1812 Brewing Company Inc (KEGS)

[bradakus]

Section 6.2 Financial Covenants.

(a) Minimum Tangible Net Worth. The Borrower will maintain, during each
period described below, its Tangible Net Worth, determined as of the
end of each such period, in an amount not less than the amount set
forth for each such period (numbers appearing between "< >" are
negative):

------------------------------------- ---------------------------------------
Minimum
Tangible Net Worth
Quarter Ending
------------------------------------- ---------------------------------------
March 31, 2008 $7,079,098
------------------------------------- ---------------------------------------
June 30, 2008 $7,230,186
------------------------------------- ---------------------------------------
September 30, 2008 $7,383,032
------------------------------------- ---------------------------------------
December 31, 2008 $7,961,103
------------------------------------- ---------------------------------------

(b) Minimum Net Income (non-cumulative). The Borrower will achieve, for
each period described below on a non-cumulative basis, Net Income of
not less than, or Net Loss of not more than, the amount set forth for
each such period (numbers appearing between "< >" are negative):

--------------------------------------- -----------------------------------
Quarter Ending Minimum Net Income/
Maximum Net Loss
--------------------------------------- -----------------------------------
March 31, 2008 <$512,553>
--------------------------------------- -----------------------------------
June 30, 2008 $151,088
--------------------------------------- -----------------------------------
September 30, 2008 $152,846
--------------------------------------- -----------------------------------
December 31, 2008 $578,071
--------------------------------------- -----------------------------------

(c) Minimum Net Cash Flow (non-cumulative). The Borrower will achieve, for
each period described below on a non-cumulative basis, Net Cash Flow
of not less than (or negative Net Cash Flow of not more than) the
amount set forth for each such period (numbers appearing between "< >"
are negative):

--------------------------------------- -----------------------------------
Quarter Ending Minimum Net Cash Flow
--------------------------------------- -----------------------------------
March 31, 2008 <$687,646>
--------------------------------------- -----------------------------------
June 30, 2008 $94,425
--------------------------------------- -----------------------------------
September 30, 2008 $195,683
--------------------------------------- -----------------------------------
December 31, 2008 $620,400
--------------------------------------- -----------------------------------

(d) Capital Expenditures. The Borrower will not incur or contract to incur
Capital Expenditures of more than $400,000 in the aggregate during any
fiscal year.

(e) Establishing Future Financial Covenants. The Borrower acknowledges and
agrees that, upon Lender's receipt of projections, satisfactory to
Lender in its sole discretion, for the fiscal year ending December 31,
2009 and each fiscal year thereafter from Borrower, Lender shall reset
the foregoing Financial Covenants in its reasonable discretion.
Borrower agrees to comply with such Financial Covenants, as reset.

(f) Availability Reserve; Make Good Provisions.

(i) Lender will maintain an Availability reserve of $200,000 until
receipt by Borrower of additional equity or Subordinated
Indebtedness pursuant to this Section 6.2(f).

(ii) Notwithstanding the foregoing Sections 6.2(a) through 6.2(c),
Lender and Borrower agree that no Event of Default shall have
occurred in the event of a breach of the Financial Covenants set
forth in Section 6.(a) (Tangible Net Worth), Section 6.2(b) (Net
Income) or Section 6.2(c) (Net Cash Flow) for the fiscal quarters
ending March 31, 2008 and June 30, 2008 so long as (A) the
variance in any such covenant shall not exceed $500,000 in the
aggregate on a year to date basis and (B) Borrower shall cause
additional equity or Subordinated Indebtedness in an amount not
less than the variance to be deposited into Borrower no later
than 15 days after the due date of the financial statements for
the applicable reporting period. In the event of a breach of the
Financial Covenants described above and Borrower either notifies
Lender that it is unable to raise additional equity or
Subordinated Indebtedness or does not receive additional equity
or Subordinated Indebtedness within the time period provided, the
breach shall constitute an Event of Default as of the end of the
applicable quarterly fiscal period (March 31, 2008 or June 30,
2008) and not as of the date of notice or failure to receive such
amounts.

(iii) In the event Borrower shall receive additional equity or
Subordinated Indebtedness pursuant to this Section 6.2(f),
Borrower may repay such amounts to the Owners or Subordinated
Creditors who provided such amounts provided that (A) Lender
shall have received Borrower's audited financial statements for
the fiscal year ending December 31, 2008 as required by Section
6.1(a), the results of which are acceptable to Lender in its
discretion not to be unreasonably exercised, (B) Lender shall
have received Borrower's projections for the fiscal year ending
December 31, 2009, which are acceptable to Lender in its
discretion not to be unreasonably exercised, (C) Lender and
Borrower shall have agreed upon the reset Financial Covenants
pursuant to Section 6.2(e), (D) no Default Period then exists and
(E) no Default or Event of Default would occur as a result of any
such payments being made by Borrower.

Section 6.3 Permitted Liens; Financing Statements.

(a) The Borrower will not create, incur or suffer to exist any Lien upon
or of any of its assets, now owned or hereafter acquired, to secure
any indebtedness; excluding, however, from the operation of the
foregoing, the following (each a "Permitted Lien"; collectively,
"Permitted Liens"):

(i) In the case of any of the Borrower's property which is not
Collateral, covenants, restrictions, rights, easements and minor
irregularities in title which do not materially interfere with
the Borrower's business or operations as presently conducted;

(ii) Liens in existence on the date hereof and listed in Schedule 6.3
hereto, securing indebtedness for borrowed money permitted under
this Agreement;

(iii) The Security Interest and Liens created by the Security
Documents; and

(iv) Purchase money Liens relating to the acquisition of machinery and
equipment of the Borrower not exceeding the lesser of cost or
fair market value thereof, not exceeding $50,000 in the aggregate
during any fiscal year, and so long as no Default Period is then
in existence and none would exist immediately after such
acquisition.

(b) The Borrower will not amend any financing statements in favor of the
Lender except as permitted by law.

Section 6.4 Indebtedness. The Borrower will not incur, create, assume or
permit to exist any indebtedness or liability on account of deposits or advances
or any indebtedness for borrowed money or letters of credit issued on the
Borrower's behalf, or any other indebtedness or liability evidenced by notes,
bonds, debentures or similar obligations, except:

(a) Any existing or future Indebtedness or any other obligations of the
Borrower to the Lender;

(b) Any indebtedness of the Borrower in existence on the date hereof and
listed in Schedule 6.4 hereto;

(c) Any indebtedness relating to Permitted Liens; and

(d) Any indebtedness of Borrower to an Owner or the other Borrower,
provided payment thereof is fully subordinate to the Indebtedness
pursuant to a Subordination Agreement in form and substance acceptable
to Lender.

Section 6.5 Guaranties. The Borrower will not assume, guarantee, endorse or
otherwise become directly or contingently liable in connection with any
obligations of any other Person, except:

(a) The endorsement of negotiable instruments by the Borrower for deposit
or collection or similar transactions in the ordinary course of
business; and

(b) Guaranties, endorsements and other direct or contingent liabilities in
connection with the obligations of other Persons, in existence on the
date hereof and listed in Schedule 6.4 hereto.

Section 6.6 Investments and Subsidiaries. The Borrower will not make or
permit to exist any loans or advances to, or make any investment or acquire any
interest whatsoever in, any other Person or Affiliate, including any partnership
or joint venture, nor purchase or hold beneficially any stock or other
securities or evidence of indebtedness of any other Person or Affiliate, except:

(a) Investments in direct obligations of the United States of America or
any agency or instrumentality thereof whose obligations constitute
full faith and credit obligations of the United States of America
having a maturity of one year or less, commercial paper issued by U.S.
corporations rated "A-1" or "A-2" by Standard & Poor's Ratings
Services or "P-1" or "P-2" by Moody's Investors Service or
certificates of deposit or bankers' acceptances having a maturity of
one year or less issued by members of the Federal Reserve System
having deposits in excess of $100,000,000 (which certificates of
deposit or bankers' acceptances are fully insured by the Federal
Deposit Insurance Corporation);

(b) Travel advances or loans to the Borrower's Officers and employees not
exceeding at any one time an aggregate of $5,000;

(c) Prepaid rent not exceeding one month or security deposits; and

(d) Current investments in the Subsidiaries in existence on the date
hereof and listed in Schedule 5.5 hereto.

Section 6.7 Dividends and Distributions. The Borrower will not declare or
pay any dividends (other than dividends payable solely in stock of the Borrower)
on any class of its stock, or make any payment on account of the purchase,
redemption or other retirement of any shares of such stock, or other securities
or evidence of its indebtedness or make any distribution in respect thereof,
either directly or indirectly.

Section 6.8 Salaries. The Borrower will not pay excessive or unreasonable
salaries, bonuses, commissions, consultant fees or other compensation; or
increase the salary, bonus, commissions, consultant fees or other compensation
of any Director, Officer or consultant, or any member of their families, by more
than ten percent (10%) in any one year, either individually or for all such
persons in the aggregate, or pay any such increase from any source other than
profits earned in the year of payment.

Section 6.9 Key Person Life Insurance. The Borrower shall maintain
insurance upon the life of Thomas Scozzafava, with the death benefit thereunder
in an amount not less than $1,300,000 (the "Life Insurance Policy"). The right
to receive the proceeds of the Life Insurance Policy shall be assigned to the
Lender by the Life Insurance Assignment.

Section 6.10 Books and Records; Collateral Examination, Inspection and
Appraisals.

(a) The Borrower will keep accurate books of record and account for itself
pertaining to the Collateral and pertaining to the Borrower's business
and financial condition and such other matters as the Lender may from
time to time request in which true and complete entries will be made
in accordance with GAAP and, upon the Lender's request, will permit
any officer, employee, attorney, accountant or other agent of the
Lender to audit, review, make extracts from or copy any and all
company and financial books and records of the Borrower at all times
during ordinary business hours, to send and discuss with account
debtors and other obligors requests for verification of amounts owed
to the Borrower, and to discuss the Borrower's affairs with any of its
Directors, Officers, employees or agents.

(b) The Borrower hereby irrevocably authorizes all accountants and third
parties to disclose and deliver to the Lender or its designated agent,
at the Borrower's expense, all financial information, books and
records, work papers, management reports and other information in
their possession regarding the Borrower.

(c) The Borrower will permit the Lender or its employees, accountants,
attorneys or agents, to examine and inspect any Collateral or any
other property of the Borrower at any time during ordinary business
hours.

(d) The Lender may also, from time to time, obtain at the Borrower's
expense an appraisal of Inventory and other Collateral by an appraiser
acceptable to the Lender in its sole discretion.

Section 6.11 Account Verification.

(a) The Lender or its agent may at any time and from time to time send or
require the Borrower to send requests for verification of accounts or
notices of assignment to account debtors and other obligors. The
Lender or its agent may also at any time and from time to time
telephone account debtors and other obligors to verify accounts.

(b) The Borrower shall pay when due each account payable due to a Person
holding a Permitted Lien (as a result of such payable) on any
Collateral.

Section 6.12 Compliance with Laws.

(a) The Borrower shall (i) comply, and cause each Subsidiary to comply,
with the requirements of applicable laws and regulations, the
non-compliance with which would materially and adversely affect its
business or its financial condition and (ii) use and keep the
Collateral, and require that others use and keep the Collateral, only
for lawful purposes, without violation of any federal, state or local
law, statute or ordinance.

(b) Without limiting the foregoing undertakings, the Borrower specifically
agrees that it will comply, and cause each Subsidiary to comply, with
all applicable Environmental Laws and obtain and comply with all
permits, licenses and similar approvals required by any Environmental
Laws, and will not generate, use, transport, treat, store or dispose
of any Hazardous Substances in such a manner as to create any material
liability or obligation under the common law of any jurisdiction or
any Environmental Law.

(c) The Borrower shall (i) ensure, and cause each Subsidiary to ensure,
that no Owner shall be listed on the Specially Designated Nationals
and Blocked Person List or other similar lists maintained by the
Office of Foreign Assets Control ("OFAC"), the Department of the
Treasury or included in any Executive Orders, (ii) not use or permit
the use of the proceeds of the Credit Facility or any other financial
accommodation from the Lender to violate any of the foreign asset
control regulations of OFAC or other applicable law, (iii) comply, and
cause each Subsidiary to comply, with all applicable Bank Secrecy Act
laws and regulations, as amended from time to time, and (iv) otherwise
comply with the USA Patriot Act as required by federal law and the
Lender's policies and practices.

Section 6.13 Payment of Taxes and Other Claims. The Borrower will pay or
discharge, when due, (a) all taxes, assessments and governmental charges levied
or imposed upon it or upon its income or profits, upon any properties belonging
to it (including the Collateral) or upon or against the creation, perfection or
continuance of the Security Interest, prior to the date on which penalties
attach thereto, (b) all federal, state and local taxes required to be withheld
by it, and (c) all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a Lien upon any properties of the Borrower;
provided, that the Borrower shall not be required to pay any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for which proper reserves
have been made.

Section 6.14 Maintenance of Properties.

(a) The Borrower will keep and maintain the Collateral and all of its
other properties necessary or useful in its business in good
condition, repair and working order (normal wear and tear excepted)
and will from time to time replace or repair any worn, defective or
broken parts; provided, however, that nothing in this covenant shall
prevent the Borrower from discontinuing the operation and maintenance
of any of its properties if such discontinuance is, in the Borrower's
judgment, desirable in the conduct of the Borrower's business and not
disadvantageous in any material respect to the Lender. The Borrower
will take all commercially reasonable steps necessary to protect and
maintain its Intellectual Property Rights.

(b) The Borrower will defend the Collateral against all Liens, claims or
demands of all Persons (other than the Lender) claiming the Collateral
or any interest therein. The Borrower will keep all Collateral free
and clear of all Liens except Permitted Liens. The Borrower will take
all commercially reasonable steps necessary to prosecute any Person
Infringing its Intellectual Property Rights and to defend itself
against any Person accusing it of Infringing any Person's Intellectual
Property Rights.

Section 6.15 Insurance. The Borrower will obtain and at all times maintain
insurance with insurers acceptable to the Lender, in such amounts, on such terms
(including any deductibles) and against such risks as may from time to time be
required by the Lender, but in all events in such amounts and against such risks
as is usually carried by companies engaged in similar business and owning
similar properties in the same general areas in which the Borrower operates.
Without limiting the generality of the foregoing, the Borrower will at all times
maintain business interruption insurance including coverage for force majeure
and keep all tangible Collateral insured against risks of fire (including
so-called extended coverage), theft, collision (for Collateral consisting of
motor vehicles) and such other risks and in such amounts as the Lender may
reasonably request, with any loss payable to the Lender to the extent of its
interest, and all policies of such insurance shall contain a lender's loss
payable endorsement for the Lender's benefit.

Section 6.16 Preservation of Existence. The Borrower will preserve and
maintain its existence and all of its rights, privileges and franchises
necessary or desirable in the normal conduct of its business and shall conduct
its business in an orderly, efficient and regular manner.

Section 6.17 Delivery of Instruments, etc. Upon request by the Lender, the
Borrower will promptly deliver to the Lender in pledge all instruments,
documents and chattel paper constituting Collateral, duly endorsed or assigned
by the Borrower.

Section 6.18 Sale or Transfer of Assets; Suspension of Business Operations.

(a) Other than the transfer of assets by WiseBuys to Hackett pursuant to
the transaction described on Schedule 6.18 hereto, the Borrower will
not sell, lease, assign, transfer or otherwise dispose of (i) the
stock of any Subsidiary, (ii) all or a substantial part of its assets,
or (iii) any Collateral or any interest therein (whether in one
transaction or in a series of transactions) to any other Person other
than the sale of Inventory in the ordinary course of business and will
not liquidate, dissolve or suspend business operations.
Notwithstanding the foregoing, Borrower may transfer real property
owned by it as of the date of this Agreement to Seaway Realty
Holdings, LLC provided that (v) no Default Period then exists, (w)
Seaway Realty Holdings, LLC shall execute and deliver a Guaranty in
favor of Lender, (x) Seaway Realty Holdings, LLC shall agree not to
incur any Debt secured by such real estate other than (i) the Debt
existing as of the date of transfer of the real estate from Borrower
and (ii) additional Debt secured by such real estate incurred after
the date of this Agreement so long Seaway Realty Holdings, LLC shall
remit the proceeds of such additional Debt to Lender for the
Borrower's account immediately upon receipt of same, (y) Seaway Realty
Holdings, LLC shall agree to remit any proceeds from any loss or
condemnation of or from the sale or other disposition of any real
property owned by it to Lender for the Borrower's account, provided,
however Seaway Realty Holdings, LLC shall not be required to remit to
Lender any lease payments received by it from Borrower, and (z) Seaway
Realty Holdings, LLC shall execute and deliver a landlord's disclaimer
and consent, in favor of Lender, in form and substance acceptable to
Lender.

(b) The Borrower will not transfer any part of its ownership interest in
any Intellectual Property Rights and will not permit any agreement
under which it has licensed Licensed Intellectual Property to lapse,
except that the Borrower may transfer such rights or permit such
agreements to lapse if it shall have reasonably determined that the
applicable Intellectual Property Rights are no longer useful in its
business. If the Borrower transfers any Intellectual Property Rights
for value, the Borrower will pay over the proceeds to the Lender for
application to the Indebtedness. The Borrower will not license any
other Person to use any of the Borrower's Intellectual Property
Rights, except that the Borrower may grant licenses in the ordinary
course of its business in connection with sales of Inventory or
provision of services to its customers.

Section 6.19 Consolidation and Merger; Asset Acquisitions. The Borrower
will not consolidate with or merge into any Person, or permit any other Person
to merge into it, or acquire (in a transaction analogous in purpose or effect to
a consolidation or merger) all or substantially all the assets of any other
Person other than pursuant to the transaction described on Schedule 6.18 hereto.

Section 6.20 Sale and Leaseback. The Borrower will not enter into any
arrangement, directly or indirectly, with any other Person whereby the Borrower
shall sell or transfer any real or personal property, whether now owned or
hereafter acquired, and then or thereafter rent or lease as lessee such property
or any part thereof or any other property which the Borrower intends to use for
substantially the same purpose or purposes as the property being sold or
transferred.

Section 6.21 Restrictions on Nature of Business. The Borrower will not
engage in any line of business materially different from that presently engaged
in by the Borrower and will not purchase, lease or otherwise acquire assets not
related to its business.

Section 6.22 Accounting. The Borrower will not adopt any material change in
accounting principles other than as required by GAAP. The Borrower will not
adopt, permit or consent to any change in its fiscal year.

Section 6.23 Discounts, etc. After notice from the Lender, the Borrower
will not grant any discount, credit or allowance to any customer of the Borrower
or accept any return of goods sold. The Borrower will not at any time modify,
amend, subordinate, cancel or terminate the obligation of any account debtor or
other obligor of the Borrower.

Section 6.24 Plans. Except as disclosed to the Lender in writing prior to
the date hereof, neither the Borrower nor any ERISA Affiliate will (i) adopt,
create, assume or become a party to any Pension Plan, (ii) incur any obligation
to contribute to any Multiemployer Plan, (iii) incur any obligation to provide
post-retirement medical or insurance benefits with respect to employees or
former employees (other than benefits required by law) or (iv) amend any Plan in
a manner that would materially increase its funding obligations.

Section 6.25 Place of Business; Name. The Borrower will not transfer its
chief executive office or principal place of business, or move, relocate, close
or sell any business location. The Borrower will not permit any tangible
Collateral or any records pertaining to the Collateral to be located in any
state or area in which, in the event of such location, a financing statement
covering such Collateral would be required to be, but has not in fact been,
filed in order to perfect the Security Interest. The Borrower will not change
its name or jurisdiction of organization.

Section 6.26 Constituent Documents; S Corporation Status. The Borrower will
not amend its Constituent Documents. The Borrower will not become an S
Corporation.

Section 6.27 Performance by the Lender. If the Borrower at any time fails
to perform or observe any of the foregoing covenants contained in this Article
VI or elsewhere herein, and if such failure shall continue for a period of ten
calendar days after the Lender gives the Borrower written notice thereof (or in
the case of the agreements contained in Section 6.13 and Section 6.15,
immediately upon the occurrence of such failure, without notice or lapse of
time), the Lender may, but need not, perform or observe such covenant on behalf
and in the name, place and stead of the Borrower (or, at the Lender's option, in
the Lender's name) and may, but need not, take any and all other actions which
the Lender may reasonably deem necessary to cure or correct such failure
(including the payment of taxes, the satisfaction of Liens, the performance of
obligations owed to account debtors or other obligors, the procurement and
maintenance of insurance, the execution of assignments, security agreements and
financing statements, and the endorsement of instruments); and the Borrower
shall thereupon pay to the Lender on demand the amount of all monies expended
and all costs and expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Lender in connection with or as a result of the
performance or observance of such agreements or the taking of such action by the
Lender, together with interest thereon from the date expended or incurred at the
Default Rate. To facilitate the Lender's performance or observance of such
covenants of the Borrower, the Borrower hereby irrevocably appoints the Lender,
or the Lender's delegate, acting alone, as the Borrower's attorney in fact
(which appointment is coupled with an interest) with the right (but not the
duty) from time to time to create, prepare, complete, execute, deliver, endorse
or file in the name and on behalf of the Borrower any and all instruments,
documents, assignments, security agreements, financing statements, applications
for insurance and other agreements required to be obtained, executed, delivered
or endorsed by the Borrower hereunder.

ARTICLE VII

EVENTS OF DEFAULT, RIGHTS AND REMEDIES

Section 7.1 Events of Default. "Event of Default", wherever used herein,
means any one of the following events:

(a) Default in the payment of the Revolving Note, any Obligation of
Reimbursement, or any default with respect to any other Indebtedness
due from Borrower to Lender as such Indebtedness becomes due and
payable;

(b) Default in the performance, or breach, of any covenant or agreement of
the Borrower contained in this Agreement;

(c) An Overadvance arises as the result of any reduction in the Borrowing
Base, or arises in any manner on terms not otherwise approved of in
advance by the Lender in writing;

(d) A Change of Control shall occur;

(e) Any Financial Covenant shall become inapplicable due to the lapse of
time and the failure of the Lender and the Borrower to come to any
agreement to amend any such covenant to cover future periods that is
acceptable to the Lender in the Lender's sole discretion;

(f) The Borrower or any Guarantor shall be or become insolvent, or admit
in writing its or his inability to pay its or his debts as they
mature, or make an assignment for the benefit of creditors; or the
Borrower or any Guarantor shall apply for or consent to the
appointment of any receiver, trustee, or similar officer for it or him
or for all or any substantial part of its or his property; or such
receiver, trustee or similar officer shall be appointed without the
application or consent of the Borrower or such Guarantor, as the case
may be; or the Borrower or any Guarantor shall institute (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution,
liquidation or similar proceeding relating to it or him under the laws
of any jurisdiction; or any such proceeding shall be instituted (by
petition, application or otherwise) against the Borrower or any such
Guarantor; or any judgment, writ, warrant of attachment or execution
or similar process shall be issued or levied against a substantial
part of the property of the Borrower or any Guarantor;

(g) A petition shall be filed by or against the Borrower or any Guarantor
under the United States Bankruptcy Code or the laws of any other
jurisdiction naming the Borrower or such Guarantor as debtor;

(h) The Life Insurance Policy shall be terminated, by the Borrower or
otherwise; or the Life Insurance Policy shall be scheduled to
terminate within 30 days and the Borrower shall not have delivered a
renewal thereof or substitute therefor to the Lender; or the Borrower
shall fail to pay any premium on the Life Insurance Policy when due;
or the Borrower shall take any other action that impairs the value of
the Life Insurance Policy;

(i) Any representation or warranty made by the Borrower in this Agreement,
by any Guarantor in any Guaranty delivered to the Lender, or by the
Borrower (or any of its Officers) or any Guarantor in any agreement,
certificate, instrument or financial statement or other statement
contemplated by or made or delivered pursuant to or in connection with
this Agreement or any such Guaranty shall be incorrect in any material
respect;

(j) The rendering against the Borrower of an arbitration award, final
judgment, decree or order for the payment of money in excess of
$50,000 and the continuance of such arbitration award, judgment,
decree or order unsatisfied and in effect for any period of 30
consecutive days without a stay of execution;

(k) A default under any bond, debenture, note or other evidence of
material indebtedness of the Borrower owed to any Person other than
the Lender, or under any indenture or other instrument under which any
such evidence of indebtedness has been issued or by which it is
governed, or under any material lease or other contract, and the
expiration of the applicable period of grace, if any, specified in
such evidence of indebtedness, indenture, other instrument, lease or
contract;

(l) Any Reportable Event, which the Lender determines in good faith might
constitute grounds for the termination of any Pension Plan or for the
appointment by the appropriate United States District Court of a
trustee to administer any Pension Plan, shall have occurred and be
continuing 30 days after written notice to such effect shall have been
given to the Borrower by the Lender; or a trustee shall have been
appointed by an appropriate United States District Court to administer
any Pension Plan; or the Pension Benefit Guaranty Corporation shall
have instituted proceedings to terminate any Pension Plan or to
appoint a trustee to administer any Pension Plan; or the Borrower or
any ERISA Affiliate shall have filed for a distress termination of any
Pension Plan under Title IV of ERISA; or the Borrower or any ERISA
Affiliate shall have failed to make any quarterly contribution
required with respect to any Pension Plan under Section 412(m) of the
IRC, which the Lender determines in good faith may by itself, or in
combination with any such failures that the Lender may determine are
likely to occur in the future, result in the imposition of a Lien on
the Borrower's assets in favor of the Pension Plan; or any withdrawal,
partial withdrawal, reorganization or other event occurs with respect
to a Multiemployer Plan which results or could reasonably be expected
to result in a material liability of the Borrower to the Multiemployer
Plan under Title IV of ERISA;

(m) An event of default shall occur under any Security Document;

(n) Default in the payment of any amount owed by the Borrower to the
Lender other than any Indebtedness arising hereunder;

(o) Any Guarantor shall repudiate, purport to revoke or fail to perform
any obligation under such Guaranty in favor of the Lender, any
individual Guarantor shall die or any other Guarantor shall cease to
exist;

(p) The Borrower shall take or participate in any action which would be
prohibited under the provisions of any Subordination Agreement or make
any payment with respect to indebtedness that has been subordinated
pursuant to any Subordination Agreement in violation of such
Subordination Agreement;

(q) The Lender believes in good faith that the prospect of payment in full
of any part of the Indebtedness, or that full performance by the
Borrower under the Loan Documents, is impaired, or that there has
occurred any material adverse change in the business or financial
condition of the Borrower;

(r) There has occurred any breach, default or event of default by or
attributable to, any Affiliate under any agreement between the
Affiliate and the Lender; or

(s) The indictment of any Director, Officer, Guarantor, or any Owner of
the Borrower for a felony offence under state or federal law.

Section 7.2 Rights and Remedies. During any Default Period, the Lender may
exercise any or all of the following rights and remedies:

(a) The Lender may, by notice to the Borrower, declare the Commitment to be
terminated, whereupon the same shall forthwith terminate;

(b) The Lender may, by notice to the Borrower, declare the Indebtedness to
be forthwith due and payable, whereupon all Indebtedness shall become
and be forthwith due and payable, without presentment, notice of
dishonor, protest or further notice of any kind, all of which the
Borrower hereby expressly waives;

(c) The Lender may, without notice to the Borrower and without further
action, apply any and all money owing by the Lender to the Borrower to
the payment of the Indebtedness;

(d) The Lender may exercise and enforce any and all rights and remedies
available upon default to a secured party under the UCC, including the
right to take possession of Collateral, or any evidence thereof,
proceeding without judicial process or by judicial process (without a
prior hearing or notice thereof, which the Borrower hereby expressly
waives) and the right to sell, lease or otherwise dispose of any or
all of the Collateral (with or without giving any warranties as to the
Collateral, title to the Collateral or similar warranties), and, in
connection therewith, the Borrower will on demand assemble the
Collateral and make it available to the Lender at a place to be
designated by the Lender which is reasonably convenient to both
parties;

(e) Intentionally omitted;

(f) The Lender may exercise and enforce its rights and remedies under the
Loan Documents;

(g) The Lender may without regard to any waste, adequacy of the security
or solvency of the Borrower, apply for the appointment of a receiver
of the Collateral, to which appointment the Borrower hereby consents,
whether or not foreclosure proceedings have been commenced under the
Security Documents and whether or not a foreclosure sale has occurred;
and (h) The Lender may exercise any other rights and remedies
available to it by law or agreement.

Notwithstanding the foregoing, upon the occurrence of an Event of
Default described in Section 7.1(f) or (g), the Indebtedness shall be
immediately due and payable automatically without presentment, demand,
protest or notice of any kind. If the Lender sells any of the
Collateral on credit, the Indebtedness will be reduced only to the
extent of payments actually received. If the purchaser fails to pay
for the Collateral, the Lender may resell the Collateral and shall
apply any proceeds actually received to the Indebtedness.

Section 7.3 Certain Notices. If notice to the Borrower of any intended
disposition of Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if
given (in the manner specified in Section 8.3) at least ten calendar days before
the date of intended disposition or other action.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 No Waiver; Cumulative Remedies; Compliance with Laws. No
failure or delay by the Lender in exercising any right, power or remedy under
the Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
under the Loan Documents. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law. The Lender may
comply with any applicable state or federal law requirements in connection with
a disposition of the Collateral and such compliance will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral.

Section 8.2 Amendments, Etc. No amendment, modification, termination or
waiver of any provision of any Loan Document or consent to any departure by the
Borrower therefrom or any release of a Security Interest shall be effective
unless the same shall be in writing and signed by the Lender, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.

Section 8.3 Notices; Communication of Confidential Information; Requests
for Accounting. Except as otherwise expressly provided herein, all notices,
requests, demands and other communications provided for under the Loan Documents
shall be in writing and shall be (a) personally delivered, (b) sent by first
class United States mail, (c) sent by overnight courier of national reputation,
(d) transmitted by telecopy, or (e) sent as electronic mail, in each case
delivered or sent to the party to whom notice is being given to the business
address, telecopier number, or e mail address set forth below next to its
signature or, as to each party, at such other business address, telecopier
number, or e mail address as it may hereafter designate in writing to the other
party pursuant to the terms of this Section. All such notices, requests, demands
and other communications shall be deemed to be an authenticated record
communicated or given on (a) the date received if personally delivered, (b) when
deposited in the mail if delivered by mail, (c) the date delivered to the
courier if delivered by overnight courier, or (d) the date of transmission if
sent by telecopy or by e mail, except that notices or requests delivered to the
Lender pursuant to any of the provisions of Article II shall not be effective
until received by the Lender. All notices, financial information, or other
business records sent by either party to this Agreement may be transmitted,
sent, or otherwise communicated via such medium as the sending party may deem
appropriate and commercially reasonable; provided, however, that the risk that
the confidentiality or privacy of such notices, financial information, or other
business records sent by either party may be compromised shall be borne
exclusively by the Borrower. All requests for an accounting under Section 9-210
of the UCC (i) shall be made in a writing signed by a Person authorized under
Section 2.2(b), (ii) shall be personally delivered, sent by registered or
certified mail, return receipt requested, or by overnight courier of national
reputation, (iii) shall be deemed to be sent when received by the Lender and
(iv) shall otherwise comply with the requirements of Section 9-210 of the UCC.
The Borrower requests that the Lender respond to all such requests which on
their face appear to come from an authorized individual and releases the Lender
from any liability for so responding. The Borrower shall pay the Lender the
maximum amount allowed by law for responding to such requests.

Section 8.4 Further Documents. The Borrower will from time to time execute,
deliver, endorse and authorize the filing of any and all instruments, documents,
conveyances, assignments, security agreements, financing statements, control
agreements and other agreements and writings that the Lender may reasonably
request in order to secure, protect, perfect or enforce the Security Interest or
the Lender's rights under the Loan Documents (but any failure to request or
assure that the Borrower executes, delivers, endorses or authorizes the filing
of any such item shall not affect or impair the validity, sufficiency or
enforceability of the Loan Documents and the Security Interest, regardless of
whether any such item was or was not executed, delivered or endorsed in a
similar context or on a prior occasion).

Section 8.5 Costs and Expenses. The Borrower shall pay on demand all costs
and expenses, including reasonable attorneys' fees, incurred by the Lender in
connection with the Indebtedness, this Agreement, the Loan Documents, and any
other document or agreement related hereto or thereto, and the transactions
contemplated hereby, including all such costs, expenses and fees incurred in
connection with the negotiation, preparation, execution, amendment,
administration, performance, collection and enforcement of the Indebtedness and
all such documents and agreements and the creation, perfection, protection,
satisfaction, foreclosure or enforcement of the Security Interest.

Section 8.6 Indemnity. In addition to the payment of expenses pursuant to
Section 8.5, the Borrower shall indemnify, defend and hold harmless the Lender,
and any of its participants, parent corporations, subsidiary corporations,
affiliated corporations, successor corporations, and all present and future
officers, directors, employees, attorneys and agents of the foregoing (the
"Indemnitees") from and against any of the following (collectively, "Indemnified
Liabilities"):

(i) Any and all transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of the Loan Documents or the making of the
Advances;

(ii) Any claims, loss or damage to which any Indemnitee may be
subjected if any representation or warranty contained in Section
5.14 proves to be incorrect in any respect or as a result of any
violation of the covenant contained in Section 6.12(b) ; and

(iii) Any and all other liabilities, losses, damages, penalties,
judgments, suits, claims, costs and expenses of any kind or
nature whatsoever (including the reasonable fees and
disbursements of counsel) in connection with the foregoing and
any other investigative, administrative or judicial proceedings,
whether or not such Indemnitee shall be designated a party
thereto, which may be imposed on, incurred by or asserted against
any such Indemnitee, in any manner related to or arising out of
or in connection with the making of the Advances and the Loan
Documents or the use or intended use of the proceeds of the
Advances.

If any investigative, judicial or administrative proceeding
arising from any of the foregoing is brought against any
Indemnitee, upon such Indemnitee's request, the Borrower, or
counsel designated by the Borrower and satisfactory to the
Indemnitee, will resist and defend such action, suit or
proceeding to the extent and in the manner directed by the
Indemnitee, at the Borrower's sole costs and expense. Each
Indemnitee will use its best efforts to cooperate in the defense
of any such action, suit or proceeding. If the foregoing
undertaking to indemnify, defend and hold harmless may be held to
be unenforceable because it violates any law or public policy,
the Borrower shall nevertheless make the maximum contribution to
the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The
Borrower's obligations under this Section 8.6 shall survive the
termination of this Agreement and the discharge of the Borrower's
other obligations hereunder.

Section 8.7 Participants. The Lender and its participants, if any, are not
partners or joint venturers, and the Lender shall not have any liability or
responsibility for any obligation, act or omission of any of its participants.
All rights and powers specifically conferred upon the Lender may be transferred
or delegated to any of the Lender's participants, successors or assigns.

Section 8.8 Execution in Counterparts; Telefacsimile Execution. This
Agreement and other Loan Documents may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts, taken together, shall constitute but
one and the same instrument. Delivery of an executed counterpart of this
Agreement or any other Loan Document by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this Agreement or
such other Loan Document. Any party delivering an executed counterpart of this
Agreement or any other Loan Document by telefacsimile also shall deliver an
original executed counterpart of this Agreement or such other Loan Document but
the failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Agreement or such other
Loan Document.

Section 8.9 Retention of Borrower's Records. The Lender shall have no
obligation to maintain any electronic records or any documents, schedules,
invoices, agings, or other papers delivered to the Lender by the Borrower or in
connection with the Loan Documents for more than 30 days after receipt by the
Lender. If there is a special need to retain specific records, the Borrower must
inform the Lender of its need to retain those records with particularity, which
must be delivered in accordance with the notice provisions of Section 8.3 within
30 days of the Lender taking control of same.

Section 8.10 Binding Effect; Assignment; Complete Agreement; Sharing
Information. The Loan Documents shall be binding upon and inure to the benefit
of the Borrower and the Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights
thereunder or any interest therein without the Lender's prior written consent.
To the extent permitted by law, the Borrower waives and will not assert against
any assignee any claims, defenses or set-offs which the Borrower could assert
against the Lender. This Agreement shall also bind all Persons who become a
party to this Agreement as a borrower. This Agreement, together with the Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. To the extent that any provision of this Agreement
contradicts other provisions of the Loan Documents, this Agreement shall
control. Without limiting the Lender's right to share information regarding the
Borrower and its Affiliates with the Lender's participants, accountants, lawyers
and other advisors, the Lender and each direct and indirect subsidiary of Wells
Fargo & Company may share with each other any information that they may have in
their possession regarding the Borrower and its Affiliates, and the Borrower
waives any right of confidentiality it may have with respect to all such sharing
of information.

Section 8.11 Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.

Section 8.12 Headings. Article, Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

Section 8.13 Cross Guaranty; Subordination.

(a) Guaranty. Each Borrower hereby agrees that such Borrower is jointly
and severally liable for, and hereby absolutely and unconditionally
guarantees to Lender, the full and prompt payment (whether at stated
maturity, by acceleration or otherwise) and performance of, all
Indebtedness owed or hereafter owing to Lender by each other Borrower.
Each Borrower agrees that its guaranty obligation hereunder is a
continuing guaranty of payment and performance and not of collection,
that its obligations under this Section shall not be discharged until
payment and performance, in full, of the Indebtedness has occurred,
and that its obligations under this Section shall be absolute and
unconditional, irrespective of, and unaffected by:

(1) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan
Document or any other agreement, document or instrument to which
any Borrower is or may become a party;

(2) the absence of any action to enforce this Agreement (including
this Section) or any other Loan Document or the waiver or consent
by Lender with respect to any of the provisions thereof;

(3) the existence, value or condition of, or failure to perfect its
security interest in or lien against, any security for the
Indebtedness or any action, or the absence of any action, by
Lender in respect thereof (including the release of any such
security);

(4) the insolvency of any Borrower or Guarantor; or

(5) any other action or circumstances that might otherwise constitute
a legal or equitable discharge or defense of a surety or
guarantor.

Each Borrower shall be regarded, and shall be in the same position, as
principal debtor with respect to the Indebtedness guaranteed hereunder.

(b) Waivers by Borrower. Each Borrower expressly waives all rights it may
have now or in the future under any statute, or at common law, or at
law or in equity, or otherwise, to subrogation, to compel Lender to
marshal assets or to proceed in respect of the Indebtedness guaranteed
hereunder against any other Borrower or Guarantor, any other party or
against any security for the payment and performance of the
Indebtedness before proceeding against, or as a condition to
proceeding against, such Borrower. It is agreed among each Borrower
and Lender that the foregoing waivers are of the essence of the
transaction contemplated by this Agreement and the other Loan
Documents and that, but for the provisions of this Section and such
waivers, the Lender would decline to enter into this Agreement.

(c) Benefit of Guaranty. Each Borrower agrees that the provisions of this
Section are for the benefit of the Lender and its successors,
transferees, endorsees and assigns, and nothing herein contained shall
impair, as between any other Borrower and the Lender, the obligations
of such other Borrower under the Loan Documents.

(d) Election of Remedies. If the Lender may, under applicable law, proceed
to realize its benefits under any of the Loan Documents giving Lender
a security interest in or lien upon any Collateral, whether owned by
any Borrower or by any Guarantor, either by judicial foreclosure or by
non-judicial sale or enforcement, the Lender may, at its sole option,
determine which of its remedies or rights it may pursue without
affecting any of its rights and remedies under this Section. If, in
the exercise of any of its rights and remedies, Lender shall forfeit
any of its rights or remedies, including its right to enter a
deficiency judgment against any Borrower or any other Guarantor,
whether because of any applicable laws pertaining to "election of
remedies" or the like, each Borrower hereby consents to such action by
Lender and waives any claim based upon such action. Any election of
remedies that results in the denial or impairment of the right of
Lender to seek a deficiency judgment against any Borrower shall not
impair any other Borrower's obligation to pay the full amount of the
Indebtedness. In the event Lender shall bid at any foreclosure or
trustee's sale or at any private sale permitted by law or the Loan
Documents, Lender may bid all or less than the amount of the
Indebtedness and the amount of such bid need not be paid by Lender but
shall be credited against the Indebtedness. The amount of the
successful bid at any such sale, whether Lender or any other party is
the successful bidder, shall be conclusively deemed to be the fair
market value of the Collateral and the difference between such bid
amount and the remaining balance of the Indebtedness shall be
conclusively deemed to be the amount of the Indebtedness guaranteed
under this Section, notwithstanding that any present or future law or
court decision or ruling may have the effect of reducing the amount of
any deficiency claim to which Lender might otherwise be entitled but
for such bidding at any such sale.

(e) Liability Cumulative. The liability of each Borrower under this
Section 8.13 is in addition to and shall be cumulative with all
liabilities of each Borrower to Lender under this Agreement and the
other Loan Documents to which such Borrower is a party or in respect
of any Indebtedness or obligation of the other Borrower, without any
limitation as to amount, unless the instrument or agreement evidencing
or creating such other liability specifically provides to the
contrary.

(f) Subordination.

(1) Each Borrower covenants and agrees that during a Default Period
the payment of all indebtedness, principal, interest (including
interest which accrues after the commencement of any case or
proceeding in bankruptcy, or for the reorganization of any
Borrower or Guarantor), fees, charges, expenses, attorneys' fees
and any other sum, obligation or liability owing by any other
Borrower to such Borrower, including any intercompany loans or
trade payables or royalty or licensing fees (collectively, the
"Intercompany Obligations"), is subordinated, to the extent and
in the manner provided in this Section 8.13(f), to the prior
payment in full of all Indebtedness (herein, the "Senior
Obligations") and that the subordination is for the benefit of
the Lender, and Lender may enforce such provisions directly.

(2) Each Borrower executing this Agreement hereby (i) authorizes
Lender to demand specific performance of the terms of this
Section 8.13(f), whether or not any other Borrower shall have
complied with any of the provisions hereof applicable to it, at
any time when such Borrower shall have failed to comply with any
provisions of this Section 8.13 which are applicable to it and
(ii) irrevocably waives any defense based on the adequacy of a
remedy at law, which might be asserted as a bar to such remedy of
specific performance.

(3) Upon any distribution of assets of any Borrower in any
dissolution, winding up, liquidation or reorganization (whether
in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise):

(i) The Lender shall first be entitled to receive payment in
full in cash of the Senior Obligations before any Borrower
is entitled to receive any payment on account of the
Intercompany Obligations.

(ii) Any payment or distribution of assets of any Borrower of any
kind or character, whether in cash, property or securities,
to which any other Borrower would be entitled except for the
provisions of this Section 8.13(f)(3), shall be paid by the
liquidating trustee or agent or other person making such
payment or distribution directly to the Lender, to the
extent necessary to make payment in full of all Senior
Obligations remaining unpaid after giving effect to any
concurrent payment or distribution or provisions therefor to
the Lender.

(iii) In the event that notwithstanding the foregoing provisions
of this Section 8.13(f)(3), any payment or distribution of
assets of any Borrower of any kind or character, whether in
cash, property or securities, shall be received by any other
Borrower on account of the Intercompany Obligations before
all Senior Obligations are paid in full, such payment or
distribution shall be received and held in trust for and
shall be paid over to the Lender for application to the
payment of the Senior Obligations until all of the Senior
Obligations shall have been paid in full, after giving
effect to any concurrent payment or distribution or
provision therefor to the Lender.

No right of the Lender or any other present or future holders of any Senior
Obligations to enforce the subordination provisions herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Borrower or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by any Borrower with the terms hereof, regardless of any
knowledge thereof which any such holder may have or be otherwise charged with.

Section 8.14 Governing Law; Jurisdiction, Venue; Waiver of Jury Trial. The
Loan Documents shall be governed by and construed in accordance with the
substantive laws (other than conflict laws) of the State of New York. The
parties hereto hereby (i) consent to the personal jurisdiction of the state and
federal courts located in the State of New York in connection with any
controversy related to this Agreement; (ii) waive any argument that venue in any
such forum is not convenient; (iii) agree that any litigation initiated by the
Lender or the Borrower in connection with this Agreement or the other Loan
Documents may be venued in either the state or federal courts located in the
City of New York, New York County, New York; and (iv) agree that a final
judgment in any such suit, 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.

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