EXHIBIT
      10.25

    


    THIRD
      AMENDED
      AND RESTATED GENERAL SECURITY AGREEMENT

     

    THIS
      THIRD AMENDED AND RESTATED GENERAL SECURITY AGREEMENT dated
      as
      of February 28, 2007 (this "Agreement"),
      between Simclar, Inc., a Florida corporation ("Simclar"),
      Simclar (Mexico) Inc, a Illinois corporation ("Simclar
      - Mexico"),
      Simclar Interconnect Technologies, Inc. ("SIT"),
      a
      Delaware corporation, Simclar (North America), a North Carolina corporation
      (“Simclar NA”),
      Simclar De Mexico, S.A. de C.V., an entity organized under the laws of Mexico
      ("Simclar SA") (Simclar SA, SIT, Simclar, Simclar NA and Simclar - Mexico shall
      be individually known as a "Grantor"
      and
      collectively as the "Grantors"),
      and
      The Governor and Company of the Bank of Scotland (the "Lender")
      of the
      Facility Letter in respect of a $5,650,000 term loan originally dated October
      2,
      2001, as amended on January 17, 2003, July 1, 2003, October 14, 2004 and
      December 21, 2005, between Lender and Simclar (the "Term
      Loan Facility Letter"),
      the
      Facility Letter in respect of $7,500,000 working capital facilities originally
      dated October 2, 2001, as amended on July 25, 2002, November 10, 2003,
      October 14, 2004, December 21, 2005 and January 26, 2007 between Lender and
      Simclar (the "Working
      Capital Facilities Letter")
      and
      the Facility Letter in respect of $1,000,000 additional working capital
      facilities dated December 21, 2005, as amended on January 26, 2007, between
      Lender, Simclar and SIT (the “Additional
      Working Capital Facilities Letter,”
and
      together with the Term Loan Facility Letter and the Working Capital Facilities
      Letter, the "Facilities
      Letters")
      and
      for and on behalf of each person or other entity which is now or hereafter
      a
      Security Beneficiary (as such term is defined below). 

     

    As
      an
      express condition of Lender agreeing to make additional loans to Simclar and
      SIT, the Lender required, inter
      alia,
      that
      Grantors provide additional security for the performance of all of the
      obligations under the Loan Documents, which security Simclar agreed to provide
      in accordance with the terms of that certain Second Amended and Restated General
      Security Agreement dated as of February 23, 2006, between Simclar, Lender and
      the other parties named therein (the "Original
      Security Agreement");
      and


     

    Grantors
      desire to amend and restate the terms of the Original General Security Agreement
      in order to, inter
      alia,
      provide
      additional collateral to the Lender in order to induce Lender to fund the
      additional amounts under the Facilities Letters, and Lender is amenable to
      such
      amendment and restatement in accordance with the terms set forth herein;
      and

     

    Each
      Grantor acknowledges that it has benefited from the loans already extended
      by
      the Lender to Simclar pursuant to the terms of the Loan Documents, and that
      is
      willing to derive further benefit from the funding by Lender; and 

     

    It
      is a
      condition precedent to the obligation of Lender agreeing to make available
      to
      Simclar the facilities under the Facilities Letters (and the execution of any
      amendment thereto) that Grantors shall have executed and delivered this
      Agreement to the Lender for the benefit of the Security
      Beneficiaries.

      
        
          
          

        

        
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    Accordingly,
      the Grantors and the Lender, for the benefit of each of the Security
      Beneficiaries, hereby agree as follows:

     

    1.    DEFINITIONS

     

    Capitalized
      terms used in this Agreement but not defined herein shall have the meanings
      given to such terms in the Facilities Letters. As used herein, the following
      terms shall have the following meanings:

     

    "Accounts"
      means,
      with respect to each Grantor, all "accounts" (as defined in the UCC), including
      health-care-insurance receivables and Supporting Obligations, now owned or
      hereafter acquired by such Grantor and shall also mean and include all accounts
      receivable, contract rights, book debts, Facilities Letters, drafts and other
      obligations or indebtedness owing to such Grantor arising from the sale, lease
      or exchange of goods or other property by it and/or the performance of services
      by it (including any such obligation which might be characterized as an account,
      contract right or General Intangible under the UCC in effect in any
      jurisdiction) and all of such Grantor's rights in, to and under all purchase
      orders for goods, services or other property, and all of such Grantor's rights
      to any goods, services or other property represented by any of the foregoing
      (including returned or repossessed goods and unpaid sellers' rights of
      rescission, replevin, reclamation and rights to stoppage in transit) and all
      monies due to or to become due to such Grantor under all contracts for the
      sale,
      lease or exchange of goods or other property and/or the performance of services
      by it (whether or not yet earned by performance on the part of such Grantor),
      in
      cash case whether now in existence or hereafter arising or acquired including
      the right to receive the proceeds of such purchase orders and contracts and
      all
      collateral security and guarantees of any kind given by any Person with respect
      to any of the foregoing.

     

    "Chattel
      Paper"
      has the
      meaning set forth in the UCC (whether tangible or electronic).

     

    "Collateral"
      means
      (a) with respect to any Grantor, all of the following types and categories
      of
      personal property, wherever located, in which such Grantor now has or hereafter
      acquires any right or interest: all Accounts, Chattel Paper, Commercial Tort
      Claims identified on Annex V hereto (including any supplement to such Annex),
      Contracts, Deposit Accounts, Documents, Fixtures, General Intangibles, Goods
      (including Inventory, Equipment and any accessions thereto), Instruments,
      Intellectual Property, Investment Property, Pledged Deposits, Receivables,
      special collateral accounts and all books and records, customer lists and credit
      files related to any of the foregoing, and all proceeds and products of any
      of
      the foregoing, and (b) when used generally, all of the foregoing in which any
      Grantor now has or hereafter acquires any right or interest, provided, however,
      the term "Collateral" shall not include, (x) any Intellectual Property or
      software licenses to the extent that: (i) such Intellectual Property or software
      licenses are not assignable or capable of being encumbered as a matter of law
      or
      under the terms of the agreement for such Intellectual Property or licenses,
      without the consent of the other parties thereto or licensor thereof, and (ii)
      such consent has not been obtained or (y) any equipment leased by a third party
      to Grantor to the extent that: (i) such leased equipment is not assignable
      or
      capable of being encumbered as a matter of law or under the terms of the
      equipment lease for such leased equipment, without the consent of the lessor
      thereof, and (ii) such consent has not

      
        
          
          

        

        
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    been
      obtained, and (z) any Contract, contract right, license, agreement, lease
      pertaining to real or personal property or any other document, instrument or
      agreement of any Grantor (each such item referred to in clause (x), (y) and
      (z)
      hereof of such Grantor being hereinafter referred to as "Excluded
      Property"),
      if
      the granting of a security interest therein by such Grantor to the Lender is
      expressly prohibited by the terms and provisions of the written agreement,
      document or instrument creating or evidencing such Excluded Property or rights
      related thereto or by applicable law (it being understood and agreed that the
      Grantors shall provide to the Lender written notice of any Excluded Property
      and, promptly following a request by the Lender, such Grantor shall use its
      best
      efforts to obtain from the Person in whose favor the prohibition has been
      granted any waiver or consent necessary in order to remove or terminate such
      prohibition or permit the Lender to have a security interest in the Grantors
      rights to any such Excluded Property subject to such a prohibition and referred
      to in such request, and that any such Excluded Property so referred to shall
      constitute part of the Collateral as of the date hereof automatically upon
      the
      execution and delivery of the applicable waiver or consent).

     

    "Commercial
      Tort Claim"
      has the
      meaning set forth in the UCC.

     

    "Contracts"
      means
      all contracts, agreements and other similar consensual obligations, as the
      same
      may from time to time be amended, supplemented or otherwise modified, including
      (a) all rights to receive moneys due and to become due thereunder or in
      connection therewith, (b) all rights to damages arising out of any breach or
      default in respect thereof and (c) all rights to perform and to exercise
      remedies thereunder.

     

    "Copyrights"
      means
      (i) all copyrights arising under the laws of the United States, any other
      country or any political subdivision thereof, whether registered or unregistered
      and whether published or unpublished, all registrations and recordings thereof,
      and all applications in, connection therewith, including all registrations,
      recordings and applications in the United States Copyright Office, and (ii)
      the
      right to obtain all renewals thereof.

     

    "Copyright
      Licenses"
      means
      any written agreement naming any Grantor as licensor or licensee, granting
      any
      right under any Copyright, including the grant of rights to manufacture,
      distribute, exploit, and sell materials derived from any Copyright.

     

    "Default
      Period"
      means
      any period during which one or more Events of Default are
      continuing.

     

    "Deposit
      Accounts"
      has the
      meaning set forth in the UCC.

     

    "Documents"
      means
      all "documents" (as defined in the UCC) or other receipts covering, evidencing
      or representing Goods, now owned or hereafter acquired, by any
      Grantor.

     

    "Equipment"
      means
      all "equipment" (as defined in the UCC) now owned or hereafter acquired by
      any
      Grantor, including all rolling stock.

     

    "Event
      of Default"
      means
      an "Event of Default" as set forth in the Term Loan Facility
      Letter.

     

    "Excluded
      Property"
      has the
      meaning set forth in the definition of Collateral.

     

    "Farm
      Products"
      has the
      meaning set forth in the UCC.

    
      
        
        

      

      
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    "Fixtures"
      means
      all "fixtures" (as defined in the UCC) and all goods which are or are to be
      attached to real property in such a manner that their removal would cause damage
      to the real property and which have therefore taken on the character of the
      property.

     

    "General
      Intangibles"
      means
      all "general intangibles" (as defined in the UCC), including payment intangibles
      and Software, now owned or hereafter acquired by any Grantor, including (i)
      all
      right, title and interest in or under any Contract, models, drawings, materials
      and records, claims, literary rights, goodwill, rights of performance and
      warranties, (ii) all Intellectual Property, copyright licenses, copyrights,
      patent licenses, patents, trademark licenses, trademarks, other intellectual
      property rights, trade secrets, permits and licenses and (iii) all rights under
      insurance policies and rights of indemnification.

     

    "Goods"
      has the
      meaning set forth in the UCC, including, without limitation, embedded Software
      to the extent included in such Goods.

     

    "Grantor
      Obligations"
      means
      the collective reference to the unpaid principal and interest under the
      Facilities Letters (including interest accruing at the then applicable rate
      provided in the Facilities Letters after the final repayment date referred
      to
      therein or any acceleration thereof pursuant to the terms of the Facilities
      Letters or after the commencement of any insolvency, reorganization or like
      proceeding relating to Simclar) and all other obligations and liabilities of
      any
      Grantor to the Lender or the Security Beneficiaries, whether direct or indirect,
      absolute or contingent, due or to become due, or now existing or hereafter
      incurred, which may arise under, out of or in connection with the Facilities
      Letters, the other Loan Documents or any other document made, delivered or
      given
      by any Grantor in connection with the Loan Documents, in each case whether
      on
      account of principal, interest, reimbursement obligations, foes, indemnities,
      costs, expenses or otherwise (including all fees and disbursements of counsel
      to
      the Lender or the Security Beneficiaries that are required to be paid by any
      Grantor pursuant to the terms of any of the foregoing).

     

    "Instruments"
      means
      all "instruments," "chattel paper" (whether tangible or electronic) or "letters
      of credit" (each as defined in the UCC), including those evidencing,
      representing, arising from or existing in respect of, relating to, securing
      or
      otherwise supporting the payment of, any of the Accounts, including (but not
      limited to) the Facilities Letters, drafts, bills of exchange, trade acceptances
      and Letter-of-Credit Rights, now owned or hereafter acquired by any
      Grantor.

     

    "Intellectual
      Property"
      means
      all rights, priorities and privileges relating to intellectual property, whether
      arising under United States, multinational or foreign law or otherwise,
      including: all patents, patent applications, patent disclosures and inventions
      (whether or not patentable and whether or not reduced to practice); all
      trademarks, service marks, trade dress, trade names and corporate names and
      all
      the goodwill associated therewith; all registered and unregistered statutory
      and
      common law copyrights; all registrations, applications and renewals for any
      of
      the foregoing; all mask works; all trade secrets, confidential information,
      ideas, formulae, compositions, know-how, manufacturing and production processes
      and techniques, research and development information, drawings, specifications,
      designs, plans, improvements, proposals, technical and computer data, financial,
      business and marketing plans, and customer

      
        
          
          

        

        
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    and
      supplier lists and related information; all other proprietary rights (including
      all computer software and documentation and all license agreements and
      sublicense agreements to and from third parties relating to any of the
      foregoing); all copies and tangible embodiments of the foregoing (in whatever
      form or medium); all damages and payments for past, present and future
      infringements of the foregoing; all royalties and income due with respect to
      the
      foregoing; and the right to sue (whether at law or in equity) and recover for
      past, present and future infringements of the foregoing, and for the avoidance
      of doubt, to the extant not included in, the foregoing, all Copyrights,
      Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark
      Licenses.

     

    "Intellectual
      Property Collateral"
      means
      any Intellectual Property constituting a part of the Collateral.

     

    "Inventory"
      means
      all "inventory" (as defined in the UCC), now owned or hereafter acquired by
      any
      Grantor, wherever located, and shall also mean and include all raw materials
      and
      other materials and supplies, work-in-process and finished goods and any
      products made or processed therefrom and all substances, if any, commingled
      therewith or added thereto.

     

    "Investment
      Property"
      has the
      meaning set forth in the UCC.

     

    "Letter-of-Credit
      Rights"
      has the
      meaning set forth in the UCC (whether or not the letter of credit is evidenced
      by a writing).

     

    "Lien"
      means,
      with respect to any asset, any mortgage, lien, pledge, charge, security interest
      or similar encumbrance, whether voluntary or involuntary or arising by operation
      of law, in respect of such asset, including the Security Interests. For purposes
      of this Agreement, a Person shall be deemed to own subject to a Lien any asset
      which it has acquired or holds subject to the interest of a vendor or lessor
      under any conditional sale agreement, capital lease or other title retention
      agreement relating to such asset.

     

    "Loan
      Document"
      the
      "BoS Documents" as defined in Term Loan Facility Letter, together with this
      Agreement or any other financing statement, agreement, document or instrument
      entered into or delivered pursuant thereto or hereto.

     

    "Material
      Alteration"
      has the
      meaning set forth in Section 4.8(b)(ii).

     

    "Patents"
      means
      (i) all letters patent of the United States, any other country or any political
      subdivision thereof, all reissues and extensions thereof and all goodwill
      associated therewith, (ii) all applications for letters patent of the United
      States or any other country or any political subdivision thereof an all
      divisions, continuations and continuations-in-part thereof, and (iii) all rights
      to obtain any reissues or extensions of the foregoing.

     

    "Patent
      License"
      means
      all agreements, whether written or oral, providing for the grant by or to any
      Grantor of any right to manufacture, use or sell any invention covered in whole
      or in part by a Patent.

     

    "Permitted
      Liens"
      means
      (i) Liens for taxes, assessments, governmental charges or claims that are not
      yet due and payable or that are being contested in good faith by appropriate
      legal

      
        
          
          

        

        
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    proceedings
      promptly instituted and diligently conducted and for which a reserve or other
      appropriate provision, if any, as shall be required in conformity with generally
      accepted accounting principals ("GAAP")
      shall
      have been made, (ii) statutory and common law Liens of landlords and carriers,
      warehousemen, mechanics, suppliers, repairmen or other similar liens arising
      in
      the ordinary course of business and with respect to amounts not yet delinquent
      or being contested in good faith by appropriate legal proceedings promptly
      instituted and diligently conducted and for which a reserve or other appropriate
      provision, if any, as shall be required in conformity with GAAP shall have
      been
      made, (iii) Liens incurred or deposits made in the ordinary course of business
      in connection with workers' compensation, unemployment insurance and other
      types
      of social security, (iv) those Liens on Equipment set forth on Annex IV hereto,
      and (v) Liens permitted pursuant to the Facilities Letters.

     

    "Person"
      means
      any individual, corporation, company, limited liability company, voluntary
      association, partnership, limited liability partnership, joint venture, trust,
      unincorporated organization or government (or any agency, instrumentality or
      political subdivision thereof).

     

    "Pledge
      Agreement"
      means
      that certain Third Amended and Restated Pledge Agreement dated February 23,
      2006 and executed in connection with the Facilities Letters.

     

    "Pledged
      Account"
      has the
      meaning set forth in Section 7.1.

     

    "Pledged
      Deposits"
      means
      all deposits of money, whether or not evidenced by certificates, with any bank
      (including all rights to receive interest on such deposits and all other sums
      credited by or due from third parties with respect thereto), which originate
      from Collateral or Proceeds and which are deposited with any bank or other
      financial institution following an Event of Default.

     

    "Proceeds"
      means
      all proceeds of, and all other profits, products, rentals or receipts, in
      whatever form, arising from the collection, sale, lease, exchange, assignment,
      licensing or other disposition of, or other realization upon, collateral,
      including all claims of any Granter against third parties for loss of, damage
      to
      or destruction of, or for proceeds payable under, or unearned premiums with
      respect to, policies of insurance in respect of, any Collateral, and any
      condemnation or requisition payments with respect to any Collateral, in each
      case whether now existing or hereafter arising.

     

    "Receivables"
      means
      the Accounts, Chattel Paper, Pledged Deposits, Documents, General Intangibles,
      Intellectual Property representing rights to the payment of money (however
      arising), and any related Instruments.

     

    "Released
      Collateral"
      has the
      meaning set forth in Section 9.10(c).

     

    "Security
      Beneficiary"
      means
      the Lender and any assignee, novatee or transferee of any of the rights and
      obligations of the Lender under the Facilities Letters.

     

    "Security
      Interests"
      means
      the security interests in the Collateral granted hereunder securing the Grantor
      Obligations.

      
        
          
          

        

        
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    "Software"
      has the
      meaning set forth in the UCC.

     

    "Supporting
      Obligations"
      has the
      meaning set forth in the UCC.

     

    "Trademarks"
      means
      (i) all trademarks, trade names, corporate names, company names, business names,
      fictitious business names, trade styles, service marks, logos and other source
      or business identifiers, and all goodwill associated therewith, now existing
      or
      hereafter adopted or acquired all registrations and recordings thereof, and
      all
      applications in connection therewith, whether in the United States Patent and
      Trademark Office or in any similar office or agency of the United States, any
      State thereof or any other country or any political subdivisions thereof, or
      otherwise and all common-law rights related thereto, and (ii) the right to
      obtain all renewals thereof.

     

    "Trademark
      License"
      means
      any agreement, whether written or oral, providing for the grant by or to any
      Grantor of any right to use any Trademark.

     

    "UCC"
      means
      the Uniform Commercial Code as from time to time in effect in the State of
      Florida; provided
      that if
      by reason of mandatory provisions of law, the perfection or the effect of
      perfection or non-perfection of a security interest in any Collateral is
      governed by the Uniform Commercial Code as in effect in a jurisdiction other
      than Florida, "UCC" means the Uniform Commercial Code as in effect in such
      other
      jurisdiction for purposes of the provisions hereof relating to such perfection
      or effect of perfection or non-perfection; and provided further
      that to
      the extent that the UCC is used to define any term herein or in any Loan
      Document and such term is defined differently in different Articles or Divisions
      of the UCC, the definition of such term contained in Article or Division 9
      shall
      govern.

     

    2.    GRANT.

     

    To
      secure
      payment, performance and observance of the Grantor Obligations, each Grantor
      hereby: (i) pledges, and grants to the Lender, for the benefit of the Lender
      and
      the other Security Beneficiaries, a continuing security interest in, and a
      right
      of set-off against, such Grantor's Collateral (including the Intellectual
      Property Collateral) and all present and future right, title and interest of
      such Grantor therein; and (ii) upon demand by the Lender, upon the occurrence
      of
      an Event of Default and until such Event of Default shall have been cured,
      assigns, transfers and conveys the Intellectual Property Collateral to the
      Lender, for the benefit of the Lender and the other Security
      Beneficiaries.

     

    The
      security interests and assignments granted herein shall not relieve any Grantor
      from the performance of any term, covenant, condition or agreement on such
      Grantor's part to be performed or observed under or in respect of any of the
      Collateral or impose any obligation on the Lender or any Security Beneficiary
      to
      perform or observe any such term, covenant, condition or agreement on such
      Grantor's part to be so performed or observed or impose any liability on the
      Lender or any Security Beneficiary for any act or omission on the part of such
      Grantor relative thereto or for any breach of any representation or warranty
      on
      the part of such Grantor contained in this Agreement or any of the Loan
      Documents or in respect of the Collateral or made in connection herewith or
      therewith.

      
        
          
          

        

        
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    3.    REPRESENTATIONS
      AND WARRANTIES.

     

    Each
      Grantor hereby represents and warrants to the Lender and to each Security
      Beneficiary, as of the date hereof (which representations and warranties are
      in
      addition to, and not in lieu of or in limitation of any representations and
      warranties made in any of the other Loan Documents) that:

     

    Section
      3.1. Principal
      Location; Jurisdiction of Incorporation.
      Such
      Grantor's mailing address, and the location of its chief executive office and
      each location of any books and records (including all computer data and related
      software including source codes) relating to the Accounts is disclosed in
Annex
      I
      hereto;
      such Grantor has no other places of business except those set forth in
Annex
      I
      hereto.
      Simclar is a corporation duly organized, validly existing and in good standing
      in the State of Florida. Simclar - Mexico is a corporation duly organized,
      validly existing and in good standing in the State of Illinois. Simclar SA
      is an
      entity duly organized, validly existing and in good standing under the laws
      of
      Mexico. Simclar NA is an entity duly organized, validly existing and in good
      standing in the State of North Carolina. 

     

    Section
      3.2. Property
      Locations.
      Except
      as permitted hereby, the Inventory, Equipment and Fixtures are located solely
      at
      the locations described in Annex
      I
      hereto.
      Except as permitted hereby, none of such locations are leased by such Grantor
      as
      lessee except those so designated in Annex
      I
      hereto.

     

    Section
      3.3. No
      Other Names.
      Except
      as listed on Annex
      II
      hereto,
      such Grantor does not conduct or has not conducted any trade or business under
      any name except the name in which it has executed this Agreement. Such Grantor
      has not been a party to any merger or consolidation in the last five years
      except as disclosed on Annex
      II.

     

    Section
      3.4. Filing
      Requirements.
      None of
      the Equipment is covered by any certificate of title. None of the Collateral
      consists of property subject to a statute or treaty referred to in Section
      9-311
      of the UCC (other than Intellectual Property Collateral). None of the Collateral
      is of a type with respect to which any Lien may be filed under any federal
      statute except for patents, copyrights and trademarks held by such Grantor
      and
      described in Annex
      III
      hereto.

     

    Section
      3.5. No
      Financing Statements.
      Except
      for financing statements filed with respect to the Equipment set forth on
Annex
      IV,
      no
      financing statement describing all or any portion of the Collateral which has
      not lapsed or been terminated has been filed in any jurisdiction except
      financing statements naming the Lender as secured party.

     

    Section
      3.6. Title
      to Properties.
      Such
      Grantor has good and marketable title to and ownership of the Collateral held
      by
      it, free and clear of all Liens except Permitted Liens. Such Grantor has taken
      all actions necessary under the UCC to perfect its interest in any Accounts
      purchased or otherwise acquired by it, as against its assignors and creditors
      of
      its assignors. Except for the Equipment set forth on Annex
      IV,
      no
      Collateral is in the possession of any Person (other than such Grantor)
      asserting any claim thereto or Security Interest therein, except that the Lender
      may have possession of Collateral as contemplated hereby.

     

    Section
      3.7. Intellectual
      Property.
      Annex
      III
      hereto
      contains a complete and accurate list as of the date hereof of all patented
      and
      registered Intellectual Property owned by such

      
        
          
          

        

        
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    Grantor
      and all pending patent applications and applications for the registration of
      other Intellectual Property owned or filed by such Grantor. Annex
      III
      also
      contains a complete and accurate list of all licenses and other rights granted
      by such Grantor to any third party with respect to the Intellectual Property
      and
      licenses and other rights granted by any third party to such Grantor. Except
      as
      set forth on Annex III such Grantor has made all necessary filings and
      recordations and has paid all required fees and taxes to record and maintain
      its
      ownership of the patented or registered intellectual property rights in the
      United States Patent and Trademark Office and the United States Copyright Office
      and in each other applicable filing office (whether in the United States or
      otherwise) and no consents are required under any licenses listed in
Annex
      III
      to the
      grant of the security interest to, and exercise of any rights and remedies
      of,
      the Lender.

     

    Section
      3.8. Contracts.
      No
      consent of any party to any Contract is required in connection with the
      execution, delivery and performance of this Agreement, other than consents
      which
      if not obtained could not, individually or in the aggregate, result in a
      Material Adverse Effect and those consents set forth in clauses (x)(i) and
      (y)(i) under the definition of "Collateral."

     

    Section
      3.9. Farm
      Products.
      None of
      the Collateral constitutes, or is the Proceeds of, Farm Products.

     

    Section
      3.10. Perfection
      Certificate.
      The
      information set forth in the Perfection Certificate substantially in the form
      of
Exhibit
      A
      attached
      hereto and delivered to the Lender on the date hereof and prior to the execution
      and delivery of this Agreement is correct and complete.

     

    Section
      3.11. Security
      Interest.
      The
      Security Interests constitute valid security interests under the UCC and other
      applicable law securing the Grantor Obligations. The Security Interests
      constitute perfected security interests in the Collateral to the extent that
      a
      security interest therein may be perfected (a) by filing pursuant to the UCC,
      (b) with respect to registered Intellectual Property Collateral, by filing
      with
      the United States Patent and Trademark Office or the United States Copyright
      Office, or (c) with respect to money, letters of credit, instruments and
      certificated securities, by possession of the Collateral if maintained by the
      Lender or any Security Beneficiary. Such perfected Security Interests are and
      at
      all times shall be prior to all Liens and rights of others therein except for
      (a) unrecorded Permitted Liens which are (i) not for borrowed money, (ii) are
      not securing obligations which are past due and (iii) have priority over the
      Security Interests by operation of law, and (b) Permitted Liens on Equipment
      existing on the date hereof and identified on Annex
      IV.

     

    Section
      3.12. Receivables.
      No
      amount payable to such Grantor under or in connection with any Receivable is
      evidenced by any Instrument or Chattel Paper which has not been delivered to
      the
      Lender; none of the obligors on any Receivable is a governmental authority
      (including any the United States, any state thereof, or any other United States
      or foreign federal, state or local governmental agency, authority,
      instrumentality, regulatory body or subdivision); and the amounts represented
      by
      each Grantor to the Lender or any Security Beneficiary from time to time as
      owing to such Grantor in respect of the Receivables will at all such times
      be
      accurate in all material respects.


    
      
        
          
          

        

        
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    4.    COVENANTS.

     

    From
      the
      date of this Agreement, and thereafter until this Agreement is
      terminated:

     

    Section
      4.1. Inspection
      and Verification.
      The
      Lender and such Persons as the Lender may designate from time to time shall
      have
      the right, at any reasonable time or times upon prior notice and during each
      Grantor's usual business hours, to inspect the Collateral, all records related
      thereto (and to make extracts and copies from such records), and the promises
      upon which any of the Collateral is located. In addition, the Lender and its
      designees shall have such other inspection and verification rights concerning
      the Collateral as are provided or permitted under other of the Loan
      Documents.

     

    Section
      4.2. Records
      and Reports.
      Each
      Grantor will maintain complete and accurate books and records with respect
      to
      the Collateral, and furnish to the Lender such reports relating to the
      Collateral as the Lender shall from time to time reasonably
      request.

     

    Section
      4.3. Financing
      Statements and Other Actions.
      Each
      Grantor will execute and deliver to the Lender and hereby authorizes the Lender
      to file all financing statements and amendments thereto and other documents,
      and
      take such other actions, as are from time to time reasonably requested by the
      Lender in order to perfect and to maintain and protect a first priority
      perfected Security Interest in the Collateral or to enable the Lender, on behalf
      of the Security Beneficiaries, to exercise and enforce its rights and remedies
      hereunder with respect to the Collateral.

     

    Section
      4.4. Change
      in Location or Name; Change in Jurisdiction of Organization.
      Each
      Grantor will not (i) have any Inventory or Equipment or products thereof (other
      than Inventory sold in the ordinary course of its business) at a location other
      than a location specified in Annex
      I
      hereto,
      except for Inventory and Equipment in transit between such locations, (ii)
      maintain records relating to the Receivables at a location other than those
      locations specified on Annex
      I
      hereto
      as a location where such records are kept, (iii) maintain a place of business
      at
      a location other than a location specified on Annex
      I
      hereto,
      (iv) change its name or jurisdiction of organization, or (v) change its mailing
      address, unless in each such case such Grantor shall have given the Lender
      at
      least 30 days' prior written notice thereof and delivered any financing
      statements or other documents requested by the Lender.

     

    Section
      4.5. Other
      Financing Statements; Other Liens.
      Each
      Grantor will not sign, authorize the signing on its behalf or authorize the
      filing of any financing statement naming it as debtor which covers all or any
      portion of the Collateral, except financing statements naming the Lender as
      secured party and those filed in respect of Permitted Liens. Each Grantor shall
      not create, permit or suffer to exist any Liens on or with respect to any of
      the
      Collateral except Permitted Liens on Equipment existing on the date hereof
      and
      identified on Annex
      IV.
      Each
      Grantor acknowledges that it is not authorized to file any amendment or
      termination statement with respect to any financing statement without the prior
      written consent of the Lender and agrees that it will not do so without the
      prior written consent of the Lender (other than such filings that are made
      with
      respect to Permitted Liens), subject to such Grantor's rights under Section
      9-509(d)(2) of the UCC.

      
        
          
          

        

        
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    Section
      4.6. Accounts.

     

    (a) Except
      as
      otherwise provided in this Agreement, each Grantor will collect and enforce
      in
      accordance with its past collection practices and procedures, at each Grantor's
      sole expense, all amounts due or hereafter due to such Grantor under the
      Accounts.

     

    (b) Except
      in
      the ordinary course of business, each Grantor will not, without the Lender's
      prior written consent, grant any extension of the time of payment of any of
      the
      Accounts, compromise, compound or settle the same for less than the full amount
      thereof, release, wholly or partly, any Person liable for the payment thereof,
      or allow any credit or discount whatsoever thereon.

     

    Section
      4.7. Maintenance
      of Inventory and Equipment.
      Each
      Grantor will do all things necessary to maintain, preserve, protect and keep
      the
      Inventory in saleable condition and the Equipment in as good a state of repair
      and condition as at the date hereof except for ordinary wear and
      tear.

     

    Section
      4.8. Insurance.

     

    (a) Each
      Grantor hereby irrevocably makes, constitutes, and appoints the Lender (and
      all
      officers, employees, or agents designated by the Lender) as such Grantor's
      true
      and lawful attorney (and agent-in-fact) for the purpose of making, settling,
      and
      adjusting claims under policies of insurance, endorsing the name of such Grantor
      on any check, draft, instrument, or other item of payment for the proceeds
      of
      such policies of insurance and for making all determinations and decisions
      with
      respect thereto. In the event that a Grantor at any time or times shall fail
      to
      obtain or maintain any of the policies of insurance required by Section 4.8(b)
      or to pay any premium in whole or part relating thereto, the Lender may, without
      waiving or releasing any obligation or liability of such Grantor hereunder
      or
      any Event of Default, in its sole discretion, obtain and maintain such policies
      of insurance and pay such premium and take any other action with respect thereto
      as the Lender deems advisable. All such sums so disbursed by the Lender,
      including reasonable attorneys' fees and expenses, court costs, expenses and
      other charges relating thereto, shall be payable, upon demand, by such Grantor
      to the Lender and shall be additional Grantor Obligations secured
      hereby.

     

    (b) (i) Each
      Grantor will maintain, with financially sound and reputable companies, insurance
      policies (A) insuring the Collateral against loss by fire, explosion, theft
      and
      such other casualties in accordance with its past business practices and (B)
      to
      the extent requested by the Lender, insuring such Grantor, the Lender and the
      Security Beneficiaries against liability for loss by fire, explosion, theft
      and
      such other casualties, personal injury and property damage relating to such
      Collateral in such form and amounts as may be reasonably required by the
      Lender.

     

    (ii) All
      such
      insurance shall at all times (A) provide that no cancellation, material
      reduction in amount or material change in coverage (collectively, a
      "Material
      Alteration"),
      thereof shall be effective until at least 30 days after receipt by the Lender
      of
      written notice thereof except, in the case of any Material Alteration resulting
      from nonpayment of premiums, in which instance such Material Alteration shall
      not be effective until at least 10 days after receipt

      
        
          
          

        

        
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    by
      the
      Lender of written notice thereof, (B) name the Lender as insured party or loss
      payee, and (C) be reasonably satisfactory to the Lender in all other
      respects.

     

    (iii) Each
      Grantor shall deliver to the Lender a report of a reputable insurance broker
      with respect to such insurance as the Lender may from time to time reasonably
      request.

     

    Section
      4.9. Titled
      Vehicles.
      Upon
      request of the Lender, each Grantor shall promptly execute and deliver any
      instruments and documents that may be necessary or that the Lender may request
      in order to perfect the Security Interests in all property now or hereafter
      owned by such Grantor and subject to a certificate of title.

     

    Section
      4.10. Bailees.
      If any
      Collateral of a Grantor is in the possession or control of any warehouseman,
      processor or other bailee, such Grantor shall notify such warehousemen,
      processors and other bailees in writing (with a copy to the Lender) of the
      Lender's security interest therein and, upon the occurrence and continuation
      of
      an Event of Default and upon the Lender's request, instruct such Persons to
      hold
      all such Collateral for the Lender's account and subject to the Lender's
      instructions. Each Grantor will use its best efforts to obtain from any
      warehouseman, processor or other bailee written acknowledgment, in form and
      substance satisfactory to Lender, that such warehouseman, processor or other
      bailee holds possession of the Collateral for the Lender's benefit. If any
      Grantor is unable to obtain a written acknowledgment of the type required by
      the
      previous sentence from any warehouseman, processor or other bailee, then such
      Grantor shall move such Collateral to a warehouseman, processor or bailee who
      will provide the required acknowledgment. If more than $100,000 of Collateral
      of
      a Grantor is held by a bailee, such Grantor will file a financing statement
      in
      the appropriate jurisdiction against such bailee in a form appropriate for
      the
      underlying transaction. In addition, each Grantor agrees that if any warehouse
      receipt or receipt in the nature of a warehouse receipt is issued with respect
      to any of its Inventory, such warehouse receipt or receipt in the nature of
      a
      warehouse receipt shall not be "negotiable" (as such term is defined in Section
      7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
      or under other relevant law), or, if any warehouse receipt or receipt in the
      nature thereof is "negotiable" (as such term is so used), such Grantor shall
      promptly take all action as may be required under the relevant jurisdiction
      to
      grant a perfected security interest in such Collateral to the Lender for the
      benefit of the Security Beneficiaries.

     

    Section
      4.11. Delivery
      of Pledged Collateral; Control of Collateral.
      To the
      extent not required to be delivered to the Lender pursuant to another provision
      of this Agreement or pursuant to another Loan Document, each Grantor will hold
      in trust for the Lender upon receipt and, upon the occurrence of an Event of
      Default and the continuation thereof or if otherwise requested by the Lender,
      promptly deliver to the Lender the originals of all Instruments, Documents,
      Chattel Paper, letters of credit, certificated securities and certificates
      issued in respect of Pledged Deposits, which shall be endorsed in blank, marked
      with such legends and accompanied by such stock powers and assignments as the
      Lender shall specify. To the extent Pledged Deposits constitute Deposit
      Accounts, each Grantor shall take all steps that may be required (including
      the
      obtaining and furnishing to the Lender appropriate account control agreements
      as
      required under Section 9-104 of the UCC) to grant "control" (as defined in
      Section 9-104 of the UCC) to the Lender. Each Grantor further agrees to take
      such steps as Lender may reasonably request for the Lender to obtain "control"
      (as set forth in corresponding provisions in

      
        
          
          

        

        
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    Sections
      9-104, 9-105, 9-106 and 9-107 relating to what constitutes "control" for such
      items of Collateral) of any Investment Property, other Deposit Accounts,
      Letter-of-Credit Rights or electronic Chattel Paper, with any agreements
      establishing control to be in form and substance satisfactory to the
      Lender.

     

    Section
      4.12. Investment
      Property.
      If a
      Grantor acquires any Investment Property (whether or not a certificated
      security), such Grantor (i) shall take and cause all other relevant parties
      to
      take all such actions as may be requested by the Lender (including obtaining
      for
      the Lender the agreement of any securities intermediary to comply with
      instructions and entitlement orders originated by the Lender without further
      consent of such Grantor or other registered owner or entitlement holder) in
      order to cause the Security Interests in such Collateral to be perfected by
      "control" (as such term is used in Articles 8 and 9 of the UCC) and (ii) will
      take and will cause such other relevant parties to take all other action
      necessary or appropriate to create and maintain a perfected first priority
      Lien
      in such Investment Property in favor of the Lender for the benefit of the
      Security Beneficiaries.

     

    Section
      4.13. Intellectual
      Property Covenant.
      Each
      Grantor shall make all necessary filings and recordings and pay all required
      fees and taxes to record and maintain its registration and ownership of, and
      do
      all other things and take all other actions necessary to preserve, protect
      and
      maintain, each item of Intellectual property owned by it, other than such items
      the loss or forfeiture of which would not individually or in the aggregate
      have
      a Material Adverse Effect. Without limiting the foregoing:

     

    (a) Each
      Grantor (either itself or through licensees) will (i) continue to use each
      material Trademark on each and every trademark class of goods applicable to
      its
      current line as reflected in its current catalogs, brochures and price lists
      in
      order to maintain such trademark in full force free from any claim of
      abandonment for non-use, (ii) maintain as in the past the quality of products
      and services offered under such Trademark, (iii) use such Trademark with the
      appropriate notice of registration and all other notices and legends required
      by
      applicable requirements of law, (iv) not adopt or use any mark which is
      confusingly similar or a colorable imitation of such Trademark unless the
      Lender, for the benefit of the Security Beneficiaries, shall obtain a perfected
      Security Interest in such mark pursuant to this Agreement, and (v) not (and
      not
      permit any licensee or sublicensee thereof to) do any act or knowingly omit
      to
      do any act whereby such Trademark may become invalidated or impaired in any
      way.

     

    (b) Each
      Grantor (either itself or through licensees) will not do any act, or omit to
      do
      any act, whereby any material Patent may become forfeited, abandoned or
      dedicated to the public.

     

    (c) Each
      Grantor (either itself or through licensees) (i) will employ each material
      Copyright and (ii) will not (and will not permit any licensee or sublicensee
      thereof to) do any act or knowingly omit to do any act whereby any material
      portion of the Copyrights may become invalidated or otherwise impaired. Such
      Grantor will not (either itself or through licensees) do any act whereby any
      material portion of the Copyrights may fall into the public domain.

      
        
          
          

        

        
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    (d) Each
      Grantor (either itself or through licensees) will not do any act that knowingly
      uses any material Intellectual Property to infringe the intellectual property
      rights of any other Person.

     

    (e) Each
      Grantor will notify the Lender and the Security Beneficiaries immediately if
      it
      knows, or has reason to know, that any application or registration relating
      to
      any material Intellectual Property may become forfeited, abandoned or dedicated
      to the public, or of any adverse determination or development (including the
      institution of, or any such determination or development in, any proceeding
      in
      the United States Patent and Trademark Office, the United States Copyright
      Office or any court or tribunal in any country) regarding such Grantor's
      ownership of, or the validity of, any material Intellectual Property or such
      Grantor's right to register the same or to own and maintain the
      same.

     

    (f) Whenever
      a Grantor, either by itself or through any agent, employee, licensee or
      designee, shall file an application for the registration of Intellectual
      Property with the United States Patent and Trademark Office, the United States
      Copyright Office or any similar office or agency in any other country or any
      political subdivision thereof, such Grantor shall report such filing to the
      Lender within five business days after the last day of the fiscal quarter in
      which such filing occurs. Upon request of the Lender, each Grantor shall execute
      and deliver, and have recorded, any and all agreements, instruments, documents
      and papers as the Lender may request to evidence the Security Interest in any
      Copyright, Patent or Trademark and the goodwill and general intangibles of
      such
      Grantor relating thereto or represented thereby.

     

    (g) Each
      Grantor shall take all reasonable and necessary steps, including in any
      proceeding before the United Status Patent and Trademark Office, the United
      States Copyright Office or any similar office or agency in any other country
      or
      any political subdivision thereof to maintain and pursue each application (and
      to obtain the relevant registration) and to maintain each registration of the
      material Intellectual Property, including filing of applications for renewal,
      affidavits of use and affidavits of incontestability.

     

    (h) In
      the
      event that any material Intellectual Property is infringed, misappropriated
      or
      diluted by a third party, each Grantor shall (i) take such actions as such
      Grantor shall reasonably deem appropriate under the circumstances to protect
      such Intellectual Property and (ii) if such Intellectual Property is of material
      economic value, promptly notify the Lender after it learns thereof and sue
      for
      infringement, misappropriation or dilution, to seek injunctive relief where
      appropriate and to recover any and all damages for such infringement,
      misappropriation or dilution.

     

    Section
      4.14. Federal
      Claim.

     

    (a) Claims.
      Each
      Grantor will notify the Lender of any material Receivable which constitutes
      a
      claim against the United States government or any instrumentality or agency
      thereof, the assignment of which claim is restricted by federal
      law.

     

    (b) Action.
      Upon
      the request of the Lender, each Grantor will take all reasonable actions
      required to comply to the Lender's satisfaction, with the Assignment of Claims
      Act of 1940, as amended, or any similar applicable law, with respect to any
      such
      material Receivable.

      
        
          
          

        

        
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    Section
      4.15. Commercial
      Tort Claims.
      If any
      Grantor shall at any time acquire a Commercial Tort Claim, then such Grantor
      shall immediately notify the Lender in writing signed by such Grantor of the
      brief details thereof and grant to the Lender in such writing a security
      interest therein and in the proceeds thereof, all upon the terms of this
      Agreement, with such writing to be in form and substance satisfactory to the
      Lender.

     

    Section
      4.16. Subsidiaries.
      If any
      Grantor shall at any time control, directly or indirectly, or acquire any direct
      or indirect equity participation in, any corporation, partnership, trust or
      other business association, then such Grantor shall immediately notify the
      Lender in writing signed by such Grantor of the details thereof and take all
      action with may be necessary to grant to the agent a security interest therein.
      Simclar agrees to cause Simclar - England to become a party to this Agreement
      upon the acquisition of any assets.

     

    5.    REMEDIES
      UPON DEFAULT.

     

    Upon
      the
      occurrence and during the continuance of an Event of Default, whether or not
      all
      of the Grantor Obligations shall have become due and payable, the Lender may,
      in
      addition to its rights under any of the Loan Documents:

     

    Section
      5.1. General.
      Exercise any or all of the rights and remedies provided (i) in this Agreement,
      (ii) to a secured party when a debtor is in default under a security agreement
      governed by the UCC or (iii) to a secured party when a debtor is in default
      by
      any other applicable law including any law governing the exercise of a bank's
      right of set-off or bankers' lien. Without precluding any other methods of
      sale,
      the sale of Collateral shall be deemed to have been made in a commercially
      reasonable manner if conducted in conformity with reasonable commercial
      practices of commercial lenders disposing of similar property, but in any event
      the Lender may sell Collateral on such terms as the Lender may choose without
      assuming any credit risk and without any obligation to advertise or give notice
      of any kind not expressly required under this Agreement or required by
      applicable law (to the extent such notice may not be waived under applicable
      law).

     

    Section
      5.2. Sale
      or Disposition of Collateral.
      Collect, receive, appropriate and realize upon the Collateral, and sell, resell,
      assign, lease, give option or options to purchase, or otherwise dispose of,
      transfer and deliver all or any part of the Collateral (or contract to do any
      of
      the foregoing), in one or more parcels at public or private sale or sales,
      at
      any exchange, broker's board or office of the Lender or any Security Beneficiary
      or elsewhere upon such terms and conditions as it may deem advisable and at
      such
      prices as it may deem best, for cash or on credit or for future delivery without
      assumption of any credit risk. The Lender or any Security Beneficiary shall
      have
      the right upon any such public sale or sales, and, to the extent permitted
      by
      law, upon any such private sale or sales, to purchase the whole or any part
      of
      the Collateral so sold, free of any right or equity of redemption in any
      Grantor, which right or equity is hereby waived and released to the fullest
      extent permitted by applicable law. To the fullest extent permitted by
      applicable law, each Grantor waives all claims, damages and demands it may
      acquire against the Lender or any Security Beneficiary arising out of the
      exercise by them of any rights hereunder.

      
        
          
          

        

        
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    Section
      5.3. Access
      to Leased Premises.
      Immediately enter upon any premises leased by any Grantor for the storage,
      warehousing or maintenance of Inventory and remove, take possession and dispose
      of, or store at another site, such Inventory in the Lender's sole discretion.
      

     

    Section
      5.4. Pledged
      Deposits.
      Without
      any necessity on the Lender's part to resort to other security or sources of
      reimbursement for the Grantor Obligations, at any time during the continuance
      of
      an Event of Default and without notice to any Person, exercise rights of set-off
      against any of the Pledged Deposits (general or special, time or demand,
      provisional or final) or other sums of any Grantor in the possession of or
      in
      transit to the Lender for application to the Grantor Obligations, which rights
      shall be cumulative with the Lender's other rights and remedies including other
      rights of set-off.

     

    Section
      5.5. Grant
      of License to Use General Intangibles.
      For the
      purpose of enabling the Lender to exercise rights and remedies thereunder during
      the continuation of an Event of Default, each Grantor hereby grants to the
      Lender an irrevocable, nonexclusive license (to the extent permitted by
      applicable law, exercisable without payment of royalty or other compensation
      to
      such Grantor) to use, assign, license or sublicense any of the General
      Intangibles to the extent permitted by the terms of such General Intangibles,
      wherever the same may be located, including in such license reasonable access
      to
      all media in which any of the General intangibles may be recorded or stored
      and
      to all computer programs used for the compilation or printout thereof.
      Notwithstanding the foregoing, the Lender shall have no obligations or
      liabilities regarding any or all or the General Intangibles by reason of or
      arising out of, this Agreement.

     

    Section
      5.6. Specific
      Performance.
      Each
      Grantor agrees that, in addition to all other rights and remedies granted to
      the
      Lender in this Agreement and any other Loan Document, the Lender shall be
      entitled to specific performance said injunctive and other equitable relief,
      and
      each Grantor further agrees to waive any requirement for the securing or posting
      of any bond or other security in connection with the obtaining of any such
      specific performance and injunctive or other equitable relief.

     

    Section
      5.7. Additional
      Liabilities Upon Default.
      Upon
      the request of the Lender after the occurrence and during the continuance of
      an
      Event of Default, each Grantor will promptly

     

    (a) Assembly
      of Collateral.
      Assemble and make available to the Lender the Collateral and all records
      relating thereto at any place or places specified by the Lender within the
      continental United States of America.

     

    (b) Secured
      Party Access.
      Permit
      the Lender, or the Lender's representatives and agents, to enter any premises
      where all or any part of the Collateral, or the books and records relating
      thereto, or both, are located, to take possession of all or any part of the
      Collateral and to remove all or any part of the Collateral.

     

    6.    WAIVERS,
      AMENDMENTS AND REMEDIES.

     

    No
      failure on the part of the Lender to exercise, and no delay in exercising,
      any
      right, power or remedy hereunder shall operate as a waiver thereof, nor shall
      any single or partial exercise of any such right, power or remedy by the Lender
      preclude any other or further exercise

      
        
          
          

        

        
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    thereof
      or the exercise of any other right, power or remedy. All remedies hereunder
      are
      cumulative and are not exclusive of any other remedies provided by law. The
      Lender shall not be deemed to have waived any rights hereunder or under any
      other agreement or instrument unless such waiver shall be in writing and signed
      by such parties.

     

    7.    PROCEEDS;
      COLLECTION OF RECEIVABLES.

     

    Section
      7.1. Collection
      of Receivables.
      The
      Lender may at any time during a Default Period, without notice to any Grantor,
      elect to enforce collection of any Receivable, require that the Proceeds of
      Receivables or other Collateral be paid directly to the Lender or to any account
      specified by the Lender and/or require that Proceeds of Receivables or other
      Collateral received by such Grantor be deposited into any account specified
      by
      the Lender (any account referred to in this sentence being a "Pledged
      Account").
      During any Default Period, each Grantor shall (if requested to do so by Lender),
      and/or Lender may, promptly notify the account debtors or obligors of the
      Receivables of the Lender's interest therein and direct such account debtors
      or
      obligors to make payment of all amounts then or thereafter due under the
      Receivables directly to the Lender or to any account specified by the Lender.
      During a Default Period, each Grantor shall hold in trust for the Lender all
      amounts and Proceeds received by it with respect to the Receivables and other
      Collateral, shall segregate all such amounts and Proceeds from other funds
      of
      such Grantor, and shall at all tames thereafter promptly deliver to the Lender
      (or into any Pledged Account as the Lender may specify) all such amounts and
      Proceeds in the same form as so received, whether by cash, check, draft or
      otherwise, with any necessary endorsements. Each Grantor will execute and
      deliver to the Lender, for delivery by the Lender to each bank or other
      financial institution with which it maintains any bank or deposit account (or
      if
      so instructed by the Lender will execute and deliver directly to each such
      bank
      or other financial institution) such notices as the Lender may from time to
      time
      request advising each such bank or other financial institution that Proceeds
      deposited to an account during a Default Period constitute Pledged Deposits
      hereunder, subject to the Security Interest granted hereby, and instructing
      each
      such bank or other financial institution that during the Default Period each
      Pledged Account and all Pledged Deposits are to be maintained by such bank
      or
      other financial institution subject to the absolute dominion and control of
      the
      Lender and are to be delivered, disbursed or otherwise distributed solely in
      accordance with the instructions of the Lender, and such Grantor shall take
      all
      such other actions as may otherwise be required under applicable law to perfect
      the Security Interest in the Pledged Accounts and Pledged Deposits.

     

    Section
      7.2. Application
      of Proceeds.

     

    (a) During
      the continuance of an Event of Default, the Lender shall have the continuing
      and
      exclusive right to apply or reverse and re-apply any and all payments to any
      portion of the Grantor Obligations. To the extent that a Grantor makes a payment
      or payments to the Lender or the Lender receives any payment or proceeds of
      the
      Collateral, which payment or proceeds or any part thereof are subsequently
      invalidated, declared to be fraudulent or preferential, set aside or required
      to
      be repaid to a trustee, receiver or any other party under any bankruptcy law,
      state or federal law, common law or equitable cause, then, to the extent of
      such
      payment or proceeds, the Grantor Obligations or part thereof intended to be
      satisfied and this Agreement shall be revived and continue in full force and
      effect, as if such payment or proceeds had not been received by such
      party.

      
        
          
          

        

        
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    (b) The
      proceeds of any sale of or collection of Collateral, as well as any Collateral
      consisting of cash, shall be applied by the Lender first, to the payment of
      the
      costs and expenses of any such sale or collection, including reasonable fees
      and
      disbursements of the Lender's agents and counsel, and of any judicial proceeding
      wherein the same may be made, and of all expenses, liabilities and advances
      (to
      the extent such advances are reasonably made for the protection of the
      Collateral or the enforcement of the Lender's security interest in the
      Collateral) made or incurred by the Lender, together with interest thereon,
      second, in satisfaction of the Grantor Obligations in the order set forth in
      the
      Facilities Letter, and third, to whomsoever may be lawfully entitled to receive
      any surplus. Each Grantor shall remain liable for any deficiency if the proceeds
      of sale or other disposition of the Collateral are insufficient to pay the
      Grantor Obligations and the fees and disbursements of any attorneys employed
      by
      the Lender or any Security Beneficiary to collect such deficiency. Upon any
      sale
      of the Collateral by the Lender (including pursuant to a power of sale granted
      by statute or under a judicial proceeding), the receipt of the Lender or of
      the
      officer making the sale shall be a sufficient discharge to the purchaser or
      purchasers of the Collateral so sold and such purchaser or purchasers shall
      not
      be obligated to see to the application of any part of the purchase money paid
      over to the Lender or such officer or be answerable in any way for the
      misapplication thereof.

     

    8.    GENERAL
      PROVISIONS.

     

    Section
      8.1. Notice
      of Disposition of Collateral.
      Any
      notice of any public sale or the time after which any private sale or other
      disposition of all or any part of the Collateral may be made shall be deemed
      reasonable if given to each Grantor at least 10 days prior to the time of any
      such public sale or the time after which any such private sale or other
      disposition may be made.

     

    Section
      8.2. Compromises
      and Collection.
      Each
      Grantor recognizes that set-offs, counterclaims, defenses and other claims
      may
      be asserted by obligors with respect to certain of the Receivables, that certain
      of the Receivables may be or become uncollectible in whole or in part and that
      the expense and probability of success in litigating a disputed Receivable
      may
      exceed the amount that reasonably may be expected to be recovered with respect
      to a Receivable. In view of the foregoing, each Grantor agrees that the Lender
      may at any time and from time to tune upon the occurrence and during the
      continuance of an Event of Default, compromise with the obligor on any
      Receivable, accept in full payment of any Receivable such amount as the Lender
      in its sole discretion shall determine or abandon any Receivable, and any such
      action by the Lender shall be commercially reasonable so long as the Lender
      acts
      in good faith based on information known to it at the time it takes any such
      action.

     

    Section
      8.3. Secured
      Party Performance of Debtor Secured Liabilities.
      Without
      having any obligation to do so, the Lender may perform or pay any obligation
      which any Grantor has agreed to perform or pay in this Agreement but has not
      performed or paid on the due date therefor and such Grantor shall reimburse
      the
      Lender for any amounts paid or incurred pursuant to this Section 8.3. Each
      Grantor's obligation to reimburse pursuant to the preceding sentence shall
      be
      Grantor Obligations payable on demand.

     

    Section
      8.4. Authorization
      for Secured Party To Take Certain Action.
      Each
      Grantor irrevocably authorizes the Lender at any time and from time to time
      in
      the sole discretion of the

      
        
          
          

        

        
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    Lender
      and appoints the Lender as its attorney-in-fact to act on behalf of such
      Grantor, in the name of such Grantor or otherwise, from time to time in the
      Lender's discretion, to take any action and to execute any instrument which
      the
      Lender may deem necessary or advisable to accomplish the purposes of this
      Agreement, including (but as to the matters described in the following clauses
      (ii), (iv), (vi), (vii), (viii), (x) and (xi), only upon the occurrence and
      during the continuance of an Event of Default): (i) to execute on behalf of
      such
      Grantor as debtor and to file financing statements, continuation statements
      and
      amendments thereto necessary or desirable in the Lender's sole discretion to
      perfect and to maintain the perfection and priority of the Lender's security
      interest in the Collateral; (ii) to endorse, deposit and collect any cash,
      Instruments and other proceeds of the Collateral: (iii) to file a carbon,
      photographic or other reproduction of this Agreement or any financing statement
      with respect to the Collateral as a financing statement in such offices as
      the
      Lender in its sole discretion deems necessary or desirable to perfect and to
      maintain the perfection and priority of the Lender's security interest in the
      Collateral; (iv) to enforce payment of the Receivables in the name of the Lender
      or such Grantor; (v) to cause the proceeds of any Collateral received by the
      Lender or any Security Beneficiary to be applied to the Grantor Obligations
      as
      contemplated by the Loan Documents; (vi) to sign such Grantor's name on any
      invoice or bill of lading relating to any Receivable, on drafts against
      customers, on schedules and assignments of Receivables, on notices of
      assignment, financing statements and other public records, on verifications
      of
      accounts and on notices to customers; (vii) to notify the post office
      authorities to change the address for delivery of such Grantor's mail to an
      address designated by the Lender, and to receive, open and dispose of all mail
      addressed to such Grantor; (viii) to send requests for verification of
      Receivables to customers or account debtors (provided that this clause shall
      not
      limit the Lender's rights under Section 4.1); (ix) to do any act or thing which
      the Lender ought to execute and do under the terms of this Agreement or which
      may be required or deemed proper in the exercise of any rights or powers
      conferred on the Lender for any of the purposes of this Agreement; (x) to grant
      or issue any exclusive or nonexclusive license under the Collateral to anyone;
      (xi) to assign, pledge, convey or otherwise transfer title in or to or dispose
      of the Collateral to anyone, including assignments, recordings, registrations
      and applications therefor in the United States Patent and Trademark Office,
      the
      United States Copyright Office or any similar office or agency of the United
      States, any State thereof or any other country or political subdivision thereof,
      and to execute and deliver any and all agreements, documents, instruments of
      assignment or other papers necessary or advisable to effect any of the foregoing
      or the recordation, registration, filing or perfection thereof; and (xii) to
      file financing statements, continuation statements and amendments thereto that
      describe the Collateral (a) as all assets of such Grantor or words of similar
      effect, regardless of whether any particular asset comprised in the Collateral
      falls within the scope of Article 9 of the UCC, or (b) as being of an equal
      or
      lesser scope or with greater detail, and which contain any other information
      required by Part 5 of Article 9 of the UCC for the sufficiency or filing office
      acceptance of any financing statement, continuation statement or amendment,
      including (x) whether the Grantor is an organization, the type of organization
      and any organization identification number issued to the Grantor and (y) in
      the
      case of a financing statement filed as a fixture filing or indicating Collateral
      as as-extracted collateral or timber to cut, a sufficient description of the
      real property to which the Collateral relates. Each Grantor hereby ratifies
      all
      that such attorneys shall lawfully do or cause to be done by virtue hereof
      and
      also ratifies its authorization for the Lender to have filed in any UCC
      jurisdiction any like initial financing statements or amendments thereto if
      filed prior to the date hereof. All powers, authorizations and agencies
      contained in this Agreement are

      
        
          
          

        

        
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    coupled
      with an interest and are irrevocable until this Agreement is terminated and
      the
      security interests created hereby are released. The powers conferred on the
      Lender and the other Security Beneficiaries hereunder are solely to protect
      the
      Lender's and the Security Beneficiaries' interests in the Collateral and shall
      not impose any duty upon the Lender or any Security Beneficiary to exercise
      any
      such powers. The Lender and the Security Beneficiaries shall be accountable
      only
      for amounts that they actually receive as a result of the exercise of such
      powers, and neither they nor any of their officers, directors, employees or
      agents shall be responsible to any Grantor for any act or failure to act
      hereunder, except for their own gross negligence or willful
      misconduct.

     

    Section
      8.5. Use
      and Possession of Certain Premises.
      Upon
      the occurrence and during the continuance of an Event of Default, the Lender
      or
      its agents or representatives shall be entitled to occupy and use any premises
      owned or leased by any Grantor where any of the Collateral or any records
      relating to the Collateral are located until the Grantor Obligations are paid
      in
      full or until the Collateral is removed therefrom, whichever occurs first,
      without any obligation to pay such Grantor for such use and
      occupancy.

     

    Section
      8.6. Standard
      of Care.
      The
      Lender's sole duty with respect to the custody, safekeeping and physical
      preservation of the Collateral in its possession, under Section 9-207 of the
      UCC
      or otherwise, shall be to deal with it in the same manner as the Lender deals
      with similar property for its own account. Neither the Lender, any Security
      Beneficiary nor any of their respective officers, directors, employees or agents
      shall be liable for failure to demand, collect or realize upon any of the
      Collateral or for any delay in doing so or shall be under any obligation to
      sell
      or otherwise dispose of any Collateral upon the request of any Grantor or any
      other Person or to take any other action whatsoever with regard to the
      Collateral or any part thereof.

     

    Section
      8.7. Specific
      Provisions Regarding Execution and Filing of Financing
      Statements.
      Pursuant to the UCC and any other applicable law, each Grantor authorizes the
      Lender to file or record financing statements and other filing or recording
      documents or instruments with respect to the Collateral or to use a generic
      description such as "all assets" or "all property" without the signature of
      such
      Grantor in such form and in such offices as the Lender reasonably determines
      appropriate to perfect the security interests granted hereunder. To the extent
      permitted under the UCC, a photographic or other reproduction of this Agreement
      shall be sufficient as a financing statement or other filing or recording
      document or instrument for filing or recording in any jurisdiction.

     

    9.    MISCELLANEOUS.

     

    Section
      9.1. [Intentionally
      Omitted]

     

    Section
      9.2. [Intentionally
      Omitted]

     

    Section
      9.3. Security
      Interest Absolute.
      The
      obligations of each Grantor under this Agreement are independent of the
      obligations under any of the other Loan Documents, and a separate action or
      actions may be brought and prosecuted against any single, or every, Grantor
      to
      enforce this Agreement. All rights of the Lender hereunder, the security
      interests granted

      
        
          
          

        

        
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    hereby,
      and all Grantor Obligations of each Grantor hereunder, shall be absolute and
      unconditional irrespective of (a) any lack of validity or enforceability of
      any
      of the Loan Documents, any agreement with respect to any of the Grantor
      Obligations or any other agreement or instrument relating to any of the
      foregoing, (b) any change in the time, manner or place of payment of, or in
      any
      other term of, all or any of the Grantor Obligations, or any other amendment
      or
      waiver of or any consent to any departure from any of the Loan Documents or
      any
      other agreement or instrument, (c) any exchange, release or non-perfection
      of
      any other Collateral, or any release, amendment or waiver of, or consent to
      or
      departure from, any guaranty for all or any of the Grantor Obligations, or
      (d)
      any other circumstance which might otherwise constitute a defense available
      to,
      or a discharge of, any Grantor in respect of the Grantor Obligations or in
      respect of this Agreement.

     

    Section
      9.4. Lender's
      Fees and Expenses - Indemnification.

     

    (a) Each
      Grantor agrees to pay upon demand to the Lender the amount of any and all
      out-of-pocket expenses, including the reasonable fees and expenses of its
      counsel and of any experts or agents, which the Lender may reasonably incur
      in
      connection with (i) the administration of this Agreement, (ii) the custody
      or
      preservation of, or the sale of, collection from, or other realization upon,
      any
      of the Collateral, (iii) the exercise or enforcement of any of the rights of
      the
      Lender hereunder, or (iv) the failure by any Grantor to perform or observe
      any
      of the provisions hereof. 

     

    (b) Without
      limiting the foregoing, each Grantor agrees to pay, and to save the Lender
      and
      the Security Beneficiaries harmless from, and to indemnify them against, any
      and
      all liabilities with respect to, or resulting from any delay in paying, any
      and
      all stamp, excise, sales or other taxes which may be payable or determined
      to be
      payable with respect to any of the Collateral or in connection with any of
      the
      transactions contemplated by this Agreement. Any such amounts payable as
      provided hereunder shall be additional Grantor Obligations secured by this
      Agreement and the other Loan Documents to which the Grantors are a party. Each
      Grantor further agrees to pay, and to save the Lender and the Security
      Beneficiaries harmless from, and to indemnify them against, any and all
      liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
      costs, expenses or disbursements of any kind or nature whatsoever with respect
      to the execution, delivery, enforcement, performance and administration of
      this
      Agreement, or arising out of or relating to the Lender's or any Security
      Beneficiary's relationship with such Grantor hereunder or under any other Loan
      Document.

     

    Section
      9.5. Binding
      Agreement; Assignments.
      This
      Agreement, and the terms, covenants and conditions hereof, shall be binding
      upon
      and inure to the benefit of the parties hereto and their respective successors
      and permitted assigns, except that no Grantor shall be permitted to assign
      this
      Agreement or any interest herein.

     

    Section
      9.6. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the domestic
      laws of the State of Florida, without giving effect to any choice of law or
      conflict of law provision or rule (whether of the State of Florida or any other
      jurisdiction) that would cause the application of the laws of any jurisdiction
      other than the State of Florida.

      
        
          
          

        

        
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    Section
      9.7. Severability.
      In case
      any one or more of the provisions contained in this Agreement should be invalid,
      illegal or unenforceable in any respect, no party hereto shall be required
      to
      comply with such provision for so long as such provision is held to be invalid,
      illegal or unenforceable and the validity, legality and enforceability of the
      remaining provisions contained herein shall not in any way be affected or
      impaired. The parties shall endeavor in good-faith negotiations to replace
      the
      invalid, illegal and unenforceable provisions with valid provisions, the
      economic effect of which comes as close as possible to that of the invalid,
      illegal or unenforceable provisions.

     

    Section
      9.8. Section
      Headings; Interpretation.
      Section
      headings used herein are for convenience only and are not to affect the
      construction of, or to be taken into consideration in interpreting, this
      Agreement. The use of the word "including" or any variation or derivative
      thereof in this Agreement is by way of example rather than by limitation. The
      language used in this Agreement will be deemed to be the language chosen, by
      the
      Lender and the Grantors to express their mutual intent. In the event an
      ambiguity or question of intent or interpretation arises, this Agreement will
      be
      construed as if drafted jointly by the Grantors and the Lender, and no
      presumption or burden of proof will arise favoring or disfavoring any Person
      by
      virtue of the authorship of any of the provisions of this
      Agreement.

     

    Section
      9.9. Counterparts.
      This
      Agreement may be authenticated in two or more counterparts, each of which shall
      constitute an original, but all of which, when taken together, shall constitute
      but one instrument, and any of the parties hereto may authenticate this
      Agreement by signing any such counterpart. This Agreement may be authenticated
      by manual signature, facsimile or, if approved in writing by the Lender and
      the
      Grantors, electronic means, all of which shall be equally valid.

     

    Section
      9.10. Termination.

     

    (a) At
      such
      time as all of the Grantor Obligations (other than any indemnity and similar
      obligations which expressly survive termination of this Agreement and are not
      then due and payable) have been paid irrevocably and in full, this Agreement
      and
      all obligations (other than those expressly stated to survive such termination)
      of the Lender and the Grantors shall terminate, and the Collateral shall be
      released from the Security Interests created hereby, all without delivery of
      any
      instrument or performance of any act by any party, and all rights to the
      Collateral shall revert to the Grantors. At the request and sole expense of
      the
      Grantors following any such termination, the Lender shall deliver to each
      Grantor any Collateral of such Grantor then held by the Lender hereunder and
      shall execute and deliver to such Grantor or authorize the filing of but without
      recourse to or warranty by the Lender, such Uniform Commercial Code termination
      statements and similar documents prepared by such Grantor which such Grantor
      shall reasonably request to evidence the release of the Collateral from the
      security constituted hereby.

     

    (b) Notwithstanding
      anything to the contrary contained in this Agreement, this Agreement shall
      remain in full force and effect and continue to be effective should any petition
      be filed by or against any Grantor for liquidation or reorganization, should
      any
      Grantor become insolvent or make are assignment for any benefit of creditors
      or
      should a receiver or trustee be appointed for all or any significant part of
      any
      Grantor's assets, and shall continue to be effective

      
        
          
          

        

        
          -22-

          
            

          

        

        
          
          

        

      



    or
      be
      reinstated, as the case may be, if at any time payment and performance of the
      Grantor Obligations, or any part thereof, is, pursuant to applicable law,
      rescinded or reduced in amount, or must otherwise be restored or returned by
      any
      obligee of the Grantor Obligations, whether as a "voidable preference,"
      "fraudulent conveyance" or otherwise, all as though such payment, or any part
      thereof, had not been made.

     

    (c) Notwithstanding
      anything in this Security Agreement to the contrary, the Grantors may, to the
      extent permitted by the Facility Letters sell, assign, transfer or otherwise
      dispose of any Collateral. In addition, the Collateral shall be subject to
      release from time to time (with the Collateral referred to in the immediately
      preceding sentence, the "Released
      Collateral")
      in
      accordance with the facility Letters. The Liens under this Security Agreement
      shall terminate with respect to the Released Collateral (other than Released
      Collateral that is sold, assigned, transferred or otherwise disposed to a
      Grantor or any other Guarantor) upon such sale, transfer, assignment,
      disposition or release, and upon the written request of the Grantor, the Lender
      shall execute and deliver such instrument or document as may be necessary to
      release the Liens granted hereunder; provided, however, that (i) the Lender
      shall not be required to execute any such documents on terms which, in the
      Lender's opinion, would expose the Lender to liability or create any obligation
      or entail any consequence other than the release of such Liens without recourse
      or warranty, and (ii) such release shall not in any manner discharge, affect
      or
      impair the Grantor Obligations or any Liens on (or obligations of any Grantor
      in
      respect of all interests retained by any Grantor, including without limitation,
      the proceeds of any sale, all of which shall continue to constitute part of
      the
      Collateral unless and until applied strictly in accordance with the Loan
      Documents.

     

    Section
      9.11. CONSENT
      TO JURISDICTION AND SERVICE OF PROCESS.
      ALL
      JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR WITH RESPECT TO THIS AGREEMENT
      MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN MIAMI,
      FLORIDA AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH GRANTOR ACCEPTS
      FOR
      ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
      THE
      NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
      BE
      BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. TO
      THE
      EXTENT PERMITTED BY LAW, EACH GRANTOR AND THE AGENT ON BEHALF OF ITSELF AND
      EACH
      OF THE LENDERS HEREBY AGREES THAT SERVICE UPON IT BY CERTIFIED MAIL SHALL
      CONSTITUTE SUFFICIENT NOTICE AND SERVICE OF PROCESS. NOTHING HEREIN SHALL AFFECT
      THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
      THE RIGHT OF THE AGENT TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS
      OF
      ANY OTHER JURISDICTION.

     

    Section
      9.12. WAIVER
      OF JURY TRIAL.
      EACH
      GRANTOR AND THE AGENT, ON BEHALF OF ITSELF AND EACH OF THE LENDERS, EACH HEREBY
      IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY
      IN
      ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING
      OUT
      OF THIS AGREEMENT, OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION
      OR
      ENFORCEMENT HEREOF; AND EACH GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED
      BY
      APPLICABLE

      
        
          
          

        

        
          -23-

          
            

          

        

        
          
          

        

      



    LAW,
      THE
      RIGHT TO INTERPOSE ANY SET OFF OR COUNTERCLAIM OR CROSS-CLAIM IN CONNECTION
      WITH
      ANY SUCH LITIGATION, IRRESPECTIVE OF THE NATURE OF SUCH SETOFF, COUNTERCLAIM
      OR
      CROSS-CLAIM EXCEPT TO THE EXTENT THAT THE FAILURE SO TO ASSERT ANY SUCH SETOFF,
      COUNTERCLAIM OR CROSS-CLAIM WOULD PERMANENTLY PRECLUDE THE PROSECUTION OF OR
      RECOVERY UPON SAME, Notwithstanding anything contained In this Agreement to
      the
      contrary, no claim may be made by any Grantor against the Lender or any Security
      Beneficiary for any lost profits or any special, indirect or consequential
      damages in respect of any breach or wrongful conduct (other than willful
      misconduct or actual fraud) in connection with, arising out of or in any way
      related to the transactions contemplated hereunder, or any act, omission or
      event occurring in connection therewith; and each Grantor hereby waives,
      releases and agrees not to sue upon any such claim for any such damages. EACH
      GRANTOR AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS
      AGREEMENT AND ACKNOWLEDGES THAT THE LENDERS WOULD NOT EXTEND TO THE GRANTORS
      THE
      FACILITIES UNDER THE FACILITIES LETTERS IF THIS SECTION WERE NOT PART OF THIS
      AGREEMENT.

     

    Section
      9.13. Notices.

     

    All
      notices and other communications provided for hereunder shall be in writing
      (including telegraphic or telecopier communication) and mailed, telegraphed,
      telecopied or delivered to the address set forth in the Facilities Letters
      or to
      such other address and/or with such other copy or copies as the intended
      recipient may have specified by prior notice to the notifying party. All such
      notices and other communications shall, when mailed, telegraphed, telecopied
      or
      telexed, be effective when deposited in the mails, delivered to the telegraph
      company or telecopied and confirmed by answerback, respectively, addressed
      as
      aforesaid; except that notices and other communications to the Lender shall
      not
      be effective until received by the Lender. Delivery by telecopier of an executed
      counterpart of any amendment or waiver or any provision of any Loan Document
      shall be effective as delivery of an original executed counterpart
      thereof.

     

    Section
      9.14. Acknowledgements.
      Each
      Grantor acknowledges that: (a) it has been advised by counsel in the
      negotiation, execution and delivery of this Agreement and the other Loan
      Documents; (b) neither the Lender, any other Lender nor any Security Beneficiary
      has any fiduciary relationship with or duty to any Grantor arising out of or
      in
      connection with this Agreement or any of the other Loan Documents, and the
      relationship between each Grantor, on the one hand, and the Lender, each other
      Lender and the other Security Beneficiaries, on the other hand, in connection
      herewith or therewith is solely that of debtor and creditor; and (c) no joint
      venture is created hereby or by the Loan Documents or otherwise exists by virtue
      of the transactions contemplated hereby among the Security Beneficiaries or
      among any Grantor and the Security Beneficiaries.

      
        
          
          

        

        
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    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
      the
      date first above written.

     

    
      	
              GRANTORS:

               

            	
              SIMCLAR,
                INC.

               

               

              By: 
                /s/
                Barry J. Pardon

              
                

              

              Name:
                 Barry
                J. Pardon

              Title:
                 President

            
	 	 
	 	
              SIMCLAR
                (MEXICO) INC.

               

               

              By: 
                /s/
                Barry J. Pardon

              
                

              

              Name:
                 Barry
                J. Pardon

              Title:
                 President

            
	 	 
	 	
              SIMCLAR
                DE MEXICO, S.A. DE C.V.

               

               

              By: 
                /s/
                Barry J. Pardon

              
                

              

              Name:
                 Barry
                J. Pardon

              Title:
                 President

            
	 	 
	 	
              SIMCLAR
                INTERCONNECT TECHNOLOGIES INC.

               

               

              By: 
                /s/
                Barry J. Pardon

              
                

              

              Name:
                 Barry
                J. Pardon

              Title:
                 President

            
	 	 
	 	
              SIMCLAR
                (NORTH AMERICA)

               

               

              By: 
                /s/
                Barry J. Pardon

              
                

              

              Name:
                 Barry
                J. Pardon

              Title:
                 President

            


    

    

      
        
          
          

        

        
          -25-

          
            

          

        

        
          
          

        

      



    


    
      	
              STATE
                OF FLORIDA

            	
              )

            
	 	
              )
                ss:

            
	
              COUNTY
                OF MIAMI-DADE

            	
              )

            
	 	 


    

    The
      foregoing instrument was acknowledged before me this 28th day of February,
      2007,
      by Barry J. Pardon as President of Simclar, Inc., a Florida corporation (the
      "Borrower"), and before me executed the attached Third Amended and Restated
      Security Agreement dated February 28, 2007, on behalf of the
      Borrower.

     

     

    /s/
      Roxana L. Alvarez 
      
        

      

    

    NOTARY
      PUBLIC

     

    [Stamp]
      
      
        

      

    

    (Print,
      Type or Stamp Commissioned Name of Notary Public)

     

    
      	
              STATE
                OF FLORIDA

            	
              )

            
	 	
              )
                ss:

            
	
              COUNTY
                OF MIAMI-DADE

            	
              )

            
	 	 


    

    The
      foregoing instrument was acknowledged before me this 28th day of February,
      2007,
      by Barry J. Pardon as President of Simclar (Mexico) Inc., an Illinois
      corporation (the "Borrower"), and before me executed the attached Third Amended
      and Restated Security Agreement dated February 28, 2007, on behalf of the
      Borrower.

     

     

    /s/
      Roxana L. Alvarez 
      
        

      

    

    NOTARY
      PUBLIC

     

    [Stamp]
      
      
        

      

    

    (Print,
      Type or Stamp Commissioned Name of Notary Public)

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    
      	
              STATE
                OF FLORIDA

            	
              )

            
	 	
              )
                ss:

            
	
              COUNTY
                OF MIAMI-DADE

            	
              )

            
	 	 


    

    The
      foregoing instrument was acknowledged before me this 28th day of February,
      2007,
      by Barry J. Pardon as President of Simclar Interconnect Technologies, Inc.,
      a
      Delaware corporation (the "Borrower"), and before me executed the attached
      Third
      Amended and Restated Security Agreement dated February 28, 2007, on behalf
      of
      the Borrower.

     

     

    /s/
      Roxana L. Alvarez 
      
        

      

    

    NOTARY
      PUBLIC

     

     

    [Stamp]
      
      
        

      

    

    (Print,
      Type or Stamp Commissioned Name of Notary Public)

     

    
      	
              STATE
                OF FLORIDA

            	
              )

            
	 	
              )
                ss:

            
	
              COUNTY
                OF MIAMI-DADE

            	
              )

            
	 	 


    

    The
      foregoing instrument was acknowledged before me this 28th day of February,
      2007,
      by Barry J. Pardon as President of Simclar Mexico, S.A. de C.V. (the
      "Borrower"), and before me executed the attached Third Amended and Restated
      Security Agreement dated February 28, 2007, on behalf of the
      Borrower.

     

     

    /s/
      Roxana L. Alvarez 
      
        

      

    

    NOTARY
      PUBLIC

     

     

    [Stamp]
      
      
        

      

    

    (Print,
      Type or Stamp Commissioned Name of Notary Public)

     

    
      	
              STATE
                OF FLORIDA

            	
              )

            
	 	
              )
                ss:

            
	
              COUNTY
                OF MIAMI-DADE

            	
              )

            
	 	 


    

    The
      foregoing instrument was acknowledged before me this 28th day of February,
      2007,
      by Barry J. Pardon as President of Simclar (North America), a North Carolina
      corporation (the "Borrower"), and before me executed the attached Third Amended
      and Restated Security Agreement dated February 28, 2007, on behalf of the
      Borrower.

     

     

    /s/
      Roxana L. Alvarez 
      
        

      

    

    NOTARY
      PUBLIC

     

     

    [Stamp]
      
      
        

      

    

    (Print,
      Type or Stamp Commissioned Name of Notary Public)

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    


    LENDER:

     

    EXECUTED
      and DELIVERED

    for
      and
      on behalf of THE GOVERNOR

    AND
      COMPANY OF THE BANK OF 

    SCOTLAND
      in the presence
      of:-                                                                                  
/s/ Peter Gordon

    
      
        

      

    

    Authorized
      Signatory

     

    /s/
      Douglas A.
      Archibald           
Witness

     

    Doublas
      A.
      Archibald                 
Full
      Name

     

    Bank
      of
      Scotland                          
Address

     

    Edinburgh

     

     

    
      
        
        

      

      -28-