Credit Agreement - Exhibit 10.2




EXHIBIT 10.2



EXECUTION COPY







CREDIT AGREEMENT



dated as of March 31, 2003



among



NATIONAL WINE & SPIRITS, INC.



AND



LASALLE BANK NATIONAL ASSOCIATION

NATIONAL CITY BANK OF INDIANA



and



LASALLE BANK NATIONAL ASSOCIATION, as Agent







Table of Contents




	
ARTICLE I:    DEFINITIONS	
1
	 	
1.1	
Certain Definitions	
1
	 	
1.2	
Other Definitions; Rules of Construction	
16





	
ARTICLE II:    THE COMMITMENTS AND THE ADVANCES	
17
	 	
2.1	
Commitment of the Banks	
17

	 	
2.2	
Termination, Reduction and Increases of Commitments	
17
	 	
2.3	
Fees	
18
	 	
2.4	
Disbursement of Advances	
19
	 	
2.5	
Conditions for First Disbursement	
23
	 	
2.6	
Further Conditions for Disbursements	
25
	 	
2.7	
Subsequent Elections as to Loans    	
26
	 	
2.8	
Limitation of Requests and Elections           	
26
	 	
2.9	
Minimum Amounts; Limitation on Number of Loans; Etc.           	
27
	 	
2.10	
Borrowing Base Adjustments           	
27
	 	
2.11	
Security and Collateral           	
27





	
ARTICLE III:    PAYMENTS AND PREPAYMENTS OF ADVANCES	
28
	 	
3.1	
Principal Payments and Prepayments        	
28
	 	
3.2	
Interest Payments	
28
	 	
3.3	
Letter of Credit Reimbursement Payments     	
28
	 	
3.4	
Payment Method     	
31
	 	
3.5	
No Setoff or Deduction      	
32
	 	
3.6	
Payment on Non-Business Day; Payment Computations     	
32
	 	
3.7	
Additional Costs     	
32
	 	
3.8	
Illegality and Impossibility     	
33
	 	
3.9	
Indemnification     	
34





	
ARTICLE IV:    REPRESENTATIONS AND WARRANTIES	
34
	 	
4.1	
Existence and Power    	
34  
	 	
4.2	
Authority    	
35  
	 	
4.3	
Binding Effect    	
35  
	 	
4.4	
Restricted and Unrestricted Subsidiaries    	
35  
	 	
4.5	
Litigation    	
35  
	 	
4.6	
Financial Condition    	
36  
	 	
4.7	
Corporate Restructuring and Future Financial Statements    	
36  
	 	
4.8	
Use of Advances    	
36  
	 	
4.9	
Consents, Etc.    	
37  
	 	
4.10	
Taxes    	
37  
	 	
4.11	
Title to Properties    	
37  
	 	
4.12	
Borrowing Base    	
37  
	 	
4.13	
ERISA    	
38  
	 	
4.14	
Disclosure    	
38  
	 	
4.15	
No Default    	
38  








Table of Contents

(continued)




	
ARTICLE V:    COVENANTS	
38
	 	
5.1	
Affirmative Covenants    	
38  
	 	
5.2	
Negative Covenants    	
44  





	
ARTICLE VI:    DEFAULT	
51
	 	
6.1	
Events of Default    	
51  
	 	
6.2	
Remedies    	
54  





	
ARTICLE VII:    THE AGENT AND THE BANKS	
55
	 	
7.1	
Appointment and Authorization  	
55  
	 	
7.2	
Agent and Affiliates  	
55  
	 	
7.3	
Scope of Agent's Duties  	
55  
	 	
7.4	
Reliance by Agent  	
56  
	 	
7.5	
Default  	
56  
	 	
7.6	
Liability of Agent  	
56  
	 	
7.7	
Nonreliance on Agent and Other Banks  	
57  
	 	
7.8	
Indemnification  	
57  
	 	
7.9	
Successor Agent  	
58  
	 	
7.10	
Sharing of Payments  	
58  





	
ARTICLE VIII:    MISCELLANEOUS	
59
	 	
8.1	
Amendments, Etc.  	
59  
	 	
8.2	
Notices  	
60  
	 	
8.3	
No Waiver By Conduct; Remedies Cumulative  	
61  
	 	
8.4	
Reliance on and Survival of Various Provisions  	
61  
	 	
8.5	
Expenses; Indemnification  	
61  
	 	
8.6	
Successors and Assigns  	
63  
	 	
8.7	
Counterparts and Telefacsimile Signatures  	
67  
	 	
8.8	
Governing Law  	
67  
	 	
8.9	
Table of Contents and Headings  	
67  
	 	
8.10	
Construction of Certain Provisions  	
67  
	 	
8.11	
Integration and Severability  	
67  
	 	
8.12	
Independence of Covenants  	
68  
	 	
8.13	
Interest Rate Limitation  	
68  
	 	
8.14	
Waiver of Jury Trial  	
68  





	
EXHIBITS





	 	
Exhibit A	
Borrowing Base Certificate
	 	
Exhibit B	
Intercompamy Note
	 	
Exhibit C	
Note
	 	
Exhibit D	
Pledge Agreement
	 	
Exhibit E	
Security Agreement
	 	
Exhibit F	
Guaranty
	 	
Exhibit G	
Legal Opinion
	 	
Exhibit H	
Assignment and Acceptance







	
SCHEDULES





	 	
Schedule 2.5(K)	
Debt to be Repaid
	 	
Schedule 4.4	
Restricted and Unrestricted Subsidiaries
	 	
Schedule 4.5	
Litigation
	 	
Schedule 5.2(D)	
Indebtedness
	 	
Schedule 5.2(E)	
Liens
	 	
Schedule 5.2(J)	
Capital Leases
	 	
Schedule 5.2(K)	
Investments







        THIS CREDIT AGREEMENT, dated as
of March 31, 2003 (this “Agreement”), is by and among
NATIONAL WINE & SPIRITS, INC., an Indiana corporation (the
“Company”), the Banks set forth on the signature pages
hereof (collectively, the “Banks” and individually, a
“Bank”) and LASALLE BANK NATIONAL ASSOCIATION, as agent
for the Banks (in such capacity, the
“Agent”).




INTRODUCTION 




        The Company desires to obtain a
revolving credit facility, including letters of credit, in the aggregate
principal amount of $40,000,000, in order to provide funds and other financial
accommodations for working capital and its other general corporate purposes, and
the Banks are willing to establish such a credit facility in favor of the
Company on the terms and conditions herein set forth.




        In
consideration of the premises and of the mutual agreements herein contained, the parties
hereto agree as follows:




ARTICLE I:   DEFINITIONS 




        1.1    
Certain Definitions. As used herein the following terms shall have the following
respective meanings:




        “Adjusted
Base Rate” shall mean the per annum rate equal to the sum of (a) the Applicable
Margin plus (b) the greater of (i) the Base Rate in effect from time to time, and (ii) the
sum of one-half of one percent (1/2 of 1%) per annum plus the Federal Funds Rate in effect
from time to time; which Adjusted Base Rate shall change simultaneously with any change in
such Base Rate or Federal Funds Rate, as the case may be.




        “Adjusted
Base Rate Loan” shall mean any Loan which bears interest at the Adjusted Base Rate.




        “Advance”
shall mean any Loan and any Letter of Credit Advance.




        “Affiliate”,
when used with respect to any Person shall mean any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such Person. For
purposes of this definition “control” (including the correlative meanings of the
terms “controlled by” and “under common control with”), with respect
to any Person, shall mean possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.




        “Aggregate
Commitment” means the aggregate of the Commitments of all the Banks, as may be
adjusted from time to time pursuant to the terms hereof. The initial Aggregate Commitment
is Forty Million and 00/100 Dollars ($40,000,000).







- 1 -




        “Applicable
Margin” shall mean for any date with respect to any Adjusted Base Rate Loan,
Eurodollar Rate Loan, or commitment fee, as the case may be, the applicable percentage set
forth in the applicable column of the table below for, in the case of Loans, the Borrowing
Base level in effect on such date, based upon the Interest Coverage Ratio as determined as
of the end of each fiscal quarter, commencing with the March 31, 2003 fiscal quarter, for
the period of the four fiscal quarters then ending, as adjusted on the tenth Business Day
following receipt by the Agent of the Company’s financial statements for such fiscal
quarter, or fiscal year, as the case may be, and remaining in effect until the next change
to be effected pursuant to this definition, provided that if any Event of Default has
occurred and is continuing, the Interest Coverage Ratio as of the end of the most recently
ended fiscal quarter shall, for the purposes of this definition, be deemed to be less than
2.00:1.00; provided, further that during the period from the Effective Date through and
including the tenth Business Day following receipt by the Agent of the Company’s
financial statements for the fiscal quarter ending on March 31, 2003, the Applicable
Margin shall be determined from Tier IV. In the table below, the abbreviation
“bps” means “basis points”. Each basis point is equal to 0.01% per
annum.


	Applicable Margin (in bps)
			80% A/R + 60% Inv.	75% A/R + 55% Inv.	70% A/R + 50% Inv.
	Tier	Interest Coverage Ratio	ABR	Eurodollar	ABR	Eurodollar	ABR	Eurodollar	Commitment Fee
	I	› 3.50:1.00	0 	175 	0 	150 	0 	125 	35 
	II	› 3.00 ‹ 3.50:1.00	25 	200 	0 	175 	0 	150 	40 
	III	› 2.50 ‹ 3.00:1.00	50 	225 	25 	200 	0 	175 	40 
	IV	‹ 2.00 ‹ 2.50:1.00	75 	250 	50 	225 	25 	200 	45 
	V	‹ 2.00:1.00	100 	275 	75 	250 	50 	225 	50 






        “Asset
Sale” shall mean (i) the sale, lease, conveyance or other disposition of any assets
or rights other than sales of inventory in the ordinary course of business consistent
with past practices and (ii) the issue or sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company’s Restricted Subsidiaries, in
the case of either clause (i) or (ii), whether in a single transaction or a series of
related transactions (a) that have a fair market value in excess of $1,000,000 or (b) for
net proceeds in excess of $1,000,000, but excluding a transfer of assets by the Company
to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to another
Restricted Subsidiary. 







- 2 -




        “Base
Rate” shall mean the per annum rate announced by the Agent from time to time as its
“base rate” or its “prime rate” (it being acknowledged that such
announced rate may not necessarily be the lowest rate charged by the Agent to any of its
customers); which Base Rate shall change simultaneously with any change in such announced
rate. 




        “Borrowing”shall
mean the aggregation of Advances, including each Letter of Credit issuance, of the Banks
to be made to the Company, or continuations and conversions of any Loans, made pursuant
to Article II on a single date and, in the case of any Loans, for a single Interest
Period, which Borrowings may be classified for purposes of this Agreement by reference to
the type of Loans or the type of Advance comprising the related Borrowing, e.g., a “Eurodollar
Rate Borrowing” is a Borrowing comprised of Eurodollar Rate Loans and a “Letter
of Credit Borrowing” is an Advance comprised of a single Letter of Credit. 




        “Borrowing
Base” shall mean, as of any date, one of the following three levels: (1) the sum of
(a) an amount equal to 80% of the value of Eligible Accounts Receivable plus (b) an
amount equal to 60% of the value of Eligible Inventory; or (2) the sum of (a) an amount
equal to 75% of the value of Eligible Accounts Receivable plus (b) an amount equal to 55%
of the value of Eligible Inventory; or (3) the sum of (a) 70% of the value of Eligible
Accounts Receivable plus (b) 50% of the value of Eligible Inventory, as selected by the
Company as follows: The initial Borrowing Base shall be the level described in (3) above.
The Company may change the Borrowing Base level by submitting written notice of its
selection of a different Borrowing Base level to the Agent. The change in the Borrowing
Base level shall be effective ten (10) Business Days following receipt by the Agent of
the request to change. The Company may not change the Borrowing Base level more than four
(4) times in any twelve (12) month period, nor more frequently than once in a sixty (60)
day period without the written consent of the Agent. 




        “Borrowing
Base Certificate” for any date shall mean an appropriately completed report as of
such date in substantially the form of Exhibit A hereto, certified as true and correct as
of such date by a duly authorized officer of the Company. 




        “Business
Day” shall mean a day other than a Saturday, Sunday or other day on which banks in
Chicago, Illinois are not open to the public for carrying on substantially all of their
banking functions. 




        “Capital
Lease” of any Person shall mean any lease which, in accordance with Generally
Accepted Accounting Principles, is or should be capitalized on the books of such Person. 




        “Capital
Stock” shall mean (i) in the case of a corporation, corporate stock, (ii) in the
case of an association or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, (iii) in the case of
a partnership or limited liability company, partnership (whether general or limited) or
membership interests and (iv) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person. 







- 3 -





        “Code”shall
mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations
thereunder. 




        “Commitment”shall
mean, with respect to each Bank, the commitment of each such Bank to make Loans and to
participate in Letter of Credit Advances made through the Agent pursuant to Section 2.1,
in amounts not exceeding in aggregate principal amount outstanding at any time the
respective commitment amounts for each such Bank set forth next to the name of each such
Bank in the signature pages hereof, as such amounts may be adjusted from time to time
pursuant to Section 2.2. 




        “Company
Shareholder Note Receivable” shall mean any promissory note receivable due to
NWS-Indiana on the date of this Agreement from any shareholder of the Company. 




        “Consolidated” has
the meaning accorded under Generally Accepted Accounting Principles. 




        “Consolidated
Cash Flow” shall mean, with respect to the Company and its Restricted Subsidiaries
for any period, their Consolidated Net Income for such period plus (i) an amount equal to
any extraordinary loss plus any net loss realized in connection with an Asset Sale (to
the extent such losses were deducted in computing such Consolidated Net Income), plus
(ii) (A) as to any Person that is an S-Corporation or substantially similar pass through
entity for Federal income tax purposes, the amount of all distributions for such period
made for the payment of taxes attributable to such Person’s income, and (B) as to
any Person that is not an S-Corporation or substantially similar pass-through entity for
Federal income tax purposes, any provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period, to the extent that such provision
for taxes was included in computing such Consolidated Net Income, plus (iii) consolidated
interest expense of the Company and its Restricted Subsidiaries for such period, whether
paid or accrued and whether or not capitalized (including, without limitation, non-cash
interest payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease obligations,
commissions, discounts and other fees and charges incurred in respect of letter of credit
or bankers’ acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing such
Consolidated Net Income, plus (iv) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period other than debt issuance costs) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of the Company and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other non-cash expenses
were deducted in computing such Consolidated Net Income, plus (v) LIFO expense, plus (vi)
prepayment penalties associated with the prepayment of Indebtedness with the proceeds of
the Senior Unsecured Debt to the extent any such expense was deducted in computing such
Consolidated Net Income, minus (vii) non-cash items increasing such Consolidated Net
Income for such period including, without limitation, LIFO income, and capitalized
interest on Indebtedness owed to the Company or any Restricted Subsidiary by any owner of
its Capital Stock, and minus (viii) an amount equal to any extraordinary gain plus any
net gain realized in connection with an Asset Sale to the extent such gains were included
in computing such Consolidated Net Income, in each case, on a Consolidated basis and
determined in accordance with Generally Accepted Accounting Principles. 







- 4 -





        “Consolidated
Net Income” shall mean, with respect to the Company and its Restricted Subsidiaries
for any period, the aggregate of their Net Income for such period, on a Consolidated
basis, determined in accordance with Generally Accepted Accounting Principles, reduced,
as to any Person that is an S-Corporation or substantially similar pass-through entity
for Federal income tax purposes, by the amount of distributions for such period made for
the payment of taxes attributable to such Person’s income. 




        “Contingent
Liabilities” of any Person shall mean, as of any date, all obligations of such
Person or of others for which such Person is contingently liable, as obligor, guarantor,
surety, accommodation party, partner or in any other capacity, or in respect of which
obligations such Person assures a creditor against loss or agrees to take any action to
prevent any such loss (other than endorsements of negotiable instruments for collection
in the ordinary course of business), including without limitation all reimbursement
obligations of such Person in respect of any letters of credit, surety bonds or similar
obligations (including, without limitation, bankers acceptances) and all obligations of
such Person to advance funds to, or to purchase assets, property or services from, any
other Person in order to maintain the financial condition of such other Person. 




        “Contractual
Obligation” shall mean as to any Person, any provision of any security issued by
such Person or of any agreement, instrument or other undertaking to which such Person is
a party or by which it or any of its property is bound. 




        “Default”shall
mean any event or condition which might become an Event of Default with notice or lapse
of time or both. 




        “Dollars”and
“$” shall mean the lawful money of the United States of America. 




        “Effective
Date” shall mean March 31, 2003. 







- 5 -





        “Eligible
Accounts Receivable” shall mean, as of any date, those trade accounts receivable
owned by the Company and the Guarantors which are payable in Dollars and in which the
Company and the Guarantors have granted to the Agent for the benefit of the Banks and the
Agent a first-priority perfected security interest pursuant to the Security Agreements,
valued at the face amount thereof less sales, excise or similar taxes and less returns,
discounts, claims, credits and allowances of any nature at any time issued, owing,
granted, outstanding, available or claimed, but shall not include any such account
receivable (a) that is not a bona fide existing obligation created by the sale and actual
delivery of inventory, goods or other property or the furnishing of services or other
good and sufficient consideration to customers of the Company and the Guarantors in the
ordinary course of business, (b) that is more than 45 days past due or, in the case of an
account receivable owed to the U.S. Beverage division of NWS-Illinois and in the case of
an account receivable owed by a Person located in Illinois, that is more than 60 days
past due, (c) that is subject to any dispute, contra-account, defense, offset or
counterclaim or any Lien (except those in favor of the Agent for the benefit of the Banks
under the Security Documents), or the inventory, goods, property, services or other
consideration of which such account receivable constitutes proceeds is subject to any
such Lien, (d) in respect of which the inventory, goods, property, services or other
consideration have been rejected or the amount is in dispute, (e) that is due from any
Affiliate or Subsidiary of the Company, (f) that has been classified by the Company or a
Guarantor as doubtful or has otherwise failed to meet established or customary credit
standards of the Company or a Guarantor, (g) that is payable by any Person located
outside the United States (which shall not be deemed to include any territories of the
United States) and is not supported by letters of credit issued to the Agent by
commercial banks, and in form and substance, acceptable to the Agent, (h) with respect to
which any representation or warranty contained in Section 4.12 is incorrect at any time,
(i) that is payable by the United States or any of its departments, agencies or
instrumentalities or by any state or other governmental entity, (j) that is payable by
any Person as to which 50% or more of the aggregate amount of such accounts receivable
payable by such Person to the Company and the Guarantors do not otherwise constitute
Eligible Accounts Receivable, (k) that is payable by any Person that is the subject of
any proceeding seeking to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up or reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency or reorganization or
relief or protection of debtors or seeking the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its property,
or that is not generally paying its debts as they become due or has admitted in writing
its inability to pay its debts generally or has made a general assignment for the benefit
of creditors, (l) that is evidenced by a promissory note or other instrument, (m) that is
subordinate or junior in right or priority of payment to any other obligation or claim,
or (n) that for any other reason is at any time reasonably deemed by the Agent to be
ineligible. 







- 6 -





        “Eligible
Inventory” shall mean, as of any date, that inventory owned by the Company and the
Guarantors that constitutes raw materials or finished goods in which the Company and the
Guarantors have granted to the Agent for the benefit of the Banks a first-priority
perfected security interest pursuant to the Security Agreements, valued at the lower of
cost or market on a LIFO basis without deduction for any LIFO reserve, except for bottled
water, which is valued on a FIFO basis, but shall not include any such inventory (a) that
does not constitute raw materials or finished goods readily salable or usable in the
business of the Company and the Guarantors (b) that is located outside the United States
(which shall not be deemed to include any territories of the United States), (c) that is
subject to, or any accounts or other proceeds resulting from the sale or other
disposition thereof could be subject to, any Lien (except those in favor of the Banks and
the Agent under the Security Documents or any other Lien that shall have been waived
and/or subordinated on terms and conditions reasonably acceptable to the Agent),
including any sale on approval or sale or return transaction or any consignment, (d) that
is not in the possession of the Company or a Guarantor (unless it is in the possession of
a bailee which has issued warehouse receipts therefor that have been delivered to the
Agent), (e) that is held for lease or is the subject of any lease, (f) that is subject to
any trademark, trade name or licensing arrangement, or any law, rule or regulation, that
could limit or impair the ability of the Banks and the Agent to promptly exercise all
rights of the Banks and the Agent under the Security Documents, (g) if such inventory is
located on premises not owned by the Company or a Guarantor and the landlord or other
owner of such premises shall not have waived its distraint, lien and similar rights with
respect to such inventory and shall not have agreed to permit the Banks and the Agent to
enter such premises pursuant to a waiver and agreement of such Person in favor of and in
form and substance acceptable to the Banks and the Agent, (h) with respect to which any
insurance proceeds are not payable to the Banks and the Agent as a loss payee or are
payable to any loss payee other than the Banks and the Agent or the Company or a
Guarantor, (i) with respect to which warehouse receipts have been issued but have not
been delivered to the Agent, or (j) that for any other reason is at any time reasonably
deemed by the Agent to be ineligible. 




        “Environmental
Laws” at any date shall mean all provisions of law, statutes, ordinances, rules,
regulations, judgments, writs, injunctions, decrees, orders, awards and standards
promulgated by the government of the United States of America or any foreign government
or by any state, province, municipality or other political subdivision thereof or
therein, or by any court, agency, instrumentality, regulatory authority or commission of
any of the foregoing concerning the protection of, or regulating the discharge of
substances into, the environment. 




        “Equity
Interests” shall mean Capital Stock and all warrants, options or other rights to
acquire Capital Stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock). 




        “ERISA”shall
mean the Employee Retirement Income Security Act of 1974, as amended from time to time,
and the regulations thereunder. 




        “ERISA
Affiliate” shall mean, with respect to any Person, any trade or business (whether or
not incorporated) which, together with such Person or any Subsidiary of such Person,
would be treated as a single employer under Section 414 of the Code and the regulations
promulgated thereunder. 




        “Eurodollar
Business Day” shall mean, with respect to any Eurodollar Rate Loan, a day which is
both a Business Day and a day on which dealings in Dollar deposits are carried out in the
London interbank market. 




        “Eurodollar
Interest Period” shall mean, with respect to any Eurodollar Rate Loan, the period
commencing on the day such Eurodollar Rate Loan is made or converted to a Eurodollar Rate
Loan and ending on the day which is one, two or three months thereafter, as the Company
may elect under Section 2.4 or 2.7, and each subsequent period commencing on the last day
of the immediately preceding Eurodollar Interest Period and ending on the day which is
one, two or three months thereafter, as the Company may elect under Section 2.4 or 2.7,
provided, however, that (a) any Eurodollar Interest Period which commences on the last
Eurodollar Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month) shall end on
the last Eurodollar Business Day of the appropriate subsequent calendar month, (b) each
Eurodollar Interest Period which would otherwise end on a day which is not a Eurodollar
Business Day shall end on the next succeeding Eurodollar Business Day or, if such next
succeeding Eurodollar Business Day falls in the next succeeding calendar month, on the
next preceding Eurodollar Business Day, and (c) no Eurodollar Interest Period which would
end after the Termination Date shall be permitted. 







- 7 -





        “Eurodollar
Rate” shall mean, with respect to any Eurodollar Rate Loan and the related
Eurodollar Interest Period, the per annum rate that is equal to the sum of:


	 	
        
(a)        the Applicable Margin, plus







	 	
        
(b)        the
rate per annum obtained by dividing (i) the per annum rate of
interest at which deposits in Dollars in an amount comparable to the
principal balance of such Eurodollar Rate Loan and for a period equal
to the relevant Eurodollar Interest Period are offered in the London
Interbank Eurodollar market at approximately 11:00 a.m. (London time) two
Eurodollar Business Days prior to the commencement of such Eurodollar
Interest Period, as displayed in Bloomberg Financial Markets system,
or other authoritative source elected by the Agent in its sole
discretion by (ii) a number determined by subtracting from 1.00 the
maximum reserve percentage for determining reserves to be maintained
by member banks of the Federal Reserve System (or any successor
agency thereto) for Eurocurrency liabilities, such rate to remain
fixed for such Eurodollar Interest Period;








all as conclusively determined by the Agent, absent manifest error, and such sum
to be rounded up, if necessary, to the nearest whole multiple of one
one-hundredth of one percent (1/100 of 1%).




        “Eurodollar
Rate Loan” shall mean any Loan which bears interest at the Eurodollar Rate. 




        “Event
of Default” shall mean any of the events or conditions described in Section 6.1. 




        “Federal
Funds Rate” shall mean the per annum rate that is equal to the average of the rates
on overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published by the Federal Reserve Bank of New York
for such day, or, if such rate is not so published for any day, the average of the
quotations for such rates received by the Agent from three federal funds brokers of
recognized standing selected by the Agent in its discretion; all as conclusively
determined by the Agent, such sum to be rounded up, if necessary, to the nearest whole
multiple of one one-hundredth of one percent (1/100 of 1%), which Federal Funds Rate
shall change simultaneously with any change in such published or quoted rates. 




        “Funded
Debt” as of any date, shall mean without duplication all interest-bearing
Indebtedness including but not limited to the capitalized portion of all Capital Lease
obligations, all as determined for the Company and its Restricted Subsidiaries on a
Consolidated basis. 




        “Funded
Debt Coverage Ratio” shall mean the ratio of Funded Debt as of the end of any fiscal
quarter of the Company to Consolidated Cash Flow for the period of the four fiscal
quarters ending at the end of such fiscal quarter. In the event that a Restricted
Subsidiary shall have been acquired during such period, the Consolidated Cash Flow used
for this ratio shall include the results of operations of such Restricted Subsidiary for
such period. 




        “Generally
Accepted Accounting Principles” shall mean generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such other entity
as have been approved by a significant segment of the accounting profession, as in effect
from time to time. 




        “Glazer’s
Transactions” means the transactions described in the letter of intend dated January
30, 2003 between the Company, NWS-Illinois, LLC and Glazier’s Wholesale Drug
Company, Inc., a copy of which letter has been delivered to the Agent and the Banks prior
to the Effective Date. 




        “Guaranty”shall
mean that certain Irrevocable Guaranty Agreement (and any and all supplements thereto)
executed from time to time by each Guarantor, in favor of the Agent for the benefit of
the Agent and the Banks, in substantially the form of Exhibit F attached hereto, as
amended, restated, supplemented or otherwise modified from time to time. 




        “Guarantors”shall
mean NWS-Indiana, NWS-Illinois, NWS-Illinois, LLC, NWS Michigan, Inc. United States
Beverage, L.L.C., National Wine & Spirits, LLC, and R. M. Gilligan, Inc., and each
Person that enters into a Guaranty pursuant to Section 5.1(G)(ii). 




        “Hazardous
Materials” includes, without limitation, any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or toxic substances or
related materials defined in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901, et seq.) and in the
regulations adopted and publications promulgated pursuant thereto, or any other federal,
state or local government law, ordinance, rule or regulation. 







- 8 -





        “Hedging Obligations” shall mean, with respect to any Person, the obligations of such Person
under (i) interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (ii) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates. 




        “Indebtedness” of
any Person shall mean, as of any date, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person as lessee under any Capital Lease, (c) all
obligations which are secured by any Lien existing on any asset or property of such
Person whether or not the obligation secured thereby shall have been assumed by such
Person (to the extent of such Lien if such obligation is not assumed), (d) all
obligations of such Person for the unpaid purchase price for goods, property or services
acquired by such Person, except for trade accounts payable arising in the ordinary course
of business that are not aged more than 45 days after the invoice date, (e) all
obligations of such Person to purchase goods, property or services where payment therefor
is required regardless of whether delivery of such goods or property or the performance
of such services is ever made or tendered (generally referred to as “take or pay
contracts”), (f) all reimbursement obligations of such Person in respect of letters
of credit and (g) all Off-Balance Sheet Liabilities of such Person. 




        “Intercompany
Note” shall mean the promissory note of a Subsidiary evidencing Indebtedness of such
Subsidiary to the Company, in substantially the form of Exhibit B hereto and “Intercompany
Notes” shall mean all such promissory notes of all of the Restricted Subsidiaries,
provided that the aggregate principal amount of Intercompany Notes at any time
outstanding shall not exceed the aggregate principal amount of the Advances then
outstanding. 




        “Interest
Coverage Ratio” shall mean with respect to the Company and its Restricted
Subsidiaries for any period, the ratio of their Consolidated Cash Flow for such period to
their Interest Expense for such period. In addition, for purposes of making the
computation referred to above, (i) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with Generally Accepted Accounting
Principles, and to operations or businesses disposed of prior to the date on which the
event for which the calculation of the Interest Coverage Ratio is made (the “Calculation
Date”), shall be excluded, and (ii) the Interest Expense attributable to
discontinued operations, as determined in accordance with Generally Accepted Accounting
Principles, and operations or businesses disposed of prior to the Calculation Date, shall
be excluded, but only to the extent that the obligations giving rise to such Interest
Expense will not be obligations of the Company or any of its Restricted Subsidiaries
following the Calculation Date. 




        “Interest
Expense” shall mean, with respect to the Company and its Restricted Subsidiaries for
any period, the sum, without duplication, of (i) their Consolidated interest expense for
such period, whether paid or accrued (including, without limitation, non-cash interest
payments, the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance
financings, and net payments (if any) pursuant to Hedging Obligations, but excluding
interest accrued for such period on any NWSI Shareholder Subordinated Note net of the
amount of interest received in cash for such period with respect to any Company
Shareholder Note Receivable and (ii) their Consolidated interest expense that was
capitalized during such period, in each case on a Consolidated basis and in accordance
with Generally Accepted Accounting Principles. 







- 9 -





        “Interest
Payment Date” shall mean (a) with respect to any Eurodollar Rate Loan, the last day
of each Interest Period with respect to such Eurodollar Rate Loan and (b) in all other
cases, the last Business Day of each month occurring after the date hereof, commencing
with the first such Business Day occurring after the date of this Agreement. 




        “Interest
Period” shall mean any Eurodollar Interest Period. 




        “Investments”of
any Person shall mean the purchase or other acquisition of any Capital Stock of or debt
securities of or any evidences of Indebtedness of, any other Person, or the making of any
loan or the advance of any of its funds or property or the making of any other extension
of credit to or the making of any investment or the acquisition of any interest
whatsoever in, any other Person, or the incurrence of any Contingent Liability. 




        “Letter
of Credit” shall mean a standby or commercial letter of credit having a stated
expiry date or a date upon which the draft must be reimbursed not later than twelve
months after the date of issuance and not later than the fifth Business Day before the
Termination Date issued by the Agent on behalf of the Banks for the account of the
Company or one of its Restricted Subsidiaries under an application and related
documentation acceptable to the Agent requiring, among other things, immediate
reimbursement by the Company to the Agent in respect of all drafts or other demand for
payment honored thereunder and all expenses paid or incurred by the Agent relative
thereto. 




        “Letter
of Credit Advance” shall mean any issuance of a Letter of Credit under Section 2.4
made pursuant to Section 2.1 in which each Bank acquires a pro rata risk participation
pursuant to Section 2.4(D). 




        “Letter
of Credit Documents” shall have the meaning ascribed thereto in Section 3.3(B). 




        “Lien”shall
mean any pledge, assignment, hypothecation, mortgage, security interest, deposit
arrangement, option, conditional sale or title retaining contract, sale and leaseback
transaction, lessor’s or lessee’s interest under any lease, subordination of
any claim or right, or any other type of lien, charge, encumbrance, preferential
arrangement or other claim or right. 







- 10 -





        “Loan”shall
mean any borrowing under Section 2.4 evidenced by the Notes and made pursuant to Section
2.1. Any such Loan or portion thereof may also be denominated as an Adjusted Base Rate
Loan or a Eurodollar Rate Loan and such Loans are referred to herein as “types” of
Loans. 




        “Loan
Documents” shall mean, collectively, this Agreement, the Notes, the Security
Documents and all agreements, instruments and documents executed pursuant thereto at any
time. 




        “Material
Adverse Effect” shall mean a material adverse effect on (a) the business, assets,
operations or condition (financial or otherwise) of the Company and its Restricted
Subsidiaries on a consolidated basis, (b) the ability of the Company or any Guarantor to
perform its obligations under any Loan Document, (c) the validity of enforceability of
any Loan Document or the rights or remedies of the Agent or the Banks under any Loan
Document. 




        “Multiemployer
Plan” shall mean any “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code. 




        “Net
Income” shall mean, for any period, the Consolidated net income (or loss) of the
Company and its Restricted Subsidiaries for such period taken as a single accounting
period, determined in accordance with Generally Accepted Accounting Principles; provided
that in determining Consolidated Net Income there shall be excluded, without duplication:
(a) the income of any Person in which any Person other than the Company or a Restricted
Subsidiary of the Company has a joint interest or partnership interest, except to the
extent of the amount of dividends or other distributions actually paid to the Company or
each Restricted Subsidiary by such Person during such period, (b) the proceeds of any
insurance policy, (c) gains from the sale, exchange, transfer or other disposition of
property or assets not in the ordinary course of business of the Company and its
Restricted Subsidiaries and related tax effects in accordance with Generally Accepted
Accounting Principles, and (d) any other extraordinary or non-recurring gains of the
Company or any of its Restricted Subsidiaries or other income which is not from the
continuing operations of the Company and its Restricted Subsidiaries, and related tax
effects, in accordance with Generally Accepted Accounting Principles. 




        “Non-Recourse
Debt” shall mean Indebtedness (i) as to which neither the Company nor any of its
Restricted Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly
or indirectly liable (as a guarantor or otherwise), or (c) constitutes the lender and
(ii) as to which the lenders have been notified in writing that they will not have any
recourse to the stock or assets of the Company or any of its Restricted Subsidiaries. 




        “Note”shall
mean any promissory note of the Company evidencing the Loans, in substantially the form
of Exhibit C hereto as amended or modified from time to time and together with any
promissory note or notes issued in exchange or replacement therefor. 







- 11 -





        “NWS-Illinois” shall
mean NWS, Inc., an Illinois corporation. 




        “NWS-Indiana” shall
mean National Wine & Spirits Corporation, an Indiana corporation. 




        “NWSI
Shareholder Subordinated Note” shall mean any note payable to any shareholder of the
Company by NWS-Illinois, NWS-Illinois, LLC or the Company that is outstanding on the date
of this Agreement and (i) matures on or after January 15, 2009, (ii) does not require
payment of cash interest or redemption prior to maturity, and (iii) that is Subordinated
Debt. 




        “Off-Balance
Sheet Liability” of a Person means (i) any repurchase obligation or liability of
such Person or any of its Subsidiaries with respect to accounts or notes receivable sold
by such Person or any of its Subsidiaries (calculated to include the unrecovered
investment of purchasers or transferees of accounts or any other obligation of such
Person or such transferor to purchasers/transferees of interests in accounts or notes
receivable or the agent for such purchasers/transferees), (ii) any liability under any
sale and leaseback transaction which is not a Capital Lease, (iii) any liability under
any financing lease or so-called “synthetic lease” or “tax ownership
operating lease” transaction entered into by such Person, or (iv) any obligation
arising with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
consolidated balance sheets of such Person, but excluding from this definition all
operating leases. 




        “Overdue
Rate” shall mean (a) in respect of principal of Adjusted Base Rate Loans, a rate per
annum that is equal to the sum of three percent (3%) per annum plus the Adjusted Base
Rate, (b) in respect of principal of Eurodollar Rate Loans, a rate per annum that is
equal to the sum of three percent (3%) per annum plus the per annum rate in effect
thereon until the end of the then current Interest Period for such Loan and, thereafter,
a rate per annum that is equal to the sum of three percent (3%) per annum plus the
Adjusted Base Rate, and (c) in respect of other amounts payable by the Company hereunder
(other than interest), a per annum rate that is equal to the sum of three percent (3%)
per annum plus the Adjusted Base Rate. 




        “PBGC” shall
mean the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of
its functions under ERISA. 




        “Permitted
Liens” shall mean Liens permitted by Section 5.2(E) hereof. 




        “Person” shall
include an individual, a corporation, an association, a partnership, a trust or estate, a
joint stock company, a limited liability company, an unincorporated organization, a joint
venture, a trade or business (whether or not incorporated), a government (foreign or
domestic) and any agency or political subdivision thereof, or any other entity. 







- 12 -





        “Plan” shall
mean, with respect to any Person, any pension plan (including a Multiemployer Plan)
subject to Title IV of ERISA or to the minimum funding standards of Section 412 of the
Code which has been established or maintained by such Person, any Subsidiary of such
Person or any ERISA Affiliate, or by any other Person if such Person, any Subsidiary of
such Person or any ERISA Affiliate could have liability with respect to such pension
plan. 




        “Pledge
Agreement” shall mean each pledge agreement entered into by the Company in favor of
the Agent for the benefit of the Banks pursuant to this Agreement in substantially the
form of Exhibit D hereto, as amended or modified from time to time. 




        “Prohibited
Transaction” shall mean any transaction involving any Plan which is proscribed by
Section 406 of ERISA or Section 4975 of the Code. 




        “Reportable
Event” shall mean a reportable event as described in Section 4043(b) of ERISA
including those events as to which the thirty (30) day notice period is waived under Part
2615 of the regulations promulgated by the PBGC under ERISA. 




        “Required
Banks” shall mean Banks holding not less than (i) fifty-one percent (51%) of the
aggregate principal amount of the Advances then outstanding or (ii) fifty-one percent
(51%) of the Aggregate Commitment if no Advances are then outstanding; provided that if
any Bank shall hold fifty-one percent (51%) or more of the aggregate principal amount of
the Advances (or if no Advances are then outstanding, fifty-one percent (51%) or more of
the Aggregate Commitment), “Required Banks” shall mean such Bank plus one
additional Bank. 




        “Requirement
of Law” shall mean as to any Person, the certificate of incorporation and by-laws or
other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other governmental authority,
in each case applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject. 




        “Restricted
Payment” shall mean with respect to the Company or any Restricted Subsidiary, any
dividend, payment or other distribution in respect of any class of its Capital Stock or
any dividend, payment or distribution in connection with the redemption, purchase,
retirement or other acquisition, directly or indirectly, of any shares of its Capital
Stock other than such dividends, payments or other distributions to the extent payable
solely in shares of the Capital Stock of the Company or to the extent payable to the
Company by a Restricted Subsidiary of the Company. 




        “Restricted
Subsidiary” of a Person shall mean any Subsidiary of the referent Person that is not
an Unrestricted Subsidiary. 




        “Security
Agreement” shall mean each security agreement entered into by the Company or any
Guarantor for the benefit of the Agent and the Banks pursuant to this Agreement in
substantially the form of Exhibit E hereto, as amended or modified from time to time. 







- 13 -





        “Security
Documents” shall mean, collectively, the Pledge Agreement, the Security Agreements,
and the Guaranty and all other related agreements and documents, including financing
statements and similar documents, delivered pursuant to this Agreement or otherwise
entered into by any Person to secure the Advances. 




        “Senior
Unsecured Debt” shall mean the senior unsecured notes due January 15, 2009 issued by
the Company on January 25, 1999 in the original aggregate principal amount of
$110,000,000. 




        “Subordinated
Debt” of any Person shall mean, as of any date, that Indebtedness of such Person for
borrowed money which is expressly subordinate and junior in right and priority of payment
to the Advances and other Indebtedness of such Person to the Banks in manner and by
agreement satisfactory in form and substance to the Agent including without limitation
maturities, covenants, defaults, rates and fees acceptable to the Agent. 




        “Subsidiary”of
any Person shall mean any other Person (whether now existing or hereafter organized or
acquired) in which (other than directors qualifying shares required by law) at least a
majority of the securities or other ownership interests of each class having ordinary
voting power or analogous right (other than securities or other ownership interests which
have such power or right only by reason of the happening of a contingency), at the time
as of which any determination is being made, are owned, beneficially and of record, by
such Person or by one or more of the other Restricted Subsidiaries of such Person or by
any combination thereof. Unless otherwise specified, reference to “Subsidiary” shall
mean a Subsidiary of the Company. 




        “Termination
Date” shall mean the earlier to occur of (a) April 1, 2008 and (b) the date on which
the Commitments shall be terminated pursuant to Section 2.2 or 6.2. 




        “Unrestricted
Subsidiary” shall mean (i) any Subsidiary of the Company (other than the Guarantors
or any successor to any of them) that is designated by the Board of Directors as an
Unrestricted Subsidiary pursuant to a resolution of such Board; but only to the extent
that such Subsidiary: (a) has no Indebtedness other than Non-Recourse Debt; (b) is not
party to any agreement, contract, arrangement or understanding with the Company or any
Restricted Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (c) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect obligation (x) to subscribe
for additional Equity Interests or (y) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of operating
results; (d) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its Restricted Subsidiaries; and
(e) has at least one director on its board of directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries and has at least
one executive officer that is not a director or executive officer of the Company or any
of its Restricted Subsidiaries. Any such designation by the Board of Directors shall be
evidenced to the Agent by filing with the Agent a certified copy of the resolution of
such Board giving effect to such designation and an officers’ certificate certifying
that such designation complied with the foregoing conditions and did not violate any
covenant of this Agreement. If, at any time, any Unrestricted Subsidiary would fail to
meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the indenture with respect to the Senior
Unsecured Debt and any Indebtedness of such Subsidiary shall be deemed to be incurred by
a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under any covenant herein, the Company shall be
in default of such covenant). The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary
and such designation shall only be permitted if (i) such Indebtedness is permitted under
the covenant contained in this Agreement, (ii) no Default or Event of Default would be in
existence following such designation. 







- 14 -





        “USB-LLC” means
United States Beverage, L.L.C., a Illinois limited liability company and a wholly-owned
indirect Subsidiary of the Company. 




        1.2    
Other Definitions; Rules of Construction.  As used herein, the terms “Agent”,
“Banks”, “Company” and “this Agreement” shall have the
respective meanings ascribed thereto in the introductory paragraph of this Agreement, and
the term “Guaranteed Obligations” shall have the meaning ascribed thereto in
the Guaranty. Such terms, together with the other terms defined in Section 1.1, shall
include both the singular and the plural forms thereof and shall be construed
accordingly. All computations required hereunder and all financial terms used herein
shall be made or construed in accordance with Generally Accepted Accounting Principles
unless such principles are inconsistent with the express requirements of this Agreement;
provided that, if the Company notifies the Agent that the Company wishes to amend any
covenant in Article V to eliminate the effect of any change in Generally Accepted
Accounting Principles in the operation of such covenant (or if the Agent notifies the
Company that the Required Banks wish to amend Article V for such purpose), then the
Company’s compliance with such covenant shall be determined on the basis of
Generally Accepted Accounting Principles in effect immediately before the relevant change
in Generally Accepted Accounting Principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Company and the
Required Banks. Use of the terms “herein”, “hereof”, and “hereunder” shall
be deemed references to this Agreement in its entirety and not to the Section or clause
in which such term appears. References to “Sections” and “subsections” shall
be to Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. As used herein, the “knowledge” or “best knowledge” of
the Company or any Guarantor, or similar phrases, shall mean the actual knowledge of
James E. LaCrosse, Patrick A. Trefun or John J. Baker, and knowledge that any such Person
would reasonably be expected to have obtained in the ordinary course exercise of his or
her duties and responsibilities regarding such matter.







- 15 -




ARTICLE II:    THE COMMITMENTS AND THE ADVANCES



        2.1    
Commitment of the Banks.



        (A)        
Advances. Each Bank agrees, for itself only, subject to the terms and
conditions of this Agreement, to make Loans to the Company pursuant to Section
2.4 and Section 3.3 and to participate in Letter of Credit Advances to the
Company pursuant to Section 2.4, from time to time from and including the
Effective Date to but excluding the Termination Date, not to exceed in aggregate
principal amount at any time outstanding the amount determined pursuant to
Section 2.1(B).



        (B)        
Limitation on Amount of Advances. Notwithstanding anything in this Agreement to
the contrary, (i) the aggregate principal amount of the Advances made by any
Bank at any time outstanding shall not exceed the amount of its respective
Commitment as of the date any such Advance is made, provided, however, that the
aggregate principal amount of Letter of Credit Advances outstanding at any time
shall not exceed $5,000,000, and (ii) the aggregate principal amount of all
Advances at any time outstanding shall not exceed the amount of the Borrowing
Base as of the date of the Borrowing Base Certificate dated or next preceding
the date any such Advance is made.



        2.2        
Termination, Reduction and Increases of Commitments.




        (A)        
     The Company shall have the right to terminate or reduce the Aggregate
Commitment at any time and from time to time at its option, provided that (i)
the Company shall give notice of such termination or reduction to the Agent
(with sufficient executed copies for each Bank) specifying the amount and
effective date thereof, (ii) each partial reduction of the Aggregate Commitment
shall be in a minimum amount of $5,000,000 and in an integral multiple of
$1,000,000 and shall reduce the Commitments of all of the Banks proportionately
in accordance with the respective commitment amounts for each such Bank set
forth in the signature pages hereof next to name of each such Bank, (iii) no
such termination or reduction shall be permitted with respect to any portion of
the Aggregate Commitment as to which a request for an Advance pursuant to
Section 2.4 is then pending and (iv) the Aggregate Commitment may not be
terminated if any Advances are then outstanding and may not be reduced below the
principal amount of Advances then outstanding. The Aggregate Commitment or any
portion thereof terminated or reduced pursuant to this Section 2.2, whether
optional or mandatory, may not be reinstated.



        (B)        
For purposes of this Agreement, a Letter of Credit Advance (i) shall be deemed
outstanding in an amount equal to the sum of the maximum amount available to be
drawn under the related Letter of Credit on or after the date of determination
and on or before the stated expiry date thereof plus the amount of any draws
under such Letter of Credit that have not been reimbursed as provided in Section
3.3 and (ii) shall be deemed outstanding at all times on and before such stated
expiry date or such earlier date on which all amounts available to be drawn
under such Letter of Credit have been fully drawn, and thereafter until all
related reimbursement obligations have been paid pursuant to Section 3.3. As
provided in Section 3.3, upon each payment made by the Agent in respect of any
draft or other demand for payment under any Letter of Credit the amount of any
Letter of Credit Advance outstanding immediately prior to such payment shall be
automatically reduced by the amount of each Loan deemed advanced in respect of
the related reimbursement obligation of the Company.







- 16 -




     	
                  

          (C)         At any time prior to the
          Termination Date, the Company may, on the terms set forth below, request that
          the Aggregate Commitment hereunder be increased to an amount not to exceed
          $60,000,000; provided, however, that (i) each such request shall be in a minimum
          amount of at least $10,000,000 and in increments of $5,000,000 in excess
          thereof, (ii) an increase in the Aggregate Commitment hereunder may only be made
          at a time when no Default or Unmatured Default shall have occurred and be
          continuing, and (iii) no Bank’s Commitment shall be increased under this
          Section 2.2(C) without its consent. In the event of such a requested increase in
          the Aggregate Commitment, any financial institution which the Company and the
          Agent invite to become a Bank or to increase its Commitment may set the amount
          of its Commitment at a level agreed to by the Company and the Agent. In the
          event that the Company and one or more of the Banks (or other financial
          institutions) shall agree upon such an increase in the Aggregate Commitment (i)
          the Company, the Agent and each Bank or other financial institution increasing
          its Commitment or extending a new Commitment shall enter into an amendment to
          this Agreement setting forth the amounts of the Commitments, as so increased,
          providing that the financial institutions extending new Commitments shall be
          Banks for all purposes under this Agreement, and setting forth such additional
          provisions as the Agent shall consider reasonably appropriate and (ii) the
          Company shall furnish a new Note to each financial institution that is extending
          a new Commitment or increasing its Commitment. No such amendment shall require
          the approval or consent of any Bank whose Commitment is not being increased.
          Upon the execution and delivery of such amendment as provided above, and upon
          satisfaction of such other conditions as the Agent may reasonably specify upon
          the request of the financial institutions that are extending new Commitments
          (including, without limitation, the Agent administering the reallocation of any
          outstanding Loans ratably among the Banks after giving effect to each such
          increase in the Aggregate Commitment, and the delivery of certificates, evidence
          of corporate authority and legal opinions on behalf of the Company), this
          Agreement shall be deemed to be amended accordingly.



          



        2.3        
Fees.



     	
                  

          (A)         The Company agrees to pay to
          each Bank a commitment fee on the daily average unused amount of its respective
          Commitment, for the period from the Effective Date to but excluding the
          Termination Date, at a rate equal to forty-five one-hundredths of one percent
          (0.45%) per annum during the period ending on the tenth Business Day following
          the receipt by the Agent of the Company’s financial statements for the
          fiscal quarter ending on March 31, 2003, and thereafter at a per annum rate
          equal to the Applicable Margin. Accrued commitment fees shall be payable
          quarterly in arrears on the last Business Day of each March, June, September and
          December, commencing on the first such Business Day occurring after the
          Effective Date, and on the Termination Date.



          







- 17 -




     	
                  

          (B)         The Company agrees to pay
          ratably to the Banks a facility fee in the amount of $135,000. Such facility fee
          shall be payable on or prior to the Effective Date.



          



     	
                  

          (C)         On or before the date of
          issuance of any Letter of Credit, the Company agrees (i) to pay to the Banks in
          the case of a standby Letter of Credit a fee computed at a per annum rate equal
          to the Applicable Margin for Eurodollar Rate Loans in effect at the time of
          issuance of such Letter of Credit for the period from and including such date to
          and including the stated expiry date of such Letter of Credit, and in the case
          of a commercial Letter of Credit equal to one-half of one percent (1/2 of 1%),
          in both cases of the maximum amount available to be drawn under such Letter of
          Credit, and (ii) to pay an additional fee to the Agent for its own account
          computed at a per annum rate equal to one-quarter of one percent (1/4 of 1%) on
          such maximum amount. Such fees are nonrefundable and the Company shall not be
          entitled to any rebate of any portion thereof if such Letter of Credit does not
          remain outstanding through its stated expiry date or for any other reason. The
          Company further agrees to pay to the Agent, on demand, such other customary
          administrative fees, charges and expenses of the Agent in respect of the
          issuance, negotiation, acceptance, amendment, transfer and payment of such
          Letter of Credit or otherwise payable pursuant to the application and related
          documentation under which such Letter of Credit is issued.



          



     	
                  

          (D)         The Company agrees to pay to
          the Agent an agency fee for its services as Agent under this Agreement in such
          amounts as may from time to time be agreed upon by the Company and the Agent.



          



        2.4        
Disbursement of Advances. 



     	
                  

          (A)         The Company shall give the
          Agent telephonic notice of its request for each Advance not later than 12:00
          noon Chicago time (i) three Eurodollar Business Days prior to the date such
          Advance is requested to be made if such Advance is to be made as a Eurodollar
          Rate Loan, (ii) five Business Days prior to the date any Letter of Credit
          Advance is requested to be made, and (iii) on the same Business Day that such
          Advance is requested to be made in all other cases, which notice shall specify
          whether a Eurodollar Rate Loan or Adjusted Base Rate Loan or a Letter of Credit
          Advance is requested and, in the case of each requested Eurodollar Rate Loan,
          the Interest Period to be initially applicable to such Loan and, in the case of
          each Letter of Credit Advance, such information as may be necessary for the
          issuance thereof by the Agent. The Agent, not later than the date of any
          requested Adjusted Base Rate Loan and not later than the Business Day next
          succeeding the day such notice is given with respect to a Letter of Credit
          Advance and not later than the day such notice is given with respect to a
          Eurodollar Rate Loan, shall provide notice of such requested Advance to each
          Bank, provided that in the case of Adjusted Base Rate Loans where the Agent
          elects to settle with the Banks weekly instead of at the time of each such Loan,
          the Agent shall provide notice of such Loans on the weekly settlement date next
          following the dates on which they are requested. Subject to the terms and
          conditions of this Agreement, the proceeds of each such requested Loan shall be
          made available to the Company by depositing the proceeds thereof in immediately
          available funds, in an account maintained and designated by the Company at the
          principal office of the Agent. Subject to the terms and conditions of this
          Agreement, the Agent shall, on the date any Letter of Credit Advance is
          requested to be made, issue the related Letter of Credit on behalf of the Banks
          for the account of the Company. Notwithstanding anything herein to the contrary,
          the Agent may decline to issue any requested Letter of Credit on the basis that
          the beneficiary, the purpose of issuance or the terms or the conditions of
          drawing are unacceptable to it in its reasonable discretion.



          







- 18 -




     	
                  

          (B)         Each Bank, on the date any
          Borrowing in the form of a Loan is requested to be made, or on the date the
          Agent requests such Bank to make available its share of such Borrowing pursuant
          to Section 2.4(C), shall make its pro rata share of such Borrowing available in
          immediately available, freely transferable, cleared funds for disbursement to
          the Company or application by the Agent to a reduction of its Loans made
          pursuant to Section 2.4(C), pursuant to the terms and conditions of this
          Agreement at the principal office of the Agent. Unless the Agent shall have
          received notice from any Bank prior to the date such Borrowing is requested to
          be made under this Section 2.4 that such Bank will not make available to the
          Agent such Bank’s pro rata portion of such Borrowing, the Agent may assume
          that such Bank has made such portion available to the Agent on the date such
          Borrowing is requested to be made in accordance with this Section 2.4. If and to
          the extent such Bank shall not have so made such pro rata portion available to
          the Agent, the Agent may (but shall not be obligated to) make such amount
          available to the Company, and such Bank and the Company severally agree to pay
          to the Agent forthwith on demand such amount together with interest thereon, for
          each day from the date such amount is made available to the Company by the Agent
          until the date such amount is repaid to the Agent, at the Federal Funds Rate. If
          such Bank shall pay such amount to the Agent together with interest, such amount
          so paid shall constitute a Loan by such Bank as a part of such the related
          Borrowing for purposes of this Agreement. The failure of any Bank to make its
          pro rata portion of any such Borrowing available to the Agent shall not relieve
          any other Bank of its obligations to make available its pro rata portion of such
          Borrowing on the date such Borrowing is requested to be made, but no Bank shall
          be responsible for failure of any other Bank to make such pro rata portion
          available to the Agent on the date of any such Borrowing.



          







- 19 -




     	
                  

          (C)         Administrative Convenience
          Loans.



          



     	
                  

          (i)         With respect to any Adjusted
          Base Rate Loan requested on a day other than the day chosen by the Agent for
          weekly settlements with the Banks, the Agent may elect, for administrative
          convenience, to make such requested Loan itself and to defer until the next
          following weekly settlement date notifying the Banks of such requested Loan.
          Each Bank’s Commitment shall be deemed utilized by an amount equal to such
          Bank’s pro rata share (based on such Bank’s Commitment) of each such
          Loan made solely by the Agent for purposes of determining the amount of Advances
          required to be made by such Bank, but no Bank’s Commitment, other than the
          Agent’s, shall be deemed utilized for purposes of determining commitment
          fees under Section 2.3(A). Each Bank shall be absolutely and unconditionally
          obligated to fund its pro rata share (based on such Bank’s Commitment) of
          any such Loan or, if applicable, purchase a participating interest in any such
          Loan pursuant to Section 2.4(C)(ii) and such obligation shall not be affected by
          any circumstance, including, without limitation, (A) any set-off, counterclaim,
          recoupment, defense or other right which such Bank has or may have against the
          Agent or anyone else for any reason whatsoever; (B) the occurrence or
          continuance of a Default or an Event of Default, subject to Section 2.4(C)(ii);
          (C) any adverse change in the condition (financial or otherwise) of the Company
          or any of its Restricted Subsidiaries; (D) any breach of this Agreement by the
          Company or any of the Guarantors or any other Bank; or (E) any other
          circumstance, happening or event whatsoever, whether or not similar to any of
          the foregoing (including without limitation the Company’s failure to
          satisfy any conditions contained in Article II or any other provision of this
          Agreement).



          



     	
                  

          (ii)         If, for any reason
          (including without limitation as a result of the occurrence of an Event of
          Default with respect to the Company pursuant to Section 6.1(H)), Loans may not
          be made by the Banks as described in Section 2.4(C)(i), then (A) the Company
          agrees that each Loan not paid pursuant to Section 2.4(C)(i) shall bear
          interest, payable on demand by the Agent, at the Overdue Rate, and (B) effective
          on the date each such Loan would otherwise have been made by it, each Bank
          severally agrees that it shall unconditionally and irrevocably, without regard
          to the occurrence of any Default or Event of Default, in lieu of deemed
          disbursement of loans, to the extent of such Bank’s Commitment, purchase a
          participating interest in each such Loan by paying its participation percentage
          thereof. Each Bank will immediately transfer to the Agent, in same day funds,
          the amount of its participation. Each Bank shall share on a pro rata basis
          (calculated by reference to its Commitment) in any interest which accrues
          thereon and in all repayments thereof. If and to the extent that any Bank shall
          not have so made the amount of such participating interest available to the
          Agent, such Bank and the Company severally agree to pay to the Agent forthwith
          on demand such amount together with interest thereon, for each day from the date
          of demand by the Agent until the date such amount is paid to the Agent, at (x)
          in the case of the Company, the interest rate specified above and (y) in the
          case of such Bank, the Federal Funds Rate.



          







- 20 -




     	
                  

          (D)         All Loans made under this
          Section 2.4 shall be evidenced by the Notes, and all such Loans shall be due and
          payable and bear interest as provided in Article III. Each Bank is hereby
          authorized by the Company to record on the schedule attached to the Notes, or in
          its books and records, the date, amount and type of each Loan and the duration
          of the related Interest Period (if applicable), the amount of each payment or
          prepayment of principal thereon, and the other information provided for on such
          schedule, which schedule or books and records, as the case may be, shall
          constitute prima facie evidence of the information so recorded, provided,
          however, that failure of any Bank to record, or any error in recording, any such
          information shall not relieve the Company of its obligation to repay the
          outstanding principal amount of the Loans, all accrued interest thereon and
          other amounts payable with respect thereto in accordance with the terms of the
          Notes and this Agreement. Subject to the terms and conditions of this Agreement,
          the Company may borrow Loans under this Section 2.4 and under Section 3.3,
          prepay Loans pursuant to Section 3.1 and reborrow Loans under this Section 2.4
          and under Section 3.3.



          



     	
                  

          (E)         Nothing in this Agreement
          shall be construed to require or authorize any Bank to issue any Letter of
          Credit, it being recognized that the Agent has the sole obligation under this
          Agreement to issue Letters of Credit on behalf of the Banks, and the Commitment
          of each Bank with respect to Letter of Credit Advances is expressly conditioned
          upon the Agent’s performance of such obligations. Upon such issuance by the
          Agent, each Bank shall automatically acquire a pro rata risk participation
          interest in such Letter of Credit Advance based on the amount of its respective
          Commitment. If the Agent shall honor a draft or other demand for payment
          presented or made under any Letter of Credit, the Agent shall provide notice
          thereof to each Bank on the date such draft or demand is honored unless the
          Company shall have satisfied its reimbursement obligation under Section 3.3 by
          payment to the Agent on such date. Each Bank, on such date, shall make its pro
          rata share of the amount paid by the Agent available in immediately available
          funds at the principal office of the Agent for the account of the Agent. If and
          to the extent such Bank shall not have made such pro rata portion available to
          the Agent, such Bank and the Company severally agree to pay to the Agent
          forthwith on demand such amount together with interest thereon, for each day
          from the date such amount was paid by the Agent until such amount is so made
          available to the Agent for its own account at a per annum rate equal to the
          Federal Funds Rate. If such Bank shall pay such amount to the Agent together
          with such interest, such amount so paid shall constitute a Loan by such Bank as
          part of the Borrowing disbursed in respect of the reimbursement obligation of
          the Company under Section 3.3 for purposes of this Agreement. The failure of any
          Bank to make its pro rata portion of any such amount paid by the Agent available
          to the Agent shall not relieve any other Bank of its obligation to make
          available its pro rata portion of such amount, but no Bank shall be responsible
          for failure of any other Bank to make such pro rata portion available to the
          Agent.



          







- 21 -





        2.5        
Conditions for First Disbursement. The obligation of the Banks to make the first Advance
hereunder is subject to receipt by each Bank and the Agent of the following documents and
completion of the following matters, in form and substance satisfactory to each Bank and
the Agent:



     	 	
                  

          (A)         Charter Documents.
          Certificates of recent date of the appropriate authority or official of the
          Company’s and each Guarantor’s respective state of incorporation or
          organization (listing all charter documents of the Company and each Guarantor,
          respectively, on file in that office if such listing is available) and
          certifying as to the good standing and corporate existence of the Company and
          each Guarantor that is a corporation, and as to the existence and status of each
          Guarantor that is a limited liability company, together with copies of such
          charter documents of the Company and each Guarantor, certified as of a recent
          date by such authority or official and certified as true and correct as of the
          Effective Date by a duly authorized officer of the Company;



          


    	 	
                  

          (B)         By-Laws and Corporate
          Authorizations. Copies of the by-laws or operating agreement of the Company and
          each Guarantor together with all authorizing resolutions and evidence of other
          corporate or limited liability company action taken by the Company and each
          Guarantor to authorize the execution, delivery and performance by the Company
          and each Guarantor of this Agreement, the Notes and the Security Documents to
          which the Company and such Guarantor, respectively, is a party and the
          consummation by the Company and such Guarantor, respectively, of the
          transactions contemplated hereby, certified as true and correct as of the
          Effective Date by a duly authorized officer of the Company and each Guarantor,
          respectively;



          


    	 	
                  

          (C)         Incumbency Certificate.
          Certificates of incumbency of the Company and each Guarantor containing, and
          attesting to the genuineness of, the signatures of those officers, members or
          managers authorized to act on behalf of the Company and such Guarantor in
          connection with this Agreement, the Notes and the Security Documents to which
          the Company or such Guarantor is a party and the consummation by the Company and
          such Guarantor of the transactions contemplated hereby, certified as true and
          correct as of the Effective Date by a duly authorized officer of the Company and
          each Guarantor;



          


    	 	
                  

          (D)         This Agreement and Notes.
          This Agreement duly executed on behalf of each party hereto and the Notes duly
          executed on behalf of the Company for each Bank;



          


    	 	
                  

          (E)         Security Documents. The
          Security Documents duly executed on behalf of the Company and each Guarantor, as
          the case may be, granting to the Banks and the Agent the collateral and security
          intended to be provided pursuant to Section 2.11, together with:



          







- 22 -



    	 	
                 

          (i)         Recording, Filing, Etc.            Evidence of the recordation, filing and other action (including payment of any
          applicable taxes or fees) in such jurisdictions as the Agent may deem necessary
          or appropriate with respect to the Security Documents, including the filing of
          financing statements and similar documents which the Agent may deem necessary or
          appropriate to create, preserve or perfect the liens, security interests and
          other rights intended to be granted to the Banks or the Agent thereunder,
          together with Uniform Commercial Code record searches in such offices as the
          Agent may request;



          


     	 	
                  

          (ii)         Leased Property; Landlord
          Waivers. A schedule setting forth all real property leased by the Company and
          each Guarantor in which inventory is located, together with copies of the
          related leases, certified as true and correct as of the Effective Date by a duly
          authorized officer of the Company, and an agreement of each landlord under such
          leases, in form and substance acceptable to the Banks and the Agent, waiving its
          distraint, lien and similar rights with respect to any property subject to the
          Security Documents and agreeing to permit the Banks and the Agent to enter such
          premises in connection therewith;



          


    	 	
                  

          (iii)         Casualty and Other
          Insurance. Evidence that the casualty and other insurance required pursuant to
          Section 5.1(C) of this Agreement and pursuant to each Security Agreement is in
          full force and effect; and



          


    	 	
                  

          (iv)         Intercompany Notes and
          Security Agreements. The original copies of the Intercompany Notes, and copies
          of security agreements and financing statements given by the Guarantors to the
          Company granting to the Company security interests in their accounts and
          inventory, that are expressly made junior to the security interest of the Agent
          in such assets, and that in the case of such financing statements show the
          assignment by the Company of its rights as secured party to the Agent;



          


    	 	
                  

          (F)         Subordination Agreements
          with respect to Shareholder Subordinated Debt. Subordination agreements executed
          by James LaCrosse and Norma Johnston subordinating to the Loans all Indebtedness
          to them for borrowed money of the Company and the Guarantors;



          


    	 	
                  

          (G)        Subrogation and Contribution
          Agreement. A subrogation and contribution agreement in form satisfactory to the
          Agent executed by the Guarantors;



          


    	 	
                  

          (H)        Legal Opinions. The
          favorable written opinion of Bose McKinney & Evans LLP, counsel for the
          Company and each Guarantor in substantially the form of Exhibit G hereto;



          


     	 	
                  

          (I)         Consents, Approvals, Etc.
          Copies of all governmental and nongovernmental consents, approvals,
          authorizations, declarations, registrations or filings, if any, required on the
          part of the Company or any Guarantor in connection with the execution, delivery
          and performance of this Agreement, the Notes, the Security Documents or the
          transactions contemplated hereby or as a condition to the legality, validity or
          enforceability of this Agreement, the Notes or any of the Security Documents,
          certified as true and correct and in full force and effect as of the Effective
          Date by a duly authorized officer of the Company, or, if none are required, a
          certificate of such officer to that effect;



          







- 23 -



    	 	
                  

          (J)         Fees. The facility fee
          described in Section 2.3(B);



          


    	 	
                  

          (K)         Repayment of Indebtedness.
          The Company shall have applied the proceeds of Loans under this Agreement to
          repay all Indebtedness and other obligations outstanding under the Credit
          Agreement among the Company, certain Guarantors, certain lenders and NBD Bank
          (now known as Bank One, NA), as Agent, dated January 25, 1999 (the
          “Existing Credit Agreement”), and other debt described on Schedule
          2.5(K) hereof;



          


    	 	
                  

          (L)         Solvency Certificate. A
          Solvency Certificate from each of the Company and the Guarantors in a form
          acceptable to the Agent; and



          


    	 	
                  

          (M)         Other. Such other documents,
          and completion of such other matters, as the Agent may reasonably request.



          




        2.6    Further
Conditions for Disbursements. The obligation of the Banks to make any
Advance (including the first Advance), or any continuation or conversion under
Section 2.7 is further subject to the satisfaction of the following conditions
precedent:


    	 	
                  

          (A)         The representations and
          warranties contained in Article IV hereof and in the Security Documents shall be
          true and correct on and as of the date such Advance is made (both before and
          after such Advance is made) as if such representations and warranties were made
          on and as of such date;



          


    	 	
                  

          (B)         No Default or Event of
          Default shall exist or shall have occurred and be continuing on the date such
          Advance is made (whether before or after such Advance is made);



          


    	 	
                  

          (C)         The Agent shall have
          received the latest Borrowing Base Certificate required pursuant to Section
          5.1(D)(v) prior to the date such Advance is made; and



          


    	 	
                  

          (D)         In the case of any Letter of
          Credit Advance, the Company shall have delivered to the Agent an application for
          the related Letter of Credit and other related documentation requested by and
          acceptable to the Agent appropriately completed and duly executed on behalf of
          the Company.



          




The Company shall be deemed to have made a representation and warranty to the
Banks at the time of the making of, and the continuation or conversion of, each
Advance to the effects set forth in clauses (A) and (B) of this Section 2.6. For
purposes of this Section 2.6 the representations and warranties contained in
Section 4.6 hereof shall be deemed made with respect to both the financial
statements referred to therein and the most recent financial statements
delivered pursuant to Section 5.1(D)(ii) and (iii).








- 24 -





        2.7 Subsequent Elections as
to Loans.    The Company may elect (a) to continue a
Eurodollar Rate Loan, or a portion thereof, as a Eurodollar Rate Loan or (b) may
elect to convert a Eurodollar Rate Loan, or a portion thereof, to a Loan of
another type or (c) elect to convert an Adjusted Base Rate Loan, or a portion
thereof, to a Eurodollar Rate Loan in each case by giving telephonic notice
thereof to the Agent not later than 12:00 noon Chicago time four Eurodollar
Business Days prior to the date any such continuation of or conversion to a
Eurodollar Rate Loan is to be effective and not later than 12:00 noon Chicago
time one Business Day prior to the date such continuation or conversion is to be
effective in all other cases, provided that an outstanding Eurodollar Rate Loan
may only be converted on the last day of the then current Interest Period with
respect to such Loan, and provided, further, if a continuation of a Loan as, or
a conversion of a Loan to, a Eurodollar Rate Loan is requested, such notice
shall also specify the Interest Period to be applicable thereto upon such
continuation or conversion. The Agent, not later than the Business Day next
succeeding the day such notice is given, shall provide notice of such election
to the Banks. If the Company shall not timely deliver such a notice with respect
to any outstanding Eurodollar Rate Loan, the Company shall be deemed to have
elected to convert such Eurodollar Rate Loan to an Adjusted Base Rate Loan on
the last day of the then current Interest Period with respect to such
Loan.




        2.8    Limitation
of Requests and Elections. Notwithstanding any other provision of this
Agreement to the contrary, if, upon receiving a request for a Eurodollar Rate
Loan pursuant to Section 2.4, or a request for a continuation of a
Eurodollar Rate Loan as a Eurodollar Rate Loan of the then existing type, or a
request for a conversion of an Adjusted Base Rate Loan to a Eurodollar Rate Loan
pursuant to Section 2.7, (a) in the case of any Eurodollar Rate Loan,
deposits in Dollars for periods comparable to the Interest Period elected by the
Company are not available to any Bank in the London interbank market, or (b) the
Eurodollar Rate will not adequately and fairly reflect the cost to any Bank of
making, funding or maintaining the related Eurodollar Rate Loan, or (c) by
reason of national or international financial, political or economic conditions
or by reason of any applicable law, treaty or other international agreement,
rule or regulation (whether domestic or foreign) now or hereafter in effect, or
the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by any
Bank with any guideline, request or directive of such authority (whether or not
having the force of law), including without limitation exchange controls, it is
impracticable, unlawful or impossible for, or shall limit or impair the ability
of, (i) any Bank to make or fund the relevant Loan or to continue such Loan as a
Loan of the then existing type or to convert a Loan to such a Loan or (ii) the
Company to make or any Bank to receive any payment under this Agreement at the
place specified for payment hereunder or to freely convert any amount paid into
Dollars at market rates of exchange or to transfer any amount paid or so
converted to the address of its principal office specified in Section
8.2, then the Company shall not be entitled, so long as such circumstances
continue, to request a Loan of the affected type pursuant to Section 2.4
or a continuation of or conversion to a Loan of the affected type pursuant to
Section 2.7. In the event that such circumstances no longer exist, the Banks
shall again consider requests for Loans of the affected type pursuant to
Section 2.4, and requests for continuations of and conversions to Loans
of the affected type pursuant to Section 2.7.







- 25 -






        2.9    Minimum
Amounts; Limitation on Number of Loans; Etc.  Except for (a) Advances which
exhaust the entire remaining amount of the Aggregate Commitment, and (b)
payments required pursuant to Section 3.1(C) or Section 3.8, each Eurodollar
Rate Loan and each continuation of or conversion to a Eurodollar Rate Loan
pursuant to Section 2.7 and each prepayment thereof shall be in a minimum amount
of $3,000,000 and in an integral multiple of $1,000,000, and each Adjusted Base
Rate Loan and each continuation of or conversion to an Adjusted Base Rate Loan
shall be in a minimum amount of $250,000 and in an integral multiple of $50,000.
The aggregate number of Eurodollar Rate Loans outstanding at any one time under
this Agreement may not exceed five.





        2.10    Borrowing
Base Adjustments. The Company agrees that if at any time any trade account
receivable or any inventory of the Company fails to constitute an Eligible
Account Receivable or Eligible Inventory, as the case may be, for any reason,
the Agent may, at any time and notwithstanding any prior classification of
eligibility, classify such asset or property as ineligible and exclude the same
from the computation of the Borrowing Base without in any way impairing the
rights of the Banks and the Agent in and to the same under the Security
Agreement.




        2.11    Security
and Collateral. To secure the payment when due of the Notes and all other
obligations of the Company under this Agreement to the Banks and the Agent, the
Company shall execute and deliver, or cause to be executed and delivered, to the
Banks and the Agent Security Documents granting the following:


    	 	
                  (A)         Security interests in all
present and future accounts and inventory of the Company;



          


    	 	
                  (B)        
Security interests in all present and future accounts and inventory of the
Guarantors; and



          


    	 	
                  (C)        
Security interests in the Intercompany Notes and in the collateral securing
such Intercompany Notes.



          




        Notwithstanding the
foregoing, the collateral shall not include any property to the extent that such
grant of a security interest constitutes a breach or default under or results in
the termination of or requires any consent not obtained under, any contract,
license, agreement, instrument or other document evidencing or giving rise to
such property, except to the extent that such applicable law or the term in such
contract, license, agreement, instrument or other document or similar agreement
providing for such prohibition, breach, default or termination of requiring such
consent is ineffective under applicable law. 







- 26 -




ARTICLE III:    PAYMENTS AND PREPAYMENTS OF ADVANCES




        3.1    Principal Payments
and Prepayments. 


	 	
        (A)        
Unless earlier payment is required under this Agreement, the Company shall pay
to the Banks on the Termination Date the entire outstanding principal amount of
the Loans.






	 	
        (B)        
The Company may at any time and from time to time prepay all or a portion of the
Loans, without premium or penalty, provided that (i) the Company may not prepay
any portion of any Loan as to which an election for a continuation of or a
conversion to a Eurodollar Rate Loan is pending pursuant to Section 2.4, and
(ii) unless earlier payment is required under this Agreement, any Eurodollar
Rate Loan may only be prepaid on the last day of the then current Interest
Period with respect to such Loan.






	 	
        (C)        
If at any time the aggregate outstanding principal amount of the Advances shall
exceed the lesser of Borrowing Base or the Aggregate Commitment, the Company
shall forthwith pay to the Agent, for the ratable benefit of the Banks, without
demand, an amount not less than the amount of such excess for application to the
outstanding principal amount of the Loans, provided that if any such prepayment
would be in excess of the outstanding amount of the Loans, the Company shall
deliver cash collateral to the Agent to secure the outstanding Letters of Credit
in the amount of such excess which is greater than the outstanding Loans and the
Company hereby grants to the Agent, for the benefit of the Banks, a first
priority lien and security interest in such collateral, and all such cash
collateral shall be under the sole and exclusive control of the
Agent.









        3.2    Interest
Payments. The Company shall pay interest to the Banks on the unpaid
principal amount of each Loan, for the period commencing on the date such Loan
is made until such Loan is paid in full, on each Interest Payment Date and at
maturity (whether at stated maturity, by acceleration or otherwise), and
thereafter on demand, at the following rates per annum:


	 	
        (A)        
During such periods that
such Loan is an Adjusted Base Rate Loan, the Adjusted Base Rate.






	 	
        (B)        
During such periods that
such Loan is a Eurodollar Rate Loan, the Eurodollar Rate applicable to such Loan
for each related Eurodollar Interest Period.








Notwithstanding the foregoing paragraphs (A) and (B), the Company shall pay
interest on demand by the Agent at the Overdue Rate on the outstanding principal
amount of any Loan and any other amount payable by the Company hereunder (other
than interest) at any time on or after an Event of Default if required in
writing by the Required Banks.







- 27 -





        3.3    Letter of Credit
Reimbursement Payments. 




                (A)



          	 	
                       
               (i)         The Company agrees to pay to
               the Agent, not later than (a) 12:00 noon Chicago time on the day on which the
               Agent shall honor a draft or other demand for payment presented or made under
               any Letter of Credit if such draft or demand is made prior to 12:00 noon Chicago
               time on such day and (b) 12:00 noon Chicago time on the next succeeding Business
               Day after the day on which the Agent shall honor a draft or other demand for
               payment presented or made under any Letter of Credit if such draft or demand is
               made at or after 12:00 noon Chicago time on any day, in each case, an amount
               equal to the amount paid by the Agent in respect of such draft or other demand
               under any such Letter of Credit and all expenses paid or incurred by the Agent
               relative thereto (the “Reimbursement Amount”). Unless the Company
               shall have made such payment to the Agent on such day, upon each such payment by
               the Agent, the Agent shall be deemed to have disbursed to the Company and the
               Company shall be deemed to have elected to satisfy its reimbursement obligation
               by, a Loan bearing interest at the Adjusted Base Rate for the account of the
               Banks in an amount equal to the amount so paid by the Agent in respect of such
               draft or other demand under such Letter of Credit. Such Loan shall be disbursed
               notwithstanding any failure to satisfy any conditions for disbursement of any
               Loan set forth in Article II hereof and, to the extent of the Loan so disbursed,
               the reimbursement obligation of the Company under this Section 3.3 shall be
               deemed satisfied; provided, however, that nothing in this Section 3.3 shall be
               deemed to constitute a waiver of any Default or Event of Default caused by the
               failure to the conditions for disbursement or otherwise.



               



          	 	
                       
              (ii)         If, for any reason
               (including without limitation as a result of the occurrence of an Event of
               Default with respect to the Company pursuant to Section 6.1(H)), Adjusted Base
               Rate Loans may not be made by the Banks as described in Section 3.3(A)(i), then
               (A) the Company agrees that each reimbursement amount not paid pursuant to the
               first sentence of Section 3.3(A)(i) shall bear interest, payable on demand by
               the Agent at the interest rate then applicable to Adjusted Base Rate Loans, and
               (B) effective on the date each such Adjusted Base Rate Loan would otherwise have
               been made, each Bank severally agrees that it shall unconditionally and
               irrevocably, without regard to the occurrence of any Default or Event of
               Default, in lieu of deemed disbursement of loans, to the extent of such
               Bank’s Commitment, purchase a participating interest in each Reimbursement
               Amount. Each Bank will immediately transfer to the Agent, in same day funds, the
               amount of its participation for its own account. Each Bank shall share on a pro
               rata basis (calculated by reference to its Commitment) in any interest which
               accrues thereon and in all repayments thereof. If and to the extent that any
               Bank shall not have so made the amount of such participating interest available
               to the Agent, such Bank and the Company severally agree to pay to the Agent for
               its own account forthwith on demand such amount together with interest thereon,
               for each day from the date of demand by the Agent until the date such amount is
               paid to the Agent, at (x) in the case of the Company, the interest rate then
               applicable to Adjusted Base Rate Loans and (y) in the case of such Bank, the
               Federal Funds Rate.



               







- 28 -




          	 	
                       
               (iii)         Each Bank holding a
               Commitment shall be obligated, absolutely and unconditionally to make Adjusted
               Base Rate Loans pursuant to Section 3.3(A)(i), and to purchase and fund
               participation interests in Letters of Credit pursuant to Section 2.4(D) and
               3.3(A)(ii), and such obligation shall not be affected by any circumstance
               whatsoever, including, without limitation, (i) any set off, counterclaim,
               recoupment, defense or other right which such Bank or the Company may have
               against the Agent, the Company or anyone else for any reason whatsoever, (ii)
               the occurrence of any Event of Default or Default, (iii) any adverse change in
               the condition (financial or otherwise) of the Company or any of the Guarantors,
               (iv) any breach of this Agreement or any other Loan Document by the Company, any
               of the Guarantors, the Agent or any other Bank, or (v) any other circumstance,
               happening or event whatsoever, whether or not similar to any of the foregoing,
               including without limitation any termination or other limitation on the
               Commitments or any failure to satisfy any conditions precedent to any Advance
               contained herein or any other provision of this Agreement.



               



          	 	
                       
                             (B)         The reimbursement obligation
               of the Company under this Section 3.3 shall be absolute, unconditional and
               irrevocable and shall remain in full force and effect until all obligations of
               the Company to the Banks hereunder shall have been satisfied, and such
               obligations of the Company shall not be affected, modified or impaired upon the
               happening of any event, including without limitation, any of the following,
               whether or not with notice to, or the consent of, the Company:



               



          	 	
                       

               (i)         Any lack of validity or
               enforceability of any Letter of Credit or any documentation relating to any
               Letter of Credit or to any transaction related in any way to such Letter of
               Credit (the “Letter of Credit Documents”);



               



          	 	
                       

               (ii)         Any amendment,
               modification, waiver, consent, or any substitution, exchange or release of or
               failure to perfect any interest in collateral or security, with respect to any
               of the Letter of Credit Documents;



               



          	 	
                       
                             (iii)         The existence of any
               claim, setoff, defense or other right which the Company may have at any time
               against any beneficiary or any transferee of any Letter of Credit (or any
               Persons or entities for whom any such beneficiary or any such transferee may be
               acting), the Agent or any Bank or any other Person or entity, whether in
               connection with any of the Letter of Credit Documents, the transactions
               contemplated herein or therein or any unrelated transactions;



               







- 29 -




          	 	
                       

               (iv)         Any draft or other
               statement or document presented under any Letter of Credit proving to be forged,
               fraudulent, invalid or insufficient in any respect or any statement therein
               being untrue or inaccurate in any respect;



               



          	 	
                       

               (v)         Payment by the Agent to the
               beneficiary under any Letter of Credit against presentation of documents which
               do not comply with the terms of the Letter of Credit, including failure of any
               documents to bear any reference or adequate reference to such Letter of Credit;



               



          	 	
                       

               (vi)         Any failure, omission,
               delay or lack on the part of the Agent or any Bank or any party to any of the
               Letter of Credit Documents to enforce, assert or exercise any right, power or
               remedy conferred upon the Agent, any Bank or any such party under this Agreement
               or any of the Letter of Credit Documents, or any other acts or omissions on the
               part of the Agent, any Bank or any such party;



               



          	 	
                       

               (vii)         Any other event or
               circumstance that would, in the absence of this clause, result in the release or
               discharge by operation of law or otherwise of the Company from the performance
               or observance of any obligation, covenant or agreement contained in this Section
               3.3.



               




No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Company has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to the Company
against the Agent or any Bank.




        3.4    Payment Method. 



          	 	
                  
          (A)         All payments to be made by
          the Company hereunder will be made to the Agent for the account of the Banks in
          Dollars and in immediately available funds not later than 12:00 noon Chicago
          time at the principal office of the Agent specified in Section 8.2. Payments
          received after 12:00 noon Chicago time at the place for payment shall be deemed
          to be payments made prior to 12:00 noon Chicago time at the place for payment on
          the next succeeding Business Day. The Company hereby authorizes the Agent to
          charge its account with the Agent in order to cause timely payment of amounts
          due hereunder to be made (subject to sufficient funds being available in such
          account for that purpose).



          



          	 	
                  

          (B)         At the time of making each
          such payment, the Company shall, subject to the other terms and conditions of
          this Agreement, specify to the Agent that Loan or other obligation of the
          Company hereunder to which such payment is to be applied. In the event that the
          Company fails to so specify the relevant obligation or if an Event of Default
          shall have occurred and be continuing, the Agent may apply such payments as it
          may determine in its sole discretion.



          



          	 	
                  

          (C)         On the day such payments are
          deemed received, the Agent shall remit to the Banks their pro rata shares of
          such payments in immediately available funds to the Banks at their respective
          address in the United States specified for notices pursuant to Section 8.2. In
          the case of payments of principal and interest on any Borrowing, such pro rata
          shares shall be determined with respect to each such Bank by the ratio which the
          outstanding principal balance of its Loan included in such Borrowing bears to
          the outstanding principal balance of the Loans of all of the Banks included in
          such Borrowing, and in the case of fees paid pursuant to Section 2.3 and other
          amounts payable hereunder (other than the Agent’s fees payable pursuant to
          Section 2.3(D) and amounts payable to any Bank under Section 3.7), such pro rata
          shares shall be determined with respect to each such Bank by the ratio which the
          Commitment of such Bank bears to the Aggregate Commitment.



          







- 30 -





        3.5    
No Setoff or Deduction. All payments of principal of and interest on the Loans and other
amounts payable by the Company hereunder shall be made by the Company without setoff or
counterclaim, and free and clear of, and without deduction or withholding for, or on
account of, any present or future taxes, levies, imposts, duties, fees, assessments, or
other charges of whatever nature, imposed by any governmental authority, or by any
department, agency or other political subdivision or taxing authority.




        3.6    Payment on Non-Business Day; Payment Computations. Except as otherwise provided in this
Agreement to the contrary, whenever any installment of principal of, or interest on, any
Loan or any other amount due hereunder becomes due and payable on a day which is not a
Business Day, the maturity thereof shall be extended to the next succeeding Business Day
and, in the case of any installment of principal, interest shall be payable thereon at the
rate per annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be made on the
basis of a year of 360 days for the actual number of days elapsed, including the first day
but excluding the last day of the relevant period.




        3.7    Additional Costs. 



          	 	
                  

          (A)         In the event that any
          applicable law, treaty or other international agreement, rule or regulation
          (whether domestic or foreign) now or hereafter in effect and whether or not
          presently applicable to any Bank or the Agent, or any interpretation or
          administration thereof by any governmental authority charged with the
          interpretation or administration thereof, or compliance by any Bank or the Agent
          with any guideline, request or directive of any such authority (whether or not
          having the force of law), shall (a) affect the basis of taxation of payments to
          any Bank or the Agent of any amounts payable by the Company under this Agreement
          (other than taxes imposed on the overall net income of any Bank or the Agent, by
          the jurisdiction, or by any political subdivision or taxing authority of any
          such jurisdiction, in which any Bank or the Agent, as the case may be, has its
          principal office), or (b) shall impose, modify or deem applicable any reserve,
          special deposit or similar requirement against assets of, deposits with or for
          the account of, or credit extended by any Bank or the Agent, or (c) shall impose
          any other condition with respect to this Agreement, or any of the Commitments,
          the Notes or the Loans or any Letter of Credit, and the result of any of the
          foregoing is to increase the cost to any Bank or the Agent, as the case may be,
          of making, funding or maintaining any Eurodollar Rate Loan or any Letter of
          Credit or to reduce the amount of any sum receivable by any Bank or the Agent,
          as the case may be, thereon, then the Company shall pay to such Bank or the
          Agent, as the case may be, from time to time, upon request by such Bank (with a
          copy of such request to be provided to the Agent) or the Agent, additional
          amounts sufficient to compensate such Bank or the Agent, as the case may be, for
          such increased cost or reduced sum receivable to the extent, in the case of any
          Eurodollar Rate Loan, such Bank or the Agent is not compensated therefor in the
          computation of the interest rate applicable to such Eurodollar Rate Loan. A
          statement as to the amount of such increased cost or reduced sum receivable,
          prepared in good faith and in reasonable detail by such Bank or the Agent, as
          the case may be, and submitted by such Bank or the Agent, as the case may be, to
          the Company, shall be conclusive and binding for all purposes absent manifest
          error in computation.



          







- 31 -




          	 	
                  

          (B)         In the event that any
          applicable law, treaty or other international agreement, rule or regulation
          (whether domestic or foreign) now or hereafter in effect and whether or not
          presently applicable to any Bank or the Agent, or any interpretation or
          administration thereof by any governmental authority charged with the
          interpretation or administration thereof, or compliance by any Bank or the Agent
          with any guideline, request or directive of any such authority (whether or not
          having the force of law), including any risk-based capital guidelines, affects
          or would affect the amount of capital required or expected to be maintained by
          such Bank or the Agent (or any corporation controlling such Bank or the Agent)
          and such Bank or the Agent, as the case may be, reasonably determines that the
          amount of such capital is increased by or based upon the existence of such
          Bank’s or the Agent’s obligations hereunder and such increase has the
          effect of reducing the rate of return on such Bank’s or the Agent’s
          (or such controlling corporation’s) capital as a consequence of such
          obligations hereunder to a level below that which such Bank or the Agent (or
          such controlling corporation) could have achieved but for such circumstances
          (taking into consideration its policies with respect to capital adequacy), then
          the Company shall pay to such Bank or the Agent, as the case may be, from time
          to time, upon request by such Bank (with a copy of such request to be provided
          to the Agent) or the Agent, additional amounts sufficient to compensate such
          Bank or the Agent (or such controlling corporation) for any increase in the
          amount of capital and reduced rate of return which such Bank or the Agent
          reasonably determines to be allocable to the existence of such Bank’s or
          the Agent’s obligations hereunder. A statement as to the amount of such
          compensation, prepared in good faith and in reasonable detail by such Bank or
          the Agent, as the case may be, and submitted by such Bank or the Agent to the
          Company, shall be conclusive and binding for all purposes absent manifest error
          in computation.



          




        3.8    
Illegality and Impossibility. In the event that any applicable law,
treaty or other international agreement, rule or regulation (whether domestic or
foreign) now or hereafter in effect and whether or not presently applicable to
any Bank, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Bank with any guideline, request or directive of such
authority (whether or not having the force of law), including without limitation
exchange controls, shall make it unlawful or impossible for any Bank to maintain
any Loan under this Agreement, or shall make it impracticable, unlawful or
impossible for, or shall in any way limit or impair ability of, the Company to
make or any Bank to receive any payment under this Agreement at the place
specified for payment hereunder, the Company shall upon receipt of notice
thereof from such Bank, repay in full the then outstanding principal amount of
each Loan so affected, together with all accrued interest thereon to the date of
payment and all amounts owing to such Bank under Section 3.8, (a) on the last
day of the then current Interest Period applicable to such Loan if such Bank may
lawfully continue to maintain such Loan to such day, or (b) immediately if such
Bank may not continue to maintain such Loan to such day.







- 32 -





        3.9    
Indemnification. If the Company makes any payment of principal with respect to any
Eurodollar Rate Loan on any other date than the last day of an Interest Period applicable
thereto (whether pursuant to Section 3.1(C), Section 3.7, Section 6.2 or otherwise), or if
the Company fails to borrow any Eurodollar Rate Loan after notice has been given to the
Banks in accordance with Section 2.4, or if the Company fails to make any payment of
principal or interest in respect of a Eurodollar Rate Loan when due, the Company shall
reimburse each Bank on demand for any resulting loss or expense incurred by each such
Bank, including without limitation any loss incurred in obtaining, liquidating or
employing deposits from third parties, whether or not such Bank shall have funded or
committed to fund such Loan. A statement as to the amount of such loss or expense,
prepared in good faith and in reasonable detail by such Bank and submitted by such Bank to
the Company, shall be conclusive and binding for all purposes absent manifest error in
computation. Calculation of all amounts payable to such Bank under this Section 3.9 shall
be made as though such Bank shall have actually funded or committed to fund the relevant
Eurodollar Rate Loan through the purchase of an underlying deposit in an amount equal to
the amount of such Loan in the relevant market and having a maturity comparable to the
related Interest Period and, through the transfer of such deposit to a domestic office of
such Bank in the United States; provided, however, that such Bank may fund any Eurodollar
Rate Loan in any manner it sees fit and the foregoing assumption shall be utilized only
for the purpose of calculation of amounts payable under this Section 3.9.


ARTICLE IV:    REPRESENTATIONS AND WARRANTIES




        The
Company represents and warrants to the Banks and the Agent that: 




        4.1    
Existence and Power. Each of the Company and the Guarantors is a corporation or a limited
liability company duly organized, validly existing and in good standing under the laws of
the state of its jurisdiction of incorporation or organization, as the case may be, and is
duly qualified to do business, and is in good standing in all additional jurisdictions
where such qualification is necessary under applicable law and the failure to qualify
could reasonably be expected to have a Material Adverse Effect. Each of the Company and
the Guarantors has all requisite corporate or limited liability company power to own or
lease the properties used in its business and to carry on its business as now being
conducted and as proposed to be conducted, and to execute and deliver this Agreement, the
Notes and the Security Documents to which it is a party and to engage in the transactions
contemplated by this Agreement.







- 33 -






        4.2    Authority.
The execution, delivery and performance by the Company and each Guarantor of
this Agreement, the Notes and the Security Documents to which it is a party have
been duly authorized by all necessary corporate or limited liability company
action and are not in contravention of any law, rule or regulation, or any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
governmental authority, or of the terms of the Company’s or the
Guarantor’s charter, by-laws, articles of organization or operating
agreement or of any contract or undertaking to which the Company or any
Guarantor is a party or by which the Company or any Guarantor or any of their
respective property may be bound or affected and will not result in the
imposition of any Lien on any of their property or of any of their Restricted
Subsidiaries except for Permitted Liens.




        4.3    
Binding Effect. This Agreement is, and the Notes and the Security Documents to which the
Company or any Guarantor is a party when delivered hereunder will be, legal, valid and
binding obligations of the Company and the Guarantor, respectively, enforceable against
the Company and the Guarantor in accordance with their respective terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent conveyances,
reorganization or similar laws relating to or affecting the enforcement of creditors’
rights generally; (ii) general equitable principles (whether considered in a proceeding in
equity or at law); and (iii) requirements of reasonableness, good faith and fair dealing.




        4.4    Restricted and Unrestricted Subsidiaries. Schedule 4.4 hereto correctly sets forth the
name, jurisdiction of incorporation or organization and ownership of each Subsidiary of
the Company, and whether it is a Restricted Subsidiary or an Unrestricted Subsidiary. Each
such Subsidiary and each corporation or limited liability company becoming a Subsidiary of
the Company or any Guarantor after the date hereof is and will be a corporation or limited
liability company duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation or organization and is and will be duly qualified to do
business in each additional jurisdiction where such qualification is necessary under
applicable law and the failure to qualify could reasonably be expected to have a Material
Adverse Effect. Each Subsidiary of the Company and each Guarantor has and will have all
requisite corporate or limited liability company power to own or lease the properties used
in its business and to carry on its business as now being conducted and as proposed to be
conducted. All outstanding shares of Capital Stock of each class of each Subsidiary, the
Company and each Guarantor have been and will be validly issued and are and will be fully
paid and nonassessable, and, except as otherwise indicated in Schedule 4.4 hereto or
disclosed in writing to the Agent and the Banks from time to time, all ownership interests
in the company’s subsidiaries, are and will be owned, beneficially and of record, by
the Company or another Subsidiary of the Company free and clear of any Liens.







- 34 -





        4.5    Litigation. 



          	 	
                       

               (i)         Except as set forth in
               Schedule 4.5 hereto, there is no action, suit or proceeding pending or, to the
               best of the Company’s and the Guarantors’ knowledge, threatened
               against or affecting the Company, any Guarantor or any of their respective
               Subsidiaries before or by any court, governmental authority or arbitrator, which
               if adversely decided could reasonably be expected to result in liability equal
               to $1,000,000 or more and, to the best of the Company’s and the
               Guarantor’s knowledge, neither the Company nor any Guarantor has received
               any notice of any such action, suit or proceeding.



               



          	 	
                       

               (ii)         Since the Effective Date,
               no judgment, order or settlement of a dispute, claim or other action, in either
               case, in an aggregate amount of $5,000,000 or more has been rendered against or
               entered into by the Company or any Restricted Subsidiary.



               




        4.6    Financial Condition. The Consolidated financial statements of the Company and its
Restricted Subsidiaries for the fiscal year ended on March 31, 2002 and reported on by
Arthur Andersen LLP, certified public accountants, and the interim Consolidated balance
sheet and interim statements of income, retained earnings and cash flows of the Company
and its Restricted Subsidiaries as of or for the nine-month period ended on December 31,
2002, copies of which have been furnished to the Banks, fairly present the Consolidated
financial position of the Company and its Restricted Subsidiaries as at the respective
dates thereof, and the Consolidated results of operations of the Company and its
Restricted Subsidiaries for the respective periods indicated, all in accordance with
Generally Accepted Accounting Principles consistently applied (subject, in the case of
said interim statements, to year-end audit adjustments and the lack of footnotes and other
presentation items). Except as set forth in the Company’s Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities
and Exchange Commission prior to the Effective Date, there has been no event or
development which has had or could reasonably be expected to have a Material Adverse
Effect since March 31, 2002. To the knowledge of the Company, there is no material
Contingent Liability of the Company or any of its Restricted Subsidiaries that is not
reflected in such financial statements or in the notes thereto.




        4.7    
Corporate Restructuring and Future Financial Statements. The financial statements of the
Company and its Restricted Subsidiaries delivered pursuant to Section 5.1(D) fairly
present the Consolidated financial position of the Company and its Restricted Subsidiaries
as at the respective dates thereof and the Consolidated results of operations of the
Company and its Restricted Subsidiaries for the respective periods indicated, all in
accordance with Generally Accepted Accounting Principles consistently applied (subject, in
the case of interim statements, to year-end audit adjustments and the lack of footnotes
and other presentation items).




        4.8    
Regulation U. Neither the Company nor any Guarantor nor any of their respective Restricted
Subsidiaries extends or maintains, in the ordinary course of business, credit for the
purpose, whether immediate, incidental, or ultimate, of buying or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Advance will be used for the purpose, whether
immediate, incidental, or ultimate, of buying or carrying any such margin stock or
maintaining or extending credit to others for such purpose. After applying the proceeds of
each Advance, such margin stock will not constitute more than 25% of the value of the
assets (either of the Company or any Guarantor alone or of the Company and the Guarantors
and their respective Restricted Subsidiaries on a consolidated basis) that are subject to
any provisions of this Agreement or any Security Document that may cause the Advances to
be deemed secured, directly or indirectly, by margin stock.







- 35 -





        4.9    
Consents, Etc. Except for such consents, approvals, authorizations, declarations,
registrations or filings delivered by the Company and the Guarantors pursuant to Section
2.5(E)(i) and (I), if any, each of which is in full force and effect, no consent, approval
or authorization of or declaration, registration or filing with any governmental authority
or any nongovernmental Person or entity, including without limitation any creditor, lessor
or stockholder of the Company or any Guarantor or any of their respective Restricted
Subsidiaries, is required on the part of the Company or any Guarantor in connection with
the execution, delivery and performance of this Agreement, the Notes, the Security
Documents or the transactions contemplated hereby or as a condition to the legality,
validity or enforceability of this Agreement, the Notes or any of the Security Documents.




        4.10    
Taxes. The Company and the Guarantors and their respective Restricted Subsidiaries have
filed all income tax returns (federal, state and local) required to be filed and have paid
all taxes shown thereon to be due, including interest and penalties, or have established
adequate financial reserves on their respective books and records for payment thereof in
accordance with Generally Accepted Accounting Principles, except where the failure to so
file or to so pay could not reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any Guarantor nor any of their respective Restricted Subsidiaries
knows of any actual or proposed assessment for taxes based on income or any basis
therefor, and no extension of time for the assessment of deficiencies in any such federal
or state tax has been granted by the Company, any Guarantor or any such Subsidiary.




        4.11    
Title to Properties. Except as otherwise disclosed in the latest balance sheet delivered
pursuant to Section 4.6 or 5.1(D) of this Agreement, the Company, the Guarantors or one or
more of their respective Restricted Subsidiaries have a valid ownership interest in all of
their respective properties and assets (including, without limitation, the collateral
subject to the Security Documents to which any of them is a party) reflected in said
balance sheet or subsequently acquired by the Company, any Guarantor or any such
Subsidiary. All of such properties and assets are free and clear of any Lien, except for
Permitted Liens.




        4.12    
Borrowing Base. All trade accounts receivable and inventory of the Company represented or
reported by the Company to be, or are otherwise included in, Eligible Accounts Receivable
and Eligible Inventory comply in all respects with the requirements therefor set forth in
the definition thereof, and the computation of the Borrowing Base set forth in each
Borrowing Base Certificate is true and correct.







- 36 -





        4.13    
ERISA. The Company, the Guarantors, their respective Restricted Subsidiaries, their ERISA
Affiliates and their respective Plans are in compliance in all material respects with
those provisions of ERISA and of the Code which are applicable with respect to any Plan.
No Prohibited Transaction and no Reportable Event has occurred with respect to any such
Plan. Since the Effective Date, none of the Company, any Guarantor, any of their
respective Restricted Subsidiaries or any of their ERISA Affiliates has incurred, or is
reasonably expected to incur, pursuant to Section 4201 of ERISA, any withdrawal liability
to Multiemployer Plans. The Company, the Guarantors, their respective Restricted
Subsidiaries and their ERISA Affiliates have met the minimum funding requirements under
ERISA and the Code with respect to each of their respective Plans, if any, and have not
incurred any liability to the PBGC or any Plan. The execution, delivery and performance of
this Agreement, the Notes and the Security Documents do not constitute a Prohibited
Transaction.




        4.14    
Disclosure. No report or other information furnished in writing and prepared by, or, to
the knowledge of the Company, on behalf of, the Company or any Guarantor to any Bank or
the Agent in connection with the negotiation or administration of this Agreement contains
any material misstatement of fact or omits to state any material fact or any fact
necessary to make the statements contained therein not misleading in light of the
circumstances in which they were made. Neither this Agreement, the Notes, the Security
Documents nor any other document, certificate, or report or statement or other information
furnished to any Bank or the Agent and prepared by, or, to the knowledge of the Company,
on behalf of, the Company or any Guarantor in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and therein not
misleading in light of the circumstances in which they were made. There is no fact known
to the Company or any Guarantor which has or which in the future could reasonably be
expected to have (so far as the Company or any Guarantor can now foresee) a Material
Adverse Effect, which has not been set forth in this Agreement or in the other documents,
certificates, statements, reports and other information furnished in writing to the Banks
by or on behalf of the Company or any Guarantor in connection with the transactions
contemplated hereby.




        4.15    
No Default. Neither the Company nor any Subsidiary is in default or has received any
written notice of default under or with respect to any of its Contractual Obligations in
any respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.



ARTICLE V:    COVENANTS




        5.1    Affirmative Covenants. The Company covenants and agrees that, until the Termination Date
and thereafter until payment in full of the principal of and accrued interest on the Notes
and the performance of all other obligations of the Company and the Guarantors under this
Agreement and the other Loan Documents to which it is a party, unless the Required Banks
shall otherwise consent in writing, it shall, and shall cause its Restricted Subsidiaries
to:







- 37 -




          	 	
                  

          (A)         Preservation of Corporate
          Existence, Etc. Do or cause to be done all things necessary to preserve, renew
          and keep in full force and effect its legal existence, and its qualification as
          a foreign corporation or limited liability company in good standing in each
          jurisdiction in which such qualification is necessary under applicable law and
          the failure to qualify could reasonably be expected to have a Material Adverse
          Effect, and the rights, licenses, permits (including those required under
          Environmental Laws), franchises, patents, copyrights, trademarks and trade names
          material to the conduct of its businesses; and defend all of the foregoing
          against all claims, actions, demands, suits or proceedings at law or in equity
          or by or before any governmental instrumentality or other agency or regulatory
          authority.



          



          	 	
                  

          (B)         Compliance with Laws, Etc.
          Comply in all material respects with all applicable laws, rules, regulations and
          orders of any governmental authority, whether federal, state, local or foreign
          (including without limitation ERISA, the Code and Environmental Laws), in effect
          from time to time; and pay and discharge promptly when due all taxes,
          assessments and governmental charges or levies imposed upon it or upon its
          income, revenues or property, before the same shall become delinquent or in
          default, as well as all lawful claims for labor, materials and supplies or
          otherwise, which, if unpaid, might give rise to Liens upon the collateral
          subject to the Security Documents or any portion thereof, except to the extent
          that payment of any of the foregoing is then being contested in good faith by
          appropriate legal proceedings and with respect to which adequate financial
          reserves have been established on the books and records of the Company, any
          Guarantor or any of their respective Restricted Subsidiaries in accordance with
          Generally Accepted Accounting Principles.



          



          	 	
                  
          (C)         Maintenance of Properties;
          Insurance. Maintain, preserve and protect all property that is material to the
          conduct of the business of the Company, any Guarantor or any of their respective
          Restricted Subsidiaries and keep such property in good repair, working order and
          condition and from time to time make, or cause to be made all needful and proper
          repairs, renewals, additions, improvements and replacements thereto necessary in
          order that the business carried on in connection therewith may be properly
          conducted at all times in accordance with customary and prudent business
          practices for similar businesses; and, in addition to that insurance required
          under the Security Documents, maintain in full force and effect insurance with
          responsible and reputable insurance companies or associations in such amounts,
          on such terms and covering such risks, including fire and other risks insured
          against by extended coverage, as is usually carried by companies engaged in
          similar businesses and owning similar properties similarly situated and maintain
          in full force and effect public liability insurance, insurance against claims
          for personal injury or death or property damage occurring in connection with any
          of its activities or any properties owned, occupied or controlled by it, in such
          amount as it shall reasonably deem necessary, and maintain such other insurance
          as may be required by law or as may be reasonably requested by the Required
          Banks for purposes of assuring compliance with this Section 5.1(C).



          







- 38 -



          	 	
                  

          (D)         Reporting Requirements.
          Furnish to the Banks and the Agent the following:



          



          	 	
                  

          (i)         Promptly and in any event
          within three Business Days after becoming aware of the occurrence of (A) any
          Default or Event of Default, (B) the commencement of any material litigation
          against the Company, any Guarantor or any of their respective Restricted
          Subsidiaries, and any material developments therein, or (C) entering into any
          material contract or undertaking that is not entered into in the ordinary course
          of business or (D) any development in the business or affairs of the Company,
          any Guarantor or any of their respective Subsidiaries which has resulted in or
          which is likely in the reasonable judgment of the Company or any Guarantor, to
          result in a Material Adverse Effect, a statement of a duly authorized officer of
          the Company or the Guarantor, as the case may be setting forth details of each
          such Default or Event of Default or such litigation, material contract or
          undertaking or development and the action which the Company, such Guarantor or
          such Subsidiary, as the case may be, has taken and proposes to take with respect
          thereto, except to the extent any such event in clauses (B) through (D) shall
          have been described in any publicly-available filing made by the Company or any
          Guarantor or any of their respective Restricted Subsidiaries with the Securities
          and Exchange Commission or any successor agency thereof within such applicable
          period;



          



          	 	
                  

          (ii)         As soon as available and in
          any event within 45 days after the end of each month of the Company, the
          Consolidated and consolidating balance sheet of the Company and its Restricted
          Subsidiaries, and of the Company and its Subsidiaries, as of the end of such
          month, and the related Consolidated and consolidating statements of income,
          retained earnings and cash flows for the period commencing at the end of the
          previous fiscal year and ending with the end of such month, setting forth in
          each case in comparative form the corresponding figures for the corresponding
          date or period of the preceding fiscal year, all in reasonable detail and duly
          certified (subject to year-end audit adjustments and the lack of footnotes and
          other presentation items) by the chief financial officer of the Company as
          having been prepared in accordance with Generally Accepted Accounting
          Principles, together with, in the case of the financial statements for the last
          month of each fiscal quarter, a certificate of a duly authorized officer of the
          Company stating (A) that no Default or Event of Default has occurred and is
          continuing or, if a Default or Event of Default has occurred and is continuing,
          a statement setting forth the details thereof and the action which the Company
          has taken and proposes to take with respect thereto, and (B) at the end of each
          fiscal quarter, that a computation (which computation shall accompany such
          certificate and shall be in reasonable detail) showing compliance with Section
          5.2(A), (B) and (C) hereof is in conformity with the terms of this Agreement;



          







- 39 -



          	 	
                  

          (iii)         As soon as available and
          in any event within 90 days after the end of each fiscal year of the Company, a
          copy of the Consolidated balance sheet of the Company and its Restricted
          Subsidiaries, and of the Company and its Subsidiaries, as of the end of such
          fiscal year and the related consolidated statements of income, retained earnings
          and changes in financial position of the Company and its Restricted
          Subsidiaries, and of the Company and its Subsidiaries, for such fiscal year,
          with a customary audit report of Deloitte & Touche LLP, or other independent
          certified public accountants selected by the Company and acceptable to the
          Required Banks, without qualifications unacceptable to the Required Banks,
          together with a certificate of such accountants stating (A) that they have
          reviewed this Agreement and stating further whether, in the course of their
          review of such financial statements, they have become aware of any Default or
          Event of Default and, if such a Default or Event of Default exists and is
          continuing, a statement setting forth the nature and status thereof, and (B)
          that a computation by the Company (which computation shall accompany such
          certificate and shall be in reasonable detail) showing compliance with Section
          5.2 (A), (B), and (C) hereof is in conformity with the terms of this Agreement;



          



          	 	
                  

          (iv)         Promptly after the sending
          or filing thereof, copies of all reports, proxy statements and financial
          statements which the Company or any Guarantor or any of their respective
          Restricted Subsidiaries sends to or files with any of their respective security
          holders or any securities exchange or the Securities and Exchange Commission or
          any successor agency thereof;



          



          	 	
                  

          (v)         Promptly and in any event
          within 10 calendar days following last day of each month, or within one Business
          Day following the last day of each week at any time when the Borrowing Base
          selected by the Company is equal to the sum of 80% of the value of Eligible
          Accounts Receivable plus 60% of the value of Eligible Inventory, a Borrowing
          Base certificate prepared as of the close of business on such last day, together
          with supporting schedules, in form and detail satisfactory to the Agent, setting
          forth such information as the Agent may request with respect to the aging,
          value, location, and ownership of such Eligible Accounts Receivable and Eligible
          Inventory, and other information relating to the computation of the Borrowing
          Base and the eligibility of any property or assets included in such computation,
          certified as true and correct by the chief financial officer of the Company;



          



          	 	
                  

          (vi)         Promptly and in any event
          within 10 calendar days after receiving or becoming aware thereof (A) a copy of
          any notice of intent to terminate any Plan of the Company, any Guarantor, their
          respective Restricted Subsidiaries or any ERISA Affiliate filed with the PBGC,
          (B) a statement of the chief financial officer of the Company or any Guarantor,
          as the case may be; setting forth the details of the occurrence of any
          Reportable Event with respect to any such Plan, (C) a copy of any notice that
          the Company, any Guarantor, any of their respective Restricted Subsidiaries or
          any ERISA Affiliate may receive from the PBGC relating to the intention of the
          PBGC to terminate any such Plan or to appoint a trustee to administer any such
          Plan, or (D) a copy of any notice of failure to make a required installment or
          other payment within the meaning of Section 412(n) of the Code or Section 302(f)
          of ERISA with respect to any such Plan;



          







- 40 -



          	 	
                  

          (vii)         As soon as available and
          in any event within 15 days after the end of each month, a report with respect
          to the Company and its Restricted Subsidiaries, listing their accounts
          receivable and accounts payable and the age thereof, and setting forth in
          summary form their inventory and its value, in form and detail satisfactory to
          the Agent, certified as true and correct by a duly authorized officer of the
          Company;



          



          	 	
                  

          (viii)         As soon as practicable
          and in any event not later than June 30 of each fiscal year, commencing with the
          fiscal year beginning April 1, 2003, a copy of the projected Consolidated income
          statement of the Company and the Restricted Subsidiaries for such fiscal year
          prepared in such detail as shall be reasonably satisfactory to the Agent; and



          



          	 	
                  

          (ix)         Promptly, such other
          information respecting the business, properties, operations or condition,
          financial or otherwise, of the Company, any Guarantor or any of their respective
          Restricted Subsidiaries as any Bank or the Agent may from time to time
          reasonably request.



          



          	 	
                 

          (E)         Accounting; Access to
          Records, Books, Etc. Maintain a system of accounting established and
          administered in accordance with sound business practices to permit preparation
          of financial statements in accordance with Generally Accepted Accounting
          Principles and to comply with the requirements of this Agreement and, at any
          reasonable time and from time to time, (i) permit any Bank or the Agent or any
          agents or representatives thereof to examine and make copies of and abstracts
          from the records and books of account of, and visit the properties of, the
          Company, the Guarantors and their respective Restricted Subsidiaries, and to
          discuss the affairs, finances and accounts of the Company, the Guarantors and
          their respective Restricted Subsidiaries with their respective directors,
          officers, employees and independent auditors, and by this provision each of the
          Company and the Guarantors hereby authorizes such Persons to discuss such
          affairs, finances and accounts with any Bank or the Agent, and (ii) (a) during
          any fiscal quarter that the Borrowing Base is equal to the sum of 80% of the
          value of Eligible Accounts Receivable plus 60% of the value of Eligible
          Inventory, permit the Agent or any of its agents or representatives to conduct a
          comprehensive field audit of its books, records, properties and assets,
          including without limitation all collateral subject to the Security Documents,
          at any one time during such quarter, at the expense of the Company, and (b) if a
          different Borrowing Base level is in effect permit the Agent to do so at any
          time, at the expense of the Banks unless an Event of Default shall be continuing
          in which event such field audit shall be at the expense of the Company.



          



          	 	
                  

          (F)         Loans by the Company to the
          Restricted Subsidiaries. In the event that the Company makes loans or other
          advances to or for the benefit of a Restricted Subsidiary after the Effective
          Date that are not evidenced by an Intercompany Note delivered to the Agent, the
          Company will obtain an Intercompany Note from the borrowing Restricted
          Subsidiary to evidence such loans and advances and shall deliver it to the Agent
          pursuant to the Pledge Agreement.



          







- 41 -



          	 	
                  

          (G)         Additional Security and
          Collateral. Promptly (i) execute and deliver and cause each Restricted
          Subsidiary of the Company and the Guarantors to execute and deliver, additional
          Security Documents, within 30 days after request therefor by the Banks and the
          Agent, sufficient to grant to the Agent for the benefit of the Banks liens and
          security interests in any after acquired property of the type described in
          Section 2.11, and (ii) cause each Person becoming a Restricted Subsidiary of the
          Company or any Guarantor from time to time to execute and deliver to the Banks
          and the Agent, within 30 days after such Person becomes a Restricted Subsidiary,
          a Guaranty and Security Documents, together with other related documents
          described in Section 2.5, sufficient to grant to the Agent for the benefit of
          the Banks liens and security interests in all collateral of the type described
          in Section 2.11. The Company shall notify the Banks and the Agent, within 10
          Business Days after the occurrence thereof, of the acquisition of any property
          by the Company or any Guarantor that is not subject to the existing Security
          Documents, any Person’s becoming a Restricted Subsidiary and any other
          event or condition that may require additional action of any nature in order to
          preserve the effectiveness and perfected status of the liens and security
          interests of the Banks and the Agent with respect to such property pursuant to
          the Security Documents.



          



          	 	
                  

          (H)         Addition of Covenants;
          Incorporation by Reference. If at any time the Company shall enter into or be a
          party to any instrument or agreement, including all such instruments or
          agreements in existence as of the date hereof and all such instruments or
          agreements entered into after the date hereof, relating to or amending any terms
          or conditions applicable to any of its Indebtedness of the type described in
          clauses (a), (b), (f) or (g) of the definition of “Indebtedness”, or
          any issuance or placement of its equity which includes covenants, terms,
          conditions or defaults not substantially provided for in this Agreement or more
          favorable to the holder or holders thereof than those provided for in this
          Agreement, then the Company shall promptly so advise the Agent and the Banks.
          Thereupon, if the Agent shall request, upon notice to the Company, the Agent and
          the Banks shall enter into with the Company an amendment to this Agreement or an
          additional agreement (as the Agent may request), providing for substantially the
          same covenants, terms, conditions and defaults as those provided for in such
          instrument or agreement to the extent required and as may be selected by the
          Agent.



          



          	 	
                  

          (I)         Further Assurances. Will,
          and will cause each Guarantor to, execute and deliver within 30 days after
          request therefor by the Banks and the Agent, all further instruments and
          documents and take all further action that the Agent may reasonably request as
          necessary to give effect to, and to aid in the exercise and enforcement of the
          rights and remedies of the Banks under, this Agreement, the Notes and the
          Security Documents, including without limitation causing each lessor of real
          property to the Company or any Guarantor in which inventory is located to
          execute and deliver to the Agent, prior to or upon the commencement of any such
          tenancy, an agreement in form and substance reasonably acceptable to the Banks
          and the Agent duly executed on behalf of such lessor waiving any distraint, lien
          and similar rights with respect to any property subject to the Security
          Documents and agreeing to permit the Banks and the Agent to enter such premises
          in connection therewith.



          







- 42 -



          	 	
                  

          (J)         Use of Proceeds. The Company
          will use the proceeds of the Advances for its general corporate purposes and,
          subject to the requirements of Section 5.1(F), to make loans to the Guarantors
          for their general corporate purposes. The Company will not, nor will it permit
          any Subsidiary to, use any of the proceeds of the Advances to purchase or carry
          any “margin stock” (as defined in Regulation U of the Board of
          Governors of the Federal Reserve System).



          




        5.2    
Negative Covenants. Until the Termination Date and thereafter until payment in full of the
principal of and accrued interest on the Notes and the performance of all other
obligations of the Company and the Guarantors under this Agreement, the Company agrees
that, unless the Required Banks shall otherwise consent in writing it shall not, and shall
not permit any of its Restricted Subsidiaries to:



          	 	
                  

          (A)         Interest Coverage Ratio.
          Permit or suffer the Interest Coverage Ratio for any 12-month period ending on
          the last day of any fiscal quarter to be less than 1.75 to 1.0.



          



          	 	
                  

          (B)         Funded Debt Coverage Ratio.
          Permit or suffer the Funded Debt Coverage Ratio to be greater than (i) 6.0 to
          1.0 at any time during the period ending on March 31, 2004 and (ii) 5.5 to 1.0
          at any time thereafter.



          



          	 	
                  

          (C)         Capital Expenditures.
          Acquire or contract to acquire any fixed asset or make any other capital
          expenditure if the aggregate purchase price and other acquisition costs of all
          such fixed assets acquired and contracted to be acquired and other capital
          expenditures made by the Company or any of its Restricted Subsidiaries during
          any fiscal year of the Company would exceed, on a Consolidated basis, an amount
          equal to $10,000,000 in any fiscal year.



          



          	 	
                  

          (D)         Indebtedness. Create, incur,
          assume or in any manner become liable in respect of, or suffer to exist, any
          Indebtedness other than:



          



          	 	
                  

          (i)         The Advances;



          



          	 	
                  

          (ii)         The Indebtedness described
          in Schedule 5.2(D) hereto, having the same terms as those existing on the date
          of this Agreement;



          



          	 	
                  

          (iii)         Indebtedness of any
          Restricted Subsidiary of the Company owing to the Company or to any other
          Restricted Subsidiary of the Company;



          



          	 	
                  

          (iv)         Senior Unsecured Debt;



          







- 43 -



          	 	
                  

          (v)         Subordinated Debt of the
          Company or any of its Restricted Subsidiaries; and



          



          	 	
                  

          (vi)         Indebtedness owing to any
          Bank that constitutes Hedging Obligations that are incurred for the purpose of
          fixing or hedging interest rate risk with respect to any floating rate
          Indebtedness that is permitted by the terms of this Agreement to be outstanding
          (valued in an amount equal to the highest termination payment, if any, that
          would be payable upon termination for any reason on the date of determination)
          not exceeding in aggregate amount $25,000,000;



          



          	 	
                  

          (vii)         Indebtedness in aggregate
          principal amount at any time outstanding not exceeding $5,000,000 which is
          secured by one or more liens permitted by Section 5.2(E)(viii) hereof; and



          



          	 	
                  

          (viii)         Additional Indebtedness
          not to exceed $5,000,000 in aggregate principal amount at any time outstanding.



          



          	 	
                 

          (E)         Liens. Create, incur or
          suffer to exist any Lien on any of the assets, rights, revenues or property,
          real, personal or mixed, tangible or intangible, whether now owned or hereafter
          acquired, of the Company or any of its Restricted Subsidiaries, other than:



          



          	 	
                  

          (i)         Liens for taxes not
          delinquent or for taxes being contested in good faith by appropriate proceedings
          and as to which adequate financial reserves have been established on its books
          and records in accordance with Generally Accepted Accounting Principles;



          



          	 	
                  

          (ii)         Liens (other than any Lien
          imposed by ERISA or any Environmental Law) created and maintained in the
          ordinary course of business which are not material in the aggregate, and which
          would not have a Material Adverse Effect and which constitute (A) pledges or
          deposits under worker’s compensation laws, unemployment insurance laws or
          similar legislation, (B) good faith deposits in connection with bids, tenders,
          contracts or leases to which the Company or any of its Restricted Subsidiaries
          is a party for a purpose other than borrowing money or obtaining credit,
          including rent security deposits, (C) liens imposed by law, such as those of
          carriers, warehousemen and mechanics, if payment of the obligation secured
          thereby is not yet due, (D) Liens securing taxes, assessments or other
          governmental charges or levies not yet subject to penalties for nonpayment, and
          (E) pledges or deposits to secure public or statutory obligations of the Company
          or any of its Restricted Subsidiaries, or surety, customs or appeal bonds to
          which the Company or any of its Restricted Subsidiaries is a party;



          



          	 	
                  

          (iii)         Liens affecting real
          property which constitute minor survey exceptions or defects or irregularities
          in title, minor encumbrances, easements or reservations of, or rights of others
          for, rights of way, sewers, electric lines, telegraph and telephone lines and
          other similar purposes, or zoning or other restrictions as to the use of such
          real property, provided that all of the foregoing, in the aggregate, do not at
          any time materially detract from the value of said properties or materially
          impair their use in the operation of the businesses of the Company or any of its
          Restricted Subsidiaries;



          







- 44 -



          	 	
                  

          (iv)         Liens created pursuant to
          the Security Documents and Liens expressly permitted by the Security Documents;



          



          	 	
                  

          (v)         Each Lien described in
          Schedule 5.2(E) hereto so long as such Lien shall have the same terms as those
          existing on the date hereof;



          



          	 	
                  

          (vi)         Liens in favor of the
          Company or any of its Restricted Subsidiaries as security for Indebtedness
          permitted by Section 5.2(D)(iii);



          



          	 	
                  

          (vii)         The interest or title of a
          lessor under any lease otherwise permitted under this Agreement with respect to
          the property subject to such lease to the extent performance of the obligations
          of the Company or its Restricted Subsidiary thereunder is not delinquent by more
          than 30 days or is being contested in good faith; and



          



          	 	
                  

          (viii)         Any lien created to
          secure payment of a portion of the purchase price of any tangible fixed asset,
          including, without limitation, real estate (including improvements thereto) and
          vehicles, acquired by the Company or any of its Restricted Subsidiaries created
          or suffered to exist upon such fixed asset if the outstanding principal amount
          of the Indebtedness secured by such Lien does not at any time exceed the
          purchase price paid by the Company or such Subsidiary for such fixed asset and
          the aggregate principal amount at any time outstanding of all Indebtedness
          secured by such Liens does not exceed $5,000,000, provided that such Lien does
          not encumber any other asset at any time owned by the Company or such Restricted
          Subsidiary, and provided, further, that not more than one such Lien shall
          encumber such fixed asset at any one time.



          



          	 	
                  

          (F)         Merger; Acquisitions; Etc.
          Subject to the limitations and exceptions contained in Section 5.2(K), purchase
          or otherwise acquire, whether in one or a series of transactions, all or a
          substantial portion of the business, assets, rights, revenues or property, real,
          personal or mixed, tangible or intangible, of any Person (other than a
          Restricted Subsidiary), or all or a substantial portion of the Capital Stock of
          any other Person (other than a Restricted Subsidiary); nor merge or consolidate
          or amalgamate with any other Person or take any other action having a similar
          effect (other than the Glazer’s Transaction), provided, however, that this
          Section 5.2(F) shall not prohibit any merger or acquisition, including but not
          limited to those in which the consideration paid by the Company or a Restricted
          Subsidiary consists of its Capital Stock, if (i) the Company shall be the
          surviving or continuing corporation thereof, (ii) immediately before and after
          such merger or acquisition, no Default or Event of Default shall exist or shall
          have occurred and be continuing and the representations and warranties contained
          in Article IV shall be true and correct on and as of the date thereof (both
          before and after such merger or acquisition is consummated) as if made on the
          date such merger or acquisition is consummated, (iii) the purchase is
          consummated pursuant to a negotiated acquisition agreement on a non-hostile
          basis and approved by the target company’s board of directors (and
          shareholders, if necessary) prior to the consummation of the acquisition, and
          (iv) the Company shall have provided to the Agent before such merger or
          acquisition pro forma financial statements reflecting the occurrence of such
          merger or acquisition demonstrating compliance with the covenants contained in
          this Agreement, certified by a duly authorized officer of the Company.



          







- 45 -



          	 	
                  

          (G)         Disposition of Assets; Etc.
          Sell, lease, license, transfer, assign or otherwise dispose of all or a
          substantial portion of its business, assets, rights, revenues or property, real,
          personal or mixed, tangible or intangible, whether in one or a series of
          transactions, other than inventory sold in the ordinary course of business upon
          customary credit terms and sales of obsolete material or equipment, provided,
          however, that this Section 5.2(G) shall not prohibit any such sale, lease,
          license, transfer, assignment or other disposition if (i) the aggregate book
          value (disregarding any write-downs of such book value other than ordinary
          depreciation and amortization) of all of the business, assets, rights, revenues
          and property disposed of (excluding the value of any Capital Stock of U.S.
          Beverage Company disposed of) after the date of this Agreement shall be less
          than three percent (3%) of such aggregate book value of the total assets of the
          Company or such Restricted Subsidiary, as the case may be, or (ii) with respect
          to a Restricted Subsidiary at least seventy-five percent (75%) of the
          consideration therefor received by such Restricted Subsidiary is either cash or
          the assumption of liabilities that are assumed by the transferee of any such
          assets pursuant to a novation agreement that releases the Restricted Subsidiary
          from further liability, and the cash proceeds are paid to the Company in
          reduction of such Restricted Subsidiary’s Indebtedness to the Company; and
          (iii) in the case of both (i) and (ii) above, immediately before and after such
          transaction no Default or Event of Default shall exist or shall have occurred
          and be continuing. Notwithstanding the above, the Company or any of its
          Subsidiaries may (a) sell the Capital Stock of U.S. Beverage Company; (b)
          transfer its assets primarily used in its U.S. Beverage division to USB-LLC, (c)
          sell beer franchises, brand labels and distribution rights, and its ownership
          rights, trademarks, trademark registrations, brand names and other rights with
          respect to its rectified products, for fair market value including cash royalty
          payments or cash payments over time and (d) sell the Capital Stock of any of
          Commonwealth Wine & Spirits, LLC, Goose Island Beer Co. and Extreme Beverage
          Company, LLC.



          



          	 	
                  

          (H)         Nature of Business. Make any
          substantial change in the nature of its business from that engaged in on the
          date of this Agreement or engage in any other businesses other than those in
          which it is engaged on the date of this Agreement, other than businesses
          reasonably related thereto.



          







- 46 -



          	 	
                  

          (I)         Restricted Payments. Make,
          pay, declare or authorize any Restricted Payment, provided, however, that (i)
          the Company may make Restricted Payments with respect to any taxable year of the
          Company in the total amount not exceeding the federal, state and local income
          taxes incurred by attribution to the Company’s shareholders of the S
          corporation taxable income of the Company for such taxable year, so long as
          there shall not then exist a Default or Event of Default, and so long as prior
          to such distribution the chief financial officer of the Company shall deliver to
          the Agent a certificate in form acceptable to the Agent stating that such
          distribution is in compliance with this Section 5.2(I), and (ii) the Company and
          the Restricted Subsidiaries may make (a) redemptions of the Capital Stock of the
          Company or any Restricted Subsidiary owned by (1) Martin H. Bart and Joseph J.
          Fisch, Jr. as of the Effective Date so long as no Default or Event of Default
          has occurred and is continuing and (2) Norma M. Johnston as of the Effective
          Date, in an aggregate amount for clauses (1) and (2) not to exceed $15,000,000
          plus the aggregate amount of all life insurance proceeds received by the Company
          to the extent used to fund such repurchase, (b) Restricted Payments otherwise
          permitted under Sections 5.2(E) or (K), and (c) additional Restricted Payments,
          provided that the aggregate of such additional Restricted Payments made after
          the Effective Date shall be less than the sum of (A) 50% of Consolidated Net
          Income for the period (taken as one accounting period) from the beginning of the
          first fiscal quarter commencing after January 25, 1999 to the end of the
          Company’s most recently ended fiscal quarter for which internal financial
          statements are available at the time of such Restricted Payment (or, if such
          Consolidated Net Income for such period is a deficit, less 100% of such
          deficit), plus (B) 100% of the aggregate net cash proceeds received by the
          Company from the issue or sale since January 25, 1999 of Capital Stock of the
          Company (other than Capital Stock sold to a Subsidiary of the Company) and 100%
          of the capital contributions received by the Company after January 25, 1999 in
          cash, plus (C) one year and one day after the date of such receipt, 100% of the
          cash payments received by the Company after January 25, 1999 on a Company
          Shareholder Note Receivable, plus (D) to the extent that any Investment
          permitted under Section 5.2(K) hereof that was made after January 25, 1999 is
          sold for cash or otherwise liquidated or repaid for cash, the lesser of (x) the
          cash return of capital with respect to such Investment (less the cost of
          disposition, if any) and (y) the initial amount of such Investment, plus (E) 50%
          of any dividends received by the Company or a Restricted Subsidiary after
          January 25, 1999 from an Unrestricted Subsidiary, to the extent that such
          dividends were not otherwise included in Consolidated Net Income for such
          period, plus (F) provided that no Default or Event of Default has occurred and
          is continuing, $2,500,000.



          



          	 	
                  

          (J)         Capital Leases. Permit or
          suffer the aggregate outstanding capitalized amount of all obligations under
          Capital Leases of the Company and its Restricted Subsidiaries at any time to
          exceed $5,000,000, excluding from this amount obligations on Capital Leases
          existing on the Effective Date and described on Schedule 5.2(J).



          







- 47 -



          	 	
                  

          (K)         Investments. Make any
          Investments other than (i) Investments by the Company or any Restricted
          Subsidiary in any Restricted Subsidiary; (ii) extensions of trade credit made in
          the ordinary course of business on customary credit terms and commission, travel
          and similar advances made to officers and employees in the ordinary course of
          business; (iii) Investments in commercial paper of any United States issuer
          having the highest rating then given by Moody’s Investors Service, Inc., or
          Standard & Poor’s Ratings Services, a division of The McGraw-Hill
          Companies, Inc., direct obligations of and obligations fully guaranteed by the
          United States of America or any agency or instrumentality thereof, or
          certificates of deposit of any commercial bank which is a member of the Federal
          Reserve System and which has capital, surplus and undivided profit (as shown on
          its most recently published statement of condition) aggregating not less than
          $100,000,000, provided, however, that each of the foregoing Investments has a
          maturity date not later than one year after the acquisition thereof by the
          Company or any of its Restricted Subsidiaries; (iv) Investments in joint venture
          or similar arrangements, exclusive of Investments described in subsection (iii)
          above, and (except for loans and advances of credit) Unrestricted Subsidiaries
          in which the aggregate of all such Investments does not exceed, at any one time
          outstanding, an amount equal to 10% of Consolidated Tangible Assets; (v) those
          Investments described in Schedule 5.2(K) hereto, having the same terms as
          existing on the date of this Agreement, but no extension or renewal thereof
          shall be permitted; (vi) redemptions of the Capital Stock of the Company or any
          Restricted Subsidiary owned on the Effective Date by Martin H. Bart, Norma M.
          Johnston and Joseph J. Fisch, Jr. as of the Effective Date to the extent
          permitted under Section 5.1(I); (vii) Investments permitted under Section
          5.2(F); and (viii) Investments consisting of purchases of Senior Unsecured Debt
          permitted under Section 5.2(O).



          



          	 	
                  

          (L)         Transactions with
          Affiliates. Enter into, become a party to, or become liable in respect of, any
          contract or undertaking with any Affiliate except in the ordinary course of
          business and on terms not less favorable to the Company or such Restricted
          Subsidiary than those which could be obtained if such contract or undertaking
          were an arm’s length transaction with a Person other than an Affiliate.



          



          	 	
                  

          (M)         Sale and Leaseback
          Transactions. Become or remain liable in any way, whether directly or by
          assignment or as a guarantor or other contingent obligor, for the obligations of
          the lessee or user under any lease or contract for the use of any real or
          personal property if such property is owned on the date of this Agreement or
          thereafter acquired by the Company or any of its Restricted Subsidiaries and has
          been or is to be sold or transferred to any other Person and was, is or will be
          used by the Company or any such Restricted Subsidiary for substantially the same
          purpose as such property was used by the Company or such Restricted Subsidiary
          prior to such sale or transfer.



          







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          (N)         Payments and Modification of
          Subordinated Debt. Make any optional payment, prepayment or redemption of any
          Subordinated Debt, nor amend or modify, or consent or agree to any amendment or
          modification, which would shorten any maturity or increase the amount of any
          payment of principal or increase the rate (or require earlier payment) of
          interest on any such Subordinated Debt, nor amend the subordination provisions
          of any agreement under which any Subordinated Debt is issued or created or
          otherwise related thereto, nor enter into any agreement or arrangement providing
          for the defeasance of any Subordinated Indebtedness.



          



          	 	
                  

          (O)         Payments and Modification of
          Senior Unsecured Debt. Make any optional payment, prepayment or any optional or
          mandatory redemption of, or purchase, any Senior Unsecured Debt, nor amend or
          modify, or consent or agree to any amendment or modification, which would
          shorten any maturity or increase the amount of any payment of principal or
          increase the rate (or require earlier payment) of interest on any such Senior
          Unsecured Debt, nor enter into any agreement or arrangement providing for the
          defeasance of any Senior Unsecured Debt; provided, that the Company may (A) make
          redemptions of Senior Unsecured Debt that are (1) permitted or required by the
          terms of the indenture governing the Senior Unsecured Debt from the cash
          proceeds of a sale of common stock of the Company or (2) required by the terms
          of the indenture governing the Senior Unsecured Debt from the cash proceeds of a
          sale of assets of the Company or any of its Restricted Subsidiaries (other than
          assets subject to a Lien in favor of the Agent) to the extent such cash proceeds
          are not reinvested in the Company’s and its Restricted Subsidiaries’
          assets and (B) purchase in one or more transactions up to $20,000,000 in
          aggregate principal amount of Senior Unsecured Debt at par or less than par, if
          (i) immediately before and after such purchase or redemption, no Default or
          Event of Default shall exist or shall have occurred and be continuing, (ii)
          except as may be set forth in any periodic report filed by the Company with the
          Securities and Exchange Commission, the representations and warranties contained
          in Article IV shall be true and correct on and as of the date thereof (both
          before and after such purchase or redemption is consummated) as if made on the
          date such purchase or redemption is consummated, (iii) the Company shall have
          provided to the Agent before such purchase or redemption pro forma financial
          statements reflecting the occurrence of such purchase or redemption
          demonstrating compliance with the covenants contained in this Agreement,
          certified by a duly authorized officer of the Company, and (iv) after giving
          effect to such purchase or redemption, Availability shall be greater than or
          equal to $15,000,000. For purposes of this Section 5.1(O),
          “Availability” shall mean an amount equal to (a) the lesser of the
          Aggregate Commitment and the Borrowing Base then in effect, minus (b) the
          aggregate outstanding principal amount of all Advances.



          



          	 	
                  

          (P)         Negative Pledge Limitation.
          Enter into any agreement with any Person other than the Banks pursuant hereto
          which prohibits or limits the ability of the Company or any Subsidiary to
          create, incur, assume or suffer to exist any Lien in favor of the Agent and the
          Banks upon any of its assets, rights, revenues or property, real, personal or
          mixed, tangible or intangible, whether now owned or hereafter acquired, except
          for any such prohibitions or limitations contained in the indenture governing
          the Senior Unsecured Debt as in effect on the Effective Date.



          







- 49 -



          	 	
                  

          (Q)         Inconsistent Agreements.
          Enter into any agreement containing any provision which would be violated or
          breached by this Agreement or any of the transactions contemplated hereby or by
          performance by the Company or any of its Restricted Subsidiaries of its
          obligations in connection therewith.



          



          	 	
                  

          (R)         Accounting Changes. The
          Company shall not change its fiscal year or make any significant changes (i) in
          accounting treatment and reporting practices except as permitted by generally
          accepted accounting principles and disclosed to the Banks, or (ii) in tax
          reporting treatment except as permitted by law and disclosed to the Banks.



          



ARTICLE VI:    DEFAULT




        6.1    
Events of Default. The occurrence of any one of the following events or conditions shall
be deemed an “Event of Default” hereunder unless waived pursuant to Section 8.1:



          	 	
                  

          (A)         Nonpayment. The Company
          shall fail to pay (i) any principal of the Notes or any reimbursement obligation
          under Section 3.3 (whether by deemed disbursement of a Loan or otherwise) when
          due and payable hereunder, or (ii) interest on the Notes or any fees or any
          other amount within five days after such interest, fee or other amount becomes
          due and payable hereunder; or



          



          	 	
                  

          (B)         Misrepresentation. Any
          representation or warranty made by the Company in Article IV hereof or by the
          Company or any Guarantor in any Security Document or any other certificate,
          report, financial statement or other document furnished by or on behalf of the
          Company or any Guarantor in connection with this Agreement, shall prove to have
          been incorrect in any material respect when made or deemed made; or



          



          	 	
        
(C)         Certain Covenants.
The Company or any Guarantor shall fail to perform or observe any term, covenant
or agreement contained in (i) subsection (J) of Section 5.1 or
Section 5.2, (ii) subsection (D) of Section 5.1 and such failure
under this clause (ii) shall remain unremedied for 5 Business Days after the
occurrence thereof, or (iii) any other subsection of Section 5.1 and any
such failure under this clause (iii) shall remain unremedied for 30
calendar days after written notice thereof shall have been given to the Company
or such Guarantor, as the case may be, by the Agent; or



          



          	 	
                  

          (D)         Other Defaults. The Company
          or any Guarantor shall fail to perform or observe any other term, covenant or
          agreement contained in this Agreement or in any Security Document, and any such
          failure shall remain unremedied for 30 calendar days after notice thereof shall
          have been given to the Company or such Guarantor, as the case may be, by the
          Agent (or such longer or shorter period of time as may be specified in such
          Security Document); or



          







- 50 -



          	 	
                  

          (E)        Cross Default. The Company
          or any Restricted Subsidiary shall fail to pay any part of the principal of, the
          premium, if any, or the interest on, or any other payment of money due under any
          of its Indebtedness (other than Indebtedness hereunder), beyond any period of
          grace provided with respect thereto, which individually or together with other
          such Indebtedness as to which any such failure exists has an aggregate
          outstanding principal amount in excess of $1,000,000; or if the Company or any
          Restricted Subsidiary fails to perform or observe any other term, covenant or
          agreement contained in, or if any other event or condition occurs or exists
          under, any agreement, document or instrument evidencing or securing any such
          Indebtedness having such aggregate outstanding principal amount, or under which
          any such Indebtedness was incurred, issued or created, beyond any period of
          grace, if any, provided with respect thereto if the effect of such failure is
          either (i) to cause, or permit the holders of such Indebtedness (or a trustee on
          behalf of such holders) to cause, any payment in respect of such Indebtedness to
          become due prior to its due date or (ii) to permit the holders of such
          Indebtedness (or a trustee on behalf of such holders) to elect a majority of the
          board of directors of the Company; or



          



          	 	
                 

          (F)         Judgments. One or more
          judgments or orders for the payment of money in an aggregate amount of
          $1,000,000 or more shall be rendered against the Company or any Restricted
          Subsidiary, or any other judgment or order (whether or not for the payment of
          money) shall be rendered against or shall affect the Company or any Restricted
          Subsidiary which could reasonably be expected to have a Material Adverse Effect,
          and either (i) such judgment or order shall have remained unsatisfied and the
          Company or such Restricted Subsidiary shall not have taken action necessary to
          stay enforcement thereof by reason of pending appeal or otherwise, prior to the
          expiration of the applicable period of limitations for taking such action or, if
          such action shall have been taken, a final order denying such stay shall have
          been rendered, or (ii) enforcement proceedings shall have been commenced by any
          creditor upon any such judgment or order; or



          



          	 	
                  

          (G)         ERISA. The occurrence of a
          Reportable Event that results in or could result in liability of the Company,
          any Restricted Subsidiary or their ERISA Affiliates to the PBGC or to any Plan,
          individually or in the aggregate in excess of $1,000,000, and such Reportable
          Event is not corrected within thirty (30) days after the occurrence thereof; or
          the occurrence of any Reportable Event which could constitute grounds for
          termination of any Plan of the Company, any Restricted Subsidiary or their ERISA
          Affiliates by the PBGC or for the appointment by the appropriate United States
          District Court of a trustee to administer any such Plan and such Reportable
          Event is not corrected within thirty (30) days after the occurrence thereof; or
          the filing by the Company, any Restricted Subsidiary or any of their ERISA
          Affiliates of a notice of intent to terminate a Plan or the institution of other
          proceedings to terminate a Plan; or the Company, any Restricted Subsidiary or
          any of their ERISA Affiliates shall fail to pay when due any liability to the
          PBGC or to a Plan individually or in the aggregate in excess of $1,000,000; or
          the PBGC shall have instituted proceedings to terminate, or to cause a trustee
          to be appointed to administer, any Plan of the Company, any Guarantor,
          Restricted Subsidiary or any of their ERISA Affiliates; or any Person engages in
          a Prohibited Transaction with respect to any Plan which results in or could
          result in liability of the Company, Restricted Subsidiary, any of their ERISA
          Affiliates, any Plan of the Company, any Restricted Subsidiary or their ERISA
          Affiliates or fiduciary of any such Plan, individually or in the aggregate in
          excess of $1,000,000; or failure by the Company, any Restricted Subsidiary or
          any of their ERISA Affiliates to make a required installment or other payment to
          any Plan within the meaning of Section 302(f) of ERISA or Section 412(n) of the
          Code that results in or could result in liability of the Company, any Restricted
          Subsidiary or any of their ERISA Affiliates to the PBGC or any Plan,
          individually or in the aggregate in excess of $1,000,000; or the withdrawal of
          the Company, any Restricted Subsidiary or any of their ERISA Affiliates from a
          Plan during a plan year in which it was a “substantial employer” as
          defined in Section 4001(9a)(2) of ERISA; or, since the Effective Date, the
          Company, any Restricted Subsidiary or any of their ERISA Affiliates has
          incurred, or is reasonably expected to incur, pursuant to Section 4201 of ERISA,
          any withdrawal liability to Multiemployer Plans; or



          







- 51 -



          	 	
                  

          (H)         Insolvency, Etc. The Company
          or any Restricted Subsidiary shall be dissolved or liquidated (or any judgment,
          order or decree therefor shall be entered), or shall generally not pay its debts
          as they become due, or shall admit in writing its inability to pay its debts
          generally, or shall make a general assignment for the benefit of creditors, or
          shall institute, or there shall be instituted against the Company or any
          Restricted Subsidiary, any proceeding or case seeking to adjudicate it a
          bankrupt or insolvent or seeking liquidation, winding up, reorganization,
          arrangement, adjustment, protection, relief or composition of it or its debts
          under any law relating to bankruptcy, insolvency or reorganization or relief or
          protection of debtors or seeking the entry of an order for relief, or the
          appointment of a receiver, trustee, custodian or other similar official for it
          or for any substantial part of its assets, rights, revenues or property, and, if
          such proceeding is instituted against the Company or such Restricted Subsidiary
          and is being contested by the Company or such Restricted Subsidiary, as the case
          may be, in good faith by appropriate proceedings, such proceeding shall remain
          undismissed or unstayed for a period of 60 days; or the Company or such
          Restricted Subsidiary shall take any action (corporate or other) to authorize or
          further any of the actions described above in this subsection; or



          



          	 	
                  

          (I)         Loan Documents. Any event of
          default described in any Loan Document (other than this Agreement) shall have
          occurred and be continuing, or any Loan Document shall at any time for any
          reason cease to be valid and binding and enforceable against any obligor
          thereunder, or the validity, binding effect or enforceability thereof shall be
          contested by any Person, or any obligor shall deny that it has any or further
          liability or obligation thereunder, or any Loan Document shall be terminated,
          invalidated or set aside, or be declared ineffective or inoperative or in any
          way cease to give or provide to the Banks and the Agent the benefits purported
          to be created thereby; or



          







- 52 -



          	 	
                  

          (J)         Control. James LaCrosse, his
          spouse, and trusts established by him or his spouse for the benefit of his
          spouse or descendants, shall cease to own directly or indirectly free and clear
          of all Liens at least 65% of the securities of the Company of each class having
          ordinary voting power for the election of directors (other than securities which
          have such power only by reason of the happening of a contingency); or any Person
          other than James LaCrosse, his spouse, trusts established by him or his spouse
          for the benefit of his spouse or descendants, and Norma Johnston shall possess,
          directly or indirectly, the power to direct or cause the direction of the
          management and policies of the Company, whether through the ownership of voting
          securities or by contract or otherwise.



          



        6.2    Remedies.



          	 	
                  

          (A)         Upon the occurrence and
          during the continuance of any Event of Default, the Agent may and, upon being
          directed to do so by the Required Banks, shall by notice to the Company (i)
          terminate the Commitments or (ii) declare the outstanding principal of, and
          accrued interest on, the Notes, all unpaid reimbursement obligations in respect
          of drawings under Letters of Credit and all other amounts owing under this
          Agreement to be immediately due and payable, or (iii) demand immediate delivery
          of cash collateral, and the Company agrees to deliver such cash collateral upon
          demand, in an amount equal to the maximum amount that may be available to be
          drawn at any time prior to the stated expiry of all outstanding Letters of
          Credit, or any one or more of the foregoing, whereupon the Commitments shall
          terminate forthwith and all such amounts, including such cash collateral, shall
          become immediately due and payable, provided that in the case of any event or
          condition described in Section 6.1(H) with respect to the Company or any
          Restricted Subsidiary, the Commitments shall automatically terminate forthwith
          and all such amounts, including such cash collateral, shall automatically become
          immediately due and payable without notice; in all cases without demand,
          presentment, protest, diligence, notice of dishonor or other formality, all of
          which are hereby expressly waived. Such cash collateral delivered in respect of
          outstanding Letters of Credit shall be deposited in a special cash collateral
          account to be held by the Agent as collateral security for the payment and
          performance of the Company’s obligations under this Agreement to the Banks
          and the Agent.



          



          	 	
                  

          (B)         The Agent may and, upon
          being directed to do so by the Required Banks, shall, in addition to the
          remedies provided in Section 6.2(A), exercise and enforce any and all other
          rights and remedies available to it, whether arising under this Agreement, the
          Notes or any Security Document or under applicable law, in any manner deemed
          appropriate by the Agent, including suit in equity, action at law, or other
          appropriate proceedings, whether for the specific performance (to the extent
          permitted by law) of any covenant or agreement contained in this Agreement or in
          the Notes or any Security Document or in aid of the exercise of any power
          granted in this Agreement, the Notes or any Security Document.



          







- 53 -



          	 	
                  

          (C)         Upon the occurrence and
          during the continuance of any Event of Default, each Bank may at any time and
          from time to time, without notice to the Company or any Guarantor (any
          requirement for such notice being expressly waived by the Company and each
          Guarantor) set off and apply against any and all of the obligations of the
          Company and each Guarantor now or hereafter existing under this Agreement,
          whether owing to such Bank or any other Bank or the Agent, any and all deposits
          (general or special, time or demand, provisional or final) at any time held and
          other indebtedness at any time owing by such Bank to or for the credit or the
          account of the Company or any Guarantor and any property of the Company or any
          Guarantor from time to time in possession of such Bank, irrespective of whether
          or not such Bank shall have made any demand hereunder and although such
          obligations may be contingent and unmatured. Each of the Company and the
          Guarantors hereby grants to the Banks and the Agent a lien on and security
          interest in all such deposits, indebtedness and property as collateral security
          for the payment and performance of the obligations of the Company and each
          Guarantor under this Agreement. The rights of such Bank under this Section
          6.2(C) are in addition to other rights and remedies (including, without
          limitation, other rights of setoff) which such Bank may have.



          



ARTICLE VII:    THE AGENT AND THE BANKS




        7.1    
Appointment and Authorization. Each Bank hereby irrevocably appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement, the Notes and the Security Documents as are
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto. The provisions of this Article VII
are solely for the benefit of the Agent and the Banks, and neither the Company
nor any Guarantor shall have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Banks and does not assume
and shall not be deemed to have assumed any obligation towards or relationship
of agency or trust with or for the Company.




        7.2    
Agent and Affiliates. LaSalle Bank National Association in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and may
exercise or refrain from exercising the same as though it were not the Agent. LaSalle Bank
National Association and its affiliates may (without having to account therefor to any
Bank) accept deposits from, lend money to, and generally engage in any kind of banking,
trust, financial advisory or other business with the Company, any Guarantor or any of
their respective Restricted Subsidiaries as if it were not acting as Agent hereunder, and
may accept fees and other consideration therefor without having to account for the same to
the Banks.




        7.3    
Scope of Agent’s Duties. The Agent shall have no duties or responsibilities except
those expressly set forth herein, and shall not, by reason of this Agreement, have a
fiduciary relationship with any Bank, and no implied covenants, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or shall otherwise exist
against the Agent. As to any matters not expressly provided for by this Agreement
(including, without limitation, collection and enforcement action under the Notes and the
Security Documents), the Agent shall not be required to exercise any discretion or take
any action, but the Agent shall take such action or omit to take any action pursuant to
the reasonable written instructions of the Required Banks and may request instructions
from the Required Banks. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, pursuant to the written instructions of the Required Banks (or all
of the Banks, as the case may be, in accordance with the requirements of this Agreement),
which instructions and any action or omission pursuant thereto shall be binding upon all
of the Banks; provided, however, that the Agent shall not be required to act or omit to
act if, in the judgment of the Agent, such action or omission may expose the Agent to
personal liability or is contrary to this Agreement, the Notes or the Security Documents
or applicable law.







- 54 -




        7.4    
Reliance by Agent. The Agent shall be entitled to rely upon any certificate, notice,
document or other communication (including any cable, telegram, telex, facsimile
transmission or oral communication) believed by it to be genuine and correct and to have
been sent or given by or on behalf of a proper Person. The Agent may treat the payee of
any Note as the holder thereof unless and until the Agent receives written notice of the
assignment thereof pursuant to the terms of this Agreement signed by such payee and the
Agent receives the written agreement of the assignee that such assignee is bound hereby to
the same extent as if it had been an original party hereto. The Agent may employ agents
(including without limitation collateral agents) and may consult with legal counsel (who
may be counsel for the Company), independent public accountants and other experts selected
by it and shall not be liable to the Banks, except as to money or property received by it
or its authorized agents, for the negligence or misconduct of any such agent selected by
it with reasonable care or for any action taken or omitted to be taken by it in good faith
in accordance with the advice of such counsel, accountants or experts.




        7.5    
Default. The Agent shall not be deemed to have knowledge of the occurrence of any Default
or Event of Default, unless the Agent has received written notice from a Bank or the
Company or any Guarantor specifying such Default or Event of Default and stating that such
notice is a “Notice of Default”. In the event that the Agent receives such a
notice, the Agent shall give written notice thereto to the Banks.




        7.6    
Liability of Agent. Neither the Agent nor any of its directors, officers, agents, or
employees shall be liable to the Banks for any action taken or not taken by it or them in
connection herewith with the consent or at the request of the Required Banks or in the
absence of its or their own gross negligence or willful misconduct. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any recital, statement, warranty or
representation contained in this Agreement, any Note or any Security Document, or in any
certificate, report, financial statement or other document furnished in connection with
this Agreement, (ii) the performance or observance of any of the covenants or agreements
of the Company or any Guarantor, (iii) the satisfaction of any condition specified in
Article II hereof, or (iv) the validity, effectiveness, legal enforceability, value or
genuineness of this Agreement, Notes or the Security Documents or any collateral subject
thereto or any other instrument or document furnished in connection herewith.







- 55 -




        7.7    
Nonreliance on Agent and Other Banks. Each Bank acknowledges and agrees that it has,
independently and without reliance on the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own credit analysis of
the Company and the Guarantors and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to make its
own analysis and decision in taking or not taking action under this Agreement. The Agent
shall not be required to keep itself informed as to the performance or observance by the
Company or any Guarantor of this Agreement, the Notes or the Security Documents or any
other documents referred to or provided for herein or to inspect the properties or books
of the Company or any Guarantor and, except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any information
concerning the affairs, financial condition or business of the Company, any Guarantor or
any of their respective Restricted Subsidiaries which may come into the possession of the
Agent or any of its affiliates.




        7.8    
Indemnification. The Banks agree to indemnify the Agent (to the extent not reimbursed by
the Company or any Guarantor, but without limiting any obligation of the Company or any
Guarantor to make such reimbursement), ratably according to the respective principal
amounts of the Advances then outstanding made by each of them (or if no Advances are at
the time outstanding, ratably according to the respective amounts of their Commitments),
from and against any and all claims, damages, losses, liabilities, costs or expenses of
any kind or nature whatsoever (including, without limitation, fees and disbursements of
counsel) which may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or the transactions contemplated hereby or
any action taken or omitted by the Agent under this Agreement, provided, however, that no
Bank shall be liable for any portion of such claims, damages, losses, liabilities, costs
or expenses resulting from the Agent’s gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank agrees to reimburse the Agent promptly upon
demand for its ratable share of any out-of-pocket expenses (including without limitation
fees and expenses of counsel) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Company or any Guarantor, but without limiting the
obligation of the Company or any Guarantor to make such reimbursement. Each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any amounts owing to the
Agent by the Banks pursuant to this Section. If the indemnity furnished to the Agent under
this Section shall, in the judgment of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity from the Banks and cease, or not commence, to take
any action until such additional indemnity is furnished.







- 56 -




        7.9    
Successor Agent. The Agent may resign as such at any time upon ten days’ prior
written notice to the Company and the Banks. In the event of any such resignation, the
Required Banks shall, by an instrument in writing delivered to the Company and the Agent,
appoint a successor, which shall be a commercial bank organized under the laws of the
United States or any State thereof and having a combined capital and surplus of at least
$500,000,000. If a successor is not so appointed or does not accept such appointment
before the Agent’s resignation becomes effective, the retiring Agent may appoint a
temporary successor to act until such appointment by the Required Banks is made and
accepted or if no such temporary successor is appointed as provided above by the retiring
Agent, the Required Banks shall thereafter perform all the duties of the Agent hereunder
until such appointment by the Required Banks is made and accepted. Any successor to the
Agent shall execute and deliver to the Company and the Banks an instrument accepting such
appointment and thereupon such successor Agent, without further act, deed, conveyance or
transfer shall become vested with all of the properties, rights, interests, powers,
authorities and obligations of its predecessor hereunder with like effect as if originally
named as Agent hereunder. Upon request of such successor Agent, the Company and the
retiring Agent shall execute and deliver such instruments of conveyance, assignment and
further assurance and do such other things as may reasonably be required for more fully
and certainly vesting and confirming in such successor Agent all such properties, rights,
interests, powers, authorities and obligations. The provisions of this Article VII shall
thereafter remain effective for such retiring Agent with respect to any actions taken or
omitted to be taken by such Agent while acting as the Agent hereunder.




        7.10    
Sharing of Payments. The Banks agree among themselves that, in the event that any Bank
shall obtain payment in respect of any Advance or any other obligation owing to the Banks
under this Agreement through the exercise of a right of set-off, banker’s lien,
counterclaim or otherwise in excess of its ratable share of payments received by all of
the Banks on account of the Advances and other obligations (or if no Advances are
outstanding, ratably according to the respective amounts of the Commitments), such Bank
shall promptly purchase from the other Banks participations in such Advances and other
obligations in such amounts, and make such other adjustments from time to time, as shall
be equitable to the end that all of the Banks share such payment in accordance with such
ratable shares. The Banks further agree among themselves that if payment to a Bank
obtained by such Bank through the exercise of a right of set-off, banker’s lien,
counterclaim or otherwise as aforesaid shall be rescinded or must otherwise be restored,
each Bank which shall have shared the benefit of such payment shall, by repurchase of
participations theretofore sold, return its share of that benefit to each Bank whose
payment shall have been rescinded or otherwise restored. Each of the Company and the
Guarantors agrees that any Bank so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off, banker’s
lien or counterclaim, with respect to such participation as fully as if such Bank were a
holder of such Advance or other obligation in the amount of such participation. The Banks
further agree among themselves that, in the event that amounts received by the Banks and
the Agent hereunder are insufficient to pay all such obligations or insufficient to pay
all such obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the Banks under
this Agreement. Except as otherwise expressly provided in this Agreement, if any Bank or
the Agent shall fail to remit to the Agent or any other Bank an amount payable by such
Bank or the Agent to the Agent or such other Bank pursuant to this Agreement on the date
when such amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to the Agent
or such other Bank at a rate per annum equal to the rate at which borrowings are available
to the payee in its overnight federal funds market. It is further understood and agreed
among the Banks and the Agent that if the Agent shall engage in any other transactions
with the Company and shall have the benefit of any collateral or security therefor which
does not expressly secure the obligations arising under this Agreement except by virtue of
a so-called dragnet clause or comparable provision, the Agent shall be entitled to apply
any proceeds of such collateral or security first in respect of the obligations arising in
connection with such other transaction before application to the obligations arising under
this Agreement.







- 57 -



ARTICLE VIII:    MISCELLANEOUS



8.1    Amendments, Etc. 



          	 	
                  

          (A)         No amendment, modification,
          termination or waiver of any provision of this Agreement nor any consent to any
          departure therefrom shall be effective unless the same shall be in writing and
          signed by the Company and Required Banks and, to the extent any rights or duties
          of the Agent may be affected thereby, the Agent, provided, however, that no such
          amendment, modification, termination, waiver or consent shall, without the
          consent of the Agent and all of the Banks, (i) authorize or permit the extension
          of time for, or any reduction of the amount of, any payment of the principal of,
          or interest on, the Notes or any Letter of Credit reimbursement obligation, or
          any fees or other amount payable hereunder, (ii) except as set forth in Section
          2.5(C), amend, extend or terminate the respective Commitments of any Bank set
          forth on the signature pages hereof, or modify the provisions of this Section
          regarding the taking of any action under this Section or the definition of
          Required Banks or any provision of this Agreement requiring the consent of all
          of the Banks, (iii) provide for the discharge of any Guarantor or the release of
          any collateral subject to any Security Document, or (iv) modify any other
          provision of this Agreement which by its terms requires the consent of all of
          the Banks.



          



          	 	
                  

          (B)         Any such amendment, waiver
          or consent shall be effective only in the specific instance and for the specific
          purpose for which given.



          



          	 	
                  

          (C)         Notwithstanding anything
          herein to the contrary, no Bank that is in default of any of its obligations,
          covenants or agreements under this Agreement shall be entitled to vote (whether
          to consent or to withhold its consent) with respect to any amendment,
          modification, termination or waiver of any provision of this Agreement or any
          departure therefrom or any direction from the Banks to the Agent, and, for
          purposes of determining the Required Banks at any time when any Bank is in
          default under this Agreement, the Commitments and Advances of such defaulting
          Banks shall be disregarded.



          







- 58 -



          	 	
                  

          (D)         If any Bank refuses to
          consent to certain proposed changes, waivers, discharges or terminations with
          respect to this Agreement requiring the consent of all Banks (or all affected
          Banks) pursuant to this Section 8.1 and the same have been approved by the
          Required Banks, the Company may designate another bank which is acceptable to
          the Agent in its reasonable discretion (such other bank being called a
          “Replacement Bank”) to purchase the Loans of such Bank and such
          Bank’s rights hereunder, without recourse to or warranty by, or expense to,
          such Bank, for a purchase price equal to the outstanding principal amount of the
          Loans payable to such Bank plus any accrued but unpaid interest on such Loans
          and all accrued but unpaid fees owed to such Bank and any other amounts payable
          to such Bank under this Agreement, and to assume all the obligations of such
          Bank hereunder, and, upon such purchase and assumption (pursuant to an
          Assignment and Acceptance), such Bank shall no longer be a party hereto or have
          any rights hereunder (other than rights with respect to indemnities and similar
          rights applicable to such Bank prior to the date of such purchase and
          assumption) and shall be relieved from all obligations to the Company hereunder,
          and the Replacement Bank shall succeed to the rights and obligations of such
          Bank hereunder.



          



        8.2    Notices.



          	 	
                  

          (A)         Except as otherwise provided
          in Sections 2.4(A), 2.7 and 8.2(C) hereof or any other provision of this
          Agreement, all notices and other communications hereunder shall be in writing
          and shall be sent to the Company, and the Guarantors c/o the Company, at P.O.
          Box 1602, Indianapolis, IN 46206-1602, or by facsimile to facsimile No.
          317/685-8810, or delivered to the Company, and the Guarantors c/o the Company,
          at 700 West Morris Street, Indianapolis, IN 46225, in all the above cases to the
          attention of James LaCrosse, President; and to the Agent and the Banks at the
          respective addresses for notices set forth on the signatures pages hereof, or to
          such other address as may be designated by the Company, any Guarantor, the Agent
          or any Bank by notice to the other parties hereto. All notices and other
          communications shall be deemed to have been given at the time of actual delivery
          thereof to such address, or, unless sooner delivered, (i) if sent by certified
          or registered mail, postage prepaid, to such address, on the third day after the
          date of mailing, (ii) if sent by telex, upon receipt of the appropriate
          answerback, or (iii) if sent by facsimile transmission, upon confirmation of
          receipt by telephone at the number specified for confirmation, provided,
          however, that notices to the Agent shall not be effective until received.



          



          	 	
                  

          (B)         Notices by the Company to
          the Agent with respect to terminations, reductions or increases of the Aggregate
          Commitment pursuant to Section 2.2, requests for Advances pursuant to Section
          2.4, requests for continuations or conversions of Loans pursuant to Section 2.7
          and notices of prepayment pursuant to Section 3.1 shall be irrevocable and
          binding on the Company.



          







- 59 -



          	 	
                  

          (C)         Any notice to be given by
          the Company to the Agent pursuant to Sections 2.4, 2.7 or 3.1 and any notice to
          be given by the Agent to any Bank or by any Bank to the Agent or any Bank
          hereunder, may be given by telephone, and all such notices given by the Company
          must be immediately confirmed in writing in the manner provided in Section
          8.2(A). Any such notice given by telephone shall be deemed effective upon
          receipt thereof by the party to whom such notice is to be given. The Company and
          the Guarantors shall indemnify and hold harmless the Banks and the Agent from
          any and all losses, damages, liabilities and claims arising from their good
          faith reliance on any such telephone notice by the Company or any Guarantor.



          




        8.3    
No Waiver By Conduct; Remedies Cumulative. No course of dealing on the part of the Agent
or any Bank, nor any delay or failure on the part of the Agent or any Bank in exercising
any right, power or privilege hereunder shall operate as a waiver of such right, power or
privilege or otherwise prejudice the Agent’s or such Bank’s rights and remedies
hereunder; nor shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or remedy
conferred upon or reserved to the Agent or any Bank under this Agreement, the Notes or any
Security Document is intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to every other right or remedy
granted thereunder or now or hereafter existing under any applicable law. Every right and
remedy granted by this Agreement, the Notes or any Security Document or by applicable law
to the Agent or any Bank may be exercised from time to time and as often as may be deemed
expedient by the Agent or any Bank and, unless contrary to the express provisions of this
Agreement, the Notes or any Security Document, irrespective of the occurrence or
continuance of any Default or Event of Default.




        8.4    
Reliance on and Survival of Various Provisions. All terms, covenants, agreements,
representations and warranties of the Company or any Guarantor made herein or in any
Security Document or in any certificate, report, financial statement or other document
furnished by or on behalf of the Company or any Guarantor in connection with this
Agreement shall be deemed to be material and to have been relied upon by the Banks,
notwithstanding any investigation heretofore or hereafter made by any Bank or on such
Bank’s behalf, and those covenants and agreements of the Company set forth in Section
3.7, 3.9 and 8.5 hereof shall survive the repayment in full of the Advances and the
termination of the Commitments.




        8.5    Expenses;
Indemnification. 



          	 	
                  

          (A)         Company agrees to pay, or
          reimburse the Agent for the payment of, on demand, (i) the reasonable fees and
          expenses of counsel to the Agent, including without limitation the fees and
          expenses of Sidley Austin Brown & Wood, in connection with the preparation,
          execution and delivery of this Agreement, the Notes, the Security Documents and
          in connection with advising the Agent as to its rights and responsibilities with
          respect thereto, and in connection with any amendments, waivers or consents in
          connection therewith, and (ii) all stamp and other taxes and fees payable or
          determined to be payable in connection with the execution, delivery, filing or
          recording of this Agreement, Notes, the Security Documents (or the verification
          of filing, recording, perfection or priority thereof) or the consummation of the
          transactions contemplated hereby, and any and all liabilities with respect to or
          resulting from any delay in paying or omitting to pay such taxes or fees, and
          (iii) all reasonable costs and expenses of the Agent and the Banks (including
          reasonable fees and expenses of counsel and whether incurred through
          negotiations, legal proceedings or otherwise)) in connection with any Default or
          Event of Default or the enforcement of, or the exercise or preservation of any
          rights under, this Agreement or the Notes or any Security Document or in
          connection with any refinancing or restructuring of the credit arrangements
          provided under this Agreement and (iv) all reasonable costs and expenses of the
          Agent and the Banks (including reasonable fees and expenses of counsel) in
          connection with any action or proceeding relating to a court order, injunction
          or other process or decree restraining or seeking to restrain the Agent from
          paying any amount under, or otherwise relating in any way to, any Letter of
          Credit and any and all costs and expenses which any of them may incur relative
          to any payment under any Letter of Credit.



          







- 60 -



          	 	
                  

          (B)         The Company hereby
          indemnifies and agrees to hold harmless the Banks and the Agent, and their
          respective officers, directors, employees and agents, harmless from and against
          any and all claims, damages, losses, liabilities, costs or expenses of any kind
          or nature whatsoever (“Losses”) which the Banks, the Agent or any such
          Person may incur or which may be claimed against any of them by reason of or in
          connection with any Letter of Credit, and neither any Bank nor the Agent or any
          of their respective officers, directors, employees or agents (each an
          “Indemnified Party”) shall be liable or responsible for: (i) the use
          which may be made of any Letter of Credit or for any acts or omissions of any
          beneficiary in connection therewith; (ii) the validity, sufficiency or
          genuineness of documents or of any endorsement thereon, even if such documents
          should in fact prove to be in any or all respects invalid, insufficient,
          fraudulent or forged; (iii) payment by the Agent to the beneficiary under any
          Letter of Credit issued by it against presentation of documents which do not
          comply with the terms of any Letter of Credit, including failure of any
          documents to bear any reference or adequate reference to such Letter of Credit;
          (iv) any error, omission, interruption or delay in transmission, dispatch or
          delivery of any message or advice, however transmitted, in connection with any
          Letter of Credit; or (v) any other event or circumstance whatsoever arising in
          connection with any Letter of Credit; provided, however, that the Company shall
          not be required to indemnify the Indemnified Parties, and the Agent and the
          Banks shall be liable to the Company to the extent, but only to the extent, of
          any Losses incurred by the Company which were caused by (A) the Agent’s
          wrongful dishonor of any Letter of Credit issued by it after the presentation to
          it by the beneficiary thereunder of a draft or other demand for payment and
          other documentation strictly complying with the terms and conditions of such
          Letter of Credit, or (B) the Agent’s payment to the beneficiary under any
          Letter of Credit issued by it against presentation of documents which do not
          comply with the terms of the Letter of Credit to the extent, but only to the
          extent, that such payment constitutes gross negligence of willful misconduct of
          such Indemnified Party. It is understood that in making any payment under a
          Letter of Credit issued by it the Agent will rely on documents presented to it
          under such Letter of Credit as to any and all matters set forth therein without
          further investigation and regardless of any notice or information to the
          contrary, and such reliance and payment against documents presented under a
          Letter of Credit substantially complying with the terms thereof shall not be
          deemed gross negligence or willful misconduct of the Agent in connection with
          such payment. It is further acknowledged and agreed that the Company may have
          rights against the beneficiary or others in connection with any Letter of Credit
          with respect to which the Banks or the Agent are alleged to be liable and it
          shall be a precondition of the assertion of any liability of the Banks or the
          Agent under this Section that the Company shall first have exhausted all
          reasonable remedies in respect of the alleged loss against such beneficiary and
          any other parties obligated or liable in connection with such Letter of Credit
          and any related transactions.



          







- 61 -



          	 	
                  

          (C)         The Company hereby
          indemnifies and agrees to hold harmless the Banks and the Agent, and their
          respective officers, directors, employees and agents, from and against any and
          all claims, damages, losses, liabilities, costs or expenses of any kind or
          nature whatsoever (including reasonable attorneys fees and disbursements
          incurred in connection with any investigative, administrative or judicial
          proceeding whether or not such Person shall be designated as a party thereto)
          which the Banks or the Agent or any such Person may incur or which may be
          claimed against any of them by reason of or in connection with entering into
          this Agreement or the transactions contemplated hereby, including without
          limitation those arising under Environmental Laws; provided, however, that the
          Company shall not be required to indemnify any such Bank and the Agent or such
          other Person, to the extent, but only to the extent, that such claim, damage,
          loss, liability, cost or expense is attributable to the gross negligence or
          willful misconduct of such Bank or the Agent or their employees or agents, as
          the case may be.



          



          	 	
                  

          (D)         Neither the Agent nor any
          Bank shall have any liability with respect to, and the Company hereby waives,
          releases and agrees not to sue for, any special, indirect, consequential or
          punitive damages suffered by the Company or any Subsidiary in connection with,
          arising out of, or in any way related to the Loan Documents or the transactions
          contemplated thereby.



          




        8.6    Successors and
Assigns. 



          	 	
                  

          (A)         This Agreement shall be
          binding upon and inure to the benefit of the parties hereto and their respective
          successors and assigns, provided that the Company may not, without the prior
          consent of the Banks, assign its rights or obligations hereunder or under the
          Notes or any Security Document and the Banks shall not be obligated to make any
          Advance hereunder to any entity other than the Company.



          







- 62 -



          	 	
                 

          (B)         Each Bank may, with the
          prior consent of the Company (which shall not be unreasonably withheld and which
          is not required if there should then exist a Default or Event of Default or if
          the sale is to an Affiliate of such Bank) may sell to any financial institution
          or institutions, and such financial institution or institutions may further
          sell, a participation interest (undivided or divided) in, the Advances and such
          Bank’s rights and benefits under this Agreement, the Notes and the Security
          Documents, and to the extent of that participation interest such participant or
          participants shall have the same rights and benefits against the Company under
          Section 3.7, 3.9 and 6.2(C) as it or they would have had if such participant or
          participants were the Bank making the Advances to the Company hereunder,
          provided, however, that (i) such Bank’s obligations under this Agreement
          shall remain unmodified and fully effective and enforceable against such Bank,
          (ii) such Bank shall remain solely responsible to the other parties hereto for
          the performance of such obligations, (iii) such Bank shall remain the holder of
          its Notes for all purposes of this Agreement, (iv) the Company, the Agent and
          the other Banks shall continue to deal solely and directly with such Bank in
          connection with such Bank’s rights and obligations under this Agreement,
          and (v) such Bank shall not grant to its participant any rights to consent or
          withhold consent to any action taken by such Bank or the Agent under this
          Agreement other than action requiring the consent of all of the Banks hereunder.



          



          	 	
                  

          (C)         The Agent from time to time
          in its sole discretion may appoint agents for the purpose of servicing and
          administering this Agreement and the transactions contemplated hereby and
          enforcing or exercising any rights or remedies of the Agent provided under this
          Agreement, the Notes, any Security Documents or otherwise. In furtherance of
          such agency, the Agent may from time to time direct that the Company and the
          Guarantors provide notices, reports and other documents contemplated by this
          Agreement (or duplicates thereof) to such agent. The Company and each Guarantor
          hereby consents to the appointment of such agent and agrees to provide all such
          notices, reports and other documents and to otherwise deal with such agent
          acting on behalf of the Agent in the same manner as would be required if dealing
          with the Agent itself.



          



          	 	
                  

          (D)         Each Bank may, with the
          prior consent of the Company (which shall not be unreasonably withheld and which
          is not required if there should then exist a Default or Event of Default) and
          the Agent, assign to one or more banks or other entities all or a portion of its
          rights and obligations under this Agreement (including, without limitation, all
          or a portion of its Commitment, the Advances owing to it and the Note held by
          it); provided, however, that (i) each such assignment shall be of a uniform, and
          not a varying, percentage of all rights and obligations, (ii) except in the case
          of an assignment of all of a Bank’s rights and obligations under this
          Agreement, (A) the amount of the Commitment of the assigning Bank being assigned
          pursuant to each such assignment (determined as of the date of the Assignment
          and Acceptance with respect to such assignment) shall in no event be less than
          $10,000,000, and in integral multiples of $5,000,000 thereafter, or such lesser
          amount as the Company and the Agent may consent to and (B) after giving effect
          to each such assignment, the amount of the Commitment of the assigning Bank
          shall in no event be less than $5,000,000, (iii) the parties to each such
          assignment shall execute and deliver to the Agent, for its acceptance and
          recording in the Register, an Assignment and Acceptance in the form of Exhibit H
          hereto (an “Assignment and Acceptance”), together with the Note
          subject to such assignment and a processing and recordation fee of $3,500, and
          (iv) any Bank may without the consent of the Company or the Agent, and without
          paying any fee, assign to any Affiliate of such Bank that is a bank or financial
          institution or to any other Bank all or any portion of its rights and
          obligations under this Agreement. Upon such execution, delivery, acceptance and
          recording, from and after the effective date specified in such Assignment and
          Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
          extent that rights and obligations hereunder have been assigned to it pursuant
          to such Assignment and Acceptance, have the rights and obligations of a Bank
          hereunder and (y) the Bank assignor thereunder shall, to the extent that rights
          and obligations hereunder have been assigned by it pursuant to such Assignment
          and Acceptance, relinquish its rights and be released from its obligations under
          this Agreement (and, in the case of an Assignment and Acceptance covering all of
          the remaining portion of an assigning Bank’s rights and obligations under
          this Agreement, such Bank shall cease to be a party hereto).



          







- 63 -



          	 	
                  

          (E)         By executing and delivering
          an Assignment and Acceptance, the Bank assignor thereunder and the assignee
          thereunder confirm to and agree with each other and the other parties hereto as
          follows: (i) other than as provided in such Assignment and Acceptance, such
          assigning Bank makes no representation or warranty and assumes no responsibility
          with respect to any statements, warranties or representations made in or in
          connection with this Agreement or the execution, legality, validity,
          enforceability, genuineness, sufficiency or value of this Agreement or any other
          instrument or document furnished pursuant hereto; (ii) such assigning Bank makes
          no representation or warranty and assumes no responsibility with respect to the
          financial condition of the Company or the performance or observance by the
          Company of any of its obligations under this Agreement or any other instrument
          or document furnished pursuant hereto; (iii) such assignee confirms that it has
          received a copy of this Agreement, together with copies of the financial
          statements referred to in Section 4.6 and such other documents and information
          as it has deemed appropriate to make its own credit analysis and decision to
          enter into such Assignment and Acceptance; (iv) such assignee will,
          independently and without reliance upon the Agent, such assigning Bank or any
          other Bank and based on such documents and information as it shall deem
          appropriate at the time, continue to make its own credit decisions in taking or
          not taking action under this Agreement; (v) such assignee appoints and
          authorizes the Agent to take such action as agent on its behalf and to exercise
          such powers and discretion under this Agreement as are delegated to the Agent by
          the terms hereof, together with such powers and discretion as are reasonably
          incidental thereto; and (vi) such assignee agrees that it will perform in
          accordance with their terms all of the obligations that by the terms of this
          Agreement are required to be performed by it as a Bank.



          







- 64 -



          	 	
                  

          (F)         The Agent shall maintain at
          its address designated on the signature pages hereof a copy of each Assignment
          and Acceptance delivered to and accepted by it and a register for the
          recordation of the names and addresses of the Banks and the Commitment of, and
          principal amount of the Advances owing to, each Bank from time to time (the
          “Register”). The entries in the Register shall be conclusive and
          binding for all purposes, absent manifest error, and the Company, the Agent and
          the Banks may treat each Person whose name is recorded in the Register as a Bank
          hereunder for all purposes of this Agreement. The Register shall be available
          for inspection by the Company or any Bank at any reasonable time and from time
          to time upon reasonable prior notice.



          



          	 	
                  

          (G)         Upon its receipt of an
          Assignment and Acceptance executed by an assigning Bank and an assignee,
          together with the Note subject to such assignment, the Agent shall, if such
          Assignment and Acceptance has been completed, (i) accept such Assignment and
          Acceptance, (ii) record the information contained therein in the Register and
          (iii) give prompt notice thereof to the Company. Within five Business Days after
          its receipt of such notice, the Company, at its own expense, shall execute and
          deliver to the Agent in exchange for the surrendered Note a new Note to the
          order of such assignee in an amount equal to the Commitment assumed by it
          pursuant to such Assignment and Acceptance and, if the assigning Bank has
          retained a Commitment hereunder, a new Note to the order of the assigning Bank
          in an amount equal to the Commitment retained by it hereunder. Such new Note
          shall be in an aggregate principal amount equal to the aggregate principal
          amount of such surrendered Note, shall be dated the effective date of such
          Assignment and Acceptance and shall otherwise be in substantially the form of
          Exhibit C hereto.



          



          	 	
                  

          (H)         The Company shall not be
          liable for any costs or expenses of any Bank in effectuating any participation
          or assignment under this Section 8.6.



          



          	 	
                  

          (I)         The Banks may, in connection
          with any assignment or participation or proposed assignment or participation
          pursuant to this Section 8.6, disclose to the assignee or participant or
          proposed assignee or participant any information relating to the Company,
          provided, that disclosures to proposed assignees or participants the assignments
          or sales of participations to which are subject to the consent of the Company
          may only be made with the consent of the Company, which consent shall not be
          unreasonably withheld.



          



          	 	
                  

          (J)         Notwithstanding any other
          provision set forth in this Agreement, any Bank may at any time create a
          security interest in, or assign, all or any portion of its rights under this
          Agreement (including, without limitation, the Loans owing to it and the Note
          held by it) in favor of any Federal Reserve Bank in accordance with Regulation A
          of the Board of Governors of the Federal Reserve System; provided, that such
          creation of a security interest or assignment shall not release such Bank from
          its obligations under this Agreement.



          







- 65 -




        8.7    
Counterparts and Telefacsimile Signatures. This Agreement may be executed in any number of
counterparts, and by telefacsimile signature, all of which taken together shall constitute
one and the same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.




        8.8    
Governing Law. This Agreement is a contract made under, and shall be governed by and
construed in accordance with, the law of the State of Illinois applicable to contracts
made and to be performed entirely within such State and without giving effect to choice of
law principles of such State. Each of the Company and the Guarantors and the Banks further
agrees that any legal or equitable action or proceeding with respect to this Agreement,
the Notes or any Security Document or the transactions contemplated hereby shall be
brought in any court of the State of Illinois, or in any court of the United States of
America sitting in Illinois, and the Company and each Guarantor and the Banks hereby
submits to and accepts generally and unconditionally the jurisdiction of those courts with
respect to its person and property, and, in the case of the Company and each Guarantor
irrevocably appoints NWS-Illinois, whose address in Illinois is 2600 West 35th Street,
Chicago, Illinois 60632, as its agent for service of process and irrevocably consents to
the service of process in connection with any such action or proceeding by personal
delivery to such agent or to the Company or such Guarantor, as the case may be, or by the
mailing thereof by registered or certified mail, postage prepaid to the Company or such
Guarantor at its address for notices pursuant to Section 8.2. The Company shall at all
times maintain such an agent in Illinois for such purpose and shall notify the Banks and
the Agent of such agent’s address in Illinois within ten days of any change of
address. Nothing in this paragraph shall affect the right of the Banks and the Agent to
serve process in any other manner permitted by law or limit the right of the Banks or the
Agent to bring any such action or proceeding against the Company or any Guarantor or
property in the courts of any other jurisdiction. The Company and each Guarantor and the
Banks hereby irrevocably waives any objection to the laying of venue of any such action or
proceeding in the above described courts.




        8.9    
Table of Contents and Headings. The table of contents and the headings of the various
subdivisions hereof are for the convenience of reference only and shall in no way modify
any of the terms or provisions hereof.




        8.10    
Construction of Certain Provisions. If any provision of this Agreement refers to any
action to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or indirectly by such
Person, whether or not expressly specified in such provision.




        8.11    
Integration and Severability. This Agreement, the Notes, and the Security Documents embody
the entire agreement and understanding between the Company, the Guarantors and the Agent
and the Banks, and supersede all prior agreements and understandings, relating to the
subject matter hereof. In case any one or more of the obligations of the Company or any
Guarantor under this Agreement, the Notes or any Security Document shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining obligations of the Company and the Guarantors shall not in any way be
affected or impaired thereby, and such invalidity, illegality or unenforceability in one
jurisdiction shall not affect the validity, legality or enforceability of the obligations
of the Company or any Guarantor under this Agreement, the Notes or any Security Document
in any other jurisdiction.







- 66 -




        8.12    
Independence of Covenants. All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any such covenant, the fact
that it would be permitted by an exception to, or would be otherwise within the
limitations of, another covenant shall not avoid the occurrence of a Default or an Event
of Default if such action is taken or such condition exists.




        8.13    
Interest Rate Limitation. Notwithstanding any provisions of this Agreement, the Notes or
any Security Document, in no event shall the amount of interest paid or agreed to be paid
by the Company exceed an amount computed at the highest rate of interest permissible under
applicable law. If, from any circumstances whatsoever, fulfillment of any provision of
this Agreement, the Notes or any Security Document at the time performance of such
provision shall be due, shall involve exceeding the interest rate limitation validly
prescribed by law which a court of competent jurisdiction may deem applicable hereto,
then, ipso facto, the obligations to be fulfilled shall be reduced to an amount computed
at the highest rate of interest permissible under applicable law, and if for any reason
whatsoever any Bank shall ever receive as interest an amount which would be deemed
unlawful under such applicable law such interest shall be automatically applied to the
payment of principal of the Advances outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the Company if such
principal and all other obligations of the Company to the Banks have been paid in full.




        8.14    
Waiver of Jury Trial. The Banks, the Agent, the Company and the Guarantors, after
consulting or having had the opportunity to consult with counsel, knowingly, voluntarily
and intentionally waive any right any of them may have to a trial by jury in any
litigation based upon or arising out of this Agreement or any related instrument or
agreement or any of the transactions contemplated by this Agreement or any course of
conduct, dealing, statements (whether oral or written) or actions of any of them. Neither
any Bank, the Agent, any Guarantor nor the Company shall seek to consolidate, by
counterclaim or otherwise, any such action in which a jury trial has been waived with any
other action in which a jury trial cannot be or has not been waived. These provisions
shall not be deemed to have been modified in any respect or relinquished by any party
hereto except by a written instrument executed by such party.




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        IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed and delivered as of the
day and year first above written.



	
Address for Notices







700 West Morris Street

Indianapolis, Indiana 46225

Attention:  James E. LaCrosse

Facsimile No.:  (317) 685-8810	
NATIONAL WINE & SPIRITS, INC.







By:  

        Its:












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LASALLE BANK NATIONAL

ASSOCIATION, Individually as a

Bank and as Agent







By:  

        Its







Address for Notices:

135 South LaSalle Street

Chicago, IL 60603

Attention: Michael S. Barnett

Facsimile No.:  (312) 904-0522







Commitment Amount:  $25,000,000







Percentage of Aggregate Commitment:  62.50%







Aggregate Commitment:  $40,000,000











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NATIONAL CITY BANK OF INDIANA







By:  

Its







Address for Notices:

One National City Center

Indianapolis, IN 46225

Attention: John Lichtle

Facsimile No.:  (317) 267-7441







Commitment Amount:  $15,000,000







Percentage of Aggregate Commitment:  37.50%







Aggregate Commitment:  $40,000,000












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