AMENDED AND RESTATED FORBEARANCE AGREEMENT
EXHIBT 10.1
AMENDED AND RESTATED FORBEARANCE AGREEMENT
This AMENDED AND RESTATED FORBEARANCE AGREEMENT, dated as of April 2, 2024, and deemed effective as of March 31, 2024 (the "Forbearance Effective Date") (as amended, restated, supplemented or otherwise modified from time to time, this "Agreement") is by and among VINTAGE WINE ESTATES, INC., a Nevada corporation ("Holdings"), VINTAGE WINE ESTATES, INC., a California corporation ("Borrower Agent"), each Subsidiary of Borrower Agent party to this Agreement (together with Borrower Agent, each a "Borrower" and, collectively, the "Borrowers"), the Lenders party to this Agreement (constituting all Lenders under the Loan Agreement as of the date hereof, the "Consenting Lenders"), and BMO BANK N.A., as successor in interest to BANK OF THE WEST ("BMO"), as administrative agent and collateral agent (in such capacity, together with its successors and assigns in such capacity, the "Agent"), to that Second Amended and Restated Loan and Security Agreement and Waiver, dated of December 13, 2022 (as amended by Amendment No. 1, dated as of February 13, 2023, Amendment No. 2, dated as of March 31, 2023, Amendment No. 3, dated as of May 9, 2023, and Amendment No. 4, dated as of October 12, 2023, and as further amended, restated, amended and restated, supplemented, or otherwise modified from time to time prior to the date hereof, the "Loan Agreement"). This Agreement amends and restates that certain Forbearance Agreement, dated as of February 28, 2024 (the “Original Forbearance Effective Date”), among Holdings, Borrowers, Consenting Lenders (as defined therein) and Agent (the “Original Forbearance Agreement”).
W I T N E S S E T H
WHEREAS, Holdings and the Borrowers (collectively, the "Obligors" and each an "Obligor") have requested that the Consenting Lenders and the other Secured Parties forbear from accelerating the Obligations or otherwise exercising any rights or remedies under the Loan Documents, in accordance with and subject to Section 3 of this Agreement, as a result of the Designated Defaults (as defined in the Original Forbearance Agreement;
WHEREAS, additional Defaults or Events of Default have or may have occurred under Section 11.1(b), Section 11.1(c) and/or Section 11.1(d) of the Loan Agreement resulting from (i) the Obligors’ delivery on March 19, 2024, of the Borrowing Base Certificate, detailed aged trial balance of Accounts, inventory and reconciliation reports and a listing of each Borrower’s trade payables with respect to the month ended February 29, 2024, that were required to be delivered on March 15, 2024, pursuant to Sections 8.1, 8.2.1, 8.3.1, 10.1.2(f) and 10.1.2(g) of the Loan Agreement (the “Borrowing Base Reporting Events of Default”) and (ii) the Borrowing Base Reporting Events of Default, including with respect to any representation or warranty given or deemed given as if such Borrowing Base Reporting Events of Default were not in existence or to any notice requirement relating to the Borrowing Base Reporting Events of Default (clauses (i) and (ii) are collectively the "Additional Designated Defaults" and shall be deemed included in the Designated Defaults); and
WHEREAS, the Obligors have requested that the Consenting Lenders grant a period of forbearance with respect to the Designated Defaults, and the Consenting Lenders party hereto, which constitute all of the Lenders under the Loan Agreement as of the date hereof, agree to accommodate such request of Holdings and the Borrowers on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Incorporation of Recitals. Each of the Obligors acknowledges that the recitals set forth above are true and correct in all respects.
SECTION 2. Defined Terms and Other Definitional Provisions. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Loan Agreement.
SECTION 3. Forbearance.
SECTION 4. Amendments.
"Applicable Margin: the per annum margin set forth below:
Time Period |
Revolver Loans |
Unused Line Fee Rate for Revolver Loans |
Term Loan, Equipment Loan, Capital Expenditure Loans and Delayed Draw Term Loans |
Unused Line Fee Rate for Term Loans and Delayed Draw Term Loans |
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SOFR |
Adjusted Base Rate |
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SOFR |
Adjusted Base Rate |
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Forbearance Period |
4.00% |
3.00% |
0.20% |
4.00% |
3.00% |
0.25% |
“Notwithstanding anything herein to the contrary and in addition to the scheduled amortization payments of the Term Loans but less any mandatory prepayments made pursuant to Section 5.4.2 or Section 5.4.3 on or after the Amendment No. 4 Closing Date (but prior to such scheduled mandatory prepayments), Borrower shall make the following mandatory prepayments of the Term Loans which shall be applied to the remaining installments of the Term Loans on a pro rata basis in inverse order of maturity: (i) $10,000,000 by no later than May 15, 2024, (ii) $20,000,000 (inclusive of amounts paid under clause (i) above) by no later than June 30, 2024, and (iii) $45,000,000 (inclusive of amounts paid under clauses (i) and (ii) above) by no later than December 31, 2024. For the avoidance of doubt, the amount of any mandatory prepayments made under Section 5.4.2 or 5.4.3 on or after the Amendment No. 4 Closing Date (but prior to such scheduled mandatory prepayments) shall reduce the amount of mandatory prepayments required to be made under this Section 5.4.1 on a dollar-for-dollar basis.”
For the avoidance of doubt, the amendment set forth in this clause (e) is deemed to be effective as of the Forbearance Effective Date.
"Notwithstanding the occurrence or continuance of any Trigger Period and anything to the contrary contained herein or in any other Loan Document, the Agent and the other Secured Parties will take no action to sweep any amounts held in the Borrowers' operating bank accounts or any bank account maintained by VWE Captive, LLC. Borrowers agree not to maintain in their operating accounts cash balances in excess of their projected cash needs during the Forbearance Period and any excess cash shall be paid to Agent for application against the outstanding Revolver Loans."
SECTION 5. Confirmation of Loan Documents. Each of the Obligors hereby confirms and ratifies all of its Obligations under the Loan Documents to which it is a party. Each of the Obligors hereby confirms and ratifies that its Obligations under the Loan Agreement are and shall remain secured by the Collateral, pursuant to the terms of the Loan Agreement and the other Loan Documents. By its execution on the respective signature lines provided below, each of the Obligors hereby confirms and ratifies all of its respective Obligations and the Liens granted by it under the Security Documents to which it is a party and confirms that all references in such Security Documents to the "Loan Agreement" (or words of similar import) refer to the Loan Agreement as amended hereby without impairing any such Obligations or Liens in any respect.
SECTION 6. Representations and Warranties.
SECTION 7. Covenants.
For the avoidance of doubt, failure of any Obligor to comply with the foregoing covenants shall be an immediate Event of Default under the Loan Agreement and an immediate termination of the Forbearance Period.
SECTION 8. Conditions to Effectiveness of this Agreement. This Agreement shall be effective when (i) counsel for the Agent has received a counterpart of this Agreement, executed and delivered by the Obligors and the Consenting Lenders; and (ii) the Agent has received payment of the Second Forbearance Fees; provided that, upon the effectiveness of this Agreement in accordance with this Section 8, this Agreement shall be deemed to be effective as of the Forbearance Effective Date.
SECTION 9. Effects on Loan Documents.
(a) All Loan Documents shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.
(b) Except as set forth herein, the execution, delivery, and effectiveness of this Agreement shall not operate as a waiver of any right, power, or remedy of the Agent or any Lender under any of the Loan Documents, nor constitute a waiver of any provision of the Loan Documents.
(c) The Obligors and the other parties hereto acknowledge and agree that this Agreement shall constitute a Loan Document on and after the Forbearance Effective Date.
SECTION 10. Amendments; Execution in Counterparts.
(a) Other than the amendments in Section 4 of this Agreement, this Agreement shall not constitute a modification or waiver of any provision of the Loan Agreement and, except as expressly stated herein, shall not be construed as a forbearance or consent to any further or future action on the part of the Obligors that would require a forbearance or consent of the Lenders. The provisions of the Loan Agreement are and shall remain in full force and effect.
(b) The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified, or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless amended, modified, supplemented, waived or consented to, in accordance with Section 14.1 of the Loan Agreement. This Agreement may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
SECTION 11. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each party hereto and their respective successors and assigns.
SECTION 12. No Third-Party Beneficiaries. No Person other than the Obligors, the Agent, and the Consenting Lenders shall have any rights hereunder or be entitled to rely on this Agreement, and all third-party beneficiary rights are hereby expressly disclaimed.
SECTION 13. Severability. If any provision of this Agreement is held to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 14. Time of Essence. Time is of the essence in the performance of each of the obligations of the Obligors hereunder and with respect to all conditions to be satisfied by such parties.
SECTION 15. Prior Negotiations; Entire Agreement. This Agreement, the Loan Agreement, and the other Loan Documents constitute the entire agreement of the parties hereto with respect to the subject matter hereof, and supersede all other prior negotiations, understandings, or agreements with respect to the subject matter hereof, whether oral or written.
SECTION 16. Interpretation. This Agreement is the product of negotiations of the parties and in the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any party by reason of that party having drafted or caused to be drafted this Agreement, or any portion hereof, shall not be effective in regard to the interpretation hereof.
SECTION 17. RELEASE BY XXXXXXXXX AND GUARANTOR. The Obligors, for themselves, and for their respective agents, servants, officers, directors, shareholders, members, employees, heirs, executors, administrators, agents, successors and assigns forever release and discharge Agent and Xxxxxxx and their agents, servants, employees, accountants, attorneys, shareholders, subsidiaries, officers, directors, heirs, executors, administrators, successors and assigns from any and all claims, demands, liabilities, accounts, obligations, costs, expenses, liens, actions, causes of action, rights to indemnity (legal or equitable), rights to subrogation, rights to contribution and remedies of any nature whatsoever, known or unknown, which Obligors have, now have, or have acquired, individually or jointly, at any time prior to the date of the execution of this Amendment, including specifically, but not exclusively, and without limiting the generality of the foregoing, any and all of the claims, damages, demands and causes of action, known or unknown, suspected or unsuspected by Obligors which:
(a) Arise out of the Loan Documents;
(b) Arise by reason of any matter or thing alleged or referred to in, directly or indirectly, or in any way connected with, the Loan Documents; or
(c) Arise out of or in any way are connected with any loss, damage, or injury, whatsoever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of Agent or any Lender or any party acting on behalf of Agent or any Xxxxxx committed or omitted prior to the date of this Amendment.
As further consideration for the above release, each Obligor specifically agrees, represents, and warrants that the matters released herein are not limited to matters which are known or disclosed, and such Obligor hereby waives any and all rights and benefits which it now has, or in the future may have, by virtue of the provisions of Section 1542 of the Civil Code of the State of California which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE LENDER OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
Each Obligor is aware that it may later discover facts in addition to or different from those which it now knows or believes to be true with respect to the releases given herein, and that it is nevertheless such Xxxxxxx's intention to settle, release, and discharge fully, finally, and forever all of these matters, known or unknown, suspected or unsuspected, which previously existed, now exist, or may exist. In furtherance of such intention, each Obligor specifically acknowledges and agrees that the releases given in this Amendment shall be and shall remain in effect as full and complete releases of the matters being released, notwithstanding the discovery or existence of any such additional or different facts and that such releases shall not be subject to termination or rescission by reason of any such additional or different facts.
SECTION 18. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA. EACH PARTY HERETO HEREBY AGREES AS SET FORTH FURTHER IN SECTIONS 14.13, 14.14, and 14.15 OF THE CREDIT AGREEMENT AS IF SUCH SECTIONS WERE SET FORTH IN FULL HEREIN, Mutatis mutandis.
SECTION 19. Notice of Designated Defaults. This Agreement and the matters set forth herein shall constitute written notice of the Designated Defaults for purposes of satisfaction of any disclosure requirement in the Loan Agreement or any other Loan Document requiring that the Obligors give notice of, certify as to the absence of, or otherwise disclose in writing the occurrence and/or continuance of any Default or Event of Default and the failure of any Obligor prior to, on, or after the
date hereof to deliver any such notice, certification, or other disclosure of the Designated Defaults shall not constitute a Default or Event of Default under the Loan Agreement.
[Remainder of page intentionally left blank; signatures follow.]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first above written.
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HOLDINGS:
a Nevada corporation By: /s/ Xxxxxxxx Xxxxxxxx Xxxx: Xxxxxxxx Xxxxxxxx Xxxxx: Chief Financial Officer
BORROWERS:
a California corporation By: /s/ Xxxxxxxx Xxxxxxxx Xxxx: Xxxxxxxx Xxxxxxxx Xxxxx: Chief Financial Officer
GROVE ACQUISITION, LLC, a California limited liability company By: /s/ Xxxxxxxx Xxxxxxxx Xxxx: Xxxxxxxx Xxxxxxxx Xxxxx: Chief Financial Officer
GIRARD WINERY LLC, a California limited liability company By: /s/ Xxxxxxxx Xxxxxxxx Xxxx: Xxxxxxxx Xxxxxxxx Xxxxx: Chief Financial Officer
XXXXXXX XXXXX INC., a California corporation By: /s/ Xxxxxxxx Xxxxxxxx Xxxx: Xxxxxxxx Xxxxxxxx Xxxxx: Chief Financial Officer
SPLINTER GROUP NAPA, LLC, a California limited liability company By: /s/ Xxxxxxx Xxxxx Xxxx: Xxxxxxx Xxxxx Xxxxx: Manager
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AGENT AND LENDERS:
BMO BANK N.A., as successor in interest to BANK OF THE WEST, as Agent and Lender
By:/s/ Xxx Xxxxx Xxxx: Xxx Xxxxx Xxxxx: Director
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AgCountry Farm Credit Services, PCA,
as Lender
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Vice President Capital Markets
Greenstone Farm Credit Services, ACA,
as Lender
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: VP of Capital Markets Lending
Greenstone Farm Credit Services, FLCA,
as Lender
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: VP of Capital Markets Lending
RABO AGRIFINANCE LLC,
as Lender
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Its: VP-LFR
Compeer Financial, PCA,
as Lender
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Principal Credit Officer Risk
FARM CREDIT MID-AMERICA, PCA,
as Lender
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: VP Food and Agribusiness
HTLF Bank,
as Lender
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Vice President
FARM CREDIT BANK OF TEXAS,
as Lender
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Portfolio Manager
COMERICA BANK,
as Lender
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Senior Vice President
