Document:

[EXECUTION]

     

    LOAN AND
SECURITY AGREEMENT

     

    by and
among

     

    NU
HORIZONS ELECTRONICS CORP.

    NIC
COMPONENTS CORP.

    NU
HORIZONS INTERNATIONAL CORP.

    RAZOR
ELECTRONICS, INC.

    TITAN
SUPPLY CHAIN SERVICES CORP.

    as US
Borrowers

     

    NU
HORIZONS ELECTRONICS LIMITED

    NIC
COMPONENTS EUROPE LIMITED

    as UK
Borrowers

     

    NU
HORIZONS ELECTRONICS ASIA PTE LTD

    NIC
COMPONENTS ASIA PTE LTD

    as
Singapore Borrowing Base Guarantors

     

    and

    NU
HORIZONS ELECTRONICS EUROPE LIMITED

    NUXCHANGE
B2B SERVICES, INC.

    TITAN
SUPPLY CHAIN SERVICES LIMITED

    TITAN
SUPPLY CHAIN SERVICES PTE LTD

    as
Guarantors

     

    THE
LENDERS AND ISSUING BANK FROM TIME TO TIME PARTY HERETO

     

    WACHOVIA
CAPITAL FINANCE CORPORATION (NEW ENGLAND)

    as
Administrative and Collateral Agent

     

    WELLS
FARGO CAPITAL FINANCE, LLC

    as Sole
Lead Arranger and Sole Bookrunner

    

    HSBC
BUSINESS CREDIT (USA) INC.

    as
Syndication Agent

    

    and

    

    CAPITAL
ONE BANK, N.A.

    as
Documentation Agent

    

    Dated:
June 28, 2010

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE OF
CONTENTS

     

    
      
        
          	
                  SECTION 1.

                	 	
                  DEFINITIONS

                	
                  1

                
	 
      	 	 
      	 
      
	
                  SECTION 2.

                	 	
                  CREDIT
      FACILITIES

                	
                  45

                
	 
      	 	 
      	 
      
	
                  2.1  
      

                	 	
                  Revolving
      Loans.

                	
                  45

                
	
                  2.2  
      

                	 	
                  Swing
      Line Loans.

                	
                  46

                
	
                  2.3  
      

                	 	
                  Letters
      of Credit.

                	
                  47

                
	
                  2.4  
      

                	 	
                  Requests
      for Borrowings.

                	
                  52

                
	
                  2.5  
      

                	 	
                  Increase
      in Maximum Credit.

                	
                  53

                
	
                  2.6  
      

                	 	
                  Mandatory
      Prepayments.

                	
                  55

                
	
                  2.7  
      

                	 	
                  Optional
      Prepayments

                	
                  56

                
	
                  2.8  
      

                	 	
                  Joint
      and Several Liability of US Borrowers.

                	
                  57

                
	
                  2.9
        

                	 	
                  Joint
      and Several Liability of UK Borrowers.

                	
                  59

                
	
                  2.10

                	 	
                  Commitments.

                	
                  60

                
	
                  2.11

                	 	
                  Reserves.

                	
                  60

                
	 
      	 	 
      	 
      
	
                  SECTION 3.

                	 	
                  INTEREST
      AND FEES

                	
                  60

                
	 
      	 	 
      	 
      
	
                  3.1  
      

                	 	
                  Interest.

                	
                  60

                
	
                  3.2  
      

                	 	
                  Fees.

                	
                  62

                
	
                  3.3  
      

                	 	
                  Inability
      to Determine Applicable Interest Rate.

                	
                  63

                
	
                  3.4  
      

                	 	
                  Illegality.

                	
                  63

                
	
                  3.5  
      

                	 	
                  Increased
      Costs.

                	
                  63

                
	
                  3.6  
      

                	 	
                  Capital
      Requirements.

                	
                  64

                
	
                  3.7  
      

                	 	
                  Certificates
      for Reimbursement.

                	
                  64

                
	
                  3.8  
      

                	 	
                  Delay
      in Requests.

                	
                  64

                
	
                  3.9  
      

                	 	
                  Mitigation;
      Replacement of Lenders.

                	
                  64

                
	
                  3.10

                	 	
                  Funding
      Losses.

                	
                  65

                
	
                  3.11

                	 	
                  Maximum
      Interest.

                	
                  65

                
	
                  3.12

                	 	
                  No
      Requirement of Match Funding.

                	
                  66

                
	 
      	 	 
      	 
      
	
                  SECTION 4.

                	 	
                  CONDITIONS
      PRECEDENT

                	
                  66

                
	 
      	 	 
      	 
      
	
                  4.1  
      

                	 	
                  Conditions
      Precedent to Initial Loans and Letters of Credit.

                	
                  66

                
	
                  4.2  
      

                	 	
                  Conditions
      Precedent to All Revolving Loans and Letters of Credit.

                	
                  69

                
	 
      	 	 
      	 
      
	
                  SECTION 5.

                	 	
                  GRANT
      AND PERFECTION OF SECURITY INTEREST

                	
                  70

                
	 
      	 	 
      	 
      
	
                  5.1  
      

                	 	
                  Grant
      of Security Interest.

                	
                  70

                
	
                  5.2  
      

                	 	
                  Perfection
      of Security Interests.

                	
                  71

                
	
                  5.3  
      

                	 	
                  Special
      Provisions Relating to Collateral; Excluded Property

                	
                  74

                
	 
      	 	 
      	 
      
	
                  SECTION 6.

                	 	
                  COLLECTION
      AND ADMINISTRATION

                	
                  76

                
	 
      	 	 
      	 
      
	
                  6.1  
      

                	 	
                  Borrowers’
      Loan Accounts.

                	
                  76

                
	
                  6.2  
      

                	 	
                  Statements.

                	
                  76

                
	
                  6.3  
      

                	 	
                  Lenders’
      Evidence of Debt.

                	
                  76

                
	
                  6.4  
      

                	 	
                  Register.

                	
                  76

                

        

      

    

     

    
      
        
        

      

      
        (i)

        
          

        

      

      
        
        

      

    

    

    
      
        
          
            
              	
                      6.5  
      

                    	 	
                      Promissory
      Notes.

                    	
                      77

                    
	
                      6.6  
      

                    	 	
                      Cash
      Management; Collection of Proceeds of Collateral.

                    	
                      77

                    
	
                      6.7  
      

                    	 	
                      Payments.

                    	
                      79

                    
	
                      6.8  
      

                    	 	
                      Taxes.

                    	
                      80

                    
	
                      6.9  
      

                    	 	
                      Use
      of Proceeds; Use of Proceeds of UK Tranche B Loans.

                    	
                      83

                    
	
                      6.10

                    	 	
                      Appointment
      of Administrative Borrower as Agent for Requesting Loans and Receipts of
      Loans and Statements.

                    	
                      84

                    
	
                      6.11

                    	 	
                      Pro
      Rata Treatment.

                    	
                      84

                    
	
                      6.12

                    	 	
                      Sharing
      of Payments, Etc.

                    	
                      84

                    
	
                      6.13

                    	 	
                      Settlement
      Procedures.

                    	
                      85

                    
	
                      6.14

                    	 	
                      Obligations
      Several; Independent Nature of Lenders’ Rights.

                    	
                      89

                    
	
                      6.15

                    	 	
                      Bank
      Products.

                    	
                      89

                    
	 
      	 	 
      	 
      
	
                      SECTION 7.

                    	 	
                      COLLATERAL
      REPORTING AND COVENANTS

                    	
                      90

                    
	 
      	 	 
      	 
      
	
                      7.1  
      

                    	 	
                      Collateral
      Reporting.

                    	
                      90

                    
	
                      7.2  
      

                    	 	
                      Accounts
      Covenants.

                    	
                      91

                    
	
                      7.3  
      

                    	 	
                      Inventory
      Covenants.

                    	
                      92

                    
	
                      7.4  
      

                    	 	
                      Equipment
      and Real Property Covenants.

                    	
                      93

                    
	
                      7.5  
      

                    	 	
                      Power
      of Attorney.

                    	
                      93

                    
	
                      7.6  
      

                    	 	
                      Right
      to Cure.

                    	
                      94

                    
	
                      7.7  
      

                    	 	
                      Access
      to Premises.

                    	
                      94

                    
	 
      	 	 
      	 
      
	
                      SECTION 8.

                    	 	
                      REPRESENTATIONS
      AND WARRANTIES

                    	
                      95

                    
	 
      	 	 
      	 
      
	
                      8.1  
      

                    	 	
                      Existence,
      Power and Authority.

                    	
                      95

                    
	
                      8.2  
      

                    	 	
                      Name;
      Jurisdiction of Organization; Chief Executive Office; Collateral
      Locations.

                    	
                      95

                    
	
                      8.3  
      

                    	 	
                      Financial
      Statements; No Material Adverse Effect.

                    	
                      96

                    
	
                      8.4  
      

                    	 	
                      Priority
      of Liens; Title to Properties.

                    	
                      96

                    
	
                      8.5  
      

                    	 	
                      Tax
      Returns.

                    	
                      96

                    
	
                      8.6  
      

                    	 	
                      Litigation.

                    	
                      97

                    
	
                      8.7  
      

                    	 	
                      Compliance
      with Other Agreements and Applicable Laws.

                    	
                      97

                    
	
                      8.8  
      

                    	 	
                      Environmental
      Compliance.

                    	
                      97

                    
	
                      8.9  
      

                    	 	
                      Employee
      Benefits.

                    	
                      98

                    
	
                      8.10

                    	 	
                      Bank
      Accounts.

                    	
                      98

                    
	
                      8.11

                    	 	
                      Intellectual
      Property.

                    	
                      99

                    
	
                      8.12

                    	 	
                      Subsidiaries;
      Affiliates; Capitalization; Solvency.

                    	
                      99

                    
	
                      8.13

                    	 	
                      Labor
      Disputes.

                    	
                      100

                    
	
                      8.14

                    	 	
                      Restrictions
      on Subsidiaries.

                    	
                      100

                    
	
                      8.15

                    	 	
                      Material
      Contracts

                    	
                      100

                    
	
                      8.16

                    	 	
                      OFAC.

                    	
                      100

                    
	
                      8.17

                    	 	
                      Anti-Terrorism
      Laws.

                    	
                      100

                    
	
                      8.18

                    	 	
                      Investment
      Company.

                    	
                      101

                    
	
                      8.19

                    	 	
                      Federal
      Reserve Regulations.

                    	
                      101

                    
	
                      8.20

                    	 	
                      Pensions.

                    	
                      101

                    
	
                      8.21

                    	 	
                      Governing
      law and Enforcement.

                    	
                      101

                    
	
                      8.22

                    	 	
                      Pari
      passu ranking.

                    	
                      101

                    
	
                      8.23

                    	 	
                      Ranking.

                    	
                      101

                    
	
                      8.24

                    	 	
                      Registration
      of UK establishment.

                    	
                      101

                    
	
                      8.25

                    	 	
                      No
      filing or stamp taxes.

                    	
                      102

                    
	
                      8.26

                    	 	
                      Accuracy
      and Completeness of Information.

                    	
                      102

                    

            

          

        

      

    

     

    
      
        
        

      

      
        (ii)

        
          

        

      

      
        
        

      

    

    

    
      
        
          	
                  8.27

                	 	
                  Survival
      of Warranties; Cumulative.

                	
                  102

                
	 
      	 	 
      	 
      
	
                  SECTION 9.

                	 	
                  AFFIRMATIVE
      COVENANTS

                	
                  103

                
	 
      	 	 
      	 
      
	
                  9.1  
      

                	 	
                  Maintenance
      of Existence.

                	
                  103

                
	
                  9.2  
      

                	 	
                  New
      Collateral Locations.

                	
                  103

                
	
                  9.3  
      

                	 	
                  Compliance
      with Laws, Regulations, Etc.

                	
                  103

                
	
                  9.4  
      

                	 	
                  Payment
      of Taxes and Claims.

                	
                  104

                
	
                  9.5  
      

                	 	
                  Insurance.

                	
                  105

                
	
                  9.6  
      

                	 	
                  Financial
      Statements and Other Information.

                	
                  105

                
	
                  9.7  
      

                	 	
                  Compliance
      with ERISA; UK Pensions Schemes.

                	
                  108

                
	
                  9.8  
      

                	 	
                  End
      of Fiscal Years; Fiscal Quarters.

                	
                  109

                
	
                  9.9  
      

                	 	
                  License
      Agreements.

                	
                  109

                
	
                  9.10

                	 	
                  Additional
      Guaranties and Collateral Security; Further Assurances.

                	
                  110

                
	
                  9.11

                	 	
                  Centre
      of Main Interests

                	
                  111

                
	
                  9.12

                	 	
                  Costs
      and Expenses.

                	
                  112

                
	 
      	 	 
      	 
      
	
                  SECTION 10.

                	 	
                  NEGATIVE
      COVENANTS

                	
                  112

                
	 
      	 	 
      	 
      
	
                  10.1  
      

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

                	
                  112

                
	
                  10.2  
      

                	 	
                  Encumbrances.

                	
                  113

                
	
                  10.3  
      

                	 	
                  Indebtedness.

                	
                  113

                
	
                  10.4  
      

                	 	
                  Loans,
      Investments, Etc.

                	
                  116

                
	
                  10.5  
      

                	 	
                  Restricted
      Payments.

                	
                  116

                
	
                  10.6  
      

                	 	
                  Transactions
      with Affiliates.

                	
                  117

                
	
                  10.7  
      

                	 	
                  Change
      in Business.

                	
                  117

                
	
                  10.8  
      

                	 	
                  Limitation
      of Restrictions Affecting Subsidiaries.

                	
                  117

                
	
                  10.9  
      

                	 	
                  Certain
      Payments of Indebtedness, Etc.

                	
                  118

                
	
                  10.10

                	 	
                  Modifications
      of Indebtedness, Organizational Documents and Certain Other
      Agreements.

                	
                  118

                
	
                  10.11

                	 	
                  Nippon
      License Agreement.

                	
                  118

                
	
                  10.12

                	 	
                  UK
      Bank Accounts

                	
                  119

                
	
                  10.13

                	 	
                  Designation
      as Designated Senior Debt.

                	
                  119

                
	
                  10.14

                	 	
                  Distributor
      Agreements.

                	
                  119

                
	
                  10.15

                	 	
                  Foreign
      Assets Control Regulations, Etc.

                	
                  119

                
	 
      	 	 
      	 
      
	
                  SECTION 11.

                	 	
                  FINANCIAL
      COVENANT

                	
                  119

                
	 
      	 	 
      	 
      
	
                  11.1  
      

                	 	
                  Fixed
      Charge Coverage Ratio.

                	
                  119

                
	 
      	 	 
      	 
      
	
                  SECTION 12.

                	 	
                  EVENTS
      OF DEFAULT AND REMEDIES

                	
                  120

                
	 
      	 	 
      	 
      
	
                  12.1  
      

                	 	
                  Events
      of Default.

                	
                  120

                
	
                  12.2  
      

                	 	
                  Remedies.

                	
                  122

                
	 
      	 	 
      	 
      
	
                  SECTION 13.

                	 	
                  JURY
      TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

                	
                  125

                
	 
      	 	 
      	 
      
	
                  13.1  
      

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

                	
                  125

                
	
                  13.2  
      

                	 	
                  Waiver
      of Notices.

                	
                  126

                
	
                  13.3  
      

                	 	
                  Amendments
      and Waivers.

                	
                  126

                
	
                  13.4  
      

                	 	
                  Waiver
      of Counterclaims.

                	
                  129

                

        

      

    

     

    
      
        
        

      

      
        (iii)

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                	
                        13.5  
      

                      	 	
                        Indemnification.

                      	
                        129

                      
	 
      	 	 
      	 
      
	
                        SECTION 14.

                      	 	
                        THE
      AGENT

                      	
                        130

                      
	 
      	 	 
      	 
      
	
                        14.1  
      

                      	 	
                        Appointment,
      Powers and Immunities.

                      	
                        130

                      
	
                        14.2  
      

                      	 	
                        Reliance
      by Agent.

                      	
                        130

                      
	
                        14.3  
      

                      	 	
                        Events
      of Default.

                      	
                        130

                      
	
                        14.4  
      

                      	 	
                        WFCF
      in its Individual Capacity.

                      	
                        131

                      
	
                        14.5  
      

                      	 	
                        Indemnification.

                      	
                        131

                      
	
                        14.6  
      

                      	 	
                        Non-Reliance
      on Agent and Other Lenders.

                      	
                        131

                      
	
                        14.7  
      

                      	 	
                        Failure
      to Act.

                      	
                        132

                      
	
                        14.8  
      

                      	 	
                        Additional
      Loans.

                      	
                        132

                      
	
                        14.9  
      

                      	 	
                        Concerning
      the Collateral and the Related Loan Documents.

                      	
                        132

                      
	
                        14.10

                      	 	
                        Field
      Audit, Examination Reports and other Information; Disclaimer by
      Lenders.

                      	
                        132

                      
	
                        14.11

                      	 	
                        Collateral
      Matters.

                      	
                        133

                      
	
                        14.12

                      	 	
                        Agency
      for Perfection.

                      	
                        134

                      
	
                        14.13

                      	 	
                        Agent
      May File Proofs of Claim.

                      	
                        135

                      
	
                        14.14

                      	 	
                        Successor
      Agent.

                      	
                        135

                      
	
                        14.15

                      	 	
                        Other
      Agent Designations.

                      	
                        136

                      
	 
      	 	 
      	 
      
	SECTION 15.     APPOINTMENT
      OF AGENT AS SECURITY TRUSTEE UNDER THE UK LOAN DOCUMENTS AND THE SINGAPORE
      LOAN DOCUMENTS	
                        136

                      
	 
      	 	 
      	 
      
	
                        15.1  
      

                      	 	
                        Appointment
      of the Security Trustee.

                      	
                        136

                      
	
                        15.2  
      

                      	 	
                        Duties
      of the Agent.

                      	
                        136

                      
	
                        15.3  
      

                      	 	
                        Appointments
      by the Agent under the UK Documents.

                      	
                        136

                      
	
                        15.4  
      

                      	 	
                        The
      UK Loan Documents and Singapore Loan Documents.

                      	
                        137

                      
	
                        15.5  
      

                      	 	
                        Agent
      as Proprietor.

                      	
                        137

                      
	
                        15.6  
      

                      	 	
                        Investments

                      	
                        137

                      
	
                        15.7  
      

                      	 	
                        Releases
      of Charged Property

                      	
                        137

                      
	
                        15.8  
      

                      	 	
                        Exclusion
      of Liability.

                      	
                        138

                      
	
                        15.9  
      

                      	 	
                        Insurance

                      	
                        138

                      
	
                        15.10

                      	 	
                        Appointment
      of Successor Agent under the UK Documents

                      	
                        139

                      
	
                        15.11

                      	 	
                        Trustee
      Acts.

                      	
                        139

                      
	
                        15.12

                      	 	
                        Perpetuity
      Period

                      	
                        139

                      
	 
      	 	 
      	 
      
	
                        SECTION 16.

                      	 	
                        TERM
      OF AGREEMENT; MISCELLANEOUS

                      	
                        139

                      
	 
      	 	 
      	 
      
	
                        16.1  
      

                      	 	
                        Term.

                      	
                        139

                      
	
                        16.2  
      

                      	 	
                        Interpretative
      Provisions.

                      	
                        140

                      
	
                        16.3  
      

                      	 	
                        Notices.

                      	
                        142

                      
	
                        16.4  
      

                      	 	
                        Partial
      Invalidity.

                      	
                        142

                      
	
                        16.5  
      

                      	 	
                        Confidentiality.

                      	
                        143

                      
	
                        16.6  
      

                      	 	
                        Successors.

                      	
                        144

                      
	
                        16.7  
      

                      	 	
                        Assignments;
      Participations.

                      	
                        144

                      
	
                        16.8  
      

                      	 	
                        Entire
      Agreement.

                      	
                        145

                      
	
                        16.9  
      

                      	 	
                        USA
      Patriot Act.

                      	
                        146

                      
	
                        16.10

                      	 	
                        Counterparts,
      Etc.

                      	
                        146

                      
	
                        16.11

                      	 	
                        Judgment
      Currency.

                      	
                        146

                      

              

            

          

        

      

    

     

    
      
        
        

      

      
        (iv)

        
          

        

      

      
        
        

      

    

    

    INDEX

    TO

    EXHIBITS
AND SCHEDULES

    

    
      	
              Exhibit A

            	
              Form
      of Assignment and Acceptance Agreement

            
	 
      	 
      
	
              Exhibit B

            	
              Form
      of Borrowing Base Certificate

            
	 
      	 
      
	
              Exhibit C

            	
              Information
      Certificate

            
	 
      	 
      
	
              Exhibit D

            	
              Report
      of Priority Payables

            
	 
      	 
      
	
              Exhibit E

            	
              Form
      of Compliance Certificate

            
	 
      	 
      
	
              Schedule 1.9

            	
              Approved
      Multinationals

            
	 
      	 
      
	
              Schedule 1.31

            	
              Commitments

            
	 
      	 
      
	
              Schedule 1.61

            	
              Existing
      Lenders

            
	 
      	 
      
	
              Schedule 1.107

            	
              Non-
      US Subsidiaries

            
	 
      	 
      
	
              Schedule 1.168

            	
              UK
      Loan Documents

            

    

     

    
      
        
        

      

      
        (v)

        
          

        

      

      
        
        

      

    

    

    LOAN AND SECURITY
AGREEMENT

     

    This Loan
and Security Agreement (this “Agreement”), dated June 28, 2010, is entered into
by and among Nu Horizons Electronics Corp., a Delaware corporation (“Parent”);
NIC Components Corp., a New York corporation (“NIC”); Nu Horizons International
Corp., a New York corporation (“International”); Razor Electronics, Inc., a New
York corporation (“RAZ”); Titan Supply Chain Services Corp., a New York
corporation (“TUS”, and together with Parent, NIC, International, and RAZ,
individually each a “US Borrower” and, collectively, “US Borrowers”), Nu
Horizons Electronics Limited, a company incorporated in England and Wales with
registration number 02181478 (“NEE-UK”), NIC Components Europe Limited, a
company incorporated in England and Wales with registration number 03495816
(“NIC-UK”, and together with NEE-UK, individually each a “UK Borrower” and,
collectively, “UK Borrowers” and together with US Borrowers, each individually,
a “Borrower” and collectively, “Borrowers”, as hereinafter further defined), Nu
Horizons Electronics Asia Pte Ltd, a company organized under the laws of
Singapore (“Nu Horizons Asia”), NIC Components Asia Pte Ltd, a company
incorporated under the laws of Singapore (“NIC Asia”), Titan Supply Chain
Services Pte Ltd, a company organized under the laws of Singapore (“TSA”), Nu
Horizons Electronics Europe Limited, a company incorporated in England and Wales
with registration number 03507689 (“NU-UK”), Titan Supply Chain Services
Limited, a company incorporated in England and Wales with registration number
04930783 (“TSE”), NuXchange B2B Services, Inc., a Delaware corporation (“NUX”
and together with NU-UK, Nu Horizons Asia, NIC Asia, TSA, and TSE and any Person
that at anytime after the date hereof guarantees the Obligations of the
Borrowers hereunder, each individually, a “Guarantor” and collectively
“Guarantors” as hereinafter further defined), the parties hereto from time to
time as lenders, whether by execution of this Agreement or an Assignment and
Acceptance Agreement (each individually, a “Lender” and collectively, “Lenders”
as hereinafter further defined), and Wachovia Capital Finance Corporation (New
England), a Massachusetts corporation, in its capacity as administrative agent
and collateral agent (in such capacities, “Agent”, as hereinafter further
defined).

     

    WITNESSETH:

     

    WHEREAS,
Borrowers and Guarantors have requested that Agent, Issuing Bank and Lenders
enter into financing arrangements with Borrowers pursuant to which Lenders may
make loans and advances and provide other financial accommodations to Borrowers;
and

     

    WHEREAS,
Issuing Bank and each Lender is willing to agree (severally and not jointly) to
make such loans and provide such financial accommodations to Borrowers on a pro
rata basis according to its Commitment (as defined below) on the terms and
conditions set forth herein and Agent is willing to act as agent for Issuing
Bank and Lenders on the terms and conditions set forth herein and the other Loan
Documents;

     

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

     

    SECTION
1.    DEFINITIONS

     

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

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.2  “Adjusted
Eurodollar Rate” shall mean, with respect to each Interest Period for any
Eurodollar Rate Loan comprising part of the same borrowing (including
conversions, extensions and renewals), the rate per annum determined by dividing
(i) the London Interbank Offered Rate for such Interest Period by (ii) a
percentage equal to: (A) one (1) minus (B) the Reserve
Percentage.  For purposes hereof, “Reserve Percentage” shall mean for
any day, that percentage (expressed as a decimal) which is in effect from time
to time under Regulation D of the Board of Governors of the Federal Reserve
System (or any successor), as such regulation may be amended from time to time
or any successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or marginal
reserves) applicable with respect to Eurocurrency liabilities as that term is
defined in Regulation D (or against any other category of liabilities that
includes deposits by reference to which the interest rate of Eurodollar Rate
Loans is determined), whether or not any Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time.  Eurodollar Rate
Loans shall be deemed to constitute Eurocurrency liabilities and as such shall
be deemed subject to reserve requirements without benefits of credits for
proration, exceptions or offsets that may be available from time to time to a
Lender.  The Adjusted Eurodollar Rate shall be adjusted automatically
on and as of the effective date of any change in the Reserve
Percentage.

     

    1.3  “Administrative
Borrower” shall mean Parent, in its capacity as Administrative Borrower on
behalf of itself and the other Borrowers pursuant to Section 6.10 hereof
and its successors and assigns in such capacity.

     

    1.4  “Affiliate”
shall mean, with respect to a specified Person, any other Person which directly
or indirectly, through one or more intermediaries, controls or is controlled by
or is under common control with such Person, and without limiting the generality
of the foregoing, includes (a) any Person which beneficially owns or holds ten
(10%) percent or more of any class of Voting Stock of such Person or other
equity interests in such Person, (b) any Person of which such Person
beneficially owns or holds ten (10%) percent or more of any class of Equity
Interest or in which such Person beneficially owns or holds ten (10%) percent or
more of the Equity Interests and (c) any director or executive officer of such
Person.  For the purposes of this definition, the term “control”
(including with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of any
Equity Interest, by agreement or otherwise.

     

    1.5  “Agent”
shall mean Wachovia Capital Finance Corporation (New England), in its capacity
as agent on behalf of Lenders pursuant to the terms hereof and any replacement
or successor agent hereunder.

     

    1.6  “Applicable
Margin” shall mean, with respect to Base Rate Loans and Eurodollar Rate Loans,
subject to the provisions below, the applicable percentage (on a per annum
basis) set forth below based on the Quarterly Average Consolidated Excess
Availability for the immediately preceding three (3) month period beginning on
the first day of the month of such period.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Tier

                            	 	
                              Quarterly Average Consolidated Excess

                              Availability

                            	 	
                              Applicable

                              Eurodollar Rate

                              Margin

                            	 	 	
                              Applicable Base

                              Rate Margin

                            	 
	
                              1

                            	 	
                              Less
      than $20,000,000

                            	 	 	3.50	%	 	 	1.75	%
	
                              2

                            	 	
                              Less
      than $30,000,000 and greater than or equal to $20,000,000

                            	 	 	3.25	%	 	 	1.50	%
	
                              3

                            	 	
                              Greater
      than or equal to $30,000,000

                            	 	 	3.00	%	 	 	1.25	%

                    

                  

                

              

            

          

        

      

    

     

    provided, that, (a) the
Applicable Margin shall be calculated and established once every three (3)
months and shall remain in effect until adjusted for the next three (3) month
period, (b) each adjustment of the Applicable Margin shall be effective as of
the first day of each such three (3) month period based on the Quarterly Average
Consolidated Excess Availability for the immediately preceding three (3) month
period, (c) the Applicable Margin through August 31, 2010 shall be the amount
for Tier 3 set forth above and (d) in the event that Borrowers fail to provide
any Borrowing Base Certificate for any period on the date required hereunder,
effective as of the date on which such Borrowing Base Certificate was otherwise
required, at Agent’s option, the Applicable Margin shall be based on the highest
rate above increased by two (2%) percentage points until the next Business Day
after the Borrowing Base Certificate is provided for the applicable period at
which time the Applicable Margin shall be adjusted as otherwise provided
herein.  In the event that at any time after the end of any three (3)
month period the Quarterly Average Consolidated Excess Availability for such
three (3) month period used for the determination of the Applicable Margin was
greater than the actual amount of the Quarterly Average Consolidated Excess
Availability for such period as a result of the inaccuracy of information
provided by or on behalf of Borrowers to Agent for the calculation of
Consolidated Excess Availability, the Applicable Margin for such prior period
shall be adjusted to the applicable percentage based on such actual Quarterly
Average Consolidated Excess Availability and any additional interest for the
applicable period as a result of such recalculation shall be promptly paid to
Agent.  The foregoing shall not be construed to limit the rights of
Agent and Lenders with respect to the amount of interest payable after a Default
or Event of Default whether based on such recalculated percentage or
otherwise.

     

    1.7  “Appointee”
means any receiver, administrator or other insolvency officer appointed in
respect of any Loan Party or its assets.

     

    1.8  “Approved
Fund” shall mean any Person (other than a natural Person), including, without
limitation, any special purpose entity, that is (or will be) engaged in making,
purchasing, holding or otherwise investing in bank revolving loans and similar
extensions of credit in the ordinary course of its business; provided, that, such Approved
Fund must be administered by (a) a Lender, (b) an Affiliate of a Lender or (c)
an entity or an Affiliate of an entity that administers or manages a
Lender.

     

    1.9  “Approved
Multinational Account Debtor” shall mean the account debtors listed on Schedule
1.9 hereto, as such list may be amended by Agent from time to time, each such
account debtor being an “Approved Multinational”.

     

    1.10  “Assignment
and Acceptance Agreement” shall mean an Assignment and Acceptance Agreement
substantially in the form of Exhibit A attached hereto (with blanks
appropriately completed) delivered to Agent in connection with an assignment of
a Lender’s interest hereunder in accordance with the provisions of
Section 16.7 hereof.

     

    1.11  “Bank
Product Provider” shall mean any Lender, Affiliate of any Lender or other
financial institution (in each case as to any Lender, Affiliate or other
financial institution to the extent approved by Agent) that provides any Bank
Products to a Borrower or Guarantor.

     

    
      
        
        

      

      
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    1.12  “Bank
Products” shall mean any one or more of the following types or services or
facilities provided to a Borrower or Guarantor by a Bank Product Provider: (a)
credit cards, debit cards or stored value cards or the processing of credit
card, debit card or stored value card sales or receipts,  (b) cash
management or related services, including: (i) the automated clearinghouse
transfer of funds for the account of a Borrower pursuant to agreement or
overdraft for any accounts of Borrowers maintained at Agent or any Bank Product
Provider that are subject to the control of Agent pursuant to any Deposit
Account Control Agreement to which Agent or such Bank Product Provider is a
party, as applicable, and  (ii) controlled disbursement services
and  (c) Hedge Agreements if and to the extent permitted
hereunder.  Any of the foregoing shall only be included in the
definition of  the term “Bank Products” to the extent that the Bank
Product Provider has been approved by Agent in writing with notice to
Administrative Borrower.

     

    1.13  “Bankruptcy
Code” shall mean the United States Bankruptcy Code, being Title 11 of the United
States Code, as the same now exists or may from time to time hereafter be
amended, modified, recodified or supplemented, together with all official rules,
regulations and interpretations thereunder or related thereto.

     

    1.14  “Base
Rate” shall mean the highest of (a) the rate from time to time publicly
announced by Wells Fargo, or its successors, as its “prime rate”, subject to
each increase or decrease in such prime rate, effective as of the day any such
change occurs, whether or not such announced rate is the best rate available at
such bank, (b) the Federal Funds Rate from time to time plus one-half (.50%)
percent, or (c) the three (3) month London Interbank Offered Rate plus one
(1.00%) percent.

     

    1.15  “Base
Rate Loans” shall mean any Loans or portion thereof on which interest is payable
based on the Base Rate in accordance with the terms hereof.  All Swing
Line Loans shall be Base Rate Loans.

     

    1.16  “Borrowers”
shall mean, collectively, the following (together with their respective
successors and assigns): (a) US Borrowers, (b) UK Borrowers, and (c) any other
Person that at any time after the date hereof becomes a Borrower hereunder; each
sometimes being referred to herein individually as a “Borrower”.

     

    1.17  “Borrowing
Base” shall mean, collectively, the US Borrowing Base and the UK Borrowing
Base.

     

    1.18  “Borrowing
Base Certificate” shall mean a certificate substantially in the form of
Exhibit B hereto, as such form, subject to the terms hereof, may from time
to time be modified by Agent, which is duly completed (including all schedules
thereto) and executed by the chief executive officer, chief financial officer,
controller or other appropriate financial officer of Administrative Borrower
acceptable to Agent and delivered to Agent.

     

    1.19  “Business
Day” shall mean any day other than a Saturday, Sunday, or other day on which
commercial banks are authorized or required to close under the laws of the State
of New York, and a day on which Agent is open for the transaction of business,
except that if a determination of a Business Day shall relate to any Eurodollar
Rate Loans, the term Business Day shall also exclude any day on which banks are
closed for dealings in dollar deposits in the London interbank market or other
applicable market.

     

    1.20  “Capital
Expenditures” shall mean with respect to any Person for any period the aggregate
of all expenditures by such Person and its Subsidiaries made during such period
that in accordance with GAAP are or should be included in “property, plant and
equipment” or in a similar fixed asset account on its balance sheet, whether
such expenditures are paid in cash or financed and including all obligations
under Capital Leases paid or payable during such period, other than the interest
component of any Capital Lease (without duplication as to any
period).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    1.21  “Capital
Leases” shall mean, as applied to any Person, any lease of (or any agreement
conveying the right to use) any property (whether real, personal or mixed) by
such Person as lessee which in accordance with GAAP, is required to be reflected
as a liability on the balance sheet of such Person.

     

    1.22  “Cash
Dominion Event” shall mean a period commencing on the earlier of (a) the date
that an Event of Default shall exist or have occurred and be continuing and
ending on the date ninety (90) days after such Event of Default ceases to exist
or be continuing or (b) commencing on the date that Covenant Excess Availability
shall be less than $18,000,000 and ending on date that Covenant Excess
Availability has been greater than $18,000,000 for any consecutive ninety (90)
day period thereafter.  Notwithstanding anything to the contrary
contained herein, except as Agent may otherwise hereafter agree in writing, a
Cash Dominion Event may not be terminated following the second (2nd) such
termination during the term of this Agreement and in such case, the Cash
Dominion Event shall continue until the payment in full of the Obligations
(other than contingent Obligations as to which Agent shall have received such
cash collateral, or letter of credit, as is provided for pursuant to the terms
of Section 13.1 hereof) and the termination of the Commitments.

     

    1.23  “Cash
Equivalents” shall mean, at any time, (a) any evidence of Indebtedness with a
maturity date of ninety (90) days or less issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof; the United Kingdom or any agency or instrumentality
thereof; provided, that, the full faith
and credit of the United States of America is pledged in support thereof; (b)
certificates of deposit or bankers' acceptances with a maturity of ninety (90)
days or less of any financial institution that is a member of the Federal
Reserve System or a financial institution located in the United Kingdom
acceptable to Agent, in each case, having combined capital and surplus and
undivided profits of not less than the US Dollar Equivalent of $1,000,000,000;
(c) commercial paper (including variable rate demand notes) with a maturity of
ninety (90) days or less issued by a corporation (except an Affiliate of any
Borrower or Guarantor) organized under the laws of any State of the United
States of America or the District of Columbia, or incorporated under the laws of
England or Wales and rated at least A-1 by Standard & Poor's Ratings
Service, a division of The McGraw-Hill Companies, Inc. or at least P-1 by
Moody's Investors Service, Inc.; (d) repurchase obligations with a term of not
more than thirty (30) days for underlying securities of the types described in
clause (a) above entered into with any financial institution having combined
capital and surplus and undivided profits of not less than the US Dollar
Equivalent of $1,000,000,000; (e) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or unconditionally
guaranteed by the United States of America or issued by any governmental agency
thereof and backed by the full faith and credit of the United States of America
or England or Wales, in each case maturing within ninety (90) days or less from
the date of acquisition; provided, that, the terms of
such agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions with Securities Dealers and Others, as
adopted by the Comptroller of the Currency on October 31, 1985;
and  (f) investments in money market funds and mutual funds which
invest substantially all of their assets in securities of the types described in
clauses (a) through (e) above.

     

    1.24  “Cash
Management Accounts” shall have the meaning set forth in Section 6.6
hereof.

     

    1.25  “Change
in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental
Authority.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    1.26  “Change
of Control” shall mean (a) any person or group of persons (within the meaning of
the Securities Exchange Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) of 20% or more
of the issued and outstanding Voting Stock of Parent, (b) the liquidation or
dissolution of any Borrower or Guarantor or the adoption of a plan by the
stockholders of any Borrower or Guarantor relating to the dissolution or
liquidation of such Borrower or Guarantor, other than as permitted in Section
10.1 hereof; (b) during any period of twelve (12) consecutive calendar months,
individuals who at the beginning of such period constituted the board of
directors of Parent (together with any new directors whose election by the board
of directors of Parent or whose nomination for election by the stockholders of
Parent was approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of such period or whose
elections or nomination for election was previously so approved) cease for any
reason other than death or disability to constitute a majority of the directors
then in office or (c) the failure of Parent to own directly or indirectly more
than seventy (70%) percent of the voting power of the total outstanding Voting
Stock of any Borrower (other than Parent) or Guarantor .

     

    1.27  “Charged
Property” means the assets of the Loan Parties subject to a Security Interest
under the UK Loan Documents.

     

    1.28  “Code”
shall mean the Internal Revenue Code of 1986, as the same now exists or may from
time to time hereafter be amended, modified, recodified or supplemented,
together with all rules, regulations and interpretations thereunder or related
thereto.

     

    1.29  “Collateral”
shall have the meaning set forth in Section 5 hereof.

     

    1.30  “Collateral
Access Agreement” shall mean an agreement in writing, in form and substance
satisfactory to Agent, from any lessor of premises to any Borrower or Guarantor,
or any other person to whom any Collateral is consigned or who has custody,
control or possession of any such Collateral or is otherwise the owner or
operator of any premises on which any of such Collateral is located, in favor of
Agent with respect to the Collateral at such premises or otherwise in the
custody, control or possession of such lessor, consignee or other
person.

     

    1.31  “Commitment”
shall mean, at any time, as to each Lender, the principal amount set forth on
Schedule 1.31 hereto designated as the Commitment of such Lender or on
Schedule 1 to the Assignment and Acceptance Agreement pursuant to which
such Lender became a Lender hereunder in accordance with the provisions of
Section 16.7 hereof, as the same may be adjusted from time to time in
accordance with the terms hereof; sometimes being collectively referred to
herein as “Commitments”.

     

    1.32  “Concentration
Accounts” shall mean, collectively, the deposit accounts of Borrowers identified
on Schedule 8.10 of the Information Certificate as the concentration
accounts and such other accounts as may be established after the date hereof in
accordance with the terms hereof used to receive funds from the Cash Management
Accounts; sometimes being referred to herein individually as a “Concentration
Account”.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    1.33  “Consolidated
EBITDA” shall mean, as to any Person, with respect to any period, an amount
equal to (a) the Consolidated Net Income of such Person and its Subsidiaries for
such period determined in accordance with GAAP, plus (b) each of the following,
in each case to the extent deducted in the calculation of such Consolidated Net
Income for such period: (i) depreciation and amortization (including, but not
limited to, imputed interest and deferred compensation) of such Person and its
Subsidiaries for such period, all in accordance with GAAP, plus (ii) the
Interest Expense of such Person and its Subsidiaries for such period, plus (iii)
charges for Federal, State, local and foreign income taxes for such period plus
(iv) extraordinary, one-time or non-recurring non-cash losses or charges that
have been deducted in determining Consolidated Net Income for such period in
accordance with GAAP, including with respect to the write-offs for intangibles
plus (v)
non-cash charges that are expenses in accordance with GAAP in respect of
stock-based compensation, plus (vi) deferred
tax reserves, plus (vii) facilities
closure, severance and other restructuring expenses in amount to be approved by
the Agent.

     

    1.34  “Consolidated
Excess Availability” shall mean, at any time, the sum of (a) (i) the lesser
of  (A) the US Borrowing Base or (B) the US Facility Limit plus (b) the lesser
of (i) the UK Borrowing Base or (ii) the UK Loan Limit minus (c) the sum of:
(i) the amount of all then outstanding and unpaid Obligations in respect of the
Loans and outstanding Letter of Credit Obligations, and (ii) the aggregate
amount of all then outstanding and unpaid trade payables and other obligations
of US Borrowers, UK Borrowers and Singapore Borrowing Base Guarantors which are
outstanding more than sixty (60) days past due as of the end of the immediately
preceding month or at Agent’s option, as of a more recent date based on such
reports as Agent may from time to time specify (other than trade payables or
other obligations being contested or disputed by any Borrower or Singapore
Borrowing Base Guarantor in good faith).

     

    1.35  “Consolidated
Interest Expense” shall mean, for any period, as to any Person, as determined in
accordance with GAAP, the amount equal to total interest expense of such Person
and its Subsidiaries on a consolidated basis for such period, whether paid or
accrued (including the interest component of any Capital Lease for such period),
and in any event, including, without limitation, (a) discounts in connection
with the sale of any Accounts, (b) bank fees,  commissions, discounts
and other fees and charges owed with respect to letters of credit, banker’s
acceptances or similar instruments or any factoring, securitization or similar
arrangements, (c) interest payable by addition to principal or in the form of
property other than cash and any other interest expense not payable in cash, and
(d) the costs or fees for such period associated with Hedging Agreements to the
extent not otherwise included in such total interest expense (excluding breakage
costs incurred in connection with the termination of Hedging Agreements on or
about the date hereof, if any).

     

    1.36  “Consolidated
Net Income” shall mean, with respect to any Person for any period, the aggregate
of the net income (loss) of such Person and its Subsidiaries, on a consolidated
basis, for such period (and as to Borrowers and Guarantors, excluding to the
extent included therein (i) any extraordinary, one-time or non-recurring gains
and (ii) extraordinary, one-time or non-recurring non-cash losses or charges),
and after deducting the Provision for Taxes for such period, all as determined
in accordance with GAAP; provided, that,

     

    (a)           the
net income of any Person that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid or payable to such Person or a Subsidiary of such
Person;

     

    (b)           except
to the extent included pursuant to the foregoing clause, the net income of any
Person accrued prior to the date it becomes a Subsidiary of such Person or is
merged into or consolidated with such Person or any of its Subsidiaries or that
Person’s assets are acquired by such Person or by any of its Subsidiaries shall
be excluded;

     

    (c)           the
net income (if positive) of any wholly-owned Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such
wholly-owned Subsidiary to such Person or to any other wholly-owned Subsidiary
of such Person is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such wholly-owned Subsidiary shall be
excluded.

     

    
      
        
        

      

      
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    For the
purposes of this definition, net income excludes any gain and non-cash loss
together with any related Provision for Taxes for such gain and non-cash loss
realized upon the sale or other disposition of any assets that are not sold in
the ordinary course of business or of any Equity Interests of such Person or a
Subsidiary of such Person, and any net income or non-cash loss realized as a
result of changes in accounting principles or the application thereof to such
Person and any net income or non-cash loss realized as the result of the
extinguishment of debt.

     

    1.37  “Covenant
Excess Availability” shall mean the amount, calculated at any date, equal to:
(a) the sum of the US Borrowing Base and the UK Borrowing Base, minus (b) the sum of:
(i) the amount of all then outstanding and unpaid Obligations in respect of the
Loans and outstanding Letter of Credit Obligations, and (ii) the aggregate
amount of all then outstanding and unpaid trade payables and other obligations
of US Borrowers, UK Borrowers and Singapore Borrowing Base Guarantors which are
outstanding more than sixty (60) days past due as of the end of the immediately
preceding month or at Agent’s option, as of a more recent date based on such
reports as Agent may from time to time specify (other than trade payables or
other obligations being contested or disputed by any Borrower or Singapore
Borrowing Base Guarantor in good faith).

     

    1.38  “Credit
Facility” shall mean, collectively, the US Credit Facility and the UK Credit
Facility.

     

    1.39  “Debenture”
shall mean the Debenture, dated on or about the date hereof, by each UK Borrower
in favor of Agent, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

     

    1.40  “Default”
shall mean an act, condition or event which with notice or passage of time or
both would constitute an Event of Default.

     

    1.41  “Defaulting
Lender” shall have the meaning set forth in Section 6.13(f)
hereof.

     

    1.42  “Delegate”
means any delegate, agent, attorney or co-trustee appointed by Agent (in its
capacity as security trustee) as appointed under Section 15 of this
Agreement.

     

    1.43  “Deposit
Account Control Agreement” shall mean an agreement in writing, in form and
substance reasonably satisfactory to Agent, by and among Agent, the Borrower or
Guarantor with a deposit account at any bank and the bank at which such deposit
account is at any time maintained which provides that such bank will comply with
instructions originated by Agent directing disposition of the funds in the
deposit account without further consent by such Borrower or Guarantor and has
such other terms and conditions as Agent may reasonably require.

     

    1.44  “Disqualified
Equity Interest” means, with respect to any Person, any Equity Interest in such
Person that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable, either mandatorily or at the option
of the holder thereof) or upon the happening of any event or
condition:

     

    (a) 
matures or is mandatorily redeemable (other than solely for Equity Interests in
such Person that do not constitute Disqualified Equity Interests and cash in
lieu of fractional shares of such Equity Interests), whether pursuant to a
sinking fund obligation or otherwise;

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (b) 
is convertible or exchangeable at the option of the holder thereof for
Indebtedness or Equity Interests (other than solely for Equity Interests in such
Person that do not constitute Disqualified Equity Interest and cash in lieu of
fractional shares of such Equity Interests); or

     

    (c) 
is redeemable (other than solely for Equity Interests in such Person that do not
constitute Disqualified Equity Interest and cash in lieu of fractional shares of
such Equity Interests) or is required to be repurchased by such Person or any of
its Affiliates, in whole or in part, at the option of the holder
thereof.

     

    1.45  “Documents”
means in relation to any UK Letter of Credit issued in connection with the
purchase of any Goods, any and all documents which represent or relate to those
Goods and/or the possession of and/or ownership of, and/or insurance of, and/or
warehousing of, and/or any other dealing in or with those Goods.

     

    1.46  “Eligible
Accounts” shall mean, as to US Borrowers and the US Credit Facility, Accounts
created by US Borrowers, and as to UK Borrowers and the UK Credit Facility,
Accounts created by any UK Borrower or Singapore Borrowing Base Guarantor, that
in each case at the time of creation and at all times thereafter satisfy the
criteria set forth below.  Eligible Accounts shall not
include:

     

    
      (a) 
any Account that is not subject to the first priority, valid and perfected
security interest (and as to Accounts of UK Borrowers and Singapore Borrowing
Base Guarantors, are subject to the first ranking fixed and floating charge of
Agent pursuant to the UK Loan Documents and the Singapore Loan Documents,
respectively) in favor of Agent, which Accounts may be subject, however, to
Permitted Liens described in clauses (b), (c) and (j) of the definition
thereof;

       

      (b) 
any Account which is subject to any security interest, lien or other encumbrance
other than the security interest and lien of Agent and those permitted in
clauses (b), (c) and (j) of the definition of the term Permitted Liens (but as
to liens referred to in clause (j) only to the extent that Agent has established
a Reserve as provided therein) and any other liens permitted under this
Agreement that are subject to an intercreditor agreement in form and substance
satisfactory to Agent between the holder of such security interest or lien and
Agent;

       

      (c) 
any Account (exclusive of Extended Payment Term Accounts) (i) unpaid more than
earlier of sixty (60) days after the original due date for such Accounts or one
hundred twenty (120) days after the date of the original invoice for it and (ii)
the selling terms underlying such Account exceed ninety (90) days;

       

      (d) 
any Accounts that is an Extended Payment Term Account in the event that (i) such
Account is not owing by an Approved Multinational Account Debtor, (ii) such
Account is unpaid more than the earlier of sixty (60) days after the original
due date for such Accounts or one hundred fifty (150) days after the date of the
original invoice for it; provided, that, in any event no
more than the US Dollar Equivalent of $2,500,000 of Eligible Accounts of all
Borrowers and Singapore Borrowing Base Guarantors consisting of Extended Payment
Term Accounts shall be included in the Borrowing Base at any time, or (iii) the
selling terms underlying such Account exceed one hundred five (105)
days;

       

      (e) 
any Account owing by an account debtor for which more than fifty (50%) percent
of the Accounts owing by such account debtor and its Affiliates are unpaid more
than earlier of sixty (60) days after the original due date for such Accounts or
one hundred twenty (120) days after the date of the original invoice for it (or
in the case of an Extended Payment Term Account more than the earlier of sixty
(60) days after the original due date for such Accounts or one hundred fifty
(150) days after the date of the original invoice for it);

       

      
        
          
          

        

        
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      (f) 
any Account owing by a single account debtor to the extent that the aggregate
amount of such Accounts exceeds twenty (20%) percent of the aggregate amount of
all otherwise Eligible Accounts whether owing to all Borrowers and Singapore
Borrowing Base Guarantors (but the portion of the Accounts not in excess of such
percentage that otherwise satisfy the criteria herein will be deemed Eligible
Accounts);

       

      (g) 
any Account with respect to which any covenant, representation, or warranty
contained in this Agreement or in the other Loan Documents has been breached or
is not true in any material respect;

       

      (h) 
any Account that (i) does not arise from the sale of goods or performance of
services in the ordinary course of business, (ii) is not evidenced by an invoice
or other documentation satisfactory to Agent and which has been sent to the
account debtor, (iii) represents a progress billing,  (iv) is
contingent upon such Person’s or its Affiliates’ completion of any further
performance or has otherwise been billed in advance of completion of performance
or being fully earned, (v) represents a sale on a bill-and-hold, guaranteed
sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any
other repurchase or return basis, (vi) relates to payments of interest or (vii)
has been invoiced more than once;

       

      (i) 
any Account with respect to which any check or other instrument of payment has
been returned uncollected for any reason;

       

      (j) 
any Account owed by an account debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, interim receiver,
receiver-manager, custodian, trustee, administrator or liquidator of its assets,
(ii) had possession of all or a material part of its property taken by any
receiver, interim receiver, receiver-manager, custodian, trustee, administrator
or liquidator, (iii) filed, or had filed against it, any request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as
bankrupt, winding-up, or voluntary or involuntary case under any Federal, State,
or territorial bankruptcy laws (other than in the case of US Borrowers,
post-petition accounts payable of an account debtor that is a
debtor-in-possession under the Bankruptcy Code and acceptable to Agent), (iv)
entered into discussions with its creditors existing at any time with respect to
rescheduling any of its Indebtedness, (v) admitted in writing its inability, or
is generally unable to, pay its debts as they become due, (vi) become insolvent,
or (vii) ceased operation of its business;

       

      (k) 
any Account owed by any account debtor that has sold all or substantially all
its assets (unless such Account has been assumed by a Person that shall have
acquired such assets and otherwise satisfies the requirements set forth in this
definition);

       

      (l) 
as to Accounts of US Borrowers, Accounts owing by account debtors whose chief
executive office is not located in the United States of America or Canada (so
long as in the case of an account debtor locate in Canada, at any time promptly
upon Agent’s request, such Borrower shall execute and deliver, or cause to be
executed and delivered, such other agreements, documents and instruments as may
be required by Agent to perfect the security interests of Agent in those
Accounts of an account debtor with its chief executive office or principal place
of business in Canada in accordance with the applicable laws of the Province of
Canada in which such chief executive office or principal place of business is
located and take or cause to be taken such other and further actions as Agent
may reasonably request to enable Agent as secured party with respect thereto to
collect such Accounts under the applicable Federal or Provincial laws of Canada)
unless such account debtor is an Approved Multinational as set forth in clause
(o) below or, at Agent’s option, then if either: (i) the account debtor has
delivered to such Borrower an irrevocable letter of credit issued or confirmed
by a bank reasonably satisfactory to Agent and payable only in the United States
of America and in U.S. dollars, sufficient to cover such Account, in form and
substance reasonably satisfactory to Agent and if required by Agent, the
original of such letter of credit has been delivered to Agent or Agent’s agent
and the issuer thereof, and such Borrower has complied with the terms of Section
5.2(f) hereof with respect to the assignment of the proceeds of such letter of
credit to Agent or naming Agent as transferee beneficiary thereunder, as Agent
may specify, or (ii) such Account is subject to credit insurance payable to
Agent issued by an insurer and on terms and in an amount acceptable to Agent, or
(iii) such Account is otherwise acceptable in all respects to Agent (subject to
such lending formula with respect thereto as Agent may determine) so long as the
account debtor with respect to such Account is located in a jurisdiction
otherwise permitted herein or is an Approved Multinational Account
Debtor.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (m) 
as to Accounts of UK Borrowers, Accounts owing by account debtors whose chief
executive office is not located in the United Kingdom or the United States of
America, unless such account debtor is an Approved Multinational as set forth in
clause (o) below or, at Agent’s option, then if either: (i) the account debtor
has delivered to such Borrower an irrevocable letter of credit issued or
confirmed by a bank reasonably satisfactory to Agent and payable only in the
United States of America and in US Dollars (or payable in such other country and
such other currency as Agent may determine in its sole discretion), sufficient
to cover such Account, in form and substance reasonably satisfactory to Agent
and, if required by Agent, the original of such letter of credit has been
delivered to Agent or Agent’s agent and the issuer thereof, and such Borrower
has complied with the terms of Section 5.2(f) hereof with respect to the
assignment of the proceeds of such letter of credit to Agent or naming Agent as
transferee beneficiary thereunder, as Agent may specify, or (ii) such Account is
subject to credit insurance payable to Agent issued by an insurer and on terms
and in an amount acceptable to Agent, or (iii) such Account is otherwise
acceptable in all respects to Agent (subject to such lending formula with
respect thereto as Agent may determine) so long as the account debtor with
respect to such Account is located in a jurisdiction otherwise permitted herein
or is an Approved Multinational Account Debtor;

       

      (n) 
as to Accounts of Singapore Borrowing Base Guarantors, Accounts owing by account
debtors whose chief executive office is not located in Singapore, United States
of America or Hong Kong (provided, that, the aggregate
dollar amount of Accounts owing by account debtors whose chief executive office
is located in Hong Kong which shall be included in the calculation of the
Borrowing Base at any time shall not exceed $7,000,000), unless such account
debtor is an Approved Multinational as set forth in clause (o) below or at
Agent’s option, then if either: (i) the account debtor has delivered to such
Borrower an irrevocable letter of credit issued or confirmed by a bank
reasonably satisfactory to Agent and payable only in the United States of
America and in US Dollars (or payable in such other country and such other
currency as Agent may determine in its sole discretion), sufficient to cover
such Account, in form and substance reasonably satisfactory to Agent and, if
required by Agent, the original of such letter of credit has been delivered to
Agent or Agent’s agent and the issuer thereof, and such Borrower has complied
with the terms of Section 5.2(f) hereof with respect to the assignment of the
proceeds of such letter of credit to Agent or naming Agent as transferee
beneficiary thereunder, as Agent may specify, or (ii) such Account is subject to
credit insurance payable to Agent issued by an insurer and on terms and in an
amount acceptable to Agent, or (iii) such Account is otherwise acceptable in all
respects to Agent (subject to such lending formula with respect thereto as Agent
may determine) so long as the account debtor with respect to such Account is
located in a jurisdiction otherwise permitted herein or is an Approved
Multinational Account Debtor;

       

      (o) 
Accounts which are otherwise Eligible Accounts but do not meet the criteria set
forth in Sections 1.46(l), (m) or (n) hereof, unless (i) such Accounts are owing
by any of the account debtors which are Approved Multinationals, and (ii) the
aggregate amount of such Accounts owing by Approved Multinationals which may be
deemed Eligible Accounts at any given time under this Section 1.46 are in an
aggregate amount equal to or less than the US Dollar Equivalent of
$2,500,000;

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (p) 
Accounts that consist of progress billings (such that the obligation of the
account debtors with respect to such Accounts is conditioned upon such
Borrower’s satisfactory completion of any further performance under the
agreement giving rise thereto), bill and hold invoices or retainage invoices,
except as to bill and hold invoices, if Agent shall have received an agreement
in writing from the account debtor, in form and substance reasonably
satisfactory to Agent, confirming the unconditional obligation of the account
debtor to take the goods related thereto and pay such invoice (but the portion
of such Accounts which do not constitute progress billings, bill and hold
invoices or retainage invoices shall not be deemed to be ineligible solely by
virtue of this clause (p);

       

      (q) 
any Account of any (i) US Borrower owed in any currency other than US Dollars or
Canadian Dollars, (ii) UK Borrower owed in any currency other than US Dollars,
Euros or Pounds Sterling or (iii) Singapore Borrowing Base Guarantor owed in any
currency other than US Dollars;

       

      (r) 
with respect to Accounts owing to US Borrowers, any Account owed by (i) the
government (or any department, agency, public corporation, or instrumentality
thereof) of any country other than the United States, unless such Account is
backed by a letter of credit acceptable to Agent and which has been assigned to
and is directly drawable by Agent, or (ii) the government of the United States,
or any department, agency, public corporation, or instrumentality thereof,
unless the Federal Assignment of Claims Act of 1940, as amended,, and any other
steps necessary to perfect the security interest and lien of Agent in such
Account have been complied with to Agent’s satisfaction;

       

      (s) 
with respect to Accounts owing to UK Borrowers, any Account owed by (i) the
government (or any department, agency, public corporation, or instrumentality
thereof) of any country other than the United States, unless such Account is
backed by a letter of credit acceptable to Agent and which has been assigned to
and is directly drawable by Agent, or (ii) the government of the United States,
or any department, agency, public corporation, or instrumentality thereof,
unless the Federal Assignment of Claims of 1940, as amended, and any other steps
necessary to perfect the security interest and lien of Agent in such Account
have been complied with to Agent’s satisfaction;

       

      (t) 
with respect to Accounts owing to Singapore Borrowing Base Guarantors, any
Account owed by (i) the government (or any department, agency, public
corporation, or instrumentality thereof) of any country other than the United
States, unless such Account is backed by a letter of credit acceptable to Agent
and which has been assigned to and is directly drawable by Agent, or (ii) the
government of the United States, or any department, agency, public corporation,
or instrumentality thereof, unless the Federal Assignment of Claims of 1940, as
amended, and any other steps necessary to perfect the security interest and lien
of Agent in such Account have been complied with to Agent’s
satisfaction;

       

      (u) 
any Account owed by any Affiliate, employee, officer, director or agent of any
Borrower or Guarantor;

       

      (v) 
any Account that, for any account debtor, exceeds any credit limit reasonably
acceptable to Agent with respect to such account debtor determined by the
applicable Borrower from time to time (and otherwise such credit limit as Agent
may reasonably determine after notice and consultation with Administrative
Borrower), to the extent of such excess;

       

      (w) 
any Account owed by an account debtor or any Affiliate of such account debtor to
which any Borrower or Guarantor is indebted, but only to the extent of such
indebtedness, or which is subject to any security, deposit, progress payment,
retainage or other similar advance made by or for the benefit of an account
debtor, in each case to the extent thereof;

       

      (x) 
any Account subject to any counterclaim, deduction, defense, setoff or dispute
(including, without limitation, with respect to any of the foregoing, in the
form of a rebate or warranty claim);

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (y) 
any Account evidenced by or arising under any promissory note, lease, chattel
paper, or instrument;

       

      (z) 
with respect to any Account owing to a US Borrower, any Account owed by an
account debtor located in any jurisdiction which requires filing of a “Notice of
Business Activities Report” or other similar report in order to permit such
Person to seek judicial enforcement in such jurisdiction of payment of such
Account, unless such Person has filed such report or qualified to do business in
such jurisdiction;

       

      (aa) any
Account with respect to which any Borrower or Guarantor has made any agreement
with the account debtor for any reduction thereof (to the extent of such
reduction), other than discounts and adjustments given in the ordinary course of
business, or any Account which was partially paid and such Borrower or Guarantor
created a new receivable for the unpaid portion of such Account;

       

      (bb)                 any
Account that does not comply in all material respects with the requirements of
all applicable laws and regulations, whether Federal,
State,  territorial or local, including without limitation the Federal
Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation
Z of the Board;

       

      (cc) any
Account arising from goods that have been sold under a purchase order or
pursuant to the terms of a contract or other agreement or understanding (written
or oral) that indicates or purports to indicate that any Person other than such
Person has or has had an ownership interest in such goods, or which indicates
any party other than such Person as payee or remittance party;

       

      (dd)                 any
Account which is subject to any limitation on assignments or other security
interests (whether arising by operation of law, by agreement or otherwise),
unless Agent has determined that such limitation is not enforceable;
or

       

      (ee) any
Account that Agent, in good faith, determines may not be paid by reason of the
account debtor’s financial condition or inability to pay.

       

      The
criteria for Eligible Accounts set forth above may only be changed and any new
criteria for Eligible Accounts may only be established by Agent based on either:
(i) an event, condition or other circumstance arising after the date hereof, or
(ii) an event, condition or other circumstance existing on the date hereof to
the extent Agent has no written notice thereof from a Borrower prior to the date
hereof, in either case under clause (i) or (ii) which adversely affects or could
reasonably be expected to adversely affect the Accounts in the determination of
Agent.  Any Accounts that are not Eligible Accounts shall nevertheless
be part of the Collateral

       

      1.47 “Eligible Inventory”
shall mean, Inventory of any US Borrower located in the United States of America
and Inventory of any UK Borrower located in the United Kingdom, in each case,
consisting of finished goods held for resale in the ordinary course of the
business of such Borrower that satisfy the criteria set forth
below.  Eligible Inventory shall not include:

       

      (a) 
any Inventory that is not subject to a first priority perfected security
interest (and as to Inventory located in the United Kingdom, the first ranking
fixed and floating charge of Agent pursuant to the UK Loan Documents) in favor
of Agent, which Inventory may be subject, however, to Permitted Liens described
in clauses (b), (c), and  (j) of the definition thereof (but as to
liens referred to in clause (j) only to the extent that Agent has established a
Reserve as provided therein);

       

      
        
          
          

        

        
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      (b) 
any Inventory that is subject to any security interest, lien or other
encumbrance other than the security interest and lien of Agent and those
permitted in clauses (b), (c) and (j) of the definition of the term Permitted
Liens (but as to liens referred to in clause (j) only to the extent that Agent
has established a Reserve as provided therein) and any other liens permitted
under this Agreement that are subject to an intercreditor agreement in form and
substance reasonably satisfactory to Agent between the holder of such security
interest or lien and Agent;

       

      (c) 
any Inventory that is obsolete; provided, that, any Inventory
that is purchased by a Borrower on a “NCNR” (a/k/a non-cancelable
non-returnable) basis may, at any time, be deemed Eligible Inventory in the
determination of Agent with the consent of all Lenders notwithstanding that such
Inventory will be held for more than twelve (12) months prior to such
time;

       

      (d) 
any Inventory that is unmerchantable, defective, used, unfit for sale, not
salable at prices approximating at least the cost of such Inventory in the
ordinary course of business;

       

      (e) 
any Inventory with respect to which any covenant, representation, or warranty
contained in this Agreement or any of the other Loan Documents has been breached
or is not true in any respect or which does not conform to all standards imposed
by any Governmental Authority;

       

      (f) 
any Inventory which any Person other than such Person shall (i) have any direct
or indirect ownership, interest or title to such Inventory or (ii) be indicated
on any purchase order or invoice with respect to such Inventory as having or
purporting to have an interest therein;

       

      (g) 
any Inventory that constitutes raw materials, work-in-process, spare or
replacement parts, subassemblies, packaging and shipping material, manufacturing
supplies, samples, prototypes, displays or display items, bill-and-hold goods,
goods that have been returned for repair, replacement or refurbishment, used,
repaired or refurbished goods, repossessed goods, unmerchantable, defective or
damaged goods, goods unfit for sale, goods held on consignment (except as
permitted in subsection (h) below), goods which are not of a type held for sale
in the ordinary course of business;

       

      (h) 
any Inventory that is not located at premises owned and controlled by any
Borrower, unless (i) as to leased locations, (a) Agent shall have received a
Collateral Access Agreement from the owner and lessor of such location, duly
authorized, executed and delivered by such owner and lessor, or (b) in the event
Agent has not received a Collateral Access Agreement, Lender may, at its option,
nevertheless consider Inventory at such location to be Eligible Inventory to the
extent Agent shall have established such Reserves, in respect of amounts at any
time payable by Borrower to the owner and lessor thereof as Lender shall
determine in good faith, provided, that, so long as no
Default or Event of Default shall have occurred and be continuing such Reserves
shall not exceed the amount equal to three (3) months’ rent and other charges,
and (ii) as to locations owned and operated by a third person, (A) if Agent
shall have received a Collateral Access Agreement from such owner and operator
with respect to such location, duly authorized, executed and delivered by such
owner and operator, consignee or bailee, Agent may, at its option, nevertheless
consider Inventory at such location to be Eligible Inventory to the extent Agent
shall have established such Reserves in respect of amounts at any time payable
by such Borrower to the owner and operator thereof as Lender shall determine,
and (B) in addition, if required by Agent, if Agent shall have received: (1) UCC
financing statements or (such other jurisdiction’s equivalent) between the owner
and operator, as consignee or bailee and such Borrower, as consignor or bailor,
in form and substance reasonably satisfactory to Agent, which are duly assigned
to Agent and (2) a written notice to any lender to the applicable consignee,
bailee, or owner and operator of such location of the first priority security
interest in such Inventory of Agent;

       

      
        
          
          

        

        
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      (i) 
any Inventory that is a discontinued product or component thereof and is not
usable in a continuing product;

       

      (j) 
any Inventory that is the subject of a consignment by such Person as consignor
unless the provisions of clause (h) hereof are complied with to the satisfaction
of Agent;

       

      (k) 
any Inventory that is not reflected in a current perpetual inventory report of
such Person;

       

      (l) 
any Inventory for which reclamation rights have been asserted by the seller;
and

       

      (m) 
any Inventory that contains or bears any intellectual property rights licensed
to such Person unless Agent is satisfied that it may sell or otherwise dispose
of such Inventory without (i) infringing the rights of such licensor, (ii)
violating any contract with such licensor, or (iii) incurring any liability with
respect to payment of royalties other than royalties incurred pursuant to sale
of such Inventory under the current licensing agreement.

       

      In no
event shall the aggregate amount of Eligible Inventory attributable to slow
moving Inventory of Borrowers (i.e., Inventory aged in excess of one (1) year
but less than two (2) years old ) included in the calculation of the Borrowing
Base exceed the US Dollar Equivalent of $5,000,000.

       

      The
criteria for Eligible Inventory set forth above may only be changed and any new
criteria for Eligible Inventory may only be established by Agent based on
either: (iv) an event, condition or other circumstance arising after the date
hereof, or (v) an event, condition or other circumstance existing on the date
hereof to the extent Agent has no written notice thereof from a Borrower prior
to the date hereof, in either case under clause (i) or (ii) which adversely
affects or could reasonably be expected to adversely affect the Inventory in the
determination of Agent.  Any Inventory that is not Eligible Inventory
shall nevertheless be part of the Collateral.

       

      1.48  “Eligible
Transferee” shall mean (a) any Lender; (b) the parent company of any Lender
and/or any Affiliate of such Lender which is at least fifty (50%) percent owned
by such Lender or its parent company; (c) any person (whether a corporation,
partnership, trust or otherwise) that is an Approved Fund and (d) any other
commercial bank, financial institution or “accredited investor” (as defined in
Regulation D under the Securities Act of 1933) approved by Agent; provided, that, (i) in the case of
the approval of clauses (c) and (d) above, unless an Event of Default has
occurred and is continuing a the time any assignment is effected hereunder,
Administrative Borrower shall have the right to approve such assignments, such
approval not to be unreasonably withheld, conditioned or delayed by Borrower and
such approval shall be deemed to have been given by Administrative Borrower if
no objection from Administrative Borrower is received by the assigning Lender an
d Agent within three (3) Business Days after notice of such proposed assignment
has been provided by the assigning Lender or Agent to the Administrative
Borrower, (ii) neither any Borrower nor any Guarantor or any Affiliate of any
Borrower or Guarantor shall qualify as an Eligible Transferee, and (iii) no
Person to whom any Indebtedness which is in any way subordinated in right of
payment to any other Indebtedness of any Borrower or Guarantor shall qualify as
an Eligible Transferee, except as Agent may otherwise specifically
agree.

       

      
        
          
          

        

        
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      1.49  “Environmental
Laws” shall mean all foreign, Federal, State, and local laws (including common
law), legislation, rules, codes, licenses, permits (including any conditions
imposed therein), authorizations, binding judicial or administrative decisions,
injunctions or agreements between any Borrower, Guarantor, or any Subsidiary and
any Governmental Authority, (a) relating to pollution and the protection,
preservation or restoration of the environment (including air, water vapor,
surface water, ground water, drinking water, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety, (b) relating to the exposure to, or the use, storage,
recycling, treatment, generation, manufacture, processing, distribution,
transportation, handling, labeling, production, release or disposal, or
threatened release, of Hazardous Materials, or (c) relating to all laws with
regard to recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Materials as now or may at any time be in effect during the
term of this Agreement.

       

      1.50  “Equipment”
shall mean, as to each Borrower and Guarantor, all of such Borrower’s and
Guarantor’s now owned and hereafter acquired equipment, wherever located,
including machinery, data processing and computer equipment (whether owned,
leased or licensed and including embedded software that is licensed as part of
such computer equipment), rolling stock, vehicles, tools, furniture, fixtures,
all attachments, accessions and property now or hereafter affixed thereto or
used in connection therewith, and substitutions and replacements thereof,
wherever located.

       

      1.51
“Equity Interests” shall mean, with respect to any Person, all of the shares,
interests, participations or other equivalents (however designated) of such
Person’s equity interests or partnership, limited liability company or other
equity, ownership or profit interests at any time outstanding, all of the
warrants, options or other rights for the purchase or acquisition from such
Person of shares of equity interests of (or other interests in) such Person, all
of the securities convertible into or exchangeable for shares of equity
interests of (or other interests in) such Person or warrants, rights or options
for the purchase or acquisition from such Person of such shares (or such other
interests), but excluding any interests in phantom equity plans and any debt
security that is convertible into or exchangeable for such shares, and all of
the other ownership or profit interests in such Person (including partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are outstanding on
any date of determination.

       

      1.52  “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, together with
all rules, regulations and interpretations thereunder or related
thereto.

       

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

       

      1.54  “ERISA
Event” shall mean (a) any “reportable event”, as defined in Section 4043(c)
of ERISA or the regulations issued thereunder, with respect to a Pension Plan,
other than events as to which the requirement of notice has been waived in
regulations by the Pension Benefit Guaranty Corporation; (b) the adoption of any
amendment to a Pension Plan that would require the provision of security
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA;
(c) a complete or partial withdrawal by any Borrower, Guarantor or any ERISA
Affiliate from a Multiemployer Plan or a cessation of operations which is
treated as such a withdrawal or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Pension Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the Pension Benefit Guaranty
Corporation to terminate a Pension Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan;
(f) the imposition of any liability under Title IV of ERISA, other than the
Pension Benefit Guaranty Corporation premiums due but not delinquent under
Section 4007 of ERISA, upon any Borrower, Guarantor or any ERISA Affiliate
in excess of $5,000,000 and (g) any other event or condition with respect to a
Plan including any Pension Plan subject to Title IV of ERISA maintained, or
contributed to, by any ERISA Affiliate that could reasonably be expected to
result in liability of any Borrower in excess of $5,000,000.

       

      
        
          
          

        

        
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      1.55  “Eurodollar
Rate Loans” shall mean any Loans or portion thereof on which interest is payable
based on the Adjusted Eurodollar Rate in accordance with the terms
hereof.

       

      1.56  “Euros”
and “€” shall mean the lawful currency of the European Union issued by the
European System of Central Banks and the European Central Bank.

       

      1.57  “Event
of Default” shall mean the occurrence or existence of any event or condition
described in Section 12.1 hereof.

       

      1.58  “Exchange
Act” shall mean the Securities Exchange Act of 1934, together with all rules,
regulations and interpretations thereunder or related thereto.

       

      1.59  “Exchange
Rate” shall mean the prevailing spot rate of exchange of such bank as Agent may
reasonably select for the purpose of conversion of one currency to another, at
or around 11:00 a.m. New York time, on the date on which any such conversion of
currency is to be made under this Agreement.

       

      1.60  “Excluded
Property” shall have the meaning set forth in Section 5.3(b)
hereof.

       

      1.61  “Existing
Lenders” shall mean the lenders to US Borrowers listed on Schedule 1.61 hereto
(and including Citibank, N.A in its capacity as agent for such lenders.) and
their respective predecessors, successors and assigns.

       

      1.62  [Reserved]

       

      1.63  “Extended
Payment Term Account” shall mean an Account with a stated original due date of
one hundred twenty (120) days or more after the date of the original invoice
date of such Account but not more than one hundred fifty (150) days after the
date of the original invoice date of such Account.

       

      1.64  “Federal
Funds Rate” shall mean, for any period, a fluctuating interest rate per annum
equal, for each day during such period, to the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal Funds transactions with members of the Federal Reserve System arranged
by Federal Funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Agent from three Federal Funds brokers of recognized standing selected by
it.

       

      1.65  “Fee
Letter” shall mean the letter agreement, dated of even date herewith, by and
among Borrowers, Guarantors, and Agent, setting forth certain fees payable by
Borrowers to Agent, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.

       

      1.66  “Fixed
Charge Coverage Ratio” shall mean, with respect to any date of determination,
the ratio of (a) the amount equal to Consolidated EBITDA of any Person and its
Subsidiaries, on a consolidated basis, for the immediately preceding twelve (12)
consecutive fiscal months as of the end of the most recent month for which Agent
has received financial statements pursuant to Section 9.6 (a) hereof, to (b)
Fixed Charges of such Person and its Subsidiaries, on a consolidated basis, for
such period.

       

      
        
          
          

        

        
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      1.67  “Fixed
Charges” shall mean, as to any Person and its Subsidiaries, on a consolidated
basis, with respect to any period, the sum of, without duplication, (a) all
Interest Expense paid in cash, plus (b) all principal payments of Indebtedness
for borrowed money, and payments of Indebtedness for the deferred purchase price
of any property or services (including, without limitation, any indemnification,
adjustment of purchase price, earn-outs or other similar obligations incurred in
connection with any acquisition (including a Permitted Acquisition) or sale or
other disposition of assets (including a Permitted Disposition)) and Capital
Leases (and without duplication of items (a) and (b) of this definition, the
interest component with respect to Indebtedness under Capital Leases), plus (c)
the amount of Capital Expenditures of such Person and its Subsidiaries during
such period to the extent not financed by Indebtedness permitted hereunder for
such purpose, plus (d) all taxes paid by such person and its Subsidiaries in
cash during such period, plus (e) all dividends, distributions, repurchases and
redemptions in respect of Equity Interests paid by such Person and its
Subsidiaries during such period in cash, plus (f) the amount of all
restructuring charges approved by Agent and included in the calculation of
Consolidated EBITDA pursuant to clause (vii) of Section 1.33
hereof;

       

      1.68  “Foreign
Subsidiary” shall mean, as to any Person, any Subsidiary of such Person which is
not organized under the laws of the United States of America or any state
thereof.

       

      1.69  “GAAP”
shall mean in respect of the UK Borrowers, the generally accepted accounting
principles in the United Kingdom as in effect from time to time, in respect of
the Singapore Borrowing Base Guarantors, the generally accepted accounting
principles in Singapore as in effect from time to time and in respect of the US
Borrowers, the generally accepted accounting principles in the United States of
America as in effect from time to time as set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board which are applicable to the circumstances
as of the date of determination consistently applied, provided, that, in the event of
any change in GAAP after the date hereof that affects the covenant in Section
11.1 hereof, Administrative Borrower may by notice to Agent, or Agent may, and
at the request of Required Lenders shall, by notice to Administrative Borrower
require that such covenants be calculated in accordance with GAAP as in effect,
and as applied by Parent and its Subsidiaries, immediately before the applicable
change in GAAP became effective, until either the notice from the applicable
party is withdrawn or such covenant is amended in a manner satisfactory to
Administrative Borrower, Agent and the Required
Lenders.  Administrative Borrower shall deliver to Agent and upon
Agent’s request, to each Lender at the same time as the delivery of any
financial statements given in accordance with the provisions of Section 9.6
hereof (i) a description in reasonable detail of any material change in the
application of accounting principles employed in the preparation of such
financial statements from those applied in the most recently preceding monthly,
quarterly or annual financial statements and (ii) a reasonable estimate of the
effect on the financial statements on account of such changes in
application.

       

      1.70  “Goods”
means all Inventory, produce, stock and/or other goods and in respect of which
an UK Letter of Credit has been issued.

       

      1.71  “Governmental
Authority” shall mean the government of the United States of America, United
Kingdom, Singapore, or any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government (including any supra-national body exercising such
function, such as the European Union or the European Central Bank).

       

      1.72  “Guarantors”
shall mean, collectively, the following (together with their respective
successor and assigns): (a) US Guarantors and (b) UK Guarantors; each sometimes
being referred to herein individually as a “Guarantor”.

       

      
        
          
          

        

        
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      1.73  “Guaranty
Obligations” shall mean, with respect to any Person, without duplication, any
obligations of such Person (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) guaranteeing or
intended to guarantee any Indebtedness of any other Person in any manner,
whether direct or indirect, and including, without limitation, any obligation,
whether or not contingent, (a) to purchase any such Indebtedness or any property
constituting security therefor, (b) to advance or provide funds or other support
for the payment or purchase of any such Indebtedness or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including, without limitation, keep-well agreements, maintenance agreements,
comfort letters or similar agreements or arrangements) for the benefit of any
holder of Indebtedness of such other Person, (c) to lease or purchase property,
securities or services primarily for the purpose of assuring the holder of such
Indebtedness, or (d) to otherwise assure or hold harmless the holder of such
Indebtedness against loss in respect thereof. The amount of any Guaranty
Obligation hereunder shall (subject to any limitations set forth therein) be
deemed to be an amount equal to the outstanding principal amount (or maximum
principal amount, if larger) of the Indebtedness in respect of which such
Guaranty Obligation is made.

       

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

       

      1.75  “Hedge
Agreement” shall mean an agreement between any Borrower or Guarantor and Agent
or any Bank Product Provider that is a swap agreement as such term is defined in
11 U.S.C. Section 101, and including any rate swap agreement, basis swap,
forward rate agreement, commodity swap, interest rate option, forward foreign
exchange agreement, spot foreign exchange agreement, rate cap agreement rate,
floor agreement, rate collar agreement, currency swap agreement, cross-currency
rate swap agreement, currency option, and any other similar agreement (including
any option to enter into any of the foregoing or a master agreement for any the
foregoing together with all supplements thereto) entered into for the purpose of
protecting against or managing exposure to fluctuations in interest or exchange
rates, currency valuations or commodity prices; sometimes being collectively
referred to herein as “Hedge Agreements”.

       

      1.76  “Indebtedness”
shall mean, with respect to any Person, without duplication, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid or accrued, (d) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (e) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person which are due six (6) months or more from the date after such
property is acquired or such services are completed, and including, without
limitation, customary indemnification, adjustment of purchase price or similar
obligations, earn-outs or other similar obligations, in each case, incurred in
connection with a Permitted Acquisition (but excluding trade debt and accrued
expenses incurred in the ordinary course of business on normal trade terms and
not overdue by more than ninety (90) days) which would appear as liabilities on
a balance sheet of such Person in accordance with GAAP, (f) all obligations of
such Person under take-or-pay or similar arrangements or under commodities
agreements, (g) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any security interest in, lien or other encumbrance upon, or payable
out of the proceeds of production from property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed, (h)
all Guaranty Obligations of such Person with respect to Indebtedness of another
Person, (i) the principal portion of all obligations in respect of Capital
Leases of such Person, (j) all obligations of such Person under Hedge
Agreements, (k) the maximum amount of all standby letters of credit issued or
bankers’ acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(l) all preferred Equity Interests issued by such Person and which by the terms
thereof could be (at the request of the holders thereof or otherwise) subject to
mandatory sinking fund payments, redemption or other acceleration prior to the
date which is ninety-one (91) days after the Maturity Date and other
Disqualified Equity Interests, (m) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product and (n) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer, but only to the extent such Person is liable for
such Indebtedness).

       

      
        
          
          

        

        
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      1.77  “Information
Certificate” shall mean, collectively, the Information Certificate of Borrowers
and Guarantors constituting Exhibit C hereto containing material
information with respect to Borrowers and Guarantors, their respective
businesses and assets provided by or on behalf of Borrowers and Guarantors to
Agent in connection with this Agreement and the other Loan Documents and the
financing arrangements provided for herein.

       

      1.78  “Insolvency
Regulation” shall mean the Council Regulation (EC) No.1346/2000 29 May 2000 on
Insolvency Proceedings.

       

      1.79  “Intellectual
Property” shall mean, as to each Borrower and Guarantor, such Borrower’s and
Guarantor’s now owned and hereafter arising or acquired:  patents,
patent rights, patent applications, copyrights, works which are the subject
matter of copyrights, copyright applications, copyright registrations,
trademarks, servicemarks, trade names, trade styles, trademark and service mark
applications, and licenses and rights to use any of the foregoing and all
applications, registrations and recordings relating to any of the foregoing as
may be filed in the UK Intellectual Property Office, the United States Copyright
Office, the United States Patent and Trademark Office or in any similar office
or agency of the United States, any State thereof, any political subdivision
thereof or in any other country or jurisdiction, together with all rights and
privileges arising under applicable law with respect to any Borrower’s or
Guarantor’s use of any of the foregoing; all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing; all
rights to sue for past, present and future infringement of any of the foregoing;
inventions, trade secrets, formulae, processes, compounds, drawings, designs,
blueprints, surveys, reports, manuals, and operating standards; goodwill
(including any goodwill associated with any trademark or servicemark, or the
license of any trademark or servicemark); customer and other lists in whatever
form maintained; trade secret rights, copyright rights, rights in works of
authorship, domain names and domain name registration; software and contract
rights relating to computer software programs, in whatever form created or
maintained.

       

      1.80  “Interest
Period” shall mean for any Eurodollar Rate Loan, a period of approximately three
(3) months duration, as  any Borrower (or Administrative Borrower on
behalf of such Borrower) may elect, the exact duration to be determined in
accordance with the customary practice in the applicable London Interbank
Offered Rate market; provided, that, such Borrower
(or Administrative Borrower on behalf of such Borrower) may not elect an
Interest Period which will end after the last day of the then-current term of
this Agreement.

       

      1.81  “Interest
Rate” shall mean,

       

      (a) 
Subject to clause (b) of this definition below:

       

      
        
          
          

        

        
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      (i)        as
to Base Rate Loans and Swing Line Loans, a rate equal to then Applicable Margin
for Base Rate Loans on a per annum basis plus the Base Rate, and

       

      (ii)        as
to Eurodollar Rate Loans, a rate equal to then Applicable Margin for Eurodollar
Rate Loans on a  per annum basis in excess of the Adjusted Eurodollar
Rate (in each case, based on the London Interbank Offered Rate applicable for
the Interest Period selected by a Borrower (or by Administrative Borrower on
behalf of such Borrower), as in effect two (2) Business Days prior to the
commencement of the Interest Period, whether such rate is higher or lower than
any rate previously quoted to any Borrower or Guarantor).

       

      (b) 
Notwithstanding anything to the contrary contained in clause (a) of this
definition, the Interest Rate shall mean the rate of two (2%) percent per annum
in excess of the rates set forth in clause (a) above, at Agent's or
Required Lenders’ option, without notice, (i)  either (A) for the
period on and after the date of termination of the Commitments hereunder until
such time as all Obligations are indefeasibly paid and satisfied in full in
immediately available funds, or (B) for the period from and after the date of
the occurrence of any Event of Default, and for so long as such Event of Default
is continuing as determined by Agent and (ii) on the Loans to US Borrower at any
time outstanding in excess of the lesser of the  US Borrowing Base or
the US Loan Limit and on the Loans to UK Borrowers at any time outstanding in
excess of the lesser of the UK Borrowing Base or the UK Loan Limit (whether or
not such excess(es) arise or are made with or without Agent's or any Lender’s
knowledge or consent and whether made before or after an Event of
Default).

       

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

       

      1.83  “Investment
Property Control Agreement” shall mean an agreement in writing, in form and
substance reasonably satisfactory to Agent, by and among Agent, any Borrower or
Guarantor (as the case may be) and any securities intermediary, commodity
intermediary or other person who has custody, control or possession of any
investment property of such Borrower or Guarantor acknowledging that such
securities intermediary, commodity intermediary or other person has custody,
control or possession of such investment property on behalf of Agent, that it
will comply with entitlement orders originated by Agent with respect to such
investment property, or other instructions of Agent, and has such other terms
and conditions as Agent may require.

       

      1.84  “Investment”
shall have the meaning set forth in Section 10.4 hereof.

       

      1.85  “Issuing
Bank” shall mean Wells Fargo.

       

      1.86  “Lenders”
shall mean the financial institutions who are signatories hereto as Lenders and
other persons made a party to this Agreement as a Lender in accordance with
Section 16.7 hereof, and their respective successors and assigns; each
sometimes being referred to herein individually as a “Lender”.

       

      1.87  “Letter
of Credit Documents” shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (a) the rights and obligations of
the parties concerned or at risk or (b) any collateral security for such
obligations.

       

      
        
          
          

        

        
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      1.88  “Letter
of Credit Limit” shall mean US Dollar Equivalent of $20,000,000.

       

      1.89  “Letter
of Credit Obligations” shall mean, at any time, collectively, (a) all US Letter
of Credit Obligations and (b) all UK Letter of Credit Obligations.

       

      1.90  “Letters
of Credit” shall mean letters of credit, denominated in US Dollars (whether
documentary or stand-by and whether for the purchase of inventory, equipment or
otherwise) issued by Issuing Bank for the account of any Borrower pursuant to
this Agreement, and all amendments, renewals, extensions or replacements
thereof.

       

      1.91  “License
Agreements” shall have the meaning set forth in Section 8.11
hereof.

       

      1.92  “Loan
Documents” shall mean, collectively, this Agreement, the UK Loan Documents, the
Singapore Loan Documents and all notes, guarantees, security agreements,
hypothecs, mortgages, deposit account control agreements, investment property
control agreements, intercreditor agreements and all other agreements, documents
and instruments now or at any time hereafter executed and/or delivered by any
Borrower or Guarantor in connection with this Agreement; provided, that, the Loan
Documents shall not include Hedge Agreements.

       

      1.93  “Loan
Party” shall mean, individually, each Borrower and each Guarantor, and “Loan
Parties” shall mean, collectively, the Borrowers and the
Guarantors.

       

      1.94  “Loans”
shall mean, collectively, the Revolving Loans and the Swing Line
Loans.

       

      1.95  “London
Interbank Offered Rate” shall mean, with respect to any Eurodollar Rate Loan for
the Interest Period applicable thereto, the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBOR01 Page (or any successor or substitute page of such service, or any
successor to or substitute for such service as determined by Agent) as the
London interbank offered rate for deposits in U.S. Dollars at approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided, that, if more than
one rate is specified on Reuters Screen LIBOR01 Page for such comparable period,
the applicable rate shall be the arithmetic mean of all such
rates.  In the event that such rate is not available at such time for
any reason, then the term “London Interbank Offered Rate” shall mean, with
respect to any Eurodollar Rate Loan for the Interest Period applicable thereto,
the rate of interest per annum at which dollar deposits of $5,000,000 and for a
term comparable to such Interest Period are offered by the principal London
office of Wells Fargo, in immediately available funds in the London interbank
market at approximately 11:00 a.m. London time two (2) Business Days prior to
the commencement of such Interest Period.

       

      1.96  “Material
Adverse Effect” shall mean a material adverse effect on (a) the financial
condition, business, performance or operations of Borrowers and Guarantors taken
as a whole; (b) the legality, validity or enforceability of this Agreement or
any of the other Loan Documents; (c) the legality, validity, enforceability,
perfection or priority of the security interests and liens of Agent upon the
Collateral; (d) the Collateral or its value (taken as a whole);  (e)
the ability of any Borrower to repay the Obligations or of any Borrower to
perform its obligations under this Agreement or any of the other Loan Documents
as and when to be performed; or (f) the ability of Agent or any Lender to
enforce the Obligations or realize upon the Collateral or otherwise with respect
to the rights and remedies of Agent and Lenders under this Agreement or any of
the other Loan Documents.

       

      
        
          
          

        

        
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      1.97  “Material
Contract” shall mean any contract or other agreement (other than the Loan
Documents and Hedge Agreements), whether written or oral, to which any Borrower
or Guarantor is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could reasonably expected to have a
Material Adverse Effect.

       

      1.98  “Maturity
Date” shall mean June 28, 2014.

       

      1.99  “Maximum
Credit” shall mean the amount of $80,000,000 (subject to increase as provided in
Section 2.5 hereof).

       

      1.100  “Maximum
Interest Rate” shall mean the maximum non-usurious rate of interest under
applicable Federal or State law as in effect from time to time that may be
contracted for, taken, reserved, charged or received in respect of the
indebtedness of a Borrower to Agent or a Lender, or to the extent that at any
time such applicable law may thereafter permit a higher maximum non-usurious
rate of interest, then such higher rate.

       

      1.101  “Moody’s”
means Moody’s Investors Service, Inc. and any successor to its rating agency
business.

       

      1.102  “Multiemployer
Plan” shall mean a “multi-employer plan” as defined in Section 4001(a)(3)
of ERISA which is or was at any time during the current year or the immediately
preceding six (6) years contributed to by any Borrower, Guarantor or any ERISA
Affiliate or with respect to which any Borrower, Guarantor or any ERISA
Affiliate may incur any liability.

       

      1.103  “Net
Cash Proceeds” shall mean the aggregate cash proceeds received by Parent or any
of its Subsidiaries in respect of any sale, lease, license, exchange, transfer
or other disposition of any assets or properties, or interest in assets and
properties or as proceeds of any loans or other financial accommodations
provided to it or as proceeds from the issuance and/or sale of any Equity
Interests or Indebtedness, in each case net of the reasonable and customary
direct costs relating to such sale, lease, license, exchange, transfer or other
disposition or loans or other financial accommodation or issuance and/or sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and taxes paid or payable as a result thereof and in the
case of a sale of any assets or properties or interest in assets and properties,
amounts applied to the repayment of Indebtedness secured by a valid and
enforceable lien (other than a lien created under the Loan Documents) on the
asset or assets that are the subject of such sale or other disposition required
to be repaid in connection with such transaction.

       

      1.104  “Net
Recovery Percentage” shall mean, at any time, the fraction, expressed as a
percentage, (a) the numerator of which is the amount equal to the amount of the
projected recovery in respect of the Inventory  at such time on a “net
orderly liquidation value” basis as set forth in the most recent acceptable
appraisal of Inventory received by Agent in accordance with Section 7.3
hereof, net of estimated liquidation expenses and commissions, and (b) the
denominator of which is the applicable original cost of the aggregate amount of
the Inventory subject to such appraisal.

       

      1.105  “Nippon”
shall mean, Nippon Industries Co. Ltd, a corporation organized under the laws of
Japan, and its successors and assigns.

       

      1.106  “Nippon
License Agreement” shall mean the Agreement, dated September 1, 2000, by and
between Nippon, as licensor, and Parent, as licensee, with respect to the
license of the "NIC" trademark, as amended, modified or extended, from time to
time, in accordance with the terms thereof.

       

      
        
          
          

        

        
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      1.107  “Non-US
Subsidiary” shall mean a Subsidiary of Parent that is organized or incorporated
under the laws of any jurisdiction outside of the United States of America and
which has substantially all of its assets and operations in a jurisdiction
outside the United States of America, including without limitation the UK
Borrowers, Singapore Borrowing Base Guarantors and the other subsidiaries of
Parent listed on Schedule 1.107 hereof; sometimes being referred to herein
collectively as “Non-US Subsidiaries”.

       

      1.108 “NU
Germany” shall mean, Nu Horizons Electronics GmbH, a limited liability company
organized under the laws of Germany, and its successors and
assigns.

       

      1.109  “Obligations”
shall mean (a) any and all Loans, Letter of Credit Obligations and all other
obligations, liabilities and indebtedness of every kind, nature and description
owing by any or all of Borrowers to Agent or any Lender or Issuing Bank,
including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
arising under this Agreement or any of the other Loan Documents or on account of
any Letter of Credit and all other Letter of Credit Obligations, whether now
existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of this Agreement or after the commencement of any
case with respect to such Borrower under the Bankruptcy Code, or any similar
statute (including the payment of interest and other amounts which would accrue
and become due but for the commencement of such case, whether or not such
amounts are allowed or allowable in whole or in part in such case), whether
direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated, or secured or unsecured and
(b) for purposes only of Section 5.1 hereof and subject to the priority in
right of payment set forth in Section 6.7 hereof, all obligations,
liabilities and indebtedness of every kind, nature and description owing by any
or all of Borrowers or Guarantors to Agent or any Bank Product Provider arising
under or pursuant to any Bank Products, whether now existing or hereafter
arising; provided, that, (i) as to any
such obligations, liabilities and indebtedness arising under or pursuant to a
Hedge Agreement, the same shall only be included within the Obligations if upon
Agent’s request, Agent shall have entered into an agreement, in form and
substance satisfactory to Agent, with the Bank Product Provider that is a
counterparty to such Hedge Agreement, as acknowledged and agreed to by Borrowers
and Guarantors, providing for the delivery to Agent by such counterparty of
information with respect to the amount of such obligations and providing for the
other rights of Agent and such Bank Product Provider in connection with such
arrangements, (ii) any Bank Product Provider, other than Wells Fargo and its
Affiliates, shall have delivered written notice to Agent that (A) such Bank
Product Provider has entered into a transaction to provide Bank Products to a
Borrower and Guarantor on or after the date hereof, and (B) the obligations
arising pursuant to such Bank Products provided to Borrowers and Guarantors
constitute Obligations entitled to the benefits of the security interest of
Agent granted hereunder, and Agent shall have accepted such notice in writing
and (iii) in no event shall any Bank Product Provider acting in such capacity to
whom such obligations, liabilities or indebtedness are owing be deemed a Lender
for purposes hereof to the extent of and as to such obligations, liabilities or
indebtedness except that each reference to the term “Lender” in
Sections 14.1, 14.2, 14.3(b), 14.6, 14.7, 14.9, 14.12 and 16.6 hereof shall
be deemed to include such Bank Product Provider and in no event shall the
approval of any such person in its capacity as Bank Product Provider be required
in connection with the release or termination of any security interest or lien
of Agent.

       

      1.110  “OFAC”
means the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

       

      1.111  “Other
Taxes” shall mean any present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies of the United States or any
political subdivision thereof or any applicable foreign jurisdiction (including
the United Kingdom and Singapore), and all liabilities with respect thereto, in
each case arising from any payment made hereunder or under any of the other Loan
Documents or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any of the other Loan Documents

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      1.112  “Parent”
shall mean Nu Horizons Electronics Corp., a Delaware corporation, and its
successors and assigns.

       

      1.113  “Participant”
shall mean any financial institution that acquires and holds a participation in
the interest of any Lender in any of the Loans and Letters of Credit in
conformity with the provisions of Section 16.7 of this Agreement governing
participations.

       

      1.114  “Participant
Register” shall have the meaning set forth in Section 6.4(b)
hereof.

       

      1.115  “Patriot
Act” shall mean the USA PATRIOT Act (Title III of Pub.L. 107-56 (signed into law
October 26, 2001).

       

      1.116  “Pension
Plan” shall mean a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which any Borrower or Guarantor sponsors,
maintains, or to which any Borrower, Guarantor or ERISA Affiliate makes, is
making, or is obligated to make contributions, other than a Multiemployer
Plan.

       

      1.117  “Pensions
Regulator” shall mean the body corporate called the Pensions Regulator
established under Part I of the Pensions Act 2004.

       

      1.118  “Permits”
shall have the meaning set forth in Section 8.7 hereof.

       

      1.119  “Permitted
Acquisitions” shall mean the purchase by any US Borrower (or through a direct
wholly-owned subsidiary formed by such US Borrower for the purpose of making
such acquisition, provided, that, the conditions set forth in Section 9.10
hereof have been satisfied as to the US Borrower and the subsidiary to formed)
after the date hereof of all or substantially all of the assets of any Person or
a business or division of such Person (whether pursuant to a merger or other
transaction) or of all or a majority of the Equity Interests of a Person (such
assets or Person being referred to herein as the “Acquired Business”) in one or
a series of transactions that satisfies each of the following conditions as
determined by Agent:

       

      (a) 
as of the date of such acquisition and the date of any payment in respect
thereof (including any deferred purchase price payment, indemnification payment,
purchase price adjustment, earn out or similar payment), and after giving effect
thereto, no Event of Default shall exist or shall have occurred and be
continuing;

       

      (b) 
the daily average of the US Excess Availability for the period of sixty (60)
consecutive days immediately preceding the date of such acquisition or payment
shall be not less than the amount equal to twenty (20%) percent of the US Loan
Limit and in each case after giving effect to the making of any such acquisition
or payment in respect thereof (including any deferred purchase price payment,
indemnification payment, purchase price adjustment, earn out or similar
payment), on a pro forma basis using the US Excess Availability as of the date
of the most recent calculation of the US Borrowing Base immediately prior to any
such acquisition or payment, US Excess Availability shall be not less than such
amount (but taking into account any new assets to be included in the US
Borrowing Base to the extent that such assets have been the subject of a field
examination, the results of which are satisfactory to Agent (and subject to such
additional criteria or reserves as Agent may determine in connection with such
new assets);

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      (c) 
not less than seven (7) Business Days prior to the date of such acquisition,
Agent shall have received updated projections (including in each case,
forecasted balance sheets and statements of income and loss, statements of cash
flow, and the projected US Borrowing Base and US Excess Availability) for Parent
and its Subsidiaries on such basis whether monthly, quarterly, or annually as
Agent may specify, for the twelve (12) month period after the date of such
acquisition, all in reasonable detail and in a format consistent with the
projections delivered by Parent to Agent prior to the date hereof, together with
such supporting information as Agent may reasonably request, which projections
show, on a pro forma basis after giving effect to the incurring of such
Indebtedness that (i) the Fixed Charge Coverage Ratio is at all times equal to
or greater than 1.10 to 1.00 during such period and (ii) minimum US Excess
Availability at all times during such period of not less than twenty (20%)
percent of the US Loan Limit;

       

      (d) 
the Acquired Business shall be an operating company or division or line of
business that engages in a line of business substantially similar, reasonably
related or incidental to the business that Borrowers are engaged in on date
hereof;

       

      (e) 
the Acquired Business shall be located in the United States, United Kingdom or
Singapore to the extent Administrative Borrower desires to include the Acquired
Business assets in the calculation of either the US Borrowing Base or the UK
Borrowing Base, as the case may be, except as otherwise agreed to by Agent and
all Lenders;

       

      (f) 
in the case of the acquisition of the Equity Interests of another Person, the
board of directors (or other comparable governing body) of such other Person to
be acquired shall have duly approved such acquisition and such Person shall not
have announced that it will oppose such acquisition and shall not have commenced
any action which alleges that such acquisition will violate applicable
law;

       

      (g) 
Agent shall have received not less than ten (10) Business Days’ prior written
notice of the proposed acquisition and such information with respect thereto as
Agent may reasonably request, including (i) the parties to such acquisition,
(ii) the proposed date and amount of the acquisition, (iii) a description of the
assets or shares to be acquired, (iv) the total purchase price and other
consideration for the assets to be purchased (and the terms of payment of such
purchase price), and (v) a summary of the due diligence undertaken by the
applicable Borrowers and Guarantors in connection with such
acquisition;

       

      (h) 
Agent shall have received true, correct and complete copies of all agreements,
documents and instruments relating to such acquisition;

       

      (i) 
Agent shall have received all documents required to be delivered pursuant to
Section 9.10 hereof;

       

      (j) 
the aggregate amount of consideration (which shall include the aggregate amount
of the purchase price (including, but not limited to, any assumed debt,
earn-outs (valued at the maximum amount payable thereunder or such lesser amount
as Agent may agree), deferred payments, or Equity Interests, net of the
applicable Acquired Business’ cash (including Cash Equivalents) balance as of
the date of the acquisition) to be paid, issued or delivered in connection with
any such Permitted Acquisition in any fiscal year shall not exceed the US Dollar
Equivalent of $5,000,000; and

       

      (k) 
Agent shall have received a certificate of a the chief executive officer, chief
financial officer, controller or other appropriate financial officer of
Administrative Borrower certifying on behalf of Borrowers to Agent and Lenders
that such transaction complies with this definition.

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      Notwithstanding
anything to the contrary contained herein, if Administrative Borrower requests
that any assets acquired pursuant to any acquisition be included in the
Borrowing Base, Agent shall have completed a field examination with respect to
the business and assets of the Acquired Business in accordance with Agent’s
customary procedures and practices and as otherwise required by the nature and
circumstances of the business of the Acquired Business, the scope and results of
which shall be reasonably satisfactory to Agent before such assets may be
included.  Any Accounts or Inventory of the Acquired Business shall
only be Eligible Accounts or Eligible Inventory to the extent that Agent has so
completed such field examination with respect thereto and the criteria for
Eligible Accounts or Eligible Inventory set forth herein are satisfied with
respect thereto (or such other or additional criteria as Agent may, at its
option, establish with respect thereto, and subject to such Reserves as Agent
may establish in connection with the Acquired Business), and, if requested by
Agent, in the case of Eligible Inventory acquired pursuant to a Permitted
Acquisition to the extent that it has been subject to an appraisal that
satisfies the requirements of Section 7.3 hereof.

       

      1.120  “Permitted
Dispositions” shall mean each of the following:

       

      (a) 
sales of Inventory in the ordinary course of business;

       

      (b) 
the sale or other disposition of Equipment (including worn-out or obsolete
Equipment or Equipment no longer used or useful in the business of any Borrower
or Guarantor) so long as such sales or other dispositions do not involve
Equipment having an aggregate fair market value in excess of $250,000 for all
such Equipment disposed of in any fiscal year of Borrowers or as Agent may
otherwise agree (provided,
that,
in no event shall references to the term Equipment in this clause (b) be
construed to include any Equipment that is Inventory);

       

      (c) 
the issuance and sale by any Borrower or Guarantor of Equity Interests of such
Borrower or Guarantor (other than Disqualified Equity Interests) after the date
hereof; provided, that, (i) such
Borrower or Guarantor shall not be required to pay any cash dividends or
repurchase or redeem such Equity Interests or make any other payments in respect
thereof, except as otherwise permitted in Section 10.5 hereof, (ii) the
terms of such Equity Interests, and the terms and conditions of the purchase and
sale thereof, shall not include any terms that include any limitation on the
right of any Borrower to request or receive Loans or Letters of Credit or the
right of any Borrower and Guarantor to amend or modify any of the terms and
conditions of this Agreement or any of the other Loan Documents or otherwise in
any way relate to or affect the arrangements of Borrowers and Guarantors with
Agent and Lenders or are more restrictive or burdensome to any Borrower or
Guarantor than the terms of any Equity Interests in effect on the date hereof,
(iii) on and after a Cash Dominion Event and for so long as the same is
continuing, all of the Net Cash Proceeds of the sale and issuance of such Equity
Interests shall be paid to Agent for application to the Obligations in
accordance with Section 6.7(a) hereof (but without a permanent reduction in
Commitments) and (iv) as of the date of such issuance and sale and after giving
effect thereto, no Default or Event of Default shall exist or have occurred and
be continuing;

       

      (d) 
the issuance of Equity Interests of any Borrower or Guarantor consisting of
common stock pursuant to an employee stock option or grant or similar equity
plan or 401(k) plans of such Borrower or Guarantor for the benefit of its
employees, directors and consultants, provided, that, in no event
shall such Borrower or Guarantor be required to issue, or shall such Borrower or
Guarantor issue, Equity Interests pursuant to such stock plans or 401(k) plans
which would result in a Change of Control or other Default or Event of
Default;

       

      (e) 
the abandonment or other disposition of Intellectual Property that is not
material and is no longer used or useful in any material respect in the business
of any Borrower, Guarantor or their Subsidiaries and does not appear on is or
otherwise not affixed to or incorporated in any Inventory or necessary in
connection with the Records and does not have any material value; provided, that, as of the date
of such abandonment or other disposition and after giving effect thereto, no
Default or Event of Default shall exist or have occurred and be
continuing;

       

      
        
          
          

        

        
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      (f) 
any transfer of property or assets, or issuance of Equity Interests, that is a
Restricted Payment permitted under Section 10.5 or Permitted Investment
permitted under Section 10.4; and

       

      (g) 
the transfer of cash for the payment of Indebtedness to the extent such payments
are permitted hereunder and for the payment of other payables in the ordinary
course of the business of Borrowers and Guarantors.

       

      1.121  “Permitted
Investments” shall mean each of the following:

       

      (a) 
Investments consisting of accounts receivables owing to any Borrower or
Guarantor if created or acquired in the ordinary course of business and payable
or dischargeable in accordance with customary terms;

       

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

       

      (c) 
investments in cash or Cash Equivalents, provided, that, (i) at any time
on and after a Cash Dominion Event and for so long as the same is continuing, no
Loans are then outstanding; except that the limitation in this clause (i) shall
not apply to (A) funds held in deposit accounts that are not required to be
subject to Deposit Account Control Agreements as provided in Section 6.6 hereof
and (B) deposits of cash or other immediately available funds in operating
demand deposit accounts used for disbursements to the extent required to provide
funds for amounts drawn or anticipated to be drawn shortly on such accounts and
which may be held in Cash Equivalents consisting of overnight investments until
so drawn (so long as such funds and Cash Equivalents are not held more than
three (3) Business Days from the date of the initial deposit thereof) and (ii)
the terms and conditions of Section 5.2 hereof shall have been satisfied with
respect to the deposit account, investment account or other account in which
such cash or Cash Equivalents are held;

       

      (d) 
deposits of cash for leases, utilities, worker’s compensation and similar
matters in the ordinary course of business;

       

      (e) 
obligations under Hedge Agreements permitted under Section 10.3(g)
hereof;

       

      (f) 
the existing Investments of each Borrower and Guarantor as of the date hereof in
its Subsidiaries, provided, that, no Borrower or
Guarantor shall have any further obligations or liabilities to make any capital
contributions or other additional investments or other payments (other than
payments of amounts owing from any Borrower to any other Guarantor or Borrower
in respect of trade accounts payable, provided, that, amounts owing in respect
of such trade payables are consistent with the current practices of such
Borrower, Guarantor or Subsidiary of Parent as of the date hereof) to or in or
for the benefit of any of such Subsidiaries;

       

      (g) 
loans and advances by any Borrower or Guarantor to employees of such Borrower or
Guarantor not to exceed the principal amount of $500,000 in the aggregate at any
time outstanding for:  (i) reasonable and necessary work-related
travel or other ordinary business expenses to be incurred by such employees in
connection with their work for such Borrower or Guarantor and (ii) reasonable
and necessary relocation expenses of such employees (including home mortgage
financing for relocated employees);

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      (h) 
stock or obligations issued to Parent or its Subsidiaries by any Person (or the
representative of such Person) in respect of Indebtedness of such Person owing
to Parent or its Subsidiaries in connection with the insolvency, bankruptcy,
receivership or reorganization of such Person or a composition or readjustment
of the debts of such Person; provided, that, the original of
any such stock or instrument evidencing such obligations shall be promptly
delivered to Agent, upon Agent’s request, together with such stock power,
assignment or endorsement by Parent or its Subsidiaries as Agent may
request;

       

      
        (i)  obligations
of account debtors to Parent or its Subsidiaries arising from Accounts which are
past due evidenced by a promissory note made by such account debtor payable to
Parent or its Subsidiaries; provided, that, promptly upon
the receipt of the original of any such promissory note by such Borrower or
Guarantor, such promissory note shall be endorsed to the order of Agent by such
Borrower or Guarantor and promptly delivered to Agent as so
endorsed;

         

        (j)  the
loans and advances made by any Borrower or Guarantors to any other Borrower or
Guarantor or Subsidiary of Parent outstanding as of the date hereof as set forth
on Schedule 10.4 to the Information Certificate;

         

        (k)  Investments
(for purposes of this Section 1.121, amounts owing from any Borrower to any
other Guarantor or Borrower in respect of trade accounts payable shall not be
deemed a loan or other Investment; provided, that, amounts owing in respect of
such trade accounts payable are consistent with the current practices of such
Borrower, Guarantor or other Subsidiary of Parent as of the date hereof) by a
Borrower or Guarantor to another Borrower or Guarantor, in each case made after
the date hereof; provided, that,

         

        (i)  as
to all of such Investments,

         

        (A)  the
Indebtedness arising pursuant to any loan shall not be evidenced by a promissory
note or other instrument, unless the single original of such note or other
instrument is promptly delivered to Agent upon its request to hold as part of
the Collateral, with such endorsement and/or assignment by the payee of such
note or other instrument as Agent may require,

         

        (B)  as
of the date of any loan or such other Investment and after giving effect
thereto, no Default or Event of Default shall exist or have occurred and be
continuing; and

         

        (C)  as
of the date of any loan or other Investment from any such Person to such other
Person and after giving effect thereto, the Person making such loan or other
Investment shall be Solvent;

         

        (ii) 
 as to all such Investments made by any US Borrower or any US Loan Party to
another US Loan Party,  the conditions set forth in clause (i)
immediately above are satisfied,

         

        (iii) 
 as to all such Investments made by any US Borrower or US Loan Party to a
UK Loan Party or a Singapore Loan Party,

         

        (A)  as
of the date of any such Investment and after giving effect thereto, the daily
average of the US Excess Availability for the period of thirty (30) consecutive
days immediately preceding the date of such Investment shall be not less than
the amount equal to thirty (30%) percent of the US Loan Limit (in each case
after giving effect to the making of any such Investment, on a pro forma basis
using the US Excess Availability as of the date of the most recent calculation
of the US Borrowing Base),

         

        
          
            
            

          

          
            29

            
              

            

          

          
            
            

          

        

         

        (B)  immediately
prior to the making of such Investment and after giving effect thereto, US
Excess Availability (in each case after giving effect to the making of any such
Investment, on a pro forma basis using the US Excess Availability as of the date
of the most recent calculation of the US Borrowing Base) shall be not less than
the amount equal to thirty (30%) percent of the US Loan Limit; and

         

        (C)  
the aggregate principal amount of all such Investments at any time outstanding
shall not exceed the US Dollar Equivalent of $3,000,000;

         

        (iv)  as
to all Investments made by any UK Borrower or any other UK Loan Party to any
Singapore Borrowing Base Guarantor with the proceeds of UK Tranche B
Loans,

         

        (A)  such
Investments shall be loans only and not equity investments and shall be made as
otherwise required and in accordance with Sections 6.9(b) and (c) hereof,
and

         

        (B)  such
intercompany loans shall be immediately repaid by the Singapore Borrowing Base
Guarantors at any time that the aggregate outstanding principal amount of UK
Tranche B Loans and UK Tranche B Letter of Credit Obligations exceeds the lesser
of the UK Tranche B Borrowing Base or UK Tranche B Loan Limit;

         

        (v)  as
to all such Investments made by any UK Borrower or any other UK Loan Party to
any Borrower or Guarantor except as otherwise provided in clause (iv)
above,

         

        (A)  such
Investments shall not be made with the proceeds of UK Tranche B
Loans,

         

        (B)  as
of the date of any such Investment and after giving effect thereto, the daily
average of the UK Tranche A Excess Availability for the period of thirty (30)
consecutive days immediately preceding the date of such Investment shall be not
less than $2,500,000 (in each case after giving effect to the making of any such
Investment, on a pro forma basis using the UK Tranche A Excess Availability as
of the date of the most recent calculation of the UK Tranche A Borrowing
Base),

         

        (C)  
immediately prior to the making of such Investment and after giving effect
thereto, UK Tranche A Excess Availability (in each case after giving effect to
the making of any such loan, on a pro forma basis using the UK Tranche A Excess
Availability as of the date of the most recent calculation of the UK Tranche A
Borrowing Base) shall be not less than $2,500,000; and

         

        (D)  
the aggregate principal amount of all such Investments (when taken together with
Permitted Investments made by any UK Borrower or any other UK Loan Party
permitted pursuant to clauses (l) and (m) below) shall not exceed $2,000,000 at
any time;

         

        (vi)  as
to all Investments made by any Singapore Borrowing Base Guarantor to any
Borrower or Guarantor,

         

        (A)  as
of the date of any such Investment and after giving effect thereto, the daily
average of the UK Tranche B Excess Availability for the period of thirty (30)
consecutive days immediately preceding the date of such Investment shall be not
less than $3,600,000 (in each case after giving effect to the making of any such
Investment, on a pro forma basis using the UK Tranche B Excess Availability as
of the date of the most recent calculation of the UK Tranche B Borrowing
Base),

         

        (B)  immediately
prior to the making of such Investment and after giving effect thereto, UK
Tranche B Excess Availability (in each case after giving effect to the making of
any such loan, on a pro forma basis using the UK Tranche B Excess Availability
as of the date of the most recent calculation of the UK Tranche B Borrowing
Base) shall be not less than $3,600,000; and

         

        
          
            
            

          

          
            30

            
              

            

          

          
            
            

          

        

         

        (C)  the
aggregate principal amount of all such loans or other Investments made to such
Persons (when taken together with Permitted Investments made by any Singapore
Borrowing Base Guarantor permitted pursuant to clauses (l) and (m) below) shall
not exceed the US Dollar Equivalent of $2,000,000 at any time; and

         

        (vii)  as
to all loans by any Guarantor to any Borrower,

         

        (A)  the
Indebtedness arising pursuant to such loan shall be subject to, and subordinate
in right of payment to, the right of Agent and Lenders to receive the prior
final payment and satisfaction in full of all of the Obligations on terms and
conditions  reasonably acceptable to Agent,

         

        (B)  
promptly upon Agent’s request, Agent shall have received a subordination
agreement, in form and substance reasonably satisfactory to Agent, providing for
the terms of the subordination in right of payment of such Indebtedness of such
Borrower to the prior final payment and satisfaction in full of all of the
Obligations, duly authorized, executed and delivered by such Guarantor and such
Borrower, and

         

        (C)  
no Borrower or Guarantor shall, directly or indirectly make, or be required to
make, any payments in respect of such Indebtedness prior to the end of then
current term of this Agreement, except for loans made by UK Loan Parties to
Singapore Borrowing Base Guarantors as provided for above  and as
Agent may hereafter otherwise specifically agree;

         

        (l)  Investments
by any Borrower or Guarantor to any Subsidiary of Parent (which is not either
(i) a  Borrower or Guarantor (which Investments may only be made
pursuant to clause (k) above or (ii) NU Germany which Investments may be made
pursuant to clause (m) below) made after the date hereof, provided, that, as of the date
of such Investment and after giving effect thereto (i) no Default or Event of
Default shall exist or have occurred and be continuing, (ii) the aggregate
amount of all such Investments during the term of this Agreement shall not
exceed the US Dollar Equivalent of $2,000,000, (iii) as of the date of any loan
or other Investment from any such Person to such other Person and after giving
effect thereto, the Person making such loan or other Investment shall be
Solvent; and (iv) in the case of such Investments made by any UK Borrower such
Investments are not made with the proceeds of UK Tranche B Loans;

         

        (m)  Investments
in the form of intercompany loans made by a Borrower or Guarantor to NU Germany
made after the date hereof, provided, that, as of the date
of such Investment and after giving effect thereto (i) no Default or Event of
Default shall exist or have occurred and be continuing, (ii) the aggregate
amount of all such Investments during any calendar year during the term of this
Agreement shall not exceed the US Dollar Equivalent of $2,000,000, (iii) as of
the date of any loan or other Investment from any such Person to NU Germany and
after giving effect thereto, the Person making such loan or other Investment
shall be Solvent; (iv) (A) if such loan is being made by a US Loan Party, as of
the date of any such Investment and after giving effect thereto, the daily
average of the US Excess Availability on the date of and after giving effect to
such Investment shall be not less than $10,000,000, (B) if such loan is being
made by a UK Loan Party, as of the date of any such Investment and after giving
effect thereto, the daily average of the UK Tranche A Excess Availability on the
date of and after giving effect to such Investment shall be not less than
$3,000,000, and (C) if such loan is being made by a Singapore Loan Party, as of
the date of any such Investment and after giving effect thereto, the daily
average of the UK Tranche B Excess Availability on the date of and after giving
effect to such Investment shall be not less than $3,000,000, (in each case after
giving effect to the making of any such Investment, on a pro forma basis using
the US Excess Availability, UK Tranche A Excess Availability or UK Tranche B
Excess Availability, as the case may be, as of the date of the most recent
calculation of the applicable Borrowing Base), and (iv) in the case of such
Investments made by any UK Borrower or other UK Loan Party such Investments are
not made with the proceeds of UK Tranche B Loans;

         

        
          
            
            

          

          
            31

            
              

            

          

          
            
            

          

        

         

        (n)  as
to any Investments that give rise to the issuance of any Equity Interests, such
issuance is otherwise permitted hereunder;

         

        (o)  Investments
in stock, securities and other assets of Persons which qualify as a Permitted
Acquisition;

         

        (p)  the
purchase, after the date hereof, by Parent of not more than an aggregate of the
US Dollar Equivalent $4,000,000 during the term of this Agreement, of minority
interests existing as of the date hereof in any Borrower’s or Guarantor’s
Foreign Subsidiaries pursuant to and in accordance with the terms of the
shareholder agreements of such Foreign Subsidiaries; and

         

        (q)  the
loans and advances not otherwise permitted hereunder and set forth on Schedule
10.4 to the Information Certificate; provided, that, as to such
loans and advances, Borrowers and Guarantors shall not, directly or indirectly,
amend, modify, alter or change the terms of such loans and advances or any
agreement, document or instrument related thereto and Borrowers and Guarantors
shall furnish to Agent all notices or demands in connection with such loans and
advances either received by any Borrower or Guarantor or on its behalf, promptly
after the receipt thereof, or sent by any Borrower or Guarantor or on its
behalf, concurrently with the sending thereof, as the case may be.

         

        1.122  “Permitted
Liens” shall mean:

         

        (a)  the
security interests and liens of Agent for itself and the benefit of Secured
Parties and the rights of setoff of Secured Parties provided for herein or under
applicable law;

         

        (b)  liens
securing the payment of taxes, assessments or other governmental charges or
levies either not yet overdue or the validity of which are being contested in
good faith by appropriate proceedings diligently pursued and available to such
Borrower, or Guarantor or Subsidiary of Parent, as the case may be, which
proceedings (or orders entered in connection with such proceedings) have the
effect of preventing the forfeiture or sale of the property subject to any such
Lien and with respect to which adequate reserves have been set aside on its
books in accordance with GAAP;

         

        (c)  non-consensual
statutory liens (other than liens arising under ERISA or securing the payment of
taxes) arising in the ordinary course of such Borrower’s, Guarantor’s or
Subsidiary of Parent’s business that do not secure Indebtedness for borrowed
money, such as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s
suppliers’, repairmen’s and mechanics’ liens, to the extent: (i) such liens do
not in the aggregate materially detract from the value of the property of
Borrowers and Guarantors taken as a whole and do not materially impair the use
thereof in the operation of Borrowers and Guarantors taken as a whole, (ii) such
liens secure Indebtedness which is not overdue or is fully insured and being
defended at the sole cost and expense and at the sole risk of the insurer or
being contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower, Guarantor or such Subsidiary of Parent, in each case
prior to the commencement of foreclosure or other similar proceedings, which
proceedings (or orders entered in connection with such proceeding) have the
effect of preventing the forfeiture or sale of the property subject to any such
lien and with respect to which adequate reserves have been set aside on its
books in accordance with GAAP;

         

        
          
            
            

          

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

         

        (e)  purchase
money security interests in Equipment (including Capital Leases) and purchase
money mortgages on Real Property arising after the date hereof to secure
Indebtedness permitted under Section 10.3(b) hereof;

         

        (f)  pledges
and deposits of cash by any Borrower, Guarantor or Subsidiary of Parent after
the date hereof in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security benefits
consistent with the current practices of such Borrower, Guarantor or Subsidiary
of Parent as of the date hereof;

         

        (g)  pledges
and deposits of cash by any Borrower or Guarantor after the date hereof to
secure the performance of tenders, bids, leases, trade contracts (other than for
the repayment of Indebtedness), statutory obligations and other similar
obligations in each case in the ordinary course of business consistent with the
current practices of such Borrower or Guarantor as of the date hereof; provided, that, in connection
with any performance bonds issued by a surety or other person, the issuer of
such bond shall have waived in writing any rights in or to, or other interest
in, any of the Collateral in an agreement, in form and substance reasonably
satisfactory to Agent;

         

        (h)  liens
arising from (i) operating leases and the precautionary UCC financing statement
filings in respect thereof and (ii) equipment or other materials which are not
owned by any Borrower, Guarantor or Subsidiary of Parent located on the premises
of such Borrower, Guarantor or Subsidiary (but not in connection with, or as
part of, the financing thereof) from time to time in the ordinary course of
business and consistent with current practices of such Borrower, Guarantor or
Subsidiary of Parent and the precautionary UCC financing statement filings in
respect thereof;

         

        (i)  statutory
or common law liens or rights of setoff of depository banks with respect to
funds of any Borrower, Guarantor or Subsidiary of Parent at such banks to secure
fees and charges in connection with returned items or the standard fees and
charges of such banks in connection with the deposit accounts maintained by such
Borrower, Guarantor or Subsidiary at such banks (but not any other Indebtedness
or obligations);

         

        (j)  judgments
and other similar liens arising in connection with court proceedings that do not
constitute an Event of Default; provided, that, (i) such liens
are being contested in good faith and by appropriate proceedings diligently
pursued, (ii) adequate reserves or other appropriate provision, if any, as are
required by GAAP have been made therefor, (iii) a stay of enforcement of any
such liens is in effect and (iv) Agent may establish a Reserve with respect
thereto;

         

        (k)  leases
or subleases of Real Property granted by any Borrower or Guarantor in the
ordinary course of business and consistent with past practice to any Person so
long as any such leases or subleases do not interfere in any material respect
with the ordinary conduct of the business of such Borrower or Guarantor as
presently conducted thereon; and

         

        (l)  the
security interests and liens set forth on Schedule 8.4 to the Information
Certificate which are not otherwise permitted under the other clauses of this
definition and any security interests and liens to secure Refinancing
Indebtedness of the Indebtedness secured by such security interests and liens to
the extent permitted under Section 10.3(j) hereof.

         

        
          
            
            

          

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

         

        1.124  “Plan”
shall mean an employee benefit plan (as defined in Section 3(3) of ERISA)
which any Borrower or Guarantor sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or in the case of a Multiemployer
Plan has made contributions at any time during the immediately preceding six (6)
plan years or with respect to which any Borrower or Guarantor may incur
liability.

         

        1.125  “Priority
Payables” shall mean, as to any Borrower or Guarantor at any time, (a) the full
amount of the liabilities of such Borrower or Guarantor at such time which (i)
have a trust imposed to provide for payment or a security interest, pledge, lien
or charge ranking or capable of ranking senior to or pari passu with security
interests, liens or charges securing the Obligations on any of the Eligible
Accounts or Eligible Inventory of such Borrower or Guarantor under Federal,
State, county, district, municipal, or local law in the United Kingdom or
Singapore or (ii) have a right imposed to provide for payment ranking or capable
of ranking senior to or pari passu with the Obligations under local or national
law, regulation or directive, including, but not limited to, claims for
unremitted and/or accelerated rents, taxes (including claims for debts due to UK
Inland Revenue (including any taxes or capital gains payable by an administrator
with respect to the assets of UK Borrower or UK Guarantors) or UK Customs and
Excise), wages, withholding taxes, VAT and other amounts payable to an
insolvency administrator, claims listed in Schedule 6 to the Insolvency Act of
1986 of England and Wales (as amended by the Enterprise Act of 2002 of England
and Wales), and other amounts payable to an insolvency administrator, employee
withholdings or deductions and vacation pay, workers’ compensation obligations,
government royalties or pension fund obligations in each case to the extent such
trust, or security interest, lien or charge has been or may be imposed and (b)
the amount equal to the percentage applicable to Inventory in the calculation of
the Borrowing Base multiplied by the aggregate Value of the Eligible Inventory
of such Borrower which Agent, considers is or may be subject to retention of
title or Romalpa provisions by a supplier or a right of a supplier to recover
possession thereof, where such supplier’s right has priority over the security
interests, liens or charges securing the Obligations, including, without
limitation, Eligible Inventory subject to a right of a supplier to repossess
goods pursuant to any applicable laws granting revendication or similar rights
to unpaid suppliers or any similar laws of the United Kingdom or any other
applicable jurisdiction (provided, that, to the extent
such Inventory has been identified and has been excluded from Eligible
Inventory, the amount owing to the supplier shall not be considered a Priority
Payable).

         

        1.126  “Pro
Rata Share” shall mean, as to any Lender, the fraction (expressed as a
percentage) the numerator of which is such Lender’s Commitment and the
denominator of which is the aggregate amount of all of the Commitments of the
Lenders, as adjusted from time to time in accordance with the provisions hereof;
provided, that, if the
Commitments have been terminated, the numerator shall be the unpaid amount of
such Lender’s Loans and its interest in the Swing Line Loans, Special Agent
Advances and Letter of Credit Obligations and the denominator shall be the
aggregate amount of all unpaid Loans, Swing Line Loans, Special Agent Advances
and Letter of Credit Obligations.

         

        1.127  “Provision
for Taxes” shall mean an amount equal to all taxes imposed on or measured by net
income, whether Federal, State, county or local, and whether foreign or
domestic, that are paid or payable by any Person in respect of any period in
accordance with GAAP.

         

        
          
            
            

          

          
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        1.128  “Quarterly
Average Consolidated Excess Availability” shall mean, for any three (3) month
period commencing on the first day of the month of such period, the daily
average of the Consolidated Excess Availability for such period.

         

        1.129  “Real
Property” shall mean all now owned and hereafter acquired real property of each
Borrower and Guarantor, including leasehold interests, together with all
buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever located.

         

        1.130  “Receivables”
shall mean all of the following now owned or hereafter arising or acquired
property of each Borrower and Guarantor: (a) all Accounts; (b) all interest,
fees, late charges, penalties, collection fees and other amounts due or to
become due or otherwise payable in connection with any Account; (c) all payment
intangibles of such Borrower or Guarantor; (d) letters of credit, indemnities,
guarantees, security or other deposits and proceeds thereof issued payable to
any Borrower or Guarantor or otherwise in favor of or delivered to any Borrower
or Guarantor in connection with any Account; or  (e) all other
accounts, contract rights, chattel paper, instruments, notes, general
intangibles and other forms of obligations owing to any Borrower or Guarantor,
whether from the sale and lease of goods or other property, licensing of any
property (including Intellectual Property or other general intangibles),
rendition of services or from loans or advances by any Borrower or Guarantor or
to or for the benefit of any third person (including loans or advances to any
Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise associated
with any Accounts, Inventory or general intangibles of any Borrower or Guarantor
(including, without limitation, choses in action, causes of action, tax refunds,
tax refund claims, any funds which may become payable to any Borrower or
Guarantor in connection with the termination of any Plan or other employee
benefit plan and any other amounts payable to any Borrower or Guarantor from any
Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, casualty or any similar types of insurance and any proceeds
thereof and proceeds of insurance covering the lives of employees on which any
Borrower or Guarantor is a beneficiary).

         

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

         

        1.132  “Refinancing
Indebtedness” shall have the meaning set forth in Section 10.3(j)
hereof.

         

        1.133  “Register”
shall have the meaning set forth in Section 6.4(a) hereof.

         

        1.134  “Required
Lenders” shall mean (a) at any time that there are less than three (3)
unaffiliated Lenders, all Lenders; and (b) at any time there are three (3) or
more unaffiliated Lenders, at least two (2) unaffiliated Lenders whose Pro Rata
Shares aggregate more than fifty percent (50%) of the aggregate Commitments of
all Lenders, or, if the Commitments have been terminated, Lenders to whom more
than fifty percent (50%) of the then outstanding Loans and participation
interests in other Obligations are owing..

         

        
          
            
            

          

          
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        1.135  “Reserves”
shall mean as of any date of determination, such amounts as Agent may from time
to time establish and revise in good faith, reducing the amount of Loans and
Letters of Credit which would otherwise be available to any Borrower under the
lending formula(s) provided for herein: (a) to reflect events, conditions,
contingencies or risks which, as determined by Agent in its good faith
discretion, adversely affect, or would have a reasonable likelihood of adversely
affecting, either (i) the Collateral or any other property which is security for
the Obligations, its value or the amount that might be received by Agent from
the sale or other disposition or realization upon such Collateral, or (ii) the
assets or business of any Borrower or Guarantor or (iii) the security interests
and other rights of Agent or any Lender in the Collateral (including the
enforceability, perfection and priority thereof) or (b) to reflect Agent’s good
faith belief that any collateral report or financial information furnished by or
on behalf of any Borrower or Guarantor to Agent is or may have been incomplete,
inaccurate or misleading in any material respect or (c) to reflect outstanding
Letters of Credit as provided in Section 2.3 hereof or(d) in respect of any
Default or an Event of Default.  Without limiting the generality of
the foregoing, Reserves may be established to reflect any of the following: (i)
inventory shrinkage,  (ii) dilution with respect to Accounts (based on
the ratio of the aggregate amount of non-cash reductions in Accounts for any
period to the aggregate dollar amount of the sales of such Borrower for such
period) as calculated by Agent for any period is or is reasonably anticipated to
be greater than five (5%) percent, (iii)
retainage, (iv) returns, discounts, claims, credits and allowances of any nature
that are not paid pursuant to the reduction of Accounts, (v) the sales, excise
or similar taxes included in the amount of any Accounts reported to Agent and
amounts due or to become due in respect of sales, use and/or withholding taxes,
(vi) Priority Payables, (vii) any rental payments, service charges or other
amounts due or to become due to owners or lessors of real property to the extent
Inventory, or Records are located in or on such property or in the possession or
control of such parties or such Records are needed to monitor or otherwise deal
with the Collateral (other than for locations where Agent has received a
Collateral Access Agreement executed and delivered by the owner and lessor of
such real property that Agent has acknowledged in writing is in form and
substance satisfactory to Agent), provided, that, (A) the
Reserves established pursuant to this clause (viii) as to leased locations shall
not exceed at any time the aggregate of amounts payable to the lessors of such
locations for the next three (3) months, and (B) such limitation shall not apply
at any time that there is a default or event of default under the applicable
lease or other applicable agreement or a Default or Event of Default hereunder,
(viii) any rental payments, service charges or other amounts due or to become
due to lessors of personal property; (ix) any amounts owing to vendors in
possession of Inventory of a Borrower, (x) an increase in the number of days of
the turnover of Inventory or a change in the mix of the Inventory, (xi)
variances between the inventory records of Borrowers and the results of the
physical counts of Inventory, (xii) preferential claims having priority over a
floating charge pursuant to Section 328 of the Companies Act, Chapter 50 of
Singapore, (xiii) UK Priority Claims, (xiv) fluctuations in the Exchange Rate of
Pounds Sterling, Euros, and Singapore Dollars into US Dollars so long as there
are Eligible Accounts denominated in those currencies or Eligible Inventory of
UK Borrowers is included in the UK Borrowing Base, and (xv) obligations,
liabilities or indebtedness (contingent or otherwise) of Borrowers or Guarantors
to any Bank Product Provider arising under or in connection with any Bank
Products of any Borrower or Guarantor with a Bank Product Provider as Agent has
determined is necessary or appropriate to establish (based upon the Bank Product
Provider’s reasonable determination of its credit exposure to any Borrower and
its Subsidiaries in respect of such Bank Products) in respect of Bank Products
then provided or outstanding to the extent that such obligation, liabilities or
indebtedness constitute Obligations as such term is defined herein or otherwise
receive the benefit of the security interest of Agent in any
Collateral.  The amount of any Reserve established by Agent shall have
a reasonable relationship to the event, condition or other matter which is the
basis for such Reserve as determined by Agent in good faith and Agent may, at
its option, at any time deduct such Reserve from the Maximum Credit, the US Loan
Limit or the UK Loan Limit, as applicable at any time that the amount of the
Borrowing Base is greater than the amount of the Maximum Credit, the amount of
the US Borrowing Base is greater than the US Loan Limit or the UK Borrowing Base
is greater than the UK Loan Limit, as the case may be.  Agent shall
promptly provide Administrative Borrower with notice of the establishment of any
Reserve or any material change in the amount of any Reserve, provided, that, the
failure to provide any such notice shall not limit Agent’s rights to establish
or change any such Reserves.

         

        
          
            
            

          

          
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        1.136  “Restricted
Payment” shall mean any (a) dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests of Parent or
any of its Subsidiaries, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests or on account of any return of capital to Parent or
such Subsidiary’s stockholders, partners or members (or the equivalent Person
thereof), or payment made to redeem, purchase, repurchase or retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire any Equity Interests of Parent or any of its Subsidiaries, or any
setting apart of funds or property for any of the foregoing, and (b) the payment
by Parent or any of its Subsidiaries of any management, advisory or consulting
fee to any Person or the payment of any extraordinary salary, bonus or other
form of compensation to any Person who is directly or indirectly a significant
partner, shareholder, owner or executive officer of any such Person, to the
extent such extraordinary salary, bonus or other form of compensation is not
included in the corporate overhead of Parent or such Subsidiary.

         

        1.137  “Revolving
Loans” shall mean, collectively, US Revolving Loans and UK Revolving
Loans.

         

        1.138  “S&P”
means Standard & Poor’s Financial Services LLC, a wholly-owned subsidiary of
the McGraw-Hill Companies, Inc., and any successor to its rating agency
business.

         

        1.139  “Sanctioned
Entity” shall mean (a) an agency of the government of, (b) an organization
directly or indirectly controlled by, or (c) a person resident in, a country
that is subject to a sanctions program identified on the list maintained and
published by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise
published from time to time as such program may be applicable to such agency,
organization or person.

         

        1.140  “Sanctioned
Person” shall mean a person named on the list of Specially Designated Nationals
or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise
published from time to time.

         

        1.141  “Secured
Parties” shall mean, collectively, (a) Agent, (b) Lenders, (c) each Issuing Bank
and (d) any Bank Product Provider; provided, that, as to any Bank
Product Provider, only to the extent of the Obligations owing to such Bank
Product Provider, such parties are sometimes referred to herein individually as
a “Secured Party”.

         

        1.142  “Security
Interests” means a mortgage, charge, pledge, lien, or other security interest
securing any obligation of any Person or any other agreement or arrangement in
any jurisdiction having a similar effect.

         

        1.143  “Settlement
Period” shall have the meaning set forth in Section 6.13 hereof.

         

        1.144  “Share
Mortgages” shall mean, collectively, (a) the UK Share Mortgages and (b) the
Singapore Share Charges.

         

        1.145  “Singapore
Borrowing Base Guarantors” shall mean, collectively, (together with their
respective successors and assigns): (a) Nu Horizons Asia, (b) NIC Asia, and (c)
any other Person, organized under the laws of Singapore that at any time after
the date hereof becomes party to a guarantee in favor of Agent or any Lender in
respect of or otherwise liable on or with respect to the Obligations of UK
Borrowers or who is the owner of any property which is security for the
Obligations of UK Borrowers, and whose Accounts are to be included in the UK
Tranche B Borrowing Base; each sometimes being referred to herein individually
as a “Singapore Borrowing Base Guarantor”.

         

        
          
            
            

          

          
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        1.146  “Singapore
Debentures” shall mean, collectively, (a) the debenture, dated on or about the
date hereof, by and between Nu Horizons Asia and Agent, as amended, modified,
supplemented, extended, renewed, restated or replaced, (b) the debenture, dated
on or about the date hereof, by and between NIC Asia and Agent, as amended,
modified, supplemented, extended, renewed, restated or replaced and (c) the
debenture, dated on or about the date hereof, by and between TSA and Agent, as
amended, modified, supplemented, extended, renewed, restated or
replaced.

         

        1.147  “Singapore
Loan Documents” shall mean, collectively, (a) the Singapore Debentures, (b) the
Singapore Share Charges, and (c) all other agreements, documents and instruments
which are governed by the laws of Singapore now or at any time hereafter
executed and/or delivered by any Borrower or Guarantor in connection with this
Agreement.

         

        1.148  “Singapore
Loan Parties” shall mean, collectively, the Singapore Borrowing Base Guarantors
and any other Loan Party incorporated in Singapore, and “Singapore Loan Party”
shall mean any one of them.

         

        1.149  “Singapore
Share Charges” shall mean, collectively, the following (each as amended,
modified, supplemented, extended, renewed, restated or replaced from time to
time): (a) the Share Charge (UK), dated on or about the date hereof, by Parent
in favor of Agent over the issued share capital of Nu Horizons Asia to secure
the Obligations of the UK Loan Parties and the guarantee by Parent of the
Obligations of the UK Loan Parties (but in no event any of the Obligations of
any of the US Loan Parties), (b) the Share Charge (US), dated on or about the
date hereof, by Parent in favor of Agent over not more than sixty-five (65%)
percent of the issued share capital of Nu Horizons Asia in respect of the
Obligations of US Loan Parties and the guarantee by Parent of the Obligations of
the US Loan Parties, (c) the Share Charge (UK), dated on or about the date
hereof, by Parent in favor of Agent over the issued share capital of NIC-Asia in
respect of the Obligations of the UK Loan Parties and the guarantee by Parent of
the Obligations of the UK Loan Parties (but in no event any of the Obligations
of any of the US Loan Parties), (d) the Share Charge (US), dated on or about the
date hereof, by Parent in favor of Agent over not more than sixty-five (65%)
percent of the issued share capital of NIC Asia in respect of the Obligations of
US Loan Parties and the guarantee by Parent of the Obligations of the US Loan
Parties, (e) the Share Charge (UK), dated on or about the date hereof, by Parent
in favor of Agent over the issued share capital of TSA in respect of the
Obligations of the UK Loan Parties and guarantee by Parent of the Obligations of
the UK Loan Parties  (but in no event any of the Obligations of any of
the US Loan Parties) and (f) the Share Charge (US), dated on or about the date
hereof, not more than sixty-five (65%) percent of the issued share capital of
TSA in respect of the Obligations of US Loan Parties and the guarantee by Parent
of the Obligations of the US Loan Parties.

         

        1.150  “Solvent”
shall mean, at any time with respect to any Person, that at such time such
Person (a) is able to pay its debts as they mature and has (and has a reasonable
basis to believe it will continue to have) sufficient capital (and not
unreasonably small capital) to carry on its business consistent with its
practices as of the date hereof, and (b) the assets and properties of such
Person at a fair valuation (and including as assets for this purpose at a fair
valuation all rights of subrogation, contribution or indemnification arising
pursuant to any guarantees given by such Person) are greater than the
Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such person has a reasonable basis to
believe, represents an amount which can reasonably be expected to become an
actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to
reflect the probability of it becoming a matured liability).

         

        
          
            
            

          

          
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        1.151  “Special
Agent Advances” shall have the meaning set forth in Section 14.11
hereof.

         

        1.152  “Subordinated
Debt” shall mean any Indebtedness of a Borrower or Guarantor that is subject to,
and subordinate in right of payment to, the right of Agent and Lenders to
receive the prior final payment and satisfaction in cash in full of all of the
Obligations and subject to such other terms and conditions as Agent may require
reasonably with respect thereto.

         

        1.153  “Subsidiary”
or “subsidiary” shall mean, with respect to any Person, any corporation, limited
liability company, limited liability partnership or other limited or general
partnership, trust, association or other business entity of which an aggregate
of at least a majority of the outstanding Equity Interests or other interests
entitled to vote in the election of the board of directors of such corporation
(irrespective of whether, at the time, Equity Interests of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency), managers, trustees or other controlling
persons, or an equivalent controlling interest therein, of such Person is, at
the time, directly or indirectly, owned by such Person and/or one or more
subsidiaries of such Person.

         

        1.154  “Supermajority
Lenders” shall mean, at any time, those Lenders whose Pro Rata Shares aggregate
more than sixty-six and two-thirds (66.67%) percent of the aggregate of the
Commitments of all Lenders, or if the Commitments shall have been terminated,
Lenders to whom more than sixty-six and two-thirds (66.67%) percent of the then
outstanding Obligations are owing.

         

        1.155  “Swing
Line Lender” shall mean, as to US Swing Line Loans and UK Swing Line Loans,
WFCF.

         

        1.156  “Swing
Line Loan Limit” shall mean the sum of the UK Swing Line Loan Limit and the US
Swing Line Loan Limit.

         

        1.157  “Swing
Line Loans” shall mean, collectively, UK Swing Line Loans and US Swing Line
Loans.

         

        1.158  “Taxes”
shall mean any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of Agent, Issuing Bank or any Lender, (a) such taxes (including income
taxes, franchise taxes, branch profits or capital taxes) as are imposed on or
measured by Agent’s, such Issuing Bank’s, or such Lender’s net income or capital
(or other taxes imposed in lieu thereof) by any jurisdiction or political
subdivision thereof and (b) all interest and penalties imposed on Agent, such
Issuing Bank or such Lender with respect to the taxes described in clause (a)
above.

         

        1.159  “UCC”
shall mean the Uniform Commercial Code as in effect in the State of New York,
and any successor statute, as in effect from time to time (except that terms
used herein which are defined in the Uniform Commercial Code as in effect in the
State of New York on the date hereof shall continue to have the same meaning
notwithstanding any replacement or amendment of such statute except as Agent may
otherwise determine).

         

        1.160  “UK
Borrowers” shall mean, collectively, the following (together with their
respective successors and assigns): (a) NEE-UK, (b) NIC-UK and (c) any Person
that at any time after the date hereof becomes party to the Loan Documents as a
“UK Borrower”, each sometimes being referred to herein individually as a “UK
Borrower”.

         

        1.161  “UK
Borrowing Base” shall mean, at any time, as to UK Borrowers, the sum of the UK
Tranche A Borrowing Base and the UK Tranche B Borrowing Base.

         

        
          
            
            

          

          
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        1.162  “UK
Credit Facility” shall mean the Loans and Letters of Credit provided to or for
the benefit of UK Borrowers pursuant to Section 2 hereof.

         

        1.163  “UK
Guarantors” shall mean, collectively (together with their respective successors
and assigns): (a)  UK Borrowers, (b) US Borrowers, (c) Singapore
Borrowing Base Guarantors, (d) TSA, (e) TSE, (f) NU-UK, and (g) any Person that
at any time after the date hereof becomes party to a guarantee in favor of Agent
or any Lender in respect of or otherwise liable on or with respect to the
Obligations of UK Borrowers or who is the owner of any property which is
security for the Obligations of UK Borrowers, together with their respective
successors and assigns; each sometimes being referred to herein individually as
a “UK Guarantor”.

         

        1.164  “UK
Group” shall mean, collectively, the UK Loan Parties and their Subsidiaries and
“UK Group Company” shall mean any one of them.

         

        1.165 “UK
Letter of Credit Limit” shall mean the US Dollar Equivalent of
$5,000,000

         

        1.166  “UK
Letter of Credit Obligations” shall mean, at any time, the sum of (a) UK Tranche
A Letter of Credit Obligations and (b) UK Tranche B Letter of Credit
Obligations.

         

        1.167  “UK
Letters of Credit ”shall mean collectively, UK Tranche A Letters of Credit and
UK Tranche B Letters of Credit.

         

        1.168  “UK
Loan Documents” shall mean, collectively, all of the agreements set forth on
Schedule 1.168 hereto.

         

        1.169  “UK
Loan Limit” shall mean $20,000,000, as the same may be increased pursuant to
Section 2.5 hereof.

         

        1.170  “UK
Loan Parties” shall mean, collectively, the UK Borrowers and any other Loan
Party incorporated in England and Wales, and “UK Loan Party” shall mean any one
of them.

         

        1.171  “UK
Loans” shall mean, collectively, UK Revolving Loans and UK Swing Line
Loans.

         

        1.172  “UK
Payment Account” shall mean the UK Tranche A Loan Payment Account or the UK
Tranche B Loan Payment Account, as the context requires.

         

        1.173  “UK
Priority Claims” shall mean with respect to each UK Borrower, (a) sums which are
due by way of contributions to occupational pension schemes and state scheme
premiums; (b) unpaid remuneration of employees in respect of the 4-month period
prior to insolvency, subject to the maximum cap provided under applicable law
(currently as at the date hereof £800 per employee) together with any amount
owed in respect of accrued holiday; (c) with respect to each UK Borrower, an
amount equal to the aggregate of (i) fifty (50%) percent of the first £10,000 in
value of Eligible Accounts of such UK Borrower and Eligible Inventory of such UK
Borrower (taken together) and (ii) twenty (20%) percent of the value of Eligible
Accounts of such UK Borrower and Eligible Inventory of such UK Borrower (taken
together) above £10,000, subject to a cap for this sub-clause (c) of £600,000
per each UK Borrower; and (d) the expenses of any administration or
winding-up.

         

        1.174  “UK
Revolving Loans” shall mean the loans now or hereafter made by or on behalf of
any Lender or by Agent for the account of any Lender to UK Borrowers on a
revolving basis pursuant to the UK Credit Facility (involving advances,
repayments and readvances), whether UK Tranche A Loans or UK Tranche B Loans, as
set forth in Section 2.1 hereof.

         

        
          
            
            

          

          
            40

            
              

            

          

          
            
            

          

        

         

        1.175  “UK
Share Mortgages” shall mean, collectively, the following (each as amended,
modified, supplemented, extended, renewed, restated or replaced from time to
time): (a) the Mortgage over securities (UK), dated on or about the date hereof,
by Parent in favor of Agent over the issued share capital of NU-UK, TSE and
NIC-UK to secure the Obligations of the UK Loan Parties and the guarantee by
Parent of the Obligations of the UK Loan Parties (but in no event any of the
Obligations of any of the US Loan Parties) and (b) the Mortgage over securities
(US), dated on or about the date hereof, by Parent in favor of Agent over not
more than sixty-five (65%) percent of the issued share capital of NU-UK, TSE and
NIC-UK in respect of the Obligations of US Loan Parties and the guarantee by
Parent of the Obligations of the US Loan Parties.

         

        1.176  “UK
Swing Line Loan Limit” shall mean the $2,000,000.

         

        1.177  “UK
Swing Line Loans” shall mean loans now or hereafter made by Swing Line Lender to
UK Borrowers on a revolving basis pursuant to the UK Credit Facility (involving
advances, repayments and readvances) as set forth in Section 2.2
hereof.

         

        1.178  “UK
Tranche A Borrowing Base” shall mean, at any time, as to UK Borrowers, the
amount equal to:

         

        (a)  the
amount equal to the sum of:

         

        (i) 
the amount equal to eighty-five (85%) percent of the Eligible Accounts of UK
Borrowers, plus

         

        (ii) the
lesser of (A) $4,000,000, (B) the amount equal to forty (40%) percent multiplied
by the Value of Eligible Inventory of UK Borrowers or (C) eighty-five (85%)
percent of the Net Recovery Percentage of such Eligible Inventory of UK
Borrowers multiplied by the Value thereof, minus

         

        (b)  Reserves
attributable to UK Borrowers.

         

        1.179  “UK
Tranche A Excess Availability” shall mean the amount, calculated at any date,
equal to: (a) the lesser of:  (i) the UK Tranche A Borrowing Base and
(ii) UK Tranche A Loan Limit, minus (b) the sum of:
(i) the amount of all then outstanding and unpaid Obligations in respect of the
UK Tranche A Loans and outstanding UK Tranche A Letter of Credit Obligations and
(ii) the aggregate amount of all then outstanding and unpaid trade payables and
other obligations of UK Borrowers which are outstanding more than sixty (60)
days past due as of the end of the immediately preceding month or at Agent’s
option, as of a more recent date based on such reports as Agent may from time to
time specify (other than trade payables or other obligations being contested or
disputed by any UK Borrower in good faith).

         

        1.180  “UK
Tranche A Letters of Credit ” shall mean Letters of Credit issued by Issuing
Bank for the account of the UK Borrowers based on the UK Tranche A Borrowing
Base.

         

        1.181  “UK
Tranche A Letter of Credit Limit” shall mean the US Dollar Equivalent of
$2,000,000.

         

        1.182  “UK
Tranche A Letter of Credit Obligations” shall mean, at any time, the sum of (a)
the aggregate undrawn amount of all UK Tranche A Letters of Credit issued for
the account of UK Borrowers in respect of the UK Tranche A Borrowing Base
outstanding at such time, plus (b) the aggregate amount of all drawings under
such UK Tranche A Letters of Credit for which Issuing Bank has not at such time
been reimbursed, plus (c) without duplication, the aggregate amount of all
payments made by each Lender to Issuing Bank with respect to such Lender’s
participation in such Letters of Credit issued for the account of any UK
Borrower as provided in Section 2.3 hereof for which UK Borrower has not at
such time reimbursed Lenders, whether by way of a Revolving Loan or
otherwise.

         

        
          
            
            

          

          
            41

            
              

            

          

          
            
            

          

        

         

        1.183  “UK
Tranche A Loan Limit” shall mean the US Dollar Equivalent of $8,000,000, as the
same may be increased pursuant to Section 2.5 hereof.

         

        1.184  “UK
Tranche A Loan Payment Account” shall mean Account No: 5000000030305 of Agent at
Wells Fargo, ABA No: 053000219, For Credit to: Wachovia Capital Finance
Corporation (New York) Re: UK Nu Horizons Tranche A Loans or such other account
of Agent as Agent may from time to time designate to Administrative Borrower as
the UK Tranche A  Loan Payment Account for purposes of this Agreement
and the other Loan Documents; only payments in respect of the Obligations of UK
Borrowers in respect of UK Tranche A Loans and UK Tranche A Letter of Credit
Obligations shall be made to the UK Tranche A Loan Payment Account.

         

        1.185  “UK
Tranche A Loans” shall mean UK Revolving Loans made to the UK Borrowers based on
the UK Tranche A Borrowing Base.

         

        1.186  “UK
Tranche B Borrowing Base” shall mean, at any time, as to UK Borrowers, the
amount equal to

         

        (a)  amount
equal to seventy (70%) percent of the Eligible Accounts of Singapore Borrowing
Base Guarantors, minus

         

        (b)  Reserves
attributable to Singapore Borrowing Base Guarantors.

         

        1.187  “UK
Tranche B Excess Availability” shall mean the amount, calculated at any date,
equal to: (a) the lesser of:  (i) the UK Tranche B Borrowing Base and
(ii) UK Tranche B Loan Limit, minus (b) the sum of:
(i) the amount of all then outstanding and unpaid Obligations in respect of the
UK Tranche B Loans and outstanding UK Tranche B Letter of Credit Obligations and
(ii) the aggregate amount of all then outstanding and unpaid trade payables and
other obligations of Singapore Borrowing Base Guarantors which are outstanding
more than sixty (60) days past due as of the end of the immediately preceding
month or at Agent’s option, as of a more recent date based on such reports as
Agent may from time to time specify (other than trade payables or other
obligations being contested or disputed by any Singapore Borrowing Base
Guarantor in good faith.

         

        1.188  “UK
Tranche B Letters of Credit ” shall mean Letters of Credit issued by the Issuing
Bank for the account of the UK Borrowers and for the benefit of a Singapore
Borrowing Base Guarantor based on the UK Tranche B Borrowing
Base.  All UK Tranche B Letters of Credit, except as set forth in
Section 6.9 hereof, shall be used to support the working capital and business
operations of the Singapore Borrowing Base Guarantors.

         

        1.189  “UK
Tranche B Letter of Credit Limit” shall mean the US Dollar Equivalent of
$3,000,000.

         

        1.190  “UK
Tranche B Letter of Credit Obligations” shall mean, at any time, the sum of (a)
the aggregate undrawn amount of all Tranche B Letters of Credit issued for the
account of UK Borrowers in respect of the UK Tranche B Borrowing Base
outstanding at such time, plus (b) the aggregate amount of all drawings under
such UK Tranche B Letters of Credit for which Issuing Bank has not at such time
been reimbursed, plus (c) without duplication, the aggregate amount of all
payments made by each Lender to Issuing Bank with respect to such Lender’s
participation in such Letters of Credit issued for the account of UK Borrowers
as provided in Section 2.3 hereof for which US Borrower has not at such
time reimbursed Lenders, whether by way of a Revolving Loan or
otherwise.

         

        
          
            
            

          

          
            42

            
              

            

          

          
            
            

          

        

         

        1.191  “UK
Tranche B Loan Limit” shall mean the US Dollar Equivalent of $12,000,000, as the
same may be increased pursuant to Section 2.5 hereof.

         

        1.192  “UK
Tranche B Loan Payment Account” shall mean Account No: 5000000030305 of Agent at
Wells Fargo, ABA No: 053000219, For Credit to: Wachovia Capital Finance
Corporation (New York) Re: UK Nu Horizons Tranche B Loans or such other account
of Agent as Agent may from time to time designate to Administrative Borrower as
the UK Tranche B Loan Payment Account for purposes of this Agreement and the
other Loan Documents; only payments in respect of the Obligations of UK
Borrowers in respect of UK Tranche B Loans and UK Tranche B Letter of Credit
Obligations shall be made to the UK Tranche B Loan Payment Account.

         

        1.193  “UK
Tranche B Loans” shall mean UK Revolving Loans made to the UK Borrowers based on
the UK Tranche B Borrowing Base.

         

        1.194  “US
Borrowers” shall mean, collectively, the following (together with their
respective successors and assigns): (a) Parent; (b) NIC; (c) International; (d)
RAZ; (e) TUS and (f) any Person that at any time after the date hereof becomes
party to the Loan Documents as a “US Borrower”; each sometimes being referred to
herein individually as a “US Borrower”.

         

        1.195  “US
Borrowing Base” shall mean, at any time, as to US Borrowers, the amount equal
to:

         

        (a)  the
amount equal to the sum of:

         

        (i) 
  the amount equal to eighty-five (85%) percent of the Eligible
Accounts of US Borrowers, plus

         

        (ii)  
the lesser of (A) forty (40%) percent multiplied by the Value of Eligible
Inventory of US Borrowers or (B) eighty-five (85%) percent of the Net Recovery
Percentage of such Eligible Inventory multiplied by the Value thereof, or (C) US
Inventory Loan Limit, minus

         

        (b)  Reserves
attributable to US Borrowers.

         

        1.196  “US
Credit Facility” shall mean the US Loans and US Letters of Credit provided to or
for the benefit of US Borrowers pursuant to Section 2 hereof.

         

        1.197  “US
Dollar Equivalent” shall mean at any time (a) as to any amount denominated in US
Dollars, the amount thereof at such time, and (b) as to any amount denominated
in any currency other than US Dollars, the equivalent amount in US Dollars
calculated by Agent at such time using the Exchange Rate in effect on the
Business Day of determination.

         

        1.198  “US
Dollars”, “US$” and “$” shall each mean lawful currency of the United States of
America.

         

        1.199  “US
Excess Availability” shall mean the amount, calculated at any date, equal to:
(a) the lesser of (i) the US Borrowing Base or (ii) the US Loan Limit, minus (b) the sum of:
(i) the amount of all then outstanding and unpaid Obligations in respect of the
US Loans and outstanding US Letter of Credit Obligations, and (ii) the aggregate
amount of all then outstanding and unpaid trade payables and other obligations
of US Borrowers which are outstanding more than sixty (60) days past due as of
the end of the immediately preceding month or at Agent’s option, as of a more
recent date based on such reports as Agent may from time to time specify (other
than trade payables or other obligations being contested or disputed by any US
Borrower in good faith).

         

        
          
            
            

          

          
            43

            
              

            

          

          
            
            

          

        

         

        1.200  “US
Guarantors” shall mean, collectively, the following (together with their
respective successors and assigns): (a) NUX, (b) any US Subsidiary, and (c) any
other Person that at any time after the date hereof becomes party to a guarantee
in favor of Agent or any Lender in respect of or otherwise liable on or with
respect to the Obligations of US Borrowers or who is the owner of any property
which is security for the Obligations of US Borrowers; each sometimes being
referred to herein individually as a “US Guarantor”.

         

        1.201  “US
Inventory Loan Limit” shall mean, at any time the amount equal to forty (40%)
percent of the US Borrowing Base at such time.

         

        1.202  “US
Letter of Credit Limit” shall mean $15,000,000.

         

        1.203  “US
Letters of Credit ” shall mean Letters of Credit issued by Issuing Bank for the
account of any US Borrower pursuant to the US Credit Facility.

         

        1.204  “US
Letter of Credit Obligations” shall mean, at any time, the sum of (a) the
aggregate undrawn amount of all Letters of Credit issued for the account of any
US Borrower outstanding at such time, plus (b) the aggregate amount of all
drawings under Letters of Credit for US Borrower for which Issuing Bank has not
at such time been reimbursed, plus (c) without duplication, the aggregate amount
of all payments made by each Lender to Issuing Bank with respect to such
Lender’s participation in Letters of Credit issued for the account of any US
Borrower as provided in Section 2.3 hereof for which any US Borrower has
not at such time reimbursed Lenders, whether by way of a Revolving Loan or
otherwise.

         

        1.205  “US
Loan Limit” shall mean $60,000,000, subject to increase by each increase in the
Maximum Credit pursuant to Section 2.5 hereof.

         

        1.206  “US
Loans” shall mean, collectively, the US Revolving Loans and US Swing Line
Loans.

         

        1.207  “US
Loan Parties” shall mean, collectively, the US Borrowers and any other Loan
Party which is a US Subsidiary, and “US Loan Party” shall mean any one of
them.

         

        1.208  “US
Payment Account” shall mean Account No: 5000000030305 of Agent at Wells Fargo,
ABA No: 053000219, For Credit to: Wachovia Capital Finance Corporation (New
York) Re: US Loans or such other account of Agent as Agent may from time to time
designate to Administrative Borrower as the US Payment Account for purposes of
this Agreement and the other Loan Documents.

         

        1.209  “US
Revolving Loans” shall mean the loans now or hereafter made by or on behalf of
any Lender or by Agent for the account of any Lender to US Borrower on a
revolving basis pursuant to the Credit Facility (involving advances, repayments
and readvances) as set forth in Section 2.1 hereof.

         

        1.210 “US
Subsidiary” means a Subsidiary of Parent which is a corporation now existing or
hereafter organized under the laws of the United States of America or of any
state of the United States of America, the District of Columbia or Puerto
Rico.

         

        1.211 “US
Swing Line Loan Limit” shall mean the amount equal to ten (10%) percent of the
US Loan Limit then in effect.

         

        
          
            
            

          

          
            44

            
              

            

          

          
            
            

          

        

         

        1.212  “US
Swing Line Loans” shall mean loans now or hereafter made by US Swing Line Lender
to US Borrower on a revolving basis pursuant to the Credit Facility (involving
advances, repayments and readvances) as set forth in Section 2.2
hereof.

         

        1.213  “Value”
shall mean, the US Dollar Equivalent, as determined by Agent, with respect to
Inventory, the lower of (a) cost computed on a first-in first-out basis in
accordance with GAAP or (b) market value; provided, that, for purposes of
the calculation of the Borrowing Base, (i) the Value of the Inventory shall not
include: (A) the portion of the value of Inventory equal to the profit earned by
any Affiliate on the sale thereof to any Borrower or (B) write-ups or
write-downs in value with respect to currency exchange rates and (ii)
notwithstanding anything to the contrary contained herein, the cost of the
Inventory shall be computed in the same manner and consistent with the most
recent appraisal of the Inventory received and accepted by Agent prior to the
date hereof.

         

        1.214  “VAT”
shall mean Value Added Tax imposed in the United Kingdom, Goods and Services Tax
imposed in Singapore or any other jurisdiction and any equivalent tax applicable
in any jurisdiction including any goods and services or similar
tax.

         

        1.215  “Voting
Stock” shall mean with respect to any Person, (a) one (1) or more classes of
Equity Interests of such Person having general voting powers to elect at least a
majority of the board of directors, managers or trustees of such Person,
irrespective of whether at the time Equity Interests of any other class or
classes have or might have voting power by reason of the happening of any
contingency, and (b) any Equity Interest of such Person convertible or
exchangeable without restriction at the option of the holder thereof into Equity
Interest of such Person described in clause (a) of this definition.

         

        1.216  “Wells
Fargo” shall mean Wells Fargo Bank, National Association, a national banking
association, in its individual capacity, and its successors and
assigns.

         

        1.217  “WFCF”
shall mean Wachovia Capital Finance Corporation (New England), a Massachusetts
corporation, in its individual capacity, and its successors and
assigns.

         

        1.218  “Weighted
Average Life to Maturity” shall mean, when applied to any Indebtedness at any
date, the number of years obtained by dividing (a) then outstanding principal
amount of such Indebtedness into (b) the total of the product obtained by
multiplying (i) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (ii) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment.

         

        SECTION
2.    CREDIT FACILITIES

         

        2.1   
 Revolving
Loans.

         

        (a)  Subject
to and upon the terms and conditions contained herein, each Lender severally
(and not jointly) agrees to make its Pro Rata Share of Revolving Loans to US
Borrowers from time to time in amounts requested by any US Borrower (or
Administrative Borrower on behalf of a US Borrower) up to the aggregate amount
outstanding for all Lenders at any time equal to (i)  the lesser of:
(A) the US Borrowing Base at such time or (B) the US Loan Limit at such time
minus (ii) then outstanding US Revolving Loans, Swing Line Loans and US Letter
of Credit Obligations.  All US Loans made by Lenders to US Borrower
shall be denominated in US Dollars.

         

        
          
            
            

          

          
            45

            
              

            

          

          
            
            

          

        

         

        (b)  Subject
to and upon the terms and conditions contained herein, each Lender severally
(and not jointly) agrees to make its Pro Rata Share of Revolving Loans to UK
Borrowers from time to time in amounts requested by any UK Borrower (or
Administrative Borrower on behalf of UK Borrower) up to the aggregate amount
outstanding for all Lenders at any time equal to (i)  the lesser of:
(A) the UK Borrowing Base at such time or (B) the UK Loan Limit at such time
minus (ii) then outstanding UK Revolving Loans, UK Swing Line Loans and UK
Letter of Credit Obligations.  All UK Loans made by Lenders to UK
Borrowers shall be denominated in US Dollars.

         

        (c)  Except
with the consent of Agent and all Lenders, or as otherwise provided herein, (i)
the aggregate principal amount of the Loans and the Letter of Credit Obligations
outstanding at any time shall not exceed the lesser of the Borrowing Base or the
Maximum Credit at such time, (ii) the aggregate principal amount of the US Loans
and US Letter of Credit Obligations outstanding at any time to US Borrowers
shall not exceed the lesser of the US Borrowing Base or the US Loan Limit at
such time, (iii) the aggregate principal amount of the UK Loans and UK Letter of
Credit Obligations outstanding at any time to UK Borrowers shall not exceed the
lesser of the UK Borrowing Base or the UK Loan Limit at such time, (iv) the
aggregate principal amount of the UK Tranche A Loans and UK Tranche A Letter of
Credit Obligations outstanding at any time to UK Borrowers shall not exceed the
lesser of the UK Tranche A Borrowing Base or UK Tranche A Loan Limit, (v) the
aggregate principal amount of the UK Tranche B Loans and UK Tranche B Letter of
Credit Obligations outstanding at any time to UK Borrowers shall not exceed the
lesser of the UK Tranche B Borrowing Base or UK Tranche B Loan Limit, (vi) the
aggregate principal amount of the US Loans and US Letter of Credit Obligations
outstanding at any time to US Borrowers based on the Eligible Inventory of US
Borrowers shall not exceed the US Inventory Loan Limit, (vii) the aggregate face
amount of the US Letter of Credit Obligations outstanding at any time shall not
exceed the US Letter of Credit Limit at such time, (viii) the aggregate face
amount of the UK Letter of Credit Obligations outstanding at any time shall not
exceed the UK Letter of Credit Limit at such time, (ix) the aggregate face
amount of the UK Tranche A Letter of Credit Obligations outstanding at any time
shall not exceed the UK Tranche A Letter of Credit Limit at such time, (x) the
aggregate face amount of the UK Tranche B Letter of Credit Obligations
outstanding at any time shall not exceed the UK Tranche B Letter of Credit Limit
at such time,(xi) the aggregate face amount of the UK Letter of Credit
Obligations outstanding at any time shall not exceed the UK Letter of Credit
Limit at such time, (xii) the aggregate principal amount of US Swing Line Loans
outstanding at any time shall not exceed the US Swing Line Loan Limit at such
time, (xiii) the aggregate principal amount of UK Swing Line Loans outstanding
at any time shall not exceed the UK Swing Line Loan Limit at such time, (xiv)
the aggregate principal amount of the US Loans and UK Loans and US Letter of
Credit Obligations and UK Letter of Credit Obligations outstanding at any time
shall not exceed the lesser of (A) the sum of the UK Borrowing Base and the US
Borrowing Base or (B) the Maximum Credit, and (xv) the aggregate face amount of
UK Letter of Credit Obligations and US Letter of Credit Obligations outstanding
at any time shall not exceed the Letter of Credit Limit.  Subject to
the terms and conditions hereof, each Borrower (or Administrative Borrower on
behalf of such Borrower) may from time to time borrow, prepay and reborrow
Revolving Loans.  No Lender shall be required to make any Revolving
Loan, if, after giving effect thereto, the aggregate outstanding principal
amount of all Revolving Loans of such Lender, together with such Lender’s Pro
Rata Share of the aggregate amount of all Swing Line Loans and Letter of Credit
Obligations, would exceed such Lender’s Commitment.

         

        2.2     Swing Line
Loans.

         

        (a)  Subject
to the terms and conditions contained herein, Swing Line Lender agrees that it
will make US Swing Line Loans to US Borrowers from time to time in amounts
requested by such US Borrower (or Administrative Borrower on behalf of such US
Borrower) up to the aggregate amount outstanding equal to the US Swing Line Loan
Limit; provided, that, after giving
effect to any such US Swing Line Loan, the aggregate principal amount of the US
Revolving Loans, US Swing Line Loans and US Letter of Credit Obligations
outstanding shall not exceed the US Borrowing Base or the US Loan Limit at such
time.

         

        
          
            
            

          

          
            46

            
              

            

          

          
            
            

          

        

         

        (b)  Subject
to the terms and conditions contained herein, Swing Line Lender agrees that it
will make UK Swing Line Loans to UK Borrowers from time to time in amounts
requested by such Borrowers (or Administrative Borrower on behalf of such
Borrower) up to the aggregate amount outstanding equal to the UK Swing Line Loan
Limit; provided, that, after giving
effect to any such UK Swing Line Loan, the aggregate principal amount of the UK
Revolving Loans, UK Swing Line Loans and UK Letter of Credit Obligations
outstanding shall not exceed the UK Borrowing Base or the UK Loan Limit at such
time.

         

        (c)  On
the terms and subject to the conditions hereof, each Borrower (or Administrative
Borrower on behalf of Borrowers) may from time to time borrow, prepay and
reborrow Swing Line Loans. Swing Line Lender shall not be required to make Swing
Line Loans, if, after giving effect thereto, the aggregate outstanding principal
amount of all Swing Line Loans would exceed the applicable then existing Swing
Line Loan Limit.  Swing Line Lender shall not be required to make a
Swing Line Loan to refinance an outstanding Swing Line Loan.  Each
Swing Line Loan shall be subject to all of the terms and conditions applicable
to other Base Rate Loans funded by the Lenders constituting Revolving Loans,
except that all payments thereon shall be payable to the applicable Swing Line
Lender solely for its own account.  All Revolving Loans and Swing Line
Loans shall be subject to the settlement among Lenders provided for in
Section 6.13 hereof.

         

        (d)  Upon
the making of a US Swing Line Loan, or a UK Swing Line Loan, as the case may be,
without further action by any party hereto, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from Swing Line Lender,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender’s Pro Rata Share in such US Swing Line Loan or UK Swing
Line Loan, as the case may be.  To the extent that there is no
settlement in accordance with Section 6.13 below, the Swing Line Lender may
at any time, require the Lenders to fund their participations.  From
and after the date, if any, on which any Lender has funded its participation in
any Swing Line Loan, Agent shall promptly distribute to such Lender, not less
than weekly, such Lender’s Pro Rata Share of all payments of principal and
interest received by Agent in respect of such Swing Line Loan.

         

        2.3    Letters of
Credit.

         

        (a)  General.  Subject
to and upon the terms and conditions contained herein and in the Letter of
Credit Documents, at the request of any Borrower (or Administrative Borrower on
behalf of such Borrower), Agent agrees to cause Issuing Bank to issue, and
Issuing Bank agrees to issue, for the account of any Borrower one or more
Letters of Credit, for the ratable risk of each Lender according to its Pro Rata
Share, containing terms and conditions acceptable to Agent and Issuing
Bank.

         

        
          
            
            

          

          
            47

            
              

            

          

          
            
            

          

        

         

        (b)  Notice of Issuance,
Amendment, Renewal, Extension. The Borrower requesting such Letter of
Credit (or Administrative Borrower on behalf of such Borrower) shall give Agent
and the Issuing Bank with respect thereto three (3) Business Days’ prior written
notice of such Borrower’s request for the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of
Credit).  Such notice shall be irrevocable and shall (i) specify the
original face amount of the Letter of Credit requested (or identify the Letter
of Credit to be amended, renewed or extended), (ii) the effective date (which
date shall be a Business Day and in no event shall be a date less than ten (10)
days prior to the end of then current term of this Agreement) of issuance of
such requested Letter of Credit (or such amendment, renewal or extension), (iii)
whether such Letter of Credit may be drawn in a single or in partial draws, (iv)
the date on which such requested Letter of Credit is to expire, (v) the purpose
for which such Letter of Credit is to be issued, (vi) the name and address of
the beneficiary of the requested Letter of Credit, (vii) if the Letter of Credit
is requested on behalf or by a UK Borrower, such notice shall specify whether
the Letter of Credit is to be a UK Tranche A Letter of Credit or a UK Tranche B
Letter of Credit; and in the event a Tranche B Letter of Credit is specified,
Administrative Borrower or the applicable UK Borrower, as the case may be, shall
specify the Singapore Borrowing Base Guarantor for whom such Letter of Credit is
requested, and (viii) such other information as shall be necessary to enable the
Issuing Bank to prepare, amend, renew or extend such Letter of
Credit.  If requested by the applicable Issuing Bank, the Borrower
requesting the Letter of Credit (or Administrative Borrower on behalf of such
Borrower) shall attach to the request the proposed terms of the Letter of
Credit. In no event shall a Letter of Credit be issued, amended, renewed or
extended unless the forms and terms of the proposed Letter of Credit (as
amended, renewed or extended, as the case may be) is satisfactory to Agent and
the Issuing Bank with respect thereto.  The renewal or extension of,
or increase in the amount of, any Letter of Credit shall, for purposes hereof,
be treated in all respects the same as the issuance of a new Letter of Credit
hereunder.  Anything contained herein to the contrary notwithstanding,
the Issuing Bank may, but shall not be obligated to, issue or cause the issuance
of a Letter of Credit that supports the obligations of Parent or its
Subsidiaries (A) in respect of (1) a lease of real property, or (2) an
employment contract, or (B) at any time that one or more of the Lenders is a
Defaulting Lender.

         

        (c)  Certain Conditions to
Letters of Credit.  In addition to being subject to the
satisfaction of the applicable conditions precedent contained in Section 4
hereof and the other terms and conditions contained herein, no Letter of Credit
shall be available to any Borrower unless each of the following conditions
precedent have been satisfied in a manner satisfactory to Agent:  (i)
the Borrower requesting such Letter of Credit (or Administrative Borrower on
behalf of such Borrower) shall have delivered to the Issuing Bank at such times
and in such manner as Issuing Bank may require, an application, in form and
substance satisfactory to Issuing Bank and Agent, for the issuance of the Letter
of Credit and such other Letter of Credit Documents as may be required pursuant
to the terms thereof, and the form and terms of the proposed Letter of Credit
shall be satisfactory to Agent and Issuing Bank, (ii) as of the date of
issuance, no order of any court, arbitrator or other Governmental Authority
shall purport by its terms to enjoin or restrain money center banks generally
from issuing letters of credit of the type and in the amount of the proposed
Letter of Credit, and no law, rule or regulation applicable to money center
banks generally and no request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over money center banks
generally shall prohibit, or request that the Issuing Bank (or other issuer)
refrain from, the issuance of letters of credit generally or the issuance of
such Letter of Credit, (iii) after giving effect to the issuance of such Letter
of Credit, (A) the Letter of Credit Obligations shall not exceed the Letter of
Credit Limit and the US Letter of Credit Obligations shall not exceed the US
Letter of Credit Limit, (B) the UK Letter of Credit Obligations shall not exceed
the UK Letter of Credit Limit, (C) the UK Tranche A Letter of Credit Obligations
shall not exceed the UK Tranche A Letter of Credit Limit, and (D) the UK Tranche
B Letter of Credit Obligations shall not exceed the UK Tranche B Letter of
Credit Limit, and (iv) in the case of a Letter of Credit issued for the account
of US Borrower, the US Excess Availability, and in the case of a Letter of
Credit issued for the account of UK Borrower, the UK Tranche A Excess
Availability or UK Tranche B Excess Availability on the date of the proposed
issuance of any Letter of Credit shall be equal to or greater than one hundred
(100%) percent of the Letter of Credit Obligations with respect
thereto.

         

        (d)  Letter of Credit
Sublimit.  Except in Agent’s discretion and with the consent of
all Lenders, (i) the amount of all outstanding Letter of Credit Obligations
shall not at any time exceed the Letter of Credit Limit, (ii) the amount of all
outstanding US Letter of Credit Obligations shall not at any time exceed the US
Letter of Credit Limit, (iii) the amount of all outstanding UK Letter of Credit
Obligations shall not at any time exceed the UK Letter of Credit Limit, (iv) the
amount of all outstanding UK Tranche A Letter of Credit Obligations shall not at
any time exceed the UK Tranche A Letter of Credit Limit and (v) the amount of
all outstanding UK Tranche B Letter of Credit Obligations shall not at any time
exceed the UK Tranche B Letter of Credit Limit.

         

        
          
            
            

          

          
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        (e)  Expiration.  Each
standby Letter of Credit shall expire at or prior to the earlier of (i)
twelve (12) months after the date of the issuance of such Letter of Credit
(or in the case of any renewal or extension thereof, twelve (12) months after
such renewal or extension) and (ii) the date that is five (5) Business Days
prior to the Maturity Date; provided, that, (A) any standby
Letter of Credit with a one year tenor may provide for automatic renewal or
extension thereof for additional one year periods (which in no event shall
extend beyond the date referred to in clause (ii) above) so long as such standby
Letter of Credit permits the Issuing Bank to prevent any such extension at least
once in each twelve-month period (commencing with the date of issuance of such
Letter of Credit) by giving prior notice to the beneficiary thereof within a
time period during such twelve-month period to be agreed upon at the time such
Letter of Credit is issued and (B) if the Issuing Bank and Agent each consent,
the expiration date on any standby Letter of Credit may extend beyond the date
referred to in clause (ii) above.  Each Letter of Credit that is not a
standby Letter of Credit shall expire on the earlier of one hundred eighty (180)
days after the date of issuance, renewal or extension (as applicable) of such
Letter of Credit or the date five (5) Business Days prior to the Maturity
Date.

         

        (f)  Letter of Credit
Participations.  Immediately upon the issuance or amendment of
any Letter of Credit issued for the account of a Borrower, each Lender, shall be
deemed to have irrevocably and unconditionally purchased and received, without
recourse or warranty, an undivided interest and participation to the extent of
such Lender’s Pro Rata Share of the liability with respect to such Letter of
Credit and the obligations of the applicable Borrower with respect thereto
(including all Letter of Credit Obligations with respect
thereto).  Each Lender, shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be obligated to
pay to Issuing Bank therefor and discharge when due, its Pro Rata Share of all
of such obligations arising under such Letter of Credit.  Without
limiting the scope and nature of each Lender’s participation in any such Letter
of Credit, to the extent that Issuing Bank  has not been reimbursed or
otherwise paid as reasonably required hereunder with respect to any such Letter
of Credit, each such Lender shall pay to Issuing Bank, its Pro Rata Share of
such unreimbursed drawing or other amounts then due to such Issuing Bank in
connection therewith.  Notwithstanding anything to the contrary
contained in this Agreement, in the event that there is a Defaulting Lender,
Issuing Bank, shall not be required to issue any Letter of Credit, or increase
or extend or otherwise amend any Letter of Credit, unless Issuing Bank has
entered into arrangements reasonably satisfactory to it and the applicable
Borrower with respect to the participation in Letters of Credit by such
Defaulting Lender.  Issuing Bank may require that the applicable
Borrower provide cash collateral to it, or to Agent to hold on behalf of such
Issuing Bank, on terms and conditions satisfactory to such Issuing Bank, in an
amount equal to such Defaulting Lender's Pro Rata Share of any Letter of Credit
Obligations.

         

        (g)  Letter of Credit
Reimbursement.  If Issuing Bank shall make any payment in
respect of a Letter of Credit, the applicable Borrower shall reimburse such
Issuing Bank by paying to Agent an amount equal to such payment by such Issuing
Bank not later than 12:00 noon on the date that such payment by such Issuing
Bank is made, if the applicable Borrower (or Administrative Borrower on behalf
of such Borrower) shall have received notice of such payment by such Issuing
Bank prior to 10:00 a.m. on such date, or, if such notice shall not have
been received by such Borrower (or Administrative Borrower) prior to such time
on such date, then not later than 12:00 noon on (i) the Business Day that such
Borrower (or Administrative Borrower on behalf of such Borrower) receives such
notice, if such notice is received prior to 10:00 a.m., on the day of receipt,
or (ii) the Business Day immediately following the day that such Borrower (or
Administrative Borrower on behalf of such Borrower) receives such notice, if
such notice is not received prior to such time on the day of receipt; provided, that, unless such
Borrower (or Administrative Borrower on behalf of such Borrower) requests
otherwise, and, subject to the conditions to borrowing set forth herein, each
drawing under any Letter of Credit or other amount payable in connection
therewith when due shall constitute a request by the Borrower for whose account
such Letter of Credit was issued to Agent for a Base Rate Loan in the amount of
such drawing or other amount then due, and shall be made by Agent on behalf of
Lenders, as a Revolving Loan or Swing Line Loan as Administrative Borrower
requests, or if such request is not received in a timely manner, as Agent
determines (or Special Agent Advance, as the case may be) in an equivalent
amount and, to the extent so financed, such Borrower’s obligation to make such
payment shall be discharged and replaced by the resulting Revolving Loan, Swing
Line Loan (or Special Agent Advance, as the case may be).  If the
applicable Borrower fails to make such payment when due, subject to the rights
of Agent under Section 6.13 hereof, Agent may notify each Lender, of the
applicable payment made by the Issuing Bank in respect of such Letter of Credit,
the payment then due from such Borrower in respect thereof and such Lender’s Pro
Rata Share thereof.  Promptly following receipt of such notice, each
Lender, as applicable, shall pay to Agent its Pro Rata Share of the payment then
due and Agent shall promptly pay to the Issuing Bank the amounts so received by
it from Lenders or Lenders.  Promptly following receipt by Agent of
any payment from a Borrower pursuant to this paragraph, Agent shall distribute
such payment to the Issuing Bank or, to the extent that Lenders have made
payments pursuant to this paragraph to reimburse Issuing Bank, then to such
Lenders and Issuing Bank as their interests may appear.  Any payment
made by a Lender pursuant to this paragraph to reimburse Issuing Bank for any
payment made by such Issuing Bank (other than the funding of a Revolving Loan,
Swing Line Loan or Special Agent Advance as contemplated above) shall not
constitute a Loan and shall not relieve the applicable Borrower of its
obligation to reimburse Issuing Bank for such payment.

         

        
          
            
            

          

          
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        (h)  Obligations
Absolute.  The obligations of US Borrowers to pay each Letter
of Credit Obligation, the obligations of UK Borrowers to pay each UK Letter of
Credit Obligation, the obligations of Lenders to make payments to Agent for the
account of Issuing Bank with respect to Letters of Credit issued for the account
of a UK Borrower and the obligations of Lenders to make payments to Agent for
the account of Issuing Bank with respect to Letters of Credit issued for the
account of a US Borrower shall be absolute, unconditional and irrevocable and
shall be performed strictly in accordance with the terms of this Agreement under
any and all circumstances, whatsoever, notwithstanding the occurrence or
continuance of any Default, Event of Default, the failure to satisfy any other
condition set forth in Section 4 hereof or any other event or circumstance,
and irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein or herein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, a Borrower’s obligations
hereunder.  None of Agent, Lenders or the Issuing Banks, or any of
their Affiliates, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of
Issuing Bank; provided, that, the foregoing
shall not be construed to excuse Issuing Bank from liability to the applicable
Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by each Borrower to the
extent permitted by applicable law) suffered by such Borrower that are caused by
Issuing Bank’s failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof.  The parties hereto expressly agree that, in the absence of
gross negligence or willful misconduct on the part of Issuing Bank (as
determined pursuant to a final, non-appealable order of a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised care in each
such determination.  In furtherance of the foregoing and without
limiting the generality thereof, with respect to documents presented which
appear on their face to be in substantial compliance with the terms of a Letter
of Credit, Issuing Bank may, in its discretion, either accept and make payment
upon such documents without responsibility for further investigation, regardless
of any notice or information to the contrary, or refuse to accept and make
payment upon such documents if such documents are not in strict compliance with
the terms of such Letter of Credit.

         

        
          
            
            

          

          
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        (i)  Disbursement
Procedures.  The applicable Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit.  Such Issuing Bank shall
promptly notify Agent and the applicable Borrower (or Administrative Borrower on
behalf of such Borrower) by telephone (confirmed by facsimile or otherwise as
Administrative Borrower and such Issuing Bank may agree) of such demand for
payment and whether such Issuing Bank has made or will make any payment in
respect thereof; provided, that, any failure to
give or delay in giving such notice shall not relieve the applicable Borrower of
its obligation to reimburse such Issuing Bank and Lenders with respect to any
such payment.

         

        (j)  Interim
Interest.  If Issuing Bank shall make any payment in respect of
a Letter of Credit, or otherwise be owed any amounts in respect thereof, then,
unless the applicable Borrower shall reimburse the applicable Issuing Bank for
such payment or other amount in full on the date such payment is made or amount
due, the unpaid amount thereof shall bear interest, for each day from and
including the date such payment is made or amount due but excluding the date
that the applicable Borrower reimburses such payment or other amount, at the
rate per annum then applicable to Base Rate Loans.  Interest accrued
pursuant to this paragraph shall be for the account of the applicable Issuing
Bank; except,
that, interest
accrued on and after the date of payment by Agent or any Lender pursuant to
Section 2.3(g) above to reimburse such Issuing Bank shall be for the
account of Agent or such Lender to the extent of such payment, and shall be
payable on demand or, if no demand has been made, on the date on which the
applicable Borrower reimburses the applicable payment in full.

         

        (k)  Indemnification.  Borrowers
and Guarantors shall indemnify and hold Agent and Lenders harmless from and
against any and all losses, claims, damages, liabilities, costs and expenses
which Agent or any Lender may suffer or incur in connection with any Letter of
Credit and any documents, drafts or acceptances relating thereto, including any
losses, claims, damages, liabilities, costs and expenses due to any action taken
by Issuing Bank or correspondent with respect to any Letter of Credit, except
for such losses, claims, damages, liabilities, costs or expenses that are a
direct result of the gross negligence or willful misconduct of Agent, or any
Lender as determined pursuant to a final non-appealable order of a court of
competent jurisdiction.  Each Borrower and Guarantor assumes all risks
for, and agrees to pay, all foreign, Federal, State, and local taxes, duties and
levies relating to any goods subject to any Letter of Credit or any documents,
drafts or acceptances thereunder.  Each Borrower and Guarantor hereby
releases and holds Agent and Lenders harmless from and against any acts,
waivers, errors, delays or omissions with respect to or relating to any Letter
of Credit, except for the gross negligence or willful misconduct of Agent or any
Lender as determined pursuant to a final, non-appealable order of a court of
competent jurisdiction.  The provisions of this Section 2.3(k)
shall survive the payment of Obligations and the termination of this
Agreement.

         

        
          
            
            

          

          
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        (l)  Account
Party.  In respect of any US Letter of Credit, each Borrower
and Guarantor hereby irrevocably authorizes and directs each Issuing Bank to
name such Borrower or Guarantor as the account party therein and to deliver to
Agent all instruments, documents and other writings and property received by
such Issuing Bank pursuant to each US Letter of Credit and to accept and rely
upon Agent’s instructions and agreements with respect to all matters arising in
connection with such Letter of Credit or the Letter of Credit Documents with
respect thereto.  In respect any UK Letters of Credit, Goods and
Documents are hereby and shall upon dispatch of such Goods from the supplier be
deemed to be pledged by the relevant Borrower to the Agent. The Agent shall be
entitled at its option to obtain possession of such Goods in order to perfect
the pledge. The Goods and the Documents shall only be released to the relevant
Borrower by the Agent against receipt by the Agent of a duly executed trust
receipt from the relevant Borrower in the Agent's standard form at the time or
(failing such execution) shall be deemed to be subject to a trust receipt in
such form.  Nothing contained herein shall be deemed or construed to
grant any Borrower or Guarantor any right or authority to pledge the credit of
Agent or any Lender in any manner.  Agent and Lenders shall have no
liability of any kind with respect to any Letter of Credit provided by Issuing
Bank unless Agent has duly executed and delivered to such Issuing Bank the
application or a guarantee or indemnification in writing with respect to such
Letter of Credit.  Borrowers and Guarantors shall be bound by any
reasonable interpretation made by Agent, or Issuing Bank under or in connection
with any Letter of Credit or any documents, drafts or acceptances thereunder,
notwithstanding that such interpretation may be inconsistent with any
instructions of any Borrower or Guarantor.  In connection with
Inventory purchased pursuant to a Letter of Credit, Borrowers and Guarantors
shall, at Agent’s request, instruct all suppliers, carriers, forwarders, customs
brokers, warehouses or others receiving or holding cash, checks, Inventory,
documents or instruments in which Agent holds a security interest that upon
Agent’s prior written request, such items are to be delivered to Agent and/or
subject to Agent’s order, and if they shall come into such Borrower’s or
Guarantor’s possession, to deliver them, upon Agent’s request, to Agent in their
original form.  Except as otherwise provided herein, Agent shall not
exercise such right to request such items so long as no Default or Event of
Default shall exist or have occurred and be continuing.  Except as
Agent may otherwise specify, Borrowers and Guarantors shall designate the
Issuing Bank with respect to a Letter of Credit as the consignee on all bills of
lading and other negotiable and non-negotiable documents under such Letter of
Credit.  Any rights, remedies, duties or obligations granted or
undertaken by any Borrower to Issuing Bank in any application for any Letter of
Credit, or any other agreement in favor of Issuing Bank relating to any Letter
of Credit, shall be deemed to have been granted or undertaken by such Borrower
to Agent.  Any duties or obligations undertaken by Agent to Issuing
Bank in any application for any Letter of Credit, or any other agreement by
Agent in favor of Issuing Bank relating to any Letter of Credit, shall be deemed
to have been undertaken by Borrowers to Agent and to apply in all respects to
Borrowers.

         

        2.4    Requests for
Borrowings.

         

        (a)  To
request a Revolving Loan or Swing Line Loan, the applicable Borrower (or
Administrative Borrower on behalf of such Borrower) shall notify Agent of such
request by telephone (i) in the case of a Eurodollar Rate Loan, not later than
11:00 a.m., three (3) Business Days before the date of the proposed Eurodollar
Rate Loan or (ii) in the case of a Base Rate Loan (including a Swing Line Loan),
not later than 1:00 p.m. on the same Business Day as the date of the proposed
Base Rate Loan.  Each such telephonic request shall be irrevocable
and, to the extent required by Agent, shall be confirmed promptly by hand
delivery or facsimile to Agent of a written request in a form approved by Agent
and signed by or on behalf of Borrowers.

         

        (b)  Each
such telephonic and written request shall specify the following
information:

         

        (i)      whether
the Borrower requesting the Loan is a US Borrower or a UK Borrower;

         

        (ii)     the
Borrower requesting such Revolving Loan or Swing Line Loan;

         

        (iii)    whether
such Loan is a Revolving Loan or Swing Line Loan;

         

        (iv)    the
aggregate amount of such Revolving Loan or Swing Line Loan;

         

        (v)     the
date of such Revolving Loan or Swing Line Loan, which shall be a Business
Day;

         

        
          
            
            

          

          
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        (vi)    if
such Loan is to be a Revolving Loan, whether such Revolving Loan is to be a Base
Rate Loan or a Eurodollar Rate Loan;

         

        (vii)   if
the Loan is requested by a UK Borrower whether such UK Loan is a UK Tranche A
Loan or a UK Tranche B Loan; and

         

        (viii)  the
deposit account of the applicable Borrower specified on Schedule 8.10 of
the Information Certificate or any other account with Agent (or one of its
Affiliates) that shall be specified in a written notice signed by an officer of
such Borrower and delivered to and approved by Agent.  All UK Tranche
B Loans shall be deposited into deposit accounts of Singapore Borrowing Base
Guarantors.  All proceeds of Loans requested by Borrowers shall only
be sent by Agent and Lenders to deposit accounts of US Borrowers, UK Borrowers,
and Singapore Borrowing Base Guarantors, as the case may be, maintained in the
United States.

         

        (c)  If
no election as to whether a Revolving Loan is to be a Base Rate Loan or
Eurodollar Rate Loan is specified in the applicable request, then the requested
Revolving Loan shall be a Base Rate Loan.  If no Interest Period is
specified with respect to any request for a Eurodollar Rate Loan, then the
applicable Borrower shall be deemed to have selected an Interest Period of one
month’s duration.  Promptly following receipt of a request for a
Revolving Loan in accordance with this Section, Agent shall advise each Lender
of the details thereof and of the amount of such Lender’s Revolving Loan to be
made as part of the request.

         

        (d)  If
no election as to whether a UK Loan is to be a UK Tranche A Loan or a UK Tranche
B Loan is specified in the applicable request, then the requested UK Revolving
Loan shall be a UK Tranche A Loan up to the amount available to be borrowed and
then, to the extent the amount of such loan may not be made, a UK Tranche B
Loan.  Promptly following receipt of a request for a UK Loan in
accordance with this Section, Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Revolving Loan to be made as part of
the request.

         

        (e)  All
Loans and Letters of Credit under this Agreement shall be conclusively presumed
to have been made to, and at the request of and for the benefit of, any Borrower
or Guarantor when deposited to the credit of any Borrower or Guarantor or
otherwise disbursed or established in accordance with the instructions of any
Borrower or Guarantor or in accordance with the terms and conditions of this
Agreement.

         

        (f)  Except
in Agent’s discretion and with the consent of all Lenders, or as otherwise
provided herein, the aggregate amount of the Revolving Loans, Swing Line Loans
and the Letter of Credit Obligations outstanding at any time shall not exceed
the lesser of the Maximum Credit or the Borrowing Base.

         

        2.5    Increase in Maximum
Credit.

         

        (a)  Administrative
Borrower may, at any time, so long as no Default or Event of Default shall exist
or have occurred and be continuing, deliver a written request to Agent to
increase the Maximum Credit.  Any such written request shall specify
the amount of the increase in the Maximum Credit that Borrowers are requesting,
provided, that, (i) in no event
shall the aggregate amount of any such increase in the Maximum Credit (the
“Incremental Facility”) cause the Maximum Credit to exceed $110,000,000, (ii)
such request shall be for an increase of not less than $10,000,000, (iii) any
such request shall be irrevocable, and (iv) in no event shall more than one such
written request be delivered to Agent in any calendar quarter, and more than two
(2) times during the term of the Agreement, (iv) such request(s) shall occur no
earlier than six (6) months after the date hereof and no later than June 28,
2013.  All requests for an increase in the Maximum Credit shall
include a corresponding request for an increase in either US Loan Limit or UK
Loan Limit (or combination thereof); provided, that, any request for an increase
in the UK Loan Limit shall include a corresponding request for an increase in
either or both of the UK Tranche A Loan Limit or the UK Tranche B Loan
Limit.

         

        
          
            
            

          

          
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        (b)  Upon
the receipt by Agent of any such written request, Agent shall notify each of the
Lenders of such request and each Lender shall have the option (but not the
obligation) to increase the amount of its Commitment by an amount up to its Pro
Rata Share of the amount of the increase in the Maximum Credit requested by
Administrative Borrower as set forth in the notice from Agent to such
Lender.  Each Lender shall notify Agent within fifteen (15) days after
the receipt of such notice from Agent whether it is willing to so increase its
Commitment, and if so, the amount of such increase; provided, that, (i) the minimum
increase in the Commitments of each such Lender providing the additional
Commitments shall equal or exceed $2,000,000, and (ii) no Lender shall be
obligated to provide such increase in its Commitment and the determination to
increase the Commitment of a Lender shall be within the sole and absolute
discretion of such Lender.  If the aggregate amount of the increases
in the Commitments received from the Lenders does not equal or exceed the amount
of the increase in the Maximum Credit requested by Administrative Borrower,
Agent may seek additional increases from Lenders or Commitments from such
Eligible Transferees as it may determine, after consultation with Administrative
Borrower.  In the event Lenders (or Lenders and any such Eligible
Transferees, as the case may be) have committed in writing to provide increases
in their Commitments or new Commitments in an aggregate amount in excess of the
increase in the Maximum Credit requested by Borrowers or permitted hereunder,
Agent shall then have the right to allocate such commitments, first to Lenders
and then to Eligible Transferees, in such amounts and manner as Agent may
determine, after consultation with Administrative
Borrower.  Additional Commitments for the Incremental Facility shall
be on the same terms and conditions as the Commitments on the date hereof for
Revolving Loans.

         

        (c)  The
Maximum Credit shall be increased by the amount of the increase in Commitments
from Lenders or new Commitments from Eligible Transferees, with corresponding
increases in either or both of the US Loan Limit and UK Loan Limit, in each case
as selected in accordance with Section 2.5(a) above, for which Agent has
received Assignment and Acceptances forty-five (45) days after the date of the
request by Administrative Borrower for the increase or such earlier date as
Agent and Administrative Borrower may agree (but subject to the satisfaction of
the conditions set forth below), whether or not the aggregate amount of the
increase in Commitments and new Commitments, as the case may be, equal or exceed
the amount of the increase in the Maximum Credit requested by Administrative
Borrower in accordance with the terms hereof, effective on the date that each of
the following conditions have been satisfied:

         

        (d)  Agent
shall have received from each Lender or Eligible Transferee that is providing an
additional Commitment as part of the increase in the Maximum Credit, an
Assignment and Acceptance duly executed by such Lender or Eligible Transferee
and each Borrower, provided, that, the aggregate
Commitments set forth in such Assignment and Acceptance(s) shall be not less
than $10,000,000, or such lesser amount as Agent may agree;

         

        (e)  the
conditions precedent to the making of Revolving Loans set forth in Section 4.2
shall be satisfied as of the date of the increase in the Maximum Credit, both
before and after giving effect to such increase;

         

        (f)  Agent,
at its option, shall have received an opinion of counsel to Borrowers in form
and substance and from counsel reasonably satisfactory to Agent and Lenders
addressing such matters as Agent may reasonably request (including an opinion as
to no conflicts with other Indebtedness and a non-contravention opinion as to
other documents and Indebtedness);

         

        
          
            
            

          

          
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        (g)  such
increase in the Maximum Credit on the date of the effectiveness thereof shall
not violate any applicable law, regulation or order or decree of any court or
other Governmental Authority and shall not be enjoined, temporarily,
preliminarily or permanently;

         

        (h)  there
shall have been paid to each Lender and Eligible Transferee providing an
additional Commitment in connection with such increase in the Maximum Credit all
fees and expenses arising under or related to this Agreement that are due and
payable to such Person on or before the effectiveness of such increase;
and

         

        (i)  as
of the effective date of any such increase in the Maximum Credit, each reference
to the term Maximum Credit (and US Loan Limit, UK Loan Limit, UK Tranche A Loan
Limit and UK Tranche B Loan Limit, as the case may be) herein, and in any of the
other Loan Documents shall be deemed amended to mean the amount of the Maximum
Credit (and US Loan Limit UK Loan Limit, UK Tranche A Loan Limit and UK Tranche
B Loan Limit, as the case may be) specified in the most recent written notice
from Agent to Administrative Borrower of the increase in the Maximum Credit (and
US Loan Limit UK Loan Limit, UK Tranche A Loan Limit and UK Tranche B Loan
Limit, as the case may be).

         

        (j)  Effective
on the date of each increase in the Maximum Credit pursuant to this Section 2.5,
each reference in this Agreement to an amount of Covenant Excess Availability or
Consolidated Excess Availability, shall, automatically and without any further
action, be deemed to be increased so that the ratio of each amount of Covenant
Excess Availability or Consolidated Excess Availability to the amount of the
Maximum Credit after such increase in the Maximum Credit remains the same as the
ratio of such the amount of Covenant Excess Availability or Consolidated Excess
Availability, to the amount of the Maximum Credit prior to such increase in the
Maximum Credit.

         

        (k)  
Following the effective date of any increase in the Maximum Credit pursuant to
this Section, Agent shall provide notice thereof to Lenders, and at Agent’s
option, Borrowers, Guarantors and Agent shall enter into an amendment to this
Agreement providing for such increase in the Maximum Credit and the increases in
the Excess Availability thresholds set forth in Section 2.5(j) hereof, and Agent
is hereby authorized to enter into such amendment on behalf of
Lenders.

         

        2.6    Mandatory
Prepayments.

         

        (a)  In
the event that (i) the aggregate principal amount of the Loans and the Letter of
Credit Obligations outstanding at any time exceeds the lesser of the Borrowing
Base or the Maximum Credit at such time, (ii) the aggregate principal amount of
the US Loans and US Letter of Credit Obligations outstanding at any time to US
Borrowers exceeds the lesser of the US Borrowing Base or the US Loan Limit at
such time, (iii) the aggregate principal amount of the UK Loans and UK Letter of
Credit Obligations outstanding at any time to UK Borrowers exceeds the lesser of
the UK Borrowing Base or the UK Loan Limit at such time, (iv) the aggregate
principal amount of the UK Tranche A Loans and UK Tranche A Letter of Credit
Obligations outstanding at any time to UK Borrowers exceed the lesser of the UK
Tranche A Borrowing Base or UK Tranche A Loan Limit, (v) the aggregate principal
amount of the UK Tranche B Loans and UK Tranche B Letter of Credit Obligations
outstanding at any time to UK Borrowers exceeds the lesser of the UK Tranche B
Borrowing Base or UK Tranche B Loan Limit, (vi) the aggregate principal amount
of the US Loans and US Letter of Credit Obligations outstanding at any time to
US Borrowers based on the Eligible Inventory of US Borrowers exceeds the US
Inventory Loan Limit, (vii) the aggregate face amount of the US Letter of Credit
Obligations outstanding at any time exceeds the US Letter of Credit Limit at
such time, (viii) the aggregate face amount of the UK Letter of Credit
Obligations outstanding at any time exceeds the UK Letter of Credit Limit at
such time, (ix) the aggregate face amount of the UK Tranche A Letter of Credit
Obligations outstanding at any time exceeds the UK Tranche A Letter of Credit
Limit at such time, (x) the aggregate face amount of the UK Tranche B Letter of
Credit Obligations outstanding at any time exceeds the UK Tranche B Letter of
Credit Limit at such time, (xi) the aggregate face amount of the UK Letter of
Credit Obligations outstanding at any time exceeds the UK Letter of Credit Limit
at such time, (xii) the aggregate principal amount of US Swing Line Loans
outstanding at any time exceeds the US Swing Line Loan Limit at such time,
(xiii) the aggregate principal amount of UK Swing Line Loans outstanding at any
time exceeds the UK Swing Line Loan Limit at such time, (xiv) the aggregate
principal amount of the US Loans and UK Loans and US Letter of Credit
Obligations and UK Letter of Credit Obligations outstanding at any time exceeds
the lesser of (A) the sum of the UK Borrowing Base and the US Borrowing Base or
(B) the Maximum Credit, or (xv) the aggregate face amount of UK Letter of Credit
Obligations and US Letter of Credit Obligations outstanding at any time exceeds
the Letter of Credit Limit, such event shall not limit, waive or otherwise
affect any rights of Agent or Lenders in such circumstances or on any future
occasions and US Borrowers and/or UK Borrowers, as the case may be, shall, upon
demand by Agent, which may be made at any time or from time to time, immediately
repay to Agent the entire amount of any such excess(es) for which payment is
demanded.

         

        
          
            
            

          

          
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        (b)  Upon
any Permitted Disposition with respect to the issuance or sale of any Equity
Interests by Parent or any of its Subsidiaries (other than as permitted under
clause (d) of the definition of Permitted Dispositions), at any time that a Cash
Dominion Event has occurred and is continuing, applicable Borrowers shall,
absolutely and unconditionally without notice or demand, repay the outstanding
Obligations in an amount equal to one hundred (100%) percent of the Net Cash
Proceeds payable to or for the benefit of such Person in connection with such
Permitted Disposition.

         

        (c)  Upon
the incurrence of any Indebtedness permitted under Sections 10.3(h) and (k)
hereof at any time that a Cash Dominion Event has occurred and is continuing,
applicable Borrowers shall, absolutely and unconditionally without notice or
demand, repay the outstanding Obligations in an amount equal to one hundred
(100%) percent of the Net Cash Proceeds payable to or for the benefit of
Borrowers and Guarantors in connection with the incurrence of such
Indebtedness.

         

        (d)  Upon
the receipt of any amounts as loss payee under any property insurance maintained
by Parent and its Subsidiaries, at any time that a Cash Dominion Event has
occurred and is continuing, applicable Borrowers shall, absolutely and
unconditionally without notice or demand, repay the outstanding Obligations in
an amount equal to one hundred (100%) percent of the Net Cash Proceeds payable
to or for the benefit of such Person in connection therewith, which amounts may
be reborrowed in accordance with the terms of this Agreement.

         

        (e)  All
payments required to be made pursuant to any subsection of this Section 2.6
shall be in addition to any other payments required to be made pursuant to any
other subsection of this Section 2.6.

         

        (f)  All
amounts received by Agent pursuant to this Section 2.6 shall be applied by Agent
to the Obligations, whether or not then due, in accordance with Section 6.7
hereof.  There shall be no permanent reduction in the Commitments as a
result of any prepayments of the Loans pursuant to this Section
2.6.

         

        2.7    Optional
Prepayments.  Borrowers
may prepay without penalty or premium the principal of any Revolving Loan or
Swing Line Loan, in whole or in part, subject to Section 6.7 hereof and
Section 16.1(c) hereof.

         

        
          
            
            

          

          
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        2.8     Joint and Several Liability
of US Borrowers.

         

        (a)  Notwithstanding
anything in this Agreement or any other Loan Documents to the contrary, each US
Borrower, jointly and severally, in consideration of the financial
accommodations to be provided by Agent and Lenders under this Agreement and the
other Loan Documents, for the mutual benefit, directly and indirectly, of each
US Borrower and in consideration of the undertakings of the other US Borrowers
to accept joint and several liability for the Obligations of US Borrowers,
hereby irrevocably and unconditionally accepts, not merely as a surety but also
as a co-debtor, joint and several liability with the other US Borrowers, with
respect to the payment and performance of all of the Obligations, it being the
intention of the parties hereto that all of the Obligations of US Borrowers
shall be the joint and several obligations of each US Borrower without
preferences or distinction among them.  US Borrowers shall be liable
for all amounts due to Agent and Lenders under this Agreement, regardless of
which US Borrower actually receives the Loans or Letter of Credit Obligations
hereunder or the amount of such Revolving Loans received or the manner in which
Agent or any Lender accounts for such Loans, Letter of Credit Obligations or
other extensions of credit on its books and records.  The Obligations
of US Borrowers with respect to Revolving Loans made to one of them, and the
Obligations arising as a result of the joint and several liability of one of the
US Borrowers hereunder with respect to Revolving Loans made to the other of the
US Borrowers hereunder, shall be separate and distinct obligations, but all such
other Obligations shall be primary obligations of all US Borrowers.

         

        (b)  If
and to the extent that any US Borrower shall fail to make any payment with
respect to any of the Obligations of US Borrowers as and when due or to perform
any of the Obligations of US Borrowers in accordance with the terms thereof,
then in each such event, the other US Borrowers will make such payment with
respect to, or perform, such Obligation.

         

        (c)  Except
as otherwise expressly provided herein, to the extent permitted by law, each US
Borrower (in its capacity as a joint and several obligor in respect of the
obligations of the other US Borrower) hereby waives notice of acceptance of its
joint and several liability, notice of occurrence of any Event of Default
(except to the extent notice is expressly required to be given pursuant to the
terms of this Agreement), or of any demand for any payment under this Agreement
or the other Loan Documents, notice of any action at any time taken or omitted
by Agent or any Lender under or in respect of any of the obligations hereunder,
any requirement of diligence and, generally, all demands, notices and other
formalities of every kind in connection with this Agreement and the other Loan
Documents. Each US Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations
of US Borrowers, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by Agent or any Lender at any time or
times in respect of any default by the other US Borrowers in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by Agent or any Lender in respect of
any of the obligations hereunder, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
such obligations or the addition, substitution or release, in whole or in part,
of the other US Borrowers. Without limiting the generality of the foregoing,
each US Borrower (in its capacity as a joint and several obligor in respect of
the obligations of the other US Borrower) assents to any other action or delay
in acting or any failure to act on the part of Agent or any Lender, including,
without limitation, any failure strictly or diligently to assert any right or to
pursue any remedy or to comply fully with applicable laws or regulations
thereunder which might, but for the provisions of this Section 2.8, afford
grounds for terminating, discharging or relieving such US Borrower, in whole or
in part, from any of its obligations under this Section 2.8, it being the
intention of each US Borrower that, so long as any of the Obligations of US
Borrowers hereunder remain unsatisfied, the obligations of such US Borrower
under this Section 2.8 shall not be discharged except by performance and then
only to the extent of such performance.  The obligations of each US
Borrower under this Section 2.8 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any US
Borrower.  The joint and several liability of the US Borrowers
hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any US Borrower or any of the
Lenders.

         

        
          
            
            

          

          
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        (d)  The
provisions of this Section 2.8 hereof are made for the benefit of the Lenders
and their successors and assigns, and subject to Section 14.3 hereof, may be
enforced by them from time to time against any US Borrower as often as occasion
therefor may arise and without requirement on the part of Agent or any Lender
first to marshal any of its claims or to exercise any of its rights against the
other US Borrowers or to exhaust any remedies available to it against the other
US Borrowers or to resort to any other source or means of obtaining payment of
any of the Obligations of US Borrowers hereunder or to elect any other
remedy.  The provisions of this Section 2.8 shall remain in effect
until all the Obligations of US Borrowers shall have been paid in full or
otherwise fully satisfied (other than indemnities and contingent Obligations of
US Borrowers which have not yet accrued). If at any time, any payment, or any
part thereof, made in respect of any of the Obligations of US Borrowers is
rescinded or must otherwise be restored or returned by Agent or any Lender upon
the insolvency, bankruptcy or reorganization of any US Borrower, or otherwise,
the provisions of this Section 2.8 hereof will forthwith be reinstated and in
effect as though such payment had not been made.

         

        (e)  Notwithstanding
any provision to the contrary contained herein or in any of the other Loan
Documents, to the extent the obligations of a US Borrower shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers) then the obligations of such US Borrower hereunder
shall be limited to the maximum amount that is permissible under applicable law
(whether federal, state or provincial and including, without limitation, the
Bankruptcy Code and insolvency laws of the United Kingdom (including the
Insolvency Act 1986 of England and Wales, the Enterprise Act 2002 of England and
Wales and the Companies Act 1985 of England and Wales).

         

        (f)  With
respect to the Obligations arising as a result of the joint and several
liability of US Borrowers hereunder with respect to Loans, Letter of Credit
Obligations or other extensions of credit made to the other US Borrowers
hereunder, each US Borrower waives, until the Obligations of US Borrowers shall
have been paid in full (other than indemnities and contingent Obligations of US
Borrowers which have not yet accrued) and this Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy which
Agent or any Lender now has or may hereafter have against any US Borrower, any
endorser or any guarantor of all or any part of the Obligations of US Borrowers,
and any benefit of, and any right to participate in, any security or collateral
given to Agent or any Lender.  Any claim which any US Borrower may
have against any other US Borrower with respect to any payments to Agent or
Lenders hereunder or under any of the other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations of US Borrowers arising hereunder or thereunder, to
the prior payment in full in cash of the Obligations of US
Borrowers.  Upon the occurrence of any Event of Default and for so
long as the same is continuing, Agent and Lenders may proceed directly and at
once, without notice (to the extent notice is waivable under applicable law),
against (i) with respect to Obligations of US Borrowers, either or both of them
or (ii) with respect to Obligations of any US Borrower, to collect and recover
the full amount, or any portion of the applicable Obligations, without first
proceeding against the other applicable US Borrowers or any other Person, or
against any security or collateral for the Obligations of US
Borrowers.  Each US Borrower consents and agrees that Agent and
Lenders shall be under no obligation to marshal any assets in favor of US
Borrower(s) or against or in payment of any or all of the Obligations of US
Borrowers.

         

        
          
            
            

          

          
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        2.9     Joint and Several Liability
of UK Borrowers.

         

        (a)  Notwithstanding
anything in this Agreement or any other Loan Documents to the contrary, each UK
Borrower, jointly and severally, in consideration of the financial
accommodations to be provided by Agent and Lenders under this Agreement and the
other Loan Documents, for the mutual benefit, directly and indirectly, of each
UK Borrower and in consideration of the undertakings of the other UK Borrowers
to accept joint and several liability for the Obligations of UK Borrowers,
hereby irrevocably and unconditionally accepts, not merely as a surety but also
as a co-debtor, joint and several liability with the other UK Borrowers, with
respect to the payment and performance of all of the Obligations of UK
Borrowers, it being the intention of the parties hereto that all of the
Obligations of UK Borrowers shall be the joint and several obligations of each
UK Borrower without preferences or distinction among them.  UK
Borrowers shall be liable for all amounts due to Agent and Lenders under this
Agreement, regardless of which UK Borrower actually receives the Loans or Letter
of Credit Obligations hereunder or the amount of such Revolving Loans received
or the manner in which Agent or any Lender accounts for such Loans, Letter of
Credit Obligations or other extensions of credit on its books and
records.  The Obligations with respect to Revolving Loans made to one
of them, and the Obligations arising as a result of the joint and several
liability of one of the UK Borrowers hereunder with respect to Revolving Loans
made to the other of the UK Borrowers hereunder, shall be separate and distinct
obligations, but all such other Obligations shall be primary obligations of all
UK Borrowers.

         

        (b)  If
and to the extent that any UK Borrower shall fail to make any payment with
respect to any of the Obligations of UK Borrowers as and when due or to perform
any of the Obligations of UK Borrowers in accordance with the terms thereof,
then in each such event, the other UK Borrowers will make such payment with
respect to, or perform, such Obligation.

         

        (c)  Except
as otherwise expressly provided herein, to the extent permitted by law, each UK
Borrower (in its capacity as a joint and several obligor in respect of the
obligations of the other UK Borrower) hereby waives notice of acceptance of its
joint and several liability, notice of occurrence of any Event of Default
(except to the extent notice is expressly required to be given pursuant to the
terms of this Agreement), or of any demand for any payment under this Agreement
or the other Loan Documents, notice of any action at any time taken or omitted
by Agent or any Lender under or in respect of any of the obligations hereunder,
any requirement of diligence and, generally, all demands, notices and other
formalities of every kind in connection with this Agreement and the other Loan
Documents. Each UK Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations
of UK Borrowers, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by Agent or any Lender at any time or
times in respect of any default by the other UK Borrowers in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by Agent or any Lender in respect of
any of the obligations hereunder, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
such obligations or the addition, substitution or release, in whole or in part,
of the other UK Borrowers. Without limiting the generality of the foregoing,
each UK Borrower (in its capacity as a joint and several obligor in respect of
the obligations of the other UK Borrower) assents to any other action or delay
in acting or any failure to act on the part of Agent or any Lender, including,
without limitation, any failure strictly or diligently to assert any right or to
pursue any remedy or to comply fully with applicable laws or regulations
thereunder which might, but for the provisions of this Section 2.9, afford
grounds for terminating, discharging or relieving such UK Borrower, in whole or
in part, from any of its obligations under this Section 2.9, it being the
intention of each UK Borrower that, so long as any of the Obligations of UK
Borrowers hereunder remain unsatisfied, the obligations of such UK Borrower
under this Section 2.9 shall not be discharged except by performance and then
only to the extent of such performance.  The obligations of each UK
Borrower under this Section 2.9 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any UK
Borrower.  The joint and several liability of the UK Borrowers
hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any UK Borrower or any of the
Lenders.

         

        
          
            
            

          

          
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        (d)  The
provisions of this Section 2.9 hereof are made for the benefit of the Lenders
and their successors and assigns, and subject to Section 14.3 hereof, may be
enforced by them from time to time against any UK Borrower as often as occasion
therefor may arise and without requirement on the part of Agent or any Lender
first to marshal any of its claims or to exercise any of its rights against the
other UK Borrowers or to exhaust any remedies available to it against the other
UK Borrowers or to resort to any other source or means of obtaining payment of
any of the Obligations of UK Borrowers hereunder or to elect any other
remedy.  The provisions of this Section 2.9 shall remain in effect
until all the Obligations of UK Borrowers shall have been paid in full or
otherwise fully satisfied (other than indemnities and contingent Obligations of
UK Borrowers which have not yet accrued). If at any time, any payment, or any
part thereof, made in respect of any of the Obligations of UK Borrowers is
rescinded or must otherwise be restored or returned by Agent or any Lender upon
the insolvency, bankruptcy or reorganization of any UK Borrower, or otherwise,
the provisions of this Section 2.9 hereof will forthwith be reinstated and in
effect as though such payment had not been made.

         

        (e)  With
respect to the Obligations arising as a result of the joint and several
liability of UK Borrowers hereunder with respect to Loans, Letter of Credit
Obligations or other extensions of credit made to the other UK Borrowers
hereunder, each UK Borrower waives, until the Obligations of UK Borrowers shall
have been paid in full (other than indemnities and contingent Obligations of UK
Borrowers which have not yet accrued) and this Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy which
Agent or any Lender now has or may hereafter have against any UK Borrower, any
endorser or any guarantor of all or any part of the Obligations of UK Borrowers,
and any benefit of, and any right to participate in, any security or collateral
given to Agent or any Lender.  Any claim which any UK Borrower may
have against any other UK Borrower with respect to any payments to Agent or
Lenders hereunder or under any of the other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations of UK Borrowers arising hereunder or thereunder, to
the prior payment in full in cash of the Obligations of UK
Borrowers.  Upon the occurrence of any Event of Default and for so
long as the same is continuing, Agent and Lenders may proceed directly and at
once, without notice (to the extent notice is waivable under applicable law),
against (i) with respect to Obligations of UK Borrowers, either or both of them
or (ii) with respect to Obligations of any UK Borrower, to collect and recover
the full amount, or any portion of the applicable Obligations, without first
proceeding against the other applicable UK Borrowers or any other Person, or
against any security or collateral for the Obligations of UK
Borrowers.  Each UK Borrower consents and agrees that Agent and
Lenders shall be under no obligation to marshal any assets in favor of UK
Borrower(s) or against or in payment of any or all of the Obligations of UK
Borrowers.

      

       

      
        2.10  Commitments.  The
aggregate amount of each Lender’s Pro Rata Share of the US Revolving Loans, US
Swing Line Loans, US Letter of Credit Obligations, UK Revolving Loans, UK Swing
Line Loans, and UK Letter of Credit Obligations shall not exceed the amount of
such Lender’s Commitment, as the same may from time to time be amended in
accordance with the provisions hereof.

         

        2.11  Reserves.  Agent
may at any time and from time to time establish and increase or decrease
Reserves.

         

        SECTION
3.     INTEREST AND FEES

         

        3.1    Interest.

         

        (a)  US
Borrowers shall pay to Agent interest on the outstanding principal amount of the
US Loans at the Interest Rate.  UK Borrowers shall pay to Agent
interest on the outstanding principal amount of the UK Loans at the Interest
Rate.  All interest accruing hereunder on and after the date of any
Event of Default or termination hereof shall be payable on demand.

         

        
          
            
            

          

          
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        (b)  Each
Borrower (or Administrative Borrower on behalf of such Borrower) may from time
to time request Eurodollar Rate Loans or may
request that Base Rate Loans be converted to Eurodollar Rate Loans or
that any existing Eurodollar Rate Loans continue for an additional Interest
Period.  Such request from a Borrower (or Administrative Borrower on
behalf of such Borrower) shall specify the amount of the Eurodollar Rate Loans
or the amount of the Base Rate Loans to be converted to Eurodollar Rate Loans or
the amount of the Eurodollar Rate Loans to be continued (subject to the limits
set forth below) and the Interest Period to be applicable to such Eurodollar
Rate Loans (and if it does not specify an Interest Period, the Interest Period
shall be deemed to be a one (1) month period).  Subject to the terms
and conditions contained herein, three (3) Business Days after receipt by Agent
of such a request from a Borrower (or Administrative Borrower on behalf of such
Borrower), which may be telephonic (and
followed by a confirmation in writing if requested by Agent), such Eurodollar Rate Loans shall be made or Base
Rate Loans shall be converted to Eurodollar Rate Loans or such Eurodollar Rate
Loans shall continue, as the case may be;
provided, that, (i) no Default
or Event of Default shall exist or have occurred and be continuing, (ii) no
Borrower (or Administrative Borrower on behalf of such Borrower) shall have sent
any notice of termination of this Agreement, (iii) such Borrower (or
Administrative Borrower on behalf of such Borrower) shall have complied with
such customary procedures as are established by Agent and specified by Agent to
a Borrower (or Administrative Borrower on behalf of such Borrower) from time to
time for requests by a Borrower for Eurodollar Rate Loans, (iv) no more than
eight (8) Interest Periods may be in effect at any one time, (v) the aggregate
amount of the Eurodollar Rate Loans must be in an amount not less than
$1,000,000 or an integral multiple of $500,000 in excess thereof, and (vi) Agent
shall have determined that the Interest Period or Adjusted Eurodollar Rate is
available to Agent and each Lender and can
be readily determined as of the date of the request for such Eurodollar Rate
Loan by such Borrower.  Any
request by or on behalf of a Borrower for Eurodollar Rate Loans or to
convert Base Rate Loans to Eurodollar
Rate Loans or to continue any existing Eurodollar Rate Loans shall be
irrevocable.  Notwithstanding anything to the contrary contained
herein, Agent shall not be required to purchase United States Dollar deposits in
the London interbank market or other applicable Eurodollar Rate market to fund
any Eurodollar Rate Loans, but the provisions hereof shall be deemed to apply as
if Agent had purchased such deposits to fund the Eurodollar Rate
Loans.

         

        (c)  Any
Eurodollar Rate Loans shall automatically convert to Base Rate Loans, as applicable, upon the last day of the
applicable Interest Period, unless Agent has received and approved a request to
continue such Eurodollar Rate Loan at least three (3) Business Days prior to
such last day in accordance with the terms hereof and US Borrower is entitled to
such Eurodollar Rate Loan under the terms hereof.  Any Eurodollar Rate
Loans shall, at Agent’s option, upon notice by Agent to Borrower (or
Administrative Borrower on behalf of such Borrower), be subsequently converted
to Base Rate Loans in the event that this Agreement shall terminate or not be
renewed.  Borrowers shall pay to Agent, upon demand by Agent (or Agent
may, at its option, charge any loan account of any Borrower) any amounts
required to compensate any Lender or Participant for any loss (including loss of
anticipated profits), cost or expense incurred by such person, as a result of
the conversion of Eurodollar Rate Loans to Base Rate Loans pursuant to any of
the foregoing as provided herein.

         

        (d)  Interest
shall be payable by Borrowers to Agent, for the
account of Lenders, (A) monthly in arrears not later than the first day
of each calendar month in respect of Base Rate Loans and (B) on the last day of
each Interest Period in the case of Eurodollar Rate Loans and shall be
calculated on the basis of (i) in the case of Eurodollar Rate Loans a three
hundred sixty (360) day year, and (ii) in the case of
Base Rate Loans, a three hundred
and sixty-five (365) or three hundred
and sixty-six (366) day year, as applicable, and in each case based on actual days
elapsed.  The interest rate on non-contingent Obligations (other than
Eurodollar Rate Loans) shall increase or decrease by an amount equal to each
increase or decrease in the Base Rate, as
applicable, effective on the date any change in such Base Rate is
effective.  In no event shall charges constituting interest payable by
Borrowers to Agent exceed the Maximum Interest Rate and if any such part or
provision of this Agreement is in contravention of any such law or regulation,
such part or provision shall be deemed amended to conform thereto.

         

        
          
            
            

          

          
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        3.2   
 Fees.

         

        (a)  Borrowers
shall pay to Agent, for the account of Lenders, monthly an unused line fee at a
rate equal to the applicable rate (on a per annum basis) determined as provided
below calculated upon the average daily principal balance of the outstanding
Loans and Letter of Credit Obligations during the immediately preceding month
(or part thereof) so long as any Obligations are outstanding.  Such
fees shall be payable on the first Business Day of each month in arrears and
calculated based on a three hundred sixty (360) day year and actual days
elapsed.  Such percentages shall be increased or decreased, as the
case may be, to the applicable percentage (on a per annum basis) set forth below
based on the average daily principal balance of the outstanding Loans and Letter
of Credit Obligations during the immediately preceding month (or part thereof)
for the immediately preceding thirty (30) day period (the “Average Usage”)
commencing on the first day of the month immediately preceding such
date:

         

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  Tier

                                                	 	
                                                  Average Usage

                                                	 	
                                                  Unused
      Line

                                                  Fee

                                                	 
	
                                                  1

                                                	 	
                                                  Less
      than $35,000,000

                                                	 	 	.75	%
	
                                                  2

                                                	 	
                                                  Greater
      than or equal to $35,000,000

                                                	 	 	.50	%

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

         

        provided, that, (i) the
applicable percentage shall be calculated and established once each month and
shall remain in effect until adjusted thereafter after the end of such month,
and (ii) notwithstanding anything to the contrary contained herein, the
applicable percentage through June 30, 2010 shall be the amount for Tier1 set
forth above.

         

        (b)  Borrowers
shall pay to Agent, for the benefit of Lenders, monthly, a fee calculated at a
rate per annum equal to then Applicable Margin for Eurodollar Rate Loans on the
average daily outstanding balance of Letters of Credit for the immediately
preceding one month period (or part thereof), payable in arrears as of the first
day of each month (with the first such fee payable on June 30, 2010), computed
for each day from the date of issuance to the date of expiration; provided, that, Borrowers
shall, at Agent’s option or at the written direction of the Required Lenders,
pay such fees at a rate two (2%) percent greater than such rate on such average
daily maximum amount for:  (i) the period from and after the date of
termination hereof until Lenders have received full and final payment of all
Obligations (notwithstanding entry of a judgment against any Borrower or
Guarantor) and (ii) the period from and after the date of the occurrence of an
Event of Default for so long as such Event of Default exists or has occurred and
is continuing.  Such letter of credit fees shall be calculated on the
basis of a three hundred sixty (360) day year and actual days elapsed and the
obligation of Borrowers to pay such fee shall survive the termination or
non-renewal of this Agreement.  In addition to the letter of credit
fees provided above, each Borrower shall pay to the applicable Issuing Bank for
its own account (without sharing with Lenders) the letter of credit fronting fee
of one-half of one (.50%) percent per annum and the other customary charges from
time to time of such Issuing Bank with respect to the issuance, amendment,
transfer, administration, cancellation and conversion of, and drawings under,
such Letters of Credit.

         

        (c)  Borrowers
shall pay to Agent, for its own account and the account of the Lenders (in
accordance with the arrangements among Agent and Lenders), the other fees set
forth in the Fee Letter in the amounts and at the times specified
therein.  To the extent payment in full of the applicable fee is
received by Agent from or on behalf of Borrowers on or about the date hereof,
Agent shall pay to each Lender its share of such fees in accordance with the
terms of the agreements between Agent and such Lender.

         

        
          
            
            

          

          
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        3.3   
 Inability to
Determine Applicable Interest Rate.  If
Agent shall determine (which determination shall, absent manifest error, be
final and conclusive and binding on all parties hereto) that on any date by
reason of circumstances affecting the London interbank market adequate and fair
means do not exist for ascertaining the interest rate applicable to Eurodollar
Rate Loans, Agent shall on such date give notice to Administrative Borrower and
each Lender of such determination.  Upon such date no Loans may be
made as, or converted to, Eurodollar Rate Loans until such time as Agent
notifies Administrative Borrower and Lenders that the circumstances giving rise
to such notice no longer exist and any request for Eurodollar Rate Loans
received by Agent shall be deemed to be a request, or a continuation or
conversion, for or into Base Rate Loans.

         

        3.4 
   Illegality.  Notwithstanding
anything to the contrary contained herein, if (a) any change in any law or
interpretation thereof by any Governmental Authority makes it unlawful for a
Lender to make or maintain a Eurodollar Rate Loan or to maintain any Commitment
with respect to a Eurodollar Rate Loan or (b) a Lender determines (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) has become impracticable as a result of a circumstance
that adversely affects the London interbank market or the position of such
Lender in such market, then such Lender shall give notice thereof to Agent and
Administrative Borrower and may (i) declare that Eurodollar Rate Loans will not
thereafter be made by such Lender, such that any request for a Eurodollar Rate
Loans from such Lender shall be deemed to be a request for a Base Rate Loan
unless such Lender’s declaration has been withdrawn (and it shall be withdrawn
promptly upon the cessation of the circumstances described in clause (a) or (b)
above and (ii) require that all outstanding Eurodollar Rate Loans made by such
Lender be converted to Base Rate Loans immediately, in which event all
outstanding Eurodollar Rate Loans of such Lender shall be so
converted.  Borrowers shall jointly and severally indemnify Agent and
Lenders and hold Agent and Lenders harmless from any loss or expense which Agent
or any Lender may sustain or incur as a consequence of a default by any Borrower
in making a borrowing of or conversion into Eurodollar Rate Loans after any
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement (except, that, UK Loan Parties and Singapore Loan
Parties shall not indemnify Agent and Lenders with respect to such losses and
expenses directly relating to US Loans).  This covenant shall survive
the termination or non-renewal of this Agreement and the payment of the
Obligations.

         

        3.5   
 Increased
Costs.  If
any Change in Law shall: (a) impose, modify or deem applicable any reserve,
special deposit, compulsory loan, insurance charge or similar requirement
against assets of, deposits with or for the account of, or credit extended or
participated in by, any Lender or the Issuing Bank; (b) subject any Lender or
Issuing Bank to any tax of any kind whatsoever with respect to this Agreement,
any Letter of Credit, any participation in a Letter of Credit or any Eurodollar
Rate Loan made by it, or change the basis of taxation of payments to such Lender
or the Issuing Bank in respect thereof (except for Taxes or Other Taxes covered
by Section 6.8 and the imposition of, or any change in the rate of, any
taxes payable by such Lender or the Issuing Bank described in Sections 6.8(a)(i)
and (ii)); or (c) impose on any Lender or Issuing Bank or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurodollar Rate Loans made by such Lender or any Letter of Credit or
participation therein, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Rate
Loan (or of maintaining its obligation to make any such Loan), or to increase
the cost to such Lender or Issuing Bank of participating in, issuing or
maintaining any Letter of Credit (or of maintaining its obligation to
participate in or to issue any Letter of Credit), or to reduce the amount of any
sum received or receivable by such Lender or Issuing Bank hereunder (whether of
principal, interest or any other amount) then, upon request of such Lender or
Issuing Bank, Borrowers will pay to such Lender or Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.

         

        
          
            
            

          

          
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        3.6   
  Capital
Requirements.  If
any Lender or Issuing Bank determines that any Change in Law affecting such
Lender or the Issuing Bank or any lending office of such Lender or such Lender’s
or Issuing Bank’s holding company, if any, regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s or Issuing
Bank’s capital or on the capital of such Lender’s or Issuing Bank’s holding
company, if any, as a consequence of this Agreement, the Commitments of such
Lender or the Loans made by, or participations in Letters of Credit held by,
such Lender, or the Letters of Credit issued by the applicable Issuing Bank, to
a level below that which such Lender or Issuing Bank or such Lender’s or Issuing
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or Issuing Bank’s policies and the policies of
such Lender’s or Issuing Bank’s holding company with respect to capital
adequacy), then from time to time Borrowers will pay to such Lender or Issuing
Bank, as the case may be, such additional amount or amounts as will compensate
such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company
for any such reduction suffered.

         

        3.7     Certificates for
Reimbursement.  A
certificate of a Lender or Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or Issuing Bank or its holding company, as
the case may be, as specified in Sections 3.5 or 3.6 and delivered to
Administrative Borrower shall be conclusive absent manifest
error.  Borrowers shall pay such Lender or Issuing Bank, as the case
may be, the amount shown as due on any such certificate within fifteen (15) days
after receipt thereof.

         

        3.8  
  Delay in
Requests.  Failure
or delay on the part of any Lender or Issuing Bank to demand compensation
pursuant to Sections 3.5 or 3.6 shall not constitute a waiver of such Lender’s
or Issuing Bank’s right to demand such compensation; provided, that, Borrowers shall
not be required to compensate a Lender or Issuing Bank pursuant to this
Section for any increased costs incurred or reductions occurring more than
one hundred eighty (180) days prior to the date that such Lender or Issuing
Bank, as the case may be, becomes aware of the event giving rise to such
Lender’s or Issuing Bank’s claim for compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the one hundred eighty (180) day period referred to above shall be extended
to include the period of retroactive effect thereof).

         

        3.9    
Mitigation;
Replacement of Lenders.

         

        (a)  If
any Lender requests compensation under Sections 3.4, 3.5 or Section 3.6, or
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to
Section 6.8, then such Lender shall, if requested by Administrative
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate a different lending office for funding or booking its
Loans hereunder, to assign its rights and obligations hereunder to another of
its offices, branches or affiliates or to take such other actions as such Lender
or Agent determines, if, in the judgment of such Lender, such designation,
assignment or other action (i) would eliminate or reduce amounts payable
pursuant to such Sections in the future and (ii) would not subject Agent or such
Lender to any unreimbursed cost or expense and Agent or such Lender would not
suffer any economic, legal or regulatory disadvantage.  Nothing in
this Section 3.9 shall affect or postpone any of the obligations of
Borrowers or the rights of Agent or such Lender pursuant to this
Section 3.9.  Borrowers hereby agree to pay on demand all
reasonable costs and expenses incurred by Agent or any Lender in connection with
any such designation or assignment.

         

        
          
            
            

          

          
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        (b)  If
any Lender requests compensation under Sections 3.4, 3.5 or Section 3.6 hereof,
if Borrowers are required to pay any additional amount to any Lender or
Governmental Authority pursuant to Section 6.8, then within sixty (60) days
thereafter, Administrative Borrower may, at its sole expense and effort, upon
notice to such Lender and Agent, replace such Lender by requiring such Lender to
assign and delegate (and such Lender shall be obligated to assign and delegate),
without recourse (in accordance with and subject to the restrictions contained
in Section 16.7), all
of its interests, rights and obligations under this Agreement to an Eligible
Transferee that shall assume such obligations; provided, that, (i)
Administrative Borrower has received the prior written consent of Agent and each
Issuing Bank, (ii) such Lender shall have received payment of an amount equal to
the outstanding principal amount of its Loans and participations in Letter of
Credit Obligations and Swing Line Loans that it has funded, if any, accrued
interest thereon, accrued fees and other amounts payable to it hereunder, from
the assignee (to the extent of such outstanding principal) and Administrative
Borrower (in the case of accrued interest, fees and other amounts, including
amounts under Section 3.10), (iii) such assignment will result in a
reduction in such compensation and payments, and (iv) such assignment does not
conflict with applicable laws or regulations.  A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Administrative Borrower to require such assignment and delegation cease to
apply.  Nothing in this Section 3.9 shall impair any rights that
any Borrower or Agent may have against any Lender that is a Defaulting
Lender.

         

        3.10   Funding
Losses.  Borrowers
shall pay to Agent its customary administrative charge and to each Lender all
losses, expenses and liabilities (including any interest paid by such Lender to
Lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and
any loss, expense or liability sustained by such Lender in connection with the
liquidation or redeployment of such) that it sustains (a) if for any reason
(other than a default by such Lender) a borrowing of any Eurodollar Rate Loan
does not occur on a date specified therefor in a request for borrowing, or a
conversion to or continuation of, any Eurodollar Rate Loan does not occur on a
date specific therefor in a request for conversion or continuation, (b) if any
prepayment or other principal payment of or continuation of any of its
Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to such Loan, or (c) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by a Borrower (or on its behalf by Administrative
Borrower).  This covenant shall survive the termination or non-renewal
of this Agreement and the payment of the Obligations.

         

        3.11  
Maximum
Interest.  Notwithstanding
anything to the contrary contained in this Agreement or any of the other Loan
Documents, in no event whatsoever shall the aggregate of all amounts that are
contracted for, charged or received by Agent or any Lender pursuant to the terms
of this Agreement or any of the other Loan Documents and that are deemed
interest under applicable law exceed the Maximum Interest Rate (including, to
the extent applicable, the provisions of Section 5197 of the Revised
Statutes of the United States of America as amended, 12 U.S.C. Section 85,
as amended).  In no event shall any Borrower or Guarantor be obligated
to pay interest or such amounts as may be deemed interest under applicable law
in amounts which exceed the Maximum Interest Rate.  In the event any
Interest is charged or received in excess of the Maximum Interest Rate (the
“Excess”), each Borrower and Guarantor acknowledges and stipulates that any such
charge or receipt shall be the result of an accident and bona fide error, and
that any Excess received by Agent or any Lender shall be applied, first, to the
payment of then outstanding and unpaid principal hereunder; second to the
payment of the other Obligations then outstanding and unpaid; and third,
returned to such Borrower or Guarantor.  All monies paid to Agent or
any Lender hereunder or under any of the other Loan Documents, whether at
maturity or by prepayment, shall be subject to any rebate of unearned interest
as and to the extent required by applicable law. For the purpose of determining
whether or not any Excess has been contracted for, charged or received by Agent
or any Lender, all interest at any time contracted for, charged or received from
any Borrower or Guarantor in connection with this Agreement or any of the other
Loan Documents shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread during the entire term of this Agreement in
accordance with the amounts outstanding from time to time hereunder and the
Maximum Interest Rate from time to time in effect in order to lawfully charge
the maximum amount of interest permitted under applicable laws.  The
provisions of this Section 3.11 shall be deemed to be incorporated into
each of the other Loan Documents (whether or not any provision of this
Section is referred to therein).

         

        
          
            
            

          

          
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        3.12
  No
Requirement of Match Funding.  Notwithstanding
anything to the contrary contained herein, Agent and Lenders shall not be
required to acquire US Dollar deposits in the London interbank market or any
other offshore US Dollar market to fund any Eurodollar Rate Loan or to otherwise
match fund any Obligations as to which interest accrues based on the Adjusted
Eurodollar Rate.  All of the provisions of this Section 3 shall be
deemed to apply as if Agent, each Lender or any Participant had acquired such
deposits to fund any Eurodollar Rate Loan or any other Obligation as to which
interest is accruing at the Adjusted Eurodollar Rate by acquiring such US Dollar
deposits for each Interest Period in the amount of the Eurodollar Rate Loans or
other applicable Obligations.

         

        SECTION
4.     CONDITIONS
PRECEDENT

         

        4.1    
Conditions Precedent
to Initial Loans and Letters of Credit.  The
obligation of Lenders to make the initial Loans or of Issuing Bank to provide
for the initial Letters of Credit hereunder is subject to the satisfaction of,
or waiver of, immediately prior to or concurrently with the making of such Loan
or the issuance of such Letter of Credit of each of the following conditions
precedent:

         

        (a)  Agent
shall have received, in form and substance satisfactory to Agent, all releases,
terminations and such other documents as Agent may request to evidence and
effectuate the termination by the Existing Lenders of their respective financing
arrangements with Borrowers and Guarantors and the termination and release by it
or them, as the case may be, of any interest in and to any assets and properties
of each Borrower and Guarantor, duly authorized, executed and delivered by it or
each of them, including, but not limited to, (i) UCC termination statements for
all UCC financing statements previously filed by it or any of them or their
predecessors, as secured party and any Borrower or Guarantor, as debtor; and
(ii) satisfactions and discharges of any mortgages, deeds of trust or deeds to
secure debt by any Borrower or Guarantor in favor of it or any of them, in form
acceptable for recording with the appropriate Governmental
Authority;

         

        (b)  the
Consolidated Excess Availability as determined by Agent, shall be not less than
$32,000,000 after giving effect to the initial Loans made or to be made and
Letters of Credit issued or to be issued in connection with the initial
transactions hereunder;

         

        (c)  no
material adverse change shall have occurred in the assets, business or prospects
of Borrowers since the date of Agent's latest field examination (not including
for this purpose the field review referred to in clause (d) below) and no change
or event shall have occurred which would impair the ability of any Borrower or
Guarantor to perform its obligations hereunder or under any of the other Loan
Documents to which it is a party or of Agent or any Lender to enforce the
Obligations or realize upon the Collateral;

         

        (d)  Agent
shall have completed a field review of the Records and such other information
with respect to the Collateral as Agent may require to determine the amount of
Loans available to Borrowers (including, without limitation, current perpetual
inventory records and/or roll-forwards of Accounts and Inventory through the
date of closing and test counts of the Inventory in a manner satisfactory to
Agent, together with such supporting documentation as may be necessary or
appropriate, and other documents and information that will enable Agent to
accurately identify and verify the Collateral), the results of which in each
case shall be satisfactory to Agent;

         

        
          
            
            

          

          
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        (e)  Parent
is, and Borrowers and Guarantors, taken as a whole, shall be Solvent after
giving effect to the Credit Facility, and the related transactions to be
effective on the date hereof, and Agent shall have received a certificate, in
form and substance satisfactory to Agent, from Borrowers and Guarantors to such
effect;

         

        (f)  no
material pending litigation or proceeding seeking to enjoin or otherwise limit
or restrict the Credit Facility shall exist;

         

        (g)  Agent
and Lenders shall have received the payment (including by way of Agent’s charge
to a loan account of Borrowers maintained by Agent in accordance with the Fee
Letter) of all fees and expenses required to be paid on the date hereof under
the terms of the Fee Letter and related expense letters;

         

        (h)  Lenders
shall have received, at least five (5) Business Days prior to the date hereof,
or such shorter period following each such Lender’s request for such information
but in any event prior to the date hereof, all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including without
limitation, the Patriot Act and similar statutes;

         

        (i)  Agent
shall have received, in form and substance reasonably satisfactory to Agent, the
Loan Documents and all instruments and documents hereunder and thereunder as
duly authorized, executed and delivered by each of the parties thereto, and
including:

         

        (i)   
 this Agreement and the other security agreements and
guarantees;

         

        (ii)   
the UK Loan Documents and the Singapore Loan Documents;

         

        (iii)  
Agent shall have received and reviewed lien and judgment search results for the
jurisdiction of incorporation of each Borrower and Guarantor (determined in
accordance with the Uniform Commercial Code of the applicable jurisdiction and
any other applicable law), including the United Kingdom and Singapore and any
other jurisdiction in which assets of Borrowers and Guarantors are located,
which search results shall be in form and substance satisfactory to
Agent;

         

        (iv) 
 records of requisite corporate, company or limited liability company
action and proceedings which Agent may have requested in connection therewith,
such documents where requested by Agent or its counsel to be certified by
appropriate corporate officers or Governmental Authority (and including a copy
of the certificate of incorporation of each Borrower and Guarantor certified by
the Secretary of State (or equivalent Governmental Authority) which shall set
forth the same complete corporate name of such Borrower or Guarantor as is set
forth herein and such document as shall set forth the organizational
identification number of each Borrower or Guarantor, if one is issued in its
jurisdiction of incorporation), including with respect to each of the UK Loan
Parties and the Singapore Borrowing Base Guarantors, (A) a certified extract of
the resolutions in writing of the board of directors, (B) a copy of the
unanimous resolutions of the shareholders or the sole shareholder, and (C) a
certificate of director (1) confirming that borrowing or guaranteeing, as
appropriate, the Obligations would not cause any borrowing, guaranteeing or
similar limit binding on it to be exceeded, (2) certifying that each copy
document relating to it specified in this Clause 4.1 is correct, complete and in
full force and effect as at a date no earlier than the date of this Agreement
and (3) accompanied by a specimen of the signature of each person authorized by
the resolutions referred to in (A) and (B) of this sub-paragraph (iv) above and
with respect to each of the UK Loan Parties, a certified copy of its memorandum
and articles of association;;

         

        
          
            
            

          

          
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        (v)  
a borrowing request and a Borrowing Base Certificate setting forth the Loans and
Letters of Credit available to Borrowers as of the date hereof as completed in a
manner reasonably satisfactory to Agent and duly authorized, executed and
delivered on behalf of Borrowers;

         

        (vi)  evidence
of insurance and loss payee endorsements required hereunder and under the other
Loan Documents, and certificates of insurance policies and loss payable
endorsements naming Agent as loss payee;

         

        (j)  the
opinion letters of counsel to Borrowers and Guarantors with respect to the Loan
Documents and the security interests and liens of Agent, for itself and the
benefit of Secured Parties with respect to the Collateral and such other matters
as Agent may request (including opinion letters of US counsel, UK counsel and
Singapore counsel to Borrowers and Guarantors and counsel of such other foreign
or State jurisdictions as Lender may reasonably request);

         

        (k)  Agent
shall have received, in form and substance satisfactory to Agent, all consents,
waivers, acknowledgments and other agreements from third persons which Agent may
deem reasonably necessary or desirable in order to permit, protect and perfect
its security interests in and liens upon the Collateral or to effectuate the
provisions or purposes of this Agreement and the other Loan Documents,
including, without limitation, Collateral Access Agreements;

         

        (l)  Agent
shall have received a copy of each notice required to be dispatched and
acknowledgments from all recipients of such notices as required by Clause 3.3 of
each of the Singapore Debentures;

         

        (m)  Agent
shall have received a certified copy of each notice required to be dispatched
pursuant to the Debenture and acknowledgments from all recipients of such
notices as required by the Debenture or agreement by the relevant recipient of
the form of acknowledgment to be given by it;

         

        (n)  Agent
shall have received a copy of the mandate for each blocked account in the United
Kingdom duly completed (so far as possible) by UK Borrower and evidence
satisfactory to Agent that such blocked accounts have been opened;

         

        (o)  Agent
shall have received all title documents for the Mortgaged Property (as defined
in the Debenture) and a report on title to the Mortgaged Property in form and
substance reasonably satisfactory to Agent;

         

        (p)  Agent
shall have received appropriate Trade Marks Registry, Designs Registry and
Patent office forms duly completed accompanied by all necessary fees to enable
the recordation of the security interests created by the Debenture;

         

        (q)  Agent
shall have received all certificates of registration with respect to all
Specified Intellectual Property (as defined in the Debenture);

         

        (r)  Agent
shall have received all share certificates, updated transfers of the shares
executed in blank and the other documents to be delivered pursuant to Clause 3.2
of each of the Singapore Share Charges;

         

        (s)  Agent
shall have received all share certificates and stock transfer forms to be
delivered pursuant to the Loan Documents;

         

        
          
            
            

          

          
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        (t)  Agent
shall have received, in form and substance reasonably satisfactory to Agent, a
certified copy of the register of members and directors of each UK Borrower and
each other company owned by a UK Borrower;

         

        (u)  Agent
shall have received, in form and substance reasonably satisfactory to Agent,
deeds of release from any existing lenders in respect of any existing security
granted by UK Borrower, with accompanying Forms 403a;

         

        (v)  the
security interests and liens granted to Agent under this Agreement and the other
Loan Documents shall constitute valid and perfected first priority liens,
hypothecs and security interests in and upon the Collateral subject only to the
liens indicated on Schedule 8.4 to the Information Certificate and the other
Permitted Liens;

         

        (w)  Agent
shall have received evidence that the Nippon License Agreement has been extended
through the second anniversary of the date of this Agreement; and

         

        (x)  Borrowers
shall have used commercially reasonable efforts to obtain prior to the date
hereof Deposit Account Control Agreements by and among Agent, each Borrower and
Guarantor, as the case may be, and each bank where such Borrower (or Guarantor)
has a Cash Management Account or a Concentration Account as contemplated by
Section 6.6 hereof, in each case, duly authorized, executed and delivered
by such bank and such Borrower or Guarantor, as the case may be.

         

        Without
limiting the generality of the provisions of Section 14.2 for purposes of
determining compliance with the conditions specified in this Section 4.1,
each Lender that has signed this Agreement shall be deemed to have consented to
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless Agent shall have received notice from such
Lender prior to the date hereof specifying its objection thereto.

         

        4.2  Conditions Precedent to All
Revolving Loans and Letters of Credit.  The
obligation of Lenders to make the Revolving Loans, including the initial Loans,
and the obligation of each Issuing Bank to issue (or amend or extend) any Letter
of Credit, including the initial Letters of Credit, is subject to the further
satisfaction of, or waiver of, immediately prior to or concurrently with the
making of each such Revolving Loan or the issuance of such Letter of Credit of
each of the following conditions precedent:

         

        (a)  all
representations and warranties contained herein and in the other Loan Documents
that are qualified as to materiality or Material Adverse Effect shall be true
and correct and the representations and warranties that are not so qualified
shall be true and correct in all material respects, in each case with the same
effect as though such representations and warranties had been made on and as of
the date of the making of each such Loan or providing (or amending or extending)
each such Letter of Credit and after giving effect thereto, except to the extent
that such representations and warranties expressly relate solely to an earlier
date (in which case such representations and warranties shall have been true and
accurate on and as of such earlier date);

         

        (b)  no
law, regulation, order, judgment, injunction or decree of any Governmental
Authority shall exist, and no material action, suit, investigation, litigation,
proceeding, bankruptcy or insolvency, or claim shall be pending or threatened in
any court or before any arbitrator or Governmental Authority, which (i) purports
to enjoin, prohibit, restrain or otherwise affect the making of such Loans or
providing (amending or extending) such Letters of Credit, or (ii) has or has a
reasonable likelihood of having a Material Adverse Effect; and

         

        
          
            
            

          

          
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        (c)  no
Default or Event of Default shall exist or have occurred and be continuing on
and as of the date of the making of such Loan or providing (or amending or
extending) each such Letter of Credit and after giving effect
thereto;

         

        (d)  with
respect to any Loan, Agent shall have received a request for such Loan as
required by Section 2.4 and with respect to the issuance of any Letter of
Credit, each of Agent and the applicable Issuing Bank shall have received the
request and other documents required under Section 2.3, completed to its
satisfaction, and such other certificates, documents and other papers and
information as Agent and Issuing Bank may reasonably request.

         

        Each
borrowing of Loans by and each Letter of Credit issued, amended or extended on
behalf of any Borrower hereunder shall constitute a representation and warranty
by Borrowers and Guarantors as of the date of such borrowing or such issuance,
amendment or extension that the conditions contained in this Section 4.2 have
been satisfied.

         

        SECTION
5.     GRANT AND PERFECTION OF SECURITY
INTEREST

         

        5.1   
Grant of Security
Interest.  To
secure payment and performance of all Obligations, subject to Section 5.3(b) and
5.3(c) hereof, each Borrower and Guarantor hereby grants to Agent, for itself
and the benefit of the other Secured Parties, a continuing security interest in,
a lien upon, and a right of set off against, and hereby assigns to Agent, for
itself and the benefit of the other Secured Parties, as security, all personal
and real property and fixtures, and interests in property and fixtures of each
Borrower and Guarantor, whether now owned or hereafter acquired or existing, and
wherever located (together with all other collateral security for the
Obligations at any time granted to or held or acquired by Agent or any Lender,
collectively, the “Collateral”), including all of each Borrower’s and
Guarantor’s right, title and interest in and to the following:

         

        (a)  all
Accounts;

         

        (b)  all
general intangibles, including, without limitation, all Intellectual
Property;

         

        (c)  all
goods, including, without limitation, Inventory and Equipment;

         

        (d)  all
Real Property and fixtures;

         

        (e)  all
chattel paper, including, without limitation, all tangible and electronic
chattel paper;

         

        (f)  all
instruments, including, without limitation, all promissory notes;

         

        (g)  all
documents;

         

        (h)  all
deposit accounts;

         

        (i)  all
letters of credit, banker’s acceptances and similar instruments and including
all letter-of-credit rights;

         

        (j)  all
supporting obligations and all present and future liens, security interests,
rights, remedies, title and interest in, to and in respect of Receivables and
other Collateral, including (i) rights and remedies under or relating to
guaranties, contracts of suretyship, letters of credit and credit and other
insurance related to the Collateral, (ii) rights of stoppage in transit,
replevin, repossession, reclamation and other rights and remedies of an unpaid
vendor, lienor or secured party, (iii) goods described in invoices, documents,
contracts or instruments with respect to, or otherwise representing or
evidencing, Receivables or other Collateral, including returned, repossessed and
reclaimed goods, and (iv) deposits by and property of account debtors or other
persons securing the obligations of account debtors;

         

        
          
            
            

          

          
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        (k)  all
(i) investment property (including securities, whether certificated or
uncertificated, securities accounts, security entitlements, commodity contracts
or commodity accounts) and (ii) monies, credit balances, deposits and other
property of any Borrower or Guarantor now or hereafter held or received by or in
transit to Agent, any Lender or its Affiliates or at any other depository or
other institution from or for the account of any Borrower or Guarantor, whether
for safekeeping, pledge, custody, transmission, collection or
otherwise;

         

        (l)  all
commercial tort claims, including, without limitation, those identified in the
Information Certificate;

         

        (m)  to
the extent not otherwise described above, all Receivables;

         

        (n)  all
Records; and

         

        (o)  all
products and proceeds of the foregoing, in any form, including insurance
proceeds and all claims against third parties for loss or damage to or
destruction of or other involuntary conversion of any kind or nature of any or
all of the other Collateral.

         

        5.2  
 Perfection of
Security Interests.

         

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

         

        
          
            
            

          

          
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        (b)  Each
Borrower and Guarantor does not have any chattel paper (whether tangible or
electronic) or instruments as of the date hereof, except as set forth in the
Information Certificate.  In the event that any Borrower or Guarantor
shall be entitled to or shall receive any chattel paper or instrument for
obligations in excess of US Dollar Equivalent of $100,000 in any one case or
which would result in the aggregate amount of all such chattel paper or
instruments to exceed the US Dollar Equivalent of $250,000 after the date
hereof, Borrowers and Guarantors shall promptly notify Agent thereof in
writing.  Promptly upon the receipt thereof by or on behalf of any
Borrower or Guarantor (including by any agent or representative), such Borrower
or Guarantor shall deliver, or cause to be delivered to Agent, all tangible
chattel paper and instruments that such Borrower or Guarantor has or may at any
time acquire, accompanied by such instruments of transfer or assignment duly
executed in blank as Agent may from time to time specify, in each case except as
Agent may otherwise agree.  At Agent’s option, each Borrower and
Guarantor shall, or Agent may at any time on behalf of any Borrower or
Guarantor, cause the original of any such instrument or chattel paper to be
conspicuously marked in a form and manner acceptable to Agent with the following
legend referring to chattel paper or instruments as applicable: “This [chattel
paper][instrument] is subject to the security interest of Wachovia Capital
Finance Corporation (New England) and any sale, transfer, assignment or
encumbrance of this [chattel paper][instrument] violates the rights of such
secured party.”

         

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

         

        (d)  Each
Borrower and Guarantor does not have any deposit accounts as of the date hereof,
except as set forth in Schedule 8.10 of the Information
Certificate.  Borrowers and Guarantors shall not, directly or
indirectly, after the date hereof open, establish or maintain any deposit
account unless each of the following conditions is satisfied: (i) Agent shall
have received not less than five (5) Business Days prior written notice of the
intention of any Borrower or Guarantor to open or establish such account which
notice shall specify in reasonable detail and specificity acceptable to Agent
the name of the account, the owner of the account, the name and address of the
bank at which such account is to be opened or established, the individual at
such bank with whom such Borrower or Guarantor is dealing and the purpose of the
account,  (ii) the bank where such account is opened or maintained
shall be acceptable to Agent, and (iii) on or before the opening of such deposit
account, such Borrower or Guarantor shall deliver to Agent a Deposit Account
Control Agreement with respect to such deposit account duly authorized, executed
and delivered by such Borrower or Guarantor and the bank at which such deposit
account is opened and maintained, except that Borrowers and
Guarantors shall not be required to deliver such Deposit Account Control
Agreements with respect to (A) any deposit accounts where the balance is, and
shall at all times be, less than $100,000, unless Agent shall request such
Deposit Account Control Agreement at any time a Dominion Event exists and only
to the extent that the aggregate amount of funds in all such deposit accounts is
less than $250,000 and (B) any deposit account that is specifically and
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit of any Borrower’s or Guarantor’s salaried
employees, fiduciary trust accounts.

         

        (e)  No
Borrower or Guarantor owns or holds, directly or indirectly, beneficially or as
record owner or both, any investment property, as of the date hereof, or have
any investment account, securities account, commodity account or other similar
account with any bank or other financial institution or other securities
intermediary or commodity intermediary as of the date hereof, in each case
except as set forth in the Information Certificate.

         

        
          
            
            

          

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

         

        (ii)  Borrowers
and Guarantors shall not, directly or indirectly, after the date hereof open,
establish or maintain any investment account, securities account, commodity
account or any other similar account (other than a deposit account in accordance
with Section 6.6 hereof) with any securities intermediary or commodity
intermediary unless each of the following conditions is satisfied: (A) Agent
shall have received not less than five (5) Business Days prior written notice of
the intention of such Borrower or Guarantor to open or establish such account
which notice shall specify in reasonable detail and specificity acceptable to
Agent the name of the account, the owner of the account, the name and address of
the securities intermediary or commodity intermediary at which such account is
to be opened or established, the individual at such intermediary with whom such
Borrower or Guarantor is dealing and the purpose of the account, (B) the
securities intermediary or commodity intermediary (as the case may be) where
such account is opened or maintained shall be acceptable to Agent, and (C) on or
before the opening of such investment account, securities account or other
similar account with a securities intermediary or commodity intermediary, such
Borrower or Guarantor shall execute and deliver, and cause to be executed and
delivered to Agent, an Investment Property Control Agreement with respect
thereto duly authorized, executed and delivered by such Borrower or Guarantor
and such securities intermediary or commodity intermediary.

         

        (f)  Borrowers
and Guarantors are not the beneficiary or otherwise entitled to any right to
payment under any letter of credit, banker’s acceptance or similar instrument as
of the date hereof, except as set forth in the Information
Certificate.  In the event that any Borrower or Guarantor shall be
entitled to or shall receive any right to payment under any letter of credit,
banker’s acceptance or any similar instrument, whether as beneficiary thereof or
otherwise after the date hereof, such Borrower or Guarantor shall promptly
notify Agent thereof in writing.  Such Borrower or Guarantor shall
immediately, as Agent may specify, either (i) deliver, or cause to be delivered
to Agent, with respect to any such letter of credit, banker’s acceptance or
similar instrument, the written agreement of Issuing Bank and any other
nominated person obligated to make any payment in respect thereof (including any
confirming or negotiating bank), in form and substance satisfactory to Agent,
consenting to the assignment of the proceeds of the letter of credit to Agent by
such Borrower or Guarantor and agreeing to make all payments thereon directly to
Agent or as Agent may otherwise direct or (ii) cause Agent to become, at
Borrowers’ expense, the transferee beneficiary of the letter of credit, banker’s
acceptance or similar instrument (as the case may be).

         

        (g)  Borrowers
and Guarantors do not have any commercial tort claims as of the date hereof,
except as set forth in the Information Certificate.  In the event that
any Borrower or Guarantor shall at any time after the date hereof have any
commercial tort claims, such Borrower or Guarantor shall promptly notify Agent
thereof in writing, which notice shall (i) set forth in reasonable detail the
basis for and nature of such commercial tort claim and (ii) include the express
grant by such Borrower or Guarantor to Agent of a security interest in such
commercial tort claim (and the proceeds thereof).  In the event that
such notice does not include such grant of a security interest, the sending
thereof by such Borrower or Guarantor to Agent shall be deemed to constitute
such grant to Agent. Upon the sending of such notice, any commercial tort claim
described therein shall constitute part of the Collateral and shall be deemed
included therein.  Without limiting the authorization of Agent
provided in Section 5.2(a) hereof or otherwise arising by the execution by
such Borrower or Guarantor of this Agreement or any of the other Loan Documents,
Agent is hereby irrevocably authorized from time to time and at any time to file
such financing statements naming Agent or its designee as secured party and such
Borrower or Guarantor as debtor, or any amendments to any financing statements,
covering any such commercial tort claim as Collateral. In addition, each
Borrower and Guarantor shall promptly upon Agent’s request, execute and deliver,
or cause to be executed and delivered, to Agent such other agreements, documents
and instruments as Agent may require in connection with such commercial tort
claim.

         

        
          
            
            

          

          
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        (h)  Borrowers
and Guarantors do not have any goods, documents of title or other Collateral in
the custody, control or possession of a third party as of the date hereof,
except as set forth in the Information Certificate and except for goods located
in the United States, United Kingdom or Singapore in transit to a location of a
Borrower or Guarantor permitted herein in the ordinary course of business of
such Borrower or Guarantor in the possession of the carrier transporting such
goods.  In the event that any goods, documents of title or other
Collateral are at any time after the date hereof in the custody, control or
possession of any other person not referred to in the Information Certificate or
such carriers, Borrowers and Guarantors shall promptly notify Agent thereof in
writing.  Promptly upon Agent’s request, Borrowers and Guarantors
shall deliver to Agent a Collateral Access Agreement duly authorized, executed
and delivered by such person and the Borrower or Guarantor that is the owner of
such Collateral.

         

        (i)  Borrowers
and Guarantors shall take any other actions reasonably requested by Agent from
time to time to cause the attachment, perfection and first priority of, and the
ability of Agent to enforce, the security interest of Agent in any and all of
the Collateral, including, without limitation, (i) executing, delivering and,
where appropriate, filing financing statements and amendments relating thereto
under the UCC, or other applicable law, to the extent, if any, that any
Borrower’s or Guarantor’s signature thereon is required therefor, (ii) causing
Agent’s name to be noted as secured party on any certificate of title for a
titled good if such notation is a condition to attachment, perfection or
priority of, or ability of Agent to enforce, the security interest of Agent in
such Collateral, (iii) complying with any provision of any statute, regulation
or treaty of the United States, United Kingdom or Singapore as to any Collateral
if compliance with such provision is a condition to attachment, perfection or
priority of, or ability of Agent to enforce, the security interest of Agent in
such Collateral, (iv) obtaining the consents and approvals of any Governmental
Authority or third party, including, without limitation, any consent of any
licensor, lessor or other person obligated on Collateral, and taking all actions
required by any earlier versions of the UCC, or by other law, as applicable in
any relevant jurisdiction.

         

        (j)  If
any UK Borrower acquires any right, title and interest in or to any registered
Intellectual Property which is necessary to the operation of its business, it
will give Agent reasonably prompt written notice of same.  Promptly
upon the request of Agent, such UK Borrower will create in favor of Lender a
first ranking right of pledge or fixed charge, as the case may be (to the extent
such right may be granted under applicable law), in any such Intellectual
Property by executing such deeds and agreements and taking all such other action
as agent may reasonably require.

         

        5.3 
  Special
Provisions Relating to Collateral; Excluded Property.

         

        (a)  The
grant of a security interest in the Collateral of obligors organized under the
laws of England and Wales and Singapore in favor of Agent under the laws of the
United Kingdom and Singapore, respectively, is evidenced by the UK Loan
Documents and the Singapore Loan Documents, respectively, and subject to the
terms of such other Loan Documents.

         

        
          
            
            

          

          
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        (b)  Notwithstanding
anything to the contrary contained in this Section 5, the types or items of
Collateral described in Section 5.1 hereof shall not include any of the
following (such property not included in the Collateral being the “Excluded
Property”):  (i) assets of any Non-US Subsidiary that is not a
Borrower or Guarantor,  (ii) leased real property, (iii) motor
vehicles or other Equipment subject to a certificate of title statute, (iv) any
rights or interests in any contract, lease, permit, license, charter or license
agreement covering real or personal property, as such, if under the terms of
such contract, lease, permit, license, charter or license agreement, or
applicable law with respect thereto, the valid grant of a security interest or
lien therein to Agent is prohibited (or would render such contract, lease,
permit, license, charter or license agreement cancelled, invalid or
unenforceable) and such prohibition has not been or is not waived or the consent
of the other party to such contract, lease, permit, license, charter or license
agreement has not been or is not otherwise obtained or under applicable law such
prohibition cannot be waived; provided, that, the foregoing
exclusion shall in no way be construed (A) to apply if any such prohibition is
unenforceable under Sections 9-406, 9-407 or 9-408 of the UCC, any comparable
provision of other applicable law or (B) so as to limit, impair or otherwise
affect Agent’s unconditional continuing security interests in and liens upon any
rights or interests of a Borrower or Guarantor in or to monies or other proceeds
due or to become due under any such contract, lease, permit, license, charter or
license agreement (including any Receivables), and (v) as to Obligations of US
Borrowers (other than as guarantor of the Obligations of UK Borrowers and
Singapore Borrowing Base Guarantors), shares of the Equity Interests of any
Non-US Subsidiary of Parent that is a “controlled foreign corporation” (as such
term is defined in Section 957(a) of the Code or a successor provision
thereof) in excess of sixty-five (65%) percent of all of the issued and
outstanding shares of Equity Interests in such Subsidiary entitled to vote
(within the meaning of Treasury Regulation Section 1.956-2) if a pledge of
a greater percentage would result in materially adverse tax consequences to
Borrowers and Guarantors.  The Obligations of the UK Borrowers and the
Singapore Borrowing Base Guarantors and not the Obligations of US Borrowers
(except pursuant to the Guarantee by the US Borrowers of the Obligations of UK
Borrowers and Singapore Borrowing Base Guarantors) shall be secured by one
hundred (100%) percent of the Equity Interests of the Singapore Borrowing Base
Guarantors and the UK Borrowers.  The Obligations of the US Borrowers
shall be secured by sixty-five (65%) percent of the of the Equity Interests of
the Singapore Borrowing Base Guarantors and the UK Borrowers.

         

        (c)  Notwithstanding
anything to the contrary contained in this Agreement or the other Loan Documents
to the contrary, (i) UK Borrowers and Singapore Borrowing Base Guarantors
(whether as guarantor or otherwise) shall not be liable in respect of any
Obligations of US Borrowers arising under the US Credit Facility except as
otherwise agreed by Agent and such UK Borrower or Singapore Borrowing Base
Guarantor, as the case may be, (ii) no security interest granted by any UK
Borrower or Singapore Borrowing Base Guarantor under any of the Loan Documents
shall secure any Obligations of any US Borrower arising under the US Credit
Facility, (iii) all amounts received by Agent or any Lender on account of the
Obligations by any UK Borrower or Singapore Borrowing Base Guarantor shall be
applied or credited solely to the Obligations of UK Borrowers under the UK
Credit Facility, and (iv) the liability or obligation of any UK Borrower or
Singapore Borrowing Base Guarantor with respect to the Obligations shall not
exceed that portion of the Obligations which is attributable only to the UK
Borrowers, the Obligations of the UK Borrowers under the UK Credit Facility,
their Collateral, the UK Loans, or the UK Letter of Credit Obligations (as the
case may be) or such other greater amount as may be agreed to in writing by
Agent and any UK Borrower or Singapore Borrowing Base Guarantor as the case may
be.

         

        (d)  Borrowers
and Guarantors agree that upon the request of Agent at any time upon the
occurrence an during the continuance of either  (i) a Default or an
Event of Default or (ii) a Cash Dominion Event, the applicable Borrower or
Guarantor shall execute and deliver to Agent, pledge and security agreements, in
form and substance satisfactory to Agent and its counsel, granting to Agent a
first pledge of and perfected lien on all of the issued and outstanding shares
of Equity Interests of any Non-US Subsidiary of Parent which is not a UK Loan
Party or a Singapore Loan Party on the date hereof, subject to the limitations
set forth in Section 5.3(b)(v) hereof.

         

        
          
            
            

          

          
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        SECTION
6.     COLLECTION AND
ADMINISTRATION

         

        6.1   
Borrowers’ Loan
Accounts.  Agent
shall maintain one or more loan account(s) on its books in which shall be
recorded (a) all Loans, Letters of Credit and other Obligations and the
Collateral, (b) all payments made by or on behalf of any Borrower or Guarantor
and (c) all other appropriate debits and credits as provided in this Agreement,
including fees, charges, costs, expenses and interest.  All entries in
the loan account(s) shall be made in accordance with Agent’s customary practices
as in effect from time to time.

         

        6.2   
Statements.  Agent
shall render to Administrative Borrower each month a statement setting forth the
balance in the Borrowers’ loan account(s) maintained by Agent for Borrowers
pursuant to the provisions of this Agreement, including principal, interest,
fees, costs and expenses.  Each such statement shall be subject to
subsequent adjustment by Agent but shall, absent manifest errors or omissions,
be considered correct and deemed accepted by Borrowers and Guarantors and
conclusively binding upon Borrowers and Guarantors as an account stated except
to the extent that Agent receives a written notice from Administrative Borrower
of any specific exceptions of Administrative Borrower thereto within thirty (30)
days after the date such statement has been received by Administrative
Borrower.  Until such time as Agent shall have rendered to
Administrative Borrower a written statement as provided above, the balance in
any Borrower’s loan account(s) shall be presumptive evidence of the amounts due
and owing to Agent and Lenders by Borrowers and Guarantors, absent manifest
error.

         

        6.3 
  Lenders’
Evidence of Debt.  Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the Obligations of each Borrower to such Lender, including
the amounts of the Loans made by it and each repayment and prepayment in respect
thereof, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder. Any such records shall be presumptively
correct, absent manifest error; provided, that, the failure to
make any entry or any error in such records, shall not affect any Lender’s
Commitments hereunder or the Obligations in respect of any applicable Loans and
in the event of any inconsistency between the Register and any Lender’s records,
the Register shall govern.

         

        6.4 
  Register.

         

        (a)  Agent
(or its agent or sub-agent appointed by it) shall maintain a register (the
“Register”) for the recordation of the names and addresses of Lenders and the
Commitments of, and principal amount of the Loans (the “Registered Loans”) and
Letter of Credit Obligations owing to each Lender from time to time. The
Register, as in effect at the close of business on the preceding Business Day,
shall be available for inspection by Administrative Borrower or any Lender (with
respect to a Lender, solely with respect to the Obligations owing to such
Lender) at a reasonable time and from time to time upon reasonable prior
notice.  Agent shall record, or cause to be recorded, in the Register,
the Commitments and the Loans in accordance with the provisions of
Section 16.7 and Agent shall also maintain a copy of each Assignment and
Acceptance Agreement delivered to and accepted by it and shall modify the
Register to give effect to each Assignment and Acceptance Agreement, and any
such recording shall be presumptively correct, absent manifest error; provided, that, the failure to
make any entry or any error in such records, shall not affect any Lender’s
Commitments or Obligations in respect of any Loan.  Borrowers,
Guarantors, Agent and Lenders shall treat each Person whose name is recorded in
the Register as a Lender hereunder for all purposes of this
Agreement.  Borrowers hereby designate and authorize Agent, and Agent
agrees, to maintain, or cause to be maintained as agent for Borrowers’ solely
for purposes of maintaining the Register as provided in this
Section 6.4(a).

         

        
          
            
            

          

          
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        (b)  Each
Lender that grants a participation shall maintain a register as a non-fiduciary
agent of Borrowers on which it enters the name and address of each Participant
and the principal and interest amount of each Participant’s interest in the
Loans and Letters of Credit held by it (the “Participant
Register”).  The entries in the Participant Register shall be
conclusive, absent manifest error, and such Lender shall treat each person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the
contrary.

         

        6.5   
Promissory
Notes.  Each
Lender may at any time request that the Loans made by it be evidenced by a
promissory note.  In such event, Borrowers shall execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) in a form
furnished by Agent and reasonably acceptable to Administrative
Borrower.  Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 16.7 hereof) be represented by one or more promissory notes in such
form payable to the order of the payee named therein.

         

        6.6  
 Cash Management;
Collection of Proceeds of Collateral.

         

        (a)  Each
Borrower and Guarantor have established and shall maintain, at its expense,
deposit accounts and cash management services of a type and on terms, and with
the banks, set forth on Schedule 8.10 to the Information Certificate and,
subject to Section 5.2(d) hereof, such other banks as such Borrower or
Guarantor may hereafter select; provided, that, not later than
ninety (90) days following the date hereof (or such later date as Agent may
agree in its discretion), each US Borrower and US Guarantor which is a US
Subsidiary shall establish and maintain, at its expense, deposit accounts and
cash management services at Wells Fargo or one of its Affiliates (except for
certain local deposit accounts agreed to by Agent and Administrative Borrower
which shall be maintained with such other institutions as are acceptable to
Agent) of a type and on terms reasonably satisfactory to Agent.  The
banks set forth on Schedule 8.10 of the Information Certificate constitute
all of the banks with which Borrowers and Guarantors have deposit account and
cash management arrangements as of the date hereof and identifies each of the
deposit accounts at such banks that are used for receiving receipts from
particular locations of a Borrower or otherwise describes the nature of the use
of such deposit account by such Borrower or Guarantor (together with the deposit
accounts to be established at Wells Fargo to be used for receiving receipts from
particular locations of Borrowers and Guarantors, collectively, the “Cash
Management Accounts” and individually a “Cash Management Account”).

         

        (b)  Within
sixty (60) days following the date hereof (or such later date as Agent may agree
in its discretion), Borrowers and Guarantors shall deliver, or cause to be
delivered to Agent, in form and substance satisfactory to Agent, a Deposit
Account Control Agreement by and among Agent, each bank where any Borrower or
Guarantor has a Cash Management Account or a Concentration Account (or in the
case of banks at which Cash Management Accounts or Concentration Accounts of UK
Borrowers are held, such bank shall provide an acknowledgment letter to Agent,
in the form attached to the Debenture and with respect to or in the case of
banks at which Cash Management Accounts or Concentration Accounts of Singapore
Borrowing Base Guarantors are held, such Bank shall provide an acknowledgment
letter to Agent, in the forms attached to the relevant Singapore Debenture, and
each applicable Borrower and Guarantor, duly authorized, executed and delivered
by such bank and such Borrower or Guarantor; except that Borrowers and
Guarantors shall not be required to deliver such Deposit Account Control
Agreements with respect to (A) any deposit accounts where the balance is, and
shall at all times be, less than US Dollar Equivalent of $100,000, unless Agent
shall request such Deposit Account Control Agreement at any time a Cash Dominion
Event exists and only to the extent that the aggregate amount of funds in all
such deposit accounts is more than US Dollar Equivalent $250,000 and (B) any
deposit account that is specifically and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for the benefit of any
Borrower’s or Guarantor’s salaried employees, and fiduciary trust
accounts.

         

        
          
            
            

          

          
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        (c)  Each
Borrower shall deposit or cause to be deposited all proceeds of Collateral,
including all proceeds from sales of Inventory, all amounts payable to each
Borrower and Guarantor and all other proceeds of Collateral, from each location
of such Borrower on each Business Day into the Cash Management Account of such
Borrower used for such purpose.  If, for any reason, such payments are
made directly to any Borrower, such Borrower shall collect (as agent and trustee
for Agent) all such amounts and immediately pay all such amounts into the Cash
Management Account of such Borrower, provided however that until such payment
into the Cash Management Account of such Borrower all moneys so received will be
held upon trust for Agent.  All such funds deposited into the Cash
Management Accounts shall be sent by wire transfer or other electronic funds
transfer on each Business Day to a Concentration Account, except nominal amounts
which are required to be maintained in such Cash Management Accounts under the
terms of such Borrower’s arrangements with the bank at which such Cash
Management Accounts are maintained, which nominal amounts shall not exceed the
US Dollar Equivalent of $25,000 in any individual Cash Management Account at any
time or the US Dollar Equivalent of $50,000 in the aggregate as to all such Cash
Management Accounts.  All such funds deposited or transferred into the
Concentration Accounts may be withdrawn by Borrowers or Guarantors or
transferred to the operating accounts of Borrowers and Guarantors, provided, that, at any time
that a Cash Dominion Event shall exist, Agent shall instruct the banks at which
the Concentration Accounts and/or the Cash Management Accounts are maintained to
remit the funds therein to Agent for application to the Obligations in
accordance with Section 6.7 hereof and to otherwise comply only with the
instructions of Agent.

         

        (d)  For
purposes of calculating the amount of the (i) US Loans available to each US
Borrower, and (ii) UK Loans available to each UK Borrower such payments will be
applied (conditional upon final collection) to the applicable Obligations on the
Business Day of receipt by Agent of immediately available funds in the US
Payment Account, the UK Tranche A Loan Payment Account or the UK Tranche B Loan
Payment Account, as the case may be; provided such payments and notice thereof
are received in accordance with Agent’s usual and customary practices as in
effect from time to time and within sufficient time to credit the applicable
loan account on such day, and if not, then on the next Business
Day.

         

        (e)  Each
Borrower and Guarantor and their respective employees, agents and Subsidiaries
shall, acting as trustee for Agent, receive, as the property of Agent, any
monies, checks, notes, drafts or any other payment relating to and/or proceeds
of Accounts or other Collateral which come into their possession or under their
control and promptly upon receipt thereof, shall deposit or cause the same to be
deposited in the Concentration Accounts, or remit the same or cause the same to
be remitted, in kind, to Agent.  In no event shall the same be
commingled with any Borrower’s or Guarantor’s own funds.  Borrowers
agree to reimburse Agent on demand for any amounts owed or paid to any bank or
other financial institution at which a Concentration Account or any other
deposit account or investment account is established or any other bank,
financial institution or other person involved in the transfer of funds to or
from the Concentration Accounts arising out of Agent’s payments to or
indemnification of such bank, financial institution or other
person.  The obligations of Borrowers to reimburse Agent for such
amounts pursuant to this Section 6.6 shall survive the termination of this
Agreement.

         

        
          
            
            

          

          
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        6.7  
  Payments.

         

        (a)  All
Obligations of US Borrowers shall be payable to the US Payment
Account.  Agent shall apply payments received or collected from any US
Borrower or any Guarantor of the Obligations of US Borrowers or for the account
of any US Borrower or US Guarantor (including the monetary proceeds of
collections or of realization upon any Collateral of US Borrowers or US
Guarantor) as follows: first, to pay any
fees, indemnities or expense reimbursements then due to Agent from any US
Borrower or US Guarantor; second, to pay any
fees, indemnities, or expense reimbursements then due to Lenders and the Issuing
Bank from any US Borrower or US Guarantor; third, to pay
interest due in respect of any US Swing Line Loans, fourth, to pay
principal due in respect of any US Swing Line Loans, fifth, to pay
interest due in respect of any other US Loans (and including any Special Agent
Advances); sixth, to pay
principal in respect of Special Agent Advances; seventh, to pay
principal in respect of all US Loans (other than US Swing Line Loans) and to pay
or prepay Obligations then due arising under or pursuant to any Hedge Agreements
of a US Borrower or US Guarantor with a Bank Product Provider (up to the amount
of any then effective Reserve established in respect of such Obligations), on a
pro rata basis; eighth, to pay or
prepay any other Obligations of US Borrowers whether or not then due, in such
order and manner as Agent determines or to be held as cash collateral in
connection with any US Letter of Credit Obligations or other contingent
Obligations of US Borrowers (including any such Obligations arising under or
pursuant to any Bank Products) on a pro rata basis; and ninth, to pay any of
the Obligations of UK Borrowers.

         

        (b)  All
Obligations of UK Borrowers shall be payable to either the UK Tranche A Loan
Payment Account or the UK Tranche B Loan Payment Account, as the case may
be.  Agent shall apply payments received or collected from UK
Borrowers or any UK Guarantor of the Obligations of UK Borrowers (including any
payments made by US Borrower and US Guarantors pursuant to the guarantee of the
Obligations of UK Borrowers) or for the account of UK Borrowers or any UK
Guarantors of the Obligations (including the monetary proceeds of collections or
of realization upon any Collateral of UK Borrowers or UK Guarantor) as follows:
first, to pay
any fees, indemnities or expense reimbursements then due to Agent from UK
Borrower; second, to pay any
fees, indemnities, or expense reimbursements then due to Lenders and the
applicable Issuing Bank from any UK Borrower or UK Guarantor; third, to pay
interest due in respect of any UK Swing Line Loans, fourth, to pay
principal due in respect of any UK Swing Line Loans, fifth, fifth, to pay
interest due in respect of any UK Loans (other than UK Swing Line Loans and
including any Special Agent Advances); sixth, to pay
principal in respect of Special Agent Advances; seventh, to pay
principal then due in respect of the Obligations of UK Borrower and to pay or
prepay UK Loans and other Obligations of UK Borrower arising under or pursuant
to any Hedge Agreements of UK Borrower with a Bank Product Provider (up to the
amount of any then effective Reserve established in respect of such
Obligations), on a pro rata basis; and eighth, to pay or
prepay any other Obligations of UK Borrower, whether or not then due, in such
order and manner as Agent determines or to be held as cash collateral in
connection with any UK Letter of Credit Obligations or other contingent
Obligations of UK Borrower (including any such Obligations arising under or
pursuant to any Bank Products) on a pro rata basis; provided, that, any payments
received or collected from any Singapore Borrowing Base Guarantors (including
any payments made by Singapore Borrowing Base Guarantors pursuant to the
guarantee of UK Borrowers) or for the account of UK Borrowers or any UK
Guarantors of the Obligations (including the monetary proceeds of collections or
of realization upon any Singapore Borrowing Base Guarantor Collateral) shall be
applied to the outstanding amount of UK Tranche B Loans and UK Tranche B Letter
of Credit Obligations, until paid in full, prior to the application of such
payments to any UK Tranche A Loans or UK Tranche A Letter of Credit
Obligations.

         

        (c)  Notwithstanding
anything to the contrary set forth in any of the Loan Documents, (i) all
payments by or on behalf of UK Borrowers and UK Guarantors which are Non-US
Subsidiaries (including payments made by any UK Loan Parties, any Singapore
Borrowing Base Guarantors or any other Singapore Loan Party) shall be applied
only to the Obligations of UK Borrowers, (ii) all payments on behalf of a US
Borrower or US Guarantor shall be applied to the Obligations of US Borrowers
until paid in full, and (iii) to the extent any Borrower or Guarantor, directly
or indirectly, uses any proceeds of the applicable Loans or Letter of Credit
Obligations to acquire rights in or the use of any Collateral or to repay any
Indebtedness used to acquire rights in or the use of any Collateral, payments in
respect of the Obligations shall be deemed applied first to the Obligations
arising from Loans and Letter of Credit Obligations that were not used for such
purposes and second to the Obligations arising from Loans and Letter of Credit
Obligations the proceeds of which were used to acquire rights in or the use of
any Collateral in the chronological order in which such Borrower acquired such
rights in or the use of such Collateral.

         

        
          
            
            

          

          
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        (d)  
Notwithstanding anything to the contrary contained in this Agreement, (i) unless
so directed by a US Borrower (or Administrative Borrower on behalf of a US
Borrower), or unless a Default or an Event of Default shall exist or have
occurred and be continuing, Agent shall not apply any payments which it receives
to any Eurodollar Rate Loans made to US Borrowers, except (A) on the expiration
date of the Interest Period applicable to any such Eurodollar Rate Loan or (B)
in the event that there are no outstanding Base Rate Loans made to US Borrowers
and (ii) unless so directed by a UK Borrower (or Administrative Borrower), or
unless a Default or an Event of Default shall exist or have occurred and be
continuing, Agent shall not apply any payments which it receives to any
Eurodollar Rate Loans made to UK Borrowers, except (A) on the expiration date of
the Interest Period applicable to any such Eurodollar Rate Loans made to any UK
Borrower or (B) in the event that there are no outstanding Base Rate Loans made
to UK Borrowers.

         

        (e)  For
purposes of this Section 6.7, “paid in full” and “payment in full” and
“prepayment in full” means payment of all amounts owing under the Loan Documents
according to the terms thereof, including loan fees, service fees, professional
fees, interest (and specially including interest accrued after the commencement
of any case under the U.S. bankruptcy code or any similar domestic or foreign
similar statute), default interest, interest on interest, and expense
reimbursements, whether or not the same would be or is allowed or disallowed in
whole or in part in any case under the Bankruptcy Code or any similar statute in
any jurisdiction, but excluding (i) interest to the extent paid in excess of
amounts based on the pre-default rates (but not any other interest) and (ii)
fees paid in respect of the waiver of an Event of Default, in each case as to
amounts under clauses (i) and (ii) above only to the extent that such amounts
are disallowed in any case under the Bankruptcy Code, or any similar statute in
any jurisdiction.

         

        (f)  At
Agent’s option, all principal, interest, fees, costs, expenses and other charges
provided for in this Agreement or the other Loan Documents may be charged
directly to the loan account(s) of any Borrower maintained by
Agent.  If after receipt of any payment of, or proceeds of Collateral
applied to the payment of, any of the Obligations, Agent, any Lender or Issuing
Bank is required to surrender or return such payment or proceeds to any Person
for any reason, then the Obligations intended to be satisfied by such payment or
proceeds shall be reinstated and continue and this Agreement shall continue in
full force and effect as if such payment or proceeds had not been received by
Agent or such Lender.  Borrowers and Guarantors shall be liable to pay
to Agent, and do hereby agree to indemnify and hold Agent and Lenders harmless
for the amount of any payments or proceeds surrendered or
returned.  This Section 6.7(f) shall remain effective
notwithstanding any contrary action which may be taken by Agent or any Lender in
reliance upon such payment or proceeds.  The immediately preceding two
sentences of this Section 6.7(f) shall survive the payment of the
Obligations and the termination of this Agreement.

         

        6.8  
  Taxes.

         

        (a)  Any
and all payments by Borrowers and Guarantors to Agent, Issuing Bank or any
Lender under this Agreement and any of the other Loan Documents shall be made
free and clear of, and without deduction or withholding for, any Taxes, except
to the extent required by applicable law.  In addition, Borrowers
shall pay all Other Taxes (or Agent may, at its option, pay such Other Taxes and
charge the loan account of Borrowers for such amounts so paid).

         

        
          
            
            

          

          
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        (b)  Borrowers
and Guarantors shall indemnify and hold harmless Agent, Issuing Bank and Lenders
for the full amount of Taxes or Other Taxes paid by Agent, Issuing Bank or any
Lender (including any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section, but not including Other Taxes that arise as
a result of Agent’s, Issuing Bank’s or any Lender’s activities with the
applicable taxing jurisdiction, if any, and not as a result of this Agreement)
and any liability (including penalties, interest and expenses (including
reasonable attorney’s fees and expenses) other than those resulting solely from
a failure by Agent, Issuing Bank or any Lender to pay any Taxes or Other Taxes
which it is required to pay and for which it received an indemnity payment)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority;
provided, that, Borrowers and
Guarantors shall not be required to indemnify Agent, Issuing Bank or any Lender
with respect to any Taxes or Other Taxes which are attributable to such Agent’s,
Issuing Bank’s or Lender’s failure to comply with the provisions of
Section 6.8(f), (g), (i) or (j) hereof.  Payment under this
indemnification shall be made within ten (10) days after the date Agent, Issuing
Bank or any Lender makes written demand therefor on Administrative
Borrower.  If Borrowers reasonably believe that such Taxes or Other
Taxes were not correctly or legally asserted, Agent, such Issuing Bank or such
Lender shall, upon Administrative Borrower’s request and at Borrowers’ expense,
provide such documents to Administrative Borrower in form and substance
reasonably satisfactory to Agent, as Administrative Borrower may reasonably
request, to enable Borrowers to contest such Taxes or Other Taxes (or with
respect to UK Double Tax Agreements) pursuant to appropriate proceedings then
available to Borrowers (so long as providing such documents shall not, in the
good faith determination of Agent, have a reasonable likelihood of resulting in
any liability of Agent, Issuing Bank or any Lender).

         

        (c)  If
any Borrower or Guarantor shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder or under
the other Loan Documents to Agent, Issuing Bank or any Lender,
then:

         

        (i)   
 the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) Agent, such Issuing
Bank or such Lender receives an amount equal to the sum it would have received
had no such deductions or withholdings been made; provided, that, Borrowers and
Guarantors shall not be required to increase any such sum payable to Agent,
Issuing Bank or any Lender which is attributable to such Agent’s, Issuing Bank’s
or Lender’s failure to comply with the provisions of Section 6.8(f), (g),
(i) or (j) hereof;

         

        (ii) 
  such Borrower or Guarantor shall make such deductions and
withholdings;

         

        (iii) 
 such Borrower or Guarantor shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law;

         

        (iv) 
 such Borrower or Guarantor shall promptly upon becoming aware that such
withholding or deduction is necessary notify the Agent; and

         

        (v) 
 to the extent not paid to Agent, Issuing Bank or Lenders pursuant to
Section 6.8(c)(i), such Borrower or Guarantor shall also pay to Agent,
Issuing Bank or any Lender, at the time interest is paid, all additional amounts
which are necessary to preserve the after-tax yield Agent, such Issuing Bank or
such Lender would have received pursuant to the Loan Documents if such Taxes or
Other Taxes had not been imposed.

         

        
          
            
            

          

          
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        (d)  Within
thirty (30) days after the date of any payment by any Borrower or Guarantor of
Taxes or Other Taxes, such Borrower or Guarantor shall furnish to Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment reasonably satisfactory to Agent.

         

        (e)  If
any Borrower or Guarantor otherwise would be required to pay additional amounts
to Agent, Issuing Bank or a Lender pursuant to subsection (c) of this Section,
then upon Administrative Borrower’s written request such Lender shall use
reasonable efforts at Borrowers’ expense (consistent with legal and regulatory
restrictions) to take such action, including changing the jurisdiction of its
lending office, so as to eliminate or reduce any such additional payment by such
Borrower or Guarantor which may thereafter accrue.

         

        (f)  In
the event a Lender shall assign the Obligations and its rights hereunder to an
assignee which is organized under the laws of a jurisdiction outside the United
States of America on or prior to the effective date of any such assignment, such
assignee of a Lender shall provide Administrative Borrower with an IRS Form
W-8BEN or Form W-8ECI or other applicable form, certificate or document
prescribed by the Internal Revenue Service certifying as to such assignee’s
being entitled to full exemption from United States of America withholding tax
with respect to all payments to be made to such assignee hereunder and under any
of the other Loan Documents (unless such assignee of a Lender is unable to do so
by reason of a change in law, including, without limitation, any statute,
treaty, ruling, determination or regulation occurring subsequent to the
effective date of such assignment).

         

        (g)  Notwithstanding
anything to the contrary contained in this Section 6.8, unless
Administrative Borrower has received forms or other documents indicating that
payments to a Lender or Issuing Bank hereunder or under any of the other Loan
Documents are not subject to United States of America withholding or backup
withholding tax, Borrowers shall, (i) withhold taxes from such payments at the
applicable statutory rate, or at a rate reduced by an applicable tax treaty and
(ii) pay such assignee such payment net of any taxes so
withheld.  Lenders and Issuing Bank will be required to use reasonable
efforts (including reasonable efforts to change its lending office) to avoid or
to minimize any amounts which might otherwise be payable by any Borrower or
Guarantor pursuant to this Section 6.8; provided, that, such
efforts shall not cause the imposition on such assignee of any additional costs
or legal or regulatory burdens deemed by such assignee in good faith to be
material.

         

        (h)  If
Agent, Issuing Bank or any Lender receives a permanent tax benefit in respect of
any Taxes or Other Taxes for which Agent, such Issuing Bank or such Lender has
received an indemnification payment or additional amounts from any Borrower or
Guarantor hereunder, so long as no Event of Default shall exist or have occurred
and be continuing, Agent, such Issuing Bank or such Lender (as the case may be)
shall credit to the loan account of Borrowers the amount of such tax
benefit.

         

        (i)  Each
Person that is a Lender or Issuing Bank as of the date of this Agreement and
each Person that becomes a Lender or Issuing Bank after the date of this
Agreement (i) either (A) represents and warrants to the Borrowers that such
Person is incorporated or organized under the laws of the United States of
America or a state thereof or (B) agrees to furnish (if it is organized under
the laws of any jurisdiction other than the United States of America or any
State thereof) to Agent and Administrative Borrower prior to the time that Agent
or such Borrower is required to make any payment of principal, interest or fees
hereunder, duplicate executed originals of either U.S. Internal Revenue Service
Form W-8BEN or W-8ECI, as applicable (wherein such Lender claims entitlement to
the benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new such forms upon the expiration of any previously delivered form or
comparable statements in accordance with applicable U.S. law and regulations and
amendments thereto, duly executed and completed by such Lender, and (ii) agrees
to comply with all applicable U.S. laws and regulations with regard to such
withholding tax exemption.

         

        
          
            
            

          

          
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        (j)  Each
Lender or Issuing Bank (other than any Lender or Issuing Bank that is entitled
to a presumption under applicable Treasury Regulations that it is a domestic
corporation for U.S. federal income tax purposes) shall deliver to Agent (or, in
the case of an assignee of a Lender which (i) is an Affiliate of such Lender or
an Approved Fund of such Lender and (ii) does not deliver an Assignment and
Acceptance Agreement to Agent pursuant to Section 16.7(a) hereof for
recordation pursuant to Section 16.7(b) hereof, to the assigning Lender
only) and Administrative Borrower two properly completed and duly executed
copies of U.S. Internal Revenue Service Form W-9 certifying that such Lender is
exempt from U.S. backup withholding tax.  Such forms shall be
delivered by each such Lender on or before the date it becomes a party to this
Agreement and thereafter within twenty (20) days after receipt of a written
request therefor from Agent.  Notwithstanding any other provision of
this Section 6.8(j), a Lender or Issuing Bank described in this Section 6.8(j)
shall not be required to deliver any form pursuant to this Section 6.8(j)
that such Lender or Issuing Bank is not legally able to deliver.

         

        6.9   
Use of Proceeds; Use
of Proceeds of UK Tranche B Loans.

         

        (a)  Borrowers
shall use the initial proceeds of the Loans and Letters of Credit hereunder only
for: (i) payment of the existing Indebtedness of Borrowers owing to the Existing
Lenders, (ii) payments to each of the persons listed in the disbursement
direction letter furnished by Borrowers to Agent on or about the date hereof,
and (iii) payment of all costs, expenses and fees in connection with the
preparation, negotiation, execution and delivery of this Agreement, the other
Loan Documents.  All other Loans made or Letters of Credit provided to
or for the benefit of any Borrower pursuant to the provisions hereof shall only
be used by such Borrower for general operating, working capital and other proper
corporate purposes of such Borrower not otherwise prohibited by the terms
hereof, including, without limitation, Permitted Acquisitions; provided, that, (A) in no event
shall any of the proceeds be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security or for the purposes of reducing or
retiring any indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the Loans to
be considered a “purpose credit” within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System, as amended, and (B) all proceeds of
UK Tranche B Loans must, except as permitted by Section 6.9(b) hereof, be
contemporaneously loaned by UK Borrowers to a Singapore Borrowing Base
Guarantor.

         

        (b)  All
proceeds of any UK Tranche B Loan shall be used by the UK Borrowers to make
substantially contemporaneous loans to one or more of the Singapore Borrowing
Base Guarantors (such loans may take the form of direct intercompany loans or
Tranche B Letters of Credit issued by Issuing Bank), except as
follows:

         

        (i)   
up to $1,000,000 in the aggregate of the proceeds of UK Tranche B Loans may be
retained by the UK Borrowers and not required to be used to fund intercompany
loans to the Singapore Borrowing Base Guarantors; or

         

        (ii)  
the proceeds of any UK Tranche B Loan shall not be required to be used to fund
contemporaneous loan(s) to Singapore Borrowing Base Guarantors if (A) the daily
average of UK Tranche B Excess Availability was greater than $3,000,000 for (1)
the period of  thirty (30) consecutive days prior to the request by
the UK Borrowers or Administrative Borrower on behalf of UK Borrowers for such
UK Tranche B Loan, and (2) on the date of the making of the UK Tranche B Loan
and after giving effect thereto and (B) as of the date of such UK Tranche B Loan
and after giving effect thereto, no Default or Event of Default shall exist or
have occurred and be continuing.

         

        (c)  UK
Borrowers and Singapore Borrowing Base Guarantors hereby irrevocably authorize
Agent to deposit all proceeds of each UK Tranche B Loan, subject to the
exceptions set forth in Section 6.9(b) above, into deposit account(s) of the
Singapore Borrowing Base Guarantors maintained at the Agent in the United States
of America as Administrative Borrower may from time to time designate to Agent
as the deposit account for this purpose.

         

        
          
            
            

          

          
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        6.10  Appointment of
Administrative Borrower as Agent for Requesting Loans and Receipts of Loans and
Statements.

         

        (a)  Each
Borrower hereby irrevocably appoints and constitutes Administrative Borrower as
its agent and attorney-in-fact to request and receive Loans and Letters of
Credit pursuant to this Agreement and the other Loan Documents from Agent or any
Lender in the name or on behalf of such Borrower.  Agent and Lenders
may disburse the Loans to such bank account of Administrative Borrower or a
Borrower or otherwise make such Loans to a Borrower and provide such Letters of
Credit to a Borrower as Administrative Borrower may designate or direct, without
notice to any other Borrower or Guarantor.  Notwithstanding anything
to the contrary contained herein, Agent may at any time and from time to time
require that Loans to or for the account of any Borrower be disbursed directly
to an operating account of such Borrower.

         

        (b)  Administrative
Borrower hereby accepts the appointment by Borrowers to act as the agent and
attorney-in-fact of Borrowers pursuant to this
Section 6.10.  Administrative Borrower shall ensure that the
disbursement of any Loans to each Borrower requested by or paid to or for the
account of Parent, or the issuance of any Letter of Credit for a Borrower
hereunder, shall be paid to or for the account of such Borrower.

         

        (c)  Each
Borrower and other Guarantor hereby irrevocably appoints and constitutes
Administrative Borrower as its agent to receive statements on account and all
other notices from Agent and Lenders with respect to the Obligations or
otherwise under or in connection with this Agreement and the other Loan
Documents.

         

        (d)  Any
notice, election, representation, warranty, agreement or undertaking by or on
behalf of any other Borrower or any Guarantor by Administrative Borrower shall
be deemed for all purposes to have been made by such Borrower or Guarantor, as
the case may be, and shall be binding upon and enforceable against such Borrower
or Guarantor to the same extent as if made directly by such Borrower or
Guarantor.

         

        (e)  No
purported termination of the appointment of Administrative Borrower as agent as
aforesaid shall be effective, except after ten (10) Business Days’ prior written
notice to Agent.

         

        6.11  Pro Rata
Treatment.  Except
to the extent otherwise provided in this Agreement or as otherwise agreed by the
applicable Lenders:  (a) the making and conversion of Loans shall be
made among the Lenders based on their respective Pro Rata Shares as to the Loans
and (b) each payment on account of any Obligations to or for the account of one
or more of Lenders in respect of any Obligations due on a particular day shall
be allocated among the Lenders entitled to such payments based on their
respective Pro Rata Shares and shall be distributed accordingly.

         

        6.12  Sharing of Payments,
Etc.

         

        (a)  Each
Borrower and Guarantor agrees that, in addition to (and without limitation of)
any right of setoff, banker’s lien or counterclaim Agent or any Lender may
otherwise have, each Lender shall be entitled, at its option (but subject, as
among Agent and Lenders, to the provisions of Section 14.3(b) hereof), to
offset balances held by it for the account of such Borrower or Guarantor at any
of its offices, in dollars or in any other currency, against any principal of or
interest on any Loans owed to such Lender or any other amount payable to such
Lender hereunder, that is not paid when due (regardless of whether such balances
are then due to such Borrower or Guarantor), in which case it shall promptly
notify Administrative Borrower and Agent thereof; provided, that, such Lender’s
failure to give such notice shall not affect the validity thereof.

         

        
          
            
            

          

          
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        (b)  If
any Lender (including Agent) shall obtain from any Borrower or Guarantor payment
of any principal of or interest on any Loan owing to it or payment of any other
amount under this Agreement or any of the other Loan Documents through the
exercise of any right of setoff, banker’s lien or counterclaim or similar right
or otherwise (other than from Agent as provided herein), and, as a result of
such payment, such Lender shall have received more than its Pro Rata Share of
the principal of the Loans or more than its share of such other amounts then due
hereunder or thereunder by any Borrower or Guarantor to such Lender than the
percentage thereof received by any other Lender, it shall promptly pay to Agent,
for the benefit of Lenders, the amount of such excess and simultaneously
purchase from such other Lenders a participation in the Loans or such other
amounts, respectively, owing to such other Lenders (or such interest due
thereon, as the case may be) in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all Lenders shall share
the benefit of such excess payment (net of any expenses that may be incurred by
such Lender in obtaining or preserving such excess payment) in accordance with
their respective Pro Rata Shares or as otherwise agreed by
Lenders.  To such end all Lenders shall make appropriate adjustments
among themselves (by the resale of participation sold or otherwise) if such
payment is rescinded or must otherwise be restored.

         

        (c)  Each
Borrower and Guarantor agrees that any Lender purchasing a participation (or
direct interest) as provided in this Section may exercise, in a manner
consistent with this Section, all rights of setoff, banker’s lien, counterclaim
or similar rights with respect to such participation as fully as if such Lender
were a direct holder of Loans or other amounts (as the case may be) owing to
such Lender in the amount of such participation.

         

        (d)  Nothing
contained herein shall require any Lender to exercise any right of setoff,
banker’s lien, counterclaims or similar rights or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any such right with
respect to any other Indebtedness or obligation of any Borrower or
Guarantor.  If, under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section applies, such Lender shall, to the extent practicable, assign
such rights to Agent for the benefit of Lenders and, in any event, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.

         

        6.13  Settlement
Procedures.

         

        (a)  In
order to administer the Credit Facility in an efficient manner and to minimize
the transfer of funds between Agent and Lenders, Agent may, at its option,
subject to the terms of this Section, make available, on behalf of Lenders,
including Swing Line Lender, the full amount of the Revolving Loans or Swing
Line Loans requested or charged to any Borrower’s loan account(s) or otherwise
to be advanced by Lenders pursuant to the terms hereof, without requirement of
prior notice to Lenders of the proposed Loans.

         

        
          
            
            

          

          
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        (b)  With
respect to all Loans made by Agent on behalf of Lenders or any Swing Line Loans
made by Swing Line Lender or Agent on behalf of Swing Line Lender, the amount of
each Lender’s Pro Rata Share of the outstanding Loans shall be computed weekly,
and shall be adjusted upward or downward on the basis of the amount of the
outstanding Loans as of 5:00 p.m. New York City time on the Business Day
immediately preceding the date of each settlement computation; provided, that, Agent retains
the absolute right at any time or from time to time to make the above described
adjustments at intervals more frequent than weekly, but in no event more than
twice in any week.  With respect to Swing Line Loans made by Swing
Line Lender (or Agent on behalf of such Swing Line Lender), Swing Line Lender
(or Agent on behalf of such Swing Line Lender) may settle on the Swing Line
Loans from time to time as it determines.  Agent (or Swing Line Lender
as to Swing Line Loans by it) shall deliver to each of the Lenders after the end
of each week, or at such period or periods as Agent (or  Swing Line
Lender as to Swing Line Loans by it) shall determine, a summary statement of the
amount of outstanding Loans (whether Revolving Loans, Swing Line Loans or both,
as applicable) for such period (such week or other period or periods being
hereinafter referred to as a “Settlement Period”).  If the summary
statement is sent by Agent (or Swing Line Lender in the case of Swing Line
Loans) and received by a Lender prior to 12:00 p.m., then such Lender shall make
the settlement transfer described in this Section by no later than 3:00 p.m. on
the same Business Day and if received by a Lender after 12:00 p.m., then such
Lender shall make the settlement transfer by not later than 3:00 p.m. on the
next Business Day following the date of receipt.  If, as of the end of
any Settlement Period, the amount of a Lender’s Pro Rata Share of the
outstanding Loans is more than such Lender’s Pro Rata Share of the outstanding
Loans as of the end of the previous Settlement Period, then such Lender shall
forthwith (but in no event later than the time set forth in the preceding
sentence) transfer to Agent by wire transfer in immediately available funds the
amount of the increase.  Alternatively, if the amount of a Lender’s
Pro Rata Share of the outstanding Loans in any Settlement Period is less than
the amount of such Lender’s Pro Rata Share of the outstanding Loans for the
previous Settlement Period, Agent shall forthwith transfer to such Lender by
wire transfer in immediately available funds the amount of the
decrease.  Each Lender shall forthwith (but in no event later than the
time set forth in the preceding sentence) transfer to the applicable Swing Line
Lender (or upon its request to Agent) by wire transfer in immediately available
funds the amount of such Lender’s Pro Rata Share of the outstanding Swing Line
Loans as set forth in the summary statement provided to such Lender as provided
above.  Amounts transferred to Swing Line Lender (or Agent as the case
may be) in respect to a settlement of Swing Line Loans shall be applied to the
payment of the Swing Line Loans and shall constitute Loans of such
Lenders.  The obligation of each of the Lenders to transfer such funds
and effect such settlement shall be irrevocable and unconditional and without
recourse to or warranty by Agent and may occur at any time a Default or Event of
Default exists or has occurred and whether or not the conditions set forth in
Section 4.2 are satisfied (except if there is an Event of Default under Section
12.1(h) and 12.1(i), in which case the funds shall be in respect of each
Lender’s participation).  Agent and each Lender agrees to mark its
books and records at the end of each Settlement Period to show at all times the
dollar amount of its Pro Rata Share of the outstanding Loans and Letters of
Credit.  Each Lender shall only be entitled to receive interest on its
Pro Rata Share of the Loans to the extent such Loans have been funded by such
Lender.  Because the Agent on behalf of Lenders may be advancing
and/or may be repaid Loans prior to the time when Lenders will actually advance
and/or be repaid such Loans, interest with respect to Loans shall be allocated
by Agent in accordance with the amount of Loans actually advanced by and repaid
to each Lender and the Agent and shall accrue from and including the date such
Loans are so advanced to but excluding the date such Loans are either repaid by
Borrowers or actually settled with the applicable Lender as described in this
Section.

         

        (c)  To
the extent that Agent has made any such amounts available and the settlement
described above shall not yet have occurred, upon repayment of any Loans by a
Borrower, Agent may apply such amounts repaid directly to any amounts made
available by Agent pursuant to this Section.  In lieu of settlements,
Agent may, at its option, at any time require each Lender to provide Agent with
immediately available funds representing its Pro Rata Share of each Loan, prior
to Agent’s disbursement of such Loan to a Borrower.  In such event,
Agent shall notify each Lender promptly after Agent’s receipt of the request for
the Loans from a Borrower (or Administrative Borrower on behalf of such
Borrower) or any deemed request hereunder and each Lender shall provide its Pro
Rata Share of such requested Loan to the account specified by Agent in
immediately available funds not later than 2:00 p.m. on the requested funding
date, so that all such Loans shall be made by the Lenders simultaneously and
proportionately to their Pro Rata Shares.  No Lender shall be
responsible for any default by any other Lender in the other Lender’s obligation
to make a Loan requested hereunder nor shall the Commitment of any Lender be
increased or decreased as a result of the default by any other Lender in the
other Lender’s obligation to make a Loan hereunder.

         

        
          
            
            

          

          
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        (d)  Upon
the making of any Loan by Agent as provided herein, without further action by
any party hereto, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from Agent, without recourse or warranty,
an undivided interest and participation to the extent of such Lender’s Pro Rata
Share in such Loan.  To the extent that there is no settlement in
accordance with the terms hereof, Agent may at any time require the Lenders to
fund their participations.  From and after the date, if any, on which
any Lender has funded its participation in any such Loan, Agent shall promptly
distribute to such Lender, such Lender’s Pro Rata Share of all payments of
principal and interest received by Agent in respect of such Loan.

         

        (e)  As
to any Loan funded by Agent on behalf of a Lender (including Swing Line Lender)
whether pursuant to Sections 6.13(a), 6.13(b) or 6.13(c) above, Agent may assume
that each Lender will make available to Agent such Lender’s Pro Rata Share of
the Loan requested or otherwise made on such day in the case of Loans funded
pursuant to Section 6.13(c) above or otherwise on the applicable settlement
date.  If Agent makes amounts available to a Borrower and such
corresponding amounts are not in fact made available to Agent by such Lender,
Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon for each day from the date such payment
was due until the date such amount is paid to Agent at the Federal Funds Rate
for each day during such period (as published by the Federal Reserve Bank of New
York or at Agent’s option based on the arithmetic mean determined by Agent of
the rates for the last transaction in overnight Federal funds arranged prior to
9:00 a.m. on that day by each of the three leading brokers of Federal funds
transactions in New York selected by Agent) and if such amounts are not paid
within three (3) days of Agent’s demand, at the highest Interest Rate provided
for in Section 3.1 hereof applicable to Base Rate Loans.  During
the period in which such Lender has not paid such corresponding amount to Agent,
notwithstanding anything to the contrary contained in this Agreement or any of
the other Loan Documents, the amount so advanced by Agent to or for the benefit
of any Borrower shall, for all purposes hereof, be a Loan made by Agent for its
own account.

         

        (f)  Upon
any failure by a Lender to pay Agent (or Swing Line Lender) pursuant to the
settlement described in Section 6.13(b) above or to pay Agent pursuant to
Section 6.13(c), 6.13(d) or Section 6.13(e), Agent shall promptly thereafter
notify Administrative Borrower of such failure and Borrowers shall pay such
corresponding amount to Agent for its own account within five (5) Business Days
of Administrative Borrower’s receipt of such notice.  The term
“Defaulting Lender” shall mean (i) any Lender that has failed to fund any
portion of the Revolving Loans, participations in Letter of Credit Obligations
or participations in Swing Line Loans required to be funded by it hereunder
within one (1) Business Day of the date required to be funded by it hereunder,
or has otherwise failed to pay over to Agent or any other Lender any other
amount required to be paid by it hereunder within one (1) Business Day of the
date when due, (ii) any Lender that has notified Agent, any Lender, Issuing
Bank, or any Borrower or Guarantor in writing that it will not or does not
intend to comply with any of its funding obligations under this Agreement or has
made a public statement to the effect that it will not or does not intend to
comply with its funding obligations under this Agreement or under other
agreements in which it has agreed to make loans or provide other financial
accommodations, or (iii) any Lender that becomes or is insolvent or has a parent
company that has become or is insolvent or becomes the subject of a bankruptcy
or insolvency proceeding, or has a receiver, conservator, trustee or custodian
appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment
and has not obtained all required orders, approvals or consents of any court or
other Governmental Authority to continue to fulfill its obligations hereunder,
in form and substance satisfactory to Agent.

         

        
          
            
            

          

          
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        (g)  Agent
shall not be obligated to transfer to a Defaulting Lender any payments received
by Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder (including any principal,
interest or fees and whether in respect of Revolving Loans, participation
interests or otherwise).  For purposes of voting or consenting to
matters with respect to this Agreement and the other Loan Documents and
determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
“Lender” and such Lender’s Revolving Loan Commitment shall be deemed to be zero
(0).  So long as there is a Defaulting Lender, the maximum amount of
the Loans and Letters of Credit shall not exceed the aggregate amount of the
Commitments of the Lenders that are not Defaulting Lenders plus the Pro Rata
Share of the Defaulting Lender (determined immediately prior to its being
a  Defaulting Lender) of the Loans and Letters of Credit outstanding
as of the date that the Defaulting Lender has become a Defaulting
Lender.  At any time that there is a Defaulting Lender, payments
received for application to the Obligations payable to Lenders in accordance
with the terms of this Agreement shall be distributed to Lenders based on their
Pro Rata Shares calculated after giving effect to the reduction of the
Defaulting Lender’s Revolving Loan Commitment to zero (0) as provided
herein or at Agent’s option, Agent may instead receive and retain such amounts
that would be otherwise attributable to the Pro Rata Share of a Defaulting
Lender (which for such purpose shall be such Pro Rata Share as in effect
immediately prior to its being a Defaulting Lender).  To the extent
that Agent elects to receive and retain such amounts, Agent may hold such
amounts (which shall not accrue interest) and, in its reasonable discretion,
relend such amounts to a Borrower.  To the extent that Agent exercises
its option to relend such amounts, such amounts shall be treated as Revolving
Loans for the account of Agent in addition to the Revolving Loans that are made
by the Lenders other than a Defaulting Lender based on their respective Pro Rata
Shares as calculated after giving effect to the reduction of such Defaulting
Lender’s Commitment to zero (0) as provided herein but shall be repaid in the
same order of priority as the principal amount of the Loans on a pro rata basis
for purposes of Section 6.7 hereof.  Agent shall determine whether any
Revolving Loans requested shall be made from relending such amounts or from
Revolving Loans from the Lenders (other than a Defaulting Lender) and any
allocation of requested Revolving Loans between them. The rights of a Defaulting
Lender shall be limited as provided herein until such time as the Defaulting
Lender has made all payments to Agent of the amounts that it had failed to pay
causing it to become a Defaulting Lender and such Lender is otherwise in
compliance with the terms of this Agreement (including making any payments as it
would have been required to make as a Lender during the period that it was a
Defaulting Lender other than in respect of the principal amount of Revolving
Loans, which payments as to the principal amount of Revolving Loans shall be
made based on the outstanding balance thereof on the date of the cure by
Defaulting Lender or at such other time thereafter as Agent may specify) or has
otherwise provided evidence in form and substance satisfactory to Agent that
such Defaulting Lender will be able to fund its Pro Rata Share (as in effect
immediately prior to its being a Defaulting Lender) in accordance with the terms
hereof.  Upon the cure by Defaulting Lender of the event that is the
basis for it to be a Defaulting Lender by making such payment or payments and
such Lender otherwise being in compliance with the terms hereof, such Lender
shall cease to be a Defaulting Lender and shall only be entitled to payment of
interest accrued during the period that such Lender was a Defaulting Lender to
the extent previously received and retained by Agent from or for the account of
Borrowers on the funds constituting Loans funded by such Lender prior to the
date of it being a Defaulting Lender (and not previously paid to such Lender)
and shall otherwise, on and after such cure, make Loans and settle in respect of
the Loans and other Obligations in accordance with the terms hereof. The
existence of a Defaulting Lender and the operation of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, or
relieve or excuse the performance by any Borrower or Guarantor of its duties and
obligations hereunder (including, but not limited to, the obligation of such
Borrower or Guarantor to make any payments hereunder, whether in respect of
Loans by a Defaulting Lender or otherwise).

         

        
          
            
            

          

          
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        (h)  Notwithstanding
anything to the contrary contained in this Agreement, in the event that there is
a Defaulting Lender, if there are any Letters of Credit outstanding, within one
(1) Business Day after the written request of Issuing Bank, Borrowers shall pay
to Agent an amount equal to the Pro Rata Share of the Defaulting Lender
(calculated as in effect immediately prior to such Lender becoming a Defaulting
Lender) of the Letter of Credit Obligations then outstanding to be held by Agent
on terms and conditions satisfactory to Agent and such Issuing Bank as cash
collateral for the Obligations and for so long as there is a Defaulting Lender,
such Issuing Bank shall not be required to issue any Letter of Credit, or
increase or extend or otherwise amend any Letter of Credit, unless upon the
request of such Issuing Bank, Agent has cash collateral from Borrowers in an
amount equal to the Pro Rata Share of the Defaulting Lender (calculated as in
effect immediately prior to such Lender becoming a Defaulting Lender) of the
Letter of Credit Obligations outstanding after giving effect to any such
requested Letter of Credit (or increase, extension or other amendment) to be
held by Agent on its behalf on terms and conditions satisfactory to Agent and
such Issuing Bank or there are other arrangements reasonably satisfactory to
such Issuing Bank with respect to the participation in Letters of Credit by such
Defaulting Lender.  Such cash collateral shall be applied first to the
Letter of Credit Obligations before application to any other Obligations,
notwithstanding anything to the contrary contained in Section 6.7
hereof

         

        (i)  Nothing
in this Section or elsewhere in this Agreement or the other Loan Documents
shall be deemed to require Agent to advance funds on behalf of any Lender or to
relieve any Lender from its obligation to fulfill its Commitment hereunder or to
prejudice any rights that any Borrower may have to commence any legal action
against a Lender as a result of any default by such Lender hereunder in
fulfilling its Commitment.

         

        6.14 
 Obligations
Several; Independent Nature of Lenders’ Rights.  The
obligation of each Lender hereunder is several, and no Lender shall be
responsible for the obligation or commitment of any other Lender
hereunder.  Nothing contained in this Agreement or any of the other
Loan Documents and no action taken by the Lenders pursuant hereto or thereto
shall be deemed to constitute the Lenders to be a partnership, an association, a
joint venture or any other kind of entity.  The amounts payable at any
time hereunder to each Lender shall be a separate and independent debt, and
subject to Section 14.3 hereof, each Lender shall be entitled to protect
and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.

         

        6.15 
 Bank
Products.  Borrowers
and Guarantors, or any of their Subsidiaries, may (but no such Person is
required to) request that the Bank Product Providers provide or arrange for such
Person to obtain Bank Products from Bank Product Providers, and each Bank
Product Provider may, in its sole discretion, provide or arrange for such Person
to obtain the requested Bank Products.  Borrowers shall offer Bank
Product Providers the first opportunity to bid for all interest rate protection
and currency Hedge Agreements during the term of this
Agreement.  Borrowers and Guarantors or any of their Subsidiaries that
obtains Bank Products shall indemnify and hold Agent, each Lender and their
respective Affiliates harmless from any and all obligations now or hereafter
owing to any other Person by any Bank Product Provider in connection with any
Bank Products other than for gross negligence or willful misconduct on the part
of any such indemnified Person.  Borrower and its Subsidiaries
acknowledge and agree that the obtaining of Bank Products from Bank Product
Providers (a) is in the sole discretion of such Bank Product Provider, and (b)
is subject to all rules and regulations of such Bank Product
Provider.  Each Bank Product Provider shall be deemed a party hereto
for purposes of any reference in a Loan Document to the parties for whom Agent
is acting; provided, that, the rights of
such Bank Product Provider hereunder and under any of the other Loan Documents
shall consist exclusively of such Bank Product Provider’s right to share in
payments and collections out of the Collateral as set forth
herein.  In connection with any such distribution of payments and
collections, Agent shall be entitled to assume that no amounts are due to any
Bank Product Provider unless such Bank Product Provider has notified Agent in
writing of any such liability owed to it as of the date of any such
distribution.  This Section 6.15 shall survive the payment of the
Obligations and the termination of this Agreement.

         

        
          
            
            

          

          
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        SECTION
7.     COLLATERAL REPORTING AND
COVENANTS

         

        7.1  
 Collateral
Reporting.

         

        (a)  Borrowers
shall provide Agent with the following documents in a form satisfactory to Agent
in each case setting forth the information with respect to US Borrowers, UK
Borrowers and Singapore Borrowing Base Guarantors on a separate
basis:

         

        (i)    
as soon as possible after the end of each calendar month, but in any event
within ten (10) Business Days after the end thereof, or, if either (A) Covenant
Excess Availability is less than $18,000,000 or (B) a Default or Event of
Default shall exist or have occurred and be continuing, as soon as possible
after the end of each week, but in any event within three (3) Business Days
after the end thereof (or more frequently as Agent may request), a Borrowing
Base Certificate setting forth the calculation of the Borrowing Base as of the
last Business Day of the immediately preceding period (such month, week, or day,
as applicable), duly completed and executed by the chief financial officer, vice
president of finance, treasurer or controller of Administrative Borrower,
together with all schedules required pursuant to the terms of the Borrowing Base
Certificate duly completed;

         

        (ii)   
as soon as possible after the end of each calendar month (but in any event
within ten (10) Business Days after the end thereof), on a monthly basis or more
frequently as Agent may reasonably request, (A) perpetual inventory reports (and
including the amounts of Inventory and the value thereof at any leased locations
and at premises of warehouses, processors or other third parties), (B)
reconciliation of inventory as set forth in the perpetual inventory reports and
general ledger of Borrowers, (C) agings of accounts receivable (together with a
reconciliation to the previous period’s aging and the general ledger), (D)
Inventory by location based on branch, (E) agings of outstanding accounts
payable (and including information indicating the amounts owing to owners and
lessors of leased premises, warehouses, processors, and other third parties from
time to time in possession of any Collateral), (F) a report of the preferential
creditors and Priority Payables of UK Borrowers (including payments of
contributions in respect of occupational pension schemes and state scheme
premiums) and Singapore Borrowing Base Guarantors under the laws of the United
Kingdom and Singapore substantially in the form of Exhibit D hereto, and (G) a
list of any creditors of any UK Borrower that impose retention of title, Romalpa
or similar provisions as part of its condition of supply to such
Borrower,

         

        (iii)  as
soon as possible after the end of each calendar month (but in any event within
ten (10) Business Days after the end thereof), on a monthly basis or more
frequently as Agent may reasonably request, a certificate by the chief financial
officer, vice president of finance, treasurer or controller of Administrative
Borrower consisting of: (A) a statement confirming the payment of rent and other
amounts due to owners and lessors of real property used by Borrowers in the
immediately preceding month, subject to year-end or monthly percentage rent
payment adjustments, (B) the addresses of all new locations of Borrowers and
Guarantors acquired or opened since the date of the most recent certificate
delivered to Agent containing the information required under this clause, (C) a
report of any new deposit account established or used by any Borrower or
Guarantor with any bank or other financial institution, including in each case,
the Borrower or Guarantor in whose name the account is maintained, the account
number, the name and address of the financial institution at which such account
is maintained, the purpose of such account and, if any, the amount held in such
account on or about the date of such report, and (D) a statement that all sales,
use and excise taxes have been paid when due as of the date of the certificate,
except as specifically described in such certificate,

         

        
          
            
            

          

          
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        (iv)  upon
Agent’s reasonable request, (A) reports of sales for each category of Inventory,
(B) copies of customer statements, purchase orders, sales invoices, credit
memos, remittance advices and reports, and copies of deposit slips and bank
statements, (C) copies of shipping and delivery documents, (D) summary reports
on sales and use tax collections, deposits and payments, including monthly sales
and use tax accruals, (E) true, correct and complete copies of all agreements,
documents or instruments evidencing or otherwise related to Indebtedness that
Agent has not otherwise received and (F) a certificate of the chief financial
officer, vice president of finance, treasurer or controller of Parent listing
(1) all applications, if any, by a Borrower or Guarantor for Intellectual
Property made since the date of the prior certificate (or, in the case of the
first such certificate, the date hereof), (2) all issuances of registrations or
letters on existing applications for Intellectual Property received by a
Borrower or Guarantor since the date of the prior certificate (or, in the case
of the first such certificate, the date hereof), and (3) all material License
Agreements entered into by a Borrower or Guarantor since the date of the prior
certificate (or, in the case of the first such certificate, the date hereof);
and

         

        (v)  such
other reports as to the Collateral as Agent shall reasonably request from time
to time.

         

        (b)  Nothing
contained in any Borrowing Base Certificate shall be deemed to limit, impair or
otherwise affect the rights of Agent contained herein and in the event of any
conflict or inconsistency between the calculation of the Borrowing Base as set
forth in any Borrowing Base Certificate and as determined by Agent in good
faith, the determination of Agent shall govern and, absent manifest error, be
conclusive and binding upon Borrowers and Guarantors.  Without
limiting the foregoing, Borrowers shall furnish to Agent any information which
Agent may reasonably request regarding the determination and calculation of any
of the amounts set forth in any Borrowing Base Certificate.  Subject
to the limitations set forth herein, the Borrowing Base may be adjusted based on
the information received by Agent pursuant to this Agreement.  If any
Borrower’s or Guarantor’s records or reports of the Collateral are prepared or
maintained by an accounting service, contractor, shipper or other agent, each
such Borrower and Guarantor hereby irrevocably authorizes such service,
contractor, shipper or agent to deliver such records, reports, and related
documents to Agent and to follow Agent’s reasonable instructions with respect to
further services.

         

        (c)  All
of the documents, reports and schedules provided by or on behalf of any Borrower
or Guarantor to Agent hereunder for Receivables payable in any currency other
than US Dollars and Inventory located outside the United States of America shall
set forth the US Dollar Equivalent for the amount of the Receivables included in
any such documents, reports or schedules.  For purposes hereof, Agent
may, at its option, provide to Administrative Borrower, at least five (5)
Business Days prior to the date any such documents, reports or schedules are
required to be provided by Borrowers or Guarantors to Agent hereunder, the
exchange rates required to set forth the US Dollar Equivalent in such documents,
reports and schedules and in the event Agent does not do so, Borrowers shall use
such rates of exchange with respect to the applicable currencies as Borrowers
and Guarantors use for such purpose in the ordinary course of business
consistent with current practices as of the date hereof and shall identify such
rates of exchange in any such documents, reports and schedules.

         

        7.2   
Accounts
Covenants.

         

        (a)  Administrative
Borrower shall notify Agent promptly of (i) the assertion of any claims,
offsets, defenses or counterclaims by any account debtor, or any disputes with
any account debtor or any settlement, adjustment or compromise thereof, to the
extent any of the foregoing exceeds US Dollar Equivalent of $750,000 in any one
case or US Dollar Equivalent of $1,500,000 in the aggregate and (ii) all
material adverse information of which it has notice relating to the financial
condition of any account debtor.  No credit, discount, allowance or
extension or agreement for any of the foregoing shall be granted to any account
debtor except in the ordinary course of a Borrower’s business in accordance with
the current practices of such Borrower as in effect on the date
hereof.  At any time that an Event of Default exists or has occurred
and is continuing, Agent shall, at its option, have the exclusive right to
settle, adjust or compromise any claim, offset, counterclaim or dispute with
account debtors or grant any credits, discounts or allowances.

         

        
          
            
            

          

          
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        (b)  With
respect to each Account: (i) the amounts shown on any invoice delivered to Agent
or schedule thereof delivered to Agent shall be true and complete in all
material respects, (ii) no payments shall be made thereon except those sent to
the Cash Management Accounts or Concentration Accounts, (iii) no credit,
discount, allowance or extension or agreement for any of the foregoing shall be
granted to any account debtor except as reported to Agent in accordance with
this Agreement and except for credits, discounts, allowances or extensions made
or given in the ordinary course of each Borrower’s business, (iv) there shall be
no setoffs, deductions, contras, defenses, counterclaims or disputes existing or
asserted with respect thereto other than as reported to Agent in accordance with
the terms of this Agreement, and (v) none of the transactions giving rise
thereto will violate in any material respect any applicable foreign, Federal,
State or local laws or regulations, all documentation relating thereto will be
legally sufficient under such laws and regulations and all such documentation
will be legally enforceable in accordance with its terms.

         

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

         

        7.3  
 Inventory
Covenants.  With
respect to the Inventory: (a) each Borrower and Guarantor shall at all times
maintain inventory records reasonably satisfactory to Agent, keeping correct and
accurate records in all material respects itemizing and describing the kind,
type, quality and quantity of Inventory, such Borrower’s or Guarantor’s cost
therefor and daily withdrawals therefrom and additions thereto; (b) Borrowers
and Guarantors shall conduct cycle counts of the Inventory at least once each
calendar quarter, but at any time or times as Agent may request at any time a
Default or an Event of Default exists or has occurred and is continuing, and
promptly following each such cycle count shall supply Agent, with a report in
the form and with such specificity as may be reasonably satisfactory to Agent
concerning such physical count; (c) Borrowers and Guarantors shall not remove
any Inventory from the locations set forth or permitted herein, without the
prior written consent of Agent, except for sales of Inventory in the ordinary
course of its business and except to move Inventory directly from one location
set forth or permitted herein to another such location and except for Inventory
shipped from the manufacturer thereof to such Borrower or Guarantor which is in
transit to the locations set forth or permitted herein; (d) upon Agent’s
request, Borrowers shall, (i) at their expense, one (1) time in each consecutive
twelve (12) month period so long as Covenant Excess Availability is greater than
$18,000,000, and (ii) at any time and as many times as Agent requests, at
Borrowers’ expense as Agent may request if either (A)  Default or
Event of Default shall exist or have occurred and be continuing or (B) Covenant
Excess Availability is equal to or less than $18,000,000, deliver or cause to be
delivered to Agent written appraisals as to the Inventory performed by an
appraiser acceptable to Agent, in form, scope and methodology and containing
assumptions and appraisal methods acceptable to Agent, addressed to Agent and
Lenders and upon which Agent and Lenders are expressly permitted to rely; (e)
Borrowers and Guarantors shall produce, use, store and maintain the Inventory
with all reasonable care and caution and in accordance with applicable standards
of any insurance and in conformity with applicable laws (including the
requirements of the Federal Fair Labor Standards Act of 1938, as amended and all
rules, regulations and orders related thereto), except where the failure to be
in conformity therewith could not reasonably be expected to have a Material
Adverse Effect; (f) as between Agent and Lenders, on the one hand, and Borrowers
and Guarantors, on the other hand, each Borrower and Guarantor assumes all
responsibility and liability arising from or relating to the use, sale or other
disposition of the Inventory (but nothing contained herein shall be construed as
the basis for any liability of any Borrower or Guarantor as to any third party);
(g) as of the date hereof, Borrowers and Guarantors do not sell Inventory to any
customer on approval, or any other basis which entitles the customer to return
or may obligate any Borrower or Guarantor to repurchase such Inventory (except
for returns of defective or damaged Inventory for repair or replacement
consistent with Borrowers’ policies in effect on the date hereof ) but shall
give Agent prior written notice if such practice changes together with such
information with respect to the new policy as may reasonably be requested by
Agent; (h) Borrowers and Guarantors shall keep the Inventory in good and
marketable condition; and (i) Borrowers and Guarantors shall not acquire or
accept any Inventory on consignment or approval unless such Inventory has been
specifically identified in a report with respect thereto provided by
Administrative Borrower to Agent pursuant to Section 7.1(a) hereof when
required to be included in such report or Agent has otherwise received prior
written notice thereof in form and substance reasonably satisfactory to
Agent.

         

        
          
            
            

          

          
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        7.4  
 Equipment and
Real Property Covenants.  With
respect to the Equipment and Real Property:  (a) upon Agent’s request,
Borrowers and Guarantors shall, at their expense, at any time or times as Agent
may request on or after an Event of Default, deliver or cause to be delivered to
Agent written appraisals as to the Equipment and/or Real Property, in form,
scope and methodology acceptable to Agent and by an appraiser acceptable to
Agent, addressed to Agent and Lenders and upon which Agent and Lenders are
expressly permitted to rely; (b) Borrowers and Guarantors shall keep the
Equipment in good order, repair, running and marketable condition (ordinary wear
and tear excepted); (c) Borrowers and Guarantors shall use the Equipment and
Real Property with all reasonable care and caution and in accordance with
applicable standards of any insurance and in conformity with all applicable laws
in all material respects; (d) the Equipment is and shall be used in the business
of Borrowers and Guarantors and not for personal, family, household or farming
use; (e) Borrowers and Guarantors shall not remove any Equipment from the
locations set forth or permitted herein, except to the extent necessary to have
any Equipment repaired, replaced or maintained in the ordinary course of its
business or to move Equipment directly from one location set forth or permitted
herein to another such location and except for the movement of motor vehicles
used by or for the benefit of such Borrower or Guarantor in the ordinary course
of business; (f) the Equipment is now and shall remain personal property and
Borrowers and Guarantors shall not permit any of the Equipment to be or become a
part of or affixed to real property (but not including for this purpose any
plumbing and electrical fixtures, heating, ventilation and air conditioning,
wall and floor coverings, walls or ceilings and other fixtures not constituting
trade fixtures); and (g) as between Agent and Lenders, on the one hand, and
Borrowers and Guarantors, on the other hand, each Borrower and Guarantor assumes
all responsibility and liability arising from or relating to the use, sale or
other disposition of the Equipment or Real Property.

         

        7.5  
 Power of
Attorney.  Each
Borrower and Guarantor hereby irrevocably designates and appoints Agent (and all
persons designated by Agent) as such Borrower’s and Guarantor’s true and lawful
attorney-in-fact, and authorizes Agent, in such Borrower’s, Guarantor’s or
Agent’s name, to: (a) at any time an Event of Default exists or has occurred and
is continuing (i) demand payment on any Collateral, (ii) enforce payment of any
of the Collateral by legal proceedings or otherwise, (iii) exercise all of such
Borrower’s or Guarantor’s rights and remedies to collect any Collateral, (iv)
sell or assign any Collateral upon such terms, for such amount and at such time
or times as the Agent deems advisable, (v) settle, adjust, compromise, extend or
renew any of the Collateral, (vi) discharge and release any Collateral, (vii)
prepare, file and sign such Borrower’s or Guarantor’s name on any proof of claim
in bankruptcy or other similar document against an account debtor or other
obligor in respect of any Collateral, (viii) notify the post office authorities
to change the address for delivery of remittances from account debtors or other
obligors in respect of Collateral to an address designated by Agent, and open
and dispose of all mail addressed to such Borrower or Guarantor and handle and
store all mail relating to the Collateral, (ix) clear Inventory the purchase of
which was financed with a Letter of Credit through U.S. Bureau of Customs and
Border Protection or foreign export control authorities in such Borrower’s or
Guarantor’s name, Agent’s name or the name of Agent’s designee, and to sign and
deliver to customs officials powers of attorney in such Borrower’s or
Guarantor’s name for such purpose, and to complete in such Borrower’s or
Guarantor’s or Agent’s name, any order, sale or transaction, obtain the
necessary documents in connection therewith and collect the proceeds thereof,
and (x) do all acts and things which are necessary, in Agent’s reasonable
determination, to fulfill such Borrower’s or Guarantor’s obligations under this
Agreement and the other Loan Documents and (b) at any time a Cash Dominion Event
exists to (i) take control in any manner of any item of payment constituting
Collateral or otherwise received in or for deposit in the Concentration Accounts
and (ii) have access to any lockbox or postal box into which remittances from
account debtors or other obligors in respect of Collateral are sent or received
if a Cash Dominion Event exists, and (c) at any time to (i) take control of any
item of payment constituting Collateral that is received by Agent or any Lender,
(ii) endorse such Borrower’s or Guarantor’s name upon any items of payment in
respect of Collateral received by Agent and any Lender and deposit the same in
Agent’s account for application to the Obligations, (iii) endorse such
Borrower’s or Guarantor’s name upon any chattel paper, document, instrument,
invoice, or similar document or agreement relating to any Receivable or any
goods pertaining thereto or any other Collateral, including any warehouse or
other receipts, or bills of lading and other negotiable or non-negotiable
documents, and (iv) sign such Borrower’s or Guarantor’s name on any verification
of amounts owing constituting Collateral and notices thereof to account debtors
or any secondary obligors or other obligors in respect thereof.  Each
Borrower and Guarantor hereby releases Agent and Lenders and their respective
officers, employees and designees from any liabilities arising from any act or
acts under this power of attorney and in furtherance thereof, whether of
omission or commission, except as a result of Agent’s or any Lender’s own gross
negligence or willful misconduct as determined pursuant to a final
non-appealable order of a court of competent jurisdiction.

         

        
          
            
            

          

          
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        7.6  
 Right to
Cure.  Agent
may, at its option, upon prior notice to Administrative Borrower (and so long as
Borrowers or Guarantors have not taken such action within five (5) days after
such notice, unless Agent determines in good faith that under the circumstances
it must act sooner), (a) cure any default by any Borrower or Guarantor under any
material agreement with a third party that affects the Collateral, its value or
the ability of Agent to collect, sell or otherwise dispose of the Collateral or
the rights and remedies of Agent or any Lender therein or the ability of any
Borrower or Guarantor to perform its obligations hereunder or under any of the
other Loan Documents, (b) pay or bond on appeal any judgment entered against any
Borrower or Guarantor, (c) discharge taxes, liens, security interests or other
encumbrances at any time levied on or existing with respect to the Collateral
and (d) pay any amount, incur any expense or perform any act which, in Agent’s
judgment, is necessary or appropriate to preserve, protect, insure or maintain
the Collateral and the rights of Agent and Lenders with respect
thereto.  Agent may add any amounts so expended to the Obligations and
charge any Borrower’s account therefor or may demand immediate payment
thereof.  Agent and Lenders shall be under no obligation to effect
such cure, payment or bonding and shall not, by doing so, be deemed to have
assumed any obligation or liability of any Borrower or Guarantor. Any payment
made or other action taken by Agent under this Section shall be without
prejudice to any right to assert an Event of Default hereunder and exercise any
rights and remedies with respect thereto.

         

        7.7   
Access to
Premises.  From
time to time as reasonably requested by Agent, at the cost and expense of
Borrowers, (a) Agent or its designee shall have complete access to all of each
Borrower’s and Guarantor’s premises during normal business hours and after
notice to Administrative Borrower, or at any time and without notice to
Administrative Borrower if an Event of Default exists or has occurred and is
continuing, for the purposes of inspecting, verifying and auditing the
Collateral and all of each Borrower’s and Guarantor’s books and records,
including the Records, and (b) each Borrower and Guarantor shall promptly
furnish to Agent such copies of such books and records or extracts therefrom as
Agent may reasonably request, and Agent or any Lender or Agent’s designee may
use during normal business hours such of any Borrower’s and Guarantor’s
personnel, equipment, supplies and premises as may be reasonably necessary for
the foregoing and if an Event of Default exists or has occurred and is
continuing for the collection of Receivables and realization of other
Collateral.  Agent shall conduct two (2) field examinations with
respect to the Collateral in any consecutive twelve (12) month period at the
expense of Borrowers; except, that, (i) Agent may
conduct such other field examinations at the expense of Agent and Lenders as
Agent may reasonably request from time to time and (ii) Agent may conduct such
other field examinations at the expense of Borrowers as Agent may require at
Borrowers’ expense at any time (A) a Default or Event of Default shall exist or
have occurred and be continuing or (B) Covenant Excess Availability shall be
less than $18,000,000.  Lenders shall have the right, at their
expense, to accompany Agent in connection with the inspections and examinations
described in this Section.

         

        
          
            
            

          

          
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        SECTION
8.     REPRESENTATIONS AND
WARRANTIES

         

        Each
Borrower and Guarantor hereby represents and warrants to Agent, Lenders and
Issuing Banks the following:

         

        8.1  
 Existence, Power
and Authority.  Each
Borrower and Guarantor is a corporation, company or limited liability company
duly organized or incorporated and in good standing under the laws of its
jurisdiction of organization or incorporation and is duly qualified as a foreign
corporation or limited liability company, as applicable, and in good standing in
all states or other jurisdictions where the nature and extent of the business
transacted by it or the ownership of assets makes such qualification necessary,
where the failure to so qualify, individually or in the aggregate, has or could
reasonably be expected to have a Material Adverse Effect..  The
execution, delivery and performance of this Agreement, the other Loan Documents
and the transactions contemplated hereunder and thereunder  (a) are
all within each Borrower’s and Guarantor’s corporate, company or limited
liability company powers, as applicable, (b) have been duly authorized, (c) are
not in contravention of law or the terms of any Borrower’s or Guarantor’s
certificate of incorporation, certificate of formation, bylaws, operating
agreement or other organizational documentation, or any indenture, Material
Contract or undertaking to which any Borrower or Guarantor is a party or by
which any Borrower or Guarantor or its property are bound and (d) will not
result in the creation or imposition of, or require or give rise to any
obligation to grant, any lien, security interest, charge or other encumbrance
upon any property of any Borrower or Guarantor except as permitted
hereunder.  This Agreement and the other Loan Documents to which any
Borrower or Guarantor is a party constitute legal, valid and binding obligations
of such Borrower and Guarantor enforceable in accordance with their respective
terms except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or law).

         

        8.2   
Name; Jurisdiction of
Organization; Chief Executive Office; Collateral Locations.

         

        (a)  The
exact legal name of each Borrower and Guarantor is as set forth on the signature
page of this Agreement and in the Information Certificate.  No
Borrower or Guarantor has, during the five (5) years prior to the date of this
Agreement, been known by or used any other corporate or fictitious name or been
a party to any merger or consolidation, or acquired all or substantially all of
the assets of any Person, or acquired any of its property or assets out of the
ordinary course of business, except as set forth in the Information
Certificate.

         

        (b)  Each
Borrower and Guarantor is an organization of the type and organized in the
jurisdiction set forth in the Information Certificate.  The
Information Certificate accurately sets forth the organizational identification
number of each Borrower and Guarantor or accurately states that such Borrower or
Guarantor has none and accurately sets forth the federal employer identification
number and business identification number of each Borrower and Guarantor, if
any.

         

        
          
            
            

          

          
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        (c)  The
chief executive office and mailing address of each Borrower and Guarantor and
each Borrower’s and Guarantor’s Records concerning Accounts are located only at
the address identified as such in Schedule 8.2 to the Information
Certificate and its only other places of business and the only other locations
of Collateral, if any, are the addresses set forth in Schedule 8.2 to the
Information Certificate, subject to the rights of any Borrower or Guarantor to
establish new locations in accordance with Section 9.2 below and other than
Collateral in transit to or from any such locations.  The Information
Certificate correctly identifies any of such locations that are not owned by a
Borrower or Guarantor and sets forth the owners and/or operators
thereof.

         

        8.3   
Financial Statements;
No Material Adverse Effect.  All
financial statements relating to any Borrower or Guarantor which have been or
may hereafter be delivered by any Borrower or Guarantor to Agent and Lenders
have been prepared in accordance with GAAP (except as to any interim financial
statements, to the extent such statements are subject to normal year-end
adjustments and do not include any notes) and fairly present in all material
respects the financial condition and the results of operation of Parent and its
Subsidiaries as at the dates and for the periods set forth
therein.  There has been no act, condition or event which has had or
could reasonably be expected to have a Material Adverse Effect since the date of
the most recent audited financial statements of any Borrower or Guarantor
furnished by any Borrower or Guarantor to Agent prior to the date of this
Agreement.  The projections dated April 13, 2010 for the fiscal years
ending 2011 through and including 2014 that have been delivered to Agent and any
projections hereafter delivered to Agent have been prepared in light of the past
operations of the businesses of Borrowers and Guarantors and are based upon
estimates and assumptions stated therein, all of which Borrowers and Guarantors
believe to be reasonable and fair in light of then current conditions and
current facts and reflect the good faith and reasonable estimates of Borrowers
and Guarantors of the future financial performance of Parent and its
Subsidiaries and of the other information projected therein for the periods set
forth therein and using such assumptions and methodology as is consistent with
the most recent financial statements delivered to Agent pursuant to Section 9.6
hereof (it being understood that actual results may differ from those set forth
in such projections).

         

        8.4  
 Priority of
Liens; Title to Properties.  The
security interests and liens granted to Agent under this Agreement and the other
Loan Documents constitute valid and perfected first priority liens, hypothecs
and security interests in and upon the Collateral subject only to the liens
indicated on Schedule 8.4 to the Information Certificate and the other
Permitted
Liens.  Each Borrower and Guarantor has good and marketable fee simple
title (or freehold, in the case of any Singapore Loan Party) to or valid
leasehold interests in all of its Real Property and good, valid and merchantable
title to all of its other properties and assets subject to no liens, mortgages,
pledges, security interests, encumbrances or charges of any kind, except those
granted to Agent and such others as are specifically listed on Schedule 8.4
to the Information Certificate or the Permitted Liens.

         

        8.5   
Tax
Returns.  Each
Borrower and Guarantor has filed, or caused to be filed, in a timely manner all
material tax returns, reports and declarations which are required to be filed by
it.  All information in such tax returns, reports and declarations is
complete and accurate in all material respects.  Each Borrower and
Guarantor has paid or caused to be paid all taxes due and payable by it, except
taxes the validity of which is being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower or Guarantor and
with respect to which adequate reserves have been set aside on its
books.  Adequate provision has been made for the payment of all
accrued and unpaid Federal, State, county, local, foreign and other taxes
whether or not yet due and payable and whether or not disputed.  Each
Borrower and Guarantor has collected and remitted to the appropriate tax
authority all excise taxes and sales and/or use taxes applicable to its business
(including any VAT)required to be collected and remitted under the laws of the
United States, Singapore and the United Kingdom and each possession or territory
thereof, and each State Province or other political subdivision thereof,
including any State or Province in which such Borrower or Guarantor owns any
Inventory or owns or leases any other property.  No notices of tax
liens or tax liens have been filed with respect to any such taxes.

         

        
          
            
            

          

          
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        8.6 
  Litigation.  Except
as set forth on Schedule 8.6 to the Information Certificate, (a) there is no
investigation by any Governmental Authority pending, or to the best of any
Borrower's or Guarantor’s or any of their Subsidiary’s knowledge threatened,
against or affecting any Borrower, Guarantor or any of their Subsidiaries, its
or their assets or business and (b) there is no action, suit, proceeding or
claim by any Person pending, or to the best of any Borrower's, Guarantor’s or
such Subsidiary’s knowledge threatened, against any Borrower, Guarantor or
Subsidiary or its or their assets or goodwill, or against or affecting any
transactions contemplated by this Agreement, in each case, which if adversely
determined against such Borrower or Guarantor has or could reasonably be
expected to have a Material Adverse Effect.

         

        8.7  
 Compliance with
Other Agreements and Applicable Laws.  Borrowers
and Guarantors are in compliance with the requirements of all applicable laws,
rules, regulations and orders of any Governmental Authority relating to their
respective businesses, in each case where the failure to comply, individually or
in the aggregate has or could reasonably be expected to have a Material Adverse
Effect.  Borrowers and Guarantors have obtained all material permits,
licenses, approvals, consents, certificates, orders or authorizations of any
Governmental Authority required for the lawful conduct of its business (the
“Permits”).  All of the Permits are valid and subsisting and in full
force and effect.  There are no actions, claims or proceedings pending
or to the best of any Borrower’s or Guarantor’s knowledge, threatened in writing
that seek the revocation, cancellation, suspension or modification of any of the
Permits where, individually or in the aggregate, it has or could reasonably be
expected to have a Material Adverse Effect.  Borrowers and Guarantors
are not in default in any respect under, or in violation in any respect of the
terms of, any indentures, agreements or other instrument governing Indebtedness
binding on it or its property except where the failure to comply has not or
could not be reasonably expected to have a Material Adverse Effect.

         

        8.8  
 Environmental
Compliance.

         

        (a)  Except
as set forth in Schedule 8.8 to the Information Certificate, Borrowers,
Guarantors and any Subsidiary of any Borrower or Guarantor, have not generated,
used, stored, treated, transported, manufactured, handled, produced or disposed
of any Hazardous Materials, on any property owned, leased or operated by it or
used by it in any manner which at any time violates in any respect any
applicable Environmental Law or Permit where such violation has or could
reasonably be expected to have a Material Adverse Effect, and the operations of
Borrowers, Guarantors and any Subsidiary of any Borrower or Guarantor at such
properties complies in all material respects with all Environmental Laws and all
Permits where such violation or failure to comply, individually or in the
aggregate, has or could reasonably be expected to have a Material Adverse
Effect.

         

        (b)  Except
as set forth in Schedule 8.8 to the Information Certificate, no Borrower or
Guarantor has received any notice of or otherwise has any information that there
has been any investigation by any Governmental Authority or any proceeding,
written complaint, order, directive, claim, citation or notice by any
Governmental Authority or any other person nor is any investigation pending or
to the best of any Borrower’s or Guarantor’s knowledge threatened in writing,
with respect to any non-compliance with or violation of the requirements of any
Environmental Law by any Borrower or Guarantor and any of its Subsidiaries or
the release, spill or discharge, threatened or actual, of any Hazardous Material
or the generation, use, storage, treatment, transportation, manufacture,
handling, production or disposal of any Hazardous Materials or any other
environmental, health or safety matter with regard to any properties or assets
owned, leased or operated by it or used by Borrowers, Guarantors or their
Subsidiaries or their businesses, which, individually or in the aggregate, has
or could reasonably be expected to have a Material Adverse Effect.

         

        
          
            
            

          

          
            97

            
              

            

          

          
            
            

          

        

         

        (c)  Except
as set forth in Schedule 8.8 to the Information Certificate, Borrowers,
Guarantors and their Subsidiaries have no material liability (contingent or
otherwise) in connection with a release, spill or discharge, threatened or
actual, of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials under or from any property owned, leased or operated by it or used by
it or otherwise in connection with their businesses.

         

        8.9   
Employee
Benefits.

         

        (a)  Each
Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or State law.  Each Plan which is
intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service and to the best
of any Borrower’s or Guarantor’s knowledge, nothing has occurred which would
cause the loss of such qualification where such loss, when combined with other
such occurrences or failures to comply, has or could reasonably be expected to
have a Material Adverse Effect.  Each Borrower and its ERISA
Affiliates have made all required contributions to any Plan subject to
Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.

         

        (b)  Except
as set forth in the Information Certificate, there are no pending, or to the
best of any Borrower’s or Guarantor’s knowledge, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any
Plan.  Except as set forth in the Information Certificate, there has
been no prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan which has or could reasonably be expected to have
a Material Adverse Effect.

         

        (c)  (i)
Except as set forth in the Information Certificate, no ERISA Event has occurred
or is reasonably expected to occur; (ii) based on the latest valuation of each
Pension Plan and on the actuarial methods and assumptions employed for such
valuation (determined in accordance with the assumptions used for funding such
Pension Plan pursuant to Section 412 of the Code), the aggregate current
value of accumulated benefit liabilities of such Pension Plan under
Section 4001(a)(16) of ERISA does not exceed the aggregate current value of
the assets of such Pension Plan; (iii) each Borrower and Guarantor, and their
ERISA Affiliates, have not incurred and do not reasonably expect to incur, any
liability under Title IV of ERISA with respect to any Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) each Borrower and
Guarantor, and their ERISA Affiliates, have not incurred and do not reasonably
expect to incur, any liability (and no event has occurred which, with the giving
of notice under Section 4219 of ERISA, would result in such liability)
under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan;
and (v) each Borrower and Guarantor, and their ERISA Affiliates, have not
engaged in a transaction that would be subject to Section 4069 or 4212(c)
of ERISA.

         

        8.10 
 Bank
Accounts.  All
of the deposit accounts, investment accounts or other accounts in the name of or
used by any Borrower or Guarantor maintained at any bank or other financial
institution are set forth on Schedule 8.10 to the Information Certificate,
subject to the right of each Borrower and Guarantor to establish new accounts in
accordance with Section 5.2 hereof.

         

        
          
            
            

          

          
            98

            
              

            

          

          
            
            

          

        

         

        8.11 
 Intellectual
Property.  Each
Borrower and Guarantor owns or licenses or otherwise has the right to use all
Intellectual Property necessary for the operation of its business.  As
of the date hereof, Borrowers and Guarantors do not have any material
Intellectual Property registered, or subject to pending applications, in the
United States Patent and Trademark Office or any similar office or agency in the
United States, any State thereof, any political subdivision thereof or in any
other country, other than those described in Schedule 8.11 to the
Information Certificate and has not granted any licenses with respect thereto
other than as set forth in Schedule 8.11 to the Information
Certificate.  To the best of any Borrower’s or
Guarantor’s  knowledge, no event has occurred which permits or would
permit after notice or passage of time or both, the revocation, suspension or
termination of such rights.  To the best of any Borrower’s and
Guarantor’s knowledge, no slogan or other advertising device, product, process,
method, substance or other Intellectual Property or goods bearing or using any
Intellectual Property presently contemplated to be sold by or employed by any
Borrower or Guarantor infringes any patent, trademark, servicemark, tradename,
copyright, license or other Intellectual Property owned by any other Person
presently where such infringement has or could reasonably be expected to have
Material Adverse Effect or adversely affect the ability of any Borrower to sell
or otherwise dispose of Inventory.  No claim or litigation is pending
or threatened in writing against or affecting any Borrower or Guarantor
contesting its right to sell or use any such Intellectual Property where such
claim or litigation if adversely determined for any Borrower or Guarantor would
reasonably be expected to have a Material Adverse Effect or would adversely
affect the ability of any Borrower to sell or otherwise dispose of
Inventory.  Schedule 8.11 to the Information Certificate sets
forth all of the material agreements or other arrangements of each Borrower and
Guarantor pursuant to which such Borrower or Guarantor has a license or other
right to use any trademarks, logos, designs, representations or other
Intellectual Property owned by another person (other than “off the shelf”
license agreements regarding any computer software, hardware, technology or
related products) as in effect on the date hereof and the dates of the
expiration of such agreements or other arrangements of such Borrower or
Guarantor as in effect on the date hereof which is necessary or of material
value to such Borrower’s or Guarantor’s business (collectively, together with
such agreements or other arrangements as may be entered into by any Borrower or
Guarantor after the date hereof, collectively, the “License Agreements” and
individually, a “License Agreement”).  No material trademark,
servicemark, copyright or other material Intellectual Property at any time used
by any Borrower or Guarantor which is owned by another person, or owned by such
Borrower or Guarantor subject to any security interest, lien, collateral
assignment, pledge or other encumbrance in favor of any person other than Agent,
is affixed to or incorporated in any Eligible Inventory, except (a) to the
extent permitted under the term of the license agreements listed on
Schedule 8.11 to the Information Certificate and (b) to the extent the sale
of Inventory to which such Intellectual Property is affixed or incorporated is
permitted to be sold by such Borrower or Guarantor under applicable law
(including the United States Copyright Act of 1976).

         

        8.12  
Subsidiaries;
Affiliates; Capitalization; Solvency.

         

        (a)  Each
Borrower and Guarantor does not have any direct or indirect Subsidiaries or
Affiliates and is not engaged in any joint venture or partnership as of the date
hereof except as set forth in Schedule 8.12 to the Information
Certificate.

         

        (b)  As
of the date hereof, each Borrower and Guarantor is the record and beneficial
owner of all of the issued and outstanding shares of Equity Interests of each of
the Subsidiaries listed on Schedule 8.12 to the Information Certificate as
being owned by such Borrower or Guarantor and there are no proxies, irrevocable
or otherwise, with respect to such shares and no equity securities of any of the
Subsidiaries are or may become required to be issued by reason of any options,
warrants, rights to subscribe to, calls or commitments of any kind or nature and
there are no contracts, commitments, understandings or arrangements by which any
Subsidiary is or may become bound to issue additional shares of its Equity
Interests or securities convertible into or exchangeable for such
shares.

         

        (c)  The
issued and outstanding shares of Equity Interests of each Borrower and Guarantor
(other than Parent) are directly and beneficially owned and held by the persons
indicated in the Information Certificate, and in each case all of such shares
have been duly authorized and are fully paid and non-assessable, free and clear
of all claims, liens, pledges and encumbrances of any kind, except as disclosed
in writing to Agent prior to the date hereof or otherwise permitted
hereunder.

         

        
          
            
            

          

          
            99

            
              

            

          

          
            
            

          

        

         

        (d)  Parent
is, and Borrowers and Guarantors, taken as a whole, are and will continue to be
Solvent after the creation of the Obligations, the security interests of Agent,
and the other transactions contemplated hereunder.

         

        8.13 
 Labor
Disputes.

         

        (a)  Set
forth on Schedule 8.13 to the Information Certificate is a list (including
dates of termination) of all collective bargaining or similar agreements between
or applicable to each Borrower and Guarantor and any union, labor organization
or other bargaining agent in respect of the employees of any Borrower or
Guarantor on the date hereof.

         

        (b)  Except
as set forth on Schedule 8.13 to the Information Certificate, there is (i)
no significant unfair labor practice complaint pending against any Borrower or
Guarantor or, to the best of any Borrower’s or Guarantor’s knowledge, threatened
in writing against it, before the National Labor Relations Board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is pending on the date hereof against
any Borrower or Guarantor or, to best of any Borrower’s or Guarantor’s
knowledge, threatened against it, and (ii) no significant strike, labor dispute,
slowdown or stoppage is pending against any Borrower or Guarantor or, to the
best of any Borrower’s or Guarantor’s knowledge, threatened against any Borrower
or Guarantor.

         

        8.14 
 Restrictions on
Subsidiaries.  Except
for restrictions contained in this Agreement or any other agreement with respect
to Indebtedness of any Borrower or Guarantor permitted hereunder as in effect on
the date hereof, there are no contractual or consensual restrictions on any
Borrower or Guarantor or any of its Subsidiaries which prohibit or otherwise
restrict (a) the transfer of cash or other assets (i) between any Borrower or
Guarantor and any of its or their Subsidiaries or (ii) between any Subsidiaries
of any Borrower or Guarantor or (b) the ability of any Borrower or Guarantor or
any of its or their Subsidiaries to incur Indebtedness or grant security
interests to Agent or any Lender in the Collateral.

         

        8.15
  Material
Contracts.  Schedule 8.15
to the Information Certificate sets forth all Material Contracts to which any
Borrower or Guarantor is a party or is bound as of the date
hereof.  Borrowers and Guarantors have delivered true, correct and
complete copies of such Material Contracts to Agent on or before the date
hereof.  Borrowers and Guarantors are not in breach or in default in
any material respect of or under any Material Contract and have not received any
notice of the intention of any other party thereto to terminate any Material
Contract.

         

        8.16  
OFAC.  None
of Borrowers, any Subsidiary of any Borrower or any Affiliate of
Borrower:   (a) is a Sanctioned Person, (b) has more than ten
(10%) percent of its assets in Sanctioned Entities,
or    (c) derives more than ten (10%) percent of its
operating income from investments in, or transactions with Sanctioned Persons or
Sanctioned Entities.  The proceeds of any Loan will not be used and
have not been used to fund any operations in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned
Entity.

         

        8.17 
 Anti-Terrorism
Laws.  No
Borrower, Guarantor or any of their Subsidiaries is an “enemy” or an “ally of
the enemy” within the meaning of Section 2 of the Trading with the Enemy Act of
the United States of America (50 U.S.C. App. §§ 1 et seq.), as
amended.  No Borrower, Guarantor or any of their Subsidiaries is in
violation of (a) the Trading with the Enemy Act, as amended, (b) any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto or (c) the Patriot Act.  No Borrower,
Guarantor or any of their Subsidiaries is a blocked person described in Section
1 of the Anti-Terrorism Order or, to the best of its knowledge, engages in any
dealings or transactions, or is otherwise associated, with any such blocked
person.

         

        
          
            
            

          

          
            100

            
              

            

          

          
            
            

          

        

         

        8.18
  Investment
Company.  No
Borrower or Guarantor or any of its Subsidiaries is subject to regulation under
the Investment Company Act of 1940, as amended, the Federal Power Act, the
Interstate Commerce Act,  or any other Federal, or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations
unenforceable.  No Borrower or Guarantor or any of its Subsidiaries is
an “investment company” or a company “controlled” by an “investment company” or
an “affiliated person” or a “promoter” or a “principal underwriter” of an
“investment company”, as such terms are defined in the Investment Company Act of
1940, as amended.  The making of the Loans hereunder, the application
of the proceeds and the repayment thereof by each Borrower and Guarantor and the
performance of the transactions contemplated herein will not violate any
provision of the Investment Company Act of 1940, as amended, or any rule,
regulation or order issued pursuant thereto.

         

        8.19  
Federal Reserve
Regulations.  Neither
Parent nor any of its Subsidiaries is engaged or will engage, principally or as
one of its important activities, in the business of buying or carrying margin
stock or extending credit for the purpose of buying or carrying margin
stock.  No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry any margin stock or to refinance any Indebtedness originally
incurred for such purpose or for any purpose that entails a violation of, or
that is inconsistent with, the provisions of the Regulations of the Board of
Governors, including Regulations T, U and X.

         

        8.20
  Pensions.  No
UK Loan Party is or has at any time been: (a) an employer (for the purposes of
sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme
which is not a money purchase scheme (both terms as defined in the Pensions
Schemes Act 1993); and (b)"connected" with or an "associate" (as those terms are
used in sections 38 and 43 of the Pensions Act 2004) of such an
employer.

         

        8.21
  Governing
law and Enforcement.  The
choice of English law as the governing law of the UK Loan Documents will be
recognized and enforced by the jurisdiction of incorporation of each Loan Party
which is a party to those documents; and any judgment obtained in England in
relation to a UK Loan Document will be recognized and enforced in the
jurisdiction of incorporation of each Loan Party which is a party to those
documents.

         

        8.22
  Pari passu
ranking.  Any
UK Loan Party's payment obligations under the UK Loan Documents rank at least
pari passu with the claims of all its other unsecured and unsubordinated
creditors, except for obligations mandatorily preferred by law applying to
companies generally.

         

        8.23
  Ranking.  The
UK Loan Documents have or will have the ranking in priority which it is
expressed to have in the UK Loan Documents and it is not subject to any prior
ranking or pari passu ranking Collateral.

         

        8.24
  Registration of UK
establishment.  Each Loan
Party (other than a UK Loan Party):

         

        (a)  is
not an "overseas company that is registered" within the meaning of Part 3 of The
Overseas Companies (Execution of Documents and Registration of Charges)
Regulations 2009; or

         

        (b)  has
provided to the Agent copies of all documents it has delivered to the Registrar
of Companies under:

         

        (i) 
 Part 2 (Initial registration of particulars) or Part 3 (Alteration in
registered particulars) of the Overseas Companies Regulations 2009;
or

         

        
          
            
            

          

          
            101

            
              

            

          

          
            
            

          

        

         

        (ii)
  section 1048 of the Companies Act 2006.

         

        8.25  No filing or stamp
taxes.  Under the
law of each Loan Party's jurisdiction of incorporation it is not necessary that
any Loan Documents be filed, recorded on enrolled with any court or other
authority in that jurisdiction or that any stamp, registration or similar tax be
paid on or in relation to the Loan Documents or the transactions contemplated by
the Loan Documents, except:

         

        (a)  registration
of particulars of the UK Loan Documents at the Companies Registration Office in
England and Wales in accordance with Part 25 (Company Charges) of the UK Act or
any regulations relating to the registration of charges made under, or applying
the provisions of, the UK Act and payment of associated fees;

         

        (b)  registration
of particulars of the Debenture at the Trade Marks Registry at the Patent Office
in England and Wales and payment of associated fees];

         

        (c)  registration
of the Debenture at the Land Registry or Land Charges Registry in England and
Wales and payment of associated fees,

         

        (d)  registration
of each of the Singapore Debentures and each of the Singapore Share Charges with
the Accounting and Corporate Regulatory Authority of Singapore and the payment
of the applicable amount of stamp duty payable in Singapore in respect of the
stamping of each of the Singapore Debentures and each of the Singapore Share
Charges; and

         

        (e)  which
registrations, filings and fees will be made and paid promptly after the date of
the relevant Loan Document.

         

        8.26  Accuracy and Completeness of
Information.  All
information furnished by or on behalf of any Borrower or Guarantor in writing to
Agent or any Lender in connection with this Agreement or any of the other Loan
Documents or any transaction contemplated hereby or thereby, including all
information on the Information Certificate is true and correct in all material
respects on the date as of which such information is dated or certified and does
not omit any material fact necessary in order to make such information not
misleading.  No event or circumstance has occurred which has had or
could reasonably be expected to have a Material Adverse Affect, which has not
been fully and accurately disclosed to Agent in writing prior to the date
hereof.

         

        8.27  Survival of Warranties;
Cumulative.  All
representations and warranties contained in this Agreement or any of the other
Loan Documents shall survive the execution and delivery of this Agreement and
shall be deemed to have been made again to Agent, Lenders and Issuing Bank on
the date of the request for any Loan or any issuance, amendment, renewal or
extension of a Letter of Credit and on the date of each additional Loan or such
issuance, amendment, renewal or extension, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and accurate
on and as of such earlier date) and shall be conclusively presumed to have been
relied on by Agent and Lenders regardless of any investigation made or
information possessed by Agent or any Lender.  The representations and
warranties set forth herein shall be cumulative and in addition to any other
representations or warranties which any Borrower or Guarantor shall now or
hereafter give, or cause to be given, to Agent or any Lender.

         

        
          
            
            

          

          
            102

            
              

            

          

          
            
            

          

        

         

        SECTION
9.     AFFIRMATIVE
COVENANTS

         

        9.1   
Maintenance of
Existence.

         

        (a)  Each
Borrower and Guarantor shall at all times preserve, renew and keep in full force
and effect its corporate, company or limited liability company existence and
rights and franchises with respect thereto except as permitted pursuant to
Section 10.1 hereof and maintain in full force and effect all licenses,
trademarks, tradenames, approvals, authorizations, leases, contracts and Permits
necessary to carry on the business as presently or proposed to be conducted
where the failure to do so has or could reasonably be expected to have a
Material Adverse Effect.

         

        (b)  No
Borrower or Guarantor shall change its name unless each of the following
conditions is satisfied: (i) Agent shall have received not less than thirty (30)
days prior written notice from Administrative Borrower of such proposed change
in its corporate name, which notice shall accurately set forth the new name; and
(ii) Agent shall have received a copy of the amendment to the certificate of
incorporation, certificate of formation or other organizational document of such
Borrower or Guarantor providing for the name change certified by the Secretary
of State or comparable official of the jurisdiction of incorporation or
organization of such Borrower or Guarantor as soon as it is
available.

         

        (c)  No
Borrower or Guarantor shall change its chief executive office or its mailing
address or organizational identification number (or if it does not have one,
shall not acquire one) unless Agent shall have received not less than thirty
(30) days’ prior written notice from Administrative Borrower of such proposed
change, which notice shall set forth such information with respect thereto as
Agent may require and Agent shall have received such agreements as Agent may
require in connection therewith.  No Borrower or Guarantor shall
change its type of organization, jurisdiction of organization or other legal
structure.

         

        9.2   
New Collateral
Locations.  Each
Borrower and Guarantor may only open any new location so long as (a) (i) in the
case of any US Borrower, such locations are within the United States or its
territories, (ii) in the case of any UK Borrower, are within the United Kingdom,
and (iii) in the case of any Singapore Borrowing Base Guarantor, such locations
are in Singapore, (b) such location is set forth in the applicable report
provided for in Section 7.1(a) to the extent required under such
Section or in any event if Collateral having a value of more than $250,000
at any one such location or $500,000 for all such locations in the aggregate is
or will be kept at such locations, Agent has received ten (10) Business Days’
written notice within the time of the opening of any such new location, and (c)
upon Agent’s request, such Borrower or Guarantor executes and delivers, or
causes to be executed and delivered, to Agent such agreements, documents, and
instruments as Agent may deem reasonably necessary or desirable to protect its
interests in the Collateral at such location; provided, that, so long as no
Event of Default exists or has occurred and is continuing, upon Agent’s request,
Borrowers and Guarantors shall only be required to use their commercially
reasonable efforts to obtain a Collateral Access Agreement and to the extent
that Agent has not received a Collateral Access Agreement acceptable to it for
any such location, it may establish a Reserve as provided herein.

         

        9.3    Compliance with Laws,
Regulations, Etc.

         

        (a)  Each
Borrower and Guarantor shall, and shall cause any of their respective
Subsidiaries to, at all times, comply in all respects with all laws, rules,
regulations, licenses, approvals, orders and other Permits applicable to it and
duly observe all requirements of any foreign, Federal, State, or local
Governmental Authority where the failure to do so has or could reasonably be
expected to have a Material Adverse Effect.

         

        
          
            
            

          

          
            103

            
              

            

          

          
            
            

          

        

         

        (b)  Borrowers
and Guarantors shall give written notice to Agent promptly upon any Borrower’s
or Guarantor’s receipt of any notice of, or any Borrower’s or Guarantor’s
otherwise obtaining knowledge of, (i) the occurrence of any event involving the
release, spill or discharge, threatened or actual, of a material amount of any
Hazardous Material that has or could reasonably be expected to have a Material
Adverse Effect or (ii) any investigation, proceeding, complaint, order,
directive, claims, citation or notice that with respect to any of the following
that has or could reasonably be expected to have a Material Adverse Effect: (A)
any non-compliance with or violation of any Environmental Law by any Borrower or
Guarantor or (B) the release, spill or discharge of any Hazardous Material other
than in the ordinary course of business and other than as permitted under any
applicable Environmental Law. Copies of all environmental surveys, audits,
assessments, feasibility studies and results of remedial investigations shall be
promptly furnished, or caused to be furnished, by such Borrower or Guarantor to
Agent upon Agent’s request.  Each Borrower and Guarantor shall take
prompt action to respond to any material non-compliance with any of the
Environmental Laws and shall regularly report to Agent on such
response.

         

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

         

        (d)  Each
Borrower and Guarantor shall indemnify and hold harmless Agent and Lenders and
their respective directors, officers, employees, agents, invitees,
representatives, successors and assigns, from and against any and all losses,
claims, damages, liabilities, costs, and expenses (including reasonable
attorneys’ fees and expenses) directly or indirectly arising out of or
attributable to the use, generation, manufacture, reproduction, storage,
release, threatened release, spill, discharge, disposal or presence of a
Hazardous Material, including the costs of any required or necessary repair,
cleanup or other remedial work with respect to any property of any Borrower or
Guarantor and the preparation and implementation of any closure, remedial or
other required plans.  All representations, warranties, covenants and
indemnifications in this Section 9.3 shall survive the payment of the
Obligations and the termination of this Agreement.

         

        9.4   
Payment of Taxes and
Claims.  Each
Borrower and Guarantor shall, and shall cause any Subsidiary to, duly pay and
discharge all taxes, assessments, contributions and governmental charges upon or
against it or its properties or assets, except for taxes the validity of which
is being contested in good faith by appropriate proceedings diligently pursued
and available to such Borrower, Guarantor or Subsidiary, as the case may be, and
with respect to which adequate reserves have been set aside on its books to the
extent required by GAAP.

         

        
          
            
            

          

          
            104

            
              

            

          

          
            
            

          

        

         

        9.5 
  Insurance.  Each
Borrower and Guarantor shall, and shall cause any Subsidiary to, at all times,
maintain with financially sound and reputable insurers insurance with respect to
the Collateral against loss or damage and all other insurance of the kinds and
in the amounts customarily insured against or carried by corporations of
established reputation engaged in the same or similar businesses and similarly
situated.  Said policies of insurance shall be reasonably satisfactory
to Agent as to form, amount and insurer.  Borrowers and Guarantors
shall furnish certificates, policies or endorsements to Agent as Agent shall
reasonably require as proof of such insurance, and, Agent is authorized, but not
required, to obtain such insurance at the expense of Borrowers if any Borrower
or Guarantor fails at any time to do so.  All policies shall provide
for at least thirty (30) days prior written notice to Agent of any cancellation
or reduction of coverage.  Agent may act as attorney for each Borrower
and Guarantor in obtaining, and at any time an Event of Default exists or has
occurred and is continuing, adjusting, settling, amending and canceling such
insurance.  Borrowers and Guarantors shall cause Agent to be named as
a loss payee as its interests may appear and an additional insured (but without
any liability for any premiums) under such insurance policies and Borrowers and
Guarantors shall obtain non-contributory lender’s loss payable endorsements to
all insurance policies in form and substance satisfactory to
Agent.  Such lender’s loss payable endorsements shall specify that the
proceeds of such insurance shall be payable to Agent as its interests may appear
and further specify that Agent and Lenders shall be paid regardless of any act
or omission by any Borrower, Guarantor or any of its or their
Affiliates.  Without limiting any other rights of Agent or Lenders,
any insurance proceeds received by Agent or proceeds of condemnation awards
payable at any time may be applied to payment of the Obligations (without
permanent reduction thereof), whether or not then due, in accordance with
Section 6.7 hereof.  Upon application of such proceeds to the
Revolving Loans, Revolving Loans may be available subject and pursuant to the
terms hereof to be used for the costs of repair or replacement of the Collateral
lost or damages resulting in the payment of such insurance
proceeds.

         

        9.6  
 Financial
Statements and Other Information.

         

        (a)  Each
Borrower and Guarantor shall, and shall cause any Subsidiary to, keep proper
books and records in which true and complete entries shall be made of all
dealings or transactions of or in relation to the Collateral and the business of
such Borrower, Guarantor and its Subsidiaries in accordance with
GAAP.  Borrowers and Guarantors shall during regular business hours
and upon reasonable notice from the Agent furnish to Agent and upon Agent’s
request, to Lenders, all such financial and other information as Agent shall
reasonably request relating to the Collateral and the assets, business and
operations of Borrowers and Guarantors, and Borrower shall notify the auditors
and accountants of Borrowers and Guarantors that Agent is authorized to obtain
such information directly from them (other than materials protected by the
attorney-client privilege) at any reasonable time.  Without limiting
the foregoing, Borrowers shall furnish or cause to be furnished to Agent, and
upon Agent’s request, to each Lender, the following:

         

        (i)   
 as soon as available but in any event within thirty (30) days after the
end of each fiscal month that is not the end of a fiscal quarter of Parent,
monthly statements of income and loss, provided, that, in the event that
Covenant Excess Availability shall be less than $18,000,000 and at all times
thereafter, then as soon as available, but in any event within thirty (30) days
after the end of each fiscal month that is not the end of a fiscal quarter of
Parent, monthly unaudited consolidated financial statements and unaudited
consolidating financial statements (including in each case, balance sheets,
statements of income and loss, statement of cash flow, and statements of
shareholders equity), all in reasonable detail (but without footnotes), fairly
presenting in all material respects the financial position and the results of
the operations of Parent and its Subsidiaries (with separate summary information
for Borrowers and Guarantors) as of the end of and through such fiscal month,
subject to normal year-end adjustments; and

         

        (ii)   
as soon as available, but in any event within forty-five (45) days after the end
of each fiscal quarters of each fiscal year of Parent, quarterly unaudited
consolidated financial statements and unaudited consolidating financial
statements (including in each case balance sheets, statements of income and
loss, statements of cash flow, and statements of shareholders’ equity), all in
reasonable detail, fairly presenting in all material respects the financial
position and the results of the operations of Parent and its Subsidiaries (with
separate summary information for Borrowers and Guarantors only) as of the end of
and through such fiscal quarter, subject to normal year-end adjustments;
and

         

        
          
            
            

          

          
            105

            
              

            

          

          
            
            

          

        

         

        (iii)  
within ninety (90) days after the end of each fiscal year of Parent, audited
consolidated financial statements and unaudited consolidating financial
statements of Parent and its Subsidiaries (including in each case balance
sheets, statements of income and loss, statements of cash flow and statements of
shareholders’ equity), and the accompanying notes thereto, all in reasonable
detail, fairly presenting in all material respects the financial position and
the results of the operations of Parent and its Subsidiaries (with separate
summary information for Borrowers and Guarantors only) as of the end of and for
such fiscal year.

         

        (b)  Borrowers
and Guarantors shall promptly notify Agent in writing of the details of (i) any
loss, damage, investigation, action, suit, proceeding or claim relating to
Collateral having a value of more than US Dollar Equivalent of $500,000 or which
if adversely determined would result in any Material Adverse Effect, (ii) any
Material Contract being terminated or amended or any new Material Contract
entered into (in which event Borrowers and Guarantors shall provide Agent with a
copy of such Material Contract), (iii) any order, judgment or decree in excess
of US Dollar Equivalent of $2,000,000 shall have been entered against any
Borrower or Guarantor any of its or their properties or assets, (iv) any
notification of a material violation of laws or regulations received by any
Borrower or Guarantor, (v) any ERISA Event, and (vi) the occurrence of any
Default or Event of Default.

         

        (c)  Borrowers
and Guarantors shall furnish to Agent (i) not less than ten (10) Business Days’
prior written notice of (A) the intention of any Subsidiaries of Parent to merge
or consolidate as permitted under Section 10.1(a) hereof, together with
such other information with respect thereto as Agent may reasonably request, (B)
the issuance and sale by Parent or any of its Subsidiaries of Equity Interests
as permitted under clause (c) of the definition of the term Permitted
Disposition, which notice shall specify the parties to whom such shares are to
be sold, the terms of such sale, the total amount which it is anticipated will
be realized from the issuance and sale of such Equity Interests and the Net Cash
Proceeds which it is anticipated will be received by such Borrower or Guarantor
and such other information with respect thereto as Agent may reasonably request,
(C) the intention of any Subsidiary of Parent to wind up, liquidate or dissolve
as permitted under Section 10.1(c) hereof, together with such other
information with respect thereto as Agent may reasonably request, (D) the
intention of such Borrower or Guarantor to incur Indebtedness permitted under
Sections 10.3(h),and 10.3(j), which notice shall set forth in reasonable detail
satisfactory to Agent the amount of such Indebtedness, the person or persons to
whom such Indebtedness will be owed, the interest rate, the schedule of
repayments and maturity date with respect thereto and such other information as
Agent may request with respect thereto, and (ii) all notices or demands in
connection with Indebtedness evidenced by or arising under Indebtedness
permitted under Sections 10.3(h) or any Refinancing Indebtedness in respect
thereof in each case, either received by any Borrower or Guarantor or on its
behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor
or on its behalf concurrently with the sending thereof, as the case may
be.

         

        (d)  Borrowers
and Guarantors shall furnish to Agent, and upon Agent’s reasonable request, to
each Lender, in form and detail reasonably satisfactory to Agent:

         

        (i)  
  concurrently with the delivery of the financial statements referred
to in Section 9.6(a)(i), a compliance certificate substantially in the form of
Exhibit E hereto by the chief financial officer, vice president of finance,
treasurer or controller of Administrative Borrower on behalf of Borrowers and
Guarantors, along with a schedule in form reasonably satisfactory to Agent of
the calculations used in determining, as of the end of such month, the ratio and
amounts provided for in Section 11 of this Agreement for such month (whether or
not compliance is then required) and a written summary of material changes if
any, either in GAAP or in the consistent application thereof that materially
affected the financial covenant calculations for the applicable
period;

         

        
          
            
            

          

          
            106

            
              

            

          

          
            
            

          

        

         

        (ii)    
 concurrently with the delivery of the financial statements referred to in
Section 9.6(a)(iii), the unqualified opinion of independent certified
public accountants with respect to the audited consolidated financial
statements, which independent accounting firm shall be selected by
Administrative Borrower and reasonably acceptable to Agent, that such audited
consolidated financial statements have been prepared in accordance with GAAP,
and present fairly in all material respects the results of operations and
financial condition of Parent and its Subsidiaries as of the end of and for the
fiscal year then ended and stating that in making the examination necessary
therefor no knowledge was obtained of any Default or Event of Default, or if any
such Default or Event of Default shall exist as it relates to any financial
matters, including as to Section 11.1, stating the nature and status of such
event;

         

        (iii)   
 concurrently with the delivery of the financial statements referred to in
Sections 9.6(a)(ii) and 9.6(a)(iii), a management discussion and analysis
(in substantially the same format and with the same scope of information as
provided to Agent prior to the date hereof);

         

        (iv)  
  at such time as available, but in any event no later than thirty
(30) days prior to the last day of each fiscal year of Parent, beginning with
the fiscal year ending December 31, 2010, projected consolidated and
consolidating financial statements (including in each case substantially in the
same format and with the same scope of information as in the projections most
recently provided to Agent prior to the date hereof) of Parent and its
Subsidiaries (such projections to include consolidating projections for Parent
and its US Subsidiaries and for the Non-US Subsidiaries) for the next fiscal
year, all in reasonable detail, and in a format consistent with the projections
delivered by Parent to Agent prior to the date hereof, together with such
supporting information as Agent may reasonably request, which projected
financial statements shall be prepared on a monthly basis for the next
succeeding year and shall represent the reasonable best estimate by Borrowers
and Guarantors of the future financial performance of Parent and its
Subsidiaries for the periods set forth therein and shall have been prepared on
the basis of the assumptions set forth therein believed by the Parent to be
reasonable at the time made and fair in light of then current conditions and
facts(it being understood that actual results may differ from those set forth in
such projected financial statements);

         

        (v)  
   promptly after the same are available, copies of each annual
report, proxy or annual or quarterly financial statement or other report or
communication sent generally to the equity holders of any Borrower or Guarantor,
and copies of all annual, regular, periodic and special reports and registration
statements which a Borrower or Guarantor may file or be required to file with
the Securities and Exchange Commission under Section 13 or 15(d) of the
Exchange Act, and not otherwise required to be delivered to Agent pursuant
hereto;

         

        (vi)  
  concurrently with the delivery of the financial statements referred
to in Sections 9.6(a)(i) and 9.6(a)(ii), a certificate by the chief financial
officer, vice president of finance, treasurer or controller of Administrative
Borrower on behalf of Borrowers and Guarantors containing information regarding
the amount of all sales or other dispositions of assets (whether voluntary or
involuntary), issuances or incurrence of Indebtedness or Equity Interests,
Permitted Investments, Restricted Payments, and optional prepayments of
Indebtedness that occurred during the period covered by such financial
statements and such other information with respect thereto as Agent may
request;

         

        (vii)  
 promptly after any request by Agent or any Lender, copies of any detailed
audit reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of Parent by
independent accountants in connection with the accounts or books of Parent or
any Subsidiary, or any audit of any of them;

         

        (viii) 
 promptly, and in any event within five (5) Business Days after receipt
thereof by any Borrower or Guarantor or any Subsidiary thereof, copies of each
notice or other correspondence received from the Securities and Exchange
Commission (or comparable agency in any applicable non-U.S. jurisdiction)
concerning any investigation or possible investigation or other inquiry by such
agency regarding financial or other operational results of Parent or any
Subsidiary thereof;

         

        
          
            
            

          

          
            107

            
              

            

          

          
            
            

          

        

         

        (ix)    
concurrently with the delivery of the financial statements referred to in
Sections 9.6(a)(i) and 9.6(a)(ii), a certificate by the chief executive
officer, chief financial officer, vice president of finance, treasurer or
controller of Administrative Borrower on behalf of Borrowers and Guarantors
attaching the insurance binder or other evidence of insurance for any insurance
coverage of Borrowers, Guarantors or any Subsidiary that was renewed, replaced
or modified during the period covered by such financial statements.

         

        (e)  As
to any information contained in materials furnished pursuant to
Section 9.6(d)(iv), Borrowers shall not be separately required to furnish
such information under Section 9.6(a) hereof, but the foregoing shall not
be in derogation of the obligation of Borrowers to furnish the information and
materials described in Section 9.6(a) at the times specified
therein.

         

        (f)  Borrowers
and Guarantors hereby acknowledge that Agent and/or its Affiliates may make
available to Lenders and Issuing Bank materials and/or information provided by
or on behalf of Borrowers hereunder (collectively, “Borrower Materials”) by
posting the Borrower Materials on IntraLinks, Syndtrak, or another similar
electronic system.

         

        (g)  Borrowers
and Guarantors shall furnish or cause to be furnished to Agent such other
budgets, forecasts, projections and other information respecting the Collateral
and the business of Borrowers and Guarantors, as Agent may, from time to time,
reasonably request.  Agent is hereby authorized to deliver a copy of
any financial statement or any other information relating to the business of
Borrowers and Guarantors to any court or other Governmental Authority or to any
Lender or Participant or prospective Lender or Participant or any Affiliate of
any Lender or Participant subject to Section 15.5 hereof.  Any
documents, schedules, invoices or other papers delivered to Agent or any Lender
may be destroyed or otherwise disposed of by Agent or such Lender one (1) year
after the same are delivered to Agent or such Lender, except as otherwise
designated by Administrative Borrower to Agent or such Lender in
writing.

         

        9.7  
 Compliance with
ERISA; UK Pensions Schemes.

         

        (a)  Each
Borrower and Guarantor shall, and shall cause each of its ERISA Affiliates to:
(i) maintain each Plan in compliance with the applicable provisions of ERISA,
the Code and other Federal and State law; (ii) cause each Plan which is
qualified under Section 401(a) of the Code to maintain such qualification;
(iii) not terminate any Pension Plan so as to incur any liability to the Pension
Benefit Guaranty Corporation; (iv) not allow or suffer to exist any prohibited
transaction involving any Plan or any trust created thereunder which would
subject such Borrower, Guarantor or such ERISA Affiliate to a tax or other
liability on prohibited transactions imposed under Section 4975 of the Code
or ERISA; (v) make all required contributions to any Plan which it is obligated
to pay under Section 302 of ERISA, Section 412 of the Code or the
terms of such Plan; (vi) not allow or suffer to exist any accumulated funding
deficiency, whether or not waived, with respect to any such Pension Plan; (vii)
not engage in a transaction that could be subject to Section 4069 or
4212(c) of ERISA; or (viii) not allow or suffer to exist any occurrence of a
reportable event or any other event or condition which presents a risk of
termination by the Pension Benefit Guaranty Corporation of any Plan that is a
single employer plan, which termination could result in any liability to the
Pension Benefit Guaranty Corporation.

         

        (b)  Each
Borrower and Guarantor shall ensure that all pension schemes operated by or
maintained for the benefit of UK Group Companies and/or any of their employees
are fully funded based on the statutory funding objective under sections 221 and
222 of the Pensions Act 2004 and that no action or omission is taken by any UK
Group Company in relation to such a pension scheme which has or is reasonably
likely to have a Material Adverse Effect (including the termination or
commencement of winding-up proceedings of any such pension scheme or any UK
Group Company ceasing to employ any member of such a pension
scheme).

         

        
          
            
            

          

          
            108

            
              

            

          

          
            
            

          

        

         

        (c)  Each
Borrower and Guarantor shall ensure that no UK Group Company is or has been at
any time an employer (for the purposes of sections 38 to 51 of the Pensions Act
2004) of an occupational pension scheme which is not a money purchase scheme
(both terms as defined in the Pension Schemes Act 1993) or "connected" with or
an "associate" of (as those terms are defined in sections 38 or 43 of the
Pensions Act 2004) such an employer.

         

        (d)  Each
Borrower and Guarantor shall deliver to the Agent: (i) at such times as those
reports are prepared in order to comply with the then current statutory or
auditing requirements (as applicable either to the trustees of any relevant
schemes or to the Company); and (ii) at any other time if the Agent reasonably
believes that any relevant statutory or auditing requirements are not being
complied with, actuarial reports in relation to all pension schemes mentioned in
Section 9.7(b).

         

        (e)  Each
Borrower and Guarantor shall promptly notify the Agent of any material change in
the rate of contributions to any pension scheme mentioned in Clause 9.7(b) paid
or recommended to be paid (whether by the scheme actuary or otherwise) or
required (by law or otherwise).

         

        9.8   
End of Fiscal Years;
Fiscal Quarters.  Each
Borrower and Guarantor shall, for financial reporting purposes, cause its, and
each of its Subsidiaries’ fiscal years to end on the last day of February of
each year, and fiscal quarters to end on the last day of each of May, August,
November and February of each year.

         

        9.9   
License
Agreements.

         

        (a)  Each
Borrower and Guarantor shall (i) promptly and faithfully observe and perform all
of the material terms, covenants, conditions and provisions of the material
License Agreements to which it is a party to be observed and performed by it, at
the times set forth therein, if any, (ii) not do, permit, suffer or refrain from
doing anything that could reasonably be expected to result in a material default
under or breach of any of the terms of any material License Agreement, (iii) not
cancel, surrender, modify, amend, waive or release any material License
Agreement in any material respect or any term, provision or right of the
licensee thereunder in any material respect, or consent to or permit to occur
any of the foregoing; except, that, subject to
Section 10.11(b) below, such Borrower or Guarantor may cancel, surrender or
release any material License Agreement in the ordinary course of the business of
such Borrower or Guarantor; provided, that, such Borrower
or Guarantor (as the case may be) shall give Agent not less than thirty (30)
days prior written notice of its intention to so cancel, surrender and release
any such material License Agreement, (iv) give Agent prompt written notice of
any material License Agreement entered into by such Borrower or Guarantor after
the date hereof, together with a true, correct and complete copy thereof and
such other information with respect thereto as Agent may request, (v) give Agent
prompt written notice of any material breach of any obligation, or any default,
by any party under any material License Agreement, and deliver to Agent
(promptly upon the receipt thereof by such Borrower or Guarantor in the case of
a notice to such Borrower or Guarantor and concurrently with the sending thereof
in the case of a notice from such Borrower or Guarantor) a copy of each notice
of default and every other notice and other communication received or delivered
by such Borrower or Guarantor in connection with any material License Agreement
which relates to the right of such Borrower or Guarantor to continue to use the
property subject to such License Agreement, and (vi) furnish to Agent, promptly
upon the request of Agent, such information and evidence as Agent may reasonably
require from time to time concerning the observance, performance and compliance
by such Borrower or Guarantor or the other party or parties thereto with the
material terms, covenants or provisions of any material License
Agreement.  For purposes of this Section 10.11, the term “material
License Agreement” shall mean any License Agreement applicable to Intellectual
Property that is owned by a third party and licensed to a Borrower or Guarantor
and that is affixed to or otherwise necessary for the manufacture, sale or
distribution of any Inventory or the collection of Receivables (other than an
off-the-shelf product with a shrink wrap license or that is generally
available), including without limitation, the Nippon License
Agreement.

         

        
          
            
            

          

          
            109

            
              

            

          

          
            
            

          

        

         

        (b)  Each
Borrower and Guarantor will either exercise any option to renew or extend the
term of each material License Agreement to which it is a party in such manner as
will cause the term of such material License Agreement to be effectively renewed
or extended for the period provided by such option and give prompt written
notice thereof to Agent or give Agent prior written notice that such Borrower or
Guarantor does not intend to renew or extend the term of any such material
License Agreement or that the term thereof shall otherwise be expiring, not less
than sixty (60) days prior to the date of any such non-renewal or
expiration.  In the event of the failure of such Borrower or Guarantor
to extend or renew any material License Agreement to which it is a party, Agent
shall have, and is hereby granted, the irrevocable right and authority, at its
option, to renew or extend the term of such material License Agreement, whether
in its own name and behalf, or in the name and behalf of a designee or nominee
of Agent or in the name and behalf of such Borrower or Guarantor, as Agent shall
determine at any time that an Event of Default shall exist or have occurred and
be continuing.  Agent may, but shall not be required to, perform any
or all of such obligations of such Borrower or Guarantor under any of the
License Agreements, including, but not limited to, the payment of any or all
sums due from such Borrower or Guarantor thereunder.  Any sums so paid
by Agent shall constitute part of the Obligations.

         

        9.10 
 Additional
Guaranties and Collateral Security; Further
Assurances.

         

        (a)  In
the case of the formation or acquisition by a Borrower or Guarantor of any
Subsidiary after the date hereof, subject to the last sentence of this clause
(a) below, as to any such Subsidiary, (i) the Borrower or Guarantor forming such
Subsidiary shall cause any such Subsidiary to execute and deliver to Agent, in
form and substance satisfactory to Agent, (A) a joinder agreement to the Loan
Documents in order to make such Subsidiary a party to this Agreement as a
“Borrower” if it owns accounts or inventory that Administrative Borrower
requests be included as Eligible Accounts and Eligible Inventory or otherwise as
a “Guarantor”, and (B) a guarantee as a “Guarantor” or pledge agreement as a
“Pledgor”, and including, but not limited to, supplements and amendments hereto
and to any of the other Loan Documents, authorization to file UCC financing
statements, Collateral Access Agreements (to the extent required under
Section 9.2), other agreements, documents or instruments contemplated under
Section 5.3 and other consents, waivers, acknowledgments and other
agreements from third persons which Agent may deem reasonably necessary or
desirable in order to permit, protect and perfect its security interests in and
liens upon the assets of such Subsidiary and the Equity Interests of any
Borrower or Guarantor in such Subsidiary, corporate resolutions and other
organization and authorizing documents of such Person, and favorable opinions of
counsel to such person and (ii) the Borrower or Guarantor forming or acquiring
such Subsidiary shall execute and deliver to Agent, a pledge and security
agreement, in form and substance satisfactory to Agent, granting to Agent a
first pledge of and lien on all of the issued and outstanding shares of Equity
Interests of any such Subsidiary, and otherwise comply with the terms of
Section 5.2 hereof with respect thereto, and deliver such other agreements,
documents and instruments as Agent may require in connection with the documents
referred to above, including, but not limited to, supplements and amendments
hereto, corporate resolutions and other organization and authorizing documents
and favorable opinions of counsel to such person.  Notwithstanding
anything to the contrary set forth above, the foregoing shall not apply with
respect to any such Subsidiary formed or acquired after the date hereof that is
a Foreign Subsidiary that is a “controlled foreign corporation” (as such term is
defined in Section 957(a) of the Code or a successor provision
thereof).

         

        
          
            
            

          

          
            110

            
              

            

          

          
            
            

          

        

         

        (b)  In
the case of an acquisition of assets (other than Equity Interests) by a Borrower
or Guarantor after the date hereof, Agent shall have received, in form and
substance satisfactory to Agent, (i) evidence that Agent has valid and perfected
security interests in and liens upon all purchased assets to the extent such
assets constitute Collateral hereunder (except in the case of deposit accounts,
within thirty (30) days after the acquisition thereof; provided, that, in no event
shall any such assets consisting of Accounts or Inventory so purchased be deemed
to be Eligible Accounts or Eligible Inventory until Agent is perfected in such
deposit accounts, except as Agent may otherwise agree), (ii) except as Agent may
otherwise agree, all Collateral Access Agreements (to the extent required under
Section 9.2 hereof) and other consents, waivers, acknowledgments and other
agreements from third persons which Agent may deem necessary or desirable in
order to permit, protect and perfect its security interests in and liens upon
the assets purchased, and (iii) such other agreements, documents and instruments
as Agent may require in connection with the documents referred to above,
including, but not limited to, supplements and amendments hereto, corporate
resolutions and other organization and authorizing documents and favorable
opinions of counsel to such person.

         

        (c)  Notwithstanding
anything to the contrary contained herein, if Administrative Borrower requests
that the assets of any Subsidiary or any assets acquired directly by a Borrower
or Guarantor be included in the Borrowing Base, Agent shall have completed a
field examination with respect to the business and assets of such Subsidiary or
such assets so acquired in accordance with Agent’s customary procedures and
practices and as otherwise required by the nature and circumstances of the
business of the Subsidiary or such assets, the scope and results of which shall
be reasonably satisfactory to Agent before such assets may be
included.  Any Accounts or Inventory of such Subsidiary shall only be
Eligible Accounts or Eligible Inventory to the extent that Agent has so
completed such field examination with respect thereto and the criteria for
Eligible Accounts or Eligible Inventory set forth herein are satisfied with
respect thereto (or such other or additional criteria as Agent may, at its
option, establish with respect thereto, and subject to such Reserves as Agent
may establish in connection with the business of the Subsidiary or such assets),
and, if requested by Agent, in the case of Eligible Inventory to the extent that
it has been subject to an appraisal that satisfies the requirements of Section
7.3 hereof.

         

        (d)  At
the request of Agent at any time and from time to time, Borrowers and Guarantors
shall, at their expense, duly execute and deliver, or cause to be duly executed
and delivered, such further agreements, documents and instruments, and do or
cause to be done such further acts as may be reasonably necessary or proper to
evidence, perfect, maintain and enforce the security interests and the priority
thereof in the Collateral and to otherwise effectuate the provisions or purposes
of this Agreement or any of the other Loan Documents.  Agent may at
any time and from time to time in good faith request a certificate from an
officer of any Borrower or Guarantor representing that all conditions precedent
to the making of Loans and providing Letters of Credit contained herein are
satisfied.  In the event of such request by Agent, Agent and Lenders
may, at Agent’s option, cease to make any further Loans or provide any further
Letters of Credit until Agent has received such certificate and, in addition,
Agent has determined that such conditions are satisfied.

         

        9.11  
Centre of Main
Interests.  Each UK Loan Party shall maintain its centre of
main interests in England and Wales for the purposes of the Insolvency
Regulation.

         

        
          
            
            

          

          
            111

            
              

            

          

          
            
            

          

        

         

        9.12  
Costs and
Expenses.  Borrowers
and Guarantors shall pay to Agent on demand all reasonable costs, expenses,
filing fees and taxes paid or payable in connection with the preparation,
negotiation, execution, delivery, recording, syndication, administration,
collection, liquidation, enforcement and defense of the Obligations, Agent’s
rights in the Collateral, this Agreement, the other Loan Documents and all other
documents related hereto or thereto, including any amendments, supplements or
consents which may hereafter be contemplated (whether or not executed) or
entered into in respect hereof and thereof, including: (a) all costs and
expenses of filing or recording (including UCC financing statement filing taxes
and fees, documentary taxes, intangibles taxes and mortgage recording taxes and
fees, if applicable), (b) costs and expenses and fees for insurance premiums,
environmental audits, title insurance premiums, surveys, assessments,
engineering reports and inspections, appraisal fees and search fees, background
checks, costs and expenses of remitting loan proceeds, collecting checks and
other items of payment, and establishing and maintaining the Concentration
Accounts, together with Agent’s customary charges and fees with respect thereto;
(c) charges, fees or expenses charged by Issuing Bank in connection with any
Letter of Credit; (d) costs and expenses of preserving and protecting the
Collateral; (e) costs and expenses paid or incurred in connection with obtaining
payment of the Obligations, enforcing the security interests and liens of Agent
in the Collateral, selling or otherwise realizing upon the Collateral, and
otherwise enforcing the provisions of this Agreement and the other Loan
Documents or defending any claims made or threatened against Agent or any Lender
arising out of the transactions contemplated hereby and thereby (including
preparations for and consultations concerning any such matters); (f) all
out-of-pocket expenses and costs heretofore and from time to time hereafter
incurred by Agent during the course of periodic field examinations of the
Collateral and such Borrower’s or Guarantor’s operations, plus a per diem charge
at Agent’s then standard rate for Agent’s examiners in the field and office
(which rate as of the date hereof is $1,000 per person per day) subject to the
limitations set forth in Section 7.7 hereof; (g) any VAT incurred by Agent
or any Lender; and (h) the reasonable fees and disbursements of counsel
(including legal assistants) to Agent in connection with any of the foregoing
and in respect of the matters set forth in clause (e) above, of counsel to Agent
(including such local counsel as Agent may require), and, following the
occurrence and during the continuance of an Event of Default, the reasonable
fees and disbursements of one counsel (including legal assistants) to Lenders in
connection any of the foregoing and in respect of the matters set forth in
clauses (d) and (e) above.  Upon Administrative Borrower’s
request, Agent will provide such information with respect to such costs and
expenses as is customary for Agent to maintain and provide to
borrowers.

         

        SECTION
10.    NEGATIVE
COVENANTS

         

        10.1  
Sale of Assets,
Consolidation, Merger, Dissolution, Etc.  Each
Borrower and Guarantor shall not, and shall not permit any Subsidiary to,
directly or indirectly,

         

        (a)  merge
into or with or consolidate with any other Person or permit any other Person to
merge into or with or consolidate with it except that (i) any wholly-owned
Subsidiary of Parent (other than any Borrower or Guarantor) may merge with and
into or consolidate with any other wholly-owned Subsidiary of Parent (other than
any Borrower or Guarantor), (ii) any US Borrower may merge with and into or
consolidate with any other US Borrower or US Loan Party (including Parent) so
long as such US Borrower is the surviving entity except if such merger or
consolidation is with Parent, and then so long as Parent is surviving entity,
(iii) any UK Borrower may merge with and into or consolidate with any other UK
Loan Party so long as such UK Borrower is the surviving entity, (iii) any
Singapore Borrowing Base Guarantor may merge with and into or consolidate with
any other Singapore Loan Party so long as such Singapore Borrowing Base
Guarantor is the surviving entity; provided, that, each of the
following conditions is satisfied:  (A) Agent shall have received not
less than ten (10) Business Days’ prior written notice of the intention of such
Subsidiaries to so merge or consolidate, which notice shall set forth in
reasonable detail reasonably satisfactory to Lender, the persons that are
merging or consolidating, which person will be the surviving entity, the
locations of the assets of the persons that are merging or consolidating, and
the material agreements and documents relating to such merger or consolidation,
(B) as of the effective date of the merger or consolidation and after giving
effect thereto, no Default or Event of Default shall exist or have occurred and
be continuing, (C) Agent shall have received, true, correct and complete copies
of all agreements, documents and instruments relating to such merger or
consolidation, including, but not limited to, the certificate or certificates of
merger to be filed with each appropriate Secretary of State or comparable
governmental official, as applicable (with a copy as filed promptly after such
filing), (D) the surviving entity shall expressly confirm, ratify and assume the
Obligations and the Loan Documents to which it is a party in writing, in form
and substance satisfactory to Agent, and Borrowers and Guarantors shall execute
and deliver such other agreements, documents and instruments as Agent may
request in connection therewith;

         

        
          
            
            

          

          
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        (b)  sell,
issue, assign, lease, license, transfer, abandon or otherwise dispose of any
Equity Interests or Indebtedness to any other Person or any of its assets to any
other Person, except for Permitted Dispositions;

         

        (c)  
wind up, liquidate or dissolve except that any Subsidiary of Parent (other than
a Borrower or Singapore Borrowing Base Guarantor) may wind up, liquidate and
dissolve; provided, that, each of the
following conditions is satisfied, (i) the winding up, liquidation and
dissolution of such Subsidiary shall not violate any law or any order or decree
of any court or other Governmental Authority in any material respect and shall
not conflict with or result in the breach of, or constitute a default under, any
indenture, mortgage, deed of trust, or any other agreement or instrument to
which any Borrower or Guarantor is a party or may be bound, (ii) such winding
up, liquidation or dissolution shall be done in accordance with the requirements
of all applicable laws and regulations, (iii) effective upon such winding up,
liquidation or dissolution, all of the assets and properties of such Subsidiary
shall be duly and validly transferred and assigned to its shareholders, free and
clear of any liens, restrictions or encumbrances other than the security
interest and liens of Agent (and Agent shall have received such evidence thereof
as Agent may require) and Agent shall have received such deeds, assignments or
other agreements as Agent may request to evidence and confirm the transfer of
such assets of such Guarantor to a Borrower, (iv) Agent shall have received all
documents and agreements that any Borrower or Guarantor has filed with any
Governmental Authority or as are otherwise required to effectuate such winding
up, liquidation or dissolution, (v) no Borrower or Guarantor shall assume any
Indebtedness, obligations or liabilities as a result of such winding up,
liquidation or dissolution, or otherwise become liable in respect of any
obligations or liabilities of the entity that is winding up, liquidating or
dissolving, unless such Indebtedness is otherwise expressly permitted hereunder,
(vi) Agent shall have received not less than ten (10) days prior written notice
of the intention of such Subsidiary to wind-up, liquidate or dissolve, and (vii)
as of the date of such winding up, liquidation or dissolution and after giving
effect thereto, no Default or Event of Default shall exist or have occurred and
be continuing; or

         

        (d)  agree
to do any of the foregoing, except to the extent that such agreement contains a
condition requiring the consent of the Required Lenders if the agreement to do
any of the foregoing is otherwise prohibited by the terms hereof.

         

        10.2
  Encumbrances.  Each
Borrower and Guarantor shall not, and shall not permit any Subsidiary to,
create, incur, assume or suffer to exist any security interest, mortgage,
pledge, lien, charge or other encumbrance of any nature whatsoever on any of its
assets or properties, including the Collateral, or file or permit the filing of,
or permit to remain in effect, any financing statement or other similar notice
of any security interest or lien with respect to any such assets or properties,
except Permitted Liens.

         

        10.3 
 Indebtedness.  Each
Borrower and Guarantor shall not, and shall not permit any Subsidiary to, incur,
create, assume, become or be liable in any manner with respect to, or permit to
exist, any Indebtedness, or guarantee, assume, endorse, or otherwise become
responsible for (directly or indirectly), the Indebtedness, performance,
obligations or dividends of any other Person, except:

         

        (a)  the
Obligations;

         

        (b)  purchase
money Indebtedness (including Capital Leases) arising after the date hereof to
the extent secured by purchase money security interests in Equipment (including
Capital Leases) and purchase money mortgages on Real Property not to exceed the US Dollar Equivalent
of $500,000 in the aggregate for all of such Indebtedness at any time
outstanding so long as such security interests and mortgages do not apply to any
property of such Borrower, Guarantor or Subsidiary other than the Equipment or
Real Property so acquired, and the Indebtedness secured thereby does not exceed
the cost of the Equipment or Real Property so acquired, as the case may
be;

         

        
          
            
            

          

          
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        (c)  guarantees
by any Borrower or Guarantor of the Obligations of the other Borrowers or
Guarantors in favor of Agent for the benefit of Lenders and the other Secured
Parties;

         

        (d)  the
Indebtedness of any Borrower or Guarantor to any other Borrower or Guarantor
arising after the date hereof pursuant to loans by any Borrower or Guarantor
permitted hereunder;

         

        (e)  Indebtedness
in respect of performance bonds, bid bonds, appeal bonds, surety bonds and
similar obligations, in each case provided or entered into in the ordinary
course of business;

         

        (f)  Indebtedness
of a Borrower or Guarantor arising in connection with the endorsement of
instruments for deposit or collection in the ordinary course of
business;

         

        (g)  Indebtedness
of any Borrower or Guarantor entered into in the ordinary course of business
pursuant to a Hedge Agreement; provided, that, (i) such
arrangements are with a Bank Product Provider, (ii) such arrangements are not
for speculative purposes, and (iii) such Indebtedness shall be unsecured, except
to the extent such Indebtedness constitutes part of the Obligations arising
under or pursuant to Hedge Agreements with a Bank Product Provider that are
secured under the terms hereof;

         

        (h)  unsecured
Indebtedness of any Borrower or Guarantor or any of their respective
Subsidiaries arising after the date hereof to any third person (but not to any
other Borrower or Guarantor, or Subsidiary of Parent); provided, that, each of the
following conditions is satisfied as determined by Agent: (i) such Indebtedness
shall be on terms and conditions acceptable to Agent and shall be subject and
subordinate in right of payment to the right of Agent and Lenders to receive the
prior indefeasible payment and satisfaction in full payment of all of the
Obligations pursuant to the terms of an intercreditor agreement between Agent
and such third party, in form and substance satisfactory to Agent, (ii) Agent
shall have received not less than ten (10) days prior written notice of the
intention of such Borrower or Guarantor to incur such Indebtedness, which notice
shall set forth in reasonable detail satisfactory to Agent the amount of such
Indebtedness, the person or persons to whom such Indebtedness will be owed, the
interest rate, the schedule of repayments and maturity date with respect thereto
and such other information as Agent may request with respect thereto, (iii)
Agent shall have received true, correct and complete copies of all agreements,
documents and instruments evidencing or otherwise related to such Indebtedness,
(iv) except as Agent may otherwise agree in writing, all of the proceeds of the
loans or other accommodations giving rise to such Indebtedness shall be paid to
Agent for application to the Obligations in such order and manner as Agent may
determine or at Agent’s option, to be held as cash collateral for the
Obligations, (v) in no event shall the aggregate principal amount of such
Indebtedness incurred during the term of this Agreement exceed the US Dollar
Equivalent of $2,000,000, (vi) as of the date of incurring such Indebtedness and
after giving effect thereto, no Default or Event of Default shall exist or have
occurred, (vii) such Borrower and Guarantor shall not, directly or indirectly,
(A) amend, modify, alter or change the terms of such Indebtedness or any
agreement, document or instrument related thereto; except, that, such Borrower
or Guarantor may, after prior written notice to Agent, amend, modify, alter or
change the terms thereof so as to extend the maturity thereof, or defer the
timing of any payments in respect thereof, or to forgive or cancel any portion
of such Indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or (B) redeem, retire,
defease, purchase or otherwise acquire such Indebtedness (except pursuant to
regularly scheduled payments permitted herein), or set aside or otherwise
deposit or invest any sums for such purpose, and (viii) Borrowers and Guarantors
shall furnish to Agent all notices or demands in connection with such
Indebtedness either received by any Borrower or Guarantor or on its behalf
promptly after the receipt thereof, or sent by any Borrower or Guarantor or on
its behalf concurrently with the sending thereof, as the case may
be;

         

        
          
            
            

          

          
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        (i)  the
Indebtedness set forth on Schedule 10.3 to the Information Certificate,
provided, that, as to the guarantee of the Parent described thereon, the
principal amount of Indebtedness guaranteed shall not exceed the US Dollar
Equivalent of $2,000,000;

         

        (j)  existing
Indebtedness of any Subsidiary acquired after the date hereof pursuant to a
Permitted Acquisition; provided, that, (i) such Indebtedness shall not have been
incurred by any such Subsidiary in contemplation of the acquisition, (ii) such
Subsidiary is not a Borrower or Guarantor, (iii) no Borrower or Guarantor is or
shall be liable in respect of such Indebtedness, (iv) such Indebtedness is
otherwise permitted pursuant to the terms of this Agreement and the other Loan
Documents, and (v) immediately after giving effect to such acquisition, no Event
of Default shall exist or have occurred and be continuing;

         

        (k)  guaranties
made by any Borrower or Guarantor of any Indebtedness otherwise permitted under
this Section 10.3; and

         

        (l)  Indebtedness
of any Borrower, Guarantor or Subsidiary arising after the date hereof issued in
exchange for, or the proceeds of which are used to extend, refinance, replace or
substitute for Indebtedness permitted under Sections 10.3(b), (h) or (i) hereof
(the “Refinancing Indebtedness”); provided, that, as to any such
Refinancing Indebtedness, each of the following conditions is satisfied: (i)
Agent shall have received not less than ten (10) Business Days’ prior written
notice of the intention to incur such Indebtedness, which notice shall set forth
in reasonable detail satisfactory to Agent, the amount of such Indebtedness, the
schedule of repayments and maturity date with respect thereto and such other
information with respect thereto as Agent may reasonably request, (ii)promptly
upon Agent’s request, Agent shall have received true, correct and complete
copies of all agreements, documents and instruments evidencing or otherwise
related to such Indebtedness, as duly authorized, executed and delivered by the
parties thereto, (iii) the Refinancing Indebtedness shall have a Weighted
Average Life to Maturity and a final maturity equal to or greater than the
Weighted Average Life to Maturity and the final maturity, respectively, of the
Indebtedness being extended, refinanced, replaced, or substituted for, (iv) the
Refinancing Indebtedness shall rank in right of payment no more senior than, and
be at least as subordinated (if subordinated) to, the Obligations as the
Indebtedness being extended, refinanced, replaced or substituted for, (v) the
Refinancing Indebtedness shall not include terms and conditions with respect to
Borrowers and Guarantors which are more burdensome or restrictive in any
material respect than those included in the Indebtedness so extended,
refinanced, replaced or substituted for, taken as a whole, so that in view of
all of the terms and conditions of the Refinancing Indebtedness, such terms and
conditions are no less favorable to Borrowers and Guarantors, (vi) as of the
date of incurring such Indebtedness and after giving effect thereto, no Event of
Default shall exist or have occurred and be continuing, (vii) the principal
amount of such Refinancing Indebtedness shall not exceed the principal amount of
the Indebtedness so extended, refinanced, replaced or substituted for (plus the
lesser of (A) the stated amount of any premium or other payment required to be
paid in connection with such refinancing pursuant to the terms of the
Indebtedness being refinanced and (B) the amount of premium or other payment
actually paid at such time to refinance the Indebtedness, plus, in either case,
the amount of reasonable expenses of Borrowers and Guarantors incurred in
connection with such refinancing), (viii)  the Refinancing
Indebtedness shall be secured by substantially the same assets, provided, that, such security
interests (if any) with respect to the Refinancing Indebtedness shall have a
priority no more senior than, and be at least as subordinated, if subordinated
(on terms and conditions substantially similar to the subordination provisions
applicable to the Indebtedness so extended, refinanced, replaced or substituted
for or as is otherwise acceptable to Agent) as the security interest with
respect to the Indebtedness so extended, refinanced, replaced or substituted
for, and (ix)  Borrowers and Guarantors may only make payments of
principal, interest and fees, if any, in respect of such Refinancing
Indebtedness to the extent such payments would have been permitted hereunder in
respect of the Indebtedness so extended, refinanced, replaced or substituted
for.

         

        
          
            
            

          

          
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        10.4  
Loans, Investments,
Etc.  Each
Borrower and Guarantor shall not, and shall not permit any Subsidiary to,
directly or indirectly, purchase, hold or acquire (including pursuant to any
merger with any Person that was not a wholly owned Subsidiary immediately prior
to such merger) any Equity Interests, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, or make or
permit to exist any capital contribution or other investment or any other
interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person
constituting a business unit or all or a substantial part of the assets or
property of any other Person (whether through purchase of assets, merger or
otherwise), or form or acquire any Subsidiaries, or agree to do any of the
foregoing (each of the foregoing an “Investment”), except:

         

        (a)  Permitted
Investments; and

         

        (b)  Permitted
Acquisitions.

         

        10.5
  Restricted
Payments.  Borrowers
and Guarantors shall not, and shall not permit any Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except:

         

        (a)  Borrowers
and Guarantors, and each Subsidiary, may declare and make dividend payments or
other distributions payable solely in the Equity Interests of such Person, so
long as such payments do not result in a Change of Control;

         

        (b)  Borrowers
and Guarantors may pay, or declare or pay dividends or distributions to Parent,
the proceeds of which are used to make substantially contemporaneous payments
of, any of the following:

         

        (i)   
out-of-pocket expenses for administrative, legal and accounting services
provided by third parties incurred in the ordinary course of business in
connection with the businesses of Borrowers and Guarantors, or to pay franchise
fees and similar costs incurred in connection with the businesses of Borrowers
and Guarantors; provided, that, as of the date
of any such payments or distributions and after giving effect thereto, no
Default or Event of Default shall exist or have occurred and be
continuing;

         

        (ii)  
taxes attributable to the businesses of Borrowers as part of a consolidated,
combined or unitary tax filing group or of the separate operations of Parent
which are actually due and payable (not to exceed in any event the amount of tax
that Borrowers and its Subsidiaries would otherwise pay if not part of such
filing group);

         

        (c)  Borrowers
and Guarantors may pay, or declare or pay dividends or distributions to Parent,
in addition to the dividends permitted pursuant to clause (b) above, provided,
that, as of the date of any such payments or distributions and after giving
effect thereto, (i) no Default or Event of Default shall exist or have occurred
and be continuing, and (ii) such dividend shall be paid with funds legally
available therefor; and

         

        (d)  NIC-
Asia and NIC -UK may pay, or declare or pay dividends or distributions to
Nippon, provided, that, as of the date
of any such payments or distributions and after giving effect thereto, (i) no
Default or Event of Default shall exist or have occurred and be continuing, (ii)
the aggregate amount of such dividends and distributions paid in any fiscal year
of Borrowers and Guarantors shall not exceed the US Dollar Equivalent of
$300,000, and (iii) such dividend shall be paid with funds legally available
therefor;, and

         

        
          
            
            

          

          
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        (e)  payments
permitted to be made under Section 10.9 hereof in accordance
therewith.

         

        10.6  
Transactions with
Affiliates.  Borrowers
and Guarantors shall not, directly or indirectly, purchase, acquire or lease any
property from, or sell, transfer or lease any property to, any officer, director
or other Affiliates of any Borrower or Guarantor, except pursuant to the
reasonable requirements of such Borrower’s or Guarantor’s business (as the case
may be) and upon fair and reasonable terms no less favorable to such Borrower or
Guarantor than such Borrower or Guarantor, as the case may be, would obtain in a
comparable arm’s length transaction with an unaffiliated person, except for the
following:

         

        (a)  Restricted
Payments permitted under Section 10.5 hereof;

         

        (b)  payments
to Nippon pursuant to Nippon License Agreement (as in effect on the date
hereof);

         

        (c)  the
payment of reasonable fees to directors of Borrowers who are not employees of
Borrowers;

         

        (d)  advances
to employees permitted under clause (g) of the definition of Permitted
Investments;

         

        (e)  employment
agreements and arrangements of Borrowers or Guarantors (including, without
limitation, benefits, expense reimbursement or advancement) approved by the
Board of Directors of a Borrower or Guarantor or committee thereof or as are
expressly provided for in the certificate or articles of incorporation, articles
of formation, by-laws or management agreement of any Borrower or Guarantor, and
such reasonable insurance and indemnification arrangements for officers and
directors as are approved by the Board of Directors or a committee thereof, or
of the members, as the case may be, or as expressly provided for in the
certificate or articles of incorporation  or formation or by-laws or
operating agreement of such Borrower or Guarantor; and

         

        (f)  any
employee benefit plan available to employees of Borrowers or Guarantors
generally.

         

        10.7  Change in
Business.  Each
Borrower and Guarantor shall not engage in any business other than the business
of such Borrower or Guarantor on the date hereof and any business reasonably
related, ancillary or complimentary to the business in which such Borrower or
Guarantor is engaged on the date hereof.

         

        10.8  Limitation of Restrictions
Affecting Subsidiaries.  Each
Borrower and Guarantor shall not, directly, or indirectly, create or otherwise
cause or suffer to exist any encumbrance or restriction which prohibits or
limits the ability of any Subsidiary of such Borrower or Guarantor to (a) pay
dividends or make other distributions or pay any Indebtedness owed to such
Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor; (b) make
loans or advances to such Borrower or Guarantor or any Subsidiary of such
Borrower or Guarantor, (c) transfer any of its properties or assets to such
Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor; or (d)
create, incur, assume or suffer to exist any lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than
encumbrances and restrictions arising under (i) applicable law, (ii) this
Agreement and

         

        the other
Loan Documents, (iii) customary provisions restricting subletting or assignment
of any lease governing a leasehold interest of such Borrower or Guarantor or any
Subsidiary of such Borrower or Guarantor, (iv) customary restrictions on
dispositions of real property interests found in reciprocal easement agreements
of such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor,
(v) any agreement relating to permitted Indebtedness incurred by a Subsidiary of
such Borrower or Guarantor prior to the date on which such Subsidiary was
acquired by such Borrower or such Guarantor and outstanding on such acquisition
date, and (vi) the extension or continuation of contractual obligations in
existence on the date hereof; provided, that, any such
encumbrances or restrictions contained in such extension or continuation are no
less favorable to Agent and Lenders than those encumbrances and restrictions
under or pursuant to the contractual obligations so extended or
continued.

         

        
          
            
            

          

          
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        10.9  Certain Payments of
Indebtedness, Etc.  Borrowers
and Guarantors shall not, and shall not permit any Subsidiary to, make or agree
to make any payment, prepayment, redemption, retirement, defeasance, purchase or
sinking fund payment or other acquisition for value of any of its Indebtedness
or the Indebtedness of any direct or indirect owner of any Equity Interest in
Parent, other than the Indebtedness under the Loan Documents (including, without
limitation, by way of depositing money or securities with the trustee therefor
before the date required for the purpose of paying any portion of such
Indebtedness when due), or otherwise set aside or deposit or invest any sums for
such purpose; except, that:

         

        (a)  Borrowers
may make payments in respect of Indebtedness permitted under Section 10.3(h)
with proceeds of Refinancing Indebtedness as permitted under
Section 10.3(l); and

         

        (b)  as
to payments in respect of any other Indebtedness permitted under
Section 10.3 hereof not subject to the provisions above in this
Section 10.9, Borrowers and Guarantors may make payments of regularly
scheduled principal and interest or other mandatory payments as and when due in
respect of such Indebtedness in accordance with the terms thereof (and in the
case of Subordinated Debt, subject to the terms of subordination set forth
therein or applicable thereto).

         

        10.10  Modifications of
Indebtedness, Organizational Documents and Certain Other
Agreements.  Borrowers
and Guarantors shall not, and shall not permit any Subsidiary to:

         

        (a)  amend,
supplement, modify or otherwise change its certificate of incorporation,
articles of association, certificate of formation, limited liability agreement,
limited partnership agreement or other organizational documents, as applicable,
including, without limitation, entering into any agreement with respect to any
of its Equity Interests, except for new agreements, amendments, modifications or
other changes that do not adversely affect the rights and privileges of any
Borrower or Guarantor, or its Subsidiaries, and do not adversely affect the
ability of a Borrower, Guarantor or such Subsidiary to borrow hereunder or to
amend, modify, renew or supplement the terms of this Agreement or any of the
other Loan Documents, or otherwise adversely affect the interests of Agent or
Lenders and so long as at the time of such amendment, modification or change, no
Default or Event of Default shall exist or have occurred and be
continuing;

         

        (b)  amend,
modify or otherwise change (or permit the amendment, modification or other
change in any manner of) any of the provisions of any agreements, documents or
instruments in respect of any Subordinated Debt or any agreements related to the
Indebtedness permitted under Sections 10.3(j) hereof, except, that, Borrowers and
Guarantors, and any Subsidiary, may, after prior written notice to Agent, amend,
modify, alter or change the terms thereof to extend the maturity thereof, or
defer the timing of any payments in respect thereof, or to forgive, or cancel
any portion of such Indebtedness (other than pursuant to payments thereof), or
to reduce the interest rate or any fees in connection therewith, or to make the
terms thereof less restrictive or burdensome to Borrowers, Guarantors or such
Subsidiary.

         

        10.11  Nippon License
Agreement.  Notwithstanding
anything to the contrary set forth in Section 9.9 hereof, the Nippon License
Agreement shall be in full force and effect at all times during the term of the
Loan Agreement and for so long as any Obligations remain outstanding
thereafter.

         

        
          
            
            

          

          
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        10.12  UK Bank
Accounts.  No
UK Borrower shall maintain any bank account which is not a Charged Account (as
defined in the Debenture).

         

        10.13  Designation as Designated
Senior Debt.  Borrowers
and Guarantors shall not, and shall not permit any Subsidiary to, designate any
Indebtedness, other than the Obligations as “Designated Senior Debt” or any
similar term under and as defined in the agreements relating to any Indebtedness
of Borrowers or Guarantors which contains such designation, if
any.  Borrowers and Guarantors shall, and shall cause any Subsidiary
to, designate the Obligations as “Designated Senior Debt” or any similar term
under and as defined in the agreements relating to any Indebtedness permitted
under Section 10.3 hereof of any Borrower or any Guarantor which contains such
designation.

         

        10.14  Distributor
Agreements.  At all
times upon the occurrence and during the continuance of a Cash Dominion Event,
to the extent that any Borrower or Guarantor acts as a distributor for a
supplier or manufacturer of goods under or pursuant to any “distributor”
agreement (or like agreement or arrangement) and such Borrower or Guarantor
returns product to any such supplier or manufacturer, as the case may be, such
Borrower or Guarantor shall, to the extent that such agreement gives such
Borrower the option, require a cash payment from the applicable supplier or
manufacturer in respect of any such return in lieu of receiving a credit in
respect thereof.  In furtherance of the foregoing, Borrowers agree to
report to Agent, at Agent’s option, no less frequently than weekly (or more
frequently as Agent may request), all such returns of merchandise during the
continuance of a Cash Dominion Event.

         

        10.15  Foreign Assets Control
Regulations, Etc.  None
of the requesting or borrowing of the Loans or the requesting or issuance,
extension or renewal of any Letter of Credit or the use of the proceeds of any
thereof will violate the Trading With the Enemy Act (50 U.S.C. §1 et seq., as
amended) (the “Trading With the Enemy Act”) or any of the foreign assets control
regulations of the United States Treasury Department (31 C.F.R., Subtitle B,
Chapter V, as amended) (the “Foreign Assets Control Regulations”) or any
enabling legislation or executive order relating thereto (including, but not
limited to (a) Executive order 13224 of September 21, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law
107-56).  None of Borrowers or any of their Subsidiaries or other
Affiliates is or will become a Sanctioned Entity or Sanctioned Person as
described in the Executive Order, the Trading with the Enemy Act or the Foreign
Assets Control Regulations or engages or will engage in any dealings or
transactions, or be otherwise associated, with any such Sanctioned Entity or
Sanctioned Person.

         

        SECTION
11.   FINANCIAL
COVENANT

         

        11.1   
Fixed Charge Coverage
Ratio.  At
any time that Covenant Excess Availability is less than $18,000,000 and at all
times thereafter, the Fixed Charge Coverage Ratio of Parent and its Subsidiaries
(on a consolidated basis) determined as of the end of the fiscal month most
recently ended for which Agent has received financial statements shall be not
less than 1.10 to 1.00 for the period of the immediately preceding twelve (12)
consecutive fiscal months ending on the last day of such fiscal month; provided, that, in the event
that the Consolidated EBITDA of US Borrowers, UK Borrowers, and Singapore
Borrowing Base Guarantors does not constitute more than ninety-five (95%)
percent of the Consolidated EBITDA of Parent and its Subsidiaries for the
immediately preceding twelve (12) consecutive month period prior to the date on
which the Fixed Charge Coverage Ratio is required to be determined, the Fixed
Charge Coverage Ratio shall measured by this covenant shall be the Fixed Charge
Coverage Ratio of Borrowers and Guarantors (on a consolidated
basis).

         

        
          
            
            

          

          
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        SECTION
12.  EVENTS OF
DEFAULT AND REMEDIES

         

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

         

        (a)  any
Borrower or Guarantor fails to pay any Obligation hereunder when due in
accordance with the terms hereof (whether at stated maturity, by mandatory
prepayment or otherwise);

         

        (b)  any
Borrower, Guarantor or Subsidiary: (i) fails to perform or observe any of the
covenants or other agreements contained in Sections 2, 5, 6.6, 6.9, 7.1(a)(i),
7.1(a)(ii), 7.2, 7.3, 7.7, 9.1, 9.2, 9.5, 9.6, 9.9, 10 and 11 of this Agreement
or the sections of the other Loan Documents specified on Schedule 12.1 hereto;
or (ii) fails to perform or observe any of the covenants or other agreements
contained in Section 7.1(a)(iv) and such failure shall continue for five (5)
Business Days, provided, that, such five (5)
Business Day period shall not apply in the case of (A) any failure to observe
any such covenant or other agreement which is not capable of being cured at all
within such five (5) Business Day period or which has been the subject of a
prior failure within a six (6) month period or (B) an intentional breach by any
Borrower or Guarantor of any such covenant, or (iii) fails to perform or observe
any of the terms, provisions, covenants, conditions or other agreements
contained in this Agreement or any of the other Loan Documents other than those
described in Sections 12.1(b)(i) or 12.1(b)(ii) above and such failure
shall continue for ten (10) Business Days; provided, that, such ten (10)
Business Day period shall not apply in the case of (A) any failure to observe
any such covenant or other agreement which is not capable of being cured at all
or within such ten (10) Business Day period or which has been the subject of a
prior failure within a six (6) month period or (B) an intentional breach by any
Borrower or Guarantor of any such covenant;

         

        (c)  any
representation, warranty or statement of fact made by any Borrower or Guarantor
to Agent in this Agreement, the other Loan Documents or any other written
agreement, schedule, confirmatory assignment or otherwise that are qualified as
to materiality or Material Adverse Effect shall when made or deemed made be
incorrect, false or misleading and any other such representation, warranty or
statement of fact made by any Borrower or Guarantor to Agent shall when made or
deemed made be incorrect, false or misleading in any material
respect;

         

        (d)  any
Guarantor revokes or terminates or purports to revoke or terminate or fails to
perform any of the terms, covenants, conditions or provisions of any guarantee,
endorsement or other agreement of such party in favor of Agent or any
Lender;

         

        (e)  any
judgment for the payment of money is rendered against any Borrower or Guarantor
in excess of the US Dollar Equivalent of $2,500,000 in any one case or in excess
of the US Dollar Equivalent of $5,000,000 in the aggregate (to the extent not
covered by insurance where the insurer has assumed responsibility in writing for
such judgment) and shall remain undischarged or unvacated for a period in excess
of thirty (30) days or execution shall at any time not be effectively stayed, or
any judgment other than for the payment of money, or injunction, attachment,
garnishment, expropriation, sequestration, distress, or execution is rendered
against any Borrower or Guarantor or any of the Collateral having a value in
excess of US Dollar Equivalent of $1,000,000;

         

        (f)  any
Guarantor dissolves or suspends or discontinues doing business except to the
extent permitted under Section 10.1 hereof;

         

        (g)  any
Borrower or Guarantor makes an assignment for the benefit of creditors, makes or
sends notice of a bulk transfer or calls a meeting of its creditors or principal
creditors in connection with a moratorium or adjustment of the Indebtedness due
to them;

         

        
          
            
            

          

          
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        (h)  a
case or proceeding under the bankruptcy laws of the United States of America now
or hereafter in effect or a petition, case, application or proceeding under any
bankruptcy or insolvency laws of the United Kingdom (including the Insolvency
Act 1986 of England and Wales, the Enterprise Act 2002 of England and Wales and
the Companies Acts 1985 and 2006 of England and Wales), Singapore (including the
Bankruptcy Act, Chapter 20 of Singapore and Companies Act, Chapter 50 of
Singapore) or under any insolvency, reorganization, receivership, readjustment
of debt, dissolution or liquidation law or statute of any jurisdiction now or
hereafter in effect (whether at law or in equity) is filed against any Borrower,
Guarantor or any Subsidiary or all or any part of its properties and such
petition or application is not dismissed within forty-five (45) days after the
date of its filing or any Borrower, Guarantor or Subsidiary shall file any
answer admitting or not contesting such petition or application or indicates its
consent to, acquiescence in or approval of, any such action or proceeding or the
relief requested is granted sooner or any other step is taken or procedure is
commenced including the making of an application or service of a notice with a
view to any UK Borrower being adjudicated or found insolvent or the winding up
or dissolution of any UK Borrower, or the appointment of an administrator,
trustee, receiver or similar officer in respect of any UK Borrower;

         

        (i)  (i)
a case or proceeding under the bankruptcy laws of the United States of America
now or hereafter in effect, or (ii) a petition, case, application or proceeding
under any bankruptcy or insolvency laws of the United Kingdom (including the
Insolvency Act 1986 of England and Wales, the Enterprise Act 2002 of England and
Wales and the Companies Acts 1985 and 2006 of England and Wales), Singapore
(including the Bankruptcy Act, Chapter 20 of Singapore and Companies Act,
Chapter 50 of Singapore), or any similar law now or hereafter in effect in any
jurisdiction or under any insolvency, arrangement, reorganization, moratorium,
administration, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at a law
or equity) is filed, taken or commenced after the date hereof by any Borrower,
Guarantor or Subsidiary or for all or any part of its property, including,
without limitation, if any Borrower, Guarantor or Subsidiary
shall:  (A) apply for, request or consent to the appointment of a
receiver, administrative receiver, receiver and manager, examiner, judicial
custodian, trustee, liquidator, official manager, judicial manager,
administrator, controller or any other similar official of it or of all or a
substantial part of its property and assets, (B) be generally unable, or admit
in writing its inability, to pay its debts as they become due, or, in respect of
a UK Borrower, the value of its assets is less than that its liabilities (taking
into account contingent and prospective liabilities), (C) make a general
assignment for the benefit of creditors or, in respect of a UK Borrower, declare
a moratorium in respect of its Indebtedness, (D) file a voluntary petition or
assignment in bankruptcy or a proposal seeking a reorganization, compromise,
judicial management, moratorium or arrangement with its creditors, or enter into
discussions with one or more of its creditors at any one time with respect to
rescheduling any of its Indebtedness, (E) take advantage of any insolvency or
other similar law pertaining to arrangements, moratoriums, compromises, judicial
managements or reorganizations, or admit the material allegations of a petition
or application filed in respect of it in any bankruptcy, reorganization or
insolvency proceeding, or (F) take any corporate action for the purpose of
effecting any of the foregoing or which is indicative of
insolvency;

         

        (j)  any
default in respect of any Indebtedness of any Borrower, Guarantor or Subsidiary
in any case in an amount in excess of the US Dollar Equivalent of $1,000,000
(other than Indebtedness owing to Agent and Lenders hereunder), which default
continues for more than the applicable cure period, if any, with respect thereto
which permits the holders of such Indebtedness to accelerate the maturity
thereof or any default by any Borrower or Guarantor under any Material Contract,
which default continues for more than the applicable cure period, if any, with
respect thereto and/or is not waived in writing by the other parties
thereto;

         

        (k)  any
UK Loan Party is unable or admits inability to pay its debts as they fall due,
suspends making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commences negotiations with one or more of
its creditors with a view to rescheduling any of its indebtedness;

         

        
          
            
            

          

          
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        (l)  the
value of the assets of any UK Loan Party is less than its liabilities (taking
into account contingent and prospective liabilities);

         

        (m)  
a moratorium or other protection from its creditors is declared or imposed in
respect of any indebtedness of any UK Loan Party;

         

        (n)  any
material provision hereof or of any of the other Loan Documents shall for any
reason (other than as expressly permitted herein or therein) cease to be valid,
binding and enforceable with respect to any party hereto or thereto (other than
Agent) in accordance with its terms, or any such party shall challenge the
enforceability hereof or thereof, or shall assert in writing, or take any action
or fail to take any action based on the assertion that any provision hereof or
of any of the other Loan Documents has ceased to be or is otherwise not valid,
binding or enforceable in accordance with its terms, or any security interest
provided for herein or in any of the other Loan Documents shall cease to be a
valid and perfected first priority security interest in any of the Collateral
purported to be subject thereto (except as otherwise permitted herein or
therein);

         

        (o)  an
ERISA Event shall occur which results in or could reasonably be expected to
result in liability of any Borrower, Guarantor or Subsidiary in an aggregate
amount in excess of $750,000;

         

        (p)  any
Change of Control shall occur;

         

        (q)  there
shall be a Material Adverse Effect after the date hereof;

         

        (r)  the
indictment by any Governmental Authority of any Borrower or Guarantor as to
which there is a reasonable likelihood of an adverse determination, in the good
faith determination of Agent under any criminal statute, pursuant to which
statute the penalties or remedies sought or available include forfeiture of any
of the Collateral having a value in excess of $1,000,000;

         

        (s)  there
shall be an event of default under any of the other Loan Documents;
or

         

        (t)  any
Borrower, Guarantor or Subsidiary is declared by the Minister for Finance of
Singapore to be a company to which Part IX of the Companies Act, Chapter 50 of
Singapore applies.

         

        12.2  Remedies.

         

        (a)  At
any time an Event of Default exists or has occurred and is continuing, Agent and
Lenders shall have all rights and remedies provided in this Agreement, the other
Loan Documents, the UCC, and other applicable law, all of which rights and
remedies may be exercised without notice to or consent by any Borrower or
Guarantor, except as such notice or consent is expressly provided for hereunder
or required by applicable law.  All rights, remedies and powers
granted to Agent and Lenders hereunder, under any of the other Loan Documents,
the UCC, or other applicable law, are cumulative, not exclusive and enforceable,
in Agent’s discretion, alternatively, successively, or concurrently on any one
or more occasions, and shall include, without limitation, the right to apply to
a court of equity for an injunction to restrain a breach or threatened breach by
any Borrower or Guarantor of this Agreement or any of the other Loan
Documents.  Subject to Section 14 hereof, Agent may, and at the
direction of the Required Lenders shall proceed directly against any Borrower or
Guarantor to collect the Obligations without prior recourse to the
Collateral.

         

        
          
            
            

          

          
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        (b)  Without
limiting the generality of the foregoing, at any time an Event of Default exists
or has occurred and is continuing, Agent may, at its option and shall upon the
direction of the Required Lenders, (i) upon notice to Administrative Borrower,
accelerate the payment of all Obligations and demand immediate payment thereof
to Agent for itself and the benefit of Lenders (provided, that, upon the
occurrence of any Event of Default described in Sections 12.1(g) and 12.1(h),
all Obligations shall automatically become immediately due and payable), and
(ii) terminate the Commitments whereupon the obligation of each Lender to make
any Loan and Issuing Bank to issue any Letter of Credit shall immediately
terminate (provided, that, upon the
occurrence of any Event of Default described in Sections 12.1(g) and
12.1(h), the Commitments and any other obligation of the Agent, any Lender or
Issuing Bank hereunder shall automatically terminate).

         

        (c)  Without
limiting the foregoing, at any time an Event of Default exists or has occurred
and is continuing, Agent may, in its discretion (i) with or without judicial
process or the aid or assistance of others, enter upon any premises on or in
which any of the Collateral may be located and take possession of the Collateral
or complete processing, manufacturing and repair of all or any portion of the
Collateral, (ii) require any Borrower or Guarantor, at Borrowers’ expense, to
assemble and make available to Agent any part or all of the Collateral at any
place and time designated by Agent, (iii) collect, foreclose, receive,
appropriate, setoff and realize upon any and all Collateral, (iv) remove any or
all of the Collateral from any premises on or in which the same may be located
for the purpose of effecting the sale, foreclosure or other disposition thereof
or for any other purpose, (v) sell, lease, transfer, assign, deliver or
otherwise dispose of any and all Collateral (including entering into contracts
with respect thereto, public or private sales at any exchange, broker’s board,
at any office of Agent or elsewhere) at such prices or terms as Agent may deem
reasonable, for cash, upon credit or for future delivery, with the Agent having
the right to purchase the whole or any part of the Collateral at any such public
sale, all of the foregoing being free from any right or equity of redemption of
any Borrower or Guarantor, which right or equity of redemption is hereby
expressly waived and released by Borrowers and Guarantors and/or (vi) terminate
this Agreement.  If any of the Collateral is sold or leased by Agent
upon credit terms or for future delivery, the Obligations shall not be reduced
as a result thereof until payment therefor is finally collected by
Agent.  If notice of disposition of Collateral is required by law, ten
(10) days prior notice by Agent to Administrative Borrower designating the time
and place of any public sale or the time after which any private sale or other
intended disposition of Collateral is to be made, shall be deemed to be
reasonable notice thereof and Borrowers and Guarantors waive any other
notice.  In the event Agent institutes an action to recover any
Collateral or seeks recovery of any Collateral by way of prejudgment remedy,
each Borrower and Guarantor waives the posting of any bond which might otherwise
be required. At any time an Event of Default exists or has occurred and is
continuing, upon Agent’s request, Borrowers will either, as Agent shall specify,
furnish cash collateral to Issuing Bank to be used to secure and fund the
reimbursement obligations to Issuing Bank in connection with any Letter of
Credit Obligations or furnish cash collateral to Agent for the Letter of Credit
Obligations.  Such cash collateral shall be in the amount equal to one
hundred ten (110%) percent of the amount of the Letter of Credit Obligations
plus the amount of any fees and expenses payable in connection therewith through
the end of the latest expiration date of the Letters of Credit giving rise to
such Letter of Credit Obligations.

         

        
          
            
            

          

          
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        (d)  At
any time or times that an Event of Default exists or has occurred and is
continuing, Agent may, in its discretion, enforce the rights of any Borrower or
Guarantor against any account debtor, secondary obligor or other obligor in
respect of any of the Accounts or other Receivables.  Without limiting
the generality of the foregoing, Agent may, in its discretion, at such time or
times (i) notify any or all account debtors, secondary obligors or other
obligors in respect thereof that the Receivables have been assigned to Agent and
that Agent has a security interest therein and Agent may direct any or all
account debtors, secondary obligors and other obligors to make payment of
Receivables directly to Agent, (ii) extend the time of payment of, compromise,
settle or adjust for cash, credit, return of merchandise or otherwise, and upon
any terms or conditions, any and all Receivables or other obligations included
in the Collateral and thereby discharge or release the account debtor or any
secondary obligors or other obligors in respect thereof without affecting any of
the Obligations, (iii) demand, collect or enforce payment of any Receivables or
such other obligations, but without any duty to do so, and Agent and Lenders
shall not be liable for any failure to collect or enforce the payment thereof
nor for the negligence of its agents or attorneys with respect thereto and (iv)
take whatever other action Agent may deem necessary or desirable for the
protection of its interests and the interests of Lenders.  At any time
that an Event of Default exists or has occurred and is continuing, at Agent’s
request, all invoices and statements sent to any account debtor shall state that
the Accounts and such other obligations have been assigned to Agent and are
payable directly and only to Agent and Borrowers and Guarantors shall deliver to
Agent such originals of documents evidencing the sale and delivery of goods or
the performance of services giving rise to any Accounts as Agent may
require.  In the event any account debtor returns Inventory when an
Event of Default exists or has occurred and is continuing, Borrowers shall, upon
Agent’s request, hold the returned Inventory in trust for Agent, segregate all
returned Inventory from all of its other property, dispose of the returned
Inventory solely according to Agent’s instructions, and not issue any credits,
discounts or allowances with respect thereto without Agent’s prior written
consent.

         

        (e)  To
the extent that applicable law imposes duties on Agent or any Lender to exercise
remedies in a commercially reasonable manner (which duties cannot be waived
under such law), each Borrower and Guarantor acknowledges and agrees that it is
not commercially unreasonable for Agent or any Lender (i) to incur expenses
reasonably deemed significant by Agent or any Lender to prepare Collateral for
disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to obtain third
party consents for access to Collateral to be disposed of, or to obtain or, if
not required by other law, to fail to obtain consents of any Governmental
Authority or other third party for the collection or disposition of Collateral
to be collected or disposed of, (iii) to exercise collection remedies against
account debtors, secondary obligors or other persons obligated on Collateral or
to remove liens or encumbrances on or any adverse claims against Collateral,
(iv) to exercise collection remedies against account debtors and other persons
obligated on Collateral directly or through the use of collection agencies and
other collection specialists, (v) to advertise dispositions of Collateral
through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (vi) to contact other persons, whether or
not in the same business as any Borrower or Guarantor, for expressions of
interest in acquiring all or any portion of the Collateral, (vii) to hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the collateral is of a specialized nature, (viii) to dispose of
Collateral by utilizing Internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capability of
doing so, or that match buyers and sellers of assets, (ix) to dispose of assets
in wholesale rather than retail markets, (x) to disclaim disposition warranties,
(xi) to purchase insurance or credit enhancements to insure Agent or Lenders
against risks of loss, collection or disposition of Collateral or to provide to
Agent or Lenders a guaranteed return from the collection or disposition of
Collateral, or (xii) to the extent deemed appropriate by Agent, to obtain the
services of other brokers, investment bankers, consultants and other
professionals to assist Agent in the collection or disposition of any of the
Collateral. Each Borrower and Guarantor acknowledges that the purpose of this
Section is to provide non-exhaustive indications of what actions or
omissions by Agent or any Lender would not be commercially unreasonable in the
exercise by Agent or any Lender of remedies against the Collateral and that
other actions or omissions by Agent or any Lender shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section. Without limitation of the foregoing, nothing contained in this
Section shall be construed to grant any rights to any Borrower or Guarantor
or to impose any duties on Agent or Lenders that would not have been granted or
imposed by this Agreement or by applicable law in the absence of this
Section.

         

        
          
            
            

          

          
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        (f)  For
the purpose of enabling Agent to exercise the rights and remedies hereunder,
each Borrower and Guarantor hereby grants to Agent, to the extent assignable, an
irrevocable, non-exclusive license (exercisable at any time an Event of Default
shall exist or have occurred and for so long as the same is continuing) without
payment of royalty or other compensation to any Borrower or Guarantor, to use,
assign, license or sublicense any of the trademarks, service-marks, trade names,
business names, trade styles, designs, logos and other source of business
identifiers and other Intellectual Property and general intangibles now owned or
hereafter acquired by any Borrower or Guarantor, wherever the same may be
located, including in such license reasonable access to all media in which any
of the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof.

         

        (g)  At
any time an Event of Default exists or has occurred and is continuing, Agent may
apply the cash proceeds of Collateral actually received by Agent from any sale,
lease, foreclosure or other disposition of the Collateral to payment of the
Obligations, in whole or in part and in accordance with Section 6.7 hereof,
whether or not then due, or may hold such proceeds as cash collateral for the
Obligations.  Borrowers and Guarantors shall remain liable to Agent
and Lenders for the payment of any deficiency with interest at the highest rate
provided for herein and all costs and expenses of collection or enforcement,
including attorneys’ fees and expenses.

         

        (h)  Without
limiting the foregoing, upon the occurrence and at any time during the
continuance of a Default or an Event of Default, (i) Agent and Lenders may, at
Agent’s option, and upon the occurrence and continuance of an Event of Default
at the direction of the Required Lenders, Agent and Lenders shall, without
notice, (A) cease making Loans or arranging for Letters of Credit or reduce the
lending formulas or amounts of Loans and Letters of Credit available to
Borrowers and/or (B) terminate any provision of this Agreement providing for any
future Loans to be made by Agent and Lenders or Letters of Credit to be issued
by Issuing Bank and (ii) Agent may, at its option, establish such Reserves as
Agent determines, without limitation or restriction, notwithstanding anything to
the contrary contained herein.

         

        
          
            	
                    SECTION 13. 

                  	
                    JURY TRIAL WAIVER; OTHER
      WAIVERS
      

                  

          

          AND CONSENTS; GOVERNING
LAW

        

         

        13.1  
Governing Law; Choice
of Forum; Service of Process; Jury Trial Waiver.

         

        (a)  The
validity, interpretation and enforcement of this Agreement and the other Loan
Documents (except as otherwise provided therein) and any dispute arising out of
the relationship between the parties hereto, whether in contract, tort, equity
or otherwise, shall be governed by the internal laws of the State of New York
but excluding any principles of conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction other than the laws of the
State of New York.

         

        (b)  Borrowers,
Guarantors, Agent, Lenders and Issuing Bank irrevocably consent and submit to
the non-exclusive jurisdiction of the Supreme Court of the State of New York for
New York County and the United States District Court for the Southern District
of New York, whichever Agent may elect, and waive any objection based on venue
or forum non conveniens with respect to any action instituted therein arising
under this Agreement or any of the other Loan Documents or in any way connected
with or related or incidental to the dealings of the parties hereto in respect
of this Agreement or any of the other Loan Documents or the transactions related
hereto or thereto, in each case whether now existing or hereafter arising, and
whether in contract, tort, equity or otherwise, and agree that any dispute with
respect to any such matters shall be heard only in the courts described above
(except that Agent and Lenders shall have the right to bring any action or
proceeding against any Borrower or Guarantor or its or their property in the
courts of any other jurisdiction which Agent deems necessary or appropriate in
order to realize on the Collateral or to otherwise enforce its rights against
any Borrower or Guarantor or its or their property).

         

        
          
            
            

          

          
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        (c)  Each
Borrower and Guarantor hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by certified
mail (return receipt requested) directed to its address set forth herein and
service so made shall be deemed to be completed five (5) Business Days after the
same shall have been so deposited in the U.S. mails, or, at Agent’s option, by
service upon any Borrower or Guarantor (or Administrative Borrower on behalf of
such Borrower or Guarantor) in any other manner provided under the rules of any
such courts.

         

        (d)  BORROWERS,
GUARANTORS, AGENT, LENDERS AND ISSUING BANK EACH HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO
OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
IN CONTRACT, TORT, EQUITY OR OTHERWISE.  BORROWERS, GUARANTORS, AGENT,
LENDERS AND ISSUING BANK EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY
AND THAT ANY BORROWER, ANY GUARANTOR, AGENT, ANY LENDER OR ISSUING BANK MAY FILE
AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.

         

        (e)  Agent
and Secured Parties shall not have any liability to any Borrower or Guarantor
(whether in tort, contract, equity or otherwise) for losses suffered by such
Borrower or Guarantor in connection with, arising out of, or in any way related
to the transactions or relationships contemplated by this Agreement, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Agent, such Lender
and Issuing Bank, that the losses were the result of acts or omissions
constituting gross negligence or willful misconduct.  Each Borrower
and Guarantor:  (i) certifies that neither Agent, any Lender, Issuing
Bank nor any representative, agent or attorney acting for or on behalf of Agent,
any Lender or Issuing Bank has represented, expressly or otherwise, that Agent,
Lenders and Issuing Bank would not, in the event of litigation, seek to enforce
any of the waivers provided for in this Agreement or any of the other Loan
Documents and (ii) acknowledges that in entering into this Agreement and the
other Loan Documents, Agent, Lenders and Issuing Banks are relying upon, among
other things, the waivers and certifications set forth in this Section 13
and elsewhere herein and therein.

         

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

         

        13.3  Amendments and
Waivers.

         

        (a)  Neither
this Agreement nor any other Loan Document nor any terms hereof or thereof may
be amended, waived, discharged or terminated unless such amendment, waiver,
discharge or termination is in writing signed by Agent and the Required Lenders
or at Agent’s option, by Agent with the authorization or consent of the Required
Lenders, and as to amendments to any of the Loan Documents (other than with
respect to any provision of Section 14 hereof), by the Borrowers and such
amendment, waiver, discharger or termination shall be effective and binding as
to all Lenders and Issuing Bank only in the specific instance and for the
specific purpose for which given; except, that, no such
amendment, waiver, discharge or termination shall:

         

        
          
            
            

          

          
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        (i)  reduce
the interest rate or any fees or extend the time of payment of principal,
interest or any fees or reduce the principal amount of any Loan or Letters of
Credit, in each case without the consent of each Lender directly affected
thereby,

         

        (ii)  increase
the Commitment of any Lender over the amount thereof then in effect or provided
hereunder, in each case without the consent of the Lender directly affected
thereby,

         

        (iii)  amend,
modify or waive any terms of Section 6.7 hereof, without the consent of
each Lender directly affected thereby,

         

        (iv)  release
all or substantially all of the Collateral (except as expressly required
hereunder or under any of the other Loan Documents or applicable law and except
as permitted under Section 14.11(b) hereof), without the consent of Agent
and all of Lenders,

         

        (v)  change
the definition of Required Lenders without the consent of Agent and all of
Lenders,

         

        (vi)  consent
to the assignment or transfer by any Borrower or Guarantor of any of their
rights and obligations under this Agreement, without the consent of Agent and
all of Lenders,

         

        (vii)  amend,
modify or waive any terms of this Section 13.3 hereof, without the consent
of Agent and all of Lenders;

         

        (viii)  increase
the percentage used as advance rates in the definitions of each of the terms UK
Tranche A Borrowing Base, UK Tranche B Borrowing Base or US Borrowing Base (in
each case other than as provided for in the definition of such terms), without
the consent of Agent and all of Lenders; or

         

        (ix)  amend,
modify or waive any provision of the definition of the term UK Tranche A
Borrowing Base, UK Tranche B Borrowing Base or US Borrowing Base, in each case
as to any of the foregoing if the effect thereof increases the amount of the UK
Tranche A Borrowing Base, UK Tranche B Borrowing Base or US Borrowing Base,
without the consent of Agent and the Supermajority Lenders.

         

        (b)  Agent,
Lenders and Issuing Banks shall not, by any act, delay, omission or otherwise be
deemed to have expressly or impliedly waived any of its or their rights, powers
and/or remedies unless such waiver shall be in writing and signed as provided
herein.  Any such waiver shall be enforceable only to the extent
specifically set forth therein.  A waiver by Agent, any Lender or
Issuing Bank of any right, power and/or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right, power and/or remedy which
Agent, any Lender or Issuing Bank would otherwise have on any future occasion,
whether similar in kind or otherwise.

         

        
          
            
            

          

          
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        (c)  Notwithstanding
anything to the contrary contained in Section 13.3(a) above, in the event
that any Lender has failed to consent, or failed to consent in a timely manner,
to any proposed amendment, waiver, discharge or termination which pursuant to
the terms of Section 13.3(a) requires the consent of all of the Lenders, the
Supermajority Lenders or of each Lender affected thereby (such Lender being
referred to herein as a “Non-Consenting Lender”), and with respect to which the
Required Lenders shall have given their consent then Borrowers or WFCF shall
have the right, but not the obligation, at any time thereafter, and upon the
exercise by a Borrower or WFCF of such right, such Non-Consenting Lender shall
have the obligation, to sell, assign and transfer to an Eligible Transferee
approved by WFCF, the Commitment of such Non-Consenting Lender and all rights
and interests of such Non-Consenting Lender pursuant
thereto.  Borrowers or WFCF, as the case may be, shall provide the
Non-Consenting Lender with prior written notice of its intent to exercise its
right under this Section, which notice shall specify on date on which such
purchase and sale shall occur.  Such purchase and sale shall be
pursuant to the terms of an Assignment and Acceptance Agreement (whether or not
executed by the Non-Consenting Lender); except, that, on the date of
such purchase and sale, WFCF, or such Eligible Transferee specified by WFCF,
shall pay to the Non-Consenting Lender (except as WFCF and such Non-Consenting
Lender may otherwise agree) the amount equal to:  (i) the principal
balance of the Loans held by the Non-Consenting Lender outstanding as of the
close of business on the business day immediately preceding the effective date
of such purchase and sale, plus (ii) amounts accrued and unpaid in respect of
interest and fees payable to the Non-Consenting Lender to the effective date of
the purchase (but in no event shall the Non-Consenting Lender be deemed entitled
to any early termination fee), minus (iii) the amount of the closing fee
received by the Non-Consenting Lender pursuant to the terms hereof or of any of
the other Loan Documents multiplied by the fraction, the numerator of which is
the number of months remaining in then current term of the Credit Facility and
the denominator of which is the number of months in then current term
thereof.  Such purchase and sale shall be effective on the date of the
payment of such amount to the Non-Consenting Lender and the Commitment of the
Non-Consenting Lender shall terminate on such date.

         

        (d)  The
consent of Agent shall be required for any amendment, waiver or consent
affecting the rights or duties of Agent hereunder or under any of the other Loan
Documents, in addition to the consent of the Lenders otherwise required by this
Section and the exercise by Agent of any of its rights hereunder with
respect to Reserves or Eligible Accounts or Eligible Inventory shall not be
deemed an amendment to the advance rates provided for in this
Section 13.3.  The consent of Issuing Bank shall be required for
any amendment, waiver or consent affecting the rights or duties of such Issuing
Bank hereunder or under any of the other Loan Documents, in addition to the
consent of the Lenders otherwise required by this Section; provided, that, the consent of
such Issuing Bank shall not be required for any other amendments, waivers or
consents.  The consent of Swing Line Lender shall be required for any
amendment, waiver or consent affecting the rights or duties of Swing Line Lender
hereunder or under any of the other Loan Documents, in addition to the consent
of the Lenders otherwise required by this Section.  Notwithstanding
anything to the contrary contained in Section 13.3(a) above, (i) in the
event that Agent shall agree that any items otherwise required to be delivered
to Agent as a condition of the initial Loans and Letters of Credit hereunder may
be delivered after the date hereof, Agent may, in its discretion, agree to
extend the date for delivery of such items for a period not to exceed one
hundred and twenty (120) days after the date hereof or take such other action as
Agent may deem appropriate as a result of the failure to receive such items as
Agent may determine or may waive any Event of Default as a result of the failure
to receive such items, in each case without the consent of any Lender and (ii)
Agent may consent to any change in the type of organization, jurisdiction of
organization or other legal structure of any Borrower, Guarantor or any of their
Subsidiaries and amend the terms hereof or of any of the other Loan Documents as
may be necessary or desirable to reflect any such change, in each case without
the approval of any Lender.

         

        (e)  The
consent of Agent and a Bank Product Provider that is providing Bank Products and
has outstanding any such Bank Products at such time that are secured hereunder
shall be required for any amendment to the priority of payment of Obligations
arising under or pursuant to any Hedge Agreements of a Borrower or Guarantor or
other Bank Products as set forth in Section 6.7(a) hereof.

         

        
          
            
            

          

          
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        (f)  Notwithstanding
anything to the contrary herein, (i) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto,
(ii) no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such Lender,
(iii) each Lender is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender acknowledges that
the provisions of Section 1126(c) of the Bankruptcy Code of the United States
supersedes the unanimous consent provisions set forth herein and (iv) Agent and
the Required Lenders shall determine whether or not to allow a Borrower or
Guarantor to use cash collateral in the context of a bankruptcy or insolvency
proceeding and such determination shall be binding on all of the
Lenders.

         

        (g)  Notwithstanding
the foregoing, any provision of this Agreement may be amended by an agreement in
writing entered into by Borrowers and Agent with the express consent of the
Required Lenders (and, if its rights or obligations are affected thereby, the
Issuing Bank or Swing Line Lender) if (i) by the terms of such agreement the
Commitment of each Lender not consenting to the amendment provided for therein
shall terminate upon the effectiveness of such amendment and (ii) at the time
such amendment becomes effective, each Lender not consenting thereto receives
payment in full of the principal of and interest accrued on each Loan made by it
and all other amounts owing to it or accrued for its account under this
Agreement.

         

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

         

        13.5  Indemnification.  Each
Borrower and Guarantor shall, jointly and severally, indemnify and hold Agent,
each Lender and Issuing Bank, and their respective officers, directors, agents,
employees, advisors and counsel and their respective Affiliates (each such
person being an “Indemnitee”), harmless from and against any and all losses,
claims, damages, penalties, liabilities, costs or expenses (including attorneys’
fees and expenses) imposed on, incurred by or asserted against any of them in
connection with any litigation, investigation, claim or proceeding commenced or
threatened related to the negotiation, preparation, execution, delivery,
enforcement, performance or administration of this Agreement, any other Loan
Documents, or any undertaking or proceeding related to any of the transactions
contemplated hereby or any act, omission, event or transaction related or
attendant thereto, including amounts paid in settlement, court costs, and the
fees and expenses of counsel except that Borrowers and Guarantors shall not have
any obligation under this Section 13.5 to indemnify an Indemnitee with
respect to a matter covered hereby resulting from the gross negligence or
willful misconduct of such Indemnitee as determined pursuant to a final,
non-appealable order of a court of competent jurisdiction (but without limiting
the obligations of Borrowers or Guarantors as to any other
Indemnitee).  To the extent that the undertaking to indemnify, pay and
hold harmless set forth in this Section may be unenforceable because it
violates any law or public policy, Borrowers and Guarantors shall pay the
maximum portion which it is permitted to pay under applicable law to Agent and
Lenders in satisfaction of indemnified matters under this Section.  To
the extent permitted by applicable law, no Borrower or Guarantor shall assert,
and each Borrower and Guarantor hereby waives, any claim against any Indemnitee,
on any theory of liability for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any of the other Loan Documents or any
undertaking or transaction contemplated hereby.  No Indemnitee
referred to above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or any of the other Loan Documents or the
transaction contemplated hereby or thereby.  All amounts due under
this Section shall be payable upon demand. The foregoing indemnity shall
survive the payment of the Obligations and the termination or non-renewal of
this Agreement.

         

        
          
            
            

          

          
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        SECTION
14.    THE
AGENT

         

        14.1
   Appointment, Powers and
Immunities.  Each
Secured Party irrevocably designates, appoints and authorizes WFCF to act as
Agent hereunder and under the other Loan Documents with such powers as are
specifically delegated to Agent by the terms of this Agreement and of the other
Loan Documents, together with such other powers as are reasonably incidental
thereto.  Agent (a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and in the other Loan Documents, and
shall not by reason of this Agreement or any other Loan Document be a trustee or
fiduciary for any Lender; (b) shall not be responsible to Lenders for any
recitals, statements, representations or warranties contained in this Agreement
or in any of the other Loan Documents, or in any certificate or other document
referred to or provided for in, or received by any of them under, this Agreement
or any other Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or any other document referred to or provided for herein or therein or
for any failure by any Borrower or any Guarantor or any other Person to perform
any of its obligations hereunder or thereunder; and (c) shall not be responsible
to Secured Parties for any action taken or omitted to be taken by it hereunder
or under any other Loan Document or under any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, except for its own gross negligence or willful misconduct as
determined by a final non-appealable judgment of a court of competent
jurisdiction.  Agent may employ agents and attorneys in fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys in fact selected by it in good faith.  Agent may deem and
treat the payee of any note as the holder thereof for all purposes hereof unless
and until the assignment thereof pursuant to an agreement (if and to the extent
permitted herein) in form and substance satisfactory to Agent shall have been
delivered to and acknowledged by Agent.

         

        14.2
   Reliance by
Agent.  Agent
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telecopy or other electronic means)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by
Agent.  As to any matters not expressly provided for by this Agreement
or any other Loan Document, Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder or thereunder in accordance with
instructions given by the Required Lenders or all of Lenders as is required in
such circumstance, and such instructions of such Agents and any action taken or
failure to act pursuant thereto shall be binding on all Lenders.

         

        14.3  Events of
Default.

         

        (a)  Agent
shall not be deemed to have knowledge or notice of the occurrence of a Default
or an Event of Default or other failure of a condition precedent to the Loans
and Letters of Credit hereunder, unless and until Agent has received written
notice from a Lender, or Borrower specifying such Event of Default or any
unfulfilled condition precedent, and stating that such notice is a “Notice of
Default or Failure of Condition”.  In the event that Agent receives
such a Notice of Default or Failure of Condition, Agent shall give prompt notice
thereof to the Lenders.  Agent shall (subject to Section 14.7)
take such action with respect to any such Event of Default or failure of
condition precedent as shall be directed by the Required Lenders to the extent
provided for herein; provided, that, unless and
until Agent shall have received such directions, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to or by reason of such Event of Default or failure of condition precedent, as
it shall deem advisable in the best interest of Lenders.  Without
limiting the foregoing, and notwithstanding the existence or occurrence and
continuance of an Event of Default or any other failure to satisfy any of the
conditions precedent set forth in Section 4 of this Agreement to the
contrary, unless and until otherwise directed by the Required Lenders, Agent
may, but shall have no obligation to, continue to make Loans and Issuing Banks
may, but shall have no obligation to, issue or cause to be issued any Letter of
Credit for the ratable account and risk of Lenders from time to time if Agent
believes making such Loans or issuing or causing to be issued such Letter of
Credit is in the best interests of Lenders.

         

        
          
            
            

          

          
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        (b)  Except
with the prior written consent of Agent, no Secured Party may assert or exercise
any enforcement right or remedy in respect of the Loans, Letter of Credit
Obligations or other Obligations, as against any Borrower or Guarantor or any of
the Collateral or other property of any Borrower or Guarantor or otherwise under
any of the Loan Documents.

         

        14.4  WFCF in its Individual
Capacity.  With
respect to its Commitment and the Loans made and Letters of Credit issued or
caused to be issued by it (and any successor acting as Agent), so long as WFCF
shall be a Lender hereunder, it shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise
indicates, include WFCF in its individual capacity as Lender
hereunder.  WFCF (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender) lend money to,
make investments in and generally engage in any kind of business with Borrowers
(and any of its Subsidiaries or Affiliates) as if it were not acting as Agent,
and WFCF and its Affiliates may accept fees and other consideration from any
Borrower or Guarantor and any of its Subsidiaries and Affiliates for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders.

         

        14.5  Indemnification.  Lenders
agree to indemnify Agent and Issuing Banks (to the extent not reimbursed by
Borrowers hereunder and without limiting any obligations of Borrowers hereunder)
ratably, in accordance with their Pro Rata Shares, for any and all claims of any
kind and nature whatsoever that may be imposed on, incurred by or asserted
against Agent (including by any Lender) arising out of or by reason of any
investigation in or in any way relating to or arising out of this Agreement or
any other Loan Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (including
the costs and expenses that Agent is obligated to pay hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents; provided, that, no Lender shall
be liable for any of the foregoing to the extent it arises from the gross
negligence or willful misconduct of the party to be indemnified as determined by
a final non-appealable judgment of a court of competent
jurisdiction.  The foregoing indemnity shall survive the payment of
the Obligations and the termination or non-renewal of this
Agreement.

         

        14.6  Non-Reliance on Agent and
Other Lenders.  Each
Lender agrees that it has, independently and without reliance on Agent or other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrowers and Guarantors and has
made its own decision to enter into this Agreement and that it will,
independently and without reliance upon Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement or any of the other Loan Documents.  Agent shall
not be required to keep itself informed as to the performance or observance by
any Borrower or Guarantor of any term or provision of this Agreement or any of
the other Loan Documents or any other document referred to or provided for
herein or therein or to inspect the properties or books of any Borrower or
Guarantor.  Agent will use reasonable efforts to provide Lenders with
any information received by Agent from any Borrower or Guarantor which is
required to be provided to Lenders or deemed to be requested by Lenders
hereunder and with a copy of any Notice of Default or Failure of Condition
received by Agent from any Borrower or any Lender; provided, that, Agent shall not
be liable to any Lender for any failure to do so, except to the extent that such
failure is attributable to Agent’s own gross negligence or willful misconduct as
determined by a final non-appealable judgment of a court of competent
jurisdiction.  Except for notices, reports and other documents
expressly required to be furnished to Lenders by Agent or deemed requested by
Lenders hereunder, Agent shall not have any duty or responsibility to provide
any Lender with any other credit or other information concerning the affairs,
financial condition or business of any Borrower or Guarantor that may come into
the possession of Agent.

         

        
          
            
            

          

          
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        14.7  Failure to
Act.  Except
for action expressly required of Agent hereunder and under the other Loan
Documents, Agent shall in all cases be fully justified in failing or refusing to
act hereunder and thereunder unless it shall receive further assurances to its
satisfaction from Lenders of their indemnification obligations under
Section 14.5 hereof against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such
action.

         

        14.8  Additional
Loans.  Agent
shall not make any Revolving Loans or Issuing Bank provide any Letter of Credit
to any Borrower on behalf of Lenders intentionally and with actual knowledge
that such Revolving Loans or Letter of Credit would cause the aggregate amount
of the total outstanding Revolving Loans and Letters of Credit to such Borrower
to exceed the Borrowing Base, without the prior consent of all Lenders; except, that, Agent may make
such additional Revolving Loans or Issuing Bank may provide such additional
Letter of Credit on behalf of Lenders, intentionally and with actual knowledge
that such Revolving Loans or Letter of Credit will cause the total outstanding
Revolving Loans and Letters of Credit to such Borrower to exceed the Borrowing
Base, as Agent may deem necessary or advisable in its discretion; provided, that: (a) the total
principal amount of the additional Revolving Loans or additional Letters of
Credit to any Borrower which Agent may make or provide after obtaining such
actual knowledge that the aggregate principal amount of the Revolving Loans and
Swing Line Loans equal or exceed the Borrowing Base, plus the amount of Special
Agent Advances made pursuant to Section 14.11(a)(ii) hereof then
outstanding, shall not exceed the aggregate amount equal to ten (10%) percent of
the Maximum Credit and shall not cause the total principal amount of the Loans
and Letters of Credit to exceed the Maximum Credit and (b) no such additional
Revolving Loan or Letter of Credit shall be outstanding more than ninety (90)
days after the date such additional Revolving Loan or Letter of Credit is made
or issued (as the case may be), except as the Required Lenders may otherwise
agree.  Each Lender shall be obligated to pay Agent the amount of its
Pro Rata Share of any such additional Revolving Loans or Letters of
Credit.

         

        14.9  Concerning the Collateral
and the Related Loan Documents.  Each
Secured Party authorizes and directs Agent to enter into this Agreement and the
other Loan Documents.  Each Secured Party agrees that any action taken
by Agent or Required Lenders (or such greater percentage as may be required
hereunder) in accordance with the terms of this Agreement or the other Loan
Documents and the exercise by Agent or Required Lenders (or such greater
percentage as may be required hereunder) of their respective powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Secured
Parties.

         

        14.10  Field Audit, Examination
Reports and other Information; Disclaimer by Lenders.  By
signing this Agreement, each Lender:

         

        (a)  is
deemed to have requested that Agent furnish such Lender, promptly after it
becomes available, a copy of each field audit or examination report and report
with respect to the Borrowing Base prepared or received by Agent (each field
audit or examination report and report with respect to the Borrowing Base being
referred to herein as a “Report” and collectively, “Reports”), appraisals with
respect to the Collateral and financial statements with respect to Parent and
its Subsidiaries received by Agent;

         

        (b)  expressly
agrees and acknowledges that Agent (i) does not make any representation or
warranty as to the accuracy of any Report, appraisal or financial statement or
(ii) shall not be liable for any information contained in any Report, appraisal
or financial statement;

         

        
          
            
            

          

          
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        (c)  expressly
agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that Agent or any other party performing any audit or examination
will inspect only specific information regarding Borrowers and Guarantors and
will rely significantly upon Borrowers’ and Guarantors’ books and records, as
well as on representations of Borrowers’ and Guarantors’ personnel;
and

         

        (d)  agrees
to keep all Reports confidential and strictly for its internal use in accordance
with the terms of Section 15.5 hereof, and not to distribute or use any
Report in any other manner.

         

        14.11  Collateral
Matters.

         

        (a)  Agent
may, at its option, from time to time, at any time on or after an Event of
Default and for so long as the same is continuing or upon any other failure of a
condition precedent to the Loans and Letters of Credit hereunder, make such
disbursements and advances (“Special Agent Advances”) which Agent, in its sole
discretion, (i) deems necessary or desirable either to preserve or protect the
Collateral or any portion thereof or (ii) to enhance the likelihood or maximize
the amount of repayment by Borrowers and Guarantors of the Loans and other
Obligations; provided, that, (A) the
aggregate principal amount of the Special Agent Advances pursuant to this clause
(ii) outstanding at any time, plus then outstanding principal amount of the
additional Loans and Letters of Credit which Agent may make or provide as set
forth in Section 14.8 hereof, shall not exceed the amount equal to ten
(10%) percent of the Maximum Credit and (B) the aggregate principal amount of
the Special Agent Advances pursuant to this clause (ii) outstanding at any time,
plus then outstanding principal amount of the Loans, shall not exceed the
Maximum Credit, except at Agent’s option; provided, that, to the extent
that the aggregate principal amount of Special Agent Advances plus then
outstanding principal amount of the Loans exceed the Maximum Credit the Special
Agent Advances that are in excess of the Maximum Credit shall be for the sole
account and risk of Agent and notwithstanding anything to the contrary set forth
below, no Lender shall have any obligation to provide its share of such Special
Agent Advances in excess of the Maximum Credit, or (iii) to pay any other amount
chargeable to any Borrower or Guarantor pursuant to the terms of this Agreement
or any of the other Loan Documents consisting of (A) costs, fees and expenses
and (B) payments to Issuing Banks in respect of any Letter of Credit
Obligations.  The Special Agent Advances shall be repayable on demand
and together with all interest thereon shall constitute Obligations secured by
the Collateral.  Special Agent Advances shall not constitute Loans but
shall otherwise constitute Obligations hereunder.  Interest on Special
Agent Advances shall be payable at the Interest Rate then applicable to Base
Rate Loans and shall be payable on demand.  Without limitation of its
obligations pursuant to Section 6.13, each Lender agrees that it shall make
available to Agent, upon Agent’s demand, in immediately available funds, the
amount equal to such Lender’s Pro Rata Share of each such Special Agent
Advance.  If such funds are not made available to Agent by such
Lender, such Lender shall be deemed a Defaulting Lender and Agent shall be
entitled to recover such funds, on demand from such Lender together with
interest thereon for each day from the date such payment was due until the date
such amount is paid to Agent at the Federal Funds Rate for each day during such
period (as published by the Federal Reserve Bank of New York or at Agent’s
option based on the arithmetic mean determined by Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. on that
day by each of the three leading brokers of Federal funds transactions in New
York City selected by Agent) and if such amounts are not paid within three (3)
Business Days of Agent’s demand, at the highest Interest Rate provided for in
Section 3.1 hereof applicable to Base Rate Loans.

         

        
          
            
            

          

          
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        (b)  Lenders
hereby irrevocably authorize Agent, at its option and in its discretion to
release any security interest in, mortgage or lien upon, any of the Collateral
(i) upon termination of the Commitments and payment and satisfaction of all of
the Obligations and delivery of cash collateral to the extent required under
Section 16.1 below, or (ii) constituting property being sold or disposed of
if Administrative Borrower or any Borrower or Guarantor certifies to Agent that
the sale or disposition is made in compliance with Section 10.1 hereof (and
Agent may rely conclusively on any such certificate, without further inquiry),
or (iii) constituting property in which any Borrower or Guarantor did not own an
interest at the time the security interest, mortgage or lien was granted or at
any time thereafter, or (iv) having a value in the aggregate in any twelve (12)
month period of less than $5,000,000, and to the extent Agent may release its
security interest in and lien upon any such Collateral pursuant to the sale or
other disposition thereof, such sale or other disposition shall be deemed
consented to by Lenders, or (v) if required or permitted under the terms of any
of the other Loan Documents, including any intercreditor agreement, or (vi)
approved, authorized or ratified in writing by Required
Lenders.  Except as provided above, Agent will not release any
security interest in, mortgage or lien upon, any of the Collateral without the
prior written authorization of all of Lenders. Upon request by Agent at any
time, Lenders will promptly confirm in writing Agent’s authority to release
particular types or items of Collateral pursuant to this Section.  In
no event shall the consent or approval of Issuing Bank to any release of
Collateral be required.  Nothing contained herein shall be construed
to require the consent of any Bank Product Provider to any release of any
Collateral or termination of security interests in any Collateral.

         

        (c)  Without
in any manner limiting Agent’s authority to act without any specific or further
authorization or consent by the Required Lenders, each Lender agrees to confirm
in writing, upon request by Agent, the authority to release Collateral conferred
upon Agent under this Section.  Agent shall (and is hereby irrevocably
authorized by Lenders to) execute such documents as may be necessary to evidence
the release of the security interest, mortgage or liens granted to Agent upon
any Collateral to the extent set forth above; provided, that, (i) Agent shall
not be required to execute any such document on terms which, in Agent’s opinion,
would expose Agent to liability or create any obligations or entail any
consequence other than the release of such security interest, mortgage or liens
without recourse or warranty and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any security interest, mortgage
or lien upon (or obligations of any Borrower or Guarantor in respect of) the
Collateral retained by such Borrower or Guarantor.

         

        (d)  Agent
shall have no obligation whatsoever to any Lender, Issuing Bank or any other
Person to investigate, confirm or assure that the Collateral exists or is owned
by any Borrower or Guarantor or is cared for, protected or insured or has been
encumbered, or that any particular items of Collateral meet the eligibility
criteria applicable in respect of the Loans or Letters of Credit hereunder, or
whether any particular reserves are appropriate, or that the liens and security
interests granted to Agent pursuant hereto or any of the Loan Documents or
otherwise have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
at all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to Agent in this Agreement or in any of the other Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, subject to the other terms and
conditions contained herein, Agent may act in any manner it may deem
appropriate, in its discretion, given Agent’s own interest in the Collateral as
a Lender and that Agent shall have no duty or liability whatsoever to any other
Lender or Issuing Bank.

         

        14.12  Agency for
Perfection.  Each
Secured Party hereby appoints Agent and each other Secured Party as agent and
bailee for the purpose of perfecting the security interests in and liens upon
the Collateral of Agent in assets which, in accordance with Article 9 of the UCC
can be perfected only by possession (or where the security interest of a secured
party with possession has priority over the security interest of another secured
party) and Agent and each Secured Party hereby acknowledges that it holds
possession of any such Collateral for the benefit of Agent as secured
party.  Should any Secured Party obtain possession of any such
Collateral, such Secured Party shall notify Agent thereof, and, promptly upon
Agent’s request therefor shall deliver such Collateral to Agent or in accordance
with Agent’s instructions.

         

        
          
            
            

          

          
            134

            
              

            

          

          
            
            

          

        

         

        14.13  Agent May File Proofs of
Claim.

         

        (a)  In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, judicial management, arrangement, adjustment, composition or
other judicial proceeding relative to any Borrower or Guarantor, Agent
(irrespective of whether the principal of any Loan or Letter of Credit
Obligation shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether Agent shall have made any demand on the
Borrowers) shall be entitled and empowered, by intervention in such proceeding
or otherwise:

         

        (i)  to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, Letter of Credit Obligations and all other
Obligations (other than obligations under Bank Products to which Agent is not a
party) that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of Lenders, Issuing Bank and
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of Lenders, Issuing Bank and Agent and their
respective agents and counsel and all other amounts due Lenders, Issuing Bank
and Agent allowed in such judicial proceeding; and

         

        (ii)  to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, administrator, sequestrator or other similar official in
any such judicial proceeding is hereby authorized by each Lender and Issuing
Bank to make such payments to Agent and, in the event that Agent shall consent
to the making of such payments directly to Lenders and Issuing Bank, to pay to
Agent any amount due for the reasonable compensation, expenses, disbursements
and advances of Agent and its agents and counsel, and any other amounts due
Agent.

         

        (b)  Nothing
contained herein shall be deemed to authorize Agent to authorize or consent to
or accept or adopt on behalf of any Lender or Issuing Bank any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize Agent to vote in respect of the
claim of any Lender in any such proceeding.

         

        14.14  Successor
Agent.  Agent
may resign as Agent upon thirty (30) days’ notice to Lenders and Administrative
Borrower.  If Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor agent for
Lenders.  If no successor agent is appointed prior to the effective
date of the resignation of Agent, Agent may appoint, after consulting with
Lenders and Administrative Borrower, a successor agent from among
Lenders.  Upon the acceptance by the Lender so selected of its
appointment as successor agent hereunder, such successor agent shall succeed to
all of the rights, powers and duties of the retiring Agent and the term “Agent”
as used herein and in the other Loan Documents shall mean such successor agent
and the retiring Agent’s appointment, powers and duties as Agent shall be
terminated.  After any retiring Agent’s resignation hereunder as
Agent, the provisions of this Section 14 shall inure to its benefit as to
any actions taken or omitted by it while it was Agent under this
Agreement.  If no successor agent has accepted appointment as Agent by
the date which is thirty (30) days after the date of a retiring Agent’s notice
of resignation, the retiring Agent’s resignation shall nonetheless thereupon
become effective and Lenders shall perform all of the duties of Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.  Any resignation of Agent pursuant to this Section
shall also constitute the resignation of WFCF or its successor as Swing Line
Lender and Issuing Bank, and any successor agent that is appointed pursuant to
this Section shall, upon its acceptance of such appointment, become the
successor Swing Line Lender and Issuing Bank for all purposes
thereunder.  At the time any such resignation or replacement shall
become effective, Borrowers shall pay the full outstanding principal amount of
all Swing Line Loans and all accrued and unpaid fees and expenses of the
retiring Swing Line Lender and Issuing Bank.  From and after the
effective date of any such resignation or replacement, (i) the successor Issuing
Bank shall have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit issued by it thereafter and (ii) the
retiring Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of Issuing Bank under this Agreement with respect to
Letters of Credit issued by it prior to such resignation, but shall not be
required to issue additional Letters of Credit.

         

        
          
            
            

          

          
            135

            
              

            

          

          
            
            

          

        

         

        14.15  Other Agent
Designations.  Agent
may at any time and from time to time determine that a Lender may, in addition,
be a “Co-Agent”, “Syndication Agent”, “Documentation Agent” or similar
designation hereunder and enter into an agreement with such Lender to have it so
identified for purposes of this Agreement.  Any such designation shall
be effective upon written notice by Agent to Administrative Borrower of any such
designation.  Any Lender that is so designated as a Co-Agent,
Syndication Agent, Documentation Agent or such similar designation by Agent
shall have no right, power, obligation, liability, responsibility or duty under
this Agreement or any of the other Loan Documents other than those applicable to
all Lenders as such.  Without limiting the foregoing, the Lenders so
identified shall not have or be deemed to have any fiduciary relationship with
any Lender and no Lender shall be deemed to have relied, nor shall any Lender
rely, on a Lender so identified as a Co-Agent, Syndication Agent, Documentation
Agent or such similar designation in deciding to enter into this Agreement or in
taking or not taking action hereunder.

         

        SECTION
15.  APPOINTMENT OF
AGENT AS SECURITY TRUSTEE UNDER THE UK LOAN DOCUMENTS AND THE SINGAPORE LOAN
DOCUMENTS

         

        15.1   
Appointment of the
Security Trustee.

         

        (a)  The
Secured Parties appoint the Agent to hold the Security Interests constituted by
the UK Loan Documents and the Singapore Loan Documents on trust for the Secured
Parties on the terms of the Loan Documents and the Agent accepts that
appointment.

         

        (b)  The
Agent, its subsidiaries and associated companies may each retain for its own
account and benefit any fee, remuneration and profits paid to it in connection
with (i) its activities under the UK Loan Documents and Singapore Loan
Documents; and (ii) its engagement in any kind of banking or other business with
any Loan Party.

         

        15.2  
 Duties of the
Agent.

         

        (a)  Nothing
in this Agreement constitutes the Agent as a trustee or fiduciary of, nor shall
the Agent have any duty or responsibility to, any Loan Party.

         

        (b)  The
Agent shall have no duties or obligations to any other Person except for those
which are expressly specified in the Loan Documents or mandatorily required by
applicable law.

         

        15.3   
Appointments by the
Agent under the UK Documents.

         

        (a)  The
Agent may appoint one or more Delegates on such terms (which may include the
power to sub-delegate) and subject to such conditions as it thinks fit, to
exercise and perform all or any of the duties, rights, powers and discretions
vested in it by any of the UK Loan Documents and the Singapore Loan Documents
and shall not be obliged to supervise any Delegate or be responsible to any
person for any loss incurred by reason of any act, omission, misconduct or
default on the part of any Delegate.

         

        
          
            
            

          

          
            136

            
              

            

          

          
            
            

          

        

         

        (b)  The
Agent may (whether for the purpose of complying with any law or regulation of
any overseas jurisdiction, or for any other reason) appoint (and subsequently
remove) any person to act jointly with the Agent either as a separate trustee or
as a co-trustee on such terms and subject to such conditions as the Agent thinks
fit and with such of the duties, rights, powers and discretions vested in the
Agent by any UK Loan Document or Singapore Loan Document as may be conferred by
the instrument of appointment of that person.

         

        (c)  The
Agent shall notify the Lenders of the appointment of each Appointee (other than
a Delegate).

         

        (d)  The
Agent may pay reasonable remuneration to any Delegate or Appointee, together
with any costs and expenses (including legal fees) reasonably incurred by the
Delegate or Appointee in connection with its appointment.  All such
remuneration, costs and expenses shall be treated, for the purposes of this
Agreement and any Fee Letter, as paid or incurred by the Agent.

         

        (e)  Each
Delegate and each Appointee shall have every benefit, right, power and
discretion and the benefit of every exculpation (together Rights) of the Agent
(in its capacity as security trustee) under the UK Loan Documents and the
Singapore Loan Documents, and each reference to the Agent (where the context
requires that such reference is to the Agent in its capacity as security
trustee) in the provisions of the UK Loan Documents and the Singapore Loan
Documents which confer Rights shall be deemed to include a reference to each
Delegate and each Appointee.

         

        15.4   
The UK Loan Documents
and Singapore Loan Documents.

         

        (a)  Each
Secured Party confirms its approval of the UK Loan Documents and the Singapore
Loan Documents and authorizes and instructs the Agent: (i) to execute and
deliver the UK Loan Documents and the Singapore Loan Documents; (ii) to exercise
the rights, powers and discretions given to the Agent (in its capacity as
security trustee) under or in connection with the UK Loan Documents and the
Singapore Loan Documents together with any other incidental rights, powers and
discretions; and (iii) to give any authorizations and confirmations to be given
by the Agent (in its capacity as security trustee) on behalf of the Secured
Parties under the UK Loan Documents and the Singapore Loan
Documents.

         

        (b)  The
Agent may accept without inquiry the title (if any) which any person may have to
any of the Charged Property.

         

        15.5  
 Agent as
Proprietor.  Each
other Secured Party confirms that it does not wish to be registered as a joint
proprietor of any Security Interest constituted by a UK Loan Document or a
Singapore Loan Document and accordingly authorizes: (a) the Agent to hold such
Security Interest in its sole name (or in the name of any Delegate) as trustee
for the Secured Parties; and (b) the Land Registry (or other relevant registry)
to register the Agent (or any Delegate or Appointee) as a sole proprietor of
such Security Interest.

         

        15.6  
 Investments  Except
to the extent that a UK Loan Document otherwise requires, any moneys which the
Agent receives under or pursuant to a UK Loan Document may be: (a) invested in
any investments which the Agent selects and which are authorized by applicable
law; or (b) placed on deposit at any bank or institution (including the Agent)
on terms that the Agent thinks fit, in each case in the name or under the
control of the Agent, and the Agent shall hold those moneys, together with any
accrued income (net of any applicable Tax) to the order of the Lenders, and
shall pay them to the Lenders on demand.

         

        15.7  
 Releases of
Charged Property  On
a disposal of any of the Charged Property which is permitted under the Loan
Documents, the Agent shall (at the cost of the Loan Parties) execute any release
of the relevant Loan Documents or other claim over that Charged Property and
issue any certificates of non-crystallisation of floating charges that may be
required or take any other action that the Agent considers
desirable.

         

        
          
            
            

          

          
            137

            
              

            

          

          
            
            

          

        

         

        15.8 
  Exclusion
of Liability.

         

        (a)  The
Agent shall not be liable for:

         

        (i)  
 any defect in or failure of the title (if any) which any person may have
to any assets over which security is intended to be created by any UK Loan
Document or Singapore Loan Document;

         

        (ii)  
any loss resulting from the investment or deposit at any bank of moneys which it
invests or deposits in a manner permitted by the UK Loan Documents;

         

        (iii)  the
exercise of, or the failure to exercise, any right, power or discretion given to
it by or in connection with any Loan Document or any other agreement,
arrangement or document entered into, or executed in anticipation of, under or
in connection with, any Loan Document; or

         

        (iv)  any
shortfall which arises on enforcing the UK Loan Documents or Singapore Loan
Documents.

         

        (b)  The
Agent shall not be obligated to:

         

        (i)  
 obtain any authorization or environmental permit in respect of any of the
Charged Property or any of the UK Loan Documents;

         

        (ii)  
hold in its own possession any UK Loan Document or Singapore Loan Document,
title deed or other document relating to the Charged Property or the UK Loan
Documents or the Singapore Loan Documents;

         

        (iii)  perfect,
protect, register, make any filing or give any notice in respect of the UK Loan
Documents or Singapore Loan Documents (or the order of ranking of any UK Loan
Document or Singapore Loan Document, as applicable), unless that failure arises
directly from its own gross negligence or wilful misconduct; or

         

        (iv)  require
any further assurances in relation to any UK Loan Document or Singapore Loan
Document.

         

        15.9  Insurance

         

        (a)  In
respect of the UK Loan Documents or Singapore Loan Documents, the Agent shall
not be obligated to: (i) insure, or require any other person to insure, the
Charged Property; or (ii) make any enquiry or conduct any investigation into the
legality, validity, effectiveness, adequacy or enforceability of any insurance
existing over the Charged Property.

         

        (b)  In
respect of the UK Loan Documents or Singapore Loan Documents, the Agent shall
not have any obligation or duty to any person for any loss suffered as a result
of: (i) the lack or inadequacy of any insurance; or (ii) the failure of the
Agent to notify the insurers of any material fact relating to the risk assumed
by them, or of any other information of any kind, unless Required Lenders have
requested it to do so in writing and the Agent has failed to do so within
fourteen (14) days after receipt of that request.

         

        
          
            
            

          

          
            138

            
              

            

          

          
            
            

          

        

         

        15.10  Appointment of Successor
Agent under the UK Documents.  Every
appointment of a successor Agent under the UK Loan Documents shall be by
deed.

         

        15.11  Trustee
Acts.

         

        (a)  Section
1 of the Trustee Act 2000 shall not apply to the duty of the Agent in relation
to the trusts constituted by this Agreement.

         

        (b)  In
the case of any conflict between the provisions of this Agreement and those of
the Trustee Act 1925 or the Trustee Act 2000, the provisions of this Agreement
shall prevail to the extent allowed by law, and shall constitute a restriction
or exclusion for the purposes of the Trustee Act 2000.

         

        15.12  Perpetuity Period.
The
perpetuity period under the rule against perpetuities if applicable to this
Agreement, the UK Loan Documents and the Singapore Loan Documents shall be 80
years from the date of this Agreement.

         

        SECTION
16.  TERM OF
AGREEMENT; MISCELLANEOUS

         

        16.1  
 Term.

         

        (a)  This
Agreement and the other Loan Documents shall become effective as of the date set
forth on the first page hereof and shall continue in full force and effect for a
term ending on the Maturity Date.  In addition, Borrowers may
terminate this Agreement at any time upon ten (10) days prior written notice to
Agent (which notice shall be irrevocable) and Agent may, at its option, and
shall at the direction of Required Lenders, terminate this Agreement at any time
on or after an Event of Default.  Upon the Maturity Date or any other
date of the termination of the Commitments, Borrowers shall pay to Agent all
outstanding and unpaid Obligations and shall furnish cash collateral to Agent
(or at Agent’s option, a letter of credit issued for the account of Borrowers
and at Borrowers’ expense, in form and substance satisfactory to Agent, by an
issuer acceptable to Agent and payable to Agent as beneficiary) in such amounts
as Agent determines are reasonably necessary to secure Agent, Lenders and
Issuing Bank from loss, cost, damage or expense, including reasonable attorneys’
fees and expenses, in connection with any contingent Obligations, including
issued and outstanding Letter of Credit Obligations and checks or other payments
provisionally credited to the Obligations and/or as to which Agent or any Lender
has not yet received final and indefeasible payment and any continuing
obligations of Agent or any Lender pursuant to any Deposit Account Control
Agreement and for any of the Obligations arising under or in connection with any
Bank Products in such amounts as the Bank Product Provider providing such Bank
Products may require (unless such Obligations arising under or in connection
with any Bank Products are paid in full in cash and terminated in a manner
satisfactory to such Bank Product Provider).  The amount of such cash
collateral (or letter of credit, as Agent may determine) as to any Letter of
Credit Obligations shall be in the amount equal to one hundred ten (110%)
percent of the amount of the Letter of Credit Obligations plus the amount of any
fees and expenses payable in connection therewith through the end of the latest
expiration date of the Letters of Credit giving rise to such Letter of Credit
Obligations.  Such payments in respect of the Obligations and cash
collateral shall be remitted by wire transfer in Federal funds to the US Payment
Account and/or the any of the UK Payment Accounts, as the case may be, or such
other bank account of Agent, as Agent may, in its discretion, designate in
writing to Administrative Borrower for such purpose.  Interest shall
be due until and including the next Business Day, if the amounts so paid by
Borrowers to the applicable Payment Account or other bank account designated by
Agent are received in such bank account later than 12:00 noon.

         

        
          
            
            

          

          
            139

            
              

            

          

          
            
            

          

        

         

        (b)  No
termination of the Commitments, this Agreement or any of the other Loan
Documents shall relieve or discharge any Borrower or Guarantor of its respective
duties, obligations and covenants under this Agreement or any of the other Loan
Documents until all Obligations (other than indemnities and contingent
Obligations which have not yet accrued) have been fully and finally discharged
and paid, and Agent’s continuing security interest in the Collateral and the
rights and remedies of Agent and Lenders hereunder, under the other Loan
Documents and applicable law, shall remain in effect until all such Obligations
have been fully and finally discharged and paid.  Accordingly, each
Borrower and Guarantor waives any rights it may have under the UCC or other
applicable law to demand the filing of termination statements with respect to
the Collateral and Agent shall not be required to send such termination
statements to Borrowers or Guarantors, or to file them with any filing office,
unless and until this Agreement shall have been terminated in accordance with
its terms and all Obligations (other than indemnities and contingent Obligations
which have not yet accrued) paid and satisfied in full in immediately available
funds.

         

        16.2  Interpretative
Provisions.

         

        (a)  All
terms used herein which are defined in Article 1, Article 8 or Article 9 of the
UCC shall have the meanings given therein unless otherwise defined in this
Agreement.

         

        (b)  All
references to the plural herein shall also mean the singular and to the singular
shall also mean the plural unless the context otherwise requires.

         

        (c)  All
references to any Borrower, Guarantor, Agent and Lenders pursuant to the
definitions set forth in the recitals hereto, or to any other person herein,
shall include their respective successors and assigns.

         

        (d)  The
words “hereof”, “herein”, “hereunder”, “this Agreement” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not any particular provision of this Agreement and as this Agreement now exists
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.

         

        (e)  The
word “including” when used in this Agreement shall mean “including, without
limitation” and the word “will” when used in this Agreement shall be construed
to have the same meaning and effect as the word “shall”.

         

        (f)  An
Event of Default shall exist or continue or be continuing until such Event of
Default is waived in accordance with Section 13.3 or is cured in a manner
satisfactory to Agent, if such Event of Default is capable of being cured as
determined by Agent.

         

        (g)  All
references to the term “good faith” used herein when applicable to Agent or any
Lender shall mean, notwithstanding anything to the contrary contained herein or
in the UCC, honesty in fact in the conduct or transaction concerned and
observance of reasonable commercial standards of fair dealing based on how an
asset-based lender with similar rights providing a credit facility of the type
set forth herein would act in similar circumstances at the time with the
information then available to it. .  Borrowers and Guarantors shall
have the burden of proving any lack of good faith on the part of Agent or any
Lender alleged by any Borrower or Guarantor at any time.  All
references to the term "reasonably" or “reasonable” as applied to any conduct or
determination by Agent shall be based on how an asset-based lender with similar
rights providing a credit facility of the type set forth herein would act in
similar circumstances.

         

        
          
            
            

          

          
            140

            
              

            

          

          
            
            

          

        

         

        (h)  
References to “contingent Obligations which have not yet accrued” in the phrase
“(other than indemnities and contingent Obligations which have not yet accrued)”
used throughout the Loan Documents shall not include Obligations arising (i) in
respect of issued and outstanding Letter of Credit Obligations and checks or
other payments provisionally credited to the Obligations and/or as to which
Agent or any Lender has not yet received final and indefeasible payment to the
extent Agent has received cash collateral or a letter of credit as contemplated
by Section 13.1 (and including any contingent liability of Agent to any bank at
which deposit accounts of Borrowers and Guarantors are maintained under any
Deposit Account Control Agreement) and (ii) under or in connection with any Bank
Products in such amounts as the party providing such Bank Products may require
(unless such Obligations arising under or in connection with any Bank Products
are not paid in full in cash or cash collateral or letter of credit as
contemplated by Section 16.1) and terminated in a manner satisfactory to such
other party).

         

        (i)  Any
accounting term used in this Agreement shall have, unless otherwise specifically
provided herein, the meaning customarily given in accordance with GAAP, and all
financial computations hereunder shall be computed unless otherwise specifically
provided herein, in accordance with GAAP as consistently applied and using the
same method for inventory valuation as used in the preparation of the financial
statements of Parent most recently received by Agent prior to the date hereof.
Notwithstanding anything to the contrary contained herein, all financial
statements delivered hereunder shall be prepared, and all financial covenants
contained herein shall be calculated, without giving effect to any election
under the Statement of Financial Accounting Standards No. 159 (or any similar
accounting principle) permitting a Person to value its financial liabilities or
Indebtedness at the fair value thereof. Notwithstanding anything to the contrary
contained in GAAP or any interpretations or other pronouncements by the
Financial Accounting Standards Board or otherwise, the term “unqualified
opinion” as used herein to refer to opinions or reports provided by accountants
shall mean an opinion or report that is unqualified and also does not include
any explanation, supplemental comment or other comment concerning the ability of
the applicable person to continue as a going concern or the scope of the
audit.

         

        (j)  In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including”, the words “to” and “until”
each mean “to but excluding” and the word “through” means “to and
including”.

         

        (k)  Unless
otherwise expressly provided herein, (i) references herein to any agreement,
document or instrument shall be deemed to include all subsequent amendments,
modifications, supplements, extensions, renewals, restatements or replacements
with respect thereto, but only to the extent the same are not prohibited by the
terms hereof or of any other Loan Document, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, recodifying, supplementing or
interpreting the statute or regulation.

         

        (l)  The
captions and headings of this Agreement are for convenience of reference only
and shall not affect the interpretation of this Agreement.

         

        (m)  This
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters.  All such
limitations, tests and measurements are cumulative and shall each be performed
in accordance with their terms.

         

        (n)  This
Agreement and the other Loan Documents are the result of negotiations among and
have been reviewed by counsel to Agent and the other parties, and are the
products of all parties.  Accordingly, this Agreement and the other
Loan Documents shall not be construed against Agent or Lenders merely because of
Agent’s or any Lender’s involvement in their preparation.

         

        
          
            
            

          

          
            141

            
              

            

          

          
            
            

          

        

         

        16.3 
  Notices.

         

        (a)  All
notices, requests and demands hereunder shall be in writing and deemed to have
been given or made:  if delivered in person, immediately upon
delivery; if by telex, telegram or facsimile transmission, immediately upon
sending and upon confirmation of receipt; if by nationally recognized overnight
courier service with instructions to deliver the next Business Day, one (1)
Business Day after sending; and if by certified mail, return receipt requested,
five (5) Business Days after mailing.  Notices delivered through
electronic communications shall be effective to the extent set forth in
Section 16.3(b) below.  All notices, requests and demands upon
the parties are to be given to the following addresses (or to such other address
as any party may designate by notice in accordance with this
Section):

         

        
          
            
              
                	
                        If
      to any Borrower or Guarantor:

                      	 
      	
                        Nu
      Horizons Electronics Corp.

                      
	 
      	 
      	
                        70
      Maxess Road

                      
	 
      	 
      	
                        Melville,
      NY 11747

                      
	 
      	 
      	
                        Attention:

                      	
                        Kurt
      Freudenberg, Chief

                      
	 
      	 
      	 
      	
                        Financial
      Officer

                      
	 
      	 
      	
                        Telecopy
      No.:

                      	
                        (631)
      794-2441

                      
	 
      	 
      	 
      
	
                        with
      a copy to:

                      	 
      	
                        Farrell
      Fritz, P.C.

                        1320
      RXR Plaza

                        Uniondale,
      NY 11556-1320

                        Attention:
      Nancy Lieberman, Esq.

                        Telecopy
      No.: (516) 516-227-0777

                      
	 
      	 
      	 
      
	
                        If
      to Agent or Issuing Bank:

                      	
                          

                      	
                        Wachovia
      Capital Finance Corporation (New

                        England)

                        12
      E. 49th
      Street

                        New
      York, New York 10017

                        Attention:  Portfolio
      Manager — Nu Horizons

                        Telecopy
      No.: 
212-545-4283

                      

              

            

          

        

         

        (b)  Notices
and other communications to Lenders and Issuing Bank hereunder may be delivered
or furnished by electronic communication (including e-mail and Internet or
intranet websites) pursuant to procedures approved by Agent or as otherwise
determined by Agent; provided, that, the foregoing
shall not apply to notices to any Lender or Issuing Bank pursuant to
Section 2 hereof if such Lender or Issuing Bank, as applicable, has
notified Agent that it is incapable of receiving notices under such
Section by electronic communication.  Unless Agent otherwise
requires, (i) notices and other communications sent to an e-mail address shall
be deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement); provided, that, if such notice
or other communication is not given during the normal business hours of the
recipient, such notice shall be deemed to have been sent at the opening of
business on the next Business Day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (i) of notification that such notice or
communications is available and identifying the website address
therefor.

         

        16.4  
 Partial
Invalidity.  If
any provision of this Agreement is held to be invalid or unenforceable, such
invalidity or unenforceability shall not invalidate this Agreement as a whole,
but this Agreement shall be construed as though it did not contain the
particular provision held to be invalid or unenforceable and the rights and
obligations of the parties shall be construed and enforced only to such extent
as shall be permitted by applicable law.

         

        
          
            
            

          

          
            142

            
              

            

          

          
            
            

          

        

         

        16.5 
  Confidentiality.

         

        (a)  Agent,
each Lender and Issuing Bank shall use all reasonable efforts to keep
confidential, in accordance with its customary procedures for handling
confidential information and safe and sound lending practices, any non-public
information supplied to it by any Borrower pursuant to this Agreement which is
clearly and conspicuously marked as confidential at the time such information is
furnished by such Borrower to Agent, such Lender or Issuing Bank; provided, that, nothing
contained herein shall limit the disclosure of any such information (and the
Singapore Borrowing Base Guarantors hereby authorize any such disclosure): (i)
to the extent required or permitted by statute, rule, regulation, subpoena or
court order, (ii) to bank examiners and other regulators, auditors and/or
accountants,  in connection with any litigation to which Agent, such
Lender or Issuing Bank is a party, (iii) to any Lender or Participant (or
prospective Lender or Participant) or Issuing Bank or to any Affiliate of any
Lender so long as such Lender, Participant (or prospective Lender or
Participant), Issuing Bank or Affiliate shall have been instructed to treat such
information as confidential in accordance with this Section 16.5, or (iv)
to counsel for Agent, any Lender, Participant (or prospective Lender or
Participant) or Issuing Bank.

         

        (b)  In
the event that Agent, any Lender or Issuing Bank receives a request or demand to
disclose any confidential information pursuant to any subpoena or court order,
Agent or such Lender or Issuing Bank, as the case may be, agrees (i) to the
extent permitted by applicable law or if permitted by applicable law, to the
extent Agent or such Lender or Issuing Bank determines in good faith that it
will not create any risk of liability to Agent or such Lender or Issuing Bank,
Agent or such Lender or Issuing Bank will promptly notify Administrative
Borrower of such request so that Administrative Borrower may seek a protective
order or other appropriate relief or remedy and (ii) if disclosure of such
information is required, disclose such information and, subject to reimbursement
by Borrowers of Agent’s or such Lender’s or Issuing Bank’s expenses, cooperate
with Administrative Borrower in the reasonable efforts to obtain an order or
other reliable assurance that confidential treatment will be accorded to such
portion of the disclosed information which Administrative Borrower so
designates, to the extent permitted by applicable law or if permitted by
applicable law, to the extent Agent or such Lender or Issuing Bank determines in
good faith that it will not create any risk of liability to Agent or such Lender
or Issuing Bank.

         

        (c)  In
no event shall this Section 16.5 or any other provision of this Agreement,
any of the other Loan Documents or applicable law be deemed: (i) to apply to or
restrict disclosure of information that has been or is made public by any
Borrower, Guarantor or any third party or otherwise becomes generally available
to the public other than as a result of a disclosure in violation hereof, (ii)
to apply to or restrict disclosure of information that was or becomes available
to Agent, any Lender (or any Affiliate of any Lender) or Issuing Bank on a
non-confidential basis from a person other than a Borrower or Guarantor, (iii)
to require Agent, any Lender or Issuing Bank to return any materials furnished
by a Borrower or Guarantor to Agent, a Lender or Issuing Bank
or  prevent Agent, a Lender or Issuing Bank from responding to routine
informational requests  in accordance with the Code of Ethics for the
Exchange of Credit Information promulgated by The Robert Morris Associates or
other applicable industry standards relating to the exchange of credit
information.  The obligations of Agent, Lenders and Issuing Bank under
this Section 16.5 shall supersede and replace the obligations of Agent,
Lenders and Issuing Bank under any confidentiality letter signed prior to the
date hereof or any other arrangements concerning the confidentiality of
information provided by any Borrower or Guarantor to Agent or any
Lender.  In addition, Agent and Lenders may disclose information
relating to the Credit Facility to Gold Sheets and other publications, with such
information to consist of deal terms and other information customarily found in
such publications and that Agent may otherwise use the corporate name and logo
of Borrowers and Guarantors or deal terms in “tombstones” or other
advertisements, public statements or marketing materials.

         

        
          
            
            

          

          
            143

            
              

            

          

          
            
            

          

        

         

        16.6  
 Successors.  This
Agreement, the other Loan Documents and any other document referred to herein or
therein shall be binding upon and inure to the benefit of and be enforceable by
Agent, Lenders, Issuing Bank, Borrowers, Guarantors and their respective
successors and assigns; except, that, no Borrower or
Guarantor may assign its rights under this Agreement, the other Loan Documents
and any other document referred to herein or therein without the prior written
consent of Agent and Lenders.  Any such purported assignment without
such express prior written consent shall be void.  No Lender may
assign its rights and obligations under this Agreement without the prior written
consent of Agent, except as provided in Section 16.7 below. The terms and
provisions of this Agreement and the other Loan Documents are for the purpose of
defining the relative rights and obligations of Borrowers, Guarantors, Agent,
Lenders, Issuing Bank and other Secured Parties with respect to the transactions
contemplated hereby and there shall be no third party beneficiaries of any of
the terms and provisions of this Agreement or any of the other Loan
Documents.

         

        16.7  
 Assignments;
Participations.

         

        (a)  Each
Lender may, with the prior written consent of Agent, Issuing Bank, and Swing
Line Lender, make assignments of all or, if less than all, a portion equal to at
least $5,000,000 in the aggregate for the assigning Lender (or if the Commitment
of such Lender is less than $5,000,000, the remaining amount of such Lender’s
Commitment), of such rights and obligations under this Agreement to one or more
Eligible Transferees (but not including for this purpose any assignments in the
form of a participation), each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment and Acceptance Agreement;
provided, that,  (i)
such transfer or assignment will not be effective until recorded by Agent on the
Register, and (ii) Agent shall have received for its sole account payment of a
processing fee from the assigning Lender or the assignee in the amount of
$5,000.

         

        (b)  Upon
such execution, delivery, acceptance and recording, from and after the effective
date specified in each Assignment and Acceptance Agreement, the assignee
thereunder shall be a party hereto and to the other Loan Documents and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance Agreement, have the rights and obligations
(including, without limitation, the obligation to participate in Letter of
Credit Obligations) of a Lender hereunder and thereunder and  the
assigning Lender shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance Agreement,
relinquish its rights and be released from its obligations under this
Agreement.

         

        (c)  By
execution and delivery of an Assignment and Acceptance Agreement, the assignor
and assignee thereunder confirm to and agree with each other and the other
parties hereto as follows:  (i) other than as provided in such
Assignment and Acceptance Agreement, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any of the other Loan Documents or the execution, legality,
enforceability, genuineness, sufficiency or value of this Agreement or any of
the other Loan Documents furnished pursuant hereto, (ii) the assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of any Borrower, Guarantor or any of their
Subsidiaries or the performance or observance by any Borrower or Guarantor of
any of the Obligations; (iii) such assignee confirms that it has received a copy
of this Agreement and the other Loan Documents, together with such other
documents and information it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance Agreement,
(iv) such assignee will, independently and without reliance upon the assigning
Lender, Agent and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents, (v) such
assignee appoints and authorizes Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto, and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender.  Agent and Lenders may
furnish any information concerning any Borrower or Guarantor in the possession
of Agent or any Lender from time to time to assignees and
Participants.

         

        
          
            
            

          

          
            144

            
              

            

          

          
            
            

          

        

         

        (d)  Each
Lender may sell participations to one or more banks or other entities in or to
all or a portion of its rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, all or a portion of its
Commitments and the Loans owing to it and its participation in the Letter of
Credit Obligations, without the consent of Agent or the other Lenders); provided, that, (i) such
Lender’s obligations under this Agreement (including, without limitation, its
Commitment hereunder) and the other Loan Documents shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, and Borrowers, Guarantors, the other Lenders
and Agent shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and
the other Loan Documents, and (iii) the Participant shall not have any rights
under this Agreement or any of the other Loan Documents (the Participant’s
rights against such Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of the Participant
relating thereto) and all amounts payable by any Borrower or Guarantor hereunder
shall be determined as if such Lender had not sold such
participation.

         

        (e)  Nothing
in this Agreement shall prevent or prohibit any Lender from pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by such Lender
from such Federal Reserve Bank; provided, that, no such pledge
shall release such Lender from any of its obligations hereunder or substitute
any such pledgee for such Lender as a party hereto.

         

        (f)  Borrowers
and Guarantors shall assist Agent or any Lender permitted to sell assignments or
participations under this Section 16.7 in whatever manner reasonably
necessary in order to enable or effect any such assignment or participation,
including (but not limited to) the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and
the delivery of informational materials, appraisals or other documents for, and
the participation of relevant management in meetings and conference calls with,
potential Lenders or Participants. Borrowers shall certify the correctness,
completeness and accuracy, in all material respects, of all descriptions of
Borrowers and Guarantors and their affairs provided, prepared or reviewed by any
Borrower or Guarantor that are contained in any selling materials and all other
information provided by it and included in such materials.

         

        (g)  Any
Lender that is Issuing Bank may at any time assign all of its Commitments
pursuant to this Section 16.7.  If such Issuing Bank ceases to
be  Lender, it may, at its option, resign as Issuing Bank and such
Issuing Bank’s obligations to issue Letters of Credit shall terminate but it
shall retain all of the rights and obligations of Issuing Bank hereunder with
respect to Letters of Credit outstanding as of the effective date of its
resignation and all Letter of Credit Obligations with respect thereto (including
the right to require Lenders to make Revolving Loans or fund risk participations
in outstanding Letter of Credit Obligations), shall continue.

         

        16.8 
  Entire
Agreement.  This
Agreement, the other Loan Documents, any supplements hereto or thereto, and any
instruments or documents delivered or to be delivered in connection herewith or
therewith represents the entire agreement and understanding concerning the
subject matter hereof and thereof between the parties hereto, and supersede all
other prior agreements, understandings, negotiations and discussions,
representations, warranties, commitments, proposals, offers and contracts
concerning the subject matter hereof, whether oral or written.  In the
event of any inconsistency between the terms of this Agreement and any schedule
or exhibit hereto, the terms of this Agreement shall govern.

         

        
          
            
            

          

          
            145

            
              

            

          

          
            
            

          

        

         

        16.9 
  USA
Patriot Act.  Each
Lender subject to the Patriot Act hereby notifies Borrowers and Guarantors that
pursuant to the requirements of the Patriot Act, it is required to obtain,
verify and record information that identifies each person or corporation who
opens an account and/or enters into a business relationship with it, which
information includes the name and address of Borrowers and Guarantors and other
information that will allow such Lender to identify such person in accordance
with the Patriot Act  and any other applicable
law.  Borrowers and Guarantors are hereby advised that any Loans or
Letters of Credit hereunder are subject to satisfactory results of such
verification.

         

        16.10  Counterparts,
Etc.  This
Agreement or any of the other Loan Documents may be executed in any number of
counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of this Agreement or any of the other Loan Documents by
telefacsimile or other electronic method of transmission shall have the same
force and effect as the delivery of an original executed counterpart of this
Agreement or any of such other Loan Documents.  Any party delivering
an executed counterpart of any such agreement by telefacsimile or other
electronic method of transmission shall also deliver an original executed
counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of such agreement.

         

        16.11  Judgment
Currency.  If,
for the purposes of obtaining judgment in any court in any jurisdiction with
respect to this Agreement or any other Loan Document, it becomes necessary to
convert into the currency of such jurisdiction (the "Judgment Currency") any
amount due under this Agreement or any other Loan Document in any currency other
than the Judgment Currency (the "Currency Due"), then conversion shall be made
at the Exchange Rate at which Agent is able, on the relevant date, to purchase
the Currency Due with the Judgment Currency prevailing on the Business Day
before the day on which judgment is given. In the event that there is a
challenge with respect to Exchange Rate prevailing between the Business Day
before the day on which the judgment is given and the date of receipt by Agent
of the amount due, Borrowers or Guarantors will, on the date of receipt by
Agent, pay such additional amounts, if any, or be entitled to receive
reimbursement of such amount, if any, as may be necessary to ensure that the
amount received by Agent on such date is the amount in the Judgment Currency
which when converted at the rate of exchange prevailing on the date of receipt
by Agent is the amount then due under this Agreement or any other Loan Document
in the Currency Due. If the amount of the Currency Due which Agent is able to
purchase is less than the amount of the Currency Due originally due to it,
Borrowers and Guarantors shall indemnify and save Agent harmless from and
against loss or damage arising as a result of such deficiency. The indemnity
contained herein shall constitute an obligation separate and independent from
the other obligations contained in this Agreement or any other Loan Document,
shall give rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by Agent from time to time and shall
continue in full force effect notwithstanding any judgment or order for a
liquidated sum in respect of an amount due under this Agreement or any other
Loan Document or under any judgment or order.

         

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            146

            
              

            

          

          
            
            

          

        

      

      

      IN
WITNESS WHEREOF, Agent, Lenders, Borrowers, and Guarantors have caused these
presents to be duly executed as of the day and year first above
written.

       

      
        
          
            
              
                	
                        AGENT:

                      
	 
      
	
                        WACHOVIA CAPITAL FINANCE

                      
	
                        CORPORATION (NEW ENGLAND), as Agent,

                      
	
                        Swing Line Lender, and a Lender

                      
	 
      	 
      
	
                        By:

                      	
                         
      /s/ Anwar S. Young

                      
	
                        Name: 

                      	
                        Anwar S. Young

                      
	
                        Title:

                      	
                        Vice President

                      

              

            

          

        

      

      

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                    ISSUING BANK:

                  
	 
	
                    WELLS FARGO BANK, NATIONAL

                  
	
                    ASSOCIATION, Issuing Bank

                  
	 
      
	
                    By:

                  	
                     
      /s/ Anwar S. Young

                  
	
                    Name:

                  	
                    Anwar S. Young

                  
	
                    Title:

                  	
                    Vice President

                  

          

        

      

      

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                      BORROWERS:

                    
	 
      	 
      
	 
      	
                      NU
      HORIZONS ELECTRONICS CORP.

                    
	 
      	 
      
	 
      	
                      By:

                    	
                        /s/ Kurt
      Freudenberg

                    
	 
      	
                      Name:

                    	
                      Kurt
      Freudenberg

                    
	 
      	
                      Title:

                    	
                      EVP/Chief
      Financial Officer

                    
	 
      	 
      
	 
      	
                      NIC
      COMPONENTS CORP.

                    
	 
      	 
      
	 
      	
                      By:

                    	
                        /s/ Kurt
      Freudenberg

                    
	 
      	
                      Name:

                    	
                      Kurt
      Freudenberg

                    
	 
      	
                      Title:

                    	
                      VP/Chief
      Financial Officer

                    
	 
      	 
      
	 
      	
                      NU
      HORIZONS INTERNATIONAL CORP.

                    
	 
      	 
      
	 
      	
                      By:

                    	
                        /s/ Kurt
      Freudenberg

                    
	 
      	
                      Name:

                    	
                      Kurt
      Freudenberg

                    
	 
      	
                      Title:

                    	
                      VP/Chief
      Financial Officer

                    
	 
      	 
      
	 
      	
                      RAZOR
      ELECTRONICS, INC.

                    
	 
      	 
      
	 
      	
                      By:

                    	
                        /s/ Kurt
      Freudenberg

                    
	 
      	
                      Name:

                    	
                      Kurt
      Freudenberg

                    
	 
      	
                      Title:

                    	
                      VP/Chief
      Financial Officer

                    
	 
      	 
      
	 
      	
                      TITAN
      SUPPLY CHAIN SERVICES CORP.

                    
	 
      	 
      
	 
      	
                      By:

                    	
                        /s/ Kurt
      Freudenberg

                    
	 
      	
                      Name:

                    	
                      Kurt
      Freudenberg

                    
	 
      	
                      Title:

                    	
                      VP/Chief
      Financial Officer

                    
	 
      	 
      
	 
      	
                      NU
      HORIZONS ELECTRONICS LIMITED

                    
	 
      	 
      
	 
      	
                      By:

                    	
                        /s/ Kurt
      Freudenberg

                    
	 
      	
                      Name:

                    	
                      Kurt
      Freudenberg

                    
	 
      	
                      Title:

                    	
                      VP/Chief
      Financial Officer

                    
	 
      	 
      
	 
      	
                      NIC
      COMPONENTS EUROPE LIMITED

                    
	 
      	 
      
	 
      	
                      By:

                    	
                        /s/ Kurt
      Freudenberg

                    
	 
      	
                      Name:

                    	
                      Kurt
      Freudenberg

                    
	 
      	
                      Title:

                    	
                      VP/Chief
      Financial Officer

                    
	 
      	 
      

            

          

        

      

      

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                    GUARANTORS:

                  
	 
      	 
      
	 
      	
                    NU
      HORIZONS ELECTRONICS ASIA PTE LTD

                  
	 
      	 
      
	 
      	
                    By:

                  	
                      /s/ Kurt
      Freudenberg

                  
	 
      	
                    Name:

                  	
                    Kurt
      Freudenberg

                  
	 
      	
                    Title:

                  	
                    Chief
      Financial Officer

                  
	 
      	 
      
	 
      	
                    NIC
      COMPONENTS ASIA PTE LTD

                  
	 
      	 
      
	 
      	
                    By:

                  	
                      /s/ Kurt
      Freudenberg

                  
	 
      	
                    Name:

                  	
                    Kurt
      Freudenberg

                  
	 
      	
                    Title:

                  	
                    Chief
      Financial Officer

                  
	 
      	 
      
	 
      	
                    NU
      HORIZONS ELECTRONICS EUROPE

                  
	 
      	
                    LIMITED

                  
	 
      	 
      
	 
      	
                    By:

                  	
                      /s/ Kurt
      Freudenberg

                  
	 
      	
                    Name:

                  	
                    Kurt
      Freudenberg

                  
	 
      	
                    Title:

                  	
                    VP/Chief
      Financial Officer

                  
	 
      	 
      
	 
      	
                    NUXCHANGE
      B2B SERVICES, INC.

                  
	 
      	 
      
	 
      	
                    By:

                  	
                      /s/ Kurt
      Freudenberg

                  
	 
      	
                    Name:

                  	
                    Kurt
      Freudenberg

                  
	 
      	
                    Title:

                  	
                    VP/Chief
      Financial Officer

                  
	 
      	 
      
	 
      	
                    TITAN
      SUPPLY CHAIN SERVICES LIMITED

                  
	 
      	 
      
	 
      	
                    By:

                  	
                      /s/ Kurt
      Freudenberg

                  
	 
      	
                    Name:

                  	
                    Kurt
      Freudenberg

                  
	 
      	
                    Title:

                  	
                    VP/Chief
      Financial Officer

                  
	 
      	 
      
	 
      	
                    TITAN
      SUPPLY CHAIN SERVICES PTE LTD

                  
	 
      	 
      
	 
      	
                    By:

                  	
                      /s/ Kurt
      Freudenberg

                  
	 
      	
                    Name:

                  	
                    Kurt
      Freudenberg

                  
	 
      	
                    Title:

                  	
                    Chief
      Financial Officer

                  
	 
      	 
      

          

        

      

      

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                      LENDERS:

                    
	 
      
	
                      HSBC
      BUSINESS CREDIT (USA) INC.

                    
	 
      
	
                      By:

                    	
                        /s/ Andrew
  Brown

                    
	
                      Name:

                    	
                      Andrew
      Brown

                    
	
                      Title:

                    	
                      Vice
      President

                    
	 
      
	
                      CAPITAL
      ONE BANK, N.A.

                    
	 
      
	
                      By:

                    	
                         /s/ Jed
      Pomerantz

                    
	
                      Name:

                    	
                      Jed
      Pomerantz

                    
	
                      Title:

                    	
                      Vice
      President

                    

            

          

        

      

       

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      EXHIBIT
A

      to

      LOAN AND
SECURITY AGREEMENT

       

      Form of Assignment and
Acceptance Agreement

       

      ASSIGNMENT AND ACCEPTANCE
AGREEMENT

       

      This
ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Assignment and Acceptance Agreement”)
dated as of _____________, 20_ is made between ________________________ (the
“Assignor”) and ____________________ (the “Assignee”).

       

      WITNESSETH:

       

      WHEREAS,
Wachovia Capital Finance Corporation (New England), in its capacity as agent
pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf
of the financial institutions which are parties thereto as lenders (in such
capacity, “Agent”), and the financial institutions which are parties to the Loan
Agreement as lenders (individually, each a “Lender” and collectively, “Lenders”)
have entered into financing arrangements pursuant to which Agent and Lenders may
make loans and advances and provide other financial accommodations to Nu
Horizons Electronics Corp., a Delaware corporation (“Parent”); NIC Components
Corp., a New York corporation (“NIC”); Nu Horizons International Corp., a New
York corporation (“International”); Razor Electronics, Inc., a New York
corporation (“RAZ”); Titan Supply Chain Services Corp., a New York corporation
(“TUS”, and together with Parent, NIC, International, and RAZ, individually each
a “US Borrower” and, collectively, “US Borrowers”), Nu Horizons Electronics
Limited, a company incorporated in England and Wales with registration number
02181478 (“NEE-UK”), NIC Components Europe Limited, a company incorporated in
England and Wales with registration number 03495816 (“NIC-UK”, and together with
NEE-UK, individually each a “UK Borrower” and, collectively, “UK Borrowers” and
together with US Borrowers, each individually, a “Borrower” and collectively,
“Borrowers”), as set forth in the Loan and Security Agreement, dated June 28,
2010, by and among Borrowers, certain of their affiliates, Agent and Lenders (as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, the “Loan Agreement”), and the other
agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto (all of the
foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the “Loan
Documents”);

       

      WHEREAS,
as provided under the Loan Agreement, Assignor committed to making Loans (the
“Committed Loans”) to Borrowers in an aggregate amount not to exceed
$___________ (the “Commitment”);

       

      WHEREAS,
Assignor wishes to assign to Assignee [part of the] [all] rights and obligations
of Assignor under the Loan Agreement in respect of its Commitment in an amount
equal to $______________ (the “Assigned Commitment Amount”) on the terms and
subject to the conditions set forth herein and Assignee wishes to accept
assignment of such rights and to assume such obligations from Assignor on such
terms and subject to such conditions;

       

      NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained
herein, the parties hereto agree as follows:

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

       

      1.    
       Assignment and Acceptance
Agreement.

       

      (a)           Subject
to the terms and conditions of this Assignment and Acceptance
Agreement,  Assignor hereby sells, transfers and assigns to Assignee,
and  Assignee hereby purchases, assumes and undertakes from Assignor,
without recourse and without representation or warranty (except as provided in
this Assignment and Acceptance Agreement) an interest in (i) the Commitment and
each of the Committed Loans of Assignor and (ii) all related rights, benefits,
obligations, liabilities and indemnities of the Assignor under and in connection
with the Loan Agreement and the other Loan Documents, so that after giving
effect thereto, the Commitment of Assignee shall be as set forth below and the
Pro Rata Share of Assignee shall be _______ (__%) percent.

       

      (b)           With
effect on and after the Effective Date (as defined in Section 5 hereof),
Assignee shall be a party to the Loan Agreement and succeed to all of the rights
and be obligated to perform all of the obligations of a Lender under the Loan
Agreement, including the requirements concerning confidentiality and the payment
of indemnification, with a Commitment in an amount equal to the Assigned
Commitment Amount.  Assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Agreement
are required to be performed by it as a Lender.  It is the intent of
the parties hereto that the Commitment of Assignor shall, as of the Effective
Date, be reduced by an amount equal to the Assigned Commitment Amount and
Assignor shall relinquish its rights and be released from its obligations under
the Loan Agreement to the extent such obligations have been assumed by Assignee;
provided, that, Assignor shall
not relinquish its rights under Sections 2.2, 6.4, 6.9, 13.5 and 14.5 of the
Loan Agreement to the extent such rights relate to the time prior to the
Effective Date.

       

      (c)           After
giving effect to the assignment and assumption set forth herein, on the
Effective Date Assignee’s Commitment will be $_____________.

       

      (d)           After
giving effect to the assignment and assumption set forth herein, on the
Effective Date Assignor’s Commitment will be $______________ (as such amount may
be further reduced by any other assignments by Assignor on or after the date
hereof).

       

      2.    
       Payments.

       

      (a)           As
consideration for the sale, assignment and transfer contemplated in
Section 1 hereof, Assignee shall pay to Assignor on the Effective Date in
immediately available funds an amount equal to $____________, representing
Assignee’s Pro Rata Share of the principal amount of all Committed
Loans.

       

      (b)           Assignee
shall pay to Agent the processing fee in the amount specified in
Section 15.7(a) of the Loan Agreement.

       

      3.        
   Reallocation of
Payments.  Any interest, fees and other payments accrued to the
Effective Date with respect to the Commitment, Committed Loans and outstanding
Letters of Credit shall be for the account of Assignor.  Any interest,
fees and other payments accrued on and after the Effective Date with respect to
the Assigned Commitment Amount shall be for the account of
Assignee.  Each of Assignor and Assignee agrees that it will hold in
trust for the other party any interest, fees and other amounts which it may
receive to which the other party is entitled pursuant to the preceding sentence
and pay to the other party any such amounts which it may receive promptly upon
receipt.

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

       

      4.        
   Independent Credit
Decision.  Assignee  acknowledges that it has
received a copy of the Loan Agreement and the Schedules and Exhibits thereto,
together with copies of the most recent financial statements of _____________
and its Subsidiaries, and such other documents and information as it has deemed
appropriate to make its own credit and legal analysis and decision to enter into
this Assignment and Acceptance Agreement and  agrees that it will,
independently and without reliance upon Assignor, Agent or any Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Loan Agreement.

       

      5.      
     Effective Date;
Notices.

       

      (a)           As
between Assignor and Assignee, the effective date for this Assignment and
Acceptance Agreement shall be _______________, 200_ (the “Effective Date”);
provided, that, the following
conditions precedent have been satisfied on or before the Effective
Date:

       

      (i)           this
Assignment and Acceptance Agreement shall be executed and delivered by Assignor
and Assignee;

       

      (ii)           the
consent of Agent as required for an effective assignment of the Assigned
Commitment Amount by Assignor to Assignee shall have been duly obtained and
shall be in full force and effect as of the Effective Date;

       

      (iii)          written
notice of such assignment, together with payment instructions, addresses and
related information with respect to Assignee, shall have been given to
Administrative Borrower and Agent;

       

      (iv)          Assignee
shall pay to Assignor all amounts due to Assignor under this Assignment and
Acceptance Agreement; and

       

      (v)           the
processing fee referred to in Section 2(b) hereof shall have been paid to
Agent.

       

      (b)           Promptly
following the execution of this Assignment and Acceptance Agreement, Assignor
shall deliver to Administrative Borrower and Agent for acknowledgment by Agent,
a Notice of Assignment in the form attached hereto as
Schedule 1.

       

      6.    
       Agent.  [INCLUDE
ONLY IF ASSIGNOR IS AN AGENT]

       

      (a)           Assignee
hereby appoints and authorizes Assignor in its capacity as Agent to take such
action as agent on its behalf to exercise such powers under the Loan Agreement
as are delegated to Agent by Lenders pursuant to the terms of the Loan
Agreement.

       

      (b)           Assignee
shall assume no duties or obligations held by Assignor in its capacity as Agent
under the Loan Agreement.]

       

      7.    
       Withholding
Tax.  Assignee (a) represents and warrants to Assignor, Agent
and Borrowers that under applicable law and treaties no tax will be required to
be withheld by Assignee, Agent or Borrowers with respect to any payments to be
made to Assignee hereunder or under any of the Loan Documents, (b) agrees to
furnish (if it is organized under the laws of any jurisdiction other than the
United States or any State thereof) to Agent and Borrowers prior to the time
that Agent or Borrowers are required to make any payment of principal, interest
or fees hereunder, duplicate executed originals of either U.S. Internal Revenue
Service Form W-8BEN or W-8ECI, as applicable (wherein Assignee claims
entitlement to the benefits of a tax treaty that provides for a complete
exemption from U.S. federal income withholding tax on all payments hereunder)
and agrees to provide new such forms upon the expiration of any previously
delivered form or comparable statements in accordance with applicable U.S. law
and regulations and amendments thereto, duly executed and completed by Assignee,
and (c) agrees to comply with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.

       

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

       

      8.    
       Representations and
Warranties.

       

      (a)           Assignor
represents and warrants that (i) it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear
of any security interest, lien, encumbrance or other adverse claim, (ii) it is
duly organized and existing and it has the full power and authority to take, and
has taken, all action necessary to execute and deliver this Assignment and
Acceptance Agreement and any other documents required or permitted to be
executed or delivered by it in connection with this Assignment and Acceptance
Agreement and to fulfill its obligations hereunder, (iii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Assignment and Acceptance Agreement, and apart from any agreements or
undertakings or filings required by the Loan Agreement, no further action by, or
notice to, or filing with, any Person is required of it for such execution,
delivery or performance, and (iv) this Assignment and Acceptance Agreement has
been duly executed and delivered by it and constitutes the legal, valid and
binding obligation of Assignor, enforceable against Assignor in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors’ rights and to general equitable principles.

       

      (b)           Assignor
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Loan Agreement or any of the other Loan Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Agreement or any other instrument or document furnished pursuant
thereto.  Assignor makes no representation or warranty in connection
with, and assumes no responsibility with respect to, the solvency, financial
condition or statements of Borrowers, Guarantors or any of their respective
Affiliates, or the performance or observance by Borrowers, Guarantors or any
other Person, of any of its respective obligations under the Loan Agreement or
any other instrument or document furnished in connection therewith.

       

      (c)           Assignee
represents and warrants that (i) it is duly organized and existing and it has
full power and authority to take, and has taken, all action necessary to execute
and deliver this Assignment and Acceptance Agreement and any other documents
required or permitted to be executed or delivered by it in connection with this
Assignment and Acceptance Agreement, and to fulfill its obligations hereunder,
(ii) no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance Agreement, and apart
from any agreements or undertakings or filings required by the Loan Agreement,
no further action by, or notice to, or filing with, any Person is required of it
for such execution, delivery or performance; and (iii) this Assignment and
Acceptance Agreement has been duly executed and delivered by it and constitutes
the legal, valid and binding obligation of Assignee, enforceable against
Assignee in accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application relating to or affecting creditors’ rights to general equitable
principles.

       

      9.    
       Further
Assurances.  Assignor and Assignee each hereby agree to execute
and deliver such other instruments, and take such other action, as either party
may reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance Agreement, including the delivery of any notices or
other documents or instruments to Borrowers or Agent, which may be required in
connection with the assignment and assumption contemplated hereby.

       

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

       

      10.  
       Miscellaneous.

       

      (a)           Any
amendment or waiver of any provision of this Assignment and Acceptance Agreement
shall be in writing and signed by the parties hereto.  No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance Agreement shall be without
prejudice to any rights with respect to any other for further breach
thereof.

       

      (b)           All
payments made hereunder shall be made without any set-off or
counterclaim.

       

      (c)           Assignor
and Assignee shall each pay its own costs and expenses incurred in connection
with the negotiation, preparation, execution and performance of this Assignment
and Acceptance Agreement.

       

      (d)           This
Assignment and Acceptance Agreement may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.

       

      (e)           THIS
ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK.  Assignor and Assignee each irrevocably
submits to the non-exclusive jurisdiction of any State or Federal court sitting
in New York County, New York over any suit, action or proceeding arising out of
or relating to this Assignment and Acceptance Agreement and irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court.  Each party to this
Assignment and Acceptance Agreement hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding.

       

      (f)           ASSIGNOR
AND ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND
ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY RELATED
DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).

       

      IN
WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and
Acceptance Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.

      
        
          
            	
                    [ASSIGNOR]

                  
	 
      
	
                    By:

                  	
                      

                  
	
                    Name:

                  
	
                    Title:

                  
	 
      
	
                    [ASSIGNEE]

                  
	 
      
	
                    By:

                  	
                      

                  
	
                    Name:

                  
	
                    Title:

                  

          

        

      

       

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

      
SCHEDULE
1

       

      NOTICE OF
ASSIGNMENT AND ACCEPTANCE

      

      ___,
20__

      

      Wachovia
Capital Finance Corporation (New England), as Agent

      12 E.
49th
Street

      New York,
New York 10017

      Attn.:
Portfolio Manager - Nu Horizons

      

      Re: NU Horizons

      Ladies
and Gentlemen:

      

      Wachovia
Capital Finance Corporation (New England), in its capacity as agent pursuant to
the Loan Agreement (as hereinafter defined) acting for and on behalf of the
financial institutions which are parties thereto as lenders (in such capacity,
“Agent”), and the financial institutions which are parties to the Loan Agreement
as lenders (individually, each a “Lender” and collectively, “Lenders”) have
entered or are about to enter into financing arrangements pursuant to which
Agent and Lenders may make loans and advances and provide other financial
accommodations to Nu Horizons Electronics Corp., a Delaware corporation
(“Parent”); NIC Components Corp., a New York corporation (“NIC”); Nu Horizons
International Corp., a New York corporation (“International”); Razor
Electronics, Inc., a New York corporation (“RAZ”); Titan Supply Chain Services
Corp., a New York corporation (“TUS”, and together with Parent, NIC,
International, and RAZ, individually each a “US Borrower” and, collectively, “US
Borrowers”), Nu Horizons Electronics Limited, a company incorporated in England
and Wales with registration number 02181478 (“NEE-UK”), NIC Components Europe
Limited, a company incorporated in England and Wales with registration number
03495816 (“NIC-UK”, and together with NEE-UK, individually each a “UK Borrower”
and, collectively, “UK Borrowers” and together with US Borrowers, each
individually, a “Borrower” and collectively, “Borrowers”), as set forth in the
Loan and Security Agreement, dated June 28, 2010, by and among Borrowers,
certain of their affiliates, Agent and Lenders (as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, the “Loan Agreement”), and the other agreements, documents and
instruments referred to therein or at any time executed and/or delivered in
connection therewith or related thereto (all of the foregoing, together with the
Loan Agreement, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the “Loan Documents”).  Capitalized terms not
otherwise defined herein shall have the respective meanings ascribed thereto in
the Loan Agreement.

       

      1.  We
hereby give you notice of, and request your consent to, the assignment by
__________________________ (the “Assignor”) to ___________________________ (the
“Assignee”) such that after giving effect to the assignment Assignee shall have
an interest equal to ________ (__%) percent of the total Commitments pursuant to
the Assignment and Acceptance Agreement attached hereto (the “Assignment and
Acceptance Agreement”).  We understand that the Assignor’s Commitment
shall be reduced by $_____________, as the same may be further reduced by other
assignments on or after the date hereof.

       

      
        
          
          

        

        
          A-6

          
            

          

        

        
          
          

        

      

       

      2.  Assignee
agrees that, upon receiving the consent of Agent to such assignment, Assignee
will be bound by the terms of the Loan Agreement as fully and to the same extent
as if the Assignee were the Lender originally holding such interest under the
Loan Agreement.

       

      3.  The
following administrative details apply to Assignee:

       

      
        
          
            	
                    (A)

                  	
                    Notice
      address:

                  	 
      
	 
      	 
      	 
      
	 
      	
                    Assignee
      name:

                  	
                      

                  
	 
      	
                    Address:

                  	
                      

                  
	 
      	
                    Attention:

                  	
                      

                  
	 
      	
                    Telephone:

                  	
                      

                  
	 
      	
                    Telecopier:

                  	
                      

                  
	 
      	 
      	 
      
	
                    (B)

                  	
                    Payment
      instructions:

                  	 
      
	 
      	 
      	 
      
	 
      	
                    Account
      No.:

                  	
                      

                  
	 
      	
                    At:

                  	
                      

                  
	 
      	
                    Reference:

                  	
                      

                  
	 
      	
                    Attention:

                  	
                      

                  

          

        

      

       

      4.  You
are entitled to rely upon the representations, warranties and covenants of each
of Assignor and Assignee contained in the Assignment and Acceptance
Agreement.

       

      
        
          
          

        

        
          A-7

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS WHEREOF, Assignor and Assignee have caused this Notice of Assignment and
Acceptance Agreement to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.

       

      
        
          
            
              	
                      Very
      truly yours,

                    
	 
	
                      [NAME
      OF ASSIGNOR]

                    
	 
      
	
                      By:

                    	
                        

                    
	
                      Name:

                    
	
                      Title:

                    
	 
      
	
                      [NAME
      OF ASSIGNEE]

                    
	 
      
	
                      By:

                    	
                        

                    
	
                      Name:

                    
	
                      Title:

                    

            

          

        

      

      

      ACKNOWLEDGED
AND ASSIGNMENT

      CONSENTED
TO:

      

      WACHOVIA
CAPITAL FINANCE CORPORATION(NEW ENGLAND

      as Agent
and Swing Line Lender

       

      
        
          
            	
                    By:

                  	
                      

                  
	
                    Name:

                  
	
                    Title:

                  
	 
      
	
                    WELLS
      FARGO BANK, NATIONAL ASSOCIATION,

                  
	
                    as
      Issuing Bank

                  
	 
      
	
                    By:

                  	
                      

                  
	
                    Name:

                  
	
                    Title:

                  

          

        

      

       

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
B

      TO

      LOAN AND
SECURITY AGREEMENT

      

      Form of Borrowing Base
Certificate

      

      See
attached

       

      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
C

      TO

      LOAN AND
SECURITY AGREEMENT

      

      Information
Certificate

      

      See
attached

       

      
        
          
          

        

        
          C-1

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
D

      TO

      LOAN AND
SECURITY AGREEMENT

      

      Form of Priority Payables
Report

      

      See
attached

       

      
        
          
          

        

        
          D-1

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
E

      TO

      LOAN AND
SECURITY AGREEMENT

      

      Form of Compliance
Certificate

      

      Compliance
Certificate

      

      
        	
                To:

              	
                Wachovia
      Capital Finance Corporation (New England), as
  Agent

              

      

      12 E. 49th
Street

      New York, New York 10017

      

      Ladies
and Gentlemen:

      

      I hereby
certify to you pursuant to Section 9.6 of the Loan Agreement (as defined
below) as follows:

      

      1.           I
am the duly elected Chief Financial Officer of Nu Horizons Electronics Corp. a
Delaware corporation (“Administrative Borrower”).  Capitalized terms
used herein without definition shall have the meanings given to such terms in
the Loan and Security Agreement, dated June 28, 2010, by and among Wachovia
Capital Finance Corporation (New England), as agent for the financial
institutions party thereto as lenders (in such capacity, “Agent”), the financial
institutions party thereto as lenders (collectively, “Lenders”), Nu Horizons
Electronics Corp., a Delaware corporation (“Parent”); NIC Components Corp., a
New York corporation (“NIC”); Nu Horizons International Corp., a New York
corporation (“International”); Razor Electronics, Inc., a New York corporation
(“RAZ”); Titan Supply Chain Services Corp., a New York corporation (“TUS”, and
together with Parent, NIC, International, and RAZ, individually each a “US
Borrower” and, collectively, “US Borrowers”), Nu Horizons Electronics Limited, a
company incorporated in England and Wales with registration number 02181478
(“NEE-UK”), NIC Components Europe Limited, a company incorporated in England and
Wales with registration number 03495816 (“NIC-UK”, and together with NEE-UK,
individually each a “UK Borrower” and, collectively, “UK Borrowers” and together
with US Borrowers, each individually, a “Borrower” and collectively,
“Borrowers”), and certain of their affiliates (as such Loan and Security
Agreement is amended, modified or supplemented, from time to time, the “Loan
Agreement”).

      

      2.           I
have reviewed the terms of the Loan Agreement, and have made, or have caused to
be made under my supervision, a review in reasonable detail of the transactions
and the financial condition of Borrowers and Guarantors, during the immediately
preceding fiscal month.

      

      3.           The
review described in Section 2 above did not disclose the existence during
or at the end of such fiscal month, and I have no knowledge of the existence and
continuance on the date hereof, of any condition or event which constitutes a
Default or an Event of Default, except as set forth on Schedule I attached
hereto.  Described on Schedule I attached hereto are the
exceptions, if any, to this Section 3 listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
any Borrower or Guarantor has taken, is taking, or proposes to take with respect
to such condition or event.

      

      4.           I
further certify that, based on the review described in Section 2 above, no
Borrower or Guarantor has at any time during or at the end of such fiscal month,
except as specifically described on Schedule II attached hereto or as
permitted by the Loan Agreement, done any of the following:

       

      
        
          
          

        

        
          E-1

          
            

          

        

        
          
          

        

      

       

      (a)           Changed
its respective corporate name, or transacted business under any trade name,
style, or fictitious name, other than those previously described to you and set
forth in the Loan Documents.

      

      (b)           Changed
the location of its chief executive office, changed its jurisdiction of
incorporation, changed its type of organization or changed the location of or
disposed of any of its properties or assets (other than pursuant to the sale of
Inventory in the ordinary course of its business or as otherwise permitted by
Section 10.1 of the Loan Agreement), or established any new asset
locations.

      

      (c)           Materially
changed the terms upon which it sells goods (including sales on consignment) or
provides services, nor has any vendor or trade supplier to any Borrower or
Guarantor during or at the end of such period materially adversely changed the
terms upon which it supplies goods to any Borrower or Guarantor.

      

      (d)           Permitted
or suffered to exist any security interest in or liens on any of its properties,
whether real or personal, other than as specifically permitted in the Loan
Documents.

      

      (e)           Received
any notice of, or obtained knowledge of any of the following not previously
disclosed to Agent:  (i) the occurrence of any event involving the
release, spill or discharge of any Hazardous Material in violation of applicable
Environmental Law in a material respect or (ii) any investigation, proceeding,
complaint, order, directive, claims, citation or notice with respect to: (A) any
non-compliance with or violation of any applicable Environmental Law by any
Borrower or Guarantor in any material respect or (B) the release, spill or
discharge of any Hazardous Material in violation of applicable Environmental Law
in a material respect or (C) the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials in violation of applicable Environmental Laws in a material respect or
(D) any other environmental, health or safety matter, which has a material
adverse effect on any Borrower or Guarantor or its business, operations or
assets or any properties at which such Borrower or Guarantor transported, stored
or disposed of any Hazardous Materials.

      

      (f)           Become
aware of, obtained knowledge of, or received notification of, any breach or
violation of any material covenant contained in any instrument or agreement in
respect of Indebtedness for money borrowed by any Borrower or
Guarantor.

      

      5.         
  Attached hereto as Schedule III are the calculations used in
determining, as of the end of such fiscal month whether Borrowers and Guarantors
are in compliance with the covenants set forth in Section 11.1 of the Loan
Agreement for such fiscal month.

      

      The
foregoing certifications are made and delivered this day of ___________,
20__.

      

      
        
          
            	
                    Very
      truly yours,

                  
	 
      
	
                    Nu
      Horizons Electronics Corp.

                  
	 
      
	
                    By:

                  	
                      

                  
	
                    Name:

                  
	
                    Title:

                  

          

        

      

       

      
        
          
          

        

        
          E-2

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
1.9

      TO

      LOAN AND
SECURITY AGREEMENT

       

      Approved
Multinationals

      

      
        
          	
                  1.

                	
                  Celestica
      Inc.

                

        

      

      
        
          	
                  2.

                	
                  Jabil
      Circuit Inc.

                

        

      

      
        
          	
                  3.

                	
                  Flextronics
      International

                

        

      

      
        
          	
                  4.

                	
                  Sanmina-SCI
      Corporation

                

        

      

      
        
          	
                  5.

                	
                  Plexus
      Corp.

                

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
1.31

      TO

      LOAN AND
SECURITY AGREEMENT

       

      Commitments

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        Lender

                                      	 	
                                        Commitment

                                      	 
	
                                        Wachovia
      Capital Finance Corporation (New England)

                                      	 	$	50,000,000	 
	
                                        HSBC
      Business Credit (USA) Inc.

                                      	 	$	17,500,000	 
	
                                        Capital
      One Bank, N.A.

                                      	 	$	12,500,000	 
	
                                        Total:

                                      	 	$	80,000,000	 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
1.61

      TO

      LOAN AND
SECURITY AGREEMENT

       

      Existing
Lenders

      

      Citibank,
N.A.

      JPMorgan
Chase Bank, N.A

      Israel
Discount Bank of New York

      Bank of
America, N.A.

      Sovereign
Bank

      HSBC Bank
USA, National Association

      North
Fork Bank

      Bank
Leumi USA

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
1.1.107

      TO

      LOAN AND
SECURITY AGREEMENT

       

      Non-US
Subsidiaries

      

      Nu
Horizons Electronics Pty Ltd. [Australia]

      Nu
Horizons Electronics NZ Limited [New Zealand]

      Nu
Horizons Electronics Hong Kong Ltd [Hong Kong]

      NUH
Electronics (Shanghai) Co Ltd [China]

      Nu
Horizons Asia PTE Ltd [Korea]

      Nu
Horizons GmbH [Germany]

      Nu
Horizons Electronics AS [Denmark]

      NUHC Inc.
[Canada]

      Nu
Horizons Electronics Mexico, S.A. de C.V. [Mexico]

      Nu
Horizons Electronics Services Mexico, S.A. de C.V. [Mexico]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       SCHEDULE
1.168

      TO

      LOAN AND SECURITY
AGREEMENT

      

      UK
Documents

      

      1.  Debenture

      

      2.  UK
Share MortgagesASSET
PURCHASE AGREEMENT

       

      by
and among

       

      LUBY’S,
INC.,

       

      FUDDRUCKERS,
INC.,

       

      MAGIC
BRANDS, LLC,

       

      ATLANTIC
RESTAURANT VENTURES, INC.,

       

      R.
WES, INC.,

       

      FUDDRUCKERS
OF HOWARD COUNTY, LLC

       

      and

       

      FUDDRUCKERS
OF WHITE MARSH, LLC

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

       

      
        
          
            	
                    Article I
      DEFINITIONS

                  	
                    2

                  
	
                    1.1

                  	
                    Certain
      Definitions

                  	
                    2

                  
	
                    1.2

                  	
                    Terms Defined
      Elsewhere in this Agreement

                  	
                    8

                  
	
                    1.3

                  	
                    Other Definitional and
      Interpretive Matters

                  	
                    10

                  
	
                    Article II PURCHASE
      AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

                  	
                    11

                  
	
                    2.1

                  	
                    Purchase and Sale of
      Assets

                  	
                    11

                  
	
                    2.2

                  	
                    Excluded
      Assets

                  	
                    13

                  
	
                    2.3

                  	
                    Assumption of
      Liabilities

                  	
                    14

                  
	
                    2.4

                  	
                    Excluded
      Liabilities

                  	
                    15

                  
	
                    2.5

                  	
                    Assignment of
      Contracts and Leases

                  	
                    16

                  
	
                    2.6

                  	
                    Further Conveyances
      and Assumption

                  	
                    17

                  
	
                    Article III
      CONSIDERATION

                  	
                    17

                  
	
                    3.1

                  	
                    Purchase
      Price

                  	
                    17

                  
	
                    3.2

                  	
                    Purchase Price
      Deposit

                  	
                    17

                  
	
                    Article IV CLOSING AND
      TERMINATION

                  	
                    18

                  
	
                    4.1

                  	
                    Closing
      Date

                  	
                    18

                  
	
                    4.2

                  	
                    Deliveries by the
      Sellers

                  	
                    18

                  
	
                    4.3

                  	
                    Deliveries by the
      Purchaser

                  	
                    18

                  
	
                    4.4

                  	
                    Termination of
      Agreement

                  	
                    19

                  
	
                    4.5

                  	
                    Procedure Upon
      Termination

                  	
                    20

                  
	
                    4.6

                  	
                    Effect of
      Termination

                  	
                    20

                  
	
                    Article V
      REPRESENTATIONS AND WARRANTIES OF THE SELLERS

                  	
                    20

                  
	
                    5.1

                  	
                    Organization and Good
      Standing

                  	
                    20

                  
	
                    5.2

                  	
                    Authorization of
      Agreement

                  	
                    21

                  
	
                    5.3

                  	
                    Conflicts; Consents of
      Third Parties

                  	
                    21

                  
	
                    5.4

                  	
                    Title to Purchased
      Assets

                  	
                    22

                  
	
                    5.5

                  	
                    Taxes

                  	
                    22

                  
	
                    5.6

                  	
                    Purchased Intellectual
      Property

                  	
                    22

                  
	
                    5.7

                  	
                    Permits

                  	
                    22

                  
	
                    5.8

                  	
                    Environmental
      Matters

                  	
                    23

                  
	
                    5.9

                  	
                    Employee
      Benefits

                  	
                    24

                  
	
                    5.10

                  	
                    Litigation

                  	
                    24

                  
	
                    5.11

                  	
                    Material
      Contracts

                  	
                    24

                  
	
                    5.12

                  	
                    Property

                  	
                    25

                  
	
                    5.13

                  	
                    Financial
      Statements

                  	
                    25

                  
	
                    5.14

                  	
                    Brokers

                  	
                    26

                  
	
                    5.15

                  	
                    Employees

                  	
                    26

                  
	
                    5.16

                  	
                    Related Party
      Transactions

                  	
                    27

                  
	
                    5.17

                  	
                    Franchise
      Matters

                  	
                    27

                  
	
                    5.18

                  	
                    Customer
      Programs

                  	
                    28

                  
	
                    5.19

                  	
                    No Other
      Representations or Warranties; Schedules

                  	
                    28

                  
	
                    Article VI
      REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

                  	
                    28

                  

          

        

         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

         

        
          
            	
                    6.1

                  	
                    Organization and Good
      Standing

                  	
                    28

                  
	
                    6.2

                  	
                    Authorization of
      Agreement

                  	
                    28

                  
	
                    6.3

                  	
                    Conflicts; Consents of
      Third Parties

                  	
                    29

                  
	
                    6.4

                  	
                    Brokers

                  	
                    29

                  
	
                    6.5

                  	
                    Condition of the
      Purchased Assets

                  	
                    29

                  
	
                    6.6

                  	
                    Communications

                  	
                    30

                  
	
                    6.7

                  	
                    The Debtors' Privacy
      Policy

                  	
                    30

                  
	
                    Article VII BANKRUPTCY
      COURT MATTERS

                  	
                    30

                  
	
                    7.1

                  	
                    Competing
      Transaction

                  	
                    30

                  
	
                    7.2

                  	
                    Submission to
      Bankruptcy Court

                  	
                    30

                  
	
                    7.3

                  	
                    Sale
      Order

                  	
                    30

                  
	
                    7.4

                  	
                    Lease
      Designation.

                  	
                    30

                  
	
                    Article VIII
      COVENANTS

                  	
                    31

                  
	
                    8.1

                  	
                    Access to
      Information

                  	
                    31

                  
	
                    8.2

                  	
                    Conduct Pending the
      Closing

                  	
                    31

                  
	
                    8.3

                  	
                    Consents; Liquor
      Licenses

                  	
                    31

                  
	
                    8.4

                  	
                    Further
      Assurances

                  	
                    32

                  
	
                    8.5

                  	
                    Preservation of
      Records

                  	
                    32

                  
	
                    8.6

                  	
                    Publicity

                  	
                    32

                  
	
                    8.7

                  	
                    Schedules and
      Exhibits

                  	
                    33

                  
	
                    8.8

                  	
                    Payment of
      Taxes

                  	
                    33

                  
	
                    8.9

                  	
                    Motions, Orders,
      etc

                  	
                    33

                  
	
                    8.10

                  	
                    Recurring
      Charges

                  	
                    33

                  
	
                    8.11

                  	
                    Adequate
      Assurance

                  	
                    34

                  
	
                    8.12

                  	
                    Bulk
      Sales

                  	
                    34

                  
	
                    Article IX EMPLOYEES
      AND EMPLOYEE BENEFITS

                  	
                    35

                  
	
                    9.1

                  	
                    Transferred and
      Retained Employees

                  	
                    36

                  
	
                    9.2

                  	
                    Employment Tax
      Reporting

                  	
                    38

                  
	
                    Article X CONDITIONS
      TO CLOSING

                  	
                    38

                  
	
                    10.1

                  	
                    Conditions Precedent
      to Obligations of the Purchaser

                  	
                    38

                  
	
                    10.2

                  	
                    Conditions Precedent
      to Obligations of the Sellers

                  	
                    39

                  
	
                    10.3

                  	
                    Conditions Precedent
      to Obligations of the Purchaser and the Sellers

                  	
                    39

                  
	
                    10.4

                  	
                    Frustration of Closing
      Conditions

                  	
                    40

                  
	
                    Article XI
      TAXES

                  	
                    40

                  
	
                    11.1

                  	
                    Allocation of
      Taxes

                  	
                    40

                  
	
                    11.2

                  	
                    Purchase Price
      Allocation

                  	
                    40

                  
	
                    11.3

                  	
                    Tax
      Reporting

                  	
                    40

                  
	
                    11.4

                  	
                    Cooperation and
      Audits

                  	
                    40

                  
	
                    Article XII
      MISCELLANEOUS

                  	
                    41

                  
	
                    12.1

                  	
                    No Survival of
      Representations and Warranties

                  	
                    41

                  
	
                    12.2

                  	
                    Expenses

                  	
                    41

                  
	
                    12.3

                  	
                    Injunctive
      Relief

                  	
                    41

                  
	
                    12.4

                  	
                    Submission to
      Jurisdiction; Consent to Service of Process

                  	
                    41

                  
	
                    12.5

                  	
                    Waiver of Right to
      Trial by Jury

                  	
                    42

                  
	
                    12.6

                  	
                    Entire Agreement;
      Amendments and Waivers

                  	
                    42

                  
	
                    12.7

                  	
                    Governing
      Law

                  	
                    42

                  

          

        

         

        
          
            
            

          

          
            -ii-

            
              

            

          

          
            
            

          

        

         

        
          
            	
                    12.8

                  	
                    Notices

                  	
                    42

                  
	
                    12.9

                  	
                    Severability

                  	
                    43

                  
	
                    12.10

                  	
                    Assignment

                  	
                    44

                  
	
                    12.11

                  	
                    Counterparts

                  	
                    44

                  

          

        

      

       

      
        
          
          

        

        
          -iii-

          
            

          

        

        
          
          

        

      

       

      ASSET
PURCHASE AGREEMENT

       

      This
ASSET PURCHASE AGREEMENT (this “Agreement”) is
entered into and dated as of June 23, 2010 (the “Effective Date”), by
and among Luby’s, Inc., a Delaware corporation (the “Purchaser”),
Fuddruckers, Inc., a Texas corporation (“Fuddruckers”), Magic
Brands, LLC, a Delaware limited liability company (“Magic”, and together
with Fuddruckers, collectively, the “Company”), Atlantic
Restaurant Ventures, Inc., a Virginia corporation (“ARVI,” and together
with each of Magic and Fuddruckers, the “Debtors”), R. Wes,
Inc., a Texas corporation (“R. Wes”), Fuddruckers
of Howard County, LLC, a Maryland limited liability company (“Howard County”), and
Fuddruckers of White Marsh, LLC, a Maryland limited liability company (“White Marsh,” and
together with R. Wes and Howard County, the “Non-Debtor Sellers,”
and the Non-Debtor Sellers together with the Debtors, each a “Seller” and,
collectively, the “Sellers”).

       

      WITNESSETH:

       

      WHEREAS,
the Sellers are engaged in the business of (i) owning, managing and operating
the chain of Seller-owned restaurants operating under the trade name
“Fuddruckers” in the United States, (ii) franchising the right to operate
Fuddruckers restaurants using the Fuddruckers “System”, and (iii) owning,
managing and operating the chain of restaurants operating under the trade name
“Koo Koo Roo” in the United States (the aforementioned Fuddruckers and Koo Koo
Roo businesses are collectively referred to as the “Business”);

       

      WHEREAS,
on April 21, 2010, each of the Debtors filed a voluntary petition for relief
(the “Bankruptcy
Case”) under chapter 11 of Title 11 of the United States Code, 11 U.S.C.
§§ 101-1532 (as amended, the “Bankruptcy Code”) in
the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”);

       

      WHEREAS,
on May 18, 2010, the Bankruptcy Court entered an Order (the “Bidding Procedures
Order”) (I) Approving Bidding Procedures for the Sale of Assets Free and
Clear of All Liens, Claims, Interests and Encumbrances pursuant to Section 363
of the Bankruptcy Code (the “Bidding Procedures”),
(II) Approving Certain Bidding Protections, (III) Approving the Form and Manner
of Notice of the Sale and Assumption and Assignment of Executory Contracts and
Unexpired Leases and (IV) Scheduling an Auction and Sale Hearing;

       

      WHEREAS,
upon the terms and subject to the conditions set forth herein, the Purchaser
desires to purchase from the Sellers, and the Sellers desire to sell to the
Purchaser, substantially all of the Sellers’ assets (other than the Excluded
Assets (as defined below)) in exchange for the payment to the Sellers of the
Purchase Price (as defined below) and the assumption by the Purchaser of certain
of the Sellers’ liabilities and obligations;

       

      WHEREAS,
the Debtors believe, following consultation with their financial advisors and
consideration of available alternatives, that, in light of the current
circumstances, a sale of their assets is necessary to maximize value and is in
the best interest of the Debtors and their creditors; and

       

      WHEREAS,
the transactions contemplated by this Agreement (the “Transactions”) are
subject to the approval of the Bankruptcy Court and would be consummated only
pursuant to a Sale Order (as defined below) to be entered by the Bankruptcy
Court and applicable provisions of the Bankruptcy Code.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      NOW,
THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements hereinafter contained, and intending to be
bound hereby, the parties hereto hereby agree as follows:

       

      ARTICLE
I

       

      DEFINITIONS

       

      1.1         Certain
Definitions.  For purposes of this Agreement, the following
terms shall have the meanings specified in this Section 1.1 or in
other Sections of this Agreement, as identified in the chart in Section
1.2:

       

      “Acquired Location”
means each Location that is (i) Owned Real Property, or (ii) subject to an
Assumed Lease other than a Location subject to an Assumed Lease and that is
subleased to a Franchisee.

       

      “Affiliate” means,
with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person, and the term “control” (including
the terms “controlled
by” and “under
common control with”) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through ownership of voting securities, by contract or
otherwise.

       

      “Asset Price” means
(a) Sixty One Million Dollars ($61,000,000.00), or (b) in the event that the
Purchaser elects to remove the Pepsi Contract from Schedule 2.1(b)(vii)
such that the Pepsi Contract is not an Assumed Contract hereunder, Sixty Three
Million Four Hundred and Fifty Thousand Dollars ($63,450,000.00).

       

      “Assumed Executory
Contracts” means all Assumed Contracts and Assumed Leases.

       

      “Business Day” means
any day of the year on which national banking institutions in New York are open
to the public for conducting business and are not required or authorized by Law
to close.

       

      “Code” means the
Internal Revenue Code of 1986, as amended.

       

      “Contract(s)” means
any contract, indenture, note, bond, lease, license, purchase or sale order,
warranties, commitments, franchises, or other written or oral agreement, other
than a Lease, in each case to which a Seller is a party and that is related or
beneficial to the Business.

       

      “Cure Costs” means
monetary amounts that must be paid and nonmonetary obligations that otherwise
must be satisfied, including pursuant to Sections 365(b)(1)(A) and (B) of the
Bankruptcy Code, in connection with the assumption and/or assignment of the
Assumed Executory Contracts, including any amounts payable in
connection with the assumption and assignment of the Spirit Lease.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      “Customer Programs”
means all outstanding gift certificates and gift cards relating to the Business,
and all customer loyalty and rewards programs offered with respect to the
Business, including, without limitation, the “Fudds Club”.

       

      “Debtor's DIP Lender”
means Wells Fargo Capital Finance, Inc.

       

      “Development
Agreement” shall mean any master license agreement, master franchise
agreement, multi-unit development agreement, or other agreement pursuant to
which a Franchisee has the right to develop, and/or grant subfranchises or
sublicenses to third parties to develop, multiple Fuddruckers or Fudds Express
Restaurants in a specified territory, including, without limitation, the
Development Agreements described in the current FDD.

       

      “Documents” means all
files, documents, instruments, papers, books, reports, records, tapes,
microfilms, photographs, letters, budgets, forecasts, ledgers, journals,
regulatory filings, operating data and plans, technical documentation,
Intellectual Property records, advertising, marketing and sales documentation
(sales brochures, flyers, pamphlets, web pages, catalogues, etc.), franchise
documentation, personnel files, training and other manuals, maintenance records
and drawings, architectural plans and designs, Tax Returns, financial
statements, supplier lists, title policies, surveys and deeds in the possession
or control of a Seller and relating to the Purchased Assets whether in written
or electronic form.

       

      “Employee Benefit
Plans” means each deferred compensation and each bonus or other incentive
compensation, stock purchase, stock option and other equity compensation plan,
program, agreement or arrangement; each severance or termination pay, medical,
surgical, hospitalization, life insurance and other “welfare” plan, fund or
program (within the meaning of Section 3(1) of ERISA); each profit-sharing,
stock bonus or other “pension” plan, fund or program (within the meaning of
Section 3(2) of ERISA); each employment, termination, change in control,
retention or severance plan, agreement or arrangement; and each other employee
benefit plan, fund, program, agreement or arrangement, in each case, that is
sponsored, maintained or contributed to or required to be contributed to by the
Company, the Sellers or any of their ERISA Affiliates, or to which the Company,
the Sellers or any of their ERISA Affiliates is a party for the benefit of any
employee or former employee of the Company or any Subsidiary.

       

      “Employees” means all
individuals, as of the Effective Date, who are employed by any of the
Sellers.

       

      “Encumbrances” means
any security interest, lien, collateral assignment, right of setoff, debt,
obligation, liability, pledge, levy, charge, escrow, encumbrance, option, right
of first refusal, transfer restriction, conditional sale contract, title
retention contract, mortgage, lease, deed of trust, hypothecation, indenture,
security agreement, easement, servitude, proxy, voting trust or agreement,
transfer restriction under any shareholder or similar agreement, or any other
agreement, arrangement, contract, commitment, understanding or obligation of any
kind whatsoever, whether written or oral.

       

      “Environmental Laws”
means all federal, state and local Laws relating to pollution or protection of
human health, safety, or the environment from pollution, including, without
limitation, laws relating to releases or threatened releases of Hazardous
Substances into the environment (including, without limitation, ambient air,
surface water, groundwater, land, surface and subsurface strata).

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.

       

      “ERISA Affiliate”
means any entity that with the subject Person is:

       

      
        	
                 
      

              	
                (a)

              	
                a
      member of a controlled group of corporations within the meaning of Section
      414(b) of the Code;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                a
      member of a group of trades or businesses under common control within the
      meaning of Section 414(c) of the
Code;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                a
      member of an affiliated service group within the meaning of Section 414(m)
      of the Code; or

              

      

       

      
        	
                 
      

              	
                (d)

              	
                a
      member of a group of organizations required to be aggregated under Section
      414(o) of the Code.

              

      

       

      “Excluded Contract”
means any Contract that is not an Assumed Contract.

       

      “Excluded Executory
Agreement” means any Excluded Contract and/or Excluded
Lease.

       

      “Excluded Lease” means
any Lease that is not an Assumed Lease.

       

      “Excluded Location”
means a Location that is not an Acquired Location.

       

      “Excluded Matter”
means: (i) any material change in the financial or stock markets in the United
States; (ii) any material change that generally affects the industry in which
the Sellers operate; (iii) any material change arising in connection with any
natural disaster or calamity, acts of God, any national or international
political or social conditions, including the declaration by the United States
of a national emergency or war, or the occurrence of any military or terrorist
attack upon the United States, or any of its territories, possessions, or
diplomatic or consular offices or upon any military installation, equipment or
personnel of the United States; (iv) any change in applicable Laws or GAAP or
the interpretation thereof; (v) any actions required by Law; (vi) any change
resulting from the Transactions or the public announcement thereof; (vii) any
change resulting from the commencement or continuation of the Bankruptcy Case;
or (viii) any actions taken by the Sellers pursuant to (or as contemplated by)
orders entered by the Bankruptcy Court in the Bankruptcy Case or otherwise with
the Purchaser’s prior written consent.

       

      “FDD” means the
franchise disclosure document prepared in accordance with the FTC Rule (or its
predecessor) or any applicable Franchise Law.

       

      “Final Order” means an
order of a court of competent jurisdiction as to which the time to file an
appeal, a motion for rehearing or reconsideration or a petition for writ of
certiorari has expired and no such appeal, motion or petition is
pending.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      “Franchise” means any
relationship between any Seller and any other Person which constitutes a
“franchise,” as that term is defined under (a) the FTC Rule, regardless of the
jurisdiction in which the franchised business is located or operates; or (b) the
Franchise Law applicable in the jurisdiction in which the franchised business is
located or operates, if any.

       

      “Franchise Agreement”
means (a) any oral or written agreements pursuant to which any Seller grants or
has granted any Franchise or the right or option (whether or not subject to
certain qualifications or conditions) to acquire any Franchise, together with
any guarantee or other material instrument or agreement relating thereto (for
example, any lease or sublease); and (b) that certain Fuddruckers Trademark and
Technology User Agreement dated as of November 19, 1997 by and between
Fuddruckers, Inc. and Fuddruckers-EMA E.C., as amended. As used in this
Agreement, Franchise Agreement includes Development Agreements.

       

      “Franchise Law” means
the FTC Rule, any other Law regulating the offer and/or sale of Franchises,
business opportunities or seller-assisted marketing plans, and any Law that
regulates the relationship of the parties to a Franchise Agreement in the area
of transfer, termination or non-renewal of a Franchise Agreement.

       

      “Franchisee” means a
Person who is a party to a Franchise Agreement with any Seller.

       

      “FTC Rule” means the
Federal Trade Commission trade regulation rule entitled “Disclosure Requirements
and Prohibitions Concerning Franchising,” 16 C.F.R Section 436.1 et seq.

       

      “Furniture and
Equipment” means all furniture, fixtures, furnishings, equipment,
machinery, computer hardware, tools and tooling, supplies, vehicles, leasehold
improvements, and other tangible personal property owned or used by any of the
Sellers in the conduct of the Business.

       

      “GAAP” means generally
accepted accounting principles in the United States, consistently applied
throughout the specified period.

       

      “Governmental Body”
means any government or governmental or regulatory body thereof, or political
subdivision thereof, whether foreign, federal, state, or local, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or
private).

       

      “Hazardous Substances”
means any chemical, mixture, waste, substance, material, pollutant, or
contaminant, including without limitation petroleum, asbestos and
asbestos-containing materials, with respect to which liability or standards of
conduct are imposed under any Environmental Laws.

       

      “HSR Act” means the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      “Intellectual
Property” means all intellectual property arising from or in respect of
the following: (i) all patents and applications therefor, (ii) all trademarks,
service marks, trade names, service names, brand names, all trade dress rights,
logos, Internet domain names and general intangibles of a like nature, together
with the goodwill associated with any of the foregoing, and all applications,
registrations and renewals thereof, (iii) copyrights and registrations and
applications therefor, (iv) inventions, trade secrets and confidential business
information, whether patentable or nonpatentable and whether or not reduced to
practice, know-how, manufacturing and product processes and techniques, research
and development information, copyrightable works, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information, (v) all computer software, data and
documentation, (vi) other proprietary rights relating to any of the foregoing
subsections (i) through (v), including remedies against infringements thereof
and rights of protection of interest therein under the Laws of all
jurisdictions, and (vii) all rights to sue for and collect damages for past
infringement of any of the foregoing subsections (i) through (vi).

       

      “Inventory” shall mean
all inventories, including raw materials, food and beverage (alcoholic and
non-alcoholic) inventories, linens, tableware, glasses, smallwares, dishes,
ingredients, finished product and administrative, cleaning and other supplies
and materials.

       

      “Knowledge of the
Sellers” means the actual knowledge, after due inquiry, of those
individuals listed on Schedule
1.1(k).

       

      “Law” means any
federal, state, local or foreign law, statute, code, ordinance, rule or
regulation or common law requirement.

       

      “Lease(s)” means all
unexpired and previously unterminated leases, subleases, licenses or other
agreements, in each case, pursuant to which the Sellers hold or use any Leased
Real Property, including all amendments, extensions, renewals, guaranties or
other agreements with respect thereto.

       

      “Legal Proceeding”
means any judicial, administrative or arbitral actions, suits, proceedings
(public or private) or claims, or any proceedings by or before a Governmental
Body.

       

      “Liability” means any
debt, liability or obligation (whether direct or indirect, known or unknown,
absolute or contingent, accrued or not accrued, liquidated or unliquidated, or
due or to become due), and including all costs and expenses relating
thereto.

       

      “Locations” means all
of the locations listed on Schedule
1.1(l).

       

      “Material Adverse
Effect” means a material adverse effect on or change in the Purchased
Assets, taken as a whole, other than to the extent such effect or change results
from or relates to an Excluded Matter; provided, however, that the act
of filing a case under chapter 11 of the Bankruptcy Code by any Seller does not
and shall not constitute a Material Adverse Effect.

       

      “Minnesota Locations”
means the two (2) locations listed on Schedule
1.1(m).

       

      “Minnesota Leases”
means the two (2) leases listed on Schedule
1.1(m).

       

      “Order” means any
order, injunction, judgment, decree, ruling, writ, assessment or arbitration
award of a Governmental Body.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      “Pepsi Contract” means
that certain Fountain Beverage Sales Agreement between Pepsi-Cola Fountain
Company, Inc. and Fuddruckers International, LLC, on behalf of itself and its
various direct and indirect subsidiaries, including, without limitation,
Fuddruckers.

       

      “Permits” means any
approvals, authorizations, consents, licenses, permits or certificates of a
Governmental Body, including, without limitation, liquor licenses.

       

      “Permitted Exceptions”
means, with respect to any of the property or assets of the Sellers, whether
owned as of the Effective Date or thereafter, (i) all defects, exceptions,
restrictions, easements, rights of way and encumbrances of record of such
property or asset and which either (x) are listed on Schedule B to the title
policies listed on Schedule 1.1(p), (y)
would not individually (or in the aggregate with others) be reasonably expected
to have a Material Adverse Effect on the use or enjoyment of such asset, or (z)
a title insurer has agreed to affirmatively insure against loss caused thereby
in the applicable title policy by way of ALTA coverage or other affirmative
coverage (except that the Sellers shall be obligated to remove mortgages, deeds
of trust and other Encumbrances of a definite and ascertainable amount (other
than those assumed by the Purchaser as set forth in this Agreement)); (ii) any
statutory liens arising after the Closing for Taxes, assessments or other
governmental charges not
yet due and payable; (iii) zoning, entitlement and other land use and
environmental regulations by any Governmental Body; and (iv) Encumbrances that
constitute or arise from Assumed Liabilities.

       

      “Person” means any
individual, corporation, limited liability company, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.

       

      “Petition Date” means
April 21, 2010, which is the date on which each of the Debtors filed their
respective petitions for relief under Chapter 11 of the Bankruptcy
Code.

       

      “Register Cash” means,
for each Acquired Location, cash in an amount equal to the amount set forth on
Schedule
1.1(r).

       

      “Sale Order” means an
Order entered by the Bankruptcy Court in substantially the form annexed hereto
as Exhibit A,
which attached form is acceptable to the Purchaser.

       

      “Specified Litigation
Resolution” means the earliest to occur of (i) the entering into of any
arrangements between the Purchaser and R.J. Management LLC (or its affiliates)
with respect to the Minnesota Locations that would enable the Sellers/Debtors to
deliver to the Purchaser (or its designee, which may in all events be R.J.
Management LLC or its affiliates) possession and control of the Minnesota
Locations free and clear of any legal, equitable and other interest of R.J.
Management LLC and its affiliates (other than pursuant to any such arrangements)
and to assign to the Purchaser (or its designee) the Minnesota Leases and any
Furniture and Equipment owned by the Sellers and located at the Minnesota
Locations free and clear of all Encumbrances, (ii) a settlement of the Specified
Litigation with the written consent of the Purchaser, or (iii) the date a Final
Order that would enable the Sellers/Debtors to deliver to the Purchaser (or its
designee) possession and control of the Minnesota Locations free and clear of
any legal, equitable and other interest of R.J. Management LLC and its
affiliates and to assign to the Purchaser (or its designee) the Minnesota Leases
and any Furniture and Equipment owned by the Sellers and located at the
Minnesota Locations free and clear of all Encumbrances, is entered by such court
and becomes effective; provided that in the
event that one Minnesota Lease (but not the other) has been rejected in
accordance with Section 8.13(c),
“Specified Litigation
Resolution” means the earliest to occur of any of the events described in
clauses (i), (ii) or (iii) with respect to the remaining Minnesota
Location.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      “Spirit Lease” means
the Master Lease between Fuddruckers and Spirit Master Funding, LLC, as amended,
including as amended by the Sixth Amendment to Master Lease attached as Schedule 1.1(a). The
Spirit Lease shall constitute one Lease for purposes of Section
2.1(b)(i).

       

      “Subsidiary” means
each of the Company’s direct and indirect subsidiaries, as listed on Schedule
5.1.

       

      “Tax Authority” means
any government, or agency, instrumentality or employee thereof, charged with the
administration of any Law relating to Taxes.

       

      “Taxes” means (i) all
federal, state, local or foreign taxes, charges or other assessments, including,
without limitation, all net income, gross receipts, capital, sales, use, ad
valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, (ii) any
item described in clause (i) for which a taxpayer is liable as a transferee or
successor, by reason of the regulations under Section 1502 of the Code, or by
contract, indemnity or otherwise, and (iii) all interest, penalties, fines,
additions to tax or additional amounts imposed by any Tax Authority in
connection with any item described in clause (i) or (ii).

       

      “Tax Return” means all
returns, declarations, reports, estimates, information returns and statements
required to be filed in respect of any Taxes (including any attachments thereto
or amendments thereof).

       

      “Trust Agent” means
Goulston & Storrs - A Professional Corporation.

       

      1.2         Terms Defined Elsewhere in
this Agreement.  For purposes of this Agreement, the following
terms have the meanings set forth in the sections indicated:

       

      
        
          
            	
                    Term

                  	 
      	
                    Section

                  
	 
      	 
      	 
      
	
                    Additional
      Excluded Lease

                  	 
      	
                    2.1(b)(i)

                  
	
                    Agreement

                  	 
      	
                    Preamble

                  
	
                    Allocation
      Statement

                  	 
      	
                    11.2

                  
	
                    ARVI

                  	 
      	
                    Preamble

                  
	
                    Assumed
      Contracts

                  	 
      	
                    2.1(b)(vii)

                  
	
                    Assumed
      Leases

                  	 
      	
                    2.1(b)(i)

                  
	
                    Assumed
      Liabilities

                  	 
      	
                    2.3

                  
	
                    Audited
      Financial Statements

                  	 
      	
                    5.13

                  
	
                    Bankruptcy
      Case

                  	 
      	
                    Recitals

                  
	
                    Bankruptcy
      Code

                  	 
      	
                    Recitals

                  

          

        

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      

      
        
          	
                  Bankruptcy
      Court

                	 
      	
                  Recitals

                
	
                  Bidding
      Procedures

                	 
      	
                  Recitals

                
	
                  Bidding
      Procedures Order

                	 
      	
                  Recitals

                
	
                  Business

                	 
      	
                  Recitals

                
	
                  Closing

                	 
      	
                  4.1

                
	
                  Closing
      Date

                	 
      	
                  4.1

                
	
                  Company

                	 
      	
                  Preamble

                
	
                  Competing
      Transaction

                	 
      	
                  7.1

                
	
                  Confidentiality
      Agreement

                	 
      	
                  4.6

                
	
                  Debtors

                	 
      	
                  Preamble

                
	
                  Deposit

                	 
      	
                  3.2

                
	
                  DOJ

                	 
      	
                  8.15(a)(ii)

                
	
                  Effective
      Date

                	 
      	
                  Preamble

                
	
                  Employee
      List

                	 
      	
                  5.15(a)

                
	
                  Equal
      Aggregate Compensation Level

                	 
      	
                  9.1(a)

                
	
                  Estate
      Claims

                	 
      	
                  2.2(j)

                
	
                  Excluded
      Assets

                	 
      	
                  2.2

                
	
                  Excluded
      Entities

                	 
      	
                  2.2(m)

                
	
                  Excluded
      Liabilities

                	 
      	
                  2.4

                
	
                  Financial
      Statements

                	 
      	
                  5.13

                
	
                  Franchisee
      Subtenant

                	 
      	
                  2.5(f)

                
	
                  FTC

                	 
      	
                  8.15(a)(ii)

                
	
                  Fuddruckers

                	 
      	
                  Preamble

                
	
                  Howard
      County

                	 
      	
                  Preamble

                
	
                  Interim
      Period

                	 
      	
                  9.1(a)

                
	
                  IP
      License Agreements

                	 
      	
                  5.6(b)

                
	
                  Leased
      Real Property

                	 
      	
                  5.12(b)

                
	
                  Liquor
      License Approvals

                	 
      	
                  8.3

                
	
                  Magic

                	 
      	
                  Preamble

                
	
                  Material
      Contracts

                	 
      	
                  5.11(a)

                
	
                  Non-Debtor
      Sellers

                	 
      	
                  Preamble

                
	
                  Owned
      Real Property

                	 
      	
                  5.12(a)

                
	
                  P&L
      Statements

                	 
      	
                  5.13

                
	
                  Periodic
      Taxes

                	 
      	
                  11.1

                
	
                  Pre-Resolution
      Rejection Notice

                	 
      	
                  8.13(c)

                
	
                  Purchased
      Assets

                	 
      	
                  2.1(b)

                
	
                  Purchased
      Intellectual Property

                	 
      	
                  2.1(b)(x)

                
	
                  Purchase
      Price

                	 
      	
                  3.1

                
	
                  Purchased
      Inventory

                	 
      	
                  2.1(b)(iii)

                
	
                  Purchaser

                	 
      	
                  Preamble

                
	
                  R.
      Wes

                	 
      	
                  Preamble

                
	
                  Registered
      Intellectual Property

                	 
      	
                  5.6(a)

                
	
                  Rejected
      Leases

                	 
      	
                  2.5(c)

                
	
                  Retained
      Employees

                	 
      	
                  9.1(a)

                
	
                  Salaried
      Non-Store Employees

                	 
      	
                  9.1(a)

                
	
                  Seller
      or Sellers

                	 
      	
                  Preamble

                

        

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      

      
        
          	
                  Specified
      Benefits

                	 
      	
                  9.1(a)

                
	
                  Specified
      Litigation

                	 
      	
                  8.13

                
	
                  Subleased
      Lease

                	 
      	
                  2.5(f)

                
	
                  Subsidiary

                	 
      	
                  Preamble

                
	
                  Termination
      Date

                	 
      	
                  4.4(a)

                
	
                  Transactions

                	 
      	
                  Recitals

                
	
                  Transferred
      Employees

                	 
      	
                  9.1(a)

                
	
                  Unaudited
      Financial Statements

                	 
      	
                  5.13

                
	
                  WARN
      Act

                	 
      	
                  9.1(c)

                
	
                  White
      Marsh

                	 
      	
                  Preamble

                

        

      

       

      1.3      
  Other Definitional and Interpretive Matters.

       

      (a)           Unless
otherwise expressly provided, for purposes of this Agreement, the following
rules of interpretation shall apply:

       

      Calculation of Time
Period. When calculating the period of time before which, within which or
following which any act is to be done or step taken pursuant to this Agreement,
the date that is the reference date in calculating such period shall be
excluded. If the last day of such period is a non-Business Day, the period in
question shall end on the next succeeding Business Day.

       

      Dollars. Any
reference in this Agreement to $ means U.S. dollars.

       

      Exhibits/Schedules.
All Exhibits and Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise
defined therein shall be defined as set forth in this Agreement.

       

      Gender and Number.
Any reference in this Agreement to gender shall include all genders, and words
imparting the singular number only shall include the plural and vice
versa.

       

      Headings. The
provision of a Table of Contents, the division of this Agreement into Articles,
Sections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in construing
or interpreting this Agreement. All references in this Agreement to any
“Section” are to the corresponding Section of this Agreement unless otherwise
specified.

       

      Herein. The words
such as “herein,” “hereinafter,” “hereof” and “hereunder” refer to
this Agreement as a whole and not merely to a subdivision in which such words
appear unless the context otherwise requires.

       

      Including. The word
“including” or
any variation thereof means “including, without
limitation” and shall not be construed to limit any general statement
that it follows to the specific or similar items or matters immediately
following it.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      (b)           Construction.  The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as jointly drafted by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provision of this
Agreement.

       

      ARTICLE
II

       

      PURCHASE
AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

       

      2.1     
   Purchase and Sale of Assets.

       

      (a)          On
the terms and subject to the conditions set forth in this Agreement and the Sale
Order (and subject to Section 8.13 with
respect to the Minnesota Leases), at the Closing, the Purchaser shall purchase,
acquire and accept from the Sellers, and the Sellers shall sell, transfer,
convey, assign and deliver to the Purchaser, all of the Sellers’ right, title
and interest in, to and under the Purchased Assets, free and clear of all
Encumbrances, other than the Permitted Exceptions and the Assumed Liabilities,
to the maximum extent permitted by Section 363 of the Bankruptcy
Code.

       

      (b)          For
all purposes of and under this Agreement, the term “Purchased Assets”
means all of the properties, assets, and rights of the Sellers (other than the
Excluded Assets) existing as of the Closing, real or personal, tangible or
intangible, including but not limited to:

       

      (i)          
 all Leases of the Sellers set forth in Schedule 2.1(b)(i)
(the “Assumed
Leases”), as such Schedule may be amended from time to time by the
Purchaser, in its sole discretion, to remove up to twenty (20) Leases by
delivering written notice to the Sellers at any time prior to the Closing Date
(each of such Leases so removed is called an “Additional Excluded
Lease”) (provided that the Purchaser shall not amend the Schedule to
include any Rejected Leases), together with the Sellers’ interest in all
security deposits related thereto and all permanent fixtures, improvements and
appurtenances thereto and associated with such Assumed Leases;

       

      (ii)           all
Owned Real Property, together with the Sellers’ interest in all fixtures,
improvements and appurtenances thereto and associated with such Owned Real
Property;

       

      (iii)          all
Inventory as of the Closing Date, whether at the Acquired Locations or in
transit to any Acquired Location (collectively, the “Purchased
Inventory”);

       

      (iv)          all
accounts receivable, notes receivable and other receivables related to the
Purchased Assets, except as specifically provided in Section
2.2(o);

       

      (v)           intentionally
omitted;

       

      (vi)          all
goodwill incident to the Business and goodwill of the Sellers associated with
the Business or the Purchased Assets;

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      (vii)        all
Contracts of the Sellers set forth on Schedule 2.1(b)(vii)
or to be set forth thereon after the Effective Date (and until the Closing Date)
at the sole option of the Purchaser (the “Assumed Contracts”),
as such Schedule may be amended from time to time by the Purchaser, in its sole
discretion, by providing written notice to the Sellers up to the Closing Date,
in order to add or remove Contracts listed thereon (unless any such Contract has
already expired, terminated or been rejected), together with the right to
receive income in respect of such Assumed Contracts on or after the Closing
Date, and any causes of action relating to past or present breaches of the
Assumed Contracts;

       

      (viii)     
  all of the Sellers’ prepaid charges and expenses paid in connection
with or relating to any Purchased Asset;

       

      (ix)          all
Furniture and Equipment at any Acquired Location;

       

      (x)           all
rights in and to Intellectual Property owned or licensed by the Sellers,
including, without limitation, all rights of the Sellers as franchisor under the
Franchise Agreements with respect to the Fuddruckers “System”, and all rights of
the Sellers to franchise operations manuals, franchise training manuals and the
Sellers’ Uniform Franchise Offering Circular, and all rights of the Sellers in
and to the names “Fuddruckers” and “Koo Koo Roo”, all, in each case, to the
broadest extent the Sellers are permitted by Law to transfer such Intellectual
Property (the “Purchased Intellectual
Property”);

       

      (xi)          All
computers, software, automation systems, accounting systems, point-of-sale
systems (restaurant and corporate level), websites and related systems, master
disks of source codes, and other proprietary information owned or licensed,
whether for general business usage (e.g., accounting, word processing, graphics,
spreadsheet analysis, etc.), or specific, unique-to-the-business usage, and all
computer operating, security or programming software, owned or licensed and used
in the operation of the Business, including all developments and
work-in-progress with regard to any of the foregoing, all, in each case, to the
maximum extent assignable under the Bankruptcy Code and other applicable
Law;

       

      (xii)         all
Documents that are used in, held for use in or intended to be used in, or that
arise out of, the Business and operations of the Sellers, but excluding any
Documents related to an Excluded Asset; provided, however, that,
following the Closing, the Purchaser shall provide the Sellers copies, upon a
Seller’s reasonable request and at the Sellers’ sole cost and expense, of any
Documents that are Purchased Assets as described in this subclause;

       

      (xiii)        all
Permits used by the Sellers that relate to the Purchased Assets, to the maximum
extent assignable under the Bankruptcy Code and other applicable
Law;

       

      (xiv)        all
rights under insurance policies relating to claims arising prior to the Closing
for losses related to any Purchased Assets, or in lieu of such rights, an amount
equal to the proceeds paid pursuant to any such rights between the Effective
Date and the Closing;

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      (xv)         any
rights, claims or causes of action of the Sellers against third parties relating
to the Purchased Assets or Assumed Liabilities (excluding, however, any Estate
Claims, any claims with respect to the matters set forth in Section 2.2(o), and
subject to Section
8.14(b) any claims raised in the Specified Litigation), arising out of
events occurring prior to the Closing Date, including, for the avoidance of
doubt, arising out of events occurring prior to the Petition Date;

       

      (xvi)        any
rights under or pursuant to any and all warranties, representations and
guarantees, express, implied or otherwise, made by suppliers and contractors
relating to goods sold, or services provided, to the Sellers, but not including
the Sellers’ causes of action that are identified as Excluded Assets in Section 2.2;
and

       

      (xvii)       the
Register Cash.

       

      2.2      
  Excluded
Assets.  Notwithstanding anything to the contrary contained
herein, nothing herein shall be deemed to sell, transfer, assign or convey the
Excluded Assets to the Purchaser, and the Sellers shall retain all right, title
and interest to, in and under, and all obligations with respect to, the Excluded
Assets.  For all purposes of and under this Agreement, the term “Excluded Assets”
means:

       

      (a)           all
accounts receivable, notes receivable and other receivables related solely to
the Excluded Assets;

       

      (b)           all
Excluded Locations and the Inventory, Furniture and Equipment located at any
Excluded Location;

       

      (c)           all
Excluded Executory Agreements;

       

      (d)           all
of the Sellers’ prepaid charges and expenses paid in connection with or relating
solely to any Excluded Asset;

       

      (e)           all
deposits (including security deposits for rent, electricity, telephone or
otherwise) and holdbacks (including credit card holdback payments), in each case
related solely to any Excluded Executory Agreement or any other Excluded
Asset;

       

      (f)         
  all personnel records of any Retained Employees and all Employee
Benefit Plans;

       

      (g)           all
Permits that are not assignable, and all Permits used solely in respect of the
Excluded Locations and not also used or held for use in respect of the Acquired
Locations;

       

      (h)           all
documents relating to proposals to acquire the Business by Persons other than
the Purchaser;

       

      (i)      
     all claims, rights, interests and proceeds with
respect to (i) Tax refunds, rebates, abatement or other recovery relating to the
Sellers’ assets or the conduct of the Business for, or attributable to, the
period prior to the Closing and (ii) Tax refunds, rebates, abatement or other
recovery not relating to the Purchased Assets;

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      (j)           all
rights, claims or causes of action of the Sellers (i) against third parties to
the extent any such claim relates to an Excluded Asset or Excluded Liability,
(ii) under Chapter 5 of the Bankruptcy Code, and (iii) against any current or
former directors or officers of the Sellers, and all rights under insurance
policies providing insurance to the Sellers’ respective directors and officers,
and the proceeds thereof with respect to such claims or causes of
action (collectively, the “Estate
Claims”);

       

      (k)      
   all Documents related primarily to any Excluded Asset; provided, that the
Sellers shall provide copies of such Documents to the Purchaser upon request, at
the Purchaser’s cost and expense;

       

      (l)           all
rights under insurance policies relating to claims for losses related to any
Excluded Asset;

       

      (m)         all
shares of capital stock or other equity interest of any Seller, and of ARVI of
Pikesville, Inc., a Maryland corporation, A.R.I.V. – Rockville, Inc., a Maryland
corporation, and 8725 Metcalf II, Inc., a Kansas corporation (collectively, the
"Excluded
Entities"), or any securities convertible into, exchangeable or
exercisable for shares of capital stock or other equity interest of any Seller
or any Excluded Entity;

       

      (n)          all
minute books, stock ledgers, corporate seals and stock certificates of the
Sellers, and other books and records relating to the organization and existence
of the Sellers as legal entities that the Sellers are required by Law to retain
or that the Sellers determine are reasonably necessary to retain, including Tax
Returns, financial statements and corporate or other entity filings, but
excluding Documents that are Purchased Assets; provided, that the
Sellers shall provide the Purchaser reasonable access, upon the Purchaser’s
reasonable request and at the Purchaser’s sole cost and expense, to any books
and records described in this subclause;

       

      (o)          (i)
all credit card accounts receivable, deposits and other holdbacks being held by
credit card companies, in each case as of the Closing Date, in connection with
credit cards accepted by the Sellers, and (ii) that certain receivable owing
from R.J. Management LLC to one or more of the Sellers with respect to
obligations under that certain Restaurant Management Agreement dated April 30,
2007;

       

      (p)          all
cash, cash equivalents, bank deposits or similar cash items of the Sellers other
than the Register Cash;

       

      (q)          all
deposits, retainers or on account cash paid to the Sellers’ professionals and
advisers (whether retained in the Bankruptcy Case or not); and

       

      (r)           all
rights of the Sellers under this Agreement.

       

      2.3      
  Assumption
of Liabilities.  On the terms and subject to the conditions and
limitations set forth in this Agreement, at the Closing, the Purchaser shall
assume, effective as of the Closing, and shall pay, perform and discharge in
accordance with their respective terms, only the following Liabilities (without
duplication) existing as of the Closing Date (collectively, the “Assumed
Liabilities”):

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      (a)          all
Liabilities of the Sellers arising, and to be performed, after the Closing Date
under the Assumed Executory Contracts, but specifically excluding all
obligations or liabilities of any kind whatsoever related to any matter,
circumstance or default existing at or prior to the Closing;

       

      (b)         all
Liabilities arising, and to be performed, after the Closing Date with regard to
the Purchased Assets, but specifically excluding all obligations or liabilities
of any kind whatsoever related to any matter, circumstance or default existing
at or prior to the Closing;

       

      (c)          all
Liabilities arising and to be performed after the Closing Date with regard to
the employment by Purchaser of any of the Transferred Employees, but
specifically excluding all obligations or liabilities of any kind whatsoever
related to any matter, circumstance or default existing at or prior to the
Closing;

       

      (d)         all
Liabilities set forth in Section 2.5(h); and

       

      (e)          all
Liabilities of the Sellers with respect to Customer Programs.

       

      2.4     
   Excluded
Liabilities.  Except for the Assumed Liabilities, the Purchaser
shall not assume and shall be deemed not to have assumed any Liabilities of the
Sellers or the Business of whatever nature, whether presently in existence or
arising hereafter, known or unknown, disputed or undisputed, contingent or
non-contingent, liquidated or unliquidated or otherwise, including, without
limitation, any of the Liabilities set forth below (collectively, the “Excluded
Liabilities”):

       

      (a)          all
Liabilities of the Sellers with respect to the Excluded Assets;

       

      (b)         except
as set forth in Sections 8.8, 8.10 and 11.1, all Liabilities
of the Sellers for Taxes, including (i) any Taxes arising as a result of
Sellers’ operation of the Business or ownership of the Purchased Assets prior to
the Closing Date, (ii) any Taxes that will arise as a result of the
consummation of the Transactions, and (iii) any deferred Taxes of any
nature;

       

      (c)          all
Liabilities under any Excluded Executory Agreement or under any Assumed
Executory Agreement which arises after the Closing Date but which is based on or
relates to a breach of such Assumed Executory Agreement occurring prior to the
Closing Date;

       

      (d)          all
Cure Costs related to the Assumed Executory Contracts (including, without
limitation, unpaid Lease obligations for the month in which the Petition Date
occurs);

       

      (e)          all
Liabilities to distribute to any of Sellers’ stockholders or otherwise apply all
or any part of the Purchase Price, including any Tax withholding obligations of
the Sellers in connection therewith;

       

      (f)           all
Liabilities under any employment, severance, retention, termination or other
arrangement or agreement of the Sellers with any Employees;

       

      (g)          all
Liabilities under that certain Modified Key Employee Incentive Plan approved by
the Bankruptcy Court on May 17, 2010;

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      (h)          all
Liabilities arising on or before the Closing Date with regard to the employment
by the Sellers of any Transferred Employees;

       

      (i)           all
Liabilities related to any Legal Proceeding existing as of or occurring prior to
the Closing Date or other events, conduct or conditions existing as of or
occurring prior to the Closing Date that constitute a violation or
non-compliance with any Law, any judgment, decree or order of any Governmental
Body, or any Permit; and

       

      (j)           all
Liabilities of the Sellers arising under or related to this
Agreement.

       

      2.5         Assignment
of Contracts and Leases.

       

      (a)          On
the Closing Date, the Debtors shall, pursuant to the Sale Order, assume and
assign to the Purchaser the Assumed Executory Contracts.

       

      (b)          From
the Effective Date through and including the Closing Date, the Debtors shall (i)
not reject any Assumed Executory Contract unless otherwise agreed to, in
writing, by the Purchaser, and (ii) with respect to any Assumed Lease whose
renewal option notice period expires during such period, renew or otherwise
extend such Assumed Lease to the extent permitted pursuant to such Assumed
Lease.

       

      (c)          The
Debtors have filed a motion to reject those Leases set forth on Schedule 2.5(c) (the
“Rejected
Leases”).

       

      (d)      
   The Debtors have served on all counterparties to Assumed
Executory Contracts a notice specifically stating that the Debtors are or may be
seeking to assume and assign the Assumed Executory Contracts and have notified
such parties of the deadline for objecting to the proposed Cure Costs set forth
in such notice.  In the event of an objection to the proposed Cure
Costs by a counterparty, the Debtors shall attempt to resolve such objection
(subject to approval by the Purchaser) or, at the Debtors’ sole cost and
expense, shall litigate such objection under such procedures as the Bankruptcy
Court shall approve and proscribe.  In the event that a dispute
regarding the Cure Costs with respect to an Assumed Executory Contract has not
been resolved as of the Closing Date, the parties shall nonetheless remain
obligated to consummate the Transactions (subject to satisfaction of the
conditions to Closing set forth in Article
X).  Within one (1) Business Day after the date on which the
Purchaser designates in writing a Minnesota Lease to be assumed and assigned or
rejected in accordance with Section 8.13, the
Debtors shall, at no additional cost or expense to the Purchaser, take all
requisite actions (including, without limitation, actions required under section
365 of the Bankruptcy Code) to assume and assign or reject, as applicable, the
subject Minnesota Lease to the Purchaser (or designee identified by the
Purchaser) and the Debtors shall provide notice of such assumption and
assignment or rejection by overnight courier to the applicable
lessor.

       

      (e)           On
the later of (i) the Closing Date, or (ii) as soon as practicable following
final determination by the Bankruptcy Court of any disputed Cure Costs in
accordance with Section 2.5(d), the
Debtors shall pay the Cure Costs to the counterparties to each such Assumed
Executory Contract.

       

      
        
           

        

        
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      (f)           The
Debtors are the tenant under those Leases identified on Schedule 2.5(f)
(each, a “Subleased
Lease”).  Pursuant to each Subleased Lease, the Debtors have
subleased the applicable premises to a Franchisee (the “Franchisee
Subtenant”).  To the extent requested by the Purchaser and
agreed to by the Franchisee Subtenant, the Debtors agree to use their
commercially reasonable efforts to obtain an order of the Bankruptcy Court
approving the assumption and assignment of any Subleased Lease to the Franchisee
Subtenant thereunder, in which event any such Subleased Lease shall not be an
Assumed Lease hereunder.

       

      (g)          From
and after the Effective Date and until the Closing Date, the Purchaser and the
Debtors will confer with one another with respect to the assumption and
assignment of certain Leases, together with all associated Inventory, Furniture
and Equipment, to a new Franchisee (together with signing a new Franchise
Agreement with that Franchisee).  To the extent mutually agreed upon,
the Debtors agree to use their commercially reasonable efforts to obtain an
order of the Bankruptcy Court approving the assumption and assignment of any
such Lease, Inventory, Furniture and Equipment to such new Franchisee, in which
event any such Lease shall not be an Assumed Lease hereunder.  Each
Lease so assumed and assigned pursuant to this Section 2.5(g) shall
reduce the number of Leases which the Purchaser may remove from Schedule 2.1(b)(i) in
accordance with Section 2.1(b)(i) by
one.

       

      (h)          If
(i) the Purchaser provides written notice in accordance with Section 2.1(b)(i) of
an Additional Excluded Lease, (ii) the Debtors provide notice to the applicable
landlord of the rejection of such Additional Excluded Lease within twenty-four
(24) hours of its receipt of notice from the Purchaser, and (iii) the timing of
the rejection of such Additional Excluded Lease results in the Debtors’
incurring rent or other occupancy costs under such Additional Excluded Lease for
the month immediately following the month during which the Closing occurs, then
the Purchaser shall pay such rent or other amounts to the Debtors.

       

      2.6         Further Conveyances and
Assumption.  From time to time following the Closing, the
Sellers and the Purchaser shall, and shall cause their respective Affiliates to,
execute, acknowledge and deliver all such further conveyances, notices,
assumptions, releases and other instruments, and shall take such further
actions, as may be reasonably necessary or appropriate to assure each of the
Purchaser and the Sellers their respective rights, liabilities and obligations
under this Agreement.

       

      ARTICLE
III

       

      CONSIDERATION

       

      3.1         Purchase
Price.  The aggregate cash consideration for the Purchased
Assets (the “Purchase
Price”) shall be an amount equal to the sum of:  (a) the
Asset Price, plus (b) the amount of the Register Cash, plus (c) the amount
of all security deposits (as reflected in Schedule 5.12(d))
held by the landlords under and pursuant to the Assumed Leases as of the
Closing, and plus or minus (d) the aggregate amount payable by the Purchaser or
the Sellers in accordance with Sections 8.10 and
11.1.

       

      3.2         Purchase Price
Deposit.  On June 14, 2010, the Purchaser delivered to the
Trust Agent cash equal to Four Million Three Hundred and Twenty Thousand Dollars
($4,320,000.00) (the “Deposit”), which
Deposit shall be held in trust by the Trust Agent in an interest-bearing trust
account and applied as follows:

       

      
        
           

        

        
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      (a)          if
the Closing shall occur, the Trust Agent shall pay the Deposit (together with
interest thereon) to the Sellers to be applied towards the payment of the
Purchase Price;

       

      (b)          if
this Agreement is terminated by the Sellers pursuant to Section 4.4(f), the
Trust Agent shall pay the Deposit (together with interest thereon) to the
Sellers to be retained by the Sellers; and

       

      (c)          if
this Agreement is terminated other than by the Sellers pursuant to Section 4.4(f),
the Trust Agent shall pay the Deposit (together with interest thereon) to the
Purchaser.

       

      3.3         Contingent
Payment.  If the Specified Litigation Resolution occurs prior
to the Purchaser delivering a Pre-Resolution Rejection Notice with respect to
both of the Minnesota Leases, then not later than five days after the occurrence
of the Specified Litigation Resolution and the Sellers providing written notice
thereof to the Purchaser, the Purchaser shall pay to the Sellers an amount, in
cash, equal to Two Hundred Thousand Dollars ($200,000.00).

       

      ARTICLE
IV

       

      CLOSING
AND TERMINATION

       

      4.1         Closing
Date.  Subject to the satisfaction of the conditions set forth
in Sections 10.1,
10.2 and 10.3 hereof (or the
waiver thereof by the party entitled to waive the applicable condition), the
closing of the purchase and sale of the Purchased Assets and the assumption of
the Assumed Liabilities provided for in Article II (the
“Closing”)
shall take place at the offices of Goulston & Storrs, P.C. in Boston (or at
such other place as the parties may designate in writing) at 10:00 a.m. (Boston
time) on July 26, 2010, unless another time or date, or both, are agreed to in
writing by the parties hereto.  In the event that the Closing does not
occur on July 26, 2010, because the conditions set forth in Sections 10.1,
10.2 and 10.3 hereof had not
been satisfied (or waived by the party entitled to waive the applicable
condition) on such date, then, provided that this Agreement has not been
terminated in accordance with Section 4.4, the
Closing shall take place at the offices of Goulston & Storrs, P.C. in Boston
(or at such other place as the parties may designate in writing) at 10:00 a.m.
(Boston time) on the first Business Day thereafter that the conditions set forth
in Article X
are satisfied or waived (other than conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or waiver of such
conditions), unless another time or date, or both, are agreed to in writing by
the parties hereto.  The date on which the Closing shall be held is
referred to as the “Closing
Date.”

       

      4.2         Deliveries by the
Sellers.  At the Closing, the Sellers shall deliver to the
Purchaser:

       

      
        
           

        

        
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      (a)          as
applicable, one or more duly executed bills of sale, and/or special warranty
deeds subject only to the Permitted Exceptions, real estate transfer
declarations, and all other documents, instruments or writings of conveyance and
transfer, including, but not limited to all necessary transfer tax documents,
notice to tenants, and such documents as may be reasonably required by the title
company issuing the applicable owner’s title policy, in a form to be agreed upon
by the parties hereto, as may be necessary to convey the Purchased Assets to the
Purchaser, including without limitation one or more duly executed assignment and
assumption agreements in a form to be agreed upon by the parties hereto with
respect to each of the Assumed Leases and Assumed Contracts;

       

      (b)          duly
executed assignments of the U.S. trademark registrations and applications
included in the Purchased Intellectual Property, in a form suitable for
recording in the U.S. trademark office, and general assignments of all other
Purchased Intellectual Property;

       

      (c)          or
otherwise put the Purchaser in possession and control of, all of the Purchased
Assets of a tangible nature;

       

      (d)          the
officer’s certificate required to be delivered pursuant to Sections 10.1(a)
and 10.1(b);

       

      (e)          affidavits
executed by each Seller that such Seller is not a foreign person within the
meaning of Section 1445(f)(3) of the Code; and

       

      (f)           a
copy of the Sale Order.

       

      4.3         Deliveries by the
Purchaser.  At the Closing, the Purchaser shall deliver to the
Sellers:

       

      (a)          cash
in the amount of the Purchase Price (including through providing instructions to
the Trust Agent to deliver the Deposit, together with any interest thereon, to
the Sellers);

       

      (b)          one
or more duly executed bills of sale, and/or deed of transfer, and all other
documents, instruments or writings of conveyance and transfer, in a form to be
agreed upon by the parties hereto, as may be necessary to convey the Purchased
Assets to the Purchaser, and for the Purchaser to assume the Assumed
Liabilities, including without limitation one or more duly executed assignment
and assumption agreements in a form to be agreed upon by the parties hereto with
respect to each of the Assumed Leases and Assumed Contracts; and

       

      (c)          the
officer’s certificate required to be delivered pursuant to Sections 10.2(a)
and 10.2(b).

       

      4.4         Termination of
Agreement.  This Agreement may be terminated prior to the
Closing as follows:

       

      (a)          by
the Purchaser or the Sellers, if the Closing shall not have occurred by the
close of business on July 26, 2010 (the “Termination Date”);
provided, however, that if a
request for additional information and documentary material (a so-called “Second
Request”) is made with respect to any premerger notification pursuant to the HSR
Act made in connection with the Transactions, then the Termination Date may be
extended by either the Purchaser or the Sellers by providing written notice
thereof to each other party hereto to such date as may be determined to
accommodate the same, subject to the prior consent of the Debtor’s DIP Lender;
provided, further, however, that if the
Closing shall not have occurred on or before the Termination Date due to a
material breach of any representations, warranties, covenants or agreements
contained in this Agreement by the Purchaser or the Sellers, then the breaching
party may not terminate this Agreement pursuant to this Section 4.4(a);

       

      
        
           

        

        
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      (b)           by
mutual written consent of the Sellers and the Purchaser;

       

      (c)           by
the Purchaser, if any condition to the obligations of the Purchaser set forth in
Section 10.1 or
10.3 shall have
become incapable of fulfillment other than as a result of a breach by the
Purchaser of any covenant or agreement contained in this Agreement, and such
condition is not waived by the Purchaser;

       

      (d)           by
the Sellers, if any condition to the obligations of the Sellers set forth in
Section 10.2 or
10.3 shall have
become incapable of fulfillment other than as a result of a breach by the
Sellers of any covenant or agreement contained in this Agreement, and such
condition is not waived by the Sellers;

       

      (e)           by
the Purchaser, if there shall be a breach by the Sellers of any representation
or warranty, or any covenant or agreement contained in this Agreement which
would result in a failure of a condition set forth in Section 10.1 or 10.3 and which breach
has not been cured by the earlier of (i) seven (7) days after the giving of
written notice by the Purchaser to the Sellers of such breach and (ii) the
Termination Date;

       

      (f)           by
the Sellers, if there shall be a breach by the Purchaser of any representation
or warranty, or any covenant or agreement contained in this Agreement which
would result in a failure of a condition set forth in Sections 10.2 or
10.3 and which
breach has not been cured by the earlier of (i) seven (7) days after the giving
of written notice by the Sellers to the Purchaser of such breach and (ii) the
Termination Date; and

       

      (g)           by
the Sellers or the Purchaser if there shall be in effect a final non-appealable
Order of a Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the Transactions, it being agreed that
the parties hereto shall promptly appeal any adverse determination which is not
non-appealable (and pursue such appeal with reasonable diligence).

       

      4.5         Procedure Upon
Termination.  In the event of termination pursuant to Section 4.4, written
notice thereof shall forthwith be given to the other party or parties, and this
Agreement shall terminate, and the Transactions shall be abandoned, without
further action by the Purchaser or the Sellers.

       

      4.6         Effect of
Termination.  In the event that this Agreement is validly
terminated as provided herein, then each of the parties shall be relieved of its
duties and obligations arising under this Agreement after the date of such
termination; provided, however, that the
provisions of Articles
VII and XII hereof, and that
certain Confidentiality Agreement dated June 4, 2010 (the “Confidentiality
Agreement”), shall survive any such termination and shall be enforceable
hereunder; provided further, however, that nothing
in this Section
4.6 or elsewhere in this Agreement shall be deemed to release any party
from liability for any breach of its obligations under this Agreement, except
that if the Purchaser terminates this Agreement under Section 4.4(e) on the
basis that the closing condition in Section 10.1 has
failed to have been satisfied, then such termination shall be the Purchaser’s
sole remedy, and neither the Sellers nor the Purchaser shall have any further
liability or obligation with respect to the same.

       

      
        
           

        

        
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      ARTICLE
V

       

      REPRESENTATIONS
AND WARRANTIES OF THE SELLERS

       

      Each
Seller hereby jointly and severally represents and warrants to the Purchaser
that:

       

      5.1         Organization and Good
Standing.  Each Seller is an entity duly organized, validly
existing and in good standing under the Laws of the jurisdiction of its
organization and in each jurisdiction where it is required by applicable Law to
be qualified to do business except where the failure to be so qualified would
not, individually or in the aggregate, be material to the ownership and
operation of the Business, and subject to the limitations imposed on such Seller
under the Bankruptcy Code, has the requisite power and authority to own, lease
and operate its properties and to carry on its business as now
conducted.  Schedule 5.1 sets
forth each Seller and the jurisdiction of its organization.  Each
Seller has all requisite power and authority to conduct the Business as
currently conducted and to own and use the assets and properties owned and used
by it.  Except as set forth in Schedule 5.1, none of
the Sellers directly or indirectly control or have any direct or indirect equity
participation or similar interest in any corporation, partnership, limited
liability company, joint venture or other business association or
entity.  None of the Non-Debtor Sellers has any assets other than
liquor licenses and none has any Liabilities except as set forth on Schedule
5.3(b).

       

      5.2         Authorization of
Agreement.  Subject to such authorization as is required by the
Bankruptcy Court, each Seller has the requisite power and authority to execute
and deliver this Agreement and each other agreement, document or instrument
contemplated hereby or thereby to which it is a party and to perform its
respective obligations hereunder and thereunder.  The execution and
delivery of this Agreement and each other agreement, document or instrument
contemplated hereby or thereby to which it is a party and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate or limited liability company action on the part of each
Seller.  This Agreement and each other agreement, document or
instrument contemplated hereby or thereby to which it is a party has been duly
and validly executed and delivered by each Seller and (assuming the due
authorization, execution and delivery by the other parties hereto and receipt of
such authorizations as is required by the Bankruptcy Court with respect to any
Seller) this Agreement and each other agreement, document or instrument
contemplated hereby or thereby to which it is a party constitutes legal, valid
and binding obligations of each Seller enforceable against such Seller in
accordance with its respective terms, subject to general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity).

       

      
        
           

        

        
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      5.3         Conflicts;
Consents of Third Parties.

       

      (a)           The
execution and delivery by each Seller of this Agreement and each other
agreement, document or instrument contemplated hereby or thereby to which it is
a party, the consummation of the transactions contemplated hereby and thereby,
or compliance by such Seller with any of the provisions hereof and thereof do
not conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination
or cancellation under any provision of (i) the certificate of incorporation and
by-laws or comparable limited liability company organizational documents of such
Seller; (ii) except to the extent not required if the Sale Order is entered
and except as set forth on Schedule 5.3(a), any
Contract, Lease or Permit to which such Seller is a party or by which any of the
properties or assets of such Seller are bound, other than such conflicts,
violations, defaults, terminations or cancellations that would not reasonably be
expected to be material, individually or in the aggregate, to the ownership and
operation of the Business or to the Acquired Location(s) impacted by the
conflict, violation, default, termination or cancellation; (iii) except to
the extent not required if the Sale Order is entered, any Order of any
Governmental Body applicable to such Seller or any of the properties or assets
of such Seller as of the Effective Date; or (iv) except to the extent not
required if the Sale Order is entered, any applicable Law.

       

      (b)           Except
for the notification required under the HSR Act, except as set forth on Schedule 5.3(b) and
except to the extent not required if the Sale Order is entered, no consent,
waiver, approval, Order, or authorization of, or declaration or filing with, or
notification to, any Person or Governmental Body is required on the part of the
Sellers in connection with the execution and delivery of this Agreement or any
other agreement, document or instrument contemplated hereby or thereby to which
it is a party, the compliance by the Sellers with any of the provisions hereof
or thereof, the consummation of the transactions contemplated hereby or thereby,
the assignment or conveyance of the Purchased Assets, or the taking by the
Sellers of any other action contemplated hereby or thereby, except for (i) the
entry of the Sale Order and receipt of such other authorizations as is required
by the Bankruptcy Court, and (ii) such consents, waivers, approvals, Orders,
authorizations, declarations, filings and notifications, the failure of which to
obtain or make would not reasonably be expected to be material, individually or
in the aggregate, to the ownership and operation of the Business or to the
Acquired Location(s) impacted by such failure.

       

      5.4         Title to Purchased
Assets.  The Sellers own and have good and marketable title to,
and, subject to entry of the Sale Order, have the right to transfer to the
Purchaser, the Purchased Assets, free and clear of all Encumbrances, other than
the Permitted Exceptions, those created by the Purchaser and those set forth on
Schedule
5.4.  None of the Excluded Entities owns or has any rights to
any assets used in the operation of the Business.

       

      5.5         Taxes.  No
power of attorney currently in force has been granted by the Sellers with
respect to the Business that would be binding on the Purchaser with respect to
taxable periods commencing on or after the Closing Date.  Other than
those set forth on Schedule 5.5, there
are no liens for Taxes on any of the Purchased Assets other than Permitted
Exceptions.  None of the Sellers is a foreign person within the
meaning of Section 1445(f)(3) of the Code.

       

      
        
           

        

        
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      5.6         Purchased
Intellectual Property.

       

      (a)           Schedule 5.6(a) lists
each item of Intellectual Property owned by any Seller and used in connection
with the Business as of the Effective Date and for which any Seller has received
or applied for a registration, including, without limitation, any patent, patent
application, copyright registration or application therefor, and trademark,
trade name, service mark, domain name registration or application therefor
(“Registered
Intellectual Property”).  To the Knowledge of the Sellers, all
of the Registered Intellectual Property is valid and enforceable.

       

      (b)           The
Sellers own all right, title and interest in and to, or have a valid and
enforceable right or license to use pursuant to a written agreement set forth on
Schedule 5.6(b)
(collectively, the “IP
License Agreements”), all material Intellectual Property used in or
necessary for, and material to, the operation of the Business as currently
conducted.

       

      (c)           To
the Knowledge of the Sellers, no Seller is currently infringing,
misappropriating or otherwise violating, and the operation of the Business as
currently conducted does not infringe, misappropriate or violate, any
Intellectual Property of any Person, except for any infringement,
misappropriation or violation not material to the Business.  Except as
set forth on Schedule
5.6(c), to the Knowledge of the Sellers, no Person is currently
infringing, misappropriating or violating any of the material Intellectual
Property owned by any Seller.

       

      (d)           Schedule 5.6(d) sets
forth a complete and accurate list of all material licenses, sublicenses and
other agreements, other than the Franchise Agreements, relating to the licensing
of Intellectual Property by any Seller.

       

      5.7         Permits.  Schedule 5.7 sets
forth a list of all material Permits held by the Sellers as of the Effective
Date.  Except as set forth on Schedule 5.7 and as
may have resulted from the commencement of the Bankruptcy Case, all Permits are
valid and in full force and effect and, to the Knowledge of the Sellers, none of
the Sellers are in default under or in violation of any such Permit, except for
such defaults or violations which would not reasonably be expected, individually
or in the aggregate, to be material to the operation of the Business, as a
whole, as currently conducted or material to the Acquired Location(s) impacted
by the default or violation.

       

      5.8         Environmental
Matters.  Except as set forth on Schedule 5.8 and
except as would be material to the ownership and operation of the Business, no
Seller has received written, or to the Knowledge of the Sellers, oral, notice of
any pending or, to the Knowledge of the Sellers, threatened claim or
investigation by any Governmental Authority or any other Person concerning
material potential liability of any Seller under Environmental Laws in
connection with the ownership or operation of the Business, the Owned Real
Property or the Leased Real Property.  To the Knowledge of the
Sellers, there has not been a release of any Hazardous Substance at, upon, in,
from or under (i) any of the Owned Real Property or Leased Real Property or (ii)
at any location to or from which a Seller has transported or arranged for the
transportation or disposal of Hazardous Substances, in each case, in quantities
or under circumstances that would give rise to any material liability or require
remediation, investigation or clean up pursuant to any Environmental
Law.

       

      
        
           

        

        
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    5.9          Employee
Benefits.

     

    (a)        
Schedule 5.9
sets forth a complete and correct list of all Employee Benefit Plans of the
Sellers as of the Effective Date. Except as set forth on Schedule 5.9, each
Employee Benefit Plan has been operated and administered in all material
respects in accordance with its terms and applicable Law, except where any
failure to be so operated and administered would not, individually or in the
aggregate, be expected to be material to the operation of the Business as
currently conducted and except as may have resulted from the filing of the
Bankruptcy Case. The Sellers have made available to Buyer true and complete
copies of all material Employee Benefit Plans or a description of the benefits
thereunder. Except as set forth on Schedule 5.9, each Employee
Benefit Plan intended to be “qualified” within the meaning of Section 401(a) of
the Code is so qualified and is the subject of a favorable Internal Revenue
Service determination or opinion letter regarding such qualified status and the
trusts maintained thereunder are exempt from taxation under Section 501(a) of
the Code. Except as set forth on Schedule 5.9, there
are no pending, or to the Knowledge of the Sellers, threatened claims by or on
behalf of any Employee Benefit Plan, or by any employee or beneficiary covered
under any such Plan with respect to any such Employee Benefit Plan (other than
routine claims for benefits). There are no material outstanding Liabilities of,
or related to, any Employee Benefit Plan, other than Liabilities for benefits to
be paid in the ordinary course to participants in such Employee Benefit Plan and
their beneficiaries in accordance with the terms of such Employee Benefit Plan
or as otherwise resulting from the Bankruptcy Case.

     

    (b)           No
Seller or ERISA Affiliate sponsors, maintains or otherwise contributes to or has
any liability with respect to any “employee pension benefit plan” (as defined in
Section 3(2) of ERISA) which is or was subject to Title IV of ERISA, including
any “multi-employer plan” (as defined in Section 4001(a)(3) of ERISA), or
subject to Section 412 of the Code.

     

    (c)           All
contributions and payments (including salary deferral contributions elected by
employees) with respect to Employee Benefit Plans that are due and owing or
required to be made by a Seller or an ERISA Affiliate with respect to periods
ending on or before the Closing Date (including periods from the first day of
the current plan year or policy year to the Closing Date) have been, or will be,
made before the Closing Date in accordance with applicable law and the
appropriate plan document, actuarial report, collective bargaining agreements or
insurance contracts or arrangements or as otherwise required by ERISA or the
Code.  With respect to each Employee Benefit Plan, there has not
occurred, and no person or entity is contractually bound to enter into, any
“prohibited transaction” within the meaning of Section 4975(c) of the Code or
Section 406 of ERISA, which transaction is not exempt under Section 4975(d) of
the Code or Section 408 of ERISA.

     

    (d)           No
Employee Benefit Plan provides post-employment medical, health or dental
coverage other than the continuation of coverage requirements of Part 6 of
Title I of ERISA and Section 4980B of the Code and any regulations issued
thereunder.

     

    5.10        Litigation.  Except
as set forth on Schedule 5.10, there
are no Legal Proceedings pending or, to the Knowledge of the Sellers, threatened
against any Seller before any Governmental Body, which, if adversely determined,
would reasonably be expected to be, individually or in the aggregate, material
to the operation of the Business as currently conducted.  Except as
set forth on Schedule
5.10, there are no Orders outstanding against any Seller which would
reasonably be expected to be, individually or in the aggregate, material to the
operation of the Business as currently conducted.

     

    
      
        
        

      

      
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    5.11        Material
Contracts.

     

    (a)           Schedule 5.11(a)
contains a list, as of the Effective Date, of all Contracts (the “Material Contracts”)
pursuant to which any Seller has any rights or benefits or undertakes any
obligations or liabilities with respect to the Business, that:

     

    (i)           has
a duration of one year or more and is not terminable without cause or penalty
upon 90 days or less prior written notice by any party;

     

    (ii)          requires
or could reasonably be expected to require any party thereto to pay $100,000 or
more in any 12 month period;

     

    (iii)         contains
any non-competition covenant or exclusivity arrangement binding against any
Seller;

     

    (iv)        involves
any Contract (A) granting or obtaining any right to use any material Purchased
Intellectual Property (including, without limitation, any Franchise Agreements)
or (B) restricting the Sellers’ rights to the use of any Purchased Intellectual
Property;

     

    (v)         regards
the employment, services, consulting, termination or severance from employment
relating to or for the material benefit of any director, officer, employee,
independent contractor or consultant of any Seller;

     

    (vi)        constitutes
joint venture, partnership and similar Contracts involving a sharing of profits
or expenses;

     

    (vii)       provides
for the supply or distribution of products and that is material to the operation
of the Business as currently conducted;

     

    (viii)      is
an IP License Agreement;

     

    (ix)         any
agreement for the disposition of any significant portion of the assets,
properties or rights of any Seller or any agreement for the acquisition by any
Seller of the assets, properties or rights of any other Person (other than
purchases of items normally held out for sale by such Person in the ordinary
course of business); or

     

    (x)          any
agreement (or group of related agreements) under which any Seller has assumed or
guaranteed (or may assume or guarantee) any Liability of a third party, other
than pursuant to a sublease with a Franchisee.

     

    (b)           The
Sellers have delivered to or made available to the Purchaser a complete and
accurate copy of each Material Contract.  With respect to each
Material Contract, except as set forth in Schedule
5.11(b):  (i) such Material Contract is legal, valid,
binding and enforceable against the Seller and, to the Knowledge of the Sellers,
each other party thereto, and is in full force and effect except as such
enforceability may be subject to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity); and
(ii) except for breaches and defaults of the type referred to in Section
365(b)(2) of the Bankruptcy Code, none of the Sellers or, to the Knowledge of
the Sellers, any of the counterparties to such Material Contract, are in
material default under any of the terms of such Material Contract.

     

    
      
        
        

      

      
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    5.12        Property.

     

    (a)           Schedule 5.12(a)
lists all of the locations and parcels of real estate which are owned by any
Seller (the “Owned
Real Property”).  Each Seller listed on Schedule 5.12(a) as
the owner of any Owned Real Property has good and marketable title to such Owned
Real Property.

     

    (b)           Schedule 5.12(b)
lists all of the leasehold interests of any Seller under leases of real property
(the “Leased Real
Property”).  The Sellers have delivered or made available to
the Purchaser a true and complete copy of each of the aforementioned Leases, as
it has been amended, modified, restated or otherwise supplemented.

     

    (c)           The
base rents set forth on Schedule 5.12(c)
accurately reflect in all material respects the base monthly rents being paid by
the applicable Seller as tenant, and/or being collected by Seller as landlord,
under the Assumed Leases as of the Effective Date.

     

    (d)           Schedule 5.12(d)
lists, as of the Effective Date, the amount of all security deposits held by the
landlords under all Assumed Leases.

     

    5.13        Financial
Statements.  The Sellers have provided to the Purchaser a true
and complete copy of: (i) the unaudited balance sheet, statement of income
from operations and profit and loss statement as of and for the eight months
ended February 21, 2010 (the "Unaudited Financial
Statements"); (ii) the unaudited profit and loss statements at
Location levels for the eight months ended February 21, 2010 (“P&L Statements”);
and (iii) the audited consolidated financial statements as of and for the
year ended June 28, 2009 (the “Audited Financial
Statements” and together with the Unaudited Financial Statements and the
P&L Statements, the “Financial
Statements”).  The Financial Statements together with the
footnotes thereto fairly present in all material respects the consolidated
financial position, results of operations and cash flows of the Sellers (as
applicable) for the respective fiscal periods or as of the respective dates set
forth therein in accordance with GAAP, except with respect to the Unaudited
Financial Statements and the P&L Statements for the absence of footnotes and
normal year end adjustments.

     

    5.14        Brokers.  Except
for the fees and expenses of FocalPoint Securities, LLC (for which the Sellers
shall be solely responsible), and subject to approval of the Bankruptcy Court,
the Sellers do not have any obligation to pay any fees, commissions or other
similar compensation to any broker, finder, investment banker, financial advisor
or other similar Person in connection with the Transactions.

     

    5.15        Employees.

     

    (a)           
Schedule 5.15 is a true and complete
list, as of the Effective Date, of all Employees and independent contractors of
any Seller whose total annual compensation for the current fiscal year is
expected to exceed $40,000 (the “Employee List”),
setting forth for each such individual (i) his or her position (including
whether an employee or independent contractor), (ii) his or her current salary
or hourly wage, (iii) any raises or reductions to his or her salary or hourly
wage received by him or her since January 1, 2009, (iv) a statement as to
whether such person is compensated in whole or in part on a commission basis,
and if so, a description of such commission arrangement, and (v) the amount of
any bonuses, commissions or other compensation paid to him or her in respect of
calendar year 2009 (whether paid in cash, securities or other
property).  Except as indicated on the Employee List, no Employee or
consultant on the Employee List has given or received notice terminating his or
her employment with the Seller.

     

    
      
        
        

      

      
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    (b)           No
Seller is a party to or otherwise bound by any collective bargaining agreement
or relationship with a labor union or other labor organization.  No
Seller is subject to any charge, demand, petition or representation proceeding
seeking to compel, require or demand that it bargain with any labor union or
labor organization.

     

    5.16        Related Party
Transactions.  Except as set forth on Schedule 5.16, no
officer, director, direct or indirect owner, or Affiliate of any Seller (except
for another Seller) owns any property or right, tangible or intangible, that is
used in the Business.

     

    5.17        Franchise
Matters.

     

    (a)           Schedule 5.17(a) sets
forth the Franchisee of record for each Person who has a currently-effective
Franchise Agreement.  Except as set forth on Schedule 5.17(a),
each of the currently-effective Franchise Agreements is substantially similar to
the form of Franchise Agreement incorporated into the current FDD, a copy of
which form was made available to Purchaser.  Except as described in
Schedule
5.17(a), no Seller has waived any material right or benefit of any
Seller, or any material obligation of any Franchisee, under any Franchise
Agreement.  Except as set forth on Schedule 5.17(a),
there are no other material Contracts in effect between any Seller and any
Franchisee (in its capacity as such) other than the Franchise
Agreements.  No Seller nor any of its Affiliates has, since January 1,
2006 and until the Effective Date, (i) sold Franchises anywhere in the world
except for the United States, Canada, and the Middle East, and (ii) offered
Franchises anywhere in the world except for the United States, Canada, Mexico,
the Middle East, Greece and the Dominican Republic.

     

    (b)           Either
the current FDD or Schedule 5.17(b)
contains a summary of each Franchise-related Legal Proceeding or formal
mediation proceeding which is pending or, to the Knowledge of the Sellers,
threatened in writing, except where such Legal Proceeding, either individually
or in the aggregate, is not, and would not reasonably be expected to be,
material to the operation of the Business as currently conducted.

     

    (c)           Except
as set forth on Schedule 5.17(c), no
Franchisee or other Person has any enforceable right of first refusal, option or
other right or arrangement to sign any Franchise Agreement or acquire any
Franchise other than Franchisees under currently-effective Development
Agreements.  Except as set forth on Schedule 5.17(c),
neither the Company nor any of its Subsidiaries has granted any protected
territory or exclusive territory or is otherwise limited in its right to grant
Franchises other than currently-effective Development Agreements and Franchise
Agreements.

     

    
      
        
        

      

      
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    (d)           The
Sellers have made available to the Purchaser an accurate and complete copy of
each FDD that any Seller has used to offer or sell Franchises at any time since
October 26, 2009.

     

    5.18        Customer
Programs.  Schedule 5.18
contains a summary of the Customer Programs under which any Seller has any
Liability, together with the amount of such Liability as of March 31,
2010.

     

    5.19        No Other Representations or
Warranties; Schedules.  Except for the representations and
warranties contained in this Article V (as
modified by the Schedules hereto): (a) none of the Sellers nor any other Person
makes any other express or implied representation or warranty with respect to
the Sellers, the Business, the Purchased Assets, the Assumed Liabilities or the
Transactions, and (b) each Seller disclaims (i) any other representations or
warranties, whether made by the Sellers, any Affiliate of the Sellers, or any of
the Sellers’ or their Affiliates’ respective officers, directors, managers,
employees, agents or representatives, and whether expressed or implied, at
common law, by statute, or otherwise, relating to the condition of the Purchased
Assets (including any implied or expressed warranty of merchantability or
fitness for a particular purpose) and (ii) all liability and responsibility for
any representation, warranty, projection, forecast, statement, or information
made, communicated, or furnished (orally or in writing) to the Purchaser or its
Affiliates or representatives (including any opinion, information, projection,
or advice that may have been or may be provided to the Purchaser by any
director, manager, officer, employee, agent, consultant, or representative of
the Sellers or any of its Affiliates).  Without limiting the
foregoing, the Sellers expressly disclaim and make no representations or
warranties to the Purchaser regarding the probable success or profitability of
the Business.  The disclosure of any matter or item in any Schedule
hereto shall not be deemed to constitute an acknowledgment that any such matter
is required to be disclosed or is material or that such matter would result in a
Material Adverse Effect.

     

    ARTICLE
VI

     

    REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER

     

    The
Purchaser hereby represents and warrants to the Sellers that:

     

    6.1          Organization and Good
Standing.  The Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware
and has the requisite power and authority to own, lease and operate its
properties and to carry on its business as now conducted.

     

    6.2          Authorization of
Agreement.  The Purchaser has the requisite power and authority
to execute and deliver this Agreement and each other agreement, document or
instrument contemplated hereby or thereby to which it is a party and to perform
its obligations hereunder and thereunder.  The execution and delivery
of this Agreement and each other agreement, document or instrument contemplated
hereby or thereby to which the Purchaser is a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite action on the part of the Purchaser.  This Agreement and
each other agreement, document or instrument contemplated hereby or thereby to
which the Purchaser is a party has been duly and validly executed and delivered
by it and (assuming the due authorization, execution and delivery by the other
parties hereto) this Agreement and each other agreement, document or instrument
contemplated hereby or thereby to which it is a party constitutes legal, valid
and binding obligations of it enforceable against it in accordance with its
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar Laws affecting creditors’ rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in
equity).

     

    
      
        
        

      

      
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    6.3          Conflicts;
Consents of Third Parties.

     

    (a)           The
execution and delivery by the Purchaser of this Agreement and each other
agreement, document or instrument contemplated hereby or thereby to which it is
a party, the consummation of the transactions contemplated hereby and thereby,
or compliance by it with any of the provisions hereof or thereof do not conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination or cancellation
under any provision of (i) its certificate of incorporation or bylaws, (ii) any
agreement, contract, indenture, note, bond, lease, license, approval,
authorization, consent, or permit to which  it is a party or by which
any of its properties or assets are bound, other than such conflicts,
violations, defaults, terminations or cancellations that would not reasonably be
expected to cause, individually or in the aggregate, a material adverse effect
on the Purchaser or its ability to consummate the Transactions or perform its
obligations under this Agreement; (iii) any Order of any Governmental Body
applicable to it or any of its properties or assets as of the Effective Date; or
(iv) any applicable Law.

     

    (b)           Except
for the notification required under the HSR Act, no consent, waiver, approval,
Order, Permit or authorization of, or declaration or filing with, or
notification to, any Person or Governmental Body is required in connection with
the execution and delivery of this Agreement and each other agreement, document
or instrument contemplated hereby or thereby to which the Purchaser is a party,
the compliance by it with any of the provisions hereof or thereof, the
consummation of the transactions contemplated hereby or thereby, or its taking
of any other action contemplated hereby or thereby, except for such consents,
waivers, approvals, Orders, Permits, authorizations, declarations, filings and
notifications, the failure of which to obtain or make, would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the Purchaser or its ability to consummate the Transactions or perform its
obligations under this Agreement.

     

    6.4          Brokers.  The
Purchaser does not have any obligation to pay any fees, commissions or other
similar compensation to any broker, finder, investment banker, financial advisor
or other similar Person in connection with the Transactions.

     

    6.5          Condition of the Purchased
Assets.  Notwithstanding anything contained in this Agreement
to the contrary, the Purchaser acknowledges and agrees that the Sellers are not
making any representations or warranties whatsoever, express or implied, beyond
those expressly given by the Sellers in Article V (as
modified by the Schedules hereto), and the Purchaser acknowledges and agrees
that, except for the representations and warranties contained therein, the
Purchased Assets are being transferred on a “where is” and, as to condition, “as
is” basis.  The Purchaser acknowledges that it has conducted and will
conduct its own due diligence and in making the determination to proceed with
the Transaction, the Purchaser has relied and will be relying on the results of
its own independent investigation.

     

    
      
        
        

      

      
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    6.6          Communications.  The
Purchaser and its Affiliates and representatives may contact, or engage in any
discussions or otherwise communicate with, any of the Business’s suppliers,
franchisees and others with whom Sellers have material commercial
dealings.  The Purchaser shall notify the Sellers in advance of any of
the above-described discussions or communications.  Notwithstanding
anything to the contrary in the Confidentiality Agreement, nothing in the
Confidentiality Agreement shall prohibit any of the activities contemplated by
and conducted in accordance with this Section 6.6.

     

    6.7          The Debtors' Privacy
Policy.  The Purchaser shall be bound by the privacy policy
posted at www.fuddruckers.com on June 14, 2010 with respect to any personally
identifiable information (as that term is defined in Section 101(41A) of the
Bankruptcy Code) collected and maintained by the Debtors prior to the
Closing.

     

    ARTICLE
VII

     

    BANKRUPTCY
COURT MATTERS

     

    7.1          Court
Approval.  This Agreement is subject to approval by the
Bankruptcy Court.

     

    7.2          Submission to Bankruptcy
Court.  As soon as reasonably practicable after the date of the
Auction (as defined in the Bidding Procedures), the Debtors shall file with the
Bankruptcy Court a notice designating the Purchaser as the Successful Bidder (as
defined in the Bidding Procedures) and attaching a copy of the Sale
Order.  The Debtors and the Purchaser shall cooperate with each other
in obtaining Bankruptcy Court approval of the Sale Order.

     

    7.3          Sale
Order.  The Purchaser agrees that it will promptly take such
actions as are reasonably requested by the Debtors to assist in obtaining entry
of the Sale Order and a finding of adequate assurance of future performance by
the Purchaser, including furnishing affidavits or other documents or information
for filing with the Bankruptcy Court for the purposes, among others, of
providing necessary assurances of performance by the Purchaser under this
Agreement and demonstrating that the Purchaser is a “good faith” purchaser under
section 363(m) of the Bankruptcy Code and that the Purchase Price was not
controlled by an agreement in violation of Section 363(n) of the Bankruptcy
Code.  In the event the entry of the Sale Order shall be appealed, the
Debtors and the Purchaser shall use their respective reasonable efforts to
defend such appeal.

     

    
      
        
        

      

      
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    ARTICLE
VIII

     

    COVENANTS

     

    8.1          Access to
Information.  The Sellers agree that, prior to the Closing
Date, the Purchaser shall be entitled, through its officers, employees,
consultants and representatives (including, without limitation, its legal
advisors and accountants), to make such investigation of the properties,
business and operations of the Sellers and such examination of the books and
records and financial and operating data of the Sellers, the Business, the
Purchased Assets and the Assumed Liabilities, and access to the officers, key
employees, accountants and other representatives of the Sellers, as it
reasonably requests and to make extracts and copies of such books and
records.  Any such investigation and examination shall be conducted
upon reasonable advance notice and under reasonable circumstances and shall be
subject to restrictions under applicable Law.  The Purchaser and its
representatives shall cooperate with the Sellers and their representatives and
shall use their reasonable efforts to minimize any disruption to the
Business.  Notwithstanding anything herein to the contrary, no such
investigation or examination shall be permitted to the extent that it would
require the Sellers to disclose information subject to attorney-client
privilege.

     

    8.2          Conduct Pending the
Closing.  Except (i) as required by applicable Law, (ii) as
otherwise expressly contemplated by this Agreement, or (iii) with the prior
written consent of the Purchaser, during the period from the date of this
Agreement to and through the Closing Date, the Sellers shall, to the extent
commercially reasonable, taking into account the filing of the Bankruptcy
Case:

     

    
      	
               
      

            	
              (A)

            	
              conduct
      their business only in the ordinary
course;

            

    

     

    
      	
               
      

            	
              (B)

            	
              after
      the Petition Date the Sellers shall not sell gift certificates and gift
      cards at any Seller-owned or -operated Acquired Location, provided that
      the Sellers may continue to operate the "Fudds Club" program consistent
      with past practice; and

            

    

     

    
      	
               
      

            	
              (C)

            	
              use
      their commercially reasonable efforts to (y) preserve their present
      business operations, organization and goodwill, and (z) preserve their
      present relationships with suppliers and
  franchisees.

            

    

     

    8.3          Consents; Liquor
Licenses.  The Sellers shall use their commercially reasonable
efforts, and the Purchaser shall cooperate with the Sellers, to obtain at the
earliest practicable date those consents and approvals required to consummate
the Transactions that are listed in Schedule 8.3;
provided, however, that neither the Sellers nor the Purchaser shall be obligated
to pay any consideration therefor to any third party from whom consent or
approval is requested or to initiate any Legal Proceedings to obtain any such
consent or approval; provided, further, that if requested by the Purchaser, the
Sellers shall initiate such Legal Proceedings requested by the Purchaser to
obtain such consents or approvals or an Order but only if the Purchaser pays to
the Sellers, the Sellers’ good faith and reasonable estimate of any and all out
of pocket expenses and costs (including reasonable attorneys fees) related
thereto.  Without limiting the foregoing, and for clarity only, the
Sellers shall have no responsibility to procure, and the Purchaser shall, at its
own expense and risk, be responsible for procuring, any and all consents,
authorizations, or approvals from, or make any and all registrations or filings
with, any Governmental Body or other third party to the extent that any of the
same are required with respect to any of the Sellers’ liquor licenses as a
result of or on account of the Transactions (collectively, “Liquor License
Approvals”) and the Purchaser having obtained any or all Liquor License
Approvals is not a condition to the Purchaser’s obligations hereunder and any
failure of the Purchaser to have obtained the same shall not excuse the
Purchaser from full performance of its obligations under this
Agreement.  The Sellers shall reasonably cooperate with the Purchaser
in connection with the Purchaser’s efforts to obtain any Liquor License
Approvals, including by entering into temporary management arrangements
acceptable to the Sellers, all at the Purchaser’s sole
expense.  

     

    
      
        
        

      

      
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    8.4          Further
Assurances.  Subject to the other provisions of this Agreement,
each of the Purchaser and the Sellers shall use their commercially reasonable
efforts to (i) take all actions necessary or appropriate to consummate the
Transactions and (ii) cause the fulfillment at the earliest practicable date of
all of the conditions to their respective obligations to consummate the
Transactions.

     

    8.5          Preservation of
Records.  The Sellers or their successors and the Purchaser
agree that each of them shall preserve and keep the records held by them or
their Affiliates relating to the Purchased Assets for two years after the
Closing Date (except as provided below) and shall make such records (as well as
former employees of any Seller that are then employed by the Purchaser)
available to the other as may be reasonably required by such party in connection
with, among other things, the Sellers’ (or any subsequently appointed fiduciary
of any Seller’s estate) administration of the Bankruptcy Case, the investigation
and pursuit of Estate Claims, any insurance claims by, Legal Proceedings or Tax
audits against or governmental investigations of the Sellers or the Purchaser or
any of their Affiliates or in order to enable the Sellers or the Purchaser to
comply with their respective obligations under this Agreement and each other
agreement, document or instrument contemplated hereby.  In the event
the Sellers or the Purchaser wish to destroy such records before or within two
years, such party shall first give ninety (90) days prior written notice to the
other and such other party shall have the right at its option and expense, upon
prior written notice given to such party within such ninety (90) day period, to
take possession of the records within one-hundred and eighty (180) days after
the date of such notice.  Access pursuant to this Section 8.5 shall be
afforded by the party in possession of such records, upon receipt of reasonable
advance notice, during normal business hours and at the expense of the
requesting party; provided, however, that (i) any review of such records shall
be conducted in such a manner as not to interfere unreasonably with the
operation of the business of any party, (ii) no party shall be required to take
any action that would constitute a waiver of the attorney-client privilege and
(iii) no party shall be required to supply the other party with any information
which such party is under a legal obligation not to supply.  The party
exercising this right of access shall be solely responsible for any costs or
expenses incurred by it pursuant to this Section
8.5.

     

    8.6          Publicity.  Before
the Closing Date, none of the parties hereto shall issue any press release
concerning this Agreement or the Transactions without obtaining the prior
written approval of the other party hereto, which approval will not be
unreasonably withheld or delayed, unless, in the sole judgment of the Purchaser
or the Sellers, disclosure is otherwise required by applicable Law or by the
Bankruptcy Court with respect to filings to be made with the Bankruptcy Court in
connection with this Agreement, provided that the
party intending to make such release shall use its commercially reasonable
efforts consistent with such applicable Law or Bankruptcy Court requirement to
consult with the other party with respect to the text
thereof.  Notwithstanding anything to the contrary in this Agreement
or the Confidentiality Agreement, nothing in this Agreement or the
Confidentiality Agreement shall prohibit the Purchaser from making any public
disclosures (which may include the filing of this Agreement as an exhibit to a
filing with the Securities and Exchange Commission) required, in the sole
judgment of the Purchaser, by the securities laws or the rules and regulations
of The New York Stock Exchange.

     

    
      
        
        

      

      
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    8.7          Schedules and
Exhibits.  The Sellers may, at their option, include in the
Schedules items that are not material in order to avoid any misunderstanding,
and such inclusion, or any references to dollar amounts, shall not be deemed to
be an acknowledgement or representation that such items are material, to
establish any standard of materiality or to define further the meaning of such
terms for purposes of this Agreement.

     

    8.8          Payment of
Taxes.  The Sellers shall be responsible for paying or
otherwise discharging all of their Taxes for all periods (or portions thereof)
ending on or prior to the Closing Date; provided that the Purchaser shall be
responsible for paying, and shall indemnify the Sellers for, all conveyance,
sales, use, excise, value, value added, registration, stamp, property, transfer,
real property transfer, gains, recording registration and similar Taxes,
together with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto which become payable in connection with the
Transactions (taking into account the provisions of Section 1146 of the
Bankruptcy Code).

     

    8.9          Motions, Orders,
etc.  The Debtors shall promptly provide the Purchaser with the
proposed final drafts of all documents, motions, orders, or pleadings that the
Debtors propose to file with the Bankruptcy Court which relate to the approval
of this Agreement, the Purchased Assets, the Assumed Contracts or Assumed Leases
or the consummation of the Transactions, or any provision therein or herein, so
as to provide the Purchaser and its counsel with a reasonable opportunity to
review and comment on such documents, motions, orders, or pleadings prior to
filing with the Bankruptcy Court, and insomuch as is consistent with the
Debtors’ fiduciary duties, consider such comments in good faith.

     

    8.10        Recurring
Charges.

     

    (a)           With
respect to any regularly recurring rents, water, telephone, electricity or other
utility charge which relates to the Purchased Assets and is imposed on a
periodic basis and is payable for a period that includes (but does not end on)
the Closing Date, the portion of such charge which relates to the portion of
such period ending prior to the Closing Date shall be deemed to be the amount of
such charge for such entire period multiplied by a fraction the numerator of
which is the number of days in such period ending prior to the Closing Date and
the denominator of which is the number of days in the entire such
period.  The Sellers shall be responsible for the payment of the
amount so deemed to relate to the portion of such period prior to Closing, and
the Purchaser shall pay the amount so deemed to relate to the portion of such
period as of and following Closing.

     

    (b)           To
the extent any year end adjustments due and payable under any Assumed Leases
including, without limitation, common area maintenance (excluding common area
maintenance under any Assumed Lease with respect to which the prior year’s
reconciliation has already been reflected in the monthly common area maintenance
charge), Taxes and insurance, are not known as of the Closing Date, the
proration with respect thereto between the Sellers and the Purchaser shall be
calculated based on the amounts paid with respect thereto for the prior
year.  To the extent any other amounts described in Section 8.10(a) are
not known as of the Closing Date, the proration with respect thereto between the
Sellers and the Purchaser shall be calculated based on the amounts paid with
respect thereto for the prior period.  There shall be no further
proration between the Sellers and the Purchaser after the Closing Date based on
the actual amounts payable.

     

    
      
        
        

      

      
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    (c)           Any
amounts payable by the Sellers in accordance with this Sections 8.10 and
11.1 shall be
paid and fully satisfied in accordance with Section
3.1.  The Purchaser shall pay to any applicable third party all
amounts due and payable after the Closing with respect to the items to which the
proration provisions of this Section 8.10 and
Section 11.1
apply.

     

    8.11        Adequate
Assurance.  The Purchaser will timely provide such information
to the Debtors, as the Debtors believe is reasonably necessary to provide
“adequate assurance,” as that term is used in Section 365 of the Bankruptcy
Code, with respect to the Assumed Leases and the Assumed Contracts.

     

    8.12        Bulk
Sales.  To the greatest extent permitted by applicable law, the
Purchaser and the Sellers hereby waive compliance by the Purchaser and the
Sellers with the terms of any bulk sales or similar laws in any applicable
jurisdiction in respect of the Transactions.

     

    8.13        Specified
Litigation.

     

    (a)           The
parties hereby acknowledge that the Minnesota Locations are currently occupied
and operated by R.J. Management LLC (or its affiliates) and are the subject of
litigation which the Sellers are currently pursuing in order to, among other
things, obtain a Final Order enabling the Sellers to deliver possession and
control of the Minnesota Locations to the Purchaser free and clear of any claim
or interest of R.J. Management LLC (or its affiliates) (not
including any claims to collect the account receivable described in Section 2.2(o)(ii),
the “Specified
Litigation”).

     

    (b)           After
the Closing: (i) the Sellers will conduct the Specified Litigation in accordance
with the reasonable instructions and direction of the Purchaser, and will
cooperate with the Purchaser in connection with any Specified Litigation
Resolution, all subject to the ethical duties and professional judgments of the
legal advisors to the Sellers, (ii) the Purchaser shall cooperate with and
otherwise assist the Sellers in the Specified Litigation, and incident to such
cooperation, the Purchaser will make available any documents required or useful
in connection with, and any employees of the Purchaser (including former
employees of the Sellers) as may be required to serve as witnesses in, the
Specified Litigation, and (iii) the Purchaser shall, subject to Section 8.13(c),
reimburse the Sellers for (A) the reasonable attorneys’ fees and related
litigation expenses incurred by the Sellers in connection with the Specified
Litigation on or after the Closing Date, and (B) obligations incurred and/or
paid by the Sellers under the Minnesota Leases after the Closing
Date.

     

    (c)           Notwithstanding
anything to the contrary contained in this Agreement, the Purchaser may provide
written notice to the Sellers at any time prior to the occurrence of the
Specified Litigation Resolution designating one or both of the Minnesota Leases
as rejected (the “Pre-Resolution Rejection
Notice”) in which case the Purchaser shall not be responsible for
reimbursing the Sellers under Section 8.13(b)(iii)
or otherwise for costs and obligations incurred by the Sellers after the date of
such rejection in connection with the rejected Minnesota Lease.

     

    
      
        
        

      

      
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    (d)           For
clarity, the Minnesota Locations are Excluded Locations and the Minnesota Leases
are Excluded Leases, provided that within five days after the occurrence of the
Specified Litigation Resolution the Purchaser shall give written notice to the
Sellers designating one or both of the Minnesota Leases as assumed and assigned
to the Purchaser (or its designee) or as rejected.  In the event that
no such notice is given, the Minnesota Leases shall not thereafter be eligible
to become Assumed Leases and may be rejected by the Sellers.

     

    (e)           In
the event of the assignment and assumption of the Minnesota Leases to the
Purchaser, each of the applicable Seller and the Purchaser shall execute and
deliver to one another an assignment and assumption agreement with respect
thereto, and the Sellers shall transfer title (through appropriate bills of
sale) to the Purchaser of any Furniture and Equipment owned by the Sellers and
located at the Minnesota Locations at such time without additional consideration
(subject to Section
3.3).

     

    (f)           At
no time shall the Sellers become or be required to become the employer of any
employees of the Minnesota Locations or to operate the Minnesota
Locations.

     

    (g)           The
Sellers shall not be required to settle the Specified Litigation unless such
settlement does not require (i) the payment of money by the Sellers (unless such
payment is made by the Purchaser (it being agreed that the Purchaser shall be
under no obligation to make any such payment)) or (ii) the settlement of the
account receivable described in Section
2.2(o)(ii).

     

    8.14        Fuddruckers
Name.

     

    (a)           Immediately,
and in no event later than five days following the Closing, each of the
Sellers shall, and shall cause each of their subsidiaries to, (i) change
its legal name, as necessary, to a name that does not contain the words
“Fuddruckers”, “Koo Koo Roo” or any other trade name or trade mark constituting
part of the Purchased Intellectual Property, or any designation similar thereto
or derivative thereof, (ii) cease to use any such names or marks on
signage, advertising materials, unused stationery and other material and (c)
cease to use any other Purchased Intellectual Property. Notwithstanding anything
in this Agreement to the contrary, each of the Sellers agrees that the
Purchaser, in addition to any other remedies available to it for any breach or
threatened breach of this Section 8.14(a), shall be entitled to a
preliminary injunction, temporary restraining order or other equivalent relief
restraining the Sellers from any such breach or threatened breach.

     

    (b)           Notwithstanding
anything to the contrary in this Agreement, the Purchased Assets include all
rights, claims or causes of action of the Sellers against R.J. Management LLC
and its Affiliates relating to infringing, misappropriating or otherwise
violating any Purchased Intellectual Property.

     

    
      
        
        

      

      
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    8.15        HSR Act.

     

    (a)           The
Sellers and the Purchaser shall following the date the Sale Order is entered by
the Bankruptcy Court:

     

    (i)           ensure
that the filings required of them or any of their Affiliates under the HSR Act
are made on or before July 2, 2010;

     

    (ii)       
  comply at the earliest practicable date with any request for
additional information or documentary material received by the Sellers, the
Purchaser or any of their Affiliates from the United States Federal Trade
Commission (the "FTC") or the
Antitrust Division of the United States Department of Justice (the "DOJ") pursuant to the
HSR Act;

     

    (iii)         cooperate
with each other in connection with any filing under the HSR Act and in
connection with resolving any investigation or other inquiry concerning the
Transactions commenced by the FTC or DOJ; and

     

    (iv)        advise
the other parties promptly of any material communication received by such party
from the FTC or DOJ regarding any of the Transactions.

     

    (b)           Notwithstanding
the foregoing or any other provision of this Agreement, nothing in this
Agreement shall be deemed to require (i) the Purchaser to divest or hold
separate any assets or agree to limit its future activities, method or place of
doing business, (ii) the Purchaser or any Seller to commence any litigation
against any entity in order to facilitate the consummation of any of the
Transactions or (iii) the Purchaser or any Seller to defend against any
litigation brought by any the FTC, DOJ or other Governmental Body seeking to
prevent the consummation of, or impose limitations on, any of the
Transactions.

     

    ARTICLE
IX

     

    EMPLOYEES
AND EMPLOYEE BENEFITS

     

    9.1          Transferred
and Retained Employees.

     

    (a)          
The parties recognize that the continued employment of the personnel of the
Sellers is significant to the business interests of both the Purchaser and the
Sellers. As a result, the orderly transfer of employment relationships is
important to both parties and the parties shall use their commercially
reasonable efforts to accomplish the transition with as little disruption to the
Business as possible. As of the Closing, the Purchaser shall offer employment to
substantially all of the Sellers’ operating Employees associated with all
Acquired Locations (other than the Minnesota Locations and the corporate offices
in Austin Texas, and North Andover, Massachusetts), and the Purchaser may offer
employment to any other Employee of the Sellers, in each case initially at the
Equal Aggregate Compensation Level (each of the Employees that accepts such an
offer and actually commences employment as of or after the Closing Date, the
“Transferred
Employees”, and all other Employees that have not been terminated by the
Sellers prior to the Closing Date, the “Retained Employees”).
The “Equal Aggregate
Compensation Level” means that the applicable Transferred Employee’s
level of base compensation and benefits, taken as a whole, will be substantially
similar to the Employee as his/her current level of aggregate base compensation
and Specified Benefits (defined below), taken as a whole, but excluding and
without considering any Employee Benefit Plans that are not the Specified
Benefits. “Specified
Benefits” means, to the extent the Transferred Employee was a participant
therein, (x) the 13 Employee Benefit Plans listed on Schedule 5.9 under
the heading “Medical, surgical, hospitalization, life insurance and other
“welfare” plans, funds or programs (within the meaning of Section 3(1) of
ERISA)” and the 4 Employee Benefit Plans listed on Schedule 5.9 under the
heading “Other employee benefit plans, funds, programs agreements or
arrangements,” and (y) the Magic Brands, LLC 401(k) Plan. Nothing in this
Agreement shall require the Purchaser to assume any Employee Benefit Plan or
prevent the Purchaser from enacting other plans or benefits.

     

    
      
        
        

      

      
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    In this
Agreement, the “Salaried Non-Store
Employees” means those Transferred Employees who are primarily
compensated on a salary, rather than an hourly or wage, basis and who do not
spend at least eighty percent (80%) of their working time working at one
restaurant.  The Purchaser shall either (a) employ each Salaried
Non-Store Employee at the Equal Aggregate Compensation Level for a period of at
least six (6) months after the Closing (the “Interim Period”),
unless such Salaried Non-Store Employee quits employment or is terminated for
cause; or (b) if the Purchaser terminates a Salaried Non-Store Employee’s
employment during the Interim Period without cause, the Purchaser shall pay to
that Salaried Non-Store Employee a severance payment in an amount equal to the
unpaid salary that would have been payable to that Salaried Non-Store Employee
during the remainder of the Interim Period.

     

    The
Purchaser intends to develop and implement one or more appropriate incentive
compensation plans to align compensation with the Purchaser’s business
objectives.

     

    Notwithstanding
the foregoing provisions, the Purchaser shall have no obligation to permit any
Transferred Employee or Retained Employee to rollover or otherwise transfer such
Employee’s account under any Employee Benefit Plan maintained by the Seller to
any “employee benefit plan” (as defined in Section 3(3) of ERISA) that the
Purchaser offers to the Transferred Employees or the Retained
Employees.  To the extent that any of the Employees has or would have
“COBRA” rights pursuant to Section 4980B of the Code or Part 6 of Title I of
ERISA and any regulations issued thereunder as an “M&A qualified
beneficiary” (as defined in such regulations), the Purchaser shall be solely
responsible for providing such required COBRA coverage to such Employees (and to
the spouse or any qualifying child of any such Employee) in accordance with
Treasury Regulation Section 1.4980B-9.

     

    Notwithstanding
anything herein to the contrary, the Purchaser shall have no obligation to
provide compensation or benefits with respect to Retained
Employees.  Except as otherwise required by law, all employees will be
employees-at-will.

     

    (b)           For
purposes of determining eligibility, vesting and the calculation of the amount
of vacation, severance or other benefits under any “employee benefit plan” (as
defined in Section 3(3) of ERISA) that the Purchaser offers to Transferred
Employees, the Purchaser will credit each Transferred Employee with his or her
months and years of service with the Sellers to the same extent as such
Transferred Employee was entitled immediately prior to the Closing to credit for
such service under any similar Employee Benefit Plan.

     

    
      
        
        

      

      
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    (c)           The
Sellers and the Purchaser shall cooperate to comply with and take all actions
necessary to minimize the obligations arising under the Worker Adjustment and
Retraining Notification Act of 1988 or any similar applicable state or local Law
requiring notice to employees in the event of a closing or layoff (the “WARN Act”) in
connection with any (i) plant closing as defined in the WARN Act affecting any
site of employment or one or more facilities or operating units within any site
of employment of the Sellers; (ii) mass layoff as defined in the WARN Act
affecting any site of employment of the Sellers; or (iii) similar action under
the WARN Act requiring notice to employees in the event of an employment loss or
layoff.  The Sellers shall send such notices under the WARN Act as the
Purchaser may reasonably request or as may be reasonably required.

     

    9.2          Employment Tax
Reporting.  With respect to Transferred Employees, the
Purchaser and the Sellers shall use the standard procedure set forth in Revenue
Procedure 2004-53, 2004-34 I.R.B. 320, for purposes of employment tax
reporting.

     

    ARTICLE
X

     

    CONDITIONS
TO CLOSING

     

    10.1        Conditions Precedent to
Obligations of the Purchaser.  The obligation of the Purchaser
to consummate the Transactions is subject to the fulfillment, on or prior to the
Closing Date, of each of the following conditions (any or all of which may be
waived by the Purchaser in whole or in part to the extent permitted by
applicable Law):

     

    (a)           the
representations and warranties of the Sellers contained in this Agreement (i)
that are not qualified by materiality or a Material Adverse Effect shall be true
and correct in all respects on and as of the Closing Date, except to the extent
expressly made as of an earlier date, in which case as of such earlier date, and
except to the extent that the failure of such representations and warranties to
be true and correct would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect and (ii) that are qualified by
materiality or Material Adverse Effect shall be true and correct in all respects
on and as of the Closing Date, except to the extent expressly made as of an
earlier date, in which case as of such earlier date; and the Purchaser shall
have received a certificate signed by authorized officers of the Sellers, dated
the Closing Date, to the foregoing effect;

     

    (b)           the
Sellers shall have performed and complied in all material respects with all
obligations and agreements required in this Agreement to be performed or
complied with by them prior to the Closing Date, and the Purchaser shall have
received a certificate signed by authorized officers of the Sellers, dated the
Closing Date, to the forgoing effect; and

     

    (c)           the
Sellers shall have delivered, or caused to be delivered, to the Purchaser all of
the items set forth in Section
4.2.

     

    
      
        
        

      

      
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    10.2        Conditions Precedent to
Obligations of the Sellers.  The obligations of the Sellers to
consummate the Transactions are subject to the fulfillment, prior to or on the
Closing Date, of each of the following conditions (any or all of which may be
waived by the Sellers in whole or in part to the extent permitted by applicable
Law):

     

    (a)         
The representations and warranties of the Purchaser contained in this Agreement
(i) that are not qualified by materiality shall be true and correct in all
respects on and as of the Closing Date, except to the extent expressly made as
of an earlier date, in which case as of such earlier date, and except to the
extent that the failure of such representations and warranties to be true and
correct would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the Purchaser or its ability to
consummate the Transactions and perform its obligations under this Agreement,
and (ii) that are qualified by materiality shall be true and correct in all
respects on and as of the Closing Date, except to the extent expressly made as
of an earlier date, in which case as of such earlier date, and the Sellers shall
have received a certificate signed by an authorized officer of the Purchaser,
dated the Closing Date, to the foregoing effect;

     

    (b)           the
Purchaser shall have performed and complied in all material respects with all
obligations and agreements required by this Agreement to be performed or
complied with by the Purchaser on or prior to the Closing Date, and the Sellers
shall have received a certificate signed by an authorized officer of the
Purchaser, dated the Closing Date, to the foregoing effect; and

     

    (c)           the
Purchaser shall have delivered to the Sellers all of the items set forth in
Section
4.3.

     

    10.3        Conditions Precedent to
Obligations of the Purchaser and the Sellers.  The respective
obligations of the Purchaser and the Sellers to consummate the Transactions are
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by the Purchaser and the
Sellers in whole or in part to the extent permitted by applicable
Law):

     

    (a)           there
shall not be in effect any Order of a Governmental Body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the consummation of
the Transactions;

     

    (b)           the
Bidding Procedures Order shall not have been stayed, vacated, modified or
supplemented in any material respect without the Purchaser’s prior written
consent;

     

    (c)           the
Bankruptcy Court shall have entered the Sale Order in form and substance
reasonably acceptable to the Debtors and the Purchaser;

     

    (d)           the
Sale Order shall have become a Final Order, unless the Purchaser, in its sole
discretion, waives that requirement; and

     

    (e)           if
applicable, the waiting period applicable to the consummation of the
Transactions under the HSR Act shall have expired or been earlier
terminated.

     

    
      
        
        

      

      
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    10.4        Frustration of Closing
Conditions.  No party may rely on the failure of any condition
set forth in Sections
10.1, 10.2 or 10.3, as the case may
be, if such failure was caused by such party’s failure to comply with any
provision of this Agreement.

     

    ARTICLE
XI

     

    TAXES

     

    11.1        Allocation of
Taxes.  Except with respect to matters provided for in Section 8.10, all
Taxes imposed on or with respect to the Purchased Assets on a periodic basis
(including but not limited to real estate Taxes and assessments) (“Periodic Taxes”)
relating to periods beginning on or before and ending after the Closing Date
shall be allocated on a per diem basis to the Sellers and the Purchaser,
respectively, in accordance with Section 164(d) of the Code.  All
Periodic Taxes relating to periods ending on or before the Closing Date shall be
allocated solely to the Sellers.  All Periodic Taxes relating to the
periods beginning after the Closing Date shall be allocated solely to the
Purchaser.  If the actual amounts to be prorated are not known as of
the Closing Date, the prorations shall be made on the basis of Periodic Taxes
assessed for the prior year.  Notwithstanding anything to the contrary
set forth in this Section 11.1 but
subject to the provisions of Section 8.8,
Liabilities for any Taxes determined by reference to income, capital gains,
gross income, gross receipts, sales, net profits, windfall profits or similar
items or resulting from a transfer of assets incurred during a period beginning
before and ending after the Closing Date shall be allocated solely to the
Sellers if such item accrued during the period ending on and including the
Closing Date.

     

    11.2        Purchase Price
Allocation.  The Sellers and the Purchaser shall allocate the
Purchase Price among the Sellers and among the Purchased Assets of each Seller
in accordance with a statement (the “Allocation
Statement”) provided by the Purchaser to the Sellers as soon as
practicable after the Closing.  The Purchase Price allocated to each
Seller shall be comprised first of the Assumed Liabilities of each Seller and
then such portion of each item comprising the Purchase Price as determined by
the Purchaser.  The Allocation Statement shall be prepared in
accordance with Section 1060 of the Code and in no event shall more than
$15,000,000 of the Purchase Price be allocated to the assets of
Magic.  Subject to the immediately preceding sentence, the Purchaser
and the Sellers shall file all Tax Returns (including Form 8594) consistent
with, and shall take no tax position inconsistent with the Allocation
Statement.

     

    11.3        Tax
Reporting.  The Purchaser and the Sellers shall each be
responsible for the preparation and filing of their own Tax
Returns.

     

    11.4        Cooperation and
Audits.  Without expanding the obligations of the parties
pursuant to Section
8.5, the Purchaser and the Sellers shall cooperate fully with each other
regarding tax matters, and shall make available to the other as reasonably
requested all information, records and documents relating to Taxes governed by
this Agreement until the expiration of the applicable statute of limitations or
extension thereof or the conclusion of all audits, appeals or litigation with
respect to such Taxes.

     

    
      
        
        

      

      
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    ARTICLE
XII

     

    MISCELLANEOUS

     

    12.1        No Survival of
Representations and Warranties.  The parties hereto agree that
the representations and warranties contained in this Agreement shall not survive
the Closing hereunder and no Person shall have any liability for any breach
thereof.  The parties hereto agree that the covenants contained in
this Agreement to be performed at or after the Closing shall survive the Closing
hereunder, and each party hereto shall be liable to the other after the Closing
for any breach thereof.

     

    12.2        Expenses.  Except
as otherwise provided in this Agreement, each of the Sellers, on the one hand,
and the Purchaser, on the other hand, shall bear its own expenses incurred in
connection with the negotiation and execution of this Agreement and each other
agreement, document and instrument contemplated by this Agreement and the
consummation of the Transactions.  The Purchaser shall pay any fee
payable to the FTC in connection with the pre-merger notification required by
the HSR Act.

     

    12.3        Injunctive
Relief.  Damages at law may be an inadequate remedy for the
breach of any of the covenants, promises or agreements contained in this
Agreement, and, accordingly, any party hereto shall be entitled to injunctive
relief with respect to any such breach, including without limitation specific
performance of such covenants, promises or agreements or an order enjoining a
party from any threatened, or from the continuation of any actual, breach of the
covenants, promises or agreements contained in this Agreement.  The
rights set forth in this Section 12.3 shall be
in addition to any other rights which a party hereto may have at law or in
equity pursuant to this Agreement.

     

    12.4        Submission
to Jurisdiction; Consent to Service of Process.

     

    (a)           Without
limiting any party’s right to appeal any order of the Bankruptcy Court, (i) the
Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of
this Agreement and to decide any claims or disputes which may arise or result
from, or be connected with, this Agreement, any breach or default hereunder, or
the Transactions, and (ii) any and all proceedings related to the foregoing
shall be filed and maintained only in the Bankruptcy Court, and the parties
hereby consent to and submit to the jurisdiction and venue of the Bankruptcy
Court and shall receive notices at such locations as indicated in Section 12.8 hereof;
provided, however, that if the
Bankruptcy Case has closed, the parties agree to unconditionally and irrevocably
submit to the exclusive jurisdiction of the United States District Court for the
District of Delaware and any appellate court thereof, for the resolution of any
such claim or dispute.  The parties hereby irrevocably waive, to the
fullest extent permitted by applicable Law, any objection which they may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum for the maintenance of such
dispute.  Each of the parties hereto agrees that a judgment in any
such dispute may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by Law.

     

    
      
        
        

      

      
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    (b)           Each
of the parties hereto hereby consents to process being served by any party to
this Agreement in any suit, action or proceeding by delivery of a copy thereof
in accordance with the provisions of Section
12.8.

     

    12.5        Waiver of Right to Trial by
Jury.  Each party to this Agreement waives any right to trial
by jury in any action, matter or proceeding regarding this Agreement or any
provision hereof.

     

    12.6        Entire Agreement; Amendments
and Waivers.  This Agreement (including the Schedules and
Exhibits hereto) collectively represent the entire understanding and agreement
between the parties hereto with respect to the subject matter
hereof.  This Agreement can be amended, supplemented or changed, and
any provision hereof can be waived, only by written instrument making specific
reference to this Agreement signed by the party against whom enforcement of any
such amendment, supplement, modification or waiver is sought.  No
action taken pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein.  The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a further or continuing waiver of such breach or as a waiver of
any other or subsequent breach.  No failure on the part of any party
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
such right, power or remedy by such party preclude any other or further exercise
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.

     

    12.7        Governing
Law.  This Agreement shall be governed by and construed in
accordance with the Laws of the State of Delaware applicable to contracts made
and performed in such State.

     

    12.8        Notices.  All
notices and other communications under this Agreement shall be in writing and
shall be deemed given (i) when delivered personally by hand, (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one (1) Business
Day following the day sent by overnight courier (with written confirmation of
receipt), in each case at the following addresses and facsimile numbers (or to
such other address or facsimile number as a party may have specified by notice
given to the other party pursuant to this provision):

     

    If to the
Sellers, to:

    

    c/o Magic
Brands, LLC

    5700
South MoPac Expressway

    Building
C, Suite 300

    Austin,
TX 78749

    Attn:
Peter Large

    Fax:
(800) 478-9236

     

    
      
        
        

      

      
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    with
copies to:

    

    Goulston
& Storrs, P.C.

    400
Atlantic Avenue

    Boston,
MA 02110-3333

    Attn:  Kitt
Sawitsky, Esq. and Janice S. Gross, Esq.

    Fax:  (617)
574-4112

    

    If to the
Purchaser, to:

    

    Luby's,
Inc.

    13111
Northwest Freeway, Suite 600

    Houston,
Texas  77040

    Attn:  Peter
Tropoli, General Counsel

    Fax:  (713)
329-6819

    

    With
copies to:

    

    Bracewell
& Giuliani LLP

    711
Louisiana Street, Suite 2300

    Houston,
Texas  77002

    Attn:  William
S. Anderson

    Fax:  (713)
437-5370

    

    and

    

    Fuqua
& Associates, P.C.

    2777
Allen Parkway, Suite 480

    Houston,
TX  77019-2162

    Attn:  Richard
L. Fuqua

    Fax:  (713)
960-1064

    

    and

    

    Morris,
Nichols, Arsht & Tunnell LLP.

    1201 N.
Market Street, 18th
Floor.

    Wilmington,
DE 19801

    Attn:
Gregory W. Werkheiser

    Fax:
(302) 425-4663

    

    12.9        Severability.  If
any term or other provision of this Agreement is invalid, illegal, or incapable
of being enforced by any Law or public policy, all other terms or provisions of
this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the Transactions is not affected in any manner
materially adverse to any party.  Upon such determination that any
term or other provision is invalid, illegal, or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner in order that the Transactions are consummated as originally
contemplated to the greatest extent possible.

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    12.10      Assignmen.  This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns.  Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any Person or entity not a party to this Agreement.  No assignment
of this Agreement or of any rights or obligations hereunder may be made by any
Seller or the Purchaser (by operation of law or otherwise) without the prior
written consent of the other parties hereto and any attempted assignment without
the required consents shall be void; provided that the
Purchaser may assign some or all of its rights and obligations hereunder to one
or more Affiliates formed by it prior to the Closing without the consent of any
Seller.  No assignment of any obligations hereunder shall relieve the
parties hereto of any such obligations.  Upon any such permitted
assignment, the references in this Agreement to the Sellers or the Purchaser
shall also apply to any such assignee unless the context otherwise
requires.

     

    12.11      Counterparts.  This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement

     

    [Remainder
of Page Intentionally Left Blank]

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first
written above.

     

    
      
        
          
            
              	
                      THE
      PURCHASER:

                    	 
      
	 
      	 
      
	
                      LUBY'S,
      INC.

                    	 
      
	 
      	 
      	 
      
	
                      By:

                    	 
      	 
      
	 
      	
                      Name:

                    	 
      
	 
      	
                      Title:

                    	 
      

            

          

        

      

    

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first
written above

     

    THE
SELLERS:

     

    
      
        
          
            
              
                
                  	
                          FUDDRUCKERS,
      INC.

                        	 
      	
                          R.
      WES, INC.

                        
	 
      	 
      	 
      	 
      	 
      
	
                          By:

                        	
                          /s/
      Peter Large

                        	 
      	
                          By:

                        	
                          /s/
      Michael Mason

                        
	 
      	
                          Name:  Peter
      Large

                        	 
      	 
      	
                          Name:  Michael
      Mason

                        
	 
      	
                          Title:  President

                        	 
      	 
      	
                          Title:  President

                        
	 
      	 
      	 
      	 
      	 
      
	
                          MAGIC
      BRANDS, LLC

                        	 
      	
                          FUDDRUCKERS
      OF HOWARD COUNTY, 
LLC

                        
	 
      	 
      	 
      
	
                          By:  KCI,
      LLC, its sole Manager

                        	 
      	
                          By:  Fuddruckers,
      Inc., its Managing Member

                        
	 
      	 
      	 
      
	
                          By:

                        	
                          /s/
      Peter Large

                        	 
      	
                          By:

                        	
                          /s/
      Peter Large

                        
	 
      	
                          Name:  Peter
      Large

                        	 
      	 
      	
                          Name:  Peter
      Large

                        
	 
      	
                          Title:  Manager

                        	 
      	 
      	
                          Title:  President

                        
	 
      	 
      	 
      	 
      	 
      
	
                          ATLANTIC
      RESTAURANT VENTURES, 
INC.

                        	 
      	
                          FUDDRUCKERS
      OF WHITE MARSH, LLC

                        
	 
      	 
      	 
      
	
                          By:

                        	
                          /s/
      Peter Large

                        	 
      	
                          By:  Fuddruckers,
      Inc., its Managing Member

                        
	 	
                          Name:  Peter
      Large

                        	 	 
	 
      	
                          Title:  Director

                        	 
      	
                          By:

                        	
                          /s/
      Peter Large

                        
	 
      	 	 
      	 
      	
                          Name:  Peter
      Large

                        
	 
      	 
      	 
      	 
      	
                          Title:  President

                        

                

              

            

          

        

      

    

    
      
         

      

      
        46

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