Document:

THIS
      WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGIS-TERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS OTHERWISE
      SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF DECEMBER
      15,
      2006, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED
      OR
      ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRA-TION STATEMENT FOR SUCH
      SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND
      SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
      REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE
      144
      OR REGULATION S UNDER SUCH ACT.

     

    
      	 	
              Right
                to

              Purchase
                

              ______________
                

              Shares
                of 

              Common
                

              Stock,
                $.0001 

              par
                value per
                

              share

            
	 	 
	 	 

    

    STOCK
      PURCHASE WARRANT

     

    THIS
      CERTIFIES THAT,
      for
      value received, _________________ or its registered assigns, is entitled to
      purchase from DealerAdvance, Inc., a Nevada corporation (the “Company”), at any
      time or from time to time during the period specified in Paragraph 2
      hereof, _________ fully paid and nonassessable shares of the Company’s Common
      Stock, $.0001 par value per share (the “Common Stock”), at an exercise price per
      share equal to $.05 (the “Exercise Price”). The term “Warrant Shares,” as used
      herein, refers to the shares of Common Stock purchasable hereunder. The Warrant
      Shares and the Exercise Price are subject to adjustment as provided in Paragraph
      4 hereof. The term “Warrants” means this Warrant and the other warrants issued
      pursuant to that certain Securities Purchase Agreement, dated December 15,
      2006,
      by and among the Company and the Buyers listed on the execution page thereof
      (the “Securities Purchase Agreement”), including any additional warrants
      issuable pursuant to Section 4(l) thereof. 

     

    This
      Warrant is subject to the following terms, provisions, and conditions:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1. Manner
      of Exercise; Issuance of Certificates; Payment for Shares. Subject
      to the provisions hereof and the Company obtaining Stockholder Approval as
      defined in Section 4(n) of the Securities Purchase Agreement, this Warrant
      may
      be exercised by the holder hereof, in whole or in part, by the surrender of
      this
      Warrant, together with a completed exercise agreement in the form attached
      hereto (the “Exercise Agreement”), to the Company during normal business hours
      on any business day at the Company’s principal executive offices (or such other
      office or agency of the Company as it may designate by notice to the holder
      hereof), and upon (i) payment to the Company in cash, by certified or offi-cial
      bank check or by wire transfer for the account of the Company of the Exercise
      Price for the Warrant Shares specified in the Exercise Agreement or (ii) if
      the
      resale of the Warrant Shares by the holder is not then registered pursuant
      to an
      effective registration statement under the Securities Act of 1933, as amended
      (the “Securities Act”), delivery to the Company of a written notice of an
      election to effect a “Cashless Exercise” (as defined in Section 11(c) below) for
      the Warrant Shares specified in the Exercise Agreement. The Warrant Shares
      so
      purchased shall be deemed to be issued to the holder hereof or such holder’s
      designee, as the record owner of such shares, as of the close of business on
      the
      date on which this Warrant shall have been surrendered, the completed Exercise
      Agreement shall have been deliv-ered, and payment shall have been made for
      such
      shares as set forth above. Certifi-cates for the Warrant Shares so purchased,
      representing the aggregate number of shares specified in the Exercise Agreement,
      shall be delivered to the holder hereof within a reasonable time, not exceeding
      three (3) business days, after this Warrant shall have been so exercised. The
      certificates so delivered shall be in such denominations as may be requested
      by
      the holder hereof and shall be registered in the name of such holder or such
      other name as shall be designated by such holder. If this Warrant shall have
      been exercised only in part, then, unless this Warrant has expired, the Company
      shall, at its expense, at the time of delivery of such certificates, deliver
      to
      the holder a new Warrant representing the number of shares with respect to
      which
      this Warrant shall not then have been exercised. In addition to all other
      available remedies at law or in equity, if the Company fails to deliver
      certificates for the Warrant Shares within three (3) business days after this
      Warrant is exercised, then the Company shall pay to the holder in cash a penalty
      (the “Penalty”) equal to 2% of the number of Warrant Shares that the holder is
      entitled to multiplied by the Market Price (as hereinafter defined) for each
      day
      that the Company fails to deliver certificates for the Warrant Shares. For
      example, if the holder is entitled to 100,000 Warrant Shares and the Market
      Price is $2.00, then the Company shall pay to the holder $4,000 for each day
      that the Company fails to deliver certificates for the Warrant Shares. The
      Penalty shall be paid to the holder by the fifth day of the month following
      the
      month in which it has accrued.

     

    Notwithstanding
      anything in this Warrant to the contrary, in no event shall the holder of this
      Warrant be entitled to exercise a number of Warrants (or portions thereof)
      in
      excess of the number of Warrants (or portions thereof) upon exercise of which
      the sum of (i) the number of shares of Common Stock beneficially owned by the
      holder and its affiliates (other than shares of Common Stock which may be deemed
      beneficially owned through the ownership of the unexercised Warrants and the
      unexercised or unconverted portion of any other securities of the Company
      (including the Notes (as defined in the Securities Purchase Agreement)) subject
      to a limitation on conversion or exercise analogous to the limitation contained
      herein) and (ii) the number of shares of Common Stock issuable upon exercise
      of
      the Warrants (or portions thereof) with respect to which the determination
      described herein is being made, would result in beneficial ownership by the
      holder and its affiliates of more than 4.9% of the outstanding shares of Common
      Stock. For purposes of the immediately preceding sentence, beneficial ownership
      shall be determined in accordance with Section 13(d) of the Securities Exchange
      Act of 1934, as amended, and Regulation 13D-G thereunder, except as otherwise
      provided in clause (i) of the preceding sentence. Notwithstanding anything
      to
      the contrary contained herein, the limitation on exercise of this Warrant set
      forth herein may not be amended without (i) the written consent of the holder
      hereof and the Company and (ii) the approval of a majority of shareholders
      of
      the Company.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    2. Period
      of Exercise. This
      Warrant is exercisable at any time or from time to time on or after the date
      on
      which this Warrant is issued and delivered pursuant to the terms of the
      Securities Purchase Agreement and before 6:00 p.m., New York, New York time
      on
      the fifth (5th)
      anniversary of the date of issuance (the “Exercise Period”).

     

    3. Certain
      Agreements of the Company.  The
      Company hereby covenants and agrees as follows:

     

    (a) Shares
      to be Fully Paid.
      All
      Warrant Shares will, upon issuance in accordance with the terms of this Warrant,
      be validly issued, fully paid, and nonassessable and free from all taxes, liens,
      and charges with respect to the issue thereof.

     

    (b) Reservation
      of Shares.
      During
      the Exercise Period, the Company shall at all times have authorized, and
      reserved for the purpose of issuance upon exercise of this Warrant, a
      suf-ficient number of shares of Common Stock to provide for the exercise of
      this
      Warrant.

     

    (c) Listing.
      The
      Company shall promptly secure the listing of the shares of Common Stock issuable
      upon exercise of the Warrant upon each national securities exchange or automated
      quotation system, if any, upon which shares of Common Stock are then listed
      (subject to official notice of issuance upon exercise of this Warrant) and
      shall
      maintain, so long as any other shares of Common Stock shall be so listed, such
      listing of all shares of Common Stock from time to time issuable upon the
      exercise of this Warrant; and the Company shall so list on each national
      securities exchange or automated quotation system, as the case may be, and
      shall
      maintain such listing of, any other shares of capital stock of the Company
      issuable upon the exercise of this Warrant if and so long as any shares of
      the
      same class shall be listed on such national securities exchange or automated
      quotation system.

     

    (d) Certain
      Actions Prohibited.
      The
      Company will not, by amendment of its charter or through any re-organi-zation,
      transfer of assets, consolidation, mer-ger, dissolution, issue or sale of
      securities, or any other voluntary action, avoid or seek to avoid the observance
      or performance of any of the terms to be observed or performed by it hereunder,
      but will at all times in good faith assist in the carrying out of all the
      provisions of this Warrant and in the taking of all such action as may
      reasonably be requested by the holder of this Warrant in order to protect the
      exercise privilege of the holder of this Warrant against dilu-tion or other
      impairment, consistent with the tenor and purpose of this Warrant. Without
      limiting the general-ity of the foregoing, the Company (i) will not increase
      the
      par value of any shares of Common Stock receivable upon the exercise of this
      Warrant above the Exercise Price then in effect, and (ii) will take all such
      actions as may be necessary or appropriate in order that the Company may validly
      and legally issue fully paid and nonassessable shares of Common Stock upon
      the
      exercise of this Warrant.

     

    (e) Successors
      and Assigns.
      This
      Warrant will be binding upon any entity succeeding to the Company by merger,
      consolidation, or acquisition of all or sub-stantially all the Company’s
      assets.

     

    4. Antidilution
      Provisions. During
      the Exercise Period, the Exercise Price and the number of Warrant Shares shall
      be subject to adjustment from time to time as provided in this Paragraph
      4.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    In
      the
      event that any adjustment of the Exercise Price as required herein results
      in a
      fraction of a cent, such Exercise Price shall be rounded up to the nearest
      cent.

     

    (a) Adjustment
      of Exercise Price and Number of Shares upon Issuance of Common
      Stock.
      Except
      as otherwise provided in Paragraphs 4(c) and 4(e) hereof, if and whenever on
      or
      after the date of issuance of this Warrant, the Company issues or sells, or
      in
      accordance with Paragraph 4(b) hereof is deemed to have issued or sold, any
      shares of Common Stock for no consideration or for a consideration per share
      (before deduction of reasonable expenses or commissions or underwriting
      discounts or allowances in connection therewith) less than the Market Price
      on
      the date of issuance (a “Dilutive Issuance”), then immediately upon the Dilutive
      Issuance, the Exercise Price will be reduced to a price determined by
      multiplying the Exercise Price in effect immediately prior to the Dilutive
      Issuance by a fraction, (i) the numerator of which is an amount equal to the
      sum
      of (x) the number of shares of Common Stock actually outstanding immediately
      prior to the Dilutive Issuance, plus (y) the quotient of the aggregate
      consideration, calculated as set forth in Paragraph 4(b) hereof, received by
      the
      Company upon such Dilutive Issuance divided by the Market Price in effect
      immediately prior to the Dilutive Issuance, and (ii) the denominator of which
      is
      the total number of shares of Common Stock Deemed Outstanding (as defined below)
      immediately after the Dilutive Issuance. 

     

    (b) Effect
      on Exercise Price of Certain Events.
      For
      purposes of determining the adjusted Exercise Price under Paragraph 4(a) hereof,
      the following will be applicable:

     

    (i) Issuance
      of Rights or Options.
      If the
      Company in any manner issues or grants any warrants, rights or options, whether
      or not immediately exercisable, to subscribe for or to purchase Common Stock
      or
      other securities convertible into or exchangeable for Common Stock (“Convertible
      Securities”) (such warrants, rights and options to purchase Common Stock or
      Convertible Securities are hereinafter referred to as “Options”) and the price
      per share for which Common Stock is issuable upon the exercise of such Options
      is less than the Market Price on the date of issuance or grant of such Options,
      then the maximum total number of shares of Common Stock issuable upon the
      exercise of all such Options will, as of the date of the issuance or grant
      of
      such Options, be deemed to be outstanding and to have been issued and sold
      by
      the Company for such price per share. For purposes of the preceding sentence,
      the “price per share for which Common Stock is issuable upon the exercise of
      such Options” is determined by dividing (i) the total amount, if any, received
      or receivable by the Company as consideration for the issuance or granting
      of
      all such Options, plus the minimum aggregate amount of additional consideration,
      if any, payable to the Company upon the exercise of all such Options, plus,
      in
      the case of Convertible Securities issuable upon the exercise of such Options,
      the minimum aggregate amount of additional consideration payable upon the
      conversion or exchange thereof at the time such Convertible Securities first
      become convertible or exchangeable, by (ii) the maximum total number of shares
      of Common Stock issuable upon the exercise of all such Options (assuming full
      conversion of Convertible Securities, if applicable). No further adjustment
      to
      the Exercise Price will be made upon the actual issuance of such Common Stock
      upon the exercise of such Options or upon the conversion or exchange of
      Convertible Securities issuable upon exercise of such Options.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities, whether or
      not
      immediately convertible (other than where the same are issuable upon the
      exercise of Options) and the price per share for which Common Stock is issuable
      upon such conversion or exchange is less than the Market Price on the date
      of
      issuance, then the maximum total number of shares of Common Stock issuable
      upon
      the conversion or exchange of all such Convertible Securities will, as of the
      date of the issuance of such Convertible Securities, be deemed to be outstanding
      and to have been issued and sold by the Company for such price per share. For
      the purposes of the preceding sentence, the “price per share for which Common
      Stock is issuable upon such conversion or exchange” is determined by dividing
      (i) the total amount, if any, received or receivable by the Company as
      consideration for the issuance or sale of all such Convertible Securities,
      plus
      the minimum aggregate amount of additional consideration, if any, payable to
      the
      Company upon the conversion or exchange thereof at the time such Convertible
      Securities first become convertible or exchangeable, by (ii) the maximum total
      number of shares of Common Stock issuable upon the conversion or exchange of
      all
      such Convertible Securities. No further adjustment to the Exercise Price will
      be
      made upon the actual issuance of such Common Stock upon conversion or exchange
      of such Convertible Securities.

     

    (iii) Change
      in Option Price or Conversion Rate.
      If there
      is a change at any time in (i) the amount of additional consideration payable
      to
      the Company upon the exercise of any Options; (ii) the amount of additional
      consideration, if any, payable to the Company upon the conversion or exchange
      of
      any Convertible Securities; or (iii) the rate at which any Convertible
      Securities are convertible into or exchangeable for Common Stock (other than
      under or by reason of provisions designed to protect against dilution), the
      Exercise Price in effect at the time of such change will be readjusted to the
      Exercise Price which would have been in effect at such time had such Options
      or
      Convertible Securities still outstanding provided for such changed additional
      consideration or changed conversion rate, as the case may be, at the time
      initially granted, issued or sold.

     

    (iv) Treatment
      of Expired Options and Unexercised Convertible
      Securities.
      If, in
      any case, the total number of shares of Common Stock issuable upon exercise
      of
      any Option or upon conversion or exchange of any Convertible Securities is
      not,
      in fact, issued and the rights to exercise such Option or to convert or exchange
      such Convertible Securities shall have expired or terminated, the Exercise
      Price
      then in effect will be readjusted to the Exercise Price which would have been
      in
      effect at the time of such expiration or termination had such Option or
      Convertible Securities, to the extent outstanding immediately prior to such
      expiration or termination (other than in respect of the actual number of shares
      of Common Stock issued upon exercise or conversion thereof), never been
      issued.

     

    (v) Calculation
      of Consideration Received.
      If any
      Common Stock, Options or Convertible Securities are issued, granted or sold
      for
      cash, the consideration received therefor for purposes of this Warrant will
      be
      the amount received by the Company therefor, before deduction of reasonable
      commissions, underwriting discounts or allowances or other reasonable expenses
      paid or incurred by the Company in connection with such issuance, grant or
      sale.
      In case any Common Stock, Options or Convertible Securities are issued or sold
      for a consideration part or all of which shall be other than cash, the amount
      of
      the consideration other than cash received by the Company will be the fair
      value
      of such consideration, except where such consideration consists of securities,
      in which case the amount of consideration received by the Company will be the
      Market Price thereof as of the date of receipt. In case any Common Stock,
      Options or Convertible Securities are issued in connection with any acquisition,
      merger or consolidation in which the Company is the surviving corporation,
      the
      amount of consideration therefor will be deemed to be the fair value of such
      portion of the net assets and business of the non-surviving corporation as
      is
      attributable to such Common Stock, Options or Convertible Securities, as the
      case may be. The fair value of any consideration other than cash or securities
      will be determined in good faith by the Board of Directors of the
      Company.

     

    
      
         

      

      
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    (vi) Exceptions
      to Adjustment of Exercise Price.
      No
      adjustment to the Exercise Price will be made (i) upon the exercise of any
      warrants, options or convertible securities granted, issued and outstanding
      on
      the date of issuance of this Warrant; (ii) upon the grant or exercise of any
      stock or options which may hereafter be granted or exercised under any employee
      benefit plan, stock option plan or restricted stock plan of the Company now
      existing or to be implemented in the future, so long as the issuance of such
      stock or options is approved by a majority of the independent members of the
      Board of Directors of the Company or a majority of the members of a committee
      of
      independent directors established for such purpose; or (iii) upon the exercise
      of the Warrants.

     

    (c) Subdivision
      or Combination of Common Stock.
      If the
      Company at any time subdivides (by any stock split, stock dividend,
      recapitalization, reorganization, reclassification or otherwise) the shares
      of
      Common Stock acquirable hereunder into a greater number of shares, then, after
      the date of record for effecting such subdivision, the Exercise Price in effect
      immediately prior to such subdivision will be proportionately reduced. If the
      Company at any time combines (by reverse stock split, recapitalization,
      reorganization, reclassification or otherwise) the shares of Common Stock
      acquirable hereunder into a smaller number of shares, then, after the date
      of
      record for effecting such combination, the Exercise Price in effect immediately
      prior to such combination will be proportionately increased.

     

    (d) Adjustment
      in Number of Shares.
      Upon
      each adjustment of the Exercise Price pursuant to the provisions of this
      Paragraph 4, the number of shares of Common Stock issuable upon exercise of
      this
      Warrant shall be adjusted by multiplying a number equal to the Exercise Price
      in
      effect immediately prior to such adjustment by the number of shares of Common
      Stock issuable upon exercise of this Warrant immediately prior to such
      adjustment and dividing the product so obtained by the adjusted Exercise
      Price.

     

    (e) Consolidation,
      Merger or Sale.
      In case
      of any consolidation of the Company with, or merger of the Company into any
      other corporation, or in case of any sale or conveyance of all or substantially
      all of the assets of the Company other than in connection with a plan of
      complete liquidation of the Company, then as a condition of such consolidation,
      merger or sale or conveyance, adequate provision will be made whereby the holder
      of this Warrant will have the right to acquire and receive upon exercise of
      this
      Warrant in lieu of the shares of Common Stock immediately theretofore acquirable
      upon the exercise of this Warrant, such shares of stock, securities or assets
      as
      may be issued or payable with respect to or in exchange for the number of shares
      of Common Stock immediately theretofore acquirable and receivable upon exercise
      of this Warrant had such consolidation, merger or sale or conveyance not taken
      place. In any such case, the Company will make appropriate provision to insure
      that the provisions of this Paragraph 4 hereof will thereafter be applicable
      as
      nearly as may be in relation to any shares of stock or securities thereafter
      deliverable upon the exercise of this Warrant. The Company will not effect
      any
      consolidation, merger or sale or conveyance unless prior to the consummation
      thereof, the successor corporation (if other than the Company) assumes by
      written instrument the obligations under this Paragraph 4 and the obligations
      to
      deliver to the holder of this Warrant such shares of stock, securities or assets
      as, in accordance with the foregoing provisions, the holder may be entitled
      to
      acquire.

     

    
      
         

      

      
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    (f) Distribution
      of Assets.
      In case
      the Company shall declare or make any distribution of its assets (including
      cash) to holders of Common Stock as a partial liquidating dividend, by way
      of
      return of capital or otherwise, then, after the date of record for determining
      shareholders entitled to such distribution, but prior to the date of
      distribution, the holder of this Warrant shall be entitled upon exercise of
      this
      Warrant for the purchase of any or all of the shares of Common Stock subject
      hereto, to receive the amount of such assets which would have been payable
      to
      the holder had such holder been the holder of such shares of Common Stock on
      the
      record date for the determination of shareholders entitled to such
      distribution.

     

    (g) Notice
      of Adjustment.
      Upon the
      occurrence of any event which requires any adjustment of the Exercise Price,
      then, and in each such case, the Company shall give notice thereof to the holder
      of this Warrant, which notice shall state the Exercise Price resulting from
      such
      adjustment and the increase or decrease in the number of Warrant Shares
      purchasable at such price upon exercise, setting forth in reasonable detail
      the
      method of calculation and the facts upon which such calculation is based. Such
      calculation shall be certified by the Chief Financial Officer of the
      Company.

     

    (h) Minimum
      Adjustment of Exercise Price.
      No
      adjustment of the Exercise Price shall be made in an amount of less than 1%
      of
      the Exercise Price in effect at the time such adjustment is otherwise required
      to be made, but any such lesser adjustment shall be carried forward and shall
      be
      made at the time and together with the next subsequent adjustment which,
      together with any adjustments so carried forward, shall amount to not less
      than
      1% of such Exercise Price.

     

    (i) No
      Fractional Shares.
      No
      fractional shares of Common Stock are to be issued upon the exercise of this
      Warrant, but the Company shall pay a cash adjustment in respect of any
      fractional share which would otherwise be issuable in an amount equal to the
      same fraction of the Market Price of a share of Common Stock on the date of
      such
      exercise.

     

    (j) Other
      Notices.
      In case
      at any time:

     

    (i) the
      Company shall declare any dividend upon the Common Stock payable in shares
      of
      stock of any class or make any other distribution (including dividends or
      distributions payable in cash out of retained earnings) to the holders of the
      Common Stock;

     

    (ii) the
      Company shall offer for subscription pro rata to the holders of the Common
      Stock
      any additional shares of stock of any class or other rights;

     

    (iii) there
      shall be any capital reorganiza-tion of the Company, or reclassification of
      the
      Common Stock, or consolidation or merger of the Company with or into, or sale
      of
      all or substan-tially all its assets to, another corporation or entity;
      or

     

    (iv) there
      shall be a voluntary or involun-tary dissolution, liquidation or winding up
      of
      the Company;

     

    
      
         

      

      
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    then,
      in
      each such case, the Company shall give to the holder of this Warrant (a) notice
      of the date on which the books of the Company shall close or a record shall
      be
      taken for determining the holders of Common Stock entitled to receive any such
      divi-dend, distribution, or subscription rights or for determining the holders
      of Common Stock entitled to vote in respect of any such reorganization,
      reclassification, consolidation, merger, sale, dissolution, liquidation or
      winding-up and (b) in the case of any such reorganization, reclassification,
      consolidation, merger, sale, dissolution, liquidation or winding-up, notice
      of
      the date (or, if not then known, a reasonable approximation thereof by the
      Company) when the same shall take place. Such notice shall also specify the
      date
      on which the holders of Common Stock shall be entitled to receive such dividend,
      distribution, or subscription rights or to exchange their Common Stock for
      stock
      or other securities or property deliverable upon such reorganization,
      re-classification, consolidation, merger, sale, dissolution, liquidation, or
      winding-up, as the case may be. Such notice shall be given at least thirty
      (30)
      days prior to the record date or the date on which the Company’s books are
      closed in respect thereto. Failure to give any such notice or any defect therein
      shall not affect the validity of the proceedings referred to in clauses (i),
      (ii), (iii) and (iv) above.

     

    (k) Certain
      Events.
      If any
      event occurs of the type contemplated by the adjustment provisions of this
      Paragraph 4 but not expressly provided for by such provisions, the Company
      will
      give notice of such event as provided in Paragraph 4(g) hereof, and the
      Company’s Board of Directors will make an appropriate adjustment in the Exercise
      Price and the number of shares of Common Stock acquirable upon exercise of
      this
      Warrant so that the rights of the holder shall be neither enhanced nor
      diminished by such event.

     

    (l) Certain
      Definitions. 

     

    (i) “Common
      Stock Deemed Outstanding”
      shall
      mean the number of shares of Common Stock actually outstanding (not including
      shares of Common Stock held in the treasury of the Company), plus (x) pursuant
      to Paragraph 4(b)(i) hereof, the maximum total number of shares of Common Stock
      issuable upon the exercise of Options, as of the date of such issuance or grant
      of such Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the
      maximum total number of shares of Common Stock issuable upon conversion or
      exchange of Convertible Securities, as of the date of issuance of such
      Convertible Securities, if any. 

     

    (ii) “Market
      Price,”
      as of
any date, (i) means the average of the last reported sale prices for the shares
      of Common Stock on the OTCBB for the five (5) Trading Days immediately preceding
      such date as reported by Bloomberg, or (ii) if the OTCBB is not the principal
      trading market for the shares of Common Stock, the average of the last reported
      sale prices on the principal trading market for the Common Stock during the
      same
      period as reported by Bloomberg, or (iii) if market value cannot be calculated
      as of such date on any of the foregoing bases, the Market Price shall be the
      fair market value as reasonably determined in good faith by (a) the Board of
      Directors of the Company or, at the option of a majority-in-interest of the
      holders of the outstanding Warrants by (b) an independent investment bank of
      nationally recognized standing in the valuation of businesses similar to the
      business of the corporation. The manner of determining the Market Price of
      the
      Common Stock set forth in the foregoing definition shall apply with respect
      to
      any other security in respect of which a determination as to market value must
      be made hereunder.

     

    
      
         

      

      
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    (iii) “Common
      Stock,”
      for
      purposes of this Paragraph 4, includes the Common Stock, par value $.0001 per
      share, and any additional class of stock of the Company having no preference
      as
      to dividends or distributions on liquidation, provided that the shares
      purchasable pursuant to this Warrant shall include only shares of Common Stock,
      par value $.0001 per share, in respect of which this Warrant is exercisable,
      or
      shares resulting from any subdivision or combination of such Common Stock,
      or in
      the case of any reorganization, reclassification, consolidation, merger, or
      sale
      of the character referred to in Paragraph 4(e) hereof, the stock or other
      securities or property provided for in such Paragraph.

     

    5. Issue
      Tax. The
      issuance of certificates for Warrant Shares upon the exercise of this Warrant
      shall be made without charge to the holder of this Warrant or such shares for
      any issuance tax or other costs in respect thereof, provided that the Company
      shall not be required to pay any tax which may be payable in respect of any
      transfer involved in the issuance and delivery of any certificate in a name
      other than the holder of this Warrant.

     

    6. No
      Rights or Liabilities as a Shareholder. This
      Warrant shall not entitle the holder hereof to any voting rights or other rights
      as a shareholder of the Company. No provision of this Warrant, in the absence
      of
      affirmative action by the holder hereof to purchase Warrant Shares, and no
      mere
      enumeration herein of the rights or privileges of the holder hereof, shall
      give
      rise to any liability of such holder for the Exercise Price or as a shareholder
      of the Company, whether such liability is asserted by the Company or by
      creditors of the Company.

     

    7. Transfer,
      Exchange, and Replacement of Warrant.

     

    (a) Restriction
      on Transfer.
      This
      Warrant and the rights granted to the holder hereof are transferable, in whole
      or in part, upon surrender of this Warrant, together with a properly executed
      assignment in the form attached hereto, at the office or agency of the Company
      referred to in Paragraph 7(e) below, pro-vided, however, that any transfer
      or assignment shall be subject to the conditions set forth in Paragraph 7(f)
      hereof and to the applicable provisions of the Securities Purchase Agreement.
      Until due presentment for registration of transfer on the books of the Company,
      the Company may treat the registered holder hereof as the owner and holder
      hereof for all purposes, and the Company shall not be affected by any notice
      to
      the con-trary. Notwithstanding anything to the contrary contained herein, the
      registration rights described in Paragraph 8 are assignable only in accordance
      with the provisions of that certain Registration Rights Agreement, dated June
      18, 2004, by and among the Company and the other signatories thereto (the
“Registration Rights Agreement”).

     

    (b) Warrant
      Exchangeable for Different Denomina-tions.
      This
      Warrant is exchange-able, upon the surrender hereof by the holder hereof at
      the
      office or agency of the Company referred to in Paragraph 7(e) below, for new
      Warrants of like tenor representing in the aggregate the right to purchase
      the
      number of shares of Common Stock which may be purchased hereunder, each of
      such
      new Warrants to represent the right to purchase such number of shares as shall
      be designated by the holder hereof at the time of such surrender.

     

    (c) Replacement
      of Warrant.
      Upon
      receipt of evi-dence reasonably satisfactory to the Company of the loss, theft,
      destruction, or mutilation of this Warrant and, in the case of any such loss,
      theft, or destruc-tion, upon delivery of an indemnity agreement reason-ably
      satisfactory in form and amount to the Company, or, in the case of any such
      mutilation, upon surrender and cancellation of this Warrant, the Company, at
      its
      expense, will execute and deliver, in lieu thereof, a new Warrant of like
      tenor.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    (d) Cancellation;
      Payment of Expenses.
      Upon the
      surrender of this Warrant in connection with any trans-fer, exchange, or
      replacement as provided in this Paragraph 7, this Warrant shall be promptly
      canceled by the Company. The Company shall pay all taxes (other than securities
      transfer taxes) and all other expenses (other than legal expenses, if any,
      incurred by the holder or transferees) and charges payable in connection with
      the preparation, execution, and delivery of Warrants pursuant to this Paragraph
      7.

     

    (e) Register.
      The
      Company shall maintain, at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee and each prior owner of this
      Warrant.

     

    (f) Exercise
      or Transfer Without Registration.
      If, at
      the time of the surrender of this Warrant in connection with any exercise,
      transfer, or exchange of this Warrant, this Warrant (or, in the case of any
      exercise, the Warrant Shares issuable hereunder), shall not be registered under
      the Securities Act of 1933, as amended (the “Securities Act”) and under
      applicable state securities or blue sky laws, the Company may require, as a
      condition of allowing such exercise, transfer, or exchange, (i) that the holder
      or transferee of this Warrant, as the case may be, furnish to the Company a
      written opinion of counsel, which opinion and counsel are acceptable to the
      Company, to the effect that such exercise, transfer, or exchange may be made
      without registration under said Act and under applicable state securities or
      blue sky laws, (ii) that the holder or transferee execute and deliver to the
      Company an investment letter in form and substance acceptable to the Company
      and
      (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)
      promulgated under the Securities Act; provided that no such opinion, letter
      or
      status as an “accredited investor” shall be required in connection with a
      transfer pursuant to Rule 144 under the Securities Act. The first holder of
      this
      Warrant, by taking and holding the same, represents to the Company that such
      holder is acquiring this Warrant for investment and not with a view to the
      distribution thereof. 

     

    8. Registration
      Rights. The
      initial holder of this Warrant (and certain assignees thereof) is entitled
      to
      the benefit of such registration rights in respect of the Warrant Shares as
      are
      set forth in Section 2 of the Registration Rights Agreement.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    9. Notices.
      All
      notices, requests, and other communications required or permitted to be given
      or
      delivered hereunder to the holder of this Warrant shall be in writing, and
      shall
      be personally delivered, or shall be sent by certified or registered mail or
      by
      recognized overnight mail courier, postage prepaid and addressed, to such holder
      at the address shown for such holder on the books of the Company, or at such
      other address as shall have been furnished to the Company by notice from such
      holder. All notices, requests, and other communications required or permitted
      to
      be given or delivered hereunder to the Company shall be in writing, and shall
      be
      personally delivered, or shall be sent by certified or registered mail or by
      recognized overnight mail courier, postage prepaid and addressed, to the office
      of the Company at 16801 Addison Road, Suite 310, Addison, TX 75001, Attention:
      President and Chief Executive Officer, or at such other address as shall have
      been furnished to the holder of this Warrant by notice from the Company. Any
      such notice, request, or other communication may be sent by facsimile, but
      shall
      in such case be subsequently confirmed by a writing personally delivered or
      sent
      by certified or registered mail or by recognized overnight mail courier as
      provided above. All notices, requests, and other communications shall be deemed
      to have been given either at the time of the receipt thereof by the person
      entitled to re-ceive such notice at the address of such person for purposes
      of
      this Paragraph 9, or, if mailed by registered or certified mail or with a
      recognized overnight mail courier upon deposit with the United States Post
      Office or such overnight mail courier, if postage is prepaid and the mailing
      is
      properly addressed, as the case may be.

     

    10. Governing
      Law. THIS
      WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
      LAWS
      OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
      LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
      UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO
      ANY
      DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN CONNECTION
      HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES
      IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
      SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
      UPON
      A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
      SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN
      SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
      BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH
      SUIT
      OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
      BY
      SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
      PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR
      ALL
      FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
      IN CONNECTION WITH SUCH DISPUTE.

     

    11. Miscellaneous.
      (a) Amendments.
      This
      Warrant and any provision hereof may only be amended by an instrument in writing
      signed by the Company and the holder hereof.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    (b) Descriptive
      Headings.
      The
      descriptive headings of the several paragraphs of this Warrant are in-serted
      for
      purposes of reference only, and shall not affect the meaning or construction
      of
      any of the provisions hereof.

     

    (c) Cashless
      Exercise.
      Notwithstanding anything to the contrary contained in this Warrant, if the
      resale of the Warrant Shares by the holder is not then registered pursuant
      to an
      effective registration statement under the Securities Act, this Warrant may
      be
      exercised by presentation and surrender of this Warrant to the Company at its
      principal executive offices with a written notice of the holder’s intention to
      effect a cashless exercise, including a calculation of the number of shares
      of
      Common Stock to be issued upon such exercise in accordance with the terms hereof
      (a “Cashless Exercise”). In the event of a Cashless Exercise, in lieu of paying
      the Exercise Price in cash, the holder shall surrender this Warrant for that
      number of shares of Common Stock determined by multiplying the number of Warrant
      Shares to which it would otherwise be entitled by a fraction, the numerator
      of
      which shall be the difference between the then current Market Price per share
      of
      the Common Stock and the Exercise Price, and the denominator of which shall
      be
      the then current Market Price per share of Common Stock. For example, if the
      holder is exercising 100,000 Warrants with a per Warrant exercise price of
      $0.75
      per share through a cashless exercise when the Common Stock’s current Market
      Price per share is $2.00 per share, then upon such Cashless Exercise the holder
      will receive 62,500 shares of Common Stock.

     

    (d) Remedies.
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the holder, by vitiating the intent and purpose of the
      transaction contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for a breach of its obligations under this Warrant will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Warrant, that the holder shall be entitled,
      in
      addition to all other available remedies at law or in equity, and in addition
      to
      the penalties assessable herein, to an injunction or injunctions restraining,
      preventing or curing any breach of this Warrant and to enforce specifically
      the
      terms and provisions thereof, without the necessity of showing economic loss
      and
      without any bond or other security being required.

     

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

    

 

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be signed by its duly authorized
      officer.

     

    DEALERADVANCE,
      INC.

    

    

    

    By:
      _______________________________

    Steven
      E.
      Humphries

    President
      and Chief Executive Officer

    

     

    Dated
      as
      of February 12, 2007

     

    

 

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    FORM
      OF EXERCISE AGREEMENT

     

    

     

    Dated:
      ________ __, 200_

     

    

     

    To: ______________________

     

    

     

    

     

    The
      undersigned, pursuant to the provisions set forth in the within Warrant, hereby
      agrees to purchase ________ shares of Common Stock covered by such Warrant,
      and
      makes pay-ment herewith in full therefor at the price per share provided by
      such
      Warrant in cash or by certified or official bank check in the amount of, or,
      if
      the resale of such Common Stock by the undersigned is not currently registered
      pursuant to an effective registration statement under the Securities Act of
      1933, as amended, by surrender of securities issued by the Company (including
      a
      portion of the Warrant) having a market value (in the case of a portion of
      this
      Warrant, determined in accordance with Section 11(c) of the Warrant) equal
      to
      $_________. Please issue a certificate or certifi-cates for such shares of
      Common Stock in the name of and pay any cash for any fractional share
      to:

     

    

     

    Name:
       ______________________________

    

    

    Signature: 

    Address:____________________________

    _____________________________

    

    

    Note: The
      above
      signature should correspond exactly with the name on the face of the within
      Warrant, if applicable.

    

     

    and,
      if
      said number of shares of Common Stock shall not be all the shares purchasable
      under the within Warrant, a new Warrant is to be issued in the name of said
      undersigned covering the balance of the shares purchasable thereunder less
      any
      frac-tion of a share paid in cash.

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    FORM
      OF ASSIGNMENT

    

     

    

     

    FOR
      VALUE RECEIVED,
      the
      undersigned hereby sells, assigns, and transfers all the rights of the
      undersigned under the within Warrant, with respect to the number of shares
      of
      Common Stock covered thereby set forth hereinbelow, to:

    

     

    Name
      of Assignee  
  Address  
   No
      of
      Shares

     

    

     

    

     

    

     

    ,
      and
      hereby irrevocably constitutes and appoints ___________________________________
      as agent and attorney-in-fact to trans-fer said Warrant on the books of the
      within-named corporation, with full power of substitution in the
      premises.

     

    

     

    Dated: ________
      __, 200_

     

    

     

    In
      the
      presence of:                       
      ______________________________

     

    Name:______________________________

    

     

    Signature:_________________________

    Title
      of
      Signing Officer or Agent (if any):

    ______________________________

    Address: ______________________________

    ______________________________

    

    

    
      	 	
              Note:

            	
              The
                above signature should correspond exactly with the name on the face
                of the
                within Warrant, if applicable.Unassociated Document

    

    CREDIT
      AND GUARANTY AGREEMENT

    

    by
      and
      among

    

    BEL
      FUSE INC., 

    as
      Borrower,

    

    THE
      SUBSIDIARY GUARANTORS PARTY HERETO

    

    and

    

    BANK
      OF AMERICA, N.A.,

    as
      Lender

    

    Dated
      February 12, 2007

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE
      OF CONTENTS

     

    
      	 	 	 	
              Page

            
	 	 	 	 
	
              ARTICLE
                1 

            	
              DEFINITIONS
                AND RULES OF INTERPRETATION

            	 	
              1

            
	
              Section
                1.1

            	
              Definitions

            	 	
              1

            
	
              Section
                1.2

            	
              Accounting
                Terms

            	 	
              13

            
	
              Section
                1.3

            	
              Rules
                of Interpretation

            	 	
              13

            
	 	 	 	 
	
              ARTICLE
                2 

            	
              AMOUNT
                AND TERMS OF THE LOANS

            	 	
              14

            
	
              Section
                2.1

            	
              Loans

            	 	
              14

            
	
              Section
                2.2

            	
              Procedure
                for Borrowing

            	 	
              14

            
	
              Section
                2.3

            	
              Termination
                and Reduction of Revolving Commitment

            	 	
              15

            
	
              Section
                2.4

            	
              Prepayments
                of the Loans

            	 	
              15

            
	
              Section
                2.5

            	
              Payments;
                Set-Off

            	 	
              15

            
	 	 	 	 
	
              ARTICLE
                3 

            	
              INTEREST,
                FEES, YIELD PROTECTIONS, ETC.

            	 	
              16

            
	
              Section
                3.1

            	
              Interest
                Rate and Payment Dates

            	 	
              16

            
	
              Section
                3.2

            	
              Fees

            	 	
              17

            
	
              Section
                3.3

            	
              Conversions

            	 	
              17

            
	
              Section
                3.4

            	
              Concerning
                Interest Periods

            	 	
              18

            
	
              Section
                3.5

            	
              Funding
                Loss

            	 	
              19

            
	
              Section
                3.6

            	
              Increased
                Costs; Illegality, etc.

            	 	
              19

            
	
              Section
                3.7

            	
              Taxes

            	 	
              20

            
	
              Section
                3.8

            	
              Changes
                of Lending Offices

            	 	
              21

            
	 	 	 	 
	
              ARTICLE
                4 

            	
              REPRESENTATIONS
                AND WARRANTIES

            	 	
              21

            
	
              Section
                4.1

            	
              Organization
                and Power

            	 	
              21

            
	
              Section
                4.2

            	
              Authorization;
                Enforceability

            	 	
              22

            
	
              Section
                4.3

            	
              Governmental
                Approvals; No Conflicts

            	 	
              22

            
	
              Section
                4.4

            	
              Financial
                Condition; No Material Adverse Change

            	 	
              22

            
	
              Section
                4.5

            	
              Properties

            	 	
              23

            
	
              Section
                4.6

            	
              Litigation

            	 	
              23

            
	
              Section
                4.7

            	
              Environmental
                Matters

            	 	
              23

            
	
              Section
                4.8

            	
              Compliance
                with Laws and Agreements; No Default

            	 	
              24

            
	
              Section
                4.9

            	
              Investment
                Companies and other Regulated Entities

            	 	
              24

            
	
              Section
                4.10

            	
              Federal
                Reserve Regulations

            	 	
              24

            
	
              Section
                4.11

            	
              ERISA

            	 	
              24

            
	
              Section
                4.12

            	
              Taxes

            	 	
              25

            
	
              Section
                4.13

            	
              Subsidiaries

            	 	
              25

            
	
              Section
                4.14

            	
              Absence
                of Certain Restrictions

            	 	
              25

            
	
              Section
                4.15

            	
              Labor
                Relations

            	 	
              25

            
	
              Section
                4.16

            	
              Insurance

            	 	
              25

            
	
              Section
                4.17

            	
              Financial
                Condition

            	 	
              25

            
	
              Section
                4.18

            	
              No
                Misrepresentation

            	 	
              26

            
	 	 	 	 
	
              ARTICLE
                5 

            	
              CONDITIONS

            	 	
              26

            
	
              Section
                5.1

            	
              Effective
                Date

            	 	
              26

            
	
              Section
                5.2

            	
              Each
                Borrowing

            	 	
              27

            

    

     

    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

     

    
      	
              ARTICLE
                6 

            	
              AFFIRMATIVE
                COVENANTS

            	 	
              28

            
	
              Section
                6.1

            	
              Financial
                Statements and Information

            	 	
              28

            
	
              Section
                6.2

            	
              Notice
                of Material Events

            	 	
              30

            
	
              Section
                6.3

            	
              Existence;
                Conduct of Business

            	 	
              30

            
	
              Section
                6.4

            	
              Payment
                of Obligations

            	 	
              30

            
	
              Section
                6.5

            	
              Maintenance
                of Properties

            	 	
              30

            
	
              Section
                6.6

            	
              Insurance

            	 	
              31

            
	
              Section
                6.7

            	
              Books
                and Records: Inspection Rights

            	 	
              31

            
	
              Section
                6.8

            	
              Compliance
                with Laws

            	 	
              31

            
	
              Section
                6.9

            	
              Additional
                Subsidiaries

            	 	
              31

            
	
              Section
                6.10

            	
              Maintenance
                of Licenses

            	 	
              31

            
	 	 	 	 
	
              ARTICLE
                7 

            	
              NEGATIVE
                COVENANTS

            	 	
              32

            
	
              Section
                7.1

            	
              Indebtedness

            	 	
              32

            
	
              Section
                7.2

            	
              Negative
                Pledge

            	 	
              33

            
	
              Section
                7.3

            	
              Fundamental
                Changes

            	 	
              33

            
	
              Section
                7.4

            	
              Investments,
                Loans, Advances and Guaranties

            	 	
              34

            
	
              Section
                7.5

            	
              Acquisitions

            	 	
              34

            
	
              Section
                7.6

            	
              Dispositions

            	 	
              35

            
	
              Section
                7.7

            	
              Restricted
                Payments

            	 	
              36

            
	
              Section
                7.8

            	
              Hedging
                Agreements

            	 	
              36

            
	
              Section
                7.9

            	
              Sale
                and Lease-Back Transactions

            	 	
              36

            
	
              Section
                7.10

            	
              Lines
                of Business

            	 	
              36

            
	
              Section
                7.11

            	
              Transactions
                with Affiliates

            	 	
              37

            
	
              Section
                7.12

            	
              Use
                of Proceeds

            	 	
              37

            
	
              Section
                7.13

            	
              Restrictive
                Agreements

            	 	
              37

            
	
              Section
                7.14

            	
              Financial
                Covenants

            	 	
              37

            
	
              Section
                7.15

            	
              Excluded
                Subsidiaries

            	 	
              37

            
	 	 	 	 
	
              ARTICLE
                8 

            	
              DEFAULTS

            	 	
              38

            
	
              Section
                8.1

            	
              Events
                of Default

            	 	
              38

            
	
              Section
                8.2

            	
              Contract
                Remedies

            	 	
              39

            
	 	 	 	 
	
              ARTICLE
                9 

            	
              OTHER
                PROVISIONS

            	 	
              40

            
	
              Section
                9.1

            	
              Amendments
                and Waivers

            	 	
              40

            
	
              Section
                9.2

            	
              Notices

            	 	
              41

            
	
              Section
                9.3

            	
              Survival

            	 	
              41

            
	
              Section
                9.4

            	
              Expenses;
                Indemnity

            	 	
              41

            
	
              Section
                9.5

            	
              Successors
                and Assigns

            	 	
              42

            
	
              Section
                9.6

            	
              Interest
                Rate Limitation

            	 	
              43

            
	
              Section
                9.7

            	
              Counterparts;
                Integration

            	 	
              43

            
	
              Section
                9.8

            	
              Severability

            	 	
              43

            
	
              Section
                9.9

            	
              Governing
                Law

            	 	
              44

            
	
              Section
                9.10

            	
              Jurisdiction;
                Service of Process

            	 	
              44

            
	
              Section
                9.11

            	
              Waiver
                of Trial By Jury

            	 	
              45

            
	
              Section
                9.12

            	
              No
                Advisory or Fiduciary Responsibility

            	 	
              45

            
	 	 	 	 
	
              ARTICLE
                10 

            	
              SUBSIDIARY
                GUARANTY

            	 	
              46

            
	
              Section
                10.1

            	
              Guaranty

            	 	
              46

            
	
              Section
                10.2

            	
              Absolute
                Obligation

            	 	
              47

            
	
              Section
                10.3

            	
              Repayment
                in Bankruptcy, etc

            	 	
              47

            
	
              Section
                10.4

            	
              Additional
                Subsidiary Guarantors

            	 	
              48

            
	
              Section
                10.5

            	
              Miscellaneous

            	 	
              48

            
	
              Section
                10.6

            	
              Dispute
                Resolution

            	 	
              48

            

    

    

    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

    

    

    EXHIBITS:

     

    
      	
              Exhibit
                “A” 

            	
              Form
                of Borrowing Request

            
	
              Exhibit
                “B” 

            	
              Form
                of Guaranty Supplement

            
	
              Exhibit
                “C” 

            	
              Form
                of Revolving Credit Note

            
	
              Exhibit
                “D”

            	
              Form
                of Notice of Conversion

            
	
              Exhibit
                “E”

            	
              Form
                of Compliance Certificate

            

    

     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

    

    CREDIT
      AND GUARANTY AGREEMENT

     

    THIS
      CREDIT AND GUARANTY AGREEMENT
      dated
      February 12, 2007 (the “Effective
      Date”),
      by
      and among BEL
      FUSE INC.,
      a New
      Jersey corporation (the “Borrower”),
      the
“Subsidiary Guarantors” (as such term is defined in Section
      1.1
      below),
      and BANK
      OF AMERICA, N.A.
      (the
“Lender”).

     

    RECITALS

     

    A. The
      Borrower has requested that the Lender provide a revolving credit facility
      to
      the Borrower, and the Lender is willing to do so on the terms and conditions
      set
      forth herein.

    

    NOW
      THEREFORE,
      in
      consideration of the mutual covenants and agreements herein contained, the
      parties hereto covenant and agree as follows:

     

    ARTICLE
      1

     

    DEFINITIONS
      AND RULES OF INTERPRETATION

     

    Section
      1.1 Definitions

     

    As
      used
      in this Agreement, terms defined in the preamble have the meanings therein
      indicated, and the following terms have the following meanings:

     

    “ABR
      Advances”
means
      the Loans (or any portions thereof), at such time as they (or such portions)
      are
      made and/or being maintained at a rate of interest based upon the Alternate
      Base
      Rate.

     

    “Accountants”
means
      Deloitte & Touche LLP (or any successor thereto), or such other firm of
      certified public accountants of recognized national standing selected by the
      Borrower and reasonably satisfactory to the Lender.

     

    “Acquisition”
has
      the
      meaning set forth in Section 7.5
      hereof.

     

    “Acquisition
      Consideration”
means,
      with respect to the Acquisition, the sum of (i) the cash consideration paid
      or agreed to be paid in connection with all such Acquisitions, plus
      (ii) the fair market value of all non-cash consideration paid or agreed to
      be paid in connection with all such Acquisitions, plus (iii) an amount
      equal to the principal or stated amount of all liabilities assumed or incurred
      in connection therewith.

     

    “Affiliate”
means
      as to any Person any other Person at the time directly or indirectly
      controlling, controlled by or under direct or indirect common control with
      such
      Person. For purposes of this definition, “control” of a Person means the power,
      directly or indirectly, either to (i) vote 5% or more of the securities
      having ordinary voting power for the election of directors of such Person or
      (ii) direct or cause the direction of the management and policies of such
      Person, whether by contract or otherwise.

     

    “Agreement”
means
      this Credit and Guaranty Agreement, as
      it may
      be from time to time amended, modified, extended, renewed, refinanced, and/or
      supplemented.

     

    “Alternate
      Base Rate”
means
      on any date, a rate of interest per annum equal to the higher of (i) the
      Federal Funds Effective Rate in effect on such date plus 1/2 of 1% or
      (ii) the Prime Rate in effect on such date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Applicable
      Margin”
means,
      at all times during the applicable periods set forth below: (i) with
      respect to ABR Advances, the percentage set forth below under the heading “ABR
      Margin”, (ii) with respect to Eurodollar Advances, the percentage set forth
      below under the heading “Eurodollar Margin”, and (iii) with respect to the
      Commitment Fee, the percentage set forth below under the heading “Commitment
      Fee”.

     

    WHEN
      THE CONSOLIDATED LEVERAGE RATIO IS:

     

    
      	
              GREATER
                THAN OR EQUAL TO

            	 	
              AND
                LESS THAN

            	 	
              ABR
                MARGIN

            	 	
              EURODOLLAR
                MARGIN

            	 	
              COMMITMENT
                FEE

            
	
              2.00:1.00

            	 	 	 	
              0.00%

            	 	
              1.25%

            	 	
              0.25%

            
	
              1.00:1.00

            	 	
              2.00:1.00

            	 	
              0.00%

            	 	
              1.00%

            	 	
              0.20%

            
	 	 	
              1.00:1.00

            	 	
              0.15%

            	 	
              0.75%

            	 	
              0.15%

            

    

    

    Changes
      in the Applicable Margin resulting from a change in the Consolidated Leverage
      Ratio shall be based upon the Compliance Certificate most recently delivered
      pursuant to Section
      6.1(c)
      hereof
      and shall become effective on the date such Compliance Certificate is delivered
      to the Lender. Notwithstanding anything to the contrary contained in this
      definition, if the Borrower shall fail to deliver to the Lender a Compliance
      Certificate on or prior to any date required hereby, the Consolidated Leverage
      Ratio shall be deemed to be greater than 2.00:1.00 from and including such
      date
      to the date of delivery to the Lender of such Compliance
      Certificate.

     

    “Board
      of Governors”
means
      the Board of Governors of the Federal Reserve System of the United
      States.

     

    “Borrower
      Obligations”
means,
      collectively, all of the obligations and liabilities of the Borrower under
      the
      Loan Documents, and all other Indebtedness of the Borrower to the Lender,
      including all reimbursement obligations of the Borrower in respect of any
      letters of credit issued by the Lender for the account of the Borrower or any
      Subsidiary, in each case whether fixed, contingent, now existing or hereafter
      arising, created, assumed, incurred or acquired, and whether arising before
      or
      after the occurrence of any Event of Default under Sections 8.1(h)
      or (i)
      hereof and including any obligation or liability in respect of any breach
      of any representation or warranty and all post-petition interest and funding
      losses, whether or not allowed as a claim in any proceeding arising in
      connection with such an event.

     

    “Borrowing
      Date”
means
      any Business Day on which the Lender makes Loans.

     

    “Borrowing
      Request”
means
      a
      request by the Borrower for a Loan in accordance with Section 2.2
      hereof
      and substantially in the form of Exhibit
      “A”
      attached
      hereto and made a part hereof.

     

    “Business
      Day”
means
      any day other than a Saturday, a Sunday or a day on which commercial banks
      located in New York City are authorized or required by law or other governmental
      action to be closed, provided that when used in connection with a Eurodollar
      Advance, the term shall also exclude any day on which banks are not open for
      dealings in dollar deposits in the London interbank market.

     

    “Capital
      Lease Obligations”
means,
      with respect to any Person, the obligations of such Person to pay rent or other
      amounts under any lease of (or other arrangement conveying the right to use)
      real or personal property, or a combination thereof, (a) which obligations
      are required to be classified and accounted for as capital leases on a balance
      sheet of such Person under GAAP, and the amount of such obligations shall be
      the
      capitalized amount thereof determined in accordance with GAAP, or (b) which
      lease does not qualify as a Tax Operating Lease. For purposes of this
      definition, “Tax Operating Lease” means any “synthetic lease”, and any other
      lease (i) that is treated as a lease for purposes of the Code, and
      (ii) the lessor under which is treated as the owner of the assets subject
      to the lease for purposes of the Code.

     

    
      
        
        

      

      
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    “Capital
      Stock”
means,
      as to any Person, all shares, interests, partnership interests, limited
      liability company interests, participations, rights in or other equivalents
      (however designated) of such Person’s equity (however designated) and any
      rights, warrants or options exchangeable for or convertible into such shares,
      interests, participations, rights or other equity.

     

    “Cash
      Equivalents”
means
      Dollar denominated investments in (i) securities issued or directly and
      fully guarantied or insured by the United States or any agency or
      instrumentality thereof (provided that the full faith and credit of the United
      States is pledged in full support thereof) having maturities of not more than
      one year from the date of acquisition, (ii) time deposits, certificates of
      deposit and bankers acceptances maturing within 270 days from the date of
      acquisition thereof issued or Guarantied by or placed with, and money market
      deposit accounts issued or offered by, any domestic office of any commercial
      bank having a combined capital surplus and undivided profits of not less than
      $100,000,000 and whose (or whose parent company’s) unsecured non-credit
      supported short-term debt or commercial paper rating at the time of such
      acquisition (x) from Standard & Poor’s Ratings Services, a division of
      The McGraw-Hill Companies, Inc., or any successor thereto (“S&P”)
      is at
      least A-1, or the equivalent thereof, or (y) from Moody’s Investors Service,
      Inc. or any successor thereto (“Moody’s”)
      is at
      least P-1, or the equivalent thereof, (iii) commercial paper maturing
      within 90 days from the date of acquisition thereof and having, at such date
      of
      acquisition, a rating (x) from S&P of at least A-1, or the equivalent
      thereof, or (y) from Moody’s of at least P-1, or the equivalent thereof,
      (iv) marketable direct obligations issued by any state of the United States
      or any political subdivision of any such state or any public instrumentality
      thereof maturing within one year from the date of acquisition thereof and,
      at
      the time of acquisition, having one of the two highest ratings obtainable from
      either S&P or Moody’s, (v) normal business banking accounts, and
      (vi) investments in money market funds substantially all the assets of
      which are comprised of securities of the types described in clauses
      (i) through (iv) above.

     

    “Change
      in Law”
means
      (i) the adoption of any law, rule or regulation after the Effective Date,
      (ii) the issuance or promulgation after the Effective Date of any
      directive, guideline or request from any Governmental Authority (whether or
      not
      having the force of law), or (iii) any change after the Effective Date in
      the interpretation of any existing law, rule, regulation, directive, guideline
      or request by any Governmental Authority charged with the administration
      thereof.

     

    “Change
      of Control”
means
      the occurrence of any of the following events:

     

    (a) any
      person or group (other than any one or more permitted investors) shall have
      become the beneficial owner of voting shares entitled to exercise more than
      20%
      of the total voting power of all outstanding voting shares of the Borrower
      (including any voting shares which are not then outstanding of which such person
      or group is deemed the beneficial owner);

     

    (b) a
      change
      in the composition of the Managing Person of the Borrower shall have occurred
      in
      which the individuals who constituted the Managing Person of the Borrower at
      the
      beginning of the two year period immediately preceding such change (together
      with any other director whose election by the Managing Person of the Borrower
      or
      whose nomination for election by the shareholders of the Borrower was approved
      by a vote of at least a majority of the members of such Managing Person then
      in
      office who either were members of such Managing Person at the beginning of
      such
      period or whose election or nomination for election was previously so approved)
      cease for any reason to constitute a majority of the members of such Managing
      Person then in office; or

     

    
      
        
        

      

      
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    (c) any
      similar circumstance which, under the documentation evidencing or governing
      any
      Indebtedness of the Borrower of $5,000,000 or more, results in the Borrower
      being required to prepay, purchase, offer to purchase, redeem or defease such
      Indebtedness.

     

    For
      purposes of this definition, (i) the terms “person” and “group” shall have
      the respective meanings ascribed thereto in Sections 13(d) and
      14(d)(2) of the Exchange Act, (ii) the term “beneficial owner” has the
      meaning ascribed thereto in Rule 13d-3 under the Exchange Act, except that
      a
      Person shall not be deemed to be the “beneficial owner” of a security as a
      result of such Person’s right to acquire such security within a specified time
      period if such right is conditioned, in whole or in part, upon events other
      than
      the passage of time, and such events have not occurred, (iii) the term
“permitted investors” shall mean Elliot Bernstein, any of his immediate family
      members and any of his heirs or beneficiaries, and (iv) the term “voting
      shares” shall mean all outstanding shares of any class or classes (however
      designated) of Capital Stock of the Borrower entitled to vote generally in
      the
      election of members of the Managing Person thereof.

     

    “Code”
means
      the Internal Revenue Code of 1986, as the same may be amended from time to
      time,
      or any successor thereto, and the rules and regulations issued thereunder,
      as
      from time to time in effect.

     

    “Combined
      Current Ratio”
means,
      at any date of determination, the ratio of (i) the combined assets of all
      Domestic Subsidiaries which, in accordance with GAAP, would be classified on
      a
      combined balance sheet of said Domestic Subsidiaries as current assets -to-
      (ii)
      the combined liabilities of all Domestic Subsidiaries which, in accordance
      with
      GAAP, would be classified on a combined balance sheet of said Domestic
      Subsidiaries as current liabilities.

     

    “Commitment
      Fee”
has
      the
      meaning set forth in Section 3.2(a)
      hereof.

     

    “Compliance
      Certificate”
has
      the
      meaning set forth in Section 6.1(c)
      hereof.

     

    “Consolidated
      EBITDA”
means,
      for any period, net income of the Borrower and the Subsidiaries, determined
      on a
      consolidated basis in accordance with GAAP for such period plus (i) the sum
      of, without duplication, each of the following with respect to the Borrower
      and
      the Subsidiaries on a consolidated basis in accordance with GAAP, each to the
      extent utilized in determining net income for such period (a) interest
      expense, (b) provision for income taxes, (c) depreciation,
      amortization and other non-cash charges, and (d) extraordinary losses from
      sales, exchanges and other dispositions of property not in the ordinary course
      of business, minus (ii) the sum of, without duplication, each of the
      following with respect to the Borrower and the Subsidiaries on a consolidated
      basis in accordance with GAAP, each to the extent utilized in determining net
      income for such period: (a) extraordinary gains from sales, exchanges and
      other dispositions of property not in the ordinary course of business, and
      (b) other non-recurring items (other than expenses and
      losses).

     

    “Consolidated
      Fixed Charge Ratio”
means,
      as of the last day of each fiscal quarter, the ratio of Consolidated EBITDA
      to
      Consolidated Fixed Charges, in each case the Four Quarter Trailing
      Period.

     

    “Consolidated
      Fixed Charges”
means,
      for any period, the sum of each of the following with respect to the Borrower
      and the Subsidiaries, determined on a consolidated basis in accordance with
      GAAP: (i) interest expense for such period, (ii) the aggregate amount
      of all Capital Expenditures made during such period, (iii) without
      duplication, current maturities of long-term Indebtedness plus scheduled
      payments made during such period on account of the principal of Indebtedness
      of
      the Borrower or any of its Subsidiaries and (iv) the aggregate amount of
      all cash income taxes paid during such period.

     

    
      
        
        

      

      
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    “Consolidated
      Leverage Ratio”
means,
      as of the last day of each fiscal quarter, the ratio of the aggregate
      Indebtedness on such date of the Borrower and the Subsidiaries, determined
      on a
      consolidated basis in accordance with GAAP to Consolidated EBITDA for the Four
      Quarter Trailing Period.

     

    “Consolidated
      Net Worth”
means,
      at any date of determination, the sum of (i) all amounts which would be included
      under “stockholder’s equity” or any analogous entry on a consolidated balance
      sheet of the Borrower and the Subsidiaries determined in accordance with GAAP
      as
      of such date, plus (ii) to the extent deducted from such stockholder’s equity,
      the aggregate amount (not to exceed $60,000,000.00 in the aggregate) of stock
      repurchases made by the Borrower pursuant to Section
      7.7(d)
      hereof.

     

    “Conversion
      Date”
means
      the date on which (i) a Eurodollar Advance is converted to an ABR Advance,
      (ii) an ABR Advance is converted to a Eurodollar Advance or (iii) a
      Eurodollar Advance is converted to, or continued as, a new Eurodollar
      Advance.

     

    “Customary
      Lien”
means
      any of the following: (i) any Lien imposed by law for Taxes that are not
      yet due or are being contested in compliance with Section 6.4
      hereof,
      provided that enforcement of such Lien is stayed pending such contest;
      (ii) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and
      other like Liens imposed by law, arising in the ordinary course of business
      and
      securing obligations that are not overdue by more than 30 days or are being
      contested in compliance with Section 6.4, provided that enforcement of each
      such Lien is stayed pending such contest; (iii) pledges and deposits made
      in the ordinary course of business in compliance with workers’ compensation,
      unemployment insurance and other social security laws or regulations;
      (iv) deposits and pledges to secure the performance of bids, tenders,
      contracts (other than contracts for the payment of money), leases, statutory
      obligations, surety and appeal bonds and other obligations of like nature
      arising in the ordinary course of business; (v) judgment liens in respect
      of judgments that would not cause an Event of Default under Section 8.1(j)
      hereof;
      (vi) zoning ordinances, easements, rights of way, minor defects,
      irregularities, and other similar encumbrances on real property imposed by
      law
      or arising in the ordinary course of business that do not secure any monetary
      obligations and do not materially detract from the value of the affected
      property or interfere with the ordinary conduct of business of the Borrower
      or
      any Subsidiary; and (vii) Liens created under the Loan
      Documents.

     

    “Default”
means
      any event or condition which constitutes an Event of Default or which, with
      the
      giving of notice, the lapse of time, or the occurrence of any other condition,
      would, unless cured or waived, become an Event of Default.

     

    “Dispute”
means
      any controversy, claim or dispute between or among the parties to this
      Agreement, including any controversy, claim or dispute arising out of or
      relating to (a) this Agreement, (b) any other Loan Documents, (c) any related
      agreements or instruments, or (d) the transaction contemplated herein or therein
      (including any claim based on or arising from an alleged personal injury or
      business tort).

    

    “Disqualified
      Stock”
means
      any Capital Stock of any Person that, by its terms (or by the terms of any
      security into which it is convertible or for which it is exchangeable at the
      option of the holder thereof), or upon the happening of any event, matures
      or is
      mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
      or
      is redeemable at the option of the holder thereof, in whole or in part,
      provided, however, that any Capital Stock that would constitute Disqualified
      Stock solely because the holders thereof have the right to require such Person
      to repurchase or redeem such Capital Stock upon the occurrence of certain events
      shall not constitute Disqualified Stock if the terms of such Capital Stock
      provide that the Borrower may not repurchase or redeem any such Capital Stock
      pursuant to such provisions unless such repurchase or redemption complies with
      Section 7.7
      of this
      Agreement.

     

    
      
        
        

      

      
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    “Dollars”
and
      “$”
mean
      lawful currency of the United States.

     

    “Domestic
      Subsidiary”
means
      any Subsidiary that is not a Foreign Subsidiary.

     

    “Effective
      Date”
has
      the
      meaning set forth in the preamble hereto.

     

    “Environmental
      Laws”
has
      the
      meaning set forth in Section 4.7
      hereof.

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time, and the rules and regulations issued thereunder, as from time to time
      in
      effect.

     

    “ERISA
      Affiliate”
means
      any Person which is a member of any group of organizations within the meaning
      of
      Sections 414(b) or (c) of the Code (or, solely for purposes of
      potential liability under Section 302(c)(11) of ERISA and
      Section 412(c)(11) of the Code and the lien created under
      Section 302(f) of ERISA and Section 412(n) of the Code, within
      the meanings of Sections 414(m) or (o) of the Code) of which the Borrower
      or any Subsidiary is a member.

     

    “ERISA
      Event”
means
      (i) a “reportable event”, as defined in Section 4043 of ERISA with
      respect to a Pension Plan (other than an event for which the 30-day notice
      period is waived), (ii) the existence with respect to any Pension Plan of
      an “accumulated funding deficiency” (as defined in Section 412 of the Code
      or Section 302 of ERISA), whether or not waived; (iii) the filing
      pursuant to Section 412(d) of the Code or Section 303(d) of
      ERISA of an application for a waiver of the minimum funding standard with
      respect to any Pension Plan; (iv) the incurrence by the Borrower or any of
      its ERISA Affiliates of any liability under Title IV of ERISA with respect
      to
      the termination of any Pension Plan; (v) the receipt by the Borrower or any
      ERISA Affiliate from the PBGC or a plan administrator of any notice relating
      to
      an intention to terminate any Pension Plan or Pension Plans or to appoint a
      trustee to administer any Pension Plan; (vi) the incurrence by the Borrower
      or any of its ERISA Affiliates of any liability with respect to the withdrawal
      or partial withdrawal from any Pension Plan or Multiemployer Plan; or
      (vii) the receipt by the Borrower or any ERISA Affiliate of any notice, or
      the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate
      of any notice, concerning the imposition of Withdrawal Liability or a
      determination that a Multiemployer Plan is, or is expected to be, insolvent
      or
      in reorganization, within the meaning of Title IV of ERISA.

     

    “Eurodollar
      Advances”
means
      the Loans (or any portions thereof), at such time as it (or such portions)
      are
      made and/or being maintained at a rate of interest based upon the Eurodollar
      Rate.

     

    “Eurodollar
      Base Rate”
has
      the
      meaning specified in the definition of Eurodollar Rate.

     

    “Eurodollar
      Rate”
means
      for any Interest Period with respect to a Eurodollar Rate Loan, a rate per
      annum
      determined by the Lender pursuant to the following formula:

     

    
      	
              Eurodollar
                Rate =

            	
              ______Eurodollar
                Base Rate_______ 

              1.00
                - Eurodollar Reserve Percentage

            

    

    

    Where,

     

    “Eurodollar
      Base Rate”
means,
      for such Interest Period the rate per annum equal to the British Bankers
      Association LIBOR Rate (“BBA
      LIBOR”),
      as
      published by Reuters (or other commercially available source providing
      quotations of BBA LIBOR as designated by the Lender from time to time) at
      approximately 11:00 a.m., London time, two (2) Business Days prior to the
      commencement of such Interest Period, for Dollar deposits (for delivery on
      the
      first day of such Interest Period) with a term equivalent to such Interest
      Period. If such rate is not available at such time for any reason, then the
      “Eurodollar
      Base Rate”
for
      such Interest Period shall be the rate per annum determined by the Lender to
      be
      the rate at which deposits in Dollars for delivery on the first day of such
      Interest Period in same day funds in the approximate amount of the Eurodollar
      Rate Loan being made, continued or converted by the Lender and with a term
      equivalent to such Interest Period would be offered by the Lender’s London
      Branch to major banks in the London interbank eurodollar market at their request
      at approximately 11:00 a.m. (London time) two Business Days prior to the
      commencement of such Interest Period.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

       

    

    “Eurodollar
      Reserve Percentage”
means,
      for any day during any Interest Period, the reserve percentage (expressed as
      a
      decimal, carried out to five decimal places) in effect on such day, whether
      or
      not applicable to the Lender, under regulations issued from time to time by
      the
      Board of Governors of the Federal Reserve System of the United States for
      determining the maximum reserve requirement (including any emergency,
      supplemental or other marginal reserve requirement) with respect to Eurocurrency
      funding (currently referred to as “Eurocurrency liabilities”). The Eurodollar
      Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically
      as of the effective date of any change in the Eurodollar Reserve Percentage.
      

     

    “Event
      of Default”
has
      the
      meaning set forth in Section 8.1
      hereof.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended from time to time.

     

    “Excluded
      Subsidiaries”
means,
      collectively, (i) Bel Delaware LLC, a Delaware limited liability company
      and a Wholly Owned Subsidiary of the Hong Kong Subsidiary, and (ii) each of
      Transformer One LLC, Transformer Two LLC, Transformer Three LLC, Transformer
      Four LLC, Transformer Five LLC and Transformer Six LLC (each, a “Transformer
      Entity”),
      each
      a Delaware limited liability company and a Wholly Owned Subsidiary formed for
      the sole purpose of holding one share of Capital Stock in a Subsidiary organized
      under the laws of the Dominican Republic (a “Dominican
      Subsidiary”)
      in
      order to comply with the laws of the Dominican Republic; provided,
      however,
      that if
      (x) such Transformer Entity engages in the active conduct of a trade or
      business, or (y) such Transformer Entity holds or acquires any asset other
      than
      one share of the Capital Stock of such Dominican Subsidiary (other than an
      asset
      incidental to the holding of such share), such Transformer Entity shall
      automatically cease to be an Excluded Subsidiary.

     

    “Excluded
      Tax”
means
      as to any Person, a Tax imposed by one of the following jurisdictions or by
      any
      political subdivision or taxing authority thereof: (i) the United States,
      (ii) the jurisdiction in which such Person is organized, (iii) the
      jurisdiction in which such Person’s principal office is located, (iv) in
      the case of the Lender, any jurisdiction in which the Lender is or is deemed
      to
      be doing business; which Tax (a) is any income tax or franchise tax imposed
      on all or part of the net income or net profits of such Person or
      (b) represents interest, fees or penalties for payment of any such income
      tax or franchise tax.

     

    “Federal
      Funds Effective Rate”
means,
      for any day, the rate per annum equal to the weighted average of the rates
      on
      overnight Federal funds transactions with members of the Federal Reserve System
      arranged by Federal funds brokers on such day, as published by the Federal
      Reserve Bank of New York on the Business Day next succeeding such day;
provided
      that (a)
      if such day is not a Business Day, the Federal Funds Rate for such day shall
      be
      such rate on such transactions on the next preceding Business Day as so
      published on the next succeeding Business Day, and (b) if no such rate is so
      published on such next succeeding Business Day, the Federal Funds Rate for
      such
      day shall be the average of the quotations for such day on such transactions
      received by the Lender (rounded upward, if necessary, to a whole multiple of
      1/100 of 1%).

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    “Fees”
has
      the
      meaning set forth in Section 2.5(a)
      hereof.

     

    “Financial
      Officer”
means,
      as to any Person, the chief financial officer of such Person or such other
      officer as shall be satisfactory to the Lender.

     

    “Foreign
      Subsidiary”
means
      any Subsidiary that is a “controlled foreign corporation” within the meaning of
      Section 957 of the Code.

     

    “Four
      Quarter Trailing Period”
means,
      at any date of determination, the period of the four fiscal quarters ending
      on
      such date, or, if such date is not the last day of a fiscal quarter, the period
      of the most immediately completed four fiscal quarters.

     

    “Fraudulent
      Transfer Laws”
has
      the
      meaning set forth in Section 10.1(b)
      hereof.

     

    “GAAP”
means
      generally accepted accounting principles as in effect from time to time in
      the
      United States.

     

    “Governmental
      Authority”
means
      any foreign, federal, state, municipal or other government, or any department,
      commission, board, bureau, agency, public authority or instrumentality thereof,
      or any court or arbitrator.

     

    “Guaranty”
of
      or
      by any Person (the “guarantor”) means any obligation, contingent or otherwise,
      of the guarantor guarantying or in effect guarantying any return on any
      investment made by another Person, or any Indebtedness, lease, dividend or
      other
      obligation (a “primary obligation”) of any other Person (a “primary obligor”) in
      any manner, whether directly or indirectly, including any obligation of the
      guarantor, direct or indirect (i) to purchase any primary obligation or any
      property constituting direct or indirect security therefor, (ii) to advance
      or supply funds (A) for the purchase or payment of any primary obligation or
      (B)
      to maintain working capital or equity capital of the primary obligor or
      otherwise to maintain the net worth or solvency of a primary obligor,
      (iii) to purchase property, securities or services primarily for the
      purpose of assuring the beneficiary of any primary obligation of the ability
      of
      a primary obligor to make payment of a primary obligation, (iv) otherwise
      to assure or hold harmless the beneficiary of a primary obligation against
      loss
      in respect thereof, and (v) in respect of the liabilities of any
      partnership in which a secondary obligor is a general partner, except to the
      extent that such liabilities of such partnership are nonrecourse to such
      secondary obligor and its separate property, provided, however, that the term
      “Guaranty” shall not include the endorsement of instruments for deposit or
      collection in the ordinary course of business. The amount of any Guaranty shall
      be an amount equal to the stated or determinable amount of the primary
      obligation in respect of which such Guaranty is made or, if not stated or
      determinable, the maximum reasonably anticipated liability in respect thereof
      as
      determined by the guarantor in good faith.

     

    “Guaranty
      Supplement”
means
      a
      Guaranty Supplement in the form attached hereof as Exhibit
      “B”
      and made
      a part hereof.

     

    “Guarantor
      Obligations”
means,
      with respect to each Subsidiary Guarantor, all of the obligations and
      liabilities of such Subsidiary Guarantor under the Loan Documents, whether
      fixed, contingent, now existing or hereafter arising, created, assumed, incurred
      or acquired, and whether arising before or after the occurrence of any Event
      of
      Default under Sections 8.1(h)
      or (i)
      hereof and including any obligation or liability in respect of any breach
      of any representation or warranty and all post-petition interest and funding
      losses, whether or not allowed as a claim in any proceeding arising in
      connection with such an event.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    “Hedging
      Agreement”
means
      any interest rate swap, cap or collar arrangement or any other derivative
      product customarily offered by banks or other financial institutions to their
      customers in order to manage the exposure of such customers to interest rate
      fluctuations.

     

    “Hong
      Kong Subsidiary”
means
      Bel Fuse, Limited, a Hong Kong corporation and a direct Wholly Owned Subsidiary
      of the Borrower.

     

    “Impermissible
      Qualification”
has
      the
      meaning set forth in Section 6.1(a)(i)
      hereof.

     

    “Indebtedness”
means,
      as to any Person, at a particular time, all items which constitute, without
      duplication, (i) indebtedness for borrowed money, (ii) indebtedness in
      respect of the deferred purchase price of property (other than trade payables
      incurred in the ordinary course of business), (iii) indebtedness evidenced
      by notes, bonds, debentures or similar instruments, (iv) obligations with
      respect to any conditional sale or title retention agreement,
      (v) indebtedness arising under acceptance facilities and the amount
      available to be drawn under all letters of credit issued for the account of
      such
      Person and, without duplication, all drafts drawn thereunder to the extent
      such
      Person shall not have reimbursed the issuer in respect of the issuer’s payment
      thereof, (vi) liabilities secured by (or for which the holder of such
      Indebtedness has an existing right, contingent or otherwise, to be secured
      by)
      any Lien on property owned by such Person (other than carriers’, warehousemen’s,
      mechanics’, materialmen’s, repairmen’s or other like non-consensual statutory
      Liens arising in the ordinary course of business), even though such Person
      has
      not assumed or otherwise become liable for the payment thereof,
      (vii) Capital Lease Obligations, (viii) all obligations of such Person
      in respect of Disqualified Stock, and (ix) all Guaranties by such Person of
      Indebtedness of others. The Indebtedness of any Person shall include the
      Indebtedness of any other entity (including any partnership in which such Person
      is a general partner) to the extent such Person is liable therefor as a result
      of such Person’s ownership interest in or other relationship with such entity,
      except to the extent the terms of such Indebtedness provide that such Person
      is
      not liable therefor.

     

    “Indemnified
      Liabilities”
and
      “Indemnified
      Person”
have
      the meanings set forth in Section 9.4(b)
      hereof.

     

    “Indemnified
      Tax”
means
      as to any Person, any Tax, except (i) an Excluded Tax imposed on such
      Person and (ii) any interest, fees or penalties for late payment of an
      Excluded Tax imposed on such Person.

     

    “Insolvent”
means,
      with respect to any Person, (a) the sum of the assets, at a fair valuation,
      of such Person does not exceed its debts, (b) such Person has incurred
      debts beyond its ability to pay such debts as such debts mature, (c) such
      Person believes that, in the ordinary course of its business during the
      reasonably foreseeable future, it will incur debts beyond its ability to pay
      such debts as such debts mature, and (d) such Person has insufficient
      capital with which to conduct its business. For purposes of this definition
      only, “debt” means any liability on a claim, and “claim” means any
      (i) right to payment, whether such a right is reduced to judgment,
      liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
      undisputed, legal, equitable, secured, or unsecured, or (ii) right to an
      equitable remedy for breach of performance if such breach gives rise to a
      payment, whether such right to an equitable remedy is reduced to judgment,
      fixed, contingent, matured, unmatured, disputed, undisputed, secured, unsecured,
      liquidated or unliquidated.

     

    “Intercompany
      Transaction Amount”
has
      the
      meaning set forth in Section 7.1(c)(ii)
      hereof.

     

    “Interest
      Period”
means,
      with respect to each Eurodollar Advance, the period commencing on the Borrowing
      Date or Conversion Date of such Eurodollar Advance and ending on the numerically
      corresponding day in the calendar month that is one, two, three or six months
      thereafter, as the Borrower may select in the applicable Borrowing Request
      or
      Notice of Conversion.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    “Investments”
has
      the
      meaning set forth in Section 7.4
      hereof.

     

    “Lien”
means
      any mortgage, pledge, hypothecation, assignment, encumbrance, lien (statutory
      or
      other), or other security agreement or security interest of any kind or nature
      whatsoever, including any conditional sale or other title retention agreement
      and any capital or financing lease having substantially the same economic effect
      as any of the foregoing.

     

    “Line
      of Business”
means
      the manufacturing and distribution of electronic components and any business
      reasonably similar, complimentary, ancillary or related thereto.

     

    “Loans”
means
      the loans made by the Lender to the Borrower pursuant to this
      Agreement.

     

    “Loan
      Documents”
means,
      collectively, this Agreement, the Note, each Secured Hedging Agreement and
      all
      other agreements, instruments and documents executed or delivered in connection
      herewith.

     

    “Loan
      Parties”
means,
      collectively, the Borrower, each Subsidiary Guarantor and each other Person
      (other than the Lender or any of its Affiliates) party to a Loan
      Document.

     

    “Managing
      Person”
means,
      with respect to any Person that is (i) a corporation, its board of
      directors, (ii) a limited liability company, its board of control, managing
      member or members, (iii) a limited partnership, its general partner or
      general partners, (iv) a general partnership or a limited liability
      partnership, its managing partner or managing partners or executive committee
      or
      (v) any other Person, the managing body thereof or other Person analogous
      to the foregoing.

     

    “Margin
      Stock”
has
      the
      meaning set forth in Regulation U.

     

    “Material
      Adverse”
means,
      with respect to any change or effect, a material adverse change in, or effect
      on, as the case may be, (i) the business, assets, operations, prospects or
      condition, financial or otherwise, of the Borrower and the Subsidiaries taken
      as
      a whole, (ii) the ability of any Loan Party to perform its obligations
      under the Loan Documents to which it is a party, (iii) the rights of, or
      benefits available to, the Lender under the Loan Documents, in any material
      respect, or (iv) the legality or enforceability of any Loan
      Document.

     

    “Material
      Subsidiary”
means
      any direct or indirect Subsidiary (other than the Excluded Subsidiaries) as
      to
      which any of the following tests are or have at any time on or after the
      Effective Date been met: (i) the Borrower’s and the other Subsidiaries’
investments in and advances to such Subsidiary are greater than or equal to
      5%
      of the total assets of the Borrower and the Subsidiaries on a consolidated
      basis
      as of the last day of the most recently completed fiscal year of the Borrower,
      (ii) such Subsidiary’s proportionate share of the total assets (after
      intercompany eliminations) of the Borrower and the Subsidiaries on a
      consolidated basis is greater than or equal to 5% of the total assets of the
      Borrower and the Subsidiaries on a consolidated basis as of the last day of
      the
      most recently completed fiscal year of the Borrower, or (iii) the income from
      continuing operations before income taxes, extraordinary items and the
      cumulative effect of a change in accounting principles of such Subsidiary is
      greater than or equal to 5% of such income of the Borrower and the Subsidiaries
      on a consolidated basis as of the last day of the most recently completed fiscal
      year of the Borrower.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    “Material
      Liabilities”
means,
      on any date, with respect to the Borrower, any Subsidiary, or any combination
      thereof: (i) all Indebtedness (other than Indebtedness under the Loan
      Documents), (ii) the net termination obligations in respect of one or more
      Hedging Agreements (calculated as if such Hedging Agreements were terminated
      as
      of such date), and (iii) other liabilities, in each case whether as
      principal, guarantor, surety or other obligor, in an aggregate principal amount
      exceeding $1,000,000.00.

     

    “Minimum
      Amount”
means
      in respect of (i) ABR Advances, $100,000.00 or such amount plus a whole
      multiple of $50,000.00 in excess thereof, and (ii) Eurodollar Advances,
      $100,000.00 or such amount plus a whole multiple of $100,000.00 in excess
      thereof.

     

    “Multiemployer
      Plan”
means
      a
      Pension Plan which is a multiemployer plan as defined in
      Section 4001(a)(3) of ERISA.

     

    “Non-Guarantor
      Subsidiary”
at
      any
      time, the Excluded Subsidiaries and any other Subsidiary that is not a
      Subsidiary Guarantor at such time, including, without limitation, all Foreign
      Subsidiaries.

     

    “Note”
means
      a
      Revolving Credit Loan Note, substantially in the form attached hereto as
Exhibit
      “C”
      and made
      a part hereof, payable to the order of the Lender, made by the Borrower and
      dated as of the Effective Date, including all replacements thereof and
      substitutions therefor.

     

    “Notice
      of Conversion”
has
      the
      meaning set forth in Section 3.3(a)
      hereof.

     

    “Obligations”
means,
      collectively, the Borrower Obligations and the Guarantor
      Obligations.

     

    “Organizational
      Documents”
means
      as to any Person which is (i) a corporation, the certificate or articles of
      incorporation and by-laws of such Person, (ii) a limited liability company,
      the limited liability company agreement or similar agreement of such Person,
      (iii) a partnership, the partnership agreement or similar agreement of such
      Person, or (iv) any other form of entity or organization, the
      organizational documents analogous to the foregoing.

     

    “Other
      Taxes”
means
      any and all current or future stamp or documentary taxes or any other excise
      or
      property taxes, charges or similar levies that arise from any payment made
      hereunder or from the execution, delivery, registration or enforcement of,
      or
      any amendment, supplement or modification of, or any waiver or consent under
      or
      in respect of, the Loan Documents or otherwise with respect to the Loan
      Documents.

     

    “Payment
      Office”
means
      the office of the Lender set forth in Section 9.2(b)
      hereof.

     

    “PBGC”
means
      the Pension Benefit Guaranty Corporation established pursuant to Subtitle A
      of
      Title IV of ERISA, or any Governmental Authority succeeding to the functions
      thereof.

     

    “Pension
      Plan”
means,
      at any date of determination, any employee pension benefit plan (other than
      a
      Multiemployer Plan), the funding requirements of which (under Section 302
      of ERISA or Section 412 of the Code) are, or at any time within the six
      years immediately preceding such date, were, in whole or in part, the
      responsibility of the Borrower or any ERISA Affiliate.

     

    “Permitted
      Liens”
has
      the
      meaning set forth in Section 7.2
      hereof.

     

    “Person”
means
      a
      natural person, firm, partnership, limited liability company, joint venture,
      corporation, association, business enterprise, joint stock company,
      unincorporated association, trust, Governmental Authority or any other entity,
      whether acting in an individual, fiduciary, or other capacity, and for the
      purpose of the definition of “ERISA Affiliate”, a trade or
      business.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    “Prime
      Rate”
is
      a
      rate set by the Lender based upon various factors including the Lender’s costs
      and desired return, general economic conditions and other factors, and is used
      as a reference point for pricing some loans, which may be priced at, above,
      or
      below such announced rate. Any change in such rate announced by the Lender
      shall
      take effect at the opening of business on the day specified in the public
      announcement of such change.

     

    “Regulation
      D, T, U and X”
means
      Regulations D, T, U and X, respectively, of the Board of Governors as from
      time
      to time in effect and all official rulings and interpretations thereunder or
      thereof.

     

    “Related
      Parties”
means,
      with respect to any Person, such Person’s Affiliates and the respective
      directors, officers, employees, agents and advisors of such Person and such
      Person’s Affiliates.

     

    “Required
      Payment”
has
      the
      meaning set forth in Section 3.7(a)
      hereof.

     

    “Restricted
      Payment”
has
      the
      meaning set forth in Section 7.7
      hereof.

     

    “Revolving
      Commitment”
means
      the commitment of the Lender to make Revolving Loans hereunder, expressed as
      an
      amount representing the maximum aggregate amount of the Revolving Credit
      Exposure permitted hereunder, as such commitment may be reduced or increased
      from time to time pursuant to Section 2.3
      hereof.
      The initial amount of the Lender’s Revolving Commitment is
      $20,000,000.00.

     

    “Revolving
      Credit Exposure”
means,
      at any time, the aggregate outstanding principal amount of the Revolving Loans
      at such time.

     

    “Revolving
      Loan”
means
      a
      loan referred to in Section 2.1
      hereof and made pursuant to Section 2.4
      hereof.

     

    “Revolving
      Maturity Date”
means
      June 30, 2008, or such earlier date on which the Revolving Loans shall become
      due and payable, whether by acceleration or otherwise.

     

    “SEC”
means
      the Securities and Exchange Commission or any Governmental Authority succeeding
      to the functions thereof.

     

    “Secured
      Hedging Agreement”
means
      any Hedging Agreement entered into by the Borrower with the Lender (or an
      Affiliate thereof).

     

    “Special
      Counsel”
means
      Reed Smith LLP, or such other counsel selected by the Lender as, special counsel
      to the Lender hereunder.

     

    “Subsidiary”
means,
      with respect to any Person (the “parent”) at any date, any other Person
      (i) the accounts of which would be consolidated with those of the parent in
      the parent’s consolidated financial statements if such financial statements were
      prepared in accordance with GAAP as of such date, (ii) of which securities
      or other ownership interests representing more than 50% of the equity or more
      than 50% of the ordinary voting power or, in the case of a partnership, more
      than 50% of the general partnership interests or more than 50% of the profits
      or
      losses of which are, as of such date, owned, controlled or held by the parent
      or
      one or more subsidiaries of the parent. Unless otherwise qualified, all
      references to “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to
      a Subsidiary or Subsidiaries of the Borrower.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    “Subsidiary
      Guarantor”
means
      each Domestic Subsidiary party to this Agreement, provided that the Excluded
      Subsidiaries shall not be Subsidiary Guarantors.

     

    “Tax”
means
      any present or future tax, levy, impost, duty, charge, fee, deduction or
      withholding of any nature and whatever called, by a Governmental Authority,
      on
      whomsoever and wherever imposed, levied, collected, withheld or
      assessed.

     

    “Transactions”
means,
      collectively the transactions contemplated by the Loan
      Documents.

     

    “Type”,
      when
      used in reference to a Loan or Advance, refers to whether the rate of interest
      on such Loan, or on the Loans comprising such Advance, is determined by
      reference to the Eurodollar Rate or the Alternate Base Rate.

     

    “Unconsolidated
      Investment”
means,
      as of any date, any investment made by the Borrower or any Subsidiary in any
      other Person that, pursuant to GAAP as in effect on such date, would not be
      consolidated with the Borrower for financial reporting purposes immediately
      after giving effect to such investment.

     

    “United
      States”
means
      the United States of America.

     

    “Upfront
      Fee”
has
      the
      meaning set forth in Section 3.2(b)
      hereof.

     

    “Wholly
      Owned”
means,
      with respect to any Subsidiary of any Person, 100% of the outstanding Capital
      Stock of such Subsidiary is owned, directly or indirectly, by such
      Person.

     

    “Withdrawal
      Liability”
means,
      with respect to any Person, liability of such Person to a Multiemployer Plan
      as
      a result of a complete or partial withdrawal from such Multiemployer Plan,
      as
      such terms are defined in Part I of Subtitle E of Title IV of ERISA.

     

    Section
      1.2 Accounting
      Terms

     

    As
      used
      in the Loan Documents and in any certificate, opinion or other document made
      or
      delivered pursuant thereto, accounting terms not defined in Section 1.1
      hereof,
      and accounting terms partly defined in Section 1.1
      hereof,
      to the extent not defined, shall have the respective meanings given to them
      under GAAP. If any change in GAAP would affect the computation of any financial
      ratio or requirement set forth in this Agreement, the Lender and the Borrower
      shall negotiate in good faith to amend such ratio or requirement to reflect
      such
      change in GAAP, provided that, until so amended, (i) such ratio or
      requirement shall continue to be computed in accordance with GAAP prior to
      such
      change and (ii) the Borrower shall provide to the Lender financial
      statements and other documents required under this Agreement (or such other
      items as the Lender may reasonably request) setting forth a reconciliation
      between calculations of such ratio or requirement before and after giving effect
      to such change.

     

    Section
      1.3 Rules
      of Interpretation

     

    (a) Unless
      expressly provided in a Loan Document to the contrary, (i) the words
“hereof”, “herein”, “hereto” and “hereunder” and similar words when used in each
      Loan Document shall refer to such Loan Document as a whole and not to any
      particular provision thereof, (ii) article, section, subsection, schedule
      and exhibit references contained therein shall refer to article, section,
      subsection, schedule and exhibit thereof or thereto, (iii) the words
“include” and “including”, shall mean that the same shall be “included, without
      limitation”, (iv) any definition of, or reference to, any agreement,
      instrument, certificate or other document herein shall be construed as referring
      to such agreement, instrument or other document as from time to time amended,
      supplemented or otherwise modified, (v) any reference herein to any Person
      shall be construed to include such Person’s successors and assigns,
      (vi) the words “asset” and “property” shall be construed to have the same
      meaning and to refer to any and all tangible and intangible assets and
      properties, including cash, securities, accounts and contract rights,
      (vii) words in the singular number include the plural, and words used
      therein in the plural include the singular, (viii) any reference to a time
      shall refer to such time in New York, (ix) in the computation of periods of
      time from a specified date to a later specified date, the word “from” means
“from and including” and the words “to” and “until” each means “to but
      excluding”, and (x) references therein to a fiscal period shall refer to
      that fiscal period of the Borrower.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    (b) Article and
      Section headings have been inserted in the Loan Documents for convenience
      only and shall not be construed to be a part thereof.

     

    ARTICLE
      2

     

    AMOUNT
      AND TERMS OF THE LOANS

     

    Section
      2.1 Loans

     

    Subject
      to the terms and conditions hereof, the Lender agrees to make revolving credit
      loans in Dollars (each a “Revolving
      Loan”
and
      collectively with all other Loans of the Lender, the “Revolving
      Loans”)
      to the
      Borrower from time to time on any Business Day during the period from the
      Effective Date to the Business Day proceeding the Revolving Maturity Date,
      provided that after giving effect thereto the Revolving Credit Exposure would
      not exceed the Revolving Commitment. During such period, the Borrower may
      borrow, prepay in whole or in part and reborrow under the Revolving Commitment,
      all in accordance with the terms and conditions of this Agreement. The
      outstanding principal balance of each Revolving Loan shall be due and payable
      on
      the Revolving Maturity Date.

     

    Section
      2.2 Procedure
      for Borrowing

     

    (a) To
      request a Loan, the Borrower shall notify the Lender by the delivery of a
      Borrowing Request, which shall be sent by facsimile and shall be irrevocable
      (confirmed promptly, and in any event within five Business Days, by the delivery
      to the Lender of a Borrowing Request manually signed by the Borrower), no later
      than 11:00 a.m., three Business Days prior to the requested Borrowing Date,
      in
      the case of Eurodollar Advances, and 11:00 a.m., one Business Day prior to
      the
      requested Borrowing Date, in the case of ABR Advances, specifying (i) the
      aggregate principal amount to be borrowed, (ii) the requested Borrowing Date,
      (iii) whether such borrowing is to consist of one or more Eurodollar Advances,
      ABR Advances, or a combination thereof and (iv) if the Loan is to consist of
      one
      or more Eurodollar Advances, the amount and length of the Interest Period for
      each Eurodollar Advance. The amount of each (a) Eurodollar Advance to be
      made on a Borrowing Date, when aggregated with all amounts to be converted
      to,
      or continued as, a Eurodollar Advance on such date and having the same Interest
      Period as such first Eurodollar Advance, shall equal the Minimum Amount and
      (b) each ABR Advance made on each Borrowing Date shall equal the Minimum
      Amount or, if less, the unused portion of the Revolving Commitment.

     

    (b) Subject
      to the satisfaction of the terms and conditions of this Agreement, the Lender
      shall on the requested Borrowing Date make available the proceeds of the
      requested Loan to the Borrower at the Payment Office by crediting the account
      of
      the Borrower on the books of the Lender at such office with said
      amount.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    Section
      2.3 Termination
      and Reduction of Revolving Commitment

     

    (a) Voluntary
      Termination or Reductions.
      The
      Borrower may, upon at least three (3) Business Days’ prior written notice to the
      Lender, (i) at any time when the Revolving Credit Exposure shall be zero,
      terminate the Revolving Commitment, and (ii) at any time and from time to time
      when the Revolving Commitment shall exceed the Revolving Credit Exposure (after
      giving effect to any contemporaneous payment or payment of Revolving Loans),
      permanently reduce the Revolving Commitment by a sum not greater than the amount
      of such excess, provided, however, that each such partial reduction shall be
      in
      the amount of $1,000,000.00 or such amount plus a whole multiple of $500,000.00
      in excess thereof.

     

    (b) Reductions
      in General.
      Simultaneously with each reduction of the Revolving Commitment, the Borrower
      shall pay the Commitment Fee accrued on the amount by which the Revolving
      Commitment has been reduced.

     

    (c) Mandatory
      Reductions.
      Unless
      previously terminated, the Revolving Commitment shall terminate on the Revolving
      Maturity Date.

     

    Section
      2.4 Prepayments
      of the Loans 

     

    (a) Voluntary
      Prepayments.
      The
      Borrower shall have the right at any time and from time to time to prepay all
      or
      any portion of the Loans without premium or penalty (but subject to Section 3.5
      hereof),
      by delivering to the Lender an irrevocable written notice thereof at least
      one
      Business Day prior to the proposed prepayment date, in the case of Loans
      consisting of ABR Advances, and at least three Business Days prior to the
      proposed prepayment date, in the case of Loans consisting of Eurodollar
      Advances, specifying whether the Loans to be prepaid consist of ABR Advances,
      Eurodollar Advances, or a combination thereof, the amount to be prepaid and
      the
      date of prepayment, whereupon the amount specified in such notice shall be
      due
      and payable on the date specified. Each partial prepayment of the Loans pursuant
      to this subsection shall be in an amount equal to the Minimum Amount, or, if
      less, the outstanding principal balance of the Loans. After giving effect to
      any
      partial prepayment with respect to Eurodollar Advances which were made (whether
      as the result of a borrowing, a conversion or a continuation) on the same date
      and which had the same Interest Period, the outstanding principal balance of
      such Eurodollar Advances shall equal or exceed (subject to Section 3.3
      hereof)
      the Minimum Amount.

     

    (b) Mandatory
      Prepayments of Revolving Loans.
      Simultaneously with each reduction or termination of the Revolving Commitment,
      the Borrower shall prepay the Loans by an amount equal to the lesser of
      (i) the Revolving Credit Exposure, or (ii) the excess of the Revolving
      Credit Exposure over the Revolving Commitment as so reduced or
      terminated.

     

    (c) In
      General.
      Simultaneously with each prepayment of a Loan, the Borrower shall prepay all
      accrued interest on the amount prepaid through the date of prepayment.

     

    Section
      2.5 Payments;
      Set-Off

     

    (a) Payments.
      Except
      as provided below, all payments, including prepayments, of principal and
      interest on the Loans, the Commitment Fee, the Upfront Fee and of all other
      amounts to be paid by the Borrower under the Loan Documents, (the Commitment
      Fee, the Upfront Fee together with all of such other fees, being sometimes
      hereinafter collectively referred to as the “Fees”)
      shall
      be made to the Lender, prior to 1:00 p.m. on the date such payment is due at
      the
      Payment Office, in Dollars and in immediately available funds, without set-off,
      offset, recoupment or counterclaim. The failure of the Borrower to make any
      such
      payment by such time shall not constitute a Default, provided that such payment
      is made on such due date, but any such payment made after 1:00 p.m. on such
      due
      date shall be deemed to have been made on the next Business Day for the purpose
      of calculating interest on the Loans. If any payment under the Loan Documents
      shall be due and payable on a day which is not a Business Day, the due date
      thereof (except as otherwise provided with respect to Interest Periods) shall
      be
      extended to the next Business Day and (except with respect to payments in
      respect of the Fees) interest shall be payable at the applicable rate specified
      herein during such extension, provided, however, that if such next Business
      Day
      would be after the Revolving Maturity Date, such payment shall instead be due
      on
      the immediately preceding Business Day.

     

    
      
        
        

      

      
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    (b) Set-Off.
      In
      addition to any rights and remedies of the Lender provided by law, upon the
      occurrence of an Event of Default and the acceleration of the obligations owing
      in connection with the Loan Documents, or at any time upon the occurrence and
      during the continuance of an Event of Default under Sections 8.1(a) or
      (b)
      hereof,
      the Lender shall have the right, without prior notice to the Borrower or any
      other Loan Party, any such notice being expressly waived by the Borrower and
      each other Loan Party to the extent not prohibited by applicable law, to set-off
      and apply against any indebtedness, whether matured or unmatured, of the
      Borrower or such other Loan Party, as the case may be, to the Lender any amount
      owing from the Lender to the Borrower or such other Loan Party, as the case
      may
      be, at, or at any time after, the happening of any of the above-mentioned
      events. To the extent not prohibited by applicable law, the aforesaid right
      of
      set-off may be exercised by the Lender against the Borrower or such other Loan
      Party, as the case may be, or against any trustee in bankruptcy, custodian,
      debtor in possession, assignee for the benefit of creditors, receiver, or
      execution, judgment or attachment creditor of the Borrower or such other Loan
      Party, as the case may be, or against anyone else claiming through or against
      the Borrower or such other Loan Party, as the case may be, or such trustee
      in
      bankruptcy, custodian, debtor in possession, assignee for the benefit of
      creditors, receiver, or execution, judgment or attachment creditor,
      notwithstanding the fact that such right of set-off shall not have been
      exercised by the Lender prior to the making, filing or issuance, or service
      upon
      the Lender of, or of notice of, any such petition, assignment for the benefit
      of
      creditors, appointment or application for the appointment of a receiver, or
      issuance of execution, subpoena, order or warrant. The Lender agrees promptly
      to
      notify the Borrower after any such set-off and application made by the Lender,
      provided that the failure to give such notice shall not affect the validity
      of
      such set-off and application.

     

    ARTICLE
      3

     

    INTEREST,
      FEES, YIELD PROTECTIONS, ETC.

     

    Section
      3.1 Interest
      Rate and Payment Dates

     

    (a) Advances.
      Each
      (i) ABR Advance shall bear interest at a rate per annum equal to the
      Alternate Base Rate plus the Applicable Margin and (ii) Eurodollar Advance
      shall bear interest at a rate per annum equal to the Eurodollar Rate for the
      applicable Interest Period plus the Applicable Margin.

     

    (b) Event
      of Default; Late Charges.
      Notwithstanding the foregoing, after the occurrence and during the continuance
      of an Event of Default under Section 8.1(a) or
      8.1(b)
      hereof,
      the outstanding principal balance of the Loans shall bear interest at a rate
      per
      annum equal to 2% plus the rate otherwise applicable thereto as provided in
      subsection (a) above. If any interest, Fee or other amount payable under
      the Loan Documents is not paid when due (whether at the stated maturity thereof,
      by acceleration or otherwise), such overdue amount shall bear interest at a
      rate
      per annum equal to the Alternate Base Rate plus 2%, from the date of such
      nonpayment until paid in full (whether before or after the entry of a judgment
      thereon). All such interest shall be payable on demand.

     

    
      
        
        

      

      
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    (c) Payment
      of Interest.
      Except
      as otherwise provided in subsection
      (b) above,
      interest shall be payable in arrears on the following dates and upon each
      payment (including prepayment) of the Loans:

     

    (i) in
      the
      case of an ABR Advance, on the last Business Day of each March, June,
      September and December commencing on the first of such days to occur
      after such ABR Advance is made or any Eurodollar Advance is converted to an
      ABR
      Advance;

     

    (ii) in
      the
      case of a Eurodollar Advance, on the last day of the Interest Period applicable
      thereto and, if such Interest Period is longer than three months, the last
      Business Day of each three month interval occurring during such Interest Period;
      and

     

    (iii) in
      the
      case of all Advances, the Revolving Maturity Date.

     

    (d) Computations.
      Interest
      on (i) ABR Advances to the extent based on the Prime Rate shall be
      calculated on the basis of a 365 or 366-day year (as the case may be), and
      (ii) ABR Advances to the extent based on the Federal Funds Effective Rate
      and on Eurodollar Advances shall be calculated on the basis of a 360-day year,
      in each case, for the actual number of days elapsed. The Lender shall, as soon
      as practicable, notify the Borrower of the effective date and the amount of
      each
      such change in the Prime Rate, but any failure to so notify shall not in any
      manner affect the obligation of the Borrower to pay interest on the Loans in
      the
      amounts and on the dates required. Each determination of a rate of interest
      by
      the Lender pursuant to the Loan Documents shall be conclusive and binding on
      all
      parties hereto absent manifest error. The Borrower acknowledges that to the
      extent interest payable on ABR Advances is based on the Prime Rate, such rate
      is
      only one of the bases for computing interest on loans made by the Lender, and
      by
      basing interest payable on ABR Advances on the Prime Rate, the Lender has not
      committed to charge, and the Borrower has not in any way bargained for, interest
      based on a lower or the lowest rate at which the Lender may now or in the future
      make loans to other borrowers.

     

    Section
      3.2 Fees

     

    (a) Commitment
      Fee.
      The
      Borrower agrees to pay to the Lender, a fee (the “Commitment
      Fee”),
      during the period from the Effective Date through the Business Day immediately
      preceding the Revolving Maturity Date, at a rate per annum equal to the
      Applicable Margin on the average daily unused Revolving Commitment. The
      Commitment Fee shall be payable (i) quarterly in arrears on the last
      Business Day of each March, June, September and December during such
      period, commencing on the first such day following the Effective Date,
      (ii) on the date of any reduction in the Revolving Commitment (to the
      extent of such reduction) and (iii) on the Revolving Maturity Date. The
      Commitment Fee shall be calculated on the basis of a 360 day year, as the case
      may be, for the actual number of days elapsed.

     

    (b) Upfront
      Fee.
      There
      shall be no upfront fee (the “Upfront
      Fee”)
      due
      and owing to the Lender in connection with the Revolving
      Commitment.

     

    Section
      3.3 Conversions

     

    (a) The
      Borrower may elect from time to time to convert one or more Eurodollar Advances
      to ABR Advances by giving the Lender at least one Business Day’s prior
      irrevocable notice of such election, specifying the amount to be converted,
      provided, that any such conversion of Eurodollar Advances shall only be made
      on
      the last day of the Interest Period applicable thereto. In addition, the
      Borrower may elect from time to time to (i) convert ABR Advances to
      Eurodollar Advances and (ii) continue Eurodollar Advances as new Eurodollar
      Advances by selecting a new Interest Period therefor, in each case by giving
      the
      Lender at least three Business Days’ prior irrevocable notice of such election,
      in the case of a conversion to, or continuation of, Eurodollar Advances,
      specifying the amount to be so converted or continued and the initial Interest
      Period relating thereto, provided that any such conversion of ABR Advances
      to
      Eurodollar Advances shall only be made on a Business Day and any such
      continuation of Eurodollar Advances as new Eurodollar Advances shall only be
      made on the last day of the Interest Period applicable to the Eurodollar
      Advances which are to be continued as such new Eurodollar Advances. Each such
      notice (each a “Notice
      of Conversion”)
      shall
      be substantially in the form of Exhibit
      “D”,
      shall
      be irrevocable and shall be given by facsimile (confirmed promptly, and in
      any
      event within five Business Days, by the delivery to the Lender of a Notice
      of
      Conversion manually signed by the Borrower). Advances may be converted or
      continued pursuant to this Section 3.3
      in whole
      or in part, provided that the amount to be converted to, or continued as, each
      Eurodollar Advance, when aggregated with any Eurodollar Advance to be made
      on
      such date in accordance with Section 2.2
      hereof
      and having the same Interest Period as such first Eurodollar Advance, shall
      equal the Minimum Amount.

     

    
      
        
        

      

      
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    (b) Notwithstanding
      anything in this Agreement to the contrary, upon the occurrence and during
      the
      continuance of an Event of Default, the Borrower shall have no right to elect
      to
      convert any existing ABR Advance to a new Eurodollar Advance or to continue
      any
      existing Eurodollar Advance as a new Eurodollar Advance. In such event, all
      ABR
      Advances shall be automatically continued as ABR Advances and all Eurodollar
      Advances shall be automatically converted to ABR Advances on the last day of
      the
      Interest Period applicable to such Eurodollar Advance.

     

    (c) Each
      conversion or continuation shall be effected by the Lender by applying the
      proceeds of the new ABR Advance or Eurodollar Advance, as the case may be,
      to
      the Advances (or portion thereof) being converted (it being understood that
      any
      such conversion or continuation shall not constitute a borrowing for purposes
      of
Article 4
      hereof).

     

    Section
      3.4 Concerning
      Interest Periods

     

    (a) No
      Interest Period in respect of a Eurodollar Advance shall end after the Revolving
      Maturity Date.

     

    (b) Any
      Interest Period which begins on the last Business Day of a calendar month (or
      on
      a day for which there is no numerically corresponding day in the calendar month
      at the end of such Interest Period) shall end on the last Business Day of a
      calendar month.

     

    (c) If
      an
      Interest Period would otherwise end on a day which is not a Business Day, such
      Interest Period shall be extended to the next succeeding Business Day, unless
      the result of such extension would be to carry such Interest Period into another
      calendar month, in which event such Interest Period shall end on the immediately
      preceding Business Day.

     

    (d) If
      the
      Borrower shall have failed to timely elect a Eurodollar Advance under
Section 3.3
      hereof
      in connection with any conversion to, or continuation of, a Eurodollar Advance,
      such Advance requested to be converted to, or continued as, a Eurodollar Advance
      shall thereafter be an ABR Advance until such time, if any, as the Borrower
      shall elect a new Eurodollar Advance pursuant to Section 3.3
      hereof.

     

    (e) The
      Borrower shall not be permitted to have more than eight Eurodollar Advances
      outstanding at any one time.

     

    
      
        
        

      

      
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    Section
      3.5 Funding
      Loss 

     

    Notwithstanding
      anything contained herein to the contrary, if the Borrower shall fail to borrow,
      convert or continue a Eurodollar Advance on a Borrowing Date or a Conversion
      Date after it shall have given notice to do so in which it shall have requested
      a Eurodollar Advance, or if a Eurodollar Advance shall be terminated for any
      reason prior to the last day of the Interest Period applicable thereto, or
      if,
      while a Eurodollar Advance is outstanding, any repayment or prepayment of such
      Eurodollar Advance is made for any reason (including as a result of acceleration
      or illegality) on a date which is prior to the last day of the Interest Period
      applicable thereto, the Borrower agrees to indemnify the Lender against, and
      to
      pay on demand to the Lender the amount (calculated by the Lender using any
      reasonable method chosen by it which is customarily used by it for such purpose)
      equal to any loss or out-of-pocket expense suffered by the Lender as a result
      of
      such failure to convert, or continue, or such termination, repayment or
      prepayment, including any loss, cost or expense suffered by the Lender in
      liquidating or employing deposits acquired to fund or maintain the funding
      of
      such Eurodollar Advance or redeploying funds prepaid or repaid, in amounts
      which
      correspond to such Eurodollar Advance and any reasonable internal processing
      charge customarily charged by the Lender in connection therewith.

     

    Section
      3.6 Increased
      Costs; Illegality, etc.

     

    (a) Increased
      Costs.
      If any
      Change in Law shall impose, modify or make applicable any reserve, special
      deposit, compulsory loan, assessment, increased cost or similar requirement
      against assets held by, or deposits of, or advances or loans by, or other credit
      extended by, or any other acquisition of funds by, any office of the Lender
      in
      respect of its Eurodollar Advances which is not otherwise included in the
      determination of a Eurodollar Rate and the result thereof is to increase the
      cost to the Lender of making, renewing, converting or maintaining its Eurodollar
      Advances or its commitment to make such Eurodollar Advances, or to reduce any
      amount receivable under the Loan Documents in respect of its Eurodollar
      Advances, then, in any such case, the Borrower shall pay the Lender such
      additional amounts as is sufficient to compensate the Lender for such additional
      cost or reduction in such amount receivable which the Lender deems to be
      material (as determined by the Lender.)

     

    (b) Capital
      Adequacy.
      If the
      Lender determines that any Change in Law relating to capital requirements has
      or
      would have the effect of reducing the rate of return on the Lender’s capital or
      on the capital of the Lender’s holding company on the Loans to a level below
      that which the Lender (or its holding company) would have achieved or would
      thereafter be able to achieve but for such Change in Law (after taking into
      account the Lender’s (or such holding company’s) policies regarding capital
      adequacy), the Borrower shall pay to the Lender (or such holding company) such
      additional amount or amounts as will compensate the Lender (or such holding
      company) for such reduction.

     

    (c) Illegality.
      Notwithstanding any other provision hereof, if the Lender shall reasonably
      determine that any law, regulation, treaty or directive, or any change therein
      or in the interpretation or application thereof, shall make it unlawful for
      it
      to make or maintain any Eurodollar Advance as contemplated by this Agreement,
      the Lender shall promptly notify the Borrower thereof, and (i) the
      commitment of the Lender to make such Eurodollar Advances or convert ABR
      Advances to Eurodollar Advances shall forthwith be suspended, (ii) the
      Lender shall fund each requested Eurodollar Advance as an ABR Advance and
      (iii) the portion of the Loans then outstanding as such Eurodollar
      Advances, if any, shall be converted automatically to ABR Advances on the last
      day of the then current Interest Period applicable thereto or at such earlier
      time as may be required by law. The commitment of the Lender with respect to
      Eurodollar Advances shall be suspended until the Lender shall notify the
      Borrower that the circumstances causing such suspension no longer exist. Upon
      receipt of such notice by the Borrower, the Lender’s commitment to make or
      maintain Eurodollar Advances shall be reinstated.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    (d) Substituted
      Interest Rate.
      In the
      event that the Lender shall have determined (which determination shall be
      conclusive and binding upon the Borrower) that (i) by reason of
      circumstances affecting the interbank eurodollar market either adequate and
      reasonable means do not exist for ascertaining the Eurodollar Rate applicable
      pursuant to Section 3.1
      hereof
      or (ii) the applicable Eurodollar Rate will not adequately and fairly
      reflect the cost to the Lender of maintaining or funding loans bearing interest
      based on such Eurodollar Rate, with respect to any portion of the Loans that
      the
      Borrower has requested be made as Eurodollar Advances or Eurodollar Advances
      that will result from the requested conversion or continuation of any portion
      of
      the Advances into or of Eurodollar Advances (each, an “Affected
      Advance”),
      the
      Lender shall promptly notify the Borrower (by telephone or otherwise, to be
      promptly confirmed in writing) of such determination, on or, to the extent
      practicable, prior to the requested Conversion Date for such Affected Advances.
      If the Lender shall give such notice, (a) any Affected Advances shall be made
      as
      ABR Advances, (b) the Advances (or any portion thereof) that were to have
      been converted to Affected Advances shall be converted to ABR Advances and
      (c) any outstanding Affected Advances shall be converted, on the last day
      of the then current Interest Period with respect thereto, to ABR Advances.
      Until
      any notice under clauses
      (i) or (ii)
      above,
      as the case may be, of this subsection (d) has been withdrawn by the
      Lender, no further Eurodollar Advances shall be required to be made by the
      Lender, nor shall the Borrower have the right to convert all or any portion
      of
      the Loans to Eurodollar Advances.

     

    (e) Payment;
      Certificates.
      Each
      payment pursuant to subsections
      (a) or (b) above
      shall be made within 10 days after demand therefor, which demand shall be
      accompanied by a certificate of the Lender demanding such payment setting forth
      the calculations of the additional amounts payable pursuant thereto. Each such
      certificate shall be presumptively correct absent manifest error. No failure
      by
      the Lender to demand, and no delay in demanding, compensation for any increased
      cost shall constitute a waiver of its right to demand such compensation at
      any
      time. Failure or delay on the part of the Lender to demand compensation pursuant
      to this Section shall not constitute a waiver of the Lender’s right to
      demand such compensation; provided that the Borrower shall not be required
      to
      compensate the Lender pursuant to this Section for any increased costs or
      reductions incurred more than 90 days prior to the date that the Lender notifies
      the Borrower of the Change in Law giving rise to such increased costs or
      reductions and of the Lender’s intention to claim compensation therefor;
      provided further that, if the Change in Law giving rise to such increased costs
      or reductions is retroactive, then the 90-day period referred to above shall
      be
      extended to include the period of retroactive effect thereof.

     

    Section
      3.7 Taxes

     

    (a) Payments
      Free of Taxes.
      All
      payments by or on account of the Borrower under any Loan Document to or for
      the
      account of the Lender shall be made free and clear of, and without any deduction
      or withholding for or on account of, any and all present or future Indemnified
      Taxes or Other Taxes, provided that if the Borrower or any other Person is
      required by any law, rule, regulation, order, directive, treaty or guideline
      to
      make any deduction or withholding in respect of such Indemnified Tax or Other
      Tax from any amount required to be paid by the Borrower to or on behalf of
      the
      Lender under any Loan Document (each, a “Required
      Payment”),
      then
      (i) the Borrower shall notify the Lender of any such requirement or any
      change in any such requirement as soon as the Borrower becomes aware thereof,
      (ii) the Borrower shall pay such Indemnified Tax or Other Tax prior to the
      date on which penalties attach thereto, such payment to be made (to the extent
      that the liability to pay is imposed on the Borrower) for its own account or
      (to
      the extent that the liability to pay is imposed on the Lender) on behalf and
      in
      the name of the Lender, (iii) the Borrower shall pay to the Lender an
      additional amount such that the Lender shall receive on the due date therefor
      an
      amount equal to the Required Payment had no such deduction or withholding been
      made or required, and (iv) the Borrower shall, within 30 days after paying
      such Indemnified Tax or Other Tax, deliver to the Lender satisfactory evidence
      of such payment to the relevant Governmental Authority.

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    (b) Reimbursement
      for Taxes and Other Taxes Paid by the Lender.
      The
      Borrower shall reimburse the Lender, within ten days after written demand
      therefor, for the full amount of all Indemnified Taxes or Other Taxes paid
      by
      the Lender on or with respect to any payment by or on account of any obligation
      of the Borrower under the Loan Documents (including Indemnified Taxes or Other
      Taxes imposed or asserted on or attributable to amounts payable under this
      Section 3.7)
      and any
      penalties, interest and reasonable expenses arising therefrom or with respect
      thereto (other than any such penalties, interest or expenses that are incurred
      by the Lender’s unreasonably taking or omitting to take action with respect to
      such Indemnified Taxes or Other Taxes), whether or not such Indemnified Taxes
      or
      Other Taxes were correctly or legally imposed or asserted by the relevant
      Governmental Authority. A certificate as to the amount of such payment or
      liability delivered to the Borrower by the Lender shall be presumptively correct
      absent manifest error. In the event that the Lender determines that it received
      a refund or credit for Indemnified Taxes or Other Taxes paid, or expenses
      reimbursed, by the Borrower under this Section 3.7,
      the
      Lender shall promptly notify the Borrower of such fact and shall remit to the
      Borrower the amount of such refund or credit.

     

    Section
      3.8 Changes
      of Lending Offices

     

    If
      the
      Lender (or its holding company, if any) requests compensation under Section 3.6(a) or
      (b) hereof
      or if the Borrower is required to pay an additional amount to the Lender or
      any
      Governmental Authority for the account of the Lender pursuant to Section 3.7
      hereof,
      the Lender will, upon the request of the Borrower, use reasonable efforts
      (subject to its overall policy considerations) to designate a different lending
      office for funding or booking the Loans or to assign its rights and obligations
      hereunder to another of its offices, branches or affiliates, if, in its good
      faith judgment, such designation or assignment (i) would eliminate or
      reduce future amounts payable under Section 3.6(a) or
      (b)
      hereof
      or Section 3.7
      hereof,
      as the case may be, (ii) would not subject the Lender to any unreimbursed
      cost or expense and (iii) would not otherwise be disadvantageous to the
      Lender. The Borrower agrees to pay the reasonable costs and expenses incurred
      in
      connection with any such designation or assignment and the Lender agrees that
      no
      assignment fee shall be payable to it pursuant to Section 9.5(b)
      hereof in connection therewith. Nothing in Section 3.7
      hereof
      shall affect or postpone any of the obligations of the Borrower to make the
      payments required to the Lender under Section 3.6(a) or
      (b) hereof
      or Section 3.7
      hereof,
      incurred prior to any such designation or assignment.

     

    ARTICLE
      4

     

    REPRESENTATIONS
      AND WARRANTIES

     

    The
      Borrower hereby represents and warrants to the Lender as follows:

     

    Section
      4.1 Organization
      and Power

     

    The
      Borrower and each Subsidiary (i) is duly organized or formed, validly
      existing and in good standing under the laws of the jurisdiction of its
      organization, (ii) has all requisite power and authority to own its
      property and to carry on its business as now conducted, and (iii) is duly
      qualified to do business and is in good standing in each jurisdiction in which
      the nature of the business conducted therein or the property owned by it therein
      makes such qualification necessary, except where such failure to qualify or
      be
      in good standing, individually or in the aggregate, would not reasonably be
      expected to result in a Material Adverse effect.

     

    
      
        
        

      

      
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    Section
      4.2 Authorization;
      Enforceability

     

    The
      Transactions are within the corporate, partnership or other analogous powers
      of
      The Borrower and each Subsidiary party thereto and have been duly authorized
      by
      its Managing Person and, if required, by any other Person including holders
      of
      its Capital Stock. Each Loan Document has been validly executed and delivered
      by
      each Loan Party thereto and constitutes a legal, valid and binding obligation
      of
      each such Loan Party, enforceable in accordance with its terms, subject to
      applicable bankruptcy, insolvency, reorganization, moratorium or other laws
      affecting creditors’ rights generally and subject to general principles of
      equity, regardless of whether considered in a proceeding in equity or at
      law.

     

    Section
      4.3 Governmental
      Approvals; No Conflicts

     

    The
      Transactions (i) do not require any consent or approval of, registration or
      filing with, or any other action by, any Governmental Authority, except such
      as
      have been obtained or made and are in full force and effect, (ii) will not
      violate any applicable law, rule or regulation or any order of any Governmental
      Authority applicable to the Borrower or any Subsidiary, which violation would
      reasonably be expected to have a Material Adverse effect, (iii) will not
      violate the Organizational Documents of the Borrower or any Subsidiary,
      (iv) will not violate or result in a default under any indenture, agreement
      or other instrument binding upon the Borrower or any Subsidiary or their assets,
      or give rise to a right thereunder to require any payment to be made by the
      Borrower or any Subsidiary which defaults or payments individually or in the
      aggregate would reasonably be expected to result in a Material Adverse effect,
      and (v) will not result in the creation or imposition of any Lien on any
      asset of the Borrower or any Subsidiary other than Permitted Liens.

     

    Section
      4.4 Financial
      Condition; No Material Adverse Change

     

    (a) The
      Borrower has heretofore furnished to the Lender:

     

    (i) a
      copy of
      its Form 10-K for the fiscal year ended December 31, 2005, containing the
      audited consolidated balance sheets of the Borrower and its consolidated
      Subsidiaries as of December 31, 2005 and December 31, 2004, and the
      related consolidated statements of income and stockholder’s equity and cash
      flows for the periods then ended; and

     

    (ii) the
      consolidating balance sheets of the Borrower and the Subsidiaries and the
      related consolidating statements of income, stockholders equity and cash flows
      as of and for the fiscal year ended December 31, 2005, certified by a
      Financial Officer.

     

    Such
      financial statements present fairly, in all material respects, the consolidated
      financial position and results of operations and cash flows of the Borrower
      and
      its Subsidiaries as of such dates and for such periods in accordance with GAAP,
      subject to year-end audit adjustments and the absence of footnotes in the case
      of the quarterly statements referred to above. Except as fully reflected in
      such
      financial statements, there are no material liabilities or obligations with
      respect to the Borrower or any Subsidiary of any nature whatsoever (whether
      absolute, contingent or otherwise and whether or not due) which are required
      by
      GAAP to be disclosed in such financial statements.

     

    (b) Since
      December 31, 2005, except for the Transactions, The Borrower and each
      Subsidiary has conducted its business only in the ordinary course and there
      has
      been no Material Adverse change.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    Section
      4.5 Properties

     

    (a) Except
      as
      set forth on Schedule
      4.5
      attached
      hereto and made a part hereof, The Borrower and each Subsidiary has good and
      marketable title to, or valid leasehold interests in, all of its property,
      real
      and personal, material to its business, subject to no Liens, except Permitted
      Liens and except for minor defects in title that do not interfere with its
      ability to conduct its business as currently conducted or to utilize such
      properties for their intended purposes.

     

    (b) Except
      as
      set forth on Schedule
      4.5
      attached
      hereto and made a part hereof, The Borrower and each Subsidiary owns or is
      licensed to use all patents, trademarks, tradenames, copyrights and other
      intellectual property material to its business, and the use thereof by the
      Borrower or any Subsidiary does conflict with or infringe upon the valid rights
      of others, except for any such conflicts or infringements that individually
      or
      in the aggregate, would not reasonably be expected to result in a Material
      Adverse effect.

     

    Section
      4.6 Litigation

     

    Except
      as
      set forth on Schedule
      4.6
      attached
      hereto and made a part hereof, there are no actions, suits or proceedings at
      law
      or in equity or by or before any Governmental Authority (whether purportedly
      on
      behalf of the Borrower or any Subsidiary) pending or, to the knowledge of the
      Borrower, threatened against the Borrower or any Subsidiary, or maintained
      by
      the Borrower or any Subsidiary or which may affect the property of the Borrower
      or any Subsidiary, (i) that, in the good faith opinion of the Borrower,
      would reasonably be expected to have an adverse determination and that, if
      adversely determined, would reasonably be expected, individually or in the
      aggregate, to result in a Material Adverse effect or (ii) that involve any
      of the Transactions.

     

    Section
      4.7 Environmental
      Matters

     

    Except
      as
      set forth on Schedule
      4.7
      attached
      hereto and made a part hereof and except with respect to any other matters
      that,
      individually or in the aggregate, would not reasonably be expected to result
      in
      a Material Adverse effect, neither the Borrower nor any Subsidiary has
      (i) received written notice or otherwise learned of any claim, demand,
      action, event, condition, report or investigation indicating or concerning
      any
      potential or actual liability which individually or in the aggregate would
      reasonably be expected to result in a Material Adverse effect, arising in
      connection with any non-compliance with or violation of the requirements of
      any
      applicable laws, rules, regulations, codes, ordinances, orders, decrees,
      judgments, injunctions, notices or binding agreements issued, promulgated or
      entered into by any Governmental Authority, relating in any way to the
      environment, preservation or reclamation of natural resources, the management,
      release or threatened release of any Hazardous Substance (as defined below)
      or
      to health and safety matters (collectively, “Environmental
      Laws”),
      (ii) to the best knowledge of the Borrower, any threatened or actual
      liability in connection with the release or threatened release of any Hazardous
      Substance into the environment which individually or in the aggregate would
      reasonably be expected to result in a Material Adverse effect,
      (iii) received notice of any federal or state investigation evaluating
      whether any remedial action is needed to respond to a release or threatened
      release of any Hazardous Substance into the environment for which the Borrower
      or any of its Subsidiaries is or would be liable, which liability would
      reasonably be expected to result in a Material Adverse effect, or (iv) has
      received notice that the Borrower or any of its Subsidiaries is or may be liable
      to any Person under any Environmental Law, which liability would reasonably
      be
      expected to result in a Material Adverse effect. The Borrower and each of its
      Subsidiaries is in compliance with the financial responsibility requirements
      of
      Environmental Laws to the extent applicable, except in those cases in which
      the
      failure so to comply would not reasonably be expected to result in a Material
      Adverse effect. For purposes hereof, “Hazardous Substance” shall mean any
      hazardous or toxic substance, material, waste or other pollutants, including
      petroleum or petroleum distillates, asbestos or asbestos containing materials,
      polychlorinated biphenyls, radon gas, infectious or medical wastes, radioactive
      materials or any other substance or waste regulated pursuant to any
      Environmental Law.

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

     

    Section
      4.8 Compliance
      with Laws and Agreements; No Default

     

    The
      Borrower and each Subsidiary is in compliance with all laws, regulations and
      orders of any Governmental Authority applicable to it or its property and all
      indentures, agreements and other instruments binding upon it or its property,
      except where the failure to do so, individually or in the aggregate, would
      not
      reasonably be expected to result in a Material Adverse effect.

     

    Section
      4.9 Investment
      Companies and other Regulated Entities

     

    Neither
      the Borrower, any Subsidiary nor any Person controlled by, controlling, or
      under
      common control with, the Borrower or any Subsidiary, is (i) an “investment
      company” as defined in, or subject to regulation under, the Investment Company
      Act of 1940, as amended, (ii) a “holding company” as defined in, or subject
      to regulation under, the Public Utility Holding Company Act of 1935 or the
      Federal Power Act, as amended, or (iii) subject to any statute or
      regulation which prohibits or restricts the incurrence of Indebtedness for
      borrowed money, including statutes or regulations relative to common or contract
      carriers or to the sale of electricity, gas, steam, water, telephone, telegraph
      or other public utility services.

     

    Section
      4.10 Federal
      Reserve Regulations

     

    (a) Neither
      the Borrower nor any Subsidiary is engaged principally, or as one of its
      important activities, in the business of extending credit for the purpose of
      purchasing or carrying any Margin Stock. After giving effect to the Transactions
      and the making of the Loans, Margin Stock will constitute less than 25% of
      the
      consolidated assets (as determined by any reasonable method) of the Borrower
      and
      the Subsidiaries.

     

    (b) No
      part
      of the proceeds of the Loans will be used, whether directly or indirectly,
      and
      whether immediately, incidentally or ultimately, for any purpose that entails
      a
      violation of, or that is inconsistent with, the provisions of Regulation U
      or
      X.

     

    Section
      4.11 ERISA

     

    Each
      Pension Plan is in compliance with ERISA and the Code, where applicable, in
      all
      material respects and no ERISA Event has occurred or is reasonably expected
      to
      occur that, when taken together with all other such ERISA Events for which
      liability is reasonably expected to occur, would reasonably be expected to
      result in a Material Adverse effect. The present value of all accumulated
      benefit obligations under each Pension Plan (based on the assumptions used
      for
      purposes of Statement of Financial Accounting Standards No. 87) did not, as
      of
      the date of the most recent financial statements reflecting such amounts, exceed
      by more than $0 the fair market value of the assets of such Pension Plan, and
      the present value of all accumulated benefit obligations of all underfunded
      Pension Plans (based on the assumptions used for purposes of Statement of
      Financial Accounting Standards No. 87) did not, as of the date of the most
      recent financial statements reflecting such amounts, exceed by more than $0
      the
      fair market value of the assets of all such underfunded Pension
      Plans.

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

       

    

    Section
      4.12 Taxes

     

    The
      Borrower and each Subsidiary has timely filed or caused to be filed all tax
      returns and reports required to have been filed and has paid, or caused to
      be
      paid, all Taxes required to have been paid by it except (i) Taxes being
      contested in good faith by appropriate proceedings and for which the Borrower
      or
      such Subsidiary, as applicable, has set aside on its books adequate reserves,
      and (ii) to the extent that the failure to do so would not reasonably be
      expected to result in a Material Adverse effect.

     

    Section
      4.13 Subsidiaries

     

    As
      of the
      Effective Date, (i) the Borrower has only the Subsidiaries set forth on
Schedule
      4.13
      attached
      hereto and made a part hereof, and (ii) the ownership interests in each
      Subsidiary of the Borrower are duly authorized, validly issued, fully paid
      and
      nonassessable and are owned beneficially and of record by the Persons set forth
      on such Schedule
      4.13
      attached
      hereto and made a part hereof, free and clear of all Liens (other than Permitted
      Liens). Except as set forth on Schedule
      4.13
      attached
      hereto and made a part hereof, none of the Subsidiaries (other than the Excluded
      Subsidiaries) has issued any securities convertible into, or options or warrants
      for, any common or preferred equity securities thereof and there are no
      agreements, voting trusts or understandings binding upon the Borrower or any
      Subsidiary (other than the Excluded Subsidiaries) with respect to the voting
      securities of the Borrower or any Subsidiary (other than the Excluded
      Subsidiaries) or affecting in any manner the sale, pledge, assignment or other
      disposition thereof, including any right of first refusal, option, redemption,
      call or other right with respect thereto, whether similar or dissimilar to
      any
      of the foregoing. None of the Excluded Subsidiaries (other than Bel Delaware
      LLC
      referred to in clause
      (i) of
      the definition thereof) is engaged in the active conduct of a trade or business
      or holds any assets (other than immaterial assets). The Borrower is currently
      in
      the process of dissolving its Subsidiary Bel Fuse Delaware, Inc., a Delaware
      corporation, and shall notify the Lender in writing at such time as said
      Subsidiary has been dissolved.

     

    Section
      4.14 Absence
      of Certain Restrictions

     

    No
      indenture, certificate of designation for preferred stock, agreement or
      instrument to which the Borrower or any Subsidiary is a party (other than this
      Agreement), prohibits or limits in any way, directly or indirectly the ability
      of any Subsidiary to make Restricted Payments or loans to, to make any advance
      on behalf of, or to repay any Indebtedness to, the Borrower or to another
      Subsidiary.

     

    Section
      4.15 Labor
      Relations

     

    As
      of the
      Effective Date, there are no material controversies pending between the Borrower
      or any Subsidiary and its employees which might result in a Material Adverse
      effect.

     

    Section
      4.16 Insurance

     

    Schedule
      4.16
      attached
      hereto and made a part hereof sets forth a description of all insurance
      maintained by or on behalf of the Borrower and the Subsidiaries as of the
      Effective Date. As of the Effective Date, all premiums in respect of such
      insurance that are due and payable have been paid.

     

    Section
      4.17 Financial
      Condition

     

    On
      the
      Effective Date and after giving affect to the consummation of the Transactions,
      neither the Borrower nor any Subsidiary Guarantor is Insolvent.

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

     

    Section
      4.18 No
      Misrepresentation

     

    No
      certificate or report from time to time furnished by any of the Loan Parties
      in
      connection with the Transactions contains or will contain a misstatement of
      material fact, or omits or will omit to state a material fact required to be
      stated in order to make the statements therein contained not misleading in
      the
      light of the circumstances under which made, provided that any projections
      or
      pro-forma financial information contained therein are based upon good faith
      estimates and assumptions believed by the Borrower to be reasonable at the
      time
      made, it being recognized by the Lender that such projections as to future
      events are not to be viewed as facts, and that actual results during the period
      or periods covered thereby may differ from the projected results.

     

    ARTICLE
      5

     

    CONDITIONS 

     

    Section
      5.1 Effective
      Date

     

    The
      obligations of the Lender to make Loans hereunder shall not become effective
      until the date on which each of the following conditions is satisfied (or waived
      in accordance with Section 9.1
      hereof):

     

    (a) The
      Lender shall have received a certificate of the Secretary or Assistant Secretary
      or other analogous counterpart of each Loan Party dated as of the Effective
      Date:

     

    (i) attaching
      a true and complete copy of the resolutions of its Managing Person and of all
      other documents evidencing all necessary corporate, partnership or other action
      (in form and substance satisfactory to the Lender) taken to authorize the Loan
      Documents to which it is a party and the transactions contemplated
      thereby;

     

    (ii) attaching
      a true and complete copy of its Organizational Documents;

     

    (iii) setting
      forth the incumbency of its officer or officers (or other analogous counterpart)
      who may sign the Loan Documents, including therein a signature specimen of
      such
      officer or officers (or other analogous counterpart); and

     

    (iv) attaching
      a certificate of good standing of the Secretary of State of the jurisdiction
      of
      its formation and of each other jurisdiction in which it is qualified to do
      business.

     

    (b) The
      Lender (or Special Counsel) shall have received, in respect of each Person
      listed on the signature pages of this Agreement, either (i) a counterpart
      signature page hereof signed on behalf of such Person, or (ii) written evidence
      satisfactory to the Lender (which may include a facsimile transmission of a
      signed signature page of this Agreement) that a counterpart signature page
      hereof has been signed on behalf of such Person.

     

    (c) The
      Lender shall have received the Note, dated the Effective Date, duly executed
      by
      a duly authorized officer of the Borrower.

     

    (d) The
      Lender shall have received a favorable opinion of Lowenstein Sandler PC, special
      counsel to the Loan Parties, addressed to the Lender, dated the Effective Date,
      and in form and substance satisfactory to the Lender.

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    (e) All
      approvals and consents of all Persons required to be obtained in connection
      with
      the consummation of the Transactions have been obtained, all required notices
      have been given and all required waiting periods have expired and the Lender
      shall have received a certificate of an officer of the Borrower to such
      effect.

     

    (f) The
      Lender shall have received a certificate, signed by a Financial Officer of
      the
      Borrower, in all respects reasonably satisfactory to the Lender, dated as of
      the
      Effective Date:

     

    (i) certifying
      that on the Effective Date and after giving effect to the making of the Loans
      and the consummation of the Transactions (i) no Default shall have occurred
      or be continuing and (ii) the representations and warranties contained in
      the Loan Documents are true and correct;

     

    (ii) certifying
      that the Borrower is in compliance with all covenants set forth in Section 7.14
      hereof
      on a pro-forma basis after giving effect to the Transactions and attaching
      a
      copy of a pro-forma consolidated balance sheet of the Borrower utilized for
      purposes of preparing such Compliance Certificate, which pro-forma consolidated
      balance sheet presents the Borrower’s good faith estimate of its pro-forma
      consolidated financial condition at the date thereof, after giving effect to
      the
      Transactions; and

     

    (iii) setting
      forth the Consolidated Leverage Ratio on the Effective Date and after giving
      effect to the Transactions, including calculations in reasonable detail,
      provided, however, for purposes of calculating the Consolidated Leverage Ratio,
      Consolidated EBITDA for the four quarters ended December 31, 2005 shall be
      used.

     

    (g) The
      Lender shall have received all fees and other amounts due and payable to the
      Lender under the Loan Documents on or prior to the Effective Date, including,
      to
      the extent invoiced, reimbursement or payment of the fees and disbursements
      of
      Special Counsel and all other out-of-pocket expenses required to be reimbursed
      or paid by the Borrower hereunder.

     

    (h) The
      Lender shall have received such other documents, each in form and substance
      reasonably satisfactory to it, as it shall reasonably request.

     

    Section
      5.2 Each
      Borrowing

     

    The
      obligation of the Lender to make a Loan on the occasion of any Borrowing is
      subject to the satisfaction of the following conditions:

     

    (a) The
      representations and warranties of each Loan Party set forth in each Loan
      Document shall be true and correct on and as of the date of such Borrowing
      (except for representations and warranties expressly made as of a specified
      earlier date, which shall be true as of such date).

     

    (b) At
      the
      time of and immediately after giving effect to such Borrowing, no Default shall
      have occurred and be continuing.

     

    (c) The
      Lender shall have received a Borrowing Request and such other documentation
      and
      assurances as shall be reasonably required by it in connection
      therewith.

     

    Each
      Borrowing shall be deemed to constitute a representation and warranty by the
      Borrower on the date thereof as to the matters specified in
      paragraphs (a) and (b) of this Section.

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      6

     

    AFFIRMATIVE
      COVENANTS

     

    The
      Borrower agrees that (unless otherwise consented to in writing by the Lender
      pursuant to Section 9.1
      hereof)
      until the Revolving Commitment has expired or been terminated and the principal
      of, and interest on the Loans, all Fees and all other amounts payable under
      the
      Loan Documents shall have been paid in full:

     

    Section
      6.1 Financial
      Statements and Information

     

    The
      Borrower shall furnish or cause to be furnished to the Lender:

     

    (a) within
      90
      days after the end of each fiscal year:

     

    (i) a
      copy of
      the Borrower’s Annual Report on Form 10-K in respect of such fiscal year,
      together with the financial statements required to be attached thereto, which
      statements above shall be audited and reported on by the Accountants (without
      (x) a “going concern” or like qualification or exception, (y) any
      qualification or exception as to the scope of such audit or (z) any exception
      or
      qualification which relates to the treatment or classification of any item
      and
      which, as a condition to the removal of such qualification, would require an
      adjustment to such item, the effect of which would be to cause the Borrower
      to
      be in default of any of its obligations under Section 7.14
      hereof
      (each, an “Impermissible
      Qualification”))
      to
      the effect that such consolidated financial statements present fairly in all
      material respects the financial condition and results of operations of the
      Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
      with GAAP consistently applied; and

     

    (ii) a
      copy of
      its unaudited consolidating balance sheet and related unaudited statements
      of
      income, stockholders’ equity and cash flows as of the end of and for such year,
      setting forth in each case in comparative form the figures for the previous
      fiscal year, all certified by one of its Financial Officers as presenting fairly
      in all material respects the financial condition and results of operations
      of
      the Borrower and its consolidated Subsidiaries on a consolidating basis in
      accordance with GAAP consistently applied, subject to the absence of footnotes,
      together with a schedule of other financial information consisting of
      consolidating or combining details in columnar form with such consolidating
      Subsidiaries separately identified, in accordance with GAAP consistently
      applied; and

     

    (iii) a
      copy of
      the unaudited combined balance sheet and related unaudited statements of income,
      stockholders equity and cash flows with respect to all Domestic Subsidiaries
      as
      of the end of and for such year, setting forth in each case in comparative
      form
      the figures for the previous fiscal year, all certified by one of the Borrower’s
      Financial Officers as presenting fairly in all material respects the financial
      conditions and results of operations of said Domestic Subsidiaries on a
      combining basis in accordance with GAAP consistently applied, subject to the
      absence of footnotes, together with a schedule of other financial information
      consisting of combined and combining details in columnar form with said Domestic
      Subsidiaries separately identified, all in accordance with GAAP consistently
      applied;

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

     

    (b) within
      45
      days after the end of each of the first three fiscal quarters of each fiscal
      year:

     

    (i) a
      copy of
      the Borrower’s Quarterly Report on Form 10-Q in respect of such fiscal quarter,
      together with the financial statements required to be attached thereto;
      and

     

    (ii) a
      copy of
      its unaudited consolidating balance sheet and related unaudited statements
      of
      income and cash flows as of the end of and for such fiscal quarter and the
      then
      elapsed portion of such fiscal year, setting forth in each case in comparative
      form the figures for the corresponding period or periods of (or, in the case
      of
      the balance sheet, as of the end of) the previous fiscal year, all certified
      by
      one of its Financial Officers as presenting fairly in all material respects
      the
      financial condition and results of operations of the Borrower and its
      consolidated Subsidiaries on a consolidating basis in accordance with GAAP
      consistently applied, subject to normal year-end audit adjustments and the
      absence of footnotes, together with a schedule of other financial information
      consisting of consolidating or combining details in columnar form with such
      consolidating Subsidiaries separately identified, in accordance with GAAP
      consistently applied; and

     

    (iii) a
      copy of
      the unaudited combined balance sheet and related unaudited statements of income
      and cash flows with respect to all Domestic Subsidiaries as of the end of and
      for such fiscal quarter and the then elapsed portion of such fiscal year,
      setting forth in each case in comparative form the figures for the corresponding
      period or periods of (or, in the case of the balance sheet, as of the end of)
      the previous fiscal year, all certified by one of the Borrower’s Financial
      Officers as presenting fairly in all material respects the financial condition
      and results of operations of said Domestic Subsidiaries on a combining basis
      in
      accordance with GAAP consistently applied, subject to normal year-end
      adjustments and the absence of footnotes, together with a schedule of other
      financial information consisting of combined and combining details in columnar
      form with said Domestic Subsidiaries separately identified, all in accordance
      with GAAP consistently applied;

     

    (c) concurrently
      with any delivery of financial statements under subsections (a) or
      (b) above, a certificate (a “Compliance
      Certificate”)
      signed
      by a Financial Officer of the Borrower, substantially in the form attached
      hereto as Exhibit
      “E”
      and made
      a part hereof, (i) certifying as to whether a Default has occurred and, if
      so, specifying the details thereof and any action taken or proposed to be taken
      with respect thereto, (ii) setting forth reasonably detailed calculations
      demonstrating compliance with Section 7.14
      hereof,
      (iii) stating whether any change in GAAP or in the application thereof has
      occurred since the date of the audited financial statements referred to in
      Section 4.4
      hereof
      and, if any such change has occurred, specifying the effect of such change
      on
      the financial statements accompanying such Compliance Certificate, and
      (iv) listing the Subsidiary Guarantors as of the date of such Compliance
      Certificate;

     

    (d) concurrently
      with any delivery of financial statements under subsections (a) or
      (b) above, a report of sales backlogs for major product lines as of the end
      of the relevant quarterly or annual period;

     

    (e) promptly
      after the same become publicly available, copies of all periodic and other
      reports, proxy statements and other materials filed by the Borrower or any
      Subsidiary with the SEC or with any national securities exchange, or distributed
      by the Borrower to its shareholders generally, as the case may be;
      and

     

    (f) promptly
      following any request therefor, such other information regarding the Borrower
      or
      any Subsidiary, or compliance with the terms of this Agreement, as the Lender
      may reasonably request.

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

     

    Section
      6.2 Notice
      of Material Events

     

    The
      Borrower shall furnish to the Lender prompt written notice of the following
      together with a statement of a Financial Officer or other executive officer
      of
      the Borrower setting forth the details of the event or development requiring
      such notice and, if applicable, any action taken or proposed to be taken with
      respect thereto:

     

    (a) the
      occurrence of any Default;

     

    (b) the
      filing or commencement of any action, suit or proceeding by or before any
      Governmental Authority against or affecting the Borrower or any Subsidiary
      that,
      if adversely determined, would in the good faith opinion of the Borrower
      reasonably be expected to result in a Material Adverse effect;

     

    (c) any
      lapse, refusal to renew or extend or other termination of any material license,
      permit, franchise or other authorization issued to the Borrower or any
      Subsidiary by any Person or Governmental Authority, which lapse, refusal or
      termination, would reasonably be expected to result in a Material Adverse
      effect;

     

    (d) the
      occurrence of any ERISA Event that, alone or together with any other ERISA
      Events that have occurred, would reasonably be expected to result in a Material
      Adverse effect; or

     

    (e) the
      occurrence of any other development that has or would reasonably be expected
      to
      result in, a Material Adverse effect.

     

    Section
      6.3 Existence;
      Conduct of Business

     

    The
      Borrower shall, and shall cause each Subsidiary to, do or cause to be done
      all
      things necessary to preserve, renew and keep in full force and effect
      (i) its legal existence (provided that the foregoing shall not prohibit any
      merger, consolidation or dissolution not prohibited by Section 7.3
      hereof),
      and (ii) all rights, licenses, permits, privileges and franchises the
      absence of which would reasonably be expected to have a Material Adverse
      effect.

     

    Section
      6.4 Payment
      of Obligations

     

    The
      Borrower shall, and shall cause each Subsidiary to, pay and discharge when
      due,
      its obligations, including obligations with respect to Taxes, which, if unpaid,
      would reasonably be expected to result in a Material Adverse effect, except
      where (i) the validity or amount thereof is being contested in good faith
      by appropriate proceedings diligently conducted, (ii) the Borrower or such
      Subsidiary has set aside on its books adequate reserves with respect thereto
      in
      accordance with GAAP and (iii) the failure to make payment pending such
      contest would not reasonably be expected to result in a Material Adverse
      effect.

     

    Section
      6.5 Maintenance
      of Properties

     

    The
      Borrower shall, and shall cause each Subsidiary to, maintain, protect and keep
      in good repair, working order and condition (ordinary wear and tear excepted)
      at
      all times, all of its property other than property, the loss of which would
      not
      reasonably be expected to have a Material Adverse effect.

     

    
      
        
        

      

      
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    Section
      6.6 Insurance

     

    The
      Borrower shall, and shall cause each Subsidiary to, maintain with financially
      sound and reputable insurance companies, in at least such amounts and against
      at
      least such risks (but including in any event public liability, product liability
      and business interruption coverage) as are usually insured against in the same
      general area by companies engaged in the same or a similar business, and furnish
      to the Lender, upon written request, full information as to the insurance
      carried.

     

    Section
      6.7 Books
      and Records: Inspection Rights

     

    The
      Borrower shall, and shall cause each Subsidiary to, keep proper books of record
      and account in which full, true and correct entries are made of all dealings
      and
      transactions in relation to its business and activities and, at all reasonable
      times upon reasonable prior notice, permit representatives of the Lender to
      (i) visit the offices of the Borrower and each Subsidiary,
      (ii) examine such books and records and Accountants’ reports relating
      thereto, (iii) make copies or extracts therefrom, (iv) discuss the
      affairs of the Borrower and each such Subsidiary with the respective officers
      thereof, (v) examine and inspect the property of the Borrower and each such
      Subsidiary and (vi) meet and discuss the affairs of the Borrower and each
      such Subsidiary with the Accountants.

     

    Section
      6.8 Compliance
      with Laws

     

    The
      Borrower shall, and shall cause each Subsidiary to, comply with all laws, rules,
      regulations and orders of any Governmental Authority applicable to it or its
      property, except where the failure to do so, individually or in the aggregate,
      would not reasonably be expected to result in a Material Adverse
      effect.

     

    Section
      6.9 Additional
      Subsidiaries

     

    In
      the
      event that on or after the Effective Date, any Person (other than the Excluded
      Subsidiaries) shall become a Domestic Subsidiary or any Excluded Subsidiary
      shall cease to be an Excluded Subsidiary, the Borrower shall

     

    (i) notify
      the Lender in writing thereof within three (3) Business Days
      thereof,

     

    (ii) cause
      such Person to execute and deliver to the Lender a Guaranty Supplement within
      five (5) Business Days thereafter, and

     

    (iii) deliver
      to the Lender such additional certificates, instruments and opinions (including
      opinions of foreign counsel) as the Lender may request.

     

    Section
      6.10 Maintenance
      of Licenses

     

    The
      Borrower shall do, and cause each Subsidiary to do, all things necessary, to
      renew, extend and continue in effect all permits, licenses and authorizations
      which may at any time and from time to time be necessary to operate the business
      of the Borrower and the Subsidiaries in compliance with all applicable laws
      and
      regulations, the failure to comply with which would reasonably be expected
      to
      have a Material Adverse effect.

     

    
      
        
        

      

      
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    ARTICLE
      7

     

    NEGATIVE
      COVENANTS

     

    The
      Borrower agrees that (unless otherwise consented to in writing by the Lender
      pursuant to Section 9.1
      hereof)
      until the Revolving Commitment has expired or been terminated and the principal
      of, and interest on the Loans, all Fees and all other amounts payable under
      the
      Loan Documents shall have been paid in full:

     

    Section
      7.1 Indebtedness

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, create, incur,
      assume or suffer to exist any liability for Indebtedness, except:

     

    (a) Indebtedness
      under the Loan Documents;

     

    (b) Indebtedness
      of the Borrower or any Subsidiary existing on the Effective Date as set forth
      on
Schedule
      7.1
      attached
      hereto and made a part hereof, and any extensions, renewals and replacements
      of
      any such Indebtedness that do not increase the outstanding principal amount
      thereof;

     

    (c) Indebtedness
      of the Borrower to any Subsidiary or of any Subsidiary to the Borrower or any
      other Subsidiary (other than an Excluded Subsidiary), provided
      that:

     

    (i) all
      Indebtedness of the Borrower or any Subsidiary Guarantor to any Non-Guarantor
      Subsidiary shall be subordinated in a manner in all respects acceptable to
      the
      Lender, which acceptance shall not be unreasonably withheld, and

     

    (ii) immediately
      after giving effect to any Indebtedness of any Non-Guarantor Subsidiary to
      the
      Borrower or any Subsidiary Guarantor, the sum of, without duplication, the
      following (at any time, the “Intercompany
      Transaction Amount”)
      shall
      not exceed $1,000,000.00: (A) the aggregate outstanding principal balance of
      all
      such Indebtedness permitted by this Section 7.1(c),
      plus
      (B) the aggregate amount of all Guaranties of the Borrower or any Subsidiary
      Guarantor permitted by Section 7.1(d) hereof
      in respect of Indebtedness of any Non-Guarantor Subsidiary, plus (C) the
      aggregate fair market value of all consideration paid by the Borrower or any
      Subsidiary Guarantor on or after the Effective Date to any Non-Guarantor
      Subsidiary in connection with any one or more of the following: (1) each
      sale, assignment, lease, transfer or other disposition permitted by Section
      7.6(iv)
      hereof (including each merger permitted by Section 7.3(b) hereof
      which shall be treated as such), (2) each Acquisition permitted by
Section 7.5(b)
      hereof
      (including each merger permitted by Section 7.3(b) which
      shall be treated as such), (3) each Investment permitted by Section 7.4(c),
      and
      (4) each Restricted Payment permitted by Section 7.7;

     

    (d) Guaranties
      of the Borrower in respect of Indebtedness of any Subsidiary and Guaranties
      of
      any Subsidiary in respect of Indebtedness of the Borrower or any other
      Subsidiary in each case to the extent such Indebtedness is permitted by this
      Section 8.1,
      provided that, with respect to Guaranties of the Borrower or any Subsidiary
      Guarantor in respect of Indebtedness of any Non-Guarantor Subsidiary,
      (i) such Guaranties shall be subordinated in a manner in all respects
      acceptable to the Lender, which acceptance shall not be unreasonably withheld,
      and (ii) immediately after giving effect thereto, the Intercompany
      Transaction Amount shall not exceed $1,000,000.00; and

     

    
      
        
        

      

      
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    (e) Other
      unsecured Indebtedness of the Borrower and its Subsidiaries in an aggregate
      amount not in excess of $10,000,000.00 at any one time outstanding.

     

    Section
      7.2 Negative
      Pledge

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, create, incur,
      assume or suffer to exist any Lien upon any of its property (including, without
      limitation, the Capital Stock of any Foreign Subsidiary owned by the Borrower
      or
      such Subsidiary), whether now owned or hereafter acquired, or assign or sell
      any
      income or revenues (including accounts receivable) or rights in respect of
      any
      thereof, except for the following (collectively, “Permitted
      Liens”):

     

    (a) any
      Customary Lien;

     

    (b) any
      Lien
      on any property or asset of the Borrower or any Subsidiary existing on the
      Effective Date and set forth on Schedule
      7.2
      attached
      hereto and made a part hereof, provided that (i) such Lien shall not apply
      to any property or asset of the Borrower or any Subsidiary other than the
      property and assets referred to in Schedule
      7.2
      attached
      hereto and made a part hereof and (ii) such Lien shall secure only those
      obligations which it secures on the Effective Date and extensions, renewals
      and
      replacements thereof that do not increase the outstanding principal amount
      thereof; and

     

    (c) Liens
      securing Capital Lease Obligations and Liens on property (including, in the
      event such property constitutes Capital Stock of a newly acquired Subsidiary,
      Liens on the property of such Subsidiary) acquired after the Effective Date
      and
      either existing on such property when acquired, or created contemporaneously
      with such acquisition, to secure the payment or financing of the purchase price
      thereof, provided that such Liens attach only to the property so purchased
      or
      acquired and, provided further, that the Indebtedness secured by such Liens
      is
      permitted by Section 7.1(f)
      hereof.

     

    Section
      7.3 Fundamental
      Changes

     

    The
      Borrower shall not, and shall not permit any Subsidiary, to consolidate or
      merge
      into or with any other Person, or permit any other Person to merge into or
      consolidate with it or any of the Subsidiaries, or sell, transfer, lease or
      otherwise dispose of (in one transaction or in a series of transactions) all
      or
      substantially all of its assets, or all or substantially all of any class of
      the
      Capital Stock of any of the Subsidiaries (in each case, whether now owned or
      hereafter acquired), or liquidate or dissolve, or permit any Subsidiaries to
      do
      any of the foregoing, except that, so long as immediately before and after
      giving effect thereto, no Default shall or would exist:

     

    (a) any
      Non-Guarantor Subsidiary may merge with any other Non-Guarantor
      Subsidiary;

     

    (b) any
      Non-Guarantor Subsidiary may merge with any Subsidiary Guarantor, and any
      Subsidiary Guarantor may merge with any Non-Guarantor Subsidiary; provided that,
      (i) immediately after giving effect to any such merger in which such
      Subsidiary Guarantor is the survivor, the Intercompany Transaction Amount shall
      not exceed $1,000,000.00, and such merger shall be treated as an Acquisition
      for
      all purposes of Section 7.5(b) or
      7.5(c)
      hereof,
      as the case may be, and (ii) with respect to any merger in which such
      Subsidiary Guarantor is not the survivor, such merger shall be treated as a
      sale, assignment, transfer or other disposition for all purposes of Section 7.6(iv)
      hereof;

     

    (c) the
      Borrower and any Subsidiary may make any sale, assignment, transfer or other
      disposition permitted by Section 7.6(iv)
      hereof;
      and

     

    
      
        
        

      

      
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    (d) any
      Non-Guarantor Subsidiary may liquidate or dissolve if the Borrower determines
      in
      good faith that such liquidation or dissolution is in the best interests of
      the
      Borrower and is not materially disadvantageous to the Lender.

     

    Section
      7.4 Investments,
      Loans, Advances and Guaranties

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, at any time,
      purchase or otherwise acquire (including pursuant to any merger with any Person
      that was not a Wholly Owned Subsidiary of the Borrower prior to such merger),
      hold or invest in any Capital Stock, evidences of indebtedness or other
      securities (including any option, warrant or other right to acquire any of
      the
      foregoing and any derivative product) of, make or permit to exist any loans
      to
      or advances on behalf of, incur any Guaranties in respect of any obligations
      of,
      or make or permit to exist any investment or any other interest in, any other
      Person (all of which are sometimes referred to herein as “Investments”),
      except:

     

    (a) Investments
      in Cash Equivalents and in normal business banking accounts or issued by
      federally insured institutions in amounts not exceeding the limits of such
      insurance;

     

    (b) Investments
      existing on the Effective Date as set forth on Schedule
      7.4
      attached
      hereto and made a part hereof;

     

    (c) Investments
      by the Borrower in any Subsidiary and Investments by any Subsidiary in the
      Borrower or any other Subsidiary; provided that
      (i) the proceeds of such Investment in the Borrower or any Subsidiary
      Guarantor shall be received by the Borrower or such Subsidiary Guarantor, as
      the
      case may be, and (ii) immediately after giving effect to each Investment by
      the Borrower or any Subsidiary Guarantor in any Non-Guarantor Subsidiary, the
      Intercompany Transaction Amount shall not exceed $1,000,000.00;

     

    (d) Acquisitions
      permitted by Section 7.5
      hereof;

     

    (e) other
      Investments in marketable securities (other than Cash Equivalents) in an amount
      not in excess of 10% of Consolidated Net Worth; provided,
      however,
      that
      after giving effect to any Investment described in this Section
      7.4(e),
      Margin
      Stock shall constitute less than 25% of the consolidated assets (as determined
      by any reasonable method) of the Borrower and the Subsidiaries; 

     

    (f) Guaranties
      permitted by Section 7.1
      hereof
      and Secured Hedging Agreements permitted by Section 7.8
      hereof;
      and

     

    (g) Unconsolidated
      Investments made on or after the Effective Date, provided that,
      (i) immediately before and after giving effect thereto, no Default shall or
      would exist, (ii) immediately after giving effect thereto, all of the
      representations and warranties contained in the Loan Documents shall be true
      and
      correct with the same effect as though then made, (iii) the Person in which
      such Unconsolidated Investment is made is engaged in the Line of Business,
      and
      (iv) the aggregate amount of all such Unconsolidated Investments does not
      exceed an amount (not less than zero) equal to $10,000,000.00 minus the
      Acquisition Consideration paid by the Borrower or any Subsidiary in respect
      of
      all Acquisitions made on or after the Effective Date and on or before the date
      of the making of such Unconsolidated Investment.

     

    Section
      7.5 Acquisitions

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, at any time, make
      any purchase or other acquisition (whether in a single transaction or in a
      series of related transactions) of (i) any assets of any other Person that,
      taken together, constitute a business unit, (ii) any Capital Stock of any
      other Person if, immediately thereafter, such other Person would be a Subsidiary
      of the Borrower, (iii) any assets of any other Person otherwise not in the
      ordinary course of business, (iv) enter into any binding agreement to
      perform any transaction described in clauses
      (i), (ii) or (iii) above
      which is not contingent on obtaining the consent of the Lender (each transaction
      described in clauses
      (i), (ii), (iii) and (iv) above
      being referred to as an “Acquisition”), or (v) make any deposit in
      connection with any potential Acquisition, except:

     

    (a) Acquisitions
      of Investments permitted by Section 7.4
      hereof;

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

     

    (b) Acquisitions
      by the Borrower or any Subsidiary from any other Subsidiary and Acquisitions
      by
      any Subsidiary from the Borrower or any other Subsidiary, provided that,
      immediately after giving effect to any Acquisition between a Loan Party, as
      purchaser, and a Non-Guarantor Subsidiary, as seller, the Intercompany
      Transaction Amount shall not exceed $1,000,000.00;

     

    (c) other
      Acquisitions, provided that: 

     

    (i) immediately
      before or after giving effect to each such Acquisition, no Default shall or
      would exist, and immediately after giving effect thereto, all of the
      representations and warranties contained in the Loan Documents shall be true
      and
      correct with the same effect as though then made,

     

    (ii) the
      Person or business acquired is engaged in the Line of Business,

     

    (iii) the
      Borrower or Subsidiary Guarantor making the Acquisition shall have complied
      with
      the provisions of Sections
      6.9 and 6.10
      hereof,

     

    (iv) the
      Borrower shall have delivered to the Lender (1) notice thereof not less than
      ten
      days prior to the consummation of such Acquisition, and (2) a certificate of
      a
      Financial Officer thereof, in all respects reasonably satisfactory to the Lender
      and dated the date of such consummation, certifying that no Default has occurred
      and is continuing, and 

     

    (v) in
      connection with each Acquisition, the Acquisition Consideration of which exceeds
      $10,000,000.00, the Borrower shall have delivered to the Lender (1) reasonably
      detailed calculations demonstrating compliance with Section
      7.14
      hereof
      on a pro-forma basis (after giving effect to such Acquisition and based on
      the
      most recent financial statements delivered pursuant to Section
      6.1
      hereof),
      (2) historical financial statements for the period of two years preceding such
      acquisition of the Person or business being acquired in such Acquisition, which
      financial statements shall be audited, if available, or if audited financial
      statements are not available, shall be unaudited and prepared by the management
      of such Person or the Person owning such business and (3) such other
      information, documents and other items as the Lender shall have reasonably
      requested. 

     

    Section
      7.6 Dispositions

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, sell, assign, lease,
      transfer or otherwise dispose of any property or assets, except: (i) sales
      of inventory in the ordinary course of business, (ii) sales, assignments,
      transfers or other dispositions of any property or assets that, in the
      reasonable opinion of the Borrower or such Subsidiary, as the case may be,
      are
      obsolete or no longer useful in the conduct of its business, (iii) sales or
      other dispositions of Cash Equivalents and Investments permitted by Section 7.4(e)
      hereof;
      and (iv) sales, assignments, transfers or other dispositions of any
      property or assets by the Borrower to any Subsidiary or by any Subsidiary to
      the
      Borrower or any other Subsidiary, provided that, immediately after giving effect
      to any such transaction between a Loan Party and a Non-Guarantor Subsidiary,
      the
      Intercompany Transaction Amount shall not exceed $1,000,000.00.

     

    
      
        
        

      

      
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    Section
      7.7 Restricted
      Payments

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, declare, pay or
      make
      any dividend or other distribution, direct or indirect, on account of any
      Capital Stock issued by such Person now or hereafter outstanding (other than
      a
      dividend payable solely in shares or other units of Capital Stock of such
      Person) or any redemption, retirement, sinking fund or similar payment, purchase
      or other acquisition, direct or indirect, of any shares of any class of its
      Capital Stock now or hereafter outstanding (collectively, “Restricted
      Payments”),
      except:

     

    (a) Restricted
      Payments made by any Subsidiary to the Borrower or other Subsidiary, provided
      that, (i) immediately before and after giving effect thereto, no Default
      shall or would exist, and (ii) in the case of a Restricted Payment made by
      a Loan Party to a Non-Guarantor Subsidiary, immediately after giving effect
      thereto, the Intercompany Transaction Amount shall not exceed $1,000,000.00;
      

     

    (b) repurchases
      of Capital Stock of the Borrower from participants or beneficiaries of qualified
      employee benefit plans in the ordinary course of the operation of such plans,
      provided that immediately before and after giving effect thereto, no Default
      shall or would exist;

     

    (c) cash
      dividends on its common stock, provided
      that
      immediately before and after giving effect thereto, no Default shall or would
      exists; and

     

    (d) if
      at the
      time thereof and immediately after giving effect thereto no Default shall have
      occurred and be continuing, the Borrower may repurchase shares of its Capital
      Stock in an aggregate amount not in excess of $60,000,000.00.

     

    Section
      7.8 Hedging
      Agreements

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, enter into any
      Hedging Agreements, other than Hedging Agreements entered into in the ordinary
      course of business to hedge or mitigate risks to which the Borrower or any
      Subsidiary is exposed in the conduct of its business or the management of its
      liabilities.

     

    Section
      7.9 Sale
      and Lease-Back Transactions

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, enter into an
      arrangement with any Person or group of Persons providing for the renting or
      leasing by the Borrower or any Subsidiary of any property or asset which has
      been or is to be sold or transferred by the Borrower or any Subsidiary to any
      such Person.

     

    Section
      7.10 Lines
      of Business

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, engage in any
      business other than the Line of Business.

     

    
      
        
        

      

      
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    Section
      7.11 Transactions
      with Affiliates

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, become a party
      to
      any transaction with an Affiliate, unless the Borrower’s or such Subsidiary’s
      Managing Person shall have determined that the terms and conditions relating
      thereto are as favorable to the Borrower or such Subsidiary as those which
      would
      be obtainable at the time in a comparable arms-length transaction with a Person
      other than an Affiliate.

     

    Section
      7.12 Use
      of
      Proceeds

     

    The
      Borrower shall not use the proceeds of the Loans for any purpose other than
      to
      (i) pay all of the Fees due hereunder, (ii) pay the reasonable
      out-of-pocket fees and expenses incurred by the Borrower in connection with
      the
      Loan Documents, and (iii) for the Borrower’s general corporate purposes not
      inconsistent with the provisions hereof.

     

    Section
      7.13 Restrictive
      Agreements

     

    The
      Borrower shall not, and shall not permit any Subsidiary to, directly or
      indirectly, enter into, incur or permit to exist any agreement or other
      arrangement that prohibits, restricts or imposes any condition upon (i) the
      ability of the Borrower or any such Subsidiary to create, incur or permit to
      exist any Lien upon any of its property or assets, or (ii) the ability of
      any such Subsidiary to pay dividends or other distributions with respect to
      any
      shares of its Capital Stock or to make or repay loans or advances to the
      Borrower or any other Subsidiary of the Borrower or to Guaranty Indebtedness
      of
      the Borrower or any other Subsidiary of the Borrower, provided that the
      foregoing shall not apply to restrictions and conditions imposed by applicable
      law or by the Loan Documents.

     

    Section
      7.14 Financial
      Covenants

     

    (a) Minimum
      Consolidated Net Worth.
      The
      Borrower shall not permit its Consolidated Net Worth to be less than, as of
      the
      last day of any fiscal quarter, an amount equal to $200,000,000.00 plus the
      sum
      for each fiscal quarter ending after the Effective Date of 50% of the net
      income, if positive, of the Borrower and its Subsidiaries on a consolidated
      basis for each such fiscal quarter plus
      an
      amount equal to 75% of the net proceeds of any issuance of equity by the
      Borrower.

     

    (b) Minimum
      Consolidated Fixed Charge Ratio.
      The
      Borrower shall not permit its Consolidated Fixed Charge Ratio as of the last
      day
      of any fiscal quarter to be less than 1.25:1.00.

     

    (c) Maximum
      Consolidated Leverage Ratio.
      The
      Borrower shall not permit its Consolidated Leverage Ratio as of the last day
      of
      any fiscal quarter to be greater than 3.00:1.00.

     

    (d) Minimum
      Combined Current Ratio.
      The
      Domestic Subsidiaries shall not permit their Combined Current Ratio as of the
      last day of any fiscal quarter to be less than 2.50:1.00.

     

    Section
      7.15 Excluded
      Subsidiaries

     

    The
      Borrower shall not permit any Excluded Subsidiary (other than Bel Delaware
      LLC
      referred to in clause
      (i) of
      the definition thereof) to engage in the active conduct of a trade or business
      or hold any assets (other than immaterial assets).

     

    
      
        
        

      

      
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    ARTICLE
      8

     

    DEFAULTS

     

    Section
      8.1 Events
      of Default

     

    The
      following shall each constitute an “Event of Default” hereunder:

     

    (a) the
      failure of the Borrower to make any payment of principal on the Loans when
      due
      and payable; or

     

    (b) the
      failure of the Borrower to make any payment of interest, Fees, expenses or
      other
      amounts payable under any Loan Document or otherwise to the Lender with respect
      to the loan facilities established hereunder within three Business Days of
      the
      date when due and payable; or

     

    (c) the
      failure of the Borrower to observe or perform any covenant or agreement
      contained in Sections 6.3(i),
      6.9, 6.10
      or
Article 7
      hereof;
      or

     

    (d) the
      failure of any Loan Party to observe or perform any other term, covenant, or
      agreement contained in any Loan Document to which it is a party and such failure
      shall have continued unremedied for a period of 30 days after such Loan Party
      shall have obtained knowledge thereof; or

     

    (e) any
      representation or warranty made by the Borrower or any Subsidiary (or by an
      officer thereof on its behalf) in any Loan Document or in any certificate,
      report, opinion (other than an opinion of counsel) or other document delivered
      or to be delivered pursuant thereto, shall prove to have been incorrect or
      misleading (whether because of misstatement or omission) in any material respect
      when made; or

     

    (f) the
      failure of the Borrower to make any payment when due or within any grace period,
      or the failure of the Borrower or any Subsidiary to make any payment (whether
      of
      principal or interest and regardless of amount) in respect of Material
      Liabilities when due or within any grace period for the payment thereof;
      or

     

    (g) any
      event
      or condition occurs that results in any Material Liabilities becoming or being
      declared to be due and payable prior to the scheduled maturity thereof, or
      that
      enables or permits (with or without the giving of notice, the lapse of time
      or
      both) the holder or holders of any Material Liabilities or any trustee or agent
      on its or their behalf to cause any Material Liabilities to be due and payable,
      or to require the prepayment, repurchase, redemption or defeasance thereof,
      in
      each case prior to the scheduled maturity thereof (in each case after giving
      effect to any applicable grace period), provided that this clause (g) shall
      not apply to secured Indebtedness that becomes due as a result of the voluntary
      sale or transfer of the properly or assets securing such Indebtedness;
      or

     

    (h) the
      Borrower or any Material Subsidiary shall (i) suspend or discontinue its
      business (except to the extent permitted by Section 6.3
      hereof),
      (ii) make an assignment for the benefit of creditors, (iii) generally
      not be paying its debts as such debts become due, (iv) admit in writing its
      inability to pay its debts as they become due, (v) file a voluntary
      petition in bankruptcy, (vi) become insolvent (however such insolvency
      shall be evidenced), (vii) file any petition or answer seeking for itself
      any reorganization, arrangement, composition, readjustment of debt, liquidation
      or dissolution or similar relief under any present or future statute, law or
      regulation of any jurisdiction, (viii) petition or apply to any tribunal
      for any receiver, custodian or any trustee for any substantial part of its
      property, (ix) be the subject of any such proceeding filed against it which
      remains undismissed for a period of 45 days, (x) file any answer admitting
      or not contesting the material allegations of any such petition filed against
      it
      or any order, judgment or decree approving such petition in any such proceeding,
      (xi) seek, approve, consent to, or acquiesce in any such proceeding, or in
      the appointment of any trustee, receiver, sequestrator, custodian, liquidator,
      or fiscal agent for it, or any substantial part of its property, or an order
      is
      entered appointing any such trustee, receiver, custodian, liquidator or fiscal
      agent and such order remains in effect for 45 days, or (xii) take any
      formal action for the purpose of effecting any of the foregoing or looking
      to
      the liquidation or dissolution of the Borrower or such Material Subsidiary;
      or

     

    
      
        
        

      

      
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    (i) an
      (i) order or decree is entered by a court having jurisdiction (A) adjudging
      the Borrower or any Material Subsidiary bankrupt or insolvent, (B) approving
      as
      properly filed a petition seeking reorganization, liquidation, arrangement,
      adjustment or composition of or in respect of the Borrower or any Material
      Subsidiary under the bankruptcy or insolvency laws of any jurisdiction, (C)
      appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
      (or other similar official) of the Borrower or any Material Subsidiary or of
      any
      substantial part of the property of any thereof, or (D) ordering the winding
      up
      or liquidation of the affairs of the Borrower or any Material Subsidiary, and
      any such decree or order continues unstayed and in effect for a period of 45
      days or (ii) order for relief against the Borrower or any Material
      Subsidiary is entered under the bankruptcy or insolvency laws of any
      jurisdiction; or

     

    (j) judgments
      or decrees against the Borrower or any Subsidiary aggregating in excess of
      $1,000,000.00 (unless adequately insured by a solvent unaffiliated insurance
      company which has acknowledged coverage) shall remain unpaid, unstayed on
      appeal, undischarged, unbonded or undismissed for a period of 30 days;
      or

     

    (k) any
      Loan
      Document shall cease, for any reason, to be in full force and effect (other
      than
      in accordance with its terms), or any Loan Party shall so assert in writing
      or
      shall disavow any of its obligations thereunder; or

     

    (l) an
      ERISA
      Event shall have occurred that, in the opinion of the Lender, when taken
      together with all other ERISA Events that have occurred, would reasonably be
      expected to result in liability of the Borrower and the Subsidiaries which
      would, individually or in the aggregate, have a Material Adverse effect;
      or

     

    (m) the
      occurrence of a Change of Control.

     

    Section
      8.2 Contract
      Remedies

     

    (a) Upon
      the
      occurrence of an Event of Default or at any time thereafter during the
      continuance thereof,

     

    (i) in
      the
      case of an Event of Default specified in Section 8.1(h)
      or 8.1(i)
      hereof,
      without declaration or notice to the Borrower, the Loans, all accrued and unpaid
      interest thereon and all other amounts owing under the Loan Documents shall
      immediately become due and payable, and

     

    (ii) in
      all
      other cases the Lender may, by notice to the Borrower, declare the Loans, all
      accrued and unpaid interest thereon and all other amounts owing under the Loan
      Documents to be due and payable forthwith, whereupon the same shall immediately
      become due and payable.

     

    
      
        
        

      

      
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    In
      the
      event that the Loans, all accrued and unpaid interest thereon and all other
      amounts owing under the Loan Documents shall have been declared due and payable
      pursuant to the provisions of this Section 8.2,
      the
      Lender may (A) proceed to enforce its rights under the Loan Documents by suit
      in
      equity, action at law and/or other appropriate proceedings, whether for payment
      or the specific performance of any covenant or agreement contained in the Loan
      Documents and (B) exercise any and all rights and remedies provided to the
      Lender by the Loan Documents. Except as otherwise expressly provided in the
      Loan
      Documents, the Borrower expressly waives presentment, demand, protest and all
      other notices of any kind in connection with the Loan Documents. The Borrower
      hereby further expressly waives and covenants not to assert any appraisement,
      valuation, stay, extension, redemption or similar laws, now or at any time
      hereafter in force which might delay, prevent or otherwise impede the
      performance or enforcement of any Loan Document.

     

    (b) In
      the
      event that the Loans, all accrued and unpaid interest thereon and all other
      amounts owing under the Loan Documents shall have been declared due and payable
      pursuant to the provisions of this Section 8.2,
      any
      funds received by the Lender from or on behalf of the Borrower shall be remitted
      to, and applied by, the Lender in the following manner and order:

     

    (i) first,
      to
      reimburse the Lender for any expenses due from the Borrower pursuant to the
      provisions of Section 9.4
      hereof,

     

    (ii) second,
      to the payment of the Fees due and owing the Lender,

     

    (iii) third,
      to
      the payment of any other fees, expenses or other amounts (other than the
      principal of and interest on the Loans) payable by the Loan Parties to the
      Lender under the Loan Documents,

     

    (iv) fourth,
      to the payment of interest due on the Loans,

     

    (v) fifth,
      to
      the payment to the Lender of the unpaid principal amount of the Loans and each
      amount then due and payable under each Secured Hedging Agreement,
      and

     

    (vi) sixth,
      any remaining funds shall be paid to the Borrower or as a court of competent
      jurisdiction shall direct.

     

    ARTICLE
      9

     

    OTHER
      PROVISIONS

     

    Section
      9.1 Amendments
      and Waivers

     

    Notwithstanding
      anything to the contrary contained in any Loan Document, the Lender and the
      appropriate parties to the Loan Documents may from time to time enter into
      written amendments, supplements or modifications thereof, and the Lender may
      execute and deliver to any such parties a written instrument waiving or
      consenting to the departure from, on such terms and conditions as the Lender
      may
      specify in such instrument, any of the requirements of the Loan Documents or
      any
      Default or Event of Default and its consequences. Any such amendment,
      supplement, modification, waiver or consent shall be binding upon the parties
      to
      the applicable agreement, the Lender and all future holders of the Loans. In
      the
      case of any waiver, the parties to the applicable agreement and the Lender
      shall
      be restored to their former position and rights hereunder and under the Loan
      Documents, and any Default waived shall not extend to any subsequent or other
      Default, or impair any right consequent thereon.

     

    
      
        
        

      

      
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    Section
      9.2 Notices

     

    All
      notices, requests and demands to or upon the respective parties to the Loan
      Documents to be effective shall be in writing and, unless otherwise expressly
      provided therein, shall be deemed to have been duly given or made when delivered
      by hand, one Business Day after having been sent by overnight courier service,
      two Business Days after having been deposited in the mail, first-class postage
      prepaid, or, in the case of notice by facsimile, when sent, to the last address
      (including telephone and facsimile numbers) for such party specified by such
      party in a written notice delivered to the Lender and the Borrower or, if no
      such written notice was so delivered, as follows:

     

    (a) in
      the
      case of any Loan Party, to such Loan Party c/o Bel Fuse Inc., 206 Van Vorst
      Street, Jersey City, New Jersey 07302; Attention: Colin Dunn, Vice
      President-Finance, Telephone: (201) 432-0463; Facsimile (201) 432-9542;
      and

     

    (b) in
      the
      case of the Lender, to Bank of America, N.A., Mail Stop: NJ6-502-01-05, 750
      Walnut Avenue, 1st
      Floor,
      Cranford, New Jersey 07016; Attention: David J. Bardwil, Senior Vice President;
      Telephone: (908) 709-6668, Facsimile (908) 709-6055;

     

    provided,
      however, that any notice, request
      or demand by the Borrower pursuant to Sections 2.2
      or 3.3
      shall
      not be effective until received. Any party to a Loan Document may rely on
      signatures of the parties thereto which are transmitted by facsimile or other
      electronic means as fully as if originally signed.

     

    Section
      9.3 Survival

     

    All
      covenants, agreements, representations and warranties made by the Borrower
      herein and in the certificates or other instruments delivered in connection
      with
      or pursuant to this Agreement shall be considered to have been relied upon
      by
      the other parties hereto and shall survive the execution and delivery of this
      Agreement and the making of the Loans, regardless of any investigation made
      by
      any such other party or on its behalf and notwithstanding that the Lender may
      have had notice or knowledge of any Default or incorrect representation or
      warranty at the time any credit is extended hereunder.

     

    Section
      9.4 Expenses;
      Indemnity

     

    (a) The
      Borrower agrees, on demand therefor and whether the Loans are made to pay or
      reimburse the Lender (i) for all reasonable out-of-pocket expenses incurred
      thereby, including the reasonable fees, charges and disbursements of counsel,
      in
      connection with the development, preparation, execution and administration
      of,
      the Loan Documents (including any amendment, supplement or other modification
      thereto (whether or not executed or effective)), any documents prepared in
      connection therewith and the consummation of the transactions contemplated
      thereby and (ii) for all of its costs and expenses, including reasonable
      fees and disbursements of counsel, incurred in connection with (A) the
      protection or enforcement of its rights under the Loan Documents, including
      any
      related collection proceedings and any negotiation, restructuring or “work-out”,
      and (B) the enforcement of this Section.

     

    (b) The
      Borrower shall, on demand therefor, indemnify the Lender and each of its Related
      Parties (each, an “Indemnified
      Person”)
      against, and hold each Indemnified Person harmless from, any and all losses,
      claims, damages, penalties, liabilities and related expenses, including the
      fees, charges and disbursements of any counsel, incurred by or asserted against
      any Indemnified Person in connection with or in any way arising out of any
      Loan
      Document, any other Transaction Document or any Transaction, including as a
      result of (i) any breach by the Borrower of the terms of any Loan Document,
      the use of proceeds of the Loans or any action or failure to act on the part
      of
      the Borrower, (ii) the consummation or proposed consummation of the
      Transactions or any other transactions contemplated hereby, (iii) the Loans
      or the use of the proceeds therefrom, (iv) any actual or alleged presence
      or release of Hazardous Substance on or from any property owned or operated
      by
      the Borrower or any of its Subsidiaries, or any liability in respect of any
      Environmental Law related in any way to the Borrower or any of its Subsidiaries,
      (v) any action or failure to act on the part of the Borrower or
      (vi) any actual or prospective claim, litigation, investigation or
      proceeding relating to any of the foregoing, whether based on contract, tort
      or
      any other theory and regardless of whether any Indemnified Person is a party
      thereto (collectively, the “Indemnified
      Liabilities”),
      provided that such indemnity shall not, as to any Indemnified Person, be
      available to the extent that such losses, claims, damages, liabilities or
      related expenses resulted from the gross negligence or willful misconduct of
      such Indemnified Person.

     

    
      
        
        

      

      
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    (c) To
      the
      fullest extent permitted by applicable law, the Borrower shall not assert,
      and
      hereby waives, any claim against any Indemnified Person, 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 Credit and Guaranty Agreement, the other Loan Documents or any
      agreement or instrument contemplated hereby, the transactions contemplated
      hereby or thereby, the Loans or the use of the proceeds thereof. No Indemnified
      Person shall be liable for any damages arising from the use by unintended
      recipients of any information or other materials distributed to such unintended
      recipients by such Indemnified Person through telecommunications, electronic
      or
      other information transmission systems in connection with this Credit and
      Guaranty Agreement or the other Loan Documents or the transactions contemplated
      hereby or thereby other than for direct or actual damages resulting from the
      gross negligence or willful misconduct of such Indemnified Person as determined
      by a final and nonappealable judgment of a court of competent
      jurisdiction.

    

    Section
      9.5 Successors
      and Assigns

     

    (a) The
      Loan
      Documents shall be binding upon and inure to the benefit of each of the parties
      thereto, all future holders of the Loans, and their respective successors and
      assigns, except that no Loan Party may assign, delegate or transfer any of
      its
      rights or obligations under the Loan Documents (other than in connection with
      a
      dissolution or a transaction involving a merger or consolidation, in each case
      otherwise permitted by this Agreement) without the prior written consent of
      the
      Lender.

     

    (b) In
      addition to its rights under Section 9.5(d)
      hereof,
      the Lender shall have the right to sell, assign, transfer or negotiate one
      hundred percent of its rights and obligations under the Loan Documents to any
      subsidiary or affiliate of the Lender or to any other bank, insurance company,
      financial institution, pension fund, mutual fund or other similar fund, provided
      that (i) unless the assignee is a subsidiary or affiliate of the Lender (in
      which case no claims may be made by such assignee pursuant to Section 3.5,
      3.6 or 3.7
      hereof,
      in each case except to the extent that the Lender would otherwise have the
      right
      to do so), the Borrower shall have consented thereto in writing (which consent
      shall not be unreasonably withheld or delayed and shall not be required upon
      the
      occurrence and during the continuance of an Event of Default) and (ii) the
      Lender and such assignee shall execute and deliver an assignment and acceptance
      agreement and cause one photocopy thereof, as executed, to be delivered to
      the
      Borrower. From and after the effective date specified in such assignment and
      acceptance agreement, the assignee thereunder shall be a party hereto and shall,
      for all purposes of this Agreement and the other Loan Documents, be deemed
      the
“Lender”, and the assignor thereunder shall be released from its obligations
      under this Agreement and the other Loan Documents.

     

    (c) The
      Lender may grant participations in all or any part of its rights under the
      Loan
      Documents to one or more Persons, provided that (i) the Lender’s
      obligations under this Agreement and the other Loan Documents shall remain
      unchanged, (ii) the Lender shall remain solely responsible to the other
      parties to this Agreement and the other Loan Documents for the performance
      of
      such obligations, and (iii) the Borrower shall continue to deal solely and
      directly with the Lender in connection with the Lender’s rights and obligations
      under this Agreement and the other Loan Documents. The Borrower agrees that
      each
      participant shall be entitled to the benefits of Sections 3.5,
      3.6 and 3.7
      hereof
      to the same extent as if it were the Lender and had acquired its interest by
      assignment pursuant to Section 9.5(b)
      hereof,
      provided, however, that (A) no participant shall be entitled to receive any
      greater payment under such Sections than the Lender would have been
      entitled to receive with respect to the participation sold to such participant,
      unless the sale of the participation to such participant is made with the
      Borrower’s prior written consent, and (B) no participant that is organized under
      the laws of any jurisdiction other than the United States or any political
      subdivision thereof shall be entitled to the benefits of Section 3.7,
      unless the Borrower is notified of the participation sold to such participant
      and such participant agrees, for the benefit of the Borrower, to comply with
      Section 3.7
      hereof
      as thought it were the Lender. To the extent permitted by law, each participant
      also shall be entitled to the benefits of Section 2.3(b)
      hereof as though it were the Lender.

     

    
      
        
        

      

      
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    (d) The
      Lender may at any time or from time to time assign all or any portion of its
      rights under the Loan Documents to a Federal Reserve Bank, provided that any
      such assignment shall not release such assignor from its obligations
      thereunder.

     

    Section
      9.6 Interest
      Rate Limitation.
      Notwithstanding anything to the contrary contained in any Loan Document, the
      interest paid or agreed to be paid under the Loan Documents shall not exceed
      the
      maximum rate of non-usurious interest permitted by applicable Law (the “Maximum
      Rate”). If the Lender shall receive interest in an amount that exceeds the
      Maximum Rate, the excess interest shall be applied to the principal of the
      Loans
      or, if it exceeds such unpaid principal, refunded to Borrower. In determining
      whether the interest contracted for, charged, or received by the Lender exceeds
      the Maximum Rate, such Person may, to the extent permitted by applicable Law,
      (a) characterize any payment that is not principal as an expense, fee, or
      premium rather than interest, (b) exclude voluntary prepayments and the effects
      thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
      parts the total amount of interest throughout the contemplated term of the
      Borrower Obligations hereunder.

    

    Section
      9.7 Counterparts;
      Integration

     

    Each
      Loan
      Document (other than the Note) may be executed by one or more of the parties
      thereto on any number of separate counterparts and all of said counterparts
      taken together shall be deemed to constitute one and the same document. It
      shall
      not be necessary in making proof of any Loan Document to produce or account
      for
      more than one counterpart signed by the party to be charged. Delivery of an
      executed counterpart of a signature page of any Loan Document by facsimile
      shall
      be effective as delivery of a manually executed counterpart of such Loan
      Document. The Loan Documents and any separate letter agreements between the
      Borrower and the Lender with respect to fees embody the entire agreement and
      understanding among the Loan Parties and the Lender with respect to the subject
      matter thereof and supersede all prior agreements and understandings among
      the
      Loan Parties and the Lender with respect to the subject matter
      thereof.

     

    Section
      9.8 Severability

     

    Every
      provision of the Loan Documents is intended to be severable, and if any term
      or
      provision thereof shall be invalid, illegal or unenforceable for any reason,
      the
      validity, legality and enforceability of the remaining provisions thereof shall
      not be affected or impaired thereby, and any invalidity, illegality or
      unenforceability in any jurisdiction shall not affect the validity, legality
      or
      enforceability of any such term or provision in any other
      jurisdiction.

     

    
      
        
        

      

      
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    Section
      9.9 GOVERNING
      LAW

     

    (a) GOVERNING
      LAW.
      THIS CREDIT AND GUARANTY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
      ACCORDANCE WITH, THE LAW OF THE STATE OF NEW JERSEY.

     

    (b) SUBMISSION
      TO JURISDICTION.
      THE BORROWER AND THE OTHER LOAN PARTIES IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
      FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS
      OF
      THE STATE OF NEW JERSEY AND OF THE UNITED STATES DISTRICT COURT OF THE DISTRICT
      OF NEW JERSEY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
      PROCEEDING ARISING OUT OF OR RELATING TO THIS CREDIT AND GUARANTY AGREEMENT
      OR
      LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
      OF
      THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
      RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
      NEW
      JERSEY STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN
      SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT
      IN
      ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
      JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
      NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
      THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING
      TO
      THIS CREDIT AND GUARANTY AGREEMENT OR THE OTHER LOAN DOCUMENTS AGAINST THE
      BORROWER OR THE OTHER LOAN PARTIES OR ITS PROPERTIES IN THE COURTS OF ANY
      JURISDICTION.

     

    (c) WAIVER
      OF VENUE.
      THE BORROWER AND THE OTHER LOAN PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES,
      TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY
      NOW
      OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING
      OUT
      OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT
      REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO
      HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
      THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
      PROCEEDING IN ANY SUCH COURT.

    

    (d) SERVICE
      OF PROCESS.
      EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER
      PROVIDED FOR NOTICES IN SECTION 9.2
      HEREOF. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO
      TO
      SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE
      LAW.

    

    Section
      9.10 Jurisdiction;
      Service of Process

     

    Each
      party to a Loan Document hereby irrevocably submits to the nonexclusive
      jurisdiction of any New Jersey State or Federal court over any suit, action
      or
      proceeding arising out of or relating to the Loan Documents. Each party to
      a
      Loan Document hereby irrevocably waives, to the fullest extent permitted or
      not
      prohibited by law, any objection which it may now or hereafter have to the
      laying of the venue of any such suit, action or proceeding brought in such
      a
      court and any claim that any such suit, action or proceeding brought in such
      a
      court has been brought in an inconvenient forum. Each Loan Party hereby agrees
      that a final judgment in any such suit, action or proceeding brought in such
      a
      court, after all appropriate appeals, shall be conclusive and binding upon
      it
      and may be enforced in other jurisdictions by suit on the judgment or in any
      other manner provided by law. Nothing in this Agreement shall affect any right
      that the Lender may otherwise have to bring any action or proceeding relating
      to
      Loan Documents against the Borrower or its properties in the courts of any
      jurisdiction. Each party to a Loan Document hereby irrevocably consents to
      service of process in the manner provided for notices in Section 9.2
      hereof.
      Nothing in this Agreement will affect the right of any party to a Loan Document
      to serve process in any other manner permitted by law.

     

    
      
        
        

      

      
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    Section
      9.11 WAIVER
      OF TRIAL BY JURY

     

    EACH
      PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
      APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
      DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS CREDIT AND GUARANTY
      AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY
      OR
      THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
      (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON
      HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT,
      IN
      THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
      (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
      ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,
      THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     

    Section
      9.12 No
      Advisory or Fiduciary Responsibility.
      In
      connection with all aspects of each transaction contemplated hereby, the
      Borrower and the other Loan Parties acknowledge and agree that:
      (i)
      the credit facilities provided for hereunder and any related arranging or other
      services in connection therewith (including in connection with any amendment,
      waiver or other modification hereof or of any other Loan Document) are an
      arm’s-length commercial transaction between Borrower, each of the other Loan
      Parties and their respective Affiliates, on the one hand, and the Lender, on
      the
      other hand, and Borrower and each of the other Loan Parties is capable of
      evaluating and understanding and understands and accepts the terms, risks and
      conditions of the transactions contemplated hereby and by the other Loan
      Documents (including any amendment, waiver or other modification hereof or
      thereof); (ii) in connection with the process leading to such transaction,
      the
      Lender is and has been acting solely as a principal and is not the financial
      advisor, agent or fiduciary, for Borrower, any of the other Loan Parties or
      any
      of their respective Affiliates, stockholders, creditors or employees or any
      other Person; (iii) the Lender has not assumed and will not assume an advisory,
      agency or fiduciary responsibility in favor of the Borrower or any of the other
      Loan Parties with respect to any of the transactions contemplated hereby or
      the
      process leading thereto, including with respect to any amendment, waiver or
      other modification hereof or of any other Loan Document (irrespective of whether
      the Lender has advised or is currently advising Borrower, any of the other
      Loan
      Parties or any of their respective Affiliates on other matters) and the Lender
      has no obligation to the Borrower, any of the other Loan Parties or any of
      their
      respective Affiliates with respect to the transactions contemplated hereby
      except those obligations expressly set forth herein and in the other Loan
      Documents; (iv) the Lender and its Affiliates may be engaged in a broad range
      of
      transactions that involve interests that differ from those of Borrower, the
      other Loan Parties and their respective Affiliates, and the Lender has no
      obligation to disclose any of such interests by virtue of any advisory, agency
      or fiduciary relationship; and (v) the Lender has not provided and will not
      provide any legal, accounting, regulatory or tax advice with respect to any
      of
      the transactions contemplated hereby (including any amendment, waiver or other
      modification hereof or of any of the other Loan Documents) and the Borrower
      and
      the other Loan Parties has consulted its own legal, accounting, regulatory
      and
      tax advisors to the extent it has deemed appropriate. Each of Borrower and
      the
      other Loan Parties hereby waives and releases, to the fullest extent permitted
      by law, any claims that it may have against the Lender with respect to any
      breach or alleged breach of agency or fiduciary duty.

     

    
      
        
        

      

      
        -45-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      10

     

    SUBSIDIARY
      GUARANTY

     

    The
      Subsidiary Guarantors agree that until the principal of, and interest on, the
      Loans, all Fees and all other amounts payable under the Loan Documents shall
      have been paid in full:

     

    Section
      10.1 Guaranty

     

    (a) Subject
      to Section 10.1(b)
      hereof,
      each Subsidiary Guarantor hereby absolutely, irrevocably and unconditionally
      Guaranties the full and prompt payment when due (whether at stated maturity,
      by
      acceleration or otherwise) of the Borrower Obligations. The agreements of each
      Subsidiary Guarantor under this Article 10
      constitute a Guaranty of payment, and the Lender shall not have any obligation
      to enforce any Loan Document or exercise any right or remedy with respect to
      any
      collateral security thereunder by any action, including making or perfecting
      any
      claim against any Person or any collateral security for any of the Borrower
      Obligations prior to being entitled to the benefits of this Agreement. The
      Lender may, at its option, proceed against the Subsidiary Guarantors, or any
      one
      or more of them, in the first instance, to enforce the Guarantor Obligations
      without first proceeding against the Borrower or any other Person, and without
      first resorting to any other rights or remedies, as the Lender may deem
      advisable. In furtherance hereof, if the Lender is prevented by law from
      collecting or otherwise hindered from collecting or otherwise enforcing any
      Borrower Obligation in accordance with its terms, the Lender shall be entitled
      to receive hereunder from the Subsidiary Guarantors after demand therefor,
      the
      sums that would have been otherwise due had such collection or enforcement
      not
      been prevented or hindered.

     

    (b) Notwithstanding
      anything to the contrary contained herein, the maximum aggregate amount of
      the
      obligations of each Subsidiary Guarantor hereunder shall not, as of any date
      of
      determination, exceed the lesser of (i) the greatest amount that is valid
      and enforceable against such Subsidiary Guarantor under principles of New Jersey
      State contract law, and (ii) the greatest amount that would not render such
      Subsidiary Guarantor’s liability hereunder subject to avoidance as a fraudulent
      transfer or conveyance under Section 548 of Title 11 of the United States
      Code or any applicable provisions of state law (collectively, the “Fraudulent
      Transfer Laws”),
      in
      each case after giving effect to all other liabilities of such Subsidiary
      Guarantor, contingent or otherwise, that are relevant under the Fraudulent
      Transfer Laws (specifically excluding, however, any liability (A) in respect
      of
      intercompany indebtedness to the Borrower or any affiliate or subsidiary of
      the
      Borrower, to the extent that such intercompany indebtedness would be discharged
      in an amount equal to the amount paid by such Subsidiary Guarantor hereunder,
      and (B) under any Guaranty of (1) senior unsecured indebtedness, or
      (2) indebtedness subordinated in right of payment to any Borrower
      Obligation, in either case that contains a limitation as to maximum liability
      similar to that set forth in this Section 10.1(b) and
      pursuant to which the liability of such Subsidiary Guarantor hereunder is
      included in the liabilities taken into account in determining such maximum
      liability) and after giving effect as assets to the value (as determined under
      the applicable provisions of the Fraudulent Transfer Laws) of any rights to
      subrogation, contribution, reimbursement, indemnity or similar rights of such
      Subsidiary Guarantor pursuant to applicable law or any agreement providing
      for
      an equitable allocation among such Subsidiary Guarantor and other affiliates
      or
      subsidiaries of the Borrower of obligations arising under Guaranties by such
      parties.

     

    
      
        
        

      

      
        -46-

        
          

        

      

      
        
        

      

    

     

    (c) Each
      Subsidiary Guarantor agrees that the Guarantor Obligations may at any time
      and
      from time to time exceed the maximum aggregate amount of the obligations of
      such
      Subsidiary Guarantor hereunder without impairing this Agreement or affecting
      the
      rights and remedies of the Lender hereunder.

     

    Section
      10.2 Absolute
      Obligation

     

    Subject
      to Section 10.5(c)
      hereof,
      no Subsidiary Guarantor shall be released from liability hereunder unless and
      until either (i) the Borrower shall have paid in full the outstanding
      principal balance of the Loans, together with all accrued and unpaid interest
      thereon, and all other amounts then due and owing under the Loan Documents,
      or
      (ii) the Guarantor Obligations of such Subsidiary Guarantor shall have been
      paid in full in cash. Each Subsidiary Guarantor acknowledges and agrees that
      (a) the Lender has not made any representation or warranty to such
      Subsidiary Guarantor with respect to the Borrower, any of its Subsidiaries,
      any
      Loan Document, or any agreement, instrument or document executed or delivered
      in
      connection therewith, or any other matter whatsoever, and (b) such
      Subsidiary Guarantor shall be liable hereunder, and such liability shall not
      be
      affected or impaired, irrespective of (A) the validity or enforceability of
      any
      Loan Document, or any agreement, instrument or document executed or delivered
      in
      connection therewith, or the collectability of any of the Borrower Obligations,
      (B) the preference or priority ranking with respect to any of the Borrower
      Obligations, (C) the existence, validity, enforceability or perfection of any
      security interest or collateral security under any Loan Document, or the
      release, exchange, substitution or loss or impairment of any such security
      interest or collateral security, (D) any failure, delay, neglect or omission
      by
      the Lender to realize upon or protect any direct or indirect collateral
      security, indebtedness, liability or obligation, any Loan Document, or any
      agreement, instrument or document executed or delivered in connection therewith,
      or any of the Borrower Obligations, (E) the existence or exercise of any right
      of set-off by the Lender, (F) the existence, validity or enforceability of
      any
      other Guaranty with respect to any of the Borrower Obligations, the liability
      of
      any other Person in respect of any of the Borrower Obligations, or the release
      of any such Person or any other guarantor of any of the Borrower Obligations,
      (G) any act or omission of the Lender in connection with the administration
      of
      any Loan Document or any of the Borrower Obligations, (H) the bankruptcy,
      insolvency, reorganization or receivership of, or any other proceeding for
      the
      relief of debtors commenced by or against, any Person, (I) the disaffirmance
      or
      rejection, or the purported disaffirmance or purported rejection, of any of
      the
      Borrower Obligations, any Loan Document, or any agreement, instrument or
      document executed or delivered in connection therewith, in any bankruptcy,
      insolvency, reorganization or receivership, or any other proceeding for the
      relief of debtor, relating to any Person, (J) any law, regulation or decree
      now
      or hereafter in effect that might in any manner affect any of the terms or
      provisions of any Loan Document, or any agreement, instrument or document
      executed or delivered in connection therewith or any of the Borrower
      Obligations, or that might cause or permit to be invoked any alteration in
      the
      time, amount, manner or payment or performance of any of the Borrower’s
      obligations and liabilities (including the Borrower Obligations), (K) the merger
      or consolidation of the Borrower into or with any Person, (L) the sale by the
      Borrower of all or any part of its assets, (M) the fact that at any time and
      from time to time none of the Borrower Obligations may be outstanding or owing
      to the Lender, (N) any amendment or modification of, or supplement to, any
      Loan
      Document, or (O) any other reason or circumstance that might otherwise
      constitute a defense available to or a discharge of the Borrower in respect
      of
      its obligations or liabilities (including the Borrower Obligations) or of such
      Subsidiary Guarantor in respect of any of the Guarantor Obligations (other
      than
      by the performance in full thereof).

     

    Section
      10.3 Repayment
      in Bankruptcy, etc

     

    If,
      at
      any time or times subsequent to the payment of all or any part of the Borrower
      Obligations or the Guarantor Obligations, the Lender shall be required to repay
      any amounts previously paid by or on behalf of the Borrower or any Subsidiary
      Guarantor in reduction thereof by virtue of an order of any court having
      jurisdiction in the premises, including as a result of an adjudication that
      such
      amounts constituted preferential payments or fraudulent conveyances, the
      Subsidiary Guarantors unconditionally agree to pay to the Lender, within 10
      days
      after demand, a sum in cash equal to the amount of such repayment, together
      with
      interest on such amount from the date of such repayment by the Lender to the
      date of payment to the Lender at the applicable after-maturity rate set forth
      in
Section 3.1(b)
      hereof.

     

    
      
        
        

      

      
        -47-

        
          

        

      

      
        
        

      

    

     

    Section
      10.4 Additional
      Subsidiary Guarantors

     

    Upon
      the
      execution and delivery to the Lender of a Guaranty Supplement by any Person,
      appropriately acknowledged, such Person shall be a Subsidiary
      Guarantor.

     

    Section
      10.5 Miscellaneous

     

    (a) Each
      Subsidiary Guarantor agrees that any statement of account with respect to the
      Borrower Obligations from the Lender that binds the Borrower shall also be
      binding upon such Subsidiary Guarantor, and that copies of said statements
      of
      account maintained in the regular course of the Lender’s business may be used in
      evidence against such Subsidiary Guarantor in order to establish its Guarantor
      Obligations.

     

    (b) Subject
      to the limitations set forth in Section 10.1(b),
      the
      Guarantor Obligations shall be joint and several.

     

    (c) Notwithstanding
      anything to the contrary contained in this Agreement, on and as of the date
      of
      any merger, consolidation or Acquisition permitted by Section 7.3
      or 7.5
      hereof,
      as the case may be, that shall result in any Subsidiary Guarantor ceasing to
      be
      a Subsidiary, such Subsidiary Guarantor shall, without the consent of the
      Lender, cease to be a Subsidiary Guarantor and shall have no further liability
      hereunder.

     

    (d) The
      Lender hereby notifies the Borrower that pursuant to the requirements of the
      USA
      Patriot Act (Title III of Pub. L. 107−56 (signed into law October 26, 2001))
      (the “Patriot
      Act”),
      it is
      required to obtain, verify and record information that identifies each Loan
      Party, which information includes the name and address of each Loan Party and
      other information that will allow the Lender to identify each Loan Party in
      accordance with the Patriot Act. The Borrower agrees to furnish and cause each
      of its Subsidiaries to promptly furnish to the Lender such information with
      documentation required by bank regulatory authorities under applicable “know
      your customer” and Anti-Money Laundering rules and regulations (including,
      without limitation, the Patriot Act), as from time to time may be reasonably
      requested by the Lender. 

     

    Section
      10.6 Dispute
      Resolution.

     

    (a) Arbitration.
      Except
      to the extent expressly provided below, any Dispute shall, upon the request
      of
      any party thereto, be determined by binding arbitration in accordance with
      the
      Federal Arbitration Act, Title 9, United States Code (or if not applicable,
      the
      applicable state law), the then-current rules for arbitration of financial
      services disputes of AAA and the “Special Rules” set forth below. In the event
      of any inconsistency, the Special Rules shall control. The filing of a court
      action is not intended to constitute a waiver of the right of the Borrower
      or
      any of the other Loan Parties or their Affiliates or the Lender, including
      the
      suing party, thereafter to require submittal of the Dispute to arbitration.
      Any
      party to this Agreement may bring an action, including a summary or expedited
      proceeding, to compel arbitration of any Dispute in any court having
      jurisdiction over such action. For the purposes of this Dispute Resolution
      Section only, the terms “party” and “parties” shall include any
      parent corporation, subsidiary or affiliate of the Lender involved in the
      servicing, management or administration of any obligation described in or
      evidenced by this Credit and Guaranty Agreement, together with the officers,
      employees, successors and assigns of each of the foregoing.

     

    
      
        
        

      

      
        -48-

        
          

        

      

      
        
        

      

    

     

    (b) Special
      Rules.

     

    (i) The
      arbitration shall be conducted in any U.S. state where real or tangible personal
      property collateral is located, or if there is no such collateral, in the City
      and County where Lender is located pursuant to its address for notice purposes
      in this Agreement.

     

    (ii) The
      arbitration shall be administered by AAA, who will appoint an arbitrator. If
      AAA
      is unwilling or unable to administer the arbitration, or if AAA is unwilling
      or
      unable to enforce or legally precluded from enforcing any and all provisions
      of
      this Dispute Resolution Section, then any party to this Agreement may substitute
      another arbitration organization that has similar procedures to AAA and that
      will observe and enforce any and all provisions of this Dispute Resolution
      Section. All
      Disputes shall be determined by one arbitrator; however, if the amount in
      controversy in a Dispute exceeds Five Million Dollars ($5,000,000.00), upon
      the
      request of any party, the Dispute shall be decided by three arbitrators (for
      purposes of this Agreement, referred to collectively as the
“arbitrator”).

     

    (iii) All
      arbitration hearings will be commenced within ninety (90) days of the demand
      for
      arbitration and completed within ninety (90) days from the date of commencement;
      provided, however, that upon a showing of good cause, the arbitrator shall
      be
      permitted to extend the commencement of such hearing for up to an additional
      sixty (60) days.

     

    (iv) The
      judgment and the award, if any, of the arbitrator shall be issued within thirty
      (30) days of the close of the hearing. The arbitrator shall provide a concise
      written statement setting forth the reasons for the judgment and for the award,
      if any. The
      arbitration award, if any, may be submitted to any court having jurisdiction
      to
      be confirmed and enforced, and such confirmation and enforcement shall not
      be
      subject to arbitration.

     

    (v) The
      arbitrator will give effect to statutes of limitations and any waivers thereof
      in determining the disposition of any Dispute and may dismiss one or more claims
      in the arbitration on the basis that such claim or claims is or are barred.
      For
      purposes of the application of the statute of limitations, the service on AAA
      under applicable AAA rules of a notice of Dispute is the equivalent of the
      filing of a lawsuit.

     

    (vi) Any
      dispute concerning this arbitration provision, including any such dispute as
      to
      the validity or enforceability of this provision, or whether a Dispute is
      arbitrable, shall be determined by the arbitrator; provided, however, that
      the
      arbitrator shall not be permitted to vary the express provisions of these
      Special Rules or the Reservations of Rights in subsection (c)
      below.

     

    (vii) The
      arbitrator shall have the power to award legal fees and costs pursuant to the
      terms of this Agreement.

     

    (viii) The
      arbitration will take place on an individual basis without reference to, resort
      to, or consideration of any form of class or class action.

     

    
      
        
        

      

      
        -49-

        
          

        

      

      
        
        

      

    

     

    (c) Reservations
      of Rights.
      Nothing
      in this Agreement shall be deemed to (i) limit the applicability of any
      otherwise applicable statutes of limitation and any waivers contained in this
      Credit and Guaranty Agreement, or (ii) apply to or limit the right of the Lender
      (A) to exercise self help remedies such as (but not limited to) setoff, or
      (B) to foreclose judicially or nonjudicially against any real or personal
      property collateral, or to exercise judicial or nonjudicial power of sale
      rights, (C) to obtain from a court provisional or ancillary remedies such
      as (but not limited to) injunctive relief, writ of possession, prejudgment
      attachment, or the appointment of a receiver, or (D) to pursue rights against
      a
      party to this Agreement in a third-party proceeding in any action brought
      against Lender in a state, federal or international court, tribunal or hearing
      body (including actions in specialty courts, such as bankruptcy and patent
      courts), or (E) to enforce any assignment of rents contained in the Loan
      Documents, or (F) to preserve or enforce the Lender’s rights and remedies due to
      possible application of New Jersey’s “entire controversy doctrine”. Lender may
      exercise the rights set forth in clauses (A) through (F), inclusive, before,
      during or after the pendency of any arbitration proceeding brought pursuant
      to
      this Credit and Guaranty Agreement. Neither the exercise of self help remedies
      nor the institution or maintenance of an action for foreclosure or provisional
      or ancillary remedies shall constitute a waiver of the right of any party,
      including the claimant in any such action, to arbitrate the merits of the
      Dispute occasioning resort to such remedies. No provision in the Loan Documents
      regarding submission to jurisdiction and/or venue in any court is intended
      or
      shall be construed to be in derogation of the provisions in any Loan Document
      for arbitration of any Dispute.

     

    (d) Conflicting
      Provisions for Dispute Resolution.
      If
      there is any conflict between the terms, conditions and provisions of this
      Section and those of any other provision or agreement for arbitration or dispute
      resolution, the terms, conditions and provisions of this Section shall prevail
      as to any Dispute arising out of or relating to (i) this Credit and
      Guaranty Agreement, (ii) any other Loan Document, (iii) any related
      agreements or instruments, or (iv) the transaction contemplated herein or
      therein (including any claim based on or arising from an alleged personal injury
      or business tort). In any other situation, if the resolution of a given Dispute
      is specifically governed by another provision or agreement for arbitration
      or
      dispute resolution, the other provision or agreement shall prevail with respect
      to said Dispute.

     

    (e) Jury
      Trial Waiver in Arbitration.
      By
      agreeing to this Section, the parties irrevocably and voluntarily waive any
      right they may have to a trial by jury in respect of any
      Dispute.

     

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        -50-

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Credit and Guaranty Agreement to be duly
      executed and delivered by their proper and duly authorized officers as of the
      day and year first above written.

    
      	 	 	 
	 	BORROWER:
	 	 
	 	
              BEL
                FUSE INC.,
                a
                New Jersey corporation 

            
	 	 
	 	 
	
            	By:  	/s/
              Colin Dunn
	 	 	
              

              Colin
                Dunn

              Vice
                President

            
	 	 	 
	 	 
	 	
              GUARANTORS:

            
	 	 
	 	
              BEL
                VENTURES INC.,
                a
                Delaware corporation

              

              BEL
                POWER INC.,
                a
                Massachusetts corporation

              

              BEL
                POWER PRODUCTS INC.,
                a
                Delaware corporation

              

              BEL
                TRANSFORMER INC.,
                a
                Delaware corporation

              

              BEL
                CONNECTOR INC.,
                a
                Delaware corporation

              

              AS
                TO EACH OF THE FOREGOING:

            
	 	 
	 	 	 
	 	By:	/s/ Colin Dunn
	 	
              

              Colin
                Dunn

              Vice
                President of each of the above-referenced
                corporations

            

    

     

    
      
        
        

      

      
        -51-

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	
              BANK
                OF AMERICA, N.A.

            
	 
 	 
 	 
 
	
            	By:  	/s/ David
              J. Bardwil
	 	
              

              David
                J. Bardwil

              Senior
                Vice President

            

    

    

    
      
        
        

      

      
        -52-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “A”

     

    ATTACHED
      TO AND MADE A PART OF THAT CERTAIN CREDIT AND GUARANTY 

    AGREEMENT
      BY AND AMONG BEL FUSE INC., CERTAIN SUBSIDIARY GUARANTORS,

    AND
      BANK OF AMERICA, N.A., DATED FEBRUARY ____, 2007

     

    Form
      of Borrowing Request

    

    Date:
      ___________, _____

     

    
      	
              To:

            	
              Bank
                of America, N.A.

            

    

     

    Ladies
      and Gentlemen:

    

    Reference
      is made to that certain Credit and Guaranty Agreement, dated February ____,
      2007
      (as amended, restated, extended, supplemented or otherwise modified in writing
      from time to time, the “Agreement;”
the
      terms defined therein being used herein as therein defined), among Bel Fuse
      Inc.
      (the “Company”),
      certain Subsidiaries of the Company and Bank of America, N.A., as
      Lender.

    

    Name
      of
      Borrower: Bel Fuse Inc.

    

    The
      undersigned Borrower hereby requests (select one):

    

    o
A
      Borrowing of
      Revolving Loans        o
A
      conversion or continuation of
      Revolving Loans

    

    1. On _______________________________
      (a
      Business Day).

    2. In
      the
      amount of $____________________.

    3. Comprised
      of  _______________________.

    

    [Type
      of
      Revolving Loan requested]

    

    4. For
      Eurodollar Advances: with an Interest Period of ______ months.

    
      	 	 	 
	 	
              BEL
                FUSE INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	Name:  	
              
 
	 	Title:	
              
 
	 	
              

            

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “B”

     

    ATTACHED
      TO AND MADE A PART OF THAT CERTAIN CREDIT AND GUARANTY 

    AGREEMENT
      BY AND AMONG BEL FUSE INC., CERTAIN SUBSIDIARY GUARANTORS,

    AND
      BANK OF AMERICA, N.A., DATED FEBRUARY ____, 2007

     

    Form
      of Guaranty Supplement

     

    SUPPLEMENT
      NO.
      __,
      dated as of [_________________],
      to (i)
      the Credit and Guarantee Agreement, dated February ___, 2007, by and among
      BEL
      FUSE INC.
      (the
“Borrower”),
      the
      Subsidiary Guarantors party thereto, and BANK
      OF AMERICA, N.A. (the
      “Lender”)(as
      it
      may be subsequently amended, supplemented or otherwise modified from time to
      time, the “Credit
      Agreement”).
      Capitalized terms used herein and not defined herein shall have the meanings
      assigned to such terms in the Credit Agreement. 

     

    The
      Lender has agreed to make the Loans to the Borrower pursuant to, and upon the
      terms and subject to the conditions specified in, the Credit Agreement. The
      Subsidiary Guarantors have entered into the Credit Agreement in order to induce
      the Lender to make the Loans. Pursuant to Section
      6.9
      of the
      Credit Agreement, each Subsidiary created or acquired after the Effective Date
      that is a Domestic Subsidiary is to become a Subsidiary Guarantor by the
      execution and delivery of this Guarantee Supplement.

     

    The
      undersigned Subsidiary (the “New
      Subsidiary Guarantor”)
      is
      executing this Guarantee Supplement in accordance with the requirements of
      the
      Credit Agreement to become a Subsidiary Guarantor under the Credit Agreement
      in
      order to induce the Lender to make additional Loans and as consideration for
      the
      Loans previously made.

     

    Accordingly,
      the Lender and the New Subsidiary Guarantor agree that in accordance with
Section
      6.9
      of the
      Credit Agreement, the New Subsidiary Guarantor by its signature below becomes
      a
      Subsidiary Guarantor under the Credit Agreement with the same force and effect
      as if originally named therein as a Subsidiary Guarantor and the New Subsidiary
      Guarantor hereby (i) agrees to all the terms and provisions of the Credit
      Agreement applicable to it as a Subsidiary Guarantor thereunder and (ii)
      represents and warrants that the representations and warranties made with
      respect to it as a Subsidiary Guarantor thereunder are true and correct on
      and
      as of the date hereof. Each reference to a “Subsidiary Guarantor” in any Loan
      Document shall be deemed to include the New Subsidiary
      Guarantor.

     

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    IN
      EVIDENCE
      of the
      agreement by the parties hereto to the terms and conditions herein contained,
      each such party has caused this Guarantee Supplement to be duly executed on
      its
      behalf. 

    
      	 	 	 
	 	
              [_____________________]
                

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	 	
              

              Colin
                Dunn 

              Vice
                President 

            
	 	 	 
	 	
              Address
                for Notices:

              

              c/o
                Bel Fuse Inc.

              206
                Van Vorst Street

              Jersey
                City, NJ 07302

              Attention:
                Colin Dunn - Vice President

              

              Telephone:
                (201) 432-0463

              Telecopy:
                (201) 432-9542 

            

    

    

    Accepted
      and agreed to as 

    of
      the
      date first above written: 

    
      	 	 	 	 
	
              BANK
                OF AMERICA, N.A.

            	 	 	
            
	 	 	 	 
	 	 	 	 
	By:	 	 	 
	
              
                

              

              David
                J. Bardwil 

              Senior
                Vice President 

            	 	 	
            

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “C”

     

    ATTACHED
      TO AND MADE A PART OF THAT CERTAIN CREDIT AND GUARANTY 

    AGREEMENT
      BY AND AMONG BEL FUSE INC., CERTAIN SUBSIDIARY GUARANTORS,

    AND
      BANK OF AMERICA, N.A., DATED FEBRUARY ____, 2007

     

    Form
      of Revolving Credit Loan Note

     

    
      	$20,000,000.00	
              Cranford,
                New
                Jersey

            
	 	
              February
                ____,
                2007

            

    

     

    FOR
      VALUE RECEIVED,
      the
      undersigned, BEL
      FUSE INC.,
      a New
      Jersey corporation (the “Borrower”),
      hereby promises to pay to the order of promises to pay to the order of
BANK
      OF AMERICA, N.A.,
      its
      successors and/or assigns (collectively the “Lender,”),
      the
      outstanding principal balance of the Loans made by the Lender to the Borrower,
      in the amounts, and at the times set forth in the Credit and Guaranty Agreement,
      dated of even date herewith by and among the Borrower, the Subsidiary Guarantors
      party thereto, and the Lender (as the same may be amended, supplemented or
      otherwise modified from time to time, the “Credit
      Agreement”)
      and to
      pay interest thereon from the date hereof on the principal balance of the Loans
      from time to time outstanding, at the rate or rates and at the times set forth
      in the Credit Agreement, in each case at the office of the Lender located at
      750
      Walnut Avenue, Cranford, New Jersey 07016, or at such other place as the Lender
      may specify from time to time, in lawful money of the United States in
      immediately available funds.

     

    Capitalized
      terns used herein which are not otherwise defined herein shall have the
      respective meanings ascribed thereto in the Credit Agreement.

     

    The
      Loans
      evidenced by this Note are prepayable in the amounts, and under the
      circumstances, and their respective maturities are subject to acceleration
      upon
      the terms, set forth in the Credit Agreement. This Note is the “Note”
under,
      and as such term is defined in, the Credit Agreement, and is subject to, and
      should be construed in accordance with, the provisions thereof, and is entitled
      to the benefits and security set forth in the Loan Documents.

     

    The
      Lender is hereby authorized to record on the schedule annexed hereto, and any
      continuation sheets which the Lender may attach hereto, (i) the date and the
      amount of each Loan made by the Lender to the Borrower, (ii) the Type of the
      Loan, (iii) the interest rate (without regard to the Applicable Margin) and
      Interest Period (if any) applicable to each Eurodollar Advance, and (iv) the
      date and amount of each conversion of, and each payment or prepayment of
      principal of any such Loan. No failure to so record or any error in so recording
      shall affect the obligation of the Borrower to repay the Loans, together with
      interest thereon, as provided in the Credit Agreement, and the outstanding
      principal balance of the Loans made by the Lender as set forth in such schedule
      shall be presumed to be correct absent manifest error.

     

    Except
      as
      specifically otherwise provided in the Credit Agreement, the Borrower hereby
      waives presentment, demand, notice of dishonor, protest, notice of protest
      and
      all other demands, protests and notices in connection with the execution,
      delivery, performance, collection and enforcement of this Note.

     

    This
      Note
      may only he amended by an instrument in writing executed pursuant to the
      provisions of Section
      9.l
      of the
      Credit Agreement.

     

    THIS
      NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
      THE
      LAWS OF THE STATE OF NEW JERSEY.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Borrower has caused this Note to be executed and delivered by its proper and
      duly Authorized Officer, all on the day and year first hereinabove
      written.

    
      	 	 	 
	 	
              BEL
                FUSE INC., a
                New Jersey corporation

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Colin
                Dunn 

            
	 	
              Vice
                President

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    Schedule
      “1” to Revolving Credit Loan Note

    

    REVOLVING
      CREDIT LOANS AND PAYMENTS OF REVOLVING CREDIT
      LOANS

    

    
      	
              Date

            	 	
              Amount
                of

              Revolving
                Credit Loans

            	 	
              Amount
                of

              Principal

              Repaid

            	 	
              Unpaid

              Principal

              Balance
                of Revolving Credit

              Loans

            	 	
              Notation
                Made

              By

            
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

    

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “D”

     

    ATTACHED
      TO AND MADE A PART OF THAT CERTAIN CREDIT AND GUARANTY 

    AGREEMENT
      BY AND AMONG BEL FUSE INC., CERTAIN SUBSIDIARY GUARANTORS,

    AND
      BANK OF AMERICA, N.A., DATED FEBRUARY ____, 2007

     

    Form
      of Notice of Conversion

     

    Date:
      ___________, _____

     

    
      	
              To:

            	
              Bank
                of America, N.A.

            

    

     

    Ladies
      and Gentlemen:

    

    Reference
      is made to that certain Credit and Guaranty Agreement, dated February ____,
      2007
      (as amended, restated, extended, supplemented or otherwise modified in writing
      from time to time, the “Agreement;”
the
      terms defined therein being used herein as therein defined), among Bel Fuse
      Inc.
      (the “Company”),
      certain Subsidiaries of the Company and Bank of America, N.A., as
      Lender.

    

    Name
      of
      Borrower: Bel Fuse Inc.

    

    The
      undersigned Borrower hereby requests (select one):

    

    o
A
      Borrowing of
      Revolving Loans        o
A
      conversion or continuation of
      Revolving Loans

    

    1. On ______________________________
      (a
      Business Day).

    2. In
      the
      amount of $___________________.

    3. Comprised
      of ______________________.

    

    [Type
      of
      Revolving Loan requested]

    

    4. For
      Eurodollar Advances: with an Interest Period of  
      months.

    
      	 	 	 
	 	
              BEL
                FUSE INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	Name:  	
              
 
	 	Title:	
              
 
	 	
              

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      “E”

     

    ATTACHED
      TO AND MADE A PART OF THAT CERTAIN CREDIT AND GUARANTY AGREEMENT BY AND AMONG
      BEL FUSE INC., CERTAIN SUBSIDIARY GUARANTORS, AND BANK OF AMERICA, N.A., DATED
      FEBRUARY ____, 2007

     

    Form
      of Compliance Certificate

     

    See
      Attached.

     

    
      
        
        

      

      
        -2-

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