**Exhibit 10.22(b)**

 

**MODIFICATION OF CREDIT AGREEMENT**

 

 

THIS MODIFICATION OF CREDIT AGREEMENT(“Modification”) is made as of the 14th day of May, 2003, by andbetween **SOUTHTRUSTBANK**, an Alabama corporation, formerly known as SouthTrust Bank,National Association acting as a Lender and as Administrative Agent and FundingAgent (collectively “Agent”) pursuant to the Credit Agreement (defined below), **WACHOVIABANK, NATIONAL ASSOCIATION**, a national banking association, formerlyknown as First Union National Bank, a national banking association, acting as alender, **NATIONALCITY BANK, NATIONAL ASSOCIATION,** a national banking association,acting as a lender, and **SUNTRUST BANK**, a Georgia corporation,formerly known as SunTrust Bank, South Florida, N.A., a national bankingassociation acting as a lender (collectively the “Lenders”), and **TODHUNTERINTERNATIONAL, INC.**, a Delaware corporation (the “Borrower”)

 

**W I T N E S S E T H:**

 

WHEREAS, On October 19, 2001, Agent,Lenders and Borrower entered into an Amended and Restated Credit Agreement (the“Credit Agreement”) in connection with Revolving Loans, Term Loans and Lettersof Credit made available by Lenders to Borrower in an aggregate commitment of$70,000,000.00; and

 

WHEREAS, as of January 1, 2003, Agent,Lenders and Borrower entered into a Waiver of Defaults Under Credit Agreement(the “Waiver”); and

 

WHEREAS, Borrower has requested Agent andLenders to make certain modifications to the Credit Agreement, as affected bythe Waiver, including modifications of the financial covenants and restorationof the Revolving Commitment amount; and

 

WHEREAS, Lenders and Agent are willing toamend the Credit Agreement on the terms and conditions set forth in thisModification.

 

NOW, THEREFORE, in consideration of mutualpromises and covenants of this Modification and for other good and valuableconsideration, the receipt and sufficiency of which is hereby acknowledged,Lenders, Agent and Borrower agree as follows:

 

1.             Recitals.  The foregoing recitals are true and correctand by this reference are made a material part of this Modification.  All capitalized terms used herein shall havethe meaning ascribed to them in the Credit Agreement unless the context shallrequire otherwise.

 

2.             RevolvingCommitment Amount.  The RevolvingCommitment shall be $30,000,000.00, subject to permanent reduction pursuant toSection 2.12 of the Credit Agreement.

 

3.             EBITDACalculation.  For purposes of thequarterly calculation of EBITDA, the following expenses incurred through fiscalyear ending September 30, 2003 shall be excluded,

 

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up to an aggregate amount of$1,000,000.00:  (a) expenses and feesrelated to the retirement of the current CFO; (b) expenses and fees related tothe recruitment of the new CFO; (c) expenses, fees and write-downs related totaking Borrower private; (d) expenses, fees and write-downs related to theV&S Joint Venture; (e) expenses, fees and write-downs related to theCL/Angostura joint venture; and (f) expenses and fees related to waivers andloan modifications.

 

4.             FundedDebt Defined.  The definition ofFunded Debt in Section 1.01 of the Credit Agreement is hereby replaced inits entirety with the following:

 

“***Funded Debt***” means without duplication, theprincipal balance of all indebtedness, for money borrowed, purchase moneymortgages, capitalized leases, conditional sales contracts and similar titleretention debt instruments under which Borrower or any of its Subsidiaries isan obligor, including any current maturities of such indebtedness, plus alldebt of other entities or Persons, other than Subsidiaries, which has beenguaranteed by the Borrower or any Subsidiary (other than the current balance ofthe indebtedness of Premier Wines & Spirits, Ltd. as of the Effective Dateguaranteed by Borrower), or which is supported by a letter of credit issued forthe account of the Borrower or any Subsidiary which by its terms matures morethan one year from the date of any calculation thereof and/or which isrenewable or extendible at the option of the obligor to a date beyond one yearfrom such date; *provided that*,for the purposes of this Agreement, “Funded Debt” shall exclude amountstransferred quarterly to Borrower’s Bahamian or Virgin Islands’ Subsidiariesand the bi-weekly excise tax payments made by Borrower in connection therewith.  Effective March 31, 2003, the maximumamount thus excluded in the quarterly calculation of Funded Debt shall be$7,500,000.00.  Any funds drawn on theRevolving Credit Facility for such payments shall be repaid within seven (7)business days.  “Funded Debt” shall alsoexclude the Tank Loan.

 

5.             MinimumTangible Net Worth.  Section 11.01of the Credit Agreement is hereby replaced in its entirety with the following:

 

**SECTION11.01.  *Minimum Tangible Net Worth*. **Maintain a TangibleNet Worth as of the last day of fiscal quarter of Borrower endingMarch 31, 2003 of not less than $35,331,000 and thereafter Tangible NetWorth shall be a minimum of $35,331,000, plus 50% of the annual net income (butnot loss) of the Borrower and its Subsidiaries for the prior fiscal year ofBorrower (on a consolidated basis in accordance with GAAP), plus 75% of the netproceeds of any equity or subordinated debt offering completed by Borrowerafter the Agreement Date.  Tangible NetWorth shall be tested on a quarterly basis and adjusted annually eachSeptember 30th.

 

6.             InterestCoverage Ratio.  Section 11.02 *InterestCoverage Ratio* is hereby deleted in its entirety as ofJanuary 1, 2003.

 

7.             FixedCharge Coverage Ratio.  Thedefinition of Fixed Charge Coverage Ratio in Section 1.01 of the CreditAgreement is hereby revised to mean the ratio of (i) EBITDA less

 

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capital expenditures, to (ii) cash interest,cash taxes and scheduled principal payments, but not including any additionalprincipal payments made by Borrower pursuant to Section 2.09 of the CreditAgreement (all as determined in accordance with GAAP) in accordance with theratio grid set forth in Section 11.03, measured on a four rolling quarterbasis.  Section 11.03 *Fixed ChargeCoverage*is hereby replaced in its entirety with the following:

 

**SECTION11.03.  *Fixed Charge Coverage***.  Maintain at all times a Fixed ChargeCoverage Ratio within the following Fixed Charge Coverage Ratio grid:

 
| Date     |   | 6/03 |   | 9/03 |   | 12/03 |   | 3/04 |   | 6/04 |   | 9/04 |   | Thereafter |   |
|----------|--------|------|--------|------|--------|-------|--------|------|--------|------|--------|------|--------|------------|--------|
| Required |   | 0.65 |   | 0.80 |   | 1.00  |   | 1.00 |   | 1.00 |   | 1.00 |   | 1.0        |   |

 

The Fixed Charge Coverage Ratio requirement for the quarter endedMarch 31, 2003 has been waived.

 

8.             FundedDebt to EBITDA.  Section 11.05Funded Debt to EBITDA is hereby replaced in its entirety with the following:

 

**SECTION 11.05.  *Funded Debtto EBITDA*. **Maintain a ratio of Funded Debt to EBITDAas of the end of any fiscal quarter of Borrower of not more than the following:

 

Ratio

 
| 4.65  to 1.0 |   | For the fiscal quarter ending  June 30, 2003.                                        |   |
|--------------|--------|-------------------------------------------------------------------------------------------|--------|
| 3.85  to 1.0 |   | For the fiscal quarter ending  September 30, 2003.                                   |   |
| 3.25  to 1.0 |   | For the fiscal quarters ending  December 31, 2003 through September 30, 2004.   |   |
| 3.0  to 1.0  |   | For the fiscal quarter ending  December 31, 2004 and each fiscal quarter thereafter. |   |

 

Such ratio shall be measured on the basis ofthe financial results of Borrower for the most recent four (4) fiscal quartersof Borrower ending on the dates of measurement.  This requirement is waived for fiscal quarters endingDecember 31, 2002 and March 31, 2003.

 

9.             Pricing.  The pricing grid incorporated into thedefinition of Applicable Margin in Section 1.01 of the Credit Agreement ishereby replaced in its entirety with the following:

 

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|      |   |                     |   | **Applicable  Margin  Revolving Loans** |   | **Applicable  Margin  Term Loans** |   |
|-----------|--------|--------------------------|--------|-----------------------------------------|--------|------------------------------------|--------|
| **Level** |   | **Funded   Debt/EBITDA** |   | **Eurodollar  Rate**                    |   | **Base Rate**                      |   | **Unused  Fee** |   | **Eurodollar  Rate** |   | **Base Rate** |   |
| I         |   | < 4.65 and > 4.50  |   | 3.75                                    | %      | 1.25                               | %      | 0.50 | % | 4.25 | % | 1.50 | % |
| II        |   | < 4.50 and > 4.00  |   | 3.50                                    | %      | 1.25                               | %      | 0.50 | % | 4.00 | % | 1.50 | % |
| III       |   | < 4.00 and > 3.50  |   | 3.25                                    | %      | 1.25                               | %      | 0.50 | % | 3.75 | % | 1.50 | % |
| IV        |   | < 3.50 and > 3.00  |   | 3.00                                    | %      | 1.00                               | %      | 0.375 | % | 3.50 | % | 1.25 | % |
| V         |   | < 3.00 and > 2.50  |   | 2.75                                    | %      | 0.75                               | %      | 0.375 | % | 3.25 | % | 1.00 | % |
| VI        |   | < 2.50 and > 2.00  |   | 2.50                                    | %      | 0.50                               | %      | 0.25 | % | 3.00 | % | 0.75 | % |
| VII       |   | <  2.00               |   | 2.25                                    | %      | 0.25                               | %      | 0.25 | % | 2.75 | % | 0.50 | % |

 

As of the date of this Modification,Borrower’s Applicable Margins shall be at Level I until adjusted inaccordance with the Credit Agreement on the basis of results for fiscal quarterending June 30, 2003.

 

10.           Management.  Agent and Lenders hereby acknowledge andaccept the appointment of Jay Maltby as Chairman, Chief Executive Officer andPresident and Ezra Shashoua as Executive Vice President and Chief FinancialOfficer of Borrower.

 

11.           Warranty.  Borrower hereby warrants and represents toLenders that, since the date of the Credit Agreement, other than mattersaddressed in the Waiver, Borrower has been and is in compliance with allprovisions of the Credit Agreement and all other Loan Documents and that nodefault or Event of Default has occurred thereunder nor has any event occurredor failed to occur which with the passage of time or the giving of notice orboth would comprise such a Default or Event of Default.

 

12.           Ratifications.  Borrower hereby ratifies and confirms eachof its obligations and indebtedness under the Credit Agreement and each of theother Loan Documents, as amended hereby, and hereby represents and warrants toLenders and Agent that Borrower neither has nor claims any defenses,counterclaims or offsets to any such obligations or indebtedness.

 

13.           Fees.  The effectiveness of this Modification andthe amendments contemplated herein are expressly conditioned upon the paymentby Borrower to Agent for the prorata benefit of Lenders an amendment fee of$160,000.00 (based on twenty-five (25) basis points of the current committedamount ($64,000,000)) and reimbursement by Borrower of Agent for all reasonableattorneys’ fees and expenses incurred in connection with this Modification.

 

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14.           Miscellaneous.

 

(a) This agreement shall be governed by and construed in accordance with thelaws of the State of Florida.  Paragraphheadings used herein are for convenience only and shall not be used tointerpret any term hereof.  The CreditAgreement shall continue in full force and effect as modified by thisModification.  In the event the terms ofthis Modification conflict with the terms of the  Credit Agreement, the terms of this Modification shall control.

 

(b) This Modification constitutes the entire agreement among the partieshereto and supersedes all prior agreements, understandings, negotiations anddiscussions, both written and oral among the parties hereto with respect to thesubject matter hereof, all of which prior agreements, understanding,negotiations and discussions, both written and oral, are merged into thisModification.  All provisions of theCredit Agreement and each of the other Loan Documents shall remain in fullforce and effect as modified by this Modification.  Without limiting the generality of any of the provisions of thisModification, nothing herein or in any instrument or agreement shall be deemedor construed to constitute a novation, satisfaction or refinancing of all orany portion of the Loan or in any manner affect or impair the lien or priorityof the Credit Agreement or any of the Loan Documents as amended hereby.

 

(c) This Modification may be executed in any number of counterparts with eachexecuted counterpart constituting an original, but altogether constituting butone and the same instrument.

 

(d) This Modification shall be binding upon and inure to the benefit ofBorrower, Agent and Lenders and their respective heirs, legal representatives,executors, successors and assigns.

 

15.           RELEASE.  IN CONSIDERATION OF THE ACCOMMODATIONSPROVIDED HEREIN, BORROWER HEREBY UNCONDITIONALLY IRREVOCABLY AND FOREVERRELEASES, ACQUITS AND DISCHARGES LENDERS AND EACH OF LENDERS’ RESPECTIVEOFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND COUNSEL FROM ANY AND ALL CLAIMS,DEMANDS AND CAUSES OF ACTION THAT ANY OF THEM HAD, NOW HAS OR MAY IN THE FUTUREHAVE AGAINST ANY ONE OR MORE OF THE LENDERS OR ANY ONE OR MORE OF LENDERS’OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR COUNSEL FOR THE ACTS OR OMISSIONS OFANY OF THE FOREGOING PARTIES FROM THE BEGINNING OF TIME THROUGH, TO ANDINCLUDING THE DATE OF THE EFFECTIVENESS OF THIS MODIFICATION, WHICH RELATED TOANY CLAIMS ARISING OUT OF OR CONNECTED IN ANY MANNER WITH THE TRANSACTIONSCONTEMPLATED HEREIN OR IN THE CREDIT AGREEMENT AS AMENDED HEREBY OR ANY OTHERLOAN DOCUMENTS AS THE SAME MAY BE AMENDED HEREBY, AS THE CASE MAY BE.

 

16.           WAIVEROF JURY TRIAL.  BORROWER, AGENT ANDLENDERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OFTHEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ORARISING OUT OF, UNDER OR IN CONNECTION WITH THIS

 

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MODIFICATION OR ANY AGREEMENT EXECUTED IN CONJUNCTIONHEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS, (WHETHERVERBAL OR WRITTEN) OR ACTIONS BY ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDERS’ ENTERING INTO THISMODIFICATION AND MAKING ANY LOAN, ADVANCE OR OTHER EXTENSION OF CREDIT TOBORROWER.  FURTHER, BORROWER HEREBYCERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDERS, NOR THE AGENT OR ANY OFAGENT’S COUNSEL OR LENDERS’ COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE,THAT AGENT OR ANY OF AGENT’S COUNSEL OR LENDERS WOULD NOT, IN THE EVENT OF SUCHLITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.  NO REPRESENTATIVE OR AGENT OF LENDERS, NORAGENT OR ANY OF AGENT’S COUNSEL OR LENDERS’ COUNSEL HAS THE AUTHORITY TO WAIVE,CONDITION, OR MODIFY THIS PROVISION.

 

IN WITNESS WHEREOF, Borrower, Agent andLenders have caused this agreement to be effective as of the day and year setforth above.

 
| WITNESSES:                        | BORROWER:                                             |
|-----------------------------------|-------------------------------------------------------|
|                              |                                                  |
|                              | TODHUNTER INTERNATIONAL, INC., a Delaware corporation |
|                              |                                                  |
| /s/ William Viggiano              |                                                  | By: | /s/ Jay S. Maltby |   |
| Print  Name: William Viggiano     | Print Name:                                           | Jay S. Maltby |   |
| /s/ Elisa Martinez                |                                                  | Title: | Chairman and Chief Executive Officer |   |
| Print  Name:  Elisa Martinez |                                                  |
|                              |                                                  |
| STATE OF FLORIDA                  | )                                                     |
|                              | )                                                     |
| COUNTY OF PALM BEACH              | )                                                     |
|                                   |                                                       |  |  |  |  |  |  |  |  |

 

The foregoing instrument was acknowledgedbefore me this 14th day of May, 2003 by Jay S. Maltby as Chairman and CEO ofTodhunter International, Inc., on behalf of the corporation.  He/She is personally known to me or hasproduced                                  (type of identification) as identification.

 
|   | /s/ Jennifer Lubrano-Murphy                                |   |
|--------|------------------------------------------------------------|--------|
|   | Notary Public                                              |
|   | State of Florida                                           |
|   |                                                       |
|   | Jennifer Lubrano-Murphy                                    |   |
|   | (Print,  Type or Stamp Commissioned Name of Notary Public) |

 

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| WITNESSES:        | AGENT:                                          |
|-------------------|-------------------------------------------------|
|              |                                            |
|              | SOUTHTRUST BANK, an Alabama banking corporation |
|              |                                            |
| /s/ Mark Dierks   |                                            | By: | /s/ Tom Turnberger |   |
| Print  Name:      | Mark Dierks                                     |   | Print Name: | Tom Turnberger |   |
| /s/ Antonio Corey |                                            | Title: | Vice President |   |
| Print  Name:      | Antonio  Corey                                  |   |   |
|              |                                            |
|              |                                            |
| STATE OF FLORIDA  | )                                               |
|              | )                                               |
| COUNTY OF BROWARD | )                                               |
|                   |                                                 |  |  |  |  |  |  |  |  |

 

The foregoing instrument was acknowledgedbefore me this 14th day of May, 2003 by Tom Turnberger as Vice President ofSouthTrust Bank, on behalf of the bank. He/She is personally known to me or has produced                                  (typeof identification) as identification.

 
|   | /s/ Florence Lindley                                       |   |
|--------|------------------------------------------------------------|--------|
|   | Notary Public                                              |
|   | State of Florida                                           |
|   |                                                       |
|   | Florence Lindley                                           |   |
|   | (Print,  Type or Stamp Commissioned Name of Notary Public) |

 

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| WITNESSES:        | LENDERS:                                        |
|-------------------|-------------------------------------------------|
|              |                                            |
|              | SOUTHTRUST BANK, an Alabama banking corporation |
|              |                                            |
| /s/ Mark Dierks   |                                            | By: | /s/ Tom Turnberger |   |
| Print  Name:      | Mark Dierks                                     |   | Print Name: | Tom Turnberger |   |
| /s/ Antonio Corey |                                            | Title: | Vice President |   |
| Print  Name:      | Antonio  Corey                                  |   |   |
|              |                                            |
|              |                                            |
| STATE OF FLORIDA  | )                                               |
|              | )                                               |
| COUNTY OF BROWARD | )                                               |
|                   |                                                 |  |  |  |  |  |  |  |  |

 

The foregoing instrument was acknowledgedbefore me this 14th day of 2003. by Tom Turnberger as Vice Presidentof SouthTrust Bank, on behalf of the bank. He/She is personally known to me or hasproduced                          (typeof identification) as identification.

 
|   | /s/ Florence Lindley                                       |   |
|--------|------------------------------------------------------------|--------|
|   | Notary Public                                              |
|   | State of Florida                                           |
|   |                                                       |
|   | Florence Lindley                                           |   |
|   | (Print,  Type or Stamp Commissioned Name of Notary Public) |
|   | WITNESSES:                                                 |

 

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| WITNESSES:           | WACHOVIA BANK, NATIONAL ASSOCIATION |
|----------------------|-------------------------------------|
|                 |                                |
| /s/ Michelle Gerber  |                                | By: | /s/ David F. Abee |   |
| Print  Name:         | Michelle Gerber                     |   | Print Name: | David F. Abee |   |
| /s/ Liza Grant-Smith |                                | Title: | Vice President |   |
| Print  Name:         | Liza  Grant-Smith                   |   |   |
|                 |                                |
|                 |                                |
| STATE OF FLORIDA     | )                                   |
|                 | )                                   |
| COUNTY OF PALM BEACH | )                                   |
|                      |                                     |  |  |  |  |  |  |  |  |  |  |

 

The foregoing instrument was acknowledgedbefore me this 14th day of May, 2003 by David F. Abee as VicePresident of Wachovia Bank, National Association, on behalf of the bank.  He/She is personally known to me or hasproduced                                     (type of identification) as identification.

 
|   | /s/ Laura Forbes                                           |   |
|--------|------------------------------------------------------------|--------|
|   | Notary Public                                              |
|   | State of Florida                                           |
|   |                                                       |
|   | Laura Forbes                                               |   |
|   | (Print,  Type or Stamp Commissioned Name of Notary Public) |

 

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| WITNESSES:            | SUNTRUST BANK, a Georgia corporation |
|-----------------------|--------------------------------------|
|                  |                                 |
| /s/ Alexander del Pro |                                 | By: | /s/ Sandra N. Tozzie |   |
| Print  Name:          | Alexander del Pro                    |   | Print Name: | Sandra N. Tozzie |   |
| /s/ Lyn Humbrecht     |                                 | Title: | First Vice President |   |
| Print  Name:          | Lyn Humbrecht                        |   |   |
|                  |                                 |
|                  |                                 |
| STATE OF FLORIDA      | )                                    |
|                  | )                                    |
| COUNTY OF             | )                                    |
|                       |                                      |  |  |  |  |  |  |  |  |

** **

The foregoing instrument was acknowledgedbefore me this 14th day of May, 2003 by Sandra N. Tozzie as First VicePresident of SunTrust Bank, on behalf of the bank.  He/She is personally known to me or has produced                                                (type of identification) as identification.

 
|   | /s/ Diane L. Libotte                                       |   |
|--------|------------------------------------------------------------|--------|
|   | Notary Public                                              |
|   | State of Florida                                           |
|   |                                                       |
|   | Diane L. Libotte                                           |   |
|   | (Print,  Type or Stamp Commissioned Name of Notary Public) |

 

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| WITNESSES:           | NATIONAL CITY BANK, NATIONAL ASSOCIATION |
|----------------------|------------------------------------------|
|                 |                                     |
| /s/ Tom Gurbach      |                                     | By: | /s/ Daniel R. Raynor |   |
| Print  Name:         | Tom Gurbach                              |   | Print Name: | Daniel R. Raynor |   |
| /s/ John DeFrancesco |                                     | Title: | Assistant Vice President |   |
| Print  Name:         | John DeFrancesco                         |   |   |
|                 |                                     |
|                 |                                     |
| STATE OF OHIO        | )                                        |
|                 | )                                        |
| COUNTY OF LAKE       | )                                        |
|                      |                                          |  |  |  |  |  |  |  |  |  |

 

The foregoing instrument was acknowledgedbefore me this 14th day of May, 2003 by Daniel R. Raynor as Assistant VicePresidentof National City Bank, on behalf of the bank. He/She is personally known to me or hasproduced                                   (typeof identification) as identification.

 
|   | /s/ Ellen M. Brown                                         |   |
|--------|------------------------------------------------------------|--------|
|   | Notary Public                                              |
|   | State of Florida                                           |
|   |                                                       |
|   | Ellen M. Brown                                             |   |
|   | (Print,  Type or Stamp Commissioned Name of Notary Public) |

 

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