Document:

ex103.htm

    EXHIBIT 10.3

     

    EXCLUSIVE MANUFACTURING
AGREEMENT

     

    This
EXCLUSIVE MANUFACTURING
AGREEMENT (this "Agreement") is made as of this 18th day of August 2007(
"Effective Date"), by and between Harbrew Imports Limited, a Florida
corporation, having offices at 102 Buffalo Ave. Freeport, NY 11520 ("Harbrew"),
Fagema Sorrento Delizie Di De Luca Antonino and Scala Antonino an Italian
corporation having its principal offices at Via Campangnano 2, 80067-Sorrento-
(NA) Italia. ("Sorrento" or "Manufacturer").

     

    Recitals:

     

    A. Harbrew
is in the business of importing and wholesaling Spirits, Wine and
Beer;

     

    B. Sorrento
is in the business of the production and manufacturing of over twenty types of
liquors, babba and chocolates;

     

    C. Harbrew owns and/or
possesses the right to produce and sell a limoncello product bearing the
Trademark and Tradename, Danny
DeVito's Premium Limoncello ("the Product").

     

    D. In
connection with the development and sale of the Product, Harbrew wishes to
import and sell the Product from Sorrento, and to have Sorrento be the exclusive
manufacturer of the Product for Harbrew, and Sorrento wishes to exclusively
supply Harbrew with the Product pursuant to the terms set forth
below;

     

    Agreement:

     

    In
consideration of the premises and in further consideration of the mutual
promises and undertakings herein contained, and other good and valuable
consideration, the receipt and adequacy of which hereby are acknowledged, the
parties hereto hereby agree as follows:

     

    1. Appointment
of Manufacturer. During the term of this Agreement, Sorrento shall
manufacture the Product pursuant to specifications set forth in Section
2
below (the "Specifications") and use its commercially reasonable efforts
to meet all of Harbrew's United States supply requirements for the Product, as
well as all International markets at Harbrew's direction.

     

    2.
Packaging/Labeling
Specifications.

     

    
      	
              a.  

            	
              Sorrento
      shall manufacture the Product with the recipe provided for bottles of 750
      ML each.

            

    

     

    
      	
              b.  

            	
              Each
      bottle of the Product shall bear the Tradename and the brand name Danny
      Devito's Premium LimoncelloTM,
      or such other brand name and logo that Harbrew chooses to use in
      connection with the Product (the
"Brandname").

            

    

     

    3. Trade-dress
(Package Design).

     

    
      
        	
              	
                a.  
      

              	
                Harbrew
      shall design the package utilizing a package design, layout and colors
      sothat
      customers will identify the product as a "Harbrew"
  product.

              

      

    

     

    
      
        
        

      

      
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                b.  

              	At the end of this Agreement, neither Sorrento nor any of
      its licensees will utilize a package design and/or colors similar to the
      Harbrew design.

      

       

    

    4.
Delivery and
Initial Order.
Upon receipt of a purchase order from Harbrew, Sorrento shall ship the
requested Product to the location and in the mariner set forth in such purchase
order. The initial order shall be 500,000 finished pieces (each being a 750 ML
bottle) divided into (2) orders of 250,000 each. The costs of shipping,
including freight, insurance and other shipping expenses, as well as any special packing requests, shall be borne solely by Harbrew, and
Harbrew shall provide Sorrento with appropriate courier charge numbers so that
Harbrew can be billed directly for such shipping costs and/or promptly reimburse
Sorrento for all shipping costs incurred by Sorrento on Harbrew' behalf upon the
presentation by Sorrento to Harbrew of appropriate shipping receipts and
documentation. Title and risk of loss shall pass to Harbrew at the time Sorrento
delivers the Product, or makes available the Product for pick-up, to the courier
designated by Harbrew. The total contract over the contract period will be for
10,000,000 bottles (Ten million bottles)

     

    5. Fees. For each bottle of the
Product purchased by Harbrew, Harbrew shall pay Sorrento its Manufacturing Cost
(as defined below), which costs are set forth in Exhibit
A
hereto. Such payment will be due and payable by Harbrew within thirty (30) days
of delivery of an invoice from Sorrento. Price is between $61.00 and $63.00 per
case of 12 750m1 bottles.

     

    6.
Representations
and Warranties of the Parties. Each party represents to
the other that:

    
       

      
        	
                a.  

              	it has the power, right and authority to enter into this
      agreement;

      

      
         

        
          	
                  b.  

                	that this Agreement has been duly authorized by all
      requisite corporate and partnership actions;
and

           

          
            	
                    c.  

                  	that it shall comply with all applicable laws, rules and
      regulations in performing its obligations under this
  Agreement.

          

        

      

    

     

    7. Manufacturer's
Assurances. Sorrento represents, warrants and/or agrees to each of the
following:

     

    
      	
            	
              a.  

            	
              Sorrento
      warrants that it possesses the expertise, facilities and ability to
      professionally and successfully manufacture the
  Product:

            

    

     

    
      	
            	
              b.  

            	
              Sorrento
      shall manufacture and maintain sufficient stocks of the Products to
      satisfy the orders submitted by Harbrew. The Products shall be handled and
      stored in accordance with instructions provided by
  Harbrew.

            

    

     

    
      	
               
      c.   

            	
              Sorrento
      acknowledges and agrees that this Agreement shall in no way be construed
      to provide to Sorrento any express or implied right or license to make or
      authorize any use, direct or indirect, of the Product or any variation
      thereof, for any purpose other than as specifically contemplated by this
      Agreement or to manufacture the Product, except as set forth
      herein.

            

    

    

    
      
        
        

      

      
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              d.  

            	
              Sorrento
      hereby acknowledges and agrees that the Product and all of its related
      Intellectual Property embodies and constitutes valuable intellectual
      property rights of Harbrew, including, but not limited to, trademark
      rights and trade secrets, and that Harbrew now holds and shall retain all
      right, title, and interest in and to the Intellectual Property. Upon
      termination of this Agreement, Sorrento shall retain no rights of any
      nature with respect to the any of the Intellectual Property, shall
      immediately cease using the Tradename and Brandname and the use of the
      Tradename and Brandname shall remain with Harbrew. Sorrento agrees never
      to contest the rights of Harbrew in and to the Intellectual Property.
      Sorrento shall not at any time apply for the registration of any patent,
      trademark copyright or other designation that would affect the ownership
      of or rights of Harbrew in and to the Intellectual Property, nor shall it
      file any document with any governmental authority to take any action that
      would adversely affect the ownership of or rights of Harbrew in and to the
      Intellectual Property, or assist anyone else in doing
  so.

            

    

     

    
      	
            	
              e.  

            	
              Sorrento
      and Harbrew shall cooperate to ensure that third parties may not
      unlawfully infringe on or imitate the Intellectual Property or engage in
      any acts of unfair competition involving the Intellectual Property.
      Sorrento shall promptly notify Harbrew of any such infringements,
      imitations, or acts by third parties that come to its attention. Harbrew
      shall have the exclusive right, exercisable at its discretion and at its
      expense, to institute in its own name and/or Sorrento' name and to control
      all actions against third parties relating to the Intellectual Property.
      With respect to any such actions, Harbrew shall employ counsel of its own
      choice to direct the handling of the litigation and any settlement
      thereof. Harbrew shall be entitled to receive and retain all amounts
      awarded, if any, as damages, profits, or otherwise in connection with such
      suits. Sorrento shall not, without Harbrew's prior written consent,
      institute any suit or take any action on account of such infringements,
      imitations, or acts. Harbrew shall incur no liability to Sorrento by
      reason of Harbrew's failure or refusal to prosecute, or by Harbrew's
      refusal to permit Sorrento to prosecute, any alleged such infringements,
      imitations, or acts by third parties, nor by reason of any settlement to
      which Harbrew may agree.

            

    

     

    
      	
            	
              f.  

            	
              Sorrento
      shall not use the Trademark or any other trademark or service mark owned
      by Harbrew, or the Intellectual Property, other than as expressly
      permitted under this Agreement. Sorrento agrees that in utilizing the
      Trademark in its manufacturing of the Product, it will in no way represent
      that it has any right, title, or interest in or to the Intellectual
      Property other than those expressly granted under the terms of this
      Agreement.

            

    

     

    
      	
            	
              g.  

            	
              In
      connection with the sale of the Product and all other products in
      connection with which Sorrento utilizes the Trademark, Sorrento shall
      include all such notices of Harbrew's proprietary right, title, and
      interest in and to the Intellectual Property as Harbrew shall reasonably
      require.

            

    

     

    
      
        	
              	
                h.  
      

              	
                At
      any time and from time to time at the request of Harbrew, Sorrento shall
      execute and deliver to Harbrew or other parties designated by Harbrew, at
      no cost or expense to Sorrento, any new, additional, or confirmatory
      instruments and any other documents and perform all acts that may be
      necessary or desirable to protect or confirm Harbrew's right, title, and
      interest in and to the Intellectual
Property.

              

      

    

    

    
      
        
        

      

      
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    8.
Recall.

     

    
      	
            	
              a.  

            	
              In
      the event Harbrew shall be required or shall voluntarily decide to recall
      any Product distributed by Sorrento pursuant to this Agreement, then
      Sorrento shall fully cooperate with Harbrew in connection with the recall.
      If such recall is initiated because of the negligence or failure of
      Sorrento to comply with the terms of this Agreement, then Sorrento will
      credit Harbrew for the price invoiced by Sorrento for all Product returned
      and, in addition, Sorrento will reimburse Harbrew for all reasonable
      recall expenses in connection therewith. If such recall is initiated
      because of the negligence or failure of Harbrew to comply with the terms
      of this Agreement, then Harbrew will reimburse Sorrento for all reasonable
      recall expenses in connection
therewith.

            

    

     

    
      	
            	
              b.  

            	
              Sorrento
      agrees to abide by all decisions of Harbrew to recall Product and both
      Parties shall fully cooperate with each other in the event of any recall
      of Product under this Agreement.

            

    

     

    9. Product
Warranties and Indemnification.

     

    
      	
            	
              a.  

            	
              Sorrento
      warrants that the Products shall meet the ingredient specifications
      contained on the label and conform to Harbrew's specifications for the
      Products when it leaves Sorrento's control. Sorrento makes no other
      warranties, either express or implied, including warranties of
      merchantability or of fitness for a particular
  use.

            

    

     

    
      	
            	
              b.  

            	
              Sorrento
      shall defend and indemnify Harbrew against all expenses, claims, demands,
      liabilities or money judgments, including recall, incurred by Harbrew
      arising from the negligence or fault of Sorrento or from Sorrento 's
      failure to comply with the terms of this Agreement, except to the extent
      that said expenses, claims, demands, liability or money judgments are
      caused by the negligence or fault on the part of Harbrew or Harbrew's
      failure to comply with the terms of this
  Agreement.

            

    

     

    
      
        
          	
                	
                  c.  
      

                	
                  Sorrento
      shall defend and indemnify Harbrew against all expenses, claims, demands,
      liabilities or money judgments, including recall, incurred by Harbrew
      arising from the negligence or fault of Sorrento or from Sorrento's
      failure to comply with the terms of this Agreement, except to the extent
      that said expenses, claims, demands, liability or money judgments are
      caused by the negligence or fault on the part of Harbrew or Harbrew's
      failure to comply with the terms of this
  Agreement.

                

        

      

    

     

    10. Insurance. Each party shall
maintain product liability insurance on the Product of at least S 1.000,000.00
and shall have the other party listed as an additional insured on such
policies.

    

    
      
        
        

      

      
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    11. Term. term
of this Agreement shall be5
years effective from the date set forth
-above, and it shall automatically renew thereafter for additional, consecutive
Five-year terms, unless either party gives the other party written notice that
it does not want to renew the Agreement at least ninety (90) days prior to the
end of the then current term

     

    12. Termination. Notwithstanding
anything contained herein to the contrary, this Agreement
may be terminated:

     

    
      	
              a.  

            	
              by
      the non-breaching party immediately if the other party shall fail to
      perform any obligation under this Agreement and such failure is incapable
      of remedy;

            

    

     

    
      	
            	
              b.  

            	
              by
      the non-breaching party after thirty (30) days notice and opportunity to
      cure if the other party shall fail to perform any obligation under this
      Agreement, such failure is capable of remedy, and such failure continues
      unremedied after the expiration of such thirty (30) day period, provided
      that if Harbrew is in breach of any term of this Agreement, Sorrento shall
      be entitled to suspend the supply of the Product to Harbrew until Harbrew
      cures the breach;

            

    

     

    
      	
            	
              c.  

            	
              by
      a party immediately if the other party shall file any voluntary petition
      or similar proceeding under any bankruptcy act, institute any voluntary
      proceeding in any court to declare itself insolvent or unable to meet
      debts, make an assignment for the benefit of creditors, or consent to the
      appointment of a receiver for any of its
  property;

            

    

     

    
      	
            	
              d.  

            	
              by
      a party if the other party shall have filed against it any involuntary
      petition or similar proceeding under any bankruptcy act, have instituted
      against it any involuntary proceeding in any court to
      declare it insolvent or unable to meet debts, have all or
      substantially all of its property levied upon or attached by process of
      law, or have a receiver appointed for any of its property, and the same is
      not dismissed, vacated, set aside, or released within sixty (60) days
      thereafter; or

            

    

     

    
      	
            	
              e.  

            	
              by
      Sorrento should Harbrew (i) make any false misrepresentations regarding
      the Product, or (ii) conduct its business in an immoral or unprofessional
      manner which could result in liability to
  Sorrento.

            

    

     

    13. Effect of
Termination. Termination by either party shall not prejudice any remedy
that either party may have, at law, in equity, or under this Agreement. If this
Agreement is terminated for any reason, all amounts owed to Sorrento shall
immediately come due and payable and shall thereafter accrue interest at the
Default Rate until repaid in full.

     

    14.
Exclusivity;
Non-Competition.

     

    
      	
            	
              a.  
      

            	
              During
      the term hereof, Sorrento shall not manufacture or sell the Product to
      anyone other than Harbrew, and Harbrew shall not purchasethe
      Product or related product from anyone other than
      Sorrento.

            

    

    

    
      
        
        

      

      
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              b.  

            	
              Sorrento
      hereby covenants and agrees that during the term of this Agreement and for
      a period of one year following the end of this Agreement, Sorrento will
      not, without the prior written consent of Harbrew, directly or indirectly,
      on its own behalf or in the service or on behalf of others, whether or not
      for compensation, engage in any business activity, or have any interest in
      any person, firm, corporation or business, throu2h a subsidiary or parent
      entity or other entity (whether as a shareholder,. agent, joint venturer,
      security holder, trustee, partner, consultant, creditor lending credit or
      money for the purpose of establishing or operating any such business,
      partner or otherwise) with any Competing Business in the Covered Area. For
      the purpose of this Section
      14: (i) "Competing Business" means the manufacture or sale by or
      for itself or any other company or entity (whether or not organized for
      profit) that has, or is seeking to develop, one or more premium, band-name
      limoncello products and (ii) "Covered Area" means all geographical areas
      of the United States and other foreign jurisdictions where Company then
      has offices and/or sells its products directly or indirectly through
      distributors and/or other sales agents. Notwithstanding the foregoing,
      Sorrento may own shares of companies whose securities are publicly trades,
      so long as such securities do not constitute more than one percent (1%) of
      the outstanding securities of any such
company.

            

    

     

    
      	
            	
              c.  

            	
              Non-Solicitation.
      Sorrento further agrees that as long as the Agreement remains in
      effect and for a period of one (1) year from its termination, Sorrento
      will not divert any business of Harbrew and/or its affiliates or any
      customers or suppliers of Harbrew and/or Harbrew's and/or its affiliates'
      business to any other person, entity or competitor, or induce or attempt
      to induce, directly or indirectly, any person to leave his or her
      employment with Harbrew.

            

    

     

    
      	
            	
              d.  
      

            	
              Remedies.
      Sorrento acknowledges and agrees that its obligations provided
      herein are necessary and reasonable in order to protect Harbrew and its
      affiliates and their respective business and Sorrento expressly agrees
      that monetary damages would be inadequate to compensate the Company and/or
      its affiliates for any breach by Sorrento of its covenants and agreements
      set forth herein. Accordingly, Sorrento agrees and acknowledges that any
      such violation or threatened violation of this Section
      14 will cause irreparable injury to Harbrew and that, in addition
      to any other remedies that may be available, in law, in equity or
      otherwise, Harbrew and its affiliates shall be entitled to obtain
      injunctive relief against he threatened breach of this Section
      14 or the continuation of any such breach by Sorrento without the
      necessity of proving actual
damages.

            

    

     

    15. Communication.

     

    
      	
            	
              a.  
      

            	
              Upon
      the execution of this Agreement, Harbrew shall provide Sorrento with a
      non-binding forecast of the supply of the Product that Harbrew anticipates
      that it will require for the rest of that calendar quarter. Thereafter,
      ten (10) days before the end of each subsequent quarter, Harbrew shall
      provide Sorrento with a non-binding forecast of the supply of the Product
      that Harbrew anticipates that it will require in the next calendar
      quarter.

            

    

    

    
      
        
        

      

      
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                  b.  
      

                	
                   Harbrew
      shall make all of its orders with Purchase Orders in a form acceptable to
      Sorrento.

                

        

      

    

     

    
      	
            	
              c.  
      

            	
               Further,
      the parties agree to use and/or develop mutually acceptable electronic
      means to expedite communications between the parties wherever reasonably
      possible.

            

    

     

    16.
Indemnification/Limitation
on
Liability.

     

    
      a. Sorrento
shall indemnify, defend and hold Harbrew and its parents, subsidiaries,
affiliates, officers, directors, employees, agents, and representatives (the
"Harbrew Indemnified Parties") harmless from and against any and all claims,
liabilities, demands, actions, causes of action, judgments, settlements, and
expenses (including, but not limited to, reasonable attorneys' fees, costs, and
expenses) ("Damages") arising out of or in connection with any (i) third-party
claims based upon infringement of any United States patent, copyright, or other
proprietary right by the Intellectual Property, excepting any Damages resulting
from the intentionally wrongful or negligent acts of the Harbrew Indemnified
Parties or (ii) third-party product-liability claim in which the death, personal
injury, illness, property damage or other loss is conclusively determined to
have resulted from the proper use of the Product manufactured by Sorrento and
dispensed by a licensed veterinarian.

    

     

    b. Harbrew
shall indemnify, defend and hold Sorrento and its parents, subsidiaries,
affiliates, officers, directors, employees, agents, and representatives (the
"Sorrento Indemnified Parties") harmless from and against any and all claims,
liabilities, demands, actions, causes of action, judgments, settlements, and
expenses (including, but not limited to, reasonable attorneys' fees, costs, and
expenses) ("Damages") arising out of or in connection with Harbrew' breach of
any representation, warranty, covenant, or agreement made by Harbrew under or in
connection with this Agreement or the failure of Harbrew to perform any of its
covenants or agreements contained in this Agreement.

     

    c. Upon
obtaining knowledge thereof, the party to be indemnified (the "Indemnified
Party") shall promptly notify the party which is required to provide
indemnification (the "Indemnifying Party") in writing of any damage, claim,
loss, liability or expense which the Indemnified Party has determined has given
rise or could give rise to a claim under this Section
16 (such written notice being hereinafter referred to as a "Notice of
Claim"). A Notice of Claim shall contain a brief description of the nature and
estimated amount of any such claim giving rise to a right of indemnification.
With respect to any claim or demand set forth in a Notice of Claim relating to a
third-party claim, the Indemnifying Party shall have the power and right to
defend, direct the defense, compromise and settle, in good faith and at its
expense, any such claim or demand, and the Indemnified Party, at its sole
expense, shall have the right to participate and shall cooperate in the defense
of any such third-party claim. So long as the Indemnifying Party is defending in
good faith any such third party claim, the Indemnified Party shall not settle or
compromise such third party claim.

    

    
      
        
        

      

      
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    d. In no
event shall either party be liable to the other or to any third party for any
special, indirect, incidental, consequential, or punitive damages arising out of
or in connection with this Agreement, the Product or the Intellectual Property,
whether based on breach of contract, breach of warranty, tort (including
negligence), or otherwise.

     

    e. Except as
otherwise provided herein, if the Product is found to be defective, Harbrew'
sole remedy shall be the return and replacement of such Product, and the parties
agree that under no circumstances shall Sorrento be liable for consequential,
incidental, indirect, special, punitive or exemplary damages for loss of
revenue, loss of business, loss of anticipated savings, or any other loss or
damage arising for any reason whatsoever, and that its liability shall not
exceed the price of the Product purchased under this Agreement.

     

    17. Compliance
With Laws. Both parties agree to comply with all laws and regulations and
other requirements governing the performance of their activities under an
agreement such as this.

     

    18. Publicity.
Except as required by law, neither Party shall make any public
announcement in connection with the subject matter of this Agreement without the
prior approval of the other Party.

     

    19. Confidentiality.
Each party agrees to hold in strict confidence, and not to disclose to
any other person or to use in any manner, either before or after termination of
this Agreement, any technical or business information, manufacturing technique,
process, experimental work, trade secret, patent, or other confidential matter
belonging to other party, including the Intellectual Property ("Confidential
Property"), except as specifically permitted pursuant to the terms of this
Agreement, and shall take all reasonable measures to maintain the
confidentiality of such Confidential Information, which will in no event be less
than the measures it uses to maintain the confidentiality of its own information
of similar importance. Confidential Information shall include the terms of this
Agreement.

     

    20. Recitals. The
parties agree that the recitals to this Agreement are true and accurate
and
hereby incorporate them into this Agreement.

     

    21. Force
Majeure. For the period and to the extent that a party hereto is disabled
from fulfilling in whole or in part its obligations hereunder, where such
disability arises by reason of an event of force
mai cure (including, but not limited to, any law or government
regulation, or any act of God, flood, war, terrorism, revolution, civil
commotion, political disturbance, fire, explosion, or any other cause whatsoever
over which such party has no control), such party shall be released from its
obligations hereunder until the cessation of such disability. Notice of any such
disability and cessation thereof shall forthwith be given by the party claiming
the benefits thereof to the other. The provisions of this Article shall not be
applicable to any obligation involving the payment of money.

     

    22. Assignment.
Neither this Agreement, nor any of the rights or interests of Sorrento or
Harbrew hereunder, may be assigned, transferred or conveyed by operation of law
or otherwise without the prior written consent of the other party; provided,
however, that Harbrew may
assign its rights and interest under this Agreement to any acquirer of Harbrew
in any transaction that constitutes a Change of Control for Harbrew. A Change of
Control shall mean the sale of substantially all of the assets of Harbrew, the
sale of substantially all of the stock of Harbrew or the merger or consolidation
of Harbrew with a third party in which Harbrew is not the surviving
entity.

     

    
      
        
        

      

      
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    23. Relationship
Of The Parties. The relationship established between Harbrew and Sorrento
by this Agreement is that of a vendor to its vendee. Sorrento is not an agent of
Harbrew and has no authority to bind Harbrew, transact any business in Harbrew's
name or on its behalf in any manner, or make any promises or representations on
behalf of Harbrew. Sorrento agrees to represent itself only as an independent
business who is an "authorized Harbrew Manufacturer." The employees and agents
of Sorrento are NOT for any purpose the employee or agents of
Harbrew.

     

    24. Successors
and
Assigns. Subject to Section 22 above,
this Agreement shall be binding upon, and shall inure to the benefit of, each of
the parties hereto and their respective permitted successors and
assigns.

     

    25. Survival
of Rights of Parties. The termination of this Agreement shall not release
either party from any liability, obligation, or agreement which, pursuant to any
provision of this Agreement. is to survive or be performed after such expiration
or termination.

     

    26. Notices.
All notices or other con-ununications pursuant to this Agreement shall be
in writing and shall be deemed valid and sufficient if delivered by personal
service or overnight courier or dispatched by registered mail, postage prepaid,
in any post office, or if dispatched by telefax, promptly confirmed by letter
dispatched as above provided, to the parties at the addresses as set forth
above. A party hereto may change its address by notice to the other in the
manner set forth above. Notices and other communications rendered as herein
provided shall be deemed to have been given on the day on which personally
served or sent by telefax or, if sent by overnight courier, on the second (2nd)
day after being posted, or if sent by registered mail, on the fifth (5th) day
after being posted, or in either case the date of actual receipt, whichever date
is the earlier.

     

    27. Partial
Invalidity. If any term, covenant or provision contained herein shall be
invalid or illegal, such invalidity or illegality shall not impair, invalidate
or nullify the other provisions of this Agreement.

     

    
      
        
        

      

      
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    28. Jurisdiction/Choice
of Law. This Agreement shall be governed by, interpreted and construed,
and all claims and disputes, whether in tort, contract or otherwise be resolved
in accordance with the substantive laws of the State of New York, United States
of America, without reference to any rules of conflict of laws. In the event of
any controversy or claim arising out of or relating to this Agreement,
performance hereunder, termination hereof, or relationship created hereby, each
Party irrevocably submits to the exclusive jurisdiction of the courts of the
Supreme Court of the State of New York and the U.S. District Court for the
Southern District of New York for the purposes of any suit, action or other
proceeding arising out of this Agreement or transactions contemplated hereby.
Each Party irrevocably and unconditionally waives any objection to the laying of
venue in the courts of New York as stated above and that any such action was
brought in an inconvenient forum. Notwithstanding the foregoing,
in the event of a threatened disclosure in violation of this Agreement, Harbrew
shall have the right to seek injunctive relief from any competent court in the
jurisdiction where the disclosure is threatened to prevent such disclosure
pending resolution of the merits of the dispute.

     

    29. Subject
Headings. The subject headings on this Agreement have been placed thereon
for the convenience of the parties and shall not be considered in any question
of interpretation or construction of this Agreement.

     

    30. Complete
Agreement, Waivers, And Amendments. This Agreement, in combination with
the Secrecy Agreement previously signed by the parties and the purchase orders
and invoices issued pursuant hereto, constitutes the entire agreement between
the parties relative to the subject matter hereof, and supersedes and replaces
all prior or contemporaneous agreements, written or oral, between the parties
regarding such subject matter. The failure of either party to enforce at any
time or for any period of time any provision of this Agreement shall not be
construed as a waiver of such provision or of the right of such party thereafter
to enforce such provision. In addition, no terms or provisions of this Agreement
may be changed, waived, discharged, or terminated orally but only by an
instrument in writing signed by the party against whom the enforcement of such
change, waiver, discharge, or termination is sought. Harbrew and Sorrento agree
to renegotiate in good faith any provision of, or addition to, this
Agreement.

     

    31. Further
Assurances. From and after the date hereof the parties agree to take or
cause to be taken such further action and executed, deliver and file such
further documents and instruments as the other party may reasonably request from
time to time to effectuate the intent and purposes of this
Agreement.

     

    32. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts when taken together shall constitute but one and the same
instrument.

     

    33.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the
parties hereto have duly executed this Agreement the day and year first above
written.

     

     

    
      
        	 	 	Fagema
      Sorrento Delizie Di De Luca Antonio	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Tonino Scala	 
	 	 	Name:
      Tonino Scala	 
	 	 	Title:
      Administrator	 

      

    

    
       

      
        
          	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Tonino Scala	 
	 	 	Name:
      Tonino Scala	 
	 	 	Title:
      Director Production	 
	 	 	 	 

        

      

       

    

     

    
       

      
        
          	 	 	Hebrew
      Imports, Ltd.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Richard DeCicco	 
	 	 	Name:
      Richard DeCicco	 
	 	 	Title:
      President	 
	 	 	 	 

        

      

       

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

     

     

    Price per
9 liter case $61.00 - $63.00 USD per case FOB Port of Napoli or a port mutually
agreed
upon by Fagema and Harbrew at time of shipping.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    12Unassociated Document

    EXHIBIT
10.4

     

     

     

     

     

     

    DISCOUNT
FACTORING AGREEMENT

     

     

    BETWEEN

     

    CAPSTONE
BUSINESS CREDIT, LLC,

    AS
THE FACTOR

     

     

     

    AND

     

     

     

    HARBREW
IMPORTS, LTD.,

    AS
THE COMPANY

     

     

     

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    THIS DISCOUNT FACTORING
AGREEMENT (this "Agreement"),
made and executed this 22 day of January 2007, by and between HARBREW
IMPORTS, LTD., a New York corporation (the "Company"),
and CAPSTONE BUSINESS CREDIT, LLC (the "Factor").

     

    1.              Definitions.
In addition to the terms defined elsewhere in this Agreement, the
following
terms shall have the following meanings for the purposes of this
Agreement:

     

    "Accounts"
shall have the meaning ascribed to such term in the
Code.

     

    "Accounts
Receivable" shall have the meaning set forth in Section 2 of this
Agreement.

     

    "Anniversary
Date" means the last day of the twenty fourth (24th)
month following the date of this Agreement and the same day in each year
thereafter.

     

    "Chattel
Paper" shall have the meaning ascribed to such term in the Code.

     

    "Clearance
Days" means three business, days.

     

    "Closed"
means an Account Receivable that is either (a) paid in full by the
Customer obligated on such Account Receivable, or (b) repurchased in cash by the
Company.

     

    "Code"
shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York.

     

    "Collateral"
shall have the meaning set forth in Section 7 of this
Agreement.

     

    "Company
Risk Accounts Receivable" shall have the meaning set forth in Section 3
of this Agreement.

     

    "Customer"
means the purchaser of goods or services from Company and who is
obligated on an Account, Instrument, Document, Chattel Paper or General
Intangible initially owing to such Company.

     

    "Documents"
shall have the meaning ascribed to such term in the
Code.

     

    "Event
of Default" shall have the meaning set forth in Section 17.1 of this
Agreement.

     

    "Factor
Risk Accounts Receivable" shall have the meaning set forth in Section 3
of this Agreement.

     

    "Factored
Accounts" means all Accounts, Instruments, Documents, Chattel Paper and
General Intangibles which are (a) initially owing to Company by a Customer, and
(b) subsequently purchased by Factor from Company pursuant to this Agreement.
Factored Accounts shall include all returned or repossessed goods arising out of
or relating to the sale or other disposition of goods giving rise thereto, all
proceeds thereof and the merchandise represented
thereby, and all invoices and other records evidencing or pertaining to the
Factored Accounts. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    "Factoring
Agreement" means an agreement between Company providing for the purchase
by Factor from Company of Accounts owing to Company by its
Customers.

     

    "Factoring
Documents" means this Agreement, together with any documents, instruments
and agreements, executed and/or delivered in connection herewith, as the same
now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.

     

    "Funds
Employed" means gross Factored Accounts outstanding on Factor's books
less any balance outstanding in the Reserve Account to the credit of
Company.

     

    "General
Intangibles" shall have the meaning ascribed to such term in the Code.

     

    "Instruments"
shall have the meaning ascribed to such term in the Code.

     

    "Lender"
means Capstone Capital Group I, LLC.

     

    "Misdirected
Payment Fee" shall be fifteen percent (15%) of the amount of any payment
on account of a Factored Account which has been received by Company and not
delivered in kind to Factor on the next business day following the date of
receipt by Company.

     

    "Missing
Notation Fee" shall be 15% of the face amount of each
invoice.

     

    "Obligations"
means all obligations, liabilities and indebtedness of Company to Factor,
now existing or hereafter incurred, direct or indirect, absolute or contingent,
whether created under this Agreement, any supplement hereto or any other
agreement between Company and Factor or otherwise, including without limitation,
obligations owed by Company to others which Factor obtains by
assignment.

     

    "Person"
means an individual, corporation, partnership, trust, or unincorporated
organization, or a government or any agency or political subdivision
thereof.

     

    "Purchase
Price" shall have the meaning set forth in Section 4 of this
Agreement.

     

    "Required
Reserve Amount" means the Reserve Percentage multiplied by the unpaid
balance of Accounts Receivable.

     

    "Reserve
Account" shall have the meaning set forth in Section 5 of this Agreement.

     

    "Reserve
Percentage" means 20%.

     

    "Reserve
Shortfall" means the amount by which the Reserve Account is less than the
Required Reserve Amount.

     

    "Solvent"
means that Company (i) owns property whose fair saleable value is greater
than the amount required to pay all of its indebtedness (including contingent
debts), (ii) is able to pay all
of its indebtedness as such indebtedness matures and (iii) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is engaged.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    2.             
Appointment.
Company appoints Factor as its sole factor with respect to all sales of
its merchandise or rendition of services to Customers and hereby offers to sell
and assign only to Factor, as absolute owner, all Accounts Receivables arising
out of such sales of services, including all such sales or services arising
under any trade names or through any division or selling agent. "Accounts
Receivable" shall mean and include Accounts, contract rights,
Instruments, Documents, Chattel Paper, General Intangibles, returned or
repossessed goods arising out of or relating to the sale or other disposition of
goods at any time or from time to time, all proceeds thereof and merchandise
represented thereby. The assignment of Accounts Receivable to Factor shall vest
in Factor all of Company's rights, securities, guaranties and liens with respect
to each Account Receivable, including all rights of stoppage in transit,
replevin, reclamation, and all claims of lien filed by Company or held by
Company on personal property, and all rights and interest in the merchandise
sold, and all of Company's defenses and rights of offset with respect to any
payments received by Factor on Accounts Receivable, but Factor shall not be
obligated to, and shall not be liable for, exercising or refusing to exercise
any rights granted to Factor hereby.

     

    3.             
Purchase
of
Accounts
Receivable. Factor agrees to purchase from Company at the office of
Factor all Accounts Receivable first approved by Factor in writing as to credit
risk and terms of sale (each such approved Account Receivable being herein
called a "Factor
Risk Account
Receivable"). All orders from Customers including the amount and terms of
each proposed sale or service to such Customers shall be submitted in advance of
purchase or rendition of service to Factor for prior written approval, which may
be granted or withheld at Factor's sole discretion. Factor's approval is subject
to withdrawal either orally or in writing at any time prior to delivery of
merchandise or rendition of services, and shall be deemed no longer effective in
any event if Company's delivery of merchandise or rendition of services is made
more than thirty (30) days beyond the date specified for such delivery or
rendition in the terms of sales submitted to Factor for its approval, or more
than thirty (30) days from the date of Factor's approval if no delivery or
rendition date has been specified. Submission of orders for Factor's prior
written approval shall not be required with regard to a sale made by Company in
compliance with any Customer credit line which may from time to time be issued
to Company by Factor in its sole discretion, provided that shipments are made
prior to the expiration date of the credit line approval. Any Customer credit
line issued by Factor may be amended or withdrawn by Factor in whole or in part
at any time and for any reason without advance notice. The amount of all
Accounts Receivable of each Customer as to which Factor shall have approved a
Customer credit line shall, in the order in which they have arisen, be treated
as Factor Risk Accounts Receivable up to the limit of the Customer credit line
in effect from time to time. Upon the receipt of any payment in collected funds
from or issuance of credit to a Customer with respect to a Factor Risk Account
Receivable, the Accounts Receivable of such Customer in excess of the Customer
credit line shall, to the extent of such payment or credit and in the order in
which they have arisen, be treated as Factor Risk Accounts Receivable, unless
prior to such payment or credit Factor shall have withdrawn the credit line
approval.. Factor's withholding or withdrawing of a Customer order approval or
credit line approval shall at all times be in Factor's sole discretion, and
Factor's actions with regard thereto shall not render Factor liable to Company
in any respect for damages or otherwise. Subject to Company's warranties and
representations
herein contained, Factor will assume the credit loss on each Factor Risk Account
Receivable specifically assigned to Factor hereunder within twenty-one (21) days
from the earlier of its invoice date or shipping date if the Customer, after
receiving and accepting delivery of goods or services, fails to pay in full such
Factor Risk Account Receivable on its longest maturity solely because of its
financial inability to pay. ,If, however, such failure to pay is due in whole or
in part to any other cause, Factor shall not be responsible and shall have full
recourse to Company. Factor at its option may purchase Accounts Receivable not
approved as to credit risk or teens of sale (each such Account Receivable not
approved by Factor being herein called a "Company
Risk Account Receivable"), but each purchase of a Company Risk Account
Receivable shall be with full recourse to Company and Company agrees to pay
Factor on demand for each Company Risk Account Receivable.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    4.            
 Purchase
Price. The purchase price of each Account Receivable (the "Purchase
Price")
shall be equal to eighty-percent (80%) of the gross amount of the Account
Receivable. The Purchase Price shall be remitted to the Company upon acceptance
by Factor of the assignment of the Accounts Receivables provided at that time
Factor has received a Letter of Acceptance substantially in the form of Exhibit
C annexed hereto or such other evidence acceptable to Factor, in its sole
discretion, that the Customer has received and accepted the merchandise and that
the Customer will assert no defenses, claims or offsets in excess of ten (10%)
percent of the invoice amount. After purchase of an Account Receivable by
Factor, a discount, credit, unidentifiable payment or allowance may be claimed
solely by the Customer, and if not so claimed, such discount, credit, payment or
allowance shall be the property of Factor.

     

    5.             
Company
Reserve Account. Factor shall establish on its books in Company's name a
reserve account (the "Reserve
Account") which Factor shall credit with the Purchase Price of all
Accounts Receivable purchased by Factor from Company and which Factor shall
debit with all disbursements of funds made to Company or on its behalf, as well
as all credits, discounts to Company's Customers, anticipations earned by
Company's Customers, factoring charges, interest, bank wire transfer and other
fees and any other amounts chargeable to Company under this Agreement or any
supplement hereto or any other agreement between Company and Factor.' Factor
shall furnish Company with advices of all credits and debits to the Reserve
Account. Factor will' render to Company on a monthly basis a statement of its
Reserve Account. Each statement of account will be considered correct and
binding on Company, absent manifest error, unless Company objects in writing, by
certified mail, return receipt requested, to capstone within thirty (30) days of
the date of such statement of account, setting forth each and every specific
exception by Company to such statement. Each statement of account shall be
deemed delivered when e-mailed or when mailed through the United States postal
service, three days after the date of such statement. Each statement shall be
dated within 10 days of the 1st day of each month, and Company will be deemed to
have received such statement unless it claims non-receipt in writing by
certified mail, return receipt requested, by the twenty-fifth day of such
month.

     

    6.             
Warranties
and Representations. Company warrants and represents that each Account
Receivable sold and assigned to Factor hereunder: (a) shall be genuine and valid
and shall represent a completed delivery or performance in fulfillment in every
respect of the terms, conditions and specifications of a bona fide, uncancelled
and unexpired sale or service in the ordinary
course of business to a Customer which is not affiliated with Company in full
compliance with the specifications of such Customer; (b) Company shall be at the
time of delivery or performance the absolute owner of all merchandise and other
property involved; (c) Company has not granted and, without Factor's prior
written consent, Company will not hereafter grant to any other Person until all
security interests granted hereunder have been terminated, a security interest
in, or grant to any other Person any right to purchase, the Factored Accounts;
(d) is enforceable for the full amount thereof and will be subject to no dispute
or claim by the Customer in whole or in part as to price, terms, quality,
quantity, delay in shipment, offsets, counterclaims, contra accounts or any
other defense of any other kind and character, real or claimed; (e) will be
subject to no discounts, deductions, allowances, offsets, counterclaims or other
contra items or to no special terms of payment which are not shown on the face
of the invoice thereof; (f) will not represent a delivery of merchandise upon
"consignment," "guaranteed sale," "sale or return," "payment on reorder" or
similar terms; (g) is payable in United States Dollars and has been invoiced to
the Customer by an invoice that bears notice of the sale and assignment to
Factor in compliance with the terms of this Agreement; and (h) will not
represent a "pack, bill and hold" transaction unless Company furnishes Factor
with a copy of the Customer's purchase order and has obtained Customer's
agreement to grant Factor a security interest in the merchandise and to pay for
the merchandise at the maturity date of the invoice irrespective of whether or
not Company has received instructions to deliver the same; (i) Company agrees to
notify Factor promptly of any change in the name, corporate structure, or
business addresses or location of the Company; (j) All applicable state and
federal laws have been complied with in conjunction with all of the Factoring
Agreement, as well as all of the transactions arising pursuant to the Factoring
Agreement. Company acknowledges to Factor that the non-compliance with such laws
constitutes a breach of this Agreement and would have an adverse impact on the
value, enforceability and/or collectability of any Factored Account sold and
assigned to Factor pursuant to this Agreement; (k) Company is duly incorporated
and in good standing in its state of incorporation and those states in which
Company conducts business and shall remain so for so long as this Agreement is
in effect; (1) the Factoring Agreement, and the transaction entered into in
connection therewith, does not and shall not contravene any applicable statute,
law or regulation; and (m) the Factoring Agreement correctly sets forth all of
the terms of the factoring relationship between Company and the Factor. Company
shall provide Factor with immediate notice of any breach of the Factoring
Agreement.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    7.             Collateral,
No Lien Termination Without Release, Liquidation Success
Premium.

     

    7.1         
 As security for all of the Obligations, Company grants Factor a
continuing lien in, and security interest in the collateral described in Exhibit
A (being herein referred to as the "Collateral"). Recourse to the Collateral or
any other security shall not at any time be required and Company shall at all
times remain liable for the repayment upon demand of all Obligations at any time
owing by Company to Factor. During the term of this Agreement, Company shall not
sell or assign, negotiate, pledge or grant any security interest in any of the
Collateral to anyone other than Factor or Lender, without Factor's prior written
consent.

     

    7.2           
In recognition of Factor's right to have all its attorneys' fees and other
expenses incurred in connection with this Agreement secured by the Accounts
Receivables and other collateral, notwithstanding payment in full of any
deficiency by Company, Factor shall not be required to record any
termination or satisfactions of any liens on the Accounts Receivables and
Collateral unless the Company has executed and delivered to Factor general
releases in a form reasonably acceptable to Factor. The
Company understands that this provision constitutes a waiver
of rights under Section 9-513(c) of the UCC.

     

    7.3          
If Company substantially ceases operating as a going concern, and the proceeds
of the Collateral created after an Event of Default are in excess of the balance
due at the time of default, Company shall pay to Factor a liquidation success
premium of ten (10%) percent of the amount of such excess.

     

    8.            
Invoicing.
All invoices for merchandise sold or services rendered to a Customer
shall be prepared by the Company and shall bear a notice that they have been
assigned to, are owned by and are payable directly and only to Factor's Refactor
in substantially the faun shown on the notice of assignment attached hereto as
Exhibit
B attached hereto. Upon Factor's request, Company shall furnish Factor
with copies of all invoices, accompanied by duly executed assignment schedules,
original shipping or delivery receipts, and such other information or Documents
as Factor in its discretion may request from time to time. Company represents
and warrants to Factor that it has given or will promptly give, or has caused or
will promptly cause to be given, written notification to all Customers of
Factor's purchase and ownership thereof. In the event that such notification for
any reason is not timely provided to a Customer, Factor at its option shall have
the right (but no obligation) to provide such notification to such Customer,
with the same effect as if such notice had been given directly by Company. If
Company fails for any reason to provide Factor, within two (2) days after a
request by Factor, with copies of such invoices (or the equivalent) or such
proof of shipment or delivery when requested by Factor for any Factor Risk
Account Receivable or fails to provide the Letter of Acceptance or other
evidence concerning acceptance of merchandise by the Customer as provided in
Section 3, such Factor Risk Account Receivable shall automatically become a
Company Risk Account Receivable. Factor shall have no liability with respect
such Company Risk Account Receivable and Company shall immediately reimburse
Factor for the amount of any remittances made by Factor to Company thereon. Each
invoice shall bear the terms of sale and no change from the original terms of
sale shall be made without Factor's prior written consent. Factor reserves the
right to mail original invoices to the Customers at Company's expense; however,
mailing, sending or delivery by Factor of a bill or invoice shall not be deemed
to be any representation by Factor with respect thereto.

     

    9.             
Payment
of Accounts
Receivable. All payments of Accounts Receivable and other payments on
behalf of Company received by Factor shall be credited to Company's Reserve
Account. No check, draft or other instrument received by Factor shall constitute
final payment unless and until such check, draft or other instrument shall have
been actually collected by Factor in immediately available funds. The amount of
the Purchase Price of any Factor Risk Account Receivable which remains unpaid
will be deemed collected and will be credited to Company's account as of the
earlier of the following dates: (a) the date of the Account Receivables longest
maturity if any proceeding or petition is instituted or filed by or against the
Customer for relief under any federal or state bankruptcy or insolvency law,
code or act, or if a receiver or trustee is appointed for the Customer; or (b)
as of the last day of the fourth (4th) month following its longest maturity date
if such Factor Risk Account Receivable remains unpaid as of such date without
the happening of any of the events specified in the preceding
clause
(a). If any Factor Risk Account Receivable credited to Company's Reserve Account
is not paid for any reason other than the Customer's financial inability to pay,
Factor shall reverse the credit and charge Company's Reserve Account accordingly
and such Account Receivable shall then be deemed a Company Risk Account
Receivable.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    10.            Remittances.
Without limiting the obligations of Company under Section 9 hereof, all
remittances received by Company with respect to all of its Accounts Receivable
purchased by Factor shall be held in trust for Factor, and Company shall
immediately deliver to Factor the identical checks, drafts, monies or other
forms of payment received, and Factor shall have the right to endorse Company's
name on any check, draft or other form of remittance received, where such
endorsement is required to effect collection. Company hereby appoints Factor or
such Person as Factor may name as its attorney-in-fact to execute all necessary
documents in Company's name and do all things necessary to carry out this
Agreement. Company ratifies and approves all acts of the attorney and agrees
that neither Factor nor the attorney shall be liable for any acts of commission
or omission nor for any error of judgment or mistake of fact or law. This power
being coupled with an interest is irrevocable as long as Company is indebted to
Factor in any manner.

     

    11.          
 Customer
Disputes and Claims. Company agrees to notify Factor immediately of all
returns and allowances and of all disputes with and claims made by Customers and
to adjust all such claims and disputes at its own expense, issuing credit
memoranda promptly, but subject to Factor's approval. It is Factor's practice to
allow a reasonable time for the settlement of disputes between Company and
Company's Customers without waiving Factor's right at any time to adjust any
claims and disputes on a Factor Risk Account Receivable directly with the
Customer and to charge back to the Reserve Account at any time the full amount
of the Account Receivable involved. Factor may at any time charge the Reserve
Account the full amount of: (a) any Customer deduction of not more than one
hundred dollars; (b) any Factor Risk Account which is not paid in full when due
for any reason (real or imaginary) other than the Customer's financial inability
to pay; (c) any Account for which there is a breach of any of Company's
warranties or representations set forth herein; (d) any anticipation deducted by
such Customer on any Account; and (e) any Company Risk Account Receivable which
is not paid in full when due. Any such charge back shall not be deemed to
constitute a reassignment of the Account Receivable, and Factor shall retain a
security interest therein as security for all Obligations owing to
Factor.

     

    12.       
    Collection
of Accounts;
Returned Goods. As owner of the Accounts Receivable, Factor shall have
the right to (a) bring suit, or otherwise enforce collection, of the Account
Receivable in the name of Company or Factor, (b) modify the terms of payment,
settle, compromise or release, in whole or in part, any amounts owing, on terms
Factor may deem advisable, and (c) issue credits in the name of Company or
Factor. Should any goods be returned or rejected by Company's Customers or
otherwise recovered by Company, Company shall segregate and hold such goods in
trust for Factor, but at Company's sole risk and expense. Company shall also
promptly notify Factor and, at Factor's request, will deliver such goods to
Factor, pay Factor the invoice price thereof, or sell such goods at Company's
expense for the purpose of paying Company's Obligations to Factor. Once Company
has granted or issued a discount, credit or allowance to a Customer on any
Account Receivable, Company shall have no further interest therein. Any
remittances received by Company on account of any of the Accounts
Receivable shall be held by Company as trustee of an express trust for Factor's
benefit, separate from its own property, and Company shall immediately deliver
the same in kind properly endorsed to Factor. Factor may endorse Company's name
on any check, instrument, draft or other document in payment of an Account
Receivable. Any payments made to either Company or Factor from, or credits
issued to, a Customer shall be applied first to the Factor Risk Accounts
Receivable owing by such Customer, irrespective of instructions of the Customer
or the invoice dates of such Factor Risk Accounts Receivable or the mariner in
which payment is made, and Factor shall have recourse to Company to the extent
any such payment is made directly to Company.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    13.          
 Commissions.
Company agrees to pay Factor a commission of two percent (2%), in the
form of a discount on the face amount of each Factor Risk Accounts Receivable or
Company Risk Accounts Receivable for the first thirty (30) days or part thereof
that such Account Receivable is outstanding. In no event, however, shall the
commission payable for each invoice be less than $7.00. All commissions due
hereunder shall be payable by debit to the Reserve Account. After the first
thirty (30) days that any portion of a Factor Risk Accounts Receivable or
Company Risk Accounts Receivable has not been Closed and until such Account
Receivable is Closed, the commission due to Factor shall be one percent (1%) for
each additional fourteen (14) day period, or portion thereof that such Account
Receivable is outstanding, and shall be earned on the first day of such period.
The minimum commissions to be earned by Factor under this Agreement for (i) the
first year of this Agreement, commencing the date hereof shall be $420,000 and
(ii) the second year of this Agreement, commencing on the first anniversary date
hereof shall be $540,000 (each, a "Minimum Commission"). The difference between
the Minimum Commissions and the amount of commissions actually received shall be
chargeable to the Reserve Account as of the end of each such year (or, if this
Agreement is terminated for any reason before the Anniversary Date, as of the
date of such termination).

     

    14.           
Refactoring.
The Company acknowledges and agrees that the Factor may, from time to
time, reassign and resell any Account Receivables and the Collateral to (i) CIT
Commercial Services, Inc. or any of its successors in interest; (ii) any other
factor; or (iii) such other business entity as Factor in its sole discretion may
determine (any such entity collectively and severally referred to herein as the
"Refactor"). Pursuant to the terms and conditions of agreements entered into
with such Refactor from time to time (the "Refactoring Agreements"), the Company
hereby consents to any such resale, reassignment and hypothecation. Company
agrees that all agreements, representations, warranties and covenants made by it
hereunder shall be deemed to be made both to the Factor and the Refactor,
jointly and severally as the context may require and that the term "Factor" as
used throughout this Agreement shall in all instances be interpreted to mean
"either the Factor or the Refactor or both of them." The Company agrees that (i)
this Agreement is and shall at all times be subject to the terms, provisions and
covenants of the Refactoring Agreements which may now or hereafter affect this
Agreement and to any renewals, modifications, replacements or extensions
thereof; and (ii) the Refactor may exercise all of the Factor's rights and
remedies hereunder whether or not such rights or remedies have been specifically
granted herein to the Refactor. The Company covenants and agrees that the
Refactor, its employees and its agents shall not be liable to it for any act,
omission, breach or violation on its part or on the Factor's part with respect
to performance or non-performance of any of the terms and provisions of the
Refactoring Agreements, and with respect to performance or non-performance of
any of the terms and provisions of this Agreement, or any other
agreement
between the parties hereto and any indebtedness owing by the Factor to the
Company of any kind or nature whatsoever, if any, and that the Company shall
look solely to the Factor for enforcement of its rights under this Agreement and
the Reassignment Agreements.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    15.           
Financial
Statements and Information; Inspections.

     

    15.1       
 Company shall furnish Factor with annual financial statements
prepared by an independent accountant acceptable to Factor and also furnish on a
timely basis interim financial statements and other financial information upon
Factor's request.

     

    15.2        
Factor shall have the right at any time to access, review and copy, at Company's
expense, all records and documents relating to any Collateral, and to access and
utilize computer hardware and software and other data processing systems used by
Company. Company shall maintain, and shall furnish to Factor on request, such
other supporting documents and reports with respect to the Factored Accounts as
Factor may reasonably request from time to time. If any of Company's records or
reports in respect of reporting any of the foregoing information are prepared by
an accounting service or other agent, Company hereby irrevocably authorizes such
service or agent to deliver such records, reports and related documents to
Factor, and such accounting service or agent may rely upon a copy of this
Agreement as evidencing such authorization without necessity of notice to or
further consent by Company.

     

    15.3        
Company shall permit any representative of Factor to visit and inspect any of
the properties of Company, to examine all books of accounts, records, reports
and other papers, to make copies and extracts therefrom, and to discuss the
affairs, finances and accounts of Company with its officers, employees,
independent public accountants, creditors and depository institutions all at
such reasonable times and as often as may be reasonably requested. Company
agrees to do all things necessary or appropriate to permit Factor to fully
exercise its rights under this Section 15.3.

     

    16.          
Financial
Condition. Company warrants that it is Solvent and shall remain Solvent
during the term of this Agreement; that any financial statements delivered to
Factor accurately and fairly state Company's financial condition; that there has
been no material adverse change in Company's financial condition as reflected in
the statements since the date thereof nor do the statements fail to disclose any
fact or facts which might materially adversely affect Company's financial
condition; and there is no litigation pending or threatened, which taken in the
aggregate if adversely determined, can reasonably be expected to have a material
adverse affect on Company's financial condition.

     

    17.           
Term
of
Agreement;
Termination.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    17.1        
This Agreement shall take effect on the date of acceptance by Factor and
shall remain in full force and effect until terminated: (a) by Company at any
time upon the giving of not less than thirty (30) days prior written notice of
termination to Factor or (b) by Factor at any time upon the giving of not less
than thirty (30) days prior written notice of termination to Company, or, (c)
without notice if any of the following events (each, an "Event
of Default") shall occur: (i) Company shall default in the payment of any
of the Obligations on the due date thereof (whether due at stated maturity, on
demand, upon acceleration or otherwise); (ii) any representation
or warranty made in this Agreement or any supplement hereto, or in any other
document executed in connection herewith, or any instrument, certification or
financial statement furnished in compliance with or in reference hereto or
thereto, or in any other agreement between Company and Factor, shall prove
incorrect or misleading in any material respect when made or furnished; (iii)
Company shall fail or neglect to perform, keep or observe any covenant or
agreement contained in this Agreement or any supplement hereto or any other
agreement between Company and Factor; (iv) Company or any guarantor of the
Obligations shall file or have filed against it a petition, answer or consent
seeking relief under Title 11 of the United States Bankruptcy Code, as now
constituted or hereafter amended, or any other applicable Federal or state
bankruptcy law or other similar law, or a receiver, liquidator, assignee,
trustee, custodian, sequestrator or similar official shall be appointed for
Company or any guarantor of the Obligations or any substantial part of its or
his property; (v) the occurrence of any event or condition which, alone or when
taken together with all other events or conditions occurring or existing
concurrently therewith, Factor determines (1) has or may be reasonably expected
to have a material adverse effect upon Company's business, operations,
properties, condition (financial or otherwise); (2) has or may be reasonably
expected to have any material adverse effect whatsoever upon the validity or
enforceability of this Agreement or any other agreement between Company and
Factor; (3) has or may be reasonably expected to have any material adverse
effect upon any security for the Obligations, Factor's liens therein or the
priority of such liens; or (4) materially impairs the ability of Company to
perform its Obligations under this Agreement or any other agreement between
Company and Factor, or the ability of Factor to enforce and collect the
Obligations or realize upon any of the security for the Obligations in
accordance with the terms of this Agreement or any other agreement between
Company and Factor or applicable law; (vi) Company is no longer Solvent, or
fails, closes, suspends, or goes out of business; or (vii) there is a change (by
death or otherwise) in Company's principal stockholders or owners. In the event
that this Agreement is terminated by Company prior to an Anniversary Date,
Factor shall be entitled to the unpaid portion of the minimum factoring.
commissions which would have been payable to Factor pursuant to Section 13 of
this Agreement through such Anniversary Date.

     

     17.2        
Company shall indemnify Factor and hold Factor harmless from and against any
liability, loss, damage, suit, action or proceeding ever suffered or incurred by
Factor (including reasonable attorneys' fees and expenses) as the result of
Company's failure to observe, perform or discharge any of its Obligations or
duties hereunder or under any Factoring Agreement. In addition, Company shall
defend Factor against and save Factor harmless from the actions, demands or
claims of any Person with respect to any of the Factored Accounts or any of the
other Collateral, except any such actions, demands or claims directly arising
from Factor's willful misconduct or gross negligence.

     

     17.3        
In the event that this Agreement is terminated by Company or by Factor as a
result of an Event of Default prior to an Anniversary Date, Factor shall be
entitled to the unpaid portion of the minimum factoring commissions which would
have been payable to Factor pursuant to Section 13 of this Agreement through
such Anniversary Date.

     

     18.          
Effect
of
Tertian.
ation. Upon the effective date of termination, all Obligations of Company
to Factor shall become immediately due and payable without further notice or
demand irrespective of any maturity dates established prior thereto. However, no
such termination shall release
or abrogate any security interest held by Factor in any collateral of Company
until all of Company's Obligations to Factor, including commissions, interest
and all costs, expenses and attorneys' fees as herein provided, are paid in
full. In the event that Factor shall cease to act as factor for Company, Company
agrees to furnish Factor with indemnity satisfactory to Factor that will protect
Factor against possible charges to Company under the terms of this Agreement and
with a release satisfactory to Factor of all claims Company may have against
Factor and until Company does so, Factor may hold any balance remaining to
Company's credit in the Reserve Account as security for all Obligations of
Company to Factor. Company shall pay Factor upon demand all costs and expenses,
including reasonable attorneys' fees, incurred by Factor to obtain or enforce
payment of any Obligations due from Company to Factor or in the prosecution or
successful defense of any action or proceeding concerning any matter arising out
of or related to this Agreement, the factoring of the Company's Accounts
Receivable by Factor, or any Obligations owing by Company to
Factor.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    19.           
Lien
Perfection. Company agrees to execute and deliver to Factor all financing
statements provided for by the Uniform Commercial Code and all other documents
or instruments which may be required by law or which Factor may request to
perfect its first priority security interest hereunder and to cooperate with
Factor in the filing, recording or renewal thereof, and to pay all filing and
recording fees and expenses related thereto, and Company authorizes Factor and
any Person whom Factor designates as Company's attorney with power to sign
Company's name thereon. This power being coupled with an interest is irrevocable
as long as Company is indebted to Factor in any manner. Company shall execute,
acknowledge and/or deliver such other Instruments as assurances as may
reasonably be requested to effectuate the purposes of this Agreement. At
Factor's option, this Agreement may be filed as a financing
statement.

     

    20.           
Preferences.
Company shall indemnify and hold Factor harmless from any loss, damage or
expense (including attorneys' fees) incurred by Factor as a result of a claim
made at any time against Factor for the repayment or recovery of any amount
received by Factor in payment of any Company Risk Account Receivable by the
payor or legal representative thereof (including a trustee in bankruptcy or
assignee for the benefit of creditors) on the grounds of preference under the
provisions of the Bankruptcy Code or any other federal or state insolvency law.
If such claim is ever made against Factor, in addition to all of Factor's other
rights under this Agreement, Company shall pay to Factor on demand the full net
face amount of any such Company Risk Account Receivable, or if Factor so elects,
Factor shall have the right to charge against the Reserve Account the full net
face amount of any such Company Risk Account Receivable, but such charge back
shall not be deemed a reassignment thereof The provisions of this Section 20
shall survive the termination of this Agreement and the payment in full of the
Obligations.

     

    21.          
Notices.
Any notices, demands, consents, or other writings or communications
permitted or required by this Agreement shall be given by facsimile transmitter,
overnight air courier or certified mail, return receipt requested, addressed to
the party to be notified as follows:

     

    
      	
              (a)  

            	
              If
      to Factor:Capstone Business Credit, LLC

            
	 	b

              1350
      Avenue of the Americas, 24th Floor New York, NY 10019

            
	 	Facsimile
      No.: 212-755-6833
	 	 
	(b)  	b

              If
      to Company:Harbrew Imports, Ltd.

            
	 	102
      Buffalo Ave.
	 	Freeport,
      NY
      11520
	 	Facsimile
      No.: 516-377-2509

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    or to
such other address as each party may designate for itself by notice given in
accordance with this Section 21. Any written notice or demand that is not sent
in conformity with the provisions hereof shall nevertheless be effective on the
date that such notice is actually received by the noticed party.

     

    22.           
ACH
Authorization. In order to satisfy any of the Obligations, Factor is
hereby authorized by Company to initiate electronic debit or credit entries
through the ACH system to any deposit account maintained by Company wherever
located.

     

    23.           
Miscellaneous.
This Agreement, together with any supplement hereto, contains the entire
agreement between the parties, and cannot be modified, altered, changed or
amended orally. This Agreement is intended solely for the benefit of Factor and
Company, and no other person or party (including any guarantor), is intended to
be benefited hereby in any way. The captions in this Agreement are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof. Failure of Factor to exercise any rights granted to it
hereunder upon any breach or default by Company shall not be deemed a waiver
thereof in the event of further breaches or defaults. The remedies of Factor
hereunder shall be deemed to be cumulative and not exclusive. This Agreement
shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns and shall become effective only from the date
of Factor's written acceptance. This Agreement is made and accepted and shall be
construed, interpreted and enforced in accordance with the laws of the State of
New York, without regard to conflict of law principles, and Company irrevocably
consents and submits to the jurisdiction of state courts of, and federal courts
in, the State of New York, for the purpose of any suit, action or proceeding
relating hereto.

     

    24.           
WAIVER
OF JURY TRIAL. TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, FACTOR AND COMPANY HEREBY
WAIVE, IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON,
UNDER OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY SUPPLEMENT
HERETO OR ANY OF THE OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH, OR ANY
CLAIM, DEFENSE, RIGHT OF SETOFF OR OTHER ACTION PERTAINING HERETO, OR TO ANY OF
THE FOREGOING.

     

    25.           
Electronic
Data Transmission. Factor may authorize Company to send to Factor or
receive from Factor assignments, invoices, credit memoranda, credit approval
requests, credit approvals, and other reports to be delivered to or transmitted
by Factor under this Agreement by electronic
means (each, an "Electronic
Transmission"). Any documents authorized by Factor to be sent by
Electronic Transmission shall be deemed (a) to have been transmitted by a Person
duly authorized to do so, and (b) to have been received by the Person for whom
such documents were intended on the actual date of receipt of such documents,
unless such day is not a business day, in which event such documents shall be
deemed to have been received on the first business day following actual receipt.
Each party may rely upon, and assume the authenticity of, any signatures
contained in any documents Factor authorizes to be transmitted by Electronic
Transmission, and such signatures shall have the same effect and weight as
original signatures and shall be sufficient to satisfy the requirements of the
Uniform Commercial Code or any applicable statute, rule of law, or rule of
evidence. Electronic Transmissions which are not readily capable of bearing
either a signature or a reproduction of a signature (e.g., e-mail transmissions)
shall be deemed signed, for purposes of the Uniform Commercial Code and all
other rules of law and evidence, if they contain the name or an abbreviation of
the name of the party sending the Electronic Transmission, it being agreed that
such name or abbreviation serves as a symbol adopted by the sender with the
intent to authenticate such writing. On the request of either party, the other
party shall immediately confirm the receipt of any documents transmitted by
Electronic Transmission. The sender of any documents transmitted by Electronic
Transmission shall maintain backup paper documents for such documents until at
least the third
anniversary of the date of the termination of this Agreement and shall,
on request of the receiving party, furnish such backup paper documents within
two business days of the receipt of a request therefor. Each party may rely upon
documents authorized by Factor to be sent by Electronic Transmission to the same
extent as if original documents had been personally delivered.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    26.           
Fees.
Company agrees to remit to Factor:

     

    26.1        
The fees set forth herein in the amounts and on the dates set forth
herein and authorizes Factor to collect such fees on their respective due dates
by charging Company's Reserve Account;

     

    26.2         
Any Misdirected Payment Fee immediately upon its accrual;

     

    26.3         
The Missing Notation Fee on any Invoice that is sent by Company to a Customer
which
does not contain the notice as required by Exhibit B hereof;

     

    26.4         
All past due amounts due from Company to Factor hereunder; and

     

    26.5         
The out-of-pocket expenses directly incurred by Factor in the
administration of this Agreement such as wire transfer fees, postage and audit
fees. Company shall not be required to pay (a) for more than two audits per
twelve-month period unless an Event of Default has occurred, (b) more than
$4,500.00 per audit.

     

    27.           
Special
Covenants. For so long as any of the Obligations are outstanding, Company
covenants that, unless otherwise consented to by Factor in writing, it shall
comply with the covenants set forth in Schedule
A attached hereto.

     

    28.      
     Clearance
Days. For all purposes under this Agreement, Clearance Days will be
added to
the date on which Factor receives any payment.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the day
and year first above written.

     

    
      
        	 	 	HARBREW
      IMPORTS, LTD.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Richard DeCicco	 
	 	 	Name:
      Richard DeCicco	 
	 	 	Title:
      President	 
	 	 	 	 

      

    

     

    Accepted
by Factor:

     

    
      
        	CAPSTONE
      BUSINESS CREDIT, LLC	 	 	 	 
	 	 	 	 	 
	
                /s/
      Joseph Ingrassia

              	 	 	 	 
	
                Name:
      Joseph Ingrassia

              	 	 	 	 
	
                Title:
      Managing Member

              	 	 	
                 

              	 

      

    

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    to

    Factoring
Agreement

    1.Description
of Collateral:

     

    (a) All
inventory and goods, including without limitation, all inventory and goods held
for sale or lease or to be furnished under contracts of service, raw materials,
work in process, finished goods, goods in transit, advertising, packaging and
shipping materials, and all designs, creations, patterns, styles, samples and
all other material and supplies (collectively, the
"Inventory");

     

    (b) All
documents, including without limitation, documents of transport, payment and
title relating to any of the foregoing and all such other documents as are made
available to Company for the purpose of ultimate sale or exchange of goods or
for the purpose of loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing with goods in a manner
preliminary to their sale or exchange;

     

    (c) All
rights, claims, rights of offset, rights of return, actions and causes of action
against any Person, including without limitation, those arising out of the
purchase by Company of any of its Inventory including, without limitation, the
supplier orders, and all rights of stoppage in transit, replevin, reclamation
and rights of any unpaid vendor or as a lienor;

     

    (d) All
equipment, machinery, fixtures, trade fixtures, vehicles, furnishings, furniture
supplies, materials, tools, machine tools, office equipment, appliances,
apparatus, dies, jigs, and chattels; trucks, trailers, loaders and other
vehicles and all replacements and substitutions therefore and all accessories
thereto;

     

    (e) All of
Company's now owned or hereafter acquired General Intangibles; including,
without limitation, trademarks, tradenames, tradestyles, trade secrets,
equipment formulation, manufacturing procedures, quality control procedures,
product specifications, patents, patent applications, copyrights, registrations,
contract rights, choses in action, causes of action, corporate or other business
records, inventions, designs, goodwill, claims under guarantees, licenses,
franchises, tax refunds, tax refund claims, computer programs, computer data
bases, computer program flow diagrams, source codes, object codes and all other
intangible property of every kind and nature;

     

    (f) All of
Company's now owned or hereafter acquired Accounts and contract rights,
Instruments, insurance proceeds, Documents, Chattel Paper, letters of credit and
Company's rights to receive payment thereunder, any and all rights to the
payment or receipt of money or other forms of consideration of any kind at any
time now or hereafter owing or to be owing to Company ("Receivables"), all
proceeds thereof and all files in which Company has any interest whatsoever
containing information identifying or pertaining to any of Company's
Receivables, together with all of Company's rights to any merchandise which is
represented thereby, and all Company's right, title, security and guarantees
with respect to each Receivable, including, without limitation, all rights of
stoppage in transit, replevin and reclamation and all rights as an unpaid
vendor;

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    (g) All of
Company's now owned and hereafter acquired investment property, including,
without limitation, securities (whether certificated or uncertificated,
securities entitlements, securities accounts, commodities accounts, and
commodities contracts;

     

    (h) All
representations, liens on real or personal property, leases and other agreements
and property which in any way secures or relates to the foregoing, or are
acquired for the purpose of securing and enforcing any item
thereof;

     

    (i) (1)
all cash held as collateral to the extent not otherwise constituting collateral,
all other cash or property at any time on deposit with or held by lender for the
account of Company (whether for safekeeping, custody, pledge, transmission or
otherwise), (2) all present or future deposit accounts (whether time or demand
or interest or non-interest bearing) of Company with Lender any other Person
including those to which any such cash may at any time and from time to time be
credited, (3) all investments and reinvestments (however evidenced) of amounts
from time to time credited to such accounts, and (4) all interest, dividends,
distributions and other proceeds payable on or with respect to (x) such
investments and reinvestments and (y) such accounts;

     

    (j) 
All Instruments, Chattel Paper, Documents, and contract rights and other rights,
irrespective of when acquired; and

     

    (k) All
proceeds, insurance proceeds, products and accessions of or to any and all of
the foregoing, and all collateral and security for, and guarantees of, any and
all of the foregoing, and all books and records relating to any and all of the
foregoing (including without limitation, any and all microfilm, microfiche,
computer programs and records, source materials, tapes and discs) and all
equipment containing said books and records.

     

     

     

     

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
B

    TO

    FACTORING
AGREEMENT

     

    "This
invoice has been sold and assigned to CAPSTONE BUSINESS CREDIT, LLC ("Company"),
and has been reassigned by Company to CIT Commercial Services, Inc., by whom it
is now owned and to whom it is exclusively payable at the following
address:

     

    CIT
Group/Commercial Service, Inc.

    POST
OFFICE BOX 1036 

    Charlotte,
NC 28201-1036

     

    Prompt
notice must be given to CIT Group/Commercial Service, Inc., of any merchandise
returns and any claims or disputes whether based on shortages, non-delivery,
offsets or any other claim."

     

     

     

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

     

    EXHIBIT
C

     

    Letter
Of Acceptance

     

    [Attached]

     

    Capstone
Business Credit, LLC

    1350
Avenue of the Americas, 24th Floor

    New
York, NY 10019

    Tel:
212 755 3636

    Fax:
212 755 6833

    e-mail:
crice@capstonetrade.corn

     

     

    Mr. John
Doe 

    Controller

    Sam's
Club, Inc. 

    Address

    City,
State, Zip

     

    RE:

     

    
      	PO Number 	PO Date 	Invoice
    Number	Invoice Date
    	Terms 	Invoice
    Amt.	 

    

     

    Dear Mr.
Doe,

     

    We are a
finance company and assignee for the above named entity, providing funding
during a period of rapid growth and expansion. Attached is a letter from that
company authorizing all payments to be sent directly and solely to Capstone
Business Credit, LLC.

     

    By
signing at the bottom and returning this letter to us by fax, you will
acknowledge to us both your understanding of the foregoing, and the correctness
of the above invoice numbers pursuant to the terms immediately above your
signature.

     

    Sincerely,

     

    Joseph F.
Ingrassia

    Managing
Member

     

    The
undersigned acknowledges to Capstone Business Credit, LLC that the above invoice
amounts are correct and owing: that the work and/or merchandise has been
completed and accepted and that there are not now nor will there be, any setoffs
beyond 10% of the invoice amount(s); and that there will be no claims against
the. funds paid. Neither Capstone nor its agents have made any representations
except as herein set forth. This estoppel is not subject to modification. New
York law shall apply hereto.

     

    
      
        	Authorized
      Signature	 	Title	 

      

       

      
        
          
          

        

        
          C-1

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULE
A

    TO
FACTORING AGREEMENT

     

    Special
Covenants

     

    
      	
              1.             

            	
              No
      Material Change or Change of Control. Absent prior written consent
      from Factor, Company shall not (a) make or permit any material change in
      the nature of its business as carried on as of the Effective Date, or (b)
      allow to occur a Change of
Control.

            

    

     

    "Change
of Control" shall mean, on or after the Effective Date, that any change
in the composition of Company's stockholders as of the Effective Date shall
occur which would result in any stockholder or group acquiring 20% or more of
any class of the capital stock of Company, or that any Person or entity (or
group of Persons or entities acting in concert) shall otherwise acquire,
directly or indirectly, the power to elect a majority of the Board of Directors
of Company or otherwise direct the management or affairs of Company by obtaining
proxies, entering into voting agreements or trusts, acquiring securities or
otherwise.

     

    
      	
              2.             

            	
              Negative
      Pledge. Company shall not create, incur, assume or permit to exist
      any lien upon or with respect to any Collateral now owned or hereafter
      acquired by Company, except for liens in favor of Lender or
      Factor.

            

    

     

     

     

     

     

     

     

    Schedule B-2

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