EXHIBIT 99.2
------------
EXECUTION COPY
Constellation Brands, Inc.
Underwriting Agreement
New York, New York
March 8, 2001
To the Representatives named in Schedule I hereto of the Underwriters named
in Schedule II hereto
Ladies and Gentlemen:
Constellation Brands, Inc., a corporation incorporated under the laws of
the State of Delaware (the "Company"), proposes to sell to the several
underwriters named in Schedule II hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, the number of shares of Class
A Common Stock, $.01 par value ("Common Stock"), of the Company set forth in
Schedule I hereto (said shares to be issued and sold by the Company being
hereinafter called the "Underwritten Securities"). The Company also proposes to
grant to the Underwriters an option to purchase up to the number of additional
shares of Common Stock set forth in Schedule I hereto to cover over-allotments
(the "Option Securities"; the Option Securities, together with the Underwritten
Securities, being hereinafter called the "Securities"). Any reference herein to
the Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be (the
"Incorporated Documents"); and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange
Act after the Effective Date of the Registration Statement or the issue date of
the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus,
as the case may be, deemed to be incorporated therein by reference. Certain
terms used herein are defined in Section 17 hereof.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to,
and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the Act
and has prepared and filed with the Commission a registration statement (the
file number of which is set forth in Schedule I hereto) on Form S-3, including a
related ba-
- 2 -
sic prospectus, for registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto, including
a Preliminary Final Prospectus, each of which has previously been furnished to
the Representatives. The Company will next file with the Commission one of the
following: (1) after the Effective Date of such registration statement, a final
prospectus supplement relating to the Securities in accordance with Rules 430A
and 424(b), (2) prior to the Effective Date of such registration statement, an
amendment to such registration statement (including the form of final prospectus
supplement) or (3) a final prospectus in accordance with Rules 415 and 424(b).
In the case of clause (1), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than Rule
430A Information) required by the Act and the rules thereunder to be included in
such registration statement and the Final Prospectus. As filed, such final
prospectus supplement or such amendment and form of final prospectus supplement
shall contain all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to the Representatives prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the Basic Prospectus and
any Preliminary Final Prospectus) as the Company has advised the
Representatives, prior to the Execution Time, will be included or made therein.
The Registration Statement, at the Execution Time, meets the requirements set
forth in Rule 415(a)(1)(x).
(b) On the Effective Date the Registration Statement did or will, and when
the Final Prospectus is first filed (if required) in accordance with Rule 424(b)
and on the Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a "settlement
date"), the Final Prospectus (and any supplement thereto) will, comply in all
material respects with the applicable requirements of the Act and the Exchange
Act and the respective rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Final Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date and any settlement date, the Final
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 the light of the circumstances under which
they were made, not misleading; PROVIDED, HOWEVER, that the Company makes no
representations or warranties as to the information contained in or omitted from
the Registration Statement or the Final Prospectus (or any supplement thereto)
in reliance upon and in conformity with information fur-
- 3 -
nished in writing to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration Statement or the
Final Prospectus (or any supplement thereto).
(c) The Company's authorized equity capitalization is as set forth in the
Final Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Final Prospectus; the
outstanding shares of Common Stock have been duly and validly authorized and
issued and are fully paid and nonassessable; the Securities have been duly and
validly authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and nonassessable;
the Securities are duly listed, and admitted and authorized for trading on the
New York Stock Exchange; the certificates for the Securities are in valid and
sufficient form; and the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Final Prospectus, documents
incorporated by reference into the Final Prospectus (including documents filed
with the Company's annual report on Form 10-K) or the Constellation Brands UK
Share Save Scheme, no options, warrants or other rights to purchase, agreements
or other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership interests
in the Company are outstanding.
(d) No holders of securities of the Company have rights to the registration
of such securities under the Registration Statement.
(e) The Incorporated Documents, 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 Act or the Securities 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 Incorporated Documents, 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 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.
(f) 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
- 4 -
their respective businesses as described in the Final Prospectus and are duly
qualified to transact business as foreign corporations in good standing under
the laws of each jurisdiction where the ownership or leasing of their respective
properties or the conduct of their respective businesses require such
qualification, except where the failure to so qualify would not have a material
adverse effect on the business, management, condition (financial or otherwise),
results of operations or business prospects of the Company and the Subsidiaries
considered as a whole (a "Material Adverse Effect"); the Company had at the
dates indicated an authorized capitalization as set forth in the Final
Prospectus, and the issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable, and the
outstanding shares of capital stock that the Company owns (directly or
indirectly) of each of the 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 Credit Agreement dated as of October 6, 1999, as amended by Amendment
No. 1 thereto on February 13, 2001, between the Company, the guarantors named
therein, the lenders signatory thereto, and The Chase Manhattan Bank, as
Administrative Agent, the Bank of Nova Scotia, as Syndication Agent, and Credit
Suisse First Boston and Citicorp USA, Inc., as Co-Documentation Agents (the
"Credit Agreement"). Neither the Company nor any Subsidiary is in violation of
its respective charter or bylaws and neither the Company nor any of the
Subsidiaries 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 Subsidiary where such violation or default
would have a Material Adverse Effect.
(g) The Company has full power and authority to enter into this Agreement
and to issue, sell and deliver the Securities to be sold by it to the
Underwriters as provided herein. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby 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 Liens
upon any of the assets of the Company or any Subsidiary, as the case may be,
pursuant to the terms of, (A) the Credit Agreement and any other indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or any Subsidiary, as the case may be, is a party or to
which any of them or any of their respective properties is subject, (B) the
charter or bylaws of the Company or any Subsidiary, as the case may be, or (C)
any statute, judgment, decree, order, rule or regulation of any foreign or
domestic court, governmental agency or regulatory agency or body having
jurisdiction over the
- 5 -
Company or any of the Subsidiaries or any of their respective properties or
assets except, with respect to clauses (A) and (C) of this Section 1(g), for any
conflict, breach, violation, default or Liens that would not have a Material
Adverse Effect.
(h) The execution and delivery of this Agreement by the Company has been
duly authorized by all necessary corporate action, and this Agreement has been
duly executed and delivered by the Company and is the valid and legally binding
agreement of the Company.
(i) Except as described or referred to in the Final Prospectus, there is
not pending, or to the knowledge of the Company threatened, any action, suit,
proceeding, inquiry or investigation to which the Company or any of the
Subsidiaries is a party, or to which the property of the Company or any of the
Subsidiaries is subject, before or brought by any court or governmental agency
or body, which, if determined adversely to the Company or any of the
Subsidiaries, would, individually or in the aggregate, have a Material Adverse
Effect or might materially adversely affect the consummation of the offering of
the Securities pursuant to this Agreement; and all pending legal or governmental
proceedings to which the Company or any of the Subsidiaries is a party or that
affect any of their respective properties that are not described in the Final
Prospectus, including ordinary routine litigation incidental to the business,
would not, in the aggregate, result in a Material Adverse Effect.
(j) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP are independent certified public accountants with
respect to the Company and its Subsidiaries, KPMG LLP are independent certified
public accountants with respect to certain product lines sold to the Company or
a Subsidiary by Diageo Inc., UDV Canada Inc. and United Distillers Canada Inc.
(the "Diageo Assets") and Ernst & Young LLP are independent certified public
accountants with respect to certain product lines sold to a Subsidiary of the
Company by ▇▇▇▇▇▇▇▇▇▇ Vineyards, Inc. and Tuolomne River Vintners Group (the
"▇▇▇▇▇▇ Road Vintners Wine Business"), in each case, within the meaning of Rule
101 of the Code of Professional Conduct of the American Institute of Certified
Public Accountants ("AICPA") and its interpretations and rulings thereunder. The
historical financial statements of the Company and the Diageo Assets (including
the related notes) included in or incorporated by reference in the Final
Prospectus comply as to form in all material respects with the requirements
applicable to a registration statement on Form S-3 under the Act; such
historical financial statements have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") consistently applied
throughout the periods covered thereby and present fairly the financial position
of the Company or the Diageo Assets, as the case may be, at the respective dates
indicated and the results of their operations, and in the case of the Company,
its cash flows and statements of stockholders' equity for the respective periods
indi-
- 6 -
cated. The financial information included in or incorporated by reference in the
Final Prospectus and relating to the Company is derived from the accounting
records of the Company and its Subsidiaries and presents fairly the information
purported to be shown thereby. The unaudited pro forma combined financial
statements incorporated by reference in the Final Prospectus have been prepared
on a basis consistent with the historical financial statements included in or
incorporated by reference in the Final 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 Act and the Exchange Act to reflect the transactions described in the Final
Prospectus or in the documents incorporated therein by reference, are based on
assumptions made on a reasonable basis and present fairly such transactions
described in the Final Prospectus or in the documents incorporated therein by
reference. The other historical financial and statistical information and data
included in the Final Prospectus or in the documents incorporated therein by
reference presents fairly, in all material respects, the information purported
to be shown thereby.
(k) Except as described in or contemplated by the Final Prospectus,
subsequent to November 30, 2000, (i) neither the Company nor any of the
Subsidiaries has sustained any loss or interference with its business or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental
action, order or decree which would have a Material Adverse Effect; and, (ii)
there has not been any change in the capital stock (other than as a result of
the exercise of the Company's outstanding stock options, purchases under the
Company's 1989 Employee Stock Purchase Plan, as amended, any repurchases by the
Company under its Stock Repurchase Program or as a result of the conversion of
the Company's Class B Common Stock (par value $.01 per share) into Common Stock)
or long-term debt of the Company (except for the issuance and sale of the
Company's 8% Senior Notes due 2008, which was consummated on February 21, 2001)
or any of the Subsidiaries, 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.
(l) Each of the Company and the Subsidiaries has good and marketable title
to all properties and assets, as described in the Final Prospectus as owned by
them free and clear of all Liens, except as provided under the Credit Agreement
as such as are described in the Final 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 prop-
- 7 -
erties described in the Final Prospectus, are in full force and effect and
neither the Company nor any of the Subsidiaries has any notice of any claims of
any sort that have been asserted by anyone adverse to the rights of the Company
or any of the Subsidiaries under such leases or subleases, or affecting or
questioning the rights of the Company or any of the Subsidiaries to the
continued possession of the leased or subleased premises under any such lease or
sublease, which claims would have a Material Adverse Effect.
(m) Each of the Company and the Subsidiaries owns or possesses all
governmental and other licenses, permits, certificates, consents, orders,
approvals and other authorizations necessary to own, lease and operate its
properties and to conduct its business as presently conducted by it and
described in the Final Prospectus, except where the failure to own or possess
such licenses, permits, certificates, consents, orders, approvals and other
authorizations would not, individually or in the aggregate, have a Material
Adverse Effect (collectively, the "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.
(n) Each of the Company and its Subsidiaries owns or possesses, or can
acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, trademarks, service marks, trade names and know-how
(including trade secrets and other patentable and/or unpatentable proprietary or
confidential information or procedures) (collectively, "intellectual property")
necessary to carry on its business 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.
(o) 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.
- 8 -
(p) 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.
(q) Except as described in the Final 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 the Company, threatened foreign, federal,
state or local investigation evaluating whether any remedial action by the
Company or any of its Subsidiaries is needed to respond to a release of any
Hazardous Materials (as defined below) into the environment, resulting from the
Company's or any of the Subsidiaries' business operations or ownership or
possession of any of their properties or assets or is in contravention of any
Environmental Law that would, individually or in the aggregate, have a Material
Adverse Effect. None of the Company or any of its Subsidiaries has received any
notice or claim, nor are there pending or, to the knowledge of the Company,
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 foreign, federal, state or local law or
regulation applicable to the Company's or any of the 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.
(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
not described in the Final Prospectus or incorporated therein by reference which
would have a Material Adverse Effect.
(s) No labor problem exists with the employees of the Company or any of the
Subsidiaries or, to the knowledge of the Company, is imminent that, in either
case, would have a Material Adverse Effect.
(t) Except as disclosed in the Final Prospectus, all United States federal
income tax returns and all foreign tax returns of the Company and the
Subsidiaries required by law to be filed have been filed (taking into account
extensions granted by the applicable 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
- 9 -
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 the Subsidiaries required to be filed
pursuant to applicable foreign, federal, state or local laws have been filed,
except insofar as the failure to file such returns would not individually or in
the aggregate result in a Material Adverse Effect, and all taxes shown on such
returns or otherwise assessed which are due and payable have been paid, except
for such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided and except for such taxes the payment of
which would not, individually or in the aggregate, result in a Material Adverse
Effect.
(u) The Company and each of the Subsidiaries maintain (and in the future
will maintain) a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP
and to maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(v) The Company and each of the Subsidiaries is in compliance with, and
none of such entities has 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 nor the
application of the proceeds thereof by the Company as set forth in the Final
Prospectus will violate Regulations T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.
(x) Each of the Company and the 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 Final 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
- 10 -
upon its assets and pay its debts and other liabilities, including contingent
obligations, as they mature and (D) such entity does not have unreasonably small
capital.
(y) 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 Company or any Subsidiary or any
Underwriters for a brokerage commission, finders' fee or like payment in
connection with the offering and sale of the Securities.
(z) No forward-looking statement (within the meaning of Section 27A of the
Act and Section 21E of the Exchange Act) contained in the Final Prospectus has
been made or reaffirmed without a reasonable basis or has been disclosed other
than in good faith.
Any certificate signed by an officer of the Company 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 to each
Underwriter as to the matters covered thereby.
2. PURCHASE AND SALE.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $64.152 per share, the amount
of the Underwritten Securities set forth opposite such Underwriter's name in
Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
285,000 Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date of
the Final Prospectus upon written or telegraphic notice by the Representatives
to the Company setting forth the number of shares of the Option Securities as to
which the several Underwriters are exercising the option and the settlement
date. The number of shares of the Option Securities to be purchased by each
Underwriter shall be the same percentage of the total number of shares of the
Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the
- 11 -
Underwritten Securities, subject to such adjustments as the Representatives in
their absolute discretion shall make to eliminate any fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made on the date and at the time specified in
Schedule I hereto or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement between the Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Company by wire transfer payable in same-day funds to an
account specified by the Company. Delivery of the Underwritten Securities and
the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, on the
date specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the settlement date for
the Option Securities, and the obligation of the Underwriters to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several Underwriters
propose to offer the Securities for sale to the public as set forth in the Final
Prospectus.
5. AGREEMENTS. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereof, to
become effective. Prior to the termination of the offering of the Securities,
the Company will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus or any Preliminary Final Prospectus)
to the Basic Prospectus or any Rule 462(b) Registration Statement unless
- 12 -
the Company has furnished the Representatives a copy for their review prior to
filing and will not file any such proposed amendment or supplement to which the
Representatives reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Final Prospectus is otherwise required under Rule 424(b), the
Company will cause the Final Prospectus, properly completed, and any supplement
thereto to be filed with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company will
promptly advise the Representatives (1) when the Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when the Final
Prospectus, and any supplement thereto, shall have been filed (if required) with
the Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement shall have been filed with the Commission, (3) when, prior to
termination of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (4) of any request by the
Commission or its staff for any amendment of the Registration Statement, or any
Rule 462(b) Registration Statement, or for any supplement to the Final
Prospectus or for any additional information, (5) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
and (6) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such stop order
or the suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Final Prospectus as then supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the Registration Statement
or supplement the Final Prospectus to comply with the Act or the Exchange Act or
the respective rules thereunder, the Company promptly will (1) notify the
Representatives of such event, (2) prepare and file with the Commission, subject
to the second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (3) supply any supplemented Final Prospectus to the
Representatives in such quantities as the Representatives may reasonably
request.
- 13 -
(c) As soon as practicable, the Company will make generally available to
its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Final Prospectus and the Final Prospectus and any
supplement thereto as the Representatives may reasonably request. The Company
will pay the expenses of printing or other production of all documents relating
to the offering.
(e) The Company will arrange, if necessary, for the qualification of the
Securities for sale under the laws of such jurisdictions as the Representatives
may designate, will maintain such qualifications in effect so long as required
for the distribution of the Securities and will pay any fee of the National
Association of Securities Dealers, Inc., in connection with its review of the
offering; provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any jurisdiction where
it is not now so subject.
(f) The Company will not, without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Inc., offer, sell, contract to sell, pledge, or otherwise dispose
of (or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in privity with the
Company or any affiliate of the Company), directly or indirectly, including the
filing (or participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Exchange Act, any other shares of Common Stock or any securities
convertible into, or exercisable, or exchangeable for, shares of Common Stock,
or publicly announce an intention to effect any such transaction, until the
Business Day set forth on Schedule I hereto, PROVIDED, HOWEVER, that the Company
may issue and sell Common Stock pursuant to any stock option plan, stock
in-
- 14 -
centive plan, stock ownership plan or dividend reinvestment plan of the Company
in effect at the Execution Time (including pursuant to a registration statement
on Form S-8 filed after the Execution Time relating to shares of Common Stock to
be issued under such employee stock option plans, stock ownership plans or
dividend reinvestment plans) and the Company may issue Common Stock issuable
upon the conversion of securities or the exercise of warrants outstanding at the
Execution Time.
(g) The Company will not take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities.
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Representatives agree in writing to a later time, the
Registration Statement will become effective not later than (i) 6:00 PM New York
City time on the date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on such date or
(ii) 9:30 AM on the Business Day following the day on which the public offering
price was determined, if such determination occurred after 3:00 PM New York City
time on such date; if filing of the Final Prospectus, or any supplement thereto,
is required pursuant to Rule 424(b), the Final Prospectus, and any such
supplement, will be filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have requested and caused:
(i) ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, special counsel for the Company, to have
furnished to the Underwriters their written opinion addressed to the
Underwriters, dated the Closing Date, in form and sub-
- 15 -
stance reasonably satisfactory to the Underwriters, substantially in the
form of Annex I hereto;
(ii) ▇▇▇▇▇ Peabody LLP, counsel for the Company, to have furnished to
the Underwriters their written opinion addressed to the Underwriters, dated
the Closing Date, in form and substance reasonably satisfactory to the
Underwriters, substantially in the form of Annex II hereto; and
(iii) each of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇▇▇▇▇▇ Chance LLP
and Freshfields Bruckhaus ▇▇▇▇▇▇▇▇, local counsel for the Company, to have
furnished to the Underwriters their written opinion addressed to the
Underwriters, dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriters, substantially in the form of Annex III
hereto.
(c) The Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Underwriters, such opinion or opinions, dated the Closing Date
and addressed to the Representatives, with respect to the issuance and sale of
the Securities, the Registration Statement, the Final Prospectus (together with
any supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(d) The Company shall have furnished to the Representatives a certificate
of the Company, signed by the Chairman of the Board or the President and the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully examined
the Registration Statement, the Final Prospectus, any supplements to the Final
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the same
effect as if made on the Closing Date and the Company has complied with all
the agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
- 16 -
(iii) since the date of the most recent financial statements included
or incorporated by reference in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(e) The Company shall have requested and caused ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP to have
furnished to the Representatives, at the Execution Time and at the Closing Date,
letters (which may refer to letters previously delivered to one or more of the
Representatives), dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable rules and regulations adopted
by the Commission thereunder and that they have performed a review of the
unaudited interim financial information of the Company for the nine-month
periods ended November 30, 2000 and November 30, 1999, and as of November 30,
2000, in accordance with Statement on Auditing Standards No. 71, and stating in
effect, except as provided in Schedule I hereto, that:
(i) in their opinion the audited financial statements and the
unaudited pro forma combined financial statements included in or
incorporated by reference in the Registration Statement and the Final
Prospectus and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related rules and regulations adopted by the
Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its Subsidiaries; their
limited review, in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial information
for the nine-month periods ended November 30, 2000 and November 30, 1999,
and as of November 30, 2000, incorporated by reference in the Registration
Statement and the Final Prospectus; carrying out certain specified
procedures (but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter; a
reading of the minutes of the meetings of the
- 17 -
stockholders, the Board of Directors and the Audit Committee and the Human
Resources Committee of the Company and the Subsidiaries; and inquiries of
certain officials of the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as to transactions
and events subsequent to February 29, 2000, nothing came to their attention
which caused them to believe that:
(1) any unaudited financial statements included in or
incorporated by reference in the Registration Statement and the Final
Prospectus do not comply as to form in all material respects with
applicable accounting requirements of the Act and with the related
rules and regulations adopted by the Commission with respect to
financial statements included in or incorporated by reference in
quarterly reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity with GAAP applied
on a basis substantially consistent with that of the audited financial
statements included in or incorporated by reference in the
Registration Statement and the Final Prospectus; and
(2) with respect to the period subsequent to November 30, 2000,
there were, at a specified date not more than five days prior to the
date of the letter, any changes in capital stock (other than as a
result of the exercise of the Company's outstanding stock options,
purchases under the Company's 1989 Employee Stock Purchase Plan, as
amended, any repurchases by the Company under its Stock Repurchase
Program or as a result of the conversion of the Company's Class B
Common Stock (par value $.01 per share) into Common Stock), increase
in long-term debt (except for the issuance and sale of the Company's
8% Senior Notes due 2008, which was consummated on February 21, 2001)
or any decreases in consolidated net current assets or stockholders'
equity of the consolidated companies as compared with the amounts
shown on the November 30, 2000 consolidated balance sheet included in
or incorporated by reference in the Registration Statement and the
Final Prospectus, or for the period from December 1, 2000, to such
specified date there were any decreases, as compared with the
corresponding period in the preceding year in consolidated net sales
or in total or per-share amounts of income before extraordinary items
or of net income, except in all instances for changes or decreases set
- 18 -
forth in such letter, in which case the letter shall be accompanied by
an explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Representatives;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company and the Subsidiaries) set forth in the Registration Statement
and the Final Prospectus and in Exhibit 12 to the Registration Statement,
including the information set forth under the captions "Prospectus
Supplement Summary -- Summary Historical Consolidated Financial Data" and
"Selected Financial Data" in the Final Prospectus, the information included
in Items 1, 2, 6, 7, 7A, 8 and 11 of the Company's Annual Report on Form
10-K, incorporated by reference in the Registration Statement and the Final
Prospectus, the information included in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
November 30, 2000, incorporated by reference in the Registration Statement
and the Final Prospectus, agrees with the accounting records of the Company
and its Subsidiaries, excluding any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro forma combined
financial statements incorporated by reference in the Registration
Statement and the Final Prospectus (the "pro forma financial statements");
carrying out certain specified procedures; inquiries of certain officials
of the Company who have or had responsibility for financial and accounting
matters; and proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro forma financial
statements, nothing came to their attention which caused them to believe
that the pro forma financial statements do not comply as to form in all
material respects with the applicable accounting requirements of Rule 11-02
of Regulation S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such statements.
References to the Final Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
- 19 -
(f) The Company shall have requested and caused KPMG LLP to have
furnished to the Representatives, at the Execution Time, a letter, dated as
of the Execution Time, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable
rules and regulations adopted by the Commission thereunder and stating in
effect, except as provided in Schedule I hereto, that:
(i) in their opinion the audited financial statements
incorporated by reference in the Registration Statement and the Final
Prospectus and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Act and
the Exchange Act and the related rules and regulations adopted by the
Commission; and
(ii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Diageo Assets) incorporated by
reference in the Registration Statement and the Final Prospectus
included in the Company's Current Report on Form 8-K/A, Amendment No.
2, dated April 9, 1999 and filed on November 23, 1999, agrees with the
accounting records of the Diageo Assets, excluding any questions of
legal interpretation.
References to the Final Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) The Company shall have requested and caused Ernst & Young LLP to have
furnished to the Representatives, at the Execution Time, a letter dated as of
the Execution Time, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable rules and regulations adopted
by the Commission thereunder and stating in effect, except as provided in
Schedule I hereto, that they have performed certain specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of the
▇▇▇▇▇▇ Road Vintners Wine Business) included in the Final Prospectus, agrees
with the accounting records of the ▇▇▇▇▇▇ Road Vintners Wine Business, excluding
any questions of legal interpretation.
- 20 -
References to the Final Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Registration Statement (exclusive of any amendment
thereof) and the Final Prospectus (exclusive of any supplement thereto), there
shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraphs (e) through (g) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above, is, in the
sole judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto).
(i) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
(j) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(k) The Securities shall have been listed and admitted and authorized for
trading on the Stock Exchange, and satisfactory evidence of such actions shall
have been provided to the Representatives.
(l) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from each
person or entity that is identified on Schedule III hereto, addressed to the
Representatives.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material re-
- 21 -
spects reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered
at the office of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Underwriters, at ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally through
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. on demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter, its
officers and directors, each person, if any, who controls any Underwriter and
each affiliate of any Underwriter which assists such Underwriter in the
distribution of the Securities, within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, the legal fees
and other expenses incurred in connection with any suit, action or proceeding or
any claim asserted) caused by any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Securities as originally filed or any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any
written information furnished to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion therein.
- 22 -
(b) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless each of the Company, its directors, its officers and each person who
controls the Company within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only with reference to such losses,
claims, damages or liabilities which are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Underwriter through the Representatives specifically for inclusion therein.
The Company acknowledges that the statements set forth in the last paragraph of
the cover page regarding delivery of the Securities and, under the heading
"Underwriting", (i) the list of Underwriters and their respective participation
in the sale of the Securities, (ii) the sentences related to concessions and
reallowances and (iii) the paragraphs related to stabilization, syndicate
covering transactions and penalty bids in any Preliminary Final Prospectus and
the Final Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in any Preliminary Final
Prospectus or the Final Prospectus.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person or persons against whom such indemnity may be sought (each an
"Indemnifying Person") in writing, and such Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 8 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) such
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary, (ii) such Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to such Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
an Indemnifying Person and an Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that an Indemnifying Person
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for any Underwriter, each affiliate of any Under-
- 23 -
writer which assists such Underwriter in the distribution of the Securities and
such control persons of any Underwriter shall be designated in writing by the
Representatives, and any such separate firm for the Company, their respective
directors, their respective officers and such control persons of any of the
Company shall be designated in writing by the Company. The Indemnifying Person
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, such Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in the first and second paragraphs
of this Section 8 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
the Company and the Underwriters severally agree to contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Securities PROVIDED, HOWEVER, that in
no case shall any Underwriter (except as may be provided in an agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter 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 Company on the one hand and the
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be in the
same respective proportions as the net proceeds from the offering and sale of
the Securities (before deducting expenses) received by the Company and the total
underwriting commissions received by the Underwriters, in each case as set forth
in the table on the cover of the Final Prospectus. The relative fault of the
Company on the one hand and the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or by the
Under-
- 24 -
writers on the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The Company and each of the Underwriters severally agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8, in no event shall
any Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) The remedies provided for in this Section 8 are not exclusive and shall
not limit any rights or remedies that may otherwise be available to any
indemnified party at law or in equity.
(g) The indemnity and contribution agreements contained in this Section 8
and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on behalf
of the Company, its respective officers or directors or any other person
controlling the Company and (iii) acceptance of and payment for any of the
Securities.
- 25 -
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail to
purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; PROVIDED, HOWEVER, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Prospectus (exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Underwriters set forth in or made pursuant to this
Agreement will remain in full
- 26 -
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. General Counsel (fax no.: (212)
▇▇▇-▇▇▇▇) and confirmed to the General Counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., at
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ Attention: General Counsel; with
a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.; or, if sent to
the Company, will be mailed, delivered or telefaxed to the Company, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇),
Attention: General Counsel; with a copy to ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
13. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for convenience only and
shall not affect the construction hereof.
- 27 -
17. DEFINITIONS. The terms which follow, when used in this Agreement, shall
have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph 1(a)
above contained in the Registration Statement at the Effective Date.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to the
Securities that was first filed pursuant to Rule 424(b) after the Execution
Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus, together
with the Basic Prospectus.
"Registration Statement" shall mean the registration statement referred to
in paragraph 1(a) above, including exhibits and financial statements, as amended
at the Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes effective
prior to the Closing Date, shall also mean such registration statement as so
amended or such Rule 462(b) Registration Statement, as the case may be. Such
term shall include any Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule ▇▇▇▇.
- ▇▇ -
"▇▇▇▇ ▇▇▇", "▇▇▇▇ 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration statement
and any amendments thereto filed pursuant to Rule 462(b) relating to the
offering covered by the registration statement referred to in Section 1(a)
hereof.
- 29 -
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the several Underwriters.
Very truly yours,
CONSTELLATION BRANDS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. Summer
---------------------------------
Name: ▇▇▇▇▇▇ ▇. Summer
Title: Executive Vice President and
Chief Financial Officer
- 30 -
The foregoing Agreement is hereby
confirmed and accepted as of the
date specified in Schedule I hereto.
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By: /s/ ▇▇▇▇▇▇ van der Vord
-------------------------------------
Name: ▇▇▇▇▇▇ van der Vord
Title: Managing Director
For itself and the other several Un-
derwriters, if any, named in Schedule
II to the foregoing Agreement.
SCHEDULE I
Underwriting Agreement dated March 8, 2001
Registration Statement No. 333-91587
Representative(s): ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇.▇. ▇▇▇▇▇▇ Securities Inc.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and UBS Warburg LLC
Title, Purchase Price and Description of Securities:
Title: Class A Common Stock, par value $.01 per share
Number of Underwritten Securities to be sold by the Company: 1,900,000
Number of Option Securities to be sold by the Company: 285,000
Price to Public per Share (include accrued dividends, if any): $67.00
Price to Public -- total: $127,300,000
Underwriting Discount per Share: $2.848
Underwriting Discount -- total:. $5,411,200
Proceeds to Company per Share: $64.152
Proceeds to Company -- total: $121,888,800
Other provisions: N/A
Closing Date, Time and Location: March 14, 2001 at 10:00 a.m. at ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Type of Offering: Delayed
Date referred to in Section 5(f) after which the Company may offer or sell
securities issued or guaranteed by the Company without the consent of the
Representative(s): June 6, 2001
Modification of items to be covered by the letters from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
KPMG LLP and Ernst & Young LLP delivered pursuant to Sections 6(e), (f) and (g),
respectively, at the Execution Time and/or the Closing Date, as applicable: N/A
SCHEDULE II
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc............................. 665,000
▇.▇. ▇▇▇▇▇▇ Securities Inc........................... 665,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated... 285,000
UBS Warburg LLC...................................... 285,000
---------
Total................................................ 1,900,000
=========
SCHEDULE III
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇, III
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. Summer
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Huneeus
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
CWC Partnership - I
CWC Partnership - II
MLR&R
Mac & ▇▇▇▇▇ ▇▇▇▇▇ Foundation Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇ Master Trust
Trust for the benefit of the Grandchildren of ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇
ANNEX I
Form of Opinion of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
(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 Underwriting Agreement and the transactions contemplated
therein.
(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 Underwriting
Agreement and the transactions contemplated therein by the Company or any
Subsidiary, as the case may be, except such as (i) have been obtained under the
Act and (ii) 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 Underwriting Agreement
and the transactions contemplated therein by the Company and the application of
the net proceeds from the sale of the Securities in the manner described in the
Final 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 Subsidiary, 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
Subsidiary, as the case may be, pursuant to the terms of the Credit Agreement or
any other indenture, mortgage, deed of trust, loan or credit agreement, bond,
debenture, note, lease or other agreement or instrument listed on Exhibit I
hereto, (C) contravene the General Corporation Law of the State of Delaware or
any statute, rule or regulation under the laws of the United States and the
State of New York applicable to the Company or any of its properties or (D) to
the knowledge of such counsel, conflict with or violate any judgment, decree or
order of any court or governmental agency or court or body applicable to the
Company or any of its properties.
(iv) The Underwriting Agreement and the transactions contemplated therein
have been duly authorized by the Company. The Underwriting Agreement and any
documents relating to the transactions contemplated therein have been duly
executed and delivered by the Company, as applicable. The Securities have been
duly delivered to the Underwriters by the Company.
- 2 -
(v) The Securities conform in all material respects to the descriptions
thereof under the caption "Description of Class A Common Stock" in the Final
Prospectus. The statements made in the Final Prospectus under the captions
"Description of the Senior Credit Facilities" and "Certain United States Tax
Considerations to Non-United States Holders," insofar as they describe certain
provisions of the Credit Agreement or matters of law, are accurate in all
material respects.
(vi) 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.
(vii) Neither the issuance, sale or delivery of the Securities nor the
application of the proceeds thereof by the Company as set forth in the Final
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.
(viii) The Company's authorized equity capitalization is as set forth in
the Final Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Final Prospectus; the
Securities are duly listed, and admitted and authorized for trading on the New
York Stock Exchange; the certificates for the Securities are in valid and
sufficient form; and the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for the
Securities.
(ix) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(x) The Registration Statement has become effective under the Act; any
required filing of the Basic Prospectus, any Preliminary Final Prospectus and
the Final Prospectus, and any supplements thereto, pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b); to
the knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that purpose have
been instituted or threatened and the Registration Statement and the Final
Prospectus (other than the financial statements and other financial information
contained therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of the Act and
the Exchange Act and the respective rules thereunder.
Such opinion shall also contain a statement that such counsel has
participated in conferences with officers and representatives of the Company and
the Subsidiaries, and representatives of the independent accountants of the
Company and the Underwriters at which the contents of the Registration Statement
and the Final Prospectus and related matters were
- 3 -
discussed and that although such counsel need not pass upon or assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Final Prospectus, and need not
make any independent check or verification thereof, except as set forth in
paragraph (v) of this form of opinion, based upon the foregoing, no facts came
to such counsel's attention to lead such counsel to believe that the
Registration Statement, as of the Effective Date or the date the Registration
Statement was last deemed amended, contained any 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 or that the Final
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 Final Prospectus)), as of its date and
as of the Closing Date, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. Such counsel need not express an
opinion or belief as to the financial statements, the notes thereto, schedules
and other financial data included therein, or incorporated by reference into, or
excluded from the Final Prospectus.
In rendering such opinions, such counsel may rely as to matters of fact, to
the extent such counsel deems proper, on certificates or statements of
responsible officers of the Company and certificates or other written statements
of officials of jurisdictions having custody of documents respecting corporate
existence or good standing.
EXHIBIT I TO ANNEX I
1. Importer Agreement by and between ▇▇▇▇▇▇ ▇▇▇▇▇, Ltd. and Extrade, S.A. de
C.V. dated as of November 22, 1996.
2. Indenture dated as of December 27, 1993 among the Company, its subsidiaries
and Chemical Bank, as trustee, as amended by (i) the First Supplemental
Indenture dated as of August 3, 1994 among the Company, Canandaigua West,
Inc., and Chemical Bank, as trustee, (ii) the Second Supplemental Indenture
dated as of August 25, 1995 among the Company, V Acquisition Corp. (a
subsidiary of the Company now known as The Viking Distillery, Inc.), and
Chemical Bank, as trustee, (iii) Third Supplemental Indenture dated as of
December 19, 1997 among the Company, Canandaigua Europe Limited, ▇▇▇▇▇▇▇
Trading Corp. and The Chase Manhattan Bank, as trustee, (iv) the Fourth
Supplemental Indenture dated as of October 2, 1998 among the Company,
Polyphenolics, Inc., and The Chase Manhattan Bank, as trustee, (v) the
Fifth Supplemental Indenture dated as of December 11, 1998 among the
Company, Canandaigua B.V., and The Chase Manhattan Bank, as trustee and
(vi) the Sixth Supplemental Indenture dated as of July 28, 1998 among the
Company, ▇▇▇▇▇▇ Canada, Ltd., Simi Winery, Inc., Franciscan Vineyards,
Inc., ▇▇▇▇▇▇▇▇, Inc., ▇.▇. ▇▇▇▇▇ Corp., Cloud Peak Corporation, Mt. ▇▇▇▇▇▇
Corporation, SCV-EPI Vineyards, Inc. and The Chase Manhattan Bank, as
trustee.
3. Indenture with respect to the 8 3/4% Series C Senior Subordinated Notes due
2003 dated as of October 29, 1996 among the Company, its Subsidiaries and
▇▇▇▇▇▇ Trust and Savings Bank, as trustee, as amended by (i) the First
Supplemental Indenture dated as of December 19, 1997 among the Company,
Canandaigua Europe Limited, ▇▇▇▇▇▇▇ Trading Corp. and ▇▇▇▇▇▇ Trust and
Savings Bank, (ii) the Second Supplemental Indenture dated as of October 2,
1998 among the Company, Polyphenolics, Inc. and ▇▇▇▇▇▇ Trust and Savings
Bank, (iii) the Third Supplemental Indenture dated as of December 11, 1998
among the Company, Canandaigua B.V. and ▇▇▇▇▇▇ Trust and Savings Bank and
(iv) the Fourth Supplemental Indenture dated as of July 28, 1999, among the
Company, ▇▇▇▇▇▇ Canada Ltd., Simi Winery, Inc., Franciscan Vineyards, Inc.,
▇▇▇▇▇▇▇▇, Inc., ▇.▇. ▇▇▇▇▇ Corp., Cloud Peak Corporation, Mt. ▇▇▇▇▇▇
Corporation, SCV-EPI Vineyards, Inc. and ▇▇▇▇▇▇ Trust and Savings Bank, as
trustee.
4. Indenture dated as of February 25, 1999 among the Company, the Guarantors
named therein and ▇▇▇▇▇▇ Trust and Savings Bank as trustee, as amended by
(i) Supplemental Indenture No. 1 dated as of February 25, 1999 among the
Company, the Guarantors named therein and ▇▇▇▇▇▇ Trust and Savings Bank as
trustee, (ii) Supplemental Indenture No. 2 dated as of August 4, 1999 among
the Company, the Guarantors named
- 2 -
therein and ▇▇▇▇▇▇ Trust and Savings Bank, as trustee, (iii) Supplemental
Indenture No. 3 dated as of August 6, 1999 among the Company, the New
Guarantors named therein and ▇▇▇▇▇▇ Trust and Savings Bank, as trustee, and
(iv) Supplemental Indenture No. 4, dated as of May 15, 2000 among the
Company, as Issuer, its principal operating subsidiaries, as Guarantors and
▇▇▇▇▇▇ Trust and Savings Bank, as trustee, as further amended by
Supplemental Indenture No. 5, dated as of September 14, 2000 by and among
the Company, as Issuer, its principal operating subsidiaries as Guarantors
and The Bank of New York, as trustee.
5. Indenture dated as of November 17, 1999 among the Company, as Issuer,
certain principal subsidiaries, as Guarantors and ▇▇▇▇▇▇ Trust and Savings
Bank, as trustee.
6. ▇▇▇▇▇▇ Incorporated Management Incentive Plan.
7. ▇▇▇▇▇▇ Brands, Ltd. Deferred Compensation Plan.
8. ▇▇▇▇▇▇ ▇▇▇▇▇ Split Dollar Insurance Agreement.
9. Long-Term Stock Incentive Plan, which amends and restates the Canandaigua
Wine Company, Inc. Stock Option and Stock Appreciation Right Plan, as
amended by Amendment Number One to the Long-Term Stock Incentive Plan of
the Company, as further amended by Amendment Number Two to the Long-Term
Stock Incentive Plan of the Company, as further amended by Amendment Number
Three to the Long-Term Stock Incentive Plan.
10. Incentive Stock Option Plan of the Company, as amended by Amendment Number
One to the Incentive Stock Option Plan of the Company, as further amended
by Amendment Number Two to the Incentive Stock Option Plan of the Company.
11. Annual Management Incentive Plan of the Company, as amended by Amendment
Number One to the Annual Management Incentive Plan of the Company.
12. Asset Purchase Agreement dated February 21, 1999 by and among the Company
and Diageo Inc., UDV Canada Inc., and United Distillers Canada Inc.
13. Stock Purchase Agreement by and between Canandaigua Wine Company, Inc. and
Moet ▇▇▇▇▇▇▇▇, Inc., dated as of April 1, 1999.
14. Stock Purchase Agreement between Franciscan Vineyards, the Selling
Shareholders and Selling Stockholders named therein, and Canandaigua
Brands, Inc., dated April 21, 1999; Vineyard Purchase Agreement between
Canandiagua Brands, Inc. and ▇▇▇▇▇ Properties, Inc., dated as of April 21,
1999; Vineyard Purchase Agreement be-
- 3 -
tween Canandaigua Brands, Inc. and Stonewall Canyon Vineyards, LLC, dated
as of April 21, 1999; Grape Purchase Agreement, between Franciscan
Vineyards, Inc. ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Properties, LLC and Canandaigua Brands,
Inc., dated as of June 4, 1999, Guaranty, by Canandaigua Brands, Inc. in
favor of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Properites LLC, dated as of June 4, 1999; Grape
Purchase Agreement, between Franciscan Vineyards, Inc. H/Q Vineyards LLC
and Canandaigua Brands, Inc.; Guaranty, by Canandaigua Brands, Inc. in
favor of H/Q Vineyards LLC, dated as of June 4, 1999; Wine Processing
Agreement, between Franciscan Vineyards, Inc., H/Q Wines LLC and
Canandaigua Brands, Inc., dated as of June 4, 1999; Guaranty, by
Canandaigua Brands, Inc. in favor of H/Q Wines LLC, dated as of June 4,
1999; ACSA Stock Agreement, among Alto de Casablanca S.A., Franciscan
Vineyards, Inc. and Asesoria e Inversiones ▇▇▇ S.A., dated as of June 1,
1999; EVSA Stock Agreement, among Empresas Vitivinicolas S.A., Franciscan
Vineyards, Inc. and Asesoria e Inversiones ▇▇▇ S.A., dated as of June 1,
1999; ACSA Distribution Agreement, by and between Franciscan Vineyards,
Inc., Alto de Casablanca S.A., H/Q Wines LLC, International Brand
Management, Ltd. and Canandaigua Brands, Inc., dated as of June 4, 1999;
Purchase Agreement among ▇▇▇▇▇▇▇▇▇▇ Vineyards, Inc., Tuolomne River
Vintners Group and Canandaigua Wine Company, Inc., dated as of January 30,
2001.
15. Credit Agreement, dated as of October 6, 1999, as amended by Amendment No.
1 thereto on February 13, 2001, between the Company, the guarantors named
therein, the lenders signatory thereto, and The Chase Manhattan Bank, as
Administrative Agent, the Bank of Nova Scotia, as Syndication Agent and
Credit Suisse First Boston and Citicorp USA, Inc., as Co-Documentation
Agents.
ANNEX II
Form of Opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
(i) Each of the Subsidiaries of the Company listed on Exhibit I attached
hereto (the "Subsidiaries") 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 Subsidiaries is duly
qualified and in good standing as a foreign corporation in each jurisdiction
listed for it on Exhibit II attached hereto. The Company and each Subsidiary 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 Final Prospectus. All of the issued and outstanding capital stock of each
Subsidiary 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 Subsidiary, the charter or bylaws of such Subsidiary, or,
to the best knowledge of such counsel, any agreement to which such Subsidiary 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 execution, delivery and performance of the Underwriting Agreement
and the transactions contemplated therein by the Company, does not and will not
(A) conflict with the charter or bylaws of any Subsidiary, (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
Subsidiaries 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
Subsidiaries or any of their respective properties.
(iii) To the best knowledge of such counsel after due inquiry, except as
described or referred to in the Final Prospectus: there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any of the Subsidiaries is a party, or to which the property of the
Company or any of the Subsidiaries is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to the Company or
any of the Subsidiaries, 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 Subsidiaries taken as a whole or will materially
adversely affect the consummation of the transactions contemplated by the Final
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
re-
- 2 -
spective properties, that are not described in the Final 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 Subsidiaries
taken as a whole.
(iv) Each of the documents filed by the Company under the Exchange Act and
incorporated by reference into the Final Prospectus (collectively, the
"Documents"), at the time it was filed with the Commission, appeared on its face
to be appropriately responsive in all material respects to the requirements of
the Exchange Act, and the rules and regulations as promulgated by the Commission
under the Exchange Act, except that such counsel need not express any opinion as
to the financial statements, schedules, and other financial data included
therein or incorporated by reference therein, or excluded therefrom or the
exhibits thereto (except to the extent set forth in the next sentence of this
paragraph) and such counsel need not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Documents. To such
counsel's knowledge without having made any independent investigation and based
upon representations of officers of the Company as to factual matters, there
were no contracts or documents required to be filed as exhibits to such
Documents on the date they were filed which were not so filed.
(v) The outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and non-assessable; the Securities have
been duly and validly authorized, and, when issued and delivered to and paid for
by the Underwriters pursuant to this Agreement, will be fully paid and
non-assessable; and, except as set forth in the Final Prospectus, no options,
warrants or other rights to purchase, agreements, or other obligations to issue,
or rights to convert any obligations into or exchange any securities for shares
of capital stock of or ownership interest in the Company are outstanding.
EXHIBIT I TO ANNEX II
SUBSIDIARIES
SUBSIDIARY STATE OF INCORPORATION
---------- ----------------------
▇▇▇▇▇▇ Brands, Ltd. Delaware
▇▇▇▇▇▇ Incorporated Delaware
Batavia Wine Cellars, Inc. New York
Canandaigua Wine Company, Inc. New York
Franciscan Vineyards, Inc. Delaware
▇▇▇▇▇▇ Canada, Ltd. Illinois
EXHIBIT II TO ANNEX II
COMPANY FOREIGN QUALIFICATIONS
------- ----------------------
Canandaigua Brands, Inc. New York
California
Florida
Georgia
Michigan
Oklahoma
New Hampshire
North Carolina
New Jersey
▇▇▇▇▇▇ Incorporated None
▇▇▇▇▇▇ Brands, Ltd. California
Kentucky
Illinois
Florida
Maine
Oklahoma
New Hampshire
North Carolina
New Jersey
West Virginia
Batavia Wine Cellars, Inc. New Jersey
Canandaigua Wine Company, Inc. California
Washington
Oregon
Franciscan Vineyards, Inc. None
ANNEX III
Form of Opinion of ▇▇▇▇▇▇▇▇ Chance LLP, Freshfields Bruckhaus ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
(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 execution, delivery, and performance by Constellation Brands, Inc.
of the Underwriting Agreement and the transactions contemplated therein and the
transactions contemplated by the Final Prospectus 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 such 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).
(iii) To the best knowledge of such counsel after due inquiry, except as
described or referred to in the Final Prospectus: there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any of its subsidiaries is a party, or to which the property of the
Company or any of its subsidiaries is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to the Company or
any of its subsidiaries, 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 its subsidiaries taken as a whole; and all pending
legal or governmental proceedings to which the Company or any of its
subsidiaries is a party or that affect any of their respective properties, that
---------------------------
* The opinions in paragraphs (i), (ii) and (iii) will be given as to
Canandaigua Limited by ▇▇▇▇▇▇▇▇ Chance LLP. The opinions in paragraphs (i)
and (ii) will be given as to ▇▇▇▇▇▇ ▇▇▇▇▇, Ltd. by ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇ LLP. The opinions in paragraph (iii) will be given as ▇▇▇▇▇▇
▇▇▇▇▇, Ltd. by ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP. The opinions in paragraph (i) will be
given as to ▇▇▇▇▇▇▇ ▇▇▇▇▇ plc by Freshfields Bruckhaus ▇▇▇▇▇▇▇▇. The
opinions in paragraph (iii) will be given as ▇▇▇▇▇▇▇ ▇▇▇▇▇ plc by internal
counsel to ▇▇▇▇▇▇▇ ▇▇▇▇▇ plc.
are not described in the Final 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 its subsidiaries taken as a whole.
EXHIBIT A
[Form of Lock-Up Agreement]
Constellation Brands, Inc.
--------------------------
Public Offering of Class A Common Stock
---------------------------------------
February 26, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
UBS Warburg LLC
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Constellation
Brands, Inc., a Delaware corporation (the "Company"), and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Class A Common Stock, $.01 par value (the
"Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., offer, sell, contract to sell, pledge or
otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of the Underwriting Agreement, other than (i) shares of Common Stock disposed of
as bona fide gifts and (ii) shares of Common Stock sold upon exercise of stock
options pursuant to the Company's Cashless Exercise Program.
- 2 -
If for any reason the Underwriting Agreement shall be terminated prior to
the Closing Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
Yours very truly,
-------------------------------------
Name:
Address: