SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) August 29, 1995
CANANDAIGUA WINE COMPANY, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-7570 16-0716709
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
116 Buffalo Street, Canandaigua, New York, 14424
--------------------------------------------------
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code (716) 394-7900
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On September 1, 1995, Canandaigua Wine Company, Inc. (the "Registrant"),
through its wholly-owned subsidiary, Barton Incorporated ("BI"), acquired
certain assets from United Distillers Glenmore, Inc. and several of its North
American affiliates (collectively, "UDG"). The acquisition was made pursuant to
an Asset Purchase Agreement dated August 29, 1995 (the "Purchase Agreement")
entered into between BI and UDG (terms used in this Item 2 and not defined
herein shall have the meanings as defined in the Purchase Agreement which is
attached hereto as an Exhibit). The acquisition included all of UDG's rights to
the Fleischmann, Skol, Mr. Boston, Canadian Ltd., Old Thompson, Kentucky Tavern,
Chi Chi's, Glenmore and Di Amore distilled spirits brands; the U.S. rights to
Inver House, Schenley and El Toro distilled spirits brands; inventories and
other related assets. The acquisition also included two of UDG's production
facilities: one located in Owensboro, Kentucky and the other located in Albany,
Georgia (the "Plants"). In addition, pursuant to the Purchase Agreement, the
parties entered into multi-year agreements under which BI will (i) purchase
various bulk distilled spirits from UDG and (ii) provide continued packaging
services for certain of UDG's distilled spirits brands as well as warehousing
services. The Registrant, through BI, intends to operate the acquired production
facilities and continue the sale of products under the acquired brands.
The consideration for the acquisition of the tangible and intangible
assets was the result of arms length negotiations and consisted of cash in the
Closing Amount of $144,312,522. Within 60 days after the Closing Date, UDG is to
deliver to BI a Closing Statement setting forth any required Closing Adjustment,
in accordance with the Purchase Agreement. The Closing Adjustment will be paid
by BI or UDG as appropriate, provided that BI may dispute the Closing
Adjustment. If BI and UDG are unable to agree upon the Closing Adjustment, then
the dispute will be submitted to an internationally recognized firm of
independent public accountants chosen jointly by BI and UDG whose decision
regarding the resolution of the dispute shall be final and binding on BI and
UDG.
The source of the cash payment made at closing, together with payment of
other costs and expenses required by the transaction, was financing provided to
the Registrant pursuant to a certain Third Amended and Restated Credit Agreement
dated as of September 1, 1995 (the "Amended Credit Agreement") among the
Registrant, its principal operating subsidiaries (the "Subsidiaries"), and a
syndicate of 20 banks for which The Chase Manhattan Bank (National Association)
("Chase") acts as administrative agent (terms used below in this Item 2 and not
defined herein shall have the meanings as defined in the Amended Credit
Agreement). The syndicate includes Chase's Rochester Division, The First
National Bank of Chicago, Wells Fargo Bank, N.A., Manufacturers and Traders
Trust Company, Fleet Bank, PNC Bank, National Association, National City Bank,
Natwest Bank N.A., NBD Bank, The Bank of Nova Scotia, Credit Suisse, The Daiwa
Bank, Limited, Key Bank of New York, Chemical Bank, Cooperative Cental
Raiffeisenboerenleenbank B.A. "Rabobanknederland", LTCB Trust Company,
Corestates Bank, N.A., DG Bank Deutsche Genossenschaftsbank, The Fuji Bank
Limited, The Sumitomo Bank, Limited (the "Banks"). The Amended Credit Agreement
provides for (i) a $246,000,000 Term Loan, (ii) a $185,000,000 Revolving Credit
Loan, with each loan expiring in approximately six years and (iii) the
previously existing $25,000,000 irrevocable letter of credit issued in
connection with the Registrant's June 29, 1993 acquisition of BI.
<PAGE>
The current interest rate under the Amended Credit Agreement may be increased or
decreased depending upon the Registrant's debt ratio and long-term debt ratings.
As compared to the Company's previously existing credit agreement, the Amended
Credit Agreement contains more favorable interest rate terms because of a lower
Applicable Margin on Base Rate Loans and Eurodollar Loans. In addition, as
compared to the previously existing credit agreement, the Amended Credit
Agreement reflects elimination of certain covenants and contains generally more
favorable terms with respect to covenants, fees, types of loans available and
restrictions on investments. In connection with the Amended Credit Agreement,
the Banks have continued their liens and security interests in substantially all
of the assets of the Registrant and the Subsidiaries and were given liens and
security interests in all accounts and general intangibles, inventory,
equipment, trademarks and other properties. Repayment of the loans is also
guaranteed by the Subsidiaries.
The foregoing information contained in this Form 8-K with respect to the
acquisition and the financing thereof is qualified in its entirety by reference
to the complete text of the Purchase Agreement and the Amended Credit
Agreement, copies of which are attached hereto as Exhibits.
Item 5. Press Release
On August 29, 1995, the Registrant issued the following press release:
Canandaigua Wine Company, Inc. (NASDAQ: WINEA and WINEB)
announced today that its spirits division, Barton Incorporated,
and United Distillers Glenmore, Inc. ("UDG") have signed a
definitive agreement under which Barton will purchase from UDG
certain assets including all of UDG's rights to Fleischmann,
Skol, Mr. Boston, Canadian Ltd., Old Thompson, Kentucky Tavern,
Chi Chi's, Glenmore and di Amore spirits brands; the U.S. rights
to the Inver House, Schenley and El Toro spirits brands; related
inventories and other assets; and two production facilities
located in Owensboro, KY and Albany, GA. In addition, the
transaction includes multi-year agreements under which UDG will
supply Barton with bulk whisky and Barton will supply UDG with
services including continued packaging of various UDG brands. The
transaction has been approved by both parties' boards of
directors and is scheduled to be completed on September 1, 1995.
The purchase price is approximately $144 million. In addition,
Barton will purchase at closing approximately $5 million of
certain brandy inventories and packaging supplies related to the
contract production arrangements with UDG. The purchase of assets
is being financed through an increase to Canandaigua's term loan
facility of $155 million. The financing is to be provided by a
syndicate of twenty banks arranged by The Chase Manhattan Bank,
(National Association).
Gross sales, net sales (gross sales less excises taxes) and
operating incomes for the products sold under these brands while
owned by UDG during calendar 1994 were $231 million, $99 million
and $16 million, respectively, on unit volume of approximately
five million cases.
Richard Sands, President and Chief Executive Officer of
Canandaigua, said, "We are very pleased to be acquiring these
brands as another step in our strategy of
<PAGE>
making acquisitions to strengthen our presence in the beverage
alcohol industry and to improve economies of scale. The addition
of the UDG brands will almost double our market share in the
United States distilled spirits category, as well as round out
our portfolio of brands and category participation."
Canandaigua Wine Company, Inc., headquartered in Canandaigua, New
York, is a leading producer and marketer of more than 125
national and regional beverage alcohol brands. It is the second
largest supplier of wines, the fifth largest importer of beers
and the eighth largest supplier of distilled spirits in the
United States. The Company's beverage alcohol brands are marketed
in five general categories and include the following principal
brands:
o Table Wines: Almaden, Inglenook, Paul Masson, Taylor
California Cellars, Cribari, Manischewitz, Taylor New York,
Marcus James, Deer Valley and Dunnewood
o Sparkling Wines: Cook's, J. Roget, Great Western and Taylor
New York
o Dessert Wines: Richards Wild Irish Rose, Cisco and Taylor
New York
o Imported Beers: Corona, St. Pauli Girl, Modelo Especial and
Tsingtao
o Distilled Spirits: Barton's Gin and Vodka, Ten High Bourbon
Whiskey, Crystal Palace Gin and Vodka, Montezuma Tequila,
Northern Light Canadian Whisky, Lauder's Scotch Whisky and
Monte Alban Mezcal
On September 1, 1995, the Registrant issued the following press release:
Canandaigua Wine Company, Inc. (NASDAQ: WINEA and WINEB)
announced today that its spirits division, Barton Incorporated,
and United Distillers Glenmore, Inc. ("UDG") have closed the
transaction in which Barton purchased from UDG certain assets
including all of UDG's rights to the Fleischmann, Skol, Mr.
Boston, Canadian Ltd., Old Thompson, Kentucky Tavern, Chi Chi's,
Glenmore and di Amore spirits brands; the U.S. rights to the
Inver House, Schenley and El Toro spirits brands; related
inventories and other assets; and two production facilities
located in Owensboro, KY and Albany, GA. In addition, the
transaction included multi-year agreements under which UDG will
supply Barton with bulk whisky and Barton will supply UDG with
services including continued packaging of various UDG brands.
Richard Sands, President and Chief Executive Officer of
Canandaigua, said, "This acquisition more than doubles our market
share, making us the fourth largest spirits supplier in the
United States, and better positions us in the spirits category to
take advantage of our strategy of creating economies of scale and
capitalizing on strong wholesaler relationships. In addition, we
expect to continue pursuing our strategy of making acquisitions
across all three categories of our beverage alcohol business and
believe that numerous opportunities exist in this regard."
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
a. Financial Statements of Business Acquired. At the time of the
filing of this Report, it is impracticable to provide the
financial statements required by Regulation S-X. The required
financial statements will be filed by the Registrant on Form
8-K/A, as soon as practicable, but not later than November 14,
1995.
b. Pro Forma Financial Information. At the time of the filing of
this Report, it is impracticable to provide the pro forma
financial information required by Regulation S-X. The required
pro forma financial information will be filed by the Registrant
on Form 8-K/A, as soon as practicable, but not later than
November 14, 1995.
c. Exhibits. See Index to Exhibits.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
CANANDAIGUA WINE COMPANY, INC.
September 15, 1995 By: /s/Richard Sands
Richard Sands, President
and Chief Executive Officer
<PAGE>
INDEX TO EXHIBITS
(1) Underwriting agreement
Not Applicable.
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession
(a) Asset Purchase Agreement among Barton Incorporated (a
wholly-owned subsidiary of the Registrant), United Distillers
Glenmore, Inc., Schenley Industries Inc., Medley Distilling
Company, United Distillers Manufacturing, Inc., and The Viking
Distillery, Inc., dated August 29, 1995 (including a list briefly
identifying the contents of all omitted schedules and exhibits
thereto) is included herein as Exhibit 2(a) at pages 9 through
128 of this Report. The Registrant will furnish supplementally to
the Commission or any security holder upon request a copy of any
omitted schedule or exhibit.
(b) Third Amended and Restated Credit Agreement between the
Registrant, its principal operating subsidiaries, and certain
banks for which The Chase Manhattan Bank (National Association)
acts as Administrative Agent, dated as of September 1, 1995
(including a list briefly identifying the contents of all omitted
schedules and exhibits thereto) is included herein as Exhibit
2(b) at pages 129 through 292 of this Report. The Registrant will
furnish supplementally to the Commission or any security holder
upon request a copy of any omitted schedule or exhibit.
(4) Instruments defining the rights of security holders, including
indentures
Not Applicable.
(16) Letter re change in certifying accountant
Not Applicable.
(17) Letter re director resignation
Not Applicable.
(21) Other documents or statements to security holders
Not Applicable.
(24) Consents of experts and counsel
Not Applicable.
7
<PAGE>
(25) Power of attorney
Not Applicable.
(27) Financial Data Schedule
Not Applicable.
(99) Additional Exhibits
None.
8
ASSET PURCHASE AGREEMENT
AMONG
BARTON INCORPORATED,
UNITED DISTILLERS GLENMORE, INC.,
SCHENLEY INDUSTRIES INC., MEDLEY DISTILLING COMPANY,
UNITED DISTILLERS MANUFACTURING, INC.,
AND
THE VIKING DISTILLERY, INC.
August 29, 1995
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TABLE OF CONTENTS
Page
ARTICLE I
PURCHASE AND SALE OF ASSETS AND LICENSES
1.1. Purchase and Sale........................................................................... 1
1.2. Assets...................................................................................... 1
1.3. Excluded Assets............................................................................. 5
1.4. Licenses.................................................................................... 6
1.5. Assumption of Liabilities................................................................... 6
1.6. Excluded Liabilities........................................................................ 7
1.7. Purchase Price.............................................................................. 8
1.8. Closing Statement........................................................................... 9
1.9. Prorations.................................................................................. 12
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
2.1. Organization, Good Standing, and Power...................................................... 12
2.2. Authority................................................................................... 13
2.3. Compliance with Applicable Laws............................................................. 15
2.4. U.S. Trademarks............................................................................. 15
2.5. Foreign Trademarks.......................................................................... 16
2.6. Licensed Marks.............................................................................. 17
2.7. Other Intellectual Property................................................................. 19
2.8. Title to Certain Assets..................................................................... 20
2.9. Purchaser's Title to Assets................................................................. 20
2.10. Litigation.................................................................................. 21
2.11. Assigned Contracts.......................................................................... 21
2.12. Manufacturing Equipment..................................................................... 22
2.13. Title to Properties; Encumbrances........................................................... 23
2.14. Employees................................................................................... 25
2.15. Employee Benefits........................................................................... 26
2.16. Environmental and Safety Requirements....................................................... 28
2.17. Product Liability........................................................................... 29
2.18. Permits..................................................................................... 30
2.19. Conduct of Business......................................................................... 30
2.20. Rebate and Promotional Programs............................................................. 32
2.21. Salaries.................................................................................... 32
2.22. Shipments and Depletions.................................................................... 32
2.23. Product Profit and Loss Statements.......................................................... 33
2.24. Taxes....................................................................................... 33
2.25. Distributors................................................................................ 33
2.26. Suppliers and Customers..................................................................... 34
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2.27. Accuracy of Information..................................................................... 34
2.28. Brokers..................................................................................... 34
2.29. No Implied Warranties....................................................................... 34
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
3.1. Organization, Good Standing, and Power...................................................... 35
3.2. Authority................................................................................... 35
3.3. Litigation.................................................................................. 37
3.4. Funding..................................................................................... 37
3.5. Accuracy of Information..................................................................... 38
3.6. Brokers..................................................................................... 38
ARTICLE IV
CONDITIONS TO OBLIGATIONS OF THE PURCHASER
4.1. Accuracy of Representations and Compliance with Covenants and
Conditions.................................................................................. 38
4.2. Other Closing Documents..................................................................... 39
4.3. No Governmental Action...................................................................... 39
4.4. Hart-Scott-Rodino Waiting Period............................................................ 40
4.5. Required Consents Needed.................................................................... 40
4.6. Other Agreements............................................................................ 40
4.7. Licenses.................................................................................... 41
4.8. Governmental Filings........................................................................ 41
4.9. Title To Facilities......................................................................... 42
4.10. Financing................................................................................... 42
4.11. Damage or Destruction....................................................................... 42
4.12. No Material Adverse Change.................................................................. 42
ARTICLE V
CONDITIONS TO OBLIGATIONS OF THE SELLERS
5.1. Accuracy of Representations and Compliance with Covenants and
Conditions.................................................................................. 43
5.2. Other Closing Documents..................................................................... 44
5.3. No Governmental Action...................................................................... 44
5.4. Hart-Scott-Rodino Waiting Period............................................................ 44
5.5. Required Consents Needed.................................................................... 44
5.6. Other Agreements............................................................................ 44
5.7. Licenses.................................................................................... 45
5.8. Governmental Filings........................................................................ 45
<PAGE>
ARTICLE VI
PRE- AND POST-CLOSING COVENANTS
6.1. Access to Information....................................................................... 45
6.2. Costs, Expenses, and Taxes.................................................................. 47
6.3. Bulk Sales.................................................................................. 47
6.4. Insurance................................................................................... 47
6.5. Bottles..................................................................................... 48
6.6. Operation in Ordinary Course................................................................ 48
6.7. Governmental Filings and Approvals.......................................................... 51
6.8. Additional Actions.......................................................................... 52
6.9. Distributors................................................................................ 53
6.10. Title Commitments and Surveys............................................................... 54
6.11. Employee Matters............................................................................ 54
6.12. Assistance In Collecting Certain Amounts.................................................... 60
6.13. Differentiation Between Products of the Sellers and the Purchaser........................... 61
6.14. Certain Financial Information............................................................... 61
6.15. Intangible Property......................................................................... 61
6.16. Rebate Programs............................................................................. 61
6.17. Use Up Rights............................................................................... 62
6.18. Required Consents........................................................................... 63
6.19. Name Change................................................................................. 63
6.20. Destroying Boiler House/Chimney Stack....................................................... 63
6.21. Customers and Suppliers..................................................................... 64
6.22. Other Agreements............................................................................ 64
ARTICLE VII
CLOSING
7.1. The Closing................................................................................. 64
7.2. Documents Delivered by the Sellers.......................................................... 65
7.3. Documents Delivered by Purchaser............................................................ 68
7.4. Delivery; Risk of Loss...................................................................... 69
ARTICLE VIII
INDEMNIFICATION
8.1. Indemnification by the Sellers.............................................................. 70
8.2. Indemnification by the Purchaser............................................................ 73
8.3. Indemnification Procedure for Third Party Claims............................................ 74
8.4. Direct Claims............................................................................... 77
8.5. Failure to Give Timely Notice............................................................... 78
8.6. Reduction of Losses......................................................................... 78
8.7. Subrogation................................................................................. 79
<PAGE>
8.8. Limitations on Indemnities.................................................................. 79
8.9. Survival of Representations, Warranties and Covenants; Time Limits
on Indemnification Obligations.............................................................. 81
8.10. Defense of Claims; Control of Proceedings................................................... 81
8.11. Fraud....................................................................................... 82
8.12. Knowledge Prior to Closing.................................................................. 82
8.13. Exclusivity................................................................................. 82
8.14. Environmental Matters....................................................................... 82
8.15. Contribution................................................................................ 85
ARTICLE IX
TERMINATION
9.1. Termination................................................................................. 86
9.2. Effect of Termination....................................................................... 87
ARTICLE X
DEFINITIONS
10.1. Defined Terms............................................................................... 87
ARTICLE XI
GENERAL PROVISIONS
11.1. Notices.....................................................................................107
11.2. Counterparts................................................................................108
11.3. Entire Agreement; No Third Party Beneficiaries..............................................108
11.4. Governing Law...............................................................................108
11.5. Publicity; Confidentiality..................................................................109
11.6. Assignment..................................................................................109
11.7. Section Headings............................................................................109
11.8. Partial Invalidity..........................................................................110
11.9. Waiver and Amendment........................................................................110
11.10. Jurisdiction, Venue, and Service of Process.................................................110
11.11. No Set-Off..................................................................................110
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<PAGE>
ASSET PURCHASE AGREEMENT dated as of August 29, 1995, among Barton
Incorporated, a Delaware corporation (the "Purchaser"), United Distillers
Glenmore, Inc., a Delaware corporation ("UDG"), and each of the entities listed
on Schedule I (UDG and such entities are collectively referred to as the
"Sellers" and individually, each a "Seller").
WHEREAS, the Sellers wish to sell to the Purchaser, and the Purchaser
wishes to purchase, certain assets, upon the terms and subject to the conditions
of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS AND LICENSES
SECTION 1.1. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, on the Closing Date and at the Closing the Sellers
will sell, assign, transfer, convey, and deliver (in such manner as is
customary) to the Purchaser, and the Purchaser will purchase from the Sellers,
the Assets.
SECTION 1.2. Assets. Subject to Section 1.3, the term "Assets" means: (a)
all of the Sellers' rights, titles, and interests in the United States in and to
(i) the trademarks listed in Schedule 1.2(a)-1 and Schedule 1.2(a)-2, (ii) the
United States trademark registrations and trademark applications therefor, and
(iii) the other brand names listed in Schedule 1.2(a)-1 and Schedule 1.2(a)-2
(collectively, the "U.S. Trademarks"), in each case together with the goodwill
of the business symbolized thereby;
<PAGE>
(b) all of the Sellers' rights, titles, and interests outside
of the United States, if any, in and to (i) the trademarks listed in
Schedule 1.2(a)-1, (ii) the foreign trademark registrations and
trademark applications therefor listed in Schedule 1.2(b), and (iii)
the other brand names listed in Schedule 1.2(a)-1 (collectively, the
"Foreign Trademarks"), in each case together with the goodwill of the
business symbolized thereby;
(c) all of the Sellers' rights under the Contracts listed on
Schedule 1.2(c)-1 (the "Chi-Chi's/Fleischmann's Licenses"), including
without limitation all of the Sellers' rights under the
Chi-Chi's/Fleischmann's Licenses with respect to (i) the trademarks
listed in Schedule 1.2(c)-2, (ii) the United States and foreign
trademark registrations and trademark applications therefor, and (iii)
the other brand names listed in Schedule 1.2(c)-2 (collectively, the
"Chi-Chi's/Fleischmann's Trademarks"), together in each case with the
goodwill of the business symbolized thereby;
(d) all of the Sellers' formulae, recipes, and blending
instructions currently used in the production of the Products or
necessary to enable the Purchaser to produce such Products (the
"Formulae") (subject to the Sellers' continued rights to use the
Formulae for Light Rum and Dark Rum which have heretofore been used by
the Sellers in the production of products other than the Products);
(e) all of UDG's rights, title, and interest in and to the
Mr. Boston Copyright;
(f) all of the Sellers' rights, titles, and interests in and
to the real property, including the improvements thereon and fixtures
thereto, and tanks and related piping, in Owensboro, Kentucky and
Albany, Georgia, as more fully described in the legal
<PAGE>
descriptions and plats of survey included on Schedule 1.2(f) (including
the improvements located on property leased under the Assigned
Contracts, the "Plants");
(g) the machinery, equipment, furnishings, change parts, and
other tangible property owned by the Sellers and listed on Schedule
1.2(g), wherever located, subject to such changes from such list
between the date hereof and the Closing Date as occur in the ordinary
course of business, and all other such assets located at the Plants and
all other tooling, repair parts, and similar equipment located at the
Plants (other than any such assets which are leased under the Assigned
Contracts) (the "Manufacturing Equipment");
(h) the inventories of finished goods of the Sellers related
to the Products and, to the extent owned by the Sellers or their
Affiliates, to the Heaven Hill Products as in existence at the Closing,
wherever located (the "Finished Goods Inventory");
(i) the inventories of raw materials (including barreled bulk
whiskey at the Plant in Albany, Georgia), labels, dry supplies, stores,
and work-in-progress (including tank inventories at the Plants) of the
Sellers related to the Products or the operation of the Plants
(including any such inventories of a type which are used in connection
with both Products and products to be produced by the Purchaser or a
Purchaser Subsidiary pursuant to the Bottling Agreement) and, to the
extent owned by the Sellers or their Affiliates, to the Heaven Hill
Products as in existence at the Closing, wherever located (the
"Materials Inventory");
(j) the types of advertising, promotional, and point of sale
materials of the Sellers (including, but not limited to, all drawings,
plans, artwork, slides, transparencies,
<PAGE>
screen proofs, printing plates, and lithographs) listed on Schedule
1.2(j) and at the locations listed on Schedule 1.2(j), in the
quantities existing at the Closing, and all copies of the Mr. Boston
Official Bartender's and Party Guide owned by the Sellers at Closing
(collectively, the "Literature");
(k) all of the Sellers' rights, titles, and interests in any
copyrights, trade dress, label designs, bottle designs, and other
designs, trade secrets, inventions, models, manufacturing know-how, and
any other similar intellectual property rights relating solely to the
Products, in each case which are not otherwise conveyed or licensed to
the Purchaser hereunder, together with the goodwill of the business
symbolized thereby (the "Intellectual Property");
(l) all of the Sellers' rights, titles, and interests in any
label and formula approvals and price postings relating solely to the
Products (in each case, to the extent the Sellers have, and under Law
have the right to assign or sell, such rights, titles, and interests),
together with the goodwill of the business symbolized thereby;
(m) all rights of the Sellers under the Assigned Contracts,
including and without limitation the Assigned Contracts listed on
Schedule 1.2(m) (and including and without limitation Orders for dry
supplies);
(n) all of the Sellers' rights, titles, and interests, if any,
in the trade names listed on Schedule 1.2(n), along with the goodwill
of the business associated therewith (the "Trade Names");
(o) all prepaid expenses (including unamortized license
fees) related to the foregoing and listed on Schedule 1.2(o) (the
"Prepaid Expenses");
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(p) all records relating solely to the Products or the
operation of the Plants of the types set forth on Schedule 1.2(p) (the
"Records"); and
(q) all of the Sellers' rights, if any, with respect to the
glass molds listed on Schedule 1.2(q) (the "Transferred Molds").
SECTION 1.3. Excluded Assets. Notwithstanding anything to the contrary
contained herein, the Assets shall not include any of the following
(collectively, the "Excluded Assets"): (a) any real property or interests
therein owned or leased by the Sellers other than the Plants; (b) any rights
outside the United States in the trademarks and brand names listed on Schedule
1.2(a)-2 or any non-United States trademark registrations or applications
related thereto; (c) any interest in brand names, trademarks, or trade names
owned or licensed by any of the Sellers other than the Trademarks, the
Chi-Chi's/Fleischmann's Trademarks, and the Trade Names; (d) any cash, reserves,
bank balances, or other cash equivalents or similar investments of the Sellers;
(e) any accounts receivable of the Sellers; (f) any rights of the Sellers under
any Contract that is not an Assigned Contract; (g) any equipment or other assets
listed on Schedule 1.3(g), any other repair parts, tooling, stores, or similar
assets used solely in the business of Clarendon, the formulae for the products
produced by Clarendon, or any other intellectual property used solely in the
business of Clarendon, (h) any rights of the Sellers with respect to the
intellectual property subject to the Container Licenses, (i) any rights of the
Sellers in any glass molds other than the Transferred Molds and the rights to
use certain other molds as set forth in Section 6.5, (j) any rights with respect
to any tax refunds for periods ending on or before the Closing Date, (k) any
computer hardware or software other than as listed on Schedule 1.2(g) or
Schedule 1.2(m), or (l) any assets described on Schedule 1.3(l).
<PAGE>
SECTION 1.4. Licenses. (a) In addition to the transfer of the Assets,
at the Closing UDG will execute and deliver to the Purchaser licenses, in all
substantive respects in the forms attached hereto as Exhibit 1.4(a), with
respect to rights in certain container patents and designs (the "Container
Licenses").
(b) In addition to payment of the Purchase Price and the assumption of
Assumed Liabilities, at the Closing the Purchaser will execute and deliver to
the Sellers a license, in all substantive respects in the form attached hereto
as Exhibit 1.4(b), with respect to the use of the "Schenley" Trademark for the
territories and product described in such license (the "Schenley License" and,
together with the Container Licenses, the "Licenses").
SECTION 1.5. Assumption of Liabilities. In partial consideration for
the transfer of the Assets and the grant of the Container Licenses, in addition
to payment of the Purchase Price as provided in Section 1.7 and Section 1.8, the
Purchaser will at the Closing assume only the following liabilities (the
"Assumed Liabilities"):
(a) all obligations for which the Purchaser is responsible
as provided in the first sentence of Section 1.9 or in Section 6.2
or Section 6.11;
(b) all of the obligations of the Sellers to be performed
under the Assigned Contracts after the Closing Date, exclusive of (i)
payments of money to be made by the Sellers after the Closing Date, the
obligation for which accrued on or prior to the Closing Date, (ii)
obligations of the Sellers to indemnify other parties to the Assigned
Contracts for acts or omissions of the Sellers or their Affiliates on
or prior to the Closing Date, and (iii) liabilities subject to
indemnification by the Sellers under Section 8.1(a);
<PAGE>
(c) any liability arising from or relating to any (i) refusal
by the Purchaser to deal with any of the Distributors, (ii) termination
by the Purchaser after the Closing Date of any distributors who were,
or at or after the Closing became, distributors of products (including
the Products) sold by the Purchaser, (iii) withdrawal of Products from
any Distributor, or (iv) termination of or withdrawal of Products from
any Distributor deemed to have occurred as a result of the Sellers
having sold the Trademarks or assigned the Chi-Chi's/Fleischmann's
Licenses to the Purchaser, provided that the Purchaser shall not assume
any liabilities under this Section 1.5(c) with respect to the
Distributor identified on Schedule 6.9(a) as excluded from this Section
1.5(c); and
(d) any liability for returns made by Distributors after the
Closing Date, except that the Sellers shall remain liable for, and the
Purchaser shall not assume liability for, any such returns of goods (i)
for which the Distributor gives notice within the 90 days commencing on
the Closing Date and are in accordance with the Sellers' policies
attached hereto as Schedule 1.5(d) or (ii) which were produced by the
Sellers prior to the Closing Date as part of a production run no part
of which is included in the Finished Goods Inventory at the Closing
Date (provided, that nothing in this Section 1.5(d) shall limit the
Sellers' obligations under Section 8.1(g)). SECTION 1.6. Excluded
Liabilities. The Assumed Liabilities shall not include, and the
Purchaser shall not, and as of the Closing will not, assume,
undertake, accept, or be bound by or in any way be liable or
responsible for, and the Sellers will be and remain liable for,
(a) any liabilities of the Sellers for
which the Sellers are responsible to indemnify the Purchaser
<PAGE>
under Section 8.1(a) (without giving effect to the limitations imposed in
Sections 8.8 or 8.9); (b) any liabilities of the Sellers under Contracts other
than the Assigned Contracts; (c) any liabilities of the Sellers for indebtedness
for money borrowed or any guarantees thereof; (d) any Employee Plan; (e) all
obligations for which the Sellers are responsible as provided in the first
sentence of Section 1.9; or (f) any other liabilities of the Sellers not
expressly assumed herein (collectively, the "Excluded Liabilities").
SECTION 1.7. Purchase Price. (a) In consideration of the transfer to
the Purchaser of the Assets and the grant of the Container Licenses, the
Purchaser will pay to UDG for the benefit of the Sellers, in the manner provided
in this Section 1.7 and in Section 1.8, the sum (the "Purchase Price") of (i)
$144,312,522 (the "Estimated Purchase Price") and (ii) the Book Value
Adjustment.
(b) Set forth on Schedule 1.7(b) is the parties' calculation of the
Estimated Purchase Price. Not less than five business days prior to the Closing
Date, the Sellers shall deliver to the Purchaser an updated statement setting
forth the Sellers' good faith estimate of the Purchase Price (the "Closing
Amount"), including estimates of the Book Value Adjustment (the "Estimated Book
Value Adjustment") and of each of items (i)-(iii) in the definition of Book
Value Adjustment, together with reasonably detailed supporting documentation for
such estimate. At the Closing, the Purchaser shall pay to UDG, for the benefit
of the Sellers, the Closing Amount by wire transfer of immediately available
funds.
(c) The Purchase Price shall be allocated among the Assets and the
Container Licenses by each party consistently with the principles of Section
1060 of the Code and the regulations promulgated thereunder.
<PAGE>
SECTION 1.8. Closing Statement. (a) Within 60 days after the Closing
Date, UDG shall deliver to the Purchaser a statement (the "Closing Statement")
setting forth the Closing Adjustment and the amounts of each of items (i)-(iii)
in the definition of Book Value Adjustment (the "Book Value Calculation"). The
Purchaser will provide to the Sellers and its representatives access at all
reasonable times to the Assets and any books and records related thereto for the
purposes of preparing the Closing Statement.
(b) The Purchaser may, by notice given to UDG within 60 days of receipt
of the Closing Statement, dispute the Closing Adjustment and Book Value
Calculation as set forth in the Closing Statement, including the reasons
therefor. If the Purchaser does not send such a notice, the Closing Statement
and the Closing Adjustment and Book Value Calculation as set forth therein shall
be final and binding. If the Purchaser should send such a notice, the Purchaser
and UDG shall seek in good faith to resolve any dispute. During such period of
time, UDG and the Sellers' Accountants shall use their commercially reasonable
efforts to cooperate with the Purchaser and the Purchaser's Accountants and
provide access to the work papers of the Sellers' Accountants relevant to the
Closing Statement.
(c)(i) If the Purchaser shall have disputed the Closing Statement and
the Purchaser and UDG shall not have reached written agreement as to the Closing
Adjustment and Book Value Calculation prior to the 90th calendar day after the
date of delivery of the Closing Statement, then either the Sellers or the
Purchaser may by notice to the other submit to the Unaffiliated Firm for
determination, in accordance with this Section 1.8(c), the amount of the Closing
Adjustment. Any such determination made by the Unaffiliated Firm shall be
conclusive and binding on all parties to this Agreement.
<PAGE>
(ii) The "Unaffiliated Firm" shall be a "Big Six" accounting firm
(other than the Sellers' Accountants, the Purchaser's Accountants, or any other
such firm which, at the time of or within the three years prior to its
selection, shall have been regularly employed by or had any other material
business relationship with the Sellers, the Purchaser, or any of their
Affiliates) selected by lot. If no "Big Six" firm can or will accept such
engagement, the parties agree that the Unaffiliated Firm shall be selected by
agreement between the Sellers' Accountants and the Purchaser's Accountants.
(iii) Within 30 days after the giving of the notice under Section
1.8(c)(i) (or the selection of the Unaffiliated Firm, if later), the Purchaser
and the Sellers shall each propose a Closing Adjustment to the Unaffiliated
Firm, together with the reasons therefor, in writing.
(iv) The amount determined by the Unaffiliated Firm (acting as an
expert and not as an arbitrator) shall not be higher than the higher of the
proposed Closing Adjustment or lower than the lower of the proposed Closing
Adjustment. The Unaffiliated Firm shall render its decision within 30 days after
the last submission under Section 1.8(c)(iii). Notwithstanding the foregoing, if
the difference between the proposed Closing Adjustments shall be less than
$200,000, the Closing Adjustment shall be the average of the proposed Closing
Adjustments and the Unaffiliated Firm shall not render any decision.
(d) Promptly, but in any event not more than 15 days, after
determination of the Closing Adjustment, whether pursuant to the second sentence
of Section 1.8(b), by agreement of the parties, or by decision of the
Unaffiliated Firm, (A) if the Closing Adjustment is a negative amount, UDG shall
pay the absolute value of such amount to the Purchaser, and (B) if the Closing
Adjustment is a positive amount, the Purchaser shall pay such amount to UDG,
<PAGE>
for the benefit of the Sellers, in either case together with simple interest on
the Closing Adjustment at the Prime Rate for the period from the Closing Date to
and through the date of payment. All payments made under this Section 1.8(d)
shall be made by wire transfer of immediately available funds.
(e) The fee of the Unaffiliated Firm for any determination under this
Section 1.8 shall be shared as follows: the Purchaser shall bear that portion of
such fee equal to the total fee multiplied by a fraction, the denominator of
which shall be the difference between the Closing Adjustment as initially
proposed to the Unaffiliated Firm by the Sellers and the Closing Adjustment as
initially proposed to the Unaffiliated Firm by the Purchaser, and the numerator
of which shall be the difference between the Closing Adjustment as determined by
the Unaffiliated Firm and the Closing Adjustment as initially proposed by the
Purchaser; and the Sellers shall bear the remainder of such fees.
(f) Nothing herein shall be construed to (i) authorize or permit the
Unaffiliated Firm to arbitrate or determine any question or matter whatever
under or in connection with this Agreement except the specific items in dispute
between the parties with respect to the amount of the Closing Adjustment to be
determined in accordance with the provisions of this Agreement or (ii) require
the Unaffiliated Firm to follow the rules of the American Arbitration
Association or any other body in making such determination.
(g) The accounting principles and procedures set forth in the
Accounting Methodology described on Schedule 1.8(g) have been and will be used
in calculating the Estimated Purchase Price, the Estimated Book Value
Adjustment, and the Book Value Adjustment.
<PAGE>
SECTION 1.9. Prorations. With respect to the items listed on Schedule
1.9, for any period commencing before and ending after the Closing Date, the
Sellers and the Purchaser shall, except as may be otherwise provided herein,
make such arrangements as may be necessary such that the Sellers will bear such
obligations up to the Closing Date and the Purchaser will bear such obligations
thereafter. In addition, the parties will make such arrangements as may be
necessary so that UDG will receive the royalties under the Mr. Boston Contract
and other Contracts referred to on Schedule 1.9 for the period through the
Closing Date and the Purchaser will receive such royalties for the period after
the Closing Date. Prorations shall be made in the manner provided for each item
on Schedule 1.9 as is described on Schedule 1.9. The arrangements referred to in
this Section 1.9 will include a net payment from one party to the other as
described on Schedule 1.9 on the Closing Date and from time to time after the
Closing Date, if necessary.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally, represent and warrant to, and agree
with, the Purchaser as follows:
SECTION 2.1. Organization, Good Standing, and Power. Each Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of its state of organization and has all requisite corporate power and
authority to conduct its business as it is now being conducted and to own or
hold under lease the Assets owned or held by it under
<PAGE>
lease. All of the capital stock of each Seller (other than UDG) is owned,
directly or indirectly, by UDG.
SECTION 2.2. Authority. Each Seller and each Seller Affiliate has all
requisite corporate power and authority to execute and deliver whichever of this
Agreement, the Licenses, the Transfer Documents, and the Other Agreements to
which it is or will be a party, to consummate the transactions contemplated
hereby and thereby, and to perform its obligations hereunder and thereunder. The
execution, delivery, and performance of this Agreement, the Licenses, each Other
Agreement, and the Transfer Documents and the consummation of the transactions
contemplated hereby and thereby have been (or, in the case of the Sellers other
than UDG and the Seller Affiliates, prior to Closing will have been) duly
authorized by all necessary corporate action on the part of the Sellers and the
Seller Affiliates in accordance with applicable Law and their respective
certificates of incorporation and by-laws. This Agreement has been, and at the
Closing the Licenses, each Other Agreement, and each Transfer Document will be,
duly executed and delivered by the Sellers and each Seller Affiliate, each to
the extent it is a party thereto. This Agreement constitutes, and the Licenses,
each Other Agreement, and each Transfer Document when executed and delivered
will constitute, a valid and binding obligation of the Sellers or the Seller
Affiliate party thereto, as the case may be, enforceable against such Sellers or
Seller Affiliate in accordance with its terms, subject as to enforceability to
bankruptcy, reorganization, insolvency, moratorium, and other similar Laws and
general equitable principles from time to time in effect affecting the
enforceability of creditors' rights generally. Except for making the
Governmental Filings, and obtaining the other consents (if any) of Governmental
Entities, listed on Schedule 2.2 and for expiration of the waiting period
<PAGE>
under the HSR Act, no consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any
Governmental Entity is required on the part of any of the Sellers or any Seller
Affiliate for the execution, delivery, or performance of this Agreement, the
Licenses, the Other Agreements, and the Transfer Documents by the Sellers and
the Seller Affiliates and the consummation of the transactions contemplated
hereby and thereby. Except for the Required Consents as listed on Schedule
1.2(m) and Schedule 2.2, and provided that the Purchaser meets (or the relevant
licensor waives) the Chi-Chi's Requirements as described on Schedule 1.2(c)-1,
no consent of any party to any Contract to which any of the Sellers or Seller
Affiliates, or to which any of the Sellers or Seller Affiliates or any of their
businesses, properties, or assets are subject, is required for the execution,
delivery, or performance by the Sellers and the Seller Affiliates of this
Agreement, the Licenses, the Other Agreements, and the Transfer Documents and
the consummation of the transactions contemplated hereby and thereby; the
execution, delivery, and performance of this Agreement, the Licenses, the Other
Agreements, and the Transfer Documents by the Sellers and the Seller Affiliates
will not (if the Required Consents are obtained prior to the Closing and the
Chi-Chi's Requirements are satisfied or waived) violate, result in the breach
of, or constitute a default under any of the Assigned Contracts or any other
Contract to which any of the Sellers is a party and which affects any of the
Assets, or violate or result in a breach of the certificate of incorporation or
by-laws of any of the Sellers or Seller Affiliates; and (if the waiting period
under the HSR Act has expired and all Governmental Filings and other consents of
Governmental Entities listed on Schedule 2.2 are obtained or made) the
execution, delivery, and performance of this Agreement, the Licenses, the Other
Agreements, and the Transfer
<PAGE>
Documents by the Sellers and the Seller Affiliates will not violate, result in a
breach of, or conflict with any Law binding on any of the Sellers or Seller
Affiliates or to which any of the Assets are subject.
SECTION 2.3. Compliance with Applicable Laws. Except as set forth on
Schedule 2.3, (a) each of the Sellers has complied with all Laws pertaining to
the Business and no Seller has received any pending written or, to the Sellers'
Knowledge, oral notice of any alleged violation of or liability under any such
Laws and (b) without limiting the foregoing, each Seller has complied with all
applicable Laws relating to antitrust and trade regulations pertaining to the
Business; provided, that no representation is made in this Section 2.3 with
respect to Environmental and Safety Requirements or Laws relating to the
employment of labor. Any construction at the Plants since the effective date of
applicable provisions of the ADA has been performed in compliance with the
requirements of the ADA.
SECTION 2.4. U.S. Trademarks. Each U.S. Trademark identified with a
registration or application number on Schedule 1.2(a)-1 or Schedule 1.2(a)-2 is
owned by the Seller indicated on such schedule as owning such U.S. Trademark and
is registered or application for registration has been made, solely in the name
of such Seller (or in a prior name of such Seller), on the Principal or
Supplemental Register (as indicated on such schedule) of the United States
Patent and Trademark Office, under the registration or application numbers set
forth on such schedules; the status of each such application is set forth on
such schedules; each such registration indicated on such schedules as currently
in use is valid; except as set forth on such schedules, each such registration
is in full force and effect; and such Seller has authority to assign such U.S.
Trademarks and their associated goodwill and registrations or applications to
<PAGE>
the Purchaser as contemplated by this Agreement. The Sellers have authority to
assign the Trade Names to the Purchaser as contemplated by this Agreement. The
U.S. Trademarks and the Trade Names are held by the Sellers free and clear of
all Liens except for the licenses included in the Assigned Contracts and
licenses granted to the Purchaser or its Affiliates. To the Knowledge of the
Sellers, no third party has acquired, or claims to have acquired, any right,
title, or interest in and to any U.S. Trademark or Trade Name on or in
connection with the Products by virtue of the registration or use of, or intent
to use, such U.S. Trademark or Trade Name on or in connection with the Products
in all or in any geographic areas of the United States, except for the licenses
included in the Assigned Contracts, licenses granted to the Purchaser or its
Affiliates, and the rights of third parties described on Schedule 2.4. None of
the Sellers is a party to any pending suit, dispute, or claim, nor has received
any pending written or, to the Sellers' Knowledge, oral notice of any threatened
suit, dispute, or claim, regarding the registration or use of, or intent to use,
the U.S. Trademarks or Trade Names. To the Knowledge of the Sellers, except as
set forth on Schedule 2.4, no trademark right of any third party will be
infringed by the use by the Purchaser in the United States of the U.S.
Trademarks or Trade Names which are in use in the United States as indicated on
Schedules 1.2(a)-1 and 1.2(a)-2, provided such use is not materially different
from the manner in which such U.S. Trademarks or Trade Names have been used by
the Sellers prior to the date of this Agreement.
SECTION 2.5. Foreign Trademarks. Each Foreign Trademark
identified with a registration or application number on Schedule 1.2(b) is owned
by the Seller indicated on Schedule 1.2(b) as owning such Foreign Trademark and
is registered or application for
<PAGE>
registration has been made, solely in the name of such Seller (or in a prior
name of such Seller) under the registration or application numbers set forth on
Schedule 1.2(b), and such Seller has authority to assign such Foreign Trademarks
and their associated goodwill and registrations and applications to the
Purchaser as contemplated by this Agreement. To the Knowledge of the Sellers,
the Foreign Trademarks are held by the Sellers free and clear of all Liens,
except for the licenses included in the Assigned Contracts or granted pursuant
to the Terminated Foreign Distributor Agreements listed on Schedule 6.9(b). To
the Knowledge of the Sellers, without investigation, no third party has
acquired, or claims to have acquired, any right, title, or interest in and to
any Foreign Trademark or Trade Name on or in connection with the Products by
virtue of the registration or use of, or intent to use, such Foreign Trademark
or Trade Name on or in connection with the Products in all or in any geographic
areas outside of the United States in which such Foreign Trademark is registered
as shown on Schedule 1.2(b) or in which such Trade Name is used, except for the
licenses granted pursuant to such Terminated Foreign Distributor Agreements and
the rights of third parties described on Schedule 2.4. None of the Sellers is a
party to any pending suit, dispute, or claim, nor has received any pending
written notice of any threatened suit, dispute, or claim, regarding the
registration or use of, or intent to use, the Foreign Trademarks or Trade Names.
To the Knowledge of the Sellers without investigation, except as set forth on
Schedule 2.4, no trademark right of any third party will be infringed by the use
by the Purchaser of any Foreign Trademark in the geographic areas outside the
United States in which such Foreign Trademark has been used by the Sellers,
provided such use is not materially different from the manner in
<PAGE>
which such Foreign Trademark has been used by the Sellers in such geographic
areas prior to the date of this Agreement.
SECTION 2.6. Licensed Marks. To the Knowledge of the Sellers (without
investigation, as to foreign registrations and Section 2.6(b)), (a) each
Chi-Chi's/Fleischmann's Trademark identified with a registration number on
Schedule 1.2(c)-2 is owned by the respective Chi-Chi's/Fleischmann's Licensor
and is registered, solely in the name of such Chi-Chi's/Fleischmann's Licensor,
on the Principal or Supplemental Register of the United States Patent and
Trademark Office or on various foreign registries as set forth on such schedule
under the registration numbers set forth on Schedule 1.2(c)-2, each such United
States registration indicated on Schedule 1.2(c)-2 as currently in use is valid,
and each such United States registration is in full force and effect and (b) the
Chi-Chi's/Fleischmann's Trademarks are held by the Chi-Chi's/Fleischmann's
Licensors free and clear of all Liens except the Chi-Chi's/Fleischmann's
Licenses. The Sellers have authority to assign the Chi-Chi's/Fleischmann's
Licenses to the Purchaser as contemplated by this Agreement, provided the
Purchaser satisfies the Chi-Chi's Requirements or such requirements are waived.
The Sellers and, to the Knowledge of the Sellers without investigation, each
Chi-Chi's/Fleischmann's Licensor, have complied in all material respects with
all Laws of the United States or any subdivision thereof applicable to or
affecting the Chi-Chi's/Fleischmann's Trademarks and no Seller nor, to the
Knowledge of the Sellers without investigation, any Chi-Chi's/Fleischmann's
Licensor has received any pending notice of any asserted violation of any such
Laws. To the Knowledge of the Sellers without investigation, except as may be
reflected in the Chi-Chi's/Fleischmann's Licenses, no third party has acquired,
or claims to have
<PAGE>
acquired, any right, title, or interest in or to any Chi-Chi's/Fleischmann's
Trademark on or in connection with the Products by virtue of the registration or
use of, or intent to use, such Chi-Chi's/Fleischmann's Trademark on or in
connection with the Products in all or in any geographic areas of the United
States or in all or in any geographic areas outside of the United States in
which such Chi-Chi's/Fleischmann's Trademark is registered as shown on Schedule
1.2(c)-2. None of the Sellers nor, to the Knowledge of the Sellers without
investigation, any Chi-Chi's/Fleischmann's Licensor is a party to any pending
suit, dispute, or claim, nor have any of the Sellers nor, to the Knowledge of
the Sellers without investigation, any Chi-Chi's/Fleischmann's Licensor received
any pending written notice of any threatened suit, dispute, or claim, regarding
the registration and use of, or intent to use, any Chi-Chi's/Fleischmann's
Trademark. No Seller, nor, to the Knowledge of the Sellers, any
Chi-Chi's/Fleischmann's Licensor, is in breach or default under any
Chi-Chi's/Fleischmann's License.
SECTION 2.7. Other Intellectual Property. There are no trademarks,
service marks, trade names, copyrights, patents, or other intellectual property
owned or licensed by the Sellers and used in the conduct of the Business, other
than (a) the Trademarks, the Chi-Chi's/Fleischmann's Trademarks, the Trade
Names, and the intellectual property subject to the Container Licenses, (b) the
Mr. Boston Copyright and common law rights, if any, in the Formulae, the
Records, the Literature, and the Intellectual Property (the intellectual
property referred to in this Section 2.7(b) being the "Other Intellectual
Property"), and (c) customer lists and other intellectual property included in
the Excluded Assets. Except for the Mr. Boston Copyright and approvals or
registrations relating to the Formulae, none of the Other Intellectual
<PAGE>
Property has been registered or filed with any Governmental Entity. The Other
Intellectual Property is owned by the Sellers free and clear of all Liens except
for the licenses included in the Assigned Contracts and licenses granted to the
Purchaser or its Affiliates. To the Knowledge of the Sellers, no third party has
acquired, or claims to have acquired, any right, title, or interest in and to
any Other Intellectual Property in connection with the Products by virtue of the
registration or use of, or intent to use, such Other Intellectual Property on or
in connection with the Products in all or in any geographic areas of the United
States, except for the licenses included in the Assigned Contracts, licenses
granted to the Purchaser or its Affiliates, and the rights of third-parties
described on Schedule 2.4. None of the Sellers is a party to any pending suit,
dispute, or claim, nor has received any pending written or, to the Sellers'
Knowledge, oral notice of any threatened suit, dispute, or claim, regarding the
use of, or intent to use, any Other Intellectual Property. To the Knowledge of
the Sellers, except as set forth on Schedule 2.4, no intellectual property right
of any third party will be infringed by the use by the Purchaser of the Other
Intellectual Property in the United States, provided such use is not materially
different from the manner in which such Other Intellectual Property has been
used by the Sellers.
SECTION 2.8. Title to Certain Assets. On the date of this Agreement (to
the extent in existence, with respect to Inventory) and on the Closing Date, the
Sellers own and will own, respectively, all right, title, and interest in and to
the Assets (other than the Trademarks, Trade Names, Other Intellectual Property,
Manufacturing Equipment, and Plants, as to which representations are made
elsewhere in this Agreement) free of Liens other than Permitted Encumbrances.
<PAGE>
SECTION 2.9. Purchaser's Title to Assets. Upon consummation of the
transactions provided for in this Agreement in accordance with the terms hereof,
the Purchaser will be vested with good and (in the case of the Owned Property)
marketable title to all of the Assets (other than the Foreign Trademarks), free
and clear of all Liens other than Permitted Encumbrances. To the Knowledge of
the Sellers without investigation, upon consummation of the transactions
provided for in this Agreement in accordance with the terms hereof, the
Purchaser will be vested with good title to the Foreign Trademarks, free and
clear of all Liens other than Permitted Encumbrances and licenses granted
pursuant to the Terminated Foreign Distributor Agreements.
SECTION 2.10. Litigation. Except as set forth on Schedule 2.10, there
is no suit, action, litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending or, to the Knowledge
of the Sellers, threatened against any of the Sellers, or any of their officers,
directors, or employees with respect to the business of the Sellers, nor any
judgments, decrees, injunctions, or orders of any Governmental Entity against
any Seller or to which any Seller is otherwise a party, in each case which (a)
relates to the Assets (other than the Trademarks, Trade Names,
Chi-Chi's/Fleischmann's Trademarks, Chi-Chi's/Fleischmann's Licenses, or Other
Intellectual Property, and provided that no representation is made in this
Section 2.10 with respect to environmental, employee (including occupational
health and safety and employee benefits), or product liability matters, as to
which representations are made elsewhere in this Agreement) or (b) affects the
validity, binding nature, or enforceability of this Agreement, any License, any
Other Agreement, or any Transfer Document or otherwise affect the ability of the
Sellers to perform their obligations hereunder
<PAGE>
or thereunder. Except as set forth in Schedule 2.10, no Seller is engaged in any
legal action to recover monies due it or for damages sustained by it which
relate to the Business.
SECTION 2.11. Assigned Contracts. The Sellers have delivered or made
available to the Purchaser true and complete copies (including all amendments,
modifications, or waivers) of all of the Assigned Contracts listed on Schedule
1.2(m). The Assigned Contracts listed on Schedule 1.2(m) and the Contracts
listed or described on Schedule 1.3(l) are all of the Material Contracts (other
than Orders). To the Knowledge of the Sellers, each of the Assigned Contracts
(other than Orders) is valid, binding, and in full force and effect. Each of the
Orders is or at Closing will be a valid and bona fide customer or purchase
order. Except as disclosed on Schedule 1.2(m), there is no default or event
which (with the giving of notice, lapse of time, or both) would constitute a
default by any Seller or, to the Knowledge of the Sellers, any other party under
any Assigned Contract (other than delays in performance which occur in the
ordinary course of business and which do not materially adversely affect any
party to any such Assigned Contract). No Seller has received written or, to the
Sellers' Knowledge, oral notice that any party to any Assigned Contract intends
to cancel, terminate, not renew, or exercise an option thereunder, whether in
connection with the transactions contemplated hereby or otherwise. Schedule 2.11
sets forth a true and complete list, as of a date or dates within three days of
the date of this Agreement as set forth thereon, of all Orders (as if such date
were the Closing Date) which have an unexpired term of one year or more or the
unsatisfied portion of which involves payments of $50,000 or more. Any copies of
such Orders furnished by the Sellers to the Purchaser are true, correct, and
complete copies thereof.
<PAGE>
SECTION 2.12. Manufacturing Equipment. As of the Closing Date, the
Manufacturing Equipment and any items leased under the Assigned Contracts will
include all of the equipment, trade fixtures, trucks, forklifts, furnishings,
and other tangible personal property (other than data processing equipment used
by the Sellers or their Affiliates for or at locations other than the Plants and
other than the Excluded Assets) necessary to permit the operations at the Plants
to be conducted in substantially the same manner as such operations have
heretofore been conducted. The Manufacturing Equipment listed on Schedule 1.2(g)
is all of the Manufacturing Equipment (other than tooling, repair parts, stores,
and similar items not readily listable) in existence on the date hereof, except
for any such items which do not have a Book Value in excess of $1,000
individually or $50,000 in the aggregate. Except as set forth on Schedule 2.12,
the Manufacturing Equipment and the equipment leased under the Assigned
Contracts are in good operating condition (normal wear and tear excepted), and
fit for the purposes for which they are being used (excluding any Manufacturing
Equipment which has a Book Value of zero and is not in use or held for use). The
Sellers have good title to the Manufacturing Equipment, free and clear of any
Liens except Permitted Encumbrances. Except for equipment which is off-site for
repair, all of the Manufacturing Equipment and personal property leased under
the Assigned Contracts is located at the Plants.
SECTION 2.13. Title to Properties; Encumbrances. (a) The Sellers have
good and marketable fee simple title to the Owned Property, in each case free
and clear of all Liens except for Permitted Encumbrances.
(b) Except as reflected on Schedule 2.13(b) and except for the
Permitted Encumbrances:
<PAGE>
(i) the Sellers have, and will transfer to the Purchaser at
Closing, all easements, real property licenses, and rights of way and
similar rights necessary to conduct business on the Owned Property;
(ii) no portion of any of the Owned Property is subject to any
pending condemnation proceeding or proceeding by any Governmental
Entity adverse to the Owned Property and, to the Sellers' Knowledge,
there is no threatened condemnation or proceeding with respect thereto;
(iii) the Plants, including, without limitation, the
buildings, improvements, structures, fixtures, heating, ventilation,
and air conditioning systems, roof, foundation, and floors, are in good
operating condition, normal wear and tear excepted, and are fit for the
purposes for which they are being used (except for the boiler
house/chimney stack referred to in Section 6.20);
(iv) the Sellers have not received any pending written or, to
the Sellers' Knowledge, oral notice that the Owned Property is in
violation of any covenants, restrictions, or documents of record;
(v) since the Statement Date, no written or, to the Sellers'
Knowledge, oral notice of any increase in the assessed valuation of the
Owned Property or of any contemplated special assessment has been
received by any Seller, nor, to the Sellers' Knowledge, has any special
assessment been threatened;
(vi) there are no leases, subleases, licenses, concessions,
or other agreements, written or, to the Knowledge of the Sellers,
oral, granting to any party or parties other
<PAGE>
than the Sellers the right of use or occupancy of any portion of the
parcels of the Owned Property, except the Permitted Encumbrances;
(vii) there are no parties other than the Sellers in
possession of any portions of the parcels of the Owned Property;
(viii) all facilities located on any parcel of the Owned
Property are supplied with utilities and other services necessary for
the operation of such facilities in the manner in which they have been
operated immediately prior to the date of this Agreement, all of which
services are adequate to conduct that portion of the Business conducted
at each of such facilities in the manner in which they have been
operated immediately prior to the date of this Agreement;
(ix) no Seller is a party to any written or, to the Sellers'
Knowledge, oral agreements or undertakings with owners or users of
properties adjacent to any facility located on any parcel of Owned
Property relating to the use, operation, or maintenance of such
facility or any adjacent real property, except the Permitted
Encumbrances;
(x) all real estate taxes and assessments relating to the
Owned Property have been paid through December 31, 1994;
(xi) the Sellers have furnished the Purchaser with copies of
all unexpired and transferable improvement warranties relating to the
Plants; and
(xii) there are no pending or, to the Sellers' Knowledge,
threatened, requests, applications or proceedings to alter or restrict
the zoning or other use restrictions applicable to the Owned Property
and the Sellers do not have Knowledge of and have not received any
written notice from any Governmental Entity of any plans, studies, or
<PAGE>
efforts by any Governmental Entity that would affect the present use
or zoning of any property or realign or relocate any adjacent street
or highway.
SECTION 2.14. Employees. Except as set forth on Schedule 2.14, on the
date of this on the Agreement there is not, and within the last three years
there has not been, (a) any pending or, to the Knowledge of the Sellers,
threatened strike, picketing, boycott, walkout, work stoppage or slowdown, or
other labor dispute, in each case at either of the Plants, or (b) any action,
litigation, arbitration, claim, allegation, grievance, charge, or complaint
against any Seller by any employee of the Sellers at the Plants, except workers'
compensation claims which did not involve, in any individual claim by a single
employee, payments exceeding $1,000. Except as set forth on Schedule 2.14, there
are no arbitration awards, court orders, orders of the National Labor Relations
Board, or private settlement agreements which in any way alter, amend, or
clarify any Collective Bargaining Agreement or which restrict or otherwise
affect the ability of the owner of a Plant to act with respect to the employees
covered by any Collective Bargaining Agreement in the future. Except as set
forth on Schedule 2.14, Schedule 2.15(c), or Schedule 2.16(a), the Sellers have
complied with all applicable Laws relating to the employment of labor at the
Plants, including provisions thereof relating to wages, hours, equal
opportunity, collective bargaining, and the payment of social security and other
taxes. No Seller is liable for any arrears of wages or any taxes or penalties
for failure to comply with any such Laws with respect to either Plant. To the
Sellers' Knowledge, no key employee listed as such on Schedule 2.14 has any
plans to terminate employment with any Seller at a Plant.
SECTION 2.15. Employee Benefits. (a) Except as set forth in Schedule
2.15(a), with respect to all Plant Employees, no Seller nor any Plan Affiliate
has within the past six years
<PAGE>
participated in, made contributions to, or had any other liability (including
any potential liability) with respect to any Employee Plan which is a
"multiemployer plan" as defined in Section 4001 of ERISA, a "multiemployer plan"
within the meaning of Section 3(37) of ERISA, a "multiple employer plan" within
the meaning of Code Section 413(c) or a "multiple employer welfare arrangement"
within the meaning of Section 3(40) of ERISA which could result in the
Purchaser's, such Seller's, or any Plan Affiliate of the Purchaser or any Seller
having any current or future obligation to contribute to, or any other liability
(including any potential liability) with respect to, any such plan, and no
Seller, the Purchaser, nor any Plan Affiliate of any Seller or the Purchaser has
incurred (or could incur) any current or potential withdrawal liability as a
result of a complete or partial withdrawal (or potential partial withdrawal)
from any such plan.
(b) Except as set forth in Schedule 2.15(b), no Seller nor any Plan
Affiliate of any Seller has within the past six years maintained or contributed
to or obligated itself to make contributions to (or any other liability with
respect to) any funded or unfunded Employee Welfare Plan on behalf of or with
respect to any Plan Beneficiaries, whether or not terminated, which provides
medical, health, life insurance, or other welfare-type benefits for current or
future retirees or current or future former employees, their spouses or
dependents, or any other Persons (except for limited continued medical benefit
coverage for former employees, their spouses, and other dependents as required
to be provided under Section 4980B of the Code) which would give rise to any
Seller, the Purchaser, or any Plan Affiliate of any Seller or the Purchaser
having any obligation to maintain or contribute to (or having any other
liability or potential liability with respect to) any such plan as of the
Closing or at any time in the future.
<PAGE>
(c) Except as set forth on Schedule 2.15(c), no Seller nor any Plan
Affiliate of any Seller has incurred any liability to the PBGC, the IRS, any
multiemployer plan, the Department of Labor, or otherwise with respect to any
Employee Plan currently or previously maintained by any Seller or any Plan
Affiliate of any Seller that has not been satisfied in full, and no condition
exists that presents a risk to any Seller, the Purchaser, or any Plan Affiliate
of any Seller or the Purchaser of incurring such a liability, other than
liability for premiums due the PBGC.
SECTION 2.16. Environmental and Safety Requirements. (a) Except as
disclosed in Schedule 2.16(a), (i) to the Knowledge of the Sellers, each Plant
is in compliance with all Environmental and Safety Requirements, except where
the failure to be in compliance, individually or in the aggregate, would result
in the payment of fines, penalties, and investigation, remediation, court, and
other similar costs of less than $25,000, and (ii) each Plant possesses all
Permits required by, and has filed in a timely manner all notices, applications,
reports, and disclosures required by, Environmental and Safety Requirements.
(b) Except as disclosed in Schedule 2.16(b): (i) to the Knowledge of
the Sellers, there are no Hazardous Materials present at, in, under, or upon any
Plant; (ii) there are no underground Hazardous Material storage tanks of any
kind located at the Plants; (iii) no Seller is subject to, or within the three
years preceding the date of this Agreement has received any written or, to the
Sellers' Knowledge, oral notice of, any private, administrative, or judicial
action relating to the presence or alleged presence of Hazardous Materials in,
under, or upon the Owned Property or relating to any other Person that has, at
any time, on behalf of the Sellers, disposed of or otherwise handled Hazardous
Materials generated by or the source of
<PAGE>
which is any Plant; and (iv) there are no pending or, to the Knowledge of the
Sellers, threatened actions or proceedings (or written or, to the Knowledge of
the Sellers, oral notices of potential actions or proceedings) from any
Governmental Entity or any other entity regarding any matter described in
Section 2.16(b)(i).
(c) Schedule 2.16(c) sets forth, to the Knowledge of the Sellers, the
name and principal place of business of every off-site waste disposal
enterprise, and each of the haulers, transporters, or cartage enterprises,
utilized now or in the preceding ten years by each Seller or any of its
predecessors for the benefit of each Plant to treat, transport, store, recycle,
reclaim, or dispose of Hazardous Materials at any such off-site waste disposal
location.
(d) Except as set forth on Schedule 2.16(a), (b), (c), or (d), to the
Knowledge of the Sellers there are and have been no past or present events,
conditions, circumstances, activities, practices, incidents, or actions which
could reasonably be expected to interfere in a material respect with or prevent
continued compliance with any Environmental and Safety Requirements at either
Plant.
(e) The Sellers have furnished to the Purchaser copies of all
environmental audits, assessments, and reports, and have furnished or made
available to the Purchaser all sampling and testing results, relating to the
Plants which were prepared within the four years prior to the date of this
Agreement by or at the direction of the Sellers or are in the possession of the
Sellers or, to the Sellers' Knowledge, their accountants or counsel or, in the
case of audits, assessments, and reports only, consultants. To the Knowledge of
the Sellers, no environmental audits or assessments received by the Sellers from
any prior owner of any Seller or any of the Owned Property have been destroyed
or discarded.
<PAGE>
(f) Nothing in this Section 2.16 shall limit the Sellers' obligations
under Section 8.1(d) or Section 8.14.
SECTION 2.17. Product Liability. Except as disclosed in Schedule 2.17,
there are no outstanding or to the Sellers' Knowledge threatened Product
Liability Claims and Liabilities, other than any Product Liability Claims and
Liabilities which, if adversely determined, would not be reasonably likely to
result in any individual case in liability in excess of $5,000. All of the
Products produced have been labeled in conformance with applicable Laws.
Schedule 2.17 lists all written warranties given by any Seller with respect to
the Products which are in effect. The Sellers' current insurance is adequate
(subject to deductibles and self-insured portions) to cover all pending or to
the Sellers' Knowledge threatened Product Liability Claims and Liabilities.
Schedule 2.17 lists the insurer for each current listed Product Liability Claim
and Liability covered by insurance or designates such Product Liability Claim
and Liability, or portion thereof, as uninsured and the applicable individual
and aggregate policy limits and deductibles. Schedule 2.17 sets forth all
completed Product Liability Claims and Liabilities to which any Seller was a
party during the three years preceding the date of this Agreement (other than
any Product Liability Claims and Liabilities which, if adversely determined,
would not have been reasonably likely to result in any individual case in
liability in excess of $5,000), the date such claim was made, and, for any claim
with respect to which more than $5,000 was paid, the nature of the resolution
thereof (including amounts paid in settlement or judgment).
SECTION 2.18. Permits. Schedule 2.18 is a true, correct, and complete
list as of the date of this Agreement of all Permits held by any Seller relating
to the Business or the Plants.
<PAGE>
Each Seller possesses all rights under all Permits necessary to enable each
Seller to carry on the Business as presently conducted. All such Permits are
valid and in full force and effect. No Seller has received any pending written
or, to the Sellers' Knowledge, oral notice of any proceeding, action, or
investigation by any Governmental Entity to revoke or terminate any such Permit
prior to the normal expiration thereof or not to renew any such Permit on
customary terms.
SECTION 2.19. Conduct of Business. Since the Statement Date, each
Seller has conducted its portion of the Business only in the ordinary course
consistent with past custom and practices. Except as set forth on Schedule 2.19,
since the Statement Date there has not been any:
(a) event, nor has any condition arisen, which has resulted
in, or is reasonably likely to result in, a material adverse change in
the operating results, assets, or employee, customer or supplier
relations of the Business, provided that this Section 2.19(a) shall not
be deemed breached as a result of any supplier or customer having
informed the Sellers that it does not intend to do business with the
Purchaser following the Closing with respect to the Business;
(b) destruction or loss of any Manufacturing Equipment or
portion of any Plant necessary to the operation of the Business,
whether or not covered by insurance, having a replacement cost in
excess of $50,000;
(c) loan or advance pertaining to the Business by any Seller
to any party other than sales to customers on credit and employee
advances in the ordinary course of business consistent with past custom
and practices;
<PAGE>
(d) cancellation, waiver, or release by any Seller of any
debts, rights, or claims pertaining to the Business, except in each
case in the ordinary course of business consistent with past custom and
practices;
(e) amendment or termination of any Assigned Contract to which
any Seller is a party, other than expiration of Contracts in accordance
with their terms and amendments listed on Schedule 1.2(m);
(f) adoption, amendment, or termination of any Employee
Plan, except as required by Law or the IRS; or
(g) increase in the benefits provided under any Employee
Plan
SECTION 2.20. Rebate and Promotional Programs. Schedule 2.20 lists all
Rebate Programs and Promotional Programs currently in effect or scheduled for
implementation during the remainder of calendar year 1995 or calendar year 1996.
SECTION 2.21. Salaries. Schedule 2.21 is a complete list as of the date
of this Agreement of the names and current compensation rates, titles/positions,
and dates of hire of all Union Employees and Non-Union Employees. Except as set
forth in Schedule 2.21 or as required pursuant to the Collective Bargaining
Agreements, since the Statement Date, (a) no Transferring Employee has received
any bonus or increase in compensation (other than increases of Union Employees
resulting from changes in position or grade), (b) there has been no "general
increase" in the compensation or rate of compensation payable to any
Transferring Employees, and (c) to the Sellers' Knowledge, there has not been
any promise made by the Sellers to any such employees of any bonus or increase
in compensation. The term "general increase" as used herein means any increase
generally applicable to a class or group of
<PAGE>
employees that shall not include increases granted to individual employees for
merit, length of service, or change in position or responsibility made on the
basis of any Collective Bargaining Agreement or an established course of conduct
or policy of the pertinent Seller. There are no Contracts regarding employment
for any Transferring Employee other than the Collective Bargaining Agreements
and the employment Contract listed on Schedule 1.3(l).
SECTION 2.22. Shipments and Depletions. Schedule 2.22 is a true,
accurate, and complete listing of the Sellers' shipments, and the shipments of
the Sellers' customers in the United States (depletions) as reported to the
Sellers' by such customers, in each case in cases, by brand and state and for
the two twelve-month periods ended December 31, 1993 and 1994 and the period
from January 1, 1995 to June 30, 1995; provided, in the case of information for
the period from January 1, 1995 to June 30, 1995, that such information (a) may
not reflect all withdrawals from bailment in the final month of such period and
(b) includes estimates of depletions in each control state for the months
subsequent to the latest month for which reports have been received by the
Sellers from such state as of the date of this Agreement.
SECTION 2.23. Product Profit and Loss Statements. The Product profit
and loss statements attached hereto as Schedule 2.23 present fairly in all
material respects the information set forth therein for the periods indicated on
such statements, subject to the exceptions and qualifications indicated in the
notes to such statements. The Sellers' sales, cost of sales, and other expenses
set forth in such statements were not affected by any transaction between the
Sellers and, or payments made or costs incurred on behalf of the Sellers by,
other Affiliates or former Affiliates of the Sellers except for transactions,
payments, or costs incurred
<PAGE>
which are described in the notes to such statements or otherwise are described
on Schedule 2.23.
SECTION 2.24. Taxes. The Sellers have filed all Tax Reports required to
be filed prior to the date of this Agreement. Each Tax Report filed by the
Sellers since January 1, 1992 was, when filed, true, complete, and accurate, and
the Sellers have paid all amounts due and owing with respect to such Tax
Reports. There are no pending or, to the Knowledge of the Sellers, threatened
actions or proceedings with respect to any duties or excise Taxes concerning the
Business.
SECTION 2.25. Distributors. Set forth on Schedule 2.25 is a true and
complete list of the Distributors.
SECTION 2.26. Suppliers and Customers. As of the date of this
Agreement, none of the suppliers or customers listed on Schedule 2.26 have
informed the Sellers, in writing or, to the Sellers' Knowledge, orally, that it
does not intend to do business with the Purchaser following the Closing with
respect to the Business, except as set forth on Schedule 2.26.
SECTION 2.27. Accuracy of Information. None of the representations and
warranties of the Sellers set forth in this Agreement (including the Schedules
hereto) or in any of the Transfer Documents or certificates to be delivered to
the Purchaser as contemplated by any provision hereof contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading. None of the material
information provided to the Purchaser by the Sellers as described in Section 6.1
has been designed intentionally to mislead the Purchaser in the negotiation of
the Purchase Price or this Agreement, any of the Licenses, or any of the Other
Agreements.
<PAGE>
SECTION 2.28. Brokers. No Seller has incurred any liability to any
broker, finder, or agent and there are no claims against any Seller or any
Affiliate of any Seller for any brokerage fees, finder's fees, or commissions in
connection with the transactions contemplated by this Agreement.
SECTION 2.29. No Implied Warranties. THE PURCHASER ACKNOWLEDGES THAT,
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PURCHASER IS ACQUIRING THE
ASSETS WITHOUT ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO THE
FITNESS, MERCHANTABILITY, OR CONDITION OF THE ASSETS OR THE PRESENCE OR ABSENCE
OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to, and agrees with, the
Sellers as follows:
SECTION 3.1. Organization, Good Standing, and Power. The Purchaser is,
and each Purchaser Subsidiary is or at the Closing will be, a corporation duly
organized and validly existing under the laws of its state of organization and
has or will have all requisite corporate power and authority to conduct its
business as it is now being conducted and to execute and deliver whichever of
this Agreement, the Licenses, the Other Agreements, and the Purchaser Documents
to which it is or will be a party, to consummate the transactions contemplated
<PAGE>
hereby and thereby, and to perform its obligations hereunder and thereunder. All
of the capital stock of each Purchaser Subsidiary is or will be owned, directly
or indirectly, by the Purchaser.
SECTION 3.2. Authority. The execution, delivery, and performance of
this Agreement, the Licenses, each Other Agreement, and the Purchaser Documents
and the consummation of the transactions contemplated hereby and thereby have
been (or, in the case of the Purchaser Subsidiaries, prior to Closing will have
been) duly authorized by all necessary corporate action on the part of the
Purchaser and the Purchaser Subsidiaries in accordance with applicable Law and
their respective certificates of incorporation and by-laws. This Agreement has
been, and at the Closing each License, each Other Agreement, and each Purchaser
Document will be, duly executed and delivered by the Purchaser and each
Purchaser Subsidiary, each to the extent it is a party thereto. This Agreement
constitutes, and each License, each Other Agreement, and each Purchaser Document
when executed and delivered will constitute, a valid and binding obligation of
the Purchaser or the Purchaser Subsidiary a party thereto, as the case may be,
enforceable against the Purchaser or such Purchaser Subsidiary in accordance
with its terms, subject as to enforceability to bankruptcy, reorganization,
insolvency, moratorium, and other similar Laws and general equitable principles
from time to time in effect affecting the enforceability of creditors' rights
generally. Except for making the Governmental Filings, and obtaining the
Approvals and other consents (if any) of Governmental Entities, listed on
Schedule 3.2 and for expiration of the waiting period under the HSR Act, no
consent, authorization, approval, order, license, certificate, or permit of or
from, or declaration or filing with, any Governmental Entity is required on the
part of the Purchaser or any Purchaser Subsidiary for the execution, delivery,
or performance of this
<PAGE>
Agreement, the Licenses, the Other Agreements, and the Purchaser Documents by
the Purchaser and the Purchaser Subsidiaries and the consummation of the
transactions contemplated hereby and thereby. Except as set forth on Schedule
3.2, no consent of any party to any Contract to which the Purchaser or any
Purchaser Subsidiary, or to which the Purchaser or any Purchaser Subsidiary or
any of their businesses, properties, or assets are subject, is required for the
execution, delivery, or performance by the Purchaser and the Purchaser
Subsidiaries of this Agreement, the Licenses, the Other Agreements, and the
Purchaser Documents and the consummation of the transactions contemplated hereby
and thereby; the execution, delivery, and performance of this Agreement, the
Licenses, the Other Agreements, and the Purchaser Documents by the Purchaser and
the Purchaser Subsidiaries will not violate, result in the breach of, or
constitute a default under, any Contract to which the Purchaser or any Purchaser
Subsidiary is a party or by which the Purchaser or any Purchaser Subsidiary or
any of the Purchaser's or any Purchaser's Subsidiary's property is bound, or
violate or result in a breach of the articles of incorporation or by-laws of the
Purchaser or any Purchaser Subsidiary; and (if the waiting period under the HSR
Act has expired and all Governmental Filings, Approvals, and other consents of
Governmental Entities listed on Schedule 3.2 are obtained or made) the
execution, delivery, and performance of this Agreement, the Licenses, the Other
Agreements, and the Purchaser Documents by the Purchaser and the Purchaser
Subsidiaries will not violate, result in a breach of, or conflict with any Law
binding on the Purchaser or any Purchaser Subsidiary or to which the Purchaser
or any Purchaser Subsidiary or any of the Purchaser's or any Purchaser's
Subsidiary's business, properties, or assets are subject.
<PAGE>
SECTION 3.3. Litigation. There is no suit, action, litigation,
arbitration, claim, governmental or other proceeding (formal or informal), or
investigation pending or, to the Knowledge of the Purchaser, threatened with
respect to the Purchaser or any Purchaser Subsidiary or any of their officers,
directors, or employees with respect to their business or any of the Purchaser's
businesses, properties, or assets which may affect the validity, binding nature,
or enforceability of this Agreement, the Licenses, any Other Agreement, or any
Purchaser Document or otherwise affect the ability of the Purchaser and the
Purchaser Subsidiaries to perform their obligations hereunder or thereunder.
SECTION 3.4. Funding. The Purchaser has previously delivered to UDG a
true, correct, and complete copy of the Commitment Letter. The Commitment Letter
has been duly executed and delivered by the Purchaser or its Parent and the
Purchaser or its Parent has paid all fees and expenses required thereby or in
connection therewith. The Purchaser and its Parent, to the Knowledge of the
Purchaser, are capable of satisfying, and shall use their commercially
reasonable efforts to satisfy, all conditions to funding of the loan described
in the Commitment Letter which are within their sole control and the Purchaser
has no Knowledge that such loan will not be funded in connection with the
Closing. The Purchaser and its Parent will use their commercially reasonable
efforts to comply with all covenants and to satisfy all conditions to funding
which are in their sole control set forth in the Commitment Letter.
SECTION 3.5. Accuracy of Information. None of the representations and
warranties of the Purchaser set forth in this Agreement (including the Schedules
hereto) or in any of the Purchaser Documents or certificates to be delivered to
the Sellers as contemplated by any
<PAGE>
provision hereof contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading.
SECTION 3.6. Brokers. The Purchaser has not incurred any liability to
any broker, finder, or agent and there are no claims against the Purchaser or
any Affiliate of the Purchaser for any brokerage fees, finder's fees, or
commissions in connection with the transactions contemplated by this Agreement.
ARTICLE IV
CONDITIONS TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser under this Agreement to consummate the
transactions contemplated hereby will be subject to the satisfaction at or prior
to the Closing Date of all of the following conditions, any one or more of which
may be waived at the option of the Purchaser:
SECTION 4.1. Accuracy of Representations and Compliance with Covenants
and Conditions. All representations and warranties of each Seller contained in
this Agreement shall be true and correct in all material respects when made and,
in addition, shall be true and correct in all material respects as of the
Closing as though such representations and warranties were then made in exactly
the same language by such Seller, except to the extent that the truth or
correctness of any of such representations or warranties is affected as a result
of the transactions contemplated hereby or by the Licenses or any of the Other
Agreements or any action by the Purchaser; and each Seller shall in all material
respects have performed and complied with all covenants and agreements and
satisfied all conditions required to be
<PAGE>
performed and complied with by it at or before such time by this Agreement. For
purposes of this Section 4.1, breaches of representations, warranties,
covenants, and agreements shall be deemed "material" only if, in the aggregate,
the Losses which the Purchaser would be reasonably likely to suffer as a result
of or arising from such breaches exceed $500,000. Each Seller shall deliver at
the Closing Date a certificate certifying the fulfillment by it of the foregoing
conditions, as provided in Section 7.2.
SECTION 4.2. Other Closing Documents. The Sellers shall have delivered
or caused to be delivered to the Purchaser at or prior to the Closing the other
documents and instruments referred to in Section 7.2.
SECTION 4.3. No Governmental Action. No injunction, restraining order,
or other order or legal restraint or prohibition issued by any Governmental
Entity shall be in effect which would prevent the consummation of the
transactions contemplated by this Agreement or materially interfere with the
Purchaser's ability to own the Assets and operate the Business and no proceeding
brought by or before any Governmental Entity shall be pending, or threatened by
any Governmental Entity, which seeks any such injunction, order, restraint, or
prohibition.
SECTION 4.4. Hart-Scott-Rodino Waiting Period. All applicable waiting
periods in respect of the transactions contemplated by this Agreement under the
HSR Act shall have expired or been terminated at or prior to the Closing.
SECTION 4.5. Required Consents Needed. All Material Required Consents
shall have been duly given or obtained.
<PAGE>
SECTION 4.6. Other Agreements. Each of (a) the Brandy Agreement between
the Purchaser or a Purchaser Subsidiary and UDG, in all substantive respects in
the form attached hereto as Exhibit 4.6(a) (the "Brandy Agreement"), (b) the
Bottling Agreement between the Purchaser or a Purchaser Subsidiary and UDG, in
all substantive respects in the form attached hereto as Exhibit 4.6(b) (the
"Bottling Agreement"), (c) the Canadian Whisky Supply Agreement and the Canadian
New Fillings Agreement, each between the Purchaser or a Purchaser Subsidiary and
United Distillers Canada Inc., a Quebec corporation, in all substantive respects
in the forms attached hereto as Exhibit 4.6(c) (the "Canadian Whisky
Agreements"), (d) the Scotch Whisky Supply Agreement between the Purchaser or a
Purchaser Subsidiary and UDG, in all substantive respects in the form attached
hereto as Exhibit 4.6(d) (the "Scotch Whisky Agreement"), (e) the Barrel Storage
Agreement between the Purchaser or a Purchaser Subsidiary and UDG, in all
substantive respects in the form attached hereto as Exhibit 4.6(e) (the "Barrel
Agreement"), (f) the Clarendon Lease Agreement between the Purchaser or a
Purchaser Subsidiary and United Distillers Manufacturing, Inc., in all
substantive respects in the form attached hereto as Exhibit 4.6(f) (the
"Clarendon Lease"), (g) the Flavoring Supply Agreement between the Purchaser or
a Purchaser Subsidiary and UDG, in all substantive respects in the form attached
hereto as Exhibit 4.6(g) (the "Flavoring Supply Agreement"), (h) the California
Packaging Services Agreement between the Purchaser or a Purchaser Subsidiary and
UDG, in all substantive respects in the form attached hereto as Exhibit 4.6(h)
(the "California Agreement"), (i) the Medley Lease Agreement and the Medley
Barrel Storage Agreement, each between the Purchaser or a Purchaser Subsidiary
and Medley Distilling Company or UDG, respectively, in all substantive respects
in the forms attached hereto as
<PAGE>
Exhibit 4.6(i) (the "Medley Agreements"), (j) the Services Agreements between
the Purchaser or a Purchaser Subsidiary and UDG, in all substantive respects in
the forms attached hereto as Exhibit 4.6(j) (the "Services Agreements"), (k) the
Guaranty of Guinness America, Inc., in all substantive respects in the form
attached hereto as Exhibit 4.6(k) (the "Guinness Guaranty"), (l) the Corn
Whiskey Agreement between the Purchaser or a Purchaser Subsidiary and UDG, in
all substantive respects in the form attached hereto as Exhibit 4.6(l) (the
"Corn Whiskey Agreement"), and (m) the Barton Guaranty shall have been duly
authorized, executed, and delivered by UDG or such Seller Affiliate, as the case
may be, at or prior to the Closing and at the Closing shall be in or come into
full force.
SECTION 4.7. Licenses. The Licenses shall have been duly authorized,
executed, and delivered by the appropriate Sellers at or prior to the Closing
and at the Closing shall be in or come into full force.
SECTION 4.8. Governmental Filings. The Sellers and the Purchaser shall
have made all Governmental Filings, and obtained all Approvals and other
consents of Governmental Entities, listed on Schedule 2.2 and Schedule 3.2
(excluding any not identified on such schedules as material).
SECTION 4.9. Title To Facilities. Subject to payment of applicable
premiums, the Purchaser shall have received a Title Policy for each parcel of
Owned Property pursuant to the Title Commitments, in the form and containing the
endorsements as set forth as Schedule T; any survey defect or encroachment or
violation of easements or building lines from or onto the Owned Property, other
than Permitted Encumbrances, shall have been cured or insured over pursuant to
an endorsement satisfactory to the Purchaser prior to the Closing; any Liens
which
<PAGE>
are not Permitted Encumbrances shall have been deleted from the Title Policies;
and each such Title Policy shall be in an amount equal to the fair market value
of such Owned Property as reasonably specified by the Purchaser, insuring title
to such Owned Property to be in the Purchaser subject to the Permitted
Encumbrances.
SECTION 4.10. Financing. Chase or any other participating lenders shall
have funded the loan described in the Commitment Letter; provided, that the
Purchaser shall not be excused from performance of its obligations hereunder if
the failure to fund is due to any failure of the Purchaser or its Parent to
perform their obligations under Section 3.4.
SECTION 4.11. Damage or Destruction. From the date of this Agreement to
the Closing Date, there shall have been no material loss or destruction of any
Assets, nor any institution or threat of any material condemnation or other
proceedings to acquire or limit the use of any Assets, where "material," only
for purposes of this Section 4.11, shall mean a loss, casualty, or proceeding
which has resulted or is reasonably likely to result in a loss (regardless of
insurance) exceeding $500,000.
SECTION 4.12. No Material Adverse Change. From the date of this
Agreement to the Closing Date, no event shall have occurred which shall have
resulted in, or be reasonably likely to result in, a material adverse change in
the operating results or employee, customer, or supplier relations of the
Business, other than any such change described on or contemplated by Schedule
2.19 or which results from any supplier or customer having informed the Sellers
that it does not intend to do business with the Purchaser following the Closing
with respect to the Business.
<PAGE>
ARTICLE V
CONDITIONS TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers under this Agreement to consummate the
transactions contemplated hereby will be subject to the satisfaction at or prior
to the Closing Date of all of the following conditions, any one or more of which
may be waived at the option of the Sellers:
SECTION 5.1. Accuracy of Representations and Compliance with Covenants
and Conditions. All representations and warranties of the Purchaser contained in
this Agreement shall be true and correct in all material respects when made and,
in addition, shall be true and correct in all material respects as of the
Closing as though such representations and warranties were then made in exactly
the same language by the Purchaser; and the Purchaser shall in all material
respects have performed and complied with all covenants and agreements and
satisfied all conditions required to be performed and complied with by it at or
before such time by this Agreement. For purposes of this Section 5.1, breaches
of representations, warranties, covenants, and agreements shall be deemed
"material" only if, in the aggregate, the Losses which the Sellers would be
reasonably likely to suffer as a result of or arising from such breaches exceed
$500,000. The Purchaser shall deliver at the Closing Date a certificate
certifying the fulfillment by it of the foregoing conditions, as provided in
Section 7.3.
SECTION 5.2. Other Closing Documents. The Purchaser shall have
delivered or caused to be delivered to the Sellers at or prior to the Closing
the other documents and instruments referred to in Section 7.3.
SECTION 5.3. No Governmental Action. No injunction, restraining order,
or other order or legal restraint or prohibition issued by any Governmental
Entity shall be in effect
<PAGE>
which would prevent the consummation of the transactions contemplated by this
Agreement and no proceeding brought by or before any Governmental Entity shall
be pending, or threatened by any Governmental Entity, which seeks any such
injunction, order, restraint, or prohibition.
SECTION 5.4. Hart-Scott-Rodino Waiting Period. All applicable waiting
periods in respect of the transactions contemplated by this Agreement under the
HSR Act shall have expired or been terminated at or prior to the Closing.
SECTION 5.5. Required Consents Needed. All Material Required Consents
shall have been duly given or obtained.
SECTION 5.6. Other Agreements. Each of (a) the Brandy Agreement, (b)
the Bottling Agreement, (c) the Canadian Whisky Agreements, (d) the Scotch
Whisky Agreement, (e) the Barrel Agreement, (f) the Clarendon Lease, (g) the
Flavoring Supply Agreement, (h) the California Agreement, (i) the Medley
Agreements, (j) the Services Agreements, (k) the Corn Whiskey Agreement, (l) the
Guinness Guaranty, and (m) the Guaranty of the Purchaser, in all substantive
respects in the form attached hereto as Exhibit 5.6(m) (the "Barton Guaranty"),
shall have been duly authorized, executed, and delivered by the Purchaser or a
Purchaser Subsidiary, as the case may be, at or prior to the Closing and at the
Closing shall be in or come into full force.
SECTION 5.7. Licenses. The Licenses shall have been duly authorized,
executed, and delivered by the Purchaser or a Purchaser Subsidiary at or prior
to the Closing and at the Closing shall be in or come into full force.
<PAGE>
SECTION 5.8. Governmental Filings. The Sellers and the Purchaser shall
have made all Governmental Filings, and obtained all Approvals and other
consents of Governmental Entities, listed on Schedule 2.2 and Schedule 3.2
(excluding any not identified on such schedules as material).
ARTICLE VI
PRE- AND POST-CLOSING COVENANTS
SECTION 6.1. Access to Information. (a) The Sellers have provided to
the Purchaser certain financial, sales, and other information which relates to
the Assets. Until the earlier of the Closing and the termination of this
Agreement, the Sellers will afford the Purchaser and its representatives
reasonable access to such information and other information in the possession of
the Sellers relating to the Assets; provided, that the Sellers shall have no
obligation to grant access to any document if disclosure of such document could
result in the loss of any attorney-client, attorney work product, or similar
privilege with respect to any documents; and provided further that the Purchaser
shall not until the Closing have any rights to access to (i) any Formulae which
are confidential or constitute trade secrets or (ii) any personnel records or
files. Notwithstanding anything in this Agreement to the contrary, all such
information shall be subject to the Confidentiality Agreement prior to and after
the Closing Date, which is hereby incorporated by reference herein. From and
after Closing, the Confidentiality Agreement shall terminate, except that it
shall survive with respect to any information which pertains to any assets or
business of the Sellers or their Affiliates other than the Assets and the
Business.
<PAGE>
(b) Following the Closing, the Purchaser will retain the UD Records at
the Plants on UD's behalf for a period of not less than two years. Thereafter,
the Purchaser will not destroy or dispose of any UD Records without giving UDG
30 days' prior notice of intention to destroy or dispose of such UD Records. If,
within such 30 day period, UDG shall notify the Purchaser that UDG intends to
remove such records from the Plants, the Purchaser shall not destroy or dispose
of such records until 90 days after such notice from UDG to the Purchaser,
during which period UDG shall make arrangements to remove such records. UDG may,
at any time during the period the Purchaser retains the UD Records pursuant to
this Section 6.1(b), remove all or any part of the UD Records from the Plants,
provided that such removal does not interfere with the Purchaser's operation of
the Business or damage the Assets.
(c) Notwithstanding anything to the contrary in this Agreement, risk of
loss or damage for the UD Records after the Closing shall remain with the
Sellers and the Purchaser shall have no liability or responsibility therefor so
long as the Purchaser has acted in good faith to comply with its obligations
under this Section 6.1.
(d) UDG shall have access, during the Purchaser's regular business
hours at the Plants and on reasonable notice, to the UD Records and, to the
extent reasonably necessary in connection with the preparation of any tax or
financial reports or the defense or prosecution of any matters relating to the
Excluded Liabilities or any matters with respect to which the Sellers are
responsible to indemnify the Purchaser hereunder or with respect to the Excluded
Assets, to the Records. The Purchaser shall permit UDG to make copies of or
extracts from such Records at UDG's expense. During the applicable periods
following the Closing as provided in the Purchaser's records retention policy
(as previously furnished to the Sellers), the
<PAGE>
Purchaser will use its good faith efforts to give UDG the same notice and
opportunity to remove as is provided above with respect to the UD Records prior
to any destruction or disposal of Records relating to Bureau of Alcohol, Tobacco
and Firearms, customs, quality control, or safety.
SECTION 6.2. Costs, Expenses, and Taxes. All costs and expenses
incurred in connection with this Agreement, the Licenses, the Other Agreements,
and the transactions contemplated hereby and thereby shall be paid by the party
incurring such cost or expense, except as otherwise provided in Schedule 6.2 or
elsewhere in this Agreement or in the Licenses or any Other Agreement.
SECTION 6.3. Bulk Sales. The Purchaser and the Sellers hereby waive
compliance with any bulk sales or similar Laws which may be applicable to the
transactions contemplated hereby.
SECTION 6.4. Insurance. For a period of five years from the Closing
Date, the Sellers (directly or through their parent companies) and the Purchaser
(directly or through its Parent) shall maintain, at their respective sole cost,
comprehensive General Liability Insurance including Contractual Liability
Insurance and Products Liability Insurance for an amount customary in the
industry from time to time for comparably sized companies, but not less than the
respective amounts set forth on Schedule 6.4. Each party shall have the right to
inspect the other's original policies. Each party shall be named during such
five-year period as an additional "insured" on the other's policies. Each
certificate of additional insured provided for herein may provide that such
additional insured's rights under such policy are limited to such additional
insured's rights under this Agreement as its interests appear hereunder. The
coverage
<PAGE>
will be described as primary, and a certificate of insurance will be forwarded
to each party verifying that the other's policy coverages are in force and
stating that such party has been added as an additional insured and that the
insurer will use its commercially reasonable efforts to give such party 30 days'
prior written notice prior to cancelling such coverage.
SECTION 6.5. Bottles. From and after the Closing, the Sellers shall
permit the Purchaser to use the glass molds listed on Schedule 6.5 for any of
its products and shall give such instructions to the glass suppliers holding
such molds on behalf of the Sellers as be reasonably necessary to permit the
Purchaser to order glass from such suppliers using such molds. The Sellers shall
also give such instructions to the suppliers holding the Transferred Molds as
the Purchaser may reasonably request to effectuate the transfer to the Purchaser
of the Sellers' interests therein.
SECTION 6.6. Operation in Ordinary Course. Until the earlier of the
Closing and the termination of this Agreement:
(a) The Sellers will conduct the Business in the ordinary
and usual course in substantially the same manner as it is presently
operated, including the production, sale, and promotion of Products,
and not implement any Rebate Program or Promotional Program other than
those listed on Schedule 2.20.
(b) The Sellers will use their commercially reasonable
efforts to preserve their rights to, and the goodwill associated with,
the Trademarks, the Chi-Chi's/Fleischmann's Trademarks, the Mr. Boston
Copyrights, the Trade Names, and the Intellectual Property.
<PAGE>
(c) Except in the ordinary course of business or as required
by Law or contractual obligations or other understandings or
arrangements existing on the date of this Agreement, each Seller will
not (i) increase in any manner the base compensation of, or enter into
any new bonus or incentive agreement or arrangement with, any of the
Transferring Employees, (ii) pay or agree to pay any additional
pension, retirement allowance, or other employee benefit to any such
Transferring Employee, (iii) enter into any new employment, severance,
consulting, or other compensation agreement with any existing
Transferring Employee, or (iv) amend or enter into a new Employee Plan
(except as required by Law) or amend or enter into a new collective
bargaining agreement pertaining to a Transferring Employee.
(d) Subject to the terms and conditions of this Agreement,
each Seller will use its commercially reasonable efforts to keep
available the services of the Transferring Employees, and preserve the
goodwill, reputation, and present relationships of the Business with
its suppliers, customers, licensors, and others having such business
relations with the Business.
(e) Each Seller will (i) use its commercially reasonable
efforts to maintain the Owned Property in good repair, order, and
condition, normal wear and tear excepted, (ii) use its commercially
reasonable efforts to maintain and keep in full force existing
insurance or appropriate replacements therefor relating to the Assets,
(iii) maintain its records relating to the Assets in the usual,
regular, and ordinary manner on a basis consistent with past practices,
and (iv) use its commercially reasonable efforts to perform and comply
with its obligations under all Assigned Contracts. Except as
<PAGE>
contemplated by this Agreement, no Seller shall make any material
alterations to the Owned Property without the prior written consent of
the Purchaser, which consent shall not be unreasonably withheld or
delayed.
(f) Except in the ordinary course of business or as otherwise
provided for in or contemplated by this Agreement, no Seller will (i)
sell, lease, transfer, or otherwise dispose of any of the Assets, (ii)
create or permit to exist any Lien on the Assets other than Permitted
Encumbrances, (iii) enter into any joint venture, partnership, or other
similar arrangement or form any other new arrangement for the operation
of the Assets, (iv) accelerate or delay the manufacture, shipment, or
sale of any Inventory in a manner inconsistent with past practices, or
(v) make any new commitments for capital expenditures at the Plants.
(g) The Sellers will use their commercially reasonable efforts
between the date of this Agreement and the Closing to secure
fulfillment of matters within their or their Affiliates' control which
are conditions precedent to the Purchaser's obligations hereunder, and
the Purchaser will use its commercially reasonable efforts between the
date of this Agreement and the Closing to secure fulfillment of matters
within its or its Affiliates' control which are conditions precedent to
the Sellers' obligations hereunder. The Sellers will use their
commercially reasonable efforts to obtain all Required Consents and the
Estoppel Certificates. Notwithstanding the foregoing, nothing in this
Agreement shall require any Seller or the Purchaser to pay any money
(other than amounts payable by the Purchaser or its Affiliates as
required or contemplated by the Commitment Letter) to, or enter into
any contractual or other obligation with, any other
<PAGE>
party as a condition or inducement to obtain any Required Consent
(except as may be required by any Assigned Contract as a condition to
obtain any such Required Consent) or any Estoppel Certificate, except
that the Purchaser and the Sellers agree to pay the amounts described
on Schedule 6.2 with respect to the Required Consent referred to
therein.
(h) The Sellers shall use their commercially reasonable
efforts so that at the Closing Date the number of Depletion Days (as
defined in Schedule 6.6(h)) shall not exceed 60.
SECTION 6.7. Governmental Filings and Approvals. (a) Upon or as
promptly as practicable after the execution hereof (to the extent not heretofore
made or obtained), (i) each of the Sellers and the Purchaser shall make all
Governmental Filings and apply for such other consents of Governmental Entities
as are listed on Schedule 2.2 or Schedule 3.2, respectively, including but not
limited to a Notification and Report Form pursuant to the HSR Act, requesting
early termination of the applicable waiting period, and (ii) the Purchaser
shall, to the extent permitted by Law, apply for all Approvals, including
without limitation those listed on Schedule 3.2 or Schedule 6.7. To the extent
the Purchaser cannot, by Law, apply for any Approvals listed on Schedule 6.7
prior to the Closing, the Purchaser shall apply for such Approvals upon or as
promptly as practicable after the Closing.
(b) The Sellers and the Purchaser shall (i) provide such information as
each may reasonably request to make such filings and prepare such applications,
(ii) cooperate with each other and use their commercially reasonable efforts to
assist the other in making and pursuing such filings and applications, (iii)
respond as promptly as practicable to all requests for
<PAGE>
additional information or documentation required in connection with such filings
and applications, and (iv) otherwise use their commercially reasonable efforts
to obtain all Required Consents and Approvals required for consummation of the
transactions contemplated by this Agreement.
SECTION 6.8. Additional Actions. Each Seller will use its commercially
reasonable efforts to facilitate and effect the transfer of the Assets as
contemplated hereby, including the implementation of the transfer of the Assets
to the Purchaser, and, for such purpose but without limitation, the Sellers
will, at and after the Closing, execute and deliver to the Purchaser such
assignments, bills of sale, consents, and other instruments to effect the
transfer of the Assets in all countries to the Purchaser as contemplated hereby,
as the Purchaser or its counsel may reasonably request as necessary or desirable
for such purpose. Prior to, at, and after the Closing, the Sellers will
cooperate with the Purchaser to enable the Purchaser to obtain all Approvals. At
and after the Closing, the Sellers will cooperate with the Purchaser (a) in
executing all documents necessary for the Purchaser to file transfers of the
registrations of the Trademarks and Intellectual Property in any country in the
world and the transfer of transferrable government label permits and approvals,
and (b) to enable the Purchaser to make use of and register its use of the Trade
Names, including executing and filing such instruments as may be necessary to
file in connection with, or to evidence, the discontinuation of the Sellers' use
of the Trade Names. Expenses in connection with compliance with this Section 6.8
shall be apportioned as provided on Schedule 6.2.
SECTION 6.9. Distributors. (a) On or before August 1, 1995 (except as
indicated on Schedule 6.9(a)), the Sellers gave notice to the Distributors
listed on Schedule 6.9(a),
<PAGE>
terminating Contracts with such Distributors with respect to distribution of the
Products, effective as of or prior to the Closing (or, for Contracts which
require more than 30 days notice for such termination, as soon as allowable
thereafter). At or within five days after the Closing, the Sellers shall send
notices to all Distributors (and, where required, Governmental Entities), in
substantially the forms set forth as Exhibit 6.9(a), informing them of the
purchase and sale contemplated hereby, and of the Trademarks and rights to
Chi-Chi's/Fleischmann's Trademarks (to the extent relevant to each Distributor
or Governmental Entity) so transferred.
(b) The Sellers shall, prior to or as promptly as practicable after the
Closing, give notice terminating each of the agreements listed on Schedule
6.9(b) (the "Terminated Foreign Distributor Agreements") upon the notice
required pursuant thereto. The Purchaser agrees to honor the license grants
provided pursuant to, and to otherwise assume the Sellers' obligations under,
each Terminated Foreign Distributor Agreement until the end of the notice period
required for terminating such Terminated Foreign Distributor Agreement.
(c) The Purchaser agrees that, concurrently with giving any notice
(written or oral) to any Distributor in the United States other than those
listed in Schedule 6.9(a) that the Purchaser does not intend to deal with, or is
terminating the distribution arrangement with, such Distributor with respect to
any Products, the Purchaser will give the Sellers notice of the Purchaser's
intentions to so refuse to deal with or terminate such Distributor. The covenant
set forth above in this Section 6.9(c) shall terminate at the date of
termination of UDG's obligations to perform the services described in part A of
Schedule I to the General Services Agreement. The Sellers shall keep such
information confidential with the same care they apply to their own confidential
information.
<PAGE>
SECTION 6.10. Title Commitments and Surveys. With respect to each
parcel of Owned Property, UDG shall deliver all other documentation (including
FRPTA affidavits and title affidavits) which the Purchaser or the Title Company
may reasonably request for purposes of the Title Policies.
SECTION 6.11. Employee Matters. (a) Effective as of the Closing, the
Sellers shall assign and Purchaser shall assume all of the Sellers' obligations
to be performed or discharged after the Closing under the Collective Bargaining
Agreements (other than obligations which are excluded from the Assumed
Liabilities by the exclusions to Section 1.5(b)), and the Purchaser shall offer
employment pursuant to the terms thereof to all Union Employees.
(b) The Purchaser agrees to offer to all Non-Union Employees employment
with the Purchaser effective on the Closing at positions of comparable rank to
that held by, and at wages and salaries that are not less than the wages and
salaries being paid by the Sellers to, such employees immediately prior to the
Closing and otherwise on the terms and conditions set forth on Schedule 6.11(b).
(c) Without limiting the generality of the foregoing, the Purchaser
shall, for purposes of eligibility, vesting, and benefit entitlement under all
of the Purchaser's employee benefit plans and to the extent permitted by Law and
such plans, recognize the service of all New Employees (including awarding
credit under any defined contribution pension plans or other benefit plans
maintained by the Purchaser) for all service properly credited to the New
Employees under any of the Sellers' defined contribution pension plans or other
benefit plans as in existence on the date hereof, including all service with
predecessor employers as may have been properly granted under such benefit plans
of the Sellers. The Purchaser's defined
<PAGE>
contribution pension plans and other benefit plans shall be amended to reflect
the foregoing. The Purchaser shall take such actions as may be necessary so that
(to the extent permitted by Law), (i) to the extent a New Employee or his or her
eligible spouse or dependent has satisfied the waiting period and/or
pre-existing condition limitations under the applicable Employee Welfare Plan,
such waiting period and/or pre-existing condition limitations will be regarded
as satisfied under each Employee Welfare Benefit Plan; (ii) to the extent a New
Employee has not satisfied the waiting period and/or pre-existing condition
limitation under the Employee Welfare Plan, properly credited service with the
Sellers shall be taken into account in applying waiting period and pre-existing
condition limitations under the Employee Welfare Benefit Plan; and (iii) all
amounts paid by the New Employee for the calendar year in which the Closing
occurs as deductibles or co-pay amounts or similar payments with respect to
benefits under the Employee Welfare Plans shall be credited as if so paid for
such calendar year with respect to the Employee Welfare Benefit Plans; provided,
however, that notwithstanding the foregoing, such crediting of payments shall be
contingent upon the Sellers providing the Purchaser as soon as practicable after
the Closing Date with documentation evidencing such payments made by New
Employees as well as such information as is reasonably necessary for proper
underwriting of such benefits.
(d) The Purchaser shall be liable for all claims for severance benefits
under the severance policy listed on Schedule 2.15(b) incurred with respect to
Transferring Employees on or after the Closing Date which arise as a result of
the transactions contemplated by this Agreement, and the Sellers shall be
responsible for any other claims for severance benefits (other than severance
benefits payable under policies instituted by the Purchaser, including the
<PAGE>
policy described in the next sentence). If, within one year after the Closing
Date, a New Employee other than a Union Employee (other than one who retires
under the Sellers' retiree benefit programs) is terminated by the Purchaser or
its Affiliates other than for misconduct or unsatisfactory performance, the
Purchaser shall provide such terminated New Employee other than a Union Employee
with severance benefits as set forth on Schedule 6.11(d).
(e) The Sellers shall be liable for any vacation benefits payable under
the Sellers' applicable policies on or prior to the Closing Date to Union
Employees and the Purchaser shall be liable for any vacation benefits after the
Closing Date to Union Employees who become New Employees. The Sellers and the
Purchaser shall each be liable for 50% of all vacation benefits for calendar
year 1995 earned and not used as of the Closing Date by Non-Union Employees who
become New Employees.
(f) The Sellers shall make all (i) "matching contributions" under the
UDMI Plan with respect to contributions made by or on behalf of Union Employees
accrued as of the Closing Date that would normally be matched by the Sellers,
(ii) profit sharing contributions accrued as of the Closing Date, if any, under
the terms of the UDMI Plan with respect to Union Employees, and (iii) matching
contributions accrued as of the Closing Date, if any, under the Guinness 401(k)
Plan with respect to the Non-Union Employees. The Sellers shall cause the
Guinness 401(k) Plan and the UDMI Plan to be amended to provide that all New
Employees shall be vested in their account balances under each such plan through
the Closing Date.
(g) The Sellers shall cause the trustees of the UDMI Plan to transfer,
within the meaning of Department of Treasury Regulation Section 1.414(l)-1(o),
to the trust created under
<PAGE>
the "employee pension benefit plan" (as defined in Section 3(2) of ERISA) as may
be established by the Purchaser pursuant to the Collective Bargaining
Agreements, liabilities and cash (or other assets acceptable to the funding
agent or trustees and the Sellers) in an amount equal to the value of such New
Employee's total account balance held under the UDMI Plan as of the date of the
transfer and as valued under the terms of the UDMI Plan and applicable Law on
the UDMI Plan's "valuation date" coincident with or next preceding the date of
the transfer.
(h) To the extent permitted by applicable Laws, each New Employee may
direct the trustee of the Guinness 401(k) Plan to transfer to the funding agent
or trustee of the Purchaser Plan by means of a rollover, either direct or
otherwise, within 90 days of the Closing Date cash and participant loan balances
equal to the value of such New Employee's total account balance held under the
Guinness 401(k) Plan as of the date of such rollover, whether direct or
otherwise and as valued under the terms of the Guinness 401(k) Plan and
applicable Law on the Guinness 401(k) Plan's valuation date of the rollover,
whether direct or otherwise. Such right of rollover to the Purchaser Plan shall
not limit any other rights which such New Employee has upon distribution from
the Guinness 401(k) Plan.
(i) The transfer of assets contemplated by Section 6.11(g) and the
direct rollover of the distributions contemplated by Section 6.11(h) are subject
to the prior delivery by the Purchaser to the Sellers of a legal opinion in form
and substance satisfactory to the Sellers from counsel acceptable to the Sellers
that such counsel is of the opinion that the Purchaser Plans meet the
qualification requirements of the Code. The Purchaser shall take all actions
necessary to obtain, or shall cause its Affiliates to obtain, on a timely basis,
a favorable
<PAGE>
determination letter from the IRS with respect to the Purchaser Plans to the
effect that such Purchaser Plans are qualified under the Code. The Purchaser
shall make, or cause to be made, in a timely manner any amendments to the
Purchaser Plans which may be required by the IRS as a condition for the issuance
of such a letter, and to permit the rollovers contemplated by Section 6.11(h).
The Purchaser Plans shall provide, as of the date of such transfer or rollover,
as the case may be, an account balance for each New Employee with respect to
whom such transfer or rollover, as the case may be, was made which is equal to
his or her account balance under the UDMI Plan or the Guinness 401(k) Plan, as
the case may be, as of the date of such transfer or rollover, as the case may
be. The Purchaser Plans shall recognize for all plan purposes all service
properly recognized by the UDMI Plan or the Guinness 401(k) Plan, as the case
may be, as of the Closing Date with respect to New Employees to the same extent
as properly recognized by such plan and shall treat such service as if it had
been service with the Purchaser. The Sellers shall supply the Purchaser with
information regarding such service within a reasonable period of time after the
Closing Date.
(j) The Sellers and the Purchaser shall take such action as may be
necessary or desirable to accomplish the transfer of assets described in Section
6.11(g) and the rollovers contemplated by Section 6.11(h), including notifying
the IRS if required by Section 6058 of the Code of the contemplated transfers
(and notifying any other agency of the federal government which is required by
Law to such notice), and to provide such further information or documents as the
IRS (or any other agency) may require. Further, if required by applicable Law or
regulations, the Sellers and the Purchaser agree to use their commercially
reasonable
<PAGE>
efforts to obtain any necessary IRS (or other United States federal government
agency) approval without material modification of the transactions contemplated
hereby.
(k) Notwithstanding anything to the contrary in this Agreement, the
Sellers shall remain liable for, and the Purchaser shall have no responsibility
for, any retiree medical, life or other welfare benefits arising under retiree
benefit programs of the Sellers or their predecessors.
(l) The Sellers and the Purchaser agree to provide on a correct and
timely basis such records and information as the Sellers or the Purchaser may
reasonably request to carry out their respective obligations under this Section
6.11.
(m) The Sellers shall be solely and exclusively liable for any and all
liabilities arising out of any obligation under any Law to offer or provide
continuation coverage under any Employee Welfare Plan to any Union Employee or
Non-Union Employee who is eligible for such coverage as a result of the
occurrence of an event on or before the Closing Date or an event after the
Closing with respect to any Union Employee or Non-Union Employee on leave of
absence as of the Closing Date, except that the Sellers shall have no liability
under this Section 6.11(m) with respect to any New Employee. The Sellers shall
be solely and exclusively liable for any and all liabilities arising out of any
obligation to provide notice of any such continuation rights for which the
Sellers are responsible hereunder.
(n) The Sellers shall remain liable for, and the Purchaser shall have
no responsibility for, all workers' compensation claims made by New Employees on
or before the Closing Date or arising from injuries or events occurring or
circumstances existing solely on or before the Closing Date. The Purchaser shall
be responsible for all workers' compensation claims made
<PAGE>
by New Employees arising from injuries or events occurring or circumstances
existing solely after the Closing Date.
(o) No provision of this Section 6.11 shall create any third party
beneficiary rights in any employee or former employee (including any beneficiary
or dependent thereof) of the Sellers in respect of continued employment (or
resumed employment) or in respect of any benefits that may be provided, directly
or indirectly, under any of the Sellers' or the Purchaser's employee benefit
plans (as defined in Section 3(2) of ERISA).
(p) Notwithstanding anything to the contrary in this Agreement, the
Purchaser shall not be required to offer employment to the individual employed
pursuant to the employment Contract listed on Schedule 1.3(l), such individual
need not be listed on Schedule 2.21, and the Sellers shall be responsible for
all liabilities under such employment Contract.
SECTION 6.12. Assistance In Collecting Certain Amounts. The Purchaser
shall remit promptly to UDG, for the benefit of the Sellers, any payments or
other sums received by the Purchaser that relate to any sales, shipments, or
other matters occurring on or before the Closing Date or that otherwise are
properly for the account of the Sellers. If, after the Closing Date, the Sellers
shall wish to make a claim or otherwise take action under an Assigned Contract
with respect to a liability of the Sellers that is not an Assumed Liability, or
if the Sellers shall request the Purchaser's assistance in collecting accounts
receivable of the Sellers from the Distributors, the Purchaser shall assist,
cooperate, and consult with the Sellers with respect to such action and shall
remit promptly to UDG, for the benefit of the Sellers, any payments or other
sums received by the Purchaser that relate thereto. The Sellers shall remit
promptly to the Purchaser any payments or other sums received by the Sellers
after the Closing
<PAGE>
Date that relate to any sales or shipments made by or are otherwise properly for
the account of the Purchaser.
SECTION 6.13. Differentiation Between Products of the Sellers and the
Purchaser. For a period of not less than 12 months after the Closing, the
Purchaser will code its products in the manner set forth on Schedule 6.13 or
another manner approved by the Sellers.
SECTION 6.14. Certain Financial Information. UDG shall provide or cause
to be provided to the Purchaser, or as described in Schedule 6.14 shall assist
the Purchaser in preparing, the audited and unaudited financial statements and
other information regarding the Assets described on Schedule 6.14, within the
time periods set forth on Schedule 6.14. The Sellers shall cause the Sellers'
Accountants to provide the Purchaser or its Affiliates such consents as may be
necessary for the Purchaser or its Affiliates to use such financial statements
in filings under the Securities Acts, to provide procedures letters as described
on Schedule 6.14, and to provide "comfort letters" as may be requested by the
Purchaser or its Affiliates and as are customarily given by accountants. All
expenses associated with providing the foregoing information, including expenses
associated with obtaining such consents, procedures letters, and comfort
letters, shall be paid by as provided in Schedule 6.2.
SECTION 6.15. Intangible Property. After Closing, the Sellers shall (a)
not infringe upon any of the Trademarks and (b) use their commercially
reasonable efforts to cooperate with the Purchaser at the Purchaser's expense in
the Purchaser's efforts after the Closing to maintain, protect, and enforce the
Purchaser's rights in the Trademarks and shall execute all documents reasonably
required to enable the Purchaser to accomplish such efforts.
<PAGE>
SECTION 6.16. Rebate Programs. Following the Closing, the Sellers shall
discharge all of the obligations under Rebate Programs put into effect by the
Sellers prior to Closing. liabilities for any Rebate Program shall be
apportioned between the Purchaser and the Sellers in accordance with Schedule
1.9 as soon as practicable following the end of such Rebate Program. The
Purchaser shall have no liability for any Grant Programs instituted by the
Sellers.
SECTION 6.17. Use Up Rights. (a) For a period of one year following the
Closing Date, the Sellers shall cooperate with the Purchaser, at the Purchaser's
sole expense, in connection with the Purchaser's efforts to obtain "use-up"
rights with respect to labels and trade dress included in the Assets, including,
if so requested by the Purchaser, confirmation to federal and state alcoholic
beverage authorities that the Purchaser is authorized by the Sellers to use such
labels and trade dress.
(b) The Purchaser agrees that, following the Closing, UDG may continue
to use the name "Glenmore" in its corporate name, and may continue to conduct
business under that name, to December 31, 1997. UDG shall not use the "Glenmore"
name as a trademark or service mark. If the Closing occurs, UDG agrees to change
its name by such date to a name not using the name "Glenmore." From the Closing
until such date, the Purchaser shall cooperate with the Sellers, at the Sellers'
sole expense, in connection with the Sellers' efforts to obtain "use-up" rights
with respect to advertising and point-of-sale materials on which the "Glenmore"
name appears, including, if so requested by the Sellers, confirmation to federal
and state alcoholic beverage authorities that the Sellers are authorized by the
Purchaser to use such materials. The Sellers acknowledge that, following the
Closing, the Purchaser will have the
<PAGE>
exclusive right, title, and interest in the Glenmore name and trademark. The
Sellers will not at any time do or cause to be done any act, directly or
indirectly, contesting or in any way impairing the Purchaser's right, title, and
interest in the Glenmore name and trademark. Every permitted use of the Glenmore
name shall inure to the benefit of the Purchaser.
SECTION 6.18. Required Consents. If any Required Consent relating to
any Contract is not obtained prior to Closing, and either (a) such Required
Consent is not a Material Required Consent or (b) such Required Consent is a
Material Required Consent but the parties waive the requirement to obtain such
Material Required Consent, then (c) the parties shall continue to use their
commercially reasonable efforts following the Closing to obtain such Required
Consent, (d) such Contract shall not be deemed assigned unless and until such
Required Consent is obtained, (e) the Sellers shall use their commercially
reasonable efforts to provide to the Purchaser the benefits which the Purchaser
would have received had such Required Consent has been obtained and cooperate in
any reasonable and lawful arrangement designed to provide such benefits to the
Purchaser, and (f) to the extent that the Purchaser is provided such benefits
pursuant to this Section 6.18, the Purchaser will perform for the benefit of the
other party or parties to such Contract the obligations of the Sellers, if any,
related thereto.
SECTION 6.19. Name Change. The Sellers shall not use the phrase "The
Viking Distillery Inc." or any derivation thereof from and after the Closing. On
the Closing Date, the Sellers shall cause a certificate for name change of The
Viking Distillery, Inc. to be filed.
SECTION 6.20. Destroying Boiler House/Chimney Stack. The Sellers will
use their commercially reasonable efforts to complete, prior to or as soon as
practicable after, the
<PAGE>
Closing, and in compliance with all applicable Laws, including but not limited
to, Environmental and Safety Requirements, the destruction of the boiler
house/chimney stack located at the Owensboro, Kentucky Plant, including without
limitation removal from such Plant of the debris and materials generated by the
destruction for proper disposal off-site and in accordance with all applicable
Environmental and Safety Requirements and relocation of utilities and railroad
tracks so they may be used in the manner previously used in connection with the
Business. Costs and expenses relating to compliance with this Section 6.20 shall
be borne by the Sellers.
SECTION 6.21. Customers and Suppliers. (a) Not later than two days
prior to the Closing Date, the Sellers shall deliver to the Purchaser a true and
complete list, as of a date or dates within three days of such date of delivery
as set forth thereon, of all Orders (as if such date were the Closing Date)
which have an unexpired term of one year or more or the unsatisfied portion of
which involves payments of $50,000 or more.
(b) The Sellers shall notify the Purchaser prior to the Closing Date of
any supplier or customer listed on Schedule 2.26 which inform the Sellers, in
writing or, to the Sellers' Knowledge, orally, that it does not intend to do
business with the Purchaser following the Closing with respect to the Business.
SECTION 6.22. Other Agreements. The Sellers and the Purchaser shall
provide to each other the notices, estimates, orders, and other information to
be given prior to Closing as provided in the forms of the Other Agreements
attached hereto, at the times contemplated by such forms.
<PAGE>
ARTICLE VII
CLOSING
SECTION 7.1. The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Harter,
Secrest & Emery, 700 Midtown Tower, Rochester, New York, at 10:00 A.M., local
time, on September 1, 1995 or, if later, the first day of the month after the
month in which the conditions set forth in Sections 4.4, 4.5, 4.8, 5.4, 5.5, and
5.8 have been satisfied or waived (or, if such date would be less than five
business days following the occurrence of such event, the first day of the
following month), or at such other place, time or date as may be agreed upon by
the parties hereto (it being understood that the establishment of the foregoing
conditions as the predicates for the date of the Closing shall not limit the
effect of any other term of Article IV or V creating one or more conditions to
the Closing itself). The Closing shall be deemed to be effective as of 12:01
a.m. Eastern Time on the Closing Date. The Closing may occur at such different
place, such different time, or such different date or a combination thereof as
the Purchaser and UDG may agree in writing.
SECTION 7.2. Documents Delivered by the Sellers. At the Closing, the
Sellers will at their sole cost and expense execute and deliver or cause to be
executed and delivered to the Purchaser the following documents:
(a) A certificate signed by the President or a Vice President
of each Seller to the effect set forth in Section 4.1, in all
substantive respects in the form attached hereto as Exhibit 7.2(a).
<PAGE>
(b) Opinions dated the Closing Date of Duane, Morris &
Heckscher, Pamela Ireland, Esq., Stites & Harbison, Divine, Wilkin,
Raulerson & Fields, and Robin, Blecker, Daley & Driscoll, counsel to
the Sellers, in all substantive respects in the forms attached hereto
as Exhibit 7.2(b).
(c) One or more assignments, as the Purchaser may reasonably
request, of the Trademarks (other than the Chi-Chi's/Fleischmann's
Trademarks) in all substantive respects in the form attached hereto as
Exhibit 7.2(c), or in such other form as may be reasonably necessary
with respect to the Foreign Trademarks, from and executed by each
applicable Seller.
(d) One or more assignments, as the Purchaser may reasonably
request, of the Assigned Contracts in all substantive respects in the
form attached hereto as Exhibit 7.2(d) (or such other form or
additional assignment as may be necessary under the terms of any
Assigned Contract), executed by each applicable Seller.
(e) One or more bills of sale, as the Purchaser may reasonably
request, for the Assets not otherwise conveyed, in all substantive
respects in the form attached hereto as Exhibit 7.2(e), executed by
each applicable Seller.
(f) General warranty deeds, in all substantive respects in the
forms attached hereto as Exhibits 7.2(f)-1 and 7.2(f)-2, executed by
the applicable Sellers, conveying marketable fee simple title to the
Owned Property to the Purchaser, subject only to the Permitted
Encumbrances.
(g) A Copyright Assignment, in all substantive respects in
the form attached hereto as Exhibit 7.2(g), executed by UDG, with
respect to the Mr. Boston Copyright.
<PAGE>
(h) The Licenses and Other Agreements, executed by UDG or
the appropriate Seller or Seller Affiliate.
(i) Uniform Commercial Code lien searches in Connecticut,
Kentucky, and Georgia, reasonably satisfactory to counsel for the
Purchaser, showing that there were no Liens of record outstanding
against any of the Assets (other than Permitted Encumbrances) as of the
Closing or a date reasonably proximate to the Closing Date.
(j) Evidence that all Material Required Consents and Approvals
have been obtained by the Sellers, together with copies of any writings
evidencing any Required Consents or Approvals and of the Estoppel
Certificates, if obtained.
(k) A copy of resolutions of the Board of Directors of UDG and
each of the Sellers, certified by the secretary or assistant secretary
thereof as having been duly and validly adopted and in full force and
effect, authorizing the execution and delivery of this Agreement, the
Licenses, and the Other Agreements and performance of the transactions
contemplated hereby by the Sellers.
(l) An affidavit of residence, in all substantive respects
in the form attached hereto as Exhibit 7.2(l).
(m) The Records.
(n) The name change certificate identified in Section 6.19.
(o) A certificate signed by the President or a Vice
President of Guinness America, Inc., in all substantive respects in
the form attached hereto as Exhibit 7.2(o).
(p) Certificates of incorporation, certified by the
Secretary of State of each Seller's state of incorporation.
<PAGE>
(q) Certificates of good standing (including tax status, where
available) with respect to each Seller (or such similar document, if
any, as is issued by the appropriate agencies of the states in which
the Sellers are organized).
(r) Such other documents as the Purchaser, its counsel, or
counsel for its Parent may reasonably request to consummate the
transactions contemplated hereby.
SECTION 7.3. Documents Delivered by Purchaser. At the Closing, the
Purchaser will and will cause the Purchaser Subsidiaries to, at their sole cost
and expense, execute and deliver or cause to be executed and delivered to UDG on
behalf of the Sellers the following documents:
(a) The Closing Amount by wire transfer as provided in
Section 1.7.
(b) A certificate signed by the President or a Vice
President of the Purchaser to the effect set forth in Section 5.2, in
all substantive respects in the form attached hereto as Exhibit
7.3(b).
(c) Opinions dated the Closing Date of Harter, Secrest &
Emery, Fulton, Hubbard, & Hubbard, and Fred R. Mardell, counsel to the
Purchaser, in all substantive respects in the forms attached hereto as
Exhibit 7.3(c).
(d) One or more assumptions of the Assumed Liabilities, in all
substantive respects in the form attached hereto as Exhibit 7.2(d) (or
such other form or additional instrument of assumption as may be
necessary under the terms of any Assigned Contract or for any specific
Assumed Liability), executed by the Purchaser.
(e) The Licenses and Other Agreements, executed by the
Purchaser or the appropriate Purchaser Subsidiary.
<PAGE>
(f) Resale certificates with respect to the Inventory, in
all substantive respects in the forms attached hereto as Exhibit
7.3(f).
(g) Evidence that all Required Consents and Approvals have
been obtained by the Purchaser.
(h) A copy of a resolution of the Board of Directors of the
Purchaser and each of the Purchaser Subsidiaries, certified by the
secretary or assistant secretary thereof as having been duly and
validly adopted and in full force and effect, authorizing the execution
and delivery of this Agreement, the Licenses, and the Other Agreements
and performance of the transactions contemplated hereby by the
Purchaser and the Purchaser Subsidiaries.
(i) A certificate signed by the President or a Vice President
of the Purchaser, in all substantive respects in the form attached
hereto as Exhibit 7.3(i).
(j) Certificates of incorporation, certified by the
Secretary of State of the Purchaser's and each Purchaser Subsidiary's
state of incorporation.
(k) Certificates of good standing with respect to the
Purchaser and each Purchaser Subsidiary (or such similar document, if
any, as is issued by the appropriate agencies of the states in which
the Purchaser Subsidiaries are organized).
(l) Such other documents as the Sellers or their counsel may
reasonably request to consummate the transactions contemplated hereby.
SECTION 7.4. Delivery; Risk of Loss. On the Closing Date, the Sellers
shall deliver the Assets to the Purchaser or to Persons designated by the
Purchaser in such manner as is customary. The Sellers shall deliver to the
Purchaser actual possession of the Assets to the
<PAGE>
extent actual possession of such Assets can reasonably be delivered. With
respect to any Assets that cannot actually be delivered to the Purchaser or its
designee because they are in possession of third parties, the Sellers will give
all necessary instructions to the parties in possession thereof, with copies
thereof to the Purchaser, that all of the Sellers' right, title, and interest in
and to the same have been vested and licensed in the Purchaser and that the same
are to be held for the Purchaser's exclusive use and benefit. The Sellers shall
deliver the Assets listed in items 2 and 4 of Schedule 1.2(j) to the Purchaser
as soon as practicable following the Closing, at such location or locations as
the Purchaser shall reasonably specify. The Sellers shall bear the risk of loss
to the Assets until transferred (actually or constructively) to the Purchaser on
the Closing Date (or, in the case of the Assets listed in items 2 and 4 of
Schedule 1.2(j), until delivered as provided in the preceding sentence), and the
Sellers shall be entitled to retain any insurance proceeds received, or any
other rights, as a result of any such loss.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Indemnification by the Sellers. From and after the
Closing, subject to the provisions of this Article VIII, the Sellers, jointly
and severally, agree to indemnify, defend, and save the Purchaser Indemnified
Parties harmless from and against, and to promptly pay to or reimburse a
Purchaser Indemnified Party for, all Losses sustained or incurred by any
Purchaser Indemnified Party relating to, resulting from, arising out of, or
otherwise by virtue of:
<PAGE>
(a)(i) any breach of a representation or warranty made herein
by the Sellers, (ii) non-compliance with or breach by the Sellers of
any of the covenants or agreements contained in this Agreement to be
performed by the Sellers or any of their Affiliates, (iii) Third Party
Claims relating to the Assets or the Business, to the extent such Third
Party Claims relate to, result from, or arise out of events, acts,
omissions, circumstances, or conditions occurring or existing prior to
the Closing Date, other than (A) the liabilities assumed by the
Purchaser pursuant to Section 1.5 (without regard to Section
1.5(b)(iii)), (B) the liabilities with respect to which the Purchaser
indemnifies the Seller Indemnified Parties pursuant to Section 8.2(b),
(c), (d), (e), or (f), and (C) as described on Schedule 8.1(a), (iv)
the Sellers' failure to comply with bulk sales or similar Laws which
may be applicable to the transactions contemplated hereby, (v) any
Terminated Foreign Distribution Agreement, provided the Purchaser has
complied with its obligations relating thereto provided in Section 6.9,
and (vi) Taxes relating to the Assets arising or accruing in respect of
periods prior to the Closing;
(b) any bodily injury to, or illness or death of, a consumer
of any Inventory, which injury, illness, or death resulted directly
from such consumer's consumption of such Inventory and occurred (i) as
a result of such Inventory not being Fit for Consumption when delivered
to the Purchaser by the Sellers or their Affiliates and (ii) not as a
result of (A) any storage, shipment, processing, or handling of such
Inventory other than by the Sellers or (B) any misuse or abuse of
alcoholic beverages by such consumer;
<PAGE>
(c) any bodily injury to, or illness or death of, a consumer
of any Products sold by the Sellers or their Affiliates prior to the
Closing (including the Sellers' liabilities to contribute to any Losses
relating to any such claim arising from any misuse or abuse of
alcoholic beverages by such consumer);
(d)(i) to the extent provided in Section 8.14, any Remedial
Work relating to any Sellers' Environmental Condition and any Losses
arising from the performance by the Sellers of any Remedial Work or
(ii) for Losses other than Remedial Work, any Sellers' Environmental
Condition;
(e) the Excluded Liabilities (except to the extent the
Purchaser is responsible to indemnify the Sellers pursuant to Section
8.2(c), (d), (e), or (f));
(f) any trademark right of any third party being infringed by
the use by the Purchaser in the United States of the
Chi-Chi's/Fleischmann's Trademarks which are in use in the United
States as indicated on Schedule 1.2(c)-2 and are registered in the
United States, provided the relevant Chi-Chi's/Fleischmann's License
remains in effect and such use is not materially different from the
manner in which such Chi-Chi's/Fleischmann's Trademarks have been used
by the Sellers;
(g) any Finished Goods Inventory which does not comply with
requirements of fill height, proof content, or other Federal or state
laws relating to the production or sale of alcoholic beverages;
(h) Third Party Claims which arise from the inclusion by the
Parent or any of its Affiliates of the SEC Financials or the MD&A
Materials or any presentation derivative thereof in any filing required
to be made by any of them pursuant to the
<PAGE>
requirements of the Securities Acts or any other disclosure or
communication made by any of them, provided that the Sellers shall not
have liability under this Section 8.1(h) unless (i) such Losses arise
from an untrue statement of a material fact, or omission of a material
fact necessary to make the statements made, in light of the
circumstances under which they were made, not misleading, in any of the
SEC Financials or MD&A Materials, (ii) in the case of the unaudited
statements contained in the SEC Financials, either (A) such statements
were not prepared in accordance with the Sellers' accounting policies
or (B) the Sellers had Knowledge, at the time such SEC Financials were
provided to the Purchaser, that such SEC Financials contained such
untrue statement or omission, and (iii) in the case of the MD&A
Materials, the Sellers did not prepare such MD&A Materials in good
faith; or
(i) any of the matters described on Schedule 8.1(i).
SECTION 8.2. Indemnification by the Purchaser. From and after the
Closing, subject to the provisions of this Article VIII, the Purchaser agrees to
indemnify, defend, and save the Seller Indemnified Parties harmless from and
against, and to promptly pay to or reimburse a Seller Indemnified Party for, all
Losses sustained or incurred by any Seller Indemnified Party relating to,
resulting from, arising out of, or otherwise by virtue of:
(a)(i) any breach of a representation or warranty made herein
by the Purchaser, (ii) non-compliance with or breach by the Purchaser
of any of the covenants or agreements contained in this Agreement to be
performed by the Purchaser or any of its Affiliates, (iii) Third Party
Claims relating to the Assets, to the extent such Third Party Claims
relate to, result from, or arise out of events, acts, or omissions
occurring, or
<PAGE>
circumstances or conditions first arising, after the Closing Date,
other than (A) the liabilities with respect to which the Sellers
indemnify the Purchaser Indemnified Parties pursuant to Section
8.1(a)(ii), 8.1(a)(iii), 8.1(a)(iv), 8.1(a)(v), 8.1(a)(vi), 8.1(b),
8.1(c), 8.1(d), 8.1(e), 8.1(f), 8.1(g), 8.1(h), or 8.1(i) and (B) as
described on Schedule 8.1(a), and (iv) Taxes relating to the Assets
arising or accruing in respect of periods after the Closing;
(b) any bodily injury to, or illness or death of, a consumer
of any Inventory, which injury, illness, or death resulted directly
from such consumer's consumption of such Inventory, other than any such
Losses for which the Sellers are responsible to indemnify the Purchaser
pursuant to Section 8.1(b);
(c) any Environmental Condition except as provided in
Section 8.1(a)(i), Section 8.1(d), and Section 8.14;
(d) any failure of the Purchaser (or any Purchaser
Subsidiary to which the relevant Chi-Chi's/Fleischmann's License is
assigned) to meet the Chi-Chi's Requirements;
(e) the Assumed Liabilities; or
(f) Third Party Claims which arise from the inclusion by the
Parent or any of its Affiliates of (i) the SEC Financials or any
presentation derivative thereof in any filing made by any of them
pursuant to the requirements of the Securities Acts or in any other
disclosure or communication, except to the extent the Sellers are
responsible to indemnify the Purchaser therefor pursuant to Section
8.1(h), or (ii) the MD&A Materials or any presentation derivative
thereof in any filing made by any of them
<PAGE>
pursuant to the requirements of the Securities Acts or in any other
disclosure or communication, provided that the MD&A Materials were
prepared by the Sellers in good faith.
SECTION 8.3. Indemnification Procedure for Third Party Claims.
(a) In the event
that subsequent to the Closing any Person entitled to indemnification under this
Agreement (an "Indemnified Party") asserts a claim for indemnification or
receives notice of the assertion of any claim, issuance of any order, or the
commencement of any action or proceeding by any entity who is not a party to
this Agreement or an Affiliate of such a party (including, but not limited to
any Governmental Entity) against such Indemnified Party, or intends to conduct a
voluntary recall (which, if not made voluntarily, would be reasonably likely to
be required by a Governmental Entity under applicable Law) of any Finished Goods
Inventory (any of the foregoing being a "Third Party Claim"), in each case
against which a party to this Agreement is required to provide indemnification
under this Agreement (an "Indemnifying Party"), the Indemnified Party shall give
written notice of such claim to the Indemnifying Party within 30 days after
learning of such claim (or within such shorter time as may be necessary to give
the Indemnifying Party a reasonable opportunity to respond to such claim),
together with a statement of any available information regarding such claim and
the counsel the Indemnified Party intends to employ in connection with such
claim. The Indemnifying Party shall have the right, upon written notice to the
Indemnified Party (the "Defense Notice") within 30 days after receipt from the
Indemnified Party of notice of such claim, which notice by the Indemnifying
Party shall specify the counsel it will appoint to defend such claim ("Defense
Counsel"), to conduct at its expense the defense against such claim in its own
name, or if necessary in the
<PAGE>
name of the Indemnified Party; provided, however, that the Indemnified Party
shall have the right to approve the Defense Counsel, which approval shall not be
unreasonably withheld or delayed, and, in the event the Indemnifying Party and
the Indemnified Party cannot agree upon such counsel within ten days after the
Defense Notice is provided, then the Indemnifying Party shall propose an
alternate Defense Counsel, which shall be subject again to the Indemnified
Party's approval, which approval shall not be unreasonably withheld or delayed.
(b) In the event that the Indemnifying Party shall fail to give a
Defense Notice, it shall be deemed to have elected not to conduct the defense of
the subject Third Party Claim, and in such event the Indemnified Party shall
have the right to conduct such defense in good faith, but the Indemnified Party
shall not compromise, settle, default on, or admit liability with respect to
such Third Party Claim without prior consent of the Indemnifying Party, which
consent shall not be unreasonably withheld or delayed. In such event, the
Indemnifying Party will be liable for all costs, expenses, settlement amounts,
or other Losses paid or incurred in connection with such Third Party Claim;
provided, that, if the Indemnified Party settles, compromises, defaults on, or
admits liability with respect to such Third Party Claim without the Indemnifying
Party's prior written consent (unless such consent is unreasonably withheld),
the Indemnified Party will be liable for all costs, expenses, settlement
amounts, or other Losses paid or incurred in connection therewith and the
Indemnifying Party shall have no obligation to indemnify the Indemnified Party
with respect thereto.
(c) In the event that the Indemnifying Party does elect to conduct the
defense of the subject Third Party Claim, the Indemnified Party will cooperate
with and make available to the Indemnifying Party such assistance and materials
as may be reasonably requested by it, all at
<PAGE>
the expense of the Indemnifying Party. Regardless of which party defends a Third
Party Claim, the other party shall have the right at its expense to participate
in the defense assisted by counsel of its own choosing. The Indemnified Party
shall not compromise, settle, default on, or admit liability with respect to the
Third Party Claim without the prior written consent of the Indemnifying Party,
which consent shall not be unreasonably withheld or delayed. Without the prior
written consent of the Indemnified Party, which shall not be unreasonably
withheld or delayed, the Indemnifying Party will not enter into any settlement
of any Third Party Claim or cease to defend against such claim if, pursuant to
or as a result of such settlement or cessation, (i) injunctive or other
equitable relief would be imposed against the Indemnified Party or (ii) such
settlement or cessation would lead to liability or create any financial or other
obligation on the part of the Indemnified Party for which the Indemnified Party
is not entitled to indemnification hereunder. If a firm offer is made to settle
a Third Party Claim, other than an offer the Indemnifying Party is not permitted
to accept pursuant to the preceding sentence, and the Indemnifying Party desires
to accept and agree to such offer, the Indemnifying Party will give written
notice to the Indemnified Party to that effect. If the Indemnified Party fails
to consent to such firm offer within 10 calendar days after its receipt of such
notice, the Indemnified Party may continue to contest or defend such Third Party
Claim and, in such event, the maximum liability of the Indemnifying Party as to
such Third Party Claim will not exceed the amount of such settlement offer, plus
costs and expenses paid or incurred by the Indemnified Party to the date of
delivery of such notice. If an Indemnified Party settles, compromises, defaults
on, or admits liability with respect to any Third Party Claim without the prior
written consent of the Indemnifying Party, which consent shall not be
<PAGE>
unreasonably withheld, the Indemnifying Party shall have no obligation to
indemnify the Indemnified Party under this Article VIII with respect to such
Third Party Claim.
(d) Any judgment entered or settlement agreed upon in the manner
provided herein shall be binding upon the Indemnifying Party, and shall
conclusively be deemed to be an obligation with respect to which the Indemnified
Party is entitled to prompt indemnification hereunder, subject to the
Indemnifying Party's right to appeal an appealable judgment or order.
SECTION 8.4. Direct Claims. It is the intent of the parties hereto that
all direct claims by an Indemnified Party against a party hereto not arising out
of Third Party Claims shall be subject to and benefit from the terms of this
Article VIII. Any claim under this Article VIII by an Indemnified Party for
indemnification other than indemnification against a Third Party Claim (a
"Direct Claim") will be asserted by giving the Indemnifying Party reasonably
prompt written notice thereof, and the Indemnifying Party will have a period of
30 calendar days within which to satisfy such Direct Claim. If the Indemnifying
Party does not so respond within such 30 calendar day period, the Indemnifying
Party will be deemed to have rejected such claim, in which event the Indemnified
Party will be free to pursue such remedies as may be available to the
Indemnified Party under this Article VIII.
SECTION 8.5. Failure to Give Timely Notice. A failure by an Indemnified
Party to give timely, complete, or accurate notice as provided in Sections 8.3
or 8.4 will not affect the rights or obligations of any party hereunder except
and only to the extent that, as a result of such failure, any party entitled to
receive such notice was deprived of its right to recover any payment under its
applicable insurance coverage or was otherwise adversely affected or damaged as
a result of such failure to give timely, complete, and accurate notice.
<PAGE>
SECTION 8.6. Reduction of Losses. The parties shall use their
commercially reasonable efforts to collect the proceeds of any insurance which
would have the effect of reducing any Losses (in which case such proceeds shall
reduce such Losses). To the extent any Losses of an Indemnified Party are
reduced by receipt of payment (a) under insurance policies which are not subject
to retroactive adjustment or other reimbursement to the insurer in respect of
such payment or (b) from third parties not affiliated with the Indemnified
Party, such payments (net of the expenses of the recovery thereof) shall be
credited against such Losses and, if indemnification payments shall have been
received prior to the collection of such proceeds, shall remit to the
Indemnifying Party the amount of such proceeds (net of the cost of collection
thereof) to the extent of indemnification payments received in respect of such
Losses.
SECTION 8.7. Subrogation. The Indemnifying Party shall be subrogated to
the Indemnified Party's rights of recovery to the extent of any Losses satisfied
by the Indemnifying Party. The Indemnified Party shall permit the Indemnifying
Party to use the name of the Indemnified Party and the names of the Indemnified
Party's Affiliates in any transaction or any proceeding to enforce such rights
and shall execute and deliver such instruments and papers as are necessary to
assign such rights and assist in the exercise thereof, including access to books
and records with respect to such Losses.
SECTION 8.8. Limitations on Indemnities. (a) The Purchaser shall not
have any liability pursuant to Section 8.2(a)(i) hereof unless and until the
aggregate amount of all Losses payable pursuant to Sections 8.2(a)(i) exceeds
the Threshold Amount, and then the Purchaser shall have liability only for the
amount of such Losses in excess of the Threshold Amount.
<PAGE>
(b) Except as provided in Section 8.8(g), the Sellers shall not have
any liability pursuant to Section 8.1(a)(i) hereof unless and until the
aggregate amount of all Losses payable pursuant to Sections 8.1(a)(i) exceeds
the Threshold Amount, and then the Sellers shall have liability only for the
amount of such Losses in excess of the Threshold Amount.
(c) Except as provided in Section 8.8(g), any claims (including all
claims arising out of the same event) for indemnification under Section
8.1(a)(i) may be made only in respect of Losses for such claim or related claims
if such Losses exceed $3,000, in which event the Sellers shall, subject to this
Article VIII, be liable for all of such Losses. Any claims in respect of Losses
of less than $3,000 per such claim or related claims may not be applied toward
the Threshold Amount.
(d) The Sellers' liability for the Purchaser Indemnified Parties'
Losses subject to indemnification under Sections 8.1(a)(i) and 8.1(f) shall be
limited (i) for Losses relating to any group of Assets described on Schedule
8.8, to the amount set forth beside such group of Assets on Schedule 8.8, and
(ii) in the aggregate to the Purchase Price. The Sellers' liability to the
Purchaser Indemnified Parties under Section 8.1(g) for any Finished Goods
Inventory shall be limited to the Book Value of such Finished Goods Inventory
(provided, that this sentence shall not limit the Sellers' liability with
respect to Third Party Claims other than Third Party Claims to the extent
arising solely from returns of goods).
(e) The Purchaser's liability for Seller Indemnified Parties' Losses
subject to indemnification under Section 8.2(a)(i) shall be limited to the
Purchase Price.
(f) In no event shall either party be liable under this Article VIII
for indirect, consequential, special, or exemplary damages (provided, that this
Section 8.8(f) shall not limit
<PAGE>
the Sellers' liability for (i) amounts paid by the Purchaser Indemnified Parties
in respect of Third Party Claims, including amounts payable with respect to
Third Party Claims as indirect, consequential, special, punitive, or exemplary
damages, or (ii) lost profits).
(g) If an Estoppel Certificate is not obtained from either
Chi-Chi's/Fleischmann's Licensor, any claim for indemnification under Section
8.1(a)(i) with respect to a breach of a representation or warranty made in
Section 2.6 with respect to such Chi-Chi's/Fleischmann's Licensor or the related
Chi-Chi's/Fleischmann's License shall not be subject to Section 8.8(b) or
8.8(c).
SECTION 8.9. Survival of Representations, Warranties and Covenants;
Time Limits on Indemnification Obligations. All representations, warranties,
covenants, and agreements contained in this Agreement shall survive the
execution and delivery of this Agreement and the Closing hereunder and (a) with
respect to Indefinite Claims, shall survive indefinitely, (b) with respect to
any Special Claim, shall survive until, and shall expire on, the date that all
claims against any Purchaser Indemnified Party which could give rise to a
Special Claim are barred by all applicable statutes of limitations, and no
Special Claim may be made thereafter, (c) with respect to claims under Section
8.1(g), shall survive until, and shall expire on, the date which is 12 calendar
months following the Closing Date, and no such claim may be made thereafter, and
(d) with respect to General Claims, shall survive until, and shall expire on,
the date which is 18 calendar months following the Closing Date, and no General
Claim may be made thereafter; provided that Special Claims, claims under Section
8.1(g), and General Claims for which the party asserting such a claim shall have
given notice as provided in Section 8.3
<PAGE>
on or prior to the expiration of the applicable period specified above hereof
shall survive indefinitely.
SECTION 8.10. Defense of Claims; Control of Proceedings.
Notwithstanding anything in Section 8.3 of this Agreement to the contrary, to
the extent any Losses subject to indemnification hereunder would exceed (after
giving effect to then outstanding or theretofore indemnified claims) limitations
on the Indemnifying Party's indemnity obligations under this Agreement, whether
pursuant to Section 8.9 or otherwise, the Indemnified Party shall be entitled to
control the defense of such claim or management of such proceeding with respect
to such Losses at the Indemnified Party's sole cost and expense.
SECTION 8.11. Fraud. In the case of fraud by any party in the making
of representations and warranties, the other parties shall have all remedies
available at law and at equity without giving effect to any of the limitations
set forth in Section 8.8 or Section 8.9.
SECTION 8.12. Knowledge Prior to Closing. For purposes of this Article
VIII, neither party hereto shall be deemed to have breached any representation
or warranty if (a) such party shall have notified the other party hereto in
writing, on or prior to the Closing Date, of such breach or of any facts or
circumstances constituting or resulting in such breach, (b) such party had
Knowledge of such breach, facts, or circumstances on or prior to the date of
this Agreement, and (c) as a result of all such breaches collectively, the
conditions to the other party's or parties' obligations to consummate the
Closing set forth in Section 4.1 or 5.1, as the case may be, are not satisfied.
SECTION 8.13. Exclusivity. The indemnification provided by this
Article VIII shall be the sole remedy (other than termination of this Agreement
pursuant to Article IX and except
<PAGE>
as provided in Section 8.11) for any of the matters referred to in this Article
VIII; provided, that this Section 8.13 shall not prohibit injunctive relief if
available under applicable Law.
SECTION 8.14. Environmental Matters. (a) If any Purchaser Indemnified
Party shall become aware of any condition or circumstance which may require
Remedial Work relating to a Sellers' Environmental Condition, it shall give
prompt notice thereof (an "Environmental Claim Notice") to the Sellers as
contemplated by Section 8.3. Any Environmental Claim Notice must describe with
specificity the conditions or circumstances giving rise to such notice.
(b) Subject to the provisions of this Section 8.14, (i) the Sellers
shall be liable for all costs and expenses of Sellers' Remedial Work and any
Losses arising from the performance by the Sellers of any Remedial Work and (ii)
the Purchaser shall be liable for all Remedial Work relating to any Purchaser
Environmental Condition and for any Remedial Work relating to any Sellers'
Environmental Condition which does not constitute Sellers' Remedial Work.
(c) The Sellers shall have the right, by notice (the "Environmental
Defense Notice") given within 30 days of receipt of an Environmental Claim
Notice, to elect to conduct any Remedial Work relating to the matters set forth
in such Environmental Claim Notice; provided, that the giving of an
Environmental Defense Notice shall not constitute an admission that any such
Remedial Work is Sellers' Remedial Work. If the Sellers shall give an
Environmental Defense Notice, the Sellers shall promptly commence such Remedial
Work. If the Sellers do not give an Environmental Defense Notice within such
30-day period, the Purchaser shall promptly commence such Remedial Work. The
Sellers shall be deemed to have given hereby an Environmental Defense Notice
with respect to any Remedial Work currently on-going or related to the removal
of the boiler house/chimney stack as required by Section 6.20.
<PAGE>
(d) The Sellers and their agents shall have reasonable access to the
Plants for the purpose of performing any Remedial Work to be performed by the
Sellers in accordance with this Section 8.14. The Sellers shall have the right
to bring such equipment and vehicles onto the Plants as are necessary for
efficient performance of such Remedial Work. The Purchaser shall not make any
alterations or additions to the Owned Property which would interfere with any
Remedial Work then being performed by the Sellers other than as may be required
by Law.
(e) The party performing any Remedial Work pursuant to this Section
8.14 (the "Performing Party") shall perform such Remedial Work in a commercially
reasonable manner, with contractors having appropriate experience in and all
necessary permits for such matters, in compliance with all Environmental and
Safety Requirements, and in compliance with this Section 8.14. If the Sellers
shall be the Performing Party, they shall perform such Remedial Work in such a
manner as to minimize, to the extent commercially practicable, interference with
the conduct of the Purchaser's business at the Plants.
(f) Each party shall provide the other with copies of all environmental
audits, sampling results, and assessments relevant to any Environmental Claim
Notice or Remedial Work. Prior to the commencement of any Remedial Work by a
Performing Party, the other party (the "Nonperforming Party") shall notify the
Performing Party of any conditions known to the Nonperforming Party which could
reasonably be expected to have a material effect on such Remedial Work.
(g) If a Performing Party shall conduct any Remedial Work, and it is
subsequently determined (by agreement between the parties or by a judgment not
subject to further appeal)
<PAGE>
that the Nonperforming Party was responsible in accordance with this Section
8.14 for all or a portion of the Losses related thereto, the Nonperforming Party
shall pay such Losses with interest thereon (from the date the Performing Party
paid such amounts to the date of payment by the Nonperforming Party) at the
Prime Rate.
(h) The Purchaser shall control all communications with Governmental
Entities regarding Environmental Conditions at the Plants, except to the extent
the Sellers are required by Law to make such communications. Each party shall
provide to the other copies of all such written communications received from or
made to any Governmental Entity, except as may be required by Law. Prior to
making any such written communication to any Governmental Entity, each party
shall, to the extent reasonably practicable under the circumstances and required
response times and to the extent permitted by Law, provide drafts thereof to the
other party and shall in good faith consider the comments thereon of such other
party. In no case shall either party be liable for any Remedial Work to which
the other party, in any such communication, commits or admits liability, unless
such party has consented to such admission of liability (which consent shall not
be unreasonably withheld) or so committing or admitting liability was otherwise
commercially reasonable under the circumstances and after due consideration of
the objections thereto of the party not making such communication.
(i) The obligations set forth in this Section 8.14 shall not be subject
to Section 8.8 (except for Section 8.8(f)).
SECTION 8.15. Contribution. If the indemnification provided for in
Section 8.1(h) or 8.2(f) is unavailable to an Indemnified Party in respect of
any Losses referred to therein, then each Indemnifying Party which would
otherwise be liable under such Section 8.1(h) or
<PAGE>
8.2(f), in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable to such Indemnified Party as a result of such Losses in
such proportion as is appropriate to reflect the relative fault of each
Indemnifying Party on the one hand and the Indemnified Party on the other hand
in connection with the statements or omissions which resulted in such Losses,
and any other relevant equitable considerations. The relative fault of each
Indemnifying Party on the one hand and the Indemnified Party on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statements of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by an Indemnifying
Party or such Indemnified Party and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement or
omission.
ARTICLE IX
TERMINATION
SECTION 9.1. Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual written consent executed by the Purchaser and
the Sellers;
(b) by either the Purchaser or the Sellers, in writing,
without liability to the terminating party on account of such
termination (providing the terminating party is not otherwise in
default or in breach of this Agreement) if (i) any of the conditions
to its obligations under Article IV or Article V of this Agreement, as
the case may be, shall
<PAGE>
not have been satisfied or waived in writing by such party, (ii) the
other party shall have failed to perform in any respect its covenants
or agreements contained herein required to be performed prior to the
Closing, or shall have breached any of its representations or
warranties contained herein, in each instance exclusive of such
breaches which in the aggregate would not be reasonably likely to give
rise to Losses in excess of $500,000 (and provided that the terminating
party shall afford the other party at least five business days notice
of and opportunity to cure such breach), or (iii) if the Closing shall
not have occurred for any reason on or before November 1, 1995, unless
the failure of such conditions to be satisfied or the Closing to take
place on or before such time is attributable to the breach by the
terminating party of its obligations to consummate the transactions
contemplated hereby or of any of its other obligations hereunder; or
(c) by either party, in writing, without liability, if the
purchase of the Assets contemplated hereby shall violate any
non-appealable final order, decree, or judgment of any Governmental
Entity having competent jurisdiction or if there shall be a statute,
rule, or regulation that makes such purchase illegal or otherwise
prohibited.
SECTION 9.2. Effect of Termination. Upon any termination of this
Agreement pursuant to Section 9.1, neither of the parties shall have any
liability or obligation to the other arising out of this Agreement except for
any liability arising from a party's breach of this Agreement prior to such
termination (provided that, for purposes of this Section 9.2, no party shall be
deemed to have breached a representation or warranty if Sections 8.12(a) and (b)
have been satisfied with respect to such breach); provided that the provisions
of Sections 6.1 and
<PAGE>
6.2, this Section 9.2, Article XI, and the Confidentiality Agreement shall
survive such termination.
ARTICLE X
DEFINITIONS
SECTION 10.1. Defined Terms. The following terms shall have the
following meanings as used in this Agreement:
"Accounting Methodology" shall mean the accounting principles and
procedures described on Schedule 1.8(g) hereto.
"ADA" shall mean the Americans with Disabilities Act, 42 USCA 1210, et
seq., and the rules and regulations promulgated thereunder.
"Affiliate" shall mean, as to a specified Person, any Person
controlling, controlled by, or under common control with such specified Person.
For purposes of this definition, "control," including the terms "controlling"
and "controlled," means the power to direct or cause the direction of the
management and policies of a Person, directly or indirectly, whether through the
ownership of securities of partnership or other ownership interests, by
contract, or otherwise.
"Agreement" shall mean this Asset Purchase Agreement and all Schedules
and Exhibits hereto.
"Approvals" means all permits, licenses, registrations, and approvals
of or from Governmental Entities necessary for the operation of the Plants and
sale of the Products as presently conducted, including, without limitation,
those listed on Schedules 2.2, 3.2, and 6.7.
<PAGE>
"Assets" shall have the meaning specified in Section 1.2.
"Assigned Contracts" shall mean, collectively, the agreements listed on
Schedule 1.2(m), the Chi-Chi's/Fleischmann's Licenses, the Customer Orders, and
the Purchase Orders.
"Assumed Liabilities" shall have the meaning specified in Section 1.5.
"Barrel Agreement" shall have the meaning specified in Section 4.6.
"Barton Guaranty" shall have the meaning specified in Section 5.6.
"Book Value" of any Assets, as of any date on or prior to the Closing
Date, shall mean the net value on such date of such Assets as determined in
accordance with generally accepted accounting principles consistently applied by
the Sellers (except as otherwise noted in the Accounting Methodology) on the
basis of the information contained in the internal books and records of the
Sellers.
"Book Value Adjustment" shall mean the sum of the Adjustments, where
"Adjustments" means (i) with respect to Plants and Manufacturing Equipment, (A)
the Book Value as of the Closing Date of any Manufacturing Equipment added
subsequent to the date of this Agreement in conformity with the representations
and covenants contained herein minus (B) the sum of the reductions for casualty,
loss, or disposition of such items and the per diem adjustments for depreciation
as set forth on Schedule 1.8(g), in each case from the date set forth on
Schedule 1.8(g) to the Closing Date, (ii) with respect to Prepaid Expenses, (A)
the cost of any Prepaid Expenses made subsequent to the date of this Agreement
in conformity with the representations and covenants contained herein minus (B)
the per diem adjustments for amortization as set forth on Schedule 1.8(g) from
the date set forth on Schedule 1.8(g) (or, in the case of Prepaid Expenses made
subsequent to the date of this Agreement, from the date made) to the Closing
<PAGE>
Date, and (iii) with respect to Inventory, the value of such Inventory, based on
the values for each Merchantable unit established using the Accounting
Methodology minus $17,497,425.
The Book Value Adjustment may be a positive or a negative number.
"Book Value Calculation" shall have the meaning specified in Section
1.8(a).
"Bottling Agreement" shall have the meaning specified in Section 4.6.
"Brandy Agreement" shall have the meaning specified in Section 4.6.
"Business" shall mean the manufacture, sale, and distribution of the
Products and the operation, ownership, and use of the Assets.
"California Agreement" shall have the meaning specified in Section 4.6.
"Canadian Whisky Agreements" shall have the meaning specified in
Section 4.6.
"Chase" shall mean The Chase Manhattan Bank (National Association).
"Chi-Chi's/Fleischmann's Licenses" shall have the meaning specified in
Section 1.2(c).
"Chi-Chi's/Fleischmann's Licensors" shall mean the licensors under the
Chi-Chi's/Fleischmann's Licenses.
"Chi-Chi's/Fleischmann's Trademarks" shall have the meaning specified
in Section 1.2(c).
"Chi-Chi's Requirements" shall mean the requirements for transfer of
the Chi-Chi's/Fleischmann's License related to the "Chi-Chi's" trademarks, as
described on Schedule 1.2(c)-1.
"Clarendon" shall mean Clarendon Flavor Engineering, a division of
United Distillers Manufacturing, Inc.
"Clarendon Lease" shall have the meaning specified in Section 4.6.
<PAGE>
"Closing" shall have the meaning specified in Section 7.1.
"Closing Adjustment" shall mean the Book Value Adjustment minus the
Estimated Book Value Adjustment. The Closing Adjustment may be a positive or
negative number.
"Closing Amount" shall have the meaning specified in Section 1.7(b).
"Closing Date" shall mean the date of the Closing.
"Closing Statement" shall have the meaning specified in Section 1.8(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
all regulations promulgated thereunder.
"Collective Bargaining Agreements" shall mean the Assigned Contracts
identified on Schedule 1.2(m) as collective bargaining agreements.
"Commitment Letter" shall mean the commitment letter from Chase to
provide financing for the Purchaser's payment of the Purchase Price as referred
to in Section 3.4.
"Confidentiality Agreement" shall mean the agreements dated October 18,
1994 and January 13, 1995 between UDG and the Purchaser.
"Container Licenses" shall have the meaning specified in Section 1.4.
"Contract" shall mean any written contract, agreement, instrument,
lease, or license. "Corn Whiskey Agreement" shall have the meaning specified in
Section 4.6.
"Customer Order" shall mean a bona fide order from an unaffiliated
customer evidenced by a purchase order given in accordance with the Sellers'
customary practices in the ordinary course of business.
"Defense Counsel" shall have the meaning specified in Section 8.3.
"Defense Notice" shall have the meaning specified in Section 8.3.
<PAGE>
"Direct Claim" shall have the meaning specified in Section 8.4.
"Distributors" shall mean the distributors, wholesalers, and brokers of
the Products in the United States as sold by the Sellers.
"Employee Pension Plan" shall mean any (i) nonqualified deferred
compensation or retirement plans or arrangements which are "employee pension
benefit plans," as defined in Section 3(2) of ERISA, whether or not terminated,
including, but not limited to, any excess benefit plan, top hat plan, or
deferred compensation plan, or (ii) qualified defined contribution or defined
benefit arrangements which are employee pension benefit plans, in each case
which any Seller or any Plan Affiliate of any Seller has at any time within the
past six years maintained or made contributions to or had any other liability
with respect to, and in each case on behalf of or with respect to Plan
Beneficiaries.
"Employee Plan" shall mean any Employee Welfare Plan, Employee Pension
Plan, or Other Plan.
"Employee Welfare Benefit Plan" shall mean any plan or program
maintained or sponsored by the Purchaser which would be an Employee Welfare Plan
if maintained or sponsored by the Sellers.
"Employee Welfare Plan" shall mean any employee welfare benefit plan,
as defined in Section 3(1) of ERISA, whether or not terminated, including, but
not limited to, any severance agreement or plan, any material fringe benefit
plan or program, any medical plan, life insurance plan, short-term or long-term
disability plan, dental plan, personnel policy, vacation time, holiday pay,
bonus programs, service award, moving expense reimbursement program, tool
allowance, safety equipment allowance, and sick leave, which any Seller or any
Plan Affiliate
<PAGE>
of any Seller has at any time within the past six years maintained, made
contributions to, obligated itself to make contributions to, or had any other
liability with respect to, in each case on behalf of or with respect to Plan
Beneficiaries.
"Environmental and Safety Requirements" shall mean all Laws relating to
public health and safety, worker health and safety, and pollution and protection
of the environment (including, but not limited to, soil, land surface and
subsurface, surface waters, ground water, drinking water supply, stream
sediments, ambient air, plant and animal life, and any other environmental
medium), all as amended or reauthorized, or hereafter amended or reauthorized.
"Environmental Claim Notice" shall have the meaning specified in
Section 8.14.
"Environmental Condition" shall mean any matter relating to the
presence, release, use, generation, discharge, storage, treatment, or disposal
of Hazardous Materials, at or affecting the Plants, or the transportation of
Hazardous Materials to or from the Plants, or the disposal of Hazardous
Materials generated or utilized by the Plants.
"Environmental Defense Notice" shall have the meaning specified in
Section 8.14.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Estimated Book Value Adjustment" shall have the meaning specified in
Section 1.7(b).
"Estimated Purchase Price" shall have the meaning specified in Section
1.7(a).
"Estoppel Certificates" shall mean estoppel certificates from each
Chi-Chi's/Fleischmann's Licensor, in the forms previously provided by the
Purchaser to the Sellers, subject to such modifications as may be requested by
the respective Chi-Chi's/Fleischmann's Licensor and are reasonably acceptable to
the Purchaser.
<PAGE>
"Excluded Assets" shall have the meaning specified in Section 1.3.
"Excluded Liabilities" shall have the meaning specified in Section 1.6.
"Finished Goods Inventory" shall have the meaning specified in Section
1.2(h).
"Fit for Consumption" shall mean fit for human consumption as an
alcoholic beverage.
"Flavoring Supply Agreement" shall have the meaning specified in
Section 4.6.
"Foreign Trademarks" shall have the meaning specified in Section
1.2(b).
"Formulae" shall have the meaning specified in Section 1.2(d).
"FRPTA" shall mean the Foreign Investment Real Property Transfer Act.
"General Claim" shall mean any claim for indemnification under Section
8.1(a)(i) or Section 8.2(a)(i) other than a Special Claim or Indefinite Claim.
"Governmental Entity" shall mean any Federal, state, local, or other
governmental authority or administrative agency or any court or other tribunal,
domestic or foreign.
"Governmental Filings" shall mean such filings or recordings of the
assignments of the Trademarks and the rights in the Chi-Chi's/Fleischmann's
Trademarks and such other filings as may be required to be made in connection
with this Agreement and the transactions contemplated hereby pursuant to
applicable Laws affecting the transactions contemplated hereby or relating to
the production, marketing, sale, and distribution of alcoholic beverages.
"Grant Programs" shall mean contracts, arrangements, or understandings
with Distributors regarding offers of special purchase allowances, post-offs,
other off-invoice discounts, depletion allowances, entity grants, or other
similar forms of promotional allowances, in each case with respect to the
Products.
"Guinness Guaranty" shall have the meaning specified in Section 4.6.
<PAGE>
"Guinness 401(k) Plan" shall mean The Guinness America Employees
Savings Plan.
"Hazardous Materials" shall mean (i) hazardous substances or hazardous
wastes, as those terms are defined by the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss.ss. 9601 et seq. and the
regulations promulgated thereunder, the Resource Conservation and Recovery Act,
42 U.S.C. ss.ss. 6901 et seq. and the regulations promulgated thereunder, and
any other Environmental and Safety Requirements; (ii) any pollutant or
contaminant or hazardous, dangerous, or toxic chemical, waste, material, or
substance within the meaning or scope of any Environmental and Safety
Requirements; (iii) any petroleum product or by-product, including, without
limitation, crude oil or any fraction thereof which is liquid at standard
conditions of temperature and pressure (60 degrees Fahrenheit and 14.7 pounds
per square inch absolute); (iv) any radioactive material, including, without
limitation, any source, special nuclear, or by-product material as defined in 42
U.S.C. ss.ss. 2011 et seq.; (v) asbestos in any form or condition; and (vi)
polychlorinated biphenyls.
"Heaven Hill Products" shall mean the products manufactured by any
Seller or any of their Affiliates under the Viking Bottling Agreement, dated as
of January 29, 1993, between Guinness America, Inc., an Affiliate of the
Sellers, and Heaven Hill Distilleries, Inc.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the regulations promulgated thereunder.
"Indefinite Claim" shall mean any claim for indemnification under (i)
Section 8.1(a)(i) relating to any breach of any representation or warranty of
the Sellers relating to the Sellers' title to Assets, (ii) Section 8.1(a)(ii),
8.1(a)(iii), 8.1(a)(iv), 8.1(a)(v), 8.1(a)(vi), 8.2(a)(ii),
<PAGE>
8.2(a)(iii), or 8.2(a)(iv), (iii) Section 8.1(b), 8.1(c), 8.1(d), 8.1(e),
8.1(f), 8.1(h), 8.1(i), or (iv) Section 8.2(b), 8.2(c), 8.2(d), 8.2(e), or
8.2(f) hereof, or (v) Section 8.14.
"Indemnified Party" shall have the meaning specified in Section 8.3.
"Indemnifying Party" shall have the meaning specified in Section 8.3.
"Intellectual Property" shall have the meaning specified in Section
1.2(k).
"Inventory" shall mean the Finished Goods Inventory, the Materials
Inventory, and the Literature, collectively.
"IRS" shall mean the Internal Revenue Service.
"Knowledge," "known to," or "aware of," or a similar phrase with
respect to (i) the Sellers shall mean the actual knowledge, after due inquiry
(except that, where Knowledge is stated to be without investigation, such
inquiry shall not include (A) any inquiry of persons other than employees,
agents, counsel, or accountants of the Sellers and their Affiliates or (B) any
Uniform Commercial Code, trademark, patent, or other searches of records of
Governmental Entities), as of the date of this Agreement or of any certificate
delivered pursuant hereto of the individuals listed on Schedule K-1, or any of
them individually (provided, that the knowledge of the persons listed as "key
employees" on Schedule 2.14 shall in no event be included as "Knowledge" of the
Sellers for purposes of the last sentence of Section 2.14), and (ii) the
Purchaser shall mean the actual knowledge, after due inquiry (except where
Knowledge is stated to be without investigation), as of the date of this
Agreement or of any certificate delivered pursuant hereto of the individuals
listed on Schedule K-2, or any of them individually.
<PAGE>
"Laws" shall mean all laws, statutes, regulations, codes, ordinances,
rules, policies, guidelines, interpretations, directives, writs, injunctions,
decrees, and orders of or promulgated by any Governmental Entity.
"Licenses" shall have the meaning specified in Section 1.4.
"Lien" shall mean any lien, charge, claim, option, pledge,
hypothecation, assessment, license, mortgage, encumbrance, security interest,
easement, or similar restriction.
"Literature" shall have the meaning specified in Section 1.2(j).
"Losses" shall mean any losses, liabilities (whether contingent, fixed
or unfixed, liquidated or unliquidated), claims, damages, assessments, costs, or
expenses (including, without limitation, interest, fines, penalties, actual or
punitive damages, and reasonable legal and other professional fees and expenses
of investigating or defending any claims).
"Manufacturing Equipment" shall have the meaning specified in Section
1.2(g).
"Material Contract" shall mean any Contract pertaining to the Business
which requires or results in annual payments by or to the Sellers of more than
$50,000 or is not terminable on less than 90 days notice with payments of less
than $50,000.
"Material Required Consent" shall mean any Required Consent identified
as material on Schedule 1.2(m), Schedule 2.2, or Schedule 3.2.
"Materials Inventory" shall have the meaning specified in Section
1.2(i).
"MD&A Materials" shall mean the materials to be provided pursuant to
Section 6.14 which are identified as "MD&A Materials" on Schedule 6.14.
"Medley Agreements" shall have the meaning specified in Section 4.6.
"Merchantable" shall mean have the meaning set forth on Schedule
1.8(g).
<PAGE>
"Mr. Boston Contract" shall mean the Agreement, dated as of January 1,
1993, as amended November 15, 1994, between UDG and Warner Books, Inc. relating
to the Mr. Boston Copyright.
"Mr. Boston Copyright" shall mean the copyrights for the Mr. Boston
Official Bartender's Guide and Mr. Boston Official Bartender's and Party Guide,
in all versions and media.
"New Employees" shall mean (i) all Union Employees and (ii) all active
Non-Union Employees of the Sellers at the Owensboro and Viking facilities who
become employees of the Purchaser immediately following the Closing and all
inactive Non-Union Employees of the Sellers at the Owensboro and Viking
facilities who become active employees of the Purchaser after the Closing and
who were inactive on the Closing for reasons of earned vacation, temporary
illness not constituting short or long term disability, leave of absence or
short or long term disability; provided, however, that in the case of a
Non-Union Employee who is not an active employee on the Closing due to short (as
provided pursuant to the United Distillers Manufacturing, Inc. Human Resources
Policies and Procedures) or long term disability, he or she becomes an active
employee of the Purchaser prior to the 91st day of such disability.
"Nonperforming Party" shall have the meaning specified in Section 8.14
"Non-Union Employees" shall mean the employees of the Sellers at the
Plants who are
not covered by the Collective Bargaining Agreements.
"Orders" shall mean all Customer Orders relating to the Products which
have been received by the Sellers but have not been shipped, and all Purchase
Orders relating to the
<PAGE>
Products which have been given by the Sellers but have not been received, in
each case as of the Closing Date; provided, that Orders shall not include any
purchase orders for Scotch.
"Other Agreements" shall mean the agreements to be entered into at
Closing referred to in Section 4.6 or Section 5.6.
"Other Intellectual Property" shall have the meaning specified in
Section 2.7(b).
"Other Plan" shall mean any plan, policy, program, arrangement, or
agreement, including, but not limited to, any bonus or incentive plan, stock
options, restricted stock, stock bonus, deferred bonus plan, salary reduction
agreement, change-of-control agreement, employment agreement, or consulting
agreement with a former employee (in each case, which is not an Employee Pension
Plan or Employee Welfare Plan), which any Seller or any Plan Affiliate of any
Seller has at any time within the past six years maintained, made contributions
to, obligated itself to make contributions to, or had any other liability with
respect to, in each case for the benefit of or with respect to Plan
Beneficiaries.
"Owned Property" shall mean the real property at the Plants (other than
property leased under the Assigned Contracts), as described on Schedule 1.2(f).
"Parent" shall mean Canandaigua Wine Company, Inc., a Delaware
corporation, which directly or indirectly owns all of the capital stock of the
Purchaser.
"PBGC" shall mean Pension Benefit Guaranty Corporation.
"Performing Party" shall have the meaning specified in Section 8.14.
"Permits" shall mean notifications, licenses, permits (including,
without limitation, environmental, construction, and operation permits),
franchises, certificates, approvals,
<PAGE>
exemptions, classifications, registrations, and other similar documents and
authorizations, and applications therefor, issued by, or submitted to, any
Governmental Entity.
"Permitted Encumbrance" shall mean any Liens (i) created under the
terms of, or by operation of law in connection with, any of the Assigned
Contracts, (ii) created by or through the Purchaser, (iii) relating to any taxes
or other governmental charges or levies that are not yet due and payable or
which are being contested in good faith by appropriate proceedings and which
have been or will be disclosed in writing to the Purchaser, (iv) the
encumbrances of the bailment of any state of the United States, (v) that is or
is related to one of the Assumed Liabilities, (vi) in the nature of easements or
restrictions on real property that in the aggregate do not materially detract
from the value or impair the use of the properties or assets subject thereto or
the operations of the Business, (vii) with respect to the Owned Property, are
set forth in Section II of Schedule B to either of the Title Commitments or on
either of the Surveys.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, limited liability partnership, joint venture, trust,
unincorporated association, corporation, or entity, including any Governmental
Entity.
"Plan Affiliate" of any Person shall mean any other Person with whom
such Person constitutes all or part of a controlled group, or which would be
treated with such Person as under common control, or whose employees would be
treated as employed by such Person, under Section 414 of the Code and any
regulations, administrative rulings, and case law interpreting the foregoing.
"Plan Beneficiaries" shall mean the Plant Employees and their
beneficiaries and dependents.
<PAGE>
"Plants" shall have the meaning specified in Section 1.2(f).
"Plant Employee" means any current or former employee of the Sellers
at the Plants.
"Prepaid Expenses" shall have the meaning specified in Section 1.2(o).
"Prime Rate" shall mean the rate of interest announced from time to
time by Chase as its prime or base rate.
"Product Liability Claims and Liabilities" shall mean claims against or
liabilities of the Sellers relating to personal injury or property damage
involving the Products.
"Products" shall mean the products marketed as of the date of this
Agreement and as of the Closing under the Trademarks and the
Chi-Chi's/Fleischmann's Trademarks.
"Promotional Programs" shall mean programs to provide special display,
packaging, or point-of-sale promotional materials to retailers of the Products.
"Purchase Order" shall mean a bona fide order to an unaffiliated
supplier evidenced by a purchase order given in accordance with the Sellers'
customary practices in the ordinary course of business.
"Purchase Price" shall have the meaning specified in Section 1.7(a).
"Purchaser" shall have the meaning specified in the preamble hereto.
"Purchaser Documents" shall mean the documents, instruments, and
agreements (other than the Licenses and the Other Agreements) to be executed and
delivered by the Purchaser pursuant to Section 7.3.
"Purchaser Environmental Condition" shall mean any Environmental
Condition which is not a Sellers' Environmental Condition.
<PAGE>
"Purchaser Indemnified Parties" shall mean the Purchaser, its
Affiliates, its officers, directors, employees, and agents, and its fiduciaries,
plan administrators, and other parties dealing with its employee benefit plans.
"Purchaser Plan" shall mean the Barton Incorporated Employees'
Profit-Sharing and 401(k) Plan or, in the case of the Union Employees, such
"employee pension benefit plan" (as defined in Section 3(2) of ERISA) as may be
established by the Purchaser pursuant to the Collective Bargaining Agreements.
"Purchaser Subsidiary" shall mean any subsidiary of the Purchaser which
enters into any License or Other Agreement in accordance with Section 11.6.
"Purchaser's Accountants" shall mean Arthur Andersen LLP.
"Rebate Programs" shall mean programs offering to consumers of the
Products rebates, claimed by delivering to the Sellers (or, following the
Closing, the Purchaser) or their agents coupons or tickets and proofs of
purchase.
"Records" shall have the meaning specified in Section 1.2(p).
"Remedial Work" shall mean any remedial work, including any preliminary
investigation or analyses, removal, remediation, cleanup, or post-remedial
monitoring and reporting, required by any Environmental and Safety Requirements,
and the obtaining of any Permits.
"Required Consents" shall mean consents with respect to the Assigned
Contracts as indicated on Schedule 1.2(m) and such other consents as are listed
in Schedule 2.2.
"Schenley License" shall have the meaning specified in Section 1.4.
"Scotch Whisky Agreement" shall have the meaning specified in Section
4.6.
<PAGE>
"SEC Financials" shall mean the materials to be provided pursuant to
Section 6.14 which are identified as "SEC Financials" on Schedule 6.14.
"Securities Acts" shall mean the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
"Seller" or "Sellers" shall have the meaning specified in the preamble
hereto.
"Seller Affiliates" shall mean the Affiliates of the Sellers which are
to execute and deliver Other Agreements.
"Seller Indemnified Parties" shall mean the Sellers, their Affiliates,
the Sellers' officers, directors, employees, and agents, and the Sellers'
fiduciaries, plan administrators, and other parties dealing with the Sellers'
employee benefit plans.
"Sellers' Accountants" shall mean Price Waterhouse LLP.
"Sellers' Environmental Condition" shall mean
(i) any matter referred to in Schedule 2.16(a), other than
item 3 on Schedule 2.16(a) (whether or not listed on Schedule 2.16(b)),
(ii) any violation of any Environmental and Safety
Requirements arising from the existence and operation prior to the
Closing Date of the tanks referred to in item 2 of Schedule 2.16(b);
(iii) item 5 of Schedule 2.16(b),
(iv) any asbestos which the Sellers have Knowledge is
friable at the Closing Date (whether or not listed on Schedule
2.16(b)),
(vi) any Environmental Condition not listed on Schedule
2.16(a) or Schedule 2.16(b) (A) of which the Sellers have Knowledge and
which constitutes a violation of
<PAGE>
any Environmental and Safety Requirement, (B) which arises from any
operations or business prior to the Closing Date other than the
operation, by the Sellers or any predecessor owner or operator of
either Plant, of a business which manufactures liquor products, (C)
which arises from the release, discharge, storage, treatement,
transportation, or disposal prior to the Closing Date of Hazardous
Materials generated or used by the Plants, or (D) relates to a
property previously owned by the Sellers or their Affiliates or any of
their predecessors. "Sellers' Remedial Work" shall mean any Remedial
Work relating to any Sellers' Environmental Condition; provided, that
Sellers' Remedial Work shall not include any Remedial Work (i)
performed or committed to by any Purchaser Indemnified Party prior to
the expiration of the period in which the Sellers are entitled to give
an Environmental Defense Notice (other than Remedial Work which could
not reasonably have been delayed to the end of such period), (ii) if
performed by the Sellers, other than as needed to meet the minimum
standards of applicable Environmental and Safety Requirements, or
(iii) if performed by the Purchaser, other than as needed to meet the
standards of commercial reasonableness or applicable Environmental and
Safety Requirements.
"Services Agreements" shall have the meaning specified in Section 4.6.
"Special Claim" shall mean any claim for indemnification under Section
8.1(a)(i) relating to any breach of any representation or warranty of
the Sellers contained in Section 2.15 or 2.24.
"Statement Date" shall mean December 31, 1994.
"Surveys" shall mean the surveys of the Owned Property attached as
Schedule S.
<PAGE>
"Taxes" shall mean all taxes of any kind, including, without
limitation, those on, or measured by or referred to as, income, gross receipts,
sales, use, ad valorem, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property, or windfall
profits taxes, customs duties, or similar fees, assessments, or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax,
or additional amounts imposed by any taxing authority, domestic or foreign.
"Tax Reports" shall mean all tax reports relating to the Business
required to be filed under applicable Law, including, without limitation, all
such Federal, state, county, and city tax reports relating to spirits in bonded
warehouses, tangible personal property taxes, excise taxes, records of gauge for
tax determination and removal of bulk spirits from bond, claims for drawback,
monthly wine reports, monthly reports of distillers, rectifiers, or bottles,
customs duties, and income, business, occupation, sales, use, ad valorem,
vehicle, and similar taxes and duties.
"Terminated Foreign Distributor Agreements" shall have the meaning
specified in Section 6.9(b).
"Third Party Claim" shall have the meaning specified in Section 8.3.
"Threshold Amount" shall mean $1,000,000.
"Title Commitments" shall mean the title commitments with respect to
the Owned Property attached as Schedule T, including the endorsements thereto.
"Title Company" shall mean Chicago Title Insurance Company.
"Title Policies" shall mean title policies for the Owned Property
issued in accordance with and substantially in the form of the Title
Commitments.
<PAGE>
"Trademarks" shall mean, collectively, the U.S. Trademarks and the
Foreign Trademarks.
"Trade Names" shall have the meaning specified in Section 1.2(n).
"Transfer Documents" shall mean the documents, instruments, and
agreements (other than the Licenses and the Other Agreement) to be executed and
delivered by the Sellers pursuant to Section 7.2.
"Transferred Molds" shall have the meaning specified in Section 1.2(q).
"Transferring Employees" shall mean those employees of the Sellers
employed by a Seller on the Closing Date and who are either listed on Schedule
2.21 or are current Union Employees and those additional employees who become
employed by a Seller in the ordinary course of business during the time period
from the date of this Agreement to the Closing (provided, that any such
additional employee which is a Non-Union Employee shall be a Transferring
Employee only if he or she was hired or assigned to the Plants as a replacement
for a Transferring Employee whose employment was terminated by such employee or
the Sellers and at compensation not materially greater than such terminated
employee received).
"UDG" shall have the meaning specified in the preamble hereto.
"UDMI Plan" shall mean the United Distillers Manufacturing, Inc.
401(k) Profit Sharing Plan.
"UD Records" shall mean all records of the Sellers at the Plants, other
than the Records, of the types listed on Schedule U.
"Unaffiliated Firm" shall mean the accounting firm selected in
accordance with Section 1.8.
<PAGE>
"Uniform Commercial Code" shall mean the Uniform Commercial Code
enacted in the respective jurisdictions in which the Assets or the Sellers are
located.
"Union Employees" shall mean the employees at the Plant who are covered
by the Collective Bargaining Agreements.
"United States" shall mean only the 50 States of the United States of
America and the District of Columbia.
"U.S. Trademarks" shall have the meaning specified in Section 1.2(a).
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.1. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, by
Federal Express, Express Mail, or similar overnight delivery or courier service,
or by confirmed telecopy, or mailed, to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) if to the Purchaser, to
Barton Incorporated
55 East Monroe Street
Chicago, Illinois 60603
Attention: Fred R. Mardell, Esq.
Vice President and
General Counsel
Facsimile: (312) 346-5623
with a copy to
<PAGE>
Canandaigua Wine Company, Inc.
116 Buffalo Street
Canandaigua, New York 14424
Attention: Robert Sands, Esq.
Executive Vice President,
General Counsel and
Secretary
Facsimile: (716) 396-7675
(b) if to the Sellers, to
United Distillers Glenmore, Inc.
Six Landmark Square
Stamford, CT 06901-2704
Attention: Mr. Frank P. McMorrow
Senior Vice-President,
Chief Financial Officer
Facsimile: (203) 359-7195
with a copy to
Duane, Morris & Heckscher
122 East 42nd Street
New York, NY 10168
Attention: Michael H. Margulis, Esq.
Facsimile: (212) 499-0420
Any notice or other communication given by certified mail or confirmed telecopy
shall be deemed given at the time of certification or confirmation thereof,
except for a notice changing a party's address which will be deemed given at the
time of receipt thereof. Any notice given by other means permitted by this
Section 11.1 shall be deemed given at the time of receipt thereof.
SECTION 11.2. Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
<PAGE>
SECTION 11.3. Entire Agreement; No Third Party Beneficiaries. This
Agreement (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (b) except as provided in Section 6.21,
Article VIII, and Section 11.6, is not intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.
SECTION 11.4. Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York, without giving
effect to conflicts of laws.
SECTION 11.5. Publicity; Confidentiality. Neither the Sellers nor the
Purchaser shall issue or cause the publication of any press release or other
public announcement with respect to the transactions contemplated by this
Agreement or the terms of this Agreement without the consent of the other party,
which consent shall not be unreasonably withheld or delayed, and except as
required by applicable Law. In the event that the Sellers, the Purchaser, or
their respective Affiliates become legally compelled to disclose any information
concerning the transactions contemplated by this Agreement, the compelled party
shall provide the other with prompt written notice. Each party agrees to
disclose only that portion of the information which is legally required to be
disclosed and will exercise its commercially reasonable efforts to obtain
assurance that confidential treatment will be afforded such information to the
fullest extent possible.
SECTION 11.6. Assignment. Neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be assigned by either party
hereto without the prior written consent of the other party; provided, that the
rights but not obligations of any party herein may
<PAGE>
be assigned to one or more of such party's Affiliates; and provided further that
the Purchaser may assign any of its rights to purchase any Assets, and its
rights and obligations to enter into any of the Licenses or Other Agreements, to
any Purchaser Subsidiary. This Agreement will be binding upon, inure to the
benefit of, and be enforceable by the parties and their respective permitted
successors and assigns.
SECTION 11.7. Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 11.8. Partial Invalidity. If any provision of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provisions
hereof.
SECTION 11.9. Waiver and Amendment. The waiver by the Sellers or the
Purchaser of any breach of, or failure to comply with, any provision of this
Agreement shall not be construed as or constitute a continuing waiver of such
provision or a waiver of any other breach of or failure to comply with any
provision of this Agreement. No waiver, amendment, or modification of any
provision of this Agreement shall be effective unless specifically made in
writing and signed by the party against whom the enforcement of such waiver,
amendment, or modification is sought.
SECTION 11.10. Jurisdiction, Venue, and Service of Process. Each party
hereto hereby irrevocably consents to the exclusive jurisdiction and venue of
the courts of the State of New York and of any Federal court located in such
State in connection with any action or proceeding arising out of or relating to
this Agreement, any document or instrument delivered
<PAGE>
pursuant to, in connection with, or simultaneously with this Agreement, or a
breach of this Agreement or any such document or instrument.
SECTION 11.11. No Set-Off. Any payment required to be made
pursuant to this Agreement shall be paid without any set-off, counterclaim, or
deduction any party may have against the other.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized, all as of the date first
written above.
<TABLE>
<S> <C>
BARTON INCORPORATED
By:____/s/Fred R. Martell_____
Name: Fred R. Mardell
Title: Vice Pres.
UNITED DISTILLERS GLENMORE, INC.
By:___/s/ Frank P. McMorrow___
Name: Frank P. McMorrow
Title: Sr. Vice Pres.
SCHENLEY INDUSTRIES INC.
By:___/s/ Frank P. McMorrow___
Name: Frank P. McMorrow
Title: Vice Pres.
MEDLEY DISTILLING COMPANY
By:___/s/ Frank P. McMorrow___
Name: Frank P. McMorrow
Title: Vice Pres.
<PAGE>
UNITED DISTILLERS
MANUFACTURING, INC.
By:___/s/ Frank P. McMorrow__
Name: Frank P. McMorrow
Title: Vice Pres.
THE VIKING DISTILLERY, INC.
By:___/s/ Frank P. McMorrow___
Name: Frank P. McMorrow
Title: Vice Pres.
</TABLE>
<PAGE>
<TABLE>
<S> <C>l
LIST OF SCHEDULES
Description
Schedule I Sellers
Schedule 1.2(a)-1 U.S. Trademarks Other than Inver House, El Toro,
and Schenley
Schedule 1.2(a)-2 Inver House, El Toro, and Schenley Trademarks
Schedule 1.2(b) Foreign Trademarks
Schedule 1.2(c)-1 Chi-Chi's/Fleischmann's Licenses
Schedule 1.2(c)-2 Chi-Chi's/Fleischmann's Trademarks
Schedule 1.2(f) Plants
Schedule 1.2(g) Manufacturing Equipment
Schedule 1.2(j) Literature
Schedule 1.2(m) Assigned Contracts
Schedule 1.2(n) Trade Names
Schedule 1.2(o) Prepaid Expenses
Schedule 1.2(p) Records
Schedule 1.2(q) Transferred Molds
Schedule 1.3(g) Clarendon Equipment
Schedule 1.3(l) Other Excluded Assets
Schedule 1.5(d) Returns Policy
Schedule 1.7(b) Estimated Purchase Price
Schedule 1.8(g) Accounting Methodology
Schedule 1.9 Prorations
Schedule 2.2 Sellers Governmental Filings and Other Required
Consents
Schedule 2.3 Compliance with Applicable Laws
Schedule 2.4 Third Party Rights
Schedule 2.10 Litigation
Schedule 2.11 Orders
Schedule 2.12 Manufacturing Equipment
Schedule 2.13(b) Owned Property - Exceptions
Schedule 2.14 Employees
Schedule 2.15(a) Multi-Employer Matters
Schedule 2.15(b) Welfare Plans
Schedule 2.15(c) Employee Plan Exceptions
Schedule 2.16(a) Environmental and Safety Requirements
Schedule 2.16(b) Hazardous Materials
Schedule 2.16(c) Off-Site Waste Disposals
Schedule 2.16(d) Environmental and Safety Events and Circumstances
Schedule 2.17 Product Liabilities
Schedule 2.18 Permits
Schedule 2.19 Adverse Changes
Schedule 2.20 Rebate and Promotional Programs
<PAGE>
Description
Schedule 2.21 Employees
Schedule 2.22 Shipments and Depletion Data
Schedule 2.23 Brand Profit and Loss Statements
Schedule 2.25 Distributors
Schedule 2.26 Suppliers
Schedule 3.2 Purchaser's Approvals
Schedule 6.2 Costs and Expenses
Schedule 6.4 Insurance Amounts
Schedule 6.5 Glass Molds
Schedule 6.6(h) Depletion Days
Schedule 6.7 Approvals to be Applied for Post-Closing
Schedule 6.9(a) Terminated U.S. Distributors
Schedule 6.9(b) Terminated Foreign Distributor Agreements
Schedule 6.11(b) Employment Terms
Schedule 6.11(d) Severance Terms
Schedule 6.13 Product Differentiation
Schedule 6.14 Financial Statements
Schedule 8.1(a) Indemnification Matters
Schedule 8.1(i) Certain Liabilities
Schedule 8.8 Indemnification Limits
Schedule K-1 Sellers' Knowledge Persons
Schedule K-2 Purchaser's Knowledge Persons
Schedule S Surveys
Schedule T Title Commitments
Schedule U UD Records
<PAGE>
LIST OF EXHIBITS
Description
Exhibit 1.4(a) Forms of Container Licenses
Exhibit 1.4(b) Form of Schenley License
Exhibit 4.6(a) Form of Brandy Agreement
Exhibit 4.6(b) Form of Bottling Agreement
Exhibit 4.6(c) Forms of Canadian Whisky Agreements
Exhibit 4.6(d) Form of Scotch Whisky Agreement
Exhibit 4.6(e) Form of Barrel Agreement
Exhibit 4.6(f) Form of Clarendon Lease
Exhibit 4.6(g) Form of Flavoring Supply Agreement
Exhibit 4.6(h) Form of California Agreement
Exhibit 4.6(i) Form of Medley Agreements
Exhibit 4.6(j) Form of Services Agreements
Exhibit 4.6(k) Form of Guaranty
Exhibit 4.6(l) Form of Corn Whiskey Agreement
Exhibit 5.6(m) Form of Barton Guaranty
Exhibit 6.9(a) Forms of Notice to Distributors
Exhibit 7.2(a) Form of Sellers' Officer's Certificate
Exhibit 7.2(b) Forms of Sellers' Counsels' Opinion
Exhibit 7.2(c) Form of Trademark Assignment
Exhibit 7.2(d) Form of Assignment and Assumption
Exhibit 7.2(e) Form of Bill of Sale
Exhibit 7.2(f)-1 Form of Deed (Kentucky)
Exhibit 7.2(f)-2 Form of Deed (Georgia)
Exhibit 7.2(g) Form of Copyright Assignment
Exhibit 7.2(l) Form of Georgia Affidavit
Exhibit 7.2(o) Form of Guinness America, Inc. Officer's Certificate
Exhibit 7.3(b) Form of Purchaser's Officer's Certificate
Exhibit 7.3(c) Form of Purchaser's Counsels' Opinion
Exhibit 7.3(f) Forms of Resale Certificates
Exhibit 7.3(i) Form of Purchaser's Officer's Certificate
</TABLE>
[Execution Copy]
************************************************************
CANANDAIGUA WINE COMPANY, INC.
and
SUBSIDIARY GUARANTORS
-----------------------------
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 1, 1995
------------------------------
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Administrative Agent
************************************************************
BII\36365
<PAGE>
<TABLE>
<S> <C>
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.................................................................. 2
1.01 Certain Defined Terms............................................................................ 2
1.02 Accounting Terms and Determinations.............................................................. 34
1.03 Classes and Types of Loans....................................................................... 35
Section 2. Commitments, Loans, Notes and Prepayments........................................................... 35
2.01 Syndicated Loans................................................................................. 35
2.02 Borrowings of Syndicated Loans................................................................... 39
2.03 Money Market Loans............................................................................... 39
2.04 Barton Letter of Credit.......................................................................... 45
2.05 Revolving Letters of Credit...................................................................... 49
2.06 Changes of Commitments........................................................................... 56
2.07 Commitment Fee................................................................................... 57
2.08 Lending Offices.................................................................................. 57
2.09 Several Obligations; Remedies Independent........................................................ 58
2.10 Notes ......................................................................................... 58
2.11 Optional Prepayments and Conversions or
Continuations of Loans................................................................... 59
2.12 Mandatory Prepayments and Reductions of Commit-
ments.................................................................................... 60
Section 3. Payments of Principal and Interest.................................................................. 63
3.01 Repayment of Loans............................................................................... 63
3.02 Interest......................................................................................... 65
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.................................................................................................... 66
4.01 Payments......................................................................................... 66
4.02 Pro Rata Treatment............................................................................... 67
4.03 Computations..................................................................................... 67
4.04 Minimum Amounts.................................................................................. 68
4.05 Certain Notices.................................................................................. 68
4.06 Non-Receipt of Funds by the Administrative Agent................................................. 69
4.07 Sharing of Payments, Etc......................................................................... 70
Section 5. Yield Protection, Etc............................................................................... 72
5.01 Additional Costs................................................................................. 72
5.02 Limitation on Types of Loans..................................................................... 74
5.03 Illegality....................................................................................... 74
5.04 Treatment of Affected Loans...................................................................... 75
<PAGE>
Page
5.05 Compensation..................................................................................... 76
5.06 Additional Costs in Respect of Letters of Credit................................................. 76
Section 6. Guarantee........................................................................................... 77
6.01 Guarantee........................................................................................ 77
6.02 Obligations Unconditional........................................................................ 78
6.03 Reinstatement.................................................................................... 85
6.04 Subrogation...................................................................................... 85
6.05 Remedies......................................................................................... 86
6.06 Continuing Guarantee............................................................................. 86
6.07 Limitation on Guarantee Obligations.............................................................. 86
Section 7. Conditions Precedent................................................................................ 86
7.01 Conditions to Effectiveness...................................................................... 86
7.02 Initial and Subsequent Extensions of Credit...................................................... 91
Section 8. Representations and Warranties...................................................................... 92
8.01 Corporate Existence.............................................................................. 92
8.02 Financial Condition.............................................................................. 92
8.03 Litigation....................................................................................... 93
8.04 No Breach........................................................................................ 93
8.05 Power, Authority and Enforceability.............................................................. 94
8.06 Approvals........................................................................................ 94
8.07 Use of Credit.................................................................................... 94
8.08 ERISA ......................................................................................... 95
8.09 Taxes ......................................................................................... 95
8.10 Investment Company Act........................................................................... 95
8.11 Public Utility Holding Company Act............................................................... 95
8.12 Material Agreements and Liens.................................................................... 95
8.13 Environmental Matters............................................................................ 96
8.14 Capitalization................................................................................... 98
8.15 Subsidiaries, Etc................................................................................ 99
8.16 Real Property....................................................................................100
8.17 True and Complete Disclosure.....................................................................100
8.18 Barton Acquisition...............................................................................101
8.19 Glenmore Acquisition.............................................................................101
Section 9. Covenants of the Company............................................................................101
9.01 Financial Statements Etc.........................................................................101
9.02 Litigation.......................................................................................105
9.03 Existence, Etc...................................................................................106
9.04 Insurance........................................................................................107
9.05 Prohibition of Fundamental Changes...............................................................107
9.06 Limitations on Liens.............................................................................110
9.07 Indebtedness.....................................................................................112
9.08 Investments......................................................................................113
<PAGE>
9.09 Dividend Payments................................................................................114
9.10 Certain Financial Covenants......................................................................114
9.11 Interest Rate Protection Agreements..............................................................115
9.12 Transactions with Affiliates.....................................................................116
9.13 Use of Proceeds..................................................................................117
9.14 Certain Obligations Respecting Subsidiaries......................................................117
9.15 Additional Subsidiary Guarantors.................................................................117
9.16 Modifications of Certain Documents...............................................................118
9.17 Subordinated Indebtedness........................................................................118
9.18 Eligible Inventory Located in Off-Premises
Warehouses...............................................................................120
Section 10. Events of Default..................................................................................121
Section 11. The Administrative Agent...........................................................................126
11.01 Appointment, Powers and Immunities..............................................................126
11.02 Reliance by Administrative Agent................................................................127
11.03 Defaults........................................................................................127
11.04 Rights as a Bank................................................................................128
11.05 Indemnification.................................................................................128
11.06 Non-Reliance on Administrative Agent and Other
Banks....................................................................................129
11.07 Failure to Act..................................................................................129
11.08 Resignation or Removal of Administrative Agent..................................................129
11.09 Consents under Basic Documents..................................................................130
11.10 Notices under the Senior Subordinated Debt
Documents................................................................................130
Section 12. Miscellaneous......................................................................................131
12.01 Waiver .........................................................................................131
12.02 Notices.........................................................................................131
12.03 Expenses, Etc...................................................................................131
12.04 Amendments, Etc.................................................................................133
12.05 Successors and Assigns..........................................................................134
12.06 Assignments and Participations..................................................................134
12.07 Survival........................................................................................136
12.08 Captions........................................................................................136
12.09 Counterparts....................................................................................137
12.10 Governing Law; Submission to Jurisdiction.......................................................137
12.11 Waiver of Jury Trial............................................................................137
12.12 Treatment of Certain Information................................................................137
</TABLE>
<PAGE>
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 - Stock Options
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Term Loan Note
EXHIBIT A-3 - Form of Money Market Note
EXHIBIT A-4 - Form of Swingline Note
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C-1 - Copy, as Executed, of Security Agreement
EXHIBIT C-2 - Form of Security Agreement Amendment
EXHIBIT D - Copy, as Executed, of Barton Letter of Credit EXHIBIT E-1 - Form of
Opinion of Special Counsel to Obligors EXHIBIT E-2 - Form of Opinion of
California Counsel to Obligors EXHIBIT E-3 - Form of Opinion of Kentucky Counsel
to Obligors EXHIBIT F - Form of Opinion of Special New York Counsel
to Chase
EXHIBIT G - Form of Confidentiality Agreement EXHIBIT H - Form of Money Market
Quote Request EXHIBIT I - Form of Money Market Quote EXHIBIT J - Form of Notice
of Assignment
<PAGE>
THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of
September 1, 1995, 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
administrative agent for the Banks (in such capacity, together with its
successors in such capacity, the "Administrative Agent").
The Company, certain of the Subsidiary Guarantors, the
Existing Banks (as defined below) and the Administrative Agent are parties to a
Second Amendment and Restatement dated as of August 5, 1994 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 United Distillers Glenmore, Inc. and
various of its subsidiaries, 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 2.05 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:
Credit Agreement
<PAGE>
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):
"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.
Credit Agreement
<PAGE>
"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 Administrative 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 0% per annum and (b) with respect to Eurodollar Loans, 1.250% per annum;
provided that if the Debt Ratio as at the last day of any fiscal quarter of the
Company ending after August 31, 1995 (the "First Quarter") shall fall within any
of the ranges set forth in the schedule below then, subject to the delivery to
the Administrative Agent of a certificate of a senior financial officer of the
Company demonstrating such fact prior to the last day of the fiscal quarter
immediately following the First Quarter (the "Second Quarter"), the "Applicable
Margin" for Eurodollar Loans shall be reduced to the rate set forth opposite
such range in the schedule below during the period commencing on the third
Business Day following the date of receipt of such certificate to but not
including the date (the "Change Date") that is the earlier of (x) the third
Business Day following receipt of a certificate setting forth the Debt Ratio as
at the last day of the Second Quarter and (y) the last day of the fiscal quarter
immediately following the Second Quarter; 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
the Change Date, the Applicable Margin for Eurodollar Loans shall not as a
consequence of this proviso be so reduced so long as such Event of Default shall
be continuing:
<TABLE>
<S> <C>
Debt Ratio Applicable Margin
Less than or equal to
4.50 to 1, but greater
than 4.00 to 1 1.125%
Less than or equal to
4.00 to 1, but greater
than 3.50 to 1 1.000%
Less than or equal to
3.50 to 1, but greater
than 3.00 to 1 .875%
Credit Agreement
<PAGE>
Less than or equal to
3.00 to 1, but greater
than 2.50 to 1 .750%
Less than or equal to
2.50 to 1, but greater
than 2.00 to 1 .625%
Less than or equal to
2.00 to 1 .500%
</TABLE>
Notwithstanding the foregoing, until the date on which the Company delivers to
the Banks the financial statements referred to in Section 9.01(a) for the
quarterly fiscal period ending February 28, 1996, the Debt Ratio shall for
purposes of this definition be deemed to be less than or equal to 3.00 to 1 but
greater than 2.50 to 1.
"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 Letter of Credit" shall mean Letter of Credit No. PG
752759 dated June 29, 1993, a copy of which is attached as Exhibit D hereto,
issued by the Issuing Bank to American National Bank and Trust Company of
Chicago, as escrowee, in an original face amount equal to $28,200,000 and having
a face amount, on the date hereof (reflecting prior reductions thereto), of
$25,000,000.
"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 2.06 hereof). The aggregate amount of the Barton Letter of
Credit Commitments on the Effective Date is $25,000,000.
Credit Agreement
<PAGE>
"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, Amendment No. 1 thereto dated
May 3, 1993 and Amendment No. 2 thereto dated as of June 29, 1993, each among
the Company, Barton and the Barton Stockholders, as the same shall, subject to
Section 9.16 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 Syndicated Loans or Swingline
Loans that bear interest at rates based upon the Base Rate.
"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.
Credit Agreement
<PAGE>
"Basic Documents" shall mean, collectively, this
Agreement, the Notes, the Security Documents, the Revolving
Letter of Credit Documents and the Glenmore 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 the giving of notices or quotes in connection with a LIBOR
Auction or 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 LIBOR Market 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.
"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, neither the
Glenmore Acquisition 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
Credit Agreement
<PAGE>
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.
"Commitment Fee Percentage" shall mean 0.375% per annum;
provided that if the Debt Ratio as at the last day of any fiscal quarter of the
Company ending after August 31, 1995 (the "First Quarter") shall fall within any
of the ranges set forth in the schedule below then, subject to the delivery to
the Administrative Agent of a certificate of a senior financial officer of the
Company demonstrating such fact prior to the last day of the fiscal quarter
immediately following the First Quarter (the "Second Quarter"), the "Commitment
Fee Percentage" shall be reduced to the rate set forth opposite such range in
the schedule below during the period commencing on the third Business Day
following the date of receipt of such certificate to but not including the date
(the "Change Date") that is the earlier of (x) the third Business Day following
receipt of a certificate setting forth the Debt Ratio as at the last day of the
Second Quarter and (y) the last day of the fiscal quarter immediately following
the Second Quarter; 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 the Change Date, the
Commitment Fee Percentage shall not as a consequence of this proviso be so
reduced so long as such Event of Default shall be continuing:
Credit Agreement
<PAGE>
<TABLE>
<S> <C> Commitment
Debt Ratio Fee Percentage
Less than or equal to
4.00 to 1, but greater
than 3.50 to 1 .325%
Less than or equal to
3.50 to 1, but greater
than 3.00 to 1 .300%
Less than or equal to
3.00 to 1, but greater
than 2.50 to 1 .250%
Less than or equal to
2.50 to 1, but greater
than 2.00 to 1 .225%
Less than or equal to
2.00 to 1 .200%
</TABLE>
Notwithstanding the foregoing, until the date on which the Company delivers to
the Banks the financial statements referred to in Section 9.01(a) for the
quarterly fiscal period ending February 28, 1996, the Debt Ratio shall for
purposes of this definition be deemed to be less than or equal to 3.00 to 1 but
greater than 2.50 to 1.
"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 2.11 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 2.11 hereof of one Type of Loans into another
Type of Loans, which may be accompanied by the
Credit Agreement
<PAGE>
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, Commitment Fee Percentage 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 February 28, 1996, 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 Revolving Loans and Revolving Letter of Credit
Interest hereunder) as at such day and as at the last day of
the immediately preceding fiscal quarter plus (y) $50,000,000;
and
(B) as at May 31, 1996, 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 Revolving Loans and Revolving Letter of Credit
Interest hereunder) as at such day and as at the last days of
the immediately preceding two fiscal quarters plus (y)
$50,000,000;
(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, 1995, 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, 1996, an amount equal to the
average of the aggregate amounts of Indebtedness of the
Company and its Consolidated Subsidiaries as at
Credit Agreement
<PAGE>
such day and as at the last day of the immediately
preceding fiscal quarter; and
(C) as at May 31, 1996, 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, 1995, an amount equal to (x)
Operating Cash Flow for the fiscal quarter ending on such day
times (y) four;
(B) as at February 28, 1996, an amount equal to (x)
Operating Cash Flow for the period of two consecutive fiscal
quarters ending on such day times (y) two; and
(C) as at May 31, 1996, 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
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<PAGE>
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.
"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 (except that cost shall be determined on a first-in-first-out basis)
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,
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<PAGE>
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 environment 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.
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<PAGE>
"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 or LIBOR Market 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 or LIBOR Market Loan
to be made by such Reference Bank for such Interest Period. If any Reference
Bank is not participating in any Eurodollar Loan or LIBOR Market 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 provided that in the case of any LIBOR
Market Loan, the Eurodollar Base Rate for such Loan shall be determined with
reference to deposits of $25,000,000.
"Eurodollar Loans" shall mean Syndicated 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 Administrative 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
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<PAGE>
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 2.05(m) hereof.
"Existing Letter of Credit Liabilities" shall have the meaning
assigned to such term in Section 2.05(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.
"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 Administrative 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
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<PAGE>
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.
"Glenmore Entities" shall mean, collectively, United
Distillers Glenmore, Inc., a Delaware corporation, Schenley Industries Inc., a
Delaware corporation, Medley Distilling Company, a Kentucky corporation, United
Distillers Manufacturing, Inc., a Delaware corporation and Viking Distillery,
Inc., a
Georgia corporation.
"Glenmore Acquisition" shall mean the acquisition by Barton
pursuant to the Glenmore Acquisition Documents of certain of the assets of the
Glenmore Entities.
"Glenmore Acquisition Agreement" shall mean the Asset Purchase
Agreement dated as of August 29, 1995 among Barton and the Glenmore Entities, as
the same shall subject to Section 9.16 hereof, be modified and supplemented and
in effect from time to time.
"Glenmore Acquisition Documents" shall mean the Glenmore
Acquisition Agreement and all other agreements and instruments (together with
any and all exhibits, annexes and schedules thereto) executed and delivered
between Barton or the Company (or any of their Subsidiaries) and any of the
Glenmore Entities, as the same shall, subject to Section 9.16 hereof, be
modified and supplemented and in effect from time to time.
"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)
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<PAGE>
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, radioactive 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 polychlorinated 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, Inc., a Wholly Owned Subsidiary of the Company, of certain
assets of Heublein, which acquisition occurred on the "Effective Date" under and
as defined in the Existing Credit 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) obligations
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 understanding 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
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<PAGE>
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 Agreement 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 Indebtedness 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 foregoing, 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.
Credit Agreement
<PAGE>
"Interest Period" shall mean:
(a) 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;
(b) With respect to any Set Rate Loan, the period commencing
on the date such Set Rate Loan is made and ending on any Business Day
up to 90 days thereafter, as the Company may select as provided in
Section 2.03(b) hereof; and
(c) With respect to any LIBOR Market Loan, the period
commencing on the date such LIBOR Market Loan is made and ending on the
numerically corresponding day in the second, third or sixth calendar
month thereafter, as the Company may select as provided in Section
2.03(b) hereof, except that each Interest Period that commences on the
last Business Day of a calendar month (or 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 or Money Market 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
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<PAGE>
Interest Period for any Eurodollar Loan or LIBOR Market 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 Administrative 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 2.04
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 2.05 hereof, and The First National Bank of Chicago as
Credit Agreement
<PAGE>
issuer of the Qingdao Letter of Credit, in each case together with its
successors and assigns in such capacity.
"Joint Venture Entity" shall mean, collectively, (i) any
Subsidiary formed or acquired by the Company after the date hereof that is not a
Wholly Owned Subsidiary, (ii) any other entity of which the Company and its
Wholly Owned Subsidiaries hold more than 50% of the ownership interests in such
entity, but which may not be a Subsidiary because the Company and its Wholly
Owned Subsidiaries may not have ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions and (iii) any
Subsidiary of any Joint Venture Entity described in the foregoing clauses (i) or
(ii).
"Letters of Credit" shall mean, collectively, the Barton
Letter of Credit and the Revolving Letters of Credit.
"Letter of Credit Fee Percentage" shall mean 1.125% per annum;
provided that if the Debt Ratio as at the last day of any fiscal quarter of the
Company ending after August 31, 1995 (the "First Quarter") shall fall within any
of the ranges set forth in the schedule below then, subject to the delivery to
the Administrative Agent of a certificate of a senior financial officer of the
Company demonstrating such fact prior to the last day of the fiscal quarter
immediately following the First Quarter (the "Second 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 third Business
Day following the date of receipt of such certificate to but not including the
date (the "Change Date") that is the earlier of (x) the third Business Day
following receipt of a certificate setting forth the Debt Ratio as at the last
day of the Second Quarter and (y) the last day of the fiscal quarter immediately
following the Second Quarter; 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 the
Change Date, the Letter of Credit Fee Percentage shall not as a consequence of
this proviso be so reduced so long as such Event of Default shall be continuing:
<TABLE>
<S> <C>
Letter of Credit
Debt Ratio Fee Percentage
Less than or equal to
4.50 to 1, but greater
than 4.00 to 1 1.000%
Less than or equal to
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<PAGE>
4.00 to 1, but greater
than 3.50 to 1 .875%
Less than or equal to
3.50 to 1, but greater
than 3.00 to 1 .750%
Less than or equal to
3.00 to 1, but greater
than 2.50 to 1 .625%
Less than or equal to
2.50 to 1, but greater
than 2.00 to 1 .500%
Less than or equal to
2.00 to 1 .375%
</TABLE>
Notwithstanding the foregoing, until the date on which the Company delivers to
the Banks the financial statements referred to in Section 9.01(a) for the
quarterly fiscal period ending February 28, 1996, the Debt Ratio shall for
purposes of this definition be deemed to be less than or equal to 3.00 to 1 but
greater than 2.50 to 1.
"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 Reimbursement 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 participation interest in such
Letter of Credit under Sections 2.04 or 2.05 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 2.04 and 2.05.
"LIBO Margin" shall have the meaning assigned to such term in
Section 2.03(c)(ii)(C) hereof.
"LIBO Rate" shall mean, for any LIBOR Market Loan, a rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by
the Administrative Agent to be equal to the rate of interest specified in clause
(a) of the definition of "Eurodollar Base Rate" in this Section 1.01 for the
Interest
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<PAGE>
Period for such Loan divided by 1 minus the Reserve Requirement (if any) for
such Loan for such Interest Period.
"LIBOR Auction" shall mean a solicitation of Money Market
Quotes setting forth LIBO Margins based on the LIBO Rate pursuant to Section
2.03 hereof.
"LIBOR Market Loans" shall mean Money Market Loans the
interest rates on which are determined on the basis of LIBO Rates pursuant to a
LIBOR Auction.
"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 retention agreement
(other than an operating lease) relating to such Property.
"Loans" shall mean, collectively, Syndicated Loans,
Money Market Loans and Swingline 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 Liabilities 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 unpaid principal amount of the
Money Market Loans plus (c) 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.
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<PAGE>
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations G, T, 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
Administrative Agent under any of the Basic Documents or the perfection or
priority of any of the Liens contemplated 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.
"Money Market Borrowing" shall have the meaning assigned to
such term in Section 2.03(b) hereof.
"Money Market Loan Limit" shall have the meaning assigned to
such term in Section 2.03(c)(ii) hereof.
"Money Market Loans" shall mean the loans provided for
by Section 2.03 hereof.
"Money Market Notes" shall mean the promissory notes provided
for by Section 2.09(c) 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.
"Money Market Quote" shall mean an offer in accordance with
Section 2.03(c) hereof by a Bank to make a Money Market Loan with one single
specified interest rate.
"Money Market Quote Request" shall have the meaning assigned
to such term in Section 2.03(b) hereof.
"Mortgage Notes" shall have the meaning assigned to such term
in Section 2.10(b) hereof.
"Mortgages" shall mean, collectively, the respective Deeds of
Trust and Mortgages executed and delivered by the Company and its Subsidiaries
pursuant to the Existing Credit
Credit Agreement
<PAGE>
Agreement (or pursuant to earlier restatements thereof or pursuant to the
original Credit Agreement dated as of September 30, 1991), covering the
properties of the respective Obligors identified in Parts A and B of Schedule V
hereto, in each case as such Deeds of Trust and Mortgages have been heretofore
modified, as such Deeds of Trust and Mortgages shall be modified pursuant to
instruments of Modification and Confirmation executed and delivered pursuant to
Section 7.01(h) hereto, and as such Deeds of Trust and Mortgages shall be
further 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;
(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; and
(iv) in the case of any issuance of Subordinated
Indebtedness, the aggregate amount of all cash received by the Company
in respect of such issuance net of reasonable expenses incurred by the
Company and its Subsidiaries in connection therewith and net of cash
proceeds so received and applied to refinance other Subordinated
Indebtedness as contemplated by Section 9.17 hereof.
Credit Agreement
<PAGE>
"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 2.10(b) hereof.
"Notes" shall mean, collectively, Syndicated Notes,
Money Market Notes and 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.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
Credit Agreement
<PAGE>
"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 or a Money Market 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 hereof and, thereafter, the rate provided
for above in this definition).
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<PAGE>
"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, 1995, through and including August 15, 2001.
"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.
"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 2.05(k) and 2.05(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 Administrative Agent and the Company at the time of such
modification, renewal or reissuance as the new "Qingdao Letter of Credit Limit"
for purposes of this Agreement.
"Quarterly Dates" shall mean the fifteenth day of each March,
June, September and December, the first of which shall be September 15, 1995;
provided that solely with respect to the calculation and payment of fees in
respect of the Letters of Credit under Sections 2.04(f) and 2.05(g) hereof,
"Quarterly Date" shall mean the last day of each March, June, September and
December, provided, further, that if any such day is not a Business Day, then
such Quarterly Date shall be the next succeeding Business Day.
Credit Agreement
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"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, G, T, U and X" shall mean, respectively,
Regulations A, D, G, T, 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 limitation, 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 or LIBOR Market Loan, the average maximum rate at which
reserves (including, without limitation, any marginal, supplemental 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 exceeding 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
Credit Agreement
<PAGE>
Section 1.01 or (ii) any category of extensions of credit or other assets that
includes Eurodollar Loans or LIBOR Market Loan.
"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.
"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 2.06 hereof). The aggregate principal amount of
the Revolving Credit Commitments on the Effective Date 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 2.10(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, 2001.
"Revolving Letter of Credit Documents" shall mean, with
respect to any Revolving Letter of Credit, collectively, any application
therefor and any other agreements, instruments,
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<PAGE>
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
obligations, 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 participation 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 2.05 hereof.
"Security Agreement" shall mean the Second Amended and
Restated Security Agreement dated as of August 5, 1994 between the Company, the
Obligors and Chase, as Agent, a copy of which is attached as Exhibit C-1 hereto,
as the same shall be amended by the Security Agreement Amendment and as the same
shall be further modified and supplemented and in effect from time to time.
"Security Agreement Amendment" shall mean an amendment to the
Security Agreement in substantially the form of Exhibit C-2 hereto.
"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 9.17 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
Credit Agreement
<PAGE>
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 9.17 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 9.17 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 9.17
hereof, be modified and supplemented and in effect from time to time.
"Set Rate" shall have the meaning assigned to such term in
Section 2.03(c)(ii)(D) hereof.
"Set Rate Auction" shall mean a solicitation of Money Market
Quotes setting forth Set Rates pursuant to Section 2.03 hereof.
"Set Rate Loans" shall mean Money Market Loans the interest
rates on which are determined on the basis of Set Rates pursuant to a Set Rate
Auction.
"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 9.17
hereof.
"Subsidiary" shall mean, for any Person, any corporation,
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
Credit Agreement
<PAGE>
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.
"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 2.10(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.
"Syndicated Loans" shall mean the Revolving Credit
Loans and the Term Loans.
"Syndicated Notes" shall mean the Revolving Credit
Notes and the Term Loan Notes.
"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 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
Credit Agreement
<PAGE>
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 2.06 hereof). The aggregate
principal amount of the Term Loan Commitments on the Effective Date is
$246,000,000.
"Term Loan Commitment Termination Date" shall mean
November 1, 1995.
"Term Loan Notes" shall mean the promissory notes provided for
by Section 2.10(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 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 International Company, Inc., a New York
corporation), as amended by Amendment No. 1 dated October 14, 1993 and Amendment
No. 2 dated January 14, 1994, and as the same shall be modified and supplemented
and in effect from time to time.
"Wholly Owned Subsidiary" shall mean, with respect to any
Person, any 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 directly or indirectly owned or
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Subsidiaries of such Person. For
purposes hereof, BB Servicios, S.A. de C.V. or Monarch Wine Company, Limited
Partnership shall be deemed to be Wholly Owned
Credit Agreement
<PAGE>
Subsidiaries so long as the ownership interest of the Company therein shall not
fall below that indicated on Schedule III hereto.
"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 financial
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, 1994 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
Credit Agreement
<PAGE>
basis consistent with, the generally accepted accounting principles 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, without the consent of the Majority Banks, 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, Money Market Loan or a Term Loan, each of which constitutes a Class. The
"Type" of a Loan refers to whether such Loan is a Base Rate Loan, a Eurodollar
Loan, a Set Rate Loan or a LIBOR Market Loan, each of which constitutes a Type.
Loans may be identified by both Class and Type.
Section 2. Commitments, Loans, Notes and Prepayments.
2.01 Syndicated 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, Chase
shall, by purchase of assignments from any Existing Bank that will not be a
Revolving Credit Bank hereunder, acquire all of such Existing Bank's interests
in the Existing Revolving Credit Loans. Concurrently with the satisfaction of
such conditions precedent on the Effective Date, all Existing Revolving Credit
Loans outstanding on the Effective Date shall be designated as Revolving Credit
Loans hereunder and the Revolving Credit Banks shall, by assignments from Chase
and (to the extent necessary) Existing Banks that are Revolving Credit Banks
hereunder, acquire interests in the Existing Revolving Credit Loans in such
amounts (and the Banks shall make such additional adjustments as shall be
necessary) so that after giving effect to such assignments and adjustments, the
Revolving Credit Banks
Credit Agreement
<PAGE>
shall hold Revolving Credit Loans hereunder ratably in accordance with their
respective Revolving Credit Commitments. 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).
Any Existing Revolving Credit Loan that is a "Eurodollar Loan"
under the Existing Credit Agreement and that has an "Interest Period" thereunder
that will end after the Effective Date shall, on the Effective Date,
automatically be Converted into a Base Rate Loan hereunder (and, the Company
shall pay to the Existing Banks any amounts that would be payable in respect of
the principal of such Loans pursuant to Section 5.05 of the Existing Credit
Agreement as if such Loans were being prepaid on the Effective Date). In
addition, the Company will pay to the Administrative Agent for account of the
Existing Banks on the Effective Date all accrued interest on the Existing
Revolving Credit Loans that is unpaid on the Effective Date.
In connection with the purchase by Chase of assignments in the
Existing Revolving Credit Loans of any Existing Bank that will not be a
Revolving Credit Bank hereunder, the Company agrees to reimburse Chase for any
amounts in excess of the principal of and accrued and unpaid interest on the
Loans so purchased that Chase is required to pay to such Existing Bank (whether
in respect of amounts that such Bank would be entitled to receive under Section
5.05 of the Existing Credit Agreement if such Loans were being prepaid on the
Effective Date, or otherwise) in order to induce such Existing Bank to sell such
assignment to Chase,
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<PAGE>
provided that, without the consent of the Company, Chase shall not pay to such
Existing Bank an amount in excess of 100% of the principal amount of the
Existing Revolving Credit Loans of such Existing Bank being assigned.
(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, Chase shall, by purchase of assignments from any
Existing Bank that will not be a Term Loan Bank hereunder, acquire all of such
Existing Bank's interests in the Existing Term Loans. Concurrently with the
satisfaction of such conditions precedent on the Effective Date, all Existing
Term Loans outstanding on the Effective Date shall be designated as Term Loans
hereunder and the Term Loan Banks shall, by assignments from Chase and (to the
extent necessary) Existing Banks that are Term Loan Banks hereunder, acquire
interests in the Existing Term Loans in such amounts (and the Banks shall make
such additional adjustments as shall be necessary) so that after giving effect
to such assignments and adjustments, the Term Loan Banks shall hold Term Loans
hereunder ratably in accordance with their respective Term Loan Commitments. 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 the
Effective 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 2.11 hereof) or Continue Term Loans of one Type as Term Loans of the
same Type (as provided in Section 2.11 hereof).
Any Existing Term Loan that is a "Eurodollar Loan" under the
Existing Credit Agreement and that has an "Interest Period" thereunder that will
end after the Effective Date shall, on the Effective Date, automatically be
Converted into a Base Rate Loan hereunder (and, the Company shall pay to the
Existing Banks any amounts that would be payable in respect of the principal of
such Loans pursuant to Section 5.05 of the Existing Credit Agreement as if such
Loans were being prepaid on the Effective Date). In addition, the Company will
pay to the Administrative Agent for account of the Existing Banks on the
Effective Date all accrued interest on the Existing Term Loans that is unpaid on
the Effective Date.
In connection with the purchase by Chase of assignments in the
Existing Term Loans of any Existing Bank that will not be a Term Loan Bank
hereunder, the Company agrees to reimburse Chase
Credit Agreement
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for any amounts in excess of the principal of and accrued and unpaid interest on
the Loans so purchased that Chase is required to pay to such Existing Bank
(whether in respect of amounts that such Bank would be entitled to receive under
Section 5.05 of the Existing Credit Agreement if such Loans were being prepaid
on the Effective Date, or otherwise) in order to induce such Existing Bank to
sell such assignment to Chase, provided that, without the consent of the
Company, Chase shall not pay to such Existing Bank an amount in excess of 100%
of the principal amount of the Existing Term Loans of such Existing Bank being
assigned.
(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 2.07 hereof to pay to the
Administrative 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 Revolving
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 2.11 hereof to the
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<PAGE>
contrary, may not be made as or Converted into Eurodollar
Loans.
(iii) The provisions of Sections 2.02, 2.11, 4.04 and
4.05 hereof shall not apply to the Swingline Loans.
(d) Certain Limits on Eurodollar Loans. 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, all 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. In addition, no more than fourteen separate
Interest Periods in respect of Money Market Loans and 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 Syndicated Loans. The Company shall give
the Administrative Agent (which shall promptly notify the Banks) notice of each
borrowing hereunder of Syndicated 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 any such Loan or Loans
to be made by it on such date to the Administrative Agent, at account number
NYAO-DI-900-9-000002 maintained by the Administrative Agent with Chase at the
Principal Office, in immediately available funds, for account of the Company.
The amount so received by the Administrative Agent shall, subject to the terms
and conditions of this Agreement, be made available to the Company by depositing
the same, in immediately 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 Money Market Loans.
(a) In addition to borrowings of Syndicated Loans, at any time
prior to the Revolving Credit Commitment Termination Date the Company may, as
set forth in this Section 2.03, request the Revolving Credit Banks to make
offers to make Money Market Loans to the Company in Dollars. The Revolving
Credit Banks may, but shall have no obligation to, make such offers and the
Company may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section 2.03. Money Market Loans may be LIBOR Market
Loans or Set Rate Loans, provided that:
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(i) there may be no more than fourteen different
Interest Periods for both Syndicated Loans and Money Market Loans that
are Revolving Credit Loans outstanding at the same time (for which
purpose Interest Periods described in different lettered clauses of the
definition of the term "Interest Period" shall be deemed to be
different Interest Periods even if they are coterminous);
(ii) the aggregate principal amount of all Money Market
Loans, together with the aggregate principal amount of all Revolving
Credit Loans (including all Swingline Loans), and the aggregate amount
of all Letter of Credit Liabilities in respect of Revolving Letters of
Credit, at any one time outstanding shall not exceed the aggregate
amount of the Revolving Credit Commitments at such time; and
(iii) the aggregate principal amount of all Money Market
Loans at any one time outstanding shall not exceed the aggregate amount
of the Revolving Credit Commitments at such time.
(b) When the Company wishes to request offers to make Money
Market Loans, it shall give the Administrative Agent notice (a "Money Market
Quote Request"), and the Administrative Agent shall promptly notify the
Revolving Credit Banks, so as to be received no later than 11:00 a.m. New York
time on (x) the fourth Business Day prior to the date of borrowing proposed
therein, in the case of a LIBOR Auction or (y) the Business Day next preceding
the date of borrowing proposed therein, in the case of a Set Rate Auction (or,
in any such case, such other time and date as the Company and the Administrative
Agent, with the consent of the Majority Revolving Credit Banks, may agree). The
Company may request offers to make Money Market Loans for up to three different
Interest Periods in a single notice (for which purpose Interest Periods in
different lettered clauses of the definition of the term "Interest Period" shall
be deemed to be different Interest Periods even if they are coterminous);
provided that the request for each separate Interest Period shall be deemed to
be a separate Money Market Quote Request for a separate borrowing (a "Money
Market Borrowing"). Each such notice shall be substantially in the form of
Exhibit H hereto and shall specify as to each Money Market Borrowing:
(i) the proposed date of such borrowing, which
shall be a Business Day;
(ii) the aggregate amount of such Money Market
Borrowing, which shall be at least $10,000,000 (or a larger
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<PAGE>
multiple of $5,000,000) but shall not cause the limits
specified in Section 2.03(a) hereof to be violated;
(iii) the duration of the Interest Period applicable
thereto;
(iv) whether the Money Market Quotes requested for a
particular Interest Period are seeking quotes for LIBOR Market Loans or
Set Rate Loans; and
(v) if the Money Market Quotes requested are seeking
quotes for Set Rate Loans, the date on which the Money Market Quotes
are to be submitted if it is before the proposed date of borrowing (the
date on which such Money Market Quotes are to be submitted is called
the "Quotation Date").
Except as otherwise provided in this Section 2.03(b), no Money Market Quote
Request shall be given within five Business Days (or such other number of days
as the Company and the Administrative Agent, with the consent of the Majority
Revolving Credit Banks, may agree) of any other Money Market Quote Request.
(c) (i) Each Revolving Credit Bank may submit one or more
Money Market Quotes, each constituting an offer to make a Money Market
Loan in response to any Money Market Quote Request; provided that, if
the Company's request under Section 2.03(b) hereof specified more than
one Interest Period, such Bank may make a single submission containing
one or more Money Market Quotes for each such Interest Period. Each
Money Market Quote must be submitted to the Administrative Agent not
later than (x) 2:00 p.m. New York time on the fourth Business Day prior
to the proposed date of borrowing, in the case of a LIBOR Auction or
(y) 10:00 a.m. New York time on the Quotation Date, in the case of a
Set Rate Auction (or, in any such case, such other time and date as the
Company and the Administrative Agent, with the consent of the Majority
Revolving Credit Banks, may agree); provided, further, that any Money
Market Quote may be submitted by Chase (or its Applicable Lending
Office) only if Chase (or such Applicable Lending Office) notifies the
Company of the terms of the offer contained therein not later than (x)
1:00 p.m. New York time on the fourth Business Day prior to the
proposed date of borrowing, in the case of a LIBOR Auction or (y) 9:45
a.m. New York time on the Quotation Date, in the case of a Set Rate
Auction. Subject to Sections 5.02(b), 5.03, 7.02 and 10 hereof, any
Money Market Quote so made shall be irrevocable except with
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<PAGE>
the consent of the Administrative Agent given on the
instructions of the Company.
(ii) Each Money Market Quote shall be substantially in the
form of Exhibit I hereto and shall specify:
(A) the proposed date of borrowing and the
Interest Period therefor;
(B) the principal amount of the Money Market Loan for
which each such offer is being made, which principal amount
shall be at least $5,000,000 (or a larger multiple of
$1,000,000); provided that the aggregate principal amount of
all Money Market Loans for which a Revolving Credit Bank
submits Money Market Quotes (x) may be greater or less than
the Revolving Credit Commitment of such Bank but (y) may not
exceed the principal amount of the Money Market Borrowing for
a particular Interest Period for which offers were requested;
(C) in the case of a LIBOR Auction, the margin above
or below the applicable LIBO Rate (the "LIBO Margin") offered
for each such Money Market Loan, expressed as a percentage
(rounded upwards, if necessary, to the nearest 1/10,000th of
1%) to be added to or subtracted from the applicable LIBO
Rate;
(D) in the case of a Set Rate Auction, the rate of
interest per annum (rounded upwards, if necessary, to the
nearest 1/10,000th of 1%) offered for each such Money Market
Loan (the "Set Rate"); and
(E) the identity of the quoting Bank.
Unless otherwise agreed by the Administrative Agent and the Company, no
Money Market Quote shall contain qualifying, conditional or similar
language or propose terms other than or in addition to those set forth
in the applicable Money Market Quote Request and, in particular, no
Money Market Quote may be conditioned upon acceptance by the Company of
all (or some specified minimum) of the principal amount of the Money
Market Loan for which such Money Market Quote is being made, provided
that the submission by any Revolving Credit Bank containing more than
one Money Market Quote may be conditioned on the Company not accepting
offers contained in such submission that would result in such Bank
making Money Market Loans pursuant thereto in excess of a specified
aggregate amount (the "Money Market Loan Limit").
Credit Agreement
<PAGE>
(d) The Administrative Agent shall (x) in the case of a Set
Rate Auction, as promptly as practicable after the Money Market Quote is
submitted (but in any event not later than 10:15 a.m. New York time on the
Quotation Date) or (y) in the case of a LIBOR Auction, by 4:00 p.m. New York
time on the day a Money Market Quote is submitted, notify the Company of the
terms (i) of any Money Market Quote submitted by a Revolving Credit Bank that is
in accordance with Section 2.03(c) hereof and (ii) of any Money Market Quote
that amends, modifies or is otherwise inconsistent with a previous Money Market
Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Administrative Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote. The
Administrative Agent's notice to the Company shall specify (A) the aggregate
principal amount of the Money Market Borrowing for which offers have been
received and (B) the respective principal amounts and LIBO Margins or Set Rates,
as the case may be, so offered by each Revolving Credit Bank (identifying the
Bank that made each Money Market Quote).
(e) Not later than 11:00 a.m. New York time on (x) the third
Business Day prior to the proposed date of borrowing, in the case of a LIBOR
Auction or (y) the Quotation Date, in the case of a Set Rate Auction (or, in any
such case, such other time and date as the Company and the Administrative Agent,
with the consent of the Majority Revolving Credit Banks, may agree), the Company
shall notify the Administrative Agent of its acceptance or nonacceptance of the
offers so notified to it pursuant to Section 2.03(d) hereof (which notice shall
specify the aggregate principal amount of offers from each Revolving Credit Bank
for each Interest Period that are accepted, it being understood that the failure
of the Company to give such notice by such time shall constitute nonacceptance)
and the Administrative Agent shall promptly notify each affected Bank. The
notice from the Administrative Agent shall also specify the aggregate principal
amount of offers for each Interest Period that were accepted and the lowest and
highest LIBO Margins and Set Rates that were accepted for each Interest Period.
The Company may accept any Money Market Quote in whole or in part (provided that
any Money Market Quote accepted in part shall be at least $5,000,000 or a larger
multiple of $1,000,000); provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the related
Money Market Quote Request;
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<PAGE>
(ii) the aggregate principal amount of each Money Market
Borrowing shall be at least $10,000,000 (or a larger multiple of
$5,000,000) but shall not cause the limits specified in Section 2.03(a)
hereof to be violated;
(iii) acceptance of offers may, subject to clause (v) below,
be made only in ascending order of LIBO Margins or Set Rates, as the
case may be, in each case beginning with the lowest rate so offered;
(iv) the Company may not accept any offer where the
Administrative Agent has advised the Company that such offer fails to
comply with Section 2.03(c)(ii) hereof or otherwise fails to comply
with the requirements of this Agreement (including, without limitation,
Section 2.03(a) hereof);
(v) the aggregate principal amount of each Money Market
Borrowing from any Revolving Credit Bank may not exceed any applicable
Money Market Loan Limit of such Bank.
If offers are made by two or more Revolving Credit Banks with the same LIBO
Margins or Set Rates, as the case may be, for a greater aggregate principal
amount than the amount in respect of which offers are accepted for the related
Interest Period, the principal amount of Money Market Loans in respect of which
such offers are accepted shall be allocated by the Company among such Banks as
nearly as possible (in amounts of at least $5,000,000 or larger multiples of
$1,000,000) in proportion to the aggregate principal amount of such offers.
Determinations by the Company of the amounts of Money Market Loans shall be
conclusive in the absence of manifest error.
(f) Any Revolving Credit Bank whose offer to make any Money
Market Loan has been accepted in accordance with the terms and conditions of
this Section 2.03 shall, not later than 1:00 p.m. New York time on the date
specified for the making of such Loan, make the amount of such Loan available to
the Administrative Agent at account number NYAO-DI-900-9-000002 maintained by
the Administrative Agent with Chase at the Principal Office in immediately
available funds, for account of the Company. The amount so received by the
Administrative Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Company on such date by depositing the same,
in immediately available funds, in an account of the Company maintained with
Chase at the Principal Office designated by the Company.
(g) Except for the purpose and to the extent expressly
stated in Sections 2.06(b) and 2.07 hereof, the amount of any
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<PAGE>
Money Market Loan made by any Bank shall not constitute a utilization of such
Bank's Revolving Credit Commitment.
(h) The Company shall pay to the Administrative Agent a fee of
$2,500 each time the Company gives a Money Market Quote Request to the
Administrative Agent.
2.04 Barton Letter of Credit. Pursuant to Section 2.03 of the
Existing Credit Agreement, the Barton Letter of Credit, issued by Chase as
Issuing Bank for account of the Company is outstanding on the date hereof. The
following 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 Administrative 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 Administrative Agent) of the amount to be paid by the Issuing Bank
as a
Credit Agreement
<PAGE>
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
Administrative 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 thereunder, 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 2.04, the Company shall advise the
Administrative 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 Administrative 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 Administrative 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 Administrative 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
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<PAGE>
part of the Administrative 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
2.04). 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 Administrative 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 payment received by the
Issuing Bank and so paid to the Barton Letter of Credit Banks hereunder
is rescinded or must otherwise be returned by the Issuing Bank, each
Barton Letter of Credit Bank shall, upon the request of the Issuing
Bank (through the Administrative Agent), repay to the Issuing Bank
(through the Administrative Agent) the amount of such payment paid to
such Bank, with interest at the rate specified in clause (g) of this
Section 2.04.
(f) The Company shall pay to the Administrative 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
Administrative 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).
Credit Agreement
<PAGE>
In addition, the Company shall pay to the Administrative 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 2.04 on the due date therefor, such Bank shall pay
interest to the Issuing Bank (through the Administrative 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 retroactively 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 modification or
supplement to the Barton Letter of Credit hereunder shall be subject to
the same conditions applicable under this Section 2.04 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 Administrative 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 Administrative Agent may
incur (or which may be claimed against such Bank or the Administrative 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 Agreement
<PAGE>
Credit; provided that the Company shall not be required to indemnify any Bank or
the Administrative 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 2.04 is intended to limit the other
obligations of the Company, any Bank or the Administrative Agent under this
Agreement. Notwithstanding anything to the contrary contained herein, the
Issuing Bank shall not be liable for consequential damages.
2.05 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
commercial, 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 and the
aggregate principal amount of Money Market 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 Administrative 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 Termination 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
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<PAGE>
notice, the Administrative 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 Administrative 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 Administrative 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 2.05, the Company shall advise
Credit Agreement
<PAGE>
the Administrative 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 Administrative 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 Administrative 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 Administrative
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 Administrative 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 2.05). 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
Credit Agreement
<PAGE>
Administrative 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 Administrative Agent),
repay to the Issuing Bank (through the Administrative Agent) the amount
of such payment paid to such Bank, with interest at the rate specified
in clause (j) of this Section 2.05.
(g) The Company shall pay to the Administrative 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 the 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 Administrative 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 1/2 of 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 Administrative 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).
Credit Agreement
<PAGE>
In addition, the Company shall pay to the Administrative 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 Administrative 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 procedures 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 Document,
Credit Agreement
<PAGE>
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 2.05
on the due date therefor, such Bank shall pay interest to the Issuing
Bank (through the Administrative 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 modification or
supplement to any Revolving Letter of Credit hereunder shall be
subject to the same conditions applicable under this Section 2.05 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 Administrative 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.
Credit Agreement
<PAGE>
(m) Pursuant to Section 2.04 of the Existing Credit Agreement,
Chase, as an Issuing Bank, has issued various "Revolving Letters of
Credit" under and as defined in the Existing Credit Agreement
(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 Administrative 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 Administrative 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 Administrative Agent may incur (or which
may be claimed against such Bank or the Administrative 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 Administrative 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
Credit Agreement
<PAGE>
complying with the terms and conditions of such Revolving Letter of Credit.
Nothing in this Section 2.05 is intended to limit the other obligations of the
Company, any Bank or the Administrative Agent under this Agreement.
Notwithstanding anything to the contrary contained herein, the Issuing Bank
shall not be liable for consequential damages.
2.06 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, Money Market 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 and the
aggregate principal amount of all Money Market Loans), (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 outstanding, 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 Agreement) 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
Credit Agreement
<PAGE>
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.
2.07 Commitment Fee.
(a) The Company shall pay to the Administrative 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 Commitments) use of
each Bank's Revolving Credit Commitment and for which purpose the aggregate
outstanding principal amount of any Money Market Loans shall not be so deemed),
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 the Commitment
Fee Percentage.
(b) The Company shall pay to the Administrative 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 equal to the Commitment Fee Percentage.
(c) 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.
2.08 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.
Credit Agreement
<PAGE>
2.09 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 Administrative 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 Administrative 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 Administrative
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 Administrative Agent or the
Majority Banks and not individually by a single Bank.
2.10 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 2/246 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 244/246 of the amount
of such Bank's
Credit Agreement
<PAGE>
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 Money Market Loans made by any 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 such Bank and otherwise duly
completed.
(d) 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-4 hereto, dated the date hereof, payable to the Swingline Bank in a
principal amount equal to $8,000,000 and otherwise duly completed.
(e) 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 recordation 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.
(f) No Bank shall be entitled to have its Notes subdivided, by
exchange for promissory notes of lesser denominations or otherwise, except in
connection with a permitted assignment of all or any portion of such Bank's
relevant Commitment, Loans and Notes pursuant to Section 12.06(b) hereof.
2.11 Optional Prepayments and Conversions or Continuations of
Loans. Subject to Section 4.04 hereof, the Company shall have the right to
prepay Syndicated Loans or Swingline Loans, or to Convert Syndicated Loans of
one Type into Syndicated Loans of another Type or Continue Syndicated Loans of
one Type as Syndicated Loans of the same Type, at any time or from time to time,
provided that: (a) the Company shall give the Administrative Agent notice of
each such prepayment, Conversion or Continuation as provided in Section 4.05
hereof (and, upon the
Credit Agreement
<PAGE>
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 remaining installments
thereof, ratably in accordance with the respective principal amounts thereof.
Money Market Loans may not be prepaid.
2.12 Mandatory Prepayments and Reductions of Commit-
-----------------------------------------------
ments.
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(a) Borrowing Base. Until the Revolving Credit Termination
Date, the Company shall from time to time immediately prepay the Revolving
Credit Loans and Money Market Loans (and/or provide cover for Letter of Credit
Liabilities in respect of Revolving Letters of Credit as specified in clause (i)
below) in such amounts as shall be necessary so that at all times the aggregate
outstanding amount of the Revolving Credit Loans and Money Market Loans,
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, second to Money Market Loans
outstanding and, third, 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 and Money Market 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, 1996), the aggregate
outstanding principal amount of the Revolving Credit Loans and Money Market
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, condemnation 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 (i) 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
Credit Agreement
<PAGE>
extent specified in clause (h) below). Notwithstanding 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 Liabilities as
specified in clause (i) 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 Security Documents to remit to a collateral or similar account maintained by
the Administrative 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) Sale of Assets. Without limiting the obligation of the
Company to obtain the consent of the Majority Banks pursuant 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 2.12(d), shall exceed $15,000,000 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
Administrative 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 specified in clause (i)
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 (h)
below.
(e) 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 (i) below), and the Commitments shall be
subject to automatic reduction, in an aggregate amount equal to 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 (h) below.
(f) 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
Credit Agreement
<PAGE>
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) below), and the Commitments shall be subject to
automatic reduction, in an aggregate amount equal to the portion of the Net
Available Proceeds thereof that exceeds (in the aggregate for all such issuances
after the date hereof) $50,000,000, such prepayment and reduction to be effected
in each case in the manner and to the extent specified in clause (h) below.
(g) 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, 1996, the Company shall prepay the Loans (and/or provide cover
for the Letter of Credit Liabilities as specified in clause (i) below), and
the Commitments shall be subject to automatic reduction, in an aggregate amount
equal to the excess of (A) 50% 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 2.11 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 2.06(b) hereof,
such prepayment and reduction to be effected in each case in the manner and to
the extent specified in clause (h) below.
(h) Application. Prepayments and reductions of Commitments
described in the above clauses of this Section 2.12 (other than in clauses (a)
and (b) above) shall be effected as follows:
(i) first, the amount of any such prepayment shall be
applied to the Term Loans allocated (x) in the case of any prepayment
pursuant to clauses (c), (d), (e) or (f) above to the installments
thereof in the inverse order of the maturity and (y) in the case of any
prepayment pursuant to clause (g) above, to the remaining installments
thereof, ratably in accordance with the respective principal amounts
thereof;
(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 and Money Market 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,
second, prepay Money Market Loans and, third
Credit Agreement
<PAGE>
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.
(i) Cover for Letter of Credit Liabilities. In the event that
the Company shall be required pursuant to this Section 2.12 to provide cover for
Letter of Credit Liabilities, the Company shall effect the same by paying to the
Administrative Agent immediately available funds in an amount equal to the
required amount, which funds shall be retained by the Administrative 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.
(j) 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.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) The Company hereby promises to pay to the Administrative
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
Credit Agreement
<PAGE>
pay to the Administrative 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 Administrative
Agent for account of each Bank that makes any Money Market Loan the principal
amount of such Money Market Loan, and such Money Market Loan shall mature, on
the last day of the Interest Period for such Money Market Loan.
(c) The Company hereby promises to pay to the Administrative
Agent for account of the Term Loan Banks the principal of the Term Loans in
twenty-four installments payable on the Principal Payment Dates as follows:
<TABLE>
<S> <C>
Principal Payment Date Amount of
falling on or nearest to: Installment
December 15, 1995 $10,000,000.00
March 15, 1996 $10,000,000.00
June 15, 1996 $10,000,000.00
September 15, 1996 $10,000,000.00
December 15, 1996 $10,000,000.00
March 15, 1997 $10,000,000.00
June 15, 1997 $10,000,000.00
September 15, 1997 $10,000,000.00
December 15, 1997 $10,000,000.00
March 15, 1998 $10,000,000.00
June 15, 1998 $10,000,000.00
September 15, 1998 $10,000,000.00
December 15, 1998 $10,000,000.00
March 15, 1999 $10,000,000.00
June 15, 1999 $10,000,000.00
September 15, 1999 $10,000,000.00
December 15, 1999 $10,000,000.00
March 15, 2000 $10,000,000.00
June 15, 2000 $10,000,000.00
September 15, 2000 $10,000,000.00
December 15, 2000 $10,000,000.00
March 15, 2001 $10,000,000.00
June 15, 2001 $10,000,000.00
August 15, 2001 $16,000,000.00
</TABLE>
Credit Agreement
<PAGE>
If after giving effect to the designation of the Existing Term Loans as Term
Loans hereunder (as provided in Section 2.01(b) hereof), and the making of any
additional Term Loans hereunder, on the Effective Date, the aggregate
outstanding principal amount of the Term Loans shall be less than the aggregate
amount of the Term Loan Commitments, the shortfall shall be applied to reduce
the foregoing installments in the inverse order of maturity. Prepayments of Term
Loans made pursuant to Section 2.11 or Section 2.12 hereof shall be applied to
the foregoing amortization schedule in accordance with Section 2.11(c) or
Section 2.12(h) hereof, as the case may be.
3.02 Interest. The Company hereby promises to pay to the
Administrative 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;
(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;
(c) if such Loan is a LIBOR Market Loan, the LIBO Rate for
such Loan for the Interest Period therefor plus (or minus) the LIBO
Margin quoted by the Bank making such Loan in accordance with Section
2.03 hereof; and
(d) if such Loan is a Set Rate Loan, the Set Rate for such
Loan for the Interest Period therefor quoted by the Bank making such
Loan in accordance with Section 2.03 hereof.
Notwithstanding the foregoing, the Company hereby promises to pay to the
Administrative 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
Credit Agreement
<PAGE>
case of a Eurodollar Loan or a Money Market Loan, on the last day of each
Interest Period therefor and, if such Interest 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 Administrative 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 available
funds, without deduction, set-off or counterclaim, to the Administrative Agent
at account number NYAO-DI-900-9-000002 maintained by the Administrative 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
Administrative 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 Administrative 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 Administrative Agent under
this Agreement or any Note for account of any Bank shall be paid by the
Administrative Agent promptly to such Bank, in immediately available funds, for
account of such Bank's
Credit Agreement
<PAGE>
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 2.07 hereof in respect of Commitments of
a particular 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 2.06 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 Syndicated 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 2.12 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 Reimbursement
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.
Credit Agreement
<PAGE>
4.04 Minimum Amounts. Except for mandatory prepayments made
pursuant to Section 2.12 hereof and Conversions or prepayments made pursuant to
Section 5.04 hereof, each borrowing, Conversion and partial prepayment of
principal of Loans (other than Money Market 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. Except as otherwise provided in Section
2.03 hereof with respect to Money Market Loans, notices by the Company to the
Administrative 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
Administrative 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:
<TABLE>
<S> <C>
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
</TABLE>
Credit Agreement
<PAGE>
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 Administrative 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 otherwise 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 Administrative Agent. Unless
the Administrative 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
Administrative 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 Administrative 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 Administrative Agent, the
Administrative 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 Administrative Agent, the
recipient(s) of such payment shall, on demand, repay to the Administrative 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 Administrative Agent until the date the
Administrative 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 Administrative Agent shall be entitled to recover such
amount, on
Credit Agreement
<PAGE>
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
Administrative 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 (without duplication of the obligation of the Company under
Section 3.02 hereof to pay interest on the Required Payment at the
Post-Default Rate), it being understood that the return by the
recipient(s) of the Required Payment to the Administrative Agent shall
not limit the obligation of the Company under said Section 3.02 to pay
interest 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 pursuant to whichever
of the rates specified in Section 3.02 hereof is applicable to the Type
of such Loan, it being understood that the return by the Company of the
Required Payment to the Administrative Agent shall not limit 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 2.09
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, Reimbursement Obligations or any other
amount payable to such Bank hereunder, 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 Administrative Agent thereof, provided that
such Bank's failure to give such notice shall not affect the validity thereof.
Credit Agreement
<PAGE>
(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
Administrative Agent as provided herein), and, as a result of such payment, such
Bank shall have received a greater percentage of the principal of or interest on
the Loans of such Class or Letter of Credit Liabilities or such other amounts
then due hereunder or thereunder by such Obligor to such Bank than the
percentage 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 obtaining 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.
Credit Agreement
<PAGE>
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 receivable 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 or LIBO Rate, as the case may
be, 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 Administrative
Agent), suspend the obligation of such Bank thereafter 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.
Credit Agreement
<PAGE>
(b) 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 maintenance 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) implementing 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) hereafter issued by any
government or governmental or supervisory authority implementing at the national
level the Basel Accord, 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).
(c) 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 (b) 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 Applicable
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 (b) 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)
Credit Agreement
<PAGE>
of this Section 5.01, or of the effect of capital maintained pursuant to
paragraph (b) 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 determination of any
Eurodollar Base Rate for any Interest Period:
(a) the Administrative Agent determines, which determination
shall be conclusive, that quotations of interest rates for the relevant
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 or LIBOR Market 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 (or any Bank that has
outstanding a Money Market Quote with respect to a LIBOR Market Loan
determines), which determination shall be conclusive, and notify (or
notifies, as the case may be) the Administrative 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 or LIBOR Market Loans, as the case may
be, for such Interest Period is to be determined are not likely
adequately to cover the cost to such Banks (or to such quoting Bank) of
making or maintaining Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Company and each Bank (or to such
quoting 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 or LIBOR Market 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 or
LIBOR Market Loans, either prepay such Loans or Convert such Loans into Base
Rate Loans in accordance with Section 2.11 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
Credit Agreement
<PAGE>
make or maintain Eurodollar Loans or LIBOR Market Loans hereunder, then such
Bank shall promptly notify the Company thereof (with a copy to the
Administrative 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), and such Bank
shall no longer be obligated to make any LIBOR Market Loan that it has offered
to make.
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 5.03
hereof, on such earlier date as such Bank may specify to the Company with a copy
to the Administrative Agent) and, unless and until such Bank gives notice as
provided below that the circumstances specified in Section 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 Administrative Agent
that the circumstances specified in Section 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
outstanding, 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.
Credit Agreement
<PAGE>
5.05 Compensation. The Company shall pay to the Administrative
Agent for account of each Bank, upon the request of such Bank through the
Administrative 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, a LIBO Market Loan or a Set Rate 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 (including,
without limitation, the failure of any of the conditions precedent
specified in Section 7 hereof to be satisfied) to borrow a Eurodollar
Loan, a Money Market Loan or a Set Rate Loan (with respect to which, in
the case of a Money Market Loan, the Company has accepted a Money
Market Quote), 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
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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'
reasonable allocation of the aggregate of such increases or reductions
resulting from such event), then, upon demand by such Bank or Banks (through the
Administrative Agent), the Company shall pay immediately to the Administrative
Agent for account of such Bank or Banks, from time to time as specified by such
Bank or Banks (through the Administrative Agent), such additional amounts as
shall be sufficient to compensate such Bank or Banks (through the Administrative
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 Administrative 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 9.11 hereof and all other amounts from time to time owing
to the Banks or the Administrative 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 otherwise) any of the Guaranteed Obligations, the Subsidiary
Guarantors 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
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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 obligations 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 circumstances. In full recognition and in
furtherance of the foregoing, each Subsidiary Guarantor agrees that:
(a) Without affecting the enforceability or effectiveness of
Section 6.01 hereof in accordance with its terms and without affecting,
limiting, reducing, discharging or terminating the liability of such
Subsidiary Guarantor, or the rights, remedies, powers and privileges of
the Administrative Agent and the Banks under this Agreement, the Notes
or any other agreement or instrument referred to herein or therein, the
Administrative 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 Obligations, 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);
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(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 guarantees
(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 Administrative 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
Administrative 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;
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(x) consent to the merger or consolidation of,
the sale of substantial assets by, or other restructuring 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 Administrative 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 Administrative
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 otherwise 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 Administrative Agent or any Bank may in
its discretion determine (it being agreed that nothing in this
clause (xiii) shall be deemed to make the Administrative 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 Administrative Agent or any Bank may
desire; and
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(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 Administrative 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 limitations 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 Administrative 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
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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 Obligations (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 Administrative 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 Administrative 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 Subsidiary 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 Administrative 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 Guaranteed Obligations,
even though such foreclosure, sale or election of remedies may
impair the subrogation rights of any Subsidiary Guarantor or
may preclude any Subsidiary Guarantor from obtaining
reimbursement, contribution, indemnification or other
recovery from any other Subsidiary Guarantor, the Company any
other guarantor or any other Person and even though the
Company may
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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 Administrative
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 Administrative 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 Administrative Agent or
any Bank to file or enforce a claim in any bankruptcy or other
proceeding with respect to any Person;
(xv) the election by the Administrative 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;
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(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
Administrative 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
Administrative 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 Agreement 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 relinquishes any
duty on the part of the Administrative Agent or the Banks (should any
such duty
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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 Administrative 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 Subsidiary
Guarantors jointly and severally agree that they will indemnify the
Administrative Agent and each Bank on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the
Administrative 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
provisions of this Section 6 and further agrees with the Company for the
benefit of each of its creditors (including, without limitation, each Bank and
the Administrative 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 Administrative 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
Administrative 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.
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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 notwithstanding 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 obligations of any Subsidiary Guarantor under
Section 6.01 hereof would otherwise be held or determined to be void, invalid or
unenforceable, 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 Administrative 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. The effectiveness of this
Agreement (and the amendment and restatement of the Existing Credit Agreement to
be effected hereby), 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 effectiveness shall
occur, and such extension of credit shall be made, on or before November 1, 1995
and (ii) the receipt by the Administrative Agent of the following documents,
each of which
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shall be satisfactory to the Administrative 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 Administrative
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, 1995.
(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 E-1 hereto, (ii) an
opinion dated the Effective Date, of Sheppard, Mullin, Richter &
Hampton, special California counsel to the Obligors, in substantially
the form of Exhibit E-2 hereto, and (iii) an opinion dated the
Effective Date of Fulton, Hubbard & Hubbard, special Kentucky counsel
to the Obligors substantially in the form of Exhibit E-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 Administrative 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 F
hereto. Chase hereby instructs such counsel to deliver such opinion to
the Banks and the Administrative Agent.
(f) Notes. The Notes, duly completed and executed for
each Bank.
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(g) Security Agreement Amendment. The Security Agreement
Amendment, duly executed and delivered by each Obligor and the
Administrative 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 Administrative Agent, for filing, appropriately completed and duly
executed copies of Uniform Commercial Code financing statements) as the
Administrative Agent shall have requested in order to perfect the
security interests created pursuant to the Security Agreement (as
amended by the Security Agreement Amendment).
(h) Mortgages; Title Insurance; etc. The following
documents each of which shall be executed (and, where
appropriate, acknowledged) by Persons satisfactory to the
Administrative Agent:
(i) with respect to each Mortgage, an
instrument of Modification and Confirmation pursuant to which
such Mortgage shall have been amended in form and substance
satisfactory to the Administrative Agent to spread the Lien
thereof to secure the obligations under this Agreement, in
each case duly executed, acknowledged and delivered by the
respective parties thereto, in recordable form (in such number
of copies as the Administrative Agent shall have requested);
and
(ii) mortgagee down-date continuation reports
for existing title policies issued pursuant to the Existing
Credit Agreement, 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 appropriately completed and duly
executed.
In addition, the Company shall have paid to the respective title
companies all expenses of such title companies in connection with the
issuance of the down-date continuation reports and in addition shall
have paid to such title companies an amount equal to the recording and
stamp taxes payable in connection with recording the respective
instruments of Modification and Confirmation in the appropriate county
land offices.
(i) Insurance. Certificates of insurance evidencing
the existence of all insurance required to be maintained by
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the Company and its Subsidiaries pursuant to Section 9.04 hereof and
the designation of the Administrative 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 Johnson & Higgins and Accordia of the
South, 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 Administrative 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 in connection with the Glenmore Acquisition, 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 the Glenmore Entities. In addition, the Company shall
have completed (and delivered to the Administrative 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 the Majority Banks.
(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 Glenmore
Acquisition, the initial extension of credit hereunder and
to the other transactions contemplated hereby, (i) the
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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 (including 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 Administrative
Agent shall have also received opinions of value and other appropriate
factual information with respect to the Property and business being
acquired in the Glenmore Acquisition 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 Glenmore 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 Glenmore Acquisition Documents
shall have been (or, concurrently 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 Barton and the Company (and their Subsidiaries party thereto)
and the Glenmore Entities shall have performed in all material respects
all obligations to be performed by them under the Glenmore Acquisition
Documents on or prior to the Effective Date and (iii) the Glenmore
Acquisition is being consummated in accordance with the terms of the
Glenmore Acquisition Documents.
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(n) Approvals. Evidence of receipt of all approvals from
governmental authorities with respect to the Glenmore 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 Glenmore Acquisition Documents
as currently being conducted by the Glenmore Entities.
(o) Other Documents. Such other documents as the
Administrative Agent or any Bank or special New York counsel
to the Banks may reasonably request.
The effectiveness of this Agreement (and the amendment and restatement of the
Existing Credit Agreement to be effected hereby), and 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), 2.04(a) and 2.05(m)
hereof and (ii) such fees as the Company shall have agreed to pay or deliver to
any Bank or the Administrative 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 any Bank to make any Loan (including any Money
Market Loan and such Bank's initial Syndicated Loan) or otherwise
extend any credit to the Company upon the occasion of each
borrowing or other extension of credit hereunder 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 Glenmore 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
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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 and Money Market 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(f) 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 hereunder 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 Administrative 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 requisite 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,
1994 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 consolidating balance
sheets of the Company and its Consolidated Subsidiaries as at May 31, 1995 and
the related consolidated and consolidating statements of income, retained
earnings and cash flow of the Company and its Consolidated Subsidiaries for the
nine-month period ended on such date, heretofore furnished to
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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 Subsidiaries, as at said dates and the consolidated and
unconsolidated results of their operations for the fiscal year and nine-month
period ended on said dates (subject, in the case of such financial statements
as at May 31, 1995, to normal year-end audit adjustments), all in accordance
with generally accepted accounting 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, 1994, 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
Subsidiaries, 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
Glenmore Acquisition, the issuance of the Barton Letter of Credit and the
transactions herein and in the other Basic Documents 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
Glenmore 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 governmental 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
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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 Agreement 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 enforceability 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 enforceability 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 securities exchanges, in the case of the Glenmore
Acquisition 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 (a) for filings and
recordings in respect of the Liens created pursuant to the Security Documents,
(b) the filing pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of
1976 made by the Company with respect to the Glenmore Acquisition (as to which
the waiting period under said Act with respect to the Acquisition will have
expired prior to the Effective Date), and (c) the filing of a Form 8-K with the
Securities and Exchange Commission which filing will be timely made after the
consummation of the Glenmore 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.
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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 applicable 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 consolidated 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 Subsidiaries. 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 relating 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) $200,000, 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.
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(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. 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 (and except for any of the foregoing required to be obtained
after the date hereof, by reason of conditions or changes in Environmental Laws
occurring after the date hereof, where the failure to obtain the same would not
have a Material Adverse Effect). Each of such permits, licenses and authoriza-
tions is in full force and effect and each of the Company and its Subsidiaries
is in compliance 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, except as set forth in Schedule II hereto
(and except for any of the foregoing required to be obtained after the date
hereof, by reason of conditions or changes in Environmental Laws occurring after
the date hereof, where the failure to obtain the same would not have a Material
Adverse Effect). In the judgment of the Company, no matter (either individually
or collectively with all other such matters) disclosed 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,
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<PAGE>
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 comparable 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
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Comprehensive Environmental Response and Liability Information System,
as provided for by 40 C.F.R. ss. 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 16,200,302 shares are duly and validly issued and outstanding
and 1,186,655 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 3,382,958 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.
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As at the Effective Date, 10.99% of such issued and
outstanding shares of Class A common stock and 83.90% of such issued and
outstanding shares of Class B common stock are owned beneficially and of record
by (i) Marvin Sands, his spouse, his children or his grandchildren, (ii) a trust
which is for the benefit of Marvin Sands, his spouse, his children or his
grandchildren, which trust is under the control of Marvin Sands, his spouse, his
children or his grandchildren or (iii) a partnership which is controlled by (and
the partnership interests in which are owned by) Marvin Sands, his spouse or his
children or grandchildren or their spouses. 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 and options listed on Schedule VII hereto, 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 Administrative 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.
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(b) Set forth in Part B of Schedule III hereto is a complete
and correct list, as of the date of this Agreement, of any Investment the amount
of which exceeds $200,000 (other than Investments of the types described in
clauses (b) through (h) 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 Section 9.14 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 the Company and its Subsidiaries after giving
effect to the Glenmore 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 Administrative 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 by the Glenmore Entities in connection with,
in or pursuant to, the Glenmore 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 Administrative 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
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Company by the Glenmore Entities prior to the consummation of the Glenmore
Acquisition in connection with, in or pursuant to, the Glenmore 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 Barton Acquisition. The Company has heretofore
delivered to each Bank a true and complete copy of the Barton
Stock Purchase Agreement as in effect on the date hereof.
8.19 Glenmore Acquisition. The Company has delivered to each
Bank, prior to the date hereof, a true and complete copy of the Glenmore
Acquisition Agreement as in effect on the date hereof. After the consummation of
the Glenmore Acquisition, Barton (or the respective Subsidiary of Barton
acquiring the same) will have good title to all of the assets purported to be
transferred to Barton (or such Subsidiary) pursuant to the Glenmore 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 Barton (or such
Subsidiary) will have good title to all of the assets acquired pursuant to the
Glenmore Acquisition, free and clear of all Liens.
Section 9. Covenants of the Company. The Company covenants and
agrees with the Banks and the Administrative 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 45 days after
the end of each of the first three quarterly fiscal periods of each
fiscal year of the Company, consolidated 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 respective 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 corresponding
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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
accounting principles, consistently applied, as at the end of, and
for, such period (subject to normal year-end audit adjustments);
(b) 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 standing, which
opinion shall state that said consolidated financial 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;
(c) 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 substituted therefor) or any national
securities exchange;
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(d) promptly upon the mailing thereof to the shareholders of
the Company generally, copies of all financial statements, reports and
proxy statements so mailed;
(e) 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 the 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 the 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 the 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 the
PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Company or any ERISA Affiliate
that results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a
result of a purchaser
Credit Agreement
<PAGE>
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 of 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;
(f) 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 Administrative 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;
(g) 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;
Credit Agreement
<PAGE>
(h) 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 Administrative 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) or (b) 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(i), 9.10 and 9.18
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, in each case to the extent not previously delivered, (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, (ii) copies of all material notices and
information and all financial statements delivered by Vintners to the Company
under the Vintners Acquisition Agreement and (iii) copies of all material
notices and information and all financial statements delivered by any of the
Glenmore Entities to the Company under the Glenmore Acquisition Agreement,
including, without limitation, pursuant to Sections 1.8, 6.14 (including the
documents specified on Schedule 6.14 thereof), 8.3, 8.4 and 8.14 thereof.
9.02 Litigation. The Company will promptly give to the
Administrative Agent for prompt delivery by the Administrative 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 proceedings, 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 Administrative Agent for delivery by the
Administrative Agent to each Bank notice of the assertion of any Environmental
Claim by any Person against, or
Credit Agreement
<PAGE>
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 Environmental 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 requirements 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 Administrative 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 representatives to gain access to any other
information in possession or obtainable by any of the Obligors for
purposes
Credit Agreement
<PAGE>
of bi-annual collateral audits prepared for the Banks, all to the
extent reasonably requested by such Bank or the Administrative 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 the insurance required by the Security Documents
(and will name the Administrative Agent as loss payee to the extent provided
therein).
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 liquidation 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 Glenmore 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. 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 transaction, 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
Credit Agreement
<PAGE>
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) 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 at the time thereof 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 Administrative Agent a certificate of its chief
financial officer to such effect; provided that the Company will not
use more than $50,000,000 of the proceeds of the Revolving Credit Loans
to fund any such transaction and/or pay any related fees or expenses;
(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:
(i) the California Products facility located
in Fresno, California, which is currently owned by
California Products Company;
(ii) the Tenner Brothers facility located in
Patrick, South Carolina, which is currently owned by Tenner
Brothers, Inc.;
(iii) the Madera Wine Cellars facility located
in Madera, California, which is currently owned by Bisceglia
Brothers Wine Co.;
(iv) the Central Cellars facility located in
Lodi, California, which is currently owned by Guild Wineries &
Distilleries, Inc.; and
(v) the Soledad Cellars facility located in
Soledad, California, which is currently owned by Vintners
International Company, Inc.
Credit Agreement
<PAGE>
(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
Administrative 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 Administrative 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 Administrative 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 Administrative 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
Administrative 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;
Credit Agreement
<PAGE>
\
(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 constitutes
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 Administrative 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
Administrative 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 Administrative Agent pursuant to which the Holding Company
shall, effective upon such transaction, guarantee 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 Administrative 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 consistent with those delivered by
the Company pursuant to Section 7.01 hereof upon the Effective
Date or as any Bank or the Administrative 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:
Credit Agreement
<PAGE>
(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', materialmen'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 aggregate, 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 Subsidiaries, 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
Credit Agreement
<PAGE>
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 Subsidiaries
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 $8,000,000;
(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.
Credit Agreement
<PAGE>
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 Wholly Owned
Subsidiaries in Wholly Owned 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 Protection Agreement is
entered into does not exceed $1,000,000 (but without limiting its
obligations under Section 9.11 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) Investments by the Company and its Subsidiaries in Joint
Venture Entities (and Investments by Joint Venture Entities in other
Persons), so long as the aggregate amount of all Investments by the
Company and its Subsidiaries in Joint Venture Entities shall not exceed
$10,000,000 in the aggregate at any one time outstanding;
(j) additional Investments by the Company (excluding,
however, Investments in Joint Venture Entities) up to but
not exceeding $6,000,000 at any one time outstanding; and
(k) the Senior Subordinated Note Guarantees.
The aggregate amount of an Investment at any one time outstanding
for purposes of clauses (i) and (j) above, shall be deemed to be
Credit Agreement
<PAGE>
equal to (A) the aggregate amount of cash, together with the aggregate fair
market value of Property, loaned, advanced, contributed, transferred or
otherwise invested that gives rise to such Investment minus (B) the aggregate
amount of dividends, distributions or other payments received in cash in respect
of such Investment; the amount of an Investment shall not in any event be
reduced by reason of any write-off of such Investment nor increased by any
increase in the amount of earnings retained in the Person in which such
Investment is made that have not been dividended, distributed or otherwise paid
out.
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 Certain Financial Covenants.
(a) Debt Ratio. The Company will not permit the Debt
Ratio to exceed the following respective ratios at any time
during the following respective periods:
<TABLE>
<S> <C>
Period Ratio
From 9/1/95 through 11/30/95 5.75 to 1
From 12/1/95 through 2/28/96 5.50 to 1
From 3/1/96 through 5/31/96 5.25 to 1
From 6/1/96 through 8/31/96 5.00 to 1
From 9/1/96 through 11/30/96 4.75 to 1
From 12/1/96 through 2/28/97 4.75 to 1
From 3/1/97 through 5/31/97 4.50 to 1
From 6/1/97 through 8/31/97 4.50 to 1
From 9/1/97 through 11/30/97 4.25 to 1
From 12/1/97 through 2/28/98 4.25 to 1
From 3/1/98 through 5/31/98 4.00 to 1
From 6/1/98 through 8/31/98 4.00 to 1
From 9/1/98 through 11/30/98 3.75 to 1
From 12/1/98 through 2/28/99 3.75 to 1
From 3/1/99 and at all
times thereafter 3.50 to 1
</TABLE>
Credit Agreement
<PAGE>
(b) 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:
<TABLE>
<S> <C>
Period Amount
From 9/1/95 through 11/30/95 $ 85,000,000
From 12/1/95 through 2/28/96 $ 85,000,000
From 3/1/96 through 5/31/96 $100,000,000
From 6/1/96 through 8/31/96 $110,000,000
From 9/1/96 through 11/30/96 $125,000,000
From 12/1/96 through 2/28/97 $145,000,000
From 3/1/97 through 5/31/97 $160,000,000
From 6/1/97 through 8/31/97 $184,000,000
From 9/1/97 through 11/30/97 $195,000,000
From 12/1/97 through 2/28/98 $206,000,000
From 3/1/98 through 5/31/98 $217,000,000
From 6/1/98 through 8/31/98 $229,000,000
From 9/1/98 through 11/30/98 $240,000,000
From 12/1/98 through 2/28/99 $251,000,000
From 3/1/99 through 5/31/99 $262,000,000
From 6/1/99 through 8/31/99 $274,000,000
From 9/1/99 through 11/30/99 $285,000,000
From 12/1/99 through 2/28/00 $296,000,000
From 3/31/00 through 5/31/00 $308,000,000
From 6/1/00 and at all
times thereafter $319,000,000
</TABLE>
(c) 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.
(d) 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:
<TABLE>
<S> <C>
Period Ratio
From 9/1/95 through 8/31/96 2.80 to 1
From 9/1/96 through 8/31/97 2.90 to 1
From 9/1/97 through 8/31/98 3.00 to 1
From 9/1/98 and at all times
thereafter 3.25 to 1
</TABLE>
9.11 Interest Rate Protection Agreements. The Company
will within 60 days of the Effective Date and at all times
thereafter until August 31, 1997 maintain in full force and
effect one or more Interest Rate Protection Agreements with one
Credit Agreement
<PAGE>
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:
<TABLE>
<S> <C>
Fiscal Year Ended Amount
August 31, 1996 $ 60,000,000
August 31, 1997 $ 40,000,000
</TABLE>
9.12 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) transfer, 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 assumptions 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 transactions (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 therefrom 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 compensation 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.
Credit Agreement
<PAGE>
9.13 Use of Proceeds. The Company will use the proceeds of the
Loans hereunder solely to (a) finance the Glenmore Acquisition, (b) provide
working capital for the Company and its Subsidiaries and (c) pay the expenses
relating to the Glenmore Acquisition and the consummation of the transactions
contemplated hereby (in compliance with all applicable legal and regulatory
requirements); provided that, neither the Administrative Agent nor any Bank
shall have any responsibility as to the use of any of such proceeds.
9.14 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
(other than Joint Venture Entities) is a Wholly-Owned Subsidiary. The Company
will not permit any of its Subsidiaries (other than Joint Venture Entities) 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 prohibiting 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.
9.15 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 and Joint Venture Entities) 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 a Joint Venture Entity (or, in the event that any Inactive
Subsidiary or Joint Venture Entity shall cease to be an Inactive Subsidiary or
Joint Venture Entity), the Company or the respective Subsidiary will cause such
new Subsidiary (or such Inactive Subsidiary or Joint Venture Entity which ceases
to be an Inactive Subsidiary or Joint Venture Entity) to become a "Subsidiary
Guarantor" (and, thereby, an "Obligor") hereunder pursuant to a written
instrument in form and substance satisfactory to each Bank and the
Administrative 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 Administrative Agent shall have requested.
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9.16 Modifications of Certain Documents. The Company will not,
and will not permit any of its Subsidiaries to, (i) consent to any modification,
supplement or waiver of any of the provisions of the Barton Stock Purchase
Agreement (excluding adjustments agreed to by the Seller Representative, under
and as defined in the Barton Stock Purchase Agreement, and the Company pursuant
to Section 2.1(e) of the Barton Stock Purchase Agreement) or (ii) consent to any
modification, supplement or waiver in any material respect of the Glenmore
Acquisition Documents without, in the case of either of clauses (i) or (ii)
above, the prior consent of the Administrative Agent (with the approval of the
Majority Banks). In addition, notwithstanding the provisions of clause (f) or
(g) of the last sentence of Section 9.05 hereof, 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 Administrative Agent
(with the approval of the Majority Banks).
9.17 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 Indebtedness
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);
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(d) to the extent required pursuant to Section 2.12(f) hereof,
proceeds of such Indebtedness shall be applied to prepay Loans (and/or
provide cover for the Letter of Credit Liabilities) in the manner
provided in said Section 2.12(f), provided that in the event any such
proceeds shall be applied to refinance other Subordinated Indebtedness,
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 9.10(c)
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 Section
9.10 hereof (the determination of such ratios (and such amount with
respect to Tangible Net Worth) 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), and the Company shall have
delivered to the Administrative Agent a certificate of its chief
financial officer to such effect
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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
Administrative 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 Indebtedness issued after the date hereof, as originally in
effect), and (ii) so long as no Default shall have occurred and be continuing
(or will occur as a result of such payment), from the proceeds of Subordinated
Indebtedness issued in accordance with the first paragraph of this Section 9.17,
redeem Subordinated Indebtedness that is being refinanced as contemplated in
clause (d) of the first paragraph of this Section 9.17. Neither the Company nor
any of its Subsidiaries will consent to any modification, supplement or waiver
of any of the provisions of any Subordinated Indebtedness without the prior
consent of the Administrative Agent (with the approval of the Majority Banks).
9.18 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
$50,000,000 (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 statement 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 Administrative
Agent under the Security Agreement).
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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
Obligation, 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 specified in any note, agreement, indenture or
other document evidencing or relating to Indebtedness in an aggregate
principal 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 Administrative Agent pursuant to the provisions 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 Glenmore
Acquisition Documents by any of the Glenmore Entities, or any
certificate furnished to the Company
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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(f), 9.01(g), 9.05, 9.06, 9.07,
9.08, 9.09, 9.10, 9.17 or 9.18 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 obligations 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 Administrative Agent or
any Bank (through the Administrative 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
advantage 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 readjustment 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 bankruptcy, insolvency, reorganization,
winding-up, or composition
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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 Subsidiaries and the same shall
not be discharged (or provision shall not be made for such discharge),
or a stay of execution 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(e) hereof
shall occur or exist with respect to any Plan or Multiemployer Plan
and, as a result of such event or condition, 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 the 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 Subsidiaries 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
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<PAGE>
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 reasonably 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, his spouse, his children or his grandchildren, (ii) a
trust for the benefit of Marvin Sands, his spouse, his children or his
grandchildren, which trust is under the control of Marvin Sands, his
spouse, his children or his grandchildren or (iii) a partnership which
is controlled by (and the partnership interests in which are owned by)
Marvin Sands, his spouse or his children or his grandchildren or their
spouses or by a trust referred to in the foregoing clause (ii); 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 Administrative Agent may, by notice to the Company, terminate 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 Administrative 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, Money Market Loans and
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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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative Agent or the Majority
Revolving Credit Banks or the Majority Barton Letter of Credit Banks, as the
case may be, through the Administrative 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
Administrative Agent or such Banks) provide cover for the Letter of Credit
Liabilities by paying to the Administrative Agent immediately available funds in
an amount equal to the then aggregate undrawn face amount of all effected
Letters of Credit, which funds shall be held by the
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Administrative 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 Administrative Agent.
11.01 Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Basic Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and of the other Basic Documents, together with such other powers as
are reasonably incidental thereto. The Administrative 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 certificate 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 for the exercise of remedies under the Security
Documents, as expressly provided therein); and
(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
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herewith or therewith, except for its own gross negligence
or willful misconduct.
The Administrative 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 Administrative Agent may deem and
treat the payee (or Registered Holder, as the case may be) 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 Administrative
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 Administrative Agent. The Administrative
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 Administrative Agent. As to any matters not expressly
provided for by this Agreement or any other Basic Document, the Administrative
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 Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of a Default. The Administrative
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 Administrative Agent shall have received
such directions, the Administrative 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.
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11.04 Rights as a Bank. With respect to its Commitments and
the Loans made by it, Chase (and any successor acting as Administrative 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 Administrative Agent, and the term "Bank" or "Banks" shall, unless
the context otherwise indicates, include the Administrative Agent in its
individual capacity. Chase (and any successor acting as Administrative Agent)
and its affiliates may (without 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 Administrative
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
Administrative 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
Administrative 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 outstanding,
ratably in accordance with their respective Commitments), 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 Administrative 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
Administrative 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
performance 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
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the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
11.06 Non-Reliance on Administrative Agent and Other Banks.
Each Bank agrees that it has, independently and without reliance on the
Administrative 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 Administrative 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 Administrative 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 documents and
information expressly required to be furnished to the Banks by the
Administrative Agent hereunder, the Administrative 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 Administrative Agent or any of its affiliates.
11.07 Failure to Act. Except for action expressly required of
the Administrative Agent hereunder and under the other Basic Documents, the
Administrative 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 Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving notice
thereof to the Banks and the Company, and the Administrative 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 Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Banks and shall have accepted such appointment
within 30 days after the retiring Administrative Agent's giving of notice of
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resignation or the Majority Banks' removal of the retiring Administrative Agent,
then the retiring Administrative Agent may, on behalf of the Banks, appoint a
successor Administrative 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 Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative 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 Administrative Agent.
11.09 Consents under Basic Documents. Except as otherwise
provided in Section 12.04 hereof with respect to this Agreement, the
Administrative Agent may, with the prior consent of the Majority Banks (but not
otherwise), consent to any modification, supplement or waiver under any of the
Basic Documents, provided that, without the prior consent of each Bank, the
Administrative 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 Administrative 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.
11.10 Notices under the Senior Subordinated Debt Documents.
Without the authorization of the Majority Banks, neither the Administrative
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.
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Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Administrative
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 Documents (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),
or, with respect to notices given pursuant to Section 2.03 hereof, by telephone,
confirmed in writing by telecopier by the close of business on the day the
notice is given, delivered (or telephoned, as the case may be) 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 Administrative Agent for paying all reasonable out-of-pocket costs and
expenses of the Administrative 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 Administrative Agent for all reasonable costs and expenses
of the Banks and the Administrative Agent (including, without limitation,
reasonable counsels' fees and, to the extent permitted under applicable law,
allocated costs for in-house counsel) in connection with (i) any Default and any
enforcement or collection proceedings resulting therefrom or in connection with
the negotiation of any restructuring or "work-out" (whether
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<PAGE>
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 Administrative
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 Administrative Agent for all costs, expenses and other charges in respect of
title insurance procured with respect to the Liens created pursuant to the
Mortgages; and (e) each of the Banks and the Administrative Agent for all costs,
expenses and other charges in respect of any collateral audit requested by the
Administrative Agent or the Majority Banks pursuant to Section 9.01(f) hereof.
The Company hereby agrees to indemnify the Administrative
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 Administrative Agent to any Bank, whether or not the
Administrative 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
Administrative Agent for any payments that the Administrative 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 Administrative Agent and each Bank
from, and hold the Administrative 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
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<PAGE>
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
Subsidiaries), 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
Administrative Agent or any Bank shall be in possession of any such site or
facility following the exercise by the Administrative 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
Administrative Agent and the Majority Banks, or by the Company and the
Administrative 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
Administrative 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 Administrative Agent acting with the
consent of all of the Banks: (i) increase, or extend the term of any of the
Commitments, or extend the time or waive any requirement for the reduction
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 conditions precedent set forth
in Section7 hereof or (ix) alter the obligations of or release any Subsidiary
Guarantor under Section 6 hereof provided that the Administrative 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
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Chase; and (c) any modification or supplement of Section 11 hereof shall require
the consent of the Administrative 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 obligations
hereunder or under the Notes without the prior consent of all of the Banks and
the Administrative 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 Interest (but only with the consent (which consent
shall not be unreasonably withheld) of the Company and the Administrative 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
Administrative Agent shall be required in the case of any
assignment to another Bank;
(ii) except to the extent the Company and the
Administrative Agent shall otherwise consent, 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;
(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; and
(v) upon each such assignment, the assignor and
assignee shall deliver to the Company, the Administrative
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<PAGE>
Agent and the Issuing Bank a Notice of Assignment in the form of
Exhibit J hereto.
Upon execution and delivery by the assignor and the assignee to the Company, the
appropriate Issuing Banks and the Administrative Agent of such Notice of
Assignment, and upon consent thereto by the Company, the appropriate Issuing
Banks and the Administrative Agent, the assignee shall have, to the extent of
such assignment (unless otherwise consented to by the Company, the
Administrative Agent and the Issuing Bank), 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 and specified in such Notice of Assignment (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
Administrative Agent an assignment fee of $3,000.
(c) A Bank may sell or agree to sell to one or more other
Persons (each a "Participant") 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, provided that such Participant shall not have any
rights or obligations 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 agreements 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 or Barton Letter of Credit
Interest and Commitments, and as if such Bank were funding each of such Loan,
Revolving Letter of Credit Interest or Barton Letter of Credit Interest and
Commitments in the same way that it is funding the portion of such Loan,
Revolving Letter of Credit Interest or 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, without the consent of the
Participant, agree to (i) increase or extend the term of such Bank's related
Commitment or extend the amount or date of any scheduled reduction of such
Commitment pursuant to Section 2.06 hereof,
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(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 or (v) consent
to any modification, supplement or waiver hereof or of any of the Security
Documents to the extent that the same, under Section 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
(without notice to the Company, the Administrative Agent or any other Bank and
without payment of any fee) (i) 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
and (ii) assign all or any portion of its rights under this Agreement and its
Loans and its Notes to an affiliate. 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 prospective 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
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<PAGE>
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 the Supreme Court of the State of New York sitting in New York
County (including its Appellate Division), and of any other
appellate court in the State of New York, 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 ADMINISTRATIVE
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 Subsidiaries (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 Administrative 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
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for handling confidential information of this nature and in accordance with safe
and sound banking practices, any non-public information supplied to it by the
Company pursuant to this Agreement which is identified by the Company as being
confidential at the time the same is delivered to the Banks or the
Administrative Agent; provided that nothing herein shall limit the disclosure of
any such information (i) after such information shall become public, other than
through a violation of this Section 12.12(b), (ii) to the extent required by
statute, rule, regulation or judicial process, (iii) to counsel for any of the
Banks or the Administrative Agent, (iv) to bank examiners (or any other
regulatory authority having jurisdiction over any Bank or the Administrative
Agent), auditors or accountants, (v) to the Administrative Agent or any other
Bank (or to Chase Securities, Inc.), (vi) in connection with any litigation to
which any one or more of the Banks or the Administrative Agent is a party, (vii)
to a subsidiary or affiliate of such Bank as provided in clause (a) above or
(viii) 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 G hereto; and provided further that in no
event shall any Bank or the Administrative Agent be obligated or required to
return any materials furnished by the Company.
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<PAGE>
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 /s/ Robert Sands
Title: Executive Vice President
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
Credit Agreement
<PAGE>
SUBSIDIARY GUARANTORS
BATAVIA WINE CELLARS, INC.
BISCEGLIA BROTHERS WINE CO.
CALIFORNIA PRODUCTS COMPANY
GUILD WINERIES & DISTILLERIES, INC. (formerly known as Canandaigua
California Acquisition Corp.)
WIDMER'S WINE CELLARS, INC.
VINTNERS INTERNATIONAL COMPANY, INC. (formerly known as
Canandaigua/Vintners Acquisition Corp.)
CANANDAIGUA WEST, INC.
By_____/s/Robert Sands____________
Name: Robert Sands
Title: Secretary
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.
V ACQUISITION CORP.
By_____/s/Robert Sands___________
Name: Robert Sands
Title: Vice President
TENNER BROTHERS, INC.
By:____/s/ Richard Sands_________
Name: Richard Sands
Title: President
BARTON FINANCIAL CORPORATION
By____/s/ David S. Sorce_________
Name: David S. Sorce
Title: Vice President
Credit Agreement
<PAGE>
BANKS
Barton Letter of Credit THE CHASE MANHATTAN BANK
Commitment (NATIONAL ASSOCIATION),
$2,796,052.63 ROCHESTER DIVISION
Revolving Credit Commitment
$20,690,789.46 By /s/ Diana Lauria
Title: Vice President
Term Loan Commitment
$27,513,157.91
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:
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
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<PAGE>
Barton Letter of Credit THE FIRST NATIONAL BANK OF CHICAGO
Commitment
$2,247,807.02
Revolving Credit Commitment
$16,633,771.93 By /s/ J. Garland Smith
Title: Managing Director
Term Loan Commitment
$22,118,421.05
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
Credit Agreement
<PAGE>
Barton Letter of Credit WELLS FARGO BANK, N.A.
Commitment
$2,247,807.02
Revolving Credit Commitment
$16,663,771.93 By /s/ Lee Jensen
Title: Vice President
Term Loan Commitment
$22,118,421.05
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 94104
Attention: Richard DaCosta
Telecopier No.: (415) 396-6462
Telephone No.: (415) 989-6462
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<PAGE>
Barton Letter of Credit MANUFACTURERS AND TRADERS TRUST
Commitment COMPANY
$1,699,561.40
Revolving Credit Commitment
$12,576,754.39 By /s/ Philip M. Smith
Title: Regional Senior
Term Loan Commitment Vice President
$16,723,684.21
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
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Barton Letter of Credit FLEET BANK
Commitment
$1,480,263.16
Revolving Credit Commitment By /s/ Martin K. Birmingham
$10,953,947.37 Title: Assistant Vice President
Term Loan Commitment
$14,565,789.47
Lending Office for all Loans:
Fleet Bank
Corporate Banking -- NY/RO/3016
One East Avenue
Rochester, New York 14638
Address for Notices:
Fleet Bank
Corporate Banking -- NY/RO/3016
One East Avenue
Rochester, New York 14638
Attention: Martin K. Birmingham
Telecopier No.: (716) 546-9278
Telephone No.: (716) 546-9126
Credit Agreement
<PAGE>
Barton Letter of Credit PNC BANK, NATIONAL ASSOCIATION
Commitment
1,480,263.16
Revolving Credit Commitment
$10,953,947.37 By /s/ Kenneth J. Laudano
Title: Commercial Banking Officer
Term Loan Commitment
$14,565,789.47
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
Telecopier No.: (212) 557-5461
or 5359
Telephone No.: (212) 557-5345
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Barton Letter of Credit NATIONAL CITY BANK
Commitment
$1,425,438.60
Revolving Credit Commitment
$10,548,245.61 By /s/ Lisa Beth Lisi
Title: Account Officer
Term Loan Commitment
$14,026,315.79
Lending Office for all Loans:
National City Bank
1900 East Ninth Street
Cleveland, Ohio 44114
Address for Notices:
National City Bank
1900 East Ninth Street, Locator 2102
Cleveland, Ohio 44114
Attention: Lisa B. Lisi
Telecopier No.: (216) 575-9396
Telephone No.: (216) 575-9166
Credit Agreement
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Barton Letter of Credit NATWEST BANK N.A.
Commitment
$1,315,789.47
Revolving Credit Commitment By /s/ Michael M. Dwyer
$9,736,842.11 Title: Vice President
Term Loan Commitment
$12,947,368.42
Lending Office for all Loans:
NatWest Bank N.A.
244 Westchester Avenue
White Plains, New York 10604
Address for Notices:
NatWest Bank N.A.
244 Westchester Avenue
White Plains, New York 10604
Attention: Michael M. Dwyer
Telecopier No.: (914) 681-5045
Telephone No.: (914) 681-5022
with a copy to:
Ms. Cheri Sgrulletta
Telcopier No.: (914) 681-5027
Telephone No.: (914) 681-5016
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Barton Letter of Credit NBD BANK
Commitment
$1,206,140.35
Revolving Credit Commitment
$8,925,438.60 By /s/ Karl I. Bell
Title: Vice President
Term Loan Commitment
$11,868,421.05
Lending Office for all Loans:
NBD Bank
National Banking Division - East
611 Woodward Avenue
Detroit, Michigan 48226
Address for Notices:
NBD Bank
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
Credit Agreement
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Barton Letter of Credit THE BANK OF NOVA SCOTIA
Commitment
$1,096,491.23
Revolving Credit Commitment By /s/ J. Alan Edwards
$8,114,035.09 Title: Authorized Signatory
Term Loan Commitment
$10,789,473.68
Lending Office for all Loans:
The Bank of Nova Scotia
One Liberty Plaza
New York, New York 10006
Address for Notices:
The Bank of Nova Scotia
One Liberty Plaza
New York, New York 10006
Attention: Tilsa Cora
Telecopier No.: (212) 225-5145
Telephone No.: (212) 225-5044
with a copy to:
Dan Foote
Telecopier No.: (212) 225-5145
Telephone No.: (212) 225-5012
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Barton Letter of Credit CREDIT SUISSE
Commitment
$1,096,491.23
Revolving Credit Commitment By /s/ Christopher J. Eldin
$8,114,035.09 Title:Member of Senior Management
Term Loan Commitment
$10,789,473.68 By /s/ Thomas G. Muoio
Title: Associate
Lending Office for all Loans:
Credit Suisse
12 East 49th Street
New York, New York 10017
Address for Notices:
Credit Suisse
12 East 49th Street
New York, New York 10017
Attention: Adrian Germann
Telecopier No.: (212) 238-5362
Telephone No.: (212) 238-5343
Credit Agreement
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Barton Letter of Credit THE DAIWA BANK, LIMITED
Commitment
$1,096,491.23 By /s/ James Drum
Title: Vice President
Revolving Credit Commitment
$8,114,035.09 By /s/ W.N. Paty
Title: Vice President & Manager
Term Loan Commitment N.Y. Office
$10,789,473.68
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
Vice President
Telecopier No.: (212) 818-0865
Telephone No.: (212) 808-2340
Credit Agreement
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Barton Letter of Credit KEY BANK OF NEW YORK
Commitment
$986,842.10
Revolving Credit Commitment By /s/ Kenneth K. Conte
$7,302,631.58 Title: Vice President
Term Loan Commitment
$9,710,526.32
Lending Office for all Loans:
Key Bank of New York
39 State Street, Second Floor
Rochester, New York 14614
Address for Notices:
Key Bank of New York
39 State Street, Second Floor
Rochester, New York 14614
Attention: Kenneth K. Conte
Vice President
Telecopier No.: (716) 232-6651
Telephone No.: (716) 263-4715
Credit Agreement
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Barton Letter of Credit CHEMICAL BANK
Commitment
$822,368.42
Revolving Credit Commitment By /s/ Jack Spillane
$6,085,526.32 Title: Vice President
Term Loan Commitment
$8,092,105.26
Lending Office for all Loans:
Chemical Bank
300 Linden Oaks
Rochester, New York 14625
Address for Notices:
Chemical Bank
300 Linden Oaks
Rochester, New York 14625
Attention: Jack Spillane
Telecopier No.: (716) 586-6305
Telephone No.: (716) 387-3618
Credit Agreement
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Barton Letter of Credit COOPERATIVE CENTRAL RAIFFEISEN-
Commitment BOERENLEENBANK B.A. "RABOBANK
$822,368.42 NEDERLAND", NEW YORK BRANCH
Revolving Credit Commitment
$6,085,526.32 By /s/ John W. Ball
Title: Vice President
Term Loan Commitment
$8,092,105.26
By /s/ Robert Bucklin
Title: Senior Vice President
Lending Office for all Loans:
Cooperative Central Raiffeisen-
Boerenleenbank B.A. "Rabobank
Nederland", New York Branch
245 Park Avenue
New York, New York 10167
Address for Notices:
Cooperative Central Raiffeisen-
Boerenleenbank B.A. "Rabobank
Nederland", New York Branch
245 Park Avenue
New York, New York 10167
Attention: John Ball
Vice President
Telecopier No.: (212) 916-7837
Telephone No.: (212) 916-7980
Credit Agreement
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Barton Letter of Credit LTCB TRUST COMPANY
Commitment
$767,543.86
By /s/ Rene O. LeBlanc
Revolving Credit Commitment Title: Senior Vice President
$5,679,824.56
Term Loan Commitment
$7,552,631.58
Lending Office for all Loans:
LTCB Trust Company
165 Broadway
New York, New York 10006
Address for Notices:
LTCB Trust Company
165 Broadway
New York, New York 10006
Attention: Yoshihide Nakagawa
Telecopier No.: (212) 608-2371
Telephone No.: (212) 335-4464
Credit Agreement
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Barton Letter of Credit CORESTATES BANK, N.A.
Commitment
$657,894.74
Revolving Credit Commitment By /s/ Brian M. Haley
$4,868,421.05 Title: Vice President
Term Loan Commitment
$6,473,684.21
Lending Office for all Loans:
CoreStates Bank, N.A.
1345 Chestnut Street
P.O. Box 7618
F.C. 1-8-3-14
Philadelphia, Pennsylvania 19101-7618
Address for Notices:
CoreStates Bank, N.A.
1345 Chestnut Street
P.O. Box 7618
F.C. 1-8-3-14
Philadelphia, Pennsylvania 19101-7618
Attention: Sharon Burgess
Telecopier No.: (215) 973-2045
Telephone No.: (215) 973-4448
Credit Agreement
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Barton Letter of Credit DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
Commitment CAYMAN ISLAND BRANCH
$657,894.74
Revolving Credit Commitment By /s/ Linda J. O'Connell
$4,868,421.05 Title: Vice President
Term Loan Commitment By /s/ Pamela D. Ingram
$6,473,684.21 Title: Assistant Vice President
Lending Office for all Loans:
DG Bank
609 Fifth Avenue
New York, New York 10017
Address for Notices:
DG Bank
609 Fifth Avenue
New York, New York 10017
Attention: Norah E. McCann
Telecopier No.: (212) 745-1556
Telephone No.: (212) 745-1584
Credit Agreement
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Barton Letter of Credit THE FUJI BANK LIMITED, NEW YORK BRANCH
Commitment
$548,245.61
Revolving Credit Commitment By /s/ Katsunori Nozawa
$4,057,017.54 Title: Vice President & Manager
Term Loan Commitment
$5,394,736.85
Lending Office for all Loans:
The Fuji Bank Limited
New York Branch
Two World Trade Center
New York, New York 10048
Address for Notices:
The Fuji Bank Limited
New York Branch
Two World Trade Center
New York, New York 10048
Attention: Kevin Dooley
Telecopier No.: (212) 912-0516
Telephone No.: (212) 898-2061
Credit Agreement
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Barton Letter of Credit THE SUMITOMO BANK, LIMITED
Commitment NEW YORK BRANCH
$548,245.61
Revolving Credit Commitment By /s/ Shuntaro Higashi
$4,057,017.54 Title: Joint General Manager
Term Loan Commitment
$5,394,736.85
Lending Office for all Loans:
The Sumitomo Bank, Limited,
New York Branch
One World Trade Center
Suite 9651
New York, New York 10008
Address for Notices:
The Sumitomo Bank, Limited,
New York Branch
One World Trade Center
Suite 9651
New York, New York 10008
Attention: Diana Hurtzig
Telecopier No.: (212) 323-0366
Telephone No.: (212) 323-0486
Credit Agreement
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THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Administrative Agent
By /s/ Diana Lauria
Title: Vice President
Address for Notices to
Chase as Administrative 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
Credit Agreement
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Third Amended and Restated Credit Agreement
between the Registrant, its principal operating subsidiaries,
and certain banks for which
The Chase Manhattan Bank (National Association) acts as Administrative Agent
List 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 - Stock Options
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Term Loan Note
EXHIBIT A-3 - Form of Money Market Note
EXHIBIT A-4 - Form of Swingline Note
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C-1 - Copy, as Executed, of Security Agreement
EXHIBIT C-2 - Form of Security Agreement Amendment
EXHIBIT D - Copy, as Executed, of Barton Letter of Credit
EXHIBIT E-1 - Form of Opinion of Special Counsel to Obligors
EXHIBIT E-2 - Form of Opinion of California Counsel to Obligors
EXHIBIT E-3 - Form of Opinion of Kentucky Counsel to Obligors
EXHIBIT F - Form of Opinion of Special New York Counsel to Chase
EXHIBIT G - Form of Confidentiality Agreement
EXHIBIT H - Form of Money Market Quote Request
EXHIBIT I - Form of Money Market Quote
EXHIBIT J - Form of Notice of Assignment
