SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of June 9, 1998, by and between THE CHALONE WINE GROUP, LTD., a
California corporation ("Borrower"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION
("Bank").
RECITALS
WHEREAS, Borrower is currently indebted to Bank pursuant to the terms
and conditions of that certain Credit Agreement between Borrower and Bank dated
as of July 30, 1997, as amended from time to time ("Credit Agreement").
WHEREAS, Bank and Borrower have agreed to certain changes in the terms
and conditions set forth in the Credit Agreement and have agreed to amend the
Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:
1. The following is hereby added to the Credit Agreement as Section
5.11:
"SECTION 5.11. YEAR 2000 COMPLIANCE. Perform all acts
reasonably necessary to ensure that (a) Borrower and any business in
which Borrower holds a substantial interest, and (b) all customers,
suppliers and vendors that are material to Borrower's business, become
Year 2000 Compliant in a timely manner. Such acts shall include,
without limitation, performing a comprehensive review and assessment of
all of Borrower's systems and adopting a detailed plan, with itemized
budget, for the remediation, monitoring and testing of such systems. As
used herein, "Year 2000 Compliant" shall mean, in regard to any entity,
that all software, hardware, firmware, equipment, goods or systems
utilized by or material to the business operations or financial
condition of such entity, will properly perform date sensitive
functions before, during and after the year 2000. Borrower shall,
immediately upon request, provide to Bank such certifications or other
evidence of Borrower's compliance
with the terms hereof as Bank may from time to time require."
2. Section 6.2 is hereby deleted in its entirety, and the following
substituted therefor:
"SECTION 6.2. CAPITAL EXPENDITURES. Make any additional
investment in fixed assets in the fiscal year ending March 31, 1998 in
excess of an aggregate of $4,900,000.00 excluding capital expenditures
reasonably required to replace fixed assets destroyed or damaged in the
1996 PG&E fire and $3,000,000.00 thereafter per annum."
3. Section 6.3 is hereby deleted in its entirety, and the following
substituted therefor:
"SECTION 6.3. OTHER INDEBTEDNESS. Create, incur, assume or
permit to exist any indebtedness or liabilities resulting from
borrowings, loans or advances, whether secured or unsecured, matured or
unmatured, liquidated or unliquidated, joint or several, except (a)
liabilities of Borrower to Bank; (b) any other liabilities of Borrower
existing as of December 31, 1997, and disclosed to Bank in writing
prior to, the date hereof; (c) purchase money indebtedness (inclusive
of capitalized leases) in the maximum aggregate principal amount of
$750,000.00 incurred to purchase equipment; and (d) $1,100,000.00 of
assumed debt for the acquisition of Vintage lane during March 1998."
4. Except as specifically provided herein, all terms and conditions of
the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.
5. Borrower hereby remakes all representations and warranties contained
in the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
XXXXX FARGO BANK,
THE CHALONE WINE GROUP, LTD. NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx O'Melveny
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Xxxxx O'Melveny
Title: CFO Vice President
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