the Agent based upon the information
      supplied to it pursuant to paragraph 7 above and on the assumption that,
      unless a Lender notifies the Agent to the contrary, each Lender's
      obligations in relation to cash ratio deposits, Special Deposits and the
      Fees Regulations are the same

                                      123
<PAGE>
      as those of a typical bank from its jurisdiction of incorporation with a
      Facility Office in the same jurisdiction as its Facility Office.

9     The Agent shall have no liability to any person if such determination
      results in an Additional Cost Rate which over or under compensates any
      Lender and shall be entitled to assume that the information provided by
      any Lender pursuant to paragraphs 3 and 7 above is true and correct in all
      respects.

10    The Agent shall distribute the additional amounts received as a result of
      the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate
      for each Lender based on the information provided by each Lender pursuant
      to paragraphs 3 and 7 above.

11    Any determination by the Agent pursuant to this Schedule is in relation to
      a formula, the Mandatory Cost, an Additional Cost Rate or any amount
      payable to a Lender shall, in the absence of manifest error, be conclusive
      and binding on all parties to this Agreement.

12    The Agent may from time to time, after consultation with Ideal and the
      Lenders, determine and notify all parties any amendments which are
      required to be made to this Schedule in order to comply with any change in
      law, regulation or any requirements form time to time imposed by the Bank
      of England, the Financial Services Authority or the European Central Bank
      (or, in any case, any other authority which replaces al or any of its
      functions) and any such determination shall, in the absence of manifest
      error, be conclusive and binding on all parties.


                                      124
<PAGE>
                                   SCHEDULE 6

                          FORM OF TRANSFER CERTIFICATE

To:   Bank of America, National Association
      Business Credit Unit
      1 Alie Street
      London E1 8DE

      as Agent for the Beneficiaries

                              TRANSFER CERTIFICATE

relating to the agreement (as from time to time amended, varied, supplemented,
novated or replaced, the "CREDIT AGREEMENT") of even date and made between (1)
IDEAL HARDWARE LIMITED and BELL MICROPRODUCTS EUROPE EXPORT LIMITED (the
"ORIGINAL BORROWERS") (2) BM EUROPE PARTNERS CV (3) BANK OF AMERICA NATIONAL
ASSOCIATION in its capacity as agent for the Lenders(the "AGENT"), in its
capacity as arranger (the "ARRANGER"), as the lender making SWINGLINE LOANS (the
"SWINGLINE LENDER"), as the lender issuing Letters of Credit or Guarantees (the
"ISSUER") and as security trustee under the Security Documents (the "SECURITY
TRUSTEE") (3) BANK OF AMERICA, NATIONAL ASSOCIATION and | | (the "LENDERS").
Terms defined in the Agreement have the same meanings in this Transfer
Certificate.

1     [Transferor] (the "LENDER") hereby confirms the accuracy of the summary of
      its participation in the Agreement set out in the Schedule below and
      requests [Transferee] (the "TRANSFEREE") to accept and procure the
      transfer to the Transferee of such part of such participation specified in
      the Schedule by counter-signing and delivering this Transfer Certificate
      to the Agent at its address for the service of notices specified in the
      Agreement.

2     The Transferee hereby requests the Agent to accept this Transfer
      Certificate as being delivered to the Agent pursuant to and for the
      purposes of clause 28.4 of the Agreement so as to take effect in
      accordance with the terms thereof on the business day following the date
      of receipt by it of this Transfer Certificate or (if later) on [specify
      date of transfer] subject only to the provisions of the Agreement.

3     The Transferee confirms that it has received from the Lender a copy of the
      Agreement together with such other documents and information as it has
      required in connection with this transaction and that it has not relied
      and will not hereafter rely on the Lender to check or enquire on its
      behalf into the adequacy, accuracy or completeness of any such documents
      or information or the reasonableness of any representation, warranty,
      statement, projection or assumption contained therein or into the
      legality, validity, effectiveness, enforceability or admissibility in
      evidence of any such documents or information and further agrees that it
      has not relied and will not hereafter rely on the Lender to assess or keep
      under review on its behalf the business/operations, financial condition,
      prospects, creditworthiness, status or affairs of any Borrower or any
      other Obligor.


                                      125
<PAGE>
4     The Transferee hereby undertakes with the Lender and each of the other
      parties to the Agreement that it will perform in accordance with their
      terms all those obligations which by the terms of the Agreement will be
      assumed by it after delivery of this Transfer Certificate to the Agent and
      satisfaction of the conditions (if any) subject to which this Transfer
      Certificate is expressed to take effect.

5     The Lender makes no representation or warranty and assumes no
      responsibility with respect to the legality, validity, effectiveness,
      adequacy or enforceability of the Finance Documents or any document
      delivered pursuant thereto and assumes no responsibility for the financial
      condition of any of the Obligors or any other party to the Finance
      Documents or for the performance and observance by any of the Obligors or
      any other such party of any of its obligations under any of the Finance
      Documents or any document delivered pursuant thereto and any and all such
      conditions and warranties, whether express or implied by law or otherwise,
      are hereby excluded.

6     The Lender gives notice that nothing in this Transfer Certificate or in
      any of the Finance Documents (or any document delivered pursuant thereto)
      shall oblige the Lender (i) to accept a re-transfer from the Transferee of
      the whole or any part of its rights and obligations under the Agreement
      transferred pursuant to this Transfer Certificate or (ii) to support any
      losses directly or indirectly sustained or incurred by the Transferee by
      reason of the failure by any of the Obligors or any other party to the
      Finance Documents (or any document delivered pursuant thereto) to perform
      or comply with its obligations under any of the Finance Documents or any
      such document. The Transferee hereby acknowledges the absence of any such
      obligation as is referred to in (i) and (ii) above.

7     The Transferee confirms that its Facility Office and address for notices
      for the purposes of the Agreement are as set out in the Schedule.

8     The Transferee undertakes to pay to the Agent for its own account a
      transfer fee of(pound)2,000 as provided in clause 28.7 of the Agreement.

9     This Transfer Certificate and the rights and obligations of the parties
      hereunder shall be governed by and construed in accordance with English
      law.

AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.


                                      126
<PAGE>
                                  THE SCHEDULE

COMMITMENT                                           PORTION TRANSFERRED

LENDER'S PARTICIPATION IN LOANS   REPAYMENT DATE     PORTION TRANSFERRED

[Lender]                        [Transferee]

By:                                      By:

Date:                                  Date:

                      ADMINISTRATIVE DETAILS OF TRANSFEREE

Facility Office:                ---------------------

                                ---------------------

                                ---------------------

Contact Name:                   ---------------------

Account for payments:           ---------------------

Telephone:                      ---------------------

Fax:                            ---------------------


                                      127
<PAGE>
                                   SCHEDULE 7

        THE DORMANT COMPANIES, THE CHARGING COMPANIES AND THE BABY BELLS

                                     PART 1

                              THE DORMANT COMPANIES

<TABLE>
<CAPTION>
COMPANY                                                  COMPANY NUMBER
<S>                                                      <C>
Bell Microproducts Europe Limited                        04026955

Logical Online Limited                                   03803158

Ideal Unisolve Limited                                   04002602

Bell Microproducts ApS                                   N/A
</TABLE>

                                     PART 2

                             THE CHARGING COMPANIES

<TABLE>
<CAPTION>
COMPANY                                                  COMPANY NUMBER
<S>                                                      <C>
Ideal Hardware Limited                                   03969946

Bell Microproducts Europe Export Limited                 03711148

Bell Microproducts Europe BV                             N/A

Bell Microproducts Limited                               04079671

Unifund Limited                                          03942210
</TABLE>

                                     PART 3

                                 THE BABY BELLS

<TABLE>
<CAPTION>
COMPANY                                                  COMPANY NUMBER
<S>                                                      <C>
Bell Microproducts BV

Bell Microproducts Sarl                                  43474497500013

Bell Microproducts GmbH                                  HRB 40296

Bell Microproducts AB                                    SE556597-7385

Bell Microproducts BVBA                                  647989
</TABLE>


                                      128
<PAGE>
<TABLE>
<S>                                                      <C>
Bell Microproducts S.r.l.                                13456670150
</TABLE>


                                      129
<PAGE>
                                   SCHEDULE 8

                            FORM OF ACCESSION NOTICE

To:   Bank of America, National Association
      Business Credit Unit
      1 Alie Street
      London E1 8DE

      as Agent for the Beneficiaries

From: [Group Company] and [Ideal]

Dated:

Dear Sirs

CREDIT AGREEMENT DATED |      | AND MADE BETWEEN, AMONG OTHERS, IDEAL HARDWARE
LIMITED AND BELL MICROPRODUCTS EUROPE EXPORT LIMITED AS ORIGINAL BORROWERS, BANK
OF AMERICA, NATIONAL ASSOCIATION AS AGENT, ARRANGER, ISSUER AND SECURITY TRUSTEE
AND THE LENDERS NAMED THEREIN (AS AMENDED FROM TIME TO TIME, THE "CREDIT
AGREEMENT").

1     [Group Company] agrees to become an [Additional Borrower] [Unsecured
      Guarantor] and to be bound by the terms of the Credit Agreement as an
      [Additional Borrower] [Unsecured Guarantor] pursuant to clause 3 of the
      Credit Agreement. [Group Company] is a company duly incorporated under the
      laws of [name of relevant jurisdiction].

2     [Group Company's] administrative details are as follows:

      Address:

      Fax No.:

      Attention:

3     This letter is governed by English law.

      [This Accession Notice is entered into as a deed.]

      [Ideal]   [relevant Group Company]


                                      130
<PAGE>
                                   SCHEDULE 9

          DOCUMENTS TO ACCOMPANY ACCESSION NOTICE OR SUPPLEMENTAL DEED

1     A copy, certified a true copy by a duly authorised officer of the proposed
      [Additional Borrower] [Unsecured Guarantor] [Charging Company], of the
      constitutive documents of such proposed [Additional Borrower] [Unsecured
      Guarantor] [Charging Company].

2     A copy, certified a true copy by a duly authorised officer of the proposed
      [Additional Borrower] [Unsecured Guarantor] [Charging Company], of a board
      resolution of such proposed [Additional Borrower] [Unsecured Guarantor]
      [Charging Company] approving the execution and delivery of a [Accession
      Notice] [Supplemental Deed], the accession of such proposed [Additional
      Borrower] [Unsecured Guarantor] [Charging Company] to [this Agreement]
      [the Debenture] and the performance of its obligations under the Finance
      Documents and authorising a person or persons (specified by name or
      office) on behalf of such proposed [Additional Borrower] [Unsecured
      Guarantor] [Charging Company] to execute and deliver such [Accession
      Notice] [Supplemental Deed], any other Finance Document and any other
      documents to be delivered by such proposed [Additional Borrower]
      [Unsecured Guarantor] [Charging Company] pursuant hereto or thereto.

3     A certificate of a duly authorised officer of the proposed [Additional
      Borrower] [Unsecured Guarantor] [Charging Company] setting out the names
      and signatures of the person or persons mentioned in the resolution
      referred to in paragraph 2 above.

4     A certificate addressed to the Agent signed by two authorised signatories
      of the proposed [Additional Borrower] [Unsecured Guarantor] [Charging
      Company] stating that the execution by such proposed [Additional Borrower]
      [Unsecured Guarantor] [Charging Company] of the [Accession Notice]
      [Supplemental Deed] and the performance of such proposed [Additional
      Borrower] [Unsecured Guarantor] [Charging Company] of its obligations
      hereunder and thereunder are within its corporate powers, have been duly
      approved by all necessary corporate action and will not cause any limit or
      restriction on any of its powers (whether imposed by law, decree, rule,
      regulation, its constitutive documents or agreement or otherwise) or on
      the right or ability of its directors to execute such powers, to be
      exceeded or breached.

5     A copy of its latest audited financial statements.

6     Such legal opinion(s) of counsel to the Agent as the Agent may require, in
      a form satisfactory to the Agent.

7     [In connection with the acquisition of any company where such company or
      any of its Subsidiaries accedes as a Charging Company to the Debenture or
      otherwise executes a Security Document (such person thus becoming an
      "OBLIGOR"):


                                      131
<PAGE>
      7.1   a certificate addressed to the Agent from the Auditors confirming in
            the context of section 155(2) Companies Act 1985 that:

            7.1.1 in their opinion such Obligor had positive net assets as
                  defined in section 154(2) Companies Act 1985;

            7.1.2 they are not aware of anything to indicate that the decision
                  of the directors of such Obligor not to make a provision in
                  relation to the giving of financial assistance represented by
                  the execution of each such Security Document to which it is a
                  party has not been made on fair and reasonable grounds; and

            7.1.3 the giving of such financial assistance by such Obligor would
                  not cause those net assets to be reduced,

      7.2   in each such case dated as at the date of the giving of such
            financial assistance;

      7.3   a statutory declaration by all of the directors of such Obligor as
            required by Section 155(6) Companies Act 1985 in relation to such
            financial assistance, such statutory declaration to be in the
            prescribed form and having attached thereto the report addressed by
            the Auditors complying with the provisions of Section 156(4)
            Companies Act 1985;

      7.4   a copy, certified by a duly authorised officer of such Obligor as
            being a true copy, of the resolution of its board of directors
            approving the matters and things required to be done by it pursuant
            to this paragraph 8 and in particular the giving of such financial
            assistance.]*

8     Such other documents or evidence relating to such proposed [Additional
      Borrower] [Unsecured Guarantor] [Charging Company] as the Agent may
      reasonably require.

* This paragraph only applies where a company being acquired (or one or more of
its Subsidiaries) is acceding to the Debenture or otherwise executing a Security
Document to secure borrowings raised for its acquisition.


                                      132
<PAGE>
                                   SCHEDULE 10

                             THE MATERIAL CONTRACTS

<TABLE>
<CAPTION>
DESCRIPTION OF AGREEMENT                       DATE                          PARTIES
<S>                                        <C>                             <C>
Microsoft EMEA Distribution Agreement      1 July 2002                     (1) Ideal

                                                                           (2) Microsoft Ireland Operations
                                                                           Limited

Microsoft OEM Distribution Agreement       1 October 2001                  (1) Ideal

                                                                           (2) Microsoft Licensing Inc
Compaq Direct Business Partner             1 March 1999                    (1) Ideal
Agreement with respective Compaq
Commercial Terms Addendum for                                              (2) Compaq Computer Limited
Distributors
Europe Authorized Distributor              1 January 2002                  (1) Ideal
Agreement
                                                                           (2) Seagate Removable Storage
                                                                           Solutions LLC

Specialist Distributor Agreement           [                       ]       (1) Ideal

                                                                           (2) Fujitsu Siemens Computers Ltd
Master Distribution Agreement              25 May 2000                     (1) Ideal

                                                                           (2) International Business
                                                                           Machines Corporation
International Distribution Agreement       3 March 2000                    (1) Ideal

                                                                           (2) Network Associates
                                                                           International B.V.
</TABLE>


                                      133
<PAGE>
                                   SCHEDULE 11

                    FORM OF KEY PERFORMANCE INDICATORS REPORT

[COMPANY NAME]
FORECAST [YEAR]
BELL MICROPRODUCTS EUROPE

KEY PERFORMANCE INDICATORS

<TABLE>
<CAPTION>



                   JAN - []    FEB []     MAR []   APR []     MAY []   JUN []   JUL []        KPI
DAYS
<S>                <C>         <C>        <C>      <C>        <C>      <C>      <C>       <C>
(CUMULA-
TIVE)                    []        []         []       []         []      []       []

WEEKLY

INVOICING

UK                                                                                        PER FORECAST
Europe
Export                                                                                    PER FORECAST

Europe                                                                                    PER FORECAST

HARD GP
MARGIN

UK                       []        []         []      []         []       []       []           []%
</TABLE>

<TABLE>
<CAPTION>
              FORECAST
               WEEK
              ENDING
              []-AUG     []-AUG    []-AUG     []-AUG      []-SEP      []-SEP     []-SEP    []-SEP      []-SEP    []-OCT     []-OCT
<S>           <C>        <C>       <C>        <C>        <C>         <C>        <C>        <C>        <C>        <C>        <C>
DAYS
(CUMULA-
TIVE)          []         []        []         []          []          []         []        []          []        []         []

WEEKLY

INVOICING

UK           (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]

Europe
Export       (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]

Europe       (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]

HARD GP
MARGIN

UK
</TABLE>

                                      134
<PAGE>
<TABLE>
<CAPTION>
<S>                      <C>       <C>        <C>     <C>        <C>      <C>      <C>         <C>
Europe                   []%       []%        []%     []%        []%      []%      []%          []%

Cash                                                                                            PER
collections                                                                                    FORECAST

Gross inventory          []        []         []      []         []       []       []           []%

Days Inventory           []        []         []      []         []       []       []           []%

ADDITIONAL
MONTHLY
REPORTING

Monthy DSO (90
day rolling
average)

Reserved                                                                                        []
inventory

Summary stock
aging
</TABLE>

<TABLE>
<CAPTION>
<S>                   <C>        <C>         <C>        <C>        <C>         <C>        <C>         <C>        <C>        <C>
Europe

Cash
collections           (pound)[]  (pound)[]  (pound)[]   (pound)[]  (pound)[]   (pound)[]  (pound)[]  (pound)[]  (pound)[]  (pound)[]

Gross inventory

Days Inventory

ADDITIONAL
MONTHLY
REPORTING

Monthy DSO (90
day rolling
average)

Reserved                                                                                        []
inventory

Summary stock
aging
</TABLE>


                                      135
<PAGE>
THE ORIGINAL BORROWERS

SIGNED for and on behalf of                         )
IDEAL HARDWARE LIMITED                              )
by:                                                 )

Address:          Fountain Court
                  Cox Lane
                  Chessington
                  Surrey KT9 1SJ

Fax:              020 8286 5588

Attention:        Nick Lee/Helen Hancock

SIGNED for and on behalf of                         )
BELL MICROPRODUCTS EUROPE                           )
EXPORT LIMITED by:                                  )

Address:          Fountain Court
                  Cox Lane
                  Chessington
                  Surrey KT9 1SJ

Fax:              020 8286 5588

Attention:        Nick Lee/Helen Hancock

THE DUTCH OBLIGORS

SIGNED by its Managing Partner                      )
for and on behalf of                                )
BM EUROPE PARTNERS C.V.                             )

Address:          c/o Fountain Court
                  Cox Lane
                  Chessington
                  Surrey KT9 1SJ

Fax:              020 8286 5588

Attention:        Nick Lee/Helen Hancock

SIGNED for and on behalf of                         )
BELL MICROPRODUCTS                                  )
EUROPE BV                                           )
by:                                                 )

Address:          c/o Fountain Court
                  Cox Lane
                  Chessington
                  Surrey KT9 1SJ

Fax:              020 8286 5588

Attention:        Nick Lee/Helen Hancock


                                      136
<PAGE>
THE AGENT

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Graham Moffitt/Carmen Bernardis (Business Credit)

THE ARRANGER

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Graham Moffitt/Carmen Bernardis (Business Credit)

THE SECURITY TRUSTEE

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Graham Moffitt/Carmen Bernardis (Business Credit)


                                      137
<PAGE>
THE SWINGLINE LENDER

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Graham Moffitt/Carmen Bernardis (Business Credit)

THE ISSUER

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Graham Moffitt/Carmen Bernardis (Business Credit)



                                      138
<PAGE>
THE LENDERS

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Graham Moffitt/Carmen Bernardis (Business Credit)


                                      139
<PAGE>
                                   SCHEDULE 2

                          FORM OF OBLIGOR'S CERTIFICATE

From:    [Obligor's name and address]

To:      Bank of America, National Association
         Business Credit Unit
         1 Alie Street
         London E1 8DE

         as Agent for and on behalf of the Lenders

Attention: Carmen Bernardis

CREDIT AGREEMENT DATED 2 DECEMBER 2002 AND MADE BETWEEN, AMONG OTHERS, IDEAL
HARDWARE LIMITED AND BELL MICROPRODUCTS EUROPE EXPORT LIMITED AS ORIGINAL
BORROWERS, BANK OF AMERICA, NATIONAL ASSOCIATION AS AGENT, ARRANGER, ISSUER AND
SECURITY TRUSTEE AND THE LENDERS NAMED THEREIN (AS AMENDED BY A SUPPLEMENTAL
AGREEMENT DATED * NOVEMBER 2003, THE "CREDIT AGREEMENT").

This certificate is provided for the purposes of the Credit Agreement. Unless
stated otherwise, terms defined in the Credit Agreement shall have the same
meanings in this certificate. We [ ], and [ ], the secretary and a director
respectively of the [relevant Obligor] hereby certify that:

1     The copy or copies of the memorandum and articles of association,
      certificate of incorporation and certificate(s) of incorporation on change
      of name (if any) of [relevant Obligor] delivered to the Agent on or about
      2 December 2002 have not been amended in any respect;

2     The copy or copies delivered herewith:

2.1   of a resolution of the board of directors of [relevant Obligor] approving
      the execution and delivery of the Finance Documents to which it is party
      and the performance of its obligations thereunder and authorising a named
      person or persons to sign such Finance Documents and any documents to be
      delivered by [relevant Obligor] pursuant thereto marked "A";

2.2   marked "B", being copies of each law, decree, consent, licence, approval,
      registration or declaration as is, in the opinion of local counsel to the
      Agent, necessary to render the Finance Documents to which it is a party
      valid, legally binding and enforceable and to make each of them admissible
      in evidence in England and Wales and, if different, the [relevant
      Obligor's] jurisdiction of incorporation and any jurisdiction in which any
      of its assets may be situated and to enable [relevant Obligor] to perform
      its obligations under such Finance Documents;

      are in each such case true, complete and up to date copies of the
      originals.

3     The persons whose names are listed below have been authorised on behalf of
      the [relevant Obligor], and pursuant to the board resolution described
      above to execute the Finance Documents to which [relevant Obligor] is
      party and any documents or


                                       8
<PAGE>
      notices to be delivered by [relevant Obligor] pursuant thereto and the
      signatures set opposite their names are their true signatures:

NAME OF SIGNATORY                                       SIGNATURE

-----------------------      -----------------------    -----------------------

-----------------------      -----------------------    -----------------------

-----------------------      -----------------------    -----------------------

-----------------------      -----------------------    -----------------------

Secretary

Name:                        Date

-----------------------      -----------------------

Director

Name:                        Date

[relevant Obligor]

*Ideal's certificate only


                                       9
<PAGE>
                                   SCHEDULE 3

                            FORM OF SUPPLEMENTAL DEED


                                       10
<PAGE>
THE ORIGINAL BORROWERS

SIGNED for and on behalf of                         )
IDEAL HARDWARE LIMITED                              )
by:                                                 )

Address:          Fountain Court
                  Cox Lane
                  Chessington
                  Surrey KT9 1SJ

Fax:              020 8286 5588

Attention:        Nick Lee/Helen Hancock

SIGNED for and on behalf of                         )
BELL MICROPRODUCTS EUROPE                           )
EXPORT LIMITED by:                                  )

Address:          Fountain Court
                  Cox Lane
                  Chessington
                  Surrey KT9 1SJ

Fax:              020 8286 5588

Attention:        Nick Lee/Helen Hancock

THE DUTCH OBLIGORS

SIGNED by its Managing Partner                      )
for and on behalf of                                )
BM EUROPE PARTNERS C.V.                             )

Address:          c/o Fountain Court
                  Cox Lane
                  Chessington
                  Surrey KT9 1SJ

Fax:              020 8286 5588

Attention:        Nick Lee/Helen Hancock


                                       1
<PAGE>
SIGNED for and on behalf of                         )
BELL MICROPRODUCTS                                  )
EUROPE BV                                           )
by:                                                 )

Address:          c/o Fountain Court
                  Cox Lane
                  Chessington
                  Surrey KT9 1SJ

Fax:              020 8286 5588

Attention:        Nick Lee/Helen Hancock

THE AGENT

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Carmen Bernardis (Business Credit)

THE ARRANGER

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Carmen Bernardis (Business Credit)

THE SECURITY TRUSTEE

SIGNED for and on behalf of                         )


                                       2
<PAGE>
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Carmen Bernardis (Business Credit)

THE SWINGLINE LENDER

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Carmen Bernardis (Business Credit)

THE ISSUER

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )

Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Carmen Bernardis (Business Credit)

THE LENDERS

SIGNED for and on behalf of                         )
BANK OF AMERICA, NATIONAL                           )
ASSOCIATION by:                                     )


                                       3
<PAGE>
Address:          New Broad Street House
                  35 New Broad Street
                  London EC2M 1NH

Fax:              020 7809 5807

Attention:        Carmen Bernardis (Business Credit)

SIGNED for and on behalf of                         )
GE COMMERCIAL FINANCE LIMITED  by:                  )

Address:          Enterprise House
                  Bancroft Road
                  Reigate RH2 7RT

Fax:              01737 841 275

Attention:        Allan Walker

SIGNED for and on behalf of                         )
LLOYDS TSB COMMERCIAL FINANCE                       )
LIMITED  by:                                        )

Address:          Vanburgh House
                  Grange Road
                  Hedge End, Southampton
                  Hampshire SO30 2AF

Fax:              01489  789903

Attention:        Ronnie Whitehead or Ren Randev

SIGNED for and on behalf of                         )
ENTERPRISE FINANCE EUROPE                           )
(UK) LIMITED  by:                                   )

Address:          3rd Floor
                  31 Worship Street
                  London  EC2A 2DX

Fax:              0207 448 1931

Attention:        Peter Hayden/Cathal Brennan/Gerry Hoare/Colin Keene


                                       4