Ex-10.1



 





Exhibit 10.1


EXECUTION
COPY


BRIDGE CREDIT AGREEMENT




dated as of




December 21, 2006




among




BROWN-FORMAN CORPORATION,

as the Borrower




THE LENDERS PARTY HERETO,




JPMORGAN CHASE BANK, N.A.,

as Syndication Agent




CITICORP NORTH AMERICA, INC.,

as Documentation Agent




and




BANK OF AMERICA, N.A.,

as Administrative Agent




 






BANC OF AMERICA SECURITIES LLC,

J.P. MORGAN SECURITIES INC.,




and




CITIGROUP GLOBAL MARKETS INC.

as Joint Lead Arrangers and Joint Bookrunners










 



 


TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	Definitions
	 	 	 	 
	 
	 	 	 	 
	SECTION 1.01. Defined Terms
	 	 	1	 
	 
	 	 	 	 
	SECTION 1.02. Classification of Loans and Borrowings
	 	 	1	 
	 
	 	 	 	 
	SECTION 1.03. Terms Generally
	 	 	1	 
	 
	 	 	 	 
	SECTION 1.04. Accounting Terms; GAAP
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	The Credits
	 	 	 	 
	 
	 	 	 	 
	SECTION 2.01. Commitments
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.02. Loans and Borrowings
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.03. Requests for Borrowings
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.04. Funding of Borrowings
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.05. Interest Elections
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.06. Termination and Reduction of Commitments
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.07. Repayment of Loans; Evidence of Debt
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.08. Prepayment of Loans
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.09. Fees
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.10. Interest
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.11. Alternate Rate of Interest
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.12. Increased Costs
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.13. Break Funding Payments
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.14. Taxes
	 	 	1	 












 



Contents, p. 2


	 	 	 	 	 
	 	 	Page
	SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	1	 
	 
	 	 	 	 
	SECTION 2.16. Mitigation Obligations; Replacement of Lenders
	 	 	1	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	Representations and Warranties
	 	 	 	 
	 
	 	 	 	 
	SECTION 3.01. Organization; Powers
	 	 	1	 
	 
	 	 	 	 
	SECTION 3.02. Authorization; Enforceability
	 	 	1	 
	 
	 	 	 	 
	SECTION 3.03. Governmental Approvals; No Conflicts
	 	 	1	 
	 
	 	 	 	 
	SECTION 3.04. Financial Condition; No Material Adverse Change
	 	 	1	 
	 
	 	 	 	 
	SECTION 3.05. Litigation and Environmental Matters
	 	 	1	 
	 
	 	 	 	 
	SECTION 3.06. Compliance with Laws and Agreements
	 	 	1	 
	 
	 	 	 	 
	SECTION 3.07. Investment Company Status
	 	 	1	 
	 
	 	 	 	 
	SECTION 3.08. Taxes
	 	 	1	 
	 
	 	 	 	 
	SECTION 3.09. ERISA
	 	 	1	 
	 
	 	 	 	 
	SECTION 3.10. Disclosure
	 	 	1	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	Conditions
	 	 	 	 
	 
	 	 	 	 
	SECTION 4.01. Effective Date
	 	 	1	 
	 
	 	 	 	 
	SECTION 4.02. Each Credit Event
	 	 	1	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	Affirmative Covenants
	 	 	 	 
	 
	 	 	 	 
	SECTION 5.01. Financial Statements and Other Information
	 	 	1	 
	 
	 	 	 	 
	SECTION 5.02. Notices of Material Events
	 	 	1	 
	 
	 	 	 	 
	SECTION 5.03. Existence; Conduct of Business
	 	 	1	 
	 
	 	 	 	 
	SECTION 5.04. Payment of Obligations
	 	 	1	 












 



Contents, p. 3


	 	 	 	 	 
	 	 	Page
	SECTION 5.05. Maintenance of Properties; Insurance
	 	 	1	 
	 
	 	 	 	 
	SECTION 5.06. Books and Records; Inspection Rights
	 	 	1	 
	 
	 	 	 	 
	SECTION 5.07. Compliance with Laws
	 	 	1	 
	 
	 	 	 	 
	SECTION 5.08. Use of Proceeds
	 	 	1	 
	 
	 	 	 	 
	SECTION 5.09. Consummation of the Acquisition
	 	 	1	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	Negative Covenants
	 	 	 	 
	 
	 	 	 	 
	SECTION 6.01. Subsidiary Indebtedness
	 	 	1	 
	 
	 	 	 	 
	SECTION 6.02. Liens
	 	 	1	 
	 
	 	 	 	 
	SECTION 6.03. Sale and Leaseback Transactions
	 	 	1	 
	 
	 	 	 	 
	SECTION 6.04. Fundamental Changes
	 	 	1	 
	 
	 	 	 	 
	SECTION 6.05. Transactions with Affiliates
	 	 	1	 
	 
	 	 	 	 
	SECTION 6.06. Ratio of Consolidated Total Debt to Consolidated Net Worth
	 	 	1	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	Events of Default
	 	 	 	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	 
	 	 	 	 
	The Administrative Agent
	 	 	 	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	 
	 	 	 	 
	Miscellaneous
	 	 	 	 
	 
	 	 	 	 
	SECTION 9.01. Notices
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.02. Waivers; Amendments
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.03. Expenses; Indemnity; Damage Waiver
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.04. Successors and Assigns
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.05. Survival
	 	 	1	 












 



Contents, p. 4


	 	 	 	 	 
	 	 	Page
	SECTION 9.06. Counterparts; Integration; Effectiveness
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.07. Severability
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.08. Right of Setoff
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.10. WAIVER OF JURY TRIAL
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.11. Headings
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.12. Confidentiality
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.13. Interest Rate Limitation
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.14. Conversion of Currencies
	 	 	1	 
	 
	 	 	 	 
	SECTION 9.15. USA Patriot Act
	 	 	1	 
	 
	 	 	 	 
	Schedules:
	 	 	 	 
	Schedule 2.01 — Commitments
	 	 	 	 
	Schedule 3.03 — Governmental Approvals; No Conflicts
	 	 	 	 
	Schedule 3.04 — Financial Condition; No Material Adverse Change
	 	 	 	 
	Schedule 3.05 — Disclosed Matters
	 	 	 	 
	Schedule 3.06 — Compliance with Laws and Agreements
	 	 	 	 
	Schedule 6.01 — Existing Subsidiary Indebtedness
	 	 	 	 
	Schedule 6.02 — Existing Liens
	 	 	 	 
	Schedule 6.05 — Affiliate Transactions
	 	 	 	 
	 
	 	 	 	 
	Exhibits:
	 	 	 	 
	 
	 	 	 	 
	Exhibit A — Form of Assignment and Acceptance

	 	 	 	 
	Exhibit B — Form of Opinion of Borrower’s Counsel
	 	 	 	 












 



 



     BRIDGE CREDIT AGREEMENT dated as of December 21, 2006 (the
“Agreement”), among BROWN-FORMAN CORPORATION, a Delaware corporation
(the “Borrower”); the LENDERS party hereto; JPMORGAN CHASE BANK,
N.A., as Syndication Agent; CITICORP NORTH AMERICA, INC., as Documentation
Agent; and BANK OF AMERICA, N.A., as Administrative Agent.



          The Borrower has requested the Lenders to establish the credit facility provided for herein
under which the Borrower may obtain Loans in an aggregate principal amount of up to $800,000,000.
Such Loans will be used (i) to finance the Acquisition (as defined below), (ii) to pay fees and
expenses incurred in connection with the Acquisition and (iii) to provide liquidity in connection
with any commercial paper program of the Borrower. The Lenders are willing to extend such credit
to the Borrower on the terms and subject to the conditions set forth herein. Accordingly, the
parties hereto agree as follows:




ARTICLE I




Definitions




          SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:




          “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to
the Alternate Base Rate.




          “Acquired Company” means (a) substantially all the assets of Grupo Industrial
Herradura, S.A. de C.V., a Mexican corporation, (including certain trademarks thereof) and (b)
certain of its subsidiaries, in each case as set forth in the Purchase Agreement.




          “Acquirors” means, collectively, the Borrower and one or more of its designated
Subsidiaries that acquires all or part of the Acquired Company in the Acquisition.




          “Acquisition” means the acquisition pursuant to the Purchase Agreement by the
Acquirors of the Acquired Company for approximately $876,000,000 in cash.




          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
(a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.




          “Administrative Agent” means Bank of America, N.A., in its capacity as administrative
agent for the Lenders hereunder.




          “Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.




[Signature page to Brown-Forman Credit Agreement]










 



2




          “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.




          “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.




          “Applicable Percentage” means, with respect to any Lender, the percentage of the total
Commitments represented by such Lender’s Commitment. If the Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Commitments most recently in
effect, giving effect to any assignments.




          “Applicable Rate” means, for any day, with respect to any Eurodollar Loan, or with
respect to the facility fees payable hereunder, as the case may be, the applicable rate per annum
set forth below under the caption “LIBOR Margin” or “Facility Fee”, as the case may be, based upon
the ratings by S&P and Moody’s, respectively, applicable on such date to the Index Debt:




	 	 	 	 	 	 	 	 	 	 	 
	 	 	Ratings	 	Facility Fee	 	LIBOR Margin
	 	 	(S&P/Moody’s)	 	(% per annum)	 	(% per annum)
	Category 1

	 	3AA-/Aa3
	 	 	0.030	%	 	 	0.170	%
	Category 2

	 	A+/A1
	 	 	0.040	%	 	 	0.185	%
	Category 3

	 	A/A2
	 	 	0.045	%	 	 	0.205	%
	Category 4

	 	A-/A3
	 	 	0.050	%	 	 	0.250	%
	Category 5

	 	BBB+/Baa1
	 	 	0.060	%	 	 	0.340	%
	Category 6

	 	<BBB+/Baa1
	 	 	0.070	%	 	 	0.430	%






          For purposes of the foregoing, (i) if either Moody’s or S&P shall not have in effect a
rating for the Index Debt (other than by reason of the circumstances referred to in the last
sentence of this definition), then such rating agency shall be deemed to have established a rating
in Category 6; (ii) if the ratings established or deemed to have been established by Moody’s and
S&P for the Index Debt shall fall within different Categories, the Applicable Rate shall be based
on the higher of the two ratings unless one of the two ratings is two or more Categories lower than
the other, in which case the Applicable Rate shall be determined by reference to the Category next
above that of the lower of the two ratings; and (iii) if the ratings established or deemed to have
been established by Moody’s and S&P for the Index Debt shall be changed (other than as a result of
a change in the rating system of Moody’s or S&P), such change shall be effective as of the date on
which it is first publicly announced by the applicable rating agency. Each change in the
Applicable Rate shall apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such change. If the rating
system of Moody’s or S&P shall change, or if either such rating agency shall cease to be in the
business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good
faith to amend this definition to reflect such changed rating










 



3




system or the unavailability of ratings from such rating agency and, pending the effectiveness
of any such amendment, the Applicable Rate shall be determined by reference to the rating most
recently in effect prior to such change or cessation.



          “Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by
the Administrative Agent.




          “Attributable Debt” means, with respect to any Sale-Leaseback Transaction, the present
value (discounted at the rate set forth or implicit in the terms of the lease included in such
Sale-Leaseback Transaction) of the total obligations of the lessee for rental payments (other than
amounts required to be paid on account of taxes, maintenance, repairs, insurance, assessments,
utilities, operating and labor costs and other items which do not constitute payments for property
rights) during the remaining term of the lease included in such Sale-Leaseback Transaction
(including any period for which such lease has been extended). In the case of any lease which is
terminable by the lessee upon payment of a penalty, the Attributable Debt shall be the lesser of
the Attributable Debt determined assuming termination upon the first date such lease may be
terminated (in which case the Attributable Debt shall also include the amount of the penalty, but
no rent shall be considered as required to be paid under such lease subsequent to the first date
upon which it may be so terminated) or the Attributable Debt determined assuming no such
termination.




          “Availability Period” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the Commitments.




          “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.




          “Borrower” has the meaning assigned to such term in the heading of this Agreement.




          “Borrowing” means Loans of the same Type, made, converted or continued on the same
date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.




          “Borrowing Request” means a request by a Borrower for a Borrowing in accordance with
Section 2.03.




          “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed;
provided that, when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in
the London interbank market.




          “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and







 



4





the amount of such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.



          “Capital Markets Transaction” means (a) the issuance or sale by the Borrower or any
Subsidiary of any of their Equity Interests, or the receipt by the Borrower or any Subsidiary of
any capital contribution, other than (i) any such issuance of Equity Interests to, or receipt of
any such capital contribution from, the Borrower or a Subsidiary or (ii) pursuant to and in
accordance with stock option plans or other benefit plans for management or employees of the
Borrower and its Subsidiaries and (b) the issuance or sale by the Borrower or any Subsidiary of any
of their Debt Securities.




          “Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof), of shares representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower, other than descendants of
George Garvin Brown and their respective family members and descendants, or entities controlled by,
or trusts for the benefit of, any of them, including family and charitable trusts; (b) occupation
of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by
Persons who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed
by directors so nominated; or (c) the acquisition of direct or indirect Control of the Borrower by
any Person or group, other than descendants of George Garvin Brown and their respective family
members and descendants, or entities controlled by, or trusts for the benefit of, any of them,
including family and charitable trusts.




          “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender (or, for purposes of Section 2.12(b), by any lending office of such Lender
or by such Lender’s holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after the date of this
Agreement.




          “Code” means the Internal Revenue Code of 1986, as amended from time to time.




          “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Loans hereunder, as such commitment may be reduced or increased from time to time pursuant to
Section 2.06 or pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial
amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable. The
initial aggregate amount of the Lenders’ Commitments is $800,000,000.




          “Consolidated Assets” means at any time, the aggregate amount of assets (less
applicable accumulated depreciation, depletion and amortization and other reserves and other
properly deductible items) of the Borrower and its Subsidiaries, all as set forth in the most
recent







 



5





consolidated balance sheet of the Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP.



          “Consolidated Net Worth” means on any date the net worth of the Borrower and its
Subsidiaries on such date, determined on a consolidated basis in accordance with GAAP.




          “Consolidated Total Debt” means on any date all Indebtedness of the Borrower and its
Subsidiaries on such date (other than obligations referred to in clause (i) of the definition of
“Indebtedness”), determined on a consolidated basis in accordance with GAAP.




          “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.




          “Debt Securities” means any bonds, debentures, notes, hybrid or equity-linked
securities or other similar instruments.




          “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.




          “Disclosed Matters” means the actions, suits and proceedings and the environmental
matters disclosed in Schedule 3.05.




          “dollars” or “$” refers to lawful money of the United States of America.




          “Effective Date” means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 9.02).




          “Environmental Laws” means all material laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.




          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.




          “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity







 



6





ownership interests in a Person, and any warrants, options or other rights entitling the
holder thereof to purchase or acquire any such equity interest.



          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.




          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.




          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.




          “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.




          “Event of Default” has the meaning assigned to such term in Article VII.




          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any
other recipient of any payment to be made by or on account of any Obligation hereunder, (a) income
or franchise taxes imposed on (or measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable lending office is located,
(b) any branch profit taxes imposed by the United States of America or any similar tax imposed by
any other jurisdiction in which such recipient is located and (c) in the case of a Foreign Lender
(other than an assignee pursuant to a request by the Borrower under Section 2.16(b)), any
withholding tax that is imposed by the United States of America (or any political subdivision
thereof) on payments by the Borrower from an office within such jurisdiction to the extent such tax
is in effect and applicable to such payments on the date hereof or at the time such Foreign Lender
becomes a party to this Agreement (or designates a new lending office) or is attributable to such
Foreign Lender’s failure to comply with Section 2.14(e),







 



7





except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive additional amounts with
respect to such withholding tax pursuant to Section 2.14(a).



          “Excluded Transaction” means:





     (a) any loan or credit arrangement entered into by the Borrower or any of its
Subsidiaries in connection with ordinary course business operations (including borrowings
under the Permanent Facility); and




     (b) (i) any loan or credit arrangement entered into by the Borrower or any of its
Subsidiaries outside of the ordinary course after the Effective Date and (ii) any Capital
Markets Transaction, other than the issuance or sale of Notes or commercial paper,
provided that the aggregate amount of the commitments under or Net Proceeds of such
debt facilities under clause (b)(i), together with the aggregate Net Proceeds of such
Capital Markets Transactions under clause (b)(ii), does not exceed $250,000,000.



          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.




          “Financial Officer” means the chief executive officer, chief financial officer,
principal corporate finance officer, principal accounting officer, treasurer, assistant treasurer
or controller of the Borrower.




          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than the United States of America, a State thereof or the District of Columbia.




          “GAAP” means generally accepted accounting principles in the United States of America.




          “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other similar governmental
entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.




          “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds
for the










 



8




purchase of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or obligation;
provided that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.



          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.




          “Hedging Agreement” means any interest rate protection agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or currency exchange
rate or commodity price hedging arrangement.




          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money, (b) all debt obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person under conditional sale or other
title retention agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services (excluding accounts
payable incurred in the ordinary course of business and not overdue by more than 60 days), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by
such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all
obligations, contingent or otherwise, of such Person as an account party in respect of letters of
credit and letters of guaranty, other than letters of credit arising in the ordinary course of such
Person’s business supporting accounts payable and (i) all obligations, contingent or otherwise, of
such Person in respect of bankers’ acceptances. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.




          “Indemnified Taxes” means Taxes other than Excluded Taxes.




          “Index Debt” means senior, unsecured, long-term indebtedness for borrowed money of the
Borrower that is not guaranteed by any other Person or subject to any other credit enhancement.




          “Interest Election Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.05.










 



9




          “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each
March, June, September and December and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to
the last day of such Interest Period that occurs at intervals of three months’ duration after the
first day of such Interest Period.




          “Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter, as the Borrower may elect;
provided that (i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day and (ii) any Interest Period that commences on the last Business
Day of a calendar month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.




          “Lender Affiliate” means, (a) with respect to any Lender, (i) an Affiliate of such
Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged
in making, purchasing, holding or otherwise investing in bank loans and similar extensions of
credit in the ordinary course of its business and is administered or managed by a Lender or an
Affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank loans and similar
extensions of credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.




          “Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall
have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person
that ceases to be a party hereto pursuant to an Assignment and Acceptance.




          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate equal to the British Bankers Association LIBOR Rate, as published by Reuters (or any
successor to or substitute for such Service, providing rate quotations comparable to those
currently provided by such Service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits in the London
interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that such rate is not available at such time for any reason,
then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the London branch office of the Administrative Agent in immediately
available funds in the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.










 



10




          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right (other than rights of first refusal or first offer, which shall not be a Lien) of
a third party with respect to such securities.




          “Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.




          “Material Adverse Effect” means a material adverse effect on (a) the financial
condition or results of operation of the Borrower and the Subsidiaries taken as a whole or (b) the
rights of or remedies available to the Lenders under this Agreement.




          “Material Indebtedness” means Indebtedness (other than the Loans), or obligations in
respect of one or more Hedging Agreements, of any one or more of the Borrower and its Subsidiaries
in an aggregate principal amount exceeding $25,000,000. For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect
to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.




          “Maturity Date” means the earlier of (a) the date that is 364 days after the Effective
Date and (b) if a Maturity Date Triggering Transaction shall occur after the date of this Agreement
but prior to the Permanent Facility Refinancing Date, the Permanent Facility Refinancing Date.




          “Maturity Date Triggering Transaction” means the consummation by the Borrower or any
Subsidiary of any Capital Markets Transaction (including the issuance or sale of Notes), other than
(a) any transaction constituting an Excluded Transaction and (b) the issuance or sale of commercial
paper.




          “Moody’s” means Moody’s Investors Service, Inc.




          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.




          “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in
respect of such event, including any cash subsequently received in respect of any non-cash
proceeds, but only as and when received, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid by the Borrower and the Subsidiaries to third parties (other than
Affiliates) in connection with such event and (ii) the amount of all taxes paid (or reasonably
estimated to be payable) by the Borrower and the Subsidiaries during the year that such event
occurred or the next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of the Borrower). In
addition to the foregoing, when used with respect to any loan transaction or other credit
arrangement, “Net Proceeds” shall include the availability to the Borrower or any Subsidiary of any
effective commitments of










 



11




lenders to lend under such loan transaction or credit arrangement, irrespective of whether the
Borrower or any such Subsidiary shall have drawn on such commitments.



          “Notes” means Debt Securities of the Borrower or any of its Subsidiaries (other than
commercial paper) issued or sold by the Borrower or any of its Subsidiaries.




          “Obligations” means, with respect to the Borrower, the due and punctual payment of (i)
the principal of and premium, if any, and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans made to the Borrower, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and
(ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of the Borrower under this
Agreement.




          “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.




          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.




          “Permanent Facility” means the Amendment and Restatement Agreement, dated as of April
10, 2006, in respect of the Five-Year Credit Agreement, dated as of July 30, 2004, among the
Borrower, Brown-Forman Beverages, Europe, Ltd, the Lenders party thereto and JPMorgan Chase Bank,
N.A., as Administrative Agent.




          “Permanent Facility Refinancing Date” means the first date following the date of this
Agreement on which the Permanent Facility is refinanced, replaced, amended or extended (in whole or
in part, and irrespective of whether any funds are borrowed by the Borrower or any Subsidiary upon
such refinancing, replacement, amendment or extension); provided, however, that
any amendment to the Permanent Facility that does not have the direct or indirect effect of
altering (a) the principal amount of loans or other extensions of credit available to the Borrower
or its Subsidiaries thereunder, (b) the maturity date of the loans or other extensions of credit
made thereunder, (c) the repayment or prepayment provisions thereof, or (d) the rates of interest
accruing on the loans or other extensions of credit thereunder or the fees payable thereunder,
shall be deemed not to give rise to a Permanent Facility Refinancing Date.




          “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.




          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were










 



12




terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.



          “Prepayment Event” means:




          (a) the consummation by the Borrower or any Subsidiary of any Capital Markets Transaction
(including the issuance of Notes), other than (i) any Excluded Transaction and (ii) any issuance or
sale of commercial paper; or




          (b) the receipt by the Borrower or any Subsidiary of any proceeds in connection with, or of
any commitments of lenders under, any senior syndicated credit facility or loan transaction of the
Borrower or any of its Subsidiaries, other than (i) in connection with any refinancing,
replacement, amendment or extension of the Permanent Facility and (ii) in any Excluded Transaction.




          “Prime Rate” means the rate of interest per annum publicly announced from time to time
by Bank of America, N.A. as its prime rate in effect at its principal office in New York City; each
change in the Prime Rate shall be effective from and including the date such change is publicly
announced as being effective.




          “Principal Property” means all property located in the United States of America
directly engaged in the manufacturing activities of the Borrower and its Subsidiaries, the
inventory and accounts receivable of the Borrower and its Subsidiaries wherever located and the
capital stock or other equity interests owned by the Borrower and its Subsidiaries.




          “Purchase Agreement” means the Asset Purchase Agreement dated as of August 25, 2006,
among Jose Guillermo Romo de la Peña, Luis Pedro Pablo Romo de la Peña, Grupo Industrial Herradura,
S.A. de C.V., certain subsidiaries and affiliates of Grupo Industrial Herradura, S.A. de C.V., the
Borrower and Brown-Forman Tequila Mexico, S. de R.L. de C.V.




          “Register” has the meaning set forth in Section 9.04.




          “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.




          “Required Lenders” means, at any time, Lenders having Loans and unused Commitments
representing more than 50% of the sum of the total Loans and unused Commitments at such time.




          “Sale-Leaseback Transactions” means any arrangement whereby the Borrower or a
Subsidiary shall sell or transfer any property, real or personal, used or useful in its business,
whether now owned or hereinafter acquired, and thereafter rent or lease property that it intends to
use for substantially the same purpose or purposes as the property sold or transferred;
provided that any such arrangement entered into within 180 days after the acquisition,
construction or substantial improvement of the subject property shall not be deemed to be a
“Sale-Leaseback Transaction”.










 



13




          “S&P” means Standard & Poor’s.




          “Significant Subsidiary” means each Subsidiary which is a “significant subsidiary” as
defined in Rule 1-02(w) of Regulation S-X of the Securities and Exchange Commission as such rule
may be amended or modified and in effect from time to time.




          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any comparable regulation.
The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.




          “subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent.




          “Subsidiary” means any subsidiary of the Borrower.




          “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.




          “Transactions” means (a) the Acquisition and (b) the execution, delivery and
performance by the Borrower of this Agreement, the borrowing of Loans and the use of proceeds
thereof.




          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.




          “USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001.




          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.










 



14




          SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Type (e.g., a “Eurodollar Loan”). Borrowings
also may be classified and referred to by Type (e.g., a “Eurodollar Borrowing”).




          SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.




          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on the operation of
such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.




ARTICLE II




The Credits




          SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein, each
Lender agrees to make Loans to the Borrower from time to time during the Availability Period in an
aggregate principal amount that will not result in (a) such Lender’s Loans exceeding such Lender’s
Commitment or (b) the sum of the total Loans exceeding the total Commitments. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay
and reborrow Loans.










 



15




          SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.




          (b) Subject to Section 2.11, each Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option may
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this Agreement.




          (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $5,000,000; provided
that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of
the total Commitments. Borrowings of more than one Type may be outstanding at the same time;
provided that there shall not at any time be more than a total of 10 Eurodollar Borrowings
outstanding.




          (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.




          SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of
the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York
City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:





     (i) the aggregate amount of the requested Borrowing;




     (ii) the date of such Borrowing, which shall be a Business Day;




     (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;




     (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the
term “Interest Period”; and









 



16



     (v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.04.



If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.



          SECTION 2.04. Funding of Borrowings. (a) Each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately available funds by
12:00 noon, New York City time, to the account of the Administrative Agent most recently designated
by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in New York City and designated by
the Borrower in the applicable Borrowing Request.




          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed Borrowing that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest
rate applicable to the relevant Loan. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender’s Loan included in such Borrowing.




          SECTION 2.05. Interest Elections. (a) Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the
case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this
Section. The Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.




          (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative
Agent of such election by telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrower were requesting a Borrowing of the Type










 



17




resulting from such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form
approved by the Administrative Agent and signed by the Borrower.



          (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:





     (i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);




     (ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;




     (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and




     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.



If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an
Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration.



          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.




          (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the request of the Required
Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i)no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.




          SECTION 2.06. Termination and Reduction of Commitments. (a) Unless previously
terminated, the Commitments shall terminate on the Maturity Date.




          (b) The Borrower may at any time terminate, or from time to time reduce, the Commitments;
provided that (i) each reduction of the Commitments shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not










 



18




terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of
the Loans in accordance with Section 2.08, the sum of the Loans would exceed the total Commitments.



          (c) In the event and on each occasion that any Net Proceeds are received by or on behalf of
the Borrower or any Subsidiary in respect of any Prepayment Event, (i) the Borrower shall, within
three Business Days after such Net Proceeds are received, deliver to the Administrative Agent a
certificate of a Financial Officer of the Borrower setting forth the amount of the Net Proceeds
received from such event and (ii) the Commitments of the Lenders shall be permanently reduced in an
aggregate amount equal to such Net Proceeds.




          (d) In the event that the Permanent Facility Refinancing Date shall occur prior to a Maturity
Date Triggering Transaction, (i) the Borrower shall, within three Business Days after such date,
deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower describing
such event and setting forth the amount by which the loans made or commitments available under the
amended or extended Permanent Facility (or the facility that refinanced or replaced the Permanent
Facility) exceed $400,000,000 and (ii) the Commitments of the Lenders shall be permanently reduced
in an aggregate amount equal to the amount by which the loans made or commitments available under
the amended or extended Permanent Facility (or the facility that refinanced or replaced the
Permanent Facility) exceed $400,000,000.




          (e) In the event that the Acquisition shall not be consummated (i) on or prior to February 28,
2007, (ii) in all material respects in accordance with the Purchase Agreement and all applicable
material laws and regulatory approvals and (iii) with final terms and conditions, including tax
aspects thereof, that are substantially as described in this Agreement and otherwise substantially
consistent with the description thereof delivered in writing to the Lenders prior to the date of
this Agreement, the Commitments shall immediately terminate.




          (f) The Borrower shall notify the Administrative Agent of any election to terminate or reduce
the Commitments under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments delivered by
the Borrower may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of
the Commitments shall be made ratably among the Lenders in accordance with their respective
Commitments.




          SECTION 2.07. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of each Lender the then
unpaid principal amount of each Loan made to the Borrower on the Maturity Date.










 



19




          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.




          (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from the Borrower
to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.




          (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the obligations
recorded therein absent manifest error; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.




          (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after assignment pursuant
to Section 9.04) be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).




          SECTION 2.08. Prepayment of Loans. (a) The Borrower shall have the right at any time
and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with paragraph (d) of this Section.




          (b) On the date of any reduction or termination of the Commitments pursuant to Section
2.06(c), 2.06(d) or 2.06(e), the Borrower shall prepay Borrowings to the extent necessary so that
the aggregate outstanding principal amount of all Borrowings will not exceed the aggregate
Commitments after giving effect to such reduction or termination.




          (c) In the event and on each occasion that any Net Proceeds are received by or on behalf of
the Borrower or any Subsidiary in respect of the issuance or sale by the Borrower or any Subsidiary
of commercial paper (other than any Net Proceeds that are promptly applied by the Borrower (i) to
finance the Acquisition or to pay fees and expenses incurred in connection with the Acquisition or
(ii) repay outstanding commercial paper on the maturity date thereof), the Borrower shall, within
three Business Days after such Net Proceeds are received, apply such Net Proceeds to the prepayment
of any outstanding Borrowings.




          (d) The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of
any prepayment hereunder (i) in the case of prepayment of a Eurodollar





20










 




20


Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date
of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New
York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid;
provided that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Commitments as contemplated by Section 2.06, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with Section 2.06. Promptly
following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise
the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.10.



          SECTION 2.09. Fees. (a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a facility fee, which shall accrue at the Applicable Rate on the daily
amount of the Commitment of such Lender (whether used or unused) during the period from and
including the date hereof to but excluding the date on which such Commitment terminates;
provided that, if such Lender continues to have any Loans outstanding after its Commitment
terminates, then such facility fee shall continue to accrue on the daily amount of such Lender’s
Loans from and including the date on which its Commitment terminates to but excluding the date on
which such Lender ceases to have any outstanding Loans. Accrued facility fees shall be payable in
arrears on the last day of March, June, September and December of each year, commencing on the
first such date to occur after the date hereof, and on the date on which the Commitments shall have
terminated and the Lenders shall have no outstanding Loans. All facility fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).




          (b) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrower and the Administrative
Agent.




          (c) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent for distribution to the Persons entitled thereto. Fees paid shall not
be refundable under any circumstances.




          SECTION 2.10. Interest. (a) The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate.




          (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.




          (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of any















 





 21 



Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to
ABR Loans as provided in paragraph (a) of this Section.




          (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitments; provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable
on the date of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.




          (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Administrative Agent, and such determination shall be conclusive
absent manifest error.




          SECTION 2.11. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:





     (a) the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or




     (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their Loans included in
such Borrowing for such Interest Period;


then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing; provided that if the circumstances giving rise to such notice affect only one
Type of Borrowings, then other Types of Borrowings shall be permitted.




          SECTION 2.12. Increased Costs. (a) If any Change in Law shall:





     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit









 



22



extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate); or




     (ii) impose on any Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal,
interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts
as will compensate such Lender for such additional costs incurred or reduction suffered.




          (b) If any Lender determines that any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s capital or on the capital of
such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such
Lender to a level below that which such Lender or such Lender’s holding company could have achieved
but for such Change in Law (taking into consideration such Lender’s policies and the policies of
such Lender’s holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender
or such Lender’s holding company for any such reduction suffered.




          (c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such
Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay to such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.




          (d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section
shall not constitute a waiver of such Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 270 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of
such Lender’s intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day
period referred to above shall be extended to include the period of retroactive effect thereof.




          SECTION 2.13. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default or pursuant to Section 2.08), (b) the
conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Loan on the date or in the
amount specified in any notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.08(d) and is revoked in accordance therewith) or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a







 



23




result of a request by the Borrower pursuant to Section 2.16, then, in any such event, the
Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.
In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest
which would have accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of
such event to the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at the commencement of such
period, for dollar deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that such Lender is
entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.




          SECTION 2.14. Taxes. (a) Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or the applicable Lender (as
the case may be) receives an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii) Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with applicable law.




          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.




          (c) The Borrower shall indemnify the Administrative Agent and each Lender, within 10 days
after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by
or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender, or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.




          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.









 



24





          (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without withholding or at a
reduced rate.




          SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) The
Borrower shall make each payment required to be made by it hereunder (whether of principal,
interest or fees, or of amounts payable under Section 2.12, 2.13 or 2.14, or otherwise) prior to
12:00 noon, New York City time, on the date when due, in immediately available funds, without
set-off or counterclaim. Any amounts received after such time on any date may, in the discretion
of the Administrative Agent, be deemed to have been received on the next succeeding Business Day
for purposes of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 2001 Clayton Blvd., Concord, California, except that
payments pursuant to Sections 2.12, 2.13, 2.14 and 9.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following receipt thereof.
If any payment hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.




          (b) If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall
be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal then due to such parties.




          (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued
interest thereon than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the Loans to the
extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on their respective
Loans; provided that (i) if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and (ii) the provisions
of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its Loans to any assignee
or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). The Borrower







 



25




consents to the foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such participation as fully
as if such Lender were a direct creditor of the Borrower in the amount of such participation.




          (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due from the Borrower to the Administrative Agent for the account of
the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest
thereon, for each day from and including the date such amount is distributed to it to but excluding
the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.




          (e) If any Lender shall fail to make any payment required to be made by it pursuant to Section
2.04(b) or 2.15(d), then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for
the account of such Lender to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid.




          SECTION 2.16. Mitigation Obligations; Replacement of Lenders. (a) If any Lender
requests compensation under Section 2.12, or if the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.14, then such Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.12 or
2.14, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.




          (b) If any Lender requests compensation under Section 2.12, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.14, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have
received the prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of







 



26




such outstanding principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation
under Section 2.12 or payments required to be made pursuant to Section 2.14, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease
to apply.




ARTICLE III




Representations and Warranties




          The Borrower represents and warrants to the Lenders that:




          SECTION 3.01. Organization; Powers. Each of the Borrower and its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.




          SECTION 3.02. Authorization; Enforceability. The Transactions are within the
Borrower’s and each Subsidiary’s corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly executed and
delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding in equity or at law.




          SECTION 3.03. Governmental Approvals; No Conflicts. Except as set forth on Schedule
3.03 hereto, the Transactions (a) do not require any consent or approval of, registration or filing
with, or any other action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect, (b) will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or
any order of any Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or
its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or
any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Subsidiaries pursuant to the terms of any indenture, agreement
or other instrument binding on the Borrower or any of its Subsidiaries.




          SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Borrower has
heretofore furnished to the Lenders (i) its consolidated balance sheet and statements of income,
stockholders equity and cash flows as of and for the fiscal year ended April 30, 2006, reported on
by PricewaterhouseCoopers LLP, independent public accountants and (ii) its consolidated balance
sheet and statements of income and cash flows as of and for its







 



27




fiscal quarter ended July 31, 2006. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such date and for such periods in accordance with GAAP.




          (b) The Borrower has heretofore furnished to the Lenders (i) the consolidated balance sheet
and related statements of operations of Grupo Industrial Herradura, S.A. de C.V. as of and for the
fiscal year ended December 31, 2005, reported on by Deloitte Touche Tohmatsu, independent public
accountants and (ii) the consolidated balance sheet and related statements of operations of Grupo
Industrial Herradura, S.A. de C.V. as of and for the six-months ended June 30, 2006. To the
knowledge of the Borrower, such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of Grupo Industrial Herradura, S.A. de
C.V. and its consolidated subsidiaries as of such date and for such periods in accordance with
generally accepted accounting principles in Mexico.




          (c) Since April 30, 2006 through the date of this Agreement, there has been no material
adverse change in the business, assets, liabilities, condition (financial or otherwise) or material
agreements of the Borrower and its Subsidiaries, taken as a whole.




          (d) Since December 31, 2005 through the date of this Agreement, to the knowledge of the
Borrower and except as otherwise set forth on Schedule 3.04, there has been no material adverse
change in the business, assets, liabilities, condition (financial or otherwise) or material
agreements of the Acquired Company that, after giving effect to the Transactions, would reasonably
be expected to result in a material adverse change in the business, assets, liabilities, condition
(financial or otherwise) or material agreements of the Borrower and its Subsidiaries, taken as a
whole.




          SECTION 3.05. Litigation and Environmental Matters. (a) There are no actions, suits
or proceedings by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries
(i) as to which there is a reasonable probability of an adverse determination and that, if
adversely determined, would reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve this Agreement or
the Transactions.




          (b) Except for the Disclosed Matters and except with respect to any other matters that,
individually or in the aggregate, would not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or (iv) knows of any
basis for any Environmental Liability.




          SECTION 3.06. Compliance with Laws and Agreements. Except as set forth on Schedule
3.06, each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where the







 



28




failure to do so, individually or in the aggregate, has not resulted and would not result in a
Material Adverse Effect. No Default has occurred and is continuing.




          SECTION 3.07. Investment Company Status. Neither the Borrower nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.




          SECTION 3.08. Taxes. The Borrower and its Subsidiaries have timely filed or caused to
be filed all Tax returns and reports required to have been filed and has paid or caused to be paid
all Taxes required to have been paid by it pursuant to said Tax returns or pursuant to any
assessment received by them, except (a) any Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside
on its books adequate reserves or (b) to the extent that the failure to do so would not reasonably
be expected to result in a Material Adverse Effect.




          SECTION 3.09. ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, would reasonably be expected to result in a Material Adverse Effect.




          SECTION 3.10. Disclosure. None of the reports, financial statements, certificates or
other information furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.




ARTICLE IV




Conditions




          SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans shall not
become effective until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 9.02):




          (a) The Administrative Agent (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy or electronic image scan
transmission of a signed signature page of this Agreement) that such party has signed a counterpart
of this Agreement.




          (b) The Administrative Agent shall have received a favorable written opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of Bass,







 



29




Berry & Sims PLC, counsel for the Borrower, substantially in the form of Exhibit B.
The Borrower hereby requests such counsel to deliver such opinion.




          (c) The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization, existence
and good standing of the Borrower, the authorization of the Transactions and any other legal
matters relating to the Borrower or the Transactions, all in form and substance reasonably
satisfactory to the Administrative Agent and its counsel.




          (d) The Administrative Agent shall have received all fees and other amounts due and payable on
or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all
out of pocket expenses (including fees, charges and disbursements of counsel) required to be
reimbursed or paid by the Borrower hereunder or under any other agreement related hereto.




          (e) The Borrower and the Acquired Company shall have received of all governmental, shareholder
and material third party consents (including any applicable Hart-Scott-Rodino clearance and any
necessary approvals required by Mexican, German or any other law) and approvals necessary in
connection with the Transactions and other transactions contemplated hereby and expiration of all
applicable waiting periods without any action being taken by any authority that could restrain,
prevent or impose any material adverse conditions on the Borrower and its Subsidiaries, the
Acquired Company or such transactions, or that could threaten, limit, restrict or prohibit the
Transactions or any of the foregoing, and no law or regulation shall be applicable which in the
reasonable judgment of the Administrative Agent could have such effect.




          (f) Each of the material agreements, instruments and documents relating to the Transactions
that shall have been executed on or prior to the Effective Date (other than the Purchase Agreement)
shall be reasonably satisfactory to the Administrative Agent and its counsel and following the
execution thereof, no such agreement, instrument or document, nor the Purchase Agreement, shall
have been altered, amended or otherwise changed or supplemented or any condition therein waived to
the material disadvantage of the Borrower or the Lenders, in each case without the prior written
consent of the Lenders.




          (g) The Lenders shall have received all documentation and other information required by bank
regulatory authorities under applicable “know your customer” and anti-money laundering rules and
regulations, including the U.S.A. Patriot Act.




          (h) The representations and warranties of the Borrower set forth in this Agreement shall be
true and correct on and as of the Effective Date, after giving effect to any Borrowing occurring on
the Effective Date, if any.




          (i) As of the Effective Date and immediately after giving effect to any Borrowing occurring on
the Effective Date, if any, no Default shall have occurred or be continuing.




          (j) The Administrative Agent shall have received a certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (h) and (i) of this Section.










 



30




          (k) Schedule 6.01 to this Agreement shall list all Indebtedness for borrowed money of the
Acquired Company after giving effect to the Acquisition and all related transactions, and such
schedule shall be consistent in all material respects with the information heretofore provided to
the Lenders.



The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such
notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions
is satisfied (or waived pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time, on
January 31, 2007 (and, in the event such conditions shall not have been so satisfied or waived, the
Commitments shall terminate at such time).




          SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing is subject to the satisfaction of the following conditions:





     (a) The representations and warranties of the Borrower set forth in this Agreement
(other than the representations set forth in Sections 3.04(c), 3.04(d) and 3.05) shall be
true and correct on and as of the date of such Borrowing.




     (b) At the time of and immediately after giving effect to such Borrowing, no Default
shall have occurred and be continuing.


Each Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the
date thereof as to the matters specified in paragraphs (a) and (b) of this Section.




ARTICLE V




Affirmative Covenants




          Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and
agrees with the Lenders that:




          SECTION 5.01. Financial Statements and Other Information. The Borrower will furnish
to the Administrative Agent and each Lender:





     (a) within 120 days after the end of each fiscal year of the Borrower, a copy of its
audited consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by
PricewaterhouseCoopers LLP or other independent public accountants of recognized national
standing (without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;









 



31



     (b) within 60 days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower, a copy of its consolidated balance sheet and related statements
of operations, stockholders’ equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year, all certified by one of its
Financial Officers as presenting fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;




     (c) concurrently with any delivery of financial statements under clause (a) or (b)
above, a certificate of a Financial Officer of the Borrower (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto and (ii) setting forth reasonably
detailed calculations demonstrating compliance with Section 6.06;




     (d) concurrently with any delivery of financial statements under clause (a) above, a
certificate of the accounting firm that reported on such financial statements stating
whether they obtained knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the extent required by
accounting rules or guidelines);




     (e) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials regularly filed by the Borrower or any
Subsidiary with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or distributed by the Borrower
to its shareholders generally, as the case may be; and




     (f) promptly following any request therefor, such other information regarding the
operations, business affairs and financial condition of the Borrower or any Subsidiary, or
compliance with the terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.



          SECTION 5.02. Notices of Material Events. The Borrower will furnish to the
Administrative Agent prompt written notice of the following:





     (a) the occurrence of any Default;




     (b) the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate
thereof that, if adversely determined, would reasonably be expected to result in a Material
Adverse Effect; and




     (c) any other development that results in, or would reasonably be expected to result
in, a Material Adverse Effect.









 



32

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto.




          SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will cause each
of its Significant Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of
its business except (in the case of any such failure to do so other than with respect to
preserving, renewing and keeping in full force and effect the existence of the Borrower) where the
failure to do so would not result in a Material Adverse Effect; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section
6.04.




          SECTION 5.04. Payment of Obligations. The Borrower will, and will cause each of its
Subsidiaries to, pay its Tax liabilities, that, if not paid, would result in a Material Adverse
Effect before the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such contest would not reasonably be expected
to result in a Material Adverse Effect.




          SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and will cause
each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted, except where the
failure to do so would not reasonably be expected to result in a Material Adverse Effect and (b)
maintain, with financially sound and reputable insurance companies, insurance in such amounts and
against such risks as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.




          SECTION 5.06. Books and Records; Inspection Rights. The Borrower will, and will cause
each of its Significant Subsidiaries to, keep proper books of record and account in which full,
true and correct entries are made of all dealings and transactions in relation to its business and
activities, except, in the case of any Significant Subsidiary, where the failure to do so would not
reasonably be expected to result in a Material Adverse Effect. The Borrower will, and will cause
each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or
any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make
extracts from its books and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often as reasonably
requested.




          SECTION 5.07. Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority,
including Environmental Laws and ERISA, applicable to it or its property, except where the failure
to do so, individually or in the aggregate, would not result in a Material Adverse Effect.










 



33




          SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only (a) to
consummate the Acquisition, (b) to pay fees and expenses incurred in connection with the
Acquisition and (c) to provide liquidity in connection with any commercial paper program of the
Borrower. No part of the proceeds of any Loan will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board, including Regulations
U and X.




          SECTION 5.09. Consummation of the Acquisition. The Borrower will, and will cause the
other Acquirors to, (i) cause each of the material agreements, instruments and documents relating
to the Transactions that are executed after the Effective Date to be reasonably satisfactory to the
Administrative Agent and its counsel and (ii) ensure that, following the execution thereof, no such
agreement, instrument or document, nor any material agreement, instrument or document related to
the Transactions that was executed on or prior to the Effective Date (including the Purchase
Agreement), shall be altered, amended or otherwise changed or supplemented or any condition therein
waived to the material disadvantage of the Borrower or the Lenders, in each case without the prior
written consent of the Lenders.




ARTICLE VI




Negative Covenants




          Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full, the Borrower covenants and agrees with
the Lenders that:




          SECTION 6.01. Subsidiary Indebtedness. The Borrower will not permit any Subsidiary to
create, incur, assume or permit to exist any Indebtedness, except:





     (a) Indebtedness existing on the date hereof and set forth on Schedule 6.01 and
extensions, renewals or replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof;




     (b) Indebtedness of any Subsidiary to the Borrower or any other Subsidiary;
provided that no such Indebtedness shall be assigned to, or subjected to any Lien in
favor of, a Person other than the Borrower or a Subsidiary;




     (c) Indebtedness of any Subsidiary incurred to finance the acquisition, construction or
improvement by such Subsidiary of any fixed or capital assets, including Capital Lease
Obligations and any Indebtedness incurred or assumed in connection with the acquisition,
construction or improvement of any such assets, and any Indebtedness secured by a Lien on
any such assets prior to the acquisition thereof, and extensions, renewals and replacements
of any of the foregoing Indebtedness referred to in this paragraph that do not increase the
outstanding principal amount thereof; provided that such Indebtedness is incurred
prior to or within 180 days after such acquisition or the completion of such construction or
improvement;









 



34



     (d) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that such Indebtedness exists at the time such Person becomes a Subsidiary
and is not created in contemplation of or in connection with such Person becoming a
Subsidiary;




     (e) Indebtedness of any Subsidiary as an account party in respect of letters of credit
backing obligations (other than Indebtedness) of any Subsidiary;




     (f) Indebtedness consisting of industrial development, pollution control or other
revenue bonds or similar instruments issued or guaranteed by any Governmental Authority; and




     (g) Other Indebtedness not expressly permitted by clauses (a) through (f) above;
provided that the sum, without duplication, of (i) the outstanding Indebtedness
permitted by this clause (g), (ii) the aggregate principal amount of the outstanding
obligations secured by Liens permitted by Section 6.02(n) and (iii) the Attributable Debt in
respect of Sale-Leaseback Transactions permitted by Section 6.03(b) does not at any time
exceed 25% of Consolidated Assets.



          SECTION 6.02. Liens. The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any Principal Property now owned or hereafter
acquired by it, except:





     (a) Liens imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.04;




     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like
Liens imposed by law, arising in the ordinary course of business;




     (c) pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or regulations;




     (d) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case made in the ordinary course of business;




     (e) judgment liens in respect of judgments that do not constitute Events of Default
under clause (k) of Article VII;




     (f) easements, zoning restrictions, rights-of-way and similar encumbrances on property
imposed by law or arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected property or
materially interfere with the ordinary conduct of business of the Borrower and the
Subsidiaries taken as a whole;




     (g) any Lien on any property or asset of the Borrower or any Subsidiary existing on the
date hereof (or on improvements or accessions thereto or proceeds therefrom) and









 



35



set forth on Schedule 6.02; provided that (i) such Lien shall not apply to any
other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall be
permitted by this clause (g) only to the extent of the amount of the obligations which it
secures on the date hereof and extensions, renewals and replacements thereof up to the
outstanding principal amount thereof;




     (h) any Lien (i) existing on any property or asset prior to the acquisition thereof by
the Borrower or any Subsidiary, (ii) existing on any property or asset of any Person that
becomes a Subsidiary after the date hereof prior to the time such Person becomes a
Subsidiary or (iii) to the extent such Lien applies only to the property or assets so
acquired by the Borrower or any Subsidiary or owned by a Person prior to the time such
Person becomes a Subsidiary, arising after the date of such acquisition or such Person
becoming a Subsidiary pursuant to contractual commitments entered into prior thereto;
provided that (x) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as the case may be, (y) such Lien
shall not apply to any other property or assets of the Borrower or any Subsidiary other than
improvements and accessions to the assets to which it originally applies and proceeds of
such assets, improvements and accessions and (z) such Lien shall be permitted by this clause
(h) only to the extent of the amount of the obligations which it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be, and
extensions, renewals and replacements thereof up to the outstanding principal amount
thereof;




     (i) Liens on fixed or capital assets acquired, constructed or improved by the Borrower
or any Subsidiary; provided that (i) such Liens secure Indebtedness permitted by
clause (c) of Section 6.01, (ii) such Liens and the Indebtedness secured thereby are
incurred prior to or within 180 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost
of acquiring, constructing or improving such fixed or capital assets and (iv) such Liens
shall not apply to any other property or assets of the Borrower or any Subsidiary;




     (j) Liens securing industrial development, pollution control or other revenue bonds or
similar instruments issued or guaranteed by any Governmental Authority;




     (k) Liens in favor of any Governmental Authority to secure obligations pursuant to the
provisions of any contract or statute;




     (l) Liens to secure obligations of a Subsidiary to the Borrower or any other
Subsidiary;




     (m) Liens on equity, joint venture, partnership, or other ownership or investment
interests (collectively, the “Specified Equity Interests”) of the Borrower or any
Subsidiary in any Person arising in connection with the rights of a third party owning
Specified Equity Interests in such Person pursuant to a joint venture, shareholder,
distribution or other agreement between the Borrower or any of its Subsidiaries and such
third party to purchase the Specified Equity Interests owned by the Borrower or any
Subsidiary in such Person for reasonable value pursuant to change in control provisions,









 



36



noncompetition provisions, restrictions on competing brands or other business
restriction provisions in one or more of the agreements between such parties; and




     (n) Liens not expressly permitted by clauses (a) through (m) above; provided
that the sum of (i) the outstanding Indebtedness permitted by Section 6.01(g), (ii) the
aggregate principal amount of the outstanding obligations secured by Liens permitted by this
clause (n) and (iii) the Attributable Debt in respect of Sale-Leaseback Transactions
permitted by Section 6.03(b) does not at any time exceed 25% of Consolidated Assets.



          SECTION 6.03. Sale and Leaseback Transactions. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Sale-Leaseback Transaction relating to any
Principal Property except:





     (a) Sale-Leaseback Transactions to which the Borrower or any Subsidiary is a party as
of the date hereof; and




     (b) other Sale-Leaseback Transactions; provided that the sum of (i) the
outstanding Indebtedness permitted by Section 6.01(g), (ii) the aggregate principal amount
of outstanding obligations secured by Liens permitted by Section 6.02(n) and (iii) the
aggregate Attributable Debt in respect of Sale-Leaseback Transactions permitted by this
clause (b) does not at any time exceed 25% of Consolidated Assets.



          SECTION 6.04. Fundamental Changes. (a) The Borrower will not, and will not permit
any Significant Subsidiary to, merge into or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in
one transaction or in a series of transactions) assets representing all or substantially all the
aggregate assets of the Borrower and the Subsidiaries (whether now owned or hereafter acquired), or
liquidate or dissolve, except that if at the time thereof and immediately after giving effect
thereto no Default shall have occurred and be continuing (i) any Person may merge into the Borrower
in a transaction in which the Borrower is the surviving corporation, (ii) any Person may merge with
any Subsidiary in a transaction in which the surviving entity is a Subsidiary and (iii) any
Subsidiary may liquidate or dissolve or, so long as such transaction does not constitute a transfer
or other disposition of all or substantially all the aggregate assets of the Borrower and the
Subsidiaries, merge with or into any other Person.




          (b) The Borrower will not, and will not permit any of its Significant Subsidiaries to, engage
as its principal business in any business other than businesses of the type collectively conducted
by the Borrower and its Subsidiaries on the date of this Agreement and businesses reasonably
related thereto.




          SECTION 6.05. Transactions with Affiliates. Except as set forth on Schedule 6.05, the
Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets
from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the
ordinary course of business at prices and on terms and conditions not less favorable to the
Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third
parties and (b) transactions between or among the Borrower and its Subsidiaries not







 



37




involving any other Affiliate; provided that nothing contained in this Section 6.05
shall prevent the Borrower or any Subsidiary from paying dividends to its respective shareholders.




          SECTION 6.06. Ratio of Consolidated Total Debt to Consolidated Net Worth. The
Borrower will not permit the ratio of Consolidated Total Debt to Consolidated Net Worth at any time
to be greater than 2.00 to 1.00.




ARTICLE VII




Events of Default




          If any of the following events (“Events of Default”) shall occur:





     (a) the Borrower shall fail to pay any principal of any Loan when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise;




     (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Article) payable under this
Agreement, when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three Business Days;




     (c) any representation or warranty made or deemed made by or on behalf of the Borrower
in or in connection with this Agreement or any amendment or modification hereof or waiver
hereunder, or in any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any amendment or modification hereof or
waiver hereunder, shall prove to have been materially incorrect when made or deemed made;




     (d) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02, 5.03 (with respect to the Borrower’s existence) or 5.08 or in
Article VI;




     (e) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in clause (a), (b) or (d) of this
Article), and such failure shall continue unremedied for a period of 30 days after notice
thereof from the Administrative Agent to the Borrower (which notice will be given at the
request of any Lender);




     (f) the Borrower or any Subsidiary shall fail to make any payment (whether of principal
or interest) in respect of any Material Indebtedness, when and as the same shall become due
and payable or within any applicable cure period;




     (g) any Material Indebtedness is declared to be due prior to its scheduled maturity or
the holder or holders of any Material Indebtedness or any trustee or agent on its or their
behalf require the prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity; provided that this clause (g) shall not apply to secured









 



38



Indebtedness that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;




     (h) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or
any Significant Subsidiary or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Significant Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;




     (i) the Borrower or any Significant Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this Article,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Significant Subsidiary
or for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the purpose of effecting
any of the foregoing;




     (j) the Borrower or any Significant Subsidiary shall become unable, admit in writing
its inability or fail generally to pay its debts as they become due;




     (k) one or more judgments for the payment of money in an aggregate amount in excess of
$25,000,000 shall be rendered against the Borrower, any Subsidiary or any combination
thereof and the same shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to
enforce any such judgment;




     (l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events that have occurred, would reasonably be
expected to result in liability of the Borrower and the Subsidiaries in an aggregate amount
exceeding (i) $25,000,000 in any year or (ii) $50,000,000 for all periods; or




     (m) a Change in Control shall occur;


then, and in every such event (other than an event with respect to the Borrower described in clause
(h) or (i) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different










 



39



times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately,
and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to
the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.




ARTICLE VIII




The Administrative Agent




          Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent and
authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers
as are delegated to the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.




          The bank serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.



The Administrative Agent shall not have any duties or obligations except those expressly set forth
herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and powers expressly
contemplated hereby that the Administrative Agent is required to exercise in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or wilful misconduct. The Administrative Agent shall be deemed
not to have knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into










 



40



(i) any statement, warranty or representation made in or in connection with this Agreement, (ii)
the contents of any certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent. Each party to this Agreement
acknowledges that neither the Syndication Agent nor the Documentation Agent shall have any duties,
responsibilities, obligations or authority under this Agreement in such capacity.




          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.




          The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Administrative Agent.




          Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the
Borrower. Upon any such resignation, the Borrower shall have the right, in consultation with the
Required Lenders, to appoint a successor. If no successor shall have been so appointed by the
Borrower and shall have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The
fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Administrative Agent.










 



41




          Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder or thereunder.




ARTICLE IX




Miscellaneous




          SECTION 9.01. Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:





     (a) if to the Borrower, to it at Brown-Forman Corporation, 850 Dixie Highway,
Louisville, KY 40210, Attention of Treasurer (Telecopy No. (502) 774-6908), with a copy to
the Attention of General Counsel (Telecopy No. (502) 774-6650);




     (b) if to the Administrative Agent, to Bank of America, N.A., 2001 Clayton Blvd., Mail
Code CA4-702-02-05, Concord, California 94520-2405, Attention Gail Robin (Telecopy No. (888)
969-2621); with a copy to Bank of America, N.A., Agency Management, 1455 Market Street,
5th Floor, Mail Code CA5-701-05-19, San Francisco, California 94103, Attention
Anthea Del Bianco (Telecopy No. (415) 503-5101); and




     (c) if to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.



          Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.




          SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative
Agent or any Lender in exercising any right or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Administrative
Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or consent to any
departure by the Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan shall not be construed as a







 



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waiver of any Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.




          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan,
or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) change Section 2.06(d) or Section 2.15(b) or
(c) in a manner that would alter the pro rata sharing of Commitment reductions or payments required
thereby, as the case may be, without the written consent of each Lender affected thereby or (v)
change any of the provisions of this Section or the definition of “Required Lenders” or any other
provision hereof specifying the number or percentage of Lenders required to waive, amend or modify
any rights hereunder or make any determination or grant any consent hereunder, without the written
consent of each Lender; provided, further, that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the
prior written consent of the Administrative Agent.




          SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the Administrative Agent,
in connection with the syndication of the credit facilities provided for herein, the preparation
and administration of this Agreement or any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and
(ii) all out-of-pocket expenses incurred by the Administrative Agent or any Lender, including the
reasonable fees, charges and disbursements of any counsel for the Administrative Agent or any
Lender, in connection with the lawful enforcement of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Loans made hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in
respect of such Loans.




          (b) The Borrower shall indemnify the Administrative Agent and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or
as a result of (i) the execution or delivery of this Agreement (including the syndication of the
credit facilities established hereby) or any agreement or instrument contemplated hereby, the
performance by the parties hereto of their respective obligations hereunder or the consummation of
the Transactions or any other transactions contemplated hereby, (ii) any Loan or the use of the
proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or
from any property owned or operated by the Borrower or







 



43




any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or
any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.




          (c) To the extent that the Borrower fails to pay any amount required to be paid by it to the
Administrative Agent under paragraph (a) or (b) of this Section, each Lender severally agrees to
pay to the Administrative Agent such Lender’s Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the Administrative Agent
in its capacity as such.




          (d) To the extent permitted by applicable law, the Borrower shall not assert, and the Borrower
hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or the use of the proceeds thereof.




          (e) All amounts due under this Section shall be payable promptly after written demand
therefor.




          SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that neither the Borrower nor the Borrower may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null
and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative
Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this
Agreement.




          (b) Any Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that (i) except in the case of an assignment by a Lender to a
Lender Affiliate of such Lender, the Administrative Agent must give its prior written consent to
such assignment (which consent shall not be unreasonably withheld), (ii) except in the case of an
assignment to a Lender or a Lender Affiliate, the Borrower must give its prior written consent to
such assignment (which consent shall not be unreasonably withheld), (iii) except in the case of an
assignment to a Lender or a Lender Affiliate or an assignment of the entire remaining amount of the
assigning Lender’s Commitment, the amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not







 



44




be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, (iv) each partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement, (v) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and (vi) the assignee, if it shall not be
a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire; and
provided further that any consent of the Borrower otherwise required under this paragraph
shall not be required if an Event of Default under clause (h) or (i) of Article VII has occurred
and is continuing. Subject to acceptance and recording thereof pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.12, 2.13, 2.14 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.




          (c) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices in The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of the Lenders, and
the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.




          (d) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in this paragraph.




          (e) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell
participations to one or more banks or other entities (a “Participant”) in all or a portion
of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the







 



45





          Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (f) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.12, 2.13 and
2.14 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant
to paragraph (b) of this Section. To the extent permitted by law and if prior written notice of
the sale of the participation to the Participant is provided to the Borrower, each Participant also
shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.15(c) as though it were a Lender.




          (f) A Participant shall not be entitled to receive any greater payment under Section 2.12 or
2.14 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is
made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.14 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.14(e) as though it were a Lender.




          (g) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.




          SECTION 9.05. Survival. All covenants, agreements, representations and warranties
made by the Borrower herein and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so
long as the Commitments have not expired or terminated. The provisions of Sections 2.12, 2.13,
2.14 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the Loans and the
Commitments or the termination of this Agreement or any provision hereof.




          SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts), each of







 



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which shall constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement and any separate letter agreements with respect to fees payable to
the Administrative Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or electronic image scan
shall be effective as delivery of a manually executed counterpart of this Agreement.




          SECTION 9.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.




          SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of setoff) which such
Lender may have.




          SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York.




          (b) The Borrower hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement or for recognition or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding
may be heard and determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against the Borrower or its properties in the courts of any jurisdiction.










 



47




          (c) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.




          (d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.




          SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.




          SECTION 9.11. Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.




          SECTION 9.12. Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the extent requested by
any bank regulatory authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process (but only after giving prompt written notice to the Borrower,
to the extent permitted by law, of any such requirement or request so that the Borrower may seek a
protective order or other appropriate remedy and/or waive compliance with this Section), (d) to any
other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating the enforcement of rights hereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its rights or
obligations under this Agreement, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a
source other than the Borrower. For the purposes of this Section, “Information” means all
information received from the Borrower relating to the Borrower or its







 



48




business, other than any such information that is available to the Administrative Agent or any
Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in
the case of information received from the Borrower after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential
information. Notwithstanding anything herein to the contrary, any Lender (and any employee,
representative or other agent of such Lender) may disclose to any and all persons, without
limitation of any kind, such Lender’s U.S. Federal income tax treatment and the U.S. Federal income
tax structure of the transactions contemplated hereby relating to such Lender and all materials of
any kind (including opinions or other tax analyses) that are provided to it relating to such tax
treatment and tax structure. However, no disclosure of any information relating to such tax
treatment or tax structure may be made to the extent nondisclosure is reasonably necessary in order
to comply with applicable securities laws.




          SECTION 9.13. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges
and other amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance
with applicable law, the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.




          SECTION 9.14. Conversion of Currencies. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing hereunder in one currency into
another currency, each party hereto agrees, to the fullest extent that it may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal banking procedures
in the relevant jurisdiction the first currency could be purchased with such other currency on the
Business Day immediately preceding the day on which final judgment is given.




          (b) The obligations of the Borrower in respect of any sum due to any party hereto or any
holder of the obligations owing hereunder (the “Applicable Creditor”) shall,
notwithstanding any judgment in a currency (the “Judgment Currency”) other than the
currency in which such sum is stated to be due hereunder (the “Agreement Currency”), be
discharged only to the extent that, on the Business Day following receipt by the Applicable
Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase the Agreement
Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less
than the sum originally due to the Applicable Creditor in the Agreement Currency, the Borrower
agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the







 



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Applicable Creditor against such loss. The obligations of the Borrower contained in this
Section 10.14 shall survive the termination of this Agreement and the payment of all other amounts
owing hereunder.




          SECTION 9.15. USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant
to the requirements of the USA Patriot Act, it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender to identify the Borrower in accordance with the USA
Patriot Act.




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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year first above written.



	 	 	 	 	 	 	 
	 	 	BROWN-FORMAN CORPORATION,	 	 
	 
	 	 	 	 	 	 
	 

	 	     by	 	/s/ Gerard J. Anderson	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

Name: Gerard J. Anderson
	 	 
	 

	 	 	 	Title: Vice President and Director
of Treasury and Corporate Development	 	 






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	 	 	BANK OF AMERICA, N.A., as Administrative	 	 
	 	 	Agent and a Lender,	 	 
	 
	 	 	 	 	 	 
	 

	 	     by	 	 	 	 
	 

	 	 	 	     /s/ David L. Catherall
 

	 	 
	 

	 	 	 	Name: David L. Catherall	 	 
	 

	 	 	 	Title: Vice President	 	 






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	 	 	JPMORGAN CHASE BANK, N.A., as Syndication	 	 
	 	 	Agent and a Lender,	 	 
	 
	 	 	 	 	 	 
	 

	 	     by	 	 	 	 
	 

	 	 	 	     /s/ Thomas T. Hou	 	 
	 

	 	 	 	 

Name: Thomas T. Hou
	 	 
	 

	 	 	 	Title: Vice President	 	 






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	 	 	CITICORP NORTH AMERICA, INC., as	 	 
	 	 	Documentation Agent and a Lender,	 	 
	 
	 	 	 	 	 	 
	 

	 	     by	 	 	 	 
	 

	 	 	 	     /s/ Carolyn A. Kee	 	 
	 

	 	 	 	 

Name: Carolyn A. Kee
	 	 
	 

	 	 	 	Title: Vice President	 	 






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	 	 	NATIONAL CITY BANK, as a Lender,	 	 
	 
	 	 	 	 	 	 
	 

	 	     by	 	 	 	 
	 

	 	 	 	     /s/ Deroy Scott	 	 
	 

	 	 	 	 

Name: Deroy Scott
	 	 
	 

	 	 	 	Title: Senior Vice President	 	 






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	 	 	HSBC BANK USA, N.A., as a Lender,	 	 
	 
	 	 	 	 	 	 
	 

	 	     by	 	 	 	 
	 

	 	 	 	     /s/ Thomas Foley	 	 
	 

	 	 	 	 

Name: Thomas Foley
	 	 
	 

	 	 	 	Title: Senior Vice President	 	 






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	 	 	SUNTRUST BANK, as a Lender,	 	 
	 
	 	 	 	 	 	 
	 

	 	     by	 	 	 	 
	 

	 	 	 	     /s/ John N. Gregg, Jr.	 	 
	 

	 	 	 	 

Name: John N. Gregg, Jr.
	 	 
	 

	 	 	 	Title: Managing Director	 	 






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