Exhibit (e)(3)
Xxxxxxxx Wine Estates Holdings, Inc.
000 Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxx, Xxxxxxxxxx 00000
August 28, 2000
TPG GenPar, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Ladies and Gentlemen:
This letter (this "Agreement") confirms certain agreements between TPG
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GenPar, L.P., a Delaware limited partnership (together with its successors and
permitted assigns, "TPG"), and Xxxxxxxx Wine Estates Holdings, Inc., a Delaware
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corporation (the "Company"), with respect to the proposed acquisition of at
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least a majority stake in the equity of the Company (such acquisition of at
least a majority stake, the "Acquisition") by Xxxxxx'x Brewing Group Limited
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(ABN: 49 000 000 000), a corporation organized under the laws of the State of
South Australia, Commonwealth of Australia ("Fiji"). In connection with the
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transaction, Fiji, Bordeaux Acquisition Corp., and the Company are expected to
enter into an Agreement and Plan of Merger (the "Merger Agreement").
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The parties hereby agree as follows:
1. In consideration of the investment banking and financial advisory
services provided to the Company by TPG in connection with the Acquisition
through the date hereof, in the event that (i) the Effective Time occurs or (ii)
any fee becomes payable by the Company pursuant to Section 8.2 of the Merger
Agreement, the Company shall pay to, or as directed by, TPG, in immediately
available funds, a fee of U.S.$4,000,000 in cash (the "Cash Fee") on the first
Business Day following August 28, 2003 (the "Payment Date"); provided, however,
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that execution and delivery of the Option Agreement (as defined below) by the
Company and TPG shall be deemed to constitute full payment by the Company in
satisfaction of the Cash Fee.
2. The parties hereby agree to use their reasonable best efforts, from
the date hereof until the Payment Date, to negotiate in good faith an agreement
(the "Option Agreement") which shall be enforceable under applicable law and in
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recordable form and which shall provide for the grant by the Company to TPG of
an exclusive and irrevocable option (the "Option") to purchase, at a price equal
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to book value as of the date hereof, the property generally described on
Schedule 1 hereto (the "Italy Property") and the property generally described on
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Schedule 2 hereto (the "California Property," and together with the Italy
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Property, the "Properties"), including reasonable rights of access to the
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Properties and any other easements and covenants as shall be reasonably required
by TPG. The Option Agreement shall include such other terms with respect to the
Option and the Properties as the parties shall mutually agree, including (i) if
requested by the Company, a reasonable right of first offer with respect to any
subsequent sale of the Properties by TPG, (ii) such rights of the Company to use
the Properties as are agreed upon by the parties, and (iii) such rights of the
Company to use the image, name and other intellectual property relating the
Properties in the conduct of business of the Company as are agreed upon by the
parties. The Option shall expire at such time as the parties shall agree.
3. Notwithstanding the foregoing, in the event that either party
reasonably believes that Schedule 1 and/or Schedule 2 does not describe
accurately the real property underlying and surrounding the Manor House (in the
case of the California Property) and the villa (in the case of the Italy
Property), such party shall have the right at any time during the six month
period following the date hereof to contest the description of real property set
forth on such Schedule. In such event, the parties shall use their reasonable
best efforts to negotiate in good faith an accurate description of such real
property.
4. TPG acknowledges that the Company does not currently own the Italy
Property, and the Company will, in its sole discretion, determine whether to
consummate the transaction to acquire the capital shares of the Italian
corporation that currently owns the Italy Property.
5. Any notice, demand or communication regarding this Agreement will be
in writing and will be deemed to have been given when delivered personally or by
facsimile, receipt confirmed, to the party designated to receive such notice, or
on the date following the day sent by a nationally recognized overnight courier,
or on the third (3rd) business day after the same is sent by certified mail,
postage and charges prepaid, directed to the following addresses or to such
other or additional addresses as any party might designate by written notice to
the other party:
To the Company: 000 Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Fax No.: 000-000-0000
To TPG: 000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Fax No.: 000-000-0000
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With Copy To: Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Fax No.: 000-000-0000
6. This Agreement constitutes the entire agreement between TPG and the
Company relating to the Cash Fee and the Properties. This Agreement supersedes,
in all respects, all prior written or oral agreements, if any, between the
parties relating to the Cash Fee and the Properties and there are no agreements,
understandings, warranties or representations between TPG and the Company except
as set forth herein.
7. This Agreement will inure to the benefit of and bind the respective
successors and permitted assigns of TPG and the Company.
8. (a) If (i) the Effective Time occurs or (ii) any fee becomes payable
by the Company pursuant to Section 8.2 of the Merger Agreement, the Company
agrees to indemnify fully, hold harmless and defend TPG and its successors and
assigns (collectively, the "Indemnitees") from and against any and all costs and
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expenses (including, but not limited to, reasonable attorneys' fees and the
costs and expenses of investigating, defending and litigating any claims),
judgments, fines, losses, claims, damages and liabilities to the extent
sustained or incurred by any Indemnitee in connection with any action, suit or
proceeding by or on behalf of any stockholder of the Company, other than any
Indemnitee (a "Claim"), arising out of, relating to or based upon this Agreement
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or the Option Agreement or the transactions contemplated hereby or thereby;
provided, that the Indemnitee acted in good faith in connection with the matters
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that are the subject of such Claim.
(b) Each Indemnitee shall give the Company notice in writing as soon
as practicable after Indemnitee receives notice of a Claim made against
Indemnitee for which indemnification will or could be sought under this section.
The failure to notify the Company as required pursuant to this paragraph (b)
will not relieve the Company from any liability hereunder unless and to the
extent the Company did not otherwise learn of such action and such failure
results in the forfeiture by the Company of any significant right or defense. In
addition, Indemnitee shall give the Company such information and cooperation as
the Company may reasonably request in connection with the defense of any Claim
for which indemnification is sought under this section.
(c) The Company will be entitled to participate in the defense of
any Claim for which indemnification will or could be sought under this section
or to assume the defense thereof, with counsel reasonably satisfactory to the
Indemnitee, provided that in the event that (1) the use of counsel chosen by the
Company to represent Indemnitee would present such counsel with an actual or
potential conflict, (2) the named parties in any such Claim (including any
impleaded parties) include or is reasonably likely to include both the Company
and Indemnitee and Indemnitee shall conclude that there may be one or more legal
defenses available to it that are different from or in addition to those
available to the Company, or (3) any such representation by the Company would be
precluded under the applicable standards of professional conduct then
prevailing, then Indemnitee will be entitled to retain separate counsel
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(but not more than one law firm for all Indemnitees plus, if applicable, local
counsel in respect of any particular Claim) at the Company's expense. The
Company will not, without the prior written consent of the Indemnitee, effect
any settlement of any threatened or pending Claim which the Indemnitee is or
could have been a party unless such settlement solely involves the payment of
money and includes an unconditional release of the Indemnitee from all liability
on any claims that are the subject matter of or are related to such Claim.
(d) The Company will not be liable under this section to make any
payment to an Indemnitee to the extent Indemnitee has otherwise actually
received payment (net of expenses incurred in connection therewith) under any
insurance policy, the certificate of incorporation or bylaws of the Company or
otherwise of the amounts otherwise indemnifiable hereunder.
9. If any provision of this Agreement is determined by a court having
jurisdiction to be illegal, invalid or unenforceable under any present or future
law, the remainder of this Agreement will not be affected thereby. It is the
intention of the parties that if any provision is so held to be illegal, invalid
or unenforceable, there will be added in lieu thereof a provision as similar in
terms to such provision as is possible that is legal, valid and enforceable.
10. This Agreement may be executed in counterparts, each of which will
be deemed an original document, but all of which will constitute a single
document. This document will not be binding on or constitute evidence of a
contract between the parties until such time as a counterpart of this document
has been executed by each party and a copy thereof delivered to the other party
to this Agreement.
11. Neither this Agreement nor any of the provisions hereof can be
changed, waived, discharged or terminated, except by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought.
12. Neither party may assign this Agreement or any of the rights and
obligations hereunder without the consent of the other party; provided that,
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notwithstanding the foregoing, TPG shall be permitted to assign all or any
portion of its rights hereunder to any of its affiliates.
13. The parties acknowledge that TPG may elect to perform due diligence
with respect to the Properties and the Company agrees for such purposes to
provide to TPG and its designees (including title insurance companies,
architects, engineers and land surveyors) reasonable access to the Properties
and to its records relating to the Properties. The parties further agree to
cooperate with respect to obtaining any required consents to the Option
Agreement, including the consent of any parties holding a mortgage or other
security interest on the Properties to the release of the Properties from the
lien of such mortgages. The Company agrees to maintain the Properties (including
the improvements and personal property located thereon) in good order and repair
and in a manner consistent with the standards with which such Properties have
historically been maintained.
14. This Agreement shall be governed by, and interpreted in accordance
with, the laws of the State of Delaware applicable to contracts made and to be
performed in that state, without reference to its conflicts of laws rules. The
parties consent to the venue and jurisdiction of any federal or state court
sitting in Delaware in any action brought to enforce the terms of this
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Agreement. The parties irrevocably and unconditionally submit to the
jurisdiction (both subject matter and personal) of any such court and
irrevocably and unconditionally waive: (a) any objection any party might now or
hereafter have to the venue in any such court; and (b) any claim that any action
or proceeding brought in any such court has been brought in an inconvenient
forum.
15. Capitalized terms used but not defined herein shall have the meanings
given such terms in the Merger Agreement.
16. The parties hereto agree that the Company's liability to TPG hereunder
(other than, and not including, any liability pursuant to Section 8 hereof)
shall not exceed U.S.$4,000,000.
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Please confirm that the above correctly reflects our understanding and
agreement with respect to the foregoing matters by endorsing a copy of this
letter.
Very truly yours,
XXXXXXXX WINE ESTATES HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Chairman & CEO
AGREED AND ACCEPTED
AS OF THE DATE ABOVE:
TPG GENPAR, L.P.
By: TPG Advisors, Inc.,
its General Partner
/s/ Xxxxx X. Xxxxxxx
By:-----------------------
Name: Xxxxx X. Xxxxxxx
Title: Founding Partner
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Schedule 1
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Italy Property
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. The land situated in San Xxxxxxxx Xxx di Pesa, Italy and the villa, cellar,
mill (frantoio) and parking space of "Fattoria di Gabbiano", located in San
Xxxxxxxx Xxx xx Xxxx (Fi), Italy, Via Gabbiano, identified (i) at "Nuovo
Catasto Edilizio Xxxxxx" at the Municipality of San Xxxxxxxx Xxx xx Xxxx at
Sheet 47, parcels 47, 48 and 150, and (ii) at "Nuovo Catasto Terreni" at
the Municipality of San Xxxxxxxx Xxx di Pesa at Sheet 73, parcels 47-49 and
at Sheet 73, parcel 46.
. All fixtures and personal property as of the date hereof situated on,
attached to or used in connection with the foregoing property or the
buildings or improvements thereon, except wine, barrels and other personal
property used in the production and storage of wine.
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Schedule 2
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California Property
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. All of the land situated in Napa Valley, California and identified as
"Tract Two" on the ALTA/ACSM land title survey prepared by Xxxxxxx X.
Xxxxxx & Associates, Inc., dated March 5, 1997, which survey depicts the
lands of Stag's Leap Associates, a California limited partnership, as to
Tracts One, Two and Four and Xxxx Xxxxxxx, an unmarried man as to Tract
One, as designated in the Preliminary Title Report dated July 8, 1996.
. All of the buildings and improvements located on such land, including the
building known as the "Manor House" and the cottages and cabins located on
Tract Two.
. All fixtures and personal property as of the date hereof situated on,
attached to or used in connection with the foregoing property or the
buildings and improvements thereon, including all personal property
purchased in connection with the recently completed renovation of the Manor
House and the cottages and cabins, but excluding wine, barrels and other
personal property used in the production and storage of wine.
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