Exhibit 10.56
FIRST AMENDMENT
This FIRST AMENDMENT (this "Amendment") dated as of June 16, 2003 is among
THE XXXXXX MONDAVI CORPORATION and R.M.E., INC. (each a "Borrower" and together
the "Borrowers"), various Lenders (as defined in the Credit Agreement referred
to below) and BANK OF AMERICA, N.A., as administrative agent for the Lenders (in
such capacity, the "Administrative Agent"), Swing Line Lender and L/C Issuer.
WHEREAS, the Borrowers, the Lenders, the Swing Line Lender, the L/C Issuer
and the Administrative Agent are parties to a Credit Agreement dated as of
December 14, 2001 (the "Credit Agreement"); and
WHEREAS, the parties hereto desire to amend the Credit Agreement as set
forth below;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINED TERMS
Unless otherwise defined in this Amendment, capitalized terms used herein
shall have the respective meanings assigned to such terms in the Credit
Agreement.
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
Upon the effectiveness of this Amendment pursuant to Article IV, the Credit
Agreement shall be amended as follows:
2.1 Modification to Adjusted EBITDA. The definition of "Adjusted EBITDA"
in Section 1.1 shall be amended in its entirety to read as follows:
"Adjusted EBITDA" means, for any Computation Period, EBITDA for such
Computation Period plus any loss incurred on the sale of any assets during
such Computation Period minus any gain realized on the sale of any assets
during such Computation Period; provided that if there is an Acquisition or
a disposition of a division, a particular line of business or a Subsidiary
by RMC or any Restricted Subsidiary during such Computation Period,
Adjusted EBITDA shall be calculated on a pro forma basis for such
Computation Period (assuming, for purposes of such pro forma calculation,
that the consummation of such Acquisition or disposition occurred on the
first day of such Computation Period).
2.2 New Defined Term. Section 1.1 shall be amended by the addition of the
following defined term in proper alphabetical sequence:
1
"Unencumbered Assets Ratio" means, for any Computation Period, the
ratio of (a) the sum of the net book value, as of the last date of such
Computation Period, of the (i) accounts receivable, (ii) inventory
(calculated on a first-in, first-out basis) and (iii) plant, property and
equipment (excluding any plant, property and equipment subject to any lease
which gives rise to Synthetic Lease Obligations) of RMC and its Restricted
Subsidiaries, determined on a consolidated basis, but excluding any of the
foregoing which is subject to any Lien in favor of any Person other than
the Administrative Agent, to (b) Total Debt minus the sum, without
duplication, of (i) the amount of all Synthetic Lease Obligations and (ii)
the amount of any Debt secured by any Lien in favor of any Person other
than the Administrative Agent, determined on a consolidated basis.
2.3 Interest on Swing Line Loans. Section 2.8 shall be amended by
deleting clause (a)(iii) and substituting the following therefor:
(iii) each Swing Line Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per
annum equal to the Base Rate plus the Base Rate Margin from time to time in
effect or, so long as the Lenders have not been required to fund their
participations in such Swing Ling Loan pursuant to Section 2.4.3(b), such
other rate as is agreed to in writing by the Swing Line Lender and the
Borrowers.
2.4 Amendments to Section 5.5. Section 5.5 shall be amended by (a)
deleting the reference to "September 30, 2001" in clause (b) and substituting
"December 31, 2002" therefor; and (b) deleting the language "the date of the
Audited Financial Statements" in clause (c) and substituting "December 31, 2002"
therefor.
2.5 Tax Shelter Representation. Article V shall be amended by adding
thereto the following new Section 5.18:
5.18 Tax Shelter Regulations. The Borrowers do not intend to treat the
Loans or the Letters of Credit as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4). In the event a
Borrower determines to take any action inconsistent with such intention, it
will promptly notify the Administrative Agent thereof. If a Borrower so
notifies the Administrative Agent, the Borrowers acknowledge that one or
more of the Lenders may treat its Loans and/or its interest in Swing Line
Loans and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such
Treasury Regulation.
2.6 Tax Shelter Covenant. Section 6.2 shall be amended by deleting the
word "and" at the end of clause (c), adding the following new clause (d) after
clause (c) and re-lettering existing clause (d) as clause (e):
(d) promptly after a Borrower has notified the Administrative Agent of
any intention by such Borrower to treat the Loans and/or Letters of Credit
as being a "reportable transaction" (within the meaning of Treasury
Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or any
successor form; and
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2.7 Fixed Charge Coverage Ratio. Section 7.14.1 shall be amended in its
entirety to read as follows:
7.14.1. Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio at the end of any Computation Period to be greater than (a) 1.50 to
1.00 as of the end of any Computation Period ending prior to June 30, 2004
and (b) 1.75 to 1.00 as of the end of any Computation Period on or after
June 30, 2004.
2.8 Minimum Adjusted EBITDA. Section 7.14.2 shall be amended in its
entirety to read as follows:
7.14.2. Minimum Adjusted EBITDA. Permit Adjusted EBITDA for any
Computation Period to be less than (a) for any Computation Period ending on
or prior to June 30, 2004, $65,000,000, and (b) for any Computation Period
ending thereafter, (i) the greater of (A) 85% of the actual Adjusted EBITDA
for the Computation Period ending on the last day of the most recent fiscal
year (without taking account of any Acquisitions or dispositions subsequent
to such Computation Period) and (B) the amount of Adjusted EBITDA required
under this Section 7.14.2 for the Computation Period ending on the last day
of the most recent fiscal year), minus (ii) 75% of the amount by which
Adjusted EBITDA for such Computation Period was reduced by any disposition
made during such Computation Period plus (iii) 75% of the amount by which
Adjusted EBITDA for such Computation Period was increased by any
Acquisition made during such Computation Period.
2.9 Unencumbered Assets Ratio. The following Section 7.14.5 shall be
added in proper numerical sequence:
7.14.5. Unencumbered Assets Ratio. Permit the Unencumbered Assets
Ratio as of the last day of any fiscal quarter to be less than 2.00 to
1.00.
2.10 Disclosure of Tax Structure. Section 10.14 shall be amended by (a)
changing the caption to read "Tax Forms; Tax Structure" and (b) adding the
following new subsection (d) at the end thereof.
(d) The Borrowers agree that the Administrative Agent and each Lender
may disclose, without limitation of any kind, any information with respect
to the "tax treatment" and "tax structure" (in each case, within the
meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or
other tax analyses) that are provided to the Administrative Agent or such
Lender relating to such tax treatment and tax structure.
2.11 Revised Pricing Schedule. Schedule 1.1 shall be replaced in its
entirety with Schedule 1.1 attached hereto.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
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The Borrowers represent and warrant to the Administrative Agent and the
Lenders that:
3.1 Authorization; No Conflict. The execution and delivery by each
Borrower of this Amendment, and the performance by such Borrower of its
obligations under the Credit Agreement as amended hereby (as so amended, the
"Amended Agreement"), have been duly authorized by all necessary corporate or
other organizational action and do not and will not (a) contravene the terms of
any of its Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any Contractual Obligation
to which it or any of its Subsidiaries is a party or any order, injunction, writ
or decree of any Governmental Authority to which it or any of its Subsidiaries
or any of their respective property is subject or (c) violate any Laws. No
approval, consent, exemption, authorization or other action by, or notice to, or
filing with, any Governmental Authority is necessary or required in connection
with the execution and delivery of this Amendment by either Borrower or the
performance by such Borrower of its obligations under the Amended Agreement
3.2 No Defaults. No Default or Event of Default has occurred and is
continuing or will result from the effectiveness of this Amendment.
3.3 Representations and Warranties. After giving effect to this
Amendment, the representations and warranties of the Borrowers contained in each
Loan Document are true and correct in all material respects as if made on and as
of the date first set forth above (except to the extent stated to relate to a
specific earlier date, in which case they were true and correct as of such
earlier date).
ARTICLE IV
EFFECTIVENESS
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This Amendment shall become effective upon satisfaction of the following
conditions precedent:
4.1 Documentary Conditions. The Administrative Agent shall have received
the following, in sufficient number of counterparts for itself and each Lender,
and each dated as of a date, and otherwise in form and substance, satisfactory
to the Administrative Agent:
(a) This Amendment. Counterparts of this Amendment duly executed by
the Borrowers and the Required Lenders (it being understood that the
Administrative Agent may rely on a facsimile counterpart signature page
hereof for purposes of determining whether a party hereto has executed a
counterpart hereof);
(b) Company Resolutions. A copy, duly certified by the secretary or an
assistant secretary of the each Borrower, of resolutions of the board of
directors of such Borrower authorizing the execution, delivery and
performance by such Borrower of this Amendment; and
(c) Other. Such other instruments or documents as the Administrative
Agent or any Lender may reasonably request in connection with this
Amendment.
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4.2 Other Conditions. The effectiveness of this Amendment is subject to
the additional conditions precedent that (a) after giving effect to the terms
hereof, no Default or Event of Default shall have occurred and be continuing,
(b) the representations and warranties of the Borrowers contained in the Loan
Documents shall be true and correct in all material respects with the same
effect as though made on and as of the date hereof (except to the extent any
representation or warranty is stated to relate to a specific earlier date, in
which case it was true and correct on such earlier date), (c) the Borrowers
shall have paid to the Administrative Agent, for the account of each Lender
which delivers a signed counterpart hereof on or before June 13, 2003, an
amendment fee equal to 0.075% times the Commitment of such Lender and (d) the
Borrowers shall have paid all outstanding fees and expenses of the
Administrative Agent, counsel to the Administrative Agent and Banc of America
Securities LLC, to the extent invoiced.
ARTICLE V
MISCELLANEOUS
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5.1 Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when executed and delivered shall be deemed to be an original and all of
which taken together shall constitute but one and the same instrument.
5.2 Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of California.
5.3 References to Agreement. Upon the effectiveness of this Amendment,
(a) each reference in the Credit Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Amended Agreement and (b) each reference to the "Credit Agreement" in any other
Loan Document shall mean and be a reference to the Amended Agreement.
5.4 Legal Fees and Expenses. Each Borrower agrees to pay, on demand, all
Attorney Costs of the Administrative Agent in connection with the preparation,
execution and delivery of this Amendment and any transaction or document
contemplated hereby.
[Signatures Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers, effective as of the date
first above written.
THE XXXXXX MONDAVI CORPORATION
By:
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Name:
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Title:
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R.M.E, INC.
By:
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Name:
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Title:
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BANK OF AMERICA, N.A., as
Administrative Agent
By:
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Name:
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Title:
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BANK OF AMERICA, N.A., as a Lender, L/C
Issuer and Swing Line Lender
By:
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Name:
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Title:
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S-1
COOPERATIEVE CENTRALE RAIFFEISEN - BOERENLEENBANK B.A.,
"RABOBANK INTERNATIONAL," NEW YORK BRANCH, as Documentation
Agent and as a Lender
By:
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Name:
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Title:
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By:
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Name:
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Title:
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BANK OF THE WEST
(formerly known as United California Bank)
By:
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Name:
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Title:
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U.S. BANK NATIONAL ASSOCIATION
By:
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Name:
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Title:
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BNP PARIBAS
By:
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Name:
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Title:
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S-2
SCHEDULE 1.1
PRICING SCHEDULE
Eurodollar Margin / Commitment Fee Rate / L/C
Level L/C Fee Rate for Standby Base Rate Fee Rate for Commercial
----- Letters of Credit Margin Letters of Credit
-------------------------- --------- --------------------------
I 1.375% 0.500% 0.300%
II 1.000% 0.125% 0.225%
III 0.875% 0.000% 0.175%
IV 0.750% 0.000% 0.150%
Level I applies when the Capitalization Ratio is equal to or greater than
0.550 to 1.
Level II applies when the Capitalization Ratio is equal to or greater than
0.500 to 1 but less than 0.550 to 1.
Level III applies when the Capitalization Ratio is equal to or greater than
0.450 to 1 but less than 0.500 to 1.
Level IV applies when the Capitalization Ratio is less than 0.450 to 1.
The applicable Level shall be adjusted, to the extent applicable, 55 days
(or, in the case of the last fiscal quarter of any fiscal year, 100 days) after
the end of each fiscal quarter based on the Capitalization Ratio as of the last
day of such fiscal quarter; provided that if RMC fails to deliver the financial
statements required by Section 6.1(a) or (b), as applicable, and the related
certificate required by Section 6.2(a) by the 55th day (or, if applicable, the
100th day) after any fiscal quarter, Level I shall apply until such financial
statements are delivered. Level IV shall not be available until the later of May
25, 2004 and the 55th (or, if applicable, 100th) day after the end of the first
fiscal quarter on which the Capitalization Ratio has been less than or equal to
0.450 to 1 as of the last day of two consecutive Computation Periods.
