THIS AGREEMENT is made the 29th day of September 2010 Between WHEREBY IT IS AGREED as follows:-

(a)

Negative Pledge: create or permit to exist over all or any part of the business or assets (fixed or floating, present or future, including but not limited to any right, interest, receivable and revenue) of the Borrower any Security Interest save and except for the Security Interest permitted under clause 12.1(a) above;

(b)	Constitutional documents: add to, delete, vary or amend its constitutional documents relating to the Borrower’s borrowing powers and principal business activities in any manner which is inconsistent with the terms of this Agreement;

(c)

Alteration of Capital: reduce or in any way whatsoever alter (other than by way of increase), its authorised and/or issued shares in existence at the date hereof whether by varying the amount, structure or value thereof or the rights attached thereto or connected to any of its share capital into stock, or by consolidating, dividing or sub-dividing all or any of its shares;

(d)	Change Nature of Business: substantially alter or otherwise change the nature or scope of its existing business;

(e)

Disposal: save and except in the ordinary course of business and on commercial terms on the basis of arm’s length transaction, sell, transfer, lease out, lend or otherwise dispose of or in any way cease to exercise control over, whether by single transaction or a number of transactions, related or not, the whole or a substantial part of the Borrower’s assets;

(f)

Restriction on Transactions: enter into any transaction with any person, firm or company save and except in the ordinary course of business, on ordinary commercial terms and on the basis of arm’s length arrangements, or enter into any transaction whereby the Borrower might pay more than the ordinary commercial price for any purchase or might receive less than the full commercial price for its products save and except in the ordinary course of business;

(g)	Incur Indebtedness: incur, assume, guarantee or permit to exist any indebtedness other than:-

(i)

the indebtedness under the Facilities;

(ii)

the indebtedness which have been disclosed to the Lender prior to the date of this Agreement;

(h)	Amalgamation, reconstruction etc: undertake or permit any re-organisation, amalgamation, reconstruction, take-over or any other schemes of compromise or arrangement affecting its present constitution;

(i)	Loans: make any loans or advance or guarantee or grant any credit to any of its directors or purchase or otherwise acquire the capital stock, assets or obligation of any of its directors;

 

(j)

Enter into partnership:  save and except in the ordinary course of business, enter into any partnership, profit-sharing or royalty agreement or other arrangement of whatsoever nature whereby the Borrower's income or profits are, or might be, shared with any other person, firm or company or enter into any management contract or other arrangement of whatsoever nature whereby the Borrower's business or operations are managed by any other person, firm or company.

 

13.1	Events of Default: If:-

(a)	Non-payment: the Borrower fails to pay any amount due under this Agreement on the due dates whether formally demanded or not;

(b)

Breach of obligations: the Borrower or the Corporate Guarantor fails to observe or perform or commits a breach of any of its obligations under this Agreement or the Security Documents, as the case may be, or under any undertaking or arrangement entered into in connection therewith, other than an obligation referred to in clause 13.1(a) above;

(c)

Misrepresentation: any representation, warranty or statement which is made (or acknowledged to have been made) by the Borrower or the Corporate Guarantor in this Agreement or the Security Documents or which is contained in any certificate, statement, legal opinion or notice provided or caused to be provided hereunder or in connection with this Agreement proves to be incorrect or untrue in any material respect or, if repeated at any time with reference to the facts and circumstances then existing, would not be correct and true in any material respects;

(d)

Invalidity: at any time it is or will become unlawful for the Borrower or the Corporate Guarantor to perform or comply with any of its obligations under this Agreement or the Security Documents, as the case may be, or any provision of this Agreement or the Security Documents, is or becomes, or is claimed by the Borrower or the Corporate Guarantor for any reason, to be invalid or unenforceable;

(e)

Suspension of business and expropriation: the Borrower or the Corporate Guarantor changes or threatens to change in any substantial manner the nature or scope of its business (unless in accordance with clause 12.2(d)), ceases or suspends or threatens to or cease or suspend the operation of all or a substantial part of its business;

(f)

Cross Default: the Borrower or the Corporate Guarantor stops payment in respect of its obligations generally or if any other debenture of or monies borrowed by the Borrower or the Corporate Guarantor respectively becomes repayable by reason of default or any amount owing thereunder or in respect thereof is not repaid on its due date (or within any applicable grace period), or any guarantee or indemnity given by the Borrower or the Corporate Guarantor respectively is not honoured when due and called upon or if any security for any such debenture, monies borrowed, guarantee or indemnity becomes enforceable;

 

(g)

Appointment of receiver, legal process: an encumbrancer takes possession of, or a trustee, receiver or similar officer is appointed in respect of, the whole or substantial part of the business or assets of the Borrower or the Corporate Guarantor or distress, legal process, sequestration or any form of execution is levied or enforced upon or instituted against any substantial part of the assets of the Borrower or the Corporate Guarantor;

(h)

Inability to pay debts: the Borrower or the Corporate Guarantor is deemed unable to pay its debts within the meaning of Section 218(2) of the Companies ▇▇▇ ▇▇▇▇ or by reason of financial difficulties, stops, suspends, or threatens to stop or suspend, making payments with respect to all or a material part of its debts;

(i)

Winding-up: any bona fide step is taken by any person with a view to the bankruptcy, liquidation, winding up or dissolution of the Borrower or the Corporate Guarantor (other than for the purpose of undertaking a solvent reconstruction of the Borrower or the Corporate Guarantor with the consent of the Lender);

(j)

Arrangement with creditors: the Borrower or the Corporate Guarantor convenes a meeting of its creditors or proposes or makes any arrangement or composition with, or any assignment for the benefit of, its creditors or a petition is presented or a meeting is convened for the purpose of considering a resolution or other steps are taken for making an administration order against or for winding up, dissolution, administration or reorganisation of the Borrower or the Corporate Guarantor (other than for the purposes of and followed by a reconstruction approved by the Lender);

(k)	Analogous events: anything analogous to any of the events set out in clause 13.1(g), (h), (i) and (j) above occurs under any applicable jurisdiction;

(l)	Judgment Passed: the Borrower or the Corporate Guarantor shall fail to satisfy any judgment passed against it by any Court of competent jurisdiction;

(m)	Disposal of assets:  the Borrower or the Corporate Guarantor transfers or disposes of substantial part or the whole of its business or assets save and except in the ordinary course of business and on ordinary commercial terms on the basis of arm’s length transaction;

(n)	Cessation of business:  the Borrower or the Corporate Guarantor changes or threatens to change the nature or scope of its business, suspends or threatens to suspend a substantial part of the present business operations which it now conducts directly or indirectly;

(o)	Insolvency:  the Borrower or the Corporate Guarantor is deemed unable to pay its debts or becomes unable to pay its debts as they fall due or suspends or threatens to suspend making payments (whether of principal or interest) with respect to all or any class of its debts;

(p)	Jeopardy:  any security created in any of the Security Documents or otherwise is in jeopardy;

(q)

Material Adverse Change:  in the opinion of the Lender, there should occur any material adverse change in the financial condition of the Borrower and/or the Corporate Guarantor which would affect the Borrower’s and/or the Corporate Guarantor’s ability to perform its obligations under this Agreement and the Security Documents;

(r)	Nationalisation: all or a substantial part of the assets or share capital of the Borrower or the Corporate Guarantor are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any governmental body or other authority;

 

(s)

Moratorium: the Borrower or the Corporate Guarantor begins negotiations or takes any proceedings or other steps with a view of rescheduling, readjusting or deferring all or a material part of its indebtedness or a moratorium (including but not limited to a scheme of arrangement under Section 176 of the Companies Act, 1965) is agreed or declared by a court of competent jurisdiction in respect of or affecting any part of its indebtedness or for the suspension of payments of its indebtedness generally;

(t)	Licence: any authorisations, licence, approval, consent, order or exemption which is required for the Borrower or the Corporate Guarantor to carry on its business is withheld withdrawn revoked modified or terminated or has expired and not renewed;

(u)	Repudiation: the Borrower or the Corporate Guarantor repudiates this Agreement or the Security Documents, as the case may be; or

(v)

Event or Events: any event or change or series of events or changes occurs which, in the Lender’s opinion could be expected to have a material and adverse effect on the ability of the Borrower or the Corporate Guarantor to perform its obligations under this Agreement or the Security Documents, as the case may be,

(i)	the Total Secured Amounts shall become so due and payable;

(ii)	any part of the Facilities which has not been drawndown, utilised or cancelled, shall be cancelled;

(iii)

this Agreement and the Security Documents shall immediately become enforceable; and

(iv)	any sum repaid to the Lender by the Borrower shall be applied at the Lender’s sole discretion towards the settlement and discharge of the Borrower’s liabilities and obligations under this Agreement.

(a)

If any sum due from the Borrower under this Agreement or any order or judgment given or made in relation hereto has to be converted from the currency (“first currency”) in which the same is payable hereunder or under such order or judgment into another currency (“second currency”) for the purpose of (i) making or filing a claim or proof against the Borrower, (ii) obtaining an order or judgment in any court or other tribunal or (iii) enforcing any order or judgment given or made in relation hereto, the Borrower shall, subject to the Borrower receiving a certificate from the Lender showing the calculations (in reasonable detail) of such costs and expenses together with other relevant documentary evidence, indemnify and hold harmless the Lender to whom such sum is due from and against any loss suffered as a result of any discrepancy between (1) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (2) the rate or rates of exchange at which the Lender may in their ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to them in satisfaction, in whole or in part, of any such order, judgment, claim or proof.

(b)

In the event of the winding up of the Borrower at any time while any amounts or damages owing to the Lender or under an order rendered in respect thereof shall remain outstanding the Borrower shall indemnify and hold the Lender harmless against any deficiency arising or resulting from any variation in rates of exchange between:

	(i)	the date as of which the equivalent in any currency (other than US Dollar) of the amount in US Dollar due or to become due hereunder (other than under this sub-clause), or under any order into which the relevant obligations in this Agreement shall have been merged, is calculated for the purposes of such winding-up; and

(ii)

the final date or dates for the filing of proofs of claim in such winding-up. For the purposes of this sub-clause, the final date or dates for the filing of proofs in a winding-up of the debtor shall be the date fixed by the liquidator or otherwise applicable under the relevant provisions of law as being the latest practicable date as at which liabilities of the Borrower may be ascertained for such winding-up prior to the payment by the liquidator in respect thereof.

(c)	The above indemnities shall constitute separate and independent obligations of the Borrower from its other obligations under this Agreement and shall not in any way prejudice or affect or be prejudiced or affected by:-

(i)

any collateral or other security now or hereafter held by the Lender for all or any part of the obligations and payments hereby indemnified; and

(ii)

any right of subrogation, lien or security to which the Lender may be otherwise entitled.

(a)

The Borrower hereby authorises the Lender to accept and act on all facsimile instructions on all matters pertaining to the Facilities provided that in each and every case the facsimile instruction (i) bears the facsimile signature of the duly authorised signatory(ies) of the Borrower  and (ii) is legible and complete.

(b)

The Borrower undertakes to mail to the Lender or deliver to its branch office in Kuala Lumpur, the original transaction instructions in writing duly signed by the authorised signatory(ies) within three (3) Business Days from the date of the facsimile instructions issued to the Lender or such longer period as agreed by the Lender.  Failure to comply as aforesaid shall not constitute a revocation of the authorisation, indemnity or in any way affect any waiver contained in the indemnity herein contained.

(c)

The Lender shall not be liable for any loss or liability whatsoever arising out of or in connection with the Lender acting in accordance with such authorisation or taking instructions from the Borrower and/or the Borrower’s authorised signatory(ies) provided that the Lender has acted in good faith on the belief that such facsimile instructions are genuine and validly issued by the Borrower or any delay or failure in any transmission or communication facilities regardless of the circumstances prevailing at the time of such instruction provided that such delay or failure was not caused by or due to the acts and/or omissions of the Lender.

(d)	No cancellations or amendments may be made by the Borrower in respect of any facsimile instructions if the Lender has already acted on such facsimile instructions.

(e)

The Borrower hereby agrees and undertakes to indemnify the Lender, its successors in title and assigns and at all times to keep the Lender, fully and completely indemnified from and against any loss, damage, cost, expense, liability, action, proceedings, demands or claims suffered or incurred or sustained by the Lender as a result of the Lender having acted in good faith on the facsimile instructions duly authorised by the Borrower’s authorised signatory(ies). The Borrower shall not be liable to indemnify the Lender for any loss, damage, cost, expense, liability, action, proceedings, demands or claims which the Lender may incur or suffer as a result of the Lender’s own negligence, wilful misconduct, fraud or breach.

(a)	ensure that the deduction or withholding does not exceed the minimum amount legally required;

(b)	forthwith pay to the Lender such additional amount so that the net amount received by the Lender will equal the full amount which would have been received by it had no such deduction or withholding been made;

(c)

pay to the relevant taxation or other authorities within the period for payment permitted by applicable law the full amount of the deduction or withholding (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this clause);

(d)	furnish to the Lender, within the period for payment permitted by applicable law, either:

(i)

a copy of the official receipt of the relevant taxation authorities in respect of all amounts so deducted or withheld as aforesaid; or

(ii)

if such receipts are not issued by the relevant taxation authorities on payments to them of amounts so deducted or withheld, a copy of the certificate of deduction or equivalent evidence of the relevant deduction or withholding,

(a)

first, in payment of all documented costs, charges, expenses and liabilities incurred by the Lender and every agent, delegate or other person appointed by the Lender under this Agreement or in the enforcement of this Agreement or in the performance of any duties or the exercise of any powers vested in it or him under this Agreement;

(b)	second, in or towards payment of the liabilities of the Borrower in respect of the Total Secured Amounts (other than principal and any interest thereon) due to the Lender;

(c)	third, in or towards payment of all interest (including interest on overdue interest) which has accrued on the Total Secured Amounts to the date of such application; and

(d)	fourth, in or towards payment of the principal amount of the Facilities due to the Lender,

(a)

all costs and expenses (including legal fees, on a solicitor and client basis, and out-of-pocket expenses) whether on a abortive basis or otherwise reasonably incurred in connection with the negotiation, preparation, execution and perfection of this Agreement, the Security Documents and any related documents; and

(b)

all costs and expenses (including legal fees, on a solicitor and client basis, and out-of-pocket expenses) incurred in connection with the preservation or enforcement or attempted preservation or enforcement of any of rights of the Lender under this Agreement, the Security Documents or any related documents.

(a)	if personally delivered, at the time of delivery;

(b)	in the case of posting, on the fifth (5th) day after posting; and

(c)	in the case of facsimile transmission, at the time the transmission report is received by the sender which purports to confirm that the addressee has received such facsimile in full and without error.

19.7	Service of Legal Process:

(a)	The service of any Legal Process may be given by prepaid registered or ordinary post sent to the Address for Service of the respective recipient thereof and such Legal Process shall be deemed to have been duly served after the expiration of five (5) days from the date it is posted.

(b)

No change in the Address for Service howsoever brought about shall be effective or binding on either party unless that party has given to the other actual notice of the change of Address for Service and nothing done in reliance on clause 19.8(a) shall be affected or prejudiced by any subsequent change in the Addresses for Service over which the other party has no actual knowledge of at the time the act or thing was done or carried out.

(a)	grant to the Borrower or to any surety any time or indulgence; and/or

(b)	renew any ▇▇▇▇, notes or other negotiable securities; and/or

(c)	deal with, exchange, release or modify or abstain from perfecting or enforcing any securities or other guarantees or rights it may now or at any time hereafter or from time to time have from or against the Borrower or any other person; and/or

(d)	compound with the Borrower or any other person.

(i)	any person to whom such disclosure is required under any law or pursuant to any court order;

(ii)

any person in connection with a transfer or proposed transfer. For the purposes of this sub-clause, “transfer” includes any assignment or transfer of any of the Lender’s rights or obligations, any participation, sub-participation, transfer of credit or other risk (entirely or in part) or benefit (entirely or in part) by any means, and entry into any other contractual relationship, in relation to the Facilities;

(iii)

any person for the purposes of enforcing or protecting its rights or interests in relation to the Facilities;

(iv)	any person in connection with any insolvency proceeding (including judicial management, winding-up, compromise or arrangement, and receivership) relating to the Borrower;

(v)	the Collector of Stamp Duties and any other government department, agency or statutory board if it is, the Lender’s opinion, necessary in connection with the Facilities; and

(vi)	to any companies within the Lender’s group of companies (i.e. DBS Group Holdings Ltd and its subsidiaries, direct or indirect) in connection with the promotion of financial products and services offered by any such companies.

(a)	for such purposes may disclose to a potential assignee or transferee who derives or may derive rights or obligations under or by reference to this Agreement such information about the Borrower as shall have been made available to the Lender generally in accordance with clause 19.13;

(b)	where the Lender transfers its obligations or any part thereof, the Borrower shall execute such documents as are reasonably necessary to release the Lender to the extent of the transfer and join the transferee as a party hereto; and

(c)	where the Lender transfers all its obligations and rights hereunder the Borrower shall thereafter deal solely with the transferee with respect to payments, notices and other matters relating to the administration of this Agreement.

1.	The Letter of Offer has been duly accepted by the Borrower.

2.	This Agreement and the Security Documents have been duly executed by the parties thereto and endorsed as exempted from stamp duty pursuant to the provisions of the Stamp Duty (Exemption) Order 2000.

3.	A certificate signed by a director of the Borrower substantially in the form set out in Part I of Schedule 2 and the documents therein referred to.

4.	A certified signed by a director of the Corporate Guarantor substantially in the form set out in Part II of Schedule 2 and the documents therein referred to.

5.	A certificate of incumbency and true signature of the officer executing the Corporate Guarantor, signed by the secretary or assistant secretary of the Corporate Guarantor (if applicable).

6.

Evidence that the Form 18 (as prescribed under the Labuan Financial Services and Securities Act 2010) in respect of the charge created by this Agreement and the Said Debentures for the purpose of registration of such charge with the Labuan Financial Services Authority (“Labuan Registrar”) in accordance with Section 84 of the Labuan Companies ▇▇▇ ▇▇▇▇, has been duly lodged with the Labuan Registrar and that, immediately prior to the lodgement of such Form 18, a search conducted revealed that there are no other charges that have been registered in the Labuan Registrar which would adversely affect the interest of the Lender.

7.

Winding up search conducted on the Borrower wherein the Director General of Insolvency confirms that no winding up order has been made against the Borrower. In the event the winding up search results on the Borrower is not available to the Lender, the relevant statutory declaration in the form prescribed by the Lender shall have been signed by a director of the Borrower declaring that the Borrower is not wound up and that no winding up petition has been presented against the Corporate Guarantor.

8.	The Malaysia Debenture shall have been presented to the High Court of Malaya for the registration of the power of attorney therein contained.

9.	Documentary evidence that the Corporate Guarantor has appointed a process agent in Malaysia to receive service of process.

10.	The Borrower shall have delivered to the Lender the insurance policy(ies), cover notes & premium receipts from insurers acceptable to the Lender covering all assets charged to the Lender pursuant to the Said Debentures and in accordance with such conditions as mentioned in clause 12.1(q) hereof.

11.

The Borrower shall have delivered to the Lender certified copies of any consents, licenses, approvals or authorisations of any governmental or supervising authority bureau, agency or institution required in connection with the Facilities or otherwise in connection with the matters contemplated by this Agreement.

12.	A legal opinion in form and substance acceptable to the Lender from Pennsylvania, United State of America counsel in respect of the legality, validity and enforceability of the Corporate Guarantee in Pennsylvania, United States of America.

13.	A legal opinion in form and substance acceptable to the Lender from Singapore counsel in respect of the legality, validity and enforceability of the Singapore Debenture in Singapore.

14.	A legal opinion in form and substance acceptable to the Lender from Messrs Albar & Partners in respect of the legality, validity and enforceability of this Agreement and the Malaysia Debenture.

15.	All fees due and payable to the Lender under this Agreement shall have been settled in full by the Borrower.

16.	Written confirmation by Messrs Albar & Partners that the conditions precedent contained in Schedule 1 have been complied with.

(a)	attached hereto, marked “A”, are true, correct and up to date copies latest Memorandum and Articles of Association, Forms 14, 20 and 22 of the Borrower;

(b)	attached hereto, marked “B”, is a true and correct copy of the resolution duly passed by the board of directors of the Borrower duly convened and held on *             2010:

(i)

approving and accepting a short term loan facility of up to US Dollar Twelve Million (USD12,000,000.00) only and a revolving credit facility of up to US Dollar Eight Million (USD8,000,000.00) (collectively the “Facilities”) pursuant to an agreement (“Facilities Agreement”) dated   *                 2010 between (1) the Borrower, and (2) DBS BANK LTD, LABUAN BRANCH (as Lender);

(ii)

authorising the execution, delivery and performance of the Facilities Agreement and such other documents relating to the Facilities (including but not limited to the Security Documents (as defined in Facilities Agreement)) and where required the affixation of its common seal thereto in accordance with its Memorandum and Articles of Association,

(c)	attached hereto, marked “C”, is the list of signatories of all the authorised signatories of the Borrower and their respective specimen signatures, any one (1) of whom has been authorised to give notices and communications under or in connection with the Facilities Agreement.

 

Signed:
	Director

 

Signed:
	Director

(a)	attached hereto, marked “A”, are true, correct and up to date copies of the constitutional documents of the Corporate Guarantor;

(b)	attached hereto, marked “B”, is a true and correct copy of the resolution duly passed by the board of directors of the Corporate Guarantor duly convened and held on *             2010:

(i)

approving and accepting a short term loan facility of up to US Dollar Twelve Million (USD12,000,000.00) only and a revolving credit facility of up to US Dollar Eight Million (USD8,000,000.00) (collectively the “Facilities”) pursuant to an agreement (“Facilities Agreement”) dated   *                 2010 between (1) KULICKE & ▇▇▇▇▇ GLOBAL HOLDING CORPORATION (as Borrower), and (2) DBS BANK LTD, LABUAN BRANCH (as Lender);

(ii)

authorising the execution, delivery and performance of the Corporate Guarantee (as defined in the Facilities Agreement) and such other documents relating to the Facilities and where required the affixation of its common seal thereto in accordance with its constitutional documents,

(c)	attached hereto, marked “C”, is the list of signatories of all the authorised signatories of the Corporate Guarantor and their respective specimen signatures, any one (1) of whom has been authorised to give notices and communications under or in connection with the Corporate Guarantee.

 

Signed:
	Director

Date:

(a)	give you notice that we wish to make a STL Drawing under the STL Facility in the amount of [**] only on [ * ] 2010;

(b)	elect the tenure of the STL Interest Period to be for a period of one (1) / two (2) / three (3) / six (6) month(s); [delete whichever not applicable]

(c)	request you to remit the STL Drawing directly to [**];

(d)	confirm that:-

(i)

the conditions contained in clause 4.1 of the Facilities Agreement are satisfied as at the date hereof and we know of no reason why it should not be satisfied as at the date referred to in (a) above;

(ii)

the representations and warranties contained in clause 11.1 of the Facilities Agreement if repeated at the date of this STL Drawing Notice with reference to the facts and circumstances subsisting at the date of this STL Drawing Notice would be true and accurate in all material respects; and

(iii)

no event of default mentioned in 14.1 has occurred which constitutes, or with the lapse of time and or the giving of notice and/or a relevant determination would constitute a default.

(a)	give you notice that we wish to rollover a STL Drawing of Ringgit Malaysia * (RM* ) having a STL Interest Payment Date on * and the Rollover is to have a STL Interest Period of * months after the date of the Rollover provided that the Lender has the funds for the requested STL Interest Period;

(c)	confirm that:-

(i)

the conditions contained in clause 4.1 of the Facilities Agreement are satisfied as at the date hereof and we know of no reason why it should not be satisfied as at the date referred to in (a) above;

(ii)

the representations and warranties contained in clause 11.1 of the Facilities Agreement if repeated at the date of this STL Rollover Notice with reference to the facts and circumstances subsisting at the date of this STL Rollover Notice would be true and accurate in all material respects; and

(iii)

no event of default mentioned in 14.1 has occurred which constitutes, or with the lapse of time and or the giving of notice and/or a relevant determination would constitute a default.

We hereby:

(b)	elect the tenure of the RC Interest Period to be for a period of one (1) / two (2) / three (3) / six (6) month(s); [delete whichever not applicable]