EXHIBIT 1.1
UNDERWRITING AGREEMENT
CANANDAIGUA BRANDS, INC.
$200,000,000 of 8 5/8% Senior Notes due 2006
July 28, 1999
X.X. XXXXXX SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX XXXXXX INC.
CIBC WORLD MARKETS CORP.
DEUTSCHE BANK SECURITIES INC.
XXXXXXXXX & XXXXX LLC
XXXXXX BROTHERS INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXXX & CO. INC.
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Canandaigua Brands, Inc., a Delaware corporation (the "Company"), by
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this agreement (the "Agreement") proposes to issue and sell to the several
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underwriters named in Schedule I hereto (collectively, the "Underwriters")
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$200,000,000 aggregate principal amount of its 8 5/8% Senior Notes due 2006 (the
"Notes"). The Notes will initially be unconditionally guaranteed (the
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"Guarantees" and, together with the Notes, the "Securities") by each of Batavia
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Wine Cellars, Inc., Xxxxxx Incorporated, Xxxxxx Brands, Ltd., Xxxxxx Xxxxx,
Ltd., Xxxxxx Brands of California, Inc., Xxxxxx Brands of Georgia, Inc., Xxxxxx
Distillers Import Corp., Xxxxxx Financial Corporation, Xxxxxxx Point Beverage
Co., Monarch Import Company, Canandaigua Wine Company, Inc., The Viking
Distillery, Inc., Canandaigua Europe Limited, Xxxxxxx Trading Corp., Canandaigua
Limited and Polyphenolics, Inc. (collectively, the "Guarantors" and, together
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with the Company, the "Issuers"). The Securities are to be issued under an
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indenture dated February 25, 1999 (the "Base Indenture") as supplemented by the
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second supplemental indenture thereto to be dated August 4, 1999 (the "Second
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Supplemental Indenture" and, together with the Base Indenture, the "Indenture").
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The Issuers have prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
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Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
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statement (file number 333-67037) on Form S-3, relating to certain securities
(the "Shelf Securities") to be issued from time to time by the Issuers, as the
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case may be. The Issuers have also filed with, or propose to file with, the
Commission pursuant to Rule 424 under the Securities Act ("Rule 424") a
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prospectus supplement specifically relating to the Securities (a "Prospectus
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Supplement"). The registration statement as amended to the date of this
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Agreement and including any registration statement filed pursuant to Rule 462(B)
under the Securities Act (a "Rule 462(B) Registration Statement") is hereinafter
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referred to as the "Registration Statement" and the related prospectus covering
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the Shelf Securities in the form first used to confirm sales of the Securities
is hereinafter referred to as the "Basic Prospectus." The Basic Prospectus as
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supplemented by any applicable Prospectus Supplement specifically relating to
the Securities in the form first used to confirm sales of the Securities is
hereinafter referred to as the "Prospectus." Any reference in this Agreement to
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the Registration Statement, the Basic Prospectus, any preliminary form of
Prospectus (a "Preliminary Prospectus") previously filed with the Commission
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pursuant to Rule 424 or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act that were filed under the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") on or before the date of this Agreement or
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the date of the Registration Statement, the Basic Prospectus, any Preliminary
Prospectus or the Prospectus, as the case may be; and any reference to "amend,"
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any documents filed under the Exchange Act after the
date of this Agreement, or the date of the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus or the Prospectus, as the case may be,
which are deemed to be incorporated by reference therein.
The Issuers hereby agree with the Underwriters as follows:
1. (a) The Issuers hereby agree to issue and sell the Securities to the several
Underwriters as hereinafter provided, and each Underwriter, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Issuers, the respective principal amount of Securities set forth
opposite such Underwriter's name in Schedule I hereto at the applicable purchase
price set forth in Schedule II hereto plus accrued interest, if any, from the
date specified in Schedule II hereto to the date of payment and delivery.
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(b) The Issuers and each of the Underwriters hereby confirm their
engagement of X.X. Xxxxxx Securities Inc. as, and X.X. Xxxxxx Securities Inc.
hereby confirms its agreement with the Issuers and each of the other
Underwriters, to render services as, a "qualified independent underwriter,"
within the meaning of Section (b)(15) of Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers, Inc. (the "NASD") with respect to
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the offering and sale of the Securities. X.X. Xxxxxx Securities Inc., solely in
its capacity as a qualified independent underwriter and not otherwise, is
referred to herein as the "QIU." The yield to maturity at which the Securities
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will be sold to the public shall be no lower than the minimum yield to maturity
recommended by X.X. Xxxxxx Securities Inc. acting as QIU.
2. The Issuers understand that the several Underwriters intend (i) to make a
public offering in the United States of their respective portions of the
Securities and (ii) initially to offer the Securities upon the terms set forth
in the Prospectus.
3. Payment for the Securities shall be made to the Company or to its order in
immediately available funds on the date and at the time and place set forth in
Schedule II hereto (or at such other time and place on the same or such other
date, not later than the fifth Business Day thereafter, as the Underwriters and
the Company may agree in writing). The time and date of such payment for the
Securities are referred to herein as the "Closing Date." Such payment will be
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made upon delivery to the Underwriters of the Securities registered in such
names and in such denominations as the Underwriters shall request not less than
two full Business Days prior to the date of delivery, with any transfer taxes
payable in connection with transfer to the Underwriters duly paid by the
Company. As used herein, the term "Business Day" means any day other than a day
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on which banks are permitted or required to be closed in New York City. The
Securities will be delivered through the book-entry facilities of The Depository
Trust Company ("DTC"). The Securities will be made available for inspection by
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the Underwriters at the office of Xxxxxx Xxxxxx & Xxxxxxx at 00 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 not later than 1:00 P.M., New York City time, on the
Business Day prior to the Closing Date.
4. Each of the Issuers, jointly and severally, represents and warrants to each
Underwriter that:
(a) The Registration Statement has (i) been prepared by the Company in
conformity with the requirements of the Securities Act, (ii) been filed
with the Commission under the Securities Act and (iii) become effective
under the Securities Act. Copies of such registration statement and any
amendments thereto, as well as copies of the Preliminary Prospectus, have
been delivered by the Company to you. "Effective Time" means the date and
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the time as of which the Registration Statement, or the most recent post-
effective amendment thereof, if any, was declared effective by the
Commission;
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and "Effective Date" means the date of the Effective Time. The
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Commission has not issued any order preventing or suspending the use of the
Prospectus or the effectiveness of the Registration Statement.
(b) The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus
will, when they become effective or are filed with the Commission, as the
case may be, conform, in all material respects to the requirements of the
Securities Act and the Trust Indenture Act of 1939, as amended (the "Trust
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Indenture Act"), and do not and will not, as of the applicable Effective
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Date (as to the Registration Statement and any amendment thereto) and as of
the applicable filing date (as to the Prospectus and any amendment or
supplement thereto), contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus, in light of the
circumstances in which they were made) not misleading; on the Closing Date,
the Indenture will conform in all material respects to the applicable
requirements of the Trust Indenture Act and the rules and regulations of
the Commission thereunder; and, at the Effective Time, the Prospectus, if
not filed pursuant to Rule 424(b), did not or will not, and on the date of
any filing pursuant to Rule 424(b) and on the Closing Date, the Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The preceding sentence does not
apply to (i) that part of the Registration Statement which shall constitute
the Statement of Eligibility and Qualifications (Form T-1) of the Trustee
under the Trust Indenture Act or (ii) information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriters expressly for use therein (the "Underwriters'
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Information").
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(c) The documents incorporated or deemed to be incorporated by reference in the
Prospectus, when they became effective or were filed with the Commission,
as the case may be, conformed in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an
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untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading.
(d) Each Preliminary Prospectus filed as part of the registration statement as
originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 complied when so filed in all material respects with the
Securities Act and did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to the Underwriters'
Information.
(e) The Company and each of its consolidated subsidiaries (the "Subsidiaries")
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have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, with full power and authority (corporate and other) to own
their properties and conduct their respective businesses as described in
the Prospectus, and are duly qualified to transact business as foreign
corporations in good standing under the laws of each jurisdiction where the
ownership or leasing of their respective properties or the conduct of their
respective businesses require such qualification, except where the failure
to so qualify would not have a material adverse effect on the business,
management, condition (financial or otherwise), results of operations or
business prospects of the Company and its Subsidiaries considered as a
whole (a "Material Adverse Effect"); the Company had at the dates indicated
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an authorized capitalization as set forth in the Prospectus, and the issued
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable, and the outstanding
shares of capital stock of each of the Company's Subsidiaries have been
duly authorized and validly issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned beneficially by the
Company free and clear of all liens, encumbrances, equities and claims
(collectively, "Liens") except for the Liens under the First Amended and
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Restated Credit Agreement dated as of November 2, 1998, as amended pursuant
to the Second Amended and Restated Credit Agreement, dated as of May 12,
1999, between the Company, the guarantors named therein, the lenders
signatory thereto, and The Chase Manhattan Bank, as Administrative Agent
(the "Credit Agreement"). Neither the Company nor any of the Guarantors is
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in violation of its respective charter or bylaws and neither the Company
nor any of the Guarantors is in default (nor has an event occurred with
notice, lapse of time or both that would constitute a default) in the
performance of any obligation, agreement or condition contained in any
agreement, lease, indenture or instrument of the Company or any Guarantor
where such violation or default would have a Material Adverse Effect.
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(f) The Issuers have full power and authority to enter into this Agreement and
the Indenture and to issue, sell and deliver the Notes, in the case of the
Company, and the Guarantees, in the case of the Guarantors, to be sold by
them to the Underwriters as provided herein and therein. The execution,
delivery and performance of this Agreement, the Indenture and the
Securities by the Company or any Guarantor, as the case may be, and the
consummation by the Company or any Guarantor, as the case may be, of the
transactions contemplated hereby and thereby does not and will not conflict
with or result in a breach or violation by the Company or any Subsidiary,
as the case may be, of any of the terms or provisions of, constitute a
default by the Company or any Subsidiary, as the case may be, under, or
result in the creation or imposition of any lien, charge, security interest
or encumbrance upon any of the assets of the Company or any Subsidiary, as
the case may be, pursuant to the terms of, (A) the Credit Agreement and any
other indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any Subsidiary, as the case
may be, is a party or to which any of them or any of their respective
properties is subject, (B) the charter or bylaws of the Company or any
Subsidiary, as the case may be, or (C) any statute, judgment, decree,
order, rule or regulation of any foreign or domestic court, governmental
agency or regulatory agency or body having jurisdiction over the Company or
any of the Subsidiaries or any of their respective properties or assets
except for any conflict, breach, default, lien, charge, security interest
or encumbrance that would not have a Material Adverse Effect.
(g) The execution and delivery of the Indenture has been duly authorized by all
necessary corporate action of the Issuers and, when the Second Supplemental
Indenture has been duly executed and delivered in accordance with their
terms by each party thereto, will be a legal, valid and binding agreement
of the Issuers, enforceable against the Issuers in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws
relating to creditors' rights generally, and subject, as to enforceability,
to general principles of equity (regardless of whether such enforcement may
be sought in a proceeding in equity or at law). The issuance, execution
and delivery of the Notes have been duly authorized by all necessary
corporate action of the Company and, when executed, issued and delivered by
the Company and authenticated by the Trustee and paid for in accordance
with this Agreement, will be the legal, valid, binding and enforceable
obligations of the Company, entitled to the benefits of the Indenture
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether such enforcement may be sought
in a proceeding in equity or at law). The issuance, execution and delivery
of the Guarantees have been duly authorized by all necessary corporate
action of each Guarantor and, when executed, issued and delivered by each
Guarantor and authenticated by the Trustee and paid for in accordance
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with this Agreement, will be the legal, valid, binding and enforceable
obligations of each Guarantor, entitled to the benefits of the Indenture
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether such enforcement may be sought
in a proceeding in equity or at law). The execution and delivery of this
Agreement by the Issuers has been duly authorized by all necessary
corporate action, and this Agreement has been duly executed and delivered
by the Issuers and is the valid and legally binding agreement of each of
the Issuers.
(h) Except as described or referred to in the Prospectus, there is not pending,
or to the knowledge of the Issuers threatened, any action, suit,
proceeding, inquiry or investigation to which the Company or any of the
Subsidiaries is a party, or to which the property of the Company or any of
the Subsidiaries is subject, before or brought by any court or governmental
agency or body, which, if determined adversely to the Company or any of the
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect or might materially adversely affect the consummation of the
offering of the Securities pursuant to this Agreement; and all pending
legal or governmental proceedings to which the Company or any of the
Subsidiaries is a party or that affect any of their respective properties
that are not described in the Prospectus, including ordinary routine
litigation incidental to the business, would not, in the aggregate, result
in a Material Adverse Effect.
(i) Xxxxxx Xxxxxxxx LLP are independent certified public accountants with
respect to the Company and its consolidated Subsidiaries and KPMG LLP are
independent certified public accountants with respect to certain product
lines sold to the Company by Diageo Inc. (the "Diageo Assets"), in each
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case, within the meaning of Rule 101 of the Code of Professional Conduct of
the American Institute of Certified Public Accountants ("AICPA") and its
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interpretations and rulings thereunder. The historical financial
statements of the Company and the Diageo Assets (including the related
notes) incorporated by reference in the Prospectus comply as to form in all
material respects with the requirements applicable to a registration
statement on Form S-3 under the Securities Act; such historical financial
statements have been prepared in accordance with United States generally
accepted accounting principles ("GAAP") consistently applied throughout the
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periods covered thereby and fairly present the financial position of the
Company at the respective dates indicated and the results of their
operations and in the case of the Company, its cash flows for the
respective periods indicated. The financial information contained in or
incorporated by reference in the Prospectus and relating to the Company is
derived from the accounting records of the Company and its Subsidiaries and
fairly presents the information purported to be shown thereby. The pro
forma financial statements incorporated by reference
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in the Prospectus have been prepared on a basis consistent with the
historical financial statements incorporated by reference in the Prospectus
(except for the pro forma adjustments specified therein), include all
material adjustments to the historical financial statements required by
Rule 11-02 of Regulation S-X under the Securities Act and the Exchange Act
to reflect the transactions described in the Registration Statement, the
Prospectus or in the documents incorporated therein by reference, are based
on assumptions made on a reasonable basis and fairly present such
transactions described in the Registration Statement, the Prospectus or in
the documents incorporated therein by reference. The other historical
financial and statistical information and data included in the Registration
Statement, the Prospectus or in the documents incorporated therein by
reference fairly presents, in all material respects, the information
purported to be shown thereby. The financial information included in the
Prospectus under the caption "Summary Pro Forma Financial Data" is based on
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assumptions made on a reasonable basis and such pro forma financial data is
fairly presented in all material respects.
(j) Except as described in or contemplated by the Registration Statement or the
Prospectus, subsequent to May 31, 1999, (i) neither the Company nor any of
the Subsidiaries has sustained any loss or interference with its business
or properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree which would have a Material Adverse
Effect; and (ii) there has not been any change in the capital stock (other
than as a result of the exercise of the Company's outstanding stock
options, purchases under the Company's 1989 Employee Stock Purchase Plan,
as amended, any repurchases by the Company under its Stock Repurchase
Program or as a result of the conversion of the Company's Class B Common
Stock (par value $.01 per share) into Class A Common Stock (par value $.01
per share)) or long-term debt of the Company or any of the Guarantors, or
any other material adverse change, or any development involving a
prospective material adverse change, in or affecting the business,
condition (financial or otherwise), prospects or operations of the Company
and the Subsidiaries taken as a whole.
(k) The Company and each of the Subsidiaries have good and marketable title to
all properties and assets, as described in the Prospectus as owned by them
free and clear of all liens, encumbrances, claims, security interests or
restrictions, except as provided under the Credit Agreement as such as are
described in the Prospectus or do not interfere with the use made and
proposed to be made of such properties by the Company and the Subsidiaries
and would not individually or in the aggregate result in a Material Adverse
Effect; and all of the leases and subleases material to the business of the
Company and the Subsidiaries taken as a whole, and under which the Company
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or any of the Subsidiaries holds properties described in the Prospectus,
are in full force and effect and neither the Company nor any of the
Subsidiaries has any notice of any claims of any sort that have been
asserted by anyone adverse to the rights of the Company or any of the
Subsidiaries under such leases or subleases, or affecting or questioning
the rights of the Company or any of the Subsidiaries to the continued
possession of the leased or subleased premises under any such lease or
sublease, which claims would have a Material Adverse Effect.
(l) Each of the Company and the Subsidiaries owns or possesses all governmental
and other licenses, permits, certificates, consents, orders, approvals and
other authorizations necessary to own, lease and operate its properties and
to conduct its business as presently conducted by it and described in the
Prospectus, except where the failure to own or possess such licenses,
permits, certificates, consents, orders, approvals and other authorizations
would not, individually or in the aggregate, have a Material Adverse Effect
(collectively, "Material Licenses"); all of the Material Licenses are valid
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and in full force and effect, except where the invalidity of such Material
License or the failure of such Material License to be in full force and
effect would not, individually or in the aggregate, have a Material Adverse
Effect; and none of the Company or any of its Subsidiaries has received any
notice of proceedings relating to revocation or modification of any such
Material Licenses which would, individually or in the aggregate, have a
Material Adverse Effect.
(m) Each of the Company and its Subsidiaries owns or possesses, or can acquire
on reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, trademarks, service marks, trade names and know-how (including
trade secrets and other patentable and/or unpatentable proprietary or
confidential information or procedures) (collectively, "intellectual
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property") necessary to carry on its business as presently operated by it,
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except where the failure to own or possess or have the ability to acquire
any such intellectual property would not, individually or in the aggregate,
have a Material Adverse Effect; and none of the Company or any of its
Subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any intellectual property or of any facts which would render any
intellectual property invalid or inadequate to protect the interest of the
Company or any of its Subsidiaries therein and which infringement or
conflict would have a Material Adverse Effect.
(n) None of the Company or any of its Subsidiaries has taken, or will take,
directly or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the price
of the Securities.
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(o) None of the Company or any of its Subsidiaries is an investment company
within the meaning of the Investment Company Act of 1940, as amended.
(p) Except as described in the Prospectus, the Company and its Subsidiaries
comply in all material respects with all Environmental Laws (as defined
below), except to the extent that failure to comply with such Environmental
Laws would not individually or in the aggregate have a Material Adverse
Effect. None of the Company or any of its Subsidiaries is the subject of
any pending or, to the knowledge of any of the Issuers, threatened foreign,
federal, state or local investigation evaluating whether any remedial
action by the Company or any of its Subsidiaries is needed to respond to a
release of any Hazardous Materials (as defined below) into the environment,
resulting from the Company's or any of its Subsidiaries' business
operations or ownership or possession of any of their properties or assets
or is in contravention of any Environmental Law that would, individually or
in the aggregate, have a Material Adverse Effect. None of the Company or
any of its Subsidiaries has received any notice or claim, nor are there
pending or, to the knowledge of any of the Issuers, threatened lawsuits
against them, with respect to violations of an Environmental Law or in
connection with any release of any Hazardous Material into the environment
that would have a Material Adverse Effect. As used herein, "Environmental
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Laws" means any foreign, federal, state or local law or regulation
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applicable to the Company's or any of its Subsidiaries' business operations
or ownership or possession of any of their properties or assets relating to
environmental matters, and "Hazardous Materials" means those substances
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that are regulated by or form the basis of liability under any
Environmental Laws.
(q) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act which have not been described in the
Prospectus or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Securities Act.
(r) No relationship, direct or indirect, exists between or among the Company
and its Subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described in the Prospectus or incorporated therein by reference as
permitted by the Securities Act.
(s) No labor problem exists with the employees of the Company or any of its
Subsidiaries or, to the knowledge of the Issuers, is imminent that, in
either case, would have a Material Adverse Effect.
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(t) Except as disclosed in the Prospectus, all United States federal income tax
returns and all foreign tax returns of the Company and its Subsidiaries
required by law to be filed have been filed (taking into account extensions
granted by the applicable federal governmental agency) and all taxes shown
by such returns or otherwise assessed, which are due and payable, have been
paid, except for such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided and except for such
taxes the payment of which would not individually or in the aggregate
result in a Material Adverse Effect. All other corporate franchise and
income tax returns of the Company and its Subsidiaries required to be filed
pursuant to applicable foreign, federal, state or local laws have been
filed, except insofar as the failure to file such returns would not
individually or in the aggregate result in a Material Adverse Effect, and
all taxes shown on such returns or otherwise assessed which are due and
payable have been paid, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been
provided and except for such taxes the payment of which would not
individually or in the aggregate result in a Material Adverse Effect.
(u) The Company and each of its Subsidiaries maintain (and in the future will
maintain) a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (C) access
to assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(v) The Company and each of its Subsidiaries is in compliance with, and each
such entity has not received any notice of any outstanding violation of,
all laws, regulations, ordinances and rules applicable to it and its
operations, except, in either case, where any failure by the Company or any
of its Subsidiaries to comply with any such law, regulation, ordinance or
rule would not individually or in the aggregate result in a Material
Adverse Effect.
(w) Neither the issuance, sale or delivery of the Securities and the Guarantees
nor the application of the proceeds thereof by the Company as set forth in
the Prospectus will violate Regulations T, U or X of the Board of Governors
of the Federal Reserve System or any other regulation of such Board of
Governors.
(x) Each of the Company and its Subsidiaries is, and immediately after the
Closing Date will be, Solvent. As used herein, the term "Solvent" means,
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with respect
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to any such entity on a particular date, that on such date (A) the fair
market value of the assets of such entity is greater than the amount that
will be required to pay the probable liabilities of such entity on its
debts as they become absolute and matured, (B) assuming the sale of the
Securities as contemplated by this Agreement and as described in the
Prospectus, such entity is not incurring debts or liabilities beyond its
ability to pay as such debts and liabilities mature, (C) such entity is
able to realize upon its assets and pay its debts and other liabilities,
including contingent obligations, as they mature and (D) such entity does
not have unreasonably small capital.
(y) The Company has reviewed its operations and those of the Subsidiaries to
evaluate the extent to which the business or operations of the Company or
any of the Subsidiaries will be affected by the Year 2000 Problem. As a
result of such review, the Company has no reason to believe, and does not
believe, that the Year 2000 Problem will have a Material Adverse Effect on
the Company and the Subsidiaries or result in any material loss or
interference with the Company's business or operations, other than as may
be described in the Prospectus. The "Year 2000 Problem" as used herein
-----------------
means any significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of dates
or time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
(z) Other than this Agreement, neither the Company nor any Subsidiary is a
party to any contract, agreement or understanding with any person that
would give rise to a valid claim against the Issuers or any Subsidiary or
the Underwriters for a brokerage commission, finders' fee or like payment
in connection with the offering and sale of the Securities.
(aa) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied by the Company.
(bb) No forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Prospectus or the Prospectus has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.
Any certificate signed by an officer of any of the Issuers and
delivered to the Underwriters or to counsel for the Underwriters at or prior to
the Closing Date pursuant to any section of this Agreement or the transactions
contemplated hereby shall be deemed a representation and warranty by such
Issuer, to each Underwriter as to the matters covered thereby.
-13-
5. Each of the Issuers covenants and agrees with the several Underwriters as
follows:
(a) in respect of the offering of the Securities, the Issuers will (i) prepare
a Prospectus Supplement setting forth the aggregate principal amount of
each type of Securities covered thereby and their terms not otherwise
specified in the Basic Prospectus pursuant to which the Securities are
being issued, the names of the Underwriters participating in the offering
and the aggregate principal amount of Securities that each severally has
agreed to purchase, the price at which the Securities are to be purchased
by the Underwriters from the Issuers, the initial public offering price,
the applicable selling concession and reallowance, if any, and such other
information as the Underwriters and the Issuers deem appropriate in
connection with the offering of the Securities, (ii) file the Prospectus in
a form approved by the Underwriters pursuant to Rule 424 under the
Securities Act no later than the Commission's close of business on the
second Business Day following the date of determination of the offering
price of the Securities and (iii) furnish copies of the Prospectus to the
Underwriters and to such dealers as the Underwriters shall specify in New
York City as soon as practicable (but in any event in sufficient time as to
allow the Underwriters and such dealers to deliver such Prospectus prior to
or simultaneously with confirmations of sale) after the date of this
Agreement in such quantities as the Underwriters may reasonably request;
(b) to deliver, at the expense of the Issuers, to the Underwriters a total of
ten signed copies of the Registration Statement (as originally filed) and
each amendment thereto, in each case including exhibits, and, during the
period mentioned in paragraph (f) below, to each of the Underwriters and to
dealers effecting transactions in the Securities as many copies of the
Prospectus (including all amendments and supplements thereto) as the
Underwriters may reasonably request;
(c) to furnish to the Underwriters without charge, as many copies of the
exhibits and documents incorporated by reference in the Registration
Statement as the Underwriters may reasonably request;
(d) (i) at any time when the Prospectus is required to be delivered under the
Securities Act or the Exchange Act in connection with sales of Securities,
not to file any amendment to the Registration Statement or any Rule 462(B)
Registration Statement or to make any amendment or supplement to the
Prospectus of which the Underwriters shall not previously have been advised
or to which the Underwriters or counsel for the Underwriters shall
reasonably object; and to prepare and file with the Commission, promptly
upon the Underwriters' reasonable request, any amendment to the
Registration Statement, Rule 462(B) Registration Statement, or amendment or
supplement to the Prospectus that, in the opinion of counsel for the
Underwriters, may
-14-
be necessary in connection with the distribution of the Securities by the
Underwriters, and to use its best efforts to cause the same to become
promptly effective and (ii) if applicable, the Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical in content to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T;
(e) to advise the Underwriters promptly, and to confirm such advice in writing,
(i) when any amendment to the Registration Statement shall have become
effective, (ii) when any supplement to the Prospectus or any amendment to
the Prospectus has been filed and to furnish the Underwriters with copies
thereof, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for any additional information, (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose, (v) of the occurrence of any event, within the
period referenced in paragraph (f) below, as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances in
which such statements are made, not misleading, and (vi) of the receipt by
any of the Issuers of any notification with respect to any suspension of
the qualification of the Securities for offer and sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and to
use its commercially reasonable best efforts to prevent the issuance of any
such stop order, or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of any order suspending any
such qualification of the Securities, or notification of any such order
thereof and, if issued, to use its commercially reasonable best efforts to
obtain as soon as possible the withdrawal thereof;
(f) if, during such period of time after the first date of the public offering
of the Securities as in the reasonable opinion of counsel for the
Underwriters a prospectus relating to the Securities is required by law to
be delivered in connection with sales by the Underwriters or any dealer,
any event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances in which such statements are made, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with applicable federal and state securities law, to reasonably
promptly prepare and furnish, to the Underwriters and to the dealers (whose
names and addresses the Underwriters will furnish to the Company) to which
Securities may have been sold by the Underwriters
-15-
and to any other dealers upon request, such amendments or supplements to
the Prospectus as may be necessary so that the statements in the Prospectus
as so amended or supplemented will comply with applicable federal and state
securities law; provided, however, that any amendments or supplements made
-------- -------
more than one year after the first date of the public offering of the
Securities shall be made at the expense of the Underwriters;
(g) to use its commercially reasonable best efforts to qualify the Securities
for offer and sale under the securities or Blue Sky and real estate
syndication laws of such jurisdictions as the Underwriters shall reasonably
request and to continue such qualification in effect so long as reasonably
required for distribution of the Securities and to pay all fees and
expenses (including fees and disbursements of counsel to the Underwriters)
incurred in connection with such qualification; provided that the Issuers
--------
shall not be required to file a general consent to service of process in
any jurisdiction or to qualify as a foreign corporation in any
jurisdiction, and provided, further, that all fees and expenses incurred in
connection with qualifying the Securities for offer and sale after the
first anniversary of the public offering of such Securities shall be paid
by the Underwriters;
(h) to make generally available to its security holders and to the
Underwriters, as soon as practicable, an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of
the Company and the Subsidiaries occurring after the effective date of the
Registration Statement, which shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 of the Commission promulgated
thereunder;
(i) for such period as the Securities remain outstanding, to furnish to the
Underwriters copies of all reports or other communications (financial or
other) furnished to holders of the Securities and copies of any reports and
financial statements furnished to or filed with the Commission, the NASD or
any national securities exchange;
(j) during the period when the Prospectus is required to be delivered under the
Securities Act or the Exchange Act in connection with sales of the
Securities, to file all documents required to be filed by it with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act within the
time periods required by the Exchange Act;
(k) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of the obligations of the
Issuers hereunder, including
-16-
without limiting the generality of the foregoing, all costs and expenses
(i) incident to the preparation, issuance, execution and delivery of the
Securities (including the payment of any stamp tax or duty in connection
therewith), (ii) incident to the preparation, printing and filing under the
Securities Act of the Registration Statement, the Prospectus and any
Preliminary Prospectus (including in each case all exhibits, amendments and
supplements thereto), (iii) incurred in connection with the registration or
qualification of the Securities under the applicable securities laws of
such jurisdictions as the Underwriters may reasonably designate (including
fees of counsel for the Underwriters and its reasonable disbursements in
connection therewith), (iv) in connection with the listing or proposed
listing of securities on any securities exchange, (v) related to any
required filing with, and review by, the NASD, (vi) in connection with the
printing (including word processing and duplication costs) and delivery of
this Agreement and the furnishing to the Underwriters and dealers of copies
of the Registration Statement and the Prospectus, including mailing and
shipping, as herein provided, (vii) any expenses incurred by the Company in
connection with a "road show" presentation to potential investors and
(viii) the cost and charges of any transfer agent, registrar, listing
agent, paying agent or custodian; notwithstanding any of the foregoing, so
long as the Securities are purchased by the Underwriters in accordance with
the terms of this Agreement, the Underwriters will pay up to $500,000 of
any of the foregoing expenses that are reasonably incurred by the Company;
(l) the Issuers will use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Prospectus Supplement under the caption "Use of Proceeds";
---------------
(m) the Issuers will use their best efforts to do and perform all things
required to be done and performed under this Agreement by the Issuers prior
to the Closing Date and to satisfy all conditions precedent to the delivery
of the Securities;
(n) to take all reasonable action necessary to enable Xxxxx'x Investors
Service, Inc. ("Moody's") and Standard & Poor's Ratings Group ("S&P") or
------- ---
their respective successors or assigns, to provide their respective credit
ratings of the Securities, as specified in Schedule II hereto.
6. The several obligations of the Underwriters hereunder to purchase the
Securities on the Closing Date are subject to the performance by each of the
Issuers of its respective obligations hereunder and to the following additional
conditions:
(a) (i)(A) the Registration Statement (excluding the Rule 462 Registration
Statement) shall remain effective (or if a post-effective amendment is
required to be filed under the Securities Act, such post-effective
amendment shall have become effective)
-17-
not later than 5:00 P.M., New York City time, on the date hereof, (B) if
the Company has elected to rely on Rule 462(B), the Rule 462 Registration
Statement shall have become effective not later than 10:00 P.M., New York
City time, on the date hereof, and (C) no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
shall be in effect, and no proceedings for such purpose shall be pending
before or threatened by the Commission; (ii) the Prospectus shall have been
filed with the Commission pursuant to Rule 424 within the applicable time
period prescribed for such filing by the rules and regulations under the
Securities Act and in accordance with Section 5(A) hereof; and (iii) all
requests for additional information by the Commission shall have been
complied with to the reasonable satisfaction of the Underwriters;
(b) the representations and warranties of each of the Issuers contained herein
shall be true and correct on and as of the Closing Date as if made on and
as of the Closing Date and each of the Issuers shall have complied with all
agreements and all conditions on its respective part to be performed or
satisfied hereunder at or prior to the Closing Date;
(c) subsequent to the execution and delivery of this Agreement and prior to the
Closing Date, there shall not have occurred any downgrading, nor shall any
notice have been given of (i) any intended or potential downgrading or (ii)
any review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by any of the Issuers by
any "nationally recognized statistical rating organization", as such term
is defined for purposes of Rule 436 under the Securities Act;
(d) (i) since the respective dates as of which information is given in the
Prospectus and as of the Closing Date, there shall not have been any change
in the capital shares or long-term debt of the Company or any of the
Subsidiaries and there shall not have occurred any event that would have a
Material Adverse Effect or any development involving a prospective Material
Adverse Effect, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus, the effect of which in the
judgment of the Underwriters makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities on the
Closing Date, on the terms and in the manner contemplated in the Prospectus
and (ii) neither the Company nor any of the Subsidiaries shall have
sustained since the date of the latest audited financial statements
included in or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus;
-18-
(e) the Underwriters shall have received on and as of the Closing Date, a
certificate of an executive officer of the Company with specific knowledge
about the Company's financial matters reasonably satisfactory to the
Underwriters to the effect set forth in subsections (b) through (d) (with
respect to the respective representations, warranties, agreements and
conditions of the Company) of this Section 6;
(f) XxXxxxxxx Will & Xxxxx, special counsel for the Company, shall have
furnished to the Underwriters its written opinion addressed to the
Underwriters, dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriters, substantially in the form of Annex I
hereto;
(g) Xxxxx Peabody LLP, counsel for the Issuers, shall have furnished to the
Underwriters its written opinion addressed to the Underwriters, dated the
Closing Date, in form and substance reasonably satisfactory to the
Underwriters, substantially in the form of Annex II hereto;
(h) each of Xxxxx Xxxxxxx and Xxxxxxxx Chance, local counsel for the Issuers,
shall each have furnished to the Underwriters its written opinion addressed
to the Underwriters, dated the Closing Date, in form and substance
reasonably satisfactory to the Underwriters, substantially in the form of
Annex III hereto;
(i) on the date hereof, and also on the Closing Date, Xxxxxx Xxxxxxxx LLP and
KPMG LLP shall each have furnished to the Underwriters letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to
the Underwriters, containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained or incorporated by reference in the Registration Statement and
the Prospectus, including statements with respect to a review in accordance
with SAS 71 of any interim financial information contained or incorporated
by reference in the Registration Statement and the Prospectus;
(j) the Underwriters shall have received on and as of the Closing Date an
opinion addressed to the Underwriters of Xxxxxx Xxxxxx & Xxxxxxx, counsel
to the Underwriters, with respect to the due authorization and valid
issuance of the Securities, the Registration Statement, the Prospectus and
such other related matters as the Underwriters may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
-19-
(k) on or prior to the Closing Date, the Issuers shall have furnished to the
Underwriters such further certificates and documents as the Underwriters
shall reasonably request;
(l) at the Closing Date, the Securities shall have the ratings accorded by any
"nationally recognized statistical organization," as defined by the
Commission for purposes of Rule 436(G)(2) under the Act as specified in
Schedule II hereto, and the Company shall have delivered to X.X. Xxxxxx
Securities Inc. on behalf of the Underwriters a letter, dated as of such
date, from each such rating organization, or other evidence satisfactory
X.X. Xxxxxx Securities Inc., confirming that the Securities have such
ratings. Since the date hereof, there shall not have occurred a
downgrading in the rating assigned to the Securities or any of the Issuers'
securities or any Subsidiary's other securities by any such rating
organization, and no such rating organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of the Securities or any of the Company's or any
Subsidiary's other securities;
(m) on or prior to the Closing Date, the Issuers shall have received a waiver
or amendment to the Credit Agreement providing for the issuance of the
Securities; and
7. The Issuers, jointly and severally, agree to indemnify and hold harmless
each Underwriter (including, without limitation, X.X. Xxxxxx Securities Inc.
acting in its role as QIU), its officers and directors, and each person, if any,
who controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, the
legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Issuers shall have furnished
any amendments or supplements thereto) or any Preliminary Prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any Underwriters' Information; provided,
--------
however, that the Issuers shall not be liable to any Underwriter under this
-------
paragraph of Section 7 to the extent that any such loss, claim, damage or
liability results solely from an untrue statement of a material fact contained
in, or the omission of a material fact from, a Preliminary Prospectus if (i)
such untrue statement or omission was completely corrected in the Prospectus
prior to the written confirmation of the sale of the Securities giving rise to
such liability, (ii) such Underwriter sold Securities to the person alleging
such loss, claim, damage or liability without (to the extent required by
-20-
applicable law) sending or giving the Prospectus at or prior to the written
confirmation of the sale of the Securities giving rise to such liability, (iii)
the Issuers had furnished copies of the Prospectus to such Underwriter prior to
the written confirmation of the sale of the Securities giving rise to such
liability and (iv) such Underwriter would not have been subject to such
liability if it had delivered the Prospectus to such person at or prior to the
written confirmation of such sale; provided, further, that X.X. Xxxxxx
-------- -------
Securities Inc. will not be indemnified with respect to its activities as QIU to
the extent that any loss, claim, damage or liability arising from X.X. Xxxxxx
Securities Inc.'s activities as QIU is finally judicially determined by a court
of competent jurisdiction not subject to further appeal to have resulted from
the bad faith, gross negligence or willful misconduct of X.X. Xxxxxx Securities
Inc.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless each of the Issuers, its directors, its officers who sign the
Registration Statement and each person who controls such Issuer within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Issuers to each
Underwriter, but only with reference to information relating to such Underwriter
furnished to the Company in writing by or on behalf of such Underwriter
expressly for use in the Registration Statement, the Prospectus, any amendment
or supplement thereto, or any Preliminary Prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
------------------
notify the person or persons against whom such indemnity may be sought (each an
"Indemnifying Person") in writing, and such Indemnifying Person, upon request of
-------------------
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 7 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding. In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) such
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary, (ii) such Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to such Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
an Indemnifying Person and an Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that an Indemnifying Person
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses
-21-
shall be reimbursed as they are incurred. Any such separate firm for the
Underwriters and such control persons of Underwriters shall be designated in
writing by X.X. Xxxxxx Securities Inc., and any such separate firm for the
Issuers, their respective directors, their respective officers who sign the
Registration Statement and such control persons of any of the Issuers shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, such Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuers on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Issuers on the one
hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Issuers on the one hand and the Underwriters on the other shall be deemed
to be in the same respective proportions as the net proceeds from the offering
and sale of the Securities (before deducting expenses) received by the Issuers
and the total underwriting commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus. The relative
fault of the Issuers on the one hand and the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuers, on the one hand,
or by the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
Each of the Issuers and the Underwriters agrees that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation
--------
-22-
(even if the Underwriters were treated as one entity for such purposes) or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Underwriter be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(F) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7 are several in proportion to the respective principal amounts of
Securities set forth opposite their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on behalf
of the Issuers, their respective officers or directors or any other person
controlling any of the Issuers and (iii) acceptance of and payment for any of
the Securities.
8. Notwithstanding anything herein contained, this Agreement may be terminated
in the absolute discretion of X.X. Xxxxxx Securities Inc., on behalf of the
Underwriters, by notice given to the Company, if after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
the New York Stock Exchange, the American Stock Exchange, the NASDAQ National
Market, the Chicago Mercantile Exchange, the Chicago Board of Options Exchange,
the Chicago Board of Trade or the London Stock Exchange, (ii) trading of any
securities of or guaranteed by any of the Issuers shall have been suspended on
any exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities, (iv) a general moratorium on commercial
banking activities in London shall have been declared by United Kingdom or other
governmental authorities, or (v) there shall have
-23-
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Underwriters, is
material and adverse and that, in the judgment of the Underwriters, makes it
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the execution and delivery hereof
by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities that
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-ninth of the aggregate principal amount of
Securities to be purchased on such date by all Underwriters, the other
Underwriters shall be obligated severally in the proportions that the principal
amount of Securities set forth opposite their respective names in Schedule I
hereto bears to the aggregate principal amount of Securities set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions
as the Underwriters may specify, to purchase the Securities that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount of Securities that
--------
any Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by an amount in excess of one-ninth of the principal
amount of Securities that such Underwriter is obligated to purchase on such date
hereunder without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on such date, and
the aggregate principal amount of Securities with respect to which such default
occurs is more than one-ninth of the aggregate principal amount of Securities to
be purchased on such date, and arrangements reasonably satisfactory to the
Underwriters and the Company for the purchase of such Securities are not made
within 36 hours after such default, this Agreement shall terminate with respect
to all of the Securities without liability on the part of any non-defaulting
Underwriter or the Company. In any such case the Underwriters shall have the
right to postpone the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of any of the Issuers to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason any of the Issuers shall be unable to perform its respective
obligations under this Agreement or any condition of the Underwriters'
obligations cannot be fulfilled, the Issuers agree, jointly and severally, to
promptly reimburse the Underwriters or such Underwriters as have so terminated
this Agreement
-24-
with respect to themselves, severally, for all reasonable out-of-pocket expenses
(including the fees and expenses of their counsel) incurred by the Underwriters
in connection with this Agreement or the offering contemplated hereunder.
11. Any action by the Underwriters hereunder may be taken by the Underwriters
jointly or by X.X. Xxxxxx Securities Inc. alone on behalf of the Underwriters,
and any such action taken by the Underwriters jointly or by X.X. Xxxxxx
Securities Inc. alone shall be binding upon the Underwriters.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be given, c/o X.X.
Xxxxxx Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Facsimile:
(000) 000-0000), Attention: Syndicate Department, with a copy to Xxxxxx Xxxxxx &
Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 (Facsimile: (000) 000-0000),
Attention Xxxxxx X. Xxxxxxx, Esq. Notices to the Company shall be given c/o the
Company at 000 Xxxxxxxxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx, 00000 (Facsimile:
(000) 000-0000), Attention Xxxxxxx Xxxxx, President, with a copy to XxXxxxxxx
Will & Xxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, 00000-0000 (Facsimile:
(000) 000-0000), Attention Xxxxxxx Xxxxxx, Esq.
12. This Agreement shall inure to the benefit of and be binding upon the
Underwriters, the Company, the Guarantors and any controlling person referred to
herein and their respective successors, heirs and legal representatives.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. No purchaser of Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
13. This Agreement may be signed in counterparts, each of which shall be an
original and all of which together shall constitute one and the same instrument.
14. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to the conflicts of laws
provisions thereof.
If the foregoing is in accordance with your understanding, please sign
and return fourteen counterparts hereof.
Very truly yours,
CANANDAIGUA BRANDS, INC.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Senior Vice President and
Chief Financial Officer
BATAVIA WINE CELLARS, INC.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Treasurer
XXXXXX INCORPORATED
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Vice President
XXXXXX BRANDS, LTD.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Vice President
XXXXXX XXXXX, LTD.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Vice President
XXXXXX BRANDS OF CALIFORNIA, INC.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Vice President
XXXXXX BRANDS OF GEORGIA, INC.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Vice President
XXXXXX DISTILLERS IMPORT CORP.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Vice President
XXXXXX FINANCIAL CORPORATION
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Vice President
XXXXXXX POINT BEVERAGE CO.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Vice President
CANANDAIGUA LIMITED
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Finance Director
MONARCH IMPORT COMPANY
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Vice President
CANANDAIGUA WINE COMPANY, INC.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Treasurer
THE VIKING DISTILLERY, INC.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Vice President
CANANDAIGUA EUROPE LIMITED
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Treasurer
XXXXXXX TRADING CORP.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: President and Treasurer
POLYPHENOLICS, INC.
By: /s/ Xxxxxx X. Summer
--------------------------------
Name: Xxxxxx X. Summer
Title: Treasurer
Accepted:
X.X. XXXXXX SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX XXXXXX INC.
CIBC WORLD MARKETS CORP.
DEUTSCHE BANK SECURITIES INC.
XXXXXXXXX & XXXXX LLC
XXXXXX BROTHERS INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXXX & CO. INC.
By: X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxx Xxxxxx
-----------------------------------------
Name: Xxxx Xxxxxx
Title: Managing Director
SCHEDULE I
Principal Amount of Securities
Underwriters To Be Purchased
X.X. Xxxxxx Securities Inc............................... $120,000,000.00
Bear, Xxxxxxx & Co. Inc.................................. 14,000,000.00
Credit Suisse First Boston Corporation................... 14,000,000.00
Xxxxxxx Xxxxx Barney Inc................................. 14,000,000.00
CIBC World Markets Corp.................................. 6,333,333.33
Deutsche Bank Securities Inc............................. 6,333,333.33
Xxxxxxxxx & Xxxxx LLC.................................... 6,333,333.33
Xxxxxx Brothers Inc...................................... 6,333,333.33
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated..................................... 6,333,333.33
Xxxxxxxx & Co. Inc....................................... 6,333,333.33
---------------
Total............................................... $ 200,000,000
===============
SCHEDULE II
Underwriters: X.X. Xxxxxx Securities Inc.
Bear, Xxxxxxx & Co. Inc.
Credit Suisse First Boston
Corporation
Xxxxxxx Xxxxx Xxxxxx Inc.
CIBC World Markets Corp.
Deutsche Bank Securities Inc.
Xxxxxxxxx & Xxxxx LLC
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxxx & Co. Inc.
Underwriting Agreement Dated: July 28, 1999
Registration Statement No.: 333-67037
Title of Securities: 8 5/8% Senior Notes due 2006 (the "Notes")
Aggregate Principal Amount: $200,000,000$
Price to Public: 100% per Note
Purchase Price: 98.25% per Note
Underwriting Discount: 1.75% per Note
Indenture: Indenture dated as of February 25, 1999
and the Second Supplemental Indenture dated as of
August 4, 1999, each between the Company and the Trustee.
Maturity: August 1, 2006
Interest Rate: 8 5/8%
Interest Payment Dates: Interest on the Notes will accrue from the Closing Date
and be payable semi-annually on August 1 and
February 1 of each year, commencing February 1, 2000.
-2-
Optional Redemption Provisions: The Notes are redeemable at any time at the
option of the Company in whole or in part, at a
redemption price equal to the sum of (i) the
principal amount of the securities being
redeemed plus accrued interest thereon to the
redemption date and (ii) the Make-Whole Amount
(the Adjusted Treasury Rate plus 50 Basis
Points (as defined in the Prospectus)).
Mandatory Redemption Provisions: None.
Sinking Fund Provisions: None.
Defeasance Provisions: Standard defeasance and covenant defeasance
provisions.
Ratings: Standard & Poor's: XX
Xxxxx'x Investors Service: Ba2
Lockup Provisions: None.
Other Provisions: None.
Closing Date: August 4, 1999.
Closing Location: Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
ANNEX I
-------
Form of Opinion of XxXxxxxxx, Will & Xxxxx
(i) The Company has been duly incorporated, is validly existing and
in good standing under the laws of the State of Delaware. The Company has the
corporate power and authority to execute, deliver and perform all of its
respective obligations under the Notes, the Indenture and the Underwriting
Agreement (the "Transaction Documents").
(ii) No consent, approval, authorization, order, registration or
qualification of or with any governmental authority or agency or, to our
knowledge, any court or similar body is required under the laws of the United
States, the State of New York and the General Corporation Law of the State of
Delaware for the execution, delivery or performance of the Transaction Documents
by the Company or any Guarantor, as the case may be, except such as may be
required under state securities or blue sky laws in connection with the purchase
and distribution of the securities by the Underwriters (as to which no opinion
is required).
(iii) The execution, delivery and performance of the Transaction
Documents by the Company and the application of the net proceeds from the sale
of the Securities in the manner described in the Prospectus under the caption
"Use of Proceeds" do not and will not (A) conflict with the charter and by-laws
of the Company, (B) conflict with, constitute a breach of or a default by the
Company or any Guarantor, as the case may be, under, or result in the creation
or imposition of any lien, security interest or encumbrance upon any of the
assets of the Company or any Guarantor, as the case may be, pursuant to the
terms of the Credit Agreement or any other indenture, mortgage, deed of trust,
loan or credit agreement, bond, debenture, note, lease or other agreement or
instrument listed on Exhibit I hereto, (C) contravene the General Corporation
Law of the State of Delaware or any statute, rule or regulation under the laws
of the United States and the State of New York applicable to the Company or any
of its properties or (D) to the knowledge of such counsel, conflict with or
violate any judgment, decree or order of any court or governmental agency or
court or body applicable to the Company or any of its properties.
(iv) The Transaction Documents have been duly authorized by the
Company. The Transaction Documents and the Guarantees have been duly executed
and delivered by the Company and each of the Guarantors, as applicable. The sale
and the issuance of the Notes, and the execution and delivery thereof, have been
duly authorized by requisite corporate action of the Company. The Securities
have been duly delivered to the Underwriters by the Company and the Guarantors.
-2-
(v) The Indenture is a valid and binding agreement, enforceable
against the Company and each Guarantor in accordance with its terms, except to
the extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity). When the Notes and the Guarantees have been authenticated in accordance
with the terms of the Indenture, the Notes and the Guarantees will be valid and
binding obligations of the Company and the Guarantors, respectively, entitled to
the benefits of the Indenture and enforceable against the Company and the
Guarantors in accordance with their terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and general principles of equity (regardless of whether enforceability
is considered in a proceeding at law or in equity).
(vi) The Securities and the Indenture conform in all material respects
to the descriptions thereof under the caption "Description of the Notes" in the
Prospectus and "Description of Debt Securities" in the Basic Prospectus. The
statements made in the Prospectus under the captions "Description of the Senior
Credit Facilities," insofar as they describe certain provisions of the Credit
Agreement, are accurate in all material respects.
(vii) The Company's Current Report on 8-K filed on March 3, 1999
incorporated by reference into the Prospectus, at the time it was filed with the
Commission, appeared on its face to be appropriately responsive in all material
respects to the requirements of the Exchange Act and rules and regulations as
promulgated by the Commission under the Exchange Act, except that such counsel
need not express any opinion as to the financial statements, schedules,
projections (and associated assumptions and cautionary statements) and other
financial data included therein or incorporated by reference therein or excluded
therefrom or the exhibits thereto (except to the extent set forth in the next
sentence of this paragraph).
(viii) The Registration Statement was declared effective under the
Securities Act as of November 19, 1998, the Prospectus was filed with the
Commission pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the dates specified therein and no stop
order suspending the effectiveness of the Registration Statement has been issued
and, to the knowledge of such counsel, no proceeding for that purpose is pending
or threatened by the Commission.
(ix) As of its date and as of the Closing Date, the Registration
Statement and the Prospectus and any further amendments or supplements thereto
made by the Company prior to the Closing Date (except for the financial
statements, the notes thereto and related schedules and other financial data
included therein, as to which such counsel need express no
-3-
opinion) comply as to form in all material respects with the requirements of the
Securities Act and the Rules and Regulations (except that such counsel will not
express any opinion as to the financial statements, schedules and other
financial data included therein or incorporated by reference therein or excluded
therefrom, or exhibits thereto or assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the prospectus except to
the extent set forth in paragraph (vi) of this opinion).
(x) The Indenture conforms as to form in all material respects with
the requirements of the Trust Indenture Act and the Trust Indenture Act Rules
and Regulations.
(xi) Neither the Company nor any Subsidiary is required to register
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
--------
"investment company" as such term is defined in the 1940 Act.
(xii) Neither the issuance, sale or delivery of the Securities nor
the application of the proceeds thereof by the Company as set forth in the
Prospectus will violate Regulations T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.
Such opinion shall also contain a statement that such counsel has
participated in conferences with officers and representatives of the Company and
the Subsidiaries, and representatives of the independent accountants of the
Company and the Underwriters at which the contents of the Registration Statement
and the Prospectus and related matters were discussed and that although such
counsel need not pass upon or assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, and need not make any independent check or
verification thereof, except as set forth in paragraph (vi) of this form of
opinion, based upon the foregoing, no facts came to such counsel's attention to
lead such counsel to believe that the Registration Statement or the Prospectus
(including the documents incorporated therein by reference (except to the extent
statements contained in such documents have been modified or superseded by
statements contained in the Prospectus)), as of its date and as of the closing
date, contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading. Such counsel need not express an opinion or belief as
to the financial statements, the notes thereto, schedules and other financial
data included therein, or incorporated by reference into, or excluded from the
Registration Statement or the Prospectus.
In rendering such opinions, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates or statements of
responsible officers of the Company and certificates or other written statements
of officials of jurisdictions having custody of documents respecting corporate
existence or good standing.
EXHIBIT I TO ANNEX I
1. Importer Agreement by and between Xxxxxx Xxxxx, Ltd. and Extrade, S.A. de
C.V. dated as of November 22, 1996.
2. The following documents related to the $2,370,000 Ontario County Industrial
Development Agency 1980 Industrial Development Revenue Bond (Canandaigua
Wine Company, Inc. Facility): (a) Agreement dated October 15, 1979 between
the Agency, and the Company; (b) Second Amendatory Ground Lease, dated
January 1, 1980, between the Company and the Agency; (c) Second Supplemental
Mortgage and Indenture of Trust, dated as of January 1, 1980 between the
Company and the Trustee; (d) Second Amendatory Lease Agreement, dated as of
January 1, 1980, between the Agency and the Company; (e) First Supplemental
Guaranty, dated as of January 1, 1980, executed by the Company; and (f)
Subsidiaries Guarantee, dated January 2, 1980, executed by certain
subsidiaries of the Company.
3. Indenture dated as of December 27, 1993 among the Company, its subsidiaries
and Chemical Bank, as trustee, as amended by (i) the First Supplemental
Indenture dated as of August 3, 1994 among the Company, Canandaigua West,
Inc., and Chemical Bank, as trustee, (ii) the Second Supplemental Indenture
dated as of August 25, 1995 among the Company, V Acquisition Corp. (a
subsidiary of the Company now known as The Viking Distillery, Inc.), and
Chemical Bank, as trustee, (iii) Third Supplemental Indenture dated as of
December 19, 1997 among the Company, Canandaigua Europe Limited, Xxxxxxx
Trading Corp. and The Chase Manhattan Bank, as trustee, (iv) the Fourth
Supplemental Indenture dated as of October 2, 1998 among the Company,
Polyphenolics, Inc., and The Chase Manhattan Bank, as trustee, and (v) the
Fifth Supplemental Indenture dated as of December 11, 1998 among the
Company, Canandaigua B.V., and The Chase Manhattan Bank, as trustee.
4. Indenture with respect to the 8 3/4% Series C Senior Subordinated Notes due
2003 dated as of October 29, 1996 among the Company, its Subsidiaries and
Xxxxxx Trust and Savings Bank, as trustee, as amended by (i) the First
Supplemental Indenture dated as of December 19, 1997 among the Company,
Canandaigua Europe Limited, Xxxxxxx Trading Corp. and Xxxxxx Trust and
Savings Bank, (ii) the Second Supplemental Indenture dated as of October 2,
1998 among the Company, Polyphenolics, Inc. and Xxxxxx Trust and Savings
Bank, and (iii) the Third Supplemental Indenture dated as of December 11,
1998 among the Company, Canandaigua B.V. and Xxxxxx Trust and Savings Bank.
-2-
5. Indenture dated as of February 25, 1999 among the Company, the Guarantors
named therein and Xxxxxx Trust and Savings Bank as trustee, as amended by
Supplemental Indenture No. 1 dated as of February 25, 1999 among the
Company, the Guarantors named therein and Xxxxxx Trust and Savings Bank as
trustee.
6. Xxxxxx Incorporated Management Incentive Plan.
7. Xxxxxx Brands, Ltd. Deferred Compensation Plan.
8. Xxxxxx Xxxxx Split Dollar Insurance Agreement.
9. Long-Term Stock Incentive Plan, which amends and restates the Canandaigua
Wine Company, Inc. Stock Option and Stock Appreciation Right Plan, as
amended by Amendment Number One to the Long-Term Stock Incentive Plan of
the Company.
10. Incentive Stock Option Plan of the Company, as amended by Amendment Number
One to the Incentive Stock Option Plan of the Company.
11. Annual Management Incentive Plan of the Company, as amended by Amendment
Number One to the Annual Management Incentive Plan of the Company.
12. Asset Purchase Agreement dated February 21, 1999 by and among the Company
and Diageo Inc., UDV Canada Inc., and United Distillers Canada Inc.
13. Stock Purchase Agreement by and between Canandaigua Wine Company, Inc. and
Moet Xxxxxxxx, Inc., dated as of April 1, 1999.
14. Stock Purchase Agreement between Franciscan Vineyards, the Selling
Shareholders and Selling Stockholders named therein, and Canandaigua
Brands, Inc., dated April 21, 1999; Vineyard Purchase Agreement between
Canandiagua Brands, Inc. and Xxxxx Properties, Inc., dated as of April 21,
1999; Vineyard Purchase Agreement between Canandaigua Brands, Inc. and
Stonewall Canyon Vineyards, LLC, dated as of April 21, 1999; Grape Purchase
Agreement, between Franciscan Vineyards, Inc. Xxxxxxx-Xxxxxxx Properties,
LLC and Canandaigua Brands, Inc., dated as of June 4, 1999, Guaranty, by
Canandaigua Brands, Inc. in favor of Xxxxxxx-Xxxxxxx Properites LLC, dated
as of June 4, 1999; Grape Purchase Agreement, between Franciscan Vineyards,
Inc. H/Q Vineyards LLC and Canandaigua Brands, Inc.; Guaranty, by
Canandaigua Brands, Inc. in favor of H/Q. Vineyards LLC, dated as of June
4, 1999; Wine Processing Agreement, between Franciscan Vineyards, Inc., H/Q
Wines LLC and Canandaigua Brands, Inc., dated as of June 4, 1999; Guaranty,
by Canandaigua Brands, Inc. in favor of H/Q Wines LLC, dated as of June 4,
1999; ACSA Stock Agreement, among Alto de Casablanca S.A., Franciscan
Vineyards, Inc. and Asesoria e Inversiones Xxx S.A., dated as of June 1,
1999; EVSA Stock Agreement, among Empresas Vitivinicolas S.A., Franciscan
Vineyards, Inc. and Asesoria e Inversio-
-3-
nes Xxx S.A., dated as of June 1, 1999; ACSA Distribution Agreement, by and
between Franciscan Vineyards, Inc., Alto de Casablanca S.A., H/Q Wines LLC,
International Brand Management, Ltd. and Canandaigua Brands, Inc., dated as
of June 4, 1999.
15. First Amended and Restated Credit Agreement dated as of November 1, 1998
between the Company, the Guarantors named therein and the Agents and
Lenders named therein, as amended by the Second Amended and Restated Credit
Agreement dated as of May 12, 1999, among the Company, the Guarantors named
therein and the Agents and Lenders named therein.
ANNEX II
--------
Form of Opinion of Xxxxx Xxxxxxx LLP
(i) Each of the Subsidiaries of the Company listed on Exhibit I
attached hereto (the "Guarantors") is a corporation duly incorporated, in each
----------
case, validly existing and in good standing under the laws of its respective
jurisdiction of incorporation. The Company and each of the Guarantors is duly
qualified and in good standing as a foreign corporation in each jurisdiction
listed for it on Exhibit I attached hereto. The Company and each Guarantor has
all requisite corporate power to own, lease and license its respective
properties and conduct its business as now being conducted and as described in
the Prospectus. All of the issued and outstanding capital stock of each
Guarantor has been duly authorized and validly issued and is fully paid and non-
assessable and were not issued in violation of any preemptive or similar rights
of stockholders arising under the corporate law of the state of incorporation of
such Guarantor, the charter or bylaws of such Guarantor, or, to the best
knowledge of such counsel, any agreement to which such Guarantor is party, and,
to the best knowledge of such counsel, is owned by the Company, free and clear
of any lien, adverse claim, security interest, restriction on transfer,
shareholders' agreement, voting trust or other defect of title whatsoever except
for the liens under the Credit Agreement.
(ii) The Guarantors have the corporate power and authority to execute,
deliver and perform all of their respective obligations under the Underwriting
Agreement, the Indenture and the Guarantees. The execution, delivery and
performance of the Underwriting Agreement, Indenture, Notes and Guarantees by
the Company or any Guarantor, does not and will not (A) conflict with the
charter or bylaws of any Guarantor, (B) contravene the General Corporation Law
of the State of Delaware or any statute, rule or regulation under the laws of
the State of New York applicable to the Guarantors or any of their respective
properties, or (C) to the knowledge of such counsel, conflict with or violate
any judgment, decree or order of any court or governmental agency or court or
body applicable to any of the Guarantors or any of their respective properties.
(iii) The Underwriting Agreement, the Indenture and the Guarantees
have been duly authorized, executed and delivered by each Guarantor. The sale
and issuance of the Guarantees and the execution and delivery thereof have been
duly authorized by requisite corporate action of the Guarantors.
(iv) To the best knowledge of such counsel after due inquiry, except
as described or referred to in the Registration Statement and Prospectus: there
is not pending or threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any
-2-
of the Guarantors is a party, or to which the property of the Company or any of
the Guarantors is subject, before or brought by any court or governmental agency
or body, which, if determined adversely to the Company or any of the Guarantors,
will individually or in the aggregate result in any material adverse change in
the business, financial position, net worth, results of operations or prospects,
or materially adversely affect the properties or assets, of the Company and the
Guarantors taken as a whole or will materially adversely affect the consummation
of the transactions contemplated by the Prospectus; and all pending legal or
governmental proceedings to which the Company or any of the Subsidiaries is a
party or that affect any of their respective properties, that are not described
in the Registration Statement and Prospectus, including ordinary routine
litigation incidental to the business, considered in the aggregate, will not
result in a material adverse change in the business, financial position, net
worth, results of operations or prospects, or materially adversely affect the
properties or assets, of the Company and the Guarantors taken as a whole.
(v) Each of the documents filed by the Company under the Exchange Act
and incorporated by reference into the Prospectus, other than the Company's
Current Report on Form 8-K filed on March 3, 1999, as to which we express no
opinion (collectively, the "Documents"), at the time it was filed with the
---------
Commission, appeared on its face to be appropriately responsive in all material
respects to the requirements of the Exchange Act, and the rules and regulations
as promulgated by the Commission under the Exchange Act, except that such
counsel need not express any opinion as to the financial statements, schedules,
and other financial data included therein or incorporated by reference therein,
or excluded therefrom or the exhibits thereto (except to the extent set forth in
the next sentence of this paragraph) and such counsel need not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Documents. To such counsel's knowledge without having made any
independent investigation and based upon representations of officers of the
Company as to factual matters, there were no contracts or documents required to
be filed as exhibits to such Documents on the date they were filed which were
not so filed.
EXHIBIT I TO ANNEX II
---------------------
Guarantors
----------
Guarantor State of Incorporation
--------- ----------------------
Xxxxxx Incorporated Delaware
Xxxxxx Brands, Ltd. Delaware
Batavia Wine Cellars, Inc. New York
Canandaigua Wine Company, Inc. New York
EXHIBIT II TO ANNEX II
----------------------
Company Foreign Qualifications
------- ----------------------
Canandaigua Brands, Inc. New York
California
Florida
Georgia
Michigan
Oklahoma
New Hampshire
North Carolina
New Jersey
Xxxxxx Incorporated None
Xxxxxx Brands, Ltd. California
Kentucky
Illinois
Florida
Maine
Oklahoma
New Hampshire
North Carolina
New Jersey
West Virginia
Batavia Wine Cellars, Inc. New Jersey
Canandaigua Wine Company, Inc. California
Washington
Oregon
ANNEX III
---------
Form of Opinion of Xxxxxxxx Chance and Xxxxx Xxxxxxx
(i) [ ] (the "Company") has been duly organized and is validly
-------
existing as a corporation and is in good standing under the laws of its
jurisdiction of incorporation.
(ii) The Company has the corporate power and authority to execute, deliver
and perform its obligations under the Underwriting Agreement, the Indenture and
the Guarantee. The Indenture, the Underwriting Agreement and the Guarantee have
been duly authorized for execution and delivery by the Company. The sale and
issuance by the Company of its Guarantee and the execution and delivery thereof
has been duly authorized by requisite corporation action of the Company.
(iii) The execution, delivery, and performance by the Company of the
Underwriting Agreement, the Indenture and the Guarantee does not and will not
(A) conflict with the charter or By-Laws of the Company, (B) contravene and
statute, rule or regulation under the laws of its jurisdiction of incorporation
applicable to the Company and its properties, or (c) to counsel's knowledge,
conflict with or violate any judgment, decree or order of any court or
governmental agency or court or body applicable to the Company and its
properties (except that no opinion need be expressed with respect to the
securities or Blue Sky laws of its jurisdiction of incorporation)./1/
-----------------------
/1/ For purposes of the Xxxxxxxx Chance opinion only, paragraph (iii)(c) of
this form of opinion may be substituted for by an officer's certificate.
