EXHIBIT 2(b)
************************************************************
CANANDAIGUA WINE COMPANY, INC.
and
SUBSIDIARY GUARANTORS
_____________________________
SECOND AMENDMENT AND RESTATEMENT
dated as of August 5, 1994
of
AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT
Dated as of June 29, 1993
______________________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
************************************************************
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to
which it is attached but is inserted for convenience of reference
only.
Page
Section 1. Definitions and Accounting Matters . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . 31
1.03 Classes and Types of Loans. . . . . . . . . . . . . 32
Section 2. Commitments, Loans, Notes and Prepayments. . . . . 32
2.01 Loans . . . . . . . . . . . . . . . . . . . . . . . 32
2.02 Borrowings of Revolving Credit and Term Loans . . . 35
2.03 Barton Letter of Credit . . . . . . . . . . . . . . 35
2.04 Revolving Letters of Credit.. . . . . . . . . . . . 40
2.05 Changes of Commitments. . . . . . . . . . . . . . . 46
2.06 Commitment Fee. . . . . . . . . . . . . . . . . . . 47
2.07 Lending Offices . . . . . . . . . . . . . . . . . . 48
2.08 Several Obligations; Remedies Independent . . . . . 48
2.09 Notes . . . . . . . . . . . . . . . . . . . . . . . 48
2.10 Optional Prepayments and Conversions or
Continuations of Loans. . . . . . . . . . . . . . 49
2.11 Mandatory Prepayments and Reductions of
Commitments . . . . . . . . . . . . . . . . . . . 50
Section 3. Payments of Principal and Interest . . . . . . . . 53
3.01 Repayment of Loans. . . . . . . . . . . . . . . . . 53
3.02 Interest. . . . . . . . . . . . . . . . . . . . . . 54
Section 4. Payments; Pro Rata Treatment; Computations;
Etc. . . . . . . . . . . . . . . . . . . . . . . 55
4.01 Payments. . . . . . . . . . . . . . . . . . . . . . 55
4.02 Pro Rata Treatment. . . . . . . . . . . . . . . . . 56
4.03 Computations. . . . . . . . . . . . . . . . . . . . 57
4.04 Minimum Amounts . . . . . . . . . . . . . . . . . . 57
4.05 Certain Notices . . . . . . . . . . . . . . . . . . 57
4.06 Non-Receipt of Funds by the Agent . . . . . . . . . 58
4.07 Sharing of Payments, Etc. . . . . . . . . . . . . . 59
Section 5. Yield Protection, Etc. . . . . . . . . . . . . . . 61
5.01 Additional Costs. . . . . . . . . . . . . . . . . . 61
5.02 Limitation on Types of Loans. . . . . . . . . . . . 63
5.03 Illegality. . . . . . . . . . . . . . . . . . . . . 64
5.04 Treatment of Affected Loans . . . . . . . . . . . . 64
5.05 Compensation. . . . . . . . . . . . . . . . . . . . 65
5.06 Additional Costs in Respect of Letters of Credit. . 66
Section 6. Guarantee. . . . . . . . . . . . . . . . . . . . . 66
6.01 Guarantee . . . . . . . . . . . . . . . . . . . . . 66
6.02 Obligations Unconditional . . . . . . . . . . . . . 67
6.03 Reinstatement . . . . . . . . . . . . . . . . . . . 74
6.04 Subrogation . . . . . . . . . . . . . . . . . . . . 74
6.05 Remedies. . . . . . . . . . . . . . . . . . . . . . 74
6.06 Continuing Guarantee. . . . . . . . . . . . . . . . 75
6.07 Limitation on Guarantee Obligations . . . . . . . . 75
Section 7. Conditions Precedent . . . . . . . . . . . . . . . 75
7.01 Conditions to Effectiveness of Second Amended
and Restated Credit Agreement . . . . . . . . . . 75
7.02 Initial and Subsequent Extensions of Credit . . . . 81
Section 8. Representations and Warranties . . . . . . . . . . 81
8.01 Corporate Existence . . . . . . . . . . . . . . . . 81
8.02 Financial Condition . . . . . . . . . . . . . . . . 82
8.03 Litigation. . . . . . . . . . . . . . . . . . . . . 82
8.04 No Breach . . . . . . . . . . . . . . . . . . . . . 82
8.05 Power, Authority and Enforceability . . . . . . . . 83
8.06 Approvals . . . . . . . . . . . . . . . . . . . . . 83
8.07 Use of Credit . . . . . . . . . . . . . . . . . . . 84
8.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . 84
8.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . 84
8.10 Investment Company Act. . . . . . . . . . . . . . . 84
8.11 Public Utility Holding Company Act. . . . . . . . . 84
8.12 Material Agreements and Liens . . . . . . . . . . . 85
8.13 Environmental Matters . . . . . . . . . . . . . . . 85
8.14 Capitalization. . . . . . . . . . . . . . . . . . . 87
8.15 Subsidiaries, Etc.. . . . . . . . . . . . . . . . . 88
8.16 Real Property . . . . . . . . . . . . . . . . . . . 89
8.17 True and Complete Disclosure. . . . . . . . . . . . 89
8.18 The Barton Acquisition. . . . . . . . . . . . . . . 90
8.19 The Vintners Acquisition. . . . . . . . . . . . . . 90
8.20 The Heublein Acquisition. . . . . . . . . . . . . . 91
Section 9. Covenants of the Company . . . . . . . . . . . . . 91
9.01 Financial Statements Etc. . . . . . . . . . . . . . 91
9.02 Litigation. . . . . . . . . . . . . . . . . . . . . 95
9.03 Existence, Etc. . . . . . . . . . . . . . . . . . . 96
9.04 Insurance . . . . . . . . . . . . . . . . . . . . . 97
9.05 Prohibition of Fundamental Changes. . . . . . . . . 99
9.06 Limitations on Liens. . . . . . . . . . . . . . . .103
9.07 Indebtedness. . . . . . . . . . . . . . . . . . . .104
9.08 Investments . . . . . . . . . . . . . . . . . . . .105
9.09 Dividend Payments . . . . . . . . . . . . . . . . .106
9.10 Debt Ratio. . . . . . . . . . . . . . . . . . . . .106
9.11 Tangible Net Worth. . . . . . . . . . . . . . . . .107
9.12 Fixed Charges Ratio . . . . . . . . . . . . . . . .109
9.13 Capital Expenditures. . . . . . . . . . . . . . . .109
9.14 Interest Coverage Ratio . . . . . . . . . . . . . .110
9.15 Current Ratio.. . . . . . . . . . . . . . . . . . .110
9.16 Interest Rate Protection Agreements . . . . . . . .110
9.17 Transactions with Affiliates. . . . . . . . . . . .111
9.18 Use of Proceeds . . . . . . . . . . . . . . . . . .111
9.19 Certain Obligations Respecting Subsidiaries . . . .112
9.20 Additional Subsidiary Guarantors. . . . . . . . . .112
9.21 Modifications of Certain Documents. . . . . . . . .112
9.22 Subordinated Indebtedness.. . . . . . . . . . . . .113
9.23 Eligible Inventory Located in Off-Premises
Warehouses. . . . . . . . . . . . . . . . . . . .115
Section 10. Events of Default . . . . . . . . . . . . . . . .115
Section 11. The Agent . . . . . . . . . . . . . . . . . . . .120
11.01 Appointment, Powers and Immunities . . . . . . . .120
11.02 Reliance by Agent. . . . . . . . . . . . . . . . .121
11.03 Defaults . . . . . . . . . . . . . . . . . . . . .121
11.04 Rights as a Bank . . . . . . . . . . . . . . . . .122
11.05 Indemnification. . . . . . . . . . . . . . . . . .122
11.06 Non-Reliance on Agent and Other Banks. . . . . . .123
11.07 Failure to Act . . . . . . . . . . . . . . . . . .123
11.08 Resignation or Removal of Agent. . . . . . . . . .123
11.09 Consents under Basic Documents . . . . . . . . . .124
Section 12. Miscellaneous . . . . . . . . . . . . . . . . . .124
12.01 Waiver . . . . . . . . . . . . . . . . . . . . . .124
12.02 Notices. . . . . . . . . . . . . . . . . . . . . .124
12.03 Expenses, Etc. . . . . . . . . . . . . . . . . . .125
12.04 Amendments, Etc. . . . . . . . . . . . . . . . . .126
12.05 Successors and Assigns . . . . . . . . . . . . . .127
12.06 Assignments and Participations . . . . . . . . . .127
12.07 Survival . . . . . . . . . . . . . . . . . . . . .129
12.08 Captions . . . . . . . . . . . . . . . . . . . . .130
12.09 Counterparts . . . . . . . . . . . . . . . . . . .130
12.10 Governing Law; Submission to Jurisdiction. . . . .130
12.11 Waiver of Jury Trial . . . . . . . . . . . . . . .130
12.12 Treatment of Certain Information . . . . . . . . .130
12.13 Notices under the Senior Subordinated Debt
Documents. . . . . . . . . . . . . . . . . . . .131
SCHEDULE I - Material Agreements and Liens
SCHEDULE II - Hazardous Materials
SCHEDULE III - Subsidiaries and Investments
SCHEDULE IV - Litigation
SCHEDULE V - Real Property
SCHEDULE VI - Life Insurance Agreements
SCHEDULE VII - Existing Loan Reallocation
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Term Loan Note
EXHIBIT A-3 - Form of Swingline Note
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C - Form of Security Agreement
EXHIBIT D-1 - Form of Modification and Confirmation of
Deed of Trust (California -- Bisceglia and
Guild)
EXHIBIT D-2 - Form of Modification and Confirmation of Deed of
Trust (Vintners Acquisition Corp.)
EXHIBIT D-3 - Form of Modification and Confirmation of New York
Mortgages
EXHIBIT D-4 - Form of Modification Confirmation of Kentucky
Mortgage
EXHIBIT E - Form of New York Mortgage
EXHIBIT F - Form of Kentucky Mortgage
EXHIBIT G - Form of California Deed of Trust
EXHIBIT H-1 - Form of Opinion of Special Counsel to Obligors
EXHIBIT H-2 - Form of Opinion of California Counsel to Obligors
EXHIBIT H-3 - Form of Opinion of Kentucky Counsel to Obligors
EXHIBIT I - Form of Opinion of Special New York Counsel
to Chase
EXHIBIT J - Form of Confidentiality Agreement
EXHIBIT K - Form of Barton Letter of Credit
SECOND AMENDMENT AND RESTATEMENT dated as of August 5,
1994, between: CANANDAIGUA WINE COMPANY, INC., a corporation
duly organized and validly existing under the laws of the State
of Delaware (the "Company"); each of the Subsidiaries of the
Company identified under the caption "SUBSIDIARY GUARANTORS" on
the signature pages hereto (individually, a "Subsidiary
Guarantor" and, collectively, the "Subsidiary Guarantors" and,
together with the Company, the "Obligors"); each of the lenders
that is a signatory hereto identified under the caption "BANKS"
on the signature pages hereto or which, pursuant to
Section 12.06(b) hereof, shall become a "Bank" hereunder
(individually, a "Bank" and, collectively, the "Banks"); and THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking
association, as agent for the Banks (in such capacity, together
with its successors in such capacity, the "Agent").
The Company, certain of the Subsidiary Guarantors, the
Existing Banks (as defined below) and the Agent are parties to an
Amendment and Restatement dated as of June 29, 1993 of Credit
Agreement dated as of September 30, 1991 (as heretofore modified
and supplemented and in effect on the date of this Agreement, the
"Existing Credit Agreement"), providing, subject to the terms and
conditions thereof, for extensions of credit (by the making of
loans and the issuance of letters of credit) by the Existing
Banks to the Company. The parties hereto wish to amend and
restate the Existing Credit Agreement in its entirety to provide
for, among other things, the increase of the amount of credit
available thereunder, additional lenders to become parties
thereto and the making of loans to provide a portion of the funds
needed to acquire certain assets from Heublein, Inc., it being
the intention of the parties hereto that the loans and letters of
credit outstanding under the Existing Credit Agreement on the
Effective Date (as hereinafter defined) shall continue and remain
outstanding and not be repaid on the Effective Date but shall be
assigned and reallocated among the Banks as provided in Section
2.01 and 2.04 hereof.
Accordingly, the parties hereto hereby agree that the
Existing Credit Agreement shall, as of the date hereof (but
subject to the satisfaction of the conditions precedent specified
in Section 7 hereof), be amended and restated in its entirety as
follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used in
the plural and vice versa):
"Acquisitions" shall mean, collectively, the Barton
Acquisition, the Heublein Acquisition and the Vintners
Acquisition.
"Adjusted Cash Flow" shall mean, for any period (the
"calculation period"), the sum, for the Company and its
Consolidated Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following:
(a) Operating Cash Flow for the calculation period, minus
(b) Capital Expenditures made during the calculation period
(excluding (x) Capital Expenditures made from the proceeds of
Indebtedness other than Indebtedness hereunder and (y)
Restructuring Capital Expenditures made during such period, but
not exceeding an aggregate amount for all calculation periods of
$22,270,000) plus (c) the decrease (or minus the increase) of
Working Capital from the last day of the fiscal quarter
immediately preceding the calculation period to the last day of
the calculation period.
"Affiliate" shall mean any Person that directly or
indirectly controls, or is under common control with, or is
controlled by, the Company and, if such Person is an individual,
any member of the immediate family (including parents, spouse,
children and siblings) of such individual and any trust whose
principal beneficiary is such individual or one or more members
of such immediate family and any Person who is controlled by any
such member or trust. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and
"under common control with") shall mean possession, directly or
indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities
or partnership or other ownership interests, by contract or
otherwise), provided that, in any event, any Person that owns
directly or indirectly securities having 5% or more of the voting
power for the election of directors or other governing body of a
corporation or 5% or more of the partnership or other ownership
interests of any other Person (other than as a limited partner of
such other Person) will be deemed to control such corporation or
other Person. Notwithstanding the foregoing, (a) no individual
shall be an Affiliate solely by reason of his or her being a
director, officer or employee of the Company or any of its
Subsidiaries and (b) none of the Subsidiaries of the Company
shall be Affiliates.
"Applicable Lending Office" shall mean, for each Bank
and for each Type of Loan, the "Lending Office" of such Bank (or
of an affiliate of such Bank) designated for such Type of Loan on
the signature pages hereof or such other office of such Bank (or
of an affiliate of such Bank) as such Bank may from time to time
specify to the Agent and the Company as the office by which its
Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean: (a) with respect to
Base Rate Loans, 1/4% per annum; and (b) with respect to
Eurodollar Loans, 1-1/2% per annum; provided that if the Debt
Ratio as at the last day of any quarter of the Company ending
after August 31, 1994 shall fall within any of the ranges set
forth in the schedule below then, subject to the delivery to the
Agent of a certificate of a senior financial officer of the
Company demonstrating such fact prior to the end of the next
succeeding fiscal quarter, the "Applicable Margin" for each Loan
shall be reduced to the rate set forth opposite such range in the
schedule below during the period commencing on the Quarterly Date
on or immediately following the date of receipt of such
certificate to but not including the next succeeding Quarterly
Date thereafter and provided further that in the event that at
any time any long-term senior secured debt securities of the
Company are rated BBB- or better by Standard & Poor's Corporation
("S&P) or Baa3 or better by Moody's Investors Services, Inc.
("Moody's"), then, subject to the delivery to the Agent of a
certificate of a senior financial officer of the Company
demonstrating such fact prior to the end of the next succeeding
fiscal quarter, the "Applicable Margin" for each Loan shall be
reduced to 0% (for Base Rate Loans) and 5/8 of 1% (for Eurodollar
Loans) during the period commencing on the Quarterly Date on or
immediately following the date of receipt of such certificate to
but not including the next succeeding Quarterly Date thereafter;
and provided further that notwithstanding the foregoing, if an
Event of Default shall have occurred and be continuing at the
time of delivery of such certificate or at any time following the
same until such next succeeding Quarterly Date, the Applicable
Margin for any Loan shall not as a consequence of this proviso be
so reduced so long as such Event of Default shall be continuing:
Applicable Margin
Base Rate
Debt Ratio Loan Eurodollar Loan
(a) Less than or
equal to 6.0 to
1 but greater than
4.35 to 1.0 0% 1-1/4%
(b) Less than or equal
4.35 to 1 but
greater than 3.50
to 1.0 0% 1-1/8%
(c) Less than or equal
to 3.50 to 1.0 but
greater than 2.75
to 1.0 0% 1%
(d) Less than or equal
to 2.75 to 1.0 0% 7/8 of 1%
Notwithstanding the foregoing, the Applicable Margin shall,
commencing on the date hereof and at all times thereafter, be
equal to the respective rates per annum set forth in row (a)
above until such time as, in accordance with the provisions of
this definition, the Applicable Margin shall be required to be
increased or decreased.
"Bankruptcy Code" shall mean the Federal Bankruptcy
Code of 1978, as amended from time to time.
"Barton" shall mean Barton Incorporated, a Delaware
corporation.
"Barton Acquisition" shall mean the acquisition by the
Company of the stock of Barton pursuant to the Barton Stock
Purchase Agreement.
"Barton Acquisition Documents" shall mean the Barton
Stock Purchase Agreement and all other agreements and instruments
(together with any and all exhibits, annexes and schedules
thereto) executed and delivered between the Company and Barton,
as the same shall, subject to Section 9.21 hereof, be modified
and supplemented and in effect from time to time.
"Barton Letter of Credit" shall mean a letter of credit
of the Issuing Bank issued to American National Bank and Trust
Company of Chicago, as escrowee, in a face amount equal to
$28,200,000 and substantially in the form of Exhibit K hereto.
"Barton Letter of Credit Banks" shall mean,
collectively, the Issuing Bank and (a) on the date hereof, the
Banks having Barton Letter of Credit Commitments on the signature
pages hereof and (b) thereafter, the Banks from time to time
holding Barton Letter of Credit Commitments after giving effect
to any assignments permitted by Section 12.06 hereof.
"Barton Letter of Credit Commitment" shall mean, for
each Barton Letter of Credit Bank, the obligation of such Bank to
participate in (or, in the case of the Issuing Bank, to retain an
interest in) the Barton Letter of Credit in an aggregate amount
up to but not exceeding the amount set opposite the name of such
Bank on the signature pages hereof under the caption "Barton
Letter of Credit Commitment" (as the same may be reduced from
time to time pursuant to Section 2.05 hereof). The original
aggregate amount of the Barton Letter of Credit Commitments is
$28,200,000.
"Barton Letter of Credit Interest" shall mean, for each
Bank which is a Barton Letter of Credit Bank, such Bank's
participation interest (or, in the case of the Issuing Bank, the
Issuing Bank's retained interest) in the Issuing Bank's liability
under the Barton Letter of Credit and such Bank's rights and
interests in the related Reimbursement Obligations and fees,
interest and other amounts payable in connection with the Barton
Letter of Credit and related Reimbursement Obligations.
"Barton Letter of Credit Termination Date" shall mean
the earlier of (i) December 16, 1996 or (ii) the date the Barton
Letter of Credit shall expire or be terminated.
"Barton Phantom Stock Plan" shall mean the Barton
Incorporated Phantom Stock Plan effective April 1, 1990 and as
amended and restated for Units Granted after March 31, 1992, as
the same shall be modified and supplemented and in effect from
time to time.
"Barton Stock Purchase Agreement" shall mean,
collectively, the Stock Purchase Agreement dated April 27, 1993,
and Amendment No. 1 thereto dated May 3, 1993, each among the
Company, Barton and the Barton Stockholders, as the same shall,
subject to Section 9.21 hereof, be modified and supplemented and
in effect from time to time.
"Barton Stockholders" shall mean, collectively, the
stockholders of Barton listed on Exhibit A of the Barton Stock
Purchase Agreement.
"Base Rate" shall mean, for any day, a rate per annum
equal to the higher of (a) the Federal Funds Rate for such day
plus 1/2 of 1% and (b) the Prime Rate for such day. Each change
in any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest
at rates based upon the Base Rate.
"Basic Documents" shall mean, collectively, this
Agreement, the Notes, the Security Documents, the Revolving
Letter of Credit Documents, the Barton Acquisition Documents, the
Heublein Acquisition Documents and the Vintners Acquisition
Documents.
"Borrowing Base" shall mean, as at any date, the sum of
(a) 70% of the aggregate amount of Eligible Receivables at said
date plus (b) 40% of the aggregate value of Eligible Inventory at
said date. The "value" of Eligible Inventory shall be determined
at the lower of cost or market in accordance with GAAP, except
that cost shall be determined on a first-in-first-out basis.
"Borrowing Base Certificate" shall mean a certificate
of the chief financial officer of the Company, substantially in
the form of Exhibit B hereto and appropriately completed.
"Business Day" shall mean any day (a) on which
commercial banks are not authorized or required to close in New
York City and (b) if such day relates to a borrowing of, a
payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period,
also on which dealings in Dollar deposits are carried out in the
London interbank market.
"California Products Facility" shall mean the
production facility located at 3000 Butler Avenue, Fresno,
California and as of the date hereof owned by California Products
Company.
"Canandaigua West" shall mean Canandaigua West, Inc., a
New York corporation and a Wholly Owned Subsidiary of the
Company.
"Capital Expenditures" shall mean, for any period,
expenditures (including, without limitation, the aggregate amount
of Capital Lease Obligations incurred during such period) made by
the Company or any of its Consolidated Subsidiaries to acquire or
construct fixed assets, plant and equipment (including renewals,
improvements and replacements required to be classified in
accordance with GAAP as capital expenditures, but excluding
maintenance and repairs not required to be so classified) during
such period computed in accordance with GAAP. Notwithstanding
the foregoing, none of the Acquisitions nor any acquisition
permitted pursuant to clause (d) of Section 9.05 hereof shall be
treated as a Capital Expenditure.
"Capital Lease Obligations" shall mean, for any Person,
all obligations of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be
classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards
Board), and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined
in accordance with GAAP (including such Statement No. 13).
"Casualty Event" shall mean, with respect to any
Property of any Person, any loss of or damage to, or any
condemnation or other taking of, such Property for which such
Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation.
"Chase" shall mean The Chase Manhattan Bank (National
Association).
"Class" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Commitments" shall mean the Revolving Credit
Commitments, the Term Loan Commitments and the Barton Letter of
Credit Commitments.
"Consolidated Subsidiary" shall mean, for any Person,
each Subsidiary of such Person (whether now existing or hereafter
created or acquired) the financial statements of which shall be
(or should have been) consolidated with the financial statements
of such Person in accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer
to the continuation pursuant to Section 2.10 hereof of a
Eurodollar Loan from one Interest Period to the next Interest
Period.
"Continuing Banks" shall mean all Existing Banks other
than the Exiting Bank.
"Convert", "Conversion" and "Converted" shall refer to
a conversion pursuant to Section 2.10 hereof of one Type of Loans
into another Type of Loans, which may be accompanied by the
transfer by a Bank (at its sole discretion) of a Loan from one
Applicable Lending Office to another.
"Debt Ratio" shall mean, as at the last day of any
fiscal quarter of the Company (the "day of determination"), the
ratio of (a) the average of the aggregate amounts of Indebtedness
of the Company and its Consolidated Subsidiaries as at such day
and as at the last days of each of the three immediately
preceding fiscal quarters to (b) Operating Cash Flow for the
period of four consecutive fiscal quarters ending on such day of
determination. Notwithstanding the foregoing,
(i) for the purposes of determining Debt Ratio used in
the definition of Applicable Margin and Letter of Credit Fee
Percentage, the average amounts of Indebtedness pursuant to
clause (a) above as at the following dates shall be
determined as follows:
(A) as at November 30, 1994, an amount equal to
(x) the aggregate amount of Indebtedness of the Company
and its Consolidated Subsidiaries (other than any
Indebtedness of the Company and its Consolidated
Subsidiaries in respect of the Revolving Credit
Commitments) as at such day plus (y) $100,000,000;
(B) as at February 28, 1995, an amount equal to
(x) the average of the aggregate amounts of
Indebtedness of the Company and its Consolidated
Subsidiaries (other than any Indebtedness of the
Company and its Consolidated Subsidiaries in respect of
the Revolving Credit Commitments) as at such day and as
at the last day of the immediately preceding fiscal
quarter plus (y) $100,000,000; and
(C) as at May 31, 1995, (x) the average of the
aggregate amounts of Indebtedness of the Company and
its Consolidated Subsidiaries (other than any
Indebtedness of the Company and its Consolidated
Subsidiaries in respect of the Revolving Credit
Commitments) as at such day and as at the last days of
the immediately preceding two fiscal quarters plus (y)
$100,000,000;
(ii) for the purposes of determining Debt Ratio for all
other purposes of this Agreement, the average amounts of
Indebtedness pursuant to clause (a) above as at the
following dates shall be determined as follows:
(A) as at November 30, 1994, an amount equal to
the aggregate amount of Indebtedness of the Company and
its Consolidated Subsidiaries as at such day;
(B) as at February 28, 1995, an amount equal to
the average of the aggregate amounts of Indebtedness of
the Company and its Consolidated Subsidiaries as at
such day and as at the last day of the immediately
preceding fiscal quarter; and
(C) as at May 31, 1995, an amount equal to the
average of the aggregate amounts of Indebtedness of the
Company and its Consolidated Subsidiaries as at such
day and as at the last days of the immediately
preceding two fiscal quarters;
(iii) Operating Cash Flow pursuant to clause (b) above
as at the following dates shall be determined as follows:
(A) as at November 30, 1994, an amount equal to
(x) Operating Cash Flow for the fiscal quarter ending
on such day times (y) 4;
(B) as at February 28, 1995, an amount equal to
(x) Operating Cash Flow for the period of two
consecutive fiscal quarters ending on such day times
(y) 2; and
(C) as at May 31, 1995, an amount equal to (x)
Operating Cash Flow for the period of three fiscal
quarters ending on such day times (y) 1 1/3; and
(iv) Indebtedness as at the last day of each fiscal
quarter included in the determination of average
Indebtedness pursuant to clause (a) above shall be
determined under the assumption that any prepayment of Term
Loans hereunder from the proceeds of any Equity Issuance at
any time during any such fiscal quarter included in the
calculation thereof shall have been made in the first such
fiscal quarter.
"Default" shall mean an Event of Default or an event
that with notice or lapse of time or both would become an Event
of Default.
"Disposition" shall mean any sale, assignment, transfer
or other disposition of any Property (whether now owned or
hereafter acquired) by the Company or any of its Subsidiaries to
any Person excluding any sale, assignment, transfer or other
disposition of any Property sold or disposed of in the ordinary
course of business and on ordinary business terms.
"Dividend Payment" shall mean dividends (in cash,
Property or obligations) on, or other payments or distributions
on account of, or the setting apart of money for a sinking or
other analogous fund for, or the purchase, redemption, retirement
or other acquisition of, any shares of any class of stock of the
Company or of any warrants, options or other rights to acquire
the same (or to make any payments to any Person, such as "phantom
stock" payments, where the amount thereof is calculated with
reference to the fair market or equity value of the Company or
any Subsidiary), but excluding dividends payable solely in shares
of common stock of the Company.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Effective Date" shall mean the date on which the
conditions to effectiveness set forth in Section 7.01 hereof
shall have been satisfied, and the Loans hereunder made (which
date shall in no event occur later than August 31, 1994).
"Eligible Inventory" shall mean, as at any date, all
inventory owned by the Obligors that is required to be reflected
on a consolidated balance sheet of the Company and its
Consolidated Subsidiaries prepared in accordance with GAAP less
the aggregate amount of all accounts payable owed by the Obligors
to producers of agricultural products located in the State of
California.
"Eligible Receivables" shall mean, as at any date, the
aggregate amount of all receivables owned by the Obligors (net of
bad debt reserves) that are required to be reflected on a
consolidated balance sheet of the Company and its Consolidated
Subsidiaries prepared in accordance with GAAP.
"Employee Stock Purchase Plan" shall mean the
Canandaigua Wine Company, Inc. 1989 Employee Stock Purchase Plan
as the same shall be modified and supplemented and in effect from
time to time.
"Environmental Claim" shall mean, with respect to any
Person, (a) any written or oral notice, claim, demand or other
communication (collectively, a "claim") by any other Person
alleging or asserting such Person's liability for investigatory
costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or
penalties arising out of, based on or resulting from (i) the
presence, or Release into the environment, of any Hazardous
Material at any location, whether or not owned by such Person, or
(ii) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law. The term "Environmental
Claim" shall include, without limitation, any claim by any
governmental authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the presence of
Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment.
"Environmental Laws" shall mean any and all Federal,
state, local and foreign laws, rules or regulations, and any
orders or decrees, as now or hereafter in effect, relating to the
regulation or protection of human health, safety or the environ-
ment or to emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes into the indoor or outdoor environment,
including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollu-
tants, contaminants, chemicals or toxic or hazardous substances
or wastes.
"Equity Issuance" shall mean (a) any issuance or sale
by the Company or any of its Subsidiaries after the Effective
Date of (i) any capital stock, (ii) any warrants or options
exercisable in respect of capital stock (other than any warrants
or options issued to directors, officers or employees of the
Company or any of its Subsidiaries and any capital stock of the
Company issued upon the exercise of such warrants or options) or
(iii) any other security or instrument representing an equity
interest (or the right to obtain any equity interest) in the
issuing or selling Person or (b) the receipt by the Company or
any of its Subsidiaries after the Effective Date of any capital
contribution received (whether or not evidenced by any equity
security issued by the recipient of such contribution); provided
that Equity Issuance shall not include (x) any such issuance or
sale by any Subsidiary of the Company to the Company or any
Wholly Owned Subsidiary of the Company or (y) any capital
contribution by the Company or any Wholly Owned Subsidiary of the
Company to any Subsidiary of the Company.
"Equity Rights" shall mean, with respect to any Person,
any outstanding subscriptions, options, warrants, commitments,
preemptive rights or agreements of any kind (including, without
limitation, any stockholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or outstanding
securities convertible into, any additional shares of capital
stock of any class, or partnership or other ownership interests
of any type in, such Person.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade
or business that is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code)
as the Company or is under common control (within the meaning of
Section 414(c) of the Code) with the Company.
"Eurodollar Base Rate" shall mean, with respect to any
Eurodollar Loan for any Interest Period therefor, the arithmetic
mean (rounded upwards, if necessary, to the nearest 1/16 of 1%)
of the respective rates per annum quoted by each Reference Bank
at approximately 11:00 a.m. London time (or as soon thereafter as
practicable) on the date two Business Days prior to the first day
of such Interest Period for the offering by such Reference Bank
to leading banks in the London interbank market of Dollar
deposits having a term comparable to such Interest Period and in
an amount comparable to the principal amount of the Eurodollar
Loan to be made by such Reference Bank for such Interest Period.
If any Reference Bank is not participating in any Eurodollar Loan
during any Interest Period therefor, the Eurodollar Base Rate for
such Loan for such Interest Period shall be determined by
reference to the amount of the Loan that such Reference Bank
would have made or had outstanding had it been participating in
such Loan during such Interest Period.
"Eurodollar Loans" shall mean Loans the interest rates
on which are determined on the basis of rates referred to in the
definition of "Eurodollar Base Rate" in this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan
for any Interest Period therefor, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by
the Agent to be equal to the Eurodollar Base Rate for such Loan
for such Interest Period divided by 1 minus the Reserve
Requirement for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to
such term in Section 10 hereof.
"Excess Cash Flow" shall mean for any fiscal year (the
"Current Fiscal Year"), Adjusted Cash Flow for the Current Fiscal
Year, minus the sum of (i) all payments made by the Company under
Sections 2.2, 2.3, 2.4, 2.5 and 2.6 of the Barton Stock Purchase
Agreement during the Current Fiscal Year, plus (ii) the maximum
possible amount of all payments required to be made by the
Company under Sections 2.2, 2.3, 2.4, 2.5 and 2.6 of the Barton
Stock Purchase Agreement during the immediately succeeding fiscal
year, plus (iii) Fixed Charges for the Current Fiscal Year.
"Existing Banks" shall mean the lenders party as
"Banks" to the Existing Credit Agreement.
"Existing Credit Agreement" shall have the meaning
assigned to such term in the recitals hereof.
"Existing Letters of Credit" shall have the meaning
assigned to such term in Section 2.04(m) hereof.
"Existing Letter of Credit Liabilities" shall have the
meaning assigned to such term in Section 2.04(m) hereof.
"Existing Loans" shall mean, collectively the Existing
Revolving Credit Loans and the Existing Term Loans.
"Existing Revolving Credit Loans" shall have the
meaning assigned to such term in Section 2.01(a) hereof.
"Existing Term Loans" shall have the meaning assigned
to such term in Section 2.01(b) hereof.
"Exiting Bank" shall mean Bank of America National
Trust and Savings Association.
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published
on the next succeeding Business Day and (b) if such rate is not
so published for any Business Day, the Federal Funds Rate for
such Business Day shall be the average rate charged to Chase on
such Business Day on such transactions as determined by the
Agent.
"Fixed Charges" shall mean, for any period, the sum,
for the Company and its Consolidated Subsidiaries (determined on
a consolidated basis without duplication in accordance with
GAAP), of the following: (a) all payments of principal of
Indebtedness scheduled to be made during such period plus (b) all
Interest Expense for such period plus (c) the aggregate amount of
federal and state taxes paid during such period to the extent
that net operating income for such period pursuant to clause (a)
of the definition of "Operating Cash Flow" in this Section 1.01
has been calculated before giving effect to such taxes.
"Fixed Charges Ratio" shall mean, as at the last day of
any fiscal quarter, the ratio of (a) Adjusted Cash Flow for the
period of four fiscal quarters ending on or most recently ended
prior to such day to (b) Fixed Charges for such period.
"GAAP" shall mean generally accepted accounting
principles applied on a basis consistent with those which, in
accordance with Section 1.02(a) hereof, are to be used in making
the calculations for purposes of determining compliance with this
Agreement.
"Guarantee" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person,
or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for
the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss,
and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other
similar instrument for the benefit of another Person, but
excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used
as a verb shall have a correlative meaning.
"Hazardous Material" shall mean, collectively, (a) any
petroleum or petroleum products, flammable explosives, radio-
active materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, and transformers or
other equipment that contain dielectric fluid containing poly-
chlorinated biphenyls (PCB's), (b) any chemicals or other
materials or substances which are defined as or included in the
definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted
hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants", "pollutants" or words of similar import under any
Environmental Law and (c) any other chemical or other material or
substance, exposure to which is prohibited, limited or regulated
under any Environmental Law.
"Heublein" shall mean Heublein Inc., a Connecticut
corporation.
"Heublein Acquisition" shall mean the acquisition by
Canandaigua West pursuant to the Heublein Acquisition Documents
of certain assets of Heublein.
"Heublein Acquisition Documents" shall mean the
Heublein Asset Purchase Agreement and all other agreements and
instruments (together with any and all exhibits, annexes and
schedules thereto) executed and delivered between the Company,
Canandaigua West and Heublein, as the same shall, subject to
Section 9.21 hereof, be modified and supplemented and in effect
from time to time.
"Heublein Asset Purchase Agreement" shall mean the
Asset Purchase Agreement dated as of August 3, 1994 between the
Company and Heublein (and assigned by the Company to Canandaigua
West on or prior to the Effective Date), as the same shall,
subject to Section 9.21 hereof, be modified and supplemented and
in effect from time to time.
"Heublein Assets" shall mean those certain assets sold
by Heublein to Canandaigua West pursuant to the Heublein
Acquisition Documents, all as more particularly described
therein.
"Heublein Options" shall mean the options issued by the
Company to Heublein for the purchase of 200,000 and 400,000
shares of the Company's Class A Common Stock, par value, $.01 per
share, at the exercise price of $30 per share and $35 per share,
respectively, as more particularly set forth in the Option
Agreement executed and delivered by the Company and Heublein
pursuant to Section 2.3(c) of the Heublein Asset Purchase
Agreement.
"Inactive Subsidiary" shall mean, as at any date, any
Subsidiary of the Company that, as at the end of and for the
quarterly accounting period ending on or most recently ended
prior to such date, shall have less than $100,000 in assets and
less than $100,000 in gross revenues.
"Indebtedness" shall mean, for any Person: (a) obliga-
tions created, issued or incurred by such Person for borrowed
money (whether by loan, the issuance and sale of debt securities
or the sale of Property to another Person subject to an under-
standing or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person
to pay the deferred purchase or acquisition price of Property or
services, other than (i) trade accounts payable (other than for
borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts
payable are payable within 180 days of the date the respective
goods are delivered or the respective services are rendered or
(ii) the Company's obligations to make payments under Article II
of the Barton Stock Purchase Agreement; (c) Indebtedness of
others secured by a Lien on the Property of such Person, whether
or not the respective indebtedness so secured has been assumed by
such Person; (d) obligations of such Person in respect of letters
of credit or similar instruments issued or accepted by banks and
other financial institutions for account of such Person; (e)
Capital Lease Obligations of such Person; and (f) Indebtedness of
others Guaranteed by such Person.
"Information Memorandum" shall mean, the Canandaigua
Wine Company, Inc. Information Memorandum prepared in connection
with the solicitation of banks to become parties to this Agree-
ment as "Banks" hereunder, as the same shall be supplemented by
any additional financial information forwarded by Chase to the
Banks at the request of the Company.
"Intangibles" shall mean, as at any date of
determination, the book value of all assets which are required to
be classified in accordance with GAAP as intangibles on the
consolidated balance sheet of the Company and its Consolidated
Subsidiaries.
"Interest Coverage Ratio" shall mean, as at any date,
the ratio of (a) Operating Cash Flow for the period of four
fiscal quarters ending on or most recently ended prior to such
date to (b) Interest Expense for such period.
"Interest Expense" shall mean, for any period, the sum,
for the Company and its Consolidated Subsidiaries (determined on
a consolidated basis without duplication in accordance with
GAAP), of the following: (a) all interest in respect of Indebt-
edness accrued or capitalized during such period (whether or not
actually paid during such period) plus (b) the net amounts pay-
able (or minus the net amounts receivable) under Interest Rate
Protection Agreements accrued during such period (whether or not
actually paid or received during such period) minus (c) all
interest income during such period. Notwithstanding the fore-
going, the interest component of payments made by the Company
under Sections 2.2, 2.3, 2.4, 2.5 and 2.6 of the Barton Stock
Purchase Agreement during such period shall not be included in
Interest Expense.
"Interest Period" shall mean, with respect to any
Eurodollar Loan, each period commencing on the date such
Eurodollar Loan is made or Converted from a Base Rate Loan or the
last day of the next preceding Interest Period for such Loan and
ending on the numerically corresponding day in the first, second,
third or sixth calendar month thereafter, as the Company may
select as provided in Section 4.05 hereof, except that each
Interest Period that commences on the last Business Day of a
calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent
calendar month.
Notwithstanding the foregoing: (i) if any Interest
Period for any Revolving Credit Loan would otherwise end after
the Revolving Credit Termination Date, such Interest Period shall
end on the Revolving Credit Termination Date; (ii) no Interest
Period for any Term Loan may commence before and end after any
Principal Payment Date unless, after giving effect thereto, the
aggregate principal amount of the Term Loans having Interest
Periods that end after such Principal Payment Date shall be equal
to or less than the aggregate principal amount of the Term Loans
scheduled to be outstanding after giving effect to the payments
of principal required to be made on such Principal Payment Date;
(iii) each Interest Period that would otherwise end on a day
which is not a Business Day shall end on the next succeeding
Business Day (or, if such next succeeding Business Day falls in
the next succeeding calendar month, on the next preceding
Business Day); and (iv) notwithstanding clauses (i) and (ii)
above, no Interest Period shall have a duration of less than one
month and, if the Interest Period for any Eurodollar Loan would
otherwise be a shorter period, such Loan shall not be available
hereunder for such period.
"Interest Rate Protection Agreement" shall mean, for
any Person, an interest rate swap, cap or collar agreement or
similar arrangement between such Person and one or more financial
institutions providing for the transfer or mitigation of interest
risks either generally or under specific contingencies. For
purposes hereof, the "credit exposure" at any time of any Person
under an Interest Rate Protection Agreement to which such Person
is a party shall be determined at such time in accordance with
the standard methods of calculating credit exposure under similar
arrangements as prescribed from time to time by the Agent, taking
into account potential interest rate movements and the respective
termination provisions and notional principal amount and term of
such Interest Rate Protection Agreement.
"Investment" shall mean, for any Person: (a) the
acquisition (whether for cash, Property, services or securities
or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of
any other Person or any agreement to make any such acquisition
(including, without limitation, any "short sale" or any sale of
any securities at a time when such securities are not owned by
the Person entering into such short sale); (b) the making of any
deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person, but excluding
any such deposit, advance, loan or extension of credit having a
term not exceeding 120 days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course
of business); (c) the entering into of any Guarantee of, or other
contingent obligation with respect to, Indebtedness or other
liability of any other Person and (without duplication) any
amount committed to be advanced, lent or extended to such Person;
or (d) the entering into of any Interest Rate Protection
Agreement.
"Issuing Bank" shall mean (i) in respect of the Barton
Letter of Credit, Chase, as issuer of the Barton Letter of Credit
under Section 2.03 hereof, together with its successors and
assigns in such capacity and (ii) in respect of the Revolving
Letters of Credit, collectively, Chase as issuer of all Revolving
Letters of Credit (other than the Qingdao Letter of Credit) under
Section 2.04 hereof, and The First National Bank of Chicago as
issuer of the Qingdao Letter of Credit, in each case together
with its successors and assigns in such capacity.
"Letters of Credit" shall mean, collectively, the
Barton Letter of Credit and the Revolving Letters of Credit.
"Letter of Credit Fee Percentage" shall mean 1-3/8% per
annum; provided that if the Debt Ratio as at the last day of any
fiscal quarter of the Company ending after August 31, 1994 shall
fall within any of the ranges set forth in the schedule below
then, subject to the delivery to the Agent of a certificate of a
senior financial officer of the Company demonstrating such fact
prior to the end of the next succeeding fiscal quarter, the
"Letter of Credit Fee Percentage" shall be reduced to the rate
set forth opposite such range in the schedule below during the
period commencing on the Quarterly Date on or immediately
following the date of receipt of such certificate to but not
including the next succeeding Quarterly Date thereafter and
provided further that in the event that at any time any long-term
senior secured debt securities of the Company are rated BBB- or
better by Standard & Poor's Corporation ("S&P) or Baa3 or better
by Moody's Investors Services, Inc. ("Moody's"), then, subject to
the delivery to the Agent of a certificate of a senior financial
officer of the Company demonstrating such fact prior to the end
of the next succeeding fiscal quarter, the "Letter of Credit Fee
Percentage" shall be reduced to 1/2 of 1% during the period
commencing on the Quarterly Date on or immediately following the
date of receipt of such certificate to but not including the next
succeeding Quarterly Date thereafter; and provided further that
notwithstanding the foregoing, if an Event of Default shall have
occurred and be continuing at the time of delivery of such
certificate or at any time following the same until such next
succeeding Quarterly Date, the Letter of Credit Fee Percentage
shall not as a consequence of this proviso be so reduced for the
period from the occurrence of such Event of Default and so long
as the same shall be continuing:
Letter of Credit
Debt Ratio Fee Percentage
(a) Less than or
equal to 6.0 to
1 but greater than
4.35 to 1.0 1-1/8%
(b) Less than or equal
4.35 to 1 but
greater than 3.50
to 1.0 1%
(c) Less than or equal
to 3.50 to 1.0 but
greater than 2.75
to 1.0 7/8 of 1%
(d) Less than or equal
to 2.75 to 1.0 3/4 of 1%
Notwithstanding the foregoing, the Letter of Credit Fee
Percentage shall, commencing on the date hereof and at all times
thereafter, be equal to the respective rate per annum set forth
in row (a) above until such time as, in accordance with the
provisions of this definition, the Letter of Credit Fee
Percentage shall be required to be increased or decreased.
"Letter of Credit Liabilities" shall mean, without
duplication, at any time and in respect of any Letter of Credit,
the sum of (a) the undrawn face amount of such Letter of Credit
plus (b) the aggregate unpaid principal amount of all Reimburse-
ment Obligations of the Company at such time due and payable in
respect of all drawings made under such Letter of Credit. For
the purposes of this Agreement, a Bank shall be deemed to hold a
Letter of Credit Liability in an amount equal to its participa-
tion interest in such Letter of Credit under Sections 2.03 or
2.04 hereof, and an Issuing Bank shall be deemed to hold a Letter
of Credit Liability in an amount equal to its retained interest
in such Letter of Credit after giving effect to the acquisition
by the Barton Letter of Credit Banks or the Revolving Credit
Banks, as the case may be, other than such Issuing Bank of their
participation interests under said Sections 2.03 and 2.04.
"Lien" shall mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such Property. For purposes of this
Agreement and the other Basic Documents, a Person shall be deemed
to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title reten-
tion agreement (other than an operating lease) relating to such
Property.
"Loans" shall mean the Revolving Credit Loans and the
Term Loans.
"Majority Banks" shall mean the Majority Revolving
Credit Banks, the Majority Term Loan Banks and the Majority
Barton Letter of Credit Banks.
"Majority Barton Letter of Credit Banks" shall mean Barton
Letter of Credit Banks having at least 66-2/3% of the aggregate
Barton Letter of Credit Commitments, or following the issuance of
the Barton Letter of Credit, Banks holding at least 66-2/3% of the
aggregate unpaid principal amount of the Letter of Credit Liabili-
ties in respect of the Barton Letter of Credit.
"Majority Revolving Credit Banks" shall mean Revolving
Credit Banks having at least 66-2/3% of the aggregate amount of the
Revolving Credit Commitments or, if the Revolving Credit Commitments
shall have terminated, Banks holding at least 66-2/3% of the sum of
(a) aggregate unpaid principal amount of the Revolving Credit Loans
plus (b) the aggregate amount of all Letter of Credit Liabilities in
respect of Revolving Letters of Credit.
"Majority Term Banks" shall mean Term Loan Banks
holding at least 66-2/3% of the aggregate outstanding principal
amount of the Term Loans or, if the Term Loans shall not have
been made, at least 66-2/3% of the Term Loan Commitments.
"Margin Stock" shall mean "margin stock" within the
meaning of Regulations U and X.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the Property, business, operations, financial
condition, prospects, liabilities or capitalization of the
Company and its Subsidiaries taken as a whole, (b) the legal
ability or financial capacity of the Company or any Subsidiary
Guarantor to perform its obligations under any of the Basic
Documents to which it is a party, (c) the legality, validity or
enforceability of any of the Basic Documents, (d) the rights and
remedies of the Banks and the Agent under any of the Basic Docu-
ments or the perfection or priority of any of the Liens contem-
plated by any of the Security Documents or (e) the timely payment
of the principal of or interest on the Loans or other amounts
payable in connection therewith. Material Adverse Effect shall
also include, for purposes of Section 8.13 hereof, any material
adverse effect upon the operation of any of the facilities owned,
operated or leased by the Company or any of its Subsidiaries.
"Mortgage Notes" shall have the meaning assigned to
such term in Section 2.09(b) hereof.
"Mortgages" shall mean, collectively, (i) the Deeds of
Trust executed and delivered by the respective Obligors covering
the properties identified in Parts A(1) and A(2) of Schedule V
hereto, as such Deeds of Trust shall be modified and confirmed by
instruments of Modification and Confirmation in substantially the
form of Exhibit D-1 hereto, (ii) the Deeds of Trust executed and
delivered by the respective Obligors covering the properties
identified in Part A(3) of Schedule V hereto, as such Deeds of
Trust shall be modified and confirmed by instruments of
Modification and Confirmation in substantially the form of D-2
hereto, (iii) the Mortgages executed and delivered by the
respective Obligors in favor of the Agent covering the properties
identified in Parts B(1) and B(2) of Schedule V hereto, as such
Mortgages shall be modified and confirmed by instruments of
Modification and Confirmation in substantially the form of
Exhibit D-3 hereto, (iv) the Mortgages executed and delivered by
the respective Obligors in favor of the Agent covering the
properties identified in Part B(3) of Schedule V hereto, as such
Mortgages shall be modified and confirmed by instruments of
Modification and Confirmation in substantially the form of
Exhibit D-4 hereto, and (v) the Deed of Trust substantially in
the form of Exhibit G hereto executed and delivered by respective
Obligors in favor of the Agent covering the Property identified
in Part C of Schedule V hereto, in each case as such Deeds of
Trust and Mortgages referred to in the foregoing clauses (i),
(ii), (iii), (iv) and (v) shall be modified and supplemented and
in effect from time to time.
"Multiemployer Plan" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Company or any ERISA Affiliate and which is
covered by Title IV of ERISA.
"Net Available Proceeds" shall mean:
(i) in the case of any Disposition, the amount of Net
Cash Payments received in connection with such Disposition;
(ii) in the case of any Casualty Event, the aggregate
amount of proceeds of insurance, condemnation awards and
other compensation received by the Company and its
Subsidiaries in respect of such Casualty Event net of
(A) reasonable expenses incurred by the Company and its
Subsidiaries in connection therewith and (B) contractually
required repayments of Indebtedness (other than Indebtedness
to the Banks hereunder) to the extent secured by a Lien on
such Property and any income and transfer taxes payable by
the Company or any of its Subsidiaries in respect of such
Casualty Event; and
(iii) in the case of any Equity Issuance, the aggregate
amount of all cash received by the Company and its
Subsidiaries in respect of such Equity Issuance net of
reasonable expenses incurred by the Company and its
Subsidiaries in connection therewith.
"Net Cash Payments" shall mean, with respect to any
Disposition, the aggregate amount of all cash payments, and the
fair market value of any non-cash consideration, received by the
Company and its Subsidiaries directly or indirectly in connection
with such Disposition; provided that (a) Net Cash Payments shall
be net of (i) the amount of any legal, title and recording tax
expenses, commissions and other fees and expenses paid by the
Company and its Subsidiaries in connection with such Disposition
and (ii) any Federal, state and local income or other taxes
estimated to be payable by the Company and its Subsidiaries as a
result of such Disposition (but only to the extent that such
estimated taxes are in fact paid to the relevant Federal, state
or local governmental authority within three months of date of
such Disposition) and (b) Net Cash Payments shall be net of any
repayments by the Company or any of its Subsidiaries of
Indebtedness to the extent that (i) such Indebtedness is to the
Banks hereunder or (ii) such Indebtedness is secured by a Lien on
the Property that is the subject of such Disposition and the
transferee of (or holder of a Lien on) such Property requires
that such Indebtedness be repaid as a condition to the purchase
of such Property.
"Non-Mortgage Notes" shall have the meaning assigned to
such term in Section 2.09(b) hereof.
"Notes" shall mean the Revolving Credit Notes, the Term
Loan Notes and the Swingline Notes.
"Off-Premises Warehouses" shall mean all warehouses and
other bailment facilities owned and operated by Persons other
than any Obligor that are not located on Property owned or leased
by any Obligor and in which Eligible Inventory is maintained from
time to time.
"Operating Cash Flow" shall mean, for any period, the
sum, for the Company and its Consolidated Subsidiaries
(determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) net operating
income (calculated before taxes, interest income, Interest
Expense, extraordinary and unusual items and income or loss
attributable to equity in Affiliates) for such period plus
(b) depreciation and amortization (to the extent deducted in
determining net operating income) for such period plus (c) any
period ending on or before August 31, 1994, Restructuring Related
Charges for such period (to the extent deducted in determining
net operating income).
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Permitted Investments" shall mean: (a) direct
obligations of the United States of America, or of any agency
thereof, or obligations guaranteed as to principal and interest
by the United States of America, or of any agency thereof, in
either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any
bank or trust company organized under the laws of the United
States of America or any state thereof and having capital,
surplus and undivided profits of at least $500,000,000, maturing
not more than 90 days from the date of acquisition thereof;
(c) commercial paper rated A-1 or better or P-1 by Standard &
Poor's Rating Group, a division of McGraw-Hill, Inc. ("S&P") or
Moody's Investors Services, Inc. ("Moody's"), respectively,
maturing not more than 90 days from the date of acquisition
thereof; and (d) tax-exempt and tax-preferred debt instruments
(including variable rate demand notes, municipal bonds and money
market preferred debt instruments) rated AAA or Aaa by S&P and
Moody's, respectively, maturing not more than 90 days from the
date of acquisition thereof.
"Person" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
trust, unincorporated organization, limited liability company or
government (or any agency, instrumentality or political
subdivision thereof).
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate
and that is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any
principal of any Loan, any Reimbursement Obligation or any other
amount under this Agreement, any Note or any other Basic Document
that is not paid when due (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise),
a rate per annum during the period from and including the due
date to but excluding the date on which such amount is paid in
full equal to 2% plus the Base Rate as in effect from time to
time plus the Applicable Margin for Base Rate Loans (provided
that, if the amount so in default is principal of a Eurodollar
Loan and the due date thereof is a day other than the last day of
the Interest Period therefor, the "Post-Default Rate" for such
principal shall be, for the period from and including such due
date to but excluding the last day of the Interest Period, 2%
plus the interest rate for such Loan as provided in
Section 3.02(b) hereof and, thereafter, the rate provided for
above in this definition).
"Prime Rate" shall mean the rate of interest from time
to time announced by Chase at the Principal Office as its prime
commercial lending rate.
"Principal Office" shall mean the principal office of
Chase, located on the date hereof at 1 Chase Manhattan Plaza, New
York, New York 10081.
"Principal Payment Dates" shall mean the Quarterly
Dates falling on or nearest to March 15, June 15, September 15
and December 15 of each year, commencing with December 15, 1994,
through and including June 15, 2000.
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible.
"Proportionate Share" shall mean, for any Barton Letter
of Credit Bank at any time of determination, the percentage that
the aggregate amount of such Bank's Barton Letter of Credit
Commitment bears to the aggregate amount of all Barton Letter of
Credit Commitments of the Barton Letter of Credit Banks.
"Quarterly Dates" shall mean the fifteenth day of each
March, June, September and December, the first of which shall be
September 15, 1994; provided that solely with respect to the
calculation and payment of fees in respect of the Letters of
Credit under Sections 2.03(f) and 2.04(g) hereof, "Quarterly
Date" shall mean the last day of each March, June, September and
December, provided that if any such day is not a Business Day,
then such Quarterly Date shall be the next succeeding Business
Day.
"Qingdao Letter of Credit" shall mean Letter of Credit
No. 04021104 issued by The First National Bank of Chicago to
Qingdao Brewery, 56 Dengzhou Road, Qingdao, People's Republic of
China, as such Letter of Credit shall, subject to the provisions
of Sections 2.04(k) and 2.04 (l) hereof, be modified, renewed and
reissued from time to time.
"Qingdao Letter of Credit Limit" shall mean (i) as of
the Effective Date, $3,071,250, and (ii) as of the date of any
modification or renewal or reissuance of the Qingdao Letter of
Credit, the amount specified by the Issuing Bank to the Agent and
the Company at the time of such modification or renewal as the
new "Qingdao Letter of Credit Limit" for purposes of this
Agreement.
"Reference Banks" shall mean Chase and The First
National Bank of Chicago (or their respective Applicable Lending
Offices, as the case may be).
"Regulations A, D, U and X" shall mean, respectively,
Regulations A, D, U and X of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be
modified and supplemented and in effect from time to time.
"Regulatory Change" shall mean, with respect to any
Bank, any change after the date of this Agreement in Federal,
state or foreign law or regulations (including, without limita-
tion, Regulation D) or the adoption or making after such date of
any interpretation, directive or request applying to a class of
banks including such Bank of or under any Federal, state or
foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be
unlawful) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"Reimbursement Obligations" shall mean, at any time,
the obligations of the Company then outstanding, or which may
thereafter arise, in respect of all Letters of Credit then
outstanding, to reimburse amounts paid by an Issuing Bank in
respect of any drawings under a Letter of Credit.
"Release" shall mean any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor
environment, including, without limitation, the movement of
Hazardous Materials through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata.
"Reserve Requirement" shall mean, for any Interest
Period for any Eurodollar Loan, the average maximum rate at which
reserves (including, without limitation, any marginal, supple-
mental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of
the Federal Reserve System in New York City with deposits exceed-
ing one billion Dollars against "Eurocurrency liabilities" (as
such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall include any other
reserves required to be maintained by such member banks by reason
of any Regulatory Change with respect to (i) any category of
liabilities that includes deposits by reference to which the
Eurodollar Base Rate is to be determined as provided in the
definition of "Eurodollar Base Rate" in this Section 1.01 or
(ii) any category of extensions of credit or other assets that
includes Eurodollar Loans.
"Restructuring Capital Expenditures" shall mean Capital
Expenditures made by the Company and its Consolidated
Subsidiaries in connection with the consolidation of production
facilities following the consummation of the Heublein
Acquisition.
"Restructuring Related Charges" shall mean the accrued
and unpaid charges reflected in the Company's consolidated
financial statements for the fiscal year ending August 31, 1994
related to the consolidation of operations following the
consummation of the Heublein Acquisition.
"Revolving Credit Banks" shall mean (a) on the date
hereof, the Banks having Revolving Credit Commitments on the
signature pages hereof and (b) thereafter, the Banks from time to
time holding Revolving Credit Loans and Revolving Credit
Commitments after giving effect to any assignments thereof
permitted by Section 12.06 hereof.
"Revolving Credit Commitment" shall mean, for each
Revolving Credit Bank, the obligation of such Bank to make
Revolving Credit Loans in an aggregate principal amount at any
one time outstanding up to but not exceeding the amount set
opposite the name of such Bank on the signature pages hereto
under the caption "Revolving Credit Commitment" (as the same may
be reduced from time to time pursuant to Section 2.05 hereof).
The original aggregate principal amount of the Revolving Credit
Commitments is $185,000,000.
"Revolving Credit Commitment Percentage" shall mean,
with respect to any Revolving Credit Bank, the ratio of (a) the
amount of the Revolving Credit Commitment of such Bank to (b) the
aggregate amount of the Revolving Credit Commitments of all of
the Banks.
"Revolving Credit Loans" shall mean the loans provided
for by Sections 2.01(a) and 2.01(c) hereof, which may be Base
Rate Loans and/or (except for Revolving Credit Loans that are
also Swingline Loans) Eurodollar Loans.
"Revolving Credit Notes" shall mean the promissory
notes provided for by Section 2.09(a) hereof and all promissory
notes delivered in substitution or exchange therefor, in each
case as the same shall be modified and supplemented and in effect
from time to time.
"Revolving Credit Termination Date" shall mean the
Quarterly Date falling on or nearest to June 15, 2000.
"Revolving Letter of Credit Documents" shall mean, with
respect to any Revolving Letter of Credit, collectively, any
application therefor and any other agreements, instruments,
guarantees or other documents (whether general in application or
applicable only to such Revolving Letter of Credit) governing or
providing for (a) the rights and obligations of the parties
concerned or at risk with respect to such Revolving Letter of
Credit or (b) any collateral security for any of such obliga-
tions, each as the same may be modified and supplemented and in
effect from time to time.
"Revolving Letter of Credit Interest" shall mean, for
each Bank which is a Revolving Credit Bank, such Bank's partici-
pation interest (or, in the case of an Issuing Bank, such Issuing
Bank's retained interest) in such Issuing Bank's liability under
any Revolving Letter of Credit issued by such Issuing Bank and
such Bank's rights and interests in the Reimbursement Obligations
and fees, interest and other amounts payable in connection with
Revolving Letters of Credit and related Reimbursement
Obligations.
"Revolving Letters of Credit" shall have the meaning
assigned to such term in Section 2.04 hereof.
"Security Agreement" shall mean a Second Amended and
Restated Security Agreement in substantially the form of Exhibit
C hereto, as the same shall be modified and supplemented and in
effect from time to time.
"Security Documents" shall mean, collectively, the
Security Agreement, the Mortgages and all Uniform Commercial Code
financing statements required by this Agreement, the Security
Agreement or the Mortgages to be filed with respect to the
security interests in personal Property and fixtures created
pursuant to the Security Agreement or the Mortgages.
"Senior Subordinated Debt Documents" shall mean all
documents and agreements executed and delivered in connection
with the initial issuance of the Senior Subordinated Notes,
including, without limitation, the Senior Subordinated Notes, the
Senior Subordinated Note Indenture and Senior Subordinated Note
Guarantees, as the same shall, subject to Section 9.22 hereof, be
modified and supplemented and in effect from time to time.
"Senior Subordinated Note Guarantees" shall mean,
collectively, the Guarantees, pursuant to Section 1014 or Article
14 of the Senior Subordinated Note Indenture, by each Subsidiary
Guarantor of the punctual payment and performance when due of all
of the Company's Indenture Obligations (as defined in the Senior
Subordinated Note Indenture), as the same shall, subject to
Section 9.22 hereof, be modified and supplemented and in effect
from time to time.
"Senior Subordinated Notes" shall mean the Company's
Senior Subordinated Notes due 2003 issued pursuant to the Senior
Subordinated Note Indenture, as the same shall, subject to
Section 9.22 hereof, be modified and supplemented and in effect
from time to time.
"Senior Subordinated Note Indenture" shall mean the
Indenture dated as of December 27, 1993 between the Company, the
Subsidiary Guarantors and Chemical Bank, as trustee, as such
agreement shall, subject to Section 9.22 hereof, be modified and
supplemented and in effect from time to time.
"Stock Option Plan" shall mean the Stock Option and
Stock Appreciation Plan of the Company dated July 1, 1987, as the
same shall be amended and supplemented and in effect from time to
time.
"Subordinated Indebtedness" shall mean, collectively,
(a) Indebtedness of the Company in respect of the Senior
Subordinated Notes and (b) other Indebtedness incurred in
accordance with the provisions of Section 9.22 hereof.
"Subsidiary" shall mean, for any Person, any corpora-
tion, partnership or other entity of which at least a majority of
the securities or other ownership interests having by the terms
thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether
or not at the time securities or other ownership interests of any
other class or classes of such corporation, partnership or other
entity shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person. "Wholly Owned Subsidiary" shall
mean any such corporation, partnership or other entity of which
all of the equity securities or other ownership interests (other
than, in the case of a corporation, directors' qualifying shares)
are so owned or controlled.
"Swingline Bank" shall mean The Chase Manhattan Bank
(National Association), Rochester Division, in its capacity as
the Swingline Bank under Section 2.01(c) hereof.
"Swingline Loans" shall have the meaning assigned to
such term in Section 2.01(c) hereof, which shall be Base Rate
Loans only.
"Swingline Note" shall mean the promissory note
provided for by Section 2.09(c) hereof and any promissory note
delivered in substitution or exchange therefor, in each case as
the same shall be modified and supplemented and in effect from
time to time.
"Tangible Net Worth" shall mean, as at any date, the
sum for the Company and its Consolidated Subsidiaries (determined
on a consolidated basis without duplication in accordance with
GAAP), of the following:
(a) the amount of capital stock,plus
(b) the amount of additional paid-in capital and
retained earnings (or, in the case of an additional paid-in
capital or retained earnings deficit, minus the amount of
such deficit), minus
(c) the sum of the following: cost of treasury shares
and Intangibles as at such date;
provided, however that in no event shall Subordinated
Indebtedness be included in Tangible Net Worth.
"Tenner Brothers Facility" shall mean the production
facility located at Road #2, Box 85, Patrick, South Carolina and
as of the date hereof owned by Tenner Brothers, Inc.
"Term Loan Banks" shall mean (a) on the date hereof,
the Banks having Term Loan Commitments on the signature pages
hereof and (b) thereafter, the Banks from time to time holding
Term Loans and Term Loan Commitments after giving effect to any
assignments thereof permitted by Section 12.06 hereof.
"Term Loan Commitment" shall mean, for each Term Loan
Bank, the obligation of such Bank to make one or more Term Loans
in an aggregate amount equal to the amount set opposite the name
of such Bank on the signature pages hereof under the caption
"Term Loan Commitment" (as the same may be reduced from time to
time pursuant to Section 2.05 hereof). The original aggregate
principal amount of the Term Loan Commitments is $224,000,000.
"Term Loan Commitment Termination Date" shall mean the
date ninety days following the Effective Date.
"Term Loan Notes" shall mean the promissory notes
provided for by Section 2.09(b) hereof and all promissory notes
delivered in substitution or exchange therefor, in each case as
the same shall be modified and supplemented and in effect from
time to time.
"Term Loans" shall mean the loans provided for by
Section 2.01(b) hereof, which may be Base Rate Loans and/or
Eurodollar Loans.
"Type" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Vintners" shall mean New VICI, Inc. (formerly known as
Vintners International Company, Inc.), a Delaware corporation.
"Vintners Acquisition" shall mean the acquisition by
Vintners Acquisition Corp. pursuant to the Vintners Acquisition
Documents of certain of the assets of Vintners.
"Vintners Acquisition Agreement" shall mean the Asset
Sale Agreement dated as of September 14, 1993 between Vintners
and the Company (and assigned by the Company to Vintners
Acquisition Corp.) as amended by Amendment No. 1 dated October
14, 1993 and Amendment No. 2 dated January 14, 1994, as the same
shall, subject to Section 9.21 hereof, be further modified and
supplemented and in effect from time to time.
"Vintners Acquisition Corp." shall mean Vintners
International Company, Inc. (formerly known as Canandaigua/
Vintners Acquisition Corp.), a New York corporation and a Wholly
Owned Subsidiary of the Company.
"Vintners Acquisition Documents" shall mean the
Vintners Acquisition Agreement and all other agreements and
instruments (together with any and all exhibits, annexes and
schedules thereto) executed and delivered between the Vintners
Acquisition Corp. and Vintners, as the same shall, subject to
Section 9.21 hereof, be modified and supplemented and in effect
from time to time.
"Vintners Assets" shall mean those certain assets sold
by Vintners to Vintners Acquisition Corp. pursuant to the
Vintners Acquisition Documents, all as more particularly
described therein.
"Vintners Options" shall mean the options issued by the
Company to Vintners and its designees for the purchase of an
aggregate of 500,000 shares of the Company's Class A Common
Stock, par value, $.01 per share, at the exercise price of $18.25
per share, as more particularly set forth in the respective
Option Agreements dated as of October 15, 1993 between the
Company, Vintners and the designees of Vintners identified
therein executed and delivered pursuant to Section 3(a)(ii) of
the Vintners Acquisition Agreement.
"Working Capital" shall mean, as at any date of
determination thereof the excess of current assets of the Company
and its Consolidated Subsidiaries over current liabilities of the
Company and its Consolidated Subsidiaries. For purposes hereof,
the terms "current assets" and "current liabilities" shall have
the respective meanings assigned to them by GAAP except that
(i) cash and cash equivalents shall be excluded from current
assets, (ii) the current portion of long-term debt shall be
excluded from current liabilities, (iii) the current portion of
any accrual the Company's obligations to make payments under
Article II of the Barton Stock Purchase Agreement (and, after
such payments the aggregate principal amount of the Revolving
Credit Loans as at such date, the proceeds of which were used to
make such payments) shall be excluded from current liabilities
and (iv) any accrual of an expected write-off of property, plant
or equipment resulting from the consolidation of operations in
connection with the Heublein Acquisition, and any reduction of
such reserve upon the sale or other disposition of such property,
plant or equipment (to the extent of any loss resulting from such
sale or other disposition), shall be excluded from current
liabilities.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all finan-
cial statements and certificates and reports as to financial
matters required to be delivered to the Banks hereunder, and all
calculations made for the purpose of determining compliance with
this Agreement, shall be prepared, in accordance with generally
accepted accounting principles applied on a basis consistent with
those used in the preparation of the audited financial statements
as at August 31, 1993 referred to in Section 8.02 hereof;
provided that if the Company is at any time or from time to time
required by law, regulation, Financial Accounting Standards Board
statements or its independent certified public accountants to
prepare its audited financial statements in accordance with
generally accepted accounting principles different from, or
applied on a basis not consistent with, those referred to above,
then the Company shall do so, but shall also notify the Banks of
such differences, provide the Banks with a qualitative and quanti-
tative comparison of such required financial statements and
corresponding financial statements prepared as first provided
above, and (unless the Majority Banks shall otherwise agree that
any such calculations shall be made in accordance with, and on a
basis consistent with, the generally accepted accounting prin-
ciples first referred to in this proviso) continue to make all
calculations made for the purpose of determining compliance with
this Agreement in accordance with, and on a basis consistent
with, those first referred to above in this clause (a) (as
modified in accordance with the preceding parenthetical
expression).
(b) To enable the ready and consistent determination
of compliance with the covenants set forth in Section 9 hereof,
the Company will not change the last day of its fiscal year from
the last day of August of each year, or the last days of the
first three fiscal quarters in each of its fiscal years from the
last days of November, February and May of each year,
respectively.
1.03 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan
(or of a Commitment to make a Loan) refers to whether such Loan
is a Revolving Credit Loan or a Term Loan, each of which consti-
tutes a Class. The "Type" of a Loan refers to whether such Loan
is a Base Rate Loan or a Eurodollar Loan, each of which consti-
tutes a Type. Loans may be identified by both Class and Type.
Section 2. Commitments, Loans, Notes and Prepayments.
2.01 Loans.
(a) Revolving Credit Loans. Pursuant to Section
2.01(a) of the Existing Credit Agreement, the Existing Banks have
heretofore made "Revolving Credit Loans" (the "Existing Revolving
Credit Loans") to the Company. On the Effective Date,
immediately prior to the satisfaction by the Company of the
conditions precedent to effectiveness set forth in Section 7
hereof, (i) each of the Continuing Banks that is a Revolving
Credit Bank shall be deemed to have made Revolving Credit Loans
that are Base Rate Loans in an aggregate principal amount set
forth opposite the name of such Continuing Bank in Schedule VII
hereto under the caption "Revolving Credit Loans", (ii) Chase
will pay to the Agent for account of the Exiting Bank the
principal amount in respect of its Existing Revolving Credit
Loans equal to $1,756,756.76, (iii) any Existing Revolving Credit
Loan that is a Eurodollar Loan under the Existing Credit
Agreement with an Interest Period ending after the Effective Date
will automatically be converted into a Base Rate Loan, (iv) the
Company shall pay to the Agent for account of the Existing Banks
any amounts that would be payable in respect of the principal of
such Revolving Credit Loans pursuant to Section 5.05 of the
Existing Credit Agreement if such Loans were to be prepaid in
full on the Effective Date and (v) the Company shall pay to the
Agent for account of the Existing Banks all unpaid interest on
the Existing Revolving Credit Loans held by such Banks accrued
for the period to but excluding the Effective Date. Thereafter,
each Revolving Credit Bank severally agrees, on the terms and
conditions of this Agreement, to make loans to the Company in
Dollars during the period from and including the Effective Date
to but not including the Revolving Credit Termination Date in an
aggregate principal amount at any one time outstanding up to but
not exceeding the amount of the Revolving Credit Commitment of
such Bank as in effect from time to time (such Loans being herein
called "Revolving Credit Loans"); provided that in no event shall
the aggregate principal amount of all Revolving Credit Loans,
together with the aggregate amount of all Letter of Credit
Liabilities in respect of Revolving Letters of Credit, exceed the
aggregate amount of the Revolving Credit Commitments as in effect
from time to time and provided further that the Company may not
borrow any Revolving Credit Loans unless simultaneously therewith
or prior thereto the Term Loan Commitments have been fully
utilized. Subject to the terms and conditions of this Agreement,
during such period the Company may borrow, repay and reborrow the
amount of the Revolving Credit Commitments by means of Base Rate
Loans and Eurodollar Loans and may Convert Revolving Credit Loans
of one Type into Revolving Credit Loans of another Type (as
provided in Section 2.10 hereof) or Continue Revolving Credit
Loans of one Type as Revolving Credit Loans of the same Type (as
provided in Section 2.10 hereof).
Notwithstanding the foregoing, until the earlier to
occur of (x) the date 90 days after the Effective Date and (y)
the date when the Commitments hereunder are fully syndicated by
Chase, Eurodollar Loans shall be available hereunder only for
Interest Periods of 30 days and each such Interest Period for any
such Loans shall be coterminous with Interest Periods for all
other Eurodollar Loans.
(b) Term Loans. Pursuant to Section 2.01(b) of the
Existing Credit Agreement, the Existing Banks have heretofore
made "Term Loans" (the "Existing Term Loans") to the Company. On
the Effective Date, immediately prior to the satisfaction by the
Company of the conditions precedent to effectiveness set forth in
Section 7 hereof, (i) each of the Continuing Banks that is a Term
Loan Bank shall be deemed to have made Term Loan Loans that are
Base Rate Loans in an aggregate principal amount set forth
opposite the name of such Continuing Bank in Schedule VII hereto
under the caption "Term Loans", (ii) Chase will pay to the Agent
for account of the Exiting Bank the principal amount in respect
of its Existing Term Loan equal to $4,294,294.29, (iii) any
Existing Term Loan that is a Eurodollar Loan under the Existing
Credit Agreement with an Interest Period ending after the
Effective Date will automatically be converted into a Base Rate
Loan, (iv) the Company shall pay to the Agent for account of the
Existing Banks any amounts that would be payable in respect of
the principal of such Term Loans pursuant to Section 5.05 of the
Existing Credit Agreement if such Loans were to be prepaid in
full on the Effective Date and (v) the Company shall pay to the
Agent for account of the Existing Banks all unpaid interest on
the Existing Term Loans held by such Banks accrued for the period
to but excluding the Effective Date. In addition, each Term Loan
Bank severally agrees, on the terms and conditions of this
Agreement, to make one or more term loans to the Company in
Dollars on or before the Term Loan Commitment Termination Date in
an aggregate amount up to but not exceeding the remaining unused
amount of the Term Loan Commitment of such Bank. Thereafter the
Company may Convert Term Loans of one Type into Term Loans of
another Type (as provided in Section 2.10 hereof) or Continue
Term Loans of one Type as Term Loans of the same Type (as
provided in Section 2.10 hereof).
Notwithstanding the foregoing, until the earlier to
occur of (x) the date 90 days after the Effective Date and (y)
the date when the Commitments hereunder are fully syndicated by
Chase, Eurodollar Loans shall be available hereunder only for
Interest Periods of 30 days and each such Interest Period for any
such Loans shall be coterminous with Interest Periods for all
other Eurodollar Loans.
(c) Swingline Loans. In addition to the Revolving
Credit Loans provided for in clause (a) of this Section 2.01, but
subject to the provisions of this Section 2.01(c), the Swingline
Bank, in its sole and absolute discretion, may from time to time
on any Business Day make loans to the Company during the period
from and including the Effective Date to but excluding the
Revolving Credit Termination Date in an aggregate principal
amount outstanding at any one time not to exceed $8,000,000.
Loans made pursuant to this Section 2.01(c) are herein called
"Swingline Loans". The following additional provisions shall
apply to Swingline Loans:
(i) Swingline Loans shall constitute "Revolving Credit
Loans" hereunder (except for purposes of Section 2.01(a)
hereof), but shall not be considered a utilization of the
Revolving Credit Commitment of the Swingline Bank hereunder
and thus shall not affect the Company's obligation under
Section 2.06 hereof to pay to the Agent for account of each
Revolving Credit Bank the commitment fee on the daily
average unused amount of each Revolving Credit Bank's
Revolving Credit Commitment hereunder. Subject to the
Swingline Bank's determination, in its discretion, from time
to time to make Swingline Loans, the Company may, from time
to time during the period from and including the Effective
Date to but excluding the Revolving Credit Termination Date,
borrow, repay and reborrow the Swingline Loans, provided
that the aggregate principal amount outstanding at any time
of all Revolving Credit Loans (including all Swingline
Loans) shall not exceed the aggregate amount of the Revolv-
ing Credit Commitments at such time. The Company may prepay
the outstanding Swingline Loans from time to time upon
giving same day notice thereof to the Swingline Bank. Each
borrowing and each partial prepayment of the Swingline Loans
shall be made in a principal amount at least equal to
$500,000.
(ii) The Swingline Loans shall be Base Rate Loans and,
notwithstanding anything in Section 2.10 hereof to the
contrary, may not be made as or Converted into Eurodollar
Loans.
(iii) The provisions of Sections 2.02, 2.10, 4.04 and
4.05 hereof shall not apply to the Swingline Loans.
(d) Limit on Eurodollar Loans. Except as otherwise
provided in the penultimate paragraph of each of Sections 2.01(a)
and 2.01(b) hereof, no more than fourteen separate Interest
Periods in respect of Eurodollar Loans that are Revolving Credit
Loans and no more than three separate Interest Periods in respect
of Eurodollar Loans that are Term Loans may be outstanding at any
one time.
2.02 Borrowings of Revolving Credit and Term Loans.
The Company shall give the Agent (which shall promptly notify the
Banks) notice of each borrowing hereunder of Revolving Credit and
Term Loans as provided in Section 4.05 hereof. Not later than
1:00 p.m. New York time on the date specified for each such
borrowing hereunder, each Bank shall make available the amount of
such Loan or Loans to be made by it on such date to the Agent, at
account number NYAO-DI-900-9-000002 maintained by the Agent with
Chase at the Principal Office, in immediately available funds,
for account of the Company. The amount so received by the Agent
shall, subject to the terms and conditions of this Agreement, be
made available to the Company by depositing the same, in immedi-
ately available funds, in an account of the Company maintained
with Chase at the Principal Office designated by the Company. As
provided in Section 2.01(c)(iii) hereof, the provisions of this
Section 2.02 shall not apply to Swingline Loans.
2.03 Barton Letter of Credit. Pursuant to Section
2.03 of the Existing Credit Agreement, Chase as Issuing Bank has
issued the Barton Letter of Credit for the account of the
Company. The following additional provisions shall apply to the
Barton Letter of Credit:
(a) On the Effective Date, the Barton Letter of Credit
shall automatically, and without any action on the part of
any Person, be deemed to constitute the Barton Letter of
Credit hereunder. On the Effective Date, immediately prior
to the satisfaction by the Company of the conditions
precedent to effectiveness set forth in Section 7 hereof,
(i) Chase shall, by assignment from any Existing Bank that
will not be a Barton Letter of Credit Bank hereunder,
acquire all of such Existing Bank's interest in the Barton
Letter of Credit Interest (as defined in the Existing Credit
Agreement) as of the Effective Date (the "Existing Barton
Letter of Credit Interest") and (ii) the Company shall pay
to the Agent for the account of the Existing Banks (after
giving effect to such assignments) all letter of credit fees
accrued through the Effective Date in respect of the
Existing Barton Letter of Credit Interests. Each Barton
Letter of Credit Bank (other than the Issuing Bank) agrees
that, on the Effective Date, it shall automatically acquire
(and, in the case of any Existing Bank that is a Barton
Letter of Credit Bank, it shall automatically continue) a
participation in the Issuing Bank's liability under the
Barton Letter of Credit in an amount equal to such Bank's
Proportionate Share of such liability, and each Barton
Letter of Credit Bank (other than the Issuing Bank) thereby
shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and shall be
unconditionally obligated to the Issuing Bank to pay and
discharge when due, its Proportionate Share of the Issuing
Bank's liability under the Barton Letter of Credit.
(b) Upon receipt from the beneficiary of the Barton
Letter of Credit of any demand for payment under the Barton
Letter of Credit, which demand substantially complies with
the terms and conditions thereof, the Issuing Bank shall
promptly notify the Company (through the Agent) of the
amount to be paid by the Issuing Bank as a result of such
demand and the date on which payment is to be made by the
Issuing Bank to such beneficiary in respect of such demand.
The Company hereby unconditionally agrees to pay and
reimburse the Agent for account of the Issuing Bank for the
amount of each such demand for payment under the Barton
Letter of Credit at or prior to the date on which payment is
to be made by the Issuing Bank to the beneficiary there-
under, without presentment, demand, protest or other
formalities of any kind.
(c) Forthwith upon its receipt of a notice referred to
in clause (b) of this Section 2.03, the Company shall advise
the Agent whether or not the Company intends to borrow
hereunder to finance its obligation to reimburse the Issuing
Bank for the amount of the related demand for payment.
(d) Upon receipt from the beneficiary of the Barton
Letter of Credit of any demand for payment under the Barton
Letter of Credit, which demand substantially complies with
the terms and conditions thereof, the Agent shall give each
Barton Letter of Credit Bank prompt notice of the amount of
the demand for payment, specifying such Bank's Proportionate
Share of the amount of the related demand for payment and
the date upon which such payment is to be made. Each Barton
Letter of Credit Bank (other than the Issuing Bank) shall
pay to the Agent for account of the Issuing Bank at the
Principal Office in Dollars and in immediately available
funds, the amount of such Bank's Proportionate Share of any
payment under the Barton Letter of Credit on the date of
payment under the Barton Letter of Credit specified in such
notice. Each such Barton Letter of Credit Bank's obligation
to make such payment to the Agent for account of the Issuing
Bank under this clause (d), and the Issuing Bank's right to
receive the same, shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever,
including, without limitation, (i) the failure of any other
Barton Letter of Credit Bank to make its payment under this
clause (d), the financial condition of the Company, the
existence of any Default or (ii) the termination of any of
the Commitments. Each such payment to the Issuing Bank
shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) Upon the making of each payment by a Barton Letter
of Credit Bank to the Issuing Bank pursuant to clause (d)
above in respect of the Barton Letter of Credit, such Bank
shall, automatically and without any further action on the
part of the Agent, the Issuing Bank or such Bank, acquire
(i) a participation in an amount equal to such payment in
the related Reimbursement Obligation owing to the Issuing
Bank by the Company hereunder and (ii) a participation in a
percentage equal to such Bank's Proportionate Share in any
interest or other amounts payable by the Company hereunder
in respect of such Reimbursement Obligation (other than the
commissions, charges, costs and expenses payable to the
Issuing Bank pursuant to clause (f) of this Section 2.03).
Upon receipt by the Issuing Bank from or for account of the
Company of any payment in respect of such Reimbursement
Obligation or any such interest or other amount (including
by way of setoff or application of proceeds of any
collateral security) the Issuing Bank shall promptly pay to
the Agent for account of each Barton Letter of Credit Bank
entitled thereto, such Barton Letter of Credit Bank's
Proportionate Share of such payment, each such payment by
the Issuing Bank to be made in the same money and funds in
which received by the Issuing Bank. In the event any pay-
ment received by the Issuing Bank and so paid to the Barton
Letter of Credit Banks hereunder is rescinded or must other-
wise be returned by the Issuing Bank, each Barton Letter of
Credit Bank shall, upon the request of the Issuing Bank
(through the Agent), repay to the Issuing Bank (through the
Agent) the amount of such payment paid to such Bank, with
interest at the rate specified in clause (g) of this
Section 2.03.
(f) The Company shall pay to the Agent for account of
the Issuing Bank in respect of the Barton Letter of Credit
an issuance fee in an amount equal to the Letter of Credit
Fee Percentage of the daily average undrawn face amount of
the Barton Letter of Credit for the period from and
including the date of issuance of the Barton Letter of
Credit to and including the date the Barton Letter of Credit
is drawn in full, expires or is terminated (such fee to be
non-refundable, to be paid in arrears on each Quarterly Date
and on the Barton Letter of Credit Termination Date and to
be calculated, for any day, after giving effect to any
payments made under the Barton Letter of Credit on such
day). The Issuing Bank shall pay to the Agent for account
of each Barton Letter of Credit Bank (other than the Issuing
Bank), from time to time at reasonable intervals (but in any
event at least quarterly), but only to the extent actually
received from the Company, an amount equal to such Bank's
Proportionate Share of all such fees in respect of the
Barton Letter of Credit (including any such fee in respect
of any period of any renewal or extension thereof).
In addition, the Company shall pay to the Agent solely
for account of the Issuing Bank a fronting fee in respect of
the Barton Letter of Credit in an amount equal to 1/8 of 1%
per annum of the daily average undrawn face amount of the
Barton Letter of Credit for the period from and including
the date of issuance of the Barton Letter of Credit to and
including the date the Barton Letter of Credit is drawn in
full, expires or is terminated (such fee to be
non-refundable, to be paid in arrears on each Quarterly Date
and on the Barton Letter of Credit Termination Date and to
be calculated, for any day, after giving effect to any
payments made under the Barton Letter of Credit on such day)
plus all commissions, charges, costs and expenses in the
amounts customarily charged by the Issuing Bank from time to
time in like circumstances with respect to the issuance of
the Barton Letter of Credit and drawings and other
transactions relating thereto.
(g) To the extent that any Barton Letter of Credit
Bank fails to pay any amount required to be paid pursuant to
clause (d) or (e) of this Section 2.03 on the due date
therefor, such Bank shall pay interest to the Issuing Bank
(through the Agent) on such amount from and including such
due date to but excluding the date such payment is made at a
rate per annum equal to the Federal Funds Rate (as in effect
from time to time), provided that if such payment is not
made within three Business Days of such due date then, such
Barton Letter of Credit Bank shall be obligated retro-
actively to the due date to pay interest in respect of such
payment at the rate of interest provided for Base Rate Loans
pursuant to Section 3.02 hereof.
(h) The issuance by the Issuing Bank of any modifica-
tion or supplement to the Barton Letter of Credit hereunder
shall be subject to the same conditions applicable under
this Section 2.03 to the issuance of the Barton Letter of
Credit, and no such modification or supplement shall be
issued hereunder unless each Barton Letter of Credit Bank
shall have consented thereto.
The Company hereby indemnifies and holds harmless each Barton
Letter of Credit Bank and the Agent from and against any and all
claims and damages (including, without limitation, consequential
damages), losses, liabilities, costs or expenses which such Bank
or the Agent may incur (or which may be claimed against such Bank
or the Agent by any Person whatsoever) by reason of or in
connection with the execution and delivery or transfer of or
payment or refusal to pay by the Issuing Bank under the Barton
Letter of Credit; provided that the Company shall not be required
to indemnify any Bank or the Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to
the extent, caused by (x) the willful misconduct or gross
negligence of the Issuing Bank in determining whether a request
presented under the Barton Letter of Credit complied with the
terms of the Barton Letter of Credit or (y) in the case of the
Issuing Bank, such Bank's failure to pay under the Barton Letter
of Credit after the presentation to it of a request strictly
complying with the terms and conditions of the Barton Letter of
Credit. Nothing in this Section 2.03 is intended to limit the
other obligations of the Company, any Bank or the Agent under
this Agreement. Notwithstanding anything to the contrary
contained herein, the Issuing Bank shall not be liable for
consequential damages.
2.04 Revolving Letters of Credit. Subject to the
terms and conditions of this Agreement, the Revolving Credit
Commitments may be utilized, upon the request of the Company, in
addition to the Revolving Credit Loans provided for by Section
2.01(a) hereof, by the issuance by the Issuing Bank of commer-
cial, documentary or standby letters of credit (collectively with
the Qingdao Letter of Credit and the Existing Letters of Credit,
"Revolving Letters of Credit") for account of the Company or any
of its Subsidiaries (as specified by the Company), provided that
in no event shall (i) the aggregate amount of all Letter of
Credit Liabilities in respect of Revolving Letters of Credit,
together with the aggregate principal amount of the Revolving
Credit Loans, exceed the aggregate amount of the Revolving Credit
Commitments as in effect from time to time, (ii) the outstanding
aggregate amount of all Letter of Credit Liabilities in respect
of Revolving Letters of Credit exceed $12,000,000, and (iii) the
expiration date of any Revolving Letter of Credit extend beyond
the earlier of the Revolving Credit Termination Date and the date
twelve months following the issuance of such Revolving Letter of
Credit. The following additional provisions shall apply to
Letters of Credit:
(a) The Company shall give the Agent at least three
Business Days' irrevocable prior notice (effective upon
receipt) specifying the Business Day (which shall be no
later than 30 days preceding the Revolving Credit Termi-
nation Date) each Revolving Letter of Credit is to be issued
and the account party or parties therefor and describing in
reasonable detail the proposed terms of such Revolving
Letter of Credit (including the beneficiary thereof) and the
nature of the transactions or obligations proposed to be
supported thereby. Upon receipt of any such notice, the
Agent shall advise the Issuing Bank of the contents thereof.
(b) On each day during the period commencing with the
issuance (or, in the case of the Existing Letters of Credit
and the Qingdao Letter of Credit, commencing on the
Effective Date) by the Issuing Bank of any Revolving Letter
of Credit and until such Revolving Letter of Credit shall
have expired or been terminated, the Revolving Credit
Commitment of each Revolving Credit Bank shall be deemed to
be utilized for all purposes of this Agreement in an amount
equal to such Bank's Revolving Credit Commitment Percentage
of the then undrawn face amount of such Revolving Letter of
Credit. Each Revolving Credit Bank (other than the Issuing
Bank) agrees that, upon the issuance of any Revolving Letter
of Credit hereunder (or, in the case of the Existing Letters
of Credit and the Qingdao Letter of Credit, upon the
Effective Date), it shall automatically acquire a
participation in the Issuing Bank's liability under such
Revolving Letter of Credit in an amount equal to such Bank's
Revolving Credit Commitment Percentage of such liability,
and each Revolving Credit Bank (other than the Issuing Bank)
thereby shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and shall be
unconditionally obligated to the Issuing Bank to pay and
discharge when due, its Revolving Credit Commitment
Percentage of the Issuing Bank's liability under such
Revolving Letter of Credit.
(c) Upon receipt from the beneficiary of any Revolving
Letter of Credit of any demand for payment under such
Revolving Letter of Credit, which demand substantially
complies with the terms and conditions thereof, the Issuing
Bank shall promptly notify the Company (through the Agent)
of the amount to be paid by the Issuing Bank as a result of
such demand and the date on which payment is to be made by
the Issuing Bank to such beneficiary in respect of such
demand. Notwithstanding the identity of the account party
of any Revolving Letter of Credit, the Company hereby
unconditionally agrees to pay and reimburse the Agent for
account of the Issuing Bank for the amount of each such
demand for payment under such Revolving Letter of Credit at
or prior to the date on which payment is to be made by the
Issuing Bank to the beneficiary thereunder, without
presentment, demand, protest or other formalities of any
kind.
(d) Forthwith upon its receipt of a notice referred to
in clause (c) of this Section 2.04, the Company shall advise
the Agent whether or not the Company intends to borrow
hereunder to finance its obligation to reimburse the Issuing
Bank for the amount of the related demand for payment and,
if it does, submit a notice of such borrowing as provided in
Section 4.05 hereof.
(e) Each Revolving Credit Bank (other than the Issuing
Bank) shall pay to the Agent for account of the Issuing Bank
at the Principal Office in Dollars and in immediately
available funds, the amount of such Bank's Revolving Credit
Commitment Percentage of any payment under a Revolving
Letter of Credit upon notice by the Issuing Bank (through
the Agent) to such Revolving Credit Bank requesting such
payment and specifying such amount. Each such Revolving
Credit Bank's obligation to make such payment to the Agent
for account of the Issuing Bank under this clause (e), and
the Issuing Bank's right to receive the same, shall be
absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the
failure of any other Revolving Credit Bank to make its
payment under this clause (e), the financial condition of
the Company (or any other account party), the existence of
any Default or the termination of the Commitments. Each
such payment to the Issuing Bank shall be made without any
offset, abatement, withholding or reduction whatsoever.
(f) Upon the making of each payment by a Revolving
Credit Bank to the Issuing Bank pursuant to clause (e) above
in respect of any Revolving Letter of Credit, such Bank
shall, automatically and without any further action on the
part of the Agent, the Issuing Bank or such Bank, acquire
(i) a participation in an amount equal to such payment in
the Reimbursement Obligation in respect of such Revolving
Letter of Credit owing to the Issuing Bank by the Company
hereunder and under the Revolving Letter of Credit Documents
relating to such Revolving Letter of Credit and (ii) a
participation in a percentage equal to such Bank's Revolving
Credit Commitment Percentage in any interest or other
amounts payable by the Company hereunder and under such
Revolving Letter of Credit Documents in respect of such
Reimbursement Obligation (other than the commissions,
charges, costs and expenses payable to the Issuing Bank
pursuant to clause (g) of this Section 2.04). Upon receipt
by the Issuing Bank from or for account of the Company of
any payment in respect of any such Reimbursement Obligation
or any such interest or other amount (including by way of
setoff or application of proceeds of any collateral
security) the Issuing Bank shall promptly pay to the Agent
for account of each Revolving Credit Bank entitled thereto,
such Revolving Credit Bank's Revolving Credit Commitment
Percentage of such payment, each such payment by the Issuing
Bank to be made in the same money and funds in which
received by the Issuing Bank. In the event any payment
received by the Issuing Bank and so paid to the Revolving
Credit Banks hereunder is rescinded or must otherwise be
returned by the Issuing Bank, each Revolving Credit Bank
shall, upon the request of the Issuing Bank (through the
Agent), repay to the Issuing Bank (through the Agent) the
amount of such payment paid to such Bank, with interest at
the rate specified in clause (j) of this Section 2.04.
(g) The Company shall pay to the Agent for account of
the Issuing Bank in respect of each Revolving Letter of
Credit that is a standby letter of credit an issuance fee in
an amount equal to Letter of Credit Fee Percentage of the
daily average undrawn face amount of such Revolving Letter
of Credit for the period from and including the date of
issuance of such Revolving Letter of Credit (i) in the case
of a Revolving Letter of Credit that expires in accordance
with its terms, to and including such expiration date and
(ii) in the case of a Revolving Letter of Credit that is
drawn in full or is otherwise terminated other than on the
stated expiration date of such Revolving Letter of Credit,
to but excluding the date of such Revolving Letter of Credit
is drawn in full or is terminated (such fee to be non-
refundable and to be paid in arrears on each Quarterly Date
and on the Revolving Credit Termination Date). The Company
shall pay to the Agent for account of the Issuing Bank in
respect of each Revolving Letter of Credit that is a
commercial or documentary letter of credit an issuance fee
in an amount equal to 1% per annum of the initial face
amount of such Letter of Credit for the period from and
including the date of issuance of such Revolving Letter of
Credit to and including the expiration date (such fee to be
non-refundable and to be paid in arrears on each Quarterly
Date and on the Revolving Credit Termination Date). The
Issuing Bank shall pay to the Agent for account of each
revolving Credit Bank (other than the Issuing Bank), from
time to time at reasonable intervals (but in any event at
least quarterly), but only to the extent actually received
from the Company, an amount equal to such Bank's Revolving
Credit Commitment Percentage of all such fees in respect of
each Revolving Letter of Credit (including any such fee in
respect of any period of any renewal or extension thereof).
In addition, the Company shall pay to the Agent for
account of the Issuing Bank a fronting fee in respect of
each Letter of Credit (other than the Qingdao Letter of
Credit) in an amount equal to 1/8 of 1% per annum of the
daily average undrawn face amount of such Revolving Letter
of Credit for the period from and including the date of
issuance of such Revolving Letter of Credit (i) in the case
of a Revolving Letter of Credit that expires in accordance
with its terms, to and including such expiration date and
(ii) in the case of a Revolving Letter of Credit that is
drawn in full or is otherwise terminated other than on the
stated expiration date of such Revolving Letter of Credit,
to but excluding the date such Revolving Letter of Credit is
drawn in full or is terminated (such fee to be
non-refundable and to be paid in arrears on each Quarterly
Date and on the Revolving Credit Termination Date) plus all
commissions, charges (including negotiation fees), costs and
expenses in the amounts customarily charged by the Issuing
Bank from time to time in like circumstances with respect to
the issuance of each Revolving Letter of Credit and drawings
and other transactions relating thereto.
(h) Promptly following the end of each calendar month,
the Issuing Bank shall deliver (through the Agent) to each
Revolving Credit Bank and the Company a notice describing
the aggregate amount of all Revolving Letters of Credit
outstanding at the end of such month. Upon the request of
any Revolving Credit Bank from time to time, the Issuing
Bank shall deliver any other information reasonably
requested by such Bank with respect to each Revolving Letter
of Credit then outstanding.
(i) The issuance by the Issuing Bank of each Revolving
Letter of Credit shall, in addition to the conditions
precedent set forth in Section 7 hereof, be subject to the
conditions precedent that (i) such Revolving Letter of
Credit shall be in such form, contain such terms and support
such transactions as shall be satisfactory to the Issuing
Bank consistent with its then current practices and proce-
dures with respect to letters of credit of the same type and
(ii) the Company shall have executed and delivered such
applications, agreements and other instruments relating to
such Revolving Letter of Credit as the Issuing Bank shall
have reasonably requested consistent with its then current
practices and procedures with respect to letters of credit
of the same type, provided that in the event of any conflict
between any such application, agreement or other instrument
and the provisions of this Agreement or any Security Docu-
ment, the provisions of this Agreement and the Security
Documents shall control.
(j) To the extent that any Bank shall fail to pay any
amount required to be paid pursuant to clause (e) or (f) of
this Section 2.04 on the due date therefor, such Bank shall
pay interest to the Issuing Bank (through the Agent) on such
amount from and including such due date to but excluding the
date such payment is made at a rate per annum equal to the
Federal Funds Rate (as in effect from time to time),
provided that if such Bank shall fail to make such payment
to the Issuing Bank within three Business Days of such due
date, then, retroactively to the due date, such Bank shall
be obligated to pay interest on such amount at the
Post-Default Rate.
(k) The issuance by the Issuing Bank of any modifica-
tion or supplement to any Revolving Letter of Credit here-
under shall be subject to the same conditions applicable
under this Section 2.04 to the issuance of new Revolving
Letters of Credit, and no such modification or supplement
shall be issued hereunder unless either (i) the respective
Revolving Letter of Credit affected thereby would have
complied with such conditions had it originally been issued
hereunder in such modified or supplemented form or (ii) each
Revolving Credit Bank shall have consented thereto. Upon
any modification or renewal or reissuance by the Issuing
Bank of the Qingdao Letter of Credit, such Issuing Bank
shall forthwith notify the Agent and the Company of the new
Qingdao Letter of Credit Limit for purposes of this
Agreement.
(l) Anything herein to the contrary notwithstanding,
the amount of the Qingdao Letter of Credit for all purposes
of this Agreement and the other Basic Documents (including,
without limitation, the usage of the Revolving Credit
Commitments hereunder, the calculation of fee under clause
(g) above and the obligation of the Revolving Credit Banks
to participate in Reimbursement Obligations arising upon
drawings thereunder) shall be deemed to be equal to the
Qingdao Letter of Credit Limit and any Letter of Credit
Liability arising in respect of the Qingdao Letter of Credit
in excess of the Qingdao Letter of Credit Limit shall be
solely for the account of the Issuing Bank, and no other
Bank shall be obligated to participate in such excess
amount, nor shall such excess amount be entitled to the
benefits of the Security Documents.
(m) Pursuant to Section 2.04 of the Existing Credit
Agreement, Chase, as an Issuing Bank, has issued various
Letters of Credit (collectively, the "Existing Letters of
Credit"). On the Effective Date, the Existing Letters of
Credit and the Qingdao Letter of Credit shall automatically,
and without any action on the part of any Person, become
Revolving Letters of Credit hereunder. On the Effective
Date, immediately prior to the satisfaction by the Company
of the conditions precedent to effectiveness set forth in
Section 7 hereof, (i) Chase shall, by assignment from any
Existing Bank that will not be a Revolving Credit Bank
hereunder, acquire all of such Existing Bank's interest in
the Letter of Credit Liabilities (as defined in the Existing
Credit Agreement) as of the Effective Date in respect of the
Existing Letters of Credit and the Qingdao Letter of Credit
(the "Existing Letter of Credit Liabilities") and (ii) the
Company shall pay to the Agent for the account of the
Existing Banks (after giving effect to such assignments) all
letter of credit fees accrued through the Effective Date in
respect of the Existing Letters of Credit and the Qingdao
Letter of Credit. Each Revolving Credit Bank (other than
the Issuing Bank) agrees that, on the Effective Date, it
shall acquire (and, in the case of any Existing Bank that is
a Revolving Credit Bank, it shall automatically continue)
interests in the Existing Letter of Credit Liabilities in
such amounts so that the Revolving Credit Banks shall hold
Existing Letter of Credit Liabilities ratably in accordance
with their respective Revolving Credit Commitments.
The Company hereby indemnifies and holds harmless each Revolving
Credit Bank and the Agent from and against any and all claims and
damages, losses, liabilities (including, without limitation,
consequential damages), costs or expenses that such Bank or the
Agent may incur (or which may be claimed against such Bank or the
Agent by any Person whatsoever) by reason of or in connection
with the execution and delivery or transfer of or payment or
refusal to pay by the Issuing Bank under any Revolving Letter of
Credit; provided that the Company shall not be required to
indemnify any Bank or the Agent for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the
extent, caused by (x) the willful misconduct or gross negligence
of the Issuing Bank in determining whether a request presented
under any Revolving Letter of Credit complied with the terms of
such Revolving Letter of Credit or (y) in the case of the Issuing
Bank, such Bank's failure to pay under any Revolving Letter of
Credit after the presentation to it of a request strictly
complying with the terms and conditions of such Revolving Letter
of Credit. Nothing in this Section 2.04 is intended to limit the
other obligations of the Company, any Bank or the Agent under
this Agreement. Notwithstanding anything to the contrary
contained herein, the Issuing Bank shall not be liable for
consequential damages.
2.05 Changes of Commitments.
(a) The aggregate amount of the Revolving Credit
Commitments shall be automatically reduced to zero on the
Revolving Credit Termination Date.
(b) The Company shall have the right at any time or
from time to time (i) so long as no Revolving Credit Loans or
Letter of Credit Liabilities in respect of Revolving Letters of
Credit are outstanding, to terminate the Revolving Credit
Commitments, (ii) to reduce the aggregate unused amount of the
Revolving Credit Commitments (for which purpose use of the
Revolving Credit Commitments shall be deemed to include the
aggregate amount of Letter of Credit Liabilities in respect of
Revolving Letters of Credit), (iii) to terminate the Term Loan
Commitments (but only if simultaneously therewith or prior
thereto the Barton Letter of Credit Commitments and the Revolving
Credit Commitments are being or have been terminated in full) and
(iv) so long as the Barton Letter of Credit is no longer out-
standing, to terminate the Barton Letter of Credit Commitments;
provided that (x) the Company shall give notice of each such
termination or reduction as provided in Section 4.05 hereof and
(y) each partial reduction shall be in an aggregate amount at
least equal to $1,000,000 or in multiples of $500,000 in excess
thereof.
(c) The aggregate amount of the Term Loan Commitments
shall be automatically reduced to zero on the Term Loan
Commitment Termination Date.
(d) The Company will from time to time take such
action on its part, and will use reasonable efforts to cause the
Seller Representatives (as defined in the Stock Purchase Agree-
ment) from time to time to take such action on their part, as
shall be necessary to cause the beneficiary under the Barton
Letter of Credit to instruct that the face amount of the Barton
Letter of Credit be reduced on the dates and in the amounts
specified in Section 2.12(a) of the Stock Purchase Agreement.
Each reduction in the face amount of the Barton Letter of Credit
shall result in an automatic and simultaneous reduction in the
aggregate amount of the Barton Letter of Credit Commitments in an
amount equal to the amount of such reduction. Any portion of the
Barton Letter of Credit Commitments not used on the Barton Letter
of Credit Termination Date shall be automatically terminated.
(e) The Commitments once terminated or reduced may not
be reinstated.
2.06 Commitment Fee. The Company shall pay to the
Agent for account of each Bank a commitment fee on the daily
average unused amount of such Bank's Revolving Credit Commitment
(for which purpose the aggregate amount of any Letter of Credit
Liabilities in respect of Revolving Letters of Credit shall be
deemed to be a pro rata (based on the Revolving Credit Commit-
ments) use of each Bank's Revolving Credit Commitment), for the
period from and including the date hereof to but not including
the earlier of the date such Revolving Credit Commitment is
terminated and the Revolving Credit Termination Date, at a rate
per annum equal to 3/8 of 1%. The Company shall pay to the Agent
for account of each Bank a commitment fee on the daily average
unused amount of such Bank's Term Loan Commitment, for the period
from and including the date hereof to but not including the
earlier of the date such Term Loan Commitment is terminated and
the Term Loan Commitment Termination Date, at a rate per annum
equal to 3/8 of 1%. The Company shall pay to the Agent for
account of the Barton Letter of Credit Banks a commitment fee on
the daily average unused amount of such Bank's Barton Letter of
Credit Commitment (for which purpose the aggregate amount of the
Letter of Credit Liabilities in respect of the Barton Letter of
Credit shall be deemed to be a pro rata (based on the Barton
Letter of Credit Commitments) use of such Bank's Barton Letter of
Credit Commitment), for the period from and including the date
hereof to but not including the earlier of the date such Barton
Letter of Credit Commitment is terminated and the Barton Letter
of Credit Termination Date, at a rate per annum of 3/8 of 1%.
Accrued commitment fees shall be payable on each Quarterly Date
and on the earlier of the date the relevant Commitments are
terminated and the Revolving Credit Termination Date (in the case
of the Revolving Credit Commitments) or the Term Loan Commitment
Termination Date (in the case of the Term Loan and Barton Letter
of Credit Commitments). All commitment fees hereunder shall be
computed as set forth in Section 4.03 hereof.
2.07 Lending Offices. The Loans of each Type made by
each Bank shall be made and maintained at such Bank's Applicable
Lending Office for Loans of such Type.
2.08 Several Obligations; Remedies Independent. The
failure of any Bank (such Bank, a "Non-Funding Bank") to make any
Loan to be made by it on the date specified therefor shall not
relieve any other Bank (each such other Bank, an "Other Bank") of
its obligation to make its Loan on such date, but neither any
Other Bank nor the Agent shall be responsible for the failure of
any Non-Funding Bank to make a Loan to be made by such Non-
Funding Bank, and no Non-Funding Bank shall have any obligation
to the Agent or any Other Bank for the failure by such Non-
Funding Bank to make any Loan required to be made by such Non-
Funding Bank. The foregoing shall not relieve any Non-Funding
Bank from any liability it may have to the Company in respect of
its failure to honor its obligation to make the respective Loan.
Anything in this Agreement to the contrary notwithstanding, each
Bank hereby agrees with each other Bank that no Bank shall take
any action to protect or enforce its rights arising out of this
Agreement or the Notes (including, without limitation, exercising
any rights of off-set) without first obtaining the prior written
consent of the Agent or the Majority Banks, it being the intent
of the Banks that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and
at the direction or with the consent of the Agent or the Majority
Banks and not individually by a single Bank.
2.09 Notes.
(a) The Revolving Credit Loans (other than the
Swingline Loans) made by each Bank shall be evidenced by a single
promissory note of the Company substantially in the form of
Exhibit A-1 hereto, dated the date hereof, payable to such Bank
in a principal amount equal to the amount of its Revolving Credit
Commitment as originally in effect and otherwise duly completed.
(b) The Term Loans made by each Bank shall be
evidenced by two promissory notes of the Company each
substantially in the form of Exhibit A-2 hereto, dated the date
hereof, payable to such Bank in the respective principal amounts
provided in the next sentence and otherwise duly completed. The
aggregate principal amount of such notes executed and delivered
to any Bank shall be equal to the amount of such Bank's Term Loan
Commitment as originally in effect, the first of which notes (the
"Mortgage Note") being in a principal amount equal to 2/224 of
the amount of such Bank's Term Loan Commitment and to be secured
by all of the collateral security provided for pursuant to the
Security Documents (including, without limitation, the Mortgages
covering real property of the Obligors in New York) and the
second of which notes (the "Non-Mortgage Note") being in a
principal amount equal to 222/224 of the amount of such Bank's
Term Loan Commitment and to be secured by all of the collateral
security provided for pursuant to the Security Documents
(excluding, however, the Mortgages covering real property of the
Obligors in New York). Anything in this Agreement to the
contrary notwithstanding, all payments and prepayments of the
Term Loans hereunder shall be deemed to be applied first to the
portion of the Term Loans evidenced by the Non-Mortgage Notes
(until the same shall have been paid in full) and last to the
portion of the Term Loans evidenced by the Mortgage Notes.
(c) The Swingline Loans made by the Swingline Bank
shall be evidenced by a single promissory note of the Company
substantially in the form of Exhibit A-3 hereto, dated the date
hereof, payable to the Swingline Bank in a principal amount equal
to $8,000,000 and otherwise duly completed.
(d) The date, amount, Type, interest rate and duration
of Interest Period (if applicable) of each Loan of each Class
made by each Bank to the Company, and each payment made on
account of the principal thereof, shall be recorded by such Bank
on its books and, prior to any transfer of the Note evidencing
the Loans of such Class held by it, endorsed by such Bank on the
schedule attached to such Note or any continuation thereof;
provided that the failure of such Bank to make any such recorda-
tion or endorsement shall not affect the obligations of the
Company to make a payment when due of any amount owing hereunder
or under such Note in respect of the Loans to be evidenced by
such Note.
(e) No Bank shall be entitled to have its Notes
subdivided, by exchange for promissory notes of lesser denomina-
tions or otherwise, except in connection with a permitted assign-
ment of all or any portion of such Bank's relevant Commitment,
Loans and Notes pursuant to Section 12.06(b) hereof.
2.10 Optional Prepayments and Conversions or
Continuations of Loans. Subject to Section 4.04 hereof, the
Company shall have the right to prepay Loans, or to Convert Loans
of one Type into Loans of another Type or Continue Loans of one
Type as Loans of the same Type, at any time or from time to time,
provided that: (a) the Company shall give the Agent notice of
each such prepayment, Conversion or Continuation as provided in
Section 4.05 hereof (and, upon the date specified in any such
notice of prepayment, the amount to be prepaid shall become due
and payable hereunder); (b) Eurodollar Loans may be prepaid or
Converted only on the last day of an Interest Period for such
Loans; and (c) prepayments of the Term Loans, shall be applied to
the installments of the Term Loans in inverse order of their
maturities.
2.11 Mandatory Prepayments and Reductions of Commit-
ments.
(a) Borrowing Base. Until the Revolving Credit
Termination Date, the Company shall from time to time immediately
prepay the Revolving Credit Loans (and/or provide cover for
Letter of Credit Liabilities in respect of Revolving Letters of
Credit as specified in clause (h) below) in such amounts as shall
be necessary so that at all times the aggregate outstanding
amount of the Revolving Credit Loans outstanding together with
the Letter of Credit Liabilities in respect of Revolving Letters
of Credit shall not exceed the Borrowing Base, such amount to be
applied, first, to Revolving Credit Loans outstanding and,
second, as cover for Letter of Credit Liabilities in respect of
Revolving Letters of Credit.
(b) Revolving Credit Loans Clean-Up. The Company will
from time to time prepay the Revolving Credit Loans in such
amounts as shall be necessary so that for a period of at least
thirty consecutive days at any time during the last two fiscal
quarters of each fiscal year (commencing with the fiscal year
ending August 31, 1995), the aggregate outstanding principal
amount of the Revolving Credit Loans together with the Letter of
Credit Liabilities in respect of Revolving Letters of Credit does
not exceed $50,000,000.
(c) Casualty Events. Upon the date 180 days following
the receipt by the Company of the proceeds of insurance, condem-
nation award or other compensation with respect to any Casualty
Event affecting any Property of the Company or any of its
Subsidiaries (or upon such earlier date as the Company or its
Subsidiary, as the case may be, shall have determined not to
repair or replace the Property affected by such Casualty Event),
the Company shall repay the Loans (and/or provide cover for the
Letter of Credit Liabilities as specified in clause (h) below),
and the Commitments shall be subject to automatic reduction, in
an aggregate amount, if any, equal to 100% of the Net Available
Proceeds of such Casualty Event not theretofore applied to the
repair or replacement of such Property, such prepayment and
reduction to be effected in each case in the manner and to the
extent specified in clause (g) of this Section 2.11. Notwith-
standing the foregoing, in the event that a Casualty Event shall
occur with respect to Property covered by any Mortgage, the
Company shall, if required by the terms of such Mortgage, prepay
the Loans (and/or provide cover for the Letter of Credit Liabili-
ties as specified in clause (h) below), and the Commitments shall
be subject to automatic reduction, on the dates, and in the
amounts, of the required prepayments specified in accordance with
such Mortgage. Nothing in this clause (c) shall be deemed to
limit any obligation of the Company pursuant to any of the Secur-
ity Documents to remit to a collateral or similar account main-
tained by the Agent pursuant to any of the Security Documents the
proceeds of insurance, condemnation award or other compensation
received in respect of any Casualty Event.
(d) Equity Issuance. Upon any Equity Issuance, the
Company shall prepay the Loans (and/or provide cover for the
Letter of Credit Liabilities as specified in clause (h) below),
and the Commitments shall be subject to automatic reduction, in
an aggregate amount equal to (A) 100% of the Net Available
Proceeds thereof in respect of the first $60,000,000 of Net
Available Proceeds in respect of Equity Issuances consummated
after the Effective Date and (B) 50% of the Net Available
Proceeds thereafter, such prepayment and reduction to be effected
in each case in the manner and to the extent specified in clause
(g) of this Section 2.11.
(e) Excess Cash Flow. Not later than the date 90 days
after the end of each fiscal year of the Company, commencing with
the fiscal year ending August 31, 1995, the Company shall prepay
the Loans (and/or provide cover for the Letter of Credit Liabili-
ties as specified in clause (h) below), and the Commitments shall
be subject to automatic reduction, in an aggregate amount equal
to the excess of (A) 65% of Excess Cash Flow for such fiscal year
over (B) the aggregate amount of prepayments of Term Loans made
during such fiscal year pursuant to Section 2.10 hereof and,
after the payment in full of the Term Loans, the aggregate amount
of voluntary reductions of Revolving Credit Commitments made
during such fiscal year pursuant to Section 2.05(b) hereof, such
prepayment and reduction to be effected in each case in the
manner and to the extent specified in clause (g) of this
Section 2.11.
(f) Sale of Assets. Without limiting the obligation
of the Company to obtain the consent of the Majority Banks pur-
suant to Section 9.05 hereof to any Disposition not otherwise
permitted hereunder, in the event that the Net Available Proceeds
of any Disposition (herein, the "Current Disposition"), and of
all prior Dispositions as to which a prepayment has not yet been
made under this Section 2.11(f), shall exceed $10,000,000 then,
no later than five Business Days prior to the occurrence of the
Current Disposition, the Company will deliver to the Banks a
statement, certified by the chief financial officer of the
Company, in form and detail satisfactory to the Agent, of the
amount of the Net Available Proceeds of the Current Disposition
and of all such prior Dispositions and will prepay the Loans
(and/or provide cover for Letter of Credit Liabilities as speci-
fied in clause (h) below), and the Commitments shall be subject
to automatic reduction, in an aggregate amount equal to 100% of
the Net Available Proceeds of the Current Disposition and such
prior Dispositions, such prepayment and reduction to be effected
in each case in the manner and to the extent specified in
clause (g) of this Section 2.11.
(g) Application. Prepayments and reductions of
Commitments described in the above clauses of this Section 2.11
(other than in clauses (a) and (b) above) and clause (j) below
shall be effected as follows:
(i) first, the amount of the prepayment specified in
such clauses shall be applied to the Term Loans in the
inverse order of the maturities of the installments of the
Term Loans then outstanding;
(ii) second, the Revolving Credit Commitments shall be
automatically reduced by an amount equal to any excess over
the amount referred to in the foregoing clause (i) (and to
the extent that, after giving effect to such reduction, the
aggregate principal amount of Revolving Credit Loans,
together with the aggregate amount of all Letter of Credit
Liabilities in respect of Revolving Letters of Credit would
exceed the Revolving Credit Commitments, the Company shall,
first, prepay Revolving Credit Loans and, second, provide
cover for Letter of Credit Liabilities in respect of
Revolving Letters of Credit as specified in clause (h)
below, in an aggregate amount equal to such excess); and
(iii) third, if after payment in full of the principal
of and interest on the Term Loans and Revolving Credit Loans
(and (A) the reduction to zero of the Revolving Credit
Commitments as provided in clauses (i) and (ii) above and
(B) the provision for cover for Letter of Credit Liabilities
in respect of Revolving Letters as provided in clause (ii)
above) the Barton Letter of Credit shall be outstanding,
such required prepayment shall be used to provide cover for
Letter of Credit Liabilities in respect of the Barton Letter
of Credit as specified in clause (h) below.
(h) Cover for Letter of Credit Liabilities. In the
event that the Company shall be required pursuant to this
Section 2.11 to provide cover for Letter of Credit Liabilities,
the Company shall effect the same by paying to the Agent immedi-
ately available funds in an amount equal to the required amount,
which funds shall be retained by the Agent in the Collateral
Account (as provided therein as collateral security in the first
instance for the Letter of Credit Liabilities) until such time as
the Letters of Credit shall have been terminated and all of the
Letter of Credit Liabilities paid in full.
(i) Change of Control. In the event that the Company
shall be required pursuant to the provisions of any instrument
evidencing or governing any Subordinated Indebtedness to redeem,
or make an offer to redeem or repurchase, all or any portion of
such Subordinated Indebtedness as a result of a change of control
(however defined), then, concurrently with the occurrence of the
event giving rise to such change of control, the Company shall
prepay the Loans (and/or provide cover for the Letter of Credit
Liabilities as specified in clause (h) above) in full, and the
Commitments shall be automatically reduced to zero.
(j) Subordinated Indebtedness. Without limiting the
obligation of the Company to obtain the consent of the Majority
Banks to the issuance of any Subordinated Indebtedness not
permitted hereunder, upon the receipt by the Company of any cash
proceeds from any issuance of Subordinated Indebtedness, the
Company shall prepay the Loans (and/or provide cover for the
Letter of Credit Liabilities as specified in clause (i) above),
and the Commitments shall be subject to automatic reduction, in
an aggregate amount equal to (A) the cash proceeds received by
the Company and its Subsidiaries net of reasonable expenses
incurred by the Company and its Subsidiaries in connection
therewith) minus (B) the cash proceeds so received and applied to
refinance other Subordinated Indebtedness as contemplated by
Section 9.22 hereof, such prepayment and reduction to be effected
in each case in the manner and to the extent specified in clause
(g) of this Section 2.11.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) The Company hereby promises to pay to the Agent
for account of each Bank the entire outstanding principal amount
of such Bank's Revolving Credit Loans, and each Revolving Credit
Loan shall mature, on the Revolving Credit Termination Date; the
Company hereby agrees to pay to the Agent for account of the
Swingline Bank the full outstanding amount of each Swingline
Loan, and each Swingline Loan shall mature, the earlier of (A)
two Business Days after such Loan is made by the Swingline Bank
or (B) the Revolving Credit Termination Date.
(b) The Company hereby promises to pay to the Agent
for account of each Bank the principal of the Term Loans in 23
installments payable on the Principal Payment Dates as follows:
Principal Payment Date Amount of
falling on or nearest to: Installment
December 15, 1994 $ 7,000,000.00
March 15, 1995 $ 7,000,000.00
June 15, 1995 $ 7,000,000.00
September 15, 1995 $ 7,000,000.00
December 15, 1995 $ 7,000,000.00
March 15, 1996 $ 7,000,000.00
June 15, 1996 $ 7,000,000.00
September 15, 1996 $ 7,000,000.00
December 15, 1996 $ 7,000,000.00
March 15, 1997 $ 7,000,000.00
June 15, 1997 $ 7,000,000.00
September 15, 1997 $ 7,000,000.00
December 15, 1997 $ 7,000,000.00
March 15, 1998 $ 7,000,000.00
June 15, 1998 $ 7,000,000.00
September 15, 1998 $ 7,000,000.00
December 15, 1998 $ 7,000,000.00
March 15, 1999 $ 7,000,000.00
June 15, 1999 $ 7,000,000.00
September 15, 1999 $ 7,000,000.00
December 15, 1999 $ 7,000,000.00
March 15, 2000 $ 7,000,000.00
June 15, 2000 $70,000,000.00
If the Company does not borrow the full amount of the aggregate
Term Loan Commitments on the Term Loan Commitment Termination
Date, the shortfall shall be applied to reduce the foregoing
installments in the inverse order of maturity. Prepayments of
Term Loans made pursuant to Section 2.10 or Section 2.11 hereof
shall be applied to the foregoing amortization schedule in
accordance with Section 2.10(c) or Section 2.11(g) hereof, as the
case may be.
3.02 Interest. The Company hereby promises to pay to
the Agent for account of each Bank interest on the unpaid
principal amount of each Loan made by such Bank for the period
from and including the date of such Loan to but excluding the
date such Loan shall be paid in full, at the following rates per
annum:
(a) during such periods as such Loan is a Base Rate
Loan, the Base Rate (as in effect from time to time) plus
the Applicable Margin and
(b) during such periods as such Loan is a Eurodollar
Loan, for each Interest Period relating thereto, the
Eurodollar Rate for such Loan for such Interest Period plus
the Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay
to the Agent for account of each Bank interest at the applicable
Post-Default Rate on any principal of any Loan made by such Bank
and on any other amount payable by the Company hereunder or under
the Notes held by such Bank to or for account of such Bank, which
shall not be paid in full when due (whether at stated maturity,
by acceleration, by mandatory prepayment or otherwise), for the
period from and including the due date thereof to but excluding
the date the same is paid in full. Accrued interest on each Loan
shall be payable (i) in the case of a Base Rate Loan, quarterly
on the Quarterly Dates, (ii) in the case of a Eurodollar Loan, on
the last day of each Interest Period therefor and, if such Inter-
est Period is longer than three months, at three-month intervals
following the first day of such Interest Period, and (iii) in the
case of any Loan, upon the payment or prepayment thereof or the
Conversion of such Loan to a Loan of another Type (but only on
the principal amount so paid, prepaid or Converted), except that
interest payable at the Post-Default Rate shall be payable from
time to time on demand. Promptly after the determination of any
interest rate provided for herein or any change therein, the
Agent shall give notice thereof to the Banks to which such
interest is payable and to the Company.
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein,
all payments of principal, interest, Reimbursement Obligations
and other amounts to be made by the Company under this Agreement
and the Notes and, except to the extent otherwise provided
therein, all payments to be made by the Company under any other
Basic Document, shall be made in Dollars, in immediately avail-
able funds, without deduction, set-off or counterclaim, to the
Agent at account number NYAO-DI-900-9-000002 maintained by the
Agent with Chase at the Principal Office, not later than
1:00 p.m. New York time on the date on which such payment shall
become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding
Business Day).
(b) The Company shall, at the time of making each
payment under this Agreement or any Note for account of any Bank,
specify to the Agent (which shall so notify the intended
recipient(s) thereof) the Loans, Reimbursement Obligations or
other amounts payable by the Company hereunder to which such
payment is to be applied (and in the event that the Company fails
to so specify, or if an Event of Default has occurred and is
continuing, the Agent may distribute such payment to the Banks
for application in such manner as it or the Majority Banks,
subject to Section 4.02 hereof, may determine to be appropriate).
(c) Each payment received by the Agent under this
Agreement or any Note for account of any Bank shall be paid by
the Agent promptly to such Bank, in immediately available funds,
for account of such Bank's Applicable Lending Office for the Loan
or other obligation in respect of which such payment is made.
(d) If the due date of any payment under this
Agreement or any Note would otherwise fall on a day that is not a
Business Day, such date shall be extended to the next succeeding
Business Day, and interest shall be payable for any principal so
extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein: (a) each borrowing of Loans of a
particular Class from the Banks under Section 2.01 hereof shall
be made from the relevant Banks, each payment of commitment fee
under Section 2.06 hereof in respect of Commitments of a particu-
lar Class shall be made for account of the relevant Banks, and
each termination or reduction of the amount of the Commitments of
a particular Class under Section 2.05 hereof shall be applied to
the respective Commitments of such Class of the relevant Banks,
pro rata according to the amounts of their respective Commitments
of such Class; (b) the making, Conversion and Continuation of
Revolving Credit Loans and Term Loans of a particular Type (other
than Conversions provided for by Section 5.04 hereof) shall be
made pro rata among the relevant Banks according to the amounts
of their respective Revolving Credit and Term Loan Commitments
(in the case of making of Loans) or their respective Revolving
Credit Loans and Term Loans (in the case of Conversions and
Continuations of Loans) and the then current Interest Period for
each Eurodollar Loan shall be coterminous; (c) each payment or
prepayment of principal of Revolving Credit Loans and Term Loans
by the Company shall be made for account of the relevant Banks
pro rata in accordance with the respective unpaid principal
amounts of the Loans of such Class held by them; and (d) each
payment of interest on Revolving Credit Loans and Term Loans by
the Company shall be made for account of the relevant Banks pro
rata in accordance with the amounts of interest on such Loans
then due and payable to the respective Banks. Notwithstanding
the foregoing, borrowings, payments and prepayments of Swingline
Loans shall be made without regard to the foregoing provisions of
this Section 4.02; provided that each mandatory prepayment made
pursuant to Section 2.11 hereof in respect of Revolving Credit
Loans shall be applied ratably to all Revolving Credit Loans
(including, without limitation, the Swingline Loans).
4.03 Computations. Interest on Loans and Reimburse-
ment Obligations and commitment fee and letter of credit fees
shall be computed on the basis of a year of 360 days and actual
days elapsed (including the first day but excluding the last day)
occurring in the period for which payable.
4.04 Minimum Amounts. Except for mandatory prepay-
ments made pursuant to Section 2.11 hereof and Conversions or
prepayments made pursuant to Section 5.04 hereof, each borrowing,
Conversion and partial prepayment of principal of Loans shall be
in an aggregate amount at least equal to $1,000,000 or in
multiples of $100,000 in excess thereof (borrowings, Conversions
or prepayments of or into Loans of different Types or, in the
case of Eurodollar Loans, having different Interest Periods at
the same time hereunder to be deemed separate borrowings,
Conversions and prepayments for purposes of the foregoing, one
for each Type or Interest Period). Anything in this Agreement to
the contrary notwithstanding, the aggregate principal amount of
Eurodollar Loans having the same Interest Period shall be in an
amount at least equal to $2,000,000 or in multiples of $100,000
in excess thereof and, if any Eurodollar Loans would otherwise be
in a lesser principal amount for any period, such Loans shall be
Base Rate Loans during such period. As provided in Section
2.01(c)(iii) hereof, the provisions of this Section 4.04 shall
not apply to Swingline Loans.
4.05 Certain Notices. Notices by the Company to the
Agent of terminations or reductions of the Commitments, of
borrowings, Conversions, Continuations and optional prepayments
of Loans and of Classes of Loans, of Types of Loans and of the
duration of Interest Periods shall be irrevocable and shall be
effective only if received by the Agent not later than 12:00 noon
New York time on the number of Business Days prior to the date of
the relevant termination, reduction, borrowing, Conversion,
Continuation or prepayment or the first day of such Interest
Period specified below:
Number of
Business
Notice Days Prior
Termination or reduction
of Commitments 4
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans 1
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the
amount and the Class of the Commitments to be terminated or
reduced. Each such notice of borrowing, Conversion, Continuation
or optional prepayment shall specify the Class of Loans to be
borrowed, Converted, Continued or prepaid and the amount (subject
to Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid and the date of borrowing,
Conversion, Continuation or optional prepayment (which shall be a
Business Day). Each such notice of the duration of an Interest
Period shall specify the Loans to which such Interest Period is
to relate. The Agent shall promptly notify the Banks of the
contents of each such notice. In the event that the Company
fails to select the Type of Loan, or the duration of any Interest
Period for any Eurodollar Loan, within the time period and other-
wise as provided in this Section 4.05, such Loan (if outstanding
as a Eurodollar Loan) will be automatically Converted into a Base
Rate Loan on the last day of the then current Interest Period for
such Loan or (if outstanding as a Base Rate Loan) will remain as,
or (if not then outstanding) will be made as, a Base Rate Loan.
As provided in Section 2.01(c)(iii) hereof, the provisions of
this Section 4.05 shall not apply to Swingline Loans.
4.06 Non-Receipt of Funds by the Agent. Unless the
Agent shall have been notified by a Bank or the Company (the
"Payor") prior to the date on which the Payor is to make payment
to the Agent of (in the case of a Bank) the proceeds of a Loan to
be made by such Bank, or a participation in a Letter of Credit
drawing or an interest in an Existing Loan to be acquired by such
Bank, hereunder or (in the case of the Company) a payment to the
Agent for account of one or more of the Banks hereunder (such
payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend
to make the Required Payment to the Agent, the Agent may assume
that the Required Payment has been made and may, in reliance upon
such assumption (but shall not be required to), make the amount
thereof available to the intended recipient(s) on such date; and,
if the Payor has not in fact made the Required Payment to the
Agent, the recipient(s) of such payment shall, on demand, repay
to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on
the date (the "Advance Date") such amount was so made available
by the Agent until the date the Agent recovers such amount at a
rate per annum equal to the Federal Funds Rate for such day and,
if such recipient(s) shall fail promptly to make such payment,
the Agent shall be entitled to recover such amount, on demand,
from the Payor, together with interest as aforesaid, provided
that if neither the recipient(s) nor the Payor shall return the
Required Payment to the Agent within three Business Days of the
Advance Date, then, retroactively to the Advance Date, the Payor
and the recipient(s) shall each be obligated to pay interest on
the Required Payment as follows:
(i) if the Required Payment shall represent a payment
to be made by the Company to the Banks, the Company and the
recipient(s) shall each be obligated retroactively to the
Advance Date to pay interest in respect of the Required
Payment at the Post-Default Rate (and, in case the
recipient(s) shall return the Required Payment to the Agent,
without limiting the obligation of the Company under
Section 3.02 hereof to pay interest to such recipient(s) at
the Post-Default Rate in respect of the Required Payment),
and
(ii) if the Required Payment shall represent proceeds
of a Loan to be made by the Banks to the Company, the Payor
and the Company shall each be obligated retroactively to the
Advance Date to pay interest in respect of the Required
Payment at the rate of interest provided for such Required
Payment pursuant to Section 3.02 hereof (and, in case the
Company shall return the Required Payment to the Agent,
without limiting any claim the Company may have against the
Payor in respect of the Required Payment).
4.07 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or
counterclaim a Bank may otherwise have, each Bank shall be
entitled, at its option (but subject, as between the Banks, to
the provisions of the last sentence of Section 2.08 hereof), to
offset balances held by it for account of the Company at any of
its offices, in Dollars or in any other currency, against any
principal of or interest on any of such Bank's Loans, Reimburse-
ment Obligations or any other amount payable to such Bank here-
under, that is not paid when due (regardless of whether such
balances are then due to the Company), in which case it shall
promptly notify the Company and the Agent thereof, provided that
such Bank's failure to give such notice shall not affect the
validity thereof.
(b) If any Bank shall obtain from any Obligor payment
of any principal of or interest on any Loan of any Class or
Letter of Credit Liability owing to it or payment of any other
amount under this Agreement or any Note held by it or any other
Basic Document through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise
(other than from the Agent as provided herein), and, as a result
of such payment, such Bank shall have received a greater percent-
age of the principal of or interest on the Loans of such Class or
Letter of Credit Liabilities or such other amounts then due here-
under or thereunder by such Obligor to such Bank than the percent-
age received by any other Bank, it shall promptly purchase from
such other Banks participations in (or, if and to the extent
specified by such Bank, direct interests in) the Loans of such
Class or Letter of Credit Liabilities or such other amounts,
respectively, owing to such other Banks (or in interest due
thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end
that all the Banks shall share the benefit of such excess payment
(net of any expenses that may be incurred by such Bank in obtain-
ing or preserving such excess payment) pro rata in accordance
with the unpaid principal of and/or interest on the Loans of such
Class or Letter of Credit Liabilities or such other amounts,
respectively, owing to each of the Banks. To such end all the
Banks shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is
rescinded or must otherwise be restored.
(c) The Company agrees that any Bank so purchasing
such a participation (or direct interest) may exercise all rights
of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Bank were a
direct holder of Loans or other amounts (as the case may be)
owing to such Bank in the amount of such participation.
(d) Nothing contained herein shall require any Bank to
exercise any such right or shall affect the right of any Bank to
exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of any
Obligor. If, under any applicable bankruptcy, insolvency or
other similar law, any Bank receives a secured claim in lieu of a
set-off to which this Section 4.07 applies, such Bank shall, to
the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Banks
entitled under this Section 4.07 to share in the benefits of any
recovery on such secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from
time to time such amounts as such Bank may reasonably determine
to be necessary to compensate such Bank for any costs that such
Bank reasonably determines are attributable to its making or
maintaining of any Eurodollar Loans or its obligation to make any
Eurodollar Loans hereunder, or any reduction in any amount receiv-
able by such Bank hereunder in respect of any of such Loans or
such obligation (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change that:
(i) changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its Notes in
respect of any of such Loans (other than taxes imposed on or
measured by the overall net income of such Bank or of its
Applicable Lending Office for any of such Loans by the
jurisdiction in which such Bank has its principal office or
such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special
deposit or similar requirements (other than the Reserve
Requirement utilized in the determination of the Eurodollar
Rate for such Loan) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities
of, such Bank (including, without limitation, any of such
Loans or any deposits referred to in the definition of
"Eurodollar Base Rate" in Section 1.01 hereof), or any
commitment of such Bank (including, without limitation, the
Commitments of such Bank hereunder); or
(iii) imposes any other condition affecting this
Agreement or its Notes (or any of such extensions of credit
or liabilities) or its Commitments.
If any Bank requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to such Bank (with a
copy to the Agent), suspend the obligation of such Bank there-
after to make or Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans, until the Regulatory Change
giving rise to such request ceases to be in effect (in which case
the provisions of Section 5.04 hereof shall be applicable),
provided that such suspension shall not affect the right of such
Bank to receive the compensation so requested.
(b) Without limiting the effect of the provisions of
paragraph (a) of this Section 5.01, in the event that, by reason
of any Regulatory Change, any Bank either (i) incurs Additional
Costs based on or measured by the excess above a specified level
of the amount of a category of deposits or other liabilities of
such Bank that includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in
this Agreement or a category of extensions of credit or other
assets of such Bank that includes Eurodollar Loans or (ii)
becomes subject to restrictions on the amount of such a category
of liabilities or assets that it may hold, then, if such Bank so
elects by notice to the Company (with a copy to the Agent), the
obligation of such Bank to make or Continue, or to Convert Base
Rate Loans into, Eurodollar Loans hereunder shall be suspended
until such Regulatory Change ceases to be in effect (in which
case the provisions of Section 5.04 hereof shall be applicable).
(c) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the
Company shall pay directly to each Bank from time to time on
request such amounts as such Bank may reasonably determine to be
necessary to compensate such Bank (or, without duplication, the
bank holding company of which such Bank is a subsidiary) for any
costs that it reasonably determines are attributable to the main-
tenance by such Bank (or any Applicable Lending Office or such
bank holding company), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the
force of law and whether or not failure to complete therewith
would be unlawful) of any court or governmental or monetary
authority (i) following any Regulatory Change or (ii) implement-
ing any risk-based capital guideline or other requirement
(whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) heretofore or
hereafter issued by any government or governmental or supervisory
authority implementing at the national level the Basel Accord
(including, without limitation, the Final Risk-Based Capital
Guidelines of the Board of Governors of the Federal Reserve
System (12 C.F.R. Part 208, Appendix A; 12 C.F.R. Part 225,
Appendix A) and the Final Risk-Based Capital Guidelines of the
Office of the Comptroller of the Currency (12 C.F.R. Part 3,
Appendix A)), of capital in respect of its Commitments or Loans
(such compensation to include, without limitation, an amount
equal to any reduction of the rate of return on assets or equity
of such Bank (or any Applicable Lending Office or such bank
holding company) to a level below that which such Bank (or any
Applicable Lending Office or such bank holding company) could
have achieved but for such law, regulation, interpretation,
directive or request). For purposes of this Section 5.01(c) and
Section 5.06 hereof, "Basel Accord" shall mean the proposals for
risk-based capital framework described by the Basel Committee on
Banking Regulations and Supervisory Practices in its paper
entitled "International Convergence of Capital Measurement and
Capital Standards" dated July 1988, as amended, modified and
supplemented and in effect from time to time or any replacement
thereof.
(d) Each Bank shall notify the Company of any event
occurring after the date of this Agreement entitling such Bank to
compensation under paragraph (a) or (c) of this Section 5.01 as
promptly as practicable, but in any event within 45 days, after
such Bank obtains actual knowledge thereof; provided that (i) if
any Bank fails to give such notice within 45 days after it
obtains actual knowledge of such an event, such Bank shall, with
respect to compensation payable pursuant to this Section 5.01 in
respect of any costs resulting from such event, only be entitled
to payment under this Section 5.01 for costs incurred from and
after the date 45 days prior to the date that such Bank does give
such notice and (ii) each Bank will designate a different Applic-
able Lending Office for the Loans of such Bank affected by such
event if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of
such Bank, be disadvantageous to such Bank, except that such Bank
shall have no obligation to designate an Applicable Lending
Office located in the United States of America. Each Bank will
furnish to the Company a certificate setting forth the basis and
amount of each request by such Bank for compensation under
paragraph (a) or (c) of this Section 5.01. Determinations and
allocations by any Bank for purposes of this Section 5.01 of the
effect of any Regulatory Change pursuant to paragraph (a) or (b)
of this Section 5.01, or of the effect of capital maintained
pursuant to paragraph (c) of this Section 5.01, on its costs or
rate of return of maintaining Loans or its obligation to make
Loans, or on amounts receivable by it in respect of Loans, and of
the amounts required to compensate such Bank under this
Section 5.01, shall be conclusive.
5.02 Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if, on or prior to the determina-
tion of any Eurodollar Base Rate for any Interest Period:
(a) the Agent determines, which determination shall be
conclusive, that quotations of interest rates for the rele-
vant deposits referred to in the definition of "Eurodollar
Base Rate" in Section 1.01 hereof are not being provided in
the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for Eurodollar
Loans as provided herein; or
(b) if the related Loans are Revolving Credit Loans,
the Majority Revolving Credit Banks or, if the related Loans
are Term Loans, the Majority Term Banks determine, which
determination shall be conclusive, and notify the Agent that
the relevant rates of interest referred to in the definition
of "Eurodollar Base Rate" in Section 1.01 hereof upon the
basis of which the rate of interest for Eurodollar Loans for
such Interest Period is to be determined are not likely
adequately to cover the cost to such Banks of making or
maintaining Eurodollar Loans for such Interest Period;
then the Agent shall give the Company and each Bank prompt notice
thereof and, so long as such condition remains in effect, the
Banks shall be under no obligation to make additional Eurodollar
Loans, to Continue Eurodollar Loans or to Convert Base Rate Loans
into Eurodollar Loans, and the Company shall, on the last day(s)
of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Loans or Convert such Loans
into Base Rate Loans in accordance with Section 2.10 hereof.
5.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any
Bank or its Applicable Lending Office to honor its obligation to
make or maintain Eurodollar Loans hereunder, then such Bank shall
promptly notify the Company thereof (with a copy to the Agent)
and such Bank's obligation to make or Continue, or to Convert
Loans of any other Type into, Eurodollar Loans shall be suspended
until such time as such Bank may again make and maintain
Eurodollar Loans (in which case the provisions of Section 5.04
hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation
of any Bank to make Eurodollar Loans or to Continue, or to
Convert Base Rate Loans into, Eurodollar Loans shall be suspended
pursuant to Section 5.01 or 5.03 hereof, such Bank's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on
the last day(s) of the then current Interest Period(s) for
Eurodollar Loans (or, in the case of a Conversion required by
Section 5.01(b) or 5.03 hereof, on such earlier date as such Bank
may specify to the Company with a copy to the Agent) and, unless
and until such Bank gives notice as provided below that the
circumstances specified in Section 5.01 or 5.03 hereof that gave
rise to such Conversion no longer exist:
(a) to the extent that such Bank's Eurodollar Loans
have been so Converted, all payments and prepayments of
principal that would otherwise be applied to such Bank's
Eurodollar Loans shall be applied instead to its Base Rate
Loans; and
(b) all Loans that would otherwise be made or
Continued by such Bank as Eurodollar Loans shall be made or
Continued instead as Base Rate Loans, and all Base Rate
Loans of such Bank that would otherwise be Converted into
Eurodollar Loans shall remain as Base Rate Loans.
If such Bank gives notice to the Company with a copy to the Agent
that the circumstances specified in Section 5.01 or 5.03 hereof
that gave rise to the Conversion of such Bank's Eurodollar Loans
pursuant to this Section 5.04 no longer exist (which such Bank
agrees to do promptly upon such circumstances ceasing to exist)
at a time when Eurodollar Loans made by other Banks are out-
standing, such Bank's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent
necessary so that, after giving effect thereto, all Loans held by
the Banks holding Eurodollar Loans and by such Bank are held pro
rata (as to principal amounts, Types and Interest Periods) in
accordance with their respective Commitments.
5.05 Compensation. The Company shall pay to the Agent
for account of each Bank, upon the request of such Bank through
the Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Bank) to compensate it for any loss,
cost or expense that such Bank determines is attributable to:
(a) any payment, mandatory or optional prepayment or
Conversion of a Eurodollar Loan made by such Bank for any
reason (including, without limitation, the acceleration of
the Loans pursuant to Section 10 hereof) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by the Company for any reason (includ-
ing, without limitation, the failure of any of the condi-
tions precedent specified in Section 7 hereof to be satis-
fied) to borrow a Eurodollar Loan from such Bank on the date
for such borrowing specified in the relevant notice of
borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest that otherwise would have accrued
on the principal amount so paid, prepaid or Converted or not
borrowed for the period from the date of such payment, prepay-
ment, Conversion or failure to borrow to the last day of the then
current Interest Period for such Loan (or, in the case of a
failure to borrow, the Interest Period for such Loan that would
have commenced on the date specified for such borrowing) at the
applicable rate of interest for such Loan provided for herein
over (ii) the amount of interest that otherwise would have
accrued on such principal amount at a rate per annum equal to the
interest component of the amount such Bank would have bid in the
London interbank market for Dollar deposits of leading banks in
amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such
Bank).
5.06 Additional Costs in Respect of Letters of Credit.
Without limiting the obligations of the Company under
Section 5.01 hereof (but without duplication), if as a result of
any Regulatory Change or any risk-based capital guideline or
other requirement heretofore or hereafter issued by any govern-
ment or governmental or supervisory authority implementing at the
national level the Basel Accord there shall be imposed, modified
or deemed applicable any tax, reserve, special deposit, capital
adequacy or similar requirement against or with respect to or
measured by reference to Letters of Credit issued or to be issued
hereunder and the result shall be to increase the cost to any
Bank or Banks of issuing (or purchasing participations in) or
maintaining its obligation hereunder to issue (or purchase
participations in) any Letter of Credit hereunder or reduce any
amount receivable by any Bank hereunder in respect of any Letter
of Credit (which increases in cost, or reductions in amount
receivable, shall be the result of such Bank's or Banks' reason-
able allocation of the aggregate of such increases or reductions
resulting from such event), then, upon demand by such Bank or
Banks (through the Agent), the Company shall pay immediately to
the Agent for account of such Bank or Banks, from time to time as
specified by such Bank or Banks (through the Agent), such addi-
tional amounts as shall be sufficient to compensate such Bank or
Banks (through the Agent) for such increased costs or reductions
in amount. A statement as to such increased costs or reductions
in amount incurred by any such Bank or Banks, submitted by such
Bank or Banks to the Company shall be conclusive in the absence
of manifest error as to the amount thereof.
Section 6. Guarantee.
6.01 Guarantee. The Subsidiary Guarantors hereby
jointly and severally guarantee to each Bank and the Agent and
their respective successors and assigns the prompt payment in
full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest on the Loans made by
the Banks to, and the Notes held by each Bank of, the Company,
all indebtedness of the Company to any of the Banks in respect of
Interest Rate Protection Agreements entered into pursuant to the
requirements set forth in Section 9.16 hereof and all other
amounts from time to time owing to the Banks or the Agent by the
Company under this Agreement and under the Notes and by any
Obligor under any of the other Basic Documents, in each case
strictly in accordance with the terms hereof and thereof (such
obligations being herein collectively called the "Guaranteed
Obligations"). The Subsidiary Guarantors hereby further jointly
and severally agree that if the Company shall fail to pay in full
when due (whether at stated maturity, by acceleration or other-
wise) any of the Guaranteed Obligations, the Subsidiary Guaran-
tors will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended
maturity, by acceleration or otherwise) in accordance with the
terms of such extension or renewal.
6.02 Obligations Unconditional. The obligations of
the Subsidiary Guarantors under Section 6.01 hereof are absolute
and unconditional, joint and several, irrespective of the value,
genuineness, validity, regularity or enforceability of the obli-
gations of the Company under this Agreement, the Notes or any
other agreement or instrument referred to herein or therein, or
any substitution, release or exchange of any other guarantee of
or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever which might otherwise constitute a
legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 6.02 that the obligations of
the Subsidiary Guarantors hereunder shall be absolute and
unconditional, joint and several, under any and all circum-
stances. In full recognition and in furtherance of the fore-
going, each Subsidiary Guarantor agrees that:
(a) Without affecting the enforceability or effective-
ness of Section 6.01 hereof in accordance with its terms and
without affecting, limiting, reducing, discharging or termi-
nating the liability of such Subsidiary Guarantor, or the
rights, remedies, powers and privileges of the Agent and the
Banks under this Agreement, the Notes or any other agreement
or instrument referred to herein or therein, the Agent and
the Banks may, at any time and from time to time and without
notice or demand of any kind or nature whatsoever:
(i) amend, supplement, modify, extend, renew,
waive, accelerate or otherwise change the time for
payment or performance of, or the terms of, all or any
part of the Guaranteed Obligations (including any
increase or decrease in the rate or rates of interest
on all or any part of the Guaranteed Obligations);
(ii) amend, supplement, modify, extend, renew,
waive or otherwise change, or enter into or give, any
Basic Document or any agreement, security document,
guarantee, approval, consent or other instrument with
respect to all or any part of the Guaranteed Obliga-
tions, any Basic Document or any such other instrument
or any term or provision of the foregoing (it being
understood that this clause (ii) shall not be deemed to
constitute a consent by any Subsidiary Guarantor to any
such amendment with respect to any Basic Document to
which it is a party);
(iii) accept or enter into new or additional
agreements, security documents, guarantees (including
letters of credit) or other instruments in addition to,
in exchange for or relative to any Basic Document, all
or any part of the Guaranteed Obligations or any
collateral now or in the future serving as security for
the Guaranteed Obligations;
(iv) accept or receive (including from any other
Subsidiary Guarantor) partial payments or performance
on the Guaranteed Obligations (whether as a result of
the exercise of any right, remedy, power or privilege
or otherwise);
(v) accept, receive and hold any additional
collateral for all or any part of the Guaranteed
Obligations (including from any other Guarantor);
(vi) release, reconvey, terminate, waive, abandon,
allow to lapse or expire, fail to perfect, subordinate,
exchange, substitute, transfer, foreclose upon or
enforce any collateral, security documents or guaran-
tees (including letters of credit or the obligations of
any other Subsidiary Guarantor) for or relative to all
or any part of the Guaranteed Obligations;
(vii) apply any collateral or the proceeds of any
collateral or guarantee (including any letter of credit
or the obligations of any other Subsidiary Guarantor)
to all or any part of the Guaranteed Obligations in
such manner and extent as the Agent or any Bank may in
its discretion determine;
(viii) release any Person (including any other
Subsidiary Guarantor) from any personal liability with
respect to all or any part of the Guaranteed
Obligations;
(ix) settle, compromise, release, liquidate or
enforce upon such terms and in such manner as the Agent
or the Banks may determine or as applicable law may
dictate all or any part of the Guaranteed Obligations
or any collateral on or guarantee (including any letter
of credit issued with respect to) of all or any part of
the Guaranteed Obligations;
(x) consent to the merger or consolidation of,
the sale of substantial assets by, or other restructur-
ing or termination of the corporate existence of the
Company or any other Person (including any other
Subsidiary Guarantor);
(xi) proceed against the Company, such or any
other Subsidiary Guarantor or any other guarantor of
(including any issuer of any letter of credit issued
with respect to) all or any part of the Guaranteed
Obligations or any collateral provided by any Person
and exercise the right, remedies, powers and privileges
of the Agent and the Banks under this Agreement, the
Notes or any other agreement or instrument referred to
herein or therein, or otherwise in such order and such
manner as the Agent or any Bank may, in its discretion,
determine, without any necessity to proceed upon or
against or exhaust any collateral, right, remedy, power
or privilege before proceeding to call upon or other-
wise enforce Section 6.01 hereof as to any Subsidiary
Guarantor;
(xii) foreclose upon any deed of trust, mortgage or
other instrument creating or granting liens on any
interest in real property by judicial or nonjudicial
sale or by deed in lieu of foreclosure, bid any amount
or make no bid in any foreclosure sale or make any
other election of remedies with respect to such liens
or exercise any right of set-off;
(xiii) obtain the appointment of a receiver with
respect to any collateral for all or any part of the
Guaranteed Obligations and apply the proceeds of such
receivership as the Agent or any Bank may in its
discretion determine (it being agreed that nothing in
this clause (xiii) shall be deemed to make the Agent or
any Bank a party in possession in contemplation of law,
except at its option);
(xiv) enter into such other transactions or
business dealings with any other Subsidiary Guarantor,
the Company, any Subsidiary or Affiliate of the Company
or any other guarantor of all or any part of the
Guaranteed Obligations as the Agent or any Bank may
desire; and
(xv) do all or any combination of the actions set
forth in this 6.02(a).
(b) The enforceability and effectiveness of this
Section 6 and the liability of the Subsidiary Guarantors,
and the rights remedies, powers and privileges of the Agent
and the Banks, under this Agreement, the Notes or any other
agreement or instrument referred to herein or therein, shall
not be affected, limited, reduced, discharged or terminated,
and each Subsidiary Guarantor hereby expressly waives any
defense now or in the future arising, by reason of:
(i) the illegality, invalidity, irregularity,
authenticity, or unenforceability of all or any part of
the Guaranteed Obligations, this Agreement, the Notes
or any other agreement or instrument referred to herein
or therein, or any agreement, security document,
guarantee or other instrument relative to all or any
part of the Guaranteed Obligations;
(ii) any disability or other defense of the
Company or any other Subsidiary Guarantor with respect
to all of any part of the Guaranteed Obligations or any
other guarantor of all or any part of the Guaranteed
Obligations (including any issuer of any letters of
credit), including the effect of any statute of limita-
tions that may bar the enforcement of all or any part
of the Guaranteed Obligations or the obligations of any
such other guarantor;
(iii) the illegality, invalidity, irregularity,
authenticity or unenforceability of any security or
guarantee (including any letter of credit) for all or
any part of the Guaranteed Obligations or the lack of
perfection or continuing perfection or failure of the
priority of any lien on any collateral for all or any
part of the Guaranteed Obligations;
(iv) the cessation, for any cause whatsoever, of
the liability of the Company or any other Subsidiary
Guarantor (other than subject to Section 6.05, by
reason of the full payment and performance of all
Guaranteed Obligations);
(v) any failure of the Agent or any Bank to
marshall assets in favor of the Company or any other
Person (including any other Subsidiary Guarantor), to
exhaust any collateral for all or any part of the
Guaranteed Obligations, to pursue or exhaust any right,
remedy, power or privilege it may have against any
other Subsidiary Guarantor, the Company, any other
guarantor, all or any part of the Guaranteed Obliga-
tions (including any issuer of any letter of credit) or
any other Person or to take any action whatsoever to
mitigate or reduce such or any other Subsidiary
Guarantor's liability under this Section 6, neither the
Agent nor any Bank being under any obligation to take
any such action notwithstanding the fact that all or
any part of the Guaranteed Obligations may be due and
payable and that the Company may be in default of its
obligations under this Agreement, the Notes or any
other agreement or instrument referred to herein or
therein;
(vi) any failure of the Agent or any Bank to give
notice after any Default of sale or other disposition
of any collateral (including any notice of any judicial
or nonjudicial foreclosure or sale of any interest in
real property serving as collateral for all or any part
of the Guaranteed Obligations) for all or any part of
the Guaranteed Obligations to the Company, any Subsidi-
ary Guarantor or any other Person or any defect in, or
any failure by any Subsidiary Guarantor or any other
Person to receive, any notice that may be given in
connection with any sale or disposition of any
collateral;
(vii) any failure of the Agent or any Bank to
comply with applicable laws in connection with the sale
or other disposition of any collateral for all or any
part of the Guaranteed Obligations, including any
failure to conduct a commercially reasonable sale or
other disposition of any collateral for all or any part
of the Guaranteed Obligations;
(viii) any judicial or nonjudicial foreclosure or
sale of, or other election of remedies with respect to,
any interest in real property or other collateral
serving as security for all or any part of the Guaran-
teed Obligations, even though such foreclosure, sale or
election of remedies may impair the subrogation rights
of any Subsidiary Guarantor or may preclude any Subsidi-
ary Guarantor from obtaining reimbursement, contribu-
tion, indemnification or other recovery from any other
Subsidiary Guarantor, the Company any other guarantor
or any other Person and even though the Company may
not, as a result of such foreclosure, sale or election
of remedies, be liable for any deficiency;
(ix) any benefits the Company, any Subsidiary
Guarantor or any other guarantor may otherwise derive
from Sections 580(a), 580(b), 580(d) or 726 of the
California Code of Civil Procedure or any comparable
provisions of the laws of any other jurisdiction;
(x) any act or omission of the Agent, any Bank or
any other person that directly or indirectly results in
or aids the discharge or release of the Company or any
other Subsidiary Guarantor, of all or any part of the
Guaranteed Obligations or any security or guarantee
(including any letter of credit) for all or any part of
the Guaranteed Obligations by operation of law or
otherwise;
(xi) any law which provides that the obligation of
a surety or guarantor must neither be larger in amount
nor in other respects more burdensome than that of the
principal or which reduces a surety's principal
obligation;
(xii) the possibility that the obligations of the
Company to the Agent and the Banks may at any time and
from time to time exceed the aggregate liability of the
Subsidiary Guarantors under this Section 6;
(xiii) any counterclaim, set-off or other claim
which the Company or any other Subsidiary Guarantor has
or alleges to have with respect to all or any part of
the Guaranteed Obligations;
(xiv) any failure of the Agent or any Bank to file
or enforce a claim in any bankruptcy or other proceed-
ing with respect to any Person;
(xv) the election by the Agent or any Bank, in a
bankruptcy proceeding of any Person, of the application
or nonapplication of Section 1111(b)(2) of the United
States Bankruptcy Code;
(xvi) any extension of credit or the grant of any
lien under Section 364 of the United States Bankruptcy
Code;
(xvii) any use of cash collateral under Section 363
of the United States Bankruptcy Code;
(xviii) any agreement or stipulation with respect to
the provision of adequate protection in any bankruptcy
proceeding of any Person;
(xix) the avoidance of any lien in favor of the
Agent or any Bank for any reason;
(xx) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against any
Person, including any discharge of, or bar or stay
against collecting, all or any part of the Guaranteed
Obligations (or any interest on all or any part of the
Guaranteed Obligations) in or as a result of any such
proceeding;
(xxi) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, including by reason
of Sections 2809, 2810, 2819, 2839, 2845, 2850, 2899,
3275 and 3433 of the California Civil Code, and any
future judicial decisions or legislation or of any
comparable provisions of the laws of any other
jurisdiction; or
(xxiii) diligence, presentment, demand of payment,
protest and all notices whatsoever.
(c) Each Subsidiary Guarantor represents and warrants
to the Agent that it has established adequate means of
obtaining financial and other information pertaining to the
business, operations and condition (financial and otherwise)
of the Company and its properties on a continuing basis and
that such Subsidiary Guarantor is now and will in the future
remain fully familiar with the business, operations and
condition (financial and otherwise) of the Company and its
properties. Each Subsidiary Guarantor further represents
and warrants that it has reviewed and approved this Agree-
ment and the related Basic Documents and is fully familiar
with the transactions contemplated by such Basic Documents
and that it will in the future remain fully familiar with
such transaction and with any new Basic Documents and the
transaction contemplated by such Basic Documents. Each
Subsidiary Guarantor hereby expressly waives and relin-
quishes any duty on the part of the Agent or the Banks
(should any such duty exist) to disclose to such or any
other Subsidiary Guarantor any matter of fact or other
information related to the business, operations or condition
(financial or otherwise) of the Company or its properties or
to any Basic Documents or the transactions undertaken
pursuant to, or contemplated by, such Basic Documents,
whether now or in the future known by the Agent or any Bank.
6.03 Reinstatement. The obligations of the Subsidiary
Guarantors under this Section 6 shall be automatically reinstated
if and to the extent that for any reason any payment by or on
behalf of the Company in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceed-
ings in bankruptcy or reorganization or otherwise and the Subsidi-
ary Guarantors jointly and severally agree that they will
indemnify the Agent and each Bank on demand for all reasonable
costs and expenses (including, without limitation, fees of
counsel) incurred by the Agent or such Bank in connection with
such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
6.04 Subrogation. Each Subsidiary Guarantor hereby
waives all rights of subrogation or contribution, whether arising
by contract or operation of law (including, without limitation,
any such right arising under the Federal Bankruptcy Code) or
otherwise by reason of any payment by it pursuant to the provi-
sions of this Section 6 and further agrees with the Company for
the benefit of each of its creditors (including, without limita-
tion, each Bank and the Agent) that any such payment by it shall,
to the fullest extent permitted by law, constitute a dividend on
the common stock of such Subsidiary Guarantor owned by the
Company or a return of capital paid by such Subsidiary Guarantor
to the Company and, otherwise, an investment in the equity
capital of the Company by such Subsidiary Guarantor. Each
Subsidiary Guarantor understands that, by reason of the foregoing
provisions of this Section 6.04, the exercise by the Agent or any
Bank of the rights, remedies, powers and privileges that it has
under this Section 6 and under the other Basic Documents will
result in nonreimbursable liabilities under this Agreement.
Nevertheless, each Subsidiary Guarantor hereby authorizes and
empowers the Agent and the Banks to exercise, in its or their
sole discretion, any combination of such rights, remedies, powers
and privileges as they, in their sole discretion, shall deem
appropriate.
6.05 Remedies. The Subsidiary Guarantors jointly and
severally agree that, as between the Subsidiary Guarantors and
the Banks, the obligations of the Company under this Agreement
and the Notes may be declared to be forthwith due and payable as
provided in Section 10 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in
said Section 10) for purposes of Section 6.01 hereof notwith-
standing any stay, injunction or other prohibition preventing
such declaration (or such obligations from becoming automatically
due and payable) as against the Company and that, in the event of
such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not
due and payable by the Company) shall forthwith become due and
payable by the Subsidiary Guarantors for purposes of said
Section 6.01.
6.06 Continuing Guarantee. The guarantee in this
Section 6 is a continuing guarantee, and shall apply to all
Guaranteed Obligations whenever arising.
6.07 Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any
state or Federal bankruptcy, insolvency, reorganization or other
law affecting the rights of creditors generally, if the obliga-
tions of any Subsidiary Guarantor under Section 6.01 hereof would
otherwise be held or determined to be void, invalid or unenforce-
able, or subordinated to the claims of any other creditors, on
account of the amount of its liability under said Section 6.01,
then, notwithstanding any other provision hereof to the contrary,
the amount of such liability shall, without any further action by
such Subsidiary Guarantor, any Bank, the Agent or any other
Person, be automatically limited and reduced to the highest
amount which is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or
proceeding.
Section 7. Conditions Precedent.
7.01 Conditions to Effectiveness of Second Amended and
Restated Credit Agreement. The effectiveness of this Second
Amended and Restated Credit Agreement, and the obligations of the
Banks to extend credit hereunder (whether by making a Loan or by
issuing a Letter of Credit) on the Effective Date, are subject to
(i) the condition precedent that such extension of credit shall
be made on or before the Effective Date and (ii) the receipt by
the Agent of the following documents, each of which shall be
satisfactory to the Agent (and to the extent specified below, to
each Bank) in form and substance:
(a) Corporate Documents. Certified copies of the
charter and by-laws (or equivalent documents) of each
Obligor and of all corporate authority for each Obligor
(including, without limitation, board of director
resolutions and evidence of the incumbency of officers) with
respect to the execution, delivery and performance of such
of the Basic Documents to which such Obligor is intended to
be a party and each other document to be delivered by such
Obligor from time to time in connection herewith and the
Loans hereunder (and the Agent and each Lender may
conclusively rely on such certificate until it receives
notice in writing from such Obligor to the contrary).
(b) Officer's Certificate. A certificate of a senior
officer of the Company, dated the Effective Date, to the
effect set forth in the first sentence of Section 7.02
hereof.
(c) Borrowing Base Certificate. A Borrowing Base
Certificate as at June 30, 1994.
(d) Opinions of Counsel to the Obligors. (i) An
opinion dated the Effective Date, of Harter, Secrest &
Emery, counsel to the Obligors, in substantially the form of
Exhibit H-1 hereto, (ii) an opinion dated the Effective
Date, of McDermott, Will & Emery, special California counsel
to the Obligors, in substantially the form of Exhibit H-2
hereto, and (iii) an opinion dated the Effective Date of
Fulton, Fulton & Hubbard, special Kentucky counsel to the
Obligors substantially in the form of Exhibit H-3 hereto
and, in each case covering such matters as any Bank may
reasonably request. Each Obligor hereby instructs each such
counsel to deliver such opinion to the Banks and the Agent.
(e) Opinion of Special New York Counsel to Chase. An
opinion, dated the Effective Date, of Milbank, Tweed, Hadley
& McCloy, special New York counsel to Chase in substantially
the form of Exhibit I hereto.
(f) Notes. The Notes, duly completed and executed.
(g) Security Agreement. The Security Agreement, duly
executed and delivered by each Obligor and the Agent and the
certificates identified under the name of such Obligor in
Annex 1 thereto, in each case accompanied by undated stock
powers executed in blank. In addition, each Obligor shall
have taken such other action (including, without limitation,
delivering to the Agent, for filing, appropriately completed
and duly executed copies of Uniform Commercial Code financ-
ing statements) as the Agent shall have requested in order
to perfect the security interests created pursuant to the
Security Agreement.
(h) Mortgages; Title Insurance; etc. The following
documents each of which shall be executed (and, where
appropriate, acknowledged) by Persons satisfactory to the
Agent:
(i) with respect to the properties identified in
Parts A(1) and A(2) of Schedule V hereto, instruments
of Modification and Confirmation in substantially the
form of Exhibit D-1 hereto, in the case of the
properties identified in Part A(3) of Schedule V,
instruments of Modification and Confirmation in
substantially the forms of Exhibits D-2, in the case of
the properties identified in Parts B(1) and B(2) of
Schedule V, instruments of Modification and
Confirmation in substantially the form of Exhibit D-3
hereto, in the case of the properties identified in
Part B(3) of Schedule V hereto, instruments of
Modification and Confirmation in substantially in the
form of Exhibit D-4 hereto and in the case of the
Property identified in Part C of Schedule V, Deed of
Trust in the form of Exhibit G hereto, in each case
duly executed, acknowledged and delivered by the
respective parties thereto, in recordable form (in such
number of copies as the Agent shall have requested);
(ii) mortgagee policies of title insurance or
down-date endorsements of existing title policies
issued pursuant to the Existing Credit Agreement
(collectively, the "Title Policies") on forms of and
issued by one or more title companies satisfactory to
each Bank (the "Title Companies"), insuring the
validity and priority of the Liens created under the
each of the Mortgages for and in amounts satisfactory
to each Bank, subject only to such exceptions as are
satisfactory to each Bank and, to the extent necessary
under applicable law, for filing in the appropriate
county land offices, Uniform Commercial Code financing
statements covering fixtures, in each case appropri-
ately completed and duly executed;
(iii) as-built surveys of each of the facilities to
be covered by the Mortgages, showing such matters as
may be required by any Bank, which surveys shall be in
form and content acceptable to each Bank (unless other
arrangements satisfactory to the Banks shall have been
made for the deletion of general survey exceptions
contained in the Title Policies), and certified to the
Agent and to each Bank and the Title Companies, and
shall have been prepared by a registered surveyor
acceptable to each Bank; and
(iv) to the extent available, certified copies of
permanent and unconditional certificates of occupancy
for each such facility.
In addition, the Company shall have paid to the Title
Companies all expenses and premiums of the Title Companies
in connection with the issuance of such policies and in
addition shall have paid to the Title Companies an amount
equal to the recording and stamp taxes payable in connection
with recording the Mortgages in the appropriate county land
offices.
(i) Insurance. Certificates of insurance evidencing
the existence of all insurance required to be maintained by
the Company and its Subsidiaries pursuant to Section 9.04
hereof and the designation of the Agent as the loss payee
thereunder to the extent required by said Section 9.04 in
respect of all insurance covering tangible Property, such
certificates to be in such form and contain such information
as is specified in said Section 9.04. In addition, the
Company shall have delivered (i) a certificate of the chief
financial officer of the Company setting forth the insurance
obtained by it and its Subsidiaries in accordance with the
requirements of Section 9.04 and stating that such insurance
is in full force and effect and that all premiums then due
and payable thereon have been paid and (ii) a written
report, dated reasonably near the Effective Date are being
made, of Willis Corroon Corporation and Hogg Robinson of
Georgia, Inc., or any other firm of independent insurance
brokers of nationally recognized standing, as to such
insurance and stating that, in their opinion, such insurance
adequately protects the interests of the Agent and the
Banks, is in compliance with the provisions of said
Section 9.04, and is comparable in all respects with
insurance carried by responsible owners and operators of
Properties similar to those covered by each of the
Mortgages.
(j) Environmental Surveys. Environmental surveys and
assessments prepared by one or more firms of licensed
engineers (familiar with the identification of toxic and
hazardous substances) in form and substance satisfactory to
Chase with respect to the facilities to be acquired pursuant
to the Heublein Acquisition Documents, each such
environmental survey and assessment to be based upon
physical on-site inspections by such firms of each of such
facilities, as well as a historical review of the uses of
such facilities and of the business and operations of
Heublein (including any former Subsidiaries or divisions of
Heublein which have been disposed of prior to the date of
such survey and assessment and with respect to which
Heublein or any of its Subsidiaries may have retained
liability for environmental matters). In addition, the
Company shall have completed (and delivered to the Agent)
environmental risk questionnaires with respect to all other
facilities owned, operated or leased by the Company and its
Subsidiaries and covered by environmental surveys and
assessments delivered pursuant to the Existing Credit
Agreement, and the responses to such questionnaires (and the
underlying facts and circumstances shown thereby) shall be
in form and substance satisfactory to Chase.
(k) Solvency Analysis. A certificate from the chief
financial officer of the Company to the effect that, as of
the Effective Date and after giving effect to the Heublein
Acquisition, the initial extension of credit hereunder and
to the other transactions contemplated hereby, (i) the
aggregate value of all Properties of the Company and its
Subsidiaries at their present fair saleable value (i.e., the
amount which may be realized within a reasonable time,
considered to be six months to one year, either through
collection or sale at the regular market value, conceiving
the latter as the amount which could be obtained for the
Property in question within such period by a capable and
diligent business person from an interested buyer who is
willing to purchase under ordinary selling conditions),
exceeds the amount of all the debts and liabilities (includ-
ing contingent, subordinated, unmatured and unliquidated
liabilities) of the Company and its Subsidiaries, (ii) the
Company and its Subsidiaries will not, on a consolidated
basis, have an unreasonably small capital with which to
conduct their business operations as heretofore conducted
and (iii) the Company and its Subsidiaries will have, on a
consolidated basis, sufficient cash flow to enable them to
pay their debts as they mature. The Agent shall have also
received opinions of value (including, in the case of
Canandaigua West, asset appraisals from Arthur Andersen &
Co. SC) and other appropriate factual information supporting
the conclusions described in clauses (i), (ii) and (iii)
above (which opinions of value shall not have been amended,
modified or revoked).
(l) Pro Formas. A copy of an estimated pro forma
balance sheet of the Company and its Consolidated
Subsidiaries, certified by the chief financial officer of
the Company as of the Effective Date, giving effect to the
Heublein Acquisition, the initial extension of credit
hereunder and the other transactions contemplated hereby and
showing a financial condition of the Company and its
Consolidated Subsidiaries in form and substance satisfactory
to Chase.
(m) Consummation of Acquisition. Evidence that
(i) each of the conditions precedent specified in the
Heublein Acquisition Documents shall have been (or, con-
currently with the making of the initial extension of credit
hereunder, shall be) in all material respects satisfied (or,
with the approval of the Majority Banks, waived), (ii) each
of the Company, Canandaigua West and Heublein shall have
performed in all material respects all obligations to be
performed by them under the Heublein Acquisition Documents
on or prior to the Effective Date and (iii) the Heublein
Acquisition is being consummated in accordance with the
terms of the Heublein Acquisition Documents.
(n) Approvals. Evidence of receipt of all approvals
from governmental authorities with respect to the Heublein
Acquisition (or the termination of waiting periods
applicable thereto) necessary for the Company and its
Subsidiaries to conduct the business in respect of the
assets transferred pursuant to the Heublein Acquisition
Documents as currently being conducted by Heublein.
(o) Financial Statements. Copies of (i) statements of
identified income and expenses of the product lines of
Heublein to be acquired by the Company for the fiscal years
ended September 30, 1993, September 30, 1992 and September
30, 1991, (ii) statements of cash flow of the product lines
of Heublein to be acquired by the Company for the years
ended December 31, 1993, December 31, 1992 and December 31,
1991 and (iii) statements of assets related to the product
lines of Heublein to be acquired by the Company for the
fiscal years ended September 30, 1993 and September 30,
1992, and each such financial statement shall be in form
reasonably satisfactory to the Banks.
(p) Other Documents. Such other documents as the
Agent or any Bank or special New York counsel to the Banks
may reasonably request.
The obligation of any Bank to make its initial extension of
credit hereunder is also subject to the payment by the Company of
(i) all amounts owing to the Existing Banks and Chase on the
Effective Date pursuant to Sections 2.01(a), 2.01(b), 2.03(a) and
2.04(m) hereof and (ii) such fees as the Company shall have
agreed to pay or deliver to any Bank or the Agent in connection
herewith, including, without limitation, the reasonable fees and
expenses of Milbank, Tweed, Hadley & McCloy, special New York
counsel to Chase in connection with the negotiation, preparation,
execution and delivery of this Agreement and the other Basic
Documents and the extensions of credit hereunder (to the extent
that statements for such fees and expenses have been delivered to
the Company).
7.02 Initial and Subsequent Extensions of Credit. The
obligation of the Banks to make any Loan or otherwise extend any
credit to the Company upon the occasion of each borrowing or
other extension of credit hereunder (including the initial
borrowing) is subject to the further conditions precedent that,
both immediately prior to the making of such Loan or other
extension of credit and also after giving effect thereto and to
the intended use thereof (including, without limitation, in the
case of the initial Loans hereunder, after giving effect to the
Heublein Acquisition): (a) no Default shall have occurred and be
continuing; (b) the representations and warranties made by the
Company in Section 8 hereof, and by each Obligor in each of the
other Basic Documents to which such Obligor is a party, shall be
true and complete on and as of the date of the making of such
Loan or other extension of credit with the same force and effect
as if made on and as of such date (or, if any such representation
or warranty is expressly stated to have been made as of a
specific date, as of such specific date); and (c) the aggregate
principal amount of the Revolving Credit Loans together with the
aggregate amount of all Letter of Credit Liabilities in respect
of Revolving Letters of Credit shall not exceed the Borrowing
Base reflected in the most recent Borrowing Base Certificate
delivered pursuant to Section 7.01(c) hereof (in the case of the
initial Loan hereunder) or Section 9.01(g) hereof (in the case of
any other Loan hereunder). Each notice of borrowing by the
Company or request for the issuance of a Letter of Credit here-
under shall constitute a certification by the Company to the
effect set forth in the preceding sentence (both as of the date
of such notice and, unless the Company otherwise notifies the
Agent prior to the date of such borrowing or issuance, as of the
date of such borrowing or issuance).
Section 8. Representations and Warranties. The
Company represents and warrants to the Banks that:
8.01 Corporate Existence. Each of the Company and its
Subsidiaries: (a) is a corporation, partnership or other entity
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization; (b) has all requi-
site corporate or other power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed
to be conducted; and (c) is qualified to do business and is in
good standing in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and
where failure so to qualify could have a Material Adverse Effect.
8.02 Financial Condition. The consolidated and
consolidating balance sheets of the Company and its Consolidated
Subsidiaries as at August 31, 1993 and the related consolidated
and consolidating statements of income, retained earnings and of
cash flow of the Company and its Consolidated Subsidiaries for
the fiscal year ended on said date, with the opinion thereon (in
the case of said consolidated balance sheet and statements) of
Arthur Andersen & Co., and the unaudited consolidated and con-
solidating balance sheets of the Company and its Consolidated
Subsidiaries as at February 28, 1994 and the related consolidated
and consolidating statements of income, retained earnings and
cash flow of the Company and its Consolidated Subsidiaries for
the six-month period ended on such date, heretofore furnished to
each of the Banks, are complete and correct and fairly present
the consolidated financial condition of the Company and its
Consolidated Subsidiaries, and (in the case of said consolidating
financial statements) the respective unconsolidated financial
condition of the Company and of each of its Consolidated Subsidi-
aries, as at said dates and the consolidated and unconsolidated
results of their operations for the fiscal year and six-month
period ended on said dates (subject, in the case of such finan-
cial statements as at February 28, 1994, to normal year-end audit
adjustments), all in accordance with generally accepted account-
ing principles and practices applied on a consistent basis.
Neither the Company nor any of its Subsidiaries has on the date
hereof any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as
referred to or reflected or provided for in said balance sheets
as at said dates. Since August 31, 1993, there has been no
material adverse change in the consolidated financial condition,
operations, business or prospects taken as a whole of the Company
and its Consolidated Subsidiaries from that set forth in said
financial statements as at said date.
8.03 Litigation. Except as disclosed to the Banks in
Schedule IV hereto, there are no legal or arbitral proceedings,
or any proceedings by or before any governmental or regulatory
authority or agency, now pending or (to the knowledge of the
Company) threatened against the Company or any of its Subsidi-
aries, any of which, if adversely determined, could have a
Material Adverse Effect.
8.04 No Breach. None of the execution and delivery of
this Agreement and the Notes and the other Basic Documents, the
consummation of the Heublein Acquisition, Barton Acquisition or
the Vintners Acquisition, the issuance of the Barton Letter of
Credit and the transactions herein and in the other Basic Docu-
ments contemplated and compliance with the terms and provisions
hereof and thereof will conflict with or result in a breach of,
or require any consent under (other than consents in respect of
the Heublein Acquisition that have been obtained), the charter or
by-laws of any Obligor, or any applicable law or regulation
(including any applicable alcoholic beverage law or regulation),
or any order, writ, injunction or decree of any court or govern-
mental authority or agency, or any agreement or instrument to
which the Company or any of its Subsidiaries is a party or by
which any of them or any of their Property is bound or to which
any of them is subject, or constitute a default under any such
agreement or instrument, or (except for the Liens created
pursuant to the Security Documents) result in the creation or
imposition of any Lien upon any Property of the Company or any of
its Subsidiaries pursuant to the terms of any such agreement or
instrument.
8.05 Power, Authority and Enforceability. Each
Obligor has all necessary corporate power, authority and legal
right to execute, deliver and perform its obligations under each
of the Basic Documents to which it is a party; the execution,
delivery and performance by each Obligor of each of the Basic
Documents to which it is a party have been duly authorized by all
necessary corporate action on its part (including, without
limitation, any required shareholder approvals); and this Agree-
ment has been duly and validly executed and delivered by each
Obligor and constitutes, and each of the other Basic Documents to
which such Obligor is a party when executed and delivered by such
Obligor (in the case of the Notes, for value) will constitute,
its legal, valid and binding obligation, enforceable against each
Obligor in accordance with its terms except as such enforceabil-
ity may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the
enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforce-
ability is considered in a proceeding in equity or at law).
8.06 Approvals. Each Obligor has, or prior to the
Effective Date will have, obtained all authorizations, approvals
and consents of, and has made all filings and registrations with,
all governmental and regulatory authorities, agencies and securi-
ties exchanges, in the case of the Heublein Acquisition Docu-
ments, the Barton Acquisition Documents and the Vintners Acquisi-
tion Documents, necessary in any material respect, and in the
case of the other Basic Documents, necessary, for the execution,
delivery or performance by any Obligor of the Basic Documents to
which such Obligor is a party or for the legality, validity or
enforceability thereof, except for (a) filings and recordings in
respect of the Liens created pursuant to the Security Documents
and (b) the filing of a Form 8-K with the Securities and Exchange
Commission which filing will be timely made after the
consummation of the Heublein Acquisition.
8.07 Use of Credit. Neither the Company nor any of
its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock, and no part of the proceeds of any
extension of credit hereunder will be used to buy or carry any
Margin Stock.
8.08 ERISA. The Company and the ERISA Affiliates have
fulfilled their respective obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are
in compliance in all material respects with the presently applic-
able provisions of ERISA and the Code, and have not incurred any
liability to the PBGC or any Plan or Multiemployer Plan (other
than to make contributions, pay annual PBGC premiums or pay out
benefits in the ordinary course of business).
8.09 Taxes. The Company and its Subsidiaries are
members of an affiliated group of corporations filing consoli-
dated returns for Federal income tax purposes, of which the
Company is the "common parent" (within the meaning of Section
1504 of the Code) of such group. The Company and its Subsidi-
aries have filed all Federal income tax returns and all other
material tax returns that are required to be filed by them and
have paid all taxes due pursuant to such returns or pursuant to
any assessment received by the Company or any of its Subsidi-
aries. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of the Company,
adequate. The Company has not given or been requested to give a
waiver of the statute of limitations relating to the payment of
Federal, state, local and foreign taxes or other impositions.
8.10 Investment Company Act. Neither the Company nor
any of its Subsidiaries is an "investment company", or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
8.11 Public Utility Holding Company Act. Neither the
Company nor any of its Subsidiaries is a "holding company", or an
"affiliate" of a "holding company" or a "subsidiary company" of a
"holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
8.12 Material Agreements and Liens.
(a) Part A of Schedule I hereto is a complete and
correct list, as of the date hereof, of each credit agreement,
loan agreement, indenture, purchase agreement, guarantee, letter
of credit or other arrangement providing for or otherwise relat-
ing to any Indebtedness or any extension of credit (or commitment
for any extension of credit) to, or guarantee by, the Company or
any of its Subsidiaries the aggregate principal or face amount of
which equals or exceeds (or may equal or exceed) $100,000, and
the aggregate principal or face amount outstanding or that may
become outstanding under each such arrangement is correctly
described in Part A of said Schedule I.
(b) Part B of Schedule I hereto is a complete and
correct list, as of the date hereof, of each Lien securing
Indebtedness of any Person the aggregate principal or face amount
of which equals or exceeds (or may equal or exceed) $100,000 and
covering any Property of the Company or any of its Subsidiaries,
and the aggregate Indebtedness secured (or which may be secured)
by each such Lien and the Property covered by each such Lien is
correctly described in Part B of said Schedule I.
8.13 Environmental Matters. Except as set forth in
Schedule II hereto, each of the Company and its Subsidiaries has
obtained all environmental, health and safety permits, licenses
and other authorizations required under all Environmental Laws to
carry on its business as now being or as proposed to be
conducted. Except as set forth in Schedule II hereto, each of
such permits, licenses and authorizations is in full force and
effect and each of the Company and its Subsidiaries is in compli-
ance with the terms and conditions thereof, and is also in
compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and
timetables contained in any applicable Environmental Law or in
any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved
thereunder. In the judgment of the Company, no matter (either
individually or collectively with all other such matters) dis-
closed in Schedule II creates, results in or has, or will create,
result in or have, a Material Adverse Effect.
In addition, except as set forth in Schedule II hereto:
(a) No notice, notification, demand, request for
information, citation, summons or order has been issued, no
complaint has been filed, no penalty has been assessed and,
to the best of the Company's knowledge, no investigation or
review is pending or threatened by any governmental or other
entity with respect to any alleged failure by the Company or
any of its Subsidiaries to have any environmental, health or
safety permit, license or other authorization required under
any Environmental Law in connection with the conduct of the
business of the Company or any of its Subsidiaries or with
respect to any generation, treatment, storage, recycling,
transportation, discharge or disposal, or any Release of any
Hazardous Materials generated by the Company or any of its
Subsidiaries, in each case in circumstances which may
reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries
owns, operates or leases a treatment, storage or disposal
facility requiring a permit under the Resource Conservation
and Recovery Act of 1976, as amended, or under any compar-
able state or local statute; and
(i) no polychlorinated biphenyls (PCB's) is or
has been present at any site or facility now or
previously owned, operated or leased by the Company or
any of its Subsidiaries;
(ii) no asbestos or asbestos-containing materials
is or has been present at any site or facility now or
previously owned, operated or leased by the Company or
any of its Subsidiaries;
(iii) there are no underground storage tanks or
surface impoundments for Hazardous Materials, active or
abandoned, at any site or facility now or previously
owned, operated or leased by the Company or any of its
Subsidiaries;
(iv) no Hazardous Materials have been Released at,
on or under any site or facility now or previously
owned, operated or leased by the Company or any of its
Subsidiaries in a reportable quantity established by
statute, ordinance, rule, regulation or order; and
(v) no Hazardous Materials have been otherwise
Released at, on or under any site or facility now or
previously owned, operated or leased by the Company or
any of its Subsidiaries;
that, in the case of any of clauses (i) through (v) above,
may reasonably be expected to have a Material Adverse
Effect.
(c) Neither the Company nor any of its Subsidiaries
has transported or arranged for the transportation of any
Hazardous Material to any location that is listed on the
National Priorities List ("NPL") under the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), listed for possible inclusion
on the NPL by the Environmental Protection Agency in the
Comprehensive Environmental Response and Liability
Information System, as provided for by 40 C.F.R. Section 300.5
("CERCLIS"), or on any similar state or local list or that
is the subject of Federal, state or local enforcement
actions or other investigations that may lead to
Environmental Claims in a material amount against the
Company or any of its Subsidiaries.
(d) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the
Company or any of its Subsidiaries that may reasonably be
expected to have a Material Adverse Effect, and no site or
facility now or previously owned, operated or leased by the
Company or any of its Subsidiaries is listed or, to the best
of the Company's knowledge, proposed for listing on the NPL,
CERCLIS or any similar state list of sites requiring
investigation or clean-up.
(e) No Liens have arisen under or pursuant to any
Environmental Laws on any site or facility owned, operated
or leased by the Company or any of its Subsidiaries, and no
government action has been taken or, to the best of the
Company's knowledge, is in process that could subject any
such site or facility to such Liens and neither the Company
nor any of its Subsidiaries would be required to place any
notice or restriction relating to the presence of Hazardous
Materials at any site or facility owned by it in any deed to
the real property on which such site or facility is located.
(f) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted
by or that are in the possession of the Company or any of
its Subsidiaries in relation to any site or facility now or
previously owned, operated or leased by the Company or any
of its Subsidiaries which have not been made available to
the Banks.
8.14 Capitalization. The authorized capital stock of
the Company consists, as at the Effective Date, of an aggregate
of 80,000,000 shares consisting of (i) 60,000,000 shares of Class
A common stock, par value $.01 per share, of which 12,593,231
shares are duly and validly issued and outstanding and 1,239,366
shares are issued and held in treasury, each of which shares is
fully paid and nonassessable and (ii) 20,000,000 shares of
Class B common stock, par value $.01 per share, of which
3,390,051 shares are duly and validly issued and outstanding and
625,725 shares are issued and held in treasury, each of which
shares is fully paid and nonassessable.
As at the Effective Date, 14.46% of such issued and
outstanding shares of Class A common stock and 83.73% of such
issued and outstanding shares of Class B common stock are owned
beneficially and of record by (i) Marvin Sands or members of his
immediate family (including spouse or children) or (ii) a trust
which is for the benefit of Marvin Sands or members of his
immediate family, which trust is under the control of Marvin
Sands or members of his immediate family. As of the date hereof,
(x) except for, conversion rights associated with the Class B
common stock, purchase rights associated with the Employee Stock
Purchase Plan, options associated with the Stock Option Plan, the
shares of Class A Common Stock to be issued pursuant to Section
1.3(d) of the Barton Stock Purchase Agreement, the Vintners
Options and the Heublein Options, there are no outstanding Equity
Rights with respect to the Company and (y) there are no
outstanding obligations of the Company or any of its Subsidiaries
to repurchase, redeem, or otherwise acquire any shares of capital
stock of the Company nor, are there any outstanding obligations
of the Company or any of its Subsidiaries to make payments to any
Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market value or
equity value of the Company or any Subsidiary except for
obligations of Barton in connection with payments required under
the Barton Phantom Stock Plan. The Company has heretofore
delivered to the Agent a complete and correct copy of the Stock
Option Plan as in effect on the date hereof.
8.15 Subsidiaries, Etc.
(a) Set forth in Part A of Schedule III hereto is a
complete and correct list, as of the date of this Agreement, of
all of the Subsidiaries of the Company, together with, for each
such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such
Subsidiary and (iii) the nature of the ownership interests held
by each such Person and the percentage of ownership of such
Subsidiary represented by such ownership interests. Except as
disclosed in Part A of Schedule III hereto, (x) each of the
Company and its Subsidiaries owns, free and clear of Liens (other
than Liens created pursuant to the Security Documents), and has
the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Part A of
Schedule III hereto, (y) all of the issued and outstanding
capital stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable and (z) there are no
outstanding Equity Rights with respect to such Person.
(b) Set forth in Part B of Schedule III hereto is a
complete and correct list, as of the date of this Agreement, of
all Investments (other than Investments of the types described in
clauses (b) through (e) of Section 9.08 hereof or disclosed in
Part A of said Schedule III hereto) held by the Company or any of
its Subsidiaries in any Person and, for each such Investment, (x)
the identity of the Person or Persons holding such Investment and
(y) the nature of such Investment. Except as disclosed in Part B
of Schedule III hereto, each of the Company and its Subsidiaries
owns, free and clear of all Liens (other than Liens created
pursuant to the Security Documents), all such Investments.
(c) None of the Subsidiaries of the Company is, on the
date of this Agreement, subject to any indenture, agreement,
instrument or other arrangement of the type described in the last
sentence of 9.19 hereof.
8.16 Real Property. Except with respect to leased
space which does not cost in excess of $10,000 per month in
rental expense, set forth in Schedule V attached hereto is a
list, as of the date of this Agreement, of all the real property
interests held by the Company and its Subsidiaries (including all
real property to be owned by Canandaigua West after giving effect
to the Heublein Acquisition), indicating in each case whether the
respective Property is owned or leased, the identity of the owner
or lessee and the location of the respective Property.
8.17 True and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules furnished
in writing by or on behalf of the Company to the Agent or any
Bank in connection with the negotiation, preparation or delivery
of this Agreement and the other Basic Documents, or included
herein or therein or delivered pursuant hereto or thereto, when
taken as a whole (together with the Information Memorandum) do
not (with respect to any such information, financial statements,
exhibits and schedules furnished to the Company (i) by Barton in
connection with, in or pursuant to, the Barton Acquisition Docu-
ments, or (ii) by Vintners in connection with, in or pursuant to,
the Vintners Acquisition Documents, or (iii) by Heublein in
connection with, in or pursuant to the Heublein Acquisition
Documents to the best knowledge of the Company) contain any
untrue statement of material fact or omit to state any material
fact necessary to make the statements herein or therein, in light
of the circumstances under which they were made, not misleading.
All written information furnished after the date hereof by the
Company and its Subsidiaries to the Agent and the Banks in
connection with this Agreement and the other Basic Documents and
the transactions contemplated hereby and thereby will be (with
respect to any such information furnished to the Company (i) by
Barton prior to the consummation of the Barton Acquisition in
connection with, in or pursuant to, the Barton Acquisition
Documents, or (ii) by Vintners prior to the consummation of the
Vintners Acquisition in connection with, in or pursuant to, the
Vintners Acquisition Documents, or (iii) by Heublein prior to the
consummation of the Heublein Acquisition in connection with, in
or pursuant to, the Heublein Acquisition Documents, to the best
knowledge of the Company) true, complete and accurate in every
material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is
stated or certified. There is no fact known to the Company that
could have a Material Adverse Effect that has not been disclosed
herein, in the other Basic Documents, or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing
furnished to the Banks for use in connection with the
transactions contemplated hereby or thereby.
8.18 The Barton Acquisition. The Company has hereto-
fore delivered to each Bank a true and complete copy of the
Barton Stock Purchase Agreement as in effect on the date hereof.
After the consummation of the Barton Acquisition, the Company
will have good title to all of the issued and outstanding shares
of capital stock of Barton, free and clear of all Liens (other
than Liens described in Section 8.12 hereof and permitted under
Section 9.06 hereof) and Barton will have good title to all
assets reflected on the consolidated balance sheet of Barton and
its Subsidiaries as of March 31, 1992, other than assets subse-
quently sold in the ordinary course of business, free and clear
of all Liens. The Company has delivered the requisite number of
shares of its Class A Common Stock to the Seller Representatives
and the Stock Escrow Agent (as such terms are defined in the
Barton Stock Purchase Agreement) on or before the one hundred and
eightieth day following the Closing (as so defined) and, as a
result thereof, has not been required to deposit the sum of
$22,500,000 with said Stock Escrow Agent, all as provided in
Section 1.3(d) of the Barton Stock Purchase Agreement.
8.19 The Vintners Acquisition. The Company has
delivered to each Bank, prior to the date hereof, a true and
complete copy of the Vintners Acquisition Agreement as in effect
on the date hereof. After the consummation of the Vintners
Acquisition, Vintners Acquisition Corp. will have good title to
all of the assets purported to be transferred to Vintners
Acquisition Corp. pursuant to the Vintners Acquisition Agreement,
free and clear of all Liens (other than Liens described in
Section 8.12 hereof and permitted under Section 9.06 hereof) and
Vintners Acquisition Corp. will have good title to all Vintners
Assets, free and clear of all Liens. Vintners has no Subsidi-
aries and, accordingly, Vintners Acquisition Corp. will not be
acquiring any Subsidiaries pursuant to the Vintners Acquisition.
8.20 The Heublein Acquisition. The Company has
heretofore delivered to the Agent a true and complete copy of the
Heublein Asset Purchase Agreement as in effect on the date
hereof. After the consummation of the Heublein Acquisition,
Canandaigua West will have good title to all of the assets
purported to be transferred to Canandaigua West pursuant to the
Heublein Acquisition Documents, free and clear of all Liens
(other than Liens described in Section 8.12 hereof and permitted
under Section 9.06 hereof). To the actual knowledge of the
executive officers of the Company after due inquiry, except as
set forth in Schedule II hereto, the representations and
warranties set forth in Section 8.13 hereof, if made with respect
to compliance by Heublein prior to the date hereof, would be true
and complete with respect to the assets purported to be
transferred to Canandaigua West pursuant to the Heublein
Acquisition Documents.
Section 9. Covenants of the Company. The Company
covenants and agrees with the Banks and the Agent that, so long
as any Commitment, Loan or Letter of Credit Liability is
outstanding and until payment in full of all amounts payable by
the Company hereunder:
9.01 Financial Statements Etc. The Company shall
deliver to each of the Banks:
(a) as soon as available and in any event within 30
days after the end of each calendar month of each fiscal
year of the Company, the internal management reports for the
Company and its Consolidated Subsidiaries containing consoli-
dated statements of income, retained earnings and cash flow
of the Company and its Consolidated Subsidiaries for such
calendar month and the related consolidated balance sheet as
at the end of such calendar month;
(b) as soon as available and in any event within 45
days after the end of each of the first three quarterly
fiscal periods of each fiscal year of the Company, consoli-
dated statements of income, retained earnings and cash flow
of the Company and its Consolidated Subsidiaries for such
period and for the period from the beginning of the respec-
tive fiscal year to the end of such period, and the related
consolidated balance sheet as at the end of such period,
setting forth in each case in comparative form the corres-
ponding consolidated figures for the corresponding period in
the preceding fiscal year, accompanied by a certificate of a
senior financial officer of the Company, which certificate
shall state that said consolidated financial statements
fairly present the consolidated financial condition and
results of operations of the Company and its Consolidated
Subsidiaries in accordance with generally accepted account-
ing principles, consistently applied, as at the end of, and
for, such period (subject to normal year-end audit
adjustments);
(c) as soon as available and in any event within 90
days after the end of each fiscal year of the Company,
consolidated and consolidating statements of income,
retained earnings and cash flow of the Company and its
Consolidated Subsidiaries for such fiscal year and the
related consolidated and consolidating balance sheets as at
the end of such fiscal year, setting forth in each case in
comparative form the corresponding consolidated and
consolidating figures for the preceding fiscal year, and
accompanied (i) in the case of said consolidated statements
and balance sheet, by an opinion thereon of independent
certified public accountants of recognized national stand-
ing, which opinion shall state that said consolidated finan-
cial statements fairly present the consolidated financial
condition and results of operations of the Company and its
Consolidated Subsidiaries as at the end of, and for, such
fiscal year in accordance with generally accepted accounting
principles, and a certificate of such accountants stating
that, in making the examination necessary for their opinion,
they obtained no knowledge, except as specifically stated,
of any Default, and (ii) in the case of said consolidating
statements and balance sheets, by a certificate of a senior
financial officer of the Company, which certificate shall
state that said consolidating financial statements fairly
present the respective individual unconsolidated financial
condition and results of operations of the Company and of
each of its Consolidated Subsidiaries, in each case in
accordance with generally accepted accounting principles,
consistently applied, as at the end of, and for, such fiscal
year;
(d) promptly upon their becoming available, copies of
all registration statements and regular periodic reports, if
any, which the Company shall have filed with the Securities
and Exchange Commission (or any governmental agency substi-
tuted therefor) or any national securities exchange;
(e) promptly upon the mailing thereof to the share-
holders of the Company generally, copies of all financial
statements, reports and proxy statements so mailed;
(f) as soon as possible, and in any event within ten
days after the Company knows or has reason to believe that
any of the events or conditions specified below with respect
to any Plan or Multiemployer Plan has occurred or exists, a
statement signed by a senior financial officer of the
Company setting forth details respecting such event or
condition and the action, if any, that the Company or its
ERISA Affiliate proposes to take with respect thereto (and a
copy of any report or notice required to be filed with or
given to PBGC by the Company or an ERISA Affiliate with
respect to such event or condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which PBGC
has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA,
including, without limitation, the failure to make on
or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA,
shall be a reportable event regardless of the issuance
of any waivers in accordance with Section 412(d) of the
Code); and any request for waiver under Section 412(d)
of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA
of a notice of intent to terminate any Plan or any
action taken by the Company or an ERISA Affiliate to
terminate any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice
from a Multiemployer Plan that such action has been taken
by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Company or any ERISA Affili-
ate that results in liability under Section 4201
or 4204 of ERISA (including the obligation to satisfy
secondary liability as a result of a purchaser
default), or the receipt by the Company or any ERISA
Affiliate of notice from a Multiemployer Plan that it
is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of
ERISA;
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against the Company
or any ERISA Affiliate to enforce Section 515 of ERISA,
which proceeding is not dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan
that, pursuant to Section 401(a)(29) of the Code or
Section 301 of ERISA, would result in the loss of tax-
exempt status of the trust or which such Plan is a part
if the Company or an ERISA Affiliate fails to timely
provide security to the Plan in accordance with the
provisions of said Sections;
(g) as soon as available and in any event within 20
Business Days after the end of each monthly accounting
period (ending on the last day of each calendar month), a
Borrowing Base Certificate as at the last day of such
accounting period and from time to time as requested by the
Agent or the Majority Banks (but not more frequently than
twice in any fiscal year), a report of an independent
collateral auditor (which may be, or be affiliated with, one
of the Banks) with respect to the Eligible Receivables and
Eligible Inventory components included in the Borrowing Base
as at the end of a monthly accounting period, which report
shall indicate that, based upon a review by such auditors of
the Eligible Receivables (including, without limitation,
verification with respect to the amount, aging, identity and
credit of the respective account debtors and the billing
practices of the Company and its Subsidiaries) and Eligible
Inventory (including, without limitation, verification as to
the value, location and respective types), the information
set forth in the Borrowing Base Certificate delivered by the
Company as at the end of such accounting period is accurate
and complete in all material respects;
(h) promptly after the Company knows or has reason to
believe that any Default has occurred, a notice of such
Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible,
a description of the action that the Company has taken or
proposes to take with respect thereto;
(i) promptly after the preparation thereof, the
balance sheet of the Company and its Consolidated
Subsidiaries dated as of the Effective Date restated to
reflect the reallocation of the total consideration paid by
the Company to Heublein for the assets sold by Heublein to
the Company pursuant to the Heublein Acquisition Documents;
and
(j) from time to time such other information regarding
the financial condition, operations, business or prospects
of the Company or any of its Subsidiaries (including,
without limitation, any Plan or Multiemployer Plan and any
reports or other information required to be filed under
ERISA) as any Bank or the Agent may reasonably request.
The Company will furnish to each Bank, at the time it furnishes
each set of financial statements pursuant to paragraph (a), (b)
or (c) above, a certificate of a senior financial officer of the
Company (i) to the effect that no Default has occurred and is
continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the
action that the Company has taken or proposes to take with
respect thereto) and (ii) setting forth in reasonable detail the
computations necessary to determine whether the Company is in
compliance with Sections 9.07(f), 9.08(e), 9.08(f), 9.10, 9.11,
9.12, 9.13, 9.14, 9.15 and 9.23 hereof as of the end of the
respective quarterly fiscal period or fiscal year.
In addition, the Company will deliver to the Banks,
promptly upon receipt thereof (i) pursuant to Section 2.7 of the
Barton Stock Purchase Agreement, copies of the financial
statements and other information therein referred to, as well as
copies of any EBIT Dispute Notice (as defined in the Barton Stock
Purchase Agreement) delivered by the Company to the Seller
Representatives (as so defined) pursuant to said Section 2.7 and
(ii) copies of all material notices and information and all
financial statements delivered by Heublein to the Company under
the Heublein Asset Purchase Agreement, including, without
limitation, pursuant to Section 2.4 of the Heublein Asset
Purchase Agreement, copies of the Closing Statement (as defined
in the Heublein Asset Purchase Agreement) and the accompanying
auditor's report delivered by Heublein to the Company in
connection therewith and pursuant to Section 16.9 of the Heublein
Asset Purchase Agreement, copies of the financial statements as
set forth on Exhibit 16.9 thereto delivered by Heublein to the
Company.
9.02 Litigation. The Company will promptly give to
the Agent for prompt delivery by the Agent to each Bank notice of
all legal or arbitral proceedings, and of all proceedings, by or
before any governmental or regulatory authority or agency, and
any material development in respect of such legal or other pro-
ceedings, affecting the Company or any of its Subsidiaries,
except proceedings which, if adversely determined, would not have
a Material Adverse Effect. Without limiting the generality of
the foregoing, the Company will give to the Agent for delivery by
the Agent to each Bank notice of the assertion of any Environ-
mental Claim by any Person against, or with respect to the
activities of, the Company or any of its Subsidiaries and notice
of any alleged violation of or non-compliance with any Environ-
mental Laws or any permits, licenses or authorizations, other
than any Environmental Claim or alleged violation which, if
adversely determined, would not have a Material Adverse Effect.
9.03 Existence, Etc. The Company will, and will cause
each of its Subsidiaries to:
(a) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and franchises
(provided that nothing in this Section 9.03 shall prohibit
any transaction expressly permitted under Section 9.05
hereof);
(b) comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or
regulatory authorities (including, without limitation,
requirements under the relevant statutes relating to
alcoholic beverages) if failure to comply with such require-
ments could have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its
income or profits or on any of its Property prior to the
date on which penalties attach thereto (except for any such
tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained) if
failure to so pay and discharge could have a Material
Adverse Effect;
(d) maintain all of its Properties necessary to its
business in good working order and condition, ordinary wear
and tear excepted;
(e) keep adequate records and books of account, in
which complete entries will be made in accordance with
generally accepted accounting principles consistently
applied; and
(f) upon reasonable notice, permit representatives of
any Bank or the Agent, during normal business hours, to
examine, copy and make extracts from its books and records,
to inspect any of its Properties, to discuss its business
and affairs with its officers, and to permit such represen-
tatives to gain access to any other information in posses-
sion or obtainable by any of the Obligors for purposes of
bi-annual collateral audits prepared for the Banks, all to
the extent reasonably requested by such Bank or the Agent
(as the case may be).
9.04 Insurance. The Company will, and will cause each
of its Subsidiaries to, keep insured by financially sound and
reputable insurers all Property of a character usually insured by
corporations engaged in the same or similar business similarly
situated against loss or damage of the kinds and in the amounts
customarily insured against by such corporations and carry such
other insurance as is usually carried by such corporations,
provided that in any event the Company will maintain (with
respect to itself and each of its Subsidiaries):
(1) Casualty Insurance -- insurance against loss or
damage covering all of the tangible real and personal
Property and improvements of the Company and each of its
Subsidiaries by reason of any Peril (as defined below) in
such amounts (subject to such deductibles as shall be
reasonably satisfactory to the Majority Banks) as shall be
reasonable and customary and sufficient to avoid the insured
named therein from becoming a co-insurer of any loss under
such policy but in any event in an amount (i) in the case of
fixed assets and equipment (excluding vehicles as to which
the Company may self-insure against physical damage to motor
vehicles in a manner and to the extent that corporations
engaged in the same or similar business similarly situated
customarily self-insure), at least equal to 90% of the
actual replacement cost of such assets (excluding founda-
tion, footings and excavation costs), subject to deductibles
as aforesaid and (ii) in the case of inventory, not less
than the replacement cost thereof, subject to deductibles as
aforesaid, provided that damage resulting from earthquake
and flood may be subject to stop-loss limits not less than
$15,000,000 in the aggregate.
(2) Automobile Liability Insurance for Bodily Injury
and Property Damage -- insurance against liability for
bodily injury and property damage in respect of all vehicles
(whether owned, hired or rented by the Company or any of its
Subsidiaries) at any time located at, or used in connection
with, its Properties or operations in such amounts as are
then customary for vehicles used in connection with similar
Properties and businesses, but in any event to the extent
required by applicable law.
(3) Comprehensive General Liability Insurance --
insurance against claims for bodily injury, death or
Property damage occurring on, in or about the Properties
(and adjoining streets, sidewalks and waterways) of the
Company and its Subsidiaries, in such amounts as are then
customary for Property similar in use in the jurisdictions
where such Properties are located.
(4) Workers' Compensation Insurance -- workers'
compensation insurance (including, without limitation,
Employers' Liability Insurance) to the extent required by
applicable law.
(5) Product Liability Insurance -- insurance against
claims for bodily injury, death or Property damage resulting
from the use of products sold by the Company or any of its
Subsidiaries (including, without limitation, products sold,
manufactured or processed by Barton or any of its Subsidi-
aries prior to the Barton Acquisition, products manufactured
or processed by Vintners prior to the Vintners Acquisition
and products manufactured or processed by Heublein prior to
the Heublein Acquisition) in such amounts as are then
customarily maintained by responsible persons engaged in
businesses similar to that of the Company and its
Subsidiaries.
(6) Business Interruption Insurance -- insurance
against loss of operating income by reason of any Peril.
(7) Other Insurance -- such other insurance as is
generally carried by owners of similar Properties in the
jurisdictions where such Properties are located, in such
amounts and against such risks as are then customary for
Property similar in use.
Such insurance shall be written by financially responsible
companies selected by the Company and acceptable to the Majority
Banks, and (other than workers' compensation) shall name the
Agent as additional insured, or loss payee, as its interests may
appear. Each policy referred to in this Section 9.04 shall
provide that it will not be canceled or reduced, or allowed to
lapse without renewal, except after not less than 30 days' notice
to the Agent and shall also provide that the interests of the
Agent and the Banks shall not be invalidated by any act or negli-
gence of the Company or any Person having an interest in any
Property covered by the Mortgages nor by occupancy or use of any
such Property for purposes more hazardous than permitted by such
policy nor by any foreclosure or other proceedings relating to
such Property. The Company will advise the Agent promptly of any
policy cancellation, reduction or amendment.
On or before the Effective Date, the Company will
deliver to the Agent certificates of insurance satisfactory to
the Agent evidencing the existence of all insurance required to
be maintained by the Company hereunder setting forth the respec-
tive coverages, limits of liability, carrier, policy number and
period of coverage. The Company will not obtain or carry sepa-
rate insurance concurrent in form or contributing in the event of
loss with that required by this Section 9.04 unless the Agent is
the named insured thereunder, with loss payable as provided
herein. The Company will immediately notify the Agent whenever
any such separate insurance is obtained and shall deliver to the
Agent the certificates evidencing the same.
Without limiting the obligations of the Company under
the foregoing provisions of this Section 9.04, in the event the
Company shall fail to maintain in full force and effect insurance
as required by the foregoing provisions of this Section 9.04,
then the Agent may, but shall have no obligation so to do,
procure insurance covering the interests of the Banks and the
Agent in such amounts and against such risks as the Agent (or the
Majority Banks) shall reasonably deem appropriate with respect to
the requirements of the foregoing provisions and the Company
shall reimburse the Agent in respect of any premiums paid by the
Agent in respect thereof.
For purposes hereof, the term "Peril" shall mean,
collectively, fire, lightning, flood, windstorm, hail,
earthquake, explosion, riot and civil commotion, vandalism and
malicious mischief, damage from aircraft, vehicles and smoke and
all other perils covered by the "all-risk" endorsement then in
use in the jurisdictions where the Properties of the Company and
its Subsidiaries are located.
9.05 Prohibition of Fundamental Changes. The Company
will not, nor will it permit any of its Subsidiaries to, enter
into any transaction of merger or consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any liqui-
dation or dissolution). The Company will not, nor will it permit
any of its Subsidiaries to, acquire any business or Property
from, or capital stock of, or be a party to any acquisition of,
any Person except for the Heublein Acquisition, Barton Acquisi-
tion and the Vintners Acquisition, purchases of inventory and
other Property to be sold or used in the ordinary course of
business, Investments permitted under Section 9.08 hereof, and
Capital Expenditures permitted under Section 9.13 hereof. The
Company will not, nor will it permit any of its Subsidiaries to,
convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, any part of its business
or Property, whether now owned or hereafter acquired (including,
without limitation, receivables and leasehold interests, but
excluding (i) sales and other dispositions of Property so long as
the amount thereof sold in any single fiscal year by the Company
and its Subsidiaries shall not have a fair market value in excess
of $10,000,000 and (ii) any inventory or other Property sold or
disposed of in the ordinary course of business and on ordinary
business terms). Notwithstanding the foregoing provisions of
this Section 9.05:
(a) any Subsidiary of the Company may be merged or
consolidated with or into: (i) the Company if the Company
shall be the continuing or surviving corporation or (ii) any
Wholly Owned Subsidiary; provided that in any such transac-
tion, the Wholly Owned Subsidiary shall be the continuing or
surviving corporation;
(b) any such Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its Property (upon
voluntary liquidation or otherwise) to the Company or a
Wholly Owned Subsidiary of the Company;
(c) the Company or any Subsidiary of the Company may
merge or consolidate with any other Person if (i) in the
case of a merger or consolidation of the Company, the
Company is the surviving corporation and, in any other case,
the surviving corporation is a Wholly Owned Subsidiary of
the Company and (ii) after giving effect thereto no Default
would exist hereunder;
(d) the Company may (either directly, or indirectly
through its Wholly Owned Subsidiaries) at any time after
August 31, 1994 acquire the business or Property from, or
capital stock of, or enter into a joint venture with, or be
a party to an acquisition of another Person so long as:
(w) the aggregate amount of cash (and the fair
market value of non-cash consideration) expended by the
Company and its Subsidiaries in respect of any such
joint venture in any fiscal year shall not exceed
$10,000,000;
(x) the aggregate amount of cash (and the fair
market value of non-cash consideration) expended by the
Company and its Subsidiaries in respect of all such
transactions (including, without limitation, any joint
venture) in any fiscal year shall not exceed the sum of
(i) for any fiscal year after the fiscal year ending
August 31, 1994, $15,000,000 plus (ii) an amount equal
to the portion (if any) of the Net Available Proceeds
received by the Company from Equity Issuances during
such fiscal year that is not required pursuant to
Section 2.11(d) hereof to prepay Loans (and/or to
provide cover for the Letter of Credit Liabilities);
(y) the Company will give the Banks at least 25
days prior written notice of each transaction to be
consummated pursuant to this clause (d); and
(z) to the extent that the aggregate amount
expended by the Company and its Subsidiaries in any
fiscal year pursuant to this clause (d) shall exceed
$15,000,000, the Company shall first have obtained the
consent of the Majority Banks to the effect that the
respective transaction or transactions giving rise to
such expenditures will not, in the reasonable
determination of the Majority Banks, adversely affect
the creditworthiness of the Company and its
Subsidiaries taken as a whole;
(e) the Company may (either directly, or indirectly
through its Wholly Owned Subsidiaries) sell, lease, transfer
or otherwise dispose of the following facilities and related
assets: California Products Facility, Fresno California;
Tenner Brothers Facility, Patrick, South Carolina; Bisceglia
Brothers Wine Co. (d/b/a California Fruit Products), Madera,
California; Central Cellars Winery, Lodi, California; and
Vintners International Company, Inc. Facility, Soledad,
California;
(f) the Company may, for the purpose of transferring
its jurisdiction of incorporation from Delaware to another
state of incorporation, merge with and into a Wholly Owned
Subsidiary in a transaction constituting a tax-free
reorganization under 368(a)(1)(F) of the Code, so long as:
(x) the Company shall give the Banks and the
Agent at least 15 days prior written notice of the
occurrence of such merger;
(y) such Subsidiary shall execute and deliver an
instrument in form and substance satisfactory to each
Bank and the Agent pursuant to which such Subsidiary
shall, effective upon such merger, assume all of the
obligations of the Company hereunder, under the Notes
and under the Security Documents (and execute and
deliver such other instruments as the Agent shall
request to ensure the continued perfection and priority
of any Liens granted by the Company pursuant to the
Security Documents); and
(z) such Subsidiary shall deliver such proof of
corporate action, incumbency of officers, opinions of
counsel and other documents as is consistent with those
delivered by the Company pursuant to Section 7.01
hereof upon the Effective Date or as any Bank or the
Agent shall have requested; and
(g) the Company may, for the purpose of making itself
a Wholly Owned Subsidiary of a new holding company (herein
the "Holding Company"), enter into a transaction of merger
or consolidation with another entity or transfer its assets
to another entity (such entity, in either such case, being
herein called the "New Company"), so long as:
(u) the Company shall give the Banks and the
Agent at least 15 days prior written notice of the
occurrence of such transaction (which notice shall
specify the manner and timing in which such transaction
is to occur);
(v) in such transaction the shareholders of the
Company shall receive in exchange for the shares of
stock in the Company held by them immediately prior to
such transaction newly-issued shares of stock in the
Holding Company representing substantially the same
respective percentage ownership interests in the
Holding Company as such shareholders held in the
Company immediately prior to such transaction;
(w) immediately after giving effect to such
transaction, the Company (or the New Company, as the
case may be) shall be a Wholly Owned Subsidiary of the
Holding Company;
(x) in the event that such transaction consti-
tutes a merger with a New Company in which the Company
is not the surviving entity or such transaction
involves the transfer by the Company of its assets to a
New Company, the New Company shall execute and deliver
an instrument in form and substance satisfactory to
each Bank and the Agent pursuant to which the New
Company shall, effective upon such transaction, assume
all of the obligations of the Company hereunder, under
the Notes and under the Security Documents (and execute
and deliver such other instruments as the Agent shall
request to ensure the continued perfection and priority
of any Liens granted by the Company pursuant to the
Security Documents);
(y) the Holding Company shall execute and deliver
an instrument in form and substance satisfactory to
each Bank and the Agent pursuant to which the Holding
Company shall, effective upon such transaction, guaran-
tee all of the obligations of the Company (or the New
Company, as the case may be) hereunder, under the Notes
and under the Security Documents and pledge all of the
shares of stock held by it in the Company (or the New
Company, as the case may be) and shall take such
further action as the Agent shall request to ensure the
perfection and priority of any Liens granted by the
Holding Company pursuant to such instrument; and
(z) the Holding Company and the Company (or the
New Company, as the case may be) shall each deliver
such proof of corporate action, incumbency of officers,
opinions of counsel and other documents as is consis-
tent with those delivered by the Company pursuant to
Section 7.01 hereof upon the Effective Date or as any
Bank or the Agent shall have requested.
9.06 Limitations on Liens. The Company will not, nor
will it permit any of its Subsidiaries to, create, incur, assume
or suffer to exist any Lien upon any of its Property, whether now
owned or hereafter acquired, except:
(a) Liens created pursuant to the Security Documents
(and, prior to the Effective Date, Liens securing the
Existing Loans);
(b) Liens in existence on the date hereof and listed
in Parts A and B of Schedule I hereto;
(c) Liens imposed by any governmental authority for
taxes, assessments or charges not yet due or which are being
contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the
books of the Company or the affected Subsidiaries, as the
case may be, in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', material-
men's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a
period of more than 30 days or which are being contested in
good faith and by appropriate proceedings and Liens securing
judgments but only to the extent, for an amount and for a
period not resulting in an Event of Default under Section
10(h) hereof;
(e) pledges or deposits under worker's compensation,
unemployment insurance and other social security
legislation;
(f) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(g) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of Property or
minor imperfections in title thereto which, in the aggre-
gate, are not material in amount, and which do not in any
case materially detract from the value of the Property
subject thereto, or interfere with the ordinary conduct of
the business of the Company or any of its Subsidiaries;
(h) Liens upon tangible personal Property acquired
after the date hereof by the Company or any of its Subsidi-
aries, each of which Liens either (A) existed on such
Property before the time of its acquisition and was not
created in anticipation thereof, or (B) was created solely
for the purpose of securing Indebtedness permitted under
Section 9.07(f) hereof representing, or incurred to finance,
refinance or refund, the cost of such Property; provided
that no such Lien shall extend to or cover any Property of
the Company or such Subsidiary other than the Property so
acquired and improvements thereon; and provided, further,
that the principal amount of Indebtedness secured by any
such Lien shall at no time exceed 80% of the fair market
value (as determined in good faith by a senior financial
officer of the Company) of such Property at the time it was
acquired; and
(i) any extension, renewal or replacement of the
foregoing, provided, however, that the Liens permitted
hereunder shall not be spread to cover any additional
Indebtedness or Property (other than a substitution of like
Property).
9.07 Indebtedness. The Company will not, and will not
permit any of its Subsidiaries to, create, incur or suffer to
exist any Indebtedness except:
(a) Indebtedness of the Company or any of its
Subsidiaries to the Banks hereunder (and, prior to the
Effective Date, the Existing Loans);
(b) Indebtedness of the Company or any of its
Subsidiaries outstanding on the date hereof and listed in
Part A of Schedule I hereto;
(c) Subordinated Indebtedness;
(d) Indebtedness of Subsidiaries of the Company to the
Company or to other Subsidiaries of the Company;
(e) Indebtedness of the Company or any of its Subsidi-
aries of the type described in clause (f) of the definition
of "Indebtedness" in Section 1.01 hereof to the extent that
the aggregate principal amount of all obligations Guaranteed
by the Company and/or any of its Subsidiaries does not
exceed $4,000,000;
(f) additional Indebtedness of the Company up to but
not exceeding $4,000,000 at any one time outstanding; and
(g) Guarantees by the Company and its Subsidiaries of
Indebtedness of the Company and its Subsidiaries.
9.08 Investments. The Company will not, and will not
permit any of its Subsidiaries to, make or permit to remain
outstanding any Investments except:
(a) Investments outstanding on the date hereof and
identified in Schedule III Part B hereto;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Company and its Subsidiaries in
Subsidiaries of the Company;
(e) Interest Rate Protection Agreements so long as the
aggregate credit exposure under all Interest Rate Protection
Agreements calculated at the time any Interest Rate Protec-
tion Agreement is entered into does not exceed $1,000,000
(but without limiting its obligations under Section 9.16
hereof);
(f) Investments permitted pursuant to clause (d) of
the last sentence of Section 9.05 hereof;
(g) Investments consisting of security deposits with
utilities and other like Persons made in the ordinary course
of business;
(h) Investments consisting of forward foreign exchange
contracts entered into by the Company or its Subsidiaries in
connection with hedging transactions in the ordinary course
of business but excluding any such transactions which are
speculative in nature;
(i) additional Investments by the Company up to but
not exceeding $6,000,000 at any one time outstanding; and
(j) the Senior Subordinated Note Guarantees.
9.09 Dividend Payments. The Company will not, and
will not permit any of its Subsidiaries to, declare or make any
Dividend Payment at any time other than Dividend Payments in
respect of (i) stock appreciation rights as contemplated by the
Stock Option Plan in an aggregate amount not exceeding $500,000
in any fiscal year and (ii) payments under the Barton Phantom
Stock Plan in an aggregate amount not exceeding $4,500,000 during
the term of this Agreement. Nothing herein shall be deemed to
prohibit the payment of any dividends by Subsidiaries to the
Company and other Subsidiaries.
9.10 Debt Ratio. The Company will not permit the Debt
Ratio to exceed the following respective ratios at any time
during the following respective periods:
Period Ratio
From September 1, 1994 through
and including November 30, 1994 7.00 to 1
From December 1, 1994 through
and including February 28, 1995 7.00 to 1
From March 1, 1995 through
and including May 31, 1995 6.50 to 1
From June 1, 1995 through
and including August 31, 1995 6.00 to 1
From September 1, 1995 through
and including November 30, 1995 5.75 to 1
From December 1, 1995 through
and including February 28, 1996 5.50 to 1
From March 1, 1996 through
and including May 31, 1996 5.25 to 1
From June 1, 1996 through
and including August 31, 1996 5.00 to 1
From September 1, 1996 through
and including November 30, 1996 4.75 to 1
From December 1, 1996 through
and including February 28, 1997 4.75 to 1
From March 1, 1997 through
and including May 31, 1997 4.50 to 1
From June 1, 1997 through
and including August 31, 1997 4.50 to 1
From September 1, 1997 through
and including November 30, 1997 4.25 to 1
From December 1, 1997 through
and including February 28, 1998 4.25 to 1
From March 1, 1998 through
and including May 31, 1998 4.00 to 1
From June 1, 1998 through
and including August 31, 1998 4.00 to 1
From September 1, 1998 through
and including November 30, 1998 3.75 to 1
From December 1, 1998 through
and including February 28, 1999 3.75 to 1
From March 1, 1999 and at all
times thereafter 3.50 to 1
9.11 Tangible Net Worth. The Company will not permit
Tangible Net Worth to be less than the following respective
amounts at any time during the following respective periods:
Period Amount
From September 1, 1994 through
and including November 30, 1994 $ 70,218,000
From December 1, 1994 through
and including February 28, 1995 $ 76,643,000
From March 1, 1995 through
and including May 31, 1995 $ 83,067,000
From June 1, 1995 through
and including August 31, 1995 $ 89,492,000
From September 1, 1995 through
and including November 30, 1995 $ 95,916,000
From December 1, 1995 through
and including February 28, 1996 $103,518,000
From March 1, 1996 through
and including May 31, 1996 $111,120,000
From June 1, 1996 through
and including August 31, 1996 $118,722,000
From September 1, 1996 through
and including November 30, 1996 $126,324,000
From December 1, 1996 through
and including February 28, 1997 $137,425,000
From March 1, 1997 through
and including May 31, 1997 $148,526,000
From June 1, 1997 through
and including August 31, 1997 $159,626,000
From September 1, 1997 through
and including November 30, 1997 $170,727,000
From December 1, 1997 through
and including February 28, 1998 $181,951,000
From March 1, 1998 through
and including May 31, 1998 $193,176,000
From June 1, 1998 through
and including August 31, 1998 $204,400,000
From September 1, 1998 through
and including November 30, 1998 $215,624,000
From December 1, 1998 through
and including February 28, 1999 $226,899,000
From March 1, 1999 through
and including May 31, 1999 $238,173,000
From June 1, 1999 through
and including August 31, 1999 $249,448,000
From September 1, 1999 through
and including November 30, 1999 $260,723,000
From December 1, 1999 through
and including February 28, 2000 $271,997,000
From March 1, 2000 through and
and including May 31, 2000 $283,272,000
From June 1, 2000 and at all
times thereafter $294,546,000.
Notwithstanding the foregoing, (i) on the date of any Equity
Issuance in respect of which 100% of the Net Available Proceeds
thereof shall have been applied pursuant to Section 2.11(d)
hereof to the prepayment of Loans (and/or to provide cover for
the Letter of Credit Liabilities) each of the respective amounts
set forth above shall be adjusted by adding thereto an amount
equal to the Net Available Proceeds in respect of such Equity
Issuance (provided that, the aggregate amount of all such
adjustments shall be no greater than $60,000,000) and (ii) upon
receipt by the Banks of the financial statements referred to in
Section 9.01(i) hereof (so long as the amount determined pursuant
to the succeeding clause (y) is greater than zero), each of the
respective amounts set forth above shall be adjusted by
subtracting therefrom an amount equal to the product of (x) .75
times (y) an amount equal to (A) $111,000,000 minus
(B) Intangibles as reflected on the restated balance sheet of the
Company and its Consolidated Subsidiaries dated as of the
Effective Date delivered to the Banks pursuant to Section 9.01(i)
hereof.
9.12 Fixed Charges Ratio. The Company will not permit
the Fixed Charges Ratio to be less than 1.00 to 1 as at the last
day of each fiscal quarter of each fiscal year.
9.13 Capital Expenditures. The Company will not
permit the excess of (i) the aggregate amount of Capital
Expenditures by the Company and its Consolidated Subsidiaries
made during any fiscal year over (ii) the aggregate proceeds
received during such fiscal year from the sale of tangible
Property of the Company and its Subsidiaries (but only to the
extent such proceeds are used to replace such Property within six
months of such sale) to exceed (A) for the fiscal year ending
August 31, 1995, $40,000,000, and (B) for any fiscal year ending
August 31, 1996, $17,000,000 and (C) for any fiscal year
thereafter, $15,500,000; provided that, if the aggregate amount
of Capital Expenditures for any fiscal year shall be less than
the amount set forth opposite such fiscal year then the shortfall
shall be added to the amount of Capital Expenditures permitted
for the immediately succeeding (but not any other) fiscal year
and, for purposes hereof, the amount of Capital Expenditures made
during any fiscal year shall be deemed to have been made first
from the permitted amount set forth opposite such fiscal year and
last from the amount of any carryover from any previous fiscal
year.
9.14 Interest Coverage Ratio. The Company will not
permit the Interest Coverage Ratio to be less than the following
respective ratios at any time during the following respective
periods:
Period Ratio
From the Effective Date
through August 31, 1994 2.25 to 1
From September 1, 1994
through August 31, 1995 2.75 to 1
From September 1, 1995
through August 31, 1996 2.80 to 1
From September 1, 1996
through August 31, 1997 2.90 to 1
From September 1, 1997
through August 31, 1998 3.00 to 1
From September 1, 1998 and
at all times thereafter 3.25 to 1
9.15 Current Ratio. The Company will not permit the
ratio of current assets of the Company and its Consolidated
Subsidiaries to current liabilities of the Company and its
Consolidated Subsidiaries to be less than 1.50 to 1 at any time.
For purposes hereof, the terms "current assets" and "current
liabilities" shall have the respective meanings assigned to them
by GAAP.
9.16 Interest Rate Protection Agreements. The Company
will within 60 days of the Effective Date and at all times
thereafter until August 31, 1996 maintain in full force and
effect one or more Interest Rate Protection Agreements with one
or more of the Banks (and/or with a bank or other financial
institution having capital, surplus and undivided profits of at
least $500,000,000), which effectively enables the Company (in a
manner satisfactory to the Majority Banks), to protect itself
against three-month London interbank offered rates exceeding
8.75% per annum as to a notional principal amount at least equal
to the following respective amounts at the following respective
dates:
Fiscal Quarter Amount
November 30, 1994 $87,000,000
February 28, 1995 $80,000,000
May 31, 1995 $72,000,000
August 31, 1995 $68,000,000
November 30, 1995 $65,000,000
February 28, 1996 $61,000,000
May 31, 1996 $57,000,000
August 31,1996 $57,000,000
9.17 Transactions with Affiliates. Except as
expressly permitted by this Agreement, the Company will not, nor
will it permit any of its Subsidiaries to, directly or
indirectly: (a) make any Investment in an Affiliate; (b) trans-
fer, sell, lease, assign or otherwise dispose of any Property to
an Affiliate; (c) merge into or consolidate with or purchase or
acquire Property from an Affiliate; or (d) enter into any other
transaction directly or indirectly with or for the benefit of an
Affiliate (including, without limitation, guarantees and assump-
tions of obligations of an Affiliate); provided that (x) any
Affiliate who is an individual may serve as a director, officer
or employee of the Company or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity
and (y) the Company and its Subsidiaries may enter into transac-
tions (other than extensions of credit by the Company or any of
its Subsidiaries to an Affiliate) providing for the leasing of
Property, the rendering or receipt of services or the purchase or
sale of inventory and other Property in the ordinary course of
business if the monetary or business consideration arising there-
from would be substantially as advantageous to the Company and
its Subsidiaries as the monetary or business consideration which
would obtain in a comparable transaction with a Person not an
Affiliate. During any period that the Company is a public
company regulated by, and required to file regular periodic
reports with, the Securities and Exchange Commission, any compen-
sation paid to an executive officer of the Company (who is an
Affiliate) which has been specifically approved by the board of
directors of the Company during such period will be deemed to be
reasonable for purposes of the foregoing. Notwithstanding the
foregoing, the Company may enter into so-called split-dollar life
insurance agreements substantially in the form of Schedule VI
hereto, so long as the aggregate amount of premiums payable by
the Company during any fiscal year pursuant to such agreements
shall not exceed $2,000,000 in the aggregate.
9.18 Use of Proceeds. The Company will use the
proceeds of the Loans hereunder solely to (a) finance the
Heublein Acquisition, the Barton Acquisition and the Vintners
Acquisition, (b) provide working capital for the Company and its
Subsidiaries and (c) pay the expenses relating to the Heublein
Acquisition, the Barton Acquisition and the Vintners Acquisition
and the consummation of the transactions contemplated hereby (in
compliance with all applicable legal and regulatory require-
ments); provided that, neither the Agent nor any Bank shall have
any responsibility as to the use of any of such proceeds.
9.19 Certain Obligations Respecting Subsidiaries. The
Company will, and will cause each of its Subsidiaries to, take
such action from time to time as shall be necessary to ensure
that each of its Subsidiaries is a Wholly-Owned Subsidiary (other
than with respect to BB Servicios, S.A. de C.V. or Monarch Wine
Company, Limited Partnership, as to which the ownership interest
of the Company shall not fall below that indicated on Schedule
III hereto). The Company will not permit any of its Subsidiaries
to enter into, after the date of this Agreement, any indenture,
agreement, instrument or other arrangement that, directly or
indirectly, prohibits or restrains, or has the effect of pro-
hibiting or restraining, or imposes materially adverse conditions
upon, the incurrence or payment of Indebtedness, the granting of
Liens, the declaration or payment of dividends, the making of
loans, advances or Investments or the sale, assignment, transfer
or other disposition of Property.
9.20 Additional Subsidiary Guarantors. The Company
will take such action, and will cause each of its Subsidiaries to
take such action, from time to time as shall be necessary to
ensure that all Subsidiaries of the Company (other than Inactive
Subsidiaries) are Subsidiary Guarantors and, thereby, "Obligors"
hereunder. Without limiting the generality of the foregoing, in
the event that the Company or any of its Subsidiaries shall form
any new Subsidiary after the date hereof which the Company or the
respective Subsidiary anticipates will not be an Inactive
Subsidiary (or, in the event that any Inactive Subsidiary shall
cease to be an Inactive Subsidiary), the Company or the respec-
tive Subsidiary will cause such new Subsidiary (or such Inactive
Subsidiary which ceases to be an Inactive Subsidiary) to become a
"Subsidiary Guarantor" (and, thereby, an "Obligor") hereunder
pursuant to a written instrument in form and substance satisfac-
tory to each Bank and the Agent, and to deliver such proof of
corporate action, incumbency of officers, opinions of counsel and
other documents as is consistent with those delivered by each
Obligor pursuant to Section 7.01 hereof upon the Effective Date
or as any Bank or the Agent shall have requested.
9.21 Modifications of Certain Documents. The Company
will not, and will not permit any of its Subsidiaries to, consent
to any modification, supplement or waiver of any of the provi-
sions of (i) the Barton Acquisition Documents (excluding
adjustments agreed to by the Seller Representative (as defined in
the Barton Stock Purchase Agreement) and the Company pursuant to
Section 2.1(e) of the Barton Stock Purchase Agreement), (ii) the
Vintners Acquisition Documents or (iii) the Heublein Acquisition
Documents without, in the case of any of clauses (i), (ii) and
(iii) above, the prior consent of the Agent (with the approval of
the Majority Banks). In addition, notwithstanding the provisions
of Sections 9.05(f) and 9.05(g), the Company will not consent to
any modification, supplement or waiver of its Certificate of
Incorporation as in effect on the date hereof without the prior
consent of the Agent (with the approval of the Majority Banks).
9.22 Subordinated Indebtedness. The Company may after
the date hereof incur additional Subordinated Indebtedness
subject to the following conditions each of which shall have been
fulfilled in form and substance satisfactory to the Majority
Banks:
(a) such Indebtedness shall be subordinated to the
obligations of the Company to pay principal of and interest
on the Loans, the Reimbursement Obligations and all other
amounts payable hereunder on terms in form and substance
satisfactory to the Majority Banks, it being understood that
the terms and provisions of the Senior Subordinated Note
Indenture are satisfactory to the Majority Banks;
(b) such Indebtedness shall be an obligation of the
Company only, and none of its Subsidiaries shall be
contingently or otherwise obligated in respect thereof,
unless subordinated to the obligations of such Subsidiary to
pay principal of and interest on the Loans, the
Reimbursement Obligations and all other amounts payable
hereunder on terms in form and substance satisfactory to the
Majority Banks, it being understood that the terms and
provisions of the Senior Subordinated Note Indenture are
satisfactory to the Majority Banks;
(c) the aggregate principal amount of such Indebt-
edness together with the aggregate principal amount of all
other Subordinated Indebtedness of the Company shall not
exceed $280,000,000 at any one time (including interest that
will accrue after the date of issuance);
(d) the proceeds of such Indebtedness shall be applied
either to (i) refinance other Subordinated Indebtedness or
(ii) prepay Loans (and/or provide cover for the Letter of
Credit Liabilities) as provided in Section 2.11(j) hereof,
provided that the aggregate principal amount of any such
refinancing Subordinated Indebtedness shall not exceed the
aggregate principal amount, plus accrued interest and
premium, if any, on the Subordinated Indebtedness being
refinanced;
(e) the terms of such Indebtedness shall not provide
for payment of any portion of the principal thereof prior to
the date six months after the final maturity of the Loans
hereunder;
(f) at the time of issuance of such Indebtedness, and
after giving effect thereto, the Interest Coverage Ratio
shall not be less than the ratio in effect at that time as
set out in Section 9.14 hereof (Interest Expense for such
purpose to be calculated under the assumption that such
Indebtedness was issued at the beginning of such period and
that any other Indebtedness to be retired with the proceeds
thereof was in fact retired on such date of issuance);
(g) terms in respect of financial and other covenants,
events of default and mandatory prepayments applicable to
such Indebtedness shall have been reasonably determined by
the Majority Banks to be terms that are at the time
customary in the market for subordinated debt being incurred
by borrowers, and in transactions, comparable in the
reasonable judgment of the Majority Banks to the Company and
proposed debt issuance, it being understood that the terms
in respect of financial and other covenants, events of
default and mandatory prepayments included in the Senior
Subordinated Note Indenture are, in the judgment of the
Majority Banks, comparable to those customary in such
market;
(h) at the time of issuance of such Indebtedness, and
after giving effect thereto, the Company shall be in
compliance with Sections 9.10, 9.11, 9.12 and 9.15 hereof
(the determination of such ratios (and such amount with
respect to Tangible Net Worth) shall be calculated under the
assumption that such Indebtedness was issued, at the
beginning of such period and that any other Indebtedness to
be retired with the proceeds thereof was in fact retired on
such date of issuance), and the Company shall have delivered
to the Agent a certificate of its chief financial officer to
such effect setting forth in reasonable detail the
computations necessary to determine such compliance; and
(i) at the time of such issuance, and after giving
effect thereto, no Default or Event of Default shall have
occurred and be continuing hereunder and the Company shall
have delivered to the Agent a certificate of its chief
financial officer to such effect.
Neither the Company nor any of its Subsidiaries shall
purchase, redeem, retire or otherwise acquire for value, or set
apart any money for a sinking, defeasance or other analogous fund
for, the purchase, redemption, retirement or other acquisition
of, or make any voluntary payment or prepayment of the principal
of or interest on, or any other amount owing in respect of, any
Subordinated Indebtedness, except that the Company may (i) make
payments on the regularly-scheduled payment dates with respect to
the principal of and interest on the Subordinated Indebtedness as
in effect on the date hereof (or, as to any Subordinated Indebt-
edness issued after the date hereof, as originally in effect),
and (ii) so long as no Default shall have occurred and be contin-
uing (or will occur as a result of such payment), from the pro-
ceeds of Subordinated Indebtedness issued in accordance with the
first paragraph of this Section 9.22, redeem Subordinated
Indebtedness that is being refinanced as contemplated in clause
(d) of the first paragraph of this Section 9.22. Neither the
Company nor any of its Subsidiaries will consent to any modifi-
cation, supplement or waiver of any of the provisions of any
Subordinated Indebtedness without the prior consent of the Agent
(with the approval of the Majority Banks).
9.23 Eligible Inventory Located in Off-Premises
Warehouses. The Company will not, nor will it permit any of its
Subsidiaries to, maintain Eligible Inventory at Off-Premises
Warehouses in an amount in excess of $40,000,000 (as to the
Company and all Subsidiaries) at any time unless either (a) the
amount of such excess is subtracted from the amount of Eligible
Inventory in determining the Borrowing Base or (b) the Company or
such Subsidiary has taken such steps as are necessary to ensure
that the Banks have a valid prior perfected security interest in
such Eligible Inventory (including, without limitation, the
filing of an appropriate uniform commercial code financing state-
ment in the respective jurisdiction in which such Eligible
Inventory is located naming the Company or such Subsidiary as
"secured party" and the delivery of satisfactory evidence that
such an arrangement constitutes a consignment or first priority
perfected security interest under applicable law and that such
security interest has been validly assigned to the Agent under
the Security Agreement).
Section 10. Events of Default. If one or more of the
following events (herein called "Events of Default") shall occur
and be continuing:
(a) The Company or any Subsidiary Guarantor shall
default in the payment when due (whether at stated maturity
or at mandatory or optional prepayment) of any principal of
any Loan or any Reimbursement Obligation; or the Company or
any Subsidiary Guarantor shall default in the payment when
due of any interest on any Loan or any Reimbursement Obliga-
tion, or any fee or any other amount payable by it hereunder
or under any other Basic Document and such default shall
continue unremedied for two (or more) Business Days; or
(b) The Company or any of its Subsidiaries shall default
in the payment when due of any principal of or interest on any
of its other Indebtedness, or in the payment when due of any
amount under any Interest Rate Protection Agreement, or in the
payment when due of any amount under the Barton Stock Purchase
Agreement, provided that such payment due and owing is in an
amount greater than or equal to $100,000; or any event speci-
fied in any note, agreement, indenture or other document
evidencing or relating to Indebtedness in an aggregate princi-
pal amount greater than or equal to $100,000 or any event
specified in any Interest Rate Protection Agreement shall occur
(and shall continue beyond any applicable period of grace) if
the effect of such event is to cause, or to permit the holder
or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness
to become due, or to be prepaid in full (whether by redemption,
purchase, offer to purchase or otherwise), prior to its stated
maturity or to have the interest rate thereon reset to a level
so that securities evidencing such Indebtedness trade at a
level specified in relation to the par value thereof or, in the
case of an Interest Rate Protection Agreement, to permit the
payments owing under such Interest Rate Protection Agreement to
be liquidated; or
(c) Any representation, warranty or certification made
or deemed made in any Basic Document (or in any modification
or supplement thereto) by any Obligor, or any certificate
furnished to any Bank or the Agent pursuant to the provi-
sions thereof, shall prove to have been false or misleading
as of the time made or furnished if the effect thereof could
have a Material Adverse Effect; or any representation or
warranty made or deemed made in the Heublein Acquisition
Documents by Heublein or the Barton Acquisition Documents by
the Barton Stockholders or the Vintners Acquisition
Documents by Vintners, or any certificate furnished to the
Company pursuant to the provisions of any thereof, shall
prove to have been false or misleading as of the time made
or furnished if the effect thereof could have a Material
Adverse Effect; or
(d) The Company shall default in the performance of
any of its obligations under any of Sections 9.01(g),
9.01(h), 9.05, 9.06, 9.07, 9.08, 9.09, 9.10, 9.11, 9.12,
9.13, 9.14, 9.15, 9.22 or 9.23 hereof or any Obligor shall
default in the performance of any of its obligations under
Section 5.02 of the Security Agreement or any provisions of
Section 1.03, 1.04 or 1.11 of the Mortgages; or any Obligor
shall default in the performance of any of its other obliga-
tions in this Agreement or any other Basic Document and such
default shall continue unremedied for a period of 45 (or
more) days after notice thereof to the Company by the Agent
or any Bank (through the Agent); or
(e) The Company or any of its Subsidiaries shall admit
in writing its inability to, or be generally unable to, pay
its debts as such debts become due; or
(f) The Company or any of its Subsidiaries shall (i)
apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, examiner or
liquidator of itself or of all or a substantial part of its
Property, (ii) make a general assignment for the benefit of
its creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take advan-
tage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or
winding-up, or composition or readjustment of debts, (v)
fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code or (vi) take any
corporate action for the purpose of effecting any of the
foregoing; or
(g) A proceeding or case shall be commenced, without
the application or consent of the Company or any of its
Subsidiaries, in any court of competent jurisdiction,
seeking (i) its reorganization, liquidation, dissolution,
arrangement or winding-up, or the composition or readjust-
ment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of the
Company or such Subsidiary or of all or any substantial part
of its Property, or (iii) similar relief in respect of the
Company or such Subsidiary under any law relating to bank-
ruptcy, insolvency, reorganization, winding-up, or composi-
tion or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered
and continue unstayed and in effect, for a period of 60 or
more days; or an order for relief against the Company or
such Subsidiary shall be entered in an involuntary case
under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of
money in excess of $500,000 in the aggregate (exclusive of
judgment amounts fully covered by insurance where the
insurer has admitted liability in respect of such judgment)
or in excess of $5,000,000 in the aggregate (regardless of
insurance coverage) shall be rendered by a one or more
courts, administrative tribunals or other bodies having
jurisdiction against the Company and/or any of its Subsidi-
aries and the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execu-
tion thereof shall not be procured, within 45 days from the
date of entry thereof and the Company or the relevant
Subsidiary shall not, within said period of 45 days, or such
longer period during which execution of the same shall have
been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or
(i) An event or condition specified in Section 9.01(f)
hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such event or condi-
tion, together with all other such events or conditions, the
Company or any ERISA Affiliate shall incur or in the opinion
of the Majority Banks shall be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) which would constitute, in the
reasonable determination of the Majority Banks, a Material
Adverse Effect; or
(j) A reasonable basis shall exist for the assertion
against the Company or any of its Subsidiaries of (or there
shall have been asserted against the Company or any of its
Subsidiaries) claims or liabilities, whether accrued,
absolute or contingent, based on or arising from the
generation, storage, transport, handling or disposal of
Hazardous Materials by the Company or any of its Subsidi-
aries or Affiliates, or any predecessor in interest of the
Company or any of its Subsidiaries or Affiliates, or
relating to any site or facility owned, operated or leased
by the Company or any of its Subsidiaries or Affiliates,
which claims or liabilities (insofar as they are payable by
the Company or any of its Subsidiaries but after deducting
any portion thereof which is reasonably expected to be paid
by other creditworthy Persons jointly and severally liable
therefor), in the judgment of the Majority Banks are reason-
ably likely to be determined adversely to the Company or any
of its Subsidiaries, and the amount thereof is, singly or in
the aggregate, reasonably likely to have a Material Adverse
Effect; or
(k) Common stock of the Company (after giving effect
to the exercise of all outstanding Equity Rights), having by
its terms voting power to elect at least 50% (in number of
votes) of the board of directors of the Company, shall cease
to be owned in the aggregate by (i) Marvin Sands or members
of his immediate family (including, parents, spouse,
children and siblings) or (ii) a trust for the benefit of
Marvin Sands or members of his immediate family, which trust
is under the control of Marvin Sands or members of his
immediate family; or a "Change in Control" under and as
defined in the Barton Stock Purchase Agreement shall occur
and be continuing; or
(l) The face amount of the Barton Letter of Credit
shall not be reduced on any date in the respective amount
specified in Section 2.12(a) of the Barton Stock Purchase
Agreement for such date;
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 10 with respect
to any Obligor, the Agent may, by notice to the Company, termi-
nate the Commitments and/or terminate the Barton Letter of Credit
(as provided therein) and/or declare all or any portion of the
principal amount then outstanding of, and the accrued interest
on, the Loans, the Reimbursement Obligations and other amounts
payable by the Obligors hereunder and under the Notes (including,
without limitation, any amounts payable under Section 5.05
hereof) to be forthwith due and payable (provided that (x) if so
requested by the Majority Revolving Credit Banks or, with respect
to Swingline Loans, by the Swingline Bank, the Agent shall take
such action with respect to the Revolving Credit Commitments
and/or the Revolving Credit Loans, Reimbursement Obligations in
respect of Revolving Letters of Credit, Swingline Loans and such
interest and other amounts to the extent owed to the Revolving
Credit Banks, or the Swingline Bank, as the case may be, (y) if
so requested by the Majority Term Banks, the Agent shall take
such action with respect to the Term Loan Commitments and the
Term Loans and such interest and other amounts to the extent owed
to the Term Loan Banks and (z) if so requested by the Majority
Barton Letter of Credit Banks, the Agent shall take such action
with respect to the Barton Letter of Credit Commitments and the
termination of the Barton Letter of Credit (as provided therein)
and/or the Reimbursement Obligations in respect of the Barton
Letter of Credit and such interest and other amounts to the
extent owed to the Barton Letter of Credit Banks), whereupon such
amounts shall be immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which
are hereby expressly waived by each Obligor; and (2) in the case
of the occurrence of an Event of Default referred to in clause
(f) or (g) of this Section 10 with respect to any Obligor, the
Commitments shall automatically be terminated and all of the
principal amount then outstanding of, and the accrued interest
on, the Loans, the Reimbursement Obligations and all other
amounts payable by the Obligors hereunder and under the Notes
(including, without limitation, any amounts payable under
Section 5.05 hereof) shall automatically become immediately due
and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived
by each Obligor (and the Agent may terminate the Barton Letter of
Credit as provided therein).
In addition, upon the occurrence and during the
continuance of any Event of Default (if the Agent has declared
the principal amount then outstanding of, and accrued interest
on, the Revolving Credit Loans and/or the Barton Letter of Credit
Loans and all other amounts payable by the Company hereunder and
under the Notes to be due and payable), the Company agrees that
it shall, if requested by the Agent or the Majority Revolving
Credit Banks or the Majority Barton Letter of Credit Banks, as
the case may be, through the Agent (and, in the case of any Event
of Default referred to in clause (f) or (g) of this Section 10
with respect to the Company, forthwith, without any demand or the
taking of any other action by the Agent or such Banks) provide
cover for the Letter of Credit Liabilities by paying to the Agent
immediately available funds in an amount equal to the then aggre-
gate undrawn face amount of all effected Letters of Credit, which
funds shall be held by the Agent in the Collateral Account as
collateral security in the first instance for the Letter of
Credit Liabilities and be subject to withdrawal only as therein
provided.
Section 11. The Agent.
11.01 Appointment, Powers and Immunities. Each Bank
hereby irrevocably appoints and authorizes the Agent to act as
its agent hereunder and under the other Basic Documents with such
powers as are specifically delegated to the Agent by the terms of
this Agreement and of the other Basic Documents, together with
such other powers as are reasonably incidental thereto. The
Agent (which term as used in this sentence and in Section 11.05
and the first sentence of Section 11.06 hereof shall include
reference to its affiliates and its own and its affiliates'
officers, directors, employees and agents): (a) shall have no
duties or responsibilities except those expressly set forth in
this Agreement and in the other Basic Documents, and shall not by
reason of this Agreement or any other Basic Document be a trustee
for any Bank; (b) shall not be responsible to the Banks for any
recitals, statements, representations or warranties contained in
this Agreement or in any other Basic Document, or in any certifi-
cate or other document referred to or provided for in, or
received by any of them under, this Agreement, any Note or any
other Basic Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or
any other Basic Document or any other document referred to or
provided for herein or therein or for any failure by the Company
or any other Person to perform any of its obligations hereunder
or thereunder; (c) shall not be required to initiate or conduct
any litigation or collection proceedings hereunder or under any
other Basic Document, except as may be necessary to enforce any
of the Security Documents; (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any
other Basic Document or under any other document or instrument
referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or
willful misconduct; and (e) shall not be responsible to the
Company or the Banks for (i) determining whether or not any of
the transactions contemplated hereby qualifies as a Highly
Leveraged Transaction, (ii) notifying the Banks regarding the
Highly Leveraged Transaction status of any transaction
contemplated hereby or of any change in that status or (iii) the
correctness of any determination as to Highly Leveraged
Transaction status. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence
or misconduct of any such agents or attorneys- in-fact selected
by it in good faith. The Agent may deem and treat the payee of
any Note as the holder thereof for all purposes hereof unless and
until a notice of the assignment or transfer thereof shall have
been filed with the Agent, together with the consent of the
Company to such assignment or transfer (to the extent provided in
Section 12.06(b) hereof).
11.02 Reliance by Agent. The Agent shall be entitled
to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of
the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected
by the Agent. As to any matters not expressly provided for by
this Agreement or any other Basic Document, the Agent shall in
all cases be fully protected in acting, or in refraining from
acting, hereunder or thereunder in accordance with instructions
given by the Majority Banks or, if provided herein, in accordance
with the instructions given by the Majority Revolving Credit
Banks, the Majority Term Banks or all of the Banks as is required
in such circumstance, and such instructions of such Banks and any
action taken or failure to act pursuant thereto shall be binding
on all of the Banks.
11.03 Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default. The Agent
shall (subject to Sections 11.01 and 11.07 hereof) take such
action with respect to such Default as shall be directed by the
Majority Banks or, if provided herein, the Majority Revolving
Credit Banks or the Majority Term Banks, provided that, unless
and until the Agent shall have received such directions, the
Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as
it shall deem advisable in the best interest of the Banks except
to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon
the authorization of the Majority Banks, the Majority Revolving
Credit Banks, the Majority Term Banks or all of the Banks.
11.04 Rights as a Bank. With respect to its
Commitments and the Loans made by it, Chase (and any successor
acting as Agent) in its capacity as a Bank hereunder shall have
the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not acting as the Agent, and
the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. Chase
(and any successor acting as Agent) and its affiliates may (with-
out having to account therefor to any Bank) accept deposits from,
lend money to, make investments in and generally engage in any
kind of banking, trust or other business with the Obligors (and
any of their Subsidiaries or Affiliates) as if it were not acting
as the Agent, and Chase and its affiliates may accept fees and
other consideration from the Obligors for services in connection
with this Agreement or otherwise without having to account for
the same to the Banks.
11.05 Indemnification. The Banks agree to indemnify
the Agent (to the extent not reimbursed under Section 12.03
hereof, but without limiting the obligations of the Company under
said Section 12.03, and including in any event any payments under
any indemnity that the Agent is required to issue to any bank
referred to in Section 4.02 of the Security Agreement to which
remittances in respect of Accounts, as defined therein, are to be
made) ratably in accordance with the aggregate principal amount
of the Loans and Reimbursement Obligations held by the Banks (or,
if no Loans or Reimbursement Obligations are at the time out-
standing, ratably in accordance with their respective Commit-
ments), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Agent (including
by any Bank) arising out of or by reason of any investigation in
or in any way relating to or arising out of this Agreement or any
other Basic Document or any other documents contemplated by or
referred to herein or therein or the transactions contemplated
hereby or thereby (including, without limitation, the costs and
expenses that the Company is obligated to pay under Section 12.03
hereof, and including also any payments under any indemnity that
the Agent is required to issue to any bank referred to in
Section 4.02 of the Security Agreement to which remittances in
respect of Accounts, as defined therein, are to be made, but
excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the perfor-
mance of its agency duties hereunder) or the enforcement of any
of the terms hereof or thereof or of any such other documents,
provided that no Bank shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
11.06 Non-Reliance on Agent and Other Banks. Each
Bank agrees that it has, independently and without reliance on
the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Company and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the
other Basic Documents. The Agent shall not be required to keep
itself informed as to the performance or observance by any
Obligor of this Agreement or any of the other Basic Documents or
any other document referred to or provided for herein or therein
or to inspect the Properties or books of the Company or any of
its Subsidiaries. Except for notices, reports and other docu-
ments and information expressly required to be furnished to the
Banks by the Agent hereunder, the Agent shall not have any duty
or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or
business of the Company or any of its Subsidiaries (or any of
their affiliates) that may come into the possession of the Agent
or any of its affiliates.
11.07 Failure to Act. Except for action expressly
required of the Agent hereunder and under the other Basic
Documents, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from the
Banks of their indemnification obligations under Section 11.05
hereof against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such
action.
11.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving notice thereof
to the Banks and the Company, and the Agent may be removed at any
time with or without cause by the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right
to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Majority Banks and shall have accepted
such appointment within 30 days after the retiring Agent's giving
of notice of resignation or the Majority Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, that shall be a bank which has
an office in New York, New York with a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such succes-
sor Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Section 11
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
the Agent.
11.09 Consents under Basic Documents. Except as
otherwise provided in Section 12.04 hereof with respect to this
Agreement, the Agent may, with the prior consent of the Majority
Banks (but not otherwise), consent to any modification, supple-
ment or waiver under any of the Basic Documents, provided that,
without the prior consent of each Bank, the Agent shall not
(except as provided herein or in the Security Documents) release
any collateral or otherwise terminate any Lien under any Basic
Document providing for collateral security, or agree to
additional obligations being secured by such collateral security
(unless the Lien for such additional obligations shall be junior
to the Lien in favor of the other obligations secured by such
Basic Document), except that no such consent shall be required,
and the Agent is hereby authorized and instructed, to release any
Lien covering Property which is the subject of a disposition of
Property permitted hereunder or to which the Majority Banks have
consented.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Agent or
any Bank to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under this
Agreement or any Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or
privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
12.02 Notices. All notices, requests and other
communications provided for herein and under the Security Docu-
ments (including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or made
in writing (including, without limitation, by telecopy) delivered
to the intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof (below the name of
the Company, in the case of any Subsidiary Guarantor); or, as to
any party, at such other address as shall be designated by such
party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be
deemed to have been duly given when received by telecopier or
personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
12.03 Expenses, Etc. The Company agrees to pay or
reimburse (a) the Agent for paying all reasonable out-of-pocket
costs and expenses of the Agent (including, without limitation,
the reasonable fees and expenses of Milbank, Tweed, Hadley &
McCloy, special New York counsel to Chase), in connection with
(i) the negotiation, preparation, execution and delivery of this
Agreement and the other Basic Documents and the extension of
credit hereunder and (ii) any modification, supplement or waiver
of any of the terms of this Agreement or any of the other Basic
Documents; (b) each of the Banks and the Agent for all reasonable
costs and expenses of the Banks and the Agent (including, without
limitation, reasonable counsels' fees and, to the extent permit-
ted under applicable law, allocated costs for in-house counsel)
in connection with (i) any Default and any enforcement or collec-
tion proceedings resulting therefrom or in connection with the
negotiation of any restructuring or "work-out" (whether or not
consummated), or the obligations of the Company hereunder and
(ii) the enforcement of this Section 12.03; (c) each of the Banks
and the Agent for all transfer, stamp, documentary or other
similar taxes, assessments or charges levied by any governmental
or revenue authority in respect of this Agreement or any of the
other Basic Documents or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and other
charges incurred in connection with any filing, registration,
recording or perfection of any security interest contemplated by
this Agreement or any other Basic Document or any other document
referred to herein or therein; (d) each of the Banks and the
Agent for all costs, expenses and other charges in respect of
title insurance procured with respect to the Liens created pur-
suant to the Mortgages; and (e) each of the Banks and the Agent
for all costs, expenses and other charges in respect of any
collateral audit requested by the Agent or the Majority Banks
pursuant to Section 9.01(g) hereof.
The Company hereby agrees to indemnify the Agent and
each Bank and their respective directors, officers, employees,
attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or
expenses incurred by any of them (including, without limitation,
any and all losses, liabilities, claims, damages or expenses
incurred by the Agent to any Bank, whether or not the Agent or
any Bank is a party thereto) arising out of or by reason of any
investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings)
relating to the extensions of credit hereunder or any actual or
proposed use by the Company or any of its Subsidiaries of the
proceeds of any of the extensions of credit hereunder, including,
without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of
the negligence or willful misconduct). Without limiting the
generality of the foregoing, the Company will (x) indemnify the
Agent for any payments that the Agent is required to make under
any indemnity issued to any bank referred to in Section 4.02 of
the Security Agreement to which remittances in respect to
Accounts, as defined therein, are to be made and (y) indemnify
the Agent and each Bank from, and hold the Agent and each Bank
harmless against, any losses, liabilities, claims, damages or
expenses described in the preceding sentence (but excluding, as
provided in the preceding sentence, any loss, liability, claim,
damage or expense incurred by reason of the negligence or willful
misconduct of the Person to be indemnified) arising under any
Environmental Law as a result of the past, present or future
operations of the Company or any of its Subsidiaries (or any
predecessor in interest to the Company or any of its Subsidi-
aries), or the past, present or future condition of any site or
facility owned, operated or leased by the Company or any of its
Subsidiaries (or any such predecessor in interest), or any
Release or threatened Release of any Hazardous Materials from any
such site or facility, including any such Release or threatened
Release which shall occur during any period when the Agent or any
Bank shall be in possession of any such site or facility follow-
ing the exercise by the Agent or any Bank of any of its rights
and remedies hereunder or under any of the Security Documents.
12.04 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may
be modified or supplemented only by an instrument in writing
signed by the Company, the Agent and the Majority Banks, or by
the Company and the Agent acting with the consent of the Majority
Banks, and any provision of this Agreement may be waived by the
Majority Banks or by the Agent acting with the consent of the
Majority Banks; provided that: (a) no modification, supplement
or waiver shall, unless by an instrument signed by all of the
Banks or by the Agent acting with the consent of all of the
Banks: (i) increase, or extend the term of any of the Commit-
ments, or extend the time or waive any requirement for the reduc-
tion or termination of any of the Commitments, (ii) extend the
date fixed for the payment of principal of or interest on any
Loan, any Reimbursement Obligation or any fee hereunder, (iii)
reduce the amount of any such payment of principal, (iv) reduce
the rate at which interest is payable thereon or any fee is
payable hereunder, (v) alter the rights or obligations of the
Company to prepay Loans, (vi) alter the terms of this Section
12.04, (vii) modify the definition of the term "Majority Banks",
"Majority Revolving Credit Banks" or "Majority Term Banks", or
modify in any other manner the number or percentage of the Banks
required to make any determinations or waive any rights hereunder
or to modify any provision hereof, (viii) waive any of the condi-
tions precedent set forth in Section 7 hereof or (ix) alter the
obligations of or release any Subsidiary Guarantor under Section
6 hereof provided that the Agent may, with the consent of the
Majority Banks, release any Subsidiary Guarantor which is the
subject of a disposition permitted by Section 9.05 hereof; (b)
any modification or supplement of any provision hereof relating
to the rights or obligations of Chase, in its capacity as the
Swingline Bank, shall require the consent of Chase; and (c) any
modification or supplement of Section 11 hereof shall require the
consent of the Agent.
12.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
12.06 Assignments and Participations.
(a) No Obligor may assign any of its rights or obliga-
tions hereunder or under the Notes without the prior consent of
all of the Banks and the Agent.
(b) Each Bank may assign any of its Loans, its Notes,
its Commitments, and, if such Bank is a Revolving Credit Bank,
its Revolving Letter of Credit Interest or, if such Bank is a
Barton Letter of Credit Bank, its Barton Letter of Credit Inter-
est (but only with the consent (which consent shall not be
unreasonably withheld) of the Company and the Agent, and in the
case of a Revolving Credit Commitment, Revolving Letter of Credit
Interest, Barton Letter of Credit Commitment or Barton Letter of
Credit Interest, the appropriate Issuing Banks); provided that
(i) no such consent by the Company or the Agent shall be required
in the case of any assignment to another Bank; (ii) any such
partial assignment shall be in an amount at least equal to
$5,000,000; (iii) each such assignment by a Bank of its Revolving
Credit Loans, Revolving Credit Note, Revolving Credit Commitment
or Revolving Letter of Credit Interest shall be made in such
manner so that the same portion of its Revolving Credit Loans,
Revolving Credit Note, Revolving Credit Commitment and Revolving
Letter of Credit Interest is assigned to the respective assignee;
and (iv) each such assignment by a Bank of its Term Loans or Term
Loan Commitment shall be made in such manner so that the same
portion of its Term Loans and Term Loan Commitment is assigned to
the respective assignee. Upon execution and delivery by the
assignee to the Company, the appropriate Issuing Banks and the
Agent of an instrument in writing pursuant to which such assignee
agrees to become a "Bank" hereunder (if not already a Bank)
having the Commitment(s), Loans, and if applicable, Letter of
Credit Interest and Barton Letter of Credit Interest specified in
such instrument, and upon consent thereto by the Company, the
appropriate Issuing Banks and the Agent, to the extent required
above, the assignee shall have, to the extent of such assignment
(unless otherwise provided in such assignment with the consent of
the Company, the appropriate Issuing Banks and the Agent), the
obligations, rights and benefits of a Bank hereunder holding the
Commitment(s), Loans, Revolving Letter of Credit Interest and
Barton Letter of Credit Interest (or portions thereof) assigned
to it (in addition to the Commitment(s), Loans, Revolving Letter
of Credit Interest and Barton Letter of Credit Interest, if any,
theretofore held by such assignee) and the assigning Bank shall,
to the extent of such assignment, be released from the
Commitment(s) (or portion(s) thereof) so assigned. Upon each
such assignment the assigning Bank shall pay the Agent an
assignment fee of $3,000.
(c) A Bank may sell or agree to sell to one or more
other Persons a participation in all or any part of any Loans,
Revolving Letter of Credit Interest or Barton Letter of Credit
Interest held by it, or in its Commitments, in which event each
purchaser of a participation (a "Participant") shall be entitled
to the rights and benefits of the provisions of Section 9.01(j)
hereof with respect to its participation in such Loans, Revolving
Letter of Credit Interest, Barton Letter of Credit Interest and
Commitments as if (and the Company shall be directly obligated to
such Participant under such provisions as if) such Participant
were a "Bank" for purposes of said Section, but, except as other-
wise provided in Section 4.07(c) hereof, shall not have any other
rights or benefits under this Agreement or any Note or any other
Basic Document (the Participant's rights against such Bank in
respect of such participation to be those set forth in the agree-
ments executed by such Bank in favor of the Participant). All
amounts payable by the Company to any Bank under Section 5 hereof
in respect of Loans, Revolving Letter of Credit Interest or
Barton Letter of Credit Interest held by it, and its Commitments,
shall be determined as if such Bank had not sold or agreed to
sell any participations in such Loans, Revolving Letter of Credit
Interest, Barton Letter of Credit Interest and Commitments, and
as if such Bank were funding each of such Loan, Revolving Letter
of Credit Interest, Barton Letter of Credit Interest and Commit-
ments in the same way that it is funding the portion of such
Loan, Revolving Letter of Credit Interest, Barton Letter of
Credit Interest and Commitments in which no participations have
been sold. In no event shall a Bank that sells a participation
agree with the Participant to take or refrain from taking any
action hereunder or under any other Basic Document except that
such Bank may agree with the Participant that it will not, with-
out the consent of the Participant, agree to (i) increase or
extend the term, or extend the time or waive any requirement for
the reduction or termination, of such Bank's related Commitment,
(ii) extend the date fixed for the payment of principal of or
interest on the related Loan or Loans, Reimbursement Obligations
or any portion of any fee hereunder payable to the Participant,
(iii) reduce the amount of any such payment of principal, (iv)
reduce the rate at which interest is payable thereon, or any fee
hereunder payable to the Participant, to a level below the rate
at which the Participant is entitled to receive such interest or
fee, (v) alter the rights or obligations of the Company to prepay
the related Loans or (vi) consent to any modification, supplement
or waiver hereof or of any of the other Basic Documents to the
extent that the same, under Section 11.09 or 12.04 hereof,
requires the consent of each Bank.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 12.06,
any Bank may assign and pledge all or any portion of its Loans
and its Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the
assigning Bank from its obligations hereunder.
(e) A Bank may furnish any information concerning the
Company or any of its Subsidiaries in the possession of such Bank
from time to time to assignees and participants (including pros-
pective assignees and participants), subject, however, to the
provisions of Section 12.12(b) hereof.
(f) Anything in this Section 12.06 to the contrary
notwithstanding, no Bank may assign or participate any interest
in any Loan or Reimbursement Obligation held by it hereunder to
the Company or any of its Affiliates without the prior written
consent of each Bank.
(g) Anything in this Section 12.06 to the contrary
notwithstanding, the Swingline Bank may not assign, or sell a
participation in, the Swingline Loans.
12.07 Survival. The obligations of the Company under
Sections 5.01, 5.05, 5.06 and 12.03 hereof and the obligations of
the Banks under Section 11.05 hereof shall survive the repayment
of the Loans and Reimbursement Obligations and the termination of
the Commitments.
12.08 Captions. The table of contents and captions
and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
12.09 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
12.10 Governing Law; Submission to Jurisdiction. This
Agreement and the Notes shall be governed by, and construed in
accordance with, the law of the State of New York. Each Obligor
hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and
of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. Each
Obligor irrevocably waives, to the fullest extent permitted by
applicable law, any objection which it may now or hereafter have
to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
12.11 Waiver of Jury Trial. EACH OBLIGOR, THE AGENT
AND EACH BANK HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.12 Treatment of Certain Information.
(a) The Company acknowledges that from time to time
financial advisory, investment banking and other services may be
offered or provided to the Company or one or more of its Subsidi-
aries (in connection with this Agreement or otherwise) by any
Bank or by one or more subsidiaries or affiliates of such Bank
and the Company hereby authorizes each Bank to share any
information delivered to such Bank by the Company and its
Subsidiaries pursuant to this Agreement, or in connection with
the decision of such Bank to enter into this Agreement, to any
such subsidiary or affiliate.
(b) Each Bank and the Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees
and representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures for
handling confidential information of this nature and in accor-
dance with safe and sound banking practices, any non-public
information supplied to it by the Company pursuant to this Agree-
ment which is identified by the Company as being confidential at
the time the same is delivered to the Banks or the Agent;
provided that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for any of the
Banks or the Agent, (iii) to bank examiners, auditors or
accountants, (iv) to the Agent or any other Bank (or to Chase
Securities, Inc.), (v) in connection with any litigation to which
any one or more of the Banks or the Agent is a party, (vi) to a
subsidiary or affiliate of such Bank as provided in clause (a)
above or (vii) to any assignee or participant (or prospective
assignee or participant) if such assignee or participant (or
prospective assignee or participant) first executes and delivers
to the respective Bank a Confidentiality Agreement substantially
in the form of Exhibit J hereto; and provided further that in no
event shall any Bank or the Agent be obligated or required to
return any materials furnished by the Company.
12.13 Notices under the Senior Subordinated Debt
Documents. Without the authorization of the Majority Banks,
neither the Agent nor any Bank shall send to the Company or the
Trustee under the Senior Subordinated Note Indenture any notice
of a Default or Event of Default hereunder if such notice would
result in a payment block in respect of the Senior Subordinated
Notes.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
CANANDAIGUA WINE COMPANY, INC.
By
Title:
Address for Notices:
116 Buffalo Street
Canandaigua, New York 14424-1086
Attention: Robert Sands, Esq.
Telecopier No.: (716) 394-6017
Telephone No.: (716) 394-7900
SUBSIDIARY GUARANTORS
BATAVIA WINE CELLARS, INC.
BISCEGLIA BROTHERS WINE COMPANY
CALIFORNIA PRODUCTS COMPANY
GUILD WINERIES & DISTILLERIES, INC.
(formerly known as Canandaigua California Acquisition Corp.)
TENNER BROTHERS, INC.
WIDMER'S WINE CELLARS, INC.
By_______________________________
Title:
BARTON INCORPORATED
BARTON BRANDS, LTD.
BARTON BEERS, LTD.
BARTON BRANDS OF CALIFORNIA, INC.
BARTON BRANDS OF GEORGIA, INC.
BARTON DISTILLERS IMPORT CORP.
STEVENS POINT BEVERAGE COMPANY
MONARCH WINE COMPANY,
LIMITED PARTNERSHIP
By Barton Management, Inc.,
Corporate General Partner
BARTON MANAGEMENT, INC.
VINTNERS INTERNATIONAL COMPANY, INC.
(formerly known as Canandaigua/Vintners Acquisition Corp.)
By_______________________________
Title:
BARTON FINANCIAL CORPORATION
By_______________________________
Title:
CANANDAIGUA WEST, INC.
By_______________________________
Title:
BANKS
Barton Letter of Credit THE CHASE MANHATTAN BANK
Commitment (NATIONAL ASSOCIATION)
$7,804,666.06
Revolving Credit Commitment
$51,200,823.42 By________________________________
Title:
Term Loan Commitment
$61,994,510.52
Lending Office for all Loans:
The Chase Manhattan Bank
(National Association),
1 Chase Manhattan Plaza
New York, New York 10081
Address for Notices:
The Chase Manhattan Bank, N.A.,
Rochester Division
1 Chase Square
Corporate Industries Dept.
Rochester, New York 14643
Attention: Diana Lauria
Vice President
Telecopier No.: (716) 258-4258
Telephone No.: (716) 258-5458
Barton Letter of Credit THE CHASE MANHATTAN BANK
Commitment (NATIONAL ASSOCIATION),
$3,454,716.75 ROCHESTER DIVISION
Revolving Credit Commitment
$22,663,921.91 By________________________________
Title:
Term Loan Commitment
$27,441,721.69
Lending Office for all Loans:
The Chase Manhattan Bank
(National Association),
Rochester Division
1 Chase Manhattan Plaza
New York, New York 10081
Address for Notices:
The Chase Manhattan Bank, N.A.,
Rochester Division
1 Chase Square
Corporate Industries Dept.
Rochester, New York 14643
Attention: Diana Lauria
Vice President
Telecopier No.: (716) 258-4258
Telephone No.: (716) 258-5458
Barton Letter of Credit THE FIRST NATIONAL BANK OF BOSTON
Commitment
$2,580,054.90
Revolving Credit Commitment By
$16,925,892.04 Title:
Term Loan Commitment
$20,494,053.06
Lending Office for all Loans:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Address for Notices:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention: J. Peter Mitchell
Director
Telecopier No.: (617) 434-6685
Telephone No.: (617) 434-8307
Barton Letter of Credit THE FIRST NATIONAL BANK OF CHICAGO
Commitment
$2,580,054.90
Revolving Credit Commitment
$16,925,892.04 By
Title:
Term Loan Commitment
$20,494,053.06
Lending Office for all Loans:
The First National Bank of Chicago
One First National Plaza, Suite 0173
Chicago, Illinois 60670
Address for Notices:
The First National Bank of Chicago
One First National Plaza, Suite 0173
Chicago, Illinois 60670
Attention: Mary L. Hart
Vice President
Telecopier No.: (312) 732-2715
Telephone No.: (312) 732-6137
Barton Letter of Credit MANUFACTURERS AND TRADERS TRUST
Commitment COMPANY
$2,580,054.90
Revolving Credit Commitment
$16,925,892.04 By
Title:
Term Loan Commitment
$20,494,053.06
Lending Office for all Loans:
Manufacturers and Traders Trust
Company
44 Exchange Street
Rochester, New York 14614
Address for Notices:
Manufacturers and Traders Trust
Company
44 Exchange Street
Rochester, New York 14614
Attention: Philip M. Smith
Regional Senior
Vice-President
Telecopier No.: (716) 325-5105
Telephone No.: (716) 258-8261
Barton Letter of Credit WELLS FARGO BANK, N.A.
Commitment
$2,580,054.90
Revolving Credit Commitment
$16,925,892.04 By
Title:
Term Loan Commitment
$20,494,053.06
Lending Office for all Loans:
Wells Fargo Bank, N.A.
420 Montgomery Street, 9th Floor
San Francisco, California 94104
Address for Notices:
Wells Fargo Bank, N.A.
420 Montgomery Street, 9th Floor
San Francisco, California 94164
Attention: Lenny L. Mason
Assistant Vice President
Telecopier No.: (415) 421-1352
Telephone No.: (415) 396-5997
Barton Letter of Credit NATIONAL CITY BANK
Commitment
$1,612,534.30
Revolving Credit Commitment
$10,578,682.53 By
Title:
Term Loan Commitment
$12,808,783.17
Lending Office for all Loans:
National City Bank
1900 East Ninth Street, 10th Floor
Cleveland, Ohio 44114
Address for Notices:
National City Bank
1900 East Ninth Street, 10th Floor
Cleveland, Ohio 44114
Attention: Susan Zoldak
Account Representative
Telecopier No.: (216) 575-9396
Telephone No.: (216) 575-9322
Barton Letter of Credit NBD BANK, N.A.
Commitment
$1,612,534.30
Revolving Credit Commitment
$10,578,682.53 By
Title:
Term Loan Commitment
$12,808,783.17
Lending Office for all Loans:
NBD Bank, N.A.
National Banking Division - East
611 Woodward Avenue
Detroit, Michigan 48226
Address for Notices:
NBD Bank, N.A.
National Banking Division - East
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Karl I. Bell
Vice President
Telecopier No.: (313) 225-1586
Telephone No.: (313) 225-3368
Barton Letter of Credit PNC BANK, NATIONAL ASSOCIATION
Commitment
$1,612,534.30
Revolving Credit Commitment
$10,578,682.53 By
Title:
Term Loan Commitment
$12,808.783.17
Lending Office for all Loans:
PNC Bank, National Association
One PNC Plaza
5th Avenue and Wood Street
Pittsburgh, PA 15265
Address for Notices:
PNC Bank, National Association
335 Madison Avenue
10th Floor
New York, New York 10017
Attention: Thomas R. Colwell
Assistant Vice President
Telecopier No.: (212) 557-5461
or 5463
Telephone No.: (212) 557-5345
Barton Letter of Credit THE DAIWA BANK, LTD.
Commitment
$1,290,027.45 By________________________________
Title:
Revolving Credit Commitment
$8,462,946.02 By
Title:
Term Loan Commitment
$10,247,026.53
Lending Office for all Loans:
The Daiwa Bank, Ltd. (Chicago Branch)
233 South Wacker Drive, Suite 4500
Chicago, Illinois 60606
Address for Notices (copy to Chicago
Branch):
The Daiwa Bank, Ltd.
450 Lexington Avenue, Suite 1700
New York, New York 10017
Attention: James Drum
Assistant Vice President
Telecopier No.: (212) 818-0865
Telephone No.: (212) 808-2340
Barton Letter of Credit AMERICAN NATIONAL BANK AND TRUST
Commitment COMPANY OF CHICAGO
$492,767.24
Revolving Credit Commitment By________________________________
$3,232,692.90 Title:
Term Loan Commitment
$3,914,179.51 Lending Office for all Loans:
American National Bank and Trust
Company of Chicago
33 North LaSalle
Chicago, Illinois 60690
Address for Notices:
American National Bank and Trust
Company of Chicago
33 North LaSalle
Chicago, Illinois 60690
Attention: Gregory J. Purcell
Second Vice President
Telecopier No.: (312) 661-3566
Telephone No.: (312) 661-5027
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By
Title:
Address for Notices to
Chase as Agent:
The Chase Manhattan Bank
(National Association)
4 MetroTech Center
13th Floor
Brooklyn, New York 11245
Attention: New York Agency
Telecopier No.: (718) 242-6910
Telephone No.: (718) 242-7979
Second Amendment and Restatement dated as of August 5, 1994
of Amendment and Restatement of Credit Agreement
dated as of June 29, 1993
among
Canandaigua Wine Company, Inc., it Subsidiaries
and certain banks for which
The Chase Manhattan Bank (National Association) acts as agent
Identification of Contents of Omitted Schedules and Exhibits
Schedule I Material Agreements and Liens
Schedule II Hazardous Materials
Schedule III Subsidiaries and Investments
Schedule IV Litigation
Schedule V Real Property
Schedule VI Life Insurance Agreements
Schedule VII Existing Loan Reallocation
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Term Loan Note
Exhibit A-3 Form of Swingline Note
Exhibit B Form of Borrowing Base Certificate
Exhibit C Form of Security Agreement
Exhibit D-1 Form of Modification and Confirmation of Deed of
Trust (California-Bisceglia and Guild)
Exhibit D-2 Form of Modification and Confirmation of Deed of
Trust (Vintners)
Exhibit D-3 Form of Modification and Confirmation of New York
Mortgages
Exhibit D-4 Form of Modification and Confirmation of Kentucky
Mortgage
Exhibit E Form of New York Mortgage
Exhibit F Form of Kentucky Mortgage
Exhibit G Form of California Deed of Trust
Exhibit H-1 Form of Opinion of Special Counsel to Obligors
Exhibit H-2 Form of Opinion of California Counsel to Obligors
Exhibit H-3 Form of Opinion of Kentucky Counsel to Obligors
Exhibit H-4 Form of Opinion of Special New York Counsel to
Chase
Exhibit J Form of Confidentiality Agreement
Exhibit K Form of Barton Letter of Credit