EXHIBIT 2(c)
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
SECOND AMENDED AND RESTATED SECURITY AGREEMENT 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 hereof (individually, a
"Subsidiary Guarantor" and, collectively, the "Subsidiary
Guarantors" and, together with the Company, the "Obligors"); and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as agent for the
lenders party to the Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the
"Agent").
The Company, certain of the Subsidiary Guarantors (the
"Existing Guarantors"), certain lenders and the Agent are parties
to an Amendment and Restatement of Credit Agreement dated as of
June 29, 1993 (the "Existing Credit Agreement"). In connection
with the execution and delivery of the Existing Credit Agreement,
the Company, the Existing Guarantors and the Agent entered into
an Amended and Restated Security Agreement dated as of June 29,
1993 (the "Existing Security Agreement") pursuant to which the
Company and the Existing Guarantors granted to the Agent a
security interest in all the Collateral (as defined therein).
Concurrently with the execution and delivery of this
Agreement, the Company, the Subsidiary Guarantors, certain
lenders and the Agent are entering into a Second Amendment and
Restatement dated as of August 5, 1994 of the Existing Credit
Agreement (the Existing Credit Agreement, as so amended and
restated and as further modified and supplemented and in effect
from time to time, the "Credit Agreement"), providing, subject to
the terms and conditions thereof, for the extension and renewal
of the Company's indebtedness under the Existing Credit Agreement
and for additional extensions of credit (by making of loans and
issuing a letter of credit) to the Company in an aggregate
principal or face amount (including the indebtedness under the
Existing Credit Agreement) not exceeding $437,200,000. In
addition, the Company may from time to time be obligated to
various of the Banks in respect of certain Interest Rate
Protection Agreements under and as defined in the Credit
Agreement (such indebtedness being herein referred to as "Swap
Indebtedness").
To induce the Banks to enter into the Credit Agreement
and to extend credit thereunder, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Obligors and the Agent have agreed that the
Existing Security Agreement shall be hereby amended and restated
in its entirety as follows:
Section 1. Definitions. Terms defined in the Credit
Agreement are used herein as defined therein. In addition, as
used herein:
"Accounts" shall have the meaning ascribed thereto in
Section 3(d) hereof.
"Collateral" shall have the meaning ascribed thereto in
Section 3 hereof.
"Collateral Account" shall have the meaning ascribed
thereto in Section 4.01 hereof.
"Crops" shall have the meaning ascribed thereto in
Section 3(n) hereof.
"Documents" shall have the meaning ascribed thereto in
Section 3(l) hereof.
"Equipment" shall have the meaning ascribed thereto in
Section 3(h) hereof.
"Fixtures" shall have the meaning ascribed thereto in
Section 3(i) hereof.
"Instruments" shall have the meaning ascribed thereto
in Section 3(e) hereof.
"Intellectual Property" shall mean all Patent
Collateral and all Trademark Collateral, together with
(a) all inventions, processes, production methods,
proprietary information, know-how and trade secrets; (b) all
licenses or user or other agreements granted to any Obligor
with respect to any of the foregoing, in each case whether
now or hereafter owned or used including, without limita-
tion, the licenses or other agreements with respect to the
Patent Collateral or the Trademark Collateral, listed in
Annex 4 hereto; (c) all information, customer lists,
identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge,
surveys, engineering reports, test reports, manuals, mater-
ials standards, processing standards, performance standards,
catalogs, computer and automatic machinery software and
programs; (d) all field repair data, sales data and other
information relating to sales or service of products now or
hereafter manufactured; (e) all accounting information and
all media in which or on which any information or knowledge
or data or records may be recorded or stored and all com-
puter programs used for the compilation or printout of such
information, knowledge, records or data; (f) all licenses,
consents, permits, variances, certifications and approvals
of governmental agencies now or hereafter held by any
Obligor; and (g) all causes of action, claims and warranties
now or hereafter owned or acquired by any Obligor in respect
of any of the items listed above.
"Inventory" shall have the meaning ascribed thereto in
Section 3(f) hereof.
"Issuers" shall mean, collectively, the respective
corporations identified in Annex 1 hereto under the caption
"Issuers".
"Monarch" shall mean Monarch Wine Company, Limited
Partnership, a New York limited partnership.
"Motor Vehicles" shall mean motor vehicles, tractors,
trailers and other like property, whether or not the title
thereto is governed by a certificate of title or ownership.
"Partnership Agreement" shall mean the Amendment and
Restatement of Agreement of Limited Partnership of Monarch
Wine Company, Limited Partnership dated August 10, 1987 and
effective as of July 31, 1987 by and among Barton
Management, Inc., an Illinois corporation, as general
partner and the limited partners identified therein, as the
same shall be modified and supplemented and in effect from
time to time.
"Patent Collateral" shall mean all Patents, whether now
owned or hereafter acquired by any Obligor, including
without limitation each Patent identified in Annex 2 hereto.
"Patents" shall mean all patents and patent applica-
tions, including, without limitation, the inventions and
improvements described and claimed therein together with the
reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, all income, royalties,
damages and payments now or hereafter due and/or payable
under and with respect thereto, including, without limita-
tion, damages and payments for past or future infringements
thereof, the right to sue for past, present and future
infringements thereof, and all rights corresponding thereto
throughout the world.
"Pledged Stock" shall have the meaning ascribed thereto
in Section 3(a) hereof.
"Secured Obligations" shall mean, collectively, (a) the
principal of and interest on the Loans made by the Banks to,
and the Notes held by each Bank of, the Company and all
other amounts from time to time owing to the Banks or the
Agent by the Obligors under the Basic Documents including,
without limitation, all Reimbursement Obligations, all Swap
Indebtedness and interest thereon, (b) all obligations of
the Subsidiary Guarantors under the Credit Agreement and the
other Basic Documents and (c) all obligations of the
Obligors to the Banks and the Agent hereunder.
"Stock Collateral" shall mean, collectively, the
Collateral described in clauses (a) through (c) of Section 3
hereof and the proceeds of and to any such property and, to
the extent related to any such property or such proceeds,
all books, correspondence, credit files, records, invoices
and other papers.
"Trademark Collateral" shall mean all Trademarks,
whether now owned or hereafter acquired by any Obligor,
including without limitation each Trademark identified in
Annex 3 hereto. Notwithstanding the foregoing, the
Trademark Collateral does not and shall not include any
Trademark which would be rendered invalid, abandoned, void
or unenforceable by reason of its being included as part of
the Trademark Collateral.
"Trademarks" shall mean all trade names, trademarks and
service marks, logos, trademark and service mark registra-
tions, and applications for trademark and service mark
registrations, including, without limitation, all renewals
of trademark and service mark registrations, all rights
corresponding thereto throughout the world, the right to
recover for all past, present and future infringements
thereof, all other rights of any kind whatsoever accruing
thereunder or pertaining thereto, together, in each case,
with the product lines and goodwill of the business
connected with the use of, and symbolized by, each such
trade name, trademark and service mark.
"Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect in the State of New York from
time to time.
Section 2. Representations and Warranties. Each
Obligor represents and warrants to the Banks and the Agent that:
(a) such Obligor is the sole beneficial owner of the
Collateral in which it purports to grant a security interest
pursuant to Section 3 hereof and no Lien exists or will
exist upon any such Collateral at any time (and, with
respect to the Stock Collateral, no right or option to
acquire the same exists in favor of any other Person),
except for Liens permitted under Section 9.06 of the Credit
Agreement and except for the pledge and security interest in
favor of the Agent for the benefit of the Banks created or
provided for herein, which pledge and security interest
constitutes a first priority perfected pledge and security
interest in and to all of such Collateral (other than Crops
or Intellectual Property registered or otherwise located
outside of the United States of America);
(b) the Pledged Stock evidenced by the certificates
identified under the name of such Obligor in Annex 1 hereto
is, and all other Pledged Stock in which such Obligor shall
hereafter grant a security interest pursuant to Section 3
hereof will be, duly authorized, validly issued, fully paid
and nonassessable and none of such Pledged Stock is or will
be subject to any contractual restriction, or any restric-
tion under the charter or by-laws of the respective Issuers
of such Pledged Stock, upon the transfer of such Pledged
Stock (except for any such restriction contained herein or
in the Credit Agreement);
(c) the Pledged Stock evidenced by the certificates
identified under the name of such Obligor in Annex 1 hereto
constitutes all of the issued and outstanding shares of
capital stock of any class of the Issuers beneficially owned
by such Obligor on the date hereof (whether or not regis-
tered in the name of such Obligor) and said Annex 1
correctly identifies, as at the date hereof, the respective
Issuers of such Pledged Stock, the respective class and par
value of the shares comprising such Pledged Stock and the
respective number of shares (and registered owner thereof)
evidenced by each such certificate;
(d) Annexes 2 and 3 hereto set forth a complete and
correct list of all Patents and Trademarks (other than
(i) Patents which are not used as of the date hereof,
(ii) Trademarks associated with products which generate less
than $100,000 in annual revenues only some of which are set
forth on Annexes 2 and 3 hereto and (iii) Trademarks which
are not registered with the United States Patent and
Trademark Office (collectively, "Excluded Patents and
Trademarks")) owned by such Obligor on the date hereof;
except with respect to Excluded Patents and Trademarks and
pursuant to licenses and other user agreements entered into
by such Obligor in the ordinary course of business, which
are listed in Annex 4 hereto, such Obligor has done nothing
to authorize or enable any other Person to use, any Patent
or Trademark listed in said Annexes 2 and 3, and all
registrations listed in said Annexes 2 and 3 are valid and
in full force and effect; except with respect to Excluded
Patents and Trademarks and as may be set forth in said
Annex 4, to the best of their knowledge the Obligors own and
possess the right to use all Patents and Trademarks;
(e) Annex 4 hereto sets forth a complete and correct
list of all licenses (other than licenses not used as of the
date hereof) and other user agreements included in the
Intellectual Property on the date hereof;
(f) to such Obligor's knowledge, (i) except as set
forth in Annex 4 hereto, there is no violation by others of
any right of such Obligor with respect to any Patent or
Trademark listed in Annexes 2 and 3 hereto under the name of
such Obligor and (ii) such Obligor is not infringing in any
respect upon any Patent or Trademark of any other Person;
and no proceedings have been instituted or are pending
against such Obligor or, to such Obligor's knowledge,
threatened, and no claim against such Obligor has been
received by such Obligor, alleging any such violation,
except as may be set forth in said Annex 4;
(g) such Obligor does not own any Trademarks regis-
tered in the United States of America to which the last
sentence of the definition of Trademark Collateral applies;
(h) any goods now or hereafter produced by the Company
or any of its Subsidiaries included in the Collateral have
been and will be produced in compliance with the
requirements of the Fair Labor Standards Act, as amended;
(i) the Partnership Agreement, a true and complete
copy of which has been furnished to the Agent, has been duly
authorized, executed and delivered by each of the parties
thereto, has not been amended or otherwise modified since
June 24, 1993, is in full force and effect and is binding
upon and enforceable against each of the parties thereto in
accordance with its terms except as the enforceability
thereof may be limited by (A) bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting
creditors' rights generally, (B) general principles of
equity (regardless of whether enforceability is considered
in a proceeding in equity or at law) and (C) an implied
covenant of good faith and fair dealing. No party to the
Partnership Agreement is in default thereunder; and
(j) as of the Effective Date, Annex 5 hereto sets
forth the chief executive office for each Obligor.
Section 3. Collateral. As collateral security for the
prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations, each
Obligor hereby pledges and grants to the Agent, for the benefit
of the Banks as hereinafter provided (and, if an Obligor party to
the Existing Security Agreement, hereby confirms the pledge and
grant to the Agent pursuant to the Existing Security Agreement),
a security interest in all of such Obligor's right, title and
interest in the following property, whether now owned by such
Obligor or hereafter acquired and whether now existing or
hereafter coming into existence, and wherever located (all being
collectively referred to herein as "Collateral"):
(a) the respective shares of common stock of the
Issuers evidenced by the certificates identified in Annex 1
hereto under the name of such Obligor and all other shares
of capital stock of whatever class of the Issuers, now or
hereafter owned by such Obligor, together with in each case
the certificates evidencing the same (collectively, the
"Pledged Stock");
(b) all shares, securities, moneys or property
representing a dividend on any of the Pledged Stock, or
representing a distribution or return of capital upon or in
respect of the Pledged Stock, or resulting from a split-up,
revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor,
and any subscription warrants, rights or options issued to
the holders of, or otherwise in respect of, the Pledged
Stock;
(c) without affecting the obligations of the Company
under any provision prohibiting such action hereunder or
under the Credit Agreement, in the event of any consoli-
dation or merger in which any Issuer is not the surviving
corporation, all shares of each class of the capital stock
of the successor corporation (unless such successor
corporation is the Company itself) formed by or resulting
from such consolidation or merger (the Pledged Stock,
together with all other certificates, shares, securities,
properties or moneys as may from time to time be pledged
hereunder pursuant to clause (a) or (b) above and this
clause (c) being herein collectively called the "Stock
Collateral");
(d) all accounts and general intangibles (each as
defined in the Uniform Commercial Code) of such Obligor
constituting any right to the payment of money, including
(but not limited to) all moneys due and to become due to
such Obligor in respect of any loans or advances or for
Inventory or Equipment or other goods sold or leased or for
services rendered, all moneys due and to become due to such
Obligor under any guarantee (including a letter of credit)
of the purchase price of Inventory or Equipment sold by such
Obligor and all tax refunds (such accounts, general intangi-
bles and moneys due and to become due being herein called
collectively "Accounts");
(e) all instruments, chattel paper or letters of
credit (each as defined in the Uniform Commercial Code) of
such Obligor evidencing, representing, arising from or
existing in respect of, relating to, securing or otherwise
supporting the payment of, any of the Accounts, including
(but not limited to) promissory notes, drafts, bills of
exchange and trade acceptances (herein collectively called
"Instruments");
(f) all inventory (as defined in the Uniform
Commercial Code) of such Obligor, all goods obtained by such
Obligor in exchange for such inventory, and any products
made or processed from such inventory including all
substances, if any, commingled therewith or added thereto
(herein collectively called "Inventory");
(g) all other accounts or general intangibles of such
Obligor not constituting Accounts including, without limita-
tion, all Intellectual Property of such Obligor;
(h) all equipment (as defined in the Uniform
Commercial Code) of such Obligor other than equipment leased
but not owned by including without limitation Motor Vehicles
(herein collectively called "Equipment");
(i) all such tangible Property (including all
machinery, apparatus, equipment, fittings and articles of
personal Property) now or hereafter located on or at or
attached to real Property owned or leased by such Obligor
(the "Fixture Holder") located in the State of New York as
more particularly described in Annex 6 hereto (herein
collectively called the "Property") that an interest in such
tangible Property arises under applicable real estate law
(herein collectively called "Fixtures");
(j) each contract and other agreement of such Obligor
relating to the sale or other disposition of Inventory,
Equipment or Fixtures;
(k) all rights, claims and benefits (including all
indemnities) of such Obligor arising under the Barton Stock
Purchase Agreement or the Vintners Acquisition Agreement or
the Heublein Asset Purchase Agreement;
(l) all documents of title (as defined in the Uniform
Commercial Code) or other receipts of such Obligor covering,
evidencing or representing Inventory or Equipment (herein
collectively called "Documents");
(m) all rights, claims and benefits of such Obligor
against any Person arising out of, relating to or in
connection with Inventory or Equipment purchased by such
Obligor, including, without limitation, any such rights,
claims or benefits against any Person storing or
transporting such Inventory or Equipment;
(n) all agricultural or horticultural crops raised,
cultivated or otherwise located on or in land owned or
leased by such Obligor or improvements thereon, and all
products thereof (herein collectively called "Crops");
(o) the balance from time to time in the Collateral
Account;
(p) the partnership interest of such Obligor in
Monarch, all certificates (if any) representing or
evidencing such partnership interest and all of its rights
under the Partnership Agreement (including, without
limitation, all of its right, title and interest as a
partner to participate in the operation or management of
Monarch and all of its rights to property, assets,
partnership interests and distributions under the
Partnership Agreement);
(q) all present and future rights of such Obligor to
receive payment of money or other distribution or payment
arising out of or in connection with its partnership
interest in Monarch and its rights under the Partnership
Agreement; and
(r) all other tangible and intangible property of such
Obligor, including, without limitation, all proceeds,
products, offspring, rents, profits, income, benefits,
accessions, substitutions and replacements of and to any of
the property of such Obligor described in clauses (a)
through (o) above in this Section 3 (including, without
limitation, any proceeds of insurance thereon), and, to the
extent related to any property described in said clauses or
such proceeds, products and accessions, all books, corres-
pondence, credit files, records, invoices and other papers,
including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under
the control of such Obligor or any computer bureau or
service company from time to time acting for such Obligor;
provided that, in the case of any of the Accounts and Instruments
described in clause (d) or (e) above, or any contract or
agreement referred to in clause (j) above, or any of the other
tangible or intangible Property of any Obligor referred to in
clause (p) above, such Account and Instrument, such contract and
agreement, and such tangible and intangible Property, shall not
be included in "Collateral" hereunder to the extent that a grant
of a security interest therein would, under applicable law, be
void or invalid.
Section 4. Cash Proceeds of Collateral.
4.01 Collateral Account. Pursuant to the Existing
Security Agreement a cash collateral account with the Agent (the
"Collateral Account") has been established in the name and under
the control of Chase into which there shall be deposited from
time to time the cash proceeds of any of the Collateral
(including proceeds of insurance thereon) required to be deliv-
ered to the Agent pursuant hereto and into which the Obligors may
from time to time deposit any additional amounts which any of
them wishes to pledge to the Agent for the benefit of the Banks
as additional collateral security hereunder. The balance from
time to time in the Collateral Account shall constitute part of
the Collateral hereunder and shall not constitute payment of the
Secured Obligations until applied as hereinafter provided.
Except as expressly provided in the next sentence, the Agent
shall remit the collected balance standing to the credit of the
Collateral Account to or upon the order of the Obligors as the
Obligors through the Company shall from time to time instruct.
However, at any time following the occurrence and during the
continuance of an Event of Default, the Agent may (and, if
instructed by the Banks as specified in Section 11.03 of the
Credit Agreement, shall) in its (or their) discretion apply or
cause to be applied (subject to collection) the balance from time
to time standing to the credit of the Collateral Account to the
payment of the Secured Obligations in the manner specified in
Section 5.09 hereof. The balance from time to time in the
Collateral Account shall be subject to withdrawal only as
provided herein.
4.02 Proceeds of Accounts. At any time after the
occurrence and during the continuance of a Default, each Obligor
shall instruct (and, in the event that such Obligor fails to so
instruct within 5 Business Days of the Agent's request therefor,
such Obligor hereby authorizes the Agent so to instruct) all
account debtors and other Persons obligated in respect of all
Accounts to make all payments in respect of the Accounts either
(a) directly to the Agent (by instructing that such payments be
remitted to a post office box which shall be in the name and
under the control of the Agent) or (b) to one or more other banks
in the United States of America (by instructing that such pay-
ments be remitted to a post office box which shall be in the name
and under the control of the Agent) under arrangements, in form
and substance satisfactory to the Agent pursuant to which such
Obligor shall have irrevocably instructed such other bank (and
such other bank shall have agreed) to remit all proceeds of such
payments directly to the Agent for deposit into the Collateral
Account. All payments made to the Agent, as provided in the
preceding sentence, shall be immediately deposited in the
Collateral Account. In addition to the foregoing, each Obligor
agrees that if the proceeds of any Collateral hereunder (includ-
ing the payments made in respect of Accounts) shall be received
by it, such Obligor shall as promptly as possible deposit such
proceeds into the Collateral Account. Until so deposited, all
such proceeds shall be held in trust by such Obligor for and as
the property of the Agent and shall not be commingled with any
other funds or property of such Obligor.
4.03 Investment of Balance in Collateral Account.
Amounts on deposit in the Collateral Account shall be invested
from time to time in such Permitted Investments as the Obligors
through the Company (or, after the occurrence and during the
continuance of a Default, the Agent) shall determine, which
Permitted Investments shall be held in the name and be under the
control of the Agent, provided that at any time after the occur-
rence and during the continuance of an Event of Default, the
Agent may (and, if instructed by the Banks as specified in
Section 11.03 of the Credit Agreement, shall) in its (or their)
discretion at any time and from time to time elect to liquidate
any such Permitted Investments and to apply or cause to be
applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 5.09 hereof.
4.04 Cover for Letter of Credit Liabilities. Amounts
deposited into the Collateral Account as cover for Letter of
Credit Liabilities under the Credit Agreement pursuant to Section
2.11(h) or Section 10 thereof shall be held by the Agent in a
separate sub-account (designated "Letter of Credit Liabilities
Sub-Account") and all amounts held in such sub-account shall
constitute collateral security first for the Letter of Credit
Liabilities outstanding from time to time and second as
collateral security for the other Secured Obligations hereunder.
Section 5. Further Assurances; Remedies. In
furtherance of the grant of the pledge and security interest
pursuant to Section 3 hereof, the Obligors hereby jointly and
severally agree with each Bank and the Agent as follows:
5.01 Delivery and Other Perfection. Each Obligor
shall:
(a) if any of the above-described shares, securities,
moneys or property required to be pledged by such Obligor
under clauses (a), (b) and (c) of Section 3 hereof are
received by such Obligor, forthwith either (x) transfer and
deliver to the Agent such shares or securities so received
by such Obligor (together with the certificates for any such
shares and securities duly endorsed in blank or accompanied
by undated stock powers duly executed in blank) all of which
thereafter shall be held by the Agent, pursuant to the terms
of this Agreement, as part of the Collateral or (y) take
such other action as the Agent shall deem necessary or
appropriate to duly record the Lien created hereunder in
such shares, securities, monies or property referred to in
said clauses (a), (b) and (c);
(b) deliver and pledge to the Agent any and all
Instruments, endorsed and/or accompanied by such instruments
of assignment and transfer in such form and substance as the
Agent may request; provided, that so long as no Default
shall have occurred and be continuing, such Obligor may
retain for collection in the ordinary course any Instruments
received by it in the ordinary course of business and the
Agent shall, promptly upon request of such Obligor through
the Company, make appropriate arrangements for making any
other Instrument pledged by such Obligor available to it for
purposes of presentation, collection or renewal (any such
arrangement to be effected, to the extent deemed appropriate
by the Agent, against trust receipt or like document);
(c) give, execute, deliver, file and/or record any
financing statement, notice, instrument, document, agreement
or other papers that may be necessary or desirable (in the
judgment of the Agent) to create, preserve, perfect or
validate any security interest granted pursuant hereto or to
enable the Agent to exercise and enforce its rights here-
under with respect to such security interest, including,
without limitation, causing any or all of the Stock
Collateral to be transferred of record into the name of the
Agent or its nominee (and the Agent agrees that if any Stock
Collateral is transferred into its name or the name of its
nominee, the Agent will thereafter promptly give to the
respective Obligor copies of any notices and communications
received by it with respect to the Stock Collateral pledged
by such Obligor hereunder), provided that notices to account
debtors in respect of any Accounts or Instruments shall be
subject to the provisions of clause (h) below;
(d) keep full and accurate books and records relating
to the Collateral, and stamp or otherwise mark such books
and records in such manner as the Agent may reasonably
require in order to reflect the security interests granted
by this Agreement;
(e) furnish to the Agent from time to time (but,
unless a Default shall have occurred and be continuing, no
more frequently than annually on August 31 of each year)
statements and schedules further identifying and describing
the Patent Collateral and the Trademark Collateral (and
noting in particular any additional patents and trademarks
acquired by, or requested in the name of, the Obligors) and
such other reports in connection with the Patent Collateral
and the Trademark Collateral, as the Agent may reasonably
request, all in reasonable detail;
(f) promptly upon request of the Agent, following
receipt by the Agent of any statements, schedules or reports
pursuant to clause (e) above, modify this Agreement by
amending Annex 2 and/or 3 hereto to include any Patent or
Trademark which becomes part of the Collateral under this
Agreement;
(g) permit representatives of the Agent, upon
reasonable notice, at any time during normal business hours
to inspect and make abstracts from its books and records
pertaining to the Collateral, and permit representatives of
the Agent to be present at such Obligor's place of business
to receive copies of all communications and remittances
relating to the Collateral, and forward copies of any
notices or communications received by such Obligor with
respect to the Collateral, all in such manner as the Agent
may require;
(h) upon the occurrence and during the continuance of
any Default, upon request of the Agent, promptly notify
(and, in the event that such Obligor does not so notify
within 5 Business Days, such Obligor hereby authorizes the
Agent so to notify) each account debtor in respect of any
Accounts or Instruments that such Collateral has been
assigned to the Agent hereunder, and that any payments due
or to become due in respect of such Collateral are to be
made directly to the Agent.
5.02 Other Financing Statements and Liens. Except as
otherwise permitted under Section 9.06 of the Credit Agreement,
without the prior written consent of the Agent (granted with the
authorization of the Banks as specified in Section 11.09 of the
Credit Agreement), the Obligors shall not file or suffer to be on
file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Agent is not named as the
sole secured party for the benefit of the Banks.
5.03 Preservation of Rights. The Agent shall not be
required to take steps necessary to preserve any rights against
prior parties to any of the Collateral.
5.04 Special Provisions Relating to Certain
Collateral.
(a) Stock Collateral.
(1) The Obligors will cause the Stock Collateral to
constitute at all times 100% of the total number of shares of
each class of capital stock of each Issuer then outstanding.
(2) So long as no Event of Default shall have occurred
and be continuing, the Obligors shall have the right to exercise
all voting, consensual and other powers of ownership pertaining
to the Stock Collateral for all purposes not inconsistent with
the terms of this Agreement, the Credit Agreement, the Notes or
any other instrument or agreement referred to herein or therein,
provided that the Obligors jointly and severally agree that they
will not vote the Stock Collateral in any manner that is incon-
sistent with the terms of this Agreement, the Credit Agreement,
the Notes or any such other instrument or agreement; and the
Agent shall execute and deliver to the Obligors or cause to be
executed and delivered to the Obligors all such proxies, powers
of attorney, dividend and other orders, and all such instruments,
without recourse, as the Obligors may reasonably request for the
purpose of enabling the Obligors to exercise the rights and
powers which they are entitled to exercise pursuant to this
Section 5.04(a)(2).
(3) Unless and until an Event of Default has occurred
and is continuing, the Obligors shall be entitled to receive and
retain any dividends on the Stock Collateral paid in cash out of
earned surplus.
(4) If any Event of Default shall have occurred, then
so long as such Event of Default shall continue, and whether or
not the Agent or any Bank exercises any available right to
declare any Secured Obligation due and payable or seeks or pur-
sues any other relief or remedy available to it under applicable
law or under this Agreement, the Credit Agreement, the Notes or
any other agreement relating to such Secured Obligation, all
dividends and other distributions on the Stock Collateral shall
be paid directly to the Agent and retained by it in the
Collateral Account as part of the Stock Collateral, subject to
the terms of this Agreement, and, if the Agent shall so request
in writing, the Obligors jointly and severally agree to execute
and deliver to the Agent appropriate additional dividend,
distribution and other orders and documents to that end, provided
that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Agent shall, upon request of
the Obligors (except to the extent theretofore applied to the
Secured Obligations) be returned by the Agent to the Obligors.
(b) Intellectual Property.
(1) For the purpose of enabling the Agent to exercise
rights and remedies under Section 5.05 hereof at such time as the
Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, each Obligor hereby grants to
the Agent, to the extent permissible, an irrevocable,
non-exclusive license (exercisable without payment of royalty or
other compensation to such Obligor) to use, assign, license or
sublicense any of the Intellectual Property now owned or here-
after acquired by such Obligor, wherever the same may be located,
including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout thereof.
(2) Notwithstanding anything contained herein to the
contrary, but subject to the provisions of Section 9.05 of the
Credit Agreement which limit the right of the Obligors to dispose
of their property, so long as no Event of Default shall have
occurred and be continuing, the Obligors will be permitted to
exploit, use or not use, enjoy, protect, license, sublicense,
assign, sell, dispose of or take other actions with respect to
the Intellectual Property in the ordinary course of the business
of the Obligors. In furtherance of the foregoing, unless an
Event of Default shall have occurred and be continuing the Agent
shall from time to time, upon the request of the Obligors through
the Company, execute and deliver any instruments, certificates or
other documents, in the form so requested, which the Obligors
through the Company shall have certified are appropriate (in
their judgment) to allow them to take any action permitted above
(including relinquishment of the license provided pursuant to
clause (1) immediately above as to any specific Intellectual
Property). Further, upon the payment in full of all of the
Secured Obligations and cancellation or termination of the
Commitments or release of the Collateral, the Agent shall grant
back to the Obligors the license granted pursuant to clause (1)
immediately above. The exercise of rights and remedies under
Section 5.05 hereof by the Agent shall not terminate the rights
of the holders of any licenses or sublicenses theretofore granted
by the Obligors in accordance with the first sentence of this
clause (2). In addition, the Agent shall release any Lien which
it is authorized and instructed to release pursuant to Section
11.09 of the Credit Agreement. The Agent agrees that, from time
to time upon the written request of the Obligors, the Agent will
execute and deliver such documents and do such other acts and
things as the Obligors may reasonably request in order fully to
effect the purposes of the preceding sentence.
(c) Motor Vehicles. If at any time requested by the
Agent, deliver to the Agent originals of the certificates of
title or ownership for the Motor Vehicles owned by it with the
Agent listed as lienholder.
(d) Fixtures. Each Fixture Holder hereby covenants
and agrees that the Fixtures will be kept on or at the Property
and that it will not remove any Fixtures from the Property,
except such portions or items of the Fixtures which are consumed
or worn out in ordinary usage, all of which shall be promptly
replaced by the Fixture Holder, except as otherwise permitted by
Section 9.03 or 9.05 of the Credit Agreement. This Agreement
constitutes a "fixture filing" as such term is used in the
Uniform Commercial Code.
5.05 Events of Default, etc. During the period during
which an Event of Default shall have occurred and be continuing:
(i) each Obligor shall, at the request of the
Agent, assemble the Collateral owned by it at such place or
places, reasonably convenient to both the Agent and such
Obligor, designated in its request;
(ii) the Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the
Collateral and may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of,
any of the Collateral;
(iii) the Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party
under the Uniform Commercial Code (whether or not said Code
is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and
remedies to which a secured party is entitled under the laws
in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to exer-
cise all voting, consensual and other powers of ownership
pertaining to the Collateral as if the Agent were the sole
and absolute owner thereof (and each Obligor agrees to take
all such action as may be appropriate to give effect to such
right);
(iv) the Agent in its discretion may, in its name or
in the name of the Obligors or otherwise, demand, sue for,
collect or receive any money or property at any time payable
or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so; and
(v) the Agent may, upon ten Business Days' prior
written notice to the Obligors of the time and place, with
respect to the Collateral or any part thereof which shall
then be or shall thereafter come into the possession,
custody or control of the Agent, the Banks or any of their
respective agents, sell, lease, assign or otherwise dispose
of all or any of such Collateral, at such place or places as
the Agent deems best, and for cash or on credit or for
future delivery (without thereby assuming any credit risk),
at public or private sale, without demand of performance or
notice of intention to effect any such disposition or of
time or place thereof (except such notice as is required
above or by applicable statute and cannot be waived) and the
Agent or any Bank or anyone else may be the purchaser,
lessee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the
extent permitted by law, at any private sale), and there-
after hold the same absolutely, free from any claim or right
of whatsoever kind, including any right or equity of redemp-
tion (statutory or otherwise), of the Obligors, any such
demand, notice or right and equity being hereby expressly
waived and released. In the event of any sale, assignment,
or other disposition of any of the Trademark Collateral, the
goodwill connected with and symbolized by the Trademark
Collateral subject to such disposition shall be included,
and the Obligors shall supply to the Agent or its designee,
for inclusion in such sale, assignment or other disposition,
all Intellectual Property relating to such Trademark
Collateral. The Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any
time or place to which the same may be so adjourned.
The proceeds of each collection, sale or other disposition under
this Section 5.05, including by virtue of the exercise of the
license granted to the Agent in Section 5.04(b)(1) hereof, shall
be applied in accordance with Section 5.09 hereof.
The Obligors recognize that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended,
and applicable state securities laws, the Agent may be compelled,
with respect to any sale of all or any part of the Collateral, to
limit purchasers to those who will agree, among other things, to
acquire the Collateral for their own account, for investment and
not with a view to the distribution or resale thereof. The
Obligors acknowledge that any such private sales may be at prices
and on terms less favorable to the Agent than those obtainable
through a public sale without such restrictions, and, notwith-
standing such circumstances, agree that any such private sale
shall be deemed to have been made in a commercially reasonable
manner and that the Agent shall have no obligation to engage in
public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the
respective Issuer or issuer thereof to register it for public
sale.
5.06 Deficiency. If the proceeds of sale, collection
or other realization of or upon the Collateral pursuant to
Section 5.05 hereof are insufficient to cover the costs and
expenses of such realization and the payment in full of the
Secured Obligations, the Obligors shall remain liable for any
deficiency.
5.07 Removals, etc. Without at least 30 days prior
written notice to the Agent, no Obligor shall (i) maintain any of
its books or records with respect to the Collateral at any office
or maintain its chief executive office or its principal place of
business at any place, or permit any Inventory or Equipment to be
located anywhere other than at the address indicated beneath the
signature of the Company to the Credit Agreement or at one of the
locations identified in Annex 5 hereto under its name or in
transit from one of such locations to another or (ii) change its
corporate name, or the name under which it does business, from
the name shown on the signature pages hereto.
5.08 Private Sale. The Agent and the Banks shall
incur no liability as a result of the sale of the Collateral, or
any part thereof, at any private sale pursuant to Section 5.05
hereof conducted in a commercially reasonable manner. Subject to
the Agent and the Banks exercising any rights or remedies in a
commercially reasonable manner, each Obligor hereby waives any
claims against the Agent or any Bank arising by reason of the
fact that the price at which the Collateral may have been sold at
such a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount
of the Secured Obligations, even if the Agent accepts the first
offer received and does not offer the Collateral to more than one
offeree.
5.09 Application of Proceeds. Except as otherwise
herein expressly provided and except as provided below in this
Section 5.09, the proceeds of any collection, sale or other
realization of all or any part of the Collateral pursuant hereto,
and any other cash at the time held by the Agent under Section 4
hereof or this Section 5, shall be applied by the Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Agent and the
reasonable fees and expenses of its agents and counsel, and
all expenses incurred and advances made by the Agent in
connection therewith;
Next, to the payment in full of the Secured
Obligations, in each case equally and ratably in accordance
with the respective amounts thereof then due and owing or as
the Banks holding the same may otherwise agree; and
Finally, to the payment to the respective Obligor, or
its successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining.
Notwithstanding the foregoing, the proceeds of any cash or other
amounts held in the "Letter of Credit Liabilities Sub-Account" of
the Collateral Account pursuant to Section 4.04 hereof shall be
applied first to the Letter of Credit Liabilities outstanding
from time to time and second to the other Secured Obligations in
the manner provided above in this Section 5.09.
As used in this Section 5, "proceeds" of Collateral
shall mean cash, securities and other property realized in
respect of, and distributions in kind of, Collateral, including
any thereof received under any reorganization, liquidation or
adjustment of debt of the Obligors or any issuer of or obligor on
any of the Collateral.
5.10 Attorney-in-Fact. Without limiting any rights or
powers granted by this Agreement to the Agent while no Event of
Default has occurred and is continuing, upon the occurrence and
during the continuance of any Event of Default pursuant to which
the then outstanding principal amount of and accrued interest on
the Loans are declared to be immediately due and payable and 5
Business Days after the occurrence and during the continuance of
any other Event of Default, the Agent is hereby appointed the
attorney-in-fact of each Obligor for the purpose of carrying out
the provisions of this Section 5 and taking any action and
executing any instruments which the Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest.
Without limiting the generality of the foregoing, so long as the
Agent shall be entitled under this Section 5 to make collections
in respect of the Collateral, the Agent shall have the right and
power to receive, endorse and collect all checks made payable to
the order of any Obligor representing any dividend, payment, or
other distribution in respect of the Collateral or any part
thereof and to give full discharge for the same.
5.11 Perfection. Prior to or concurrently with the
execution and delivery of this Agreement, each Obligor shall
(i) file such financing statements and other documents in such
offices as the Agent may request to perfect the security
interests granted by Section 3 of this Agreement and (ii) deliver
to the Agent all certificates identified in Annex 1 hereto,
accompanied by undated stock powers duly executed in blank.
5.12 Termination. When all Secured Obligations shall
have been paid in full and the Commitments of the Banks under the
Credit Agreement and all Letter of Credit Liabilities shall have
expired or been terminated, this Agreement shall terminate, and
the Agent shall forthwith cause to be assigned, transferred and
delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money
received in respect thereof, to or on the order of the respective
Obligors and to be released and canceled all licenses and rights
referred to in Section 5.04(b)(1) hereof. The Agent shall also
execute and deliver to the respective Obligors upon such
termination such Uniform Commercial Code termination statements,
certificates for terminating the Liens on the Motor Vehicles and
such other documentation as shall be reasonably requested by the
respective Obligors to effect the termination and release of the
Liens on the Collateral.
5.13 Expenses. The Obligors jointly and severally
agree to pay to the Agent all out-of-pocket expenses (including
reasonable expenses for legal services of every kind) of, or
incident to, the enforcement of any of the provisions of this
Section 5, or performance by the Agent of any obligations of the
Obligors in respect of the Collateral which the Obligors have
failed or refused to perform, or any actual or attempted sale, or
any exchange, enforcement, collection, compromise or settlement
in respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of the
Agent in respect thereof, by litigation or otherwise, including
expenses of insurance, and all such expenses shall be Secured
Obligations to the Agent secured under Section 3 hereof.
5.14 Further Assurances. Each Obligor agrees that,
from time to time upon the written request of the Agent, such
Obligor will execute and deliver such further documents and do
such other acts and things as the Agent may reasonably request in
order fully to effect the purposes of this Agreement.
Section 6. Miscellaneous.
6.01 No Waiver. No failure on the part of the Agent
or any of its agents to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by the Agent or any of its agents of
any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right,
power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
6.02 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the law of the State of New
York.
6.03 Notices. All notices, requests, consents and
demands hereunder shall be in writing and telexed, telecopied or
delivered to the intended recipient at its "Address for Notices"
specified pursuant to Section 12.02 of the Credit Agreement and
shall be deemed to have been given at the times specified in said
Section 12.02.
6.04 Waivers, etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly
executed by each Obligor and the Agent (with the consent of the
Banks as specified in Section 11.09 of the Credit Agreement).
Any such amendment or waiver shall be binding upon the Agent and
each Bank, each holder of any Secured Obligation and each
Obligor.
6.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective succes-
sors and assigns of each Obligor, the Agent, the Banks and each
holder of the Secured Obligations (provided, however, that no
Obligor shall assign or transfer its rights hereunder without the
prior written consent of the Agent).
6.06 Counterparts. This Agreement may be executed in
any number of counterparts, all of which together shall consti-
tute one and the same instrument and any of the parties hereto
may execute this Agreement by signing any such counterpart.
6.07 Agents. The Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it in good faith.
6.08 Severability. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest
extent permitted by law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Agent and the Banks in order
to carry out the intentions of the parties hereto as nearly as
may be possible and (ii) the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other
jurisdiction.
6.09 The Agent. As provided in Section 11 of the
Credit Agreement, each Bank has appointed The Chase Manhattan
Bank (National Association) as its Agent for purposes of this
Agreement. Following the payment in full of all Secured Obliga-
tions outstanding under the Credit Agreement and the termination
or expiration of the Commitments and Letter of Credit Liabilities
thereunder, the provisions of said Section 11 shall be deemed to
continue in full force and effect for the benefit of the Agent
under this Agreement until the payment in full of the Swap
Indebtedness. In that connection, following such payment in full
and expiration and termination of the Commitments and Letter of
Credit Liabilities, the term "Majority Banks" (as used in said
Section 11) shall be deemed to refer to Banks holding Secured
Obligations representing at least 66-2/3% of the aggregate
Secured Obligations.
IN WITNESS WHEREOF, the parties hereto have caused this
Second Amended and Restated Security Agreement to be duly
executed and delivered as of the day and year first above
written.
CANANDAIGUA WINE COMPANY, INC.
By ___________________________
Title:
SUBSIDIARY GUARANTORS
BATAVIA WINE CELLARS, INC.
BISCEGLIA BROTHERS WINE COMPANY
CALIFORNIA PRODUCTS COMPANY
TENNER BROTHERS, INC.
WIDMER'S WINE CELLARS, INC.
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., its
corporate general partner
BARTON MANAGEMENT, INC.
By _______________________________
Title:
CANANDAIGUA/VINTNERS ACQUISITION
CORP.)
By _______________________________
Title:
CANADAIGUA WEST, INC.
By _______________________________
Title:
VINTNERS INTERNATIONAL COMPANY,
INC. (formerly known as
By _______________________________
Title:
GUILD WINERIES & DISTILLERIES, INC.
(formerly known as Canandaigua
California Acquisition Corp.)
By ______________________________
Title:
BARTON FINANCIAL CORPORATION
By ______________________________
Title:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By _____________________________
Title:
Second Amended and Restated Security Agreement
dated as of August 5, 1994
between
Canandaigua Wine Company, Inc.,
each of the Subsidiary Guarantors
and
The Chase Manhattan Bank (National Association)
Identification of Contents of Annexes
Annex 1 List of Pledged Stock
Annex 2 List of Patents and Patent Applications
Annex 3 List of Trademarks, Service Marks, Trademark and
Service Mark Registrations and Applications for
Trademark and Service Mark Registrations
Annex 4 List of Contracts, Licenses and Other Agreements
Annex 5 List of Locations
Annex 6 Description of Property