EXHIBIT 1.1
CANANDAIGUA BRANDS, INC.
$200,000,000
8 1/2 % Senior Subordinated Notes due 2009
UNDERWRITING AGREEMENT
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February 25, 1999
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
FLEET SECURITIES, INC.
▇▇▇▇▇▇▇▇ & CO. INC.
SCOTIA CAPITAL MARKETS (USA) INC.
c/o Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Canandaigua Brands, Inc., a Delaware corporation (the "Company"),
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proposes to issue and sell $200,000,000 aggregate principal amount of its 8 1/2%
Senior Subordinated Notes due 2009 (the "Notes"). The Notes will be issued
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pursuant to an Indenture to be dated as of February 25, 1999 (the "Base
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Indenture") by and among the Company, the Guarantors (as defined below) and
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▇▇▇▇▇▇ Trust and Savings Bank, as trustee (the "Trustee"), as supplemented by a
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Supplemental Indenture to be dated as of February 25, 1999 (the "Supplemental
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Indenture" and, together with the Base Indenture, the "Indenture"). As of the
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Closing Date (as defined herein), the Notes will be unconditionally guaranteed
on a senior subordinated basis, as to payment of principal, premium, if any, and
interest, jointly and severally, by each of ▇▇▇▇▇▇ Distillers Import Corp.,
Batavia Wine Cellars, Inc., Canandaigua Wine Company, Inc., Canandaigua Europe
Limited, ▇▇▇▇▇▇▇ Trading Corp. and Polyphenolics, Inc., each a New York
corporation, Canandaigua Limited, a corporation organized under the laws of
England and Wales, ▇▇▇▇▇▇ Financial Corporation, ▇▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇
Brands, Ltd., each a Delaware corporation, ▇▇▇▇▇▇ ▇▇▇▇▇, Ltd., a Maryland
corporation, ▇▇▇▇▇▇ Brands of California, Inc., a Connecticut corporation,
▇▇▇▇▇▇ Brands of Georgia, Inc. and The Viking Distillery, Inc, each a Georgia
corporation, ▇▇▇▇▇▇▇ Point Beverage Co., a Wisconsin corporation, and Monarch
Import
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Company, an Illinois corporation (collectively, the "Guarantors" and,
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together with the Company, the "Issuers"), pursuant to the terms of the
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Indenture (the "Guarantees"). The Notes and the Guarantees are sometimes
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referred to herein together as the "Securities." The Issuers hereby confirm
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their agreement with Chase Securities Inc. ("CSI"), Credit Suisse First Boston
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Corporation, Fleet Securities, Inc., ▇▇▇▇▇▇▇▇ & Co. Inc. and Scotia Capital
Markets (USA) Inc. (together with CSI, the "Underwriters") concerning the
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purchase of the Securities by the several Underwriters.
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Prospectus (as defined in Section 1).
1. Representations, Warranties and Agreements of the Issuers. The
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Company and the Guarantors, jointly and severally, represent and warrant to and
agree with the Underwriters as of the date hereof and as of the Closing Date
that:
(a) A registration statement on Form S-3 (No. 333-67037), including a
form of basic prospectus relating to certain debt and equity securities
(the "Shelf Securities") to be offered from time to time by the Company
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and each of the preliminary supplements to the basic prospectus relating
to the offering of the Securities has (i) been prepared by the Company in
conformity with the requirements of the United States Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations (the
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"Rules and Regulations") of the United States Securities and Exchange
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Commission (the "Commission") thereunder, (ii) been filed with the
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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 (as defined
below), have been delivered by the Company to you. The Company has also
filed with or proposes to file with the Commission pursuant to Rule 424
under the Securities Act ("Rule 424") a final prospectus supplement
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relating to the Securities (a "Prospectus Supplement"). The registration
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statement, as amended to the date of this Agreement, including the exhibits
and schedules thereto, if any, any registration statement filed pursuant to
Rule 462(b) under the Securities Act and all documents incorporated by
reference or deemed to be incorporated by reference therein, is hereinafter
referred to as the "Registration Statement" and the related prospectus
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covering the Shelf Securities in the form first used to confirm sales is
hereinafter referred to as the "Basic Prospectus." The Basic Prospectus as
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supplemented by any applicable Prospectus Supplement is hereinafter
referred to as the "Prospectus." "Effective Time" means the date and the
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time as of which the Registration Statement, or the most recent post-
effective amendment thereof, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective Time;
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"Preliminary Prospectus" means any preliminary form of Prospectus
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specifically relating to the Notes, in the form first filed with, or
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transmitted for filing to, the Commission pursuant to Rule 424. Any
reference in this Agreement to the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus previously filed with the Commission
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 which 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
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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; 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 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, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the Rules and Regulations and do
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not and will not, as of the applicable Effective 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 with 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
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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
Underwriter specifically for use therein (the "Underwriters' 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 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 Underwriters'
Information.
(e) The Company and each of its consolidated subsidiaries (the
"Subsidiaries") 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, condition (financial or otherwise), prospects or
operations of the Company and its Subsidiaries considered as a whole (a
"Material Adverse Effect"); the Company had at the dates indicated an
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authorized capitalization as set forth in the Prospectus, and the
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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 between the Company,
the guarantors named therein, the lenders signatory thereto, and The Chase
Manhattan Bank, as Administrative Agent (the "Credit Agreement"). Neither
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the Company nor any of the Guarantors is 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.
(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
(collectively, the "Transaction Documents"), to be sold by them to the
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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 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.
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(g) The execution and delivery of the Indenture has been duly
authorized by all necessary corporate action of the Issuers and, when 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 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 have 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
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.
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(i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP are independent certified public accountants
with respect to the Company and its consolidated Subsidiaries within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants ("AICPA") and its interpretations
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and rulings thereunder. The historical financial statements of the Company
(including the related notes) contained 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 their cash flows for the respective periods indicated. KPMG
Audit plc are independent chartered accountants with respect to ▇▇▇▇▇▇▇
▇▇▇▇▇ plc within the meaning of Rule 101 of the Code of Professional
Conduct of the AICPA and its interpretations and rulings thereunder. The
historical financial statements of ▇▇▇▇▇▇▇ ▇▇▇▇▇ plc have been prepared in
accordance with United Kingdom GAAP consistently applied throughout the
periods covered thereby and fairly present the financial position of
▇▇▇▇▇▇▇ ▇▇▇▇▇ plc at the respective dates indicated and the results of its
operations and cash flows for the respective periods indicated and such
financial statements have to the extent required by the Commission for each
period presented been properly reconciled to United States GAAP and contain
a discussion of all differences between US GAAP and UK GAAP. The
historical financial information of ▇▇▇▇▇▇▇ ▇▇▇▇▇ plc contained in the
Prospectus has been converted into United States Dollars on a consistent
basis in accordance with US GAAP and the rules and regulations of the
Commission. The financial information contained 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 financial information contained in the Prospectus
and relating to ▇▇▇▇▇▇▇ ▇▇▇▇▇ plc is derived from the accounting records of
▇▇▇▇▇▇▇ ▇▇▇▇▇ plc and fairly presents the information purported to be shown
thereby. The pro forma financial statements contained in the Prospectus
have been prepared on a basis consistent with the historical financial
statements contained 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 the historical and proposed
transactions described in the Registration Statement, the Prospectus or in
the documents incorporated therein by reference (including the transactions
contemplated by the Transaction Documents). The other historical financial
and statistical
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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.
(j) Except as described in or contemplated by the Registration
Statement or the Prospectus, subsequent to February 28, 1998, (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 employee
stock purchase plan, any repurchases by the Company under the Stock
Repurchase Program (as defined in the Prospectus) 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 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 has 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 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
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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
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 each of 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 property") necessary to carry on its business
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as presently operated by it, 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.
(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 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
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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
Laws" means any federal, state or local law or regulation 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 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 or by the Rules and Regulations 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 Rules and Regulations.
(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 Rules and Regulations.
(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.
(t) Except as disclosed in the Prospectus, all United States federal
income 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, 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
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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 generally accepted accounting principles
("GAAP") and to maintain accountability for assets; (C) access to assets is
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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 Government 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, with respect 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.
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(y) 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.
(z) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied by the Company.
(aa) 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.
(bb) The Asset Purchase Agreement (the "Diageo Purchase Agreement")
-------------------------
dated February 22, 1999 by and among the Company and Diageo Inc., UDV
Canada Inc., and United Distillers Canada Inc. relating to the purchase by
the Company of certain whisky brands (the "Diageo Acquisition") has been
------------------
duly authorized and executed by the Company. The Company is not in
violation of the terms of the Diageo Purchase Agreement.
Any certificate signed by an officer of the Company or any of the
Guarantors 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 the Company or such Guarantor, as the case may be, to each Underwriter as to
the matters covered thereby.
2. Purchase of the Securities by the Underwriters. (a) On the
----------------------------------------------
basis of the representations, warranties and agreements contained herein, and
subject to the terms and conditions set forth herein, the Issuers agree to issue
and sell to each of the Underwriters, severally and not jointly, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Issuers,
the principal amount of Securities set forth opposite the name of such
Underwriter on Schedule I hereto at a purchase price equal to 98.000% of the
principal amount thereof. The Issuers shall not be obligated to deliver any of
the Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Issuers acknowledge and agree that the Underwriters may sell
Securities to any affiliate of an Underwriter and that any such affiliate may
sell Securities purchased by it to an Underwriter.
-13-
(c) The Issuers hereby confirm their engagement of ▇▇▇▇▇▇▇▇ & Co. Inc.
as, and ▇▇▇▇▇▇▇▇ & Co. Inc. hereby confirms its agreement with the Company 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 the offering and sale of
----
the Securities. ▇▇▇▇▇▇▇▇ & Co., 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 will be sold to the public shall
be no lower than the minimum yield to maturity recommended by ▇▇▇▇▇▇▇▇ & Co.
Inc. acting as QIU.
3. Delivery of and Payment for the Securities. (a) Delivery of and
---- ------------------------------------------
payment for the Securities shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, New York, New York or at such other place as shall be agreed upon by
the Underwriters and the Company, at 9:00 A.M., New York City time, on March 4,
1999, or at such other time or date, not later than seven full business days
thereafter, as shall be agreed upon by the Underwriters and the Company (such
date and time of payment and delivery being referred to herein as the "Closing
-------
Date").
----
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of same-
day funds to such account or accounts as the Company shall specify prior to the
Closing Date or by such other means as the parties hereto shall agree prior to
the Closing Date against delivery to the Underwriters of the certificates
evidencing the Securities. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligations of the Underwriters hereunder. Upon delivery, the Securities
shall be in global form, registered in such names and in such denominations as
CSI on behalf of the Underwriters shall have requested in writing not less than
two full business days prior to the Closing Date. The Issuers agree to make one
or more global certificates evidencing the Securities available for inspection
by CSI on behalf of the Underwriters in New York, New York at least 24 hours
prior to the Closing Date.
4. Further Agreements of the Company. Each of the Issuers agrees
---------------------------------
with each of the several Underwriters:
(a) to prepare the Prospectus in a form approved by the Underwriters
and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act; except for such post-effective amendment made under
Rule 462(d) under the Securities Act, which amendment shall be approved by
the Underwriters, to make no further amendment
-14-
or any supplement to the Registration Statement or to the Prospectus prior
to the Closing Date except as permitted herein; to advise the Underwriters,
promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish the Underwriters with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Securities; to advise the Underwriters,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal at the earliest possible
time;
(b) to furnish promptly to each Underwriter and to counsel for the
Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) to deliver promptly to each Underwriter such number of the
following documents as such Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings), (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus and (iii) any document incorporated by reference in the
Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Securities and if at such time any events
shall have occurred 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 the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary to amend or supplement the Prospectus or to file
-15-
under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Securities Act or the Exchange Act,
to notify the Underwriters and, upon their request, to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as each Underwriter may from time to
time reasonably request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance;
(d) to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Underwriters, be required by
the Securities Act or requested by the Commission.
(e) during the period when a prospectus is required to be delivered in
connection with the offering or sale of the Securities, prior to filing
with the Commission any amendment to the Registration Statement or
supplement to the Prospectus, any document incorporated by reference in the
Prospectus or any Prospectus pursuant to Rule 424, to furnish a copy
thereof to each Underwriter and counsel for the Underwriters and obtain the
consent of the Underwriters to the filing;
(f) as soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Underwriters an earnings statement of the Company and its Subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the Company,
Rule 158);
(g) for so long as the Securities are outstanding, to furnish the
Underwriters copies of any annual reports, quarterly reports and current
reports filed by the Company with the Commission on Forms 10-K, 10-Q and 8-
K, or such other similar forms as may be designated by the Commission, and
such other documents, reports and information as shall be furnished by the
Company to the Trustee or to the holders of the Securities pursuant to the
Indenture or the Exchange Act or any rule or regulation of the Commission
thereunder;
(h) promptly from time to time take such action as the Underwriters may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as the Underwriters may request
and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as required for the
resale of the Securities;
-16-
(i) for a period of 180 days from the date of the Prospectus, not to
offer for sale, sell, contract to sell or otherwise dispose of, directly or
indirectly, or file a registration statement for, or announce any offer,
sale, contract for sale of or other disposition of any unsecured debt
securities issued or guaranteed by the Company or any of its Subsidiaries
(other than the Securities) without the prior written consent of CSI not to
be unreasonably withheld;
(j) not to, for so long as the Securities are outstanding, be or
become, or be or become owned by, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act, and to not
be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder;
(k) in connection with the offering of the Securities, until CSI on
behalf of the Underwriters shall have notified the Company of the
completion of the distribution of the Securities, not to, and to cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Securities, or attempt to induce any person
to purchase any Securities; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the
Securities;
(l) in connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel reasonably
available upon request by the Underwriters;
(m) to furnish to each of the Underwriters on the date hereof a copy of
each of the independent accountants' reports included in the Prospectus
signed by the accountants rendering such report;
(n) to do and perform all things required to be done and performed by
it under this Agreement that are within its control prior to or after the
Closing Date, and to use its best efforts to satisfy all conditions
precedent on its part to the delivery of the Securities;
(o) to not take any action prior to the execution and delivery of the
Indenture which, if taken after such execution and delivery, would have
resulted in a default or an event of default under the Indenture;
-17-
(p) not to take any action prior to the Closing Date which would
require the Prospectus to be amended or supplemented pursuant to Section
4(d);
(q) prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with
respect to any Issuer, its condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine oral marketing
communications and earnings announcements in the ordinary course of
business and consistent with the past practices of such Issuer and of which
the Underwriters are notified), without the prior written consent of the
Underwriters, unless in the judgment of such Issuer and its counsel, and
after notification to the Underwriters, such press release or communication
is required by law; and
(r) to apply the net proceeds from the sale of the Securities as set
forth in the Prospectus under the heading "Use of Proceeds."
5. Conditions of Underwriters' Obligations. The respective
---------------------------------------
obligations of the several Underwriters hereunder are subject to the accuracy,
on and as of the date hereof and the Closing Date, of the representations and
warranties of each of the Issuers contained herein, to the accuracy of the
statements of each of the Issuers and their respective officers made in any
certificates delivered pursuant hereto, to the performance by each of the
Issuers of its respective obligations hereunder and to each of the following
additional terms and conditions:
(a) All of the representation and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) The Prospectus shall have been timely filed with the Commission in
accordance with the Securities Act; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(c) The Prospectus (and any amendments or supplements thereto) shall
have been printed and copies distributed to the Underwriters as promptly as
practicable on or following the date of this Agreement or at such other
date and time as to which the Underwriters may agree; and no stop order
suspending the sale of the Securities in any jurisdiction in which the
Underwriters reasonably expect to sell Securities
-18-
shall have been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(d) None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Prospectus or any
amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of counsel for the Underwriters, is material or omits
to state any fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(e) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents and
the Prospectus, and all other legal matters relating to the Transaction
Documents and the transactions contemplated thereby shall be satisfactory
in all material respects to the Underwriters, and the Issuers shall have
furnished to the Underwriters all documents and information that they or
their counsel may reasonably request to enable them to pass upon such
matters.
(f) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the Underwriters
their written opinion, as special securities counsel to the Issuers,
addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriters, substantially to the
effect set forth in Annex A hereto.
-------
(g) ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel to the
Issuers, shall have furnished to the Underwriters a written opinion,
addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Underwriters, substantially to the effect set
forth in Annex B hereto.
-------
(h) Each of Clifford Chance, special United Kingdom counsel to the
Issuers, and Piper & Marbury, special Maryland counsel to the Issuers,
shall have furnished to the Underwriters a written opinion, addressed to
the Underwriters and dated the Closing Date, in form and substance
satisfactory to the Underwriters, substantially to the effect set forth in
Annex C hereto.
-------
(i) The Underwriters shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to such matters as the Underwriters may reasonably
require, and the Issuers shall have furnished to such counsel such
documents and information as they request for the purpose of enabling them
to pass upon such matters.
-19-
(j) The Company shall have furnished to the Underwriters letters (the
"Initial Letters") of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and KPMG Audit Plc, addressed to
----------------
the Underwriters and dated the date hereof, in form and substance
previously approved by the Underwriters and counsel for the Underwriters.
(k) The Company shall have furnished to the Underwriters letters (the
"Bring-Down Letters") of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and KPMG Audit Plc, addressed
-------------------
to the Underwriters and dated the Closing Date, in form and substance
satisfactory to the Underwriters and counsel for the Underwriters. In
addition, the Company shall have received letters from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
and KPMG Audit Plc consenting to the use, in connection with the offering
of the Securities, of the audited financial statements of the Company and
its Subsidiaries prepared by such accountants and included in the
Prospectus.
(l) The Company shall have furnished to the Underwriters a certificate,
dated the Closing Date, of its chief executive officer and its chief
financial officer stating that:
(i) The representations, warranties and agreements of the
Company and the Guarantors in Section 1 are true and correct as of the
Closing Date; the Company and the Guarantors have complied with all
agreements contained herein; and the conditions set forth in Sections
5(a) through 5(k) have been fulfilled;
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date no event has
occurred which is required under the Securities Act to be set forth in
a supplement or amendment to the Registration Statement or the
Prospectus; and
(iii) Subsequent to the date of the most recent financial
statements of the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ contained in the
Prospectus, there has been no event or development that can reasonably
be expected to have a Material Adverse Effect, except as set forth in
the Prospectus.
(m) The Indenture shall have been duly executed and delivered by each
of Issuers and the Trustee, and the Notes shall have been duly executed and
delivered
-20-
by the Company and duly authenticated by the Trustee and the Guarantee of
each Guarantor shall have been duly endorsed thereon.
(n) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Prospectus
(exclusive of any amendment or supplement thereto), other than as expressly
described in the Prospectus, there shall not have been any change in the
capital stock or long-term debt or any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company and
its Subsidiaries taken as a whole, the effect of which, in any such case
described above, is, in the judgment of the Underwriters, so material and
adverse as to make it impracticable or inadvisable to proceed with the sale
or delivery of the Securities on the terms and in the manner contemplated
in this Agreement and the Prospectus (exclusive of any amendment or
supplement thereto).
(o) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency
or body which would, as of the Closing Date, prevent the issuance, sale or
resale of the Securities; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction
shall have been issued as of the Closing Date which would prevent the
issuance, sale or resale of the Securities.
(p) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Notes or any of
the Company's other debt securities by any "nationally recognized
statistical rating organization," as such term is defined by the Commission
for purposes of Rule 436(g)(2) of the rules and regulations of the
Commission under the Securities Act and (ii) no such organization shall
have publicly announced that it has under surveillance or review (other
than an announcement with positive implications of a possible upgrading),
its rating of the Notes or any of the Company's other debt securities.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or market
by the Commission, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in any securities of
the Company on any exchange or in the over-the-counter market shall have
been suspended, (ii) any moratorium on commercial banking activities shall
have been declared by federal or New York state authorities,
-21-
(iii) an outbreak or escalation of hostilities or a declaration by the
United States of a national emergency or war or (iv) a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United
States shall be such) the effect of which, in the case of clauses (iii) and
(iv), is, in the judgment of the Underwriters, so material and adverse as
to make it impracticable or inadvisable to proceed with the sale or the
delivery of the Securities on the terms and in the manner contemplated in
this Agreement and in the Prospectus (exclusive of any amendment or
supplement thereto).
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
6. Termination. The obligations of the Underwriters hereunder may
-----------
be terminated by the Underwriters, in their absolute discretion, by notice given
to and received by the Company prior to delivery of and payment for the
Securities if, prior to that time, any of the events described in Section 5(n),
(o), (p) or (q) shall have occurred and be continuing or, if the Underwriters
shall decline to purchase the Securities for any reason permitted under this
Agreement.
7. Defaulting Underwriters. (a) If, on the Closing Date, any of
-----------------------
the Underwriters defaults in the performance of its obligations under this
Agreement, the non-defaulting Underwriters may make arrangements for the
purchase of the Securities which such defaulting Underwriter agreed but failed
to purchase by other persons satisfactory to the Company and the non-defaulting
Underwriters, but if no such arrangements are made within 36 hours after such
default, this Agreement shall terminate without liability on the part of the
non-defaulting Underwriters or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 8 and 12 and except that the provisions of Sections 9, 10, 13 and 16
shall not terminate and shall remain in effect. As used in this Agreement, the
term "Underwriters" includes, for all purposes of this Agreement unless the
context otherwise requires, any party not listed in Schedule I hereto that,
----------
pursuant to this Section 7, purchases Securities which a defaulting Underwriter
agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company or the non-defaulting Underwriters for
damages caused by its default. If other persons are obligated or agree to
purchase the Securities of a defaulting Underwriter, either the non-defaulting
Underwriters or the Company may postpone the Closing Date for up to seven full
business days in order to effect any changes that in the opinion of counsel for
the Issuers or counsel for the Underwriters may be necessary in the Prospectus
or in any other document or arrangement, and the Issuers
-22-
agree to promptly prepare any amendment or supplement to the Prospectus that
effects any such changes.
8. Reimbursement of Underwriters' Expenses. If (a) this Agreement
---------------------------------------
shall have been terminated pursuant to Section 6 or 7, (b) the Issuers shall
fail to tender the Securities for delivery to the Underwriters for any reason
permitted under this Agreement or (c) the Underwriters shall decline to purchase
the Securities for any reason permitted under this Agreement, the Issuers,
jointly and severally, shall reimburse the Underwriters for such out-of-pocket
expenses (including reasonable fees and disbursements of counsel) as shall have
been reasonably incurred by the Underwriters in connection with this Agreement
and the proposed purchase and resale of the Securities. If this Agreement is
terminated pursuant to Section 7 by reason of the default of one or more of the
Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of such expenses.
9. Indemnification. (a) Each of the Issuers, jointly and
---------------
severally, shall indemnify and hold harmless each Underwriter (including,
without limitation, ▇▇▇▇▇▇▇▇ & Co. Inc. acting in its role as QIU), their
respective affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act (collectively referred to for purposes of this Section
9(a) and Section 10 as an "Underwriter"), from and against any loss, claim,
-----------
damage or liability, joint or several, or any action in respect thereof
(including, without limitation, any loss, claim, damage, liability or action
relating to purchases and sales of the Securities), to which such Underwriter
may become subject, whether commenced or threatened, under the Securities Act,
the Exchange Act, any other federal or state statutory law or regulation, at
common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and shall reimburse each Underwriter promptly upon demand for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Issuers
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Underwriters' Information,
or (iii) with respect to the ▇▇▇▇▇▇▇▇ & Co.
-23-
Inc. only, its activities as QIU under its engagement pursuant to Section 2(c)
hereof; provided, however, that ▇▇▇▇▇▇▇▇ & Co. will not be indemnified with
-------- -------
respect to its activities as QIU to the extent that any loss, claim, damage or
liability arising from Schroder & Co.'s activities as QIU is finally judicially
determined by a court of competent jurisdiction not subject to further appeal to
have resulted from the gross negligence or willful misconduct of ▇▇▇▇▇▇▇▇ & Co.
The foregoing indemnity agreement is in addition to any liability which the
Issuers may otherwise have to any Underwriter or to any officer, employee or
controlling person of that Underwriter; provided, further, however, that with
respect to any such untrue statement in or omission from the Preliminary
Prospectus, the indemnity agreement contained in this Section 9(a) shall not
inure to the benefit of any such Underwriter to the extent that the sale of the
Securities to the person asserting any such loss, claim, damage, liability or
action was an initial resale by such Underwriter and any such loss, claim,
damage, liability or action of or with respect to such Underwriter results from
the fact that both (A) to the extent required by applicable law, a copy of the
Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such Securities to such person and (B) the untrue
statement in or omission from the Preliminary Prospectus was corrected in the
Prospectus and the Prospectus does not contain any other untrue statement or
omission or alleged untrue statement or omission unless in, either case, such
failure to deliver the Prospectus was a result of non-compliance by the Issuers
with Section 5(c).
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless each of the Issuers, their respective affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls any Issuer within the meaning of Section 15 the Securities Act
or Section 20(a) of the Exchange Act (collectively referred to for purposes of
this Section 9(b) and Section 10 as the "Issuers"), from and against any loss,
-------
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Issuers may become subject, whether commenced or threatened, under
the Securities Act, the Exchange Act, any other federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Underwriters' Information, and shall
reimburse the Issuers promptly upon demand for any legal or other expenses
reasonably incurred by the Issuers in connection with investigating or defending
or preparing to defend against or appearing as a third
-24-
party witness in connection with any such loss, claim, damage, liability or
action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of such claim or the commencement of such action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 except to the extent
that the indemnifying party was otherwise unaware of such claim or the
commencement of such action and it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; provided,
further, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 9. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 9 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based upon advice of counsel
to the indemnified party) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based upon advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm of attorneys (in addition to any local counsel) at any one time
for all such indemnified
-25-
party or parties. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 9(a) and 9(b), shall use all reasonable efforts
to cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) The Underwriters severally confirm and the Issuers acknowledge
that the statements with respect to the public offering of the Notes by the
Underwriters set forth on the cover page of, and the information under the
caption "Underwriting" in, the Prospectus Supplement are correct and constitute
the only Underwriters' Information concerning such Underwriters furnished in
writing to the Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
The obligations of the Issuers and the Underwriters in this Section 9
are in addition to any other liability that the Issuers or the Underwriters, as
the case may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such party.
10. Contribution. If the indemnification provided for in Section 9
------------
is unavailable or insufficient to hold harmless an indemnified party under
Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Issuers on the one hand and the
Underwriters on the other 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 with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action in
respect thereof, 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 with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
purchased under this Agreement (before deducting expenses) received by or on
behalf of the Company, on the one hand, and the total discounts and commissions
received by the Underwriters with respect to the Securities purchased under this
Agreement, on the other, bear to the total gross proceeds from the sale of the
Securities under this Agreement, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things,
-26-
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 any Issuer on the one hand or to any Underwriters' Information on
the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Issuers and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 10 were to be determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending or preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 10, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
discounts and commissions received by such Underwriter with respect to the
Securities purchased by it under this Agreement exceeds the amount of any
damages which such Underwriter has otherwise paid or become liable to pay by
reason of any 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 as provided in this Section 10 are
several in proportion to their respective purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
----------------------------------------
inure to the benefit of and be binding upon each of the Underwriters and each of
the Issuers and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 9 and 10 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Issuers and
the Underwriters. Nothing in this Agreement is intended or shall be construed
to give any person, other than the persons referred to in this Section 11, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
12. Expenses. Whether or not the transactions contemplated by this
--------
Agreement are consummated or this Agreement is terminated, the Issuers, jointly
and severally, agree with the Underwriters to pay (a) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities and
any taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
-27-
post-effective amendments thereof (including, in each case, exhibits); (d) the
costs incident to the preparation, printing and distribution of the Preliminary
Prospectus, the Prospectus and any amendments or supplements thereto; (e) the
costs of reproducing and distributing each of the Transaction Documents; (f) the
costs incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (g) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of sale of the Securities; (h) the fees and expenses of the
Issuers' counsel and independent accountants; (i) the fees and expenses of
preparing, printing and distributing Blue Sky memoranda (including related fees
and expenses of counsel for the Underwriters); (j) any fees charged by rating
agencies for rating the Securities; (k) the fees and expenses of the Trustee and
any paying agent (including related fees and expenses of any counsel to such
parties); and (k) all other costs and expenses incident to the performance of
the obligations of the Issuers under this Agreement which are not otherwise
specifically provided for in this Section 12; provided, however, that except as
provided in this Section 12 and Section 8, the Underwriters shall pay their own
costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Securities they may sell and the expenses of advertising
any offering of the Securities made by the Underwriters.
13. Survival. The respective indemnities, rights of contribution,
--------
representations, warranties and agreements of the Issuers and the Underwriters
contained in this Agreement or made by or on behalf of the Issuers or the
Underwriters pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Securities and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any of them or
any of their respective affiliates, officers, directors, employees,
representatives, agents or controlling persons.
14. Notices, etc. All statements, requests, notices and agreements
------------
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or
telecopy transmission to Chase Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇ (telecopier no.: 212-270-0994); or
(b) if to the Issuers, shall be delivered or sent by mail or telecopy
transmission to the address of the Company set forth in the Final
Prospectus Supplement, Attention: ▇▇▇▇▇ ▇▇▇▇▇ (telecopier no.: 716-218-
2165);
provided, however, that any notice to an Underwriter pursuant to Section 9(c)
shall also be delivered or sent by mail to such Underwriter at its address set
forth on the signature page
-28-
hereof. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Issuers shall be entitled to act and rely
upon any request, consent, notice or agreement given or made on behalf of the
Underwriters by CSI.
15. Definition of Terms. For purposes of this Agreement, (a) the
-------------------
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading and (b) except where otherwise expressly provided, the term
"affiliate" has the meaning set forth in Rule 405 under the Securities Act.
16. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York without regard to
principals of conflicts of laws thereof.
17. Counterparts. This Agreement may be executed in two or more
------------
counterparts (which may include counterparts delivered by telecopier) and, if
executed in counterpart, the executed counterparts shall each be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
18. Amendments. No amendment or waiver of any provision of this
----------
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
19. Headings. The headings herein are inserted for convenience of
--------
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature Pages Follow]
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between each of the Issuers and the
several Underwriters in accordance with its terms.
Very truly yours,
CANANDAIGUA BRANDS, INC.
By:
-----------------------------
Name:
Title:
BATAVIA WINE CELLARS, INC.
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ INCORPORATED
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ BRANDS, LTD.
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇, LTD.
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ BRANDS OF CALIFORNIA, INC.
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ BRANDS OF GEORGIA, INC.
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ DISTILLERS IMPORT CORP.
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ FINANCIAL CORPORATION
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇▇ POINT BEVERAGE CO.
By:
-----------------------------
Name:
Title:
CANANDAIGUA LIMITED
By:
-----------------------------
Name:
Title:
MONARCH IMPORT COMPANY
By:
-----------------------------
Name:
Title:
CANANDAIGUA WINE COMPANY, INC.
By:
-----------------------------
Name:
Title:
THE VIKING DISTILLERY, INC.
By:
-----------------------------
Name:
Title:
CANANDAIGUA EUROPE LIMITED
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇▇ TRADING CORP.
By:
-----------------------------
Name:
Title:
POLYPHENOLICS, INC.
By:
-----------------------------
Name:
Title:
Accepted:
CHASE SECURITIES INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
FLEET SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇▇ & CO. INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Title: Managing Director
SCOTIA CAPITAL MARKETS (USA) INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Director
SCHEDULE I
----------
Principal Amount
Underwriters of Notes
------------ ----------------
Chase Securities Inc. $160,000,000
Credit Suisse First Boston Corporation 10,000,000
Fleet Securities, Inc. 10,000,000
▇▇▇▇▇▇▇▇ & Co. Inc. 10,000,000
Scotia Capital Markets (USA) Inc. 10,000,000
-------------
Total $200,000,000
ANNEX A
-------
[Form of Opinion of Special Securities Counsel for the Company]
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, special securities counsel to the Company,
shall have furnished to the Underwriters their written opinion, as counsel for
the Issuers, addressed to the Underwriters and dated on the Closing Date, in
form and substance reasonably satisfactory to the Underwriters, substantially to
the effect set forth below:
(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 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 or any Guarantor, as the case may be, 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
Annex 2 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 the Guarantors or any of their respective properties or (D)
to the
-2-
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 the Guarantors and their
respective properties.
(iv) The Transaction Documents have been duly authorized by the
Company. The Transaction Documents have been duly executed and
delivered by the Company and each of the Guarantors. The sale and the
issuance of the Notes and the Guarantees, and the execution and
delivery thereof, have been duly authorized by requisite corporate
action of the Company. The Notes have been duly executed by the
Company and the Guarantees have been duly executed by the Guarantors.
The Securities have been duly delivered to the Underwriters by the
Company and the Guarantors.
(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
caption "Description of the Senior Credit Facilities," insofar as they
describe certain provisions of the Credit Agreement, are accurate in
all material respects.
(vii) Each of the Company's Current Reports on Form 8-K/A filed
on February 12, 1999 and on Form 8-K filed on February 22, 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 mate-
-3-
rial 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 date 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 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.
-4-
In addition, such opinion shall state 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. Although such counsel is not
required to pass upon or assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, and are not required to make an independent check
or verification thereof, except to the extent set forth in paragraph (vi) of the
opinion, such counsel is required to state that, based upon the foregoing, no
facts have come to their attention to lead them 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
express no opinion or belief as to the financial statements, schedules, and
other financial data included therein, or incorporated by reference into, or
excluded from the Registration Statement or the Prospectus.
ANNEX B
-------
Form of Opinion of Special Counsel to the Company
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel to the Company,
shall have furnished to the Underwriters its written opinion, addressed to the
Underwriters and dated on the Closing Date, in form and substance reasonably
satisfactory to the Underwriters, substantially to the effect set forth below:
(i) Each of the Subsidiaries of the Company listed on Annex 1
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 Annex 2 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 Transaction Documents. The execution, delivery and performance of
the Transaction Documents 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 Transaction Documents have been duly authorized,
executed and delivered by each Guarantor. The sale and issuance of the
Guar-
-2-
antees 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 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/A filed on February 12,
1999 and the Company's Current Report on Form 8-K filed on February
22, 1999 (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 con-
-3-
tracts or documents required to be filed as exhibits to such Documents
on the date they were filed which were not so filed.
Such counsel may limit its opinion to the laws of the United States
and the State of New York and the General Corporation Law of the State
of Delaware.
ANNEX 1
-------
Guarantors
----------
Guarantor State of Incorporation
--------- ----------------------
Batavia Wine Cellars, Inc. New York
Canandaigua Wine Company, Inc. New York
▇▇▇▇▇▇ Incorporated Delaware
▇▇▇▇▇▇ Brands, Ltd. Delaware
ANNEX C
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Form of Opinion of Local Counsel to the Company
Clifford Chance, special United Kingdom counsel to the Issuers, and
Piper & Marbury, special Maryland counsel to the Issuers, shall have furnished
to the Underwriters their written opinions, each addressed to the Underwriters
and dated on the Closing Date, in form and substance reasonably satisfactory to
the Underwriters, substantially to the effect set forth below:
(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, the Supplemental Indenture and the
Guarantee. The Indenture, the Supplemental 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, the Supplemental Indenture
and the Guarantee does not and will not (A) conflict with the charter
or By-Laws of the Company, (B) contravene any 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).