-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 JL8PoMl0hYCFC+AFZ9uJrz6UkPDkwW7+LBBun6Wz+tuleZVOjrN37xFoTaDpnIDK
 dLjWlo9X/I1OBdefpXMUoA==

<SEC-DOCUMENT>/in/edgar/work/20000531/0000016918-00-000009/0000016918-00-000009.txt : 20000919
<SEC-HEADER>0000016918-00-000009.hdr.sgml : 20000919
ACCESSION NUMBER:		0000016918-00-000009
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20000229
FILED AS OF DATE:		20000530

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CANANDAIGUA BRANDS INC
		CENTRAL INDEX KEY:			0000016918
		STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]		IRS NUMBER:				160716709
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0228
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		10-K
			SEC ACT:		
			SEC FILE NUMBER:	001-08495
			FILM NUMBER:		646399
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		300 WILLOWBROOK OFFICE PARK
				CITY:			FAIRPORT
				STATE:			NY
				ZIP:			14450
				BUSINESS PHONE:		7162182169
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		300 WILLOWBROOK OFFICE PARK
					CITY:			FAIRPORT
					STATE:			NY
					ZIP:			14450
</MAIL-ADDRESS>

					FORMER COMPANY:	
						FORMER CONFORMED NAME:	CANANDAIGUA WINE CO INC
						DATE OF NAME CHANGE:	19920703
</FORMER-COMPANY>
</FILER>

						FILER:

							COMPANY DATA:	
								COMPANY CONFORMED NAME:			BATAVIA WINE CELLARS INC
								CENTRAL INDEX KEY:			0000914160
								STANDARD INDUSTRIAL CLASSIFICATION:	 [0000
]								IRS NUMBER:				161222994
								STATE OF INCORPORATION:			NY
								FISCAL YEAR END:			0228
</COMPANY-DATA>

								FILING VALUES:
									FORM TYPE:		10-K
									SEC ACT:		
									SEC FILE NUMBER:	033-70824-01
									FILM NUMBER:		646400
</FILING-VALUES>

									BUSINESS ADDRESS:	
										STREET 1:		116 BUFFALO STREET
										CITY:			CANANDAIGUA
										STATE:			NY
										ZIP:			14424
										BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

										MAIL ADDRESS:	
											STREET 1:		116 BUFFALO
											CITY:			CANANDAIGUA
											STATE:			NY
											ZIP:			14424
</MAIL-ADDRESS>
</FILER>

											FILER:

												COMPANY DATA:	
													COMPANY CONFORMED NAME:			BARTON INC
													CENTRAL INDEX KEY:			0000914167
													STANDARD INDUSTRIAL CLASSIFICATION:	 [0000
]													IRS NUMBER:				363500366
													STATE OF INCORPORATION:			DE
													FISCAL YEAR END:			0831
</COMPANY-DATA>

													FILING VALUES:
														FORM TYPE:		10-K
														SEC ACT:		
														SEC FILE NUMBER:	033-70824-07
														FILM NUMBER:		646401
</FILING-VALUES>

														BUSINESS ADDRESS:	
															STREET 1:		116 BUFFALO STREET
															CITY:			CANANDAIGUA
															STATE:			NY
															ZIP:			14424
															BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

															MAIL ADDRESS:	
																STREET 1:		116 BUFFALO ST
																CITY:			CANANDAIGUA
																STATE:			NY
																ZIP:			14424
</MAIL-ADDRESS>
</FILER>

																FILER:

																	COMPANY DATA:	
																		COMPANY CONFORMED NAME:			BARTON BRANDS LTD /DE/
																		CENTRAL INDEX KEY:			0000914168
																		STANDARD INDUSTRIAL CLASSIFICATION:	 [0000
]																		IRS NUMBER:				363185921
																		STATE OF INCORPORATION:			DE
																		FISCAL YEAR END:			0831
</COMPANY-DATA>

																		FILING VALUES:
																			FORM TYPE:		10-K
																			SEC ACT:		
																			SEC FILE NUMBER:	033-70824-08
																			FILM NUMBER:		646402
</FILING-VALUES>

																			BUSINESS ADDRESS:	
																				STREET 1:		116 BUFFALO STREET
																				CITY:			CANANDAIGUA
																				STATE:			NY
																				ZIP:			14424
																				BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

																				MAIL ADDRESS:	
																					STREET 1:		116 BUFFALO
																					CITY:			CANANDAIGUA
																					STATE:			NY
																					ZIP:			14424
</MAIL-ADDRESS>
</FILER>

																					FILER:

																						COMPANY DATA:	
																							COMPANY CONFORMED NAME:			BARTON BEERS LTD
																							CENTRAL INDEX KEY:			0000914169
																							STANDARD INDUSTRIAL CLASSIFICATION:	 [0000
]																							IRS NUMBER:				362855879
																							STATE OF INCORPORATION:			MD
																							FISCAL YEAR END:			0831
</COMPANY-DATA>

																							FILING VALUES:
																								FORM TYPE:		10-K
																								SEC ACT:		
																								SEC FILE NUMBER:	033-70824-09
																								FILM NUMBER:		646403
</FILING-VALUES>

																								BUSINESS ADDRESS:	
																									STREET 1:		116 BUFFALO STREET
																									CITY:			CANANDAIGUA
																									STATE:			NY
																									ZIP:			14424
																									BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

																									MAIL ADDRESS:	
																										STREET 1:		116 BUFFALO
																										CITY:			CANANDAIGUA
																										STATE:			NY
																										ZIP:			14424
</MAIL-ADDRESS>
</FILER>

																										FILER:

																											COMPANY DATA:	
																												COMPANY CONFORMED NAME:			BARTON BRANDS OF CALIFORNIA INC
																												CENTRAL INDEX KEY:			0000914171
																												STANDARD INDUSTRIAL CLASSIFICATION:	 [0000
]																												IRS NUMBER:				061048198
																												STATE OF INCORPORATION:			CT
																												FISCAL YEAR END:			0831
</COMPANY-DATA>

																												FILING VALUES:
																													FORM TYPE:		10-K
																													SEC ACT:		
																													SEC FILE NUMBER:	033-70824-10
																													FILM NUMBER:		646404
</FILING-VALUES>

																													BUSINESS ADDRESS:	
																														STREET 1:		116 BUFFALO STREET
																														CITY:			CANANDAIGUA
																														STATE:			NY
																														ZIP:			14424
																														BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

																														MAIL ADDRESS:	
																															STREET 1:		116 BUFFALO
																															CITY:			CANANDAIGUA
																															STATE:			NY
																															ZIP:			14424
</MAIL-ADDRESS>
</FILER>

																															FILER:

																																COMPANY DATA:	
																																	COMPANY CONFORMED NAME:			BARTON BRANDS OF GEORGIA INC
																																	CENTRAL INDEX KEY:			0000914172
																																	STANDARD INDUSTRIAL CLASSIFICATION:	 [0000
]																																	IRS NUMBER:				581215938
																																	STATE OF INCORPORATION:			GA
																																	FISCAL YEAR END:			0831
</COMPANY-DATA>

																																	FILING VALUES:
																																		FORM TYPE:		10-K
																																		SEC ACT:		
																																		SEC FILE NUMBER:	033-70824-11
																																		FILM NUMBER:		646405
</FILING-VALUES>

																																		BUSINESS ADDRESS:	
																																			STREET 1:		116 BUFFALO STREET
																																			CITY:			CANANDAIGUA
																																			STATE:			NY
																																			ZIP:			14424
																																			BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

																																			MAIL ADDRESS:	
																																				STREET 1:		116 BUFFALO
																																				CITY:			CANANDAIGUA
																																				STATE:			NY
																																				ZIP:			14424
</MAIL-ADDRESS>
</FILER>

																																				FILER:

																																					COMPANY DATA:	
																																						COMPANY CONFORMED NAME:			BARTON DISTILLERS IMPORT CORP
																																						CENTRAL INDEX KEY:			0000914173
																																						STANDARD INDUSTRIAL CLASSIFICATION:	 [0000
]																																						IRS NUMBER:				131794441
																																						STATE OF INCORPORATION:			NY
																																						FISCAL YEAR END:			0831
</COMPANY-DATA>

																																						FILING VALUES:
																																							FORM TYPE:		10-K
																																							SEC ACT:		
																																							SEC FILE NUMBER:	033-70824-12
																																							FILM NUMBER:		646406
</FILING-VALUES>

																																							BUSINESS ADDRESS:	
																																								STREET 1:		116 BUFFALO STREET
																																								CITY:			CANANDAIGUA
																																								STATE:			NY
																																								ZIP:			14424
																																								BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

																																								MAIL ADDRESS:	
																																									STREET 1:		116 BUFFALO
																																									CITY:			CANANDAIGUA
																																									STATE:			NY
																																									ZIP:			14424
</MAIL-ADDRESS>
</FILER>

																																									FILER:

																																										COMPANY DATA:	
																																											COMPANY CONFORMED NAME:			BARTON FINANCIAL CORP
																																											CENTRAL INDEX KEY:			0000914174
																																											STANDARD INDUSTRIAL CLASSIFICATION:	 [0000
]																																											IRS NUMBER:				510311795
																																											STATE OF INCORPORATION:			DE
																																											FISCAL YEAR END:			0831
</COMPANY-DATA>

																																											FILING VALUES:
																																												FORM TYPE:		10-K
																																												SEC ACT:		
																																												SEC FILE NUMBER:	033-70824-13
																																												FILM NUMBER:		646407
</FILING-VALUES>

																																												BUSINESS ADDRESS:	
																																													STREET 1:		116 BUFFALO STREET
																																													CITY:			CANANDAIGUA
																																													STATE:			NY
																																													ZIP:			14424
																																													BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

																																													MAIL ADDRESS:	
																																														STREET 1:		116 BUFFALO
																																														CITY:			CANANDAIGUA
																																														STATE:			NY
																																														ZIP:			14424
</MAIL-ADDRESS>
</FILER>

																																														FILER:

																																															COMPANY DATA:	
																																																COMPANY CONFORMED NAME:			STEVENS POINT BEVERAGE CO
																																																CENTRAL INDEX KEY:			0000914175
																																																STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																IRS NUMBER:				390638900
																																																STATE OF INCORPORATION:			WI
																																																FISCAL YEAR END:			0831
</COMPANY-DATA>

																																																FILING VALUES:
																																																	FORM TYPE:		10-K
																																																	SEC ACT:		
																																																	SEC FILE NUMBER:	033-17673-13
																																																	FILM NUMBER:		646408
</FILING-VALUES>

																																																	BUSINESS ADDRESS:	
																																																		STREET 1:		116 BUFFALO STREET
																																																		CITY:			CANANDAIGUA
																																																		STATE:			NY
																																																		ZIP:			14424
																																																		BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

																																																		MAIL ADDRESS:	
																																																			STREET 1:		116 BUFFALO
																																																			CITY:			CANANDAIGUA
																																																			STATE:			NY
																																																			ZIP:			14424
</MAIL-ADDRESS>
</FILER>

																																																			FILER:

																																																				COMPANY DATA:	
																																																					COMPANY CONFORMED NAME:			MONARCH IMPORT CO
																																																					CENTRAL INDEX KEY:			0000914179
																																																					STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																					IRS NUMBER:				363539106
																																																					STATE OF INCORPORATION:			IL
																																																					FISCAL YEAR END:			0228
</COMPANY-DATA>

																																																					FILING VALUES:
																																																						FORM TYPE:		10-K
																																																						SEC ACT:		
																																																						SEC FILE NUMBER:	033-70824-16
																																																						FILM NUMBER:		646409
</FILING-VALUES>

																																																						BUSINESS ADDRESS:	
																																																							STREET 1:		235 N BLOOMFIELD RD
																																																							CITY:			CANANDAIGUA
																																																							STATE:			NY
																																																							ZIP:			14424
																																																							BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

																																																							MAIL ADDRESS:	
																																																								STREET 1:		116 BUFFALO
																																																								STREET 2:		17TH FLOOR
																																																								CITY:			CANANDAIGUA
																																																								STATE:			NY
																																																								ZIP:			14424
</MAIL-ADDRESS>

																																																								FORMER COMPANY:	
																																																									FORMER CONFORMED NAME:	BARTON MANAGEMENT INC
																																																									DATE OF NAME CHANGE:	19931027
</FORMER-COMPANY>
</FILER>

																																																									FILER:

																																																										COMPANY DATA:	
																																																											COMPANY CONFORMED NAME:			CANANDAIGUA WINE CO INC /NY/
																																																											CENTRAL INDEX KEY:			0000928683
																																																											STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																											IRS NUMBER:				161462887
																																																											STATE OF INCORPORATION:			NY
																																																											FISCAL YEAR END:			0831
</COMPANY-DATA>

																																																											FILING VALUES:
																																																												FORM TYPE:		10-K
																																																												SEC ACT:		
																																																												SEC FILE NUMBER:	033-70824-19
																																																												FILM NUMBER:		646410
</FILING-VALUES>

																																																												BUSINESS ADDRESS:	
																																																													STREET 1:		235 NORTH BLOOMFIELD ROAD
																																																													CITY:			CANANDAIGUA
																																																													STATE:			NY
																																																													ZIP:			14424
																																																													BUSINESS PHONE:		7163947900
</BUSINESS-ADDRESS>

																																																													MAIL ADDRESS:	
																																																														STREET 1:		116 BUFFALO
																																																														CITY:			CANANDAIGUA
																																																														STATE:			NY
																																																														ZIP:			14424
</MAIL-ADDRESS>

																																																														FORMER COMPANY:	
																																																															FORMER CONFORMED NAME:	CANANDAIGUA WEST INC
																																																															DATE OF NAME CHANGE:	19940818
</FORMER-COMPANY>
</FILER>

																																																															FILER:

																																																																COMPANY DATA:	
																																																																	COMPANY CONFORMED NAME:			CANANDAIGUA EUROPE LTD
																																																																	CENTRAL INDEX KEY:			0001051699
																																																																	STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																	IRS NUMBER:				161195581
																																																																	STATE OF INCORPORATION:			NY
																																																																	FISCAL YEAR END:			0228
</COMPANY-DATA>

																																																																	FILING VALUES:
																																																																		FORM TYPE:		10-K
																																																																		SEC ACT:		
																																																																		SEC FILE NUMBER:	333-40571-13
																																																																		FILM NUMBER:		646411
</FILING-VALUES>

																																																																		BUSINESS ADDRESS:	
																																																																			STREET 1:		235 NORTH BLOOMFIELD ROAD
																																																																			CITY:			CANANDAIGUA
																																																																			STATE:			NY
																																																																			ZIP:			14424
																																																																			BUSINESS PHONE:		7163934130
</BUSINESS-ADDRESS>

																																																																			MAIL ADDRESS:	
																																																																				STREET 1:		235 NORTH BLOOMFIELD ROAD
																																																																				CITY:			CANANDAIGUA
																																																																				STATE:			NY
																																																																				ZIP:			14424
</MAIL-ADDRESS>
</FILER>

																																																																				FILER:

																																																																					COMPANY DATA:	
																																																																						COMPANY CONFORMED NAME:			ROBERTS TRADING CORP
																																																																						CENTRAL INDEX KEY:			0001051701
																																																																						STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																						IRS NUMBER:				160865491
																																																																						STATE OF INCORPORATION:			NY
																																																																						FISCAL YEAR END:			0228
</COMPANY-DATA>

																																																																						FILING VALUES:
																																																																							FORM TYPE:		10-K
																																																																							SEC ACT:		
																																																																							SEC FILE NUMBER:	333-40571-14
																																																																							FILM NUMBER:		646412
</FILING-VALUES>

																																																																							BUSINESS ADDRESS:	
																																																																								STREET 1:		235 NORTH BLOOMFIELD ROAD
																																																																								CITY:			CANANDAIGUA
																																																																								STATE:			NY
																																																																								ZIP:			14424
																																																																								BUSINESS PHONE:		7163934130
</BUSINESS-ADDRESS>

																																																																								MAIL ADDRESS:	
																																																																									STREET 1:		235 NORTH BLOOMFIELD ROAD
																																																																									CITY:			CANANDAIGUA
																																																																									STATE:			NY
																																																																									ZIP:			14424
</MAIL-ADDRESS>
</FILER>

																																																																									FILER:

																																																																										COMPANY DATA:	
																																																																											COMPANY CONFORMED NAME:			POLYPHENOLICS INC
																																																																											CENTRAL INDEX KEY:			0001073188
																																																																											STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																											IRS NUMBER:				161546354
																																																																											STATE OF INCORPORATION:			NY
																																																																											FISCAL YEAR END:			0228
</COMPANY-DATA>

																																																																											FILING VALUES:
																																																																												FORM TYPE:		10-K
																																																																												SEC ACT:		
																																																																												SEC FILE NUMBER:	333-67037-15
																																																																												FILM NUMBER:		646413
</FILING-VALUES>

																																																																												BUSINESS ADDRESS:	
																																																																													STREET 1:		433 AIRPORT BLVD
																																																																													STREET 2:		SUITE 403
																																																																													CITY:			BURLINGAME
																																																																													STATE:			CA
																																																																													ZIP:			94010
																																																																													BUSINESS PHONE:		7163934130
</BUSINESS-ADDRESS>

																																																																													MAIL ADDRESS:	
																																																																														STREET 1:		300 WILLOWBROOK OFFICE PARK
																																																																														CITY:			FAIRPORT
																																																																														STATE:			NY
																																																																														ZIP:			14450
</MAIL-ADDRESS>
</FILER>

																																																																														FILER:

																																																																															COMPANY DATA:	
																																																																																COMPANY CONFORMED NAME:			CANANDAIGUA LTD
																																																																																CENTRAL INDEX KEY:			0001073189
																																																																																STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																																IRS NUMBER:				161546354
																																																																																STATE OF INCORPORATION:			NY
																																																																																FISCAL YEAR END:			0228
</COMPANY-DATA>

																																																																																FILING VALUES:
																																																																																	FORM TYPE:		10-K
																																																																																	SEC ACT:		
																																																																																	SEC FILE NUMBER:	333-67037-16
																																																																																	FILM NUMBER:		646414
</FILING-VALUES>

																																																																																	BUSINESS ADDRESS:	
																																																																																		STREET 1:		200 ALDERSGATE STREET
																																																																																		CITY:			LONDON ENGLAND
																																																																																		BUSINESS PHONE:		7163934130
</BUSINESS-ADDRESS>

																																																																																		MAIL ADDRESS:	
																																																																																			STREET 1:		300 WILLOWBROOK OFFICE PARK
																																																																																			CITY:			FAIRPORT
																																																																																			STATE:			NY
																																																																																			ZIP:			14450
</MAIL-ADDRESS>
</FILER>

																																																																																			FILER:

																																																																																				COMPANY DATA:	
																																																																																					COMPANY CONFORMED NAME:			ALLBERRY INC
																																																																																					CENTRAL INDEX KEY:			0001089056
																																																																																					STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																																					STATE OF INCORPORATION:			DE
																																																																																					FISCAL YEAR END:			0228
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																																																																																						SEC ACT:		
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																																																																																						FILM NUMBER:		646415
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																																																																																						BUSINESS ADDRESS:	
																																																																																							STREET 1:		300 WILLOWBROOK OFFICE PARK
																																																																																							CITY:			FAIRPORT
																																																																																							STATE:			NY
																																																																																							ZIP:			14450
																																																																																							BUSINESS PHONE:		716-218-21
</BUSINESS-ADDRESS>

																																																																																							MAIL ADDRESS:	
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																																																																																								STATE:			NY
																																																																																								ZIP:			14450
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																																																																																								FILER:

																																																																																									COMPANY DATA:	
																																																																																										COMPANY CONFORMED NAME:			CLOUD PEAK CORP
																																																																																										CENTRAL INDEX KEY:			0001089057
																																																																																										STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																																										STATE OF INCORPORATION:			DE
																																																																																										FISCAL YEAR END:			0228
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																																																																																												STREET 1:		300 WILLOWBROOK OFFICE PARK
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																																																																																												STATE:			NY
																																																																																												ZIP:			14450
																																																																																												BUSINESS PHONE:		716-218-21
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																																																																																												MAIL ADDRESS:	
																																																																																													STREET 1:		300 WILLOWBROOK OFFICE PARK
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																																																																																													STATE:			NY
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																																																																																													FILER:

																																																																																														COMPANY DATA:	
																																																																																															COMPANY CONFORMED NAME:			BARTON CANADA LTD
																																																																																															CENTRAL INDEX KEY:			0001089059
																																																																																															STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																																															STATE OF INCORPORATION:			DE
																																																																																															FISCAL YEAR END:			0228
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																																																																																																	STATE:			NY
																																																																																																	ZIP:			14450
																																																																																																	BUSINESS PHONE:		716-218-21
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																																																																																																	MAIL ADDRESS:	
																																																																																																		STREET 1:		300 WILLOWBROOK OFFICE PARK
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																																																																																																		STATE:			NY
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																																																																																																		FILER:

																																																																																																			COMPANY DATA:	
																																																																																																				COMPANY CONFORMED NAME:			FRANCISCAN VINEYARDS INC
																																																																																																				CENTRAL INDEX KEY:			0001089064
																																																																																																				STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																																																				STATE OF INCORPORATION:			DE
																																																																																																				FISCAL YEAR END:			0228
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																																																																																																					BUSINESS ADDRESS:	
																																																																																																						STREET 1:		300 WILLOWBROOK OFFICE PARK
																																																																																																						CITY:			FAIRPORT
																																																																																																						STATE:			NY
																																																																																																						ZIP:			14450
																																																																																																						BUSINESS PHONE:		716-218-21
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																																																																																																							STREET 1:		300 WILLOWBROOK OFFICE PARK
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																																																																																																							STATE:			NY
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																																																																																																								COMPANY DATA:	
																																																																																																									COMPANY CONFORMED NAME:			M V LEWIS CORP
																																																																																																									CENTRAL INDEX KEY:			0001089065
																																																																																																									STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																																																									STATE OF INCORPORATION:			DE
																																																																																																									FISCAL YEAR END:			0228
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																																																																																																											STREET 1:		300 WILLOWBROOK OFFICE PARK
																																																																																																											CITY:			FAIRPORT
																																																																																																											STATE:			NY
																																																																																																											ZIP:			14450
																																																																																																											BUSINESS PHONE:		716-218-21
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																																																																																																												STREET 1:		300 WILLOWBROOK OFFICE PARK
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																																																																																																												STATE:			NY
																																																																																																												ZIP:			14450
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																																																																																																													COMPANY DATA:	
																																																																																																														COMPANY CONFORMED NAME:			MT VEEDER CORP
																																																																																																														CENTRAL INDEX KEY:			0001089066
																																																																																																														STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																																																														STATE OF INCORPORATION:			DE
																																																																																																														FISCAL YEAR END:			0228
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																																																																																																																CITY:			FAIRPORT
																																																																																																																STATE:			NY
																																																																																																																ZIP:			14450
																																																																																																																BUSINESS PHONE:		716-218-21
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																																																																																																																	STREET 1:		300 WILLOWBROOK OFFICE PARK
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																																																																																																																	STATE:			NY
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																																																																																																																		COMPANY DATA:	
																																																																																																																			COMPANY CONFORMED NAME:			CANDANAIGUA B V
																																																																																																																			CENTRAL INDEX KEY:			0001089067
																																																																																																																			STANDARD INDUSTRIAL CLASSIFICATION:	 [2080
]																																																																																																																			STATE OF INCORPORATION:			DE
																																																																																																																			FISCAL YEAR END:			0228
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																																																																																																																					CITY:			FAIRPORT
																																																																																																																					STATE:			NY
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																																																																																																																					BUSINESS PHONE:		716-218-21
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																																																																																																																						STATE:			NY
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<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>0001.txt
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934
For the fiscal year ended  February 29, 2000
                           -----------------

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF  THE  SECURITIES
     EXCHANGE ACT OF 1934
For the transition period from ---------------- to ----------------


                           Commission File No. 0-7570

Delaware               CANANDAIGUA BRANDS, INC.              16-0716709
                          and its Subsidiaries:
New York               Batavia Wine Cellars, Inc.            16-1222994
New York               Canandaigua Wine Company, Inc.        16-1462887
New York               Canandaigua Europe Limited            16-1195581
England and Wales      Canandaigua Limited                   98-0198402
New York               Polyphenolics, Inc.                   16-1546354
New York               Roberts Trading Corp.                 16-0865491
Netherlands            Canandaigua B.V.                      98-0205132
Delaware               Franciscan Vineyards, Inc.            94-2602962
California             Allberry, Inc.                        68-0324763
California             Cloud Peak Corporation                68-0324762
California             M.J. Lewis Corp.                      94-3065450
California             Mt. Veeder Corporation                94-2862667
Delaware               Barton Incorporated                   36-3500366
Delaware               Barton Brands, Ltd.                   36-3185921
Maryland               Barton Beers, Ltd.                    36-2855879
Connecticut            Barton Brands of California, Inc.     06-1048198
Georgia                Barton Brands of Georgia, Inc.        58-1215938
Illinois               Barton Canada, Ltd.                   36-4283446
New York               Barton Distillers Import Corp.        13-1794441
Delaware               Barton Financial Corporation          51-0311795
Wisconsin              Stevens Point Beverage Co.            39-0638900
Illinois               Monarch Import Company                36-3539106
(State or other        (Exact name of registrant as          (I.R.S. Employer
jurisdiction of        specified in its charter)             Identification No.)
incorporation or
organization)

             300 WillowBrook Office Park, Fairport, New York 14450
             -----------------------------------------------------
             (Address of principal executive offices)   (Zip Code)

        Registrants' telephone number, including area code (716) 218-2169
                                                           --------------



           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

        Title of each class             Name of each exhange on which registered
        -------------------             ----------------------------------------
       Class A Common Stock
         (par value $.01 per share)             New York Stock Exchange
       Class B Common Stock
         (par value $.01 per share)             New York Stock Exchange


           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                                      None

Indicate  by check mark  whether  the  Registrants  (1) have  filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrants  were required to file such  reports),  and (2) have been subject to
such filing requirements for the past 90 days.  Yes X   No
                                                   ---    ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrants'  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The  aggregate  market  value of the  common  stock  held by  non-affiliates  of
Canandaigua Brands, Inc., as of May 15, 2000, was $725,728,942.

The number of shares  outstanding  with respect to each of the classes of common
stock of Canandaigua  Brands,  Inc., as of May 15, 2000, is set forth below (all
of the Registrants,  other than Canandaigua Brands, Inc., are direct or indirect
wholly-owned subsidiaries of Canandaigua Brands, Inc.):

                  Class                             Number of Shares Outstanding
                  -----                             ----------------------------
Class A Common Stock, par value $.01 per share                15,159,951
Class B Common Stock, par value $.01 per share                 3,096,572


                       DOCUMENTS INCORPORATED BY REFERENCE

The proxy  statement  of  Canandaigua  Brands,  Inc. to be issued for the annual
meeting of stockholders to be held July 18, 2000 is incorporated by reference in
Part III.

================================================================================



                                     PART I

ITEM 1.  BUSINESS
- -------  --------

     Unless  the  context  otherwise  requires,  the term  "Company"  refers  to
Canandaigua Brands, Inc. and its subsidiaries, and all references to "net sales"
refer to gross  revenue less excise taxes and returns and  allowances to conform
with the Company's  method of  classification.  All references to "Fiscal 2000",
"Fiscal 1999" and "Fiscal  1998" shall refer to the Company's  fiscal year ended
the last day of February of the indicated year.

     Industry  data  disclosed  in this  Annual  Report  on Form  10-K  has been
obtained from the following industry and government  publications:  Adams Liquor
Handbook;  Adams Wine  Handbook;  Adams Beer  Handbook;  Adam's  Media  Handbook
Advance;  The U. S. Wine Market:  Impact Databank Review and Forecast;  The U.S.
Beer Market:  Impact Databank Review and Forecast;  The U.S.  Distilled  Spirits
Markets: Impact Databank Review and Forecast; NACM; AC Nielsen; the Zenith Guide
and Office for National  Statistics  (U.K.).  The Company has not  independently
verified this data.  References to positions within industries are based on unit
volume.

     The Company is a leading  producer and marketer of branded beverage alcohol
products  in North  America  and the  United  Kingdom.  According  to  available
industry  data,  the Company ranks as the second  largest  supplier of wine, the
second  largest  importer of beer and the fourth  largest  supplier of distilled
spirits in the United States.  The Company's British  subsidiary,  Matthew Clark
plc ("Matthew  Clark"),  is a leading  producer and marketer of cider,  wine and
bottled water,  and a leading  independent  beverage  alcohol  wholesaler in the
United Kingdom.

     The Company is a Delaware corporation organized in 1972 as the successor to
a business  founded in 1945.  The Company  has  aggressively  pursued  growth in
recent years through acquisitions,  brand development, new product offerings and
new distribution  agreements.  The recent acquisitions of Franciscan  Vineyards,
Inc.  ("Franciscan  Estates") and Simi Winery,  Inc. ("Simi"),  the Black Velvet
Assets (as defined  below) and  Matthew  Clark  continued a series of  strategic
acquisitions  made by the  Company  since 1991 by which it has  diversified  its
offerings and as a result,  increased its market share, net sales and cash flow.
The Company has also achieved  internal  growth by  developing  new products and
repositioning  existing  brands to focus on the fastest  growing  sectors of the
beverage alcohol industry.

     The Company  markets and sells more than 185  premier  branded  products in
North America and the United Kingdom.  The Company's products are distributed by
more than 1,000 wholesalers in North America. In the United Kingdom, the Company
also  distributes its own branded  products and those of other companies to more
than 16,000 customers.  The Company operates more than 20 production  facilities
throughout the world and purchases products for resale from other producers.

ACQUISITIONS IN FISCAL 2000 AND FISCAL 1999

     ACQUISITIONS OF FRANCISCAN ESTATES AND SIMI

     On June 4, 1999, the Company purchased all of the outstanding capital stock
of  Franciscan  Estates  and,  in  related  transactions,  purchased  vineyards,
equipment  and other  vineyard  related  assets  located in Northern  California
(collectively,  the "Franciscan Acquisition").  Franciscan Estates is one of the
foremost   super-premium  and   ultra-premium   wine  companies  in  California.
Franciscan  Estates' net sales for its fiscal year ended December 31, 1998, were
approximately  $50 million on volume of approximately  600,000 cases.  While the
super-premium and ultra-premium wine categories represented only 9% of the total
United States wine market by volume in 1997, they accounted for more than 25% of
sales dollars.  Super-premium and ultra-premium  wine sales in the United States
grew at an  annual  rate of 16%  between  1995 and 1998 and  Franciscan  Estates
recorded a compound annual growth rate of more than 17% for the same period.

     Also on June 4, 1999, the Company purchased all of the outstanding  capital
stock  of Simi.  (The  acquisition  of the  capital  stock of Simi is  hereafter
referred to as the "Simi  Acquisition".) The Simi Acquisition  included the Simi
winery (located in Healdsburg,  California), equipment, vineyards, inventory and
worldwide  ownership of the Simi brand name. Founded in 1876, Simi is one of the
oldest and best known wineries in California,  combining a strong  super-premium
and  ultra-premium  brand with a flexible  and  well-equipped  facility and high
quality vineyards in the key Sonoma appellation.  On February 29, 2000, Simi was
merged into Franciscan Estates.

     The  Franciscan and Simi  Acquisitions  have  established  the Company as a
leading  producer and marketer of  super-premium  and  ultra-premium  wine.  The
Franciscan Estates and Simi operations complement each other and offer synergies
in the areas of sales and  distribution,  grape usage and capacity  utilization.
Together,  Franciscan  Estates and Simi represent the sixth largest  presence in
the  super-premium  and  ultra-premium  wine  categories.  The Company  operates
Franciscan  Estates  and Simi,  and their  properties,  together  as a  separate
business  segment  (collectively,  "Franciscan").  The Company's  strategy is to
further penetrate the super-premium  and  ultra-premium  wine categories,  which
have higher gross profit margins than popularly-priced wine.

     ACQUISITION OF BLACK VELVET CANADIAN WHISKY BRAND AND RELATED ASSETS

     On April 9, 1999, in an asset  acquisition,  the Company  acquired  several
well-known  Canadian  whisky  brands,  including  Black  Velvet,  the third best
selling  Canadian  whisky and the 16th best selling  spirits brand in the United
States,  production facilities located in Alberta and Quebec, Canada, case goods
and bulk whisky  inventories  and other related assets from affiliates of Diageo
plc (collectively,  the "Black Velvet Assets").  Other principal brands acquired
in the transaction were Golden Wedding, OFC, MacNaughton,  McMaster's and Triple
Crown.  In  connection  with the  transaction,  the Company  also  entered  into
multi-year  agreements  with  affiliates of Diageo plc to provide  packaging and
distilling services for various brands retained by the Diageo plc affiliates.

     The  addition  of  the  Canadian   whisky  brands  from  this   transaction
strengthens  the  Company's  position in the North  American  distilled  spirits
category  and  enhances   the   Company's   portfolio  of  brands  and  category
participation.  The acquired  operations have been integrated with the Company's
existing spirits business.

     ACQUISITION OF MATTHEW CLARK

     On December 1, 1998, the Company  acquired  control of Matthew Clark and as
of February 28, 1999,  had acquired all of Matthew  Clark's  outstanding  shares
(the "Matthew Clark Acquisition"). Matthew Clark grew substantially in the 1990s
through a series of strategic  acquisitions,  including Grants of St. James's in
1993, the Gaymer Group in 1994 and Taunton Cider Co. in 1995. These acquisitions
served  to  solidify  Matthew  Clark's  position  within  its  key  markets  and
contributed  to an  increase  in net sales to  approximately  $671  million  for
Matthew Clark's fiscal year ended April 30, 1998.  Matthew Clark has developed a
number of leading market positions, including positions as a leading independent
beverage  supplier to the on-premise  trade,  the number one producer of branded
boxed wine,  the number one branded  producer of  fortified  British  wine,  the
number one branded  bottler of  sparkling  water and the number two  producer of
cider.

     The Matthew Clark  Acquisition  strengthens  the Company's  position in the
beverage alcohol industry by providing the Company with a presence in the United
Kingdom and a platform for growth in the European  market.  The  acquisition  of
Matthew   Clark  also   offers   potential   benefits   including   distribution
opportunities to market  California-produced  wine and U.S.-produced  spirits in
the United Kingdom, as well as the potential to market Matthew Clark products in
the United States.

     Through  these  and  prior  acquisitions,   the  Company  has  become  more
competitive by diversifying its portfolio; developing strong market positions in
the growing  beverage  alcohol  product  categories  of varietal  table wine and
imported beer;  strengthening its relationships with wholesalers;  expanding its
distribution and enhancing its production capabilities; and acquiring additional
management, operational, marketing, and research and development expertise.

BUSINESS SEGMENTS

     The Company  operates  primarily in the beverage  alcohol industry in North
America and the United  Kingdom.  The Company  reports its operating  results in
five segments:  Canandaigua Wine (branded  popularly-priced wine and brandy, and
other, primarily grape juice concentrate);  Barton (primarily beer and spirits);
Matthew Clark (branded wine, cider and bottled water, and wholesale wine, cider,
spirits, beer and soft drinks);  Franciscan (primarily branded super-premium and
ultra-premium  wine) and Corporate  Operations  and Other  (primarily  corporate
related items).

     Information regarding net sales,  operating income and total assets of each
of the Company's business segments and information regarding geographic areas is
set forth in Note 16 to the Company's  consolidated financial statements located
in Item 8 of this Annual Report on Form 10-K.

     CANANDAIGUA WINE

     Canandaigua Wine produces,  bottles, imports and markets wine and brandy in
the United  States.  It is the  second  largest  supplier  of wine in the United
States and exports wine to  approximately  70 countries  from the United States.
Canandaigua Wine sells table wine, dessert wine,  sparkling wine and brandy. Its
leading   brands  include   Almaden,   Inglenook,   Arbor  Mist,   Paul  Masson,
Manischewitz,  Taylor,  Marcus  James,  Estate  Cellars,  Vina  Santa  Carolina,
Dunnewood,  Mystic Cliffs,  Cook's, J. Roget,  Richards Wild Irish Rose and Paul
Masson Grande Amber Brandy. Most of its wine is marketed in the popularly-priced
category of the wine market.

     As a related part of its U.S. wine business,  Canandaigua Wine is a leading
grape juice concentrate  producer in the United States.  Grape juice concentrate
competes with other domestically produced and imported fruit-based concentrates.
Canandaigua Wine's other  wine-related  products and services include bulk wine,
cooking wine, grape juice and Inglenook-St. Regis, a leading de-alcoholized line
of wine in the United States.

     BARTON

     Barton  produces,  bottles,  imports and markets a diversified line of beer
and distilled spirits. It is the second largest marketer of imported beer in the
United  States and  distributes  six of the top 25  imported  beer brands in the
United States: Corona Extra, Modelo Especial,  Corona Light, Pacifico, St. Pauli
Girl and Negra Modelo.  Corona Extra is the number one imported beer nationwide.
Barton's  other imported beer brands  include  Tsingtao from China,  Peroni from
Italy and Double  Diamond  and  Tetley's  English  Ale from the United  Kingdom.
Barton also operates the Stevens Point  Brewery,  a regional  brewer  located in
Wisconsin, which produces Point Special, among other brands.

     Barton is the fourth  largest  supplier of distilled  spirits in the United
States and exports  distilled  spirits to  approximately  15 countries  from the
United   States.   Barton's   principal   distilled   spirits   brands   include
Fleischmann's, Mr. Boston, Canadian LTD, Chi-Chi's prepared cocktails, Ten High,
Montezuma,  Barton,  Monte Alban,  Inver House and the recently  acquired  Black
Velvet  brand.  Substantially  all of Barton's  spirits unit volume  consists of
products  marketed in the price  value  category.  Barton  also sells  distilled
spirits in bulk and provides contract production and bottling services for third
parties.

     MATTHEW CLARK

     Matthew  Clark is a leading  producer and  distributor  of cider,  wine and
bottled water and a leading drinks  wholesaler  throughout  the United  Kingdom.
Matthew Clark also exports its branded  products to  approximately  50 countries
from the United  Kingdom.  Matthew  Clark is the  second  largest  producer  and
marketer of cider in the United  Kingdom.  Matthew Clark  distributes  its cider
brands in both the on-premise and  off-premise  markets and these brands compete
in both the mainstream and premium brand  categories.  Matthew  Clark's  leading
mainstream cider brands include Blackthorn and Gaymer's Olde English. Blackthorn
is the number two mainstream cider brand and Gaymer's Olde English is the U.K.'s
second  largest cider brand in the take-home  market.  Matthew  Clark's  leading
premium cider brands are Diamond White and K.

     Matthew Clark is the largest  supplier of wine to the  on-premise  trade in
the United Kingdom. Its Stowells of Chelsea brand maintains the leading share in
the branded boxed wine segment.  Matthew Clark also  maintains a leading  market
share position in fortified British wine through its QC and Stone's brand names.
It also produces and markets Strathmore bottled water in the United Kingdom, the
leading bottled sparkling water brand in the country.

     Matthew Clark is a leading independent  beverage supplier to the on-premise
trade in the United  Kingdom  and has one of the largest  customer  bases in the
United  Kingdom,  with more than 16,000  on-premise  accounts.  Matthew  Clark's
wholesaling business involves the distribution of branded wine, spirits,  cider,
beer and soft  drinks.  While these  products  are  primarily  produced by third
parties, they also include Matthew Clark's cider and wine branded products.

     FRANCISCAN

     The Company's Franciscan segment is comprised of the Franciscan Estates and
Simi portfolios.  These  operations are managed together as a separate  business
segment of the  Company,  and  position  the  Company  as a major  player in the
super-premium  and  ultra-premium  wine  market.  Franciscan  also  exports  its
products to approximately 25 countries from the United States.

     Franciscan  includes  the  prestigious  Franciscan  Oakville  Estate  (Napa
Valley), Estancia (Monterey and Sonoma), Simi (Sonoma), Mt. Veeder and Quintessa
(Napa Valley), and Veramonte  (Casablanca Valley, Chile) wines. The portfolio of
fine wines is  supported  by the  segment's  winery  and  vineyard  holdings  in
California  and Chile.  These  brands are  marketed by a dedicated  sales force,
primarily focusing on high-end restaurants and fine wine shops.

     CORPORATE OPERATIONS AND OTHER

     Corporate Operations and Other includes traditional corporate related items
and the results of an immaterial operation.


MARKETING AND DISTRIBUTION

     NORTH AMERICA

     The Company's  products are distributed  and sold throughout  North America
through  over  1,000  wholesalers,  as  well as  through  state  and  provincial
alcoholic  beverage control  agencies.  Canandaigua  Wine, Barton and Franciscan
employ full-time,  in-house marketing,  sales and customer service organizations
to develop  and service  their  sales to  wholesalers  and state  agencies.  The
Company believes that the organization of its sales force into separate segments
positions it to maintain a high degree of focus on each of its principal product
categories.

     The Company's  marketing  strategy places primary emphasis upon promotional
programs  directed  at  its  broad  national  distribution  network,  and at the
retailers served by that network.  The Company has extensive  marketing programs
for its brands  including  promotional  programs  on both a  national  basis and
regional  basis in  accordance  with the  strength of the brands,  point-of-sale
materials, consumer media advertising, event sponsorship, market research, trade
advertising and public relations.

     During Fiscal 2000, the Company  increased its advertising  expenditures to
put  more  emphasis  on  consumer  advertising  for its  imported  beer  brands,
primarily with respect to the Mexican brands. In addition,  promotional spending
for the Company's wine brands increased to address competitive factors.

     UNITED KINGDOM

     The Company's  U.K.-produced  branded products are marketed and distributed
throughout the United Kingdom by Matthew Clark. The products are packaged at one
of three  production  facilities.  Shipments  of cider and wine are then made to
Matthew Clark's national  distribution center for branded products.  All branded
products are then  distributed to either the  on-premise or off-premise  markets
with some of the sales to  on-premise  customers  made through  Matthew  Clark's
wholesale  business.  Matthew Clark's wholesale products are distributed through
12  depots  located  throughout  the  United  Kingdom.  On-premise  distribution
channels include hotels, restaurants, pubs, wine bars and clubs. The off-premise
distribution  channels  include  grocers,  convenience  retail,   cash-and-carry
outlets and wholesalers.

     Matthew   Clark   employs  a  full-time,   in-house   marketing  and  sales
organization  that targets  off-premise  customers for Matthew  Clark's  branded
products.  Matthew  Clark also employs a full-time,  in-house  branded  products
marketing and sales  organization  that  services  specifically  the  on-premise
market in the United Kingdom.  Additionally,  Matthew Clark employs a full-time,
in-house  marketing  and sales  organization  to service  the  customers  of its
wholesale business.

TRADEMARKS AND DISTRIBUTION AGREEMENTS

     The Company's products are sold under a number of trademarks, most of which
are owned by the Company. The Company also produces and sells wine and distilled
spirits products under exclusive license or distribution  agreements.  Important
agreements  include a long-term license agreement with Hiram Walker & Sons, Inc.
(which  expires in 2116) for the Ten High,  Crystal  Palace,  Northern Light and
Imperial  Spirits  brands;  and  a  long-term  license  agreement  with  the  B.
Manischewitz  Company  (which  expires  in 2042) for the  Manischewitz  brand of
kosher  wine.  On  September  30,  1998,  under the  provisions  of an  existing
long-term license agreement, Nabisco Brands Company agreed to transfer to Barton
all of  its  right,  title  and  interest  to the  corporate  name  "Fleischmann
Distilling Company" and worldwide trademark rights to the "Fleischmann" mark for
alcoholic beverages. Pending the completion of the assignment of such interests,
the license will remain in effect.  The Company also has other less  significant
license and  distribution  agreements  related to the sale of wine and distilled
spirits with terms of various durations.

     All of the Company's  imported beer products are marketed and sold pursuant
to exclusive distribution agreements with the suppliers of these products. These
agreements  have terms that vary and prohibit the Company from  importing  other
beer from the same country. The Company's agreement to distribute Corona and its
other  Mexican beer brands  exclusively  throughout  25 primarily  U.S.  western
states  expires  in  December  2006 and,  subject  to  compliance  with  certain
performance criteria, continued retention of certain Company personnel and other
terms under the agreement, will be automatically renewed for additional terms of
five years. Changes in control of the Company or of its subsidiaries involved in
importing  the  Mexican  beer  brands,  changes  in the  position  of the  Chief
Executive  Officer of Barton Beers,  Ltd.  (including by death or disability) or
the termination of the President of Barton Incorporated,  may be a basis for the
supplier,  unless it consents to such changes,  to terminate the agreement.  The
supplier's  consent to such changes may not be unreasonably  withheld.  Prior to
their  expiration,  these  agreements  may be terminated if the Company fails to
meet  certain  performance  criteria.  The Company  believes it is  currently in
compliance with its material imported beer distribution agreements. From time to
time,  the Company has failed,  and may in the future fail,  to satisfy  certain
performance  criteria in its distribution  agreements.  Although there can be no
assurance  that its beer  distribution  agreements  will be  renewed,  given the
Company's  long-term  relationships  with its suppliers the Company expects that
such agreements  will be renewed prior to their  expiration and does not believe
that these agreements will be terminated.

     The Company  owns the  trademarks  for the  leading  brands and most of the
other brands that were  acquired in the Matthew Clark  Acquisition.  The Company
has a series of  distribution  agreements  and supply  agreements  in the United
Kingdom related to the sale of its products with varying terms and durations.

COMPETITION

     The beverage alcohol industry is highly  competitive.  The Company competes
on the  basis  of  quality,  price,  brand  recognition  and  distribution.  The
Company's   beverage   alcohol   products   compete  with  other  alcoholic  and
nonalcoholic beverages for consumer purchases,  as well as shelf space in retail
stores,  a  presence  in  restaurants  and  marketing  focus  by  the  Company's
wholesalers.  The Company  competes  with numerous  multinational  producers and
distributors  of beverage  alcohol  products,  some of which have  significantly
greater  resources than the Company.  In the United States,  Canandaigua  Wine's
principal  competitors  include E & J Gallo Winery and The Wine Group.  Barton's
principal  competitors include Heineken USA, Molson Breweries USA, Labatt's USA,
Guinness Import Company, Brown-Forman Beverages, Jim Beam Brands and Heaven Hill
Distilleries,  Inc.  Franciscan's  principal  competitors include Robert Mondavi
Corp.,  Beringer Wine Estates,  Kendall-Jackson  and Allied Domecq Wines. In the
United Kingdom, Matthew Clark's principal competitors include Halewood Vintners,
H.P.  Bulmer,  Tavern,  Waverley  Vintners and Perrier.  In connection  with its
wholesale business,  Matthew Clark distributes the branded wine of third parties
that compete directly against its own wine brands.

PRODUCTION

     In the United States, the Company's wine is produced from several varieties
of wine grapes grown  principally  in  California  and New York.  The grapes are
crushed  at  the  Company's   wineries  and  stored  as  wine,  grape  juice  or
concentrate.  Such  grape  products  may be made  into  wine for sale  under the
Company's  brand  names,  sold to other  companies  for resale  under  their own
labels,  or  shipped  to  customers  in the form of  juice,  juice  concentrate,
unfinished wine,  high-proof grape spirits or brandy. Most of the Company's wine
is  bottled  and sold  within 18 months  after the grape  crush.  The  Company's
inventories of wine,  grape juice and  concentrate  are usually at their highest
levels in November and December immediately after the crush of each year's grape
harvest, and are substantially reduced prior to the subsequent year's crush.

     The bourbon whiskeys, domestic blended whiskeys and light whiskeys marketed
by the Company are primarily  produced and aged by the Company at its distillery
in  Bardstown,  Kentucky,  though  it may  from  time  to  time  supplement  its
inventories  through purchases from other distillers.  Following the acquisition
of the Black  Velvet  Assets,  the  majority of the  Company's  Canadian  whisky
requirements  are produced and aged at its Canadian  distilleries in Lethbridge,
Alberta, and Valleyfield,  Quebec. At its Albany, Georgia, facility, the Company
produces all of the neutral grain spirits and whiskeys it uses in the production
of vodka, gin and blended whiskey it sells to customers in the state of Georgia.
The Company's  requirements  of Scotch whisky,  tequila,  mezcal and the neutral
grain  spirits it uses in the  production  of gin and vodka for sale  outside of
Georgia, and other spirits products, are purchased from various suppliers.

     The Company  operates three  facilities in the United Kingdom that produce,
bottle and package cider,  wine and water. To produce Stowells of Chelsea,  wine
is imported  in bulk from  various  countries  such as Chile,  Germany,  France,
Spain,  South  Africa and  Australia,  which is then  packaged at the  Company's
facility at Bristol and  distributed  under the Stowells of Chelsea  brand name.
The Strathmore  brand of bottled water (which is available in still,  sparkling,
and  flavored  varieties)  is sourced  and  bottled in Forfar,  Scotland.  Cider
production was consolidated at the Company's  facility at Shepton Mallet,  where
apples of many different  varieties are purchased from U.K. growers and crushed.
This juice,  along with  European-sourced  concentrate,  is then  fermented into
cider.

     The Company  operates one winery in Chile that crushes,  vinifies,  cellars
and bottles wine.

SOURCES AND AVAILABILITY OF RAW MATERIALS

     The  principal  components  in  the  production  of the  Company's  branded
beverage  alcohol  products  are  packaging  materials   (primarily  glass)  and
agricultural products,  such as grapes and grain. The Company utilizes glass and
PET  bottles  and other  materials  such as caps,  corks,  capsules,  labels and
cardboard  cartons in the bottling and packaging of its  products.  Glass bottle
costs are one of the largest  components of the Company's  cost of product sold.
The glass  bottle  industry is highly  concentrated  with only a small number of
producers.  The Company has traditionally obtained, and continues to obtain, its
glass  requirements  from a limited  number of  producers.  The  Company has not
experienced difficulty in satisfying its requirements with respect to any of the
foregoing  and  considers  its sources of supply to be  adequate.  However,  the
inability  of any  of the  Company's  glass  bottle  suppliers  to  satisfy  the
Company's requirements could adversely affect the Company's operations.

     Most of the Company's annual grape  requirements are satisfied by purchases
from each  year's  harvest  which  normally  begins in August  and runs  through
October.  The Company believes that it has adequate sources of grape supplies to
meet its sales  expectations.  However,  in the event  demand for  certain  wine
products exceeds expectations, the Company could experience shortages.

     The Company purchases grapes from over 800 independent growers, principally
in the San Joaquin  Valley,  Central Coast and North Coast regions of California
and in New York State. The Company enters into written purchase  agreements with
a majority of these growers on a year-to-year  basis. The Company currently owns
or leases approximately 7,000 acres of land and vineyards,  either fully bearing
or under development,  in California,  New York and Chile. This acreage supplies
only a small percentage of the Company's total needs.  The Company  continues to
consider the purchase or lease of additional vineyards,  and additional land for
vineyard plantings, to supplement its grape supply.

     The  distilled   spirits   manufactured  by  the  Company  require  various
agricultural  products,  neutral  grain  spirits and bulk  spirits.  The Company
fulfills  its  requirements  through  purchases  from  various  sources  through
contractual  arrangements and through purchases on the open market.  The Company
believes that adequate supplies of the aforementioned  products are available at
the present time.

     The Company  manufactures cider, perry and light and fortified British wine
from  materials that are purchased  either on a contracted  basis or on the open
market.  In particular,  supplies of cider apples are sourced  through long term
supply  arrangements with owners of apple orchards.  There are adequate supplies
of the various raw materials at this particular time.

GOVERNMENT REGULATION

     The  Company's  operations  in the United  States are subject to  extensive
Federal and state  regulation.  These  regulations  cover,  among other matters,
sales  promotion,  advertising  and public  relations,  labeling and  packaging,
changes in officers or directors, ownership or control, distribution methods and
relationships,  and requirements regarding brand registration and the posting of
prices and price  changes.  All of the Company's  operations  and facilities are
also  subject  to  Federal,  state,  foreign  and local  environmental  laws and
regulations  and the  Company is  required  to obtain  permits  and  licenses to
operate its facilities.

     In the United Kingdom, the Company has secured a Customs and Excise License
to carry on its excise trade.  Licenses are required for all premises where wine
is produced. The Company holds a license to act as an excise warehouse operator.
Registrations  have been secured for the  production of cider and bottled water.
Formal approval of product labeling is not required.

     In Canada,  the Company's  operations are also subject to extensive federal
and  provincial  regulation.  These  regulations  cover,  among  other  matters,
advertising and public relations, labeling and packaging,  environmental matters
and  customs  and duty  requirements.  The  Company is also  required  to obtain
licenses and permits to operate its facilities.

     The Company believes that it is in compliance in all material respects with
all  applicable   governmental  laws  and  regulations  and  that  the  cost  of
administration   and  compliance  with,  and  liability  under,  such  laws  and
regulations  does not have,  and is not  expected  to have,  a material  adverse
impact on the  Company's  financial  condition,  results of  operations  or cash
flows.

EMPLOYEES

     The Company  had  approximately  2,520  full-time  employees  in the United
States at the end of April  2000,  of which  approximately  830 were  covered by
collective  bargaining  agreements.  Additional  workers  may be employed by the
Company during the grape crushing season.

     The Company  had  approximately  1,720  full-time  employees  in the United
Kingdom at the end of April 2000,  of which  approximately  400 were  covered by
collective bargaining agreements.  Additional workers may be employed during the
peak season.

     The Company had approximately 260 full-time  employees in Canada at the end
of April 2000, of which approximately 200 were covered by collective  bargaining
agreements.

     The Company considers its employee relations generally to be good.


ITEM 2.  PROPERTIES
- -------  ----------

     The Company,  maintaining  its corporate  headquarters in offices leased in
Fairport, New York, consists of four business operating segments.  Through these
business segments,  the Company currently operates wineries,  distilling plants,
bottling plants, a brewery, cider and water producing facilities,  most of which
include  warehousing and  distribution  facilities on the premises.  The Company
also operates  separate  distribution  centers under the Matthew Clark segment's
wholesaling  business.  The Company  believes that all of its  facilities are in
good  condition and working  order and have adequate  capacity to meet its needs
for the foreseeable future.

     CANANDAIGUA WINE

     Canandaigua  Wine maintains its headquarters in owned and leased offices in
Canandaigua,  New York.  It  operates  three  wineries  in New York,  located in
Canandaigua,  Naples and  Batavia,  and six wineries in  California,  located in
Madera,  Gonzales,  Escalon,  Fresno and Ukiah.  All of the  facilities in which
these wineries  operate are owned,  except for the winery in Batavia,  New York,
which is leased.  Canandaigua  Wine  considers its principal  wineries to be the
Mission  Bell  winery  in  Madera,   California;   the  Canandaigua   winery  in
Canandaigua,   New  York;  and  the  Riverland  Vineyards  winery  in  Gonzales,
California.  The  Mission  Bell winery  crushes  grapes,  produces,  bottles and
distributes wine and produces grape juice  concentrate.  The Canandaigua  winery
crushes  grapes and  produces,  bottles  and  distributes  wine.  The  Riverland
Vineyards  winery crushes grapes and produces,  bottles and distributes wine for
Canandaigua Wine's account and, on a contractual basis, for third parties.

     Canandaigua  Wine  currently  owns or leases  approximately  4,200 acres of
vineyards,  either fully bearing or under  development,  in  California  and New
York.

     BARTON

     Barton maintains its  headquarters in leased offices in Chicago,  Illinois.
It owns and operates four distilling plants, two in the United States and two in
Canada. The two distilling plants in the United States are located in Bardstown,
Kentucky;  and Albany,  Georgia;  and the two distilling plants in Canada, which
were  acquired  in  connection  with the Black  Velvet  Assets,  are  located in
Valleyfield,  Quebec;  and Lethbridge,  Alberta.  Barton considers its principal
distilling  plants  to  be  the  facilities  located  in  Bardstown,   Kentucky;
Valleyfield,  Quebec; and Lethbridge,  Alberta. The Bardstown facility distills,
bottles and warehouses distilled spirits products for Barton's account and, on a
contractual  basis,  for other  participants  in the industry.  The two Canadian
facilities  distill,  bottle and store Canadian whisky for Barton's own account,
and  distill  and/or  bottle and store  Canadian  whisky,  vodka,  rum,  gin and
liqueurs for third parties.

     In the United  States,  Barton also  operates a brewery and three  bottling
plants.  The brewery is located in Stevens  Point,  Wisconsin;  and the bottling
plants  are  located in  Atlanta,  Georgia;  Owensboro,  Kentucky;  and  Carson,
California.  All of these facilities are owned by Barton except for the bottling
plant in Carson, California, which is operated and leased through an arrangement
involving an ongoing  management  contract.  Barton considers the bottling plant
located  in  Owensboro,  Kentucky  to be one of its  principal  facilities.  The
Owensboro  facility  bottles  and  warehouses  distilled  spirits  products  for
Barton's account and also performs contract bottling.


     MATTHEW CLARK

     Matthew  Clark  maintains  its  headquarters  in owned  offices in Bristol,
England.  It  currently  owns and operates  two  facilities  in England that are
located in Bristol and Shepton  Mallet and one facility in Scotland,  located in
Forfar.  Matthew  Clark  considers  all  three  facilities  to be its  principal
facilities.  The Bristol  facility  produces,  bottles and  packages  wine;  the
Shepton Mallet facility  produces,  bottles and packages  cider;  and the Forfar
facility produces,  bottles and packages water products. Matthew Clark also owns
another  facility in England,  located in Taunton,  the operations of which have
now been consolidated  into its Shepton Mallet facility.  Matthew Clark plans to
sell the Taunton property.

     Matthew  Clark  operates  the  National  Distribution  Centre,  located  in
Severnside,  England to distribute its products that are produced at the Bristol
and Shepton Mallet facilities.  This distribution  facility is leased by Matthew
Clark.  To  support  its  wholesaling   business,   Matthew  Clark  operates  12
distribution  centers located  throughout the United  Kingdom,  all of which are
leased.  These distribution  centers are used to distribute products produced by
third  parties,  as well as by Matthew  Clark.  Matthew  Clark has been and will
continue consolidating the operations of its wholesaling distribution centers.

     FRANCISCAN

     Franciscan  maintains  its  headquarters  in offices  owned in  Rutherford,
California.  Through this segment the Company owns and operates four wineries in
the United States and, through a majority owned subsidiary,  operates one winery
in Chile.  All four  wineries  in the United  States are located in the state of
California, in Rutherford,  Healdsburg,  Monterey and Mt. Veeder, and the winery
in Chile is located in the Casablanca Valley. Franciscan considers its principal
wineries to be those located in Rutherford,  California; Healdsburg, California;
Monterey,  California;  and  the  Casablanca  Valley,  Chile.  The  wineries  in
Rutherford, California; Healdsburg, California; and the Casablanca Valley, Chile
crush  grapes  and  vinify,  cellar  and bottle  wine.  The winery in  Monterey,
California crushes, vinifies and cellars wine.

     Franciscan  also owns and leases  approximately  2,000  plantable  acres of
vineyards in California and  approximately  800 plantable  acres of vineyards in
Chile.


ITEM 3.  LEGAL PROCEEDINGS
- -------  -----------------

     The Company and its  subsidiaries  are subject to  litigation  from time to
time in the ordinary  course of business.  Although the amount of any  liability
with  respect  to such  litigation  cannot  be  determined,  in the  opinion  of
management  such  liability  will  not have a  material  adverse  effect  on the
Company's financial condition, results of operations or cash flows.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -------  ---------------------------------------------------

     Not Applicable.


EXECUTIVE OFFICERS OF THE COMPANY

     Information with respect to the current  executive  officers of the Company
is as follows:

NAME                         AGE    OFFICE HELD
- ----                         ---    -----------
Richard Sands                49     Chairman of the Board, President and Chief
                                    Executive Officer
Robert Sands                 41     Group President
Peter Aikens                 61     President and Chief Executive Officer of
                                    Matthew Clark plc
Alexander L. Berk            50     President and Chief Executive Officer of
                                    Barton Incorporated
Agustin Francisco Huneeus    34     President of Franciscan Vineyards, Inc.
Jon Moramarco                43     President and Chief Executive Officer of
                                    Canandaigua Wine Company, Inc.
Thomas J. Mullin             48     Executive Vice President and General Counsel
George H. Murray             53     Executive Vice President and Chief Human
                                    Resources Officer
Thomas S. Summer             46     Executive Vice President and Chief Financial
                                    Officer


     Richard  Sands,  Ph.D.,  has  been  employed  by  the  Company  in  various
capacities since 1979. He was elected Executive Vice President and a director in
1982,  became President and Chief Operating  Officer in May 1986 and was elected
Chief  Executive  Officer in October  1993.  In  September  1999,  Mr. Sands was
elected Chairman of the Board. He is the brother of Robert Sands.

     Robert Sands was appointed  Group President in April 2000 and has served as
a director  since January 1990. Mr. Sands also had served as Vice President from
June 1990 through  October 1993, as Executive  Vice  President from October 1993
through April 2000,  and as General  Counsel from June 1986 through May 2000. He
is the brother of Richard Sands.

     Peter Aikens  serves as President  and Chief  Executive  Officer of Matthew
Clark plc, a  wholly-owned  subsidiary  of the Company.  In this  capacity,  Mr.
Aikens is in charge of the Company's  Matthew Clark segment,  and has been since
the Company  acquired control of Matthew Clark in December 1998. He has been the
Chief Executive  Officer of Matthew Clark plc since May 1990 and has been in the
brewing and drinks industry for most of his career.

     Alexander L. Berk serves as President and Chief Executive Officer of Barton
Incorporated,  a wholly-owned  subsidiary of the Company. In this capacity,  Mr.
Berk is in charge of the  Company's  Barton  segment.  From 1990 until  February
1998, Mr. Berk was President and Chief Operating Officer of Barton and from 1988
to  1990,  he  was  the  President  and  Chief  Executive  Officer  of  Schenley
Industries. Mr. Berk has been in the alcoholic beverage industry for most of his
career, serving in various positions.

     Agustin  Francisco  Huneeus  serves as President of  Franciscan  Vineyards,
Inc., a wholly-owned subsidiary of the Company. In this capacity, Mr. Huneeus is
in charge of the Company's Franciscan segment.  Since December 1995 and prior to
becoming  President  on May 15,  2000,  he  served  in  various  positions  with
Franciscan,  the last of which was Senior Vice  President,  Sales and Marketing.
From June 1994 to December  1995,  he was an associate  in the branded  consumer
venture group of Hambrecht & Quist.

     Jon  Moramarco  joined  Canandaigua  Wine  Company,  Inc.,  a  wholly-owned
subsidiary of the Company, in November 1999 as its President and Chief Executive
Officer.  In  this  capacity,  Mr.  Moramarco  is in  charge  of  the  Company's
Canandaigua Wine segment.  Prior to joining  Canandaigua Wine Company,  Inc., he
served as President and Chief  Executive  Officer of Allied  Domecq  Wines,  USA
since 1992.  Mr.  Moramarco has more than 15 years of diverse  experience in the
wine  industry,  including  prior  service as Chairman of the American  Vintners
Association, a national wine trade organization.

     Thomas J. Mullin joined the Company as Executive Vice President and General
Counsel on May 30, 2000.  Prior to joining the  Company,  Mr.  Mullin  served as
President and Chief Executive  Officer of TD Waterhouse  Bank, NA since February
2000, of CT USA, F.S.B.  since  September 1998, and of CT USA, Inc.  since March
1997.  He also served as Executive  Vice  President,  Business  Development  and
Corporate  Strategy  of  C.T. Financial Services, Inc.  from March 1997  through
February  2000.  From 1985 through 1997,  Mr. Mullin served as Vice Chairman and
Senior Executive Vice President of First Federal Savings and Loan Association of
Rochester,  and from 1982  through  1985,  he was a  partner  in the law firm of
Phillips, Lytle, Hitchcock, Blaine & Huber.

     George H. Murray joined the Company in April 1997 as Senior Vice  President
and Chief Human Resources  Officer and in April 2000 was elected  Executive Vice
President. From August 1994 to April 1997, Mr. Murray served as Vice President -
Human Resources and Corporate Communications of ACC Corp., an international long
distance  reseller.  For  eight  and a half  years  prior to that,  he served in
various  senior  management  positions  with First  Federal  Savings and Loan of
Rochester,  New York,  including the position of Senior Vice  President of Human
Resources and Marketing from 1991 to 1994.

     Thomas S. Summer joined the Company in April l997 as Senior Vice  President
and  Chief  Financial  Officer  and in April  2000 was  elected  Executive  Vice
President.  From  November  1991  to  April  1997,  Mr.  Summer  served  as Vice
President,  Treasurer of Cardinal  Health,  Inc., a large  national  health care
services company,  where he was responsible for directing  financing  strategies
and treasury  matters.  Prior to that,  from November 1987 to November 1991, Mr.
Summer held several positions in corporate  finance and  international  treasury
with PepsiCo, Inc.

     Executive officers of the Company hold office until the next Annual Meeting
of the Board of Directors and until their successors are chosen and qualify.


                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
- -------  -----------------------------------------------------------------
         MATTERS
         -------

     On October  12,  1999,  the  Company's  Class A Common  Stock (the "Class A
Stock") and Class B Common Stock (the "Class B Stock")  began trading on the New
York  Stock   Exchange(R)   ("NYSE")   under  the  symbols  "CDB"  and  "CDB.B,"
respectively. Prior to October 12, 1999, the Company's Class A Stock and Class B
Stock traded on the Nasdaq Stock Market(R)  ("NASDAQ") under the symbols "CBRNA"
and "CBRNB," respectively. (The Company delisted voluntarily its securities from
NASDAQ in order to list its Class A Stock and Class B Stock on the NYSE.)

     The following  tables set forth for the periods  indicated the high and low
sales  prices of the Class A Stock and the Class B Stock.  With  respect  to all
periods for Fiscal 1999 and the first two quarters of Fiscal 2000,  the high and
low sales  prices of the Class A Stock and the Class B Stock  reflect  trades on
the NASDAQ. For the 3rd Quarter of Fiscal 2000, the high and low sales prices of
the Class A Stock reflect trades on the NASDAQ and the NYSE,  respectively,  and
the high and low sales prices of the Class B Stock reflect trades on the NASDAQ.
For the 4th Quarter of Fiscal 2000, the high and low sales prices of the Class A
Stock and Class B Stock reflect trades on the NYSE.

                                          CLASS A STOCK
                  --------------------------------------------------------------
                  1st Quarter      2nd Quarter      3rd Quarter      4th Quarter
                  -----------      -----------      -----------      -----------
Fiscal 1999
  High            $  59 3/4        $  52 3/8       $  52 1/8         $  61 1/2
  Low             $  45 9/16       $  40 1/4       $  35 1/4         $  45 5/8
Fiscal 2000
  High            $  55 1/4        $  60 3/8       $  61 3/16        $  54 11/16
  Low             $  45 3/8        $  42 7/8       $  53             $  46 3/4


                                          CLASS B STOCK
                  --------------------------------------------------------------
                  1st Quarter      2nd Quarter      3rd Quarter      4th Quarter
                  -----------      -----------      -----------      -----------
Fiscal 1999
  High            $  59 3/4        $  51 1/2        $  52            $  62 1/4
  Low             $  45 1/2        $  40 3/4        $  37 1/4        $  46 7/8

Fiscal 2000
  High            $  55 3/4        $  60            $  60 3/4        $  58 1/8
  Low             $  47 1/2        $  44 1/4        $  56            $  49


     At May 15, 2000, the number of holders of record of Class A Stock and Class
B Stock of the Company were 940 and 273, respectively.

     The  Company's  policy is to retain  all of its  earnings  to  finance  the
development and expansion of its business, and the Company has not paid any cash
dividends since its initial public offering in 1973. In addition,  the Company's
current senior credit facility,  the Company's  indenture for its $130 million 8
3/4% Senior  Subordinated  Notes due December  2003,  its  indenture for its $65
million  8 3/4%  Series C Senior  Subordinated  Notes  due  December  2003,  its
indenture for its $200 million 8 1/2% Senior  Subordinated Notes due March 2009,
its  indenture  for its $200 million 8 5/8% Senior  Notes due August  2006,  its
indenture  for its  (pound)75  million 8 1/2% Series B Senior Notes due November
2009 and its  (pound)80  million 8 1/2% Series C Senior Notes due November  2009
restrict the payment of cash dividends.


ITEM 6.  SELECTED FINANCIAL DATA
- -------  -----------------------
<TABLE>
<CAPTION>
                                                                                                     FOR THE SIX
                                            FOR THE                                                    MONTHS        FOR THE YEAR
                                           YEAR ENDED               FOR THE YEARS ENDED                ENDED            ENDED
                                          FEBRUARY 29,                 FEBRUARY 28,                 FEBRUARY 29,      AUGUST 31,
                                          ------------    --------------------------------------   --------------    ------------
                                              2000           1999          1998         1997            1996             1995
                                          ------------    -----------   -----------  -----------   --------------    ------------
(in thousands, except per share data)
<S>                                       <C>             <C>           <C>          <C>           <C>               <C>
Gross sales                               $  3,088,699    $ 1,984,801   $ 1,632,357  $ 1,534,452   $      738,415    $  1,185,074
Less-excise taxes                             (748,230)      (487,458)     (419,569)    (399,439)        (203,391)       (278,530)
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Net sales                                2,340,469      1,497,343     1,212,788    1,135,013          535,024         906,544
Cost of product sold                        (1,618,009)    (1,049,309)     (869,038)    (812,812)        (389,281)       (657,883)
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Gross profit                               722,460        448,034       343,750      322,201          145,743         248,661
Selling, general and
  administrative expenses                     (481,909)      (299,526)     (231,680)    (208,991)        (112,411)       (159,196)
Nonrecurring charges                            (5,510)        (2,616)         -            -              (2,404)         (2,238)
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Operating income                           235,041        145,892       112,070      113,210           30,928          87,227
Interest expense, net                         (106,082)       (41,462)      (32,189)     (34,050)         (17,298)        (24,601)
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Income before taxes and
      extraordinary item                       128,959        104,430        79,881       79,160           13,630          62,626
Provision for income taxes                     (51,584)       (42,521)      (32,751)     (32,977)          (6,221)        (24,008)
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Income before extraordinary item            77,375         61,909        47,130       46,183            7,409          38,618
Extraordinary item, net of income taxes           -           (11,437)         -            -                -               -
                                          ------------    -----------   -----------  -----------   --------------    ------------
Net income                                $     77,375    $    50,472   $    47,130  $    46,183   $        7,409    $     38,618
                                          ============    ===========   ===========  ===========   ==============    ============

Earnings per common share:
  Basic:
    Income before extraordinary item      $       4.29    $      3.38   $      2.52  $      2.39   $         0.38    $       2.06
    Extraordinary item                            -             (0.62)         -            -                -               -
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Earnings per common share - basic     $       4.29    $      2.76   $      2.52  $      2.39   $         0.38    $       2.06
                                          ============    ===========   ===========  ===========   ==============    ============
  Diluted:
    Income before extraordinary item      $       4.18    $      3.30   $      2.47  $      2.37   $         0.37    $       2.03
    Extraordinary item                            -             (0.61)         -            -                -               -
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Earnings per common share - diluted   $       4.18    $      2.69   $      2.47  $      2.37   $         0.37    $       2.03
                                          ============    ===========   ===========  ===========   ==============    ============

Total assets                              $  2,348,791    $ 1,793,776   $ 1,090,555  $ 1,043,281   $    1,045,590    $    770,004
                                          ============    ===========   ===========  ===========   ==============    ============
Long-term debt                            $  1,237,135    $   831,689   $   309,218  $   338,884   $      327,616    $    198,859
                                          ============    ===========   ===========  ===========   ==============    ============
</TABLE>

For the fiscal  year ended  February  29,  2000,  and for the fiscal  year ended
February  28,  1999,  see  Management's  Discussion  and  Analysis of  Financial
Condition and Results of  Operations  under Item 7 of this Annual Report on Form
10-K and Notes to  Consolidated  Financial  Statements  as of February 29, 2000,
under Item 8 of this Annual Report on Form 10-K.  During January 1996, the Board
of Directors of the Company changed the Company's fiscal year end from August 31
to the last day of February.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- -------  -----------------------------------------------------------------------
         OF OPERATIONS
         -------------

INTRODUCTION
- ------------

     The following  discussion and analysis  summarizes the significant  factors
affecting  (i)  consolidated  results of  operations of the Company for the year
ended February 29, 2000 ("Fiscal 2000"), compared to the year ended February 28,
1999 ("Fiscal  1999"),  and Fiscal 1999 compared to the year ended  February 28,
1998 ("Fiscal  1998"),  and (ii) financial  liquidity and capital  resources for
Fiscal 2000. This discussion and analysis should be read in conjunction with the
Company's consolidated financial statements and notes thereto included herein.

     The Company  operates  primarily in the beverage  alcohol industry in North
America and the United  Kingdom.  The Company  reports its operating  results in
five segments:  Canandaigua Wine (branded  popularly-priced wine and brandy, and
other, primarily grape juice concentrate);  Barton (primarily beer and spirits);
Matthew Clark (branded wine, cider and bottled water, and wholesale wine, cider,
spirits, beer and soft drinks);  Franciscan (primarily branded super-premium and
ultra-premium  wine); and Corporate  Operations and Other  (primarily  corporate
related items).

     ACQUISITIONS IN FISCAL 2000 AND FISCAL 1999

     On June 4, 1999, the Company purchased all of the outstanding capital stock
of  Franciscan   Vineyards,   Inc.   ("Franciscan   Estates")  and,  in  related
transactions,  purchased vineyards,  equipment and other vineyard related assets
located in Northern  California  (collectively,  the "Franciscan  Acquisition").
Also on June 4, 1999, the Company purchased all of the outstanding capital stock
of Simi Winery, Inc. ("Simi").  (The acquisition of the capital stock of Simi is
hereafter referred to as the "Simi  Acquisition".) The Simi Acquisition included
the Simi winery, equipment,  vineyards, inventory and worldwide ownership of the
Simi  brand  name.  The  results  of  operations  from the  Franciscan  and Simi
Acquisitions   (collectively,   "Franciscan")   are  reported  together  in  the
Franciscan  segment  and have  been  included  in the  consolidated  results  of
operations of the Company since the date of  acquisition.  On February 29, 2000,
Simi was merged into Franciscan Estates.

     On April 9, 1999, in an asset  acquisition,  the Company  acquired  several
well-known Canadian whisky brands, including Black Velvet, production facilities
located in Alberta and Quebec,  Canada,  case goods and bulk whisky  inventories
and other related assets from affiliates of Diageo plc (collectively, the "Black
Velvet Assets").  In connection with the  transaction,  the Company also entered
into multi-year  agreements  with affiliates of Diageo plc to provide  packaging
and  distilling   services  for  various  brands  retained  by  the  Diageo  plc
affiliates.  The results of operations from the Black Velvet Assets are reported
in the Barton  segment  and have been  included in the  consolidated  results of
operations of the Company since the date of acquisition.

     On December  1, 1998,  the Company  acquired  control of Matthew  Clark plc
("Matthew  Clark") and as of February  28,  1999,  had  acquired  all of Matthew
Clark's  outstanding  shares (the  "Matthew  Clark  Acquisition").  Prior to the
Matthew Clark  Acquisition,  the Company was principally a producer and supplier
of wine and an importer and producer of beer and distilled spirits in the United
States.  The  Matthew  Clark  Acquisition  established  the Company as a leading
British  producer  of cider,  wine and bottled  water and as a leading  beverage
alcohol  wholesaler in the United Kingdom.  The results of operations of Matthew
Clark  have been  included  in the  consolidated  results of  operations  of the
Company since the date of acquisition, December 1, 1998.


RESULTS OF OPERATIONS
- ---------------------

FISCAL 2000 COMPARED TO FISCAL 1999

     NET SALES

     The  following  table sets forth the net sales (in thousands of dollars) by
operating segment of the Company for Fiscal 2000 and Fiscal 1999.

                                   Fiscal 2000 Compared to Fiscal 1999
                                  -------------------------------------
                                                Net Sales
                                  -------------------------------------
                                      2000          1999      %Increase
                                  ------------  ------------  ---------
Canandaigua Wine:
  Branded:
    External customers            $    623,796  $    598,782       4.2%
    Intersegment                         5,524          -          N/A
                                  ------------  ------------
    Total Branded                      629,320       598,782       5.1%
                                  ------------  ------------
  Other:
    External customers                  81,442        70,711      15.2%
    Intersegment                         1,146          -          N/A
                                  ------------  ------------
    Total Other                         82,588        70,711      16.8%
                                  ------------  ------------
Canandaigua Wine net sales        $    711,908  $    669,493       6.3%
                                  ------------  ------------
Barton:
  Beer                            $    570,380  $    478,611      19.2%
  Spirits                              267,762       185,938      44.0%
                                  ------------  ------------
Barton net sales                  $    838,142  $    664,549      26.1%
                                  ------------  ------------
Matthew Clark:/
  Branded:
    External customers            $    313,027  $     64,879      382.5%
    Intersegment                            75          -           N/A
                                  ------------  ------------
    Total Branded                      313,102        64,879      382.6%
  Wholesale                            416,644        93,881      343.8%
                                  ------------  ------------
Matthew Clark net sales           $    729,746  $    158,760      359.7%
                                  ------------  ------------
Franciscan:
  External customers              $     62,046  $       -           N/A
  Intersegment                              73          -           N/A
                                  ------------  ------------
Franciscan net sales              $     62,119  $       -           N/A
                                  ------------  ------------
Corporate Operations and Other    $      5,372  $      4,541       18.3%
                                  ------------  ------------
Intersegment eliminations         $     (6,818) $       -           N/A
                                  ------------  ------------
Consolidated Net Sales            $  2,340,469  $  1,497,343       56.3%
                                  ============  ============

     Net sales for Fiscal 2000  increased  to  $2,340.5  million  from  $1,497.3
million for Fiscal 1999, an increase of $843.1 million, or 56.3%.

     Canandaigua Wine
     ----------------

     Net sales for Canandaigua  Wine for Fiscal 2000 increased to $711.9 million
from $669.5 million for Fiscal 1999, an increase of $42.4 million, or 6.3%. This
increase  resulted  primarily from (i) an increase in sales of Arbor Mist, which
was  introduced  in the second  quarter of Fiscal 1999,  (ii) an increase in the
Company's bulk wine sales, (iii) an increase in sparkling wine sales as a result
of  millennium  sales,  and (iv) an increase  in Almaden  box wine sales.  These
increases were partially offset by declines in certain other wine brands.

     Barton
     ------

     Net sales for Barton for  Fiscal  2000  increased  to $838.1  million  from
$664.5 million for Fiscal 1999, an increase of $173.6  million,  or 26.1%.  This
increase  resulted  primarily from volume growth and selling price  increases in
the Mexican beer  portfolio  as well as from $81.3  million of sales of products
and services  acquired in the acquisition of the Black Velvet Assets,  which was
completed in April 1999.

     Matthew Clark
     -------------

     Net sales for Matthew  Clark for Fiscal 2000  increased  to $729.7  million
from $158.8 million for Fiscal 1999, an increase of $571.0  million,  or 359.7%.
The  Company  acquired  control of Matthew  Clark  during the fourth  quarter of
Fiscal 1999.

     Franciscan
     ----------

     Net sales for  Franciscan  for Fiscal  2000 since the date of  acquisition,
June 4, 1999, were $62.1 million.

     GROSS PROFIT

     The Company's gross profit increased to $722.5 million for Fiscal 2000 from
$448.0  million for Fiscal 1999, an increase of $274.4  million,  or 61.3%.  The
dollar  increase  in gross  profit  was  primarily  related  to  sales  from the
acquisitions  of Matthew  Clark,  the Black Velvet  Assets and  Franciscan,  all
completed  after the third quarter of Fiscal 1999,  as well as increased  Barton
beer and Canandaigua  Wine branded wine sales. As a percent of net sales,  gross
profit  increased  to 30.9% for  Fiscal  2000 from 29.9% for  Fiscal  1999.  The
increase  in the  gross  profit  margin  resulted  primarily  from the  sales of
higher-margin  spirits and super-premium and ultra-premium  wine acquired in the
acquisitions of the Black Velvet Assets and Franciscan, respectively.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling,  general and  administrative  expenses increased to $481.9 million
for Fiscal  2000 from  $299.5  million  for Fiscal  1999,  an increase of $182.4
million,  or 60.9%. The dollar increase in selling,  general and  administrative
expenses  resulted  primarily  from  the  addition  of  the  Matthew  Clark  and
Franciscan  businesses and expenses  related to the brands acquired in the Black
Velvet  Assets  acquisition.  The  Company  also  increased  its  marketing  and
promotional costs to generate  additional sales volume,  particularly of certain
Canandaigua   Wine  brands  and  Barton  beer  brands.   Selling,   general  and
administrative  expenses as a percent of net sales increased to 20.6% for Fiscal
2000 as compared to 20.0% for Fiscal 1999.  The increase in percent of net sales
resulted  primarily from (i) Canandaigua Wine's investment in brand building and
efforts to increase market share and (ii) the  acquisitions of Matthew Clark and
Franciscan,   as  Matthew  Clark's  and   Franciscan's   selling,   general  and
administrative  expenses as a percent of net sales are typically at the high end
of the range of the Company's operating segments' percentages.

     NONRECURRING CHARGES

     The Company  incurred  nonrecurring  charges of $5.5 million in Fiscal 2000
related to the closure of a cider  production  facility within the Matthew Clark
operating  segment  in the United  Kingdom  and to a  management  reorganization
within the  Canandaigua  Wine operating  segment.  In Fiscal 1999,  nonrecurring
charges  of  $2.6  million  were   incurred   related  to  the  closure  of  the
aforementioned cider production facility in the United Kingdom.

     OPERATING INCOME

     The following table sets forth the operating profit/(loss) (in thousands of
dollars) by operating segment of the Company for Fiscal 2000 and Fiscal 1999.

                                    Fiscal 2000 Compared to Fiscal 1999
                                   -------------------------------------
                                            Operating Profit/Loss
                                   -------------------------------------
                                      2000          1999       %Increase
                                   ----------    ----------    ---------
Canandaigua Wine                   $   46,778    $   46,283         1.1%
Barton                                142,931       102,624        39.3%
Matthew Clark                          48,473         8,998       438.7%
Franciscan                             12,708          -            N/A
Corporate Operations and Other        (15,849)      (12,013)       31.9%
                                   ----------    ----------
Consolidated Operating Profit      $  235,041    $  145,892        61.1%
                                   ==========    ==========

     As a result of the above  factors,  operating  income  increased  to $235.0
million  for Fiscal 2000 from $145.9  million  for Fiscal  1999,  an increase of
$89.1 million,  or 61.1%.  Operating  income for the Canandaigua  Wine operating
segment was up $0.5 million,  or 1.1%, due to the  nonrecurring  charges of $2.6
million  related  to  the  segment's  management  reorganization,   as  well  as
additional  marketing  expenses  associated  with  new  product   introductions.
Exclusive of the  nonrecurring  charges,  operating  income increased by 6.6% to
$49.3 million in Fiscal 2000.  Operating  income for the Matthew Clark operating
segment, excluding nonrecurring charges of $2.9 million, was $51.4 million.

     INTEREST EXPENSE, NET

     Net interest expense increased to $106.1 million for Fiscal 2000 from $41.5
million for Fiscal 1999, an increase of $64.6 million,  or 155.9%.  The increase
resulted  primarily  from  additional   interest  expense  associated  with  the
borrowings related to the acquisitions of Matthew Clark, the Black Velvet Assets
and Franciscan.

     NET INCOME

     As a result of the above factors, net income increased to $77.4 million for
Fiscal 2000 from $50.5 million for Fiscal 1999, an increase of $26.9 million, or
53.3%.

     For  financial  analysis  purposes  only,  the  Company's  earnings  before
interest,  taxes,  depreciation and amortization ("EBITDA") for Fiscal 2000 were
$299.8  million,  an increase of $115.3 over EBITDA of $184.5 million for Fiscal
1999.  EBITDA should not be construed as an alternative  to operating  income or
net cash flow from  operating  activities  and  should  not be  construed  as an
indication of operating performance or as a measure of liquidity.

FISCAL 1999 COMPARED TO FISCAL 1998

     NET SALES

     The  following  table sets forth the net sales (in thousands of dollars) by
operating segment of the Company for Fiscal 1999 and Fiscal 1998.

                                      Fiscal 1999 Compared to Fiscal 1998
                                    ---------------------------------------
                                                  Net Sales
                                    ---------------------------------------
                                                                 %Increase/
                                       1999           1998       (Decrease)
                                    -----------    -----------   ----------
Canandaigua Wine:
  Branded                           $   598,782    $   570,807        4.9 %
  Other                                  70,711         71,988       (1.8)%
                                    -----------    -----------
Canandaigua Wine net sales          $   669,493    $   642,795        4.2 %
                                    -----------    -----------
Barton:
  Beer                              $   478,611    $   376,607       27.1 %
  Spirits                               185,938        191,190       (2.7)%
                                    -----------    -----------
Barton net sales                    $   664,549    $   567,797       17.0 %
                                    -----------    -----------
Matthew Clark:
  Branded                           $    64,879    $      -           N/A
  Wholesale                              93,881           -           N/A
                                    -----------    -----------
Matthew Clark net sales             $   158,760    $      -           N/A
                                    -----------    -----------
Corporate Operations and Other      $     4,541    $     2,196      106.8 %
                                    -----------    -----------
Consolidated Net Sales              $ 1,497,343    $ 1,212,788       23.5 %
                                    ===========    ===========

     Net sales for Fiscal 1999  increased  to  $1,497.3  million  from  $1,212.8
million for Fiscal 1998, an increase of $284.6 million, or 23.5%.

     Canandaigua Wine
     ----------------

     Net sales for Canandaigua  Wine for Fiscal 1999 increased to $669.5 million
from $642.8 million for Fiscal 1998, an increase of $26.7 million, or 4.2%. This
increase resulted primarily from (i) the introduction of two new products, Arbor
Mist and Mystic  Cliffs,  in Fiscal 1999,  (ii) Paul Masson  Grande Amber Brandy
growth,  and (iii) Almaden boxed wine growth.  These  increases  were  partially
offset by  declines  in other  wine  brands  and in the  Company's  grape  juice
concentrate business.

     Barton
     ------

     Net sales for Barton for  Fiscal  1999  increased  to $664.5  million  from
$567.8  million for Fiscal 1998, an increase of $96.8  million,  or 17.0%.  This
increase  resulted  primarily  from an  increase  in sales of beer brands led by
Barton's Mexican portfolio.  This increase was partially offset by a decrease in
revenues from Barton's spirits contract bottling business.

     Matthew Clark
     -------------

     Net sales for Matthew Clark for Fiscal 1999 since the date of  acquisition,
December 1, 1998, were $158.8 million.

     GROSS PROFIT

     The Company's gross profit increased to $448.0 million for Fiscal 1999 from
$343.8  million for Fiscal 1998, an increase of $104.3  million,  or 30.3%.  The
dollar increase in gross profit  resulted  primarily from the sales generated by
the Matthew Clark  Acquisition  completed in the fourth  quarter of Fiscal 1999,
increased beer sales and the  combination  of higher average  selling prices and
lower  average  costs for branded wine sales.  As a percent of net sales,  gross
profit  increased  to 29.9% for  Fiscal  1999 from 28.3% for  Fiscal  1998.  The
increase in the gross  profit  margin  resulted  primarily  from higher  selling
prices and lower costs for  Canandaigua  Wine's  branded  wine sales,  partially
offset by a sales mix shift towards lower margin  products,  particularly due to
the growth in Barton's beer sales.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling,  general and  administrative  expenses increased to $299.5 million
for Fiscal  1999 from  $231.7  million  for Fiscal  1998,  an  increase of $67.8
million,  or 29.3%. The dollar increase in selling,  general and  administrative
expenses  resulted   primarily  from  expenses  related  to  the  Matthew  Clark
Acquisition,  as well as marketing and  promotional  costs  associated  with the
Company's  increased branded sales volume.  The  year-over-year  comparison also
benefited  from a one time charge for  separation  costs incurred in Fiscal 1998
related  to  an  organizational  change  within  Barton.  Selling,  general  and
administrative  expenses as a percent of net sales increased to 20.0% for Fiscal
1999 as compared to 19.1% for Fiscal 1998.  The increase in percent of net sales
resulted  primarily from (i) Canandaigua Wine's investment in brand building and
efforts to increase  market  share and (ii) the Matthew  Clark  Acquisition,  as
Matthew Clark's selling, general and administrative expenses as a percent of net
sales is typically higher than for the Company's other operating segments.

     NONRECURRING CHARGES

     The Company  incurred  nonrecurring  charges of $2.6 million in Fiscal 1999
related to the closure of a cider production  facility in the United Kingdom. No
such charges were incurred in Fiscal 1998.

     OPERATING INCOME

     The following table sets forth the operating profit/(loss) (in thousands of
dollars) by operating segment of the Company for Fiscal 1999 and Fiscal 1998.

                                     Fiscal 1999 Compared to Fiscal 1998
                                   ---------------------------------------
                                          Operating Profit/(Loss)
                                   ---------------------------------------
                                                                %Increase/
                                       1999          1998       (Decrease)
                                   -----------    -----------   ----------
Canandaigua Wine                   $    46,283    $    45,440        1.9 %
Barton                                 102,624         77,010       33.3 %
Matthew Clark                            8,998           -           N/A
Corporate Operations and Other         (12,013)       (10,380)     (15.7)%
                                   -----------    -----------
Consolidated Operating Profit      $   145,892    $   112,070       30.2 %
                                   ===========    ===========

     As a result of the above  factors,  operating  income  increased  to $145.9
million  for Fiscal 1999 from $112.1  million  for Fiscal  1998,  an increase of
$33.8 million, or 30.2%.

     INTEREST EXPENSE, NET

     Net interest expense  increased to $41.5 million for Fiscal 1999 from $32.2
million for Fiscal 1998,  an increase of $9.3  million,  or 28.8%.  The increase
resulted  primarily  from  additional   interest  expense  associated  with  the
borrowings related to the Matthew Clark Acquisition.

     EXTRAORDINARY ITEM, NET OF INCOME TAXES

     The Company incurred an  extraordinary  charge of $11.4 million after taxes
in Fiscal 1999. This charge resulted from fees related to the replacement of the
Company's senior credit facility,  including extinguishment of the Term Loan. No
extraordinary charges were incurred in Fiscal 1998.

     NET INCOME

     As a result of the above factors, net income increased to $50.5 million for
Fiscal 1999 from $47.1 million for Fiscal 1998, an increase of $3.3 million,  or
7.1%.

     For  financial  analysis  purposes  only,  the  Company's  earnings  before
interest,  taxes,  depreciation and amortization ("EBITDA") for Fiscal 1999 were
$184.5  million,  an increase of $39.3 million over EBITDA of $145.2 million for
Fiscal  1998.  EBITDA  should not be construed  as an  alternative  to operating
income or net cash flow from operating activities and should not be construed as
an indication of operating performance or as a measure of liquidity.


FINANCIAL LIQUIDITY AND CAPITAL RESOURCES
- -----------------------------------------

GENERAL

     The  Company's  principal  use of cash in its  operating  activities is for
purchasing and carrying  inventories.  The Company's primary source of liquidity
has historically  been cash flow from operations,  except during the annual fall
grape harvests when the Company has relied on short-term borrowings.  The annual
grape crush  normally  begins in August and runs  through  October.  The Company
generally  begins  purchasing  grapes in August  with  payments  for such grapes
beginning to come due in  September.  The  Company's  short-term  borrowings  to
support  such  purchases  generally  reach their  highest  levels in November or
December. Historically, the Company has used cash flow from operating activities
to repay  its  short-term  borrowings.  The  Company  will  continue  to use its
short-term borrowings to support its working capital  requirements.  The Company
believes  that  cash  provided  by  operating   activities   and  its  financing
activities,  primarily short-term borrowings, will provide adequate resources to
satisfy its working  capital,  liquidity  and  anticipated  capital  expenditure
requirements for both its short-term and long-term capital needs.

FISCAL 2000 CASH FLOWS

     OPERATING ACTIVITIES

     Net cash  provided  by  operating  activities  for  Fiscal  2000 was $148.1
million,  which resulted from $139.9 million in net income  adjusted for noncash
items, plus $8.2 million  representing the net change in the Company's operating
assets and  liabilities.  The net  change in  operating  assets and  liabilities
resulted  primarily  from increases in accrued  income taxes,  accrued  interest
expense and accrued salaries and  commissions,  partially offset by decreases in
accounts payable and accrued excise taxes.

     INVESTING ACTIVITIES AND FINANCING ACTIVITIES

     Net cash used in investing  activities for Fiscal 2000 was $495.7  million,
which  resulted  primarily  from  net  cash  paid  of  $452.9  million  for  the
acquisitions  of the Black Velvet  Assets and  Franciscan  and $57.7  million of
capital expenditures, including $8.9 million for vineyards.

     Net cash  provided  by  financing  activities  for  Fiscal  2000 was $355.6
million,  which  resulted  primarily  from  proceeds  of $1,486.2  million  from
issuance of long-term debt, including $400.0 million incurred in connection with
the  acquisitions  of the Black Velvet Assets and  Franciscan and $900.0 million
incurred to repay amounts  outstanding  under the senior credit  facility.  This
amount  was  partially  offset by  principal  payments  of  $1,060.2  million of
long-term debt and repayment of $60.4 million of net revolving loan borrowings.

     As of  February  29,  2000,  under the 2000  Credit  Agreement  (as defined
below),  the  Company had  outstanding  term loans of $570.1  million  bearing a
weighted  average  interest  rate of 7.95%,  $26.8  million of  revolving  loans
bearing a weighted average interest rate of 7.43%,  undrawn revolving letters of
credit of $10.7 million,  and $262.5 million in revolving  loans available to be
drawn.

     Total debt  outstanding  as of  February  29,  2000,  amounted  to $1,317.9
million,  an increase of $392.5  million from  February  28, 1999.  The ratio of
total debt to total  capitalization  increased to 71.7% as of February 29, 2000,
from 68.0% as of February 28, 1999.

     During  June  1998,  the  Company's  Board  of  Directors   authorized  the
repurchase  of up to  $100.0  million  of its  Class A Common  Stock and Class B
Common Stock.  The  repurchase  of shares of common stock will be  accomplished,
from  time to  time,  in  management's  discretion  and  depending  upon  market
conditions,  through  open  market or  privately  negotiated  transactions.  The
Company may finance such  repurchases  through cash generated from operations or
through the senior credit facility.  The repurchased shares will become treasury
shares. As of May 26, 2000, the Company had purchased  1,018,836 shares of Class
A Common Stock at an aggregate cost of $44.9  million,  or at an average cost of
$44.05 per share.

SENIOR CREDIT FACILITY

     During  June  1999,  the  Company  financed  the  purchase  price  for  the
Franciscan  Acquisition  primarily through additional term loan borrowings under
the senior credit facility. The Company financed the purchase price for the Simi
Acquisition with revolving loan borrowings under the senior credit facility.

     During  August  1999,  as  discussed  below,  a  portion  of the  Company's
borrowings under its senior credit facility were repaid with the net proceeds of
its Senior Notes (as defined below) offering.

     On  October 6,  1999,  the  Company,  certain  of its  principal  operating
subsidiaries,  and a syndicate of banks (the "Syndicate  Banks"),  for which The
Chase  Manhattan Bank acts as  administrative  agent,  entered into a new senior
credit  facility  (the  "2000  Credit  Agreement").  The 2000  Credit  Agreement
includes  both  U.S.  dollar  and  British  pound  sterling  commitments  of the
Syndicate  Banks of up to, in the  aggregate,  the  equivalent  of $1.0  billion
(subject to increase as therein provided to $1.2 billion).  Proceeds of the 2000
Credit  Agreement  were  used to repay all  outstanding  principal  and  accrued
interest on all loans under the Company's prior senior credit facility,  and are
available to fund permitted  acquisitions  and ongoing  working capital needs of
the Company and its subsidiaries.

     The 2000 Credit Agreement provides for a $380.0 million Tranche I Term Loan
facility due in December  2004, a $320.0  million  Tranche II Term Loan facility
available for borrowing in British pound  sterling due in December  2004,  and a
$300.0 million  Revolving Credit facility  (including  letters of credit up to a
maximum of $20.0  million)  which expires in December  2004.  The Tranche I Term
Loan  facility   ($380.0   million)  and  the  Tranche  II  Term  Loan  facility
((pound)193.4  million,  or  approximately  $320.0  million) were fully drawn at
closing.  The  Tranche  I Term  Loan  facility  requires  quarterly  repayments,
starting at $12.0 million in March 2000 and increasing  thereafter annually with
final  payments of $23.0  million in each quarter in 2004. On November 17, 1999,
proceeds from the Sterling  Senior Notes (as defined below) were used to repay a
portion  of the  $320.0  million  Tranche  II Term  Loan  facility  ((pound)73.0
million, or approximately  $118.3 million).  After this repayment,  the required
quarterly  repayments  of the  Tranche  II Term Loan  facility  were  revised to
(pound)0.6  million ($1.0 million) for each quarter in 2000,  (pound)1.2 million
($1.9  million)  for each  quarter in 2001 and 2002,  (pound)1.5  million  ($2.4
million) for each quarter in 2003, and  (pound)25.6  million ($40.4 million) for
each quarter in 2004 (the foregoing U.S.  dollar  equivalents are as of February
29, 2000).  On May 15, 2000, the Company issued  (pound)80.0  million  aggregate
principal  amount of 8 1/2% Series C Senior Notes.  The proceeds of the offering
were used to repay a portion  of the  Tranche II Term  Loan.  See  Senior  Notes
below. There are certain mandatory term loan prepayments,  including those based
on sale of assets  and  issuance  of debt and  equity,  in each case  subject to
baskets,  exceptions  and  thresholds  which are generally more favorable to the
Company than those contained in its prior senior credit facility.

     The rate of interest payable, at the Company's option, is a function of the
London interbank offering rate ("LIBOR") plus a margin,  federal funds rate plus
a margin,  or the prime rate plus a margin.  The margin is adjustable based upon
the  Company's  Debt Ratio (as defined in the 2000 Credit  Agreement)  and, with
respect to LIBOR borrowings, ranges between 0.75% and 1.25% for Revolving Credit
loans and 1.00% and 1.75% for Term Loans.  As of February 29,  2000,  the margin
was 1.25% for  Revolving  Credit loans and 1.75% for Term Loans.  In addition to
interest, the Company pays a facility fee on the Revolving Credit commitments at
0.50% per annum as of February  29, 2000.  This fee is based upon the  Company's
quarterly Debt Ratio and can range from 0.25% to 0.50%.

     Certain of the Company's principal  operating  subsidiaries have guaranteed
the  Company's  obligations  under the 2000  Credit  Agreement.  The 2000 Credit
Agreement is secured by (i) first priority  pledges of 100% of the capital stock
of Canandaigua Limited and all of the Company's domestic operating  subsidiaries
and (ii) first priority pledges of 65% of the capital stock of Matthew Clark and
certain other foreign subsidiaries.

     The Company and its subsidiaries are subject to customary lending covenants
including those restricting additional liens, incurring additional indebtedness,
the sale of assets,  the payment of dividends,  transactions with affiliates and
the making of certain investments,  in each case subject to baskets,  exceptions
and  thresholds  which are  generally  more  favorable to the Company than those
contained in its prior senior credit facility.  The primary financial  covenants
require the  maintenance of a debt coverage ratio, a senior debt coverage ratio,
a fixed charges ratio and an interest coverage ratio. Among the most restrictive
covenants  contained in the 2000 Credit  Agreement  is the senior debt  coverage
ratio.

SENIOR NOTES

     On August 4, 1999, the Company issued $200.0  million  aggregate  principal
amount of 8 5/8% Senior  Notes due August  2006 (the  "Senior  Notes").  The net
proceeds of the offering  (approximately  $196.0  million)  were used to repay a
portion of the Company's  borrowings under its senior credit facility.  Interest
on the Senior Notes is payable  semiannually  on February 1 and August 1 of each
year,  beginning February 1, 2000. The Senior Notes are redeemable at the option
of the Company, in whole or in part, at any time. The Senior Notes are unsecured
senior  obligations  and rank  equally in right of payment to all  existing  and
future  unsecured  senior  indebtedness  of the  Company.  The Senior  Notes are
guaranteed, on a senior basis, by certain of the Company's significant operating
subsidiaries.

     On November 17, 1999, the Company issued (pound)75.0 million (approximately
$121.7  million  upon  issuance  and $118.4  million as of  February  29,  2000)
aggregate  principal  amount  of 8 1/2%  Senior  Notes  due  November  2009 (the
"Sterling Senior Notes"). The net proceeds of the offering ((pound)73.0 million,
or  approximately  $118.3 million) were used to repay a portion of the Company's
British pound sterling borrowings under its senior credit facility.  Interest on
the Sterling  Senior Notes is payable  semiannually on May 15 and November 15 of
each year,  beginning on May 15, 2000. The Sterling  Senior Notes are redeemable
at the option of the  Company,  in whole or in part,  at any time.  The Sterling
Senior  Notes are  unsecured  senior  obligations  and rank  equally in right of
payment to all existing and future unsecured senior indebtedness of the Company.
The Sterling Senior Notes are  guaranteed,  on a senior basis, by certain of the
Company's  significant  operating  subsidiaries.  In  March  2000,  the  Company
exchanged  (pound)75.0  million  aggregate  principal  amount of 8 1/2% Series B
Senior Notes due in November 2009 (the "Sterling Series B Senior Notes") for the
Sterling  Senior  Notes.  The terms of the  Sterling  Series B Senior  Notes are
identical in all material respects to the Sterling Senior Notes.

     On May 15, 2000,  the Company  issued  (pound)80.0  million  (approximately
$120.4 million)  aggregate  principal amount of 8 1/2% Series C Senior Notes due
November 2009 at an issuance price of (pound)79.6 million  (approximately $119.8
million,  net of $0.6 million  unamortized  discount,  with an effective rate of
8.6%) (the "Sterling  Series C Senior Notes").  The net proceeds of the offering
((pound)78.8  million,  or  approximately  $118.6  million) were used to repay a
portion of the Company's  British  pound  sterling  borrowings  under its senior
credit facility.  After this repayment, the required quarterly repayments of the
Tranche II Term Loan facility were revised to (pound)0.2  million ($0.3 million)
for the remaining three quarters in 2000,  (pound)0.4 million ($0.6 million) for
each  quarter  in 2001 and 2002,  (pound)0.5  million  ($0.8  million)  for each
quarter in 2003,  and  (pound)8.5  million  ($12.8  million) for each quarter in
2004. (The foregoing U.S.  dollar  equivalents are as of May 15, 2000.) Interest
on the  Sterling  Series C Senior  Notes is payable  semiannually  on May 15 and
November 15 of each year,  beginning on November 15, 2000. The Sterling Series C
Senior Notes are  redeemable at the option of the Company,  in whole or in part,
at any time. The Sterling Series C Senior Notes are unsecured senior obligations
and rank equally in right of payment to all existing and future unsecured senior
indebtedness of the Company.  The Sterling Series C Senior Notes are guaranteed,
on  a  senior  basis,  by  certain  of  the  Company's   significant   operating
subsidiaries.

SENIOR SUBORDINATED NOTES

     As of  February  29,  2000,  the  Company had  outstanding  $195.0  million
aggregate  principal  amount of 8 3/4% Senior  Subordinated  Notes due  December
2003,  being the $130.0  million  aggregate  principal  amount of 8 3/4%  Senior
Subordinated  Notes due  December  2003 issued in December  1993 (the  "Original
Notes")  and the $65.0  million  aggregate  principal  amount of 8 3/4% Series C
Senior Subordinated Notes due December 2003 issued in February 1997 (the "Series
C Notes").  The Original Notes and the Series C Notes are currently  redeemable,
in whole or in part, at the option of the Company.  A brief  description  of the
Original  Notes and the Series C Notes is contained  in Note 6 to the  Company's
consolidated  financial  statements  located in Item 8 of this Annual  Report on
Form 10-K.

     On March 4, 1999,  the Company issued $200.0  million  aggregate  principal
amount  of 8  1/2%  Senior  Subordinated  Notes  due  March  2009  (the  "Senior
Subordinated  Notes").  The net proceeds of the offering  (approximately  $195.0
million) were used to fund the acquisition of the Black Velvet Assets and to pay
the fees and expenses  related  thereto  with the  remainder of the net proceeds
used for general corporate  purposes.  Interest on the Senior Subordinated Notes
is payable  semiannually  on March 1 and  September  1 of each  year,  beginning
September 1, 1999. The Senior Subordinated Notes are redeemable at the option of
the  Company,  in whole or in part,  at any time on or after March 1, 2004.  The
Company may also  redeem up to $70.0  million of the Senior  Subordinated  Notes
using the proceeds of certain equity  offerings  completed before March 1, 2002.
The  Senior  Subordinated  Notes are  unsecured  and  subordinated  to the prior
payment in full of all senior  indebtedness  of the Company,  which includes the
senior credit  facility.  The Senior  Subordinated  Notes are  guaranteed,  on a
senior  subordinated  basis, by certain of the Company's  significant  operating
subsidiaries.

CAPITAL EXPENDITURES

     During  Fiscal  2000,  the  Company  incurred  $57.7  million  for  capital
expenditures,  including $8.9 million related to vineyards. The Company plans to
spend  approximately  $65.0  million  for  capital  expenditures,  exclusive  of
vineyards,  in fiscal 2001. In addition,  the Company  continues to consider the
purchase,   lease  and  development  of  vineyards  and  may  incur   additional
expenditures for vineyards if opportunities  become  available.  See "Business -
Sources and Availability of Raw Materials" under Item 1 of this Annual Report on
Form 10-K.  Management reviews the capital expenditure program  periodically and
modifies it as required to meet current business needs.

COMMITMENTS

     The Company has agreements  with suppliers to purchase  various  spirits of
which certain  agreements are denominated in British pound sterling and Canadian
dollars.  The  maximum  future  obligation  under these  agreements,  based upon
exchange rates at February 29, 2000,  aggregate  approximately $28.4 million for
contracts expiring through December 2005.

     At February 29, 2000,  the Company had open currency  forward  contracts to
purchase  various foreign  currencies of $6.8 million which mature within twelve
months.  The  Company's  use of such  contracts is limited to the  management of
currency rate risks related to purchases denominated in a foreign currency.  The
Company's  strategy is to enter only into currency  exchange  contracts that are
matched to specific purchases and not to enter into any speculative contracts.

EFFECTS OF INFLATION AND CHANGING PRICES

     The Company's  results of operations and financial  condition have not been
significantly  affected by inflation and changing  prices.  The Company has been
able,  subject to normal  competitive  conditions,  to pass along  rising  costs
through increased selling prices.

ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No.  133  ("SFAS No.  133"),  "Accounting  for
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  133  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts  (collectively referred to as
derivatives),  and for  hedging  activities.  SFAS No. 133  requires  that every
derivative  be recorded as either an asset or liability in the balance sheet and
measured  at its fair  value.  SFAS No. 133 also  requires  that  changes in the
derivative's  fair value be  recognized  currently in earnings  unless  specific
hedge  accounting  criteria are met.  Special  accounting for qualifying  hedges
allows a derivative's  gains and losses to offset related  results on the hedged
item in the income  statement,  and requires that a company  formally  document,
designate  and assess the  effectiveness  of  transactions  that  receive  hedge
accounting.

     In June 1999, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No.  137  ("SFAS No.  137"),  "Accounting  for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date of
FASB  Statement No. 133." SFAS No. 137 delays the effective date of SFAS No. 133
for one year.  With the  issuance  of SFAS No.  137,  the Company is required to
adopt SFAS No. 133 on a prospective  basis for interim  periods and fiscal years
beginning March 1, 2001. The Company  believes the effect of the adoption on its
financial  statements  will not be material based on the Company's  current risk
management strategies.

YEAR 2000 ISSUE

     Prior to January 1, 2000, the Company put into place  detailed  programs to
address Year 2000  readiness in its internal  systems and with its key customers
and  suppliers.  These  programs  included  contingency  plans  to  protect  the
Company's  business and  operations  from Year 2000 related  interruptions.  The
costs incurred  related to its Year 2000  activities and its readiness  programs
were not material to the Company.

     The  Company  did not  experience  any  interruptions  in its  business  or
operations when the date changed from 1999 to 2000.  Based upon operations since
January 1, 2000,  the  Company  does not  expect any  significant  impact on its
on-going business as a result of the Year 2000 issue.

EURO CONVERSION ISSUES

     Effective  January 1, 1999,  eleven of the fifteen member  countries of the
European Union (the  "Participating  Countries")  established  fixed  conversion
rates between their existing sovereign  currencies and the euro. For three years
after the  introduction  of the euro,  the  Participating  Countries can perform
financial  transactions  in either the euro or their original local  currencies.
This will result in a fixed  exchange  rate among the  Participating  Countries,
whereas the euro (and the  Participating  Countries'  currency  in tandem)  will
continue to float freely  against the U.S.  dollar and other  currencies  of the
non-participating  countries.  The Company  does not believe that the effects of
the conversion will have a material adverse effect on the Company's business and
operations.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- --------  ----------------------------------------------------------

     The Company is exposed to market risk  associated  with changes in interest
rates and foreign currency exchange rates. To manage the volatility  relating to
these  risks,  the  Company  periodically  enters into  derivative  transactions
including foreign currency exchange contracts and interest rate swap agreements.
The Company has limited  involvement with derivative  financial  instruments and
does not use them for trading purposes.  The Company uses derivative instruments
solely to reduce the financial impact of these risks.

     The fair  value  of  long-term  debt is  subject  to  interest  rate  risk.
Generally, the fair value of long-term debt will increase as interest rates fall
and decrease as interest  rates rise.  The estimated fair value of the Company's
total long-term debt, including current maturities,  was approximately  $1,255.4
million at  February  29,  2000.  A  hypothetical  1% increase  from  prevailing
interest rates at February 29, 2000, would result in a decrease in fair value of
long-term debt by approximately $33.3 million.

     Also, a hypothetical 1% increase from prevailing interest rates at February
29, 2000, would result in an approximate  increase in cash required for interest
on variable interest rate debt during the next five fiscal years as follows:

                            2001     $ 5.4 million
                            2002     $ 4.8 million
                            2003     $ 4.0 million
                            2004     $ 3.0 million
                            2005     $ 1.3 million

     The Company  periodically  enters into  interest  rate swap  agreements  to
reduce its exposure to interest rate changes  relative to its long-term debt. At
February 29, 2000, the Company had no interest rate swap agreements outstanding.

     The Company has  exposure  to foreign  currency  risk as a result of having
international  subsidiaries in the United Kingdom and Canada.  For the Company's
operations in the United Kingdom,  the Company uses local currency borrowings to
hedge its earnings and cash flow exposure to adverse changes in foreign currency
exchange  rates. At February 29, 2000,  management  believes that a hypothetical
10%  adverse  change in foreign  currency  exchange  rates would not result in a
material  adverse  impact on either  earnings or cash flow. The Company also has
exposure to foreign currency risk as a result of contracts to purchase inventory
items that are denominated in various foreign currencies. In order to reduce the
risk of  foreign  currency  exchange  rate  fluctuations  resulting  from  these
contracts,  the  Company  periodically  enters  into  foreign  exchange  hedging
agreements.  At February 29, 2000,  the potential  loss on  outstanding  foreign
exchange  hedging  agreements from a hypothetical  10% adverse change in foreign
currency exchange rates would not be material.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- -------  -------------------------------------------


                    CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES
                    -----------------------------------------

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                      AND
                                      ---
                            SUPPLEMENTARY SCHEDULES
                            -----------------------

                               FEBRUARY 29, 2000
                               -----------------

                                                                            Page
                                                                            ----
The following information is presented in this Annual Report on Form 10-K:

   Report of Independent Public Accountants................................  29
   Consolidated Balance Sheets - February 29, 2000, and February 28, 1999..  30
   Consolidated Statements of Income for the years ended February 29, 2000,
      February 28, 1999, and February 28, 1998.............................  31
   Consolidated Statements of Changes in Stockholders' Equity for the years
      ended February 29, 2000, February 28, 1999, and February 28, 1998....  32
   Consolidated Statements of Cash Flows for the years ended
      February 29, 2000, February 28, 1999, and February 28, 1998..........  33
   Notes to Consolidated Financial Statements..............................  34
   Selected Quarterly Financial Information (unaudited)....................  53

Schedules I through V are not submitted  because they are not  applicable or not
required under the rules of Regulation S-X.

Individual  financial statements of the Registrant have been omitted because the
Registrant is primarily an operating  company and no subsidiary  included in the
consolidated financial statements has minority equity interest and/or noncurrent
indebtedness,  not  guaranteed  by the  Registrant,  in  excess  of 5% of  total
consolidated assets.


                                                           [LOGO]
                                                                 ARTHUR ANDERSEN



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Canandaigua Brands, Inc.:

We have audited the  accompanying  consolidated  balance  sheets of  Canandaigua
Brands,  Inc. (a Delaware  corporation) and subsidiaries as of February 29, 2000
and  February  28,  1999,  and the related  consolidated  statements  of income,
changes in  stockholders'  equity and cash flows for each of the three  years in
the  period  ended  February  29,  2000.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Canandaigua  Brands,  Inc. and
subsidiaries  as of February 29, 2000 and February 28, 1999,  and the results of
their  operations and their cash flows for each of the three years in the period
ended  February 29, 2000 in  conformity  with  accounting  principles  generally
accepted in the United States.

                                                /s/ Arthur Andersen LLP

Rochester, New York
May 15, 2000



                    CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

                                                February 29,      February 28,
                                                    2000              1999
                                                ------------      ------------

                   ASSETS
                   ------
CURRENT ASSETS:
  Cash and cash investments                     $     34,308      $     27,645
  Accounts receivable, net                           291,108           260,433
  Inventories, net                                   615,700           508,571
  Prepaid expenses and other current assets           54,881            59,090
                                                ------------      ------------
    Total current assets                             995,997           855,739
PROPERTY, PLANT AND EQUIPMENT, net                   542,971           428,803
OTHER ASSETS                                         809,823           509,234
                                                ------------      ------------
  Total assets                                  $  2,348,791      $  1,793,776
                                                ============      ============

      LIABILITIES AND STOCKHOLDERS' EQUITY
      ------------------------------------
CURRENT LIABILITIES:
  Notes payable                                 $     26,800      $     87,728
  Current maturities of long-term debt                53,987             6,005
  Accounts payable                                   122,213           122,746
  Accrued excise taxes                                30,446            49,342
  Other accrued expenses and liabilities             204,771           149,451
                                                ------------      ------------
    Total current liabilities                        438,217           415,272
                                                ------------      ------------
LONG-TERM DEBT, less current maturities            1,237,135           831,689
                                                ------------      ------------
DEFERRED INCOME TAXES                                116,447            88,179
                                                ------------      ------------
OTHER LIABILITIES                                     36,152            23,364
                                                ------------      ------------
COMMITMENTS AND CONTINGENCIES (See Note 12)

STOCKHOLDERS' EQUITY:
  Preferred Stock, $.01 par value-
    Authorized, 1,000,000 shares;
    Issued, none at February 29, 2000, and
    February 28, 1999                                   -                 -
  Class A Common Stock, $.01 par value-
    Authorized, 120,000,000 shares;
    Issued, 18,206,662 shares at
    February 29, 2000, and 17,915,359 shares
    at February 28, 1999                                 182               179
  Class B Convertible Common Stock,
    $.01 par value-
    Authorized, 20,000,000 shares;
    Issued, 3,745,560 shares at
    February 29, 2000, and 3,849,173 shares
    at February 28, 1999                                  38                39
  Additional paid-in capital                         247,949           239,912
  Retained earnings                                  358,456           281,081
  Accumulated other comprehensive income-
    Cumulative translation adjustment                 (4,149)           (4,173)
                                                ------------      ------------
                                                     602,476           517,038
                                                ------------      ------------
  Less-Treasury stock-
  Class A Common Stock, 3,137,244 at
    February 29, 2000, and 3,168,306 shares
    at February 28, 1999, at cost                    (79,429)          (79,559)
  Class B Convertible Common Stock, 625,725
    shares at February 29, 2000, and
    February 28, 1999, at cost                        (2,207)           (2,207)
                                                ------------      ------------
                                                     (81,636)          (81,766)
                                                ------------      ------------
    Total stockholders' equity                       520,840           435,272
                                                ------------      ------------
  Total liabilities and stockholders' equity    $  2,348,791      $  1,793,776
                                                ============      ============


          The accompanying notes to consolidated financial statements
                 are an integral part of these balance sheets.

<TABLE>
                                    CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF INCOME
                                      (in thousands, except per share data)
<CAPTION>
                                                     For the Year
                                                  Ended February 29,    For the Years Ended February 28,
                                                  ------------------    --------------------------------
                                                         2000                1999              1998
                                                  ------------------    --------------    --------------

<S>                                               <C>                   <C>               <C>
GROSS SALES                                       $        3,088,699    $    1,984,801    $    1,632,357
  Less - Excise taxes                                       (748,230)         (487,458)         (419,569)
                                                  ------------------    --------------    --------------
    Net sales                                              2,340,469         1,497,343         1,212,788
COST OF PRODUCT SOLD                                      (1,618,009)       (1,049,309)         (869,038)
                                                  ------------------    --------------    --------------
    Gross profit                                             722,460           448,034           343,750
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                (481,909)         (299,526)         (231,680)
NONRECURRING CHARGES                                          (5,510)           (2,616)             -
                                                  ------------------    --------------    --------------
    Operating income                                         235,041           145,892           112,070
INTEREST EXPENSE, net                                       (106,082)          (41,462)          (32,189)
                                                  ------------------    --------------    --------------
    Income before taxes and extraordinary item               128,959           104,430            79,881
PROVISION FOR INCOME TAXES                                   (51,584)          (42,521)          (32,751)
                                                  ------------------    --------------    --------------
    Income before extraordinary item                          77,375            61,909            47,130
EXTRAORDINARY ITEM, NET OF INCOME TAXES                         -              (11,437)             -
                                                  ------------------    --------------    --------------
NET INCOME                                        $           77,375    $       50,472    $       47,130
                                                  ==================    ==============    ==============


SHARE DATA:
Earnings per common share:
  Basic:
  Income before extraordinary item                $             4.29    $         3.38    $         2.52
  Extraordinary item                                            -                (0.62)             -
                                                  ------------------    --------------    --------------
  Earnings per common share - basic               $             4.29    $         2.76    $         2.52
                                                  ==================    ==============    ==============

  Diluted:
  Income before extraordinary item                $             4.18    $         3.30    $         2.47
  Extraordinary item                                            -                (0.61)             -
                                                  ------------------    --------------    --------------
  Earnings per common share - diluted             $             4.18    $         2.69    $         2.47
                                                  ==================    ==============    ==============

Weighted average common shares outstanding:
  Basic                                                       18,054            18,293            18,672
  Diluted                                                     18,499            18,754            19,105

<FN>
  The accompanying notes to consolidated financial statements are an integral part of these statements.
</FN>
</TABLE>


<TABLE>
                                               CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                 (in thousands, except per share data)

<CAPTION>
                                                                                    Accumulated
                                       Common Stock      Additional                   Other
                                     -----------------    Paid-in      Retained   Comprehensive   Treasury   Restricted
                                     Class A   Class B    Capital      Earnings      Income        Stock       Stock       Total
                                     -------   -------   ----------   ----------  -------------   --------   ----------  ---------
<S>                                  <C>       <C>       <C>          <C>         <C>             <C>        <C>         <C>
BALANCE, February 28, 1997           $   174   $    40   $  222,336   $  183,479  $        -      $(28,092)  $     -     $ 377,937
Net income and comprehensive
  income for fiscal 1998                -         -            -          47,130           -          -            -        47,130
Exercise of 117,452 Class A
  stock options                            2      -           1,799         -              -          -            -         1,801
Employee stock purchases of
  78,248 treasury shares                -         -           1,016         -              -           240         -         1,256
Repurchase of 362,100 Class A
  Common shares                         -         -            -            -              -        (9,233)        -        (9,233)
Acceleration of 142,437 Class A
  stock options                         -         -           3,625         -              -          -            -         3,625
Issuance of 25,000 restricted
  Class A Common shares                 -         -           1,144         -              -          -          (1,144)      -
Amortization of unearned restricted
  stock compensation                    -         -            -            -              -          -             267        267
Accelerated amortization of unearned
  restricted stock compensation         -         -             200         -              -          -             877      1,077
Tax benefit on Class A stock
  options exercised                     -         -           1,382         -              -          -            -         1,382
Tax benefit on disposition of
  employee stock purchases              -         -             185         -              -          -            -           185
                                     -------   -------   ----------   ----------   ------------   --------   ----------  ---------

BALANCE, February 28, 1998               176        40      231,687      230,609           -       (37,085)        -       425,427
Comprehensive income:
  Net income for fiscal 1999            -         -            -          50,472           -          -            -        50,472
  Cumulative translation adjustment     -         -            -            -            (4,173)      -            -        (4,173)
                                                                                                                          --------
Comprehensive income                                                                                                        46,299
Conversion of 107,010 Class B
  Convertible Common shares to
  Class A Common shares                    1        (1)        -            -              -          -            -          -
Exercise of 203,565 Class A
  stock options                            2      -           4,085         -              -          -            -         4,087
Employee stock purchases of
  49,850 treasury shares                -         -           1,643         -              -           197         -         1,840
Repurchase of 1,018,836 Class A
  Common shares                         -         -            -            -              -       (44,878)        -       (44,878)
Acceleration of 1,250 Class A
  stock options                         -         -              43         -              -          -            -            43
Tax benefit on Class A stock
  options exercised                     -         -           2,320         -              -          -            -         2,320
Tax benefit on disposition of
  employee stock purchases              -         -             134         -              -          -            -           134
                                     -------   -------   ----------   ----------   ------------   --------   ----------  ---------

BALANCE, February 28, 1999               179        39      239,912      281,081         (4,173)   (81,766)        -       435,272
Comprehensive income:
  Net income for fiscal 2000            -         -            -          77,375           -          -            -        77,375
  Cumulative translation adjustment     -         -            -            -                24       -            -            24
                                                                                                                         ---------
Comprehensive income                                                                                                        77,399
Conversion of 103,613 Class B
  Convertible Common shares to
  Class A Common shares                    1        (1)        -            -              -          -            -          -
Exercise of 187,690 Class A
  stock options                            2      -           3,361         -              -          -            -         3,363
Employee stock purchases of 31,062
  treasury shares                       -         -           1,298         -              -           130         -         1,428
Acceleration of 94,725 Class A
  stock options                         -         -             835         -              -          -            -           835
Tax benefit on Class A stock
  options exercised                     -         -           2,634         -              -          -            -         2,634
Tax benefit on disposition of
  employee stock purchases              -         -              43         -              -          -            -            43
Other                                   -         -            (134)        -              -          -            -          (134)
                                     -------   -------   ----------   ----------   ------------   --------   ----------  ---------

BALANCE, February 29, 2000           $   182   $    38   $  247,949   $  358,456   $     (4,149)  $(81,636)  $     -     $ 520,840
                                     =======   =======   ==========   ==========   ============   ========   ==========  =========
<FN>
              The accompanying notes to consolidated financial statements are an integral part of these statements.
</FN>
</TABLE>


<TABLE>
                                     CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (in thousands)
<CAPTION>
                                                                      For the Year
                                                                   Ended February 29,  For the Years Ended February 28,
                                                                   ------------------  --------------------------------
                                                                          2000              1999              1998
                                                                   ------------------  --------------    --------------
<S>                                                                <C>                 <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                       $           77,375  $       50,472    $       47,130

  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation of property, plant and equipment                            40,892          27,282            23,847
      Extraordinary item, net of income taxes                                    -             11,437              -
      Amortization of intangible assets                                        23,831          11,308             9,314
      Stock-based compensation expense                                            856             144             1,747
      Amortization of discount on long-term debt                                  427             388               352
      (Gain) loss on sale of assets                                            (2,003)          1,193            (3,001)
      Deferred tax (benefit) provision                                         (1,500)         10,053             4,275
      Change in operating assets and liabilities,
        net of effects from purchases of businesses:
          Accounts receivable, net                                            (10,812)         44,081               749
          Inventories, net                                                      1,926           1,190           (60,659)
          Prepaid expenses and other current assets                             4,663         (14,115)           (4,354)
          Accounts payable                                                    (17,070)        (17,560)           (3,288)
          Accrued excise taxes                                                (18,719)         17,124               440
          Other accrued expenses and liabilities                               44,184         (31,807)           14,655
          Other assets and liabilities, net                                     4,005          (3,945)           (2,452)
                                                                   ------------------  --------------    --------------
            Total adjustments                                                  70,680          56,773           (18,375)
                                                                   ------------------  --------------    --------------
            Net cash provided by operating activities                         148,055         107,245            28,755
                                                                   ------------------  --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of businesses, net of cash acquired                              (452,910)       (332,216)             -
  Purchases of property, plant and equipment                                  (57,747)        (49,857)          (31,203)
  Proceeds from sale of assets                                                 14,977             431            12,552
  Purchase of joint venture minority interest                                    -               (716)             -
                                                                   ------------------  --------------    --------------
            Net cash used in investing activities                            (495,680)       (382,358)          (18,651)
                                                                   ------------------  --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt                                  1,486,240         635,090           140,000
  Exercise of employee stock options                                            3,358           4,083             1,776
  Proceeds from employee stock purchases                                        1,428           1,840             1,256
  Principal payments of long-term debt                                     (1,060,229)       (264,101)         (186,367)
  Net (repayment of) proceeds from notes payable                              (60,352)        (13,907)           34,900
  Payment of issuance costs of long-term debt                                 (14,888)        (17,109)           (1,214)
  Purchases of treasury stock                                                    -            (44,878)           (9,233)
                                                                   ------------------  --------------    --------------
            Net cash provided by (used in) financing activities               355,557         301,018           (18,882)
                                                                   ------------------  --------------    --------------

Effect of exchange rate changes on cash and cash investments                   (1,269)            508              -
                                                                   ------------------  --------------    --------------

NET INCREASE (DECREASE) IN CASH AND CASH INVESTMENTS                            6,663          26,413            (8,778)
CASH AND CASH INVESTMENTS, beginning of year                                   27,645           1,232            10,010
                                                                   ------------------  --------------    --------------
CASH AND CASH INVESTMENTS, end of year                             $           34,308  $       27,645    $        1,232
                                                                   ==================  ==============    ==============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the year for:
    Interest                                                       $           95,004  $       35,869    $       33,394
                                                                   ==================  ==============    ==============
    Income taxes                                                   $           35,478  $       40,714    $       32,164
                                                                   ==================  ==============    ==============

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING
  AND FINANCING ACTIVITIES:
    Fair value of assets acquired, including cash acquired         $          562,204  $      740,880    $         -
    Liabilities assumed                                                      (106,805)       (382,759)             -
                                                                   ------------------  --------------    --------------
    Cash paid                                                                 455,399         358,121              -
    Less - cash acquired                                                       (2,489)        (25,905)             -
                                                                   ------------------  --------------    --------------
    Net cash paid for purchases of businesses                      $          452,910  $      332,216    $         -
                                                                   ==================  ==============    ==============
<FN>
        The accompanying notes to consolidated financial statements are an integral part of these statements.
</FN>
</TABLE>



                    CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

DESCRIPTION OF BUSINESS -
Canandaigua  Brands, Inc. and its subsidiaries (the "Company") operate primarily
in the beverage alcohol industry. The Company is a leading producer and marketer
of branded beverage alcohol products in North America and the United Kingdom. It
maintains a portfolio of over 185 premier branded  products in North America and
the United  Kingdom.  The Company's  products are distributed by more than 1,000
wholesalers in North America. In the United Kingdom, the Company distributes its
own  brands  of cider,  wine and  bottled  water  and is a  leading  independent
beverage supplier to the on-premise trade, distributing its own branded products
and those of other companies to more than 16,000  on-premise  establishments  in
the U.K.

PRINCIPLES  OF  CONSOLIDATION  -
The  consolidated  financial  statements of the Company  include the accounts of
Canandaigua Brands, Inc. and all of its subsidiaries.  All intercompany accounts
and transactions have been eliminated.

MANAGEMENT'S  USE OF  ESTIMATES  AND  JUDGMENT -
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

FOREIGN  CURRENCY  TRANSLATION -
The  "functional  currency"  for  translating  the  accounts  of  the  Company's
operations  outside the U.S. is the local  currency.  The  translation  from the
applicable  foreign  currencies  to U.S.  dollars is performed for balance sheet
accounts  using current  exchange  rates in effect at the balance sheet date and
for revenue and expense  accounts using a weighted  average exchange rate during
the period. The resulting translation adjustments are recorded as a component of
accumulated other comprehensive  income.  Gains or losses resulting from foreign
currency  transactions  are  included  in selling,  general  and  administrative
expenses.

CASH INVESTMENTS -
Cash investments  consist of highly liquid investments with an original maturity
when  purchased  of  three  months  or  less  and  are  stated  at  cost,  which
approximates  market value.  The amounts at February 29, 2000,  and February 28,
1999, are not significant.

FAIR VALUE OF FINANCIAL INSTRUMENTS -
To  meet  the  reporting  requirements  of  Statement  of  Financial  Accounting
Standards No. 107, "Disclosures about Fair Value of Financial  Instruments," the
Company  calculates the fair value of financial  instruments using quoted market
prices  whenever  available.  When quoted market prices are not  available,  the
Company uses standard pricing models for various types of financial  instruments
(such as  forwards,  options,  swaps,  etc.) which take into account the present
value of  estimated  future cash flows.  The  methods  and  assumptions  used to
estimate the fair value of financial instruments are summarized as follows:

     ACCOUNTS RECEIVABLE: The carrying amount approximates fair value due to the
short maturity of these instruments,  the  creditworthiness of the customers and
the large number of customers  constituting  the  accounts  receivable  balance.
     NOTES PAYABLE:  These  instruments are variable interest rate bearing notes
for which the carrying value  approximates  the fair value.
     LONG-TERM  DEBT: The carrying value of the debt  facilities with short-term
variable interest rates approximates the fair value. The fair value of the fixed
rate debt was estimated by discounting cash flows using interest rates currently
available for debt with similar terms and maturities.
     FOREIGN  EXCHANGE  HEDGING  AGREEMENTS:  The fair value of currency forward
contracts is estimated  based on quoted  market  prices.
     LETTERS OF CREDIT: At February 29, 2000, and February 28, 1999, the Company
had letters of credit  outstanding  totaling  $10.8  million  and $4.0  million,
respectively,  which  guarantee  payment  for certain  obligations.  The Company
recognizes  expense on these  obligations as incurred and no material losses are
anticipated.

The  carrying  amount  and  estimated  fair  value  of the  Company's  financial
instruments are summarized as follows:

<TABLE>
<CAPTION>
                                                February 29, 2000                            February 28, 1999
                                    -----------------------------------------    --------------------------------------
                                     Notional       Carrying         Fair         Notional      Carrying        Fair
                                      Amount         Amount          Value         Amount        Amount         Value
                                    ----------     -----------    -----------    ----------    ----------    ----------
(in thousands)
<S>                                 <C>            <C>            <C>            <C>           <C>           <C>
Liabilities:
- ------------
Notes payable                       $     -        $    26,800    $    26,800    $     -       $   87,728    $   87,728
Long-term debt, including
  current portion                   $     -        $ 1,291,122    $ 1,255,424    $     -       $  837,694    $  844,568

Derivative Instruments:
- -----------------------
Foreign exchange hedging
  agreements:
    Currency forward contracts      $    6,895     $      -       $      (125)   $   12,444    $     -       $   (1,732)
</TABLE>

INTEREST RATE FUTURES AND CURRENCY  FORWARD  CONTRACTS -
From time to time,  the Company  enters into interest rate futures and a variety
of currency  forward  contracts  in the  management  of  interest  rate risk and
foreign currency transaction exposure.  The Company has limited involvement with
derivative  instruments and does not use them for trading purposes.  The Company
uses  derivatives  solely to reduce the financial  impact of the related  risks.
Unrealized gains and losses on interest rate futures are deferred and recognized
as a component of interest expense over the borrowing  period.  Unrealized gains
and losses on currency  forward  contracts  are  deferred  and  recognized  as a
component of the related transactions in the accompanying  financial statements.
Discounts or premiums on currency forward contracts are recognized over the life
of the contract.  Cash flows from  derivative  instruments are classified in the
same category as the item being  hedged.  The  Company's  open currency  forward
contracts  at February 29,  2000,  hedge  purchase  commitments  denominated  in
foreign currencies and mature within twelve months.

INVENTORIES -
Inventories  are stated at the lower of cost  (computed in  accordance  with the
first-in, first-out method) or market. Elements of cost include materials, labor
and overhead and consist of the following:

                                    February 29, 2000      February 28, 1999
                                    -----------------      -----------------
     (in thousands)
     Raw materials and supplies     $          29,417      $          32,388
     In-process inventories                   419,558                344,175
     Finished case goods                      166,725                132,008
                                    -----------------      -----------------
                                    $         615,700      $         508,571
                                    =================      =================

A substantial portion of barreled whiskey and brandy will not be sold within one
year because of the  duration of the aging  process.  All  barreled  whiskey and
brandy are  classified  as  in-process  inventories  and are included in current
assets,  in accordance with industry  practice.  Bulk wine  inventories are also
included as in-process inventories within current assets, in accordance with the
general  practices of the wine industry,  although a portion of such inventories
may be aged for  periods  greater  than one  year.  Warehousing,  insurance,  ad
valorem taxes and other  carrying  charges  applicable  to barreled  whiskey and
brandy held for aging are included in inventory costs.

PROPERTY, PLANT AND EQUIPMENT -
Property, plant and equipment is stated at cost. Major additions and betterments
are charged to property  accounts,  while maintenance and repairs are charged to
operations as incurred. The cost of properties sold or otherwise disposed of and
the related  accumulated  depreciation  are eliminated  from the accounts at the
time of disposal and  resulting  gains and losses are included as a component of
operating income.

DEPRECIATION -
Depreciation  is  computed  primarily  using the  straight-line  method over the
following estimated useful lives:

                                            Depreciable Life in Years
                                            -------------------------
        Buildings and improvements                 10 to 33 1/3
        Machinery and equipment                      3 to 15
        Motor vehicles                               3 to 7

Amortization  of  assets  capitalized  under  capital  leases is  included  with
depreciation expense.  Amortization is calculated using the straight-line method
over the shorter of the estimated useful life of the asset or the lease term.

OTHER ASSETS -
Other assets, which consist of goodwill, distribution rights, trademarks, agency
license  agreements,  deferred financing costs,  prepaid pension benefits,  cash
surrender  value of officers' life  insurance and other  amounts,  are stated at
cost,  net  of  accumulated  amortization.   Amortization  is  calculated  on  a
straight-line  or effective  interest basis over the following  estimated useful
lives:

                                            Useful Life in Years
                                            --------------------
        Goodwill                                     40
        Distribution rights                          40
        Trademarks                                   40
        Agency license agreements                 16 to 40
        Deferred financing costs                   5 to 10

At February 29, 2000, the weighted average remaining useful life of these assets
is 36.4 years.  At February 29, 2000,  there were no  officers'  life  insurance
policies  with face  values.  The face  value of the  officers'  life  insurance
policies totaled $2.9 million at February 28, 1999.

LONG-LIVED ASSETS AND INTANGIBLES -
In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be  Disposed  of,"  the  Company  reviews  its  long-lived  assets  and  certain
identifiable   intangibles   for  impairment   whenever  events  or  changes  in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable on an undiscounted cash flow basis. The statement also requires that
long-lived  assets and  certain  identifiable  intangibles  to be disposed of be
reported  at the lower of carrying  amount or fair value less cost to sell.  The
Company did not record any asset impairment in fiscal 2000.

ADVERTISING AND PROMOTION COSTS -
The Company  generally  expenses  advertising  and promotion  costs as incurred,
shown or  distributed.  Prepaid  advertising  costs at February  29,  2000,  and
February 28, 1999, were not material.  Advertising and promotion expense for the
years ended February 29, 2000,  February 28, 1999,  and February 28, 1998,  were
$279.6 million, $173.1 million, and $111.7 million, respectively.

INCOME TAXES -
The Company  uses the  liability  method of  accounting  for income  taxes.  The
liability method accounts for deferred income taxes by applying  statutory rates
in effect at the balance  sheet date to the  difference  between  the  financial
reporting and tax basis of assets and liabilities.

ENVIRONMENTAL -
Environmental  expenditures  that relate to current  operations  are expensed as
appropriate.  Expenditures  that relate to an existing  condition caused by past
operations, and which do not contribute to current or future revenue generation,
are expensed.  Liabilities are recorded when  environmental  assessments  and/or
remedial  efforts  are  probable,  and the  cost  can be  reasonably  estimated.
Generally,  the timing of these  accruals  coincides  with the  completion  of a
feasibility  study  or the  Company's  commitment  to a formal  plan of  action.
Liabilities for environmental  costs were not material at February 29, 2000, and
February 28, 1999.

COMPREHENSIVE INCOME -
During  fiscal 1999,  the Company  adopted  Statement  of  Financial  Accounting
Standards No. 130,   "Reporting  Comprehensive  Income"  ("SFAS No. 130").  This
statement  establishes  rules for the reporting of comprehensive  income and its
components.  Comprehensive  income  consists of net income and foreign  currency
translation  adjustments  and is presented  in the  Consolidated  Statements  of
Changes in Stockholders'  Equity.  The adoption of SFAS No. 130 had no impact on
total stockholders' equity.

EARNINGS PER COMMON SHARE -
Basic earnings per common share excludes the effect of common stock  equivalents
and is computed by  dividing  income  available  to common  stockholders  by the
weighted average number of common shares outstanding during the period for Class
A Common Stock and Class B Convertible Common Stock. Diluted earnings per common
share  reflects the potential  dilution that could result if securities or other
contracts to issue common stock were  exercised or converted  into common stock.
Diluted  earnings per common share  assumes the exercise of stock  options using
the treasury stock method and assumes the conversion of convertible  securities,
if any, using the "if converted" method.

OTHER -
Certain fiscal 1999 balances have been  reclassified  to conform to current year
presentation.

2.   ACQUISITIONS:

MATTHEW CLARK ACQUISITION -
On December 1, 1998, the Company acquired control of Matthew Clark plc ("Matthew
Clark")  and as of  February  28,  1999,  had  acquired  all of Matthew  Clark's
outstanding shares (the "Matthew Clark Acquisition").  The total purchase price,
including  assumption  of  indebtedness,  for the  acquisition  of Matthew Clark
shares was $484.8 million, net of cash acquired. Matthew Clark, founded in 1810,
is a leading  U.K.-based  producer and  distributor  of its own brands of cider,
wine and bottled water and a leading independent drinks wholesaler in the U.K.

The purchase  price for the Matthew  Clark shares was funded with  proceeds from
loans under the  Company's  prior  senior  credit  facility.  The Matthew  Clark
Acquisition  was  accounted  for using the  purchase  method;  accordingly,  the
Matthew  Clark  assets were  recorded at fair market  value,  based upon a final
appraisal,  at the date of  acquisition,  December  1,  1998.  The excess of the
purchase price over the estimated  fair market value of the net assets  acquired
(goodwill),  (pound) 108.5 million  ($179.5  million as of December 1, 1998), is
being  amortized  on a  straight-line  basis  over  40  years.  The  results  of
operations  of  the  Matthew  Clark   Acquisition  have  been  included  in  the
Consolidated Statements of Income since the date of acquisition.

BLACK VELVET ASSETS ACQUISITION -
On  April 9,  1999,  in an  asset  acquisition,  the  Company  acquired  several
well-known Canadian whisky brands, including Black Velvet, production facilities
located in Alberta and Quebec,  Canada,  case goods and bulk whisky  inventories
and other  related  assets  from  affiliates  of Diageo plc (the  "Black  Velvet
Assets").  In  connection  with the  transaction,  the Company also entered into
multi-year  agreements  with  affiliates of Diageo plc to provide  packaging and
distilling  services for various brands  retained by the Diageo plc  affiliates.
The purchase  price was $185.5 million and was financed by the proceeds from the
sale of the Senior Subordinated Notes (as defined in Note 6).

The Black Velvet Assets acquisition was accounted for using the purchase method;
accordingly,  the acquired assets were recorded at fair market value at the date
of acquisition.  The excess of the purchase price over the estimated fair market
value of the net assets acquired  (goodwill),  $35.5 million, is being amortized
on a straight-line  basis over 40 years.  The results of operations of the Black
Velvet Assets  acquisition have been included in the Consolidated  Statements of
Income since the date of acquisition.

FRANCISCAN AND SIMI ACQUISITIONS -
On June 4, 1999, the Company  purchased all of the outstanding  capital stock of
Franciscan Vineyards,  Inc. ("Franciscan Estates") and, in related transactions,
purchased  vineyards,  equipment and other  vineyard  related  assets located in
Northern California (collectively,  the "Franciscan Acquisition").  The purchase
price was $212.4  million in cash plus assumed debt,  net of cash  acquired,  of
$30.8 million. The purchase price was financed primarily by additional term loan
borrowings under the senior credit facility.  Also, on June 4, 1999, the Company
acquired all of the outstanding capital stock of Simi Winery, Inc. ("Simi") (the
"Simi Acquisition").  The cash purchase price was $57.5 million and was financed
by revolving loan  borrowings  under the senior credit  facility.  The purchases
were accounted for using the purchase method;  accordingly,  the acquired assets
were recorded at fair market value at the date of acquisition. The excess of the
purchase price over the estimated  fair market value of the net assets  acquired
(goodwill)  for the  Franciscan  Acquisition  and the  Simi  Acquisition,  $96.5
million and $8.3 million,  respectively,  is being  amortized on a straight-line
basis over 40 years.  The  Franciscan  Estates and Simi  operations  are managed
together  as a separate  business  segment of the  Company  ("Franciscan").  The
results of  operations  of  Franciscan  have been  included in the  Consolidated
Statements of Income since the date of acquisition.

The following  table sets forth unaudited pro forma results of operations of the
Company for the fiscal years ended February 29, 2000, and February 28, 1999. The
unaudited  pro forma results of operations  give effect to the  acquisitions  of
Matthew  Clark,  the Black Velvet  Assets and  Franciscan as if they occurred on
March 1, 1998. The unaudited pro forma results of operations are presented after
giving effect to certain adjustments for depreciation, amortization of goodwill,
interest  expense on the  acquisition  financing and related income tax effects.
During fiscal 2000 and fiscal 1999,  the Company  incurred and paid $2.9 million
and $2.6 million,  respectively,  in nonrecurring charges related to the closing
of a  Matthew  Clark  cider  production  facility.  The  charges  were part of a
production  facility  consolidation  program that was begun prior to the Matthew
Clark Acquisition. The unaudited pro forma results of operations for fiscal 1999
(shown in the table below) reflect total  nonrecurring  charges of $21.5 million
($0.69  per share on a diluted  basis)  related to this  facility  consolidation
program,  of which $18.9  million was  incurred  prior to the  acquisition.  The
unaudited pro forma  results of  operations  for fiscal 2000 (shown in the table
below),  reflect total nonrecurring charges of $12.4 million ($0.40 per share on
a diluted basis) related to transaction  costs,  primarily for exercise of stock
options, which were incurred by Franciscan Estates prior to the acquisition.

The unaudited pro forma results of operations are based upon currently available
information  and  upon  certain   assumptions  that  the  Company  believes  are
reasonable  under  the  circumstances.   The  unaudited  pro  forma  results  of
operations  do not purport to present what the  Company's  results of operations
would actually have been if the aforementioned transactions had in fact occurred
on such date or at the  beginning of the period  indicated,  nor do they project
the Company's  financial position or results of operations at any future date or
for any future period.

                                                 February 29,       February 28,
                                                     2000               1999
                                                 -----------        -----------
(in thousands, except per share data)
Net sales                                        $ 2,367,833        $ 2,154,992
Income before extraordinary item                 $    68,277        $    45,793
Extraordinary item, net of income taxes          $      -           $   (11,437)
Net income                                       $    68,277        $    34,356

Earnings per common share:
  Basic:
  Income before extraordinary item               $      3.78        $      2.50
  Extraordinary item                                    -                 (0.62)
                                                 -----------        -----------
  Earnings per common share - basic              $      3.78        $      1.88
                                                 ===========        ===========

  Diluted:
  Income before extraordinary item               $      3.69        $      2.44
  Extraordinary item                                    -                 (0.61)
                                                  ----------        -----------
  Earnings per common share - diluted            $      3.69        $      1.83
                                                  ==========        ===========

Weighted average common shares outstanding:
  Basic                                               18,054             18,293
  Diluted                                             18,499             18,754





3.  PROPERTY, PLANT AND EQUIPMENT:

The major components of property, plant and equipment are as follows:

                                      February 29, 2000       February 28, 1999
                                      -----------------       -----------------
(in thousands)
Land                                  $          62,871       $          25,434
Vineyards                                        37,756                     266
Buildings and improvements                      131,588                 104,152
Machinery and equipment                         440,008                 380,069
Motor vehicles                                    7,241                  20,191
Construction in progress                         27,874                  35,468
                                      -----------------       -----------------
                                                707,338                 565,580
Less - Accumulated depreciation                (164,367)               (136,777)
                                      -----------------       -----------------
                                      $         542,971       $         428,803
                                      =================       =================

4.  OTHER ASSETS:

The major components of other assets are as follows:

                                          February 29,         February 28,
                                              2000                 1999
                                          -----------          -----------
(in thousands)
Goodwill                                  $   463,577          $   311,908
Trademarks                                    253,148              102,183
Distribution rights and agency
  license agreements                           87,052               76,894
Other                                          64,504               53,779
                                          -----------          -----------
                                              868,281              544,764
Less - Accumulated amortization               (58,458)             (35,530)
                                          -----------          -----------
                                          $   809,823          $   509,234
                                          ===========          ===========

5.  OTHER ACCRUED EXPENSES AND LIABILITIES:

The major components of other accrued expenses and liabilities are as follows:

                                         February 29,       February 28,
                                             2000               1999
                                         -----------        -----------
(in thousands)
Accrued advertising and promotions       $    37,083        $    38,604
Accrued interest                              24,757             11,384
Accrued income taxes payable                  24,093              9,347
Accrued salaries and commissions              23,850             15,584
Other                                         94,988             74,532
                                         -----------        -----------
                                         $   204,771        $   149,451
                                         ===========        ===========


6.  BORROWINGS :

Borrowings consist of the following:
<TABLE>
<CAPTION>
                                                                                        February 28,
                                                       February 29, 2000                   1999
                                           -----------------------------------------    -----------
                                             Current       Long-term        Total          Total
(in thousands)                             -----------    -----------    -----------    -----------
<S>                                        <C>            <C>            <C>            <C>
Notes Payable:
- --------------
  Senior Credit Facility:
    Revolving Credit Loans                 $    26,800    $      -       $    26,800    $    83,075
  Other                                           -              -              -             4,653
                                           -----------    -----------    -----------    -----------
                                           $    26,800    $      -       $    26,800    $    87,728
                                           ===========    ===========    ===========    ===========

Long-term Debt:
- ---------------
  Senior Credit Facility - Term Loans      $    51,801    $   518,249    $   570,050    $   625,630
  Senior Notes                                    -           318,433        318,433           -
  Senior Subordinated Notes                       -           392,947        392,947        192,520
  Other Long-term Debt                           2,186          7,506          9,692         19,544
                                           -----------    -----------    -----------    -----------
                                           $    53,987    $ 1,237,135    $ 1,291,122    $   837,694
                                           ===========    ===========    ===========    ===========
</TABLE>

SENIOR CREDIT FACILITY -
On October 6, 1999, the Company, certain of its principal operating subsidiaries
and a syndicate of banks (the "Syndicate Banks"),  for which The Chase Manhattan
Bank acts as  administrative  agent,  entered into a new senior credit  facility
(the "2000 Credit  Agreement").  The 2000 Credit  Agreement  includes  both U.S.
dollar and British pound sterling  commitments of the Syndicate  Banks of up to,
in the aggregate, the equivalent of $1.0 billion (subject to increase as therein
provided to $1.2  billion).  Proceeds of the 2000 Credit  Agreement were used to
repay all  outstanding  principal  and  accrued  interest on all loans under the
Company's  prior senior credit  facility,  and are  available to fund  permitted
acquisitions   and  ongoing  working  capital  needs  of  the  Company  and  its
subsidiaries.

The 2000 Credit  Agreement  provides  for a $380.0  million  Tranche I Term Loan
facility due in December  2004, a $320.0  million  Tranche II Term Loan facility
available for borrowing in British pound  sterling due in December  2004,  and a
$300.0 million  Revolving Credit facility  (including  letters of credit up to a
maximum of $20.0  million)  which expires in December  2004.  The Tranche I Term
Loan  facility   ($380.0   million)  and  the  Tranche  II  Term  Loan  facility
((pound)193.4  million,  or  approximately  $320.0  million) were fully drawn at
closing.  The  Tranche  I Term  Loan  facility  requires  quarterly  repayments,
starting at $12.0 million in March 2000 and increasing  thereafter annually with
final  payments of $23.0  million in each quarter in 2004. On November 17, 1999,
proceeds from the Sterling  Senior Notes (as defined below) were used to repay a
portion  of the  $320.0  million  Tranche  II Term  Loan  facility  ((pound)73.0
million, or approximately  $118.3 million).  After this repayment,  the required
quarterly  repayments  of the  Tranche  II Term Loan  facility  were  revised to
(pound)0.6  million ($1.0 million) for each quarter in 2000,  (pound)1.2 million
($1.9  million)  for each  quarter in 2001 and 2002,  (pound)1.5  million  ($2.4
million) for each quarter in 2003, and  (pound)25.6  million ($40.4 million) for
each quarter in 2004 (the foregoing U.S.  dollar  equivalents are as of February
29, 2000).  On May 15, 2000, the Company issued  (pound)80.0  million  aggregate
principal  amount of 8 1/2% Series C Senior Notes.  The proceeds of the offering
were  used to  repay a  portion  of the  Tranche  II Term  Loan  (see  Note 19 -
Subsequent Event). There are certain mandatory term loan prepayments,  including
those  based on sale of assets and  issuance  of debt and  equity,  in each case
subject to baskets, exceptions and thresholds which are generally more favorable
to the Company than those contained in its prior senior credit facility.

The rate of interest  payable,  at the  Company's  option,  is a function of the
London interbank offering rate ("LIBOR") plus a margin,  federal funds rate plus
a margin,  or the prime rate plus a margin.  The margin is adjustable based upon
the  Company's  Debt Ratio (as defined in the 2000 Credit  Agreement)  and, with
respect to LIBOR borrowings, ranges between 0.75% and 1.25% for Revolving Credit
loans and 1.00% and 1.75% for Term Loans.  As of February 29,  2000,  the margin
was 1.25% for  Revolving  Credit loans and 1.75% for Term Loans.  In addition to
interest, the Company pays a facility fee on the Revolving Credit commitments at
0.50% per annum as of February  29, 2000.  This fee is based upon the  Company's
quarterly Debt Ratio and can range from 0.25% to 0.50%.

Certain of the Company's  principal  operating  subsidiaries have guaranteed the
Company's obligations under the 2000 Credit Agreement. The 2000 Credit Agreement
is  secured  by (i)  first  priority  pledges  of 100% of the  capital  stock of
Canandaigua Limited and all of the Company's domestic operating subsidiaries and
(ii) first  priority  pledges of 65% of the capital  stock of Matthew  Clark and
certain other foreign subsidiaries.

The Company and its  subsidiaries  are subject to  customary  lending  covenants
including those restricting additional liens, incurring additional indebtedness,
the sale of assets,  the payment of dividends,  transactions with affiliates and
the making of certain investments,  in each case subject to baskets,  exceptions
and  thresholds  which are  generally  more  favorable to the Company than those
contained in its prior senior credit facility.  The primary financial  covenants
require the  maintenance of a debt coverage ratio, a senior debt coverage ratio,
a fixed charges ratio and an interest coverage ratio. Among the most restrictive
covenants  contained in the 2000 Credit  Agreement  is the senior debt  coverage
ratio.

As of  February  29,  2000,  under the 2000  Credit  Agreement,  the Company had
outstanding  term loans of $570.1 million  bearing a weighted  average  interest
rate of 7.95% and $26.8 million of revolving  loans  bearing a weighted  average
interest rate of 7.43%.  The Company had average  outstanding  Revolving  Credit
Loans of approximately $73.0 million,  $75.5 million,  and $59.9 million for the
years ended  February  29,  2000,  February  28,  1999,  and  February 28, 1998,
respectively.  Amounts  available  to be drawn down under the  Revolving  Credit
Loans were $262.5  million and $212.9 million at February 29, 2000, and February
28, 1999, respectively.  The average interest rate on the Revolving Credit Loans
was 7.31%,  6.23%,  and 6.57% for fiscal  2000,  fiscal  1999,  and fiscal 1998,
respectively.

SENIOR NOTES -
On August 4, 1999, the Company issued $200.0 million aggregate  principal amount
of 8 5/8% Senior Notes due August 2006 ("Senior Notes"). The net proceeds of the
offering  (approximately  $196.0  million)  were used to repay a portion  of the
Company's  borrowings under its senior credit  facility.  Interest on the Senior
Notes is payable semiannually on February 1 and August 1 of each year, beginning
February 1, 2000.  The Senior Notes are redeemable at the option of the Company,
in whole or in  part,  at any  time.  The  Senior  Notes  are  unsecured  senior
obligations  and rank  equally in right of payment  to all  existing  and future
unsecured senior  indebtedness of the Company.  The Senior Notes are guaranteed,
on  a  senior  basis,  by  certain  of  the  Company's   significant   operating
subsidiaries.

On November 17, 1999,  the Company  issued  (pound)75.0  million  (approximately
$121.7  million  upon  issuance  and $118.4  million as of  February  29,  2000)
aggregate  principal  amount of 8 1/2% Senior Notes due November 2009 ("Sterling
Senior  Notes").  The net  proceeds of the  offering  ((pound)73.0  million,  or
approximately  $118.3  million)  were used to repay a portion  of the  Company's
British pound sterling borrowings under its senior credit facility.  Interest on
the Sterling  Senior Notes is payable  semiannually on May 15 and November 15 of
each year,  beginning on May 15, 2000. The Sterling  Senior Notes are redeemable
at the option of the  Company,  in whole or in part,  at any time.  The Sterling
Senior  Notes are  unsecured  senior  obligations  and rank  equally in right of
payment to all existing and future unsecured senior indebtedness of the Company.
The Sterling Senior Notes are  guaranteed,  on a senior basis, by certain of the
Company's  significant  operating  subsidiaries.  In  March  2000,  the  Company
exchanged  (pound)75.0  million  aggregate  principal  amount of 8 1/2% Series B
Senior Notes due in November 2009 (the "Sterling Series B Senior Notes") for the
Sterling  Senior  Notes.  The terms of the  Sterling  Series B Senior  Notes are
identical in all material respects to the Sterling Senior Notes.

SENIOR SUBORDINATED NOTES -
On March 4, 1999, the Company issued $200.0 million  aggregate  principal amount
of 8 1/2%  Senior  Subordinated  Notes  due  March  2009  ("Senior  Subordinated
Notes").  The net proceeds of the offering  (approximately  $195.0 million) were
used to fund the  acquisition of the Black Velvet Assets and to pay the fees and
expenses related thereto with the remainder of the net proceeds used for general
corporate  purposes.  Interest  on the  Senior  Subordinated  Notes  is  payable
semiannually  on March 1 and  September 1 of each year,  beginning  September 1,
1999. The Senior Subordinated Notes are redeemable at the option of the Company,
in whole or in part, at any time on or after March 1, 2004. The Company may also
redeem up to $70.0 million of the Senior  Subordinated  Notes using the proceeds
of  certain  equity  offerings  completed  before  March  1,  2002.  The  Senior
Subordinated  Notes are unsecured and  subordinated to the prior payment in full
of all senior  indebtedness  of the Company,  which  includes the senior  credit
facility. The Senior Subordinated Notes are guaranteed, on a senior subordinated
basis, by certain of the Company's significant operating subsidiaries.

On December 27, 1993,  the Company  issued $130.0  million  aggregate  principal
amount of 8 3/4% Senior  Subordinated  Notes due in December 2003 (the "Original
Notes").  Interest on the Original Notes is payable  semiannually on June 15 and
December 15 of each year. The Original Notes are unsecured and  subordinated  to
the prior  payment  in full of all senior  indebtedness  of the  Company,  which
includes the senior credit  facility.  The Original Notes are  guaranteed,  on a
senior  subordinated  basis,  by  all  of the  Company's  significant  operating
subsidiaries (other than Matthew Clark and its subsidiaries).

On October 29, 1996, the Company issued $65.0 million aggregate principal amount
of 8 3/4% Series B Senior Subordinated Notes ($62.9 million, net of $2.1 million
unamortized  discount,  with an effective rate of 9.76% as of February 29, 2000)
due in  December  2003 (the  "Series B Notes").  In February  1997,  the Company
exchanged  $65.0 million  aggregate  principal  amount of 8 3/4% Series C Senior
Subordinated  Notes due in December 2003 (the "Series C Notes") for the Series B
Notes.  The  terms of the  Series C Notes  are  substantially  identical  in all
material respects to the Original Notes.

TRUST INDENTURES -
The Company's  various Trust Indentures  relating to the senior notes and senior
subordinated notes contain certain covenants, including, but not limited to: (i)
limitation  on  indebtedness;  (ii)  limitation on  restricted  payments;  (iii)
limitation  on  transactions   with   affiliates;   (iv)  limitation  on  senior
subordinated  indebtedness;  (v) limitation on liens; (vi) limitation on sale of
assets;   (vii)  limitation  on  issuance  of  guarantees  of  and  pledges  for
indebtedness;  (viii)  restriction  on transfer of assets;  (ix)  limitation  on
subsidiary  capital stock;  (x) limitation on the creation of any restriction on
the  ability  of the  Company's  subsidiaries  to make  distributions  and other
payments;  and (xi) restrictions on mergers,  consolidations and the transfer of
all or  substantially  all of the assets of the Company to another  person.  The
limitation on indebtedness  covenant is governed by a rolling four quarter fixed
charge ratio requiring a specified minimum.

DEBT PAYMENTS -
Principal   payments  required  under  long-term  debt  obligations   (excluding
unamortized  discount)  during the next five fiscal years and  thereafter are as
follows:

                      (in thousands)
               2001              $    53,987
               2002                   83,575
               2003                   88,469
               2004                  294,753
               2005                  253,705
               Thereafter            518,686
                                 -----------
                                 $ 1,293,175
                                 ===========

7.  INCOME TAXES:

The provision for (benefit from) income taxes consists of the following:

                                                             For the Years Ended
                                                                 February 28,
                                                             -------------------
                    For the Year Ended February 29, 2000       1999       1998
                 -----------------------------------------   --------   --------
                            State and
                  Federal     Local     Foreign     Total      Total      Total
                 --------   --------   --------   --------   --------   --------
(in thousands)
Current          $ 38,588   $  6,091   $  8,405   $ 53,084   $ 32,468   $ 28,476
Deferred          (10,804)     2,874      6,430     (1,500)    10,053      4,275
                 --------   --------   --------   --------   --------   --------
                 $ 27,784   $  8,965   $ 14,835   $ 51,584   $ 42,521   $ 32,751
                 ========   ========   ========   ========   ========   ========

The foreign  provision  for income  taxes is based on foreign  pretax  earnings.
Earnings of foreign  subsidiaries  would be subject to U.S.  income  taxation on
repatriation to the U.S. The Company's  consolidated  financial statements fully
provide for any related tax liability on amounts that may be repatriated.

A  reconciliation  of the total tax provision to the amount computed by applying
the statutory U.S. Federal income tax rate to income before provision for income
taxes is as follows:

<TABLE>
<CAPTION>
                                           For the Year Ended
                                              February 29,              For the Years Ended February 28,
                                          --------------------    --------------------------------------------
                                                  2000                    1999                    1998
                                          --------------------    --------------------    --------------------
                                                        % of                    % of                    % of
                                                       Pretax                  Pretax                  Pretax
                                           Amount      Income      Amount      Income      Amount      Income
                                          --------    --------    --------    --------    --------    --------
(in thousands)
<S>                                       <C>         <C>         <C>         <C>         <C>         <C>
Income tax provision at statutory rate    $ 45,136        35.0    $ 36,551        35.0    $ 27,958        35.0
State and local income taxes, net of
  Federal income tax benefit                 3,077         2.4       6,977         6.7       4,793         6.0
Earnings of subsidiaries taxed at
  other than U.S. statutory rate             1,294         1.0         227         0.2        -           -
Miscellaneous items, net                     2,077         1.6      (1,234)       (1.2)       -           -
                                          --------    --------    --------    --------    --------    --------
                                          $ 51,584        40.0    $ 42,521        40.7    $ 32,751        41.0
                                          ========    ========    ========    ========    ========    ========
</TABLE>

Deferred  tax assets and  liabilities  reflect the future  income tax effects of
temporary  differences  between the consolidated  financial  statement  carrying
amounts of existing assets and  liabilities  and their  respective tax bases and
are measured using enacted tax rates that apply to taxable income.

Significant  components  of deferred  tax  liabilities  (assets)  consist of the
following:

                                             February 29,      February 28,
                                                 2000             1999
                                             -----------       -----------
(in thousands)
Depreciation and amortization                $   127,436       $    89,447
Effect of change in accounting method             11,200            16,546
Inventory reserves                                 4,542             6,975
Restructuring                                     (6,824)           (3,244)
Insurance accruals                                (3,868)           (3,112)
Other accruals                                   (11,136)           (8,653)
                                             -----------       -----------
                                             $   121,350       $    97,959
                                             ===========       ===========

At  February  29,  2000,  the  Company  has  U.S.  Federal  net  operating  loss
carryforwards  of $1.8 million to offset  future  taxable  income  that,  if not
otherwise utilized, will expire during fiscal 2011.

8.  PROFIT SHARING AND RETIREMENT SAVINGS PLANS:

The Company's  retirement and profit sharing plan, the Canandaigua  Brands, Inc.
401(k) and Profit Sharing Plan (the "Plan"), covers substantially all employees,
excluding  those  employees  covered by  collective  bargaining  agreements  and
Matthew  Clark  employees.  The  401(k)  portion  of the Plan  permits  eligible
employees to defer a portion of their compensation (as defined in the Plan) on a
pretax basis.  Participants  may defer up to 12% of their  compensation  for the
year,  subject  to  limitations  of the  Plan.  The  Company  makes  a  matching
contribution  of 50% of the first 6% of compensation a participant  defers.  The
amount of the Company's  contribution  under the profit  sharing  portion of the
Plan is in such  discretionary  amount as the Board of  Directors  may  annually
determine,  subject to limitations of the Plan. Company  contributions were $7.3
million,  $6.8 million,  and $5.9 million for the years ended February 29, 2000,
February 28, 1999, and February 28, 1998, respectively.

On December 31, 1999, the Company's subsidiary,  Matthew Clark, and the Trustees
of the Matthew Clark Group Pension Plan and the Matthew Clark Executive  Pension
Plan (the "Plans") entered into an agreement to merge the Plans into the Matthew
Clark Group Pension Plan  effective  December 31, 1999.  The Matthew Clark Group
Pension  Plan is a defined  benefit  plan  with  assets  held by a  Trustee  who
administers  funds  separately  from  the  Company's  finances.  As  part of the
acquisition  of the Black  Velvet  Assets,  the  Company's  subsidiary,  Barton,
acquired pension plans, which cover certain Canadian employees.

The  following  table  summarizes  the funded  status of the  Company's  defined
benefit  pension plans and the related  amounts that are  primarily  included in
other assets in the Consolidated Balance Sheets.

<TABLE>
<CAPTION>
                                                                                                          February 28,
                                                                        February 29, 2000                    1999
                                                         ---------------------------------------------    -----------
                                                         Matthew Clark        Barton          Total          Total
                                                         -------------     ------------    -----------    -----------
(in thousands)
<S>                                                      <C>               <C>             <C>            <C>
Change in benefit obligation:
Benefit obligation at March 1                            $     163,680     $       -       $   163,680    $      -
Acquisition                                                       -              15,348         15,348        165,997
Service cost                                                     4,299              336          4,635          1,335
Interest cost                                                   10,494              711         11,205          2,671
Plan participants' contribution                                  1,507             -             1,507            481
Actuarial loss/(gain)                                           12,350           (2,222)        10,128           -
Benefits paid                                                   (4,939)            (405)        (5,344)        (1,517)
Foreign currency exchange rate changes                          (2,875)             513         (2,362)        (5,287)
                                                         -------------     ------------    -----------    -----------
Benefit obligation at last day of February               $     184,516     $     14,281    $   198,797    $   163,680
                                                         =============     ============    ===========    ===========

Change in plan assets:
Fair value of plan assets at March 1                     $     194,606     $       -       $   194,606    $      -
Acquisition                                                       -              12,318         12,318        194,001
Actual return on plan assets                                    20,903              948         21,851          7,935
Plan participants' contributions                                 1,507             -             1,507            481
Employer contribution                                             -                 670            670           -
Benefits paid                                                   (4,939)            (431)        (5,370)        (1,517)
Foreign currency exchange rate changes                          (3,198)             445         (2,753)        (6,294)
                                                         -------------     ------------    -----------    -----------
Fair value of plan assets at last day of February        $     208,879     $     13,950    $   222,829    $   194,606
                                                         =============     ============    ===========    ===========

Funded status of the plan as of last day of February:
Funded status                                            $      24,362     $       (330)   $    24,032    $    30,927
Unrecognized actuarial gain/(loss)                               2,945           (2,369)           576         (3,950)
                                                         -------------     ------------    -----------    -----------
Prepaid (accrued) benefit cost                           $      27,307     $     (2,699)   $    24,608    $    26,977
                                                         =============     ============    ===========    ===========

Assumptions as of last day of February:
Rate of return on plan assets                                    8.00%            8.50%                         8.00%
Discount rate                                                    6.00%            7.25%                         6.50%
Increase in compensation levels                                  4.00%             -                            4.50%

Components of net periodic benefit cost for the
  twelve months ended the last day of February:
Service cost                                             $       4,299     $        336    $     4,635    $     1,335
Interest cost                                                   10,494              711         11,205          2,671
Expected return on plan assets                                 (15,533)            (807)       (16,340)        (3,848)
                                                         -------------     ------------    -----------    -----------
Net periodic benefit (income) cost                       $        (740)    $        240    $      (500)   $       158
                                                         =============     ============    ===========    ===========
</TABLE>

9.  POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS:

In connection  with the  acquisition of the Black Velvet  Assets,  the Company's
subsidiary,  Barton, currently sponsors multiple non-pension  postretirement and
postemployment benefit plans for certain of its Canadian employees.

The status of the plans is as follows:

     (in thousands)
     Change in benefit obligation:
     Benefit obligation at April 9, 1999                    $       698
     Service cost                                                    14
     Interest cost                                                   32
     Benefits paid                                                  (10)
     Actuarial gain                                                (110)
     Foreign currency exchange rate changes                          23
                                                            -----------
     Benefit obligation at February 29, 2000                $       647
                                                            ===========

     Funded status as of February 29, 2000:
     Funded status                                          $      (647)
     Unrecognized net gain                                         (111)
                                                            -----------
     Accrued benefit liability                              $      (758)
                                                            ===========

     Assumptions as of February 29, 2000:
     Discount rate                                                7.25%
     Increase in compensation levels                              4.00%

     Components of net periodic benefit cost for the
       period ended February 29, 2000:
     Service cost                                           $        14
     Interest cost                                                   32
                                                            -----------
     Net periodic benefit cost                              $        46
                                                            ===========


At February  29,  2000, a 9.2% annual rate of increase in the per capita cost of
covered health  benefits was assumed for the first year. The rate was assumed to
decrease  gradually  to 4.3%  over  seven  years  and to  remain  at this  level
thereafter.  Assumed  healthcare trend rates could have a significant  effect on
the amount  reported for health care plans.  A 1% change in assumed  health care
cost trend rate would have the following effects:

                                                           1%           1%
                                                        Increase     Decrease
(in thousands)                                          --------     --------
Effect on total service and interest cost components    $      6     $     (5)
Effect on postretirement benefit obligation             $     72     $    (73)

10.  STOCKHOLDERS' EQUITY:

COMMON STOCK -
The Company has two classes of common  stock:  Class A Common  Stock and Class B
Convertible   Common  Stock.   Class  B  Convertible  Common  Stock  shares  are
convertible  into shares of Class A Common  Stock on a  one-to-one  basis at any
time at the option of the holder.  Holders of Class B  Convertible  Common Stock
are  entitled  to ten  votes  per  share.  Holders  of Class A Common  Stock are
entitled to only one vote per share but are entitled to a cash dividend premium.
If the Company pays a cash  dividend on Class B Convertible  Common Stock,  each
share of Class A Common  Stock  will  receive  an amount  at least  ten  percent
greater  than  the  amount  of the  cash  dividend  per  share  paid on  Class B
Convertible  Common Stock.  In addition,  the Board of Directors may declare and
pay a dividend on Class A Common  Stock  without  paying any dividend on Class B
Convertible Common Stock.

At February 29, 2000,  there were 15,069,418  shares of Class A Common Stock and
3,119,835  shares  of  Class B  Convertible  Common  Stock  outstanding,  net of
treasury stock.

STOCK REPURCHASE AUTHORIZATION -
In January 1996, the Company's  Board of Directors  authorized the repurchase of
up to $30.0 million of its Class A Common Stock and Class B  Convertible  Common
Stock.  The  Company was  permitted  to finance  such  purchases,  which  became
treasury  shares,  through cash generated from  operations or through the senior
credit  facility.  Throughout  the year ended  February  28,  1997,  the Company
repurchased  787,450 shares of Class A Common Stock totaling $20.8 million.  The
Company  completed  its  repurchase  program  during  fiscal 1998,  repurchasing
362,100 shares of Class A Common Stock for $9.2 million.

In June 1998, the Company's  Board of Directors  authorized the repurchase of up
to $100.0  million of its Class A Common  Stock and Class B  Convertible  Common
Stock.  The Company  may  finance  such  purchases,  which will become  treasury
shares,  through cash  generated  from  operations  or through the senior credit
facility.  During fiscal 1999, the Company repurchased 1,018,836 shares of Class
A Common Stock for $44.9 million. No repurchases were made during fiscal 2000.

LONG-TERM STOCK INCENTIVE PLAN -
Under the Company's Long-Term Stock Incentive Plan,  nonqualified stock options,
stock appreciation rights,  restricted stock and other stock-based awards may be
granted to employees,  officers and  directors of the Company.  At the Company's
Annual Meeting of Stockholders held on July 20, 1999,  stockholders approved the
amendment  to the  Company's  Long-Term  Stock  Incentive  Plan to increase  the
aggregate  number of shares of the Class A Common  Stock  available  for  awards
under the plan from 4,000,000  shares to 7,000,000  shares.  The exercise price,
vesting period and term of nonqualified stock options granted are established by
the  committee  administering  the  plan  (the  "Committee").  Grants  of  stock
appreciation  rights,  restricted stock and other stock-based awards may contain
such vesting,  terms,  conditions  and other  requirements  as the Committee may
establish.  During fiscal 2000 and fiscal 1999, no stock appreciation  rights or
restricted stock were granted. At February 29, 2000, there were 3,557,568 shares
available for future grant.

A summary of nonqualified stock option activity is as follows:

                                               Weighted                 Weighted
                                               Average                  Average
                               Shares Under    Exercise     Options     Exercise
                                  Option        Price     Exercisable    Price
                               ------------    --------   -----------   --------
Balance, February 28, 1997        1,432,975    $  18.85      51,425     $  10.67
Options granted                     569,400    $  38.72
Options exercised                  (117,452)   $  15.33
Options forfeited/canceled          (38,108)   $  17.66
                               ------------
Balance, February 28, 1998        1,846,815    $  25.23     360,630     $  25.46
Options granted                     728,200    $  50.57
Options exercised                  (203,565)   $  20.08
Options forfeited/canceled         (116,695)   $  37.13
                               ------------
Balance, February 28, 1999        2,254,755    $  33.26     492,285     $  24.55
Options granted                     819,800    $  50.42
Options exercised                  (187,690)   $  17.92
Options forfeited/canceled         (148,615)   $  44.95
                               ------------
Balance, February 29, 2000        2,738,250    $  38.81     737,455     $  27.04
                               ============

The following table summarizes  information  about stock options  outstanding at
February 29, 2000:

                            Options Outstanding             Options Exercisable
                   ------------------------------------   ----------------------
                                  Weighted
                                   Average     Weighted                 Weighted
                                  Remaining    Average                  Average
    Range of          Number     Contractual   Exercise      Number     Exercise
Exercise Prices    Outstanding      Life        Price     Exercisable    Price
- ---------------    -----------   -----------   --------   -----------   --------
$ 4.44 - $11.50         12,150     2.3 years   $  11.50        12,150   $  11.50
$17.00 - $25.63        633,420     5.4 years   $  17.28       365,280   $  17.42
$26.75 - $31.25        335,180     6.5 years   $  28.45       145,300   $  27.50
$35.38 - $50.00        940,600     8.5 years   $  45.41       185,325   $  42.76
$51.00 - $59.56        816,900     8.9 years   $  52.57        29,400   $  51.74
                   -----------                            -----------
                     2,738,250     7.6 years   $  38.81       737,455   $  27.04
                   ===========                            ===========

The weighted  average fair value of options  granted during fiscal 2000,  fiscal
1999, and fiscal 1998 was $26.28,  $26.21,  and $20.81,  respectively.  The fair
value of  options  is  estimated  on the date of grant  using the  Black-Scholes
option-pricing model with the following weighted average assumptions:  risk-free
interest rate of 5.7% for fiscal 2000, 5.3% for fiscal 1999, and 6.4% for fiscal
1998;  volatility of 40.0% for fiscal 2000, 40.6% for fiscal 1999, and 41.3% for
fiscal 1998;  expected option life of 7.0 years for fiscal 2000 and fiscal 1999,
and 6.9 years for fiscal 1998. The dividend yield was 0% for fiscal 2000, fiscal
1999, and fiscal 1998. Forfeitures are recognized as they occur.

INCENTIVE STOCK OPTION PLAN -
Under the Company's Incentive Stock Option Plan,  incentive stock options may be
granted  to  employees,  including  officers,  of the  Company.  Grants,  in the
aggregate,  may not  exceed  1,000,000  shares of the  Company's  Class A Common
Stock. The exercise price of any incentive stock option may not be less than the
fair market  value of the  Company's  Class A Common Stock on the date of grant.
The vesting period and term of incentive  stock options  granted are established
by the  Committee.  The maximum  term of incentive  stock  options is ten years.
During fiscal 2000 and fiscal 1999, no incentive stock options were granted.

EMPLOYEE STOCK PURCHASE PLAN - The Company has a stock purchase plan under which
1,125,000  shares of Class A Common Stock can be issued.  Under the terms of the
plan,  eligible  employees may purchase  shares of the Company's  Class A Common
Stock through payroll deductions.  The purchase price is the lower of 85% of the
fair market value of the stock on the first or last day of the purchase  period.
During fiscal 2000,  fiscal 1999, and fiscal 1998,  employees  purchased  31,062
shares, 49,850 shares, and 78,248 shares, respectively.

The weighted  average fair value of purchase  rights granted during fiscal 2000,
fiscal 1999, and fiscal 1998 was $12.18, $12.35, and $11.90,  respectively.  The
fair  value of  purchase  rights  is  estimated  on the date of grant  using the
Black-Scholes   option-pricing   model  with  the  following   weighted  average
assumptions:  risk-free  interest rate of 5.4% for fiscal 2000,  4.7% for fiscal
1999, and 5.3% for fiscal 1998;  volatility of 33.6% for fiscal 2000,  33.5% for
fiscal 1999,  and 35.1% for fiscal  1998;  expected  purchase  right life of 0.5
years for fiscal 2000,  fiscal 1999,  and fiscal 1998. The dividend yield was 0%
for fiscal 2000, fiscal 1999, and fiscal 1998.

PRO FORMA DISCLOSURE -
The Company applies Accounting  Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees,"  and related  interpretations  in accounting for its
plans.  The Company  adopted the  disclosure-only  provisions  of  Statement  of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation,"  ("SFAS  No.  123").  Accordingly,  no  incremental  compensation
expense has been  recognized for its  stock-based  compensation  plans.  Had the
Company  recognized the compensation  cost based upon the fair value at the date
of grant for awards under its plans  consistent with the methodology  prescribed
by SFAS No.  123,  net income and  earnings  per  common  share  would have been
reduced to the pro forma amounts as follows:
<TABLE>
<CAPTION>
                                         For the Year Ended
                                            February 29,              For the Years Ended February 28,
                                        --------------------    --------------------------------------------
                                                2000                    1999                    1998
                                        --------------------    --------------------    --------------------
                                           As          Pro         As          Pro         As          Pro
                                        Reported      Forma     Reported      Forma     Reported      Forma
                                        --------    --------    --------    --------    --------    --------
(in thousands, except per share data)
<S>                                     <C>         <C>         <C>         <C>         <C>         <C>
Net income                              $ 77,375    $ 71,474    $ 50,472    $ 46,942    $ 47,130    $ 43,230
                                        ========    ========    ========    ========    ========    ========
Earnings per common share:
  Basic                                 $   4.29    $   3.96    $   2.76    $   2.57    $   2.52    $   2.32
  Diluted                               $   4.18    $   3.86    $   2.69    $   2.50    $   2.47    $   2.26
</TABLE>

The pro  forma  effect on net  income  may not be  representative  of that to be
expected in future years.

<PAGE>

11.  EARNINGS PER COMMON SHARE:

The following table presents earnings per common share as follows:

                                             For the Year
                                                Ended        For the Years Ended
                                             February 29,        February 28,
                                             ------------    -------------------
                                                2000           1999       1998
                                             -----------     --------   --------
(in thousands, except per share data)
Income before extraordinary item             $    77,375     $ 61,909   $ 47,130
Extraordinary item, net of income taxes             -         (11,437)      -
                                             -----------     --------   --------
Income applicable to common shares           $    77,375     $ 50,472   $ 47,130
                                             ===========     ========   ========

Weighted average common shares
  outstanding - basic                             18,054       18,293     18,672
Stock options                                        445          461        433
                                             -----------     --------   --------
Weighted average common shares
  outstanding - diluted                           18,499       18,754     19,105
                                             ===========     ========   ========

Earnings per common share:
  Basic:
  Income before extraordinary item           $      4.29     $   3.38   $   2.52
  Extraordinary item                                -           (0.62)      -
                                             -----------     --------  ---------
  Earnings per common share - basic          $      4.29     $   2.76   $   2.52
                                             ===========     ========   ========

  Diluted:
  Income before extraordinary item           $      4.18     $   3.30   $   2.47
  Extraordinary item                                -           (0.61)      -
                                             -----------     --------  ---------
  Earnings per common share - diluted        $      4.18     $   2.69   $   2.47
                                             ===========     ========   ========

12.  COMMITMENTS AND CONTINGENCIES:

OPERATING LEASES -
Future payments under noncancelable operating leases having initial or remaining
terms of one year or more are as follows  during the next five fiscal  years and
thereafter:

                            (in thousands)
                       2001            $  16,312
                       2002               14,867
                       2003               13,827
                       2004               12,936
                       2005               12,067
                       Thereafter         96,301
                                       ---------
                                       $ 166,310
                                       =========

Rental  expense was $17.4  million,  $8.2  million,  and $5.6 million for fiscal
2000, fiscal 1999, and fiscal 1998, respectively.

PURCHASE COMMITMENTS AND CONTINGENCIES -
The Company has agreements  with suppliers to purchase  various spirits of which
certain  agreements  are  denominated  in British  pound  sterling  and Canadian
dollars.  The  maximum  future  obligation  under these  agreements,  based upon
exchange  rates at February  29, 2000,  aggregate  $28.4  million for  contracts
expiring through December 2005.

All of the  Company's  imported  beer products are marketed and sold pursuant to
exclusive  distribution  agreements  from the suppliers of these  products.  The
Company's agreement to distribute Corona Extra and its other Mexican beer brands
exclusively  throughout  25 primarily  western U.S.  states  expires in December
2006, with automatic five year renewals  thereafter,  subject to compliance with
certain performance criteria and other terms under the agreement.  The remaining
agreements  expire  through  December  2007.  Prior to their  expiration,  these
agreements  may be terminated  if the Company fails to meet certain  performance
criteria.  At February 29, 2000, the Company  believes it is in compliance  with
all of its material  distribution  agreements and, given the Company's long-term
relationships  with its  suppliers,  the  Company  does not  believe  that these
agreements will be terminated.

In connection with previous acquisitions, the Company assumed purchase contracts
with certain  growers and suppliers.  In addition,  the Company has entered into
other purchase contracts with various growers and suppliers in the normal course
of business.  Under the grape  purchase  contracts,  the Company is committed to
purchase all grape  production  yielded  from a specified  number of acres for a
period of time  ranging up to eighteen  years.  The actual  tonnage and price of
grapes that must be purchased  by the Company  will vary each year  depending on
certain factors,  including weather, time of harvest,  overall market conditions
and the  agricultural  practices and location of the growers and suppliers under
contract.  The Company  purchased $126.8 million of grapes under these contracts
during  fiscal 2000.  Based on current  production  yields and  published  grape
prices, the Company estimates that the aggregate purchases under these contracts
over the remaining term of the contracts will be approximately $800.5 million.

The Company's  aggregate  obligations under bulk wine purchase contracts will be
approximately $8.3 million over the remaining term of the contracts which expire
through fiscal 2001.

EMPLOYMENT CONTRACTS -
The Company has employment  contracts with certain of its executive officers and
certain other  management  personnel  with  remaining  terms of one year.  These
agreements provide for minimum salaries,  as adjusted for annual increases,  and
may include  incentive  bonuses based upon  attainment  of specified  management
goals. In addition, these agreements provide for severance payments in the event
of specified  termination  of  employment.  The aggregate  commitment for future
compensation and severance,  excluding incentive bonuses, was $4.2 million as of
February 29, 2000, of which $2.0 million is accrued in other  liabilities  as of
February 29, 2000.

EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENTS -
Approximately 31% of the Company's full-time employees are covered by collective
bargaining  agreements at February 29, 2000. Agreements expiring within one year
cover approximately 18% of the Company's full-time employees.

LEGAL MATTERS -
The Company is subject to litigation from time to time in the ordinary course of
business.  Although the amount of any liability with respect to such  litigation
cannot be determined,  in the opinion of management such liability will not have
a material  adverse  effect on the  Company's  financial  condition,  results of
operations or cash flows.

13.  SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK:

Gross sales to the five  largest  customers  of the Company  represented  17.1%,
25.2%,  and 26.4% of the  Company's  gross  sales  for the  fiscal  years  ended
February 29, 2000, February 28, 1999, and February 28, 1998, respectively. Gross
sales to the Company's largest customer, Southern Wine and Spirits,  represented
8.0%,  10.9%,  and 12.1% of the Company's gross sales for the fiscal years ended
February 29,  2000,  February  28,  1999,  and February 28, 1998,  respectively.
Accounts receivable from the Company's largest customer  represented 8.6%, 8.5%,
and 14.1% of the Company's  total  accounts  receivable as of February 29, 2000,
February 28, 1999,  and  February  28,  1998,  respectively.  Gross sales to the
Company's  five  largest  customers  are  expected to  continue  to  represent a
significant portion of the Company's revenues.  The Company's  arrangements with
certain of its  customers  may,  generally,  be  terminated by either party with
prior notice.  The Company performs ongoing credit evaluations of its customers'
financial  position,  and  management  of the Company is of the opinion that any
risk of  significant  loss is reduced  due to the  diversity  of  customers  and
geographic sales area.

14.  SUMMARIZED FINANCIAL INFORMATION - SUBSIDIARY GUARANTORS:

The following table presents summarized  financial  information for the Company,
the parent company, the combined subsidiaries of the Company which guarantee the
Company's senior notes and senior  subordinated notes ("Subsidiary  Guarantors")
and  the  combined   subsidiaries  of  the  Company  which  are  not  Subsidiary
Guarantors, primarily Matthew Clark ("Subsidiary Nonguarantors"). The Subsidiary
Guarantors are wholly owned and the guarantees  are full,  unconditional,  joint
and several obligations of each of the Subsidiary Guarantors. Separate financial
statements  for the  Subsidiary  Guarantors  of the  Company  are not  presented
because the Company has determined that such financial  statements  would not be
material to investors.  The Subsidiary Guarantors comprise all of the direct and
indirect  subsidiaries of the Company,  other than Matthew Clark,  the Company's
Canadian subsidiary,  and certain other subsidiaries which individually,  and in
the aggregate, are inconsequential.  There are no restrictions on the ability of
the  Subsidiary  Guarantors to transfer funds to the Company in the form of cash
dividends, loans or advances.

<TABLE>
<CAPTION>
                                           Parent          Subsidiary        Subsidiary
                                           Company         Guarantors       Nonguarantors      Eliminations      Consolidated
                                         -----------      ------------      -------------      ------------      ------------
(in thousands)
<S>                                      <C>              <C>               <C>                <C>               <C>
BALANCE SHEET DATA:
February 29, 2000
- -----------------
Current assets                           $   105,884      $    611,646      $     278,467      $       -         $    995,997
Noncurrent assets                        $   913,026      $  1,695,790      $      25,628      $ (1,281,650)     $  1,352,794
Current liabilities                      $   150,507      $     84,860      $     202,850      $       -         $    438,217
Noncurrent liabilities                   $ 1,230,139      $     97,410      $      62,185      $       -         $  1,389,734

February 28, 1999
- -----------------
Current assets                           $   114,243      $    532,028      $     209,468      $       -         $    855,739
Noncurrent assets                        $   646,133      $    396,125      $     421,867      $   (526,088)     $    938,037
Current liabilities                      $   157,648      $    126,803      $     130,821      $       -         $    415,272
Noncurrent liabilities                   $   815,421      $     73,178      $      54,633      $       -         $    943,232

INCOME STATEMENT DATA:
For the year ended February 29, 2000
- ------------------------------------
Net sales                                $  620,631       $  1,305,032      $     761,762      $   (346,956)     $  2,340,469
Gross profit                             $  174,231       $    332,641      $     215,588      $       -         $    722,460
(Loss) income before income taxes        $     (192)      $     92,433      $      36,718      $       -         $    128,959
Net (loss) income                        $     (115)      $     55,460      $      22,030      $       -         $     77,375

For the year ended February 28, 1999
- ------------------------------------
Net sales                                $  615,270       $  1,080,466      $    158,761       $   (357,154)     $  1,497,343
Gross profit                             $  168,575       $    237,437      $     42,022       $       -         $    448,034
Income before income taxes
  and extraordinary item                 $    4,849       $     96,935      $      2,646       $       -         $    104,430
Net income                               $    2,861       $     45,781      $      1,830       $       -         $     50,472

For the year ended February 28, 1998
- ------------------------------------
Net sales                                $  562,760       $    985,757      $      2,197       $   (337,926)     $  1,212,788
Gross profit                             $  151,092       $    191,658      $      1,000       $       -         $    343,750
Income (loss) before income taxes        $   21,024       $     59,285      $       (428)      $       -         $     79,881
Net income (loss)                        $   12,404       $     35,154      $       (428)      $       -         $     47,130
</TABLE>

15.  ACCOUNTING PRONOUNCEMENTS:

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No.  133  ("SFAS No.  133"),  "Accounting  for
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  133  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts  (collectively referred to as
derivatives),  and for  hedging  activities.  SFAS No. 133  requires  that every
derivative  be recorded as either an asset or liability in the balance sheet and
measured  at its fair  value.  SFAS No. 133 also  requires  that  changes in the
derivative's  fair value be  recognized  currently in earnings  unless  specific
hedge  accounting  criteria are met.  Special  accounting for qualifying  hedges
allows a derivative's  gains and losses to offset related  results on the hedged
item in the income  statement,  and requires that a company  formally  document,
designate  and assess the  effectiveness  of  transactions  that  receive  hedge
accounting.

In June 1999,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No.  137  ("SFAS No.  137"),  "Accounting  for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date of
FASB  Statement No. 133." SFAS No. 137 delays the effective date of SFAS No. 133
for one year.  With the  issuance  of SFAS No.  137,  the Company is required to
adopt SFAS No. 133 on a prospective  basis for interim  periods and fiscal years
beginning March 1, 2001. The Company  believes the effect of the adoption on its
financial  statements  will not be material based on the Company's  current risk
management strategies.

16.  BUSINESS SEGMENT INFORMATION:

The Company  reports its operating  results in five segments:  Canandaigua  Wine
(branded  popularly-priced  wine and brandy,  and other,  primarily  grape juice
concentrate);  Barton (primarily beer and spirits); Matthew Clark (branded wine,
cider and bottled  water,  and wholesale  wine,  cider,  spirits,  beer and soft
drinks); Franciscan (primarily branded super-premium and ultra-premium wine) and
Corporate  Operations and Other  (primarily  corporate  related items).  Segment
selection was based upon  internal  organizational  structure,  the way in which
these operations are managed and their  performance  evaluated by management and
the  Company's  Board of  Directors,  the  availability  of  separate  financial
results, and materiality considerations. The accounting policies of the segments
are the  same as  those  described  in the  summary  of  significant  accounting
policies.  The Company  evaluates  performance based on operating profits of the
respective business units.

Segment information is as follows:
<TABLE>
<CAPTION>

                                For the Year Ended
                                   February 29,      For the Years Ended February 28,
                                ------------------   --------------------------------
                                       2000               1999              1998
                                ------------------   -------------      -------------
(in thousands)
<S>                             <C>                  <C>                <C>
CANANDAIGUA WINE:
- -----------------
Net sales:
  Branded:
    External customers          $          623,796   $     598,782      $     570,807
    Intersegment                             5,524            -                  -
                                ------------------   -------------      -------------
    Total Branded                          629,320         598,782            570,807
                                ------------------   -------------      -------------
  Other:
    External customers                      81,442          70,711             71,988
    Intersegment                             1,146            -                  -
                                ------------------   -------------      -------------
    Total Other                             82,588          70,711             71,988
                                ------------------   -------------      -------------
Net sales                       $          711,908   $     669,493      $     642,795
Operating profit                $           46,778   $      46,283      $      45,440
Long-lived assets               $          192,828   $     191,762      $     185,317
Total assets                    $          639,687   $     650,578      $     632,636
Capital expenditures            $           20,213   $      25,275      $      25,666
Depreciation and amortization   $           20,828   $      20,838      $      21,189

BARTON:
- -------
Net sales:
  Beer                          $          570,380   $     478,611      $     376,607
  Spirits                                  267,762         185,938            191,190
                                ------------------   -------------      -------------
Net sales                       $          838,142   $     664,549      $     567,797
Operating profit                $          142,931   $     102,624      $      77,010
Long-lived assets               $           78,876   $      50,221      $      51,574
Total assets                    $          684,228   $     478,580      $     439,317
Capital expenditures            $            7,218   $       3,269      $       5,021
Depreciation and amortization   $           14,452   $      10,765      $      10,455

<PAGE>
<CAPTION>

                                For the Year Ended
                                    February 29,     For the Years Ended February 28,
                                ------------------   --------------------------------
                                       2000              1999               1998
                                ------------------   ------------       -------------
(in thousands)
<S>                             <C>                  <C>                <C>
MATTHEW CLARK:
- --------------
Net sales:
  Branded:
    External customers          $          313,027   $     64,879       $        -
    Intersegment                                75           -                   -
                                ------------------   ------------       -------------
    Total Branded                          313,102         64,879                -
  Wholesale                                416,644         93,881                -
                                ------------------   ------------       -------------
Net sales                       $          729,746   $    158,760       $        -
Operating profit                $           48,473   $      8,998       $        -
Long-lived assets               $          158,119   $    169,693       $        -
Total assets                    $          636,807   $    631,313       $        -
Capital expenditures            $           17,949   $     10,444       $        -
Depreciation and amortization   $           20,238   $      4,836       $        -

FRANCISCAN:
- -----------
Net sales:
  External customers            $           62,046   $       -          $        -
  Intersegment                                  73           -                   -
                                ------------------   ------------       -------------
Net sales                       $           62,119   $       -          $        -
Operating profit                $           12,708   $       -          $        -
Long-lived assets               $          106,956   $       -          $        -
Total assets                    $          357,999   $       -          $        -
Capital expenditures            $           10,741   $       -          $        -
Depreciation and amortization   $            6,028   $       -          $        -

CORPORATE OPERATIONS AND OTHER:
- -------------------------------
Net sales                       $            5,372   $      4,541       $       2,196
Operating loss                  $          (15,849)  $    (12,013)      $     (10,380)
Long-lived assets               $            6,192   $     17,127       $       7,144
Total assets                    $           30,070   $     33,305       $      18,602
Capital expenditures            $            1,626   $     10,869       $         516
Depreciation and amortization   $            3,177   $      2,151       $       1,517

INTERSEGMENT ELIMINATIONS:
- --------------------------
Net sales                       $           (6,818)  $       -          $        -

CONSOLIDATED:
- -------------
Net sales                       $        2,340,469   $  1,497,343       $   1,212,788
Operating profit                $          235,041   $    145,892       $     112,070
Long-lived assets               $          542,971   $    428,803       $     244,035
Total assets                    $        2,348,791   $  1,793,776       $   1,090,555
Capital expenditures            $           57,747   $     49,857       $      31,203
Depreciation and amortization   $           64,723   $     38,590       $      33,161

</TABLE>

The  Company's  areas  of  operations  are  principally  in the  United  States.
Operations  outside the United  States  consist of Matthew  Clark's  operations,
which are primarily in the United  Kingdom.  No other single foreign  country or
geographic area is significant to the consolidated operations.

<PAGE>

17.  SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED):

A summary of selected quarterly financial information is as follows:

<TABLE>
<CAPTION>
                                                                       QUARTER ENDED
                                               -----------------------------------------------------------
                                                 May 31,      August 31,     November 30,     February 29,
               Fiscal 2000                        1999           1999            1999             2000          Full Year
- ------------------------------------------     ----------     ----------     ------------     ------------     -----------
(in thousands, except per share data)
<S>                                            <C>            <C>            <C>              <C>              <C>
Net sales                                      $  530,169     $  621,580     $    661,520     $    527,200     $ 2,340,469
Gross profit                                   $  156,123     $  189,128     $    209,687     $    167,522     $   722,460
Net income                                     $   10,846     $   21,101     $     29,900     $     15,528     $    77,375
Earnings per common share: (1)
  Basic                                        $     0.60     $     1.17     $       1.65     $       0.86     $      4.29
  Diluted                                      $     0.59     $     1.14     $       1.60     $       0.84     $      4.18


<CAPTION>
                                                                       QUARTER ENDED
                                               -----------------------------------------------------------
                                                 May 31,      August 31,     November 30,     February 28,
               Fiscal 1999                        1998           1998            1998             1999          Full Year
- ------------------------------------------     ----------     ----------     ------------     ------------     -----------
(in thousands, except per share data)
<S>                                            <C>            <C>            <C>              <C>              <C>
Net sales                                      $  312,928     $  349,386     $    375,586     $    459,443     $ 1,497,343
Gross profit                                   $   92,061     $  103,236     $    115,695     $    137,042     $   448,034
Income before extraordinary item               $   13,099     $   16,731     $     20,161     $     11,918     $    61,909
Extraordinary item, net of income taxes (2)    $     -        $     -        $       -        $    (11,437)    $   (11,437)
Net income                                     $   13,099     $   16,731     $     20,161     $        481     $    50,472
Earnings per common share: (1)
  Basic:
    Income before extraordinary item           $     0.70     $     0.90     $       1.13     $       0.67     $      3.38
    Extraordinary item                               -              -                -               (0.64)          (0.62)
                                               ----------     ----------     ------------     ------------     -----------
    Earnings per common share - basic          $     0.70     $     0.90     $       1.13     $       0.03     $      2.76
                                               ==========     ==========     ============     ============     ===========
  Diluted:
    Income before extraordinary item           $      0.68    $     0.88     $       1.10     $       0.65     $      3.30
    Extraordinary item                                -             -                -               (0.62)          (0.61)
                                               -----------    ----------     ------------     ------------     -----------
    Earnings per common share - diluted        $      0.68    $     0.88     $       1.10     $       0.03     $      2.69
                                               ===========    ==========     ============     ============     ===========
<FN>
(1)  The sum of the  quarterly  earnings  per  common  share in fiscal  2000 and
     fiscal 1999 may not equal the total  computed for the  respective  years as
     the earnings per common  share are computed  independently  for each of the
     quarters presented and for the full year.

(2)  Represents  fees  related to the  replacement  of the prior  senior  credit
     facility, including extinguishment of the term loan.
</FN>
</TABLE>


18.  NONRECURRING CHARGES:

During fiscal 2000, the Company  incurred  nonrecurring  charges of $5.5 million
related to the closure of a cider  production  facility within the Matthew Clark
operating segment in the U.K. ($2.9 million) and to a management  reorganization
within the  Canandaigua  Wine operating  segment ($2.6  million).  During fiscal
1999, the Company incurred  nonrecurring charges of $2.6 million also related to
the closure of the aforementioned Matthew Clark cider production facility.

19.  SUBSEQUENT EVENT:

On May 15, 2000, the Company issued (pound)80.0  million  (approximately  $120.4
million) aggregate principal amount of 8 1/2% Series C Senior Notes due November
2009 at an issuance price of (pound)79.6 million  (approximately $119.8 million,
net of $0.6  million  unamortized  discount,  with an  effective  rate of  8.6%)
("Sterling   Series  C  Senior  Notes").   The  net  proceeds  of  the  offering
((pound)78.8  million,  or  approximately  $118.6  million) were used to repay a
portion of the Company's  British  pound  sterling  borrowings  under its senior
credit facility.  After this repayment, the required quarterly repayments of the
Tranche II Term Loan facility were revised to (pound)0.2  million ($0.3 million)
for the remaining three quarters in 2000,  (pound)0.4 million ($0.6 million) for
each  quarter  in 2001 and 2002,  (pound)0.5  million  ($0.8  million)  for each
quarter in 2003,  and  (pound)8.5  million  ($12.8  million) for each quarter in
2004. (The foregoing U.S.  dollar  equivalents are as of May 15, 2000.) Interest
on the  Sterling  Series C Senior  Notes is payable  semiannually  on May 15 and
November 15 of each year,  beginning on November 15, 2000. The Sterling Series C
Senior Notes are  redeemable at the option of the Company,  in whole or in part,
at any time. The Sterling Series C Senior Notes are unsecured senior obligations
and rank equally in right of payment to all existing and future unsecured senior
indebtedness of the Company.  The Sterling Series C Senior Notes are guaranteed,
on  a  senior  basis,  by  certain  of  the  Company's   significant   operating
subsidiaries.

<PAGE>


ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
- -------  -----------------------------------------------------------------------
         FINANCIAL DISCLOSURE
         --------------------

         Not Applicable.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- --------  --------------------------------------------------

     The information required by this Item (except for the information regarding
executive  officers  required by Item 401 of Regulation S-K which is included in
Part I hereof in  accordance  with  General  Instruction  G(3)) is  incorporated
herein by reference to the Company's  proxy statement to be issued in connection
with the Annual  Meeting of  Stockholders  of the Company to be held on July 18,
2000, under those sections of the proxy statement titled "Election of Directors"
and "Section  16(a)  Beneficial  Ownership  Reporting  Compliance",  which proxy
statement  will be filed within 120 days after the end of the  Company's  fiscal
year.


ITEM 11.  EXECUTIVE COMPENSATION
- --------  ----------------------

     The information  required by this Item is incorporated  herein by reference
to the  Company's  proxy  statement to be issued in  connection  with the Annual
Meeting of Stockholders  of the Company to be held on July 18, 2000,  under that
section of the proxy statement titled "Executive  Compensation" and that caption
titled  "Director  Compensation"  under  "Election  of  Directors",  which proxy
statement  will be filed within 120 days after the end of the  Company's  fiscal
year.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- --------  --------------------------------------------------------------

     The information  required by this Item is incorporated  herein by reference
to the  Company's  proxy  statement to be issued in  connection  with the Annual
Meeting of Stockholders of the Company to be held on July 18, 2000,  under those
sections  of the  proxy  statement  titled  "Beneficial  Ownership"  and  "Stock
Ownership of  Management",  which proxy  statement will be filed within 120 days
after the end of the Company's fiscal year.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------  ----------------------------------------------

     The information  required by this Item is incorporated  herein by reference
to the  Company's  proxy  statement to be issued in  connection  with the Annual
Meeting of Stockholders  of the Company to be held on July 18, 2000,  under that
section of the proxy  statement  titled  "Executive  Compensation",  which proxy
statement  will be filed within 120 days after the end of the  Company's  fiscal
year.


<PAGE>


                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- --------  ----------------------------------------------------------------

(a)  1.   Financial Statements

          The  following  consolidated  financial  statements of the Company are
          submitted herewith:

               Report of Independent Public Accountants

               Consolidated Balance Sheets - February 29, 2000, and February 28,
               1999

               Consolidated  Statements  of Income for the years ended  February
               29, 2000, February 28, 1999, and February 28, 1998

               Consolidated  Statements of Changes in  Stockholders'  Equity for
               the years  ended  February  29,  2000,  February  28,  1999,  and
               February 28, 1998

               Consolidated  Statements  of  Cash  Flows  for  the  years  ended
               February 29, 2000, February 28, 1999, and February 28, 1998

               Notes to Consolidated Financial Statements

     2.   Financial Statement Schedules

          The  following   consolidated   financial   information  is  submitted
          herewith:

               Selected Quarterly Financial Information (unaudited)

All other  schedules  are not submitted  because they are not  applicable or not
required under Regulation S-X or because the required information is included in
the financial statements or notes thereto.

Individual  financial statements of the Registrant have been omitted because the
Registrant is primarily an operating  company and no subsidiary  included in the
consolidated   financial   statements  has  minority  equity   interests  and/or
noncurrent  indebtedness,  not guaranteed by the Registrant,  in excess of 5% of
total consolidated assets.

     3.   Exhibits required to be filed by Item 601 of Regulation S-K

          For the exhibits  that are filed  herewith or  incorporated  herein by
          reference,  see  the  Index  to  Exhibits  located  on Page 81 of this
          Report.

(b)  Reports on Form 8-K

     The  following  Report  on Form  8-K was  filed  by the  Company  with  the
     Securities and Exchange  Commission during the fourth quarter of the fiscal
     year ended February 29, 2000:

     Form 8-K dated January 4, 2000.  This Form 8-K reported  information  under
     Item 5 (Other Events) and included (i) the Company's Condensed Consolidated
     Balance  Sheets as of November 30, 1999  (unaudited)  and February 28, 1999
     (audited);  (ii) the Company's Condensed Consolidated  Statements of Income
     for the three months ended November 30, 1999  (unaudited)  and November 30,
     1998 (unaudited); and (iii) the Company's Condensed Consolidated Statements
     of Income for the nine  months  ended  November  30, 1999  (unaudited)  and
     November 30, 1998 (unaudited).

<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    CANANDAIGUA BRANDS, INC.


                                        By: /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Chairman of the
                                            Board, President and Chief
                                            Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


/s/ Richard Sands                           /s/ Thomas S. Summer
- ----------------------------------          ----------------------------------
Richard Sands, Chairman of the              Thomas S. Summer, Executive Vice
Board, President, and Chief                 President and Chief Financial
Executive Officer (Principal                Officer (Principal Financial
Executive Officer)                          Officer and Principal Accounting
Dated:  May 30, 2000                        Officer)
                                            Dated: May 30, 2000


/s/ Robert Sands                            /s/ George Bresler
- ----------------------------------          ----------------------------------
Robert Sands, Director                      George Bresler, Director
Dated:  May 30, 2000                        Dated:  May 30, 2000


/s/ James A. Locke                          /s/ Thomas C. McDermott
- ----------------------------------          ----------------------------------
James A. Locke, III, Director               Thomas C. McDermott, Director
Dated:  May 30, 2000                        Dated:  May 30, 2000


/s/ Paul L. Smith
- ----------------------------------
Paul L. Smith, Director
Dated:  May 30, 2000








<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    BATAVIA WINE CELLARS, INC.


                                        By: /s/ Ned Cooper
                                            ----------------------------------
                                            Ned Cooper, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Ned Cooper
                                            ----------------------------------
                                            Ned Cooper, President
                                            (Principal Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ----------------------------------
                                            Thomas S. Summer, Treasurer
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ----------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ----------------------------------
                                            Robert Sands, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    CANANDAIGUA WINE COMPANY, INC.


                                        By: /s/ Jon Moramarco
                                            ----------------------------------
                                            Jon Moramarco, President and Chief
                                            Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 30, 2000                        /s/ Jon Moramarco
                                            ----------------------------------
                                            Jon Moramarco, President and Chief
                                            Executive Officer (Principal
                                            Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ----------------------------------
                                            Thomas S. Summer, Treasurer
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ----------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ----------------------------------
                                            Robert Sands, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    CANANDAIGUA EUROPE LIMITED


                                        By: /s/ Douglas Kahle
                                            ----------------------------------
                                            Douglas Kahle, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Douglas Kahle
                                            ----------------------------------
                                            Douglas Kahle, President
                                            (Principal Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ----------------------------------
                                            Thomas S. Summer, Treasurer
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ----------------------------------
                                            Richard Sands, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    CANANDAIGUA LIMITED


                                        By: /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Chief Executive
                                            Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Chief Executive
                                            Officer and Director (Principal
                                            Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Finance
                                            Director (Principal Financial
                                            Officer and Principal Accounting
                                            Officer)


Dated:  May 30, 2000                        /s/ Peter Aikens
                                            ---------------------------------
                                            Peter Aikens, Director


Dated:  May 30, 2000                        /s/ Anne Colquhoun
                                            ---------------------------------
                                            Anne Colquhoun, Director


Dated:  May 30, 2000                        /s/ Hugh Etheridge
                                            ---------------------------------
                                            Hugh Etheridge, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    POLYPHENOLICS, INC.


                                        By: /s/ Howard Jacobson
                                            ---------------------------------
                                            Howard Jacobson, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                    /s/ Howard Jacobson
                                            ---------------------------------
                                            Howard Jacobson, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President,
                                            Treasurer and Director (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)





<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    ROBERTS TRADING CORP.


                                        By: /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, President and
                                            Treasurer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, President and
                                            Treasurer (Principal Executive
                                            Officer, Principal Financial
                                            Officer and Principal Accounting
                                            Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    CANANDAIGUA B.V.


                                        By: /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Authorized
                                            Representative

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ G.A.L.R. Diepenhorst
                                            ---------------------------------
                                            G.A.L.R. Diepenhorst, Managing
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ E.F. Switters
                                            ---------------------------------
                                            E.F. Switters, Managing Director
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Authorized
                                            Representative in the United
                                            States


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    FRANCISCAN VINEYARDS, INC.


                                        By: /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            and Treasurer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    ALLBERRY, INC.


                                        By: /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            and Treasurer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    CLOUD PEAK CORPORATION


                                        By: /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            and Treasurer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director

Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    M.J. LEWIS CORP.


                                        By: /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        s/ Agustin Francisco Huneeus
                                            --------------------------------
                                            Agustin Francisco Huneeus,
                                            President (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            and Treasurer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    MT. VEEDER CORPORATION


                                        By: /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            and Treasurer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    BARTON INCORPORATED


                                        By: /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President and
                                            Chief Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President,
                                            Chief Executive Officer and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Troy Christensen
                                            ---------------------------------
                                            Troy Christensen, Director


Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, Director


Dated:  May 30, 2000                        /s/ William F. Hackett
                                            ---------------------------------
                                            William F. Hackett, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director

<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    BARTON BRANDS, LTD.


                                        By: /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, Director


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    BARTON BEERS, LTD.


                                        By: /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Chief Executive
                                            Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Chief Executive
                                            Officer and Director (Principal
                                            Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S.Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, Director


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ William F. Hackett
                                            ---------------------------------
                                            William F. Hackett, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    BARTON BRANDS OF CALIFORNIA, INC.


                                        By: /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    BARTON BRANDS OF GEORGIA, INC.


                                        By: /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    BARTON CANADA, LTD.


                                        By: /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    BARTON DISTILLERS IMPORT CORP.


                                        By: /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    BARTON FINANCIAL CORPORATION


                                        By: /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, President,
                                            Secretary and Director (Principal
                                            Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Charles T. Schlau
                                            ---------------------------------
                                            Charles T. Schlau, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    STEVENS POINT BEVERAGE CO.


                                        By: /s/ James P. Ryan
                                            ---------------------------------
                                            James P. Ryan, President and
                                            Chief Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ James P. Ryan
                                            ---------------------------------
                                            James P. Ryan, President, Chief
                                            Executive Officer and Director
                                            (Principal Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, Director


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ William F. Hackett
                                            ---------------------------------
                                            William F. Hackett, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 30, 2000                    MONARCH IMPORT COMPANY


                                        By: /s/ James P. Ryan
                                            ---------------------------------
                                            James P. Ryan, Chief Executive
                                            Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 30, 2000                        /s/ James P. Ryan
                                            ---------------------------------
                                            James P. Ryan, Chief Executive
                                            Officer (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, Director


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ William F. Hackett
                                            ---------------------------------
                                            William F. Hackett, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director

<PAGE>

                                INDEX TO EXHIBITS

Exhibit No.
- -----------

        2.1     Asset   Purchase   Agreement   among  Barton   Incorporated   (a
                wholly-owned  subsidiary  of  the  Company),  United  Distillers
                Glenmore,  Inc.,  Schenley  Industries,  Inc., Medley Distilling
                Company, United Distillers  Manufacturing,  Inc., and The Viking
                Distillery,  Inc.,  dated August 29, 1995 (filed as Exhibit 2(a)
                to the Company's  Current  Report on Form 8-K,  dated August 29,
                1995 and incorporated herein by reference).

        2.2     Recommended  Cash Offer,  by Schroders on behalf of  Canandaigua
                Limited,  a wholly-owned  subsidiary of the Company,  to acquire
                Matthew Clark plc (filed as Exhibit 2.1 to the Company's Current
                Report  on Form 8-K  dated  December  1,  1998 and  incorporated
                herein by reference).

        2.3     Asset  Purchase  Agreement  dated as of February 21, 1999 by and
                among Diageo Inc.,  UDV Canada Inc.,  United  Distillers  Canada
                Inc.  and the  Company  (filed  as  Exhibit  2 to the  Company's
                Current Report on Form 8-K dated April 9, 1999 and  incorporated
                herein by reference).

        2.4     Stock  Purchase   Agreement,   dated  April  21,  1999,  between
                Franciscan Vineyards,  Inc., Agustin Huneeus,  Agustin Francisco
                Huneeus,  Jean-Michel Valette,  Heidrun Eckes-Chantre Und Kinder
                Beteiligungsverwaltung  II,  GbR,  Peter  Eugen Eckes Und Kinder
                Beteiligungsverwaltung II, GbR, Harald Eckes-Chantre,  Christina
                Eckes-Chantre,  Petra Eckes-Chantre and Canandaigua Brands, Inc.
                (filed as Exhibit 2.1 to the  Company's  Current  Report on Form
                8-K dated June 4, 1999 and incorporated herein by reference).

        2.5     Stock  Purchase  Agreement  by  and  between   Canandaigua  Wine
                Company,  Inc. (a  wholly-owned  subsidiary  of the Company) and
                Moet Hennessy, Inc. dated April 1, 1999 (filed as exhibit 2.3 to
                the  Company's  Quarterly  Report  on Form  10-Q for the  fiscal
                quarter   ended  May  31,  1999  and   incorporated   herein  by
                reference).

        3.1     Restated  Certificate of  Incorporation of the Company (filed as
                Exhibit 3.1 to the Company's  Quarterly  Report on Form 10-Q for
                the fiscal quarter ended August 31, 1998 and incorporated herein
                by reference).

        3.2     Amended and  Restated  By-Laws of the Company  (filed as Exhibit
                3.2 to the  Company's  Quarterly  Report  on Form  10-Q  for the
                fiscal quarter ended August 31, 1998 and incorporated  herein by
                reference).

        4.1     Indenture, dated as of December 27, 1993, among the Company, its
                Subsidiaries  and The  Chase  Manhattan  Bank (as  successor  to
                Chemical Bank) (filed as Exhibit 4.1 to the Company's  Quarterly
                Report on Form 10-Q for the fiscal  quarter  ended  November 30,
                1993 and incorporated herein by reference).

        4.2     First Supplemental Indenture,  dated as of August 3, 1994, among
                the Company, Canandaigua West, Inc. (a subsidiary of the Company
                now  known as  Canandaigua  Wine  Company,  Inc.)  and The Chase
                Manhattan Bank (as successor to Chemical Bank) (filed as Exhibit
                4.5  to  the  Company's   Registration  Statement  on  Form  S-8
                (Registration   No.   33-56557)  and   incorporated   herein  by
                reference).

        4.3     Second Supplemental Indenture,  dated August 25, 1995, among the
                Company,  V  Acquisition  Corp. (a subsidiary of the Company now
                known as The Viking  Distillery,  Inc.) and The Chase  Manhattan
                Bank (as  successor  to Chemical  Bank) (filed as Exhibit 4.5 to
                the  Company's  Annual  Report on Form 10-K for the fiscal  year
                ended August 31, 1995 and incorporated herein by reference).

        4.4     Third  Supplemental  Indenture,  dated as of December  19, 1997,
                among the Company,  Canandaigua Europe Limited,  Roberts Trading
                Corp. and The Chase  Manhattan Bank (filed as Exhibit 4.4 to the
                Company's  Annual  Report on Form 10-K for the fiscal year ended
                February 28, 1998 and incorporated herein by reference).

        4.5     Fourth  Supplemental  Indenture,  dated as of  October  2, 1998,
                among the Company,  Polyphenolics,  Inc. and The Chase Manhattan
                Bank (filed as Exhibit 4.5 to the Company's  Quarterly Report on
                Form 10-Q for the fiscal  quarter  ended  November  30, 1998 and
                incorporated herein by reference).

        4.6     Fifth  Supplemental  Indenture,  dated as of December  11, 1998,
                among the Company, Canandaigua B.V., Canandaigua Limited and The
                Chase  Manhattan  Bank  (filed as Exhibit  4.6 to the  Company's
                Annual  Report on Form 10-K for the fiscal  year ended  February
                28, 1999 and incorporated herein by reference).

        4.7     Sixth Supplemental  Indenture,  dated as of July 28, 1999, among
                the Company,  Barton Canada, Ltd., Simi Winery, Inc., Franciscan
                Vineyards,  Inc.,  Allberry,  Inc., M.J. Lewis Corp., Cloud Peak
                Corporation,  Mt. Veeder Corporation,  SCV-EPI Vineyards,  Inc.,
                and The Chase  Manhattan  Bank, as Trustee (filed as Exhibit 4.7
                to the  Company's  Quarterly  Report on Form 10-Q for the fiscal
                quarter  ended  August  31,  1999  and  incorporated  herein  by
                reference).

        4.8     Indenture   with   respect  to  the  8  3/4%   Series  C  Senior
                Subordinated Notes due 2003, dated as of October 29, 1996, among
                the Company,  its Subsidiaries and Harris Trust and Savings Bank
                (filed as Exhibit 4.2 to the Company's Registration Statement on
                Form S-4 (Registration No. 333-17673) and incorporated herein by
                reference).

        4.9     First  Supplemental  Indenture,  dated as of December  19, 1997,
                among the Company,  Canandaigua Europe Limited,  Roberts Trading
                Corp. and Harris Trust and Savings Bank (filed as Exhibit 4.6 to
                the  Company's  Annual  Report on Form 10-K for the fiscal  year
                ended February 28, 1998 and incorporated herein by reference).

        4.10    Second  Supplemental  Indenture,  dated as of  October  2, 1998,
                among the  Company,  Polyphenolics,  Inc.  and Harris  Trust and
                Savings  Bank (filed as Exhibit 4.8 to the  Company's  Quarterly
                Report on Form 10-Q for the fiscal  quarter  ended  November 30,
                1998 and incorporated herein by reference).

        4.11    Third  Supplemental  Indenture,  dated as of December  11, 1998,
                among the Company,  Canandaigua  B.V.,  Canandaigua  Limited and
                Harris  Trust and  Savings  Bank  (filed as Exhibit  4.10 to the
                Company's  Annual  Report on Form 10-K for the fiscal year ended
                February 28, 1999 and incorporated herein by reference).

        4.12    Fourth Supplemental Indenture,  dated as of July 28, 1999, among
                the Company,  Barton Canada, Ltd., Simi Winery, Inc., Franciscan
                Vineyards,  Inc.,  Allberry,  Inc., M.J. Lewis Corp., Cloud Peak
                Corporation,  Mt. Veeder Corporation,  SCV-EPI Vineyards,  Inc.,
                and Harris Trust and Savings Bank, as Trustee  (filed as Exhibit
                4.12 to the  Company's  Quarterly  Report  on Form  10-Q for the
                fiscal quarter ended August 31, 1999 and incorporated  herein by
                reference).

        4.13    Indenture with respect to 8 1/2% Senior  Subordinated  Notes due
                2009,  dated as of February  25,  1999,  among the  Company,  as
                issuer, its principal operating subsidiaries, as Guarantors, and
                Harris Trust and Savings Bank, as Trustee (filed as Exhibit 99.1
                to the Company's  Current  Report on Form 8-K dated February 25,
                1999 and incorporated herein by reference).

        4.14    Supplemental  Indenture No. 1, dated as of February 25, 1999, by
                and  among the  Company,  as  Issuer,  its  principal  operating
                subsidiaries,  as Guarantors, and Harris Trust and Savings Bank,
                as  Trustee  (filed as  Exhibit  99.2 to the  Company's  Current
                Report  on Form 8-K dated  February  25,  1999 and  incorporated
                herein by reference).

        4.15    Supplemental Indenture No. 2, dated as of August 4, 1999, by and
                among  the  Company,   as  Issuer,   its   principal   operating
                subsidiaries,  as Guarantors, and Harris Trust and Savings Bank,
                as Trustee (filed as Exhibit 4.1 to the Company's Current Report
                on Form 8-K  dated  July 28,  1999 and  incorporated  herein  by
                reference).

        4.16    Supplemental Indenture No. 3, dated as of August 6, 1999, by and
                among the Company,  Canandaigua B.V., Barton Canada,  Ltd., Simi
                Winery, Inc., Franciscan Vineyards,  Inc., Allberry,  Inc., M.J.
                Lewis Corp.,  Cloud Peak  Corporation,  Mt. Veeder  Corporation,
                SCV-EPI  Vineyards,  Inc., and Harris Trust and Savings Bank, as
                Trustee (filed as Exhibit 4.20 to the Company's Quarterly Report
                on Form 10-Q for the fiscal  quarter  ended  August 31, 1999 and
                incorporated herein by reference).

        4.17    Supplemental  Indenture  No. 4, dated as of May 15,  2000 by and
                among  the  Company,   as  Issuer,   its   principal   operating
                subsidiaries,  as Guarantors, and Harris Trust and Savings Bank,
                as Trustee (filed herewith).

        4.18    Credit  Agreement,  dated as of  October 6,  1999,  between  the
                Company,  certain principal subsidiaries,  and certain banks for
                which The Chase Manhattan Bank acts as Administrative Agent, The
                Bank of Nova Scotia acts as Syndication Agent, and Credit Suisse
                First Boston and Citicorp  USA,  Inc.  acts as  Co-Documentation
                Agents (filed as Exhibit 4.1 to the Company's  Quarterly  Report
                on Form 10-Q for the fiscal  quarter ended November 30, 1999 and
                incorporated herein by reference).

        4.19    Indenture with respect to 8 1/2% Senior Notes due 2009, dated as
                of November 17,  1999,  among the  Company,  as Issuer,  certain
                principal  subsidiaries,  as  Guarantors,  and Harris  Trust and
                Savings Bank, as Trustee  (filed as Exhibit 4.1 to the Company's
                Registration   Statement   on   Form   S-4   (Registration   No.
                333-9436902) and incorporated herein by reference).

        10.1    Barton Incorporated  Management Incentive Plan (filed as Exhibit
                10.6 to the Company's  Annual Report on Form 10-K for the fiscal
                year  ended   August  31,  1993  and   incorporated   herein  by
                reference).

        10.2    Marvin Sands Split Dollar Insurance  Agreement (filed as Exhibit
                10.9 to the Company's  Annual Report on Form 10-K for the fiscal
                year  ended   August  31,  1993  and   incorporated   herein  by
                reference).

        10.3    Employment  Agreement between Barton  Incorporated and Alexander
                L. Berk dated as of  September  1, 1990 as amended by  Amendment
                No. 1 to Employment  Agreement  between Barton  Incorporated and
                Alexander L. Berk dated November 11, 1996 (filed as Exhibit 10.7
                to the Company's  Annual Report on Form 10-K for the fiscal year
                ended February 28, 1998 and incorporated herein by reference).

        10.4    Amendment  No.  2  to  Employment   Agreement   between   Barton
                Incorporated and Alexander L. Berk dated October 20, 1998 (filed
                as Exhibit 10.5 to the Company's  Annual Report on Form 10-K for
                the fiscal year ended February 28, 1999 and incorporated  herein
                by reference).

        10.5    Long-Term Stock  Incentive  Plan,  which amends and restates the
                Canandaigua   Wine   Company,   Inc.   Stock  Option  and  Stock
                Appreciation  Right Plan (filed as Exhibit 10.1 to the Company's
                Quarterly  Report on Form 10-Q for the fiscal  quarter ended May
                31, 1997 and incorporated herein by reference).

        10.6    Amendment Number One to the Company's  Long-Term Stock Incentive
                Plan (filed as Exhibit 10.1 to the Company's Quarterly Report on
                Form 10-Q for the  fiscal  quarter  ended  August  31,  1997 and
                incorporated herein by reference).

        10.7    Amendment Number Two to the Company's  Long-Term Stock Incentive
                Plan (filed as Exhibit 10 to the Company's  Quarterly  Report on
                Form 10-Q for the  fiscal  quarter  ended  August  31,  1999 and
                incorporated herein by reference).

        10.8    Incentive  Stock  Option Plan of the  Company  (filed as Exhibit
                10.2 to the  Company's  Quarterly  Report  on Form  10-Q for the
                fiscal quarter ended August 31, 1997 and incorporated  herein by
                reference).

        10.9    Amendment  Number One to the Incentive  Stock Option Plan of the
                Company (filed as Exhibit 10.3 to the Company's Quarterly Report
                on Form 10-Q for the fiscal  quarter  ended  August 31, 1997 and
                incorporated herein by reference).

        10.10   Annual  Management  Incentive  Plan  of the  Company  (filed  as
                Exhibit 10.4 to the Company's  Quarterly Report on Form 10-Q for
                the fiscal quarter ended August 31, 1997 and incorporated herein
                by reference).

        10.11   Amendment Number One to the Annual Management  Incentive Plan of
                the  Company  (filed as Exhibit  10.14 to the  Company's  Annual
                Report on Form 10-K for the fiscal year ended  February 28, 1998
                and incorporated herein by reference).

        10.12   Lease,  effective  December 25, 1997, by and among Matthew Clark
                Brands  Limited  and  Pontsarn  Investments  Limited  (filed  as
                Exhibit  10.13 to the  Company's  Annual Report on Form 10-K for
                the fiscal year ended February 28, 1999 and incorporated  herein
                by reference).

        10.13   Supplemental  Executive Retirement Plan of the Company (filed as
                Exhibit  10.14 to the  Company's  Annual Report on Form 10-K for
                the fiscal year ended February 28, 1999 and incorporated  herein
                by reference).

        10.14   First Amendment to the Supplemental Executive Retirement Plan of
                the  Company  (filed as  Exhibit 10 to the  Company's  Quarterly
                Report on Form 10-Q for the fiscal  quarter  ended May 31,  1999
                and incorporated herein by reference).

        10.15   Credit  Agreement,  dated as of  October 6,  1999,  between  the
                Company,  certain principal subsidiaries,  and certain banks for
                which The Chase Manhattan Bank acts as Administrative Agent, The
                Bank of Nova Scotia acts as Syndication Agent, and Credit Suisse
                First Boston and Citicorp  USA,  Inc.  acts as  Co-Documentation
                Agents (filed as Exhibit 4.1 to the Company's  Quarterly  Report
                on Form 10-Q for the fiscal  quarter ended November 30, 1999 and
                incorporated herein by reference).

        10.16   Letter Agreement between the Company and Thomas S. Summer, dated
                March 10, 1997, addressing compensation (filed herewith).

        10.17   Service  Agreement,  as amended,  between  Matthew Clark plc and
                Peter Aikens, dated September 27, 1991 (filed herewith).

        11.1    Statement re Computation of Per Share Earnings (filed herewith).

        21.1    Subsidiaries of Company (filed herewith).

        23.1    Consent of Arthur Andersen LLP (filed herewith).

        27.1    Financial Data  Schedule for the fiscal year ended  February 29,
                2000 (filed herewith).

        99.1    1989 Employee Stock Purchase Plan of the Company,  as amended by
                Amendment Number 1 through  Amendment Number 5 (filed as Exhibit
                99.1 to the Company's  Annual Report on Form 10-K for the fiscal
                year  ended  February  28,  1998  and  incorporated   herein  by
                reference).

        99.2    Amendment  Number 6 to the 1989 Employee  Stock Purchase Plan of
                the  Company  (filed as  Exhibit  99.2 to the  Company's  Annual
                Report on Form 10-K for the fiscal year ended  February 28, 1999
                and incorporated herein by reference).

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>2
<FILENAME>0002.txt
<TEXT>


                                  EXHIBIT 4.17
                                  ------------


================================================================================


                           CANANDAIGUA BRANDS, INC.,

                                  as Issuer,

                          the Guarantors named herein

                                      and

                        HARRIS TRUST AND SAVINGS BANK,

                                  as Trustee

                             ---------------------

                         Supplemental Indenture No. 4

                           Dated as of May 15, 2000

                             ---------------------

                             (pound)300,000,000.00

                     8 1/2% Series C Senior Notes due 2009

================================================================================
<PAGE>

                              CROSS-REFERENCE TABLE

                                                                    Supplemental
  TIA                                           Indenture           Indenture
Section                                         Section             Section
- -------                                         --------            -------
310(a)(1) ................................      11.5
   (a)(2) ................................      11.5
   (a)(3) ................................      N.A.                 N.A.
   (a)(4) ................................      N.A.                 N.A.
   (b) ...................................      11.4, 11.5
   (c) ...................................      N.A.                 N.A.
311(a) ...................................      11.9(a), (c)
   (b) ...................................      11.9(b), (c)
   (c) ...................................      N.A.                 N.A.
312(a) ...................................      11.11                2.06
   (b) ...................................      11.11
   (c) ...................................      11.10(a)
313(a) ...................................      N.A.                 N.A.
   (b)(1) ................................      11.10(b)
   (b)(2) ................................      11.10(c)
   (c) ...................................      11.10(c)
   (d) ...................................      11.10(c)
314(a) ...................................      4.02; 4.07           4.6
   (b) ...................................      N.A.                 N.A.
   (c)(1) ................................      3.8
   (c)(2) ................................      3.8
   (c)(3) ................................      N.A.                 N.A.
   (d) ...................................      N.A.                 N.A.
   (e) ...................................      3.8                  11.05
   (f) ...................................      N.A.                 N.A.
315(a) ...................................      11.1(a), (b)
   (b) ...................................      11.3
   (c) ...................................      11.1(a)
   (d) ...................................      11.1(a), 11.1(b)
   (e) ...................................      7.7
316(a) (last sentence) ...................                           2.10
   (a)(1)(A) .............................      7.6
   (a)(1)(B) .............................      7.1, 7.5             6.03
   (a)(2) ................................                           8.02
   (b) ...................................      7.7
   (c) ...................................      N.A.                 N.A.
317(a)(1) ................................      7.2
   (a)(2) ................................      7.2
   (b) ...................................                           2.05
318(a) ...................................      3.4

                            N.A. means Not Applicable

- ----------
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
      part of this Indenture.


                                      -i-
<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                   ARTICLE 1

                       RELATION TO INDENTURE; DEFINITIONS

Section 1.01.  Relation to Indenture .....................................     1
Section 1.02.  Definitions ...............................................     1
Section 1.03.  Incorporation by Reference of Trust Indenture Act .........    15
Section 1.04.  Rules of Construction .....................................    15

                                    ARTICLE 2

                                    THE NOTES

Section 2.01.  Form and Dating ...........................................    15
Section 2.02.  Execution and Authentication ..............................    16
Section 2.03.  Registrar and Paying Agents ...............................    17
Section 2.04.  Holders to Be Treated as Owners; Payments of Interest .....    18
Section 2.05.  Paying Agent to Hold Money in Trust .......................    19
Section 2.06.  Holder Lists ..............................................    19
Section 2.07.  Transfer and Exchange; Book-Entry Provisions ..............    19
Section 2.08.  Replacement Notes .........................................    25
Section 2.09.  Outstanding Notes .........................................    25
Section 2.10.  Treasury Notes ............................................    25
Section 2.11.  Temporary Notes ...........................................    26
Section 2.12.  Cancellation ..............................................    26
Section 2.13.  Defaulted Interest ........................................    26
Section 2.14.  CUSIP and ISIN Number; Common Code ........................    26
Section 2.15.  Deposit of Moneys; Payments by Principal Paying Agent .....    26
Section 2.16.  Restrictive Legends .......................................    27
Section 2.17.  Substitution of Currency ..................................    28

                                    ARTICLE 3

                                   REDEMPTION

Section 3.01.  Notices to Trustee ........................................    28
Section 3.02.  Selection of Notes to Be Redeemed .........................    28
Section 3.03.  Notice of Redemption ......................................    29
Section 3.04.  Effect of Notice of Redemption ............................    29
Section 3.05.  Deposit of Redemption Price ...............................    30
Section 3.06.  Notes Redeemed in Part ....................................    30
Section 3.07.  Optional Redemption .......................................    30
Section 3.08.  Tax Redemption ............................................    30


                                      -ii-
<PAGE>

                                                                            Page
                                                                            ----

                                    ARTICLE 4

                                    COVENANTS

Section 4.01.  Payment of Notes ..........................................    32
Section 4.02.  Provision of Financial Statements .........................    32
Section 4.03.  Waiver of Stay, Extension or Usury Laws ...................    33
Section 4.04.  Statement by Officers .....................................    33
Section 4.05.  Corporate Existence .......................................    33
Section 4.06.  Maintenance of Office or Agency ...........................    33
Section 4.07.  Compliance with Laws ......................................    33
Section 4.08.  Maintenance of Properties and Insurance ...................    34
Section 4.09.  Payment of Taxes and Other Claims; Additional Amounts .....    34
Section 4.10.  Limitation on Indebtedness ................................    36
Section 4.11.  Limitation on Restricted Payments .........................    37
Section 4.12.  Limitation on Transactions with Affiliates ................    40
Section 4.13.  Limitations on Liens ......................................    40
Section 4.14.  Limitation on Sale of Assets ..............................    41
Section 4.15.  Limitation on Guarantees by Restricted Subsidiaries .......    44
Section 4.16.  Purchase of Notes upon a Change of Control ................    45
Section 4.17.  Limitation on Restricted Subsidiary Capital Stock .........    48
Section 4.18.  Limitation on Dividends and Other Payment Restrictions
                 Affecting Restricted Subsidiaries .......................    48
Section 4.19.  Designation of Unrestricted Subsidiaries ..................    49
Section 4.20.  [Intentionally Omitted] ...................................    50
Section 4.21.  Waiver of Certain Covenants ...............................    50
Section 4.22.  Limitation of Applicability of Certain Covenants if Notes
                 Rated Investment Grade ..................................    50

                                    ARTICLE 5

                              SUCCESSOR CORPORATION

Section 5.01.  Company or Any Guarantor May Consolidate, etc., Only
                 on Certain Terms ........................................    50
Section 5.02.  Successor Substituted .....................................    52

                                     ARTICLE 6

                               DEFAULTS AND REMEDIES

Section 6.01.  Events of Default .........................................    52
Section 6.02.  Acceleration of Maturity; Rescission and Annulment ........    54
Section 6.03.  Waiver of Past Defaults and Events of Default .............    55


                                     -iii-
<PAGE>

                                                                            Page
                                                                            ----

                                    ARTICLE 7

                             [INTENTIONALLY OMITTED]

                                    ARTICLE 8

                             SUPPLEMENTAL INDENTURES

Section 8.01.  Supplemental Indentures and Agreements Without Consent
                 of Holders ..............................................    56
Section 8.02.  Supplemental Indentures and Agreements with Consent
                 of Holders ..............................................    56

                                    ARTICLE 9

                       DISCHARGE OF INDENTURE; DEFEASANCE

Section 9.01.  Satisfaction and Discharge of Supplemental Indenture
                 and the Indenture .......................................    58
Section 9.02.  Application of Trust Money ................................    59
Section 9.03.  Termination of the Company's Obligation ...................    59
Section 9.04.  Application of Trust Money ................................    60
Section 9.05.  Repayment to Company ......................................    60
Section 9.06.  Reinstatement .............................................    61

                                   ARTICLE 10

                                   GUARANTEES

Section 10.01. Guarantors' Guarantee .....................................    61
Section 10.02. Continuing Guarantee; No Right of Set-Off; Independent
                 Obligation ..............................................    61
Section 10.03. Guarantee Absolute ........................................    62
Section 10.04. Right to Demand Full Performance ..........................    64
Section 10.05. Waivers ...................................................    64
Section 10.06. The Guarantors Remain Obligated in Event the Company
                 Is No Longer Obligated to Discharge Indenture
                 Obligations .............................................    64
Section 10.07. Fraudulent Conveyance; Subrogation ........................    65
Section 10.08. Guarantee Is Additional to Other Security .................    65
Section 10.09. No Recourse Against Others ................................    65
Section 10.10. No Bar to Further Actions .................................    65
Section 10.11. Failure To Exercise Rights Shall Not Operate as a Waiver;
                 No Suspension of Remedies ...............................    66
Section 10.12. Trustee's Duties; Notice to Trustee .......................    66
Section 10.13. Successors and Assigns ....................................    66
Section 10.14. Release of Guarantee ......................................    66
Section 10.15. Execution of Guarantee ....................................    67


                                      -iv-
<PAGE>

                                                                            Page
                                                                            ----

                                   ARTICLE 11

                                  MISCELLANEOUS

Section 11.01. Ratification of the Indenture .............................    67
Section 11.02. Notices ...................................................    68
Section 11.03. Governing Law .............................................    68
Section 11.04. Counterparts ..............................................    68
Section 11.05. Table of Contents, Headings, etc. .........................    68
Section 11.06. Separability ..............................................    68
Section 11.07. Benefits of Supplemental Indenture and the Indenture ......    69

Signatures ...............................................................   S-1

EXHIBITS

Exhibit A.    Form of Global Notes .......................................   A-1

Exhibit B.    Form of Definitive Notes ...................................   B-1

Exhibit C.    Form of Guarantees .........................................   C-1

Exhibit D     Form of Transfer Certificate ...............................   D-1

Exhibit E.    Form of Exchange Certificate ...............................   E-1

Exhibit F.    Form of Intercompany Note ..................................   F-1


                                      -v-
<PAGE>

            SUPPLEMENTAL INDENTURE NO. 4, dated as of May 15, 2000 (the
"Supplemental Indenture"), between CANANDAIGUA BRANDS, INC., a corporation duly
organized and existing under the laws of the State of Delaware (herein called
the "Company"), the guarantors named herein and from time to time parties
hereto, and HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation, as
Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

            WHEREAS, the Company has heretofore delivered to the Trustee an
Indenture, dated as of February 25, 1999 (the "Indenture"), a form of which has
been filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, as an exhibit to the Company's Registration Statement on
Form S-3 (Registration No. 333-91587), as supplemented by Supplemental Indenture
No. 3 thereto, dated as of August 6, 1999, among the Company, certain of the
Guarantors and the Trustee, providing for the issuance from time to time of Debt
Securities of the Company.

            WHEREAS, Sections 2.1 and 2.2 of the Indenture provide for various
matters with respect to any series of Debt Securities issued under the Indenture
to be established in an indenture supplemental to the Indenture.

            WHEREAS, Section 12.1 of the Indenture provides for the Company and
the Trustee to enter into an indenture supplemental to the Indenture to
establish the form or terms of Debt Securities of any series as provided by
Sections 2.1 and 2.2 of the Indenture.

            WHEREAS, all the conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.

            NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

            For and in consideration of the premises and the purchase of the
series of Debt Securities provided for herein by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Notes, as follows:

                                    ARTICLE 1

                       RELATION TO INDENTURE; DEFINITIONS

Section 1.01. Relation to Indenture.

            This Supplemental Indenture constitutes an integral part of the
Indenture.

Section 1.02. Definitions.

            For all purposes of this Supplemental Indenture, except as otherwise
expressly provided for or unless the context otherwise requires:

            (1) Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Indenture;

            (2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental
Indenture; and
<PAGE>

            (3) To the extent terms defined herein differ from the Indenture the
terms defined herein will govern.

            "144A Global Note(s)" means one or more Note(s) in the form set
forth in Exhibit A, bearing the Private Placement Legend and sold in reliance on
Rule 144A.

            "Acquired Indebtedness" means Indebtedness of a Person (i) existing
at the time such Person becomes a Restricted Subsidiary or (ii) assumed in
connection with the acquisition of assets from such Person, in each case, other
than Indebtedness incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary or such acquisition. Acquired
Indebtedness shall be deemed to be incurred on the date of the related
acquisition of assets from any Person or the date the acquired Person becomes a
Restricted Subsidiary.

            "Additional Amounts" has the meaning set forth in Section 4.09.

            "Additional Interest" means any amounts required to be paid by the
Company to Holders of Restricted Notes pursuant to a valid registration rights
agreement among the Company, the Guarantors and the initial purchasers of such
Restricted Notes.

            "Additional Notes" means, subject to the Company's compliance with
Section 4.10, 8 1/2% Series C Senior Notes Due 2009, issued from time to time
after May 15, 2000 under the terms of this Supplemental Indenture and the
Indenture, including, without limitation any Notes issued in an exchange offer
registered under the Securities Act for the Series B Senior Notes (other than
Notes issued pursuant to Sections 2.07, 2.08, 2.11, 3.06 and 4.16 of this
Supplemental Indenture or Section 12.5 of the Indenture).

            "Adjusted Gilt Rate" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Gilt Issue, assuming a price for the Comparable Gilt Issue (expressed
as a percentage of its principal amount) equal to the Comparable Gilt Price for
such redemption date.

            "Affiliate" means, with respect to any specified Person: (i) any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person; (ii) any other Person
that owns, directly or indirectly, 5% or more of such Person's Capital Stock or
any officer or director of any such Person or other Person or, with respect to
any natural Person, any person having a relationship with such Person by blood,
marriage or adoption not more remote than first cousin; or (iii) any other
Person 10% or more of the voting Capital Stock of which is beneficially owned or
held directly or indirectly by such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

            "Applicable Procedures" means, with respect to any transfer,
exchange or other transaction involving a Global Note or beneficial interest
therein, the rules and provisions of DTC and the "Operating Procedures of the
Euroclear System," and "Terms and Conditions Governing Use of Euroclear,"
"General Terms and Conditions of Clearstream" and "Customer Handbook" of
Clearstream, in each case, to the extent applicable to such transaction and as
in effect at the time of such transaction.

            "Asset Sale" means any sale, issuance, conveyance, transfer, lease
or other disposition (including, without limitation, by way of merger,
consolidation or Sale and Leaseback Transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions of: (i) any
Capital Stock of any Re-


                                      -2-
<PAGE>

stricted Subsidiary; (ii) all or substantially all of the properties and assets
of any division or line of business of the Company or its Restricted
Subsidiaries; or (iii) any other properties or assets of the Company or any
Restricted Subsidiary, other than in the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" shall not include (x) any
transfer of properties and assets (A) that is governed by Section 5.01(a) or (B)
that is of the Company to any Restricted Subsidiary, or of any Subsidiary to the
Company or any Subsidiary in accordance with the terms of this Supplemental
Indenture and the Indenture or (y) transfers of properties and assets in any
given fiscal year with an aggregate Fair Market Value of less than $3,000,000.

            "Asset Swap" means the execution of a definitive agreement, subject
only to customary closing conditions that the Company in good faith believes
will be satisfied, for a substantially concurrent purchase and sale, or
exchange, of Productive Assets between the Company or any of its Restricted
Subsidiaries and another Person or group of affiliated Persons; it being
understood that an Asset Swap may include a cash equalization payment made in
connection therewith provided that such cash payment, if received by the Company
or its Subsidiaries, shall be deemed to be proceeds received from an Asset Sale
and applied in accordance with Section 4.14.

            "Average Life to Stated Maturity" means, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date of
determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (b) the amount of each such principal
payment by (ii) the sum of all such principal payments.

            "Bankruptcy Law" means Title 11, United States Bankruptcy Code of
1978, as amended, or any similar United States Federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.

            "Book-Entry Interest" means an indirect beneficial interest in a
Global Note shown on, and transferred only through, records maintained in
book-entry form by DTC, or Euroclear and Clearstream.

            "Borrowing Base" means the sum of (i) 85% of accounts receivable of
the Company and its Subsidiaries and (ii) 50% of the net book value of the
inventory of the Company and its Subsidiaries, in each case, as determined on a
consolidated basis in accordance with GAAP.

            "Business Day" means a day that, in the City of New York and London,
is not a day upon which banking institutions are authorized or required by law,
or by executive order issued by a governmental authority or agency regulating
such banking institutions, to close.

            "Capital Lease Obligation" means any obligations of the Company and
its Restricted Subsidiaries on a Consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.

            "Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock.

            "Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have beneficial ownership of all shares
that such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 30% of the voting power of the total outstanding Voting Stock of the
Company voting as one class, provided that the Permitted Holders "beneficially
own" (as so defined) a percentage of Voting Stock having a lesser percentage of
the voting power than such other Person and do not have the right or ability by
voting power, con-


                                      -3-
<PAGE>

tract or otherwise to elect or designate for election a majority of the Board of
Directors of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election to such
Board or whose nomination for election by the shareholders of the Company was
approved by a vote of 66 2/3% of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of such Board of Directors then in office; (iii) the Company
consolidates with or merges with or into any Person or conveys, transfers or
leases all or substantially all of its assets to any Person, or any corporation
consolidates with or merges into or with the Company, in any such event pursuant
to a transaction in which the outstanding Voting Stock of the Company is changed
into or exchanged for cash, securities or other property, other than any such
transaction where the outstanding Voting Stock of the Company is not changed or
exchanged at all (except to the extent necessary to reflect a change in the
jurisdiction of incorporation of the Company) or where (A) the outstanding
Voting Stock of the Company is changed into or exchanged for (x) Voting Stock of
the surviving corporation which is not Redeemable Capital Stock or (y) cash,
securities and other property (other than Capital Stock of the surviving
corporation) in an amount which could be paid by the Company as a Restricted
Payment in accordance with Section 4.11 (and such amount shall be treated as a
Restricted Payment subject to the provisions set forth in Section 4.11) and (B)
no "person" or "group" other than Permitted Holders owns immediately after such
transaction, directly or indirectly, more than the greater of (1) 30% of the
voting power of the total outstanding Voting Stock of the surviving corporation
voting as one class and (2) the percentage of such voting power of the surviving
corporation held, directly or indirectly, by Permitted Holders immediately after
such transaction; or (iv) the Company is liquidated or dissolved or adopts a
plan of liquidation or dissolution other than in a transaction which complies
with the provisions described in Section 5.01.

            "Change of Control Offer" shall have the meaning set forth in
Section 4.16(a).

            "Change of Control Purchase Date" shall have the meaning set forth
in Section 4.16(a).

            "Change of Control Purchase Price" shall have the meaning set forth
in Section 4.16(a).

            "Clearstream" means Clearstream Banking, formerly Cedelbank, societe
anonyme.

            "Code" means the Internal Revenue Code of 1986, as amended.

            "Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Supplemental Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

            "Common Depositary" shall have the meaning set forth in Section
2.01.

            "Company" means Canandaigua Brands, Inc., a corporation incorporated
under the laws of Delaware, until a successor Person shall have become such
pursuant to the applicable provisions of this Supplemental Indenture and the
Indenture, and thereafter "Company" shall mean such successor Person.

            "Comparable Gilt Issue" means a United Kingdom Government Obligation
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Notes to be redeemed, that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Notes.

            "Comparable Gilt Price" means, with respect to any redemption date,
(i) the average of the Reference Gilt Dealer Quotations for such redemption
date, after excluding the highest and lowest such Refer-


                                      -4-
<PAGE>

ence Gilt Dealer Quotations, or (ii) if the Trustee obtains fewer than three
such Reference Gilt Dealer Quotations, the average of all such Quotations.

            "Consolidated Fixed Charge Coverage Ratio" of the Company means, for
any period, the ratio of (a) the sum of Consolidated Net Income (Loss),
Consolidated Interest Expense, Consolidated Income Tax Expense and Consolidated
Non-cash Charges deducted in computing Consolidated Net Income (Loss) in each
case, for such period, of the Company and its Restricted Subsidiaries on a
Consolidated basis, all determined in accordance with GAAP to (b) the sum of
Consolidated Interest Expense for such period and cash and non-cash dividends
paid on any Preferred Stock of the Company and its Restricted Subsidiaries
during such period; provided that (i) in making such computation, the
Consolidated Interest Expense attributable to interest on any Indebtedness
computed on a pro forma basis and (A) bearing a floating interest rate, shall be
computed as if the rate in effect on the date of computation had been the
applicable rate for the entire period and (B) which was not outstanding during
the period for which the computation is being made but which bears, at the
option of the Company, a fixed or floating rate of interest, shall be computed
by applying at the option of the Company, either the fixed or floating rate and
(ii) in making such computation, the Consolidated Interest Expense of the
Company attributable to interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period.

            "Consolidated Income Tax Expense" means for any period, as applied
to the Company, the provision for federal, state, local and foreign income taxes
of the Company and its Restricted Subsidiaries for such period as determined in
accordance with GAAP on a Consolidated basis.

            "Consolidated Interest Expense" of the Company means, without
duplication, for any period, the sum of (a) the interest expense of the Company
and its Restricted Subsidiaries for such period, on a Consolidated basis,
including, without limitation, (i) amortization of debt discount, (ii) the net
cost under interest rate contracts (including amortization of discounts), (iii)
the interest portion of any deferred payment obligation and (iv) accrued
interest, plus (b) (i) the interest component of the Capital Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by the Company and its
Restricted Subsidiaries during such period and (ii) all capitalized interest of
the Company and its Restricted Subsidiaries, in each case as determined in
accordance with GAAP on a Consolidated basis. Whenever pro forma effect is to be
given to an acquisition or disposition of assets for the purpose of calculating
the Consolidated Fixed Charge Coverage Ratio, the amount of Consolidated
Interest Expense associated with any Indebtedness Incurred in connection with
such acquisition or disposition of assets shall be calculated on a pro forma
basis in accordance with Regulation S-X under the Securities Act, as in effect
on the date of such calculation.

            "Consolidated Net Income (Loss)" of the Company means, for any
period, the Consolidated net income (or loss) of the Company and its Restricted
Subsidiaries for such period as determined in accordance with GAAP on a
Consolidated basis, adjusted, to the extent included in calculating such net
income (loss), by excluding, without duplication: (i) all extraordinary gains or
losses (less all fees and expenses relating thereto); (ii) the portion of net
income (or loss) of the Company and its Restricted Subsidiaries allocable to
minority interests in unconsolidated Persons to the extent that cash dividends
or distributions have not actually been received by the Company or one of its
Restricted Subsidiaries; (iii) net income (or loss) of any Person combined with
the Company or any of its Restricted Subsidiaries on a "pooling of interests"
basis attributable to any period prior to the date of combination; (iv) any gain
or loss, net of taxes, realized upon the termination of any employee pension
benefit plan; (v) net gains (but not losses) (less all fees and expenses
relating thereto) in respect of dispositions of assets other than in the
ordinary course of business; or (vi) the net income of any Restricted Subsidiary
to the extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulations
applicable to that Restricted Subsidiary or its stockholders. Whenever pro forma
effect is to be given to an acquisition or disposition of assets for the purpose
of calculating the Consolidated Fixed Charge Coverage Ratio, the amount of
income or


                                      -5-
<PAGE>

earnings related to such assets shall be calculated on a pro forma basis in
accordance with Regulation S-X under the Securities Act, as in effect on the
date of such calculation.

            "Consolidated Net Tangible Assets" means with respect to any Person,
as of any date of determination, the book value of such Person's total assets,
less goodwill, deferred financing costs and other intangibles and less
accumulated amortization, shown on the most recent balance sheet of such Person,
determined on a consolidated basis in accordance with GAAP.

            "Consolidated Net Worth" of any Person means the Consolidated
stockholders' equity (excluding Redeemable Capital Stock) of such Person and its
subsidiaries, as determined in accordance with GAAP on a Consolidated basis.

            "Consolidated Non-cash Charges" of the Company means, for any
period, the aggregate depreciation, amortization and other non-cash charges of
the Company and its Consolidated Restricted Subsidiaries for such period, as
determined in accordance with GAAP on a Consolidated basis (excluding any
non-cash charge which requires an accrual or reserve for cash charges for any
future period).

            "Consolidation" means, with respect to any Person, the consolidation
of the accounts of such Person and each of its subsidiaries if and to the extent
the accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP. The term
"Consolidated" shall have a similar meaning.

            "Credit Agreement" means the Credit Agreement, dated as of October
6, 1999, between the Company, the Subsidiaries of the Company identified on the
signature pages thereof, the lenders named therein and The Chase Manhattan Bank,
as administrative agent, including any deferrals, renewals, extensions,
replacements, refinancings or refundings thereof or amendments, modifications or
supplements thereto and any agreements therefor (including any of the foregoing
that increase the principal amount of Indebtedness or the commitments to lend
thereunder and have been made in compliance with the provisions of Section 4.10;
provided that, for purposes of the definition of "Permitted Indebtedness," no
such increase may result in the principal amount of Indebtedness of the Company
under the Credit Agreement exceeding the amount permitted by subparagraph (b)(i)
of Section 4.10), whether by or with the same or any other lender, creditor,
group of lenders or group of creditors, and including related notes, guarantees
and note agreements and other instruments and agreements executed in connection
therewith.

            "Custodian" shall have the meaning set forth in Section 2.01.

            "Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.

            "Definitive Notes" means the Restricted Definitive Notes and the
Unrestricted Definitive Notes.

            "Depositary" means any of the DTC, Euroclear or Clearstream.

            "Designation" has the meaning set forth in Section 4.19.

            "Designation Amounts" has the meaning set forth in Section 4.19.

            "Domestic Restricted Subsidiary" means a Restricted Subsidiary of
the Company organized under the laws of the United States or any political
subdivision thereof or the operations of which are located substantially inside
the United States.


                                      -6-
<PAGE>

            "DTC" means the Depository Trust Company.

            "DTC Global Note" means a Global Note held in the name of Cede & Co.
on behalf of DTC.

            "Euroclear" means Morgan Guaranty Trust Company of New York
(Brussels office) as operator of the Euroclear system.

            "Excess Proceeds" has the meaning set forth in Section 4.14(b).

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Fair Market Value" means, with respect to any asset or property,
the sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.

            "Foreign Restricted Subsidiary" means a Restricted Subsidiary of the
Company not organized under the laws of the United States or any political
subdivision thereof and the operations of which are located substantially
outside of the United States.

            "GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date of this Supplemental Indenture.

            "Global Notes" or "Global Securities" means the 144A Global Note(s),
the Regulation S Global Note(s) and any Unrestricted Global Notes.

            "Guarantee" means the guarantee by each Guarantor of the Company's
Indenture Obligations pursuant to a guarantee given in accordance with this
Supplemental Indenture, including the Guarantees by the Guarantors and any
Guarantee delivered pursuant to the provisions of Section 4.15.

            "Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of "Indebtedness"
contained in this Section 1.01 guaranteed directly or indirectly in any manner
by such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v) otherwise to assure a creditor
against loss; provided that the term "guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of business.

            "Guarantor" means the Subsidiaries listed on the signature pages of
this Supplemental Indenture as guarantors and each other Subsidiary required to
become a Guarantor after the Issue Date, pursuant to Section 4.15.

            "Hedging Agreement" means, with respect to any Person, all interest
rate swap or similar agreements or foreign currency or commodity hedge, exchange
or similar agreements of such Person.


                                      -7-
<PAGE>

            "Hedging Obligations" means, with respect to any Person, the
Obligations of such Person under Hedging Agreements.

            "Holders" mean the registered holders of the Notes.

            "Incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of any Acquired Person or any of its
Subsidiaries existing at the time such Acquired Person becomes a Subsidiary (or
is merged into or consolidated with the Company or any Subsidiary), whether or
not such Indebtedness was Incurred in connection with, as a result of, or in
contemplation of, such Acquired Person becoming a Subsidiary (or being merged
into or consolidated with the Company or any Subsidiary), shall be deemed
Incurred at the time any such Acquired Person becomes a Subsidiary or merges
into or consolidates with the Company or any Subsidiary.

            "Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, excluding any trade payables
and other accrued current liabilities arising in the ordinary course of
business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit issued under
letter of credit facilities, acceptance facilities or other similar facilities
and in connection with any agreement to purchase, redeem, exchange, convert or
otherwise acquire for value any Capital Stock of such Person, or any warrants,
rights or options to acquire such Capital Stock, now or hereafter outstanding,
(ii) all obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all Hedging Obligations of such Person, (v) all Capital Lease
Obligations of such Person, (vi) all Indebtedness referred to in clauses (i)
through (v) above of other Persons and all dividends of other Persons, the
payment of which is secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien, upon or
with respect to property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, (vii) all Guaranteed Debt of such
Person, (viii) all Redeemable Capital Stock valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends, and (ix) any amendment, supplement, modification, deferral, renewal,
extension, refunding or refinancing of any liability of the types referred to in
clauses (i) through (viii) above. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Supplemental Indenture, and if such price is based upon, or measured by,
the Fair Market Value of such Redeemable Capital Stock, such Fair Market Value
to be determined in good faith by the board of directors of the issuer of such
Redeemable Capital Stock.

            "Indenture Obligations" means the obligations of the Company and any
other obligor under this Supplemental Indenture and the Indenture or under the
Notes, including any Guarantor, to pay principal of, premium, if any, and
interest when due and payable, and all other amounts due or to become due under
or in connection with this Supplemental Indenture and the Indenture, the Notes
and the performance of all other obligations to the Trustee and the Holders
under this Supplemental Indenture and the Indenture and the Notes, according to
the terms hereof or thereof.


                                      -8-
<PAGE>

            "Insolvency or Liquidation Proceeding" means, with respect to any
Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.

            "Interest Payment Date" means each semiannual interest payment date
on May 15 and November 15 of each year, commencing on May 15, 2000.

            "Investments" means, with respect to any Person, directly or
indirectly, any advance, loan (including guarantees), or other extension of
credit or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase, acquisition or ownership by such Person of any
Capital Stock, bonds, notes, debentures or other securities issued or owned by,
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP.

            "Investment Grade" means a rating of (i) BBB- or higher by S&P and
Ba1 or higher by Moody's or (ii) Baa3 or higher by Moody's and BB+ or higher by
S&P.

            "Issue Date" means May 15, 2000.

            "Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.

            "Maturity" when used with respect to any Note means the date on
which the principal of such Note becomes due and payable as therein provided or
as provided in this Supplemental Indenture and the Indenture, whether at Stated
Maturity, the Offer Date or the redemption date and whether by declaration of
acceleration, Offer in respect of Excess Proceeds, Change of Control, call for
redemption or otherwise.

            "Moody's" means Moody's Investor Services, Inc. or any successor
thereto.

            "Net Cash Proceeds" means (a) with respect to any Asset Sale by any
Person, the proceeds thereof in the form of cash or Temporary Cash Investments
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed for, cash or Temporary Cash
Investments (except to the extent that such obligations are financed or sold
with recourse to the Company or any Restricted Subsidiary) net of (i) brokerage
commissions and other actual fees and expenses (including fees and expenses of
counsel and investment bankers) related to such Asset Sale, (ii) provisions for
all taxes payable as a result of such Asset Sale, (iii) payments made to retire
Indebtedness where payment of such Indebtedness is secured by the assets or
properties the subject of such Asset Sale, (iv) amounts required to be paid to
any Person (other than the Company or any Restricted Subsidiary) owning a
beneficial interest in the assets subject to the Asset Sale and (v) appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as reflected in an Officers'
Certificate delivered to the Trustee and (b) with respect to any issuance or
sale of Capital Stock or options, warrants or rights to purchase Capital Stock,
or debt securities or Capital Stock that have been converted into or exchanged
for Capital Stock, as referred to in Section 4.11, the proceeds of such issuance
or sale in the form of cash or Temporary Cash Investments, including payments in
respect of deferred payment obligations when received in the form of, or stock
or other assets when disposed for, cash or Temporary Cash Investments (except to
the extent that such obligations are financed or sold with recourse to the
Company or any Restricted Subsidiary), net of attorneys' fees, accountants' fees
and brokerage, consultation, underwriting and other fees and ex-


                                      -9-
<PAGE>

penses actually incurred in connection with such issuance or sale and net of
taxes paid or payable as a result thereof.

            "Note Amount" has the meaning specified in Section 4.14(c) hereof.

            "Notes" means (pound)80.0 million aggregate principal amount of the
Company's 8 1/2% Series C Senior Notes Due 2009, issued pursuant to this
Supplemental Indenture on the Issue Date and any Additional Notes, treated as a
single class of securities, as amended or supplemented from time to time in
accordance with the terms of this Supplemental Indenture and the Indenture.

            "Obligations" means any principal, interest (including, without
limitation, Post-Petition Interest), penalties, fees, indemnifications,
reimbursement obligations, damages and other liabilities payable under the
documentation governing any Indebtedness.

            "Offer" has the meaning set forth in Section 4.14(c) hereof.

            "Offer Date" has the meaning set forth in Section 4.14(c) hereof.

            "Offered Price" has the meaning set forth in Section 4.14(c) hereof.

            "Officer" means, with respect to any Person, the chairman of the
board, president or any vice president (regardless of vice presidential
designation), chief financial officer, treasurer, any assistant treasurer,
secretary or assistant secretary of such Person.

            "Officers' Certificate" means a certificate signed by the Chairman
of the Board, President or any Vice President (regardless of Vice Presidential
designation), and by its Chief Financial Officer, Treasurer, any Assistant
Treasurer, Secretary or Assistant Secretary of the Company, in their capacities
as such officers of the Company and delivered to the Trustee. Each such
certificate shall include the statements provided in Section 11.05, if and to
the extent required by the provisions thereof.

            "Opinion of Counsel" means an opinion in writing signed by legal
counsel (who may be an employee of the Company) acceptable in form and substance
to the Trustee and delivered to the Trustee. Such opinion shall include the
statements provided for in Section 11.05, if and to the extent required by the
provisions thereof.

            "Other Indebtedness" has the meaning set forth in Section 4.15
hereof.

            "Pari Passu Indebtedness" means any Indebtedness of the Company or a
Guarantor that is pari passu in right of payment with the Notes or a Guarantee,
as the case may be.

            "Pari Passu Offer" has the meaning set forth in Section 4.14(c)
hereof.

            "Participant" means, with respect to DTC, Euroclear or Clearstream,
Persons who have accounts with DTC, Euroclear or Clearstream, respectively (and
with respect to DTC, shall include Euroclear and Clearstream).

            "Permitted Holders" means as of the date of determination (i)
Marilyn Sands, Richard Sands and Robert Sands; (ii) family members or the
relatives of the Persons described in clause (i) or the Mac and Sally Sands
Foundation, Incorporated; (iii) any trusts created for the benefit of the
Persons described in clauses (i), (ii) or (v) or for the benefit of Andrew Stern
or any trust for the benefit of any such trust; (iv) any partnerships that are
controlled by (and a majority of the partnership interests in which are owned
by) any of the Persons described in clauses (i), (ii), (iii) or (v) or by any
partnership that satisfies the conditions of this clause (iv); or (v) in the
case of Marvin Sands and in the event of the incompetence or death of any of the
per-


                                      -10-
<PAGE>

sons described in clauses (i) and (ii), such Person's estate, executor,
administrator, committee or other personal representative or beneficiaries, in
each case who at any particular date shall beneficially own or have the right to
acquire, directly or indirectly, Capital Stock of the Company.

            "Permitted Indebtedness" has the meaning set forth in Section 4.10.

            "Permitted Investment" means (i) Investments in any Wholly Owned
Restricted Subsidiary or any Person which, as a result of such Investment,
becomes a Wholly Owned Restricted Subsidiary; (ii) Indebtedness of the Company
or a Restricted Subsidiary described under clauses (iv) and (v) of the
definition of "Permitted Indebtedness"; (iii) Temporary Cash Investments; (iv)
Investments acquired by the Company or any Restricted Subsidiary in connection
with an Asset Sale permitted under Section 4.14 to the extent such Investments
are non-cash proceeds as permitted under such covenant; (v) guarantees of
Indebtedness otherwise permitted by this Supplemental Indenture and the
Indenture; (vi) Investments in existence on the date of this Supplemental
Indenture; and (vii) Investments in joint ventures in an aggregate amount not to
exceed at any one time the greater of (x) $50.0 million and (y) 5.0% of
Consolidated Net Tangible Assets.

            "Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.

            "Post-Petition Interest" means, with respect to any Indebtedness of
any Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person in
accordance with and at the contract rate (including, without limitation, any
rate applicable upon default) specified in the agreement or instrument creating,
evidencing or governing such Indebtedness, whether or not, pursuant to
applicable law or otherwise, the claim for such interest is allowed as a claim
in such Insolvency or Liquidation Proceeding.

            "Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred stock, whether now outstanding or issued after the Issue
Date, and including, without limitation, all classes and series of preferred or
preference stock.

            "Principal Paying Agent" has the meaning provided in Section 2.03.

            "Private Placement Legend" has the meaning provided in Section 2.16.

            "Productive Assets" means assets of a kind used or usable by the
Company and its Restricted Subsidiaries in their respective businesses
(including, without limitation, contracts, leases, licenses or other agreements
of value to the Company or any of its Restricted Subsidiaries), provided,
however, that productive assets to be acquired by the Company or any Restricted
Subsidiary shall be, in the good faith judgment of management of the Company or
such Restricted Subsidiary, assets which are reasonably related, ancillary or
complementary to the business of the Company and its Restricted Subsidiaries as
conducted on the Issue Date.

            "Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.

            "Qualified Institutional Buyer" shall have the meaning specified in
Rule 144A promulgated under the Securities Act.


                                      -11-
<PAGE>

            "Quotation Agent" means the Reference Gilt Dealer appointed by the
Company.

            "Redeemable Capital Stock" means any Capital Stock that, either by
its terms or by the terms of any security into which it is convertible or
exchangeable or otherwise, is or upon the happening of an event (other than as a
result of a change of control provision substantially similar to that contained
in Section 4.16) or passage of time would be, required to be redeemed prior to
any Stated Maturity of the principal of the Notes or is redeemable at the option
of the holder thereof at any time prior to any such Stated Maturity, or is
convertible into or exchangeable for debt securities at any time prior to any
such Stated Maturity at the option of the holder thereof.

            "Redemption Date" when used with respect to any Note to be redeemed
means the date fixed for such redemption pursuant to the terms of this
Supplemental Indenture and the Indenture.

            "Redemption Price" means, with respect to any Note to be redeemed,
the price fixed for such redemption pursuant to the terms of this Supplemental
Indenture and the Indenture.

            "Reference Gilt Dealer" means each of (x) Barclays Bank PLC and its
respective successors; provided, however, that if the foregoing shall cease to
be a primary United Kingdom Government Obligations dealer in London (a "Primary
U.K. Government Obligations Dealer"), the Company shall substitute therefor
another Primary U.K. Government Obligations Dealer; and (y) any other Primary
U.K. Government Obligations Dealer selected by the Company.

            "Reference Gilt Dealer Quotations" means, with respect to each
Reference Gilt Dealer and any redemption date, the average, as determined by the
Company, of the bid and asked prices for the Comparable Gilt Issue (expressed in
each case as a percentage of its principal amount) quoted in writing to the
Trustee by such Reference Gilt Dealer at 11:00 a.m., London time, on the third
business day preceding such redemption date.

            "Registrar" has the meaning set forth in Section 2.03.

            "Regulation S" means Regulation S promulgated under the Securities
Act.

            "Regulation S Global Note(s)" means one or more Notes in the form
set forth in Exhibit A, bearing the Private Placement Legend and sold in
reliance on Regulation S.

            "Responsible Officer" means, with respect to the Trustee, any
officer of the Trustee assigned by the Trustee to administer its corporate trust
matters.

            "Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend issued in registered form without coupons in a
principal amount of (pound)1,000 or integral multiples thereof.

            "Restricted Definitive Notes" means the Restricted Definitive Notes
and any other Notes that require the Private Placement Legend (or a
substantially similar legend) as are in definitive form.

            "Restricted Global Notes" means the 144A Global Note(s), the
Regulation S Global Note(s) and any other Notes that require the Private
Placement Legend (or a substantially similar legend) held in global form.

            "Restricted Notes" means the Restricted Global Note(s) and the
Restricted Definitive Notes.

            "Restricted Payment" has the meaning set forth in Section 4.11.


                                      -12-
<PAGE>

            "Restricted Subsidiary" means any Subsidiary of the Company that has
not been designated by the Board of Directors of the Company, by a resolution of
the Board of Directors of the Company delivered to the Trustee, as an
Unrestricted Subsidiary pursuant to Section 4.19. Any such designation may be
revoked by a resolution of the Board of Directors of the Company delivered to
the Trustee, subject to the provisions of such covenant.

            "Restricted Security" has the meaning set forth in Rule 144(a)(3)
promulgated under the Securities Act; provided that the Trustee shall be
entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether any Note is a Restricted Security.

            "Rule 144A" means Rule 144A under the Securities Act.

            "Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which the Company or a Restricted Subsidiary
sells or transfers any property or asset in connection with the leasing, or the
resale against installment payments, of such property or asset to the seller or
transferor.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Series B Senior Notes" means such of the Company's 8 1/2% Series B
Senior Notes Due 2009, issued pursuant to an indenture, dated as of November 17,
1999, among the Company, the Guarantors and the Trustee, that are outstanding on
the Issue Date.

            "S&P" means Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, Inc. or any successor thereto.

            "Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the dates specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest is due and payable.

            "Sterling" or "(pound)" means the lawful currency of the United
Kingdom that is legal tender for the payment of public and private debts, as in
effect from time to time.

            "Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor subordinated in right of payment to the Notes or a Guarantee, as the
case may be.

            "Subsidiary" means any Person a majority of the equity ownership or
the Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.

            "Temporary Cash Investments" means: (i) any evidence of Indebtedness
of a Person, other than the Company or its Subsidiaries, maturing not more than
one year after the date of acquisition, issued by the United States of America
or the United Kingdom, or an instrumentality or agency thereof and guaranteed
fully as to principal, premium, if any, and interest by the United States of
America or the United Kingdom, (ii) any certificate of deposit, maturing not
more than one year after the date of acquisition, issued by, or time deposit of,
a commercial banking institution that is a member of the Federal Reserve System
and that has combined capital and surplus and undivided profits of not less than
$500,000,000, whose debt has a rating, at the time as of which any investment
therein is made, of "P-1" (or higher) according to Moody's or any successor
rating agency or "A-1" (or higher) according to S&P or any successor rating
agency, (iii) commercial paper, maturing not more than one year after the date
of acquisition, issued by a corporation (other than an Affiliate or Subsidiary
of the Company) organized and existing under the laws of the United States of
America with a rating, at the time as of which any investment therein is made,
of "P-1" (or higher) according to Moody's or "A-1" (or

                                      -13-
<PAGE>

higher) according to S&P and (iv) any money market deposit accounts issued or
offered by a domestic commercial bank having capital and surplus in excess of
$500,000,000.

            "Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended.

            "United Kingdom Government Obligations" means direct non-callable
obligations of the United Kingdom for the payment of which the full faith and
credit of the United Kingdom is pledged.

            "Unrestricted Definitive Note" means one or more Notes in the form
set forth in Exhibit B that do not and are not required to bear the Private
Placement Legend.

            "Unrestricted Global Note" means one or more Notes in the form set
forth in Exhibit A that do not and are not required to bear the Private
Placement Legend.

            "Unrestricted Notes" means the Unrestricted Global Notes and the
Unrestricted Definitive Notes.

            "Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 4.19. Any such designation may be revoked
by a resolution of the Board of Directors of the Company delivered to the
Trustee, subject to the provisions of Section 4.19.

            "Voting Stock" means stock of the class or classes pursuant to which
the holders thereof have the general voting power under ordinary circumstances
to elect at least a majority of the board of directors, managers or trustees of
a corporation (irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).

            "Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
all the Capital Stock of which (other than directors' qualifying shares and up
to 5% of the issued and outstanding Capital Stock which may be owned by
executive officers of such Subsidiary) is owned by the Company or another Wholly
Owned Restricted Subsidiary.

Section 1.03. Incorporation by Reference of Trust Indenture Act.

            Whenever this Indenture refers to a provision of the TIA, the
portion of such provision required to be incorporated herein in order for this
Indenture to be qualified under the TIA is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:

            "indenture securities" means the Notes and the Guarantees.

            "indenture securityholder" means a Holder.

            "indenture to be qualified" means this Indenture.

            "indenture trustee" or "institutional trustee" means the Trustee.

            "obligor on the indenture securities" means the Company or any other
obligor on the Notes.

            All other terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by Commission rule
have the meanings therein assigned to them.


                                      -14-
<PAGE>

Section 1.04. Rules of Construction.

            Unless the context otherwise requires:

            (1) a term has the meaning assigned to it herein, whether defined
      expressly or by reference;

            (2) an accounting term not otherwise defined has the meaning
      assigned to it in accordance with GAAP;

            (3) "or" is not exclusive;

            (4) words in the singular include the plural, and in the plural
      include the singular; and

            (5) words used herein implying any gender shall apply to every
      gender.

                                    ARTICLE 2

                                    THE NOTES

            The following provisions of this Article Two shall apply to the
Notes (but not with respect to any other series of Debt Securities) and shall
replace in its entirety the provisions set forth in Article II of the Indenture
(but not with respect to any other series of Debt Securities).

Section 2.01. Form and Dating.

            (a) Global Notes. Notes issued and sold pursuant to an effective
registration statement under the Securities Act, issued pursuant to an effective
exchange offer registration statement under the Securities Act for the Company's
outstanding Series B Senior Notes or issued in accordance with Section
2.07(b)(iii) and 2.07(e), shall be issued in the form of Unrestricted Global
Notes and deposited with Citibank N.A., London, as custodian (in such capacity,
the "Custodian") on behalf of DTC or with Citibank N.A., London, as common
depositary (in such capacity, the "Common Depositary") on behalf of Euroclear
and Clearstream, as the case may be. Notes offered and sold to Qualified
Institutional Buyers in reliance on Rule 144A shall be issued initially in the
form of a 144A Global Note, which shall be duly executed by the Company and
authenticated by the Trustee as hereinafter provided and deposited with the
Custodian on behalf of DTC. Notes offered and sold in reliance on Regulation S
shall be issued initially in the form of a Regulation S Global Note, which shall
be duly executed by the Company and authenticated by the Trustee as hereinafter
provided and deposited with the Common Depositary on behalf of Euroclear and
Clearstream.

            Each Global Note shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and shall provide that the
aggregate principal amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges,
transfers of interests therein, redemptions and repurchases in accordance with
the terms of this Supplemental Indenture and the Indenture; provided that, the
maximum principal amount of all Notes shall never exceed (pound)300.0 million
issued and outstanding at any one time except as provided in Section 2.08. Any
endorsement of the Schedule to a Global Note to reflect the amount of any
increase or decrease in the principal amount of outstanding Notes represented
thereby shall be made by the Registrar in accordance with Sections 2.07, 3.07,
3.08, 4.14 and 4.16 hereof.


                                      -15-
<PAGE>

            Except as set forth in Section 2.07(a) hereof, the Global Notes may
be transferred, in whole and not in part, only to a successor of the relevant
Depositary on whose behalf such note is held.

            (b) Definitive Notes. Definitive Notes issued upon transfer of a
Book-Entry Interest or a Definitive Note, or in exchange for a Book-Entry
Interest or a Definitive Note, shall be issued in accordance with this
Supplemental Indenture and the Indenture, duly executed by the Company and
authenticated by the Trustee as hereinafter provided.

            (c) Book-Entry Provisions. None of the Depositaries or any of their
respective Participants shall have any rights either under this Supplemental
Indenture or the Indenture or under any Global Note with respect to such Global
Note held on their behalf by the Custodian or the Common Depositary.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any Agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Custodian
or the Common Depositary or impair, as between the Custodian or the Common
Depositary and the Depositaries and their respective Participants, the operation
of customary practices of such Depositary governing the exercise of the rights
of an owner of a beneficial interest in any Global Note.

            (d) Note Forms. The provisions of the form of Notes contained in
Exhibits A and B hereto are incorporated herein by reference. The Notes issued
on the Issue Date will be issued in the form of Exhibit A and title thereto will
pass by delivery. Additional Notes may be issued in the form of either Exhibit A
or Exhibit B, as the case may be. Notes will be issued in denominations of
(pound)l,000 and integral multiples thereof. In no event will Definitive Notes
in bearer form be issued.

            (e) Dating. Each Note shall be dated the date of its authentication.

Section 2.02. Execution and Authentication.

            An Officer shall execute the Notes on behalf of the Company by
manual or facsimile signature. The Company's seal may but need not be impressed,
affixed, imprinted or reproduced on the Notes.

            If the Officer whose signature is on a Note no longer holds that
office at the time the Trustee authenticates the Note or at any time thereafter,
the Note shall be valid nevertheless.

            A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. Such
signature shall be conclusive evidence that the Note has been authenticated
under this Supplemental Indenture and the Indenture.

            The Trustee shall authenticate Notes on the Issue Date in an
aggregate principal amount not to exceed (pound)80.0 million and thereafter,
from time to time, in an aggregate principal amount not to exceed (pound)300.0
million at any one time outstanding, in each case, upon receipt of an Officers'
Certificate signed by an Officer directing the Trustee to authenticate the Notes
and certifying that all conditions precedent to the issuance of the Notes
contained herein have been complied with.

            The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Supplemental Indenture or the Indenture to authentication
by the Trustee includes authentication by such agent. Such authenticating agent
shall have the same rights as the Trustee in any dealings hereunder with the
Company or with any of the Company's Affiliates.


                                      -16-
<PAGE>

Section 2.03. Registrar and Paying Agents.

            (a) The Company shall maintain (i) an office or agency in London
where Notes may be presented for registration of transfer or for exchange (the
"Registrar"), (ii) an office or agency in each of London (the "Principal Paying
Agent") and, if and for so long as any Notes are listed on the Luxembourg Stock
Exchange, Luxembourg (the "Luxembourg Paying Agent") where Definitive Notes may
be presented for payment and (iii) an office or agency in the City of New York
where notices and demands to or upon the Company in respect of the Notes and
this Supplemental Indenture and the Indenture may be served.

            The Company may change the Principal Paying Agent or the Registrar
or appoint additional Registrars or additional Paying Agents and the terms
"Registrar" and "Paying Agent" shall include any such additional Registrar or
Paying Agent, as applicable. The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Supplemental Indenture and the
agreement shall implement the provisions of this Supplemental Indenture and the
Indenture that relate to such Agent and, to the extent applicable, shall
incorporate the provisions of the TIA. Without limiting the foregoing, each such
agreement appointing a Principal Paying Agent must contain provisions
substantially to the effect of Section 2.07 hereof. The Company shall notify the
Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent or fails to give the foregoing notice, the
Trustee shall act as such and shall be entitled to appropriate compensation in
accordance with Section 11.2 of the Indenture.

            The Registrar shall keep a register (the "Register") of any
Definitive Notes and of their transfer and exchange.

            The Company hereby initially appoints (i) the corporate trust office
of the Trustee, located at 430 Park Avenue, New York, New York 10022, as agent
for service of notices and demands in connection with the Notes and this
Supplemental Indenture and the Indenture; (ii) the corporate trust office of
Citibank N.A., London, located at P.O. Box 18055, 5 Carmelite Street, London
EC4Y 0PA, as Registrar and Principal Paying Agent; and (iii) the corporate trust
office of Paribas Luxembourg, located at 10-A Boulevard Royal, L-2093
Luxembourg, as the Luxembourg Paying Agent.

            (b) (i) For so long as holders of Book-Entry Interests hold such
interests through a DTC Global Note and the rules of DTC require that payments
made through the facilities of DTC be made in U.S. dollars, the Paying Agent
shall, unless otherwise instructed pursuant to paragraph (b)(ii) below, convert
all payments received from the Company in Sterling in respect of any DTC Global
Note into U.S. dollars. The aggregate amount of any such payment to be made in
U.S. dollars in respect of the DTC Global Notes shall be credited to the Paying
Agent's account in Sterling and such amount, less any amount to be paid in
Sterling as contemplated in Section 2.03(b) (ii) shall be converted by the
Paying Agent into U.S. dollars (the "Sterling Conversion Amount"). The resulting
Sterling Conversion Amount shall be paid to DTC or its designated assign for
payment through DTC's settlement system to the relevant Participants. All costs
of the Paying Agent of any such conversions and payment shall be borne by the
Company. Any such conversion shall be based on Citibank, N.A.'s ("Citibank")
in-house mid-market agency GBP/USD rate of exchange prevailing as at 11:00 a.m.
New York City time on the day which is two business days prior to the relevant
payment date. If such exchange rate bid quotation is not available from
Citibank, the Paying Agent shall endeavor to obtain a bid quotation from a
leading foreign exchange bank in New York City selected by the Paying Agent for
such purpose. If no bid quotation from a leading foreign exchange bank is
available, such payments will be made in Sterling to the account or accounts
specified by or on behalf of DTC to the Paying Agent.

            (ii) Notwithstanding the foregoing, the Paying Agent shall not
convert amounts received in Sterling into U.S. dollars and shall make payments
of principal, premium, if any, and interest and any other amounts owing under
this Supplemental Indenture, the Indenture or the Notes in Sterling with respect
to any Book-Entry Interest holders in a DTC Global Note that have caused DTC
through the relevant DTC Participant


                                      -17-
<PAGE>

to notify the Paying Agent of such holder's election to receive all or a portion
of such payment in Sterling, provided such notification includes wire transfer
instruction to a Sterling account. Such election in respect of any payment must
be made by the holder at the time and in the manner required by the DTC
procedures applicable from time to time and shall, in accordance with such
procedures, be irrevocable and shall relate only to such payment.

            (iii) Notwithstanding the foregoing, Book-Entry Interest holders in
Global Notes held on behalf of Euroclear or Clearstream will receive payments of
principal, premium, if any, and interest and any other amounts owing under this
Supplemental Indenture, the Indenture or the Notes in Sterling through the
settlement systems of Euroclear or Clearstream, as the case may be.

Section 2.04. Holders to Be Treated as Owners; Payments of Interest.

            (a) The Company, the Paying Agents, the Registrar, the Trustee and
any agent of the Company, the Paying Agents, the Registrar or the Trustee may
deem and treat the person in whose name any Definitive Note is registered as the
absolute owner of such Note for the purpose of receiving payment of or on
account of the Principal of and, subject to the provisions of this Supplemental
Indenture and the Indenture, interest, Additional Amounts and Additional
Interest and any other amounts due on such Definitive Note and for all other
purposes; and neither the Company, any Paying Agent, the Registrar, the Trustee
nor any agent of the Company, any Paying Agent, the Registrar or the Trustee
shall be affected by any notice to the contrary. The Company, the Paying Agents,
the Registrar, the Trustee and any agent of the Company, the Paying Agents, the
Registrar or the Trustee may treat the Holder of any Global Note as the absolute
owner thereof for the purposes of receiving payment of or on account of the
Principal of and, subject to the provisions of this Supplemental Indenture and
the Indenture, interest, Additional Amounts and Additional Interest and any
other amounts due on, such Global Note and for all other purposes; and neither
the Company, the Paying Agents, the Registrar, the Trustee, nor any agent of the
Company, the Paying Agents, the Registrar or the Trustee shall be affected by
any notice to the contrary. All such payments so made to any such Person, or
upon his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
Note.

            (b) The Person in whose name any Definitive Note is registered at
the close of business on any record date with respect to any Interest Payment
Date shall be entitled to receive the interest, Additional Amounts and
Additional Interest, if any, payable on such Interest Payment Date
notwithstanding any transfer or exchange of such Definitive Note subsequent to
the record date and prior to such Interest Payment Date, except if and to the
extent the Company shall default in the payment of the interest, Additional
Amounts or Additional Interest due on such Interest Payment Date, in which case
such defaulted interest, Additional Amounts or Additional Interest shall be paid
in accordance with Section 2.13. The term "record date" as used with respect to
any Interest Payment Date for the Notes shall mean the date specified as such in
the terms of the Notes. Payments of interest, Additional Amounts and Additional
Interest on the Global Note will be made to the Holder of the Global Note on
each Interest Payment Date; provided that, in the event of an exchange or
transfer of a Book-Entry Interest in a Global Note for Definitive Notes
subsequent to a record date or any special record date and prior to or on the
related Interest Payment Date or other payment date under Section 2.13, any
payment of the interest, Additional Amounts or Additional Interest payable on
such payment date with respect to any such Definitive Note shall be made to the
Holder of the Global Note, notwithstanding Section 2.13 or any other provision
hereof to the contrary.

Section 2.05. Paying Agent to Hold Money in Trust.

            Each Paying Agent shall hold in trust for the benefit of the Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, interest, Additional Amounts or Additional Interest, if any, on
the Notes, and the Company and the Paying Agents shall notify the Trustee of any


                                      -18-
<PAGE>

default by the Company (or any other obligor on the Notes) in making any such
payment. Money held in trust by any Paying Agent need not be segregated except
as required by law and in no event shall any Paying Agent be liable for any
interest on any money received by it hereunder. The Company at any time may
require the Paying Agents to pay all money held by them to the Trustee and
account for any funds disbursed and the Trustee may at any time during the
continuance of any Event of Default specified in Section 6.01(a) or (b), upon
written request to such Paying Agents, require such Paying Agents to pay
forthwith all money so held by it to the Trustee and to account for any funds
disbursed. Upon making such payment, a Paying Agent shall have no further
liability for the money delivered to the Trustee.

            If the Company acts as its own Paying Agent for the Notes, it will,
on or before each due date of the principal of, premium, if any, interest,
Additional Amounts or Additional Interest, if any, on the Notes, set aside and
segregate and held in trust for the benefit of the holders of the Notes a sum
sufficient to pay such principal of, premium, if any, interest, Additional
Amounts or Additional Interest, if any, and will notify the Trustee of such
action or any failure to take such action.

Section 2.06. Holder Lists.

            The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it from the Registrar of the names
and addresses of the Holders of Definitive Notes, if any. If the Trustee is not
the Registrar, the Company shall furnish to the Trustee and each Paying Agent at
least five Business Days before each Interest Payment Date, and at such other
times as they may request in writing, a list in such form and as of such date as
they may reasonably require of the names and addresses of the Holders of
Definitive Notes, if any.

Section 2.07. Transfer and Exchange; Book-Entry Provisions.

            (a) Transfer and Exchange of Global Notes. Transfer of the Global
Notes shall be by delivery. Global Notes may be exchanged or replaced, in whole
or in part, as provided in Sections 2.08 and 2.11. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to Section 2.08 hereof, shall be authenticated and delivered in the
form of, and shall be, a Global Note. A Global Note may not be exchanged for
Definitive Notes other than as provided in this Section 2.07(a) and in the
Notes, subject to compliance with Section 2.07(c).

            Owners of Book-Entry Interests shall receive Definitive Notes: (i)
in whole (but not in part), if any of DTC, Euroclear or Clearstream is closed
for business for a continuous period of 14 days (other than by reason of
holiday, statutory or otherwise) or announces an intention permanently to cease
business or does in fact do so and no alternative clearance system satisfactory
to the Trustee is available; (ii) in part, if an Event of Default occurs and is
continuing, upon the request delivered in writing to DTC, Euroclear and/or
Clearstream, the Trustee, the Common Depositary or the Custodian; (iii) in whole
(but not in part) at any time if the Company in its sole discretion determines
that the Global Notes should be exchanged for Definitive Notes; or (iv) in whole
(but not in part), if the Custodian or Common Depositary is at any time
unwilling or unable to continue as Custodian or Common Depositary, as the case
may be, and a successor Custodian or Common Depositary, as the case may be, is
not appointed by the Company within 90 days.

            In such an event, the Registrar, subject to compliance with Section
2.07(c), shall issue Definitive Notes, registered in the name or names and
issued in any approved denominations requested by or on behalf of DTC, Euroclear
and/or Clearstream, as applicable (in accordance with their respective customary
procedures and based upon directions received from participants reflecting the
beneficial ownership of Book-Entry Interests), and bearing the Private Placement
Legend unless that legend is not required by applicable law.


                                      -19-
<PAGE>

            (b) Transfer and Exchange of Book-Entry Interests between Global
Notes. In all cases, transfers of Book-Entry Interests between Global Notes
shall require compliance with subparagraph (i) below, as well as one or more of
the other following subparagraphs, as applicable:

            (i) General Provisions Applicable to Transfers and Exchanges of
      Book-Entry Interests between Global Notes. In connection with all
      transfers and exchanges of Book-Entry Interests (other than transfers of
      Book-Entry Interests in connection with which the transferee takes
      delivery thereof in the form of a Book-Entry Interest in the same Global
      Note or transfers or exchanges resulting in the delivery of one or more
      Definitive Notes), the transferor of such Book-Entry Interest must deliver
      to the Principal Paying Agent (1) a written and/or electronic order from a
      Participant or an indirect participant given to the Depositary in
      accordance with the Applicable Procedures directing the Depositary to
      debit or cause to be debited a Book-Entry Interest in a Global Note in an
      amount equal to the Book-Entry Interest to be transferred or exchanged,
      (2) a written and/or electronic order from a Participant or an Indirect
      Participant given to the Depositary in accordance with the Applicable
      Procedures directing the Depositary to credit or cause to be credited a
      Book-Entry Interest in another Global Note in an amount equal to the
      Book-Entry Interest to be transferred or exchanged and (3) written and/or
      electronic instructions given in accordance with the Applicable Procedures
      containing information regarding the Participant account to be credited
      with such increase.

      The requirements of this Section 2.07(b)(i) shall be deemed to have been
      satisfied in connection with any exchange offer for Notes outstanding
      under this Supplemental Indenture and the Indenture upon receipt by the
      Principal Paying Agent of instructions contained in a letter of
      transmittal delivered by any Holder tendering Book-Entry Interests in a
      Restricted Global Note in such exchange offer.

            (ii) Transfer of Book-Entry Interests in a Restricted Global Note to
      Another Restricted Global Note. A Book-Entry Interest in any Restricted
      Global Note may be transferred to a Person who takes delivery thereof in
      the form of a Book-Entry Interest in a different Restricted Global Note if
      the transfer complies with the requirements of Section 2.07(b)(i) above
      and the Principal Paying Agent receives the following:

                  (A) if the transferee will take delivery in the form of a
            Book-Entry Interest in a 144A Global Note, then the transferor must
            deliver a certificate in the form of Exhibit D hereto, including the
            certifications in item (1) or (3) thereof, together, in the case of
            (3), such additional documentation as may be required by the Trustee
            and the Company pursuant to the penultimate sentence of the Private
            Placement Legend, and

                  (B) if the transferee will take delivery in the form of a
            Book-Entry Interest in a Regulation S Global Note, then the
            transferor must deliver a certificate in the form of Exhibit D
            hereto, including the certifications in item (2) thereof.

      Upon satisfaction of the conditions set forth in this Section 2.07(b)(ii),
      the Principal Paying Agent shall (i) instruct the relevant Depositary to
      deliver the relevant Global Note(s) to it, (ii) endorse the Schedule to
      the relevant Global Note(s) to reflect the relevant increase or decrease
      in the principal amount of such Global Note resulting from the applicable
      transfer, and (iii) thereafter, return the Global Notes to the relevant
      Depositary, together with all information regarding the Participant
      accounts to be credited and debited in connection with such transfer.

            (iii) Transfer and Exchange of Book-Entry Interests in a Restricted
      Global Note for Book-Entry Interests in an Unrestricted Global Note. A
      Book-Entry Interest in any Restricted Global Note may be exchanged by any
      holder thereof for a Book-Entry Interest in an Unrestricted Global Note or
      transferred to a Person who takes delivery thereof in the form of a
      Book-Entry Interest in an Unre-


                                      -20-
<PAGE>

      stricted Global Note if the exchange or transfer complies with the
      requirements of Section 2.07(b)(i) above and such transfer is effected
      pursuant to an effective registration statement under the Securities Act
      and in compliance with the prospectus delivery requirements of the
      Securities Act and the transferor delivers a certificate in the form of
      Exhibit D hereto including the certifications contained in item (4)
      thereof.

      Upon satisfaction of the conditions set forth in this Section
      2.07(b)(iii), the Principal Paying Agent shall (i) instruct the relevant
      Depositary to deliver the relevant Global Note(s) to it, (ii) endorse the
      Schedule to the relevant Global Note(s) to reflect the relevant increase
      or decrease in the principal amount of such Global Note resulting from the
      applicable transfer, and (iii) thereafter, return the Global Notes to the
      relevant Depositary, together with all information regarding the
      Participant accounts to be credited and debited in connection with such
      exchange or transfer.

      If any such transfer or exchange is effected pursuant to this Section
      2.07(b)(iii) at a time when an Unrestricted Global Note has not yet been
      issued, the Principal Paying Agent shall so inform the Trustee and the
      Company and, thereafter, the Company shall issue and, upon receipt of an
      authentication order in the form of an Officers' Certificate from the
      Company in accordance with Section 2.02 hereof, the Trustee shall
      authenticate, one or more Unrestricted Global Notes in an aggregate
      principal amount equal to the aggregate principal amount of Book-Entry
      Interests to be transferred or exchanged.

            (c) Exchange of Book-Entry Interests for Definitive Notes. In all
cases in connection with an exchange of a Book-Entry Interest for a Definitive
Note (which in any event is limited to the circumstances contemplated by Section
2.07(a)), the Principal Paying Agent and the Registrar must receive (1) a
written and/or electronic order from a Participant or an Indirect Participant
given to the relevant Depositary in accordance with the Applicable Procedures
directing such Depositary to debit or cause to be debited a Book-Entry Interest
in an amount equal to the Book-Entry Interest to be exchanged, (2) a written
order directing the Registrar to issue or cause to be issued a Definitive Note
in an amount equal to the Book-Entry Interest to be exchanged and (3)
instructions containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the exchange referred to above.

            (i) Book-Entry Interests in Restricted Global Notes to Restricted
      Definitive Notes. A holder of a Book-Entry Interest in a Restricted Global
      Note may exchange such Book-Entry Interest for a Restricted Definitive
      Note if the exchange complies with the first paragraph of this Section
      2.07(c) and the Principal Paying Agent receives a certificate from such
      holder in the form of Exhibit E hereto, including the certifications in
      item (1)(a) thereof;

      Upon satisfaction of the conditions set forth in this Section 2.07(c)(i),
      the Principal Paying Agent shall (i) instruct the Custodian or the Common
      Depositary, as the case may be, to deliver the relevant Global Note(s) to
      it, (ii) endorse the Schedule to the relevant Global Note(s) to reflect
      the relevant decrease in the principal amount of such Global Note
      resulting from the applicable transfer or exchange, (iii) thereafter,
      return the Global Note to the Custodian or the Common Depositary, as the
      case may be, together with all information regarding the Participant
      accounts to be debited in connection with such exchange or transfer and
      (iv) deliver to the Registrar instructions received by it that contain
      information regarding the Person in whose name Definitive Notes shall be
      registered to effect such exchange.

      The Company shall issue and, upon receipt of an authentication order in
      the form of an Officers' Certificate from the Company in accordance with
      Section 2.02 hereof, the Trustee shall authenticate, one or more
      Definitive Notes in an aggregate principal amount equal to the aggregate
      principal amount of Book-Entry Interests so exchanged and in the names set
      forth in the instructions received by the Registrar.


                                      -21-
<PAGE>

            (ii) Book-Entry Interests in Unrestricted Global Notes to
      Unrestricted Definitive Notes. A holder of a Book-Entry Interest in an
      Unrestricted Global Note may exchange such Book-Entry Interest for a
      Definitive Note that does not bear the Private Placement Legend if the
      exchange complies with the first paragraph of this Section 2.07(c). Upon
      satisfaction of the conditions set forth in this Section 2.07(c)(ii), the
      Principal Paying Agent shall (i) instruct the Custodian or the Common
      Depositary, as the case may be, to deliver the relevant Global Note(s) to
      it, (ii) endorse the Schedule to the relevant Global Note(s) to reflect
      the relevant decrease in the principal amount of such Global Note
      resulting from the exchange, (iii) thereafter, return the Global Note to
      the Custodian or the Common Depositary, as the case may be, together with
      all information regarding the Participant accounts to be debited in
      connection with such exchange and (iv) deliver to the Registrar
      instructions received by it that contain information regarding the Person
      in whose name Definitive Notes shall be registered to effect such
      exchange.

      The Company shall issue and, upon receipt of an authentication order in
      the form of an Officers' Certificate from the Company in accordance with
      Section 2.02 hereof, the Trustee shall authenticate, one or more
      Definitive Notes in an aggregate principal amount equal to the aggregate
      principal amount of Book-Entry Interests so exchanged and in the names set
      forth in the instructions received by the Registrar.

      Book-Entry Interests in an Unrestricted Global Note cannot be exchanged
      for a Book-Entry Interest in a Restricted Global Note, nor can such Book
      Entry Interests be transferred to Persons who take delivery thereof in the
      form of a Restricted Definitive Note.

            (d) Transfer and Exchange of Definitive Notes for Definitive Notes.
In all cases in connection with any transfer or exchange of Definitive Notes,
the Holder of such Notes shall surrender to the Registrar the Definitive Notes
for transfer or exchange duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Registrar duly executed by such Holder
or by its attorney, duly authorized in writing. In addition, the requesting
Holder shall provide any additional certifications, documents and information,
as applicable, required pursuant to the following provisions of this Section
2.07(d). Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.07(d), the Registrar shall
register the transfer or exchange of Definitive Notes.

            (i) Restricted Definitive Notes to Restricted Definitive Notes. Any
      Restricted Definitive Note may be transferred to and registered in the
      name of Persons who take delivery thereof in the form of a Restricted
      Definitive Note if the Registrar receives the following:

                  (A) if the transfer will be made pursuant to Rule 144A under
            the Securities Act, then the transferor must deliver a certificate
            in the form of Exhibit D hereto, including the certifications in
            item (1) thereof; and

                  (B) if the transfer will be made pursuant to Rule 903 or Rule
            904, then the transferor must deliver a certificate in the form of
            Exhibit D hereto, including the certifications in item (2) thereof.

            (ii) Restricted Definitive Notes to Unrestricted Definitive Notes.
      Any Restricted Definitive Note may be exchanged by the Holder thereof for
      an Unrestricted Definitive Note or transferred to a Person or Persons who
      take delivery thereof in the form of an Unrestricted Definitive Note if
      any such transfer is effected pursuant to an effective registration
      statement under the Securities Act and in compliance with the prospectus
      delivery requirements of the Securities Act and the transferor delivers a
      certificate in the form of Exhibit D hereto including the certifications
      contained in item (4) thereof.


                                      -22-
<PAGE>

            (iii) Unrestricted Definitive Notes to Unrestricted Definitive
      Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes
      to a Person who takes delivery thereof in the form of an Unrestricted
      Definitive Note. Upon receipt of a request to register such a transfer,
      consisting of the Note duly endorsed or accompanied by a written
      instrument of transfer, in form satisfactory to the Company and the
      Registrar, duly executed by the Holder or his attorney duly authorized in
      writing, the Registrar shall register the Unrestricted Definitive Notes
      pursuant to the instructions from the Holder thereof.

            (e) Exchange Offers. Upon the occurrence of an exchange offer for
Notes outstanding under this Supplemental Indenture pursuant to an effective
registration statement under the Securities Act, the Company shall issue and,
upon receipt of an authentication order in the form of an Officers' Certificate
in accordance with Section 2.02, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the Book-Entry Interests in the Restricted Global Notes
tendered for acceptance by Persons that certify or are deemed to have certified
that (x) they are not broker-dealers that acquired the Book-Entry Interests
tendered in the exchange offer directly from the Company or an Affiliate of the
Company, (y) they are not participating in a distribution of the Notes to be
received in the exchange offer and (z) they are not affiliates (as defined in
Rule 144) of the Company, that are accepted for exchange by the Company in the
exchange offer and (ii) Unrestricted Definitive Notes in an aggregate principal
amount equal to the principal amount of the Restricted Definitive Notes tendered
for acceptance by Persons who certify to the effect set forth in (i) that are
accepted for exchange by the Company in the exchange offer.

            In addition, the Principal Paying Agent shall (i) endorse the
Schedule to the Unrestricted Global Notes issued pursuant to the preceding
paragraph to reflect the principal amount of Restricted Global Notes tendered in
such exchange offer, (ii) deliver such Unrestricted Global Notes to the
Custodian and the Common Depositary, as the case may be, (iii) instruct the
Custodian and the Common Depositary to deliver the relevant Restricted Global
Note(s), (iv) endorse the Schedule to such Restricted Global Note(s) to reflect
the decrease in principal amount resulting from such exchange offer, and (v)
thereafter, return the Restricted Global Notes to the Custodian and the Common
Depositary, as the case may be, together with all information regarding the
Participant accounts to be debited in connection with such exchange offer.

            (f) Cancellation of Global Notes. At such time as all Book-Entry
Interests therein have been exchanged for Definitive Notes, a Global Note shall
be returned to or retained and canceled by the Trustee in accordance with
Section 2.12 hereof.

            (g) General Provisions Relating to all Transfers and Exchanges.

            (i) Title to Global Notes will pass by delivery. To permit
      registration of transfers and exchanges of Definitive Notes, the Company
      shall execute and, upon the Company's order, the Trustee shall
      authenticate Definitive Notes at the Registrar's request.

            (ii) No service charge shall be made to a Holder for any
      registration of transfer or exchange of any Definitive Note, but the
      Company may require payment of a sum sufficient to cover any stamp or
      transfer tax, duty or governmental charge payable in connection therewith
      (other than any such stamp or transfer taxes, duties or similar
      governmental charge payable upon exchange, redemption or purchase pursuant
      to Sections 2.11, 3.06, 3.07, 3.08, 4.14 and 4.16 of this Supplemental
      Indenture and Section 12.5 of the Indenture).

            (iii) All Global Notes and Definitive Notes issued upon any transfer
      or exchange of Global Notes or Definitive Notes shall be the valid
      obligations of the Company, evidencing the same debt, and entitled to the
      same benefits under this Supplemental Indenture and the Indenture, as the
      Global Notes or Definitive Notes surrendered upon such transfer or
      exchange.


                                      -23-
<PAGE>

            (iv) The Company shall not be required to register the transfer of
      any Definitive Notes:

                  (1) for a period of 15 calendar days prior to any date fixed
            for the redemption of the Notes;

                  (2) for a period of 15 calendar days immediately prior to the
            date fixed for selection of Notes to be redeemed in part;

                  (3) for a period of 15 calendar days prior to the record date
            with respect to any interest payment date; or

                  (4) which the holder has tendered (and not withdrawn) for
            repurchase in connection with a Change of Control Offer or an Excess
            Proceeds Offer.

            (v) Prior to due presentment for the registration of a transfer of
      any Definitive Note, the Trustee, the Paying Agents, the Registrar, any
      Agent and the Company may deem and treat the Person in whose name any Note
      is registered as the absolute owners of such Note for the purpose of
      receiving payment of principal of and interest on such Notes and for all
      other purposes, and neither the Trustee, the Paying Agents, the Registrar,
      any Agent nor the Company shall be affected by notice to the contrary.

            (vi) The Trustee shall authenticate Global Notes and Definitive
      Notes in accordance with the provisions of Section 2.02 hereof.

Section 2.08. Replacement Notes.

            If a mutilated Definitive Note is surrendered to the Registrar or
the Trustee, if a mutilated Global Note is surrendered to the Principal Paying
Agent or the Trustee, or if the Holder of a Note claims that the Note has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Note in such form as the Notes mutilated, lost,
destroyed or wrongfully taken if, in the case of a lost, destroyed or wrongfully
taken Note, the Holder of such Note furnishes to the Company, the Trustee, the
Principal Paying Agent (in the case of a Global Note) and/or the Registrar (in
the case of a Definitive Note), evidence reasonably acceptable to them of the
ownership and the destruction, loss or theft of such Note. If required by the
Trustee, the Principal Paying Agent (in the case of a Global Note), the
Registrar (in the case of a Definitive Note) or the Company, an indemnity bond
shall be posted, sufficient in the judgment of each to protect the Company, the
Principal Paying Agent (in the case of a Global Note), the Registrar (in the
case of a Definitive Note) and the Trustee from any loss that any of them may
suffer if such Note is replaced. The Company may charge such Holder for the
Company's exceptional out-of-pocket expenses in replacing such Note and the
Registrar or Principal Paying Agent, as the case may be, may charge the Company
for its expenses in replacing such Note. Every replacement Note shall constitute
an additional obligation of the Company.

Section 2.09. Outstanding Notes.

            The Notes outstanding at any time are all Notes that have been
authenticated by the Trustee except for (a) those canceled by it, (b) those
delivered to it for cancellation, (c) to the extent set forth in Article Nine,
on or after the date on which the conditions set forth in Article Nine have been
satisfied, those Notes theretofore authenticated and delivered by the Trustee
hereunder and (d) those described in this Section 2.09 as not outstanding.
Subject to Section 2.10, a Note does not cease to be outstanding because the
Company or one of its Affiliates holds the Note.


                                      -24-
<PAGE>

            If a Note is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser in whose hands such Note is a
legal, valid and binding obligation of the Company.

            If the appropriate Paying Agent holds, in its capacity as such, on
any Maturity Date or on any optional redemption date, money sufficient to pay
all accrued interest, Additional Amounts, if any, Additional Interest, if any,
and Principal with respect to the Notes payable on that date and is authorized
and not prohibited from paying such money to the Holders thereof pursuant to the
terms of this Supplemental Indenture and the Indenture, then on and after that
date such Notes shall cease to be outstanding and interest on the Notes shall
cease to accrue.

Section 2.10. Treasury Notes.

            In determining whether the Holders of the required principal amount
of Notes have concurred in any declaration of acceleration or notice of default
or direction, waiver or consent or any amendment, modification or other change
to this Supplemental Indenture or the Indenture, Notes owned by the Company or
an Affiliate of the Company shall be disregarded as though they were not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent or any
amendment, modification or other change to this Supplemental Indenture or the
Indenture, only Notes that a Responsible Officer of the Trustee actually knows
are so owned shall be so disregarded.

Section 2.11. Temporary Notes.

            In the event that Definitive Notes are to be issued pursuant to
Section 2.07(a) hereto, until Definitive Notes are prepared and ready for
delivery, the Company may prepare and the Trustee shall upon receipt of a
written order of the Company authenticate temporary Notes. Temporary Notes shall
be substantially in the form of Definitive Notes but may have variations that
the Company considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate Definitive
Notes in exchange for temporary Notes. Until such exchange, temporary Notes
shall be entitled to the same rights, benefits and privileges as Definitive
Notes.

Section 2.12. Cancellation.

            The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and each Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange, payment,
redemption or purchase. The Trustee shall cancel all Notes surrendered for
registration of transfer, exchange, payment, redemption, replacement,
cancellation or purchase and shall dispose of canceled Notes in accordance with
its policy of disposal, unless the Company directs the Trustee to return such
Notes to the Company, and, if so disposed, shall deliver a certificate of
disposition thereof to the Company. The Company may not reissue or resell, or
issue new Notes to replace, Notes that the Company has redeemed, paid or
purchased, or that have been delivered to the Trustee for cancellation.

Section 2.13. Defaulted Interest.

            If the Company defaults on a payment of interest, Additional Amounts
or Additional Interest on the Notes, it shall pay the defaulted interest,
Additional Amounts or Additional Interest, plus (to the extent permitted by law)
any interest payable (at the rate borne by the Notes) on the defaulted interest,
Additional Amounts or Additional Interest, in accordance with the terms hereof,
to (a) the Persons who are Holders of Definitive Notes, if any, on a subsequent
special record date, which date shall be at least five Business Days prior to
the payment date for such defaulted interest, Additional Amounts or Additional
Interest, and (b) if a Global Note is still outstanding, to the Holder of such
Global Note on such payment date. The Company shall


                                      -25-
<PAGE>

fix such special record date and payment date in a manner satisfactory to the
Trustee. At least 15 days before such special record date, the Company shall
mail to each Holder of Definitive Notes, if any, and if any Global Note is still
outstanding, to the applicable Depositary, a notice that states the special
record date, if any, the payment date and the amount of defaulted interest,
Additional Amounts or Additional Interest, and interest payable on such
defaulted interest, if any, to be paid.

Section 2.14. CUSIP and ISIN Number; Common Code.

            The Company may use a "CUSIP" number and may use an "ISIN" number
and a common code, and if so, such CUSIP or ISIN number and common code shall be
included in notices of redemption, repurchase or exchange as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP or ISIN
number or common code printed in the notice or on the Notes, and that reliance
may be placed only on any other identification numbers printed on the Notes. The
Company will promptly notify the Trustee, each Paying Agent and the Registrar of
any change in the CUSIP or ISIN number and the common code.

Section 2.15. Deposit of Moneys; Payments by Principal Paying Agent.

            Prior to 10:00 a.m. London time on each Interest Payment Date,
Redemption Date or Maturity (unless the Company and the Principal Paying Agent
shall agree to another time), the Company shall deposit with the Principal
Paying Agent in immediately available funds, an amount in Sterling sufficient to
make cash payments, if any, due on such Interest Payment Date, Redemption Date
or Maturity, as the case may be.

            Principal of, premium, if any, interest, Additional Interest, if
any, and Additional Amounts, if any, on any Global Notes shall be payable at the
corporate trust office or agency of the Paying Agent in London or Luxembourg
maintained for such purposes. The Company shall pay such amounts in Sterling.
All payments on the Global Notes shall be made by check or by transfer of
immediately available funds to an account of the Holder of the Global Notes in
accordance with instructions given by the Holder.

            Principal of, premium, if any, interest, Additional Interest, if
any, and Additional Amounts, if any, on any Definitive Notes shall be payable at
the corporate trust office or agency of the Registrar maintained for such
purposes. In addition, interest on Definitive Notes may be paid by check mailed
to the person entitled thereto as shown on the register for such Definitive
Notes. The Company shall pay such amounts with respect to Definitive Notes in
Sterling.

Section 2.16. Restrictive Legends.

            Each Restricted Global Note and Restricted Definitive Note shall
bear the following legend (the "Private Placement Legend") on the face thereof
unless otherwise agreed to by the Company and the Holder thereof:

      THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
      1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
      OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
      BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
      HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
      INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
      (B) IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
      TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (2)
      AGREES THAT IT WILL NOT WITHIN


                                      -26-
<PAGE>

      TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
      TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
      THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER
      IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE
      UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER
      THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
      PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT
      TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (F)
      PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
      OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE EACH PERSON TO WHOM
      THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
      LEGEND IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS
      AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY. THE INDENTURE CONTAINS A
      PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
      SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.

Section 2.17.     Substitution of Currency.

            If the United Kingdom adopts the Euro, it will replace Sterling as
the legal tender in the United Kingdom and, as provided below, result in the
effective redenomination of the Notes into Euros and the regulations of the
European Commission relating to the Euro shall apply to the Notes. The
circumstances and consequences described in this Section 2.17 entitle neither
the Company, the Guarantors nor any Holder to early redemption, rescission,
notice or repudiation of the terms and conditions of the Notes or this
Supplemental Indenture and the Indenture or to raise other defenses or to
request any compensation claim, nor will they affect any of the other
obligations of the Company or the Guarantors under the Notes and under this
Supplemental Indenture and the Indenture.

            The Company, the Guarantors and the Trustee shall, without the
consent of the Holders, on or after the Specified Date (as defined below) make
such modifications to the Notes and this Supplemental Indenture or the Indenture
as may be necessary in order to facilitate payment of interest in Euros,
redemption of the Notes at the Euro-equivalent of the Sterling principal amount
of the Notes and associated reconventioning, renominalisation and related
matters as may be proposed by the Company (and confirmed by an independent
financial institution approved by the Trustee to be in conformity with then
applicable market conventions). For this purpose, "Specified Date" means the
date on which the United Kingdom participates in the third stage of European
Economic and Monetary Union pursuant to the treaty (the "Treaty") establishing
the European Community or otherwise participates in European Economic and
Monetary Union in a manner with an effect similar to such third stage.

                                    ARTICLE 3

                                   REDEMPTION

            The following redemption provisions shall apply to the Notes (but
not with respect to any other series of Debt Securities), and shall replace in
its entirety Article V of the Indenture (but not with respect to any other
series of Debt Securities).


                                      -27-
<PAGE>

Section 3.01. Notices to Trustee.

            If the Company elects to redeem Notes pursuant to Section 3.07, at
least 60 days prior to the Redemption Date or during such other period as the
Trustee may agree to, the Company shall notify the Trustee in writing of the
Redemption Date, the principal amount of Notes to be redeemed and the Redemption
Price, and deliver to the Trustee an Officers' Certificate stating that such
redemption will comply with the conditions contained herein.

Section 3.02. Selection of Notes to Be Redeemed.

            In the event that less than all of the Notes are to be redeemed at
any time pursuant to an optional redemption, selection of such Notes for
redemption will be made by the Trustee in compliance with the requirements of
the Luxembourg Stock Exchange or, if the Notes are not then listed on the
Luxembourg Stock Exchange, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate (subject to the procedures of DTC,
Euroclear or Clearstream, as the case may be); provided, however, that no Notes
of a principal amount of (pound)1,000 or less shall be redeemed in part. A new
Note in a principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original Note.

Section 3.03. Notice of Redemption.

            The Notes will be redeemable in whole or in part upon not less than
30 nor more than 60 days' prior written notice. Such notice of redemption shall,
so long as the Notes are listed on the Luxembourg Stock Exchange and the rules
of such stock exchange shall so require, be published in the Luxembourger Wort
or another newspaper having a general circulation in Luxembourg. Notices to
Holders of Definitive Notes shall also be mailed by first class mail at least 30
but not more than 60 calendar days before the Redemption Date to each Holder at
its address appearing in the Register. For so long as any of the Notes are
represented by the Global Notes, notice to Holders shall (in addition to
publication as described above) also be given by substantially concurrent
delivery of the relevant notice to DTC, Euroclear and/or Clearstream (as the
case may be) for communication to the holders of the Book-Entry Interests.

            The notice shall identify the Notes to be redeemed (including the
CUSIP/ISIN number(s) thereof) and shall state:

            (1) the Redemption Date;

            (2) the Redemption Price and the amount of accrued interest, if any,
      to be paid;

            (3) the name, address and telephone number of the Paying Agent;

            (4) that Notes called for redemption must be surrendered to the
      Paying Agent at the address specified to collect the Redemption Price plus
      accrued interest, if any;

            (5) that, unless the Company defaults in making the redemption
      payment, interest on Notes called for redemption ceases to accrue on and
      after the Redemption Date and the only remaining right of the Holders is
      to receive payment of the Redemption Price plus accrued interest to the
      Redemption Date upon surrender of the Notes to the Paying Agent;

            (6) the subparagraph of the Notes pursuant to which the Notes called
      for redemption are being redeemed; and


                                      -28-
<PAGE>

            (7) if fewer than all the Notes are to be redeemed, the
      identification of the particular Notes (or portion thereof equal to
      (pound)1,000 in principal amount or any integral multiple thereof) to be
      redeemed, as well as the aggregate principal amount of Notes to be
      redeemed and the aggregate principal amount of Notes to be outstanding
      after such partial redemption and that, on and after the Redemption Date,
      upon surrender of such Note, a new Note or Notes in principal amount equal
      to the unredeemed portion thereof will be issued.

Section 3.04. Effect of Notice of Redemption.

            Once the notice of redemption described in Section 3.03 is published
and delivered or mailed, as the case may be, Notes called for redemption become
due and payable on the Redemption Date and at the Redemption Price, including
any premium, plus accrued interest to the Redemption Date, if any. Upon
surrender to the Paying Agent, such Notes shall be paid at the Redemption Price,
including any premium, plus accrued interest to the Redemption Date, if any;
provided that if the Redemption Date is after a Record Date and on or prior to
the Interest Payment Date, the accrued interest shall be payable to the Holder
of any redeemed Definitive Notes registered on the relevant Record Date.

Section 3.05. Deposit of Redemption Price.

            On or prior to 5:00 p.m., London time, on the Business Day prior to
each Redemption Date (unless the Company and the Principal Paying Agent shall
agree to another time), the Company shall have deposited with the Principal
Paying Agent in immediately available funds Sterling sufficient to pay the
Redemption Price of and accrued interest on all Notes to be redeemed on that
date.

            On and after any Redemption Date, if Sterling sufficient to pay the
Redemption Price of and accrued interest on Notes called for redemption shall
have been made available in accordance with the preceding paragraph, the Notes
called for redemption will cease to accrue interest and the only right of the
Holders of such Notes will be to receive payment of the Redemption Price of and,
subject to the proviso in Section 3.04, accrued and unpaid interest on such
Notes to the Redemption Date. If any Note called for redemption shall not be so
paid, interest will continue to accrue and be paid, from the Redemption Date
until such redemption payment is made, on the unpaid principal of the Note and
any interest not paid on such unpaid principal, in each case, at the rate and in
the manner provided for in Section 2.13.

Section 3.06. Notes Redeemed in Part.

            Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for a Holder a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.

Section 3.07. Optional Redemption.

            The Notes will be redeemable, in whole or in part, at the option of
the Company at any time at a redemption price equal to the greater of (i) 100%
of the principal amount of such Notes, and (ii) as determined by the Quotation
Agent, the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of
interest accrued as of the date of redemption) discounted to the date of
redemption on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Gilt Rate plus 50 basis points, plus, in each
case, accrued interest thereon to the date of redemption.


                                      -29-
<PAGE>

Section 3.08. Tax Redemption.

            (a) The Notes of any Holder will be subject to redemption as a
whole, but not in part, at the option of the Company (a "Tax Redemption") at any
time upon not less than 30 nor more than 60 days' notice mailed to such Holder
of Notes to be redeemed, at 100% of the principal amount thereof on the
Redemption Date, plus accrued and unpaid interest, if any, to the Redemption
Date, in the event the Company or any Guarantor has become or would be obligated
to pay, on any date on which any amount would be payable with respect to such
Notes or any Guarantee, any Additional Amounts as a result of any change in or
amendment to the laws, policies or treaties (including any regulation or ruling
promulgated thereunder) of the United States of America or any jurisdiction in
which any Guarantor is incorporated (or any prefecture, territory or taxing
authority thereof or therein), or any change in or amendment to any official
position or administration or assessing practices regarding the application or
interpretation of such laws, policies, treaties, rulings or regulations, which
change or amendment is announced or becomes effective on of after November 17,
1999; provided, however, that (i) no notice or redemption shall be given earlier
than 60 days prior to the earliest date on which the Company or such Guarantor
would be obligated to pay such Additional Amounts were a payment in respect of
the Notes then due, (ii) if the Company elects to exercise its Tax Redemption
option, it shall consummate any such Tax Redemption within 180 days following
the date on which the amount to which the payment of such Additional Amounts
relates would be payable to such Holder and (iii) upon the exercise by the
Company of its Tax Redemption option at any time such that, after giving effect
to the exercise of such Tax Redemption option, less than a majority of the
aggregate principal amount of the Notes originally issued remains outstanding
(the "Tax Redemption Offer Triggering Event"), prior to the consummation of such
Tax Redemption the Company shall make an offer to purchase from all Holders (the
"Tax Redemption Offer"), upon not less than 30 nor more than 60 days' notice,
the Notes of such Holders at 100% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the Redemption Date (the "Tax Redemption Offer
Purchase Price"); provided, further, that, prior to any such Tax Redemption, (i)
the Company will deliver to the Trustee a copy of the written opinion of
independent counsel to the effect that the Company has or will become obligated
to pay Additional Amounts as a result of such change, amendment, administration,
application or interpretation and (ii) the Company will use reasonable efforts
to cause the reduction or elimination of the obligation to pay any such
Additional Amounts.

            (b) Within 30 days of any Tax Redemption Offer Triggering Event, the
Company shall (a) cause a notice of the Tax Redemption Offer to be sent at least
once to the Dow Jones News Service or similar business news service in the
United States, (b) cause a notice to be published in a leading Luxembourg
newspaper (so long as the Notes are then listed on the Luxembourg Stock
Exchange) and (c) send by first-class mail, postage prepaid, to the Trustee and
to each Holder, at the address appearing in the register maintained by the
Registrar or the Principal Paying Agent, a notice stating:

            (i) that the Tax Redemption Offer is being made pursuant to this
      covenant and that all Notes tendered will be accepted for payment;

            (ii) the Tax Redemption Offer Purchase Price and the purchase date
      (which shall be a Business Day no earlier than 30 days nor later than 60
      days from the date such notice is mailed (the "Tax Redemption Offer
      Payment Date"));

            (iii) that any Note not tendered will continue to accrue interest;

            (iv) that, unless the Company defaults in the payment of the Tax
      Redemption Offer Purchase Price, any Notes accepted for payment pursuant
      to the Tax Redemption Offer shall cease to accrue interest after the Tax
      Redemption Offer Payment Date;

            (v) that Holders accepting the offer to have their Notes purchased
      pursuant to a Tax Redemption Offer will be required to surrender the Notes
      to the Principal Paying Agent at the address


                                      -30-
<PAGE>

      specified in the notice prior to the close of business on the Business Day
      preceding the Tax Redemption Offer Payment Date;

            (vi) that Holders will be entitled to withdraw their acceptance if
      the Principal Paying Agent receives, not later than the close of business
      on the third Business Day preceding the Tax Redemption Offer Payment Date,
      a telegram, telex, facsimile transmission or letter setting forth the name
      of the Holder, the principal amount of the Notes delivered for purchase,
      and a statement that such Holder is withdrawing his election to have such
      Notes purchased;

            (vii) that Holders whose Notes are being purchased only in part will
      be issued new Notes equal in principal amount to the unpurchased portion
      of the Notes surrendered;

            (viii) any other procedures that a Holder must follow to accept a
      Tax Redemption Offer or effect withdrawal of such acceptance; and

            (ix) the name and address of the Principal Paying Agent.

On the Tax Redemption Offer Payment Date, the Company shall, to the extent
lawful,

            (i) accept for payment Notes or portions thereof properly tendered
      pursuant to the Tax Redemption Offer,

            (ii) deposit with the Paying Agent money sufficient to pay the
      purchase price of all Notes or portions thereof so tendered, and

            (iii) deliver or cause to be delivered to the Trustee the Notes so
      accepted together with an Officers' Certificate stating the Notes or
      portions thereof tendered to the Company.

The Principal Paying Agent shall promptly mail to each Holder so accepted
payment in an amount equal to the purchase price for such Notes, and the Company
shall execute and issue, and the Trustee shall promptly authenticate and mail to
such Holder, a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered; provided that each such new Note shall be issued in an
original principal amount in denominations of (pound)1,000 and integral
multiples thereof.

                                    ARTICLE 4

                                    COVENANTS

            The following covenants shall apply to the Notes (but not with
respect to any other series of Debt Securities), and are in addition to the
covenants set forth in Article IV of the Indenture. With respect to the Notes
(but not with respect to any other series of Debt Securities), to the extent
inconsistent with the covenants contained in Article IV of the Indenture the
covenants set forth below in this Supplemental Indenture shall govern.

Section 4.01. Payment of Notes

            The Company will pay the principal, premium, if any, interest
(including any Additional Interest) and Additional Amounts (if any) on the Notes
on the dates and in the manner provided in the Notes, this Supplemental
Indenture and the Indenture. An installment of principal or interest shall be
considered paid in full


                                      -31-
<PAGE>

on the date it is due if the Trustee or Paying Agent holds, for the benefit of
the Holders, on that date Sterling designated for and sufficient to pay such
installment in full and is not prohibited from paying such money to the Holders
pursuant to the terms of this Supplemental Indenture or the Indenture.

            The Company will pay interest on overdue principal and interest on
overdue interest, to the extent lawful as provided for in Section 2.13.

Section 4.02. Provision of Financial Statements.

            Whether or not the Company is subject to Section 13(a) or 15(d) of
the Exchange Act, the Company will, to the extent permitted under the Exchange
Act, file with the Commission the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to such Section 13(a) or 15(d) if the Company were so subject, such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required so
to file such documents if the Company were so subject. The Company will also in
any event (x) within 15 days of each Required Filing Date (i) transmit by mail
to all Holders, as their names and addresses appear in the security register,
without cost to such Holders and (ii) file with the Trustee copies of the annual
reports, quarterly reports and other documents which the Company would have been
required to file with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act if the Company were subject to such Sections and (y) if filing such
documents by the Company with the Commission is not permitted under the Exchange
Act, promptly upon written request and payment of the reasonable cost of
duplication and delivery, supply copies of such documents to any prospective
Holder at the Company's cost.

Section 4.03. Waiver of Stay, Extension or Usury Laws.

            The Company and the Guarantors each covenant (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead (as a
defense or otherwise) or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or other law which
would prohibit or forgive the Company or any Guarantor from paying all or any
portion of the principal of, premium, if any, interest, on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Supplemental Indenture
and the Indenture; and (to the extent that they may lawfully do so) the Company
and the Guarantors each hereby expressly waive all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

Section 4.04. Statement by Officers.

            Within 120 days after the close of each fiscal year, the Company
will file with the Trustee a brief certificate from the chief executive officer,
chief financial officer or treasurer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Supplemental Indenture
and the Indenture. For purposes of this paragraph, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Supplemental Indenture and the Indenture.

Section 4.05. Corporate Existence.

            Subject to Article Five hereof, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the rights (charter and statutory) and franchises of the
Company and each Guarantor; provided, however, that the Company shall not be
required to preserve any such right or franchise if the Company shall determine
that the preservation thereof is no longer desir-


                                      -32-
<PAGE>

able in the conduct of the business and its Guarantors as a whole and that the
loss thereof is not disadvantageous in any material respect to the Holders.

Section 4.06. Maintenance of Office or Agency.

            The Company shall maintain the offices and agencies specified in
Section 2.03 as well as an agent for receipt of service of legal process (which
may be the Company itself), which agent shall have an office located in the
State of New York.

Section 4.07. Compliance with Laws.

            The Company will comply, and will cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as would not in the aggregate have a
material adverse effect on the financial condition or results of operations of
the Company and its Subsidiaries taken as a whole.

Section 4.08. Maintenance of Properties and Insurance.

            The Company will cause all material properties owned by the Company
or any Restricted Subsidiary or used or held for use in the conduct of its
business or the business of any Restricted Subsidiary to be maintained and kept
in good condition, repair and working order (ordinary wear and tear excepted)
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be consistent with sound business
practice and necessary so that the business carried on in connection therewith
may be properly conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Restricted
Subsidiary and not reasonably expected to have a material adverse effect on the
ability of the Company to perform its obligations hereunder.

Section 4.09. Payment of Taxes and Other Claims; Additional Amounts.

            (a) The Company will pay or discharge or cause to be paid or
discharged, on or before the date the same shall become due and payable, (a) all
taxes, assessments and governmental charges levied or imposed upon the Company
or any Restricted Subsidiary shown to be due on any return of the Company or any
Restricted Subsidiary or otherwise assessed or upon the income, profits or
property of the Company or any Restricted Subsidiary if failure to pay or
discharge the same could reasonably be expected to have a material adverse
effect on the ability of the Company or any Guarantor to perform its obligations
hereunder and (b) all lawful claims for labor, materials and supplies, which, if
unpaid, would by law become a Lien upon the property of the Company or any
Restricted Subsidiary, except for any Lien permitted to be incurred under
Section 4.13, if failure to pay or discharge the same could reasonably be
expected to have a material adverse effect on the ability of the Company or any
Guarantor to perform its obligations hereunder; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted and in respect of which appropriate reserves
(in the good faith judgment of management of the Company) are being maintained
in accordance with GAAP consistently applied.

            (b) (i) All payments made by the Company or any Guarantor under or
with respect to the Notes or any Guarantee will be made free and clear of and
without withholding or deduction for or on account


                                      -33-
<PAGE>

of any present or future tax, duty, levy, impost, assessment or other
governmental charge (including penalties, interest and other liabilities related
thereto) imposed or levied by or on behalf of the government of the United
States of America or of any state, prefecture or territory thereof or by any
authority or agency therein or thereof having power to tax (hereinafter,
"Taxes"), unless the Company or such Guarantor is required to withhold or deduct
Taxes by law, regulation or governmental policy or by the interpretation or
administration thereof. If the Company or any Guarantor is required to withhold
or deduct any amount for or on account of Taxes from any payment made under or
with respect to the Notes or any Guarantee, the Company or such Guarantor will
pay such additional amounts ("Additional Amounts") as may be necessary so that
the net amount received by each Holder (including Additional Amounts) after such
withholding or deduction will not be less than the amount the Holder would have
received if such Taxes had not been withheld or deducted; provided that no
Additional Amounts will be payable with respect to a payment made to a Holder
and no reimbursement shall be made to a Holder for Taxes paid by such Holder
(each such Holder, an "Excluded Holder") with respect to any Tax imposed,
levied, payable or due (i) by reason of the Holder's or beneficial owner's
present or former connection with the United States of America or any other
jurisdiction in which any Guarantor is incorporated or any prefecture or
territory thereof, other than through the mere receipt or holding of Notes or by
reason of the receipt of payments thereunder; (ii) by reason of the failure of
the Holder or beneficial owner of Notes to satisfy any certification,
identification, information or other reporting requirements which the Holder or
such beneficial owner is legally required to satisfy, whether imposed by
statute, treaty, regulation, administrative practice or otherwise, as a
precondition to exemption from, or reduction in the rate of deduction or
withholding of, Taxes; or (iii) by reason of the presentation (where
presentation is required in order to receive payment) of such Notes for payment
more than 30 days after the date such payment became due and payable or was duly
provided for under the terms of the Notes, whichever is later. The obligation of
the Company or such Guarantor to pay Additional Amounts or to reimburse a Holder
for Taxes paid by such Holder in respect of Taxes shall not apply with respect
to: (x) any estate, inheritance, gift, sales, transfer, personal property or
similar Taxes; (y) any Tax which is payable otherwise than by deduction or
withholding from payments made under or with respect to the Notes or any
Guarantee; or (z) Taxes imposed on or with respect to any payment by the Company
or such Guarantor to the Holder or beneficial owner if such Holder or beneficial
owner is a fiduciary or partnership or person other than the sole beneficial
owner of such payment to the extent that such Taxes would not have been imposed
on a beneficiary or settlor with respect to such fiduciary, a member of such
partnership or the beneficial owner of such payment had such beneficiary,
settlor, member or beneficial owner been the Holder of such Note. The Company or
such Guarantor will also (i) make such withholding or deduction compelled by
applicable law and (ii) remit the full amount deducted or withheld to the
relevant authority in accordance with applicable law. The Company or such
Guarantor will, upon written request of a Holder, furnish to each such Holder
certified copies of tax receipts evidencing the payment of any Taxes by the
Company or such Guarantor in such form as provided in the normal course by the
taxing authority imposing such Taxes and as is reasonably available to the
Company or such Guarantor, within 60 days after the later of the date of receipt
of such written request and the date of receipt of such evidence. If
notwithstanding the Company's or such Guarantor's efforts to obtain such
receipts, the same are not obtainable, the Company or such Guarantor will
promptly provide such Holder with other evidence reasonably satisfactory to such
Holder of such payments by the Company or such Guarantor. If the Company
conducts business in any jurisdiction (the "Taxing Jurisdiction") other than the
United States of America, or if any Guarantor conducts business in any Taxing
Jurisdiction other than the jurisdiction under which such Guarantor is
incorporated, in a manner which causes Holders to be liable for taxes on
payments under the Notes or any Guarantee for which they would not have been so
liable but for such conduct of business in the Taxing Jurisdiction, the
provision of the Notes described above shall be considered to apply to such
Holders as if references in such provision to "Taxes" included taxes imposed by
way of deduction or withholding by such Taxing Jurisdiction and references to
Excluded Holder shall be deemed to include Holders or beneficial owners having a
present or former connection with such Taxing Jurisdiction or any state,
prefecture or territory thereof. The Company or such Guarantor will, upon
written request of any Holder (other than an Excluded Holder), reimburse each
such Holder for the amount of (i) any Taxes so levied or imposed and paid by
such Holder as a result of payments made under or with respect to the Notes and
(ii) any Taxes so levied or imposed with respect to any reimbursement under the
foregoing clause (i) and paid by such Holder so that the net amount


                                      -34-
<PAGE>

received by such Holder (net of payments made under or with respect to the
Notes) after such reimbursement will not be less than the net amount the Holder
would have received if Taxes on such reimbursement had not been imposed. Neither
the Company nor any Guarantor will take any action or fail to act in any manner
which will have the effect of requiring the payment of any Additional Amounts
such that the Company may exercise its option to effect a Tax Redemption;
provided, however, that the Company and its Subsidiaries will not be required to
change their jurisdiction or alter their operations in any manner and will not
be required to take any other unreasonable act thereunder.

            (ii) At least 30 days prior to each date on which any payment under
or with respect to the Notes is due and payable, if the Company or any Guarantor
will be obligated to pay Additional Amounts with respect to such payment (unless
such obligation to pay Additional Amounts arises after the 30th day prior to the
date on which payment under or with respect to the Notes is due and payable, in
which case it shall be promptly thereafter), the Company or such Guarantor will
deliver to the Trustee an Officers' Certificate stating the fact that such
Additional Amounts will be payable and the amounts so payable and will set forth
such other information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date. Whenever in this Supplemental Indenture
and the Indenture there is mentioned, in any context, the payment of principal,
interest, if any, or any other amount payable under or with respect to any Note,
such mention shall be deemed to include mention of the payment of Additional
Amounts to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof.

Section 4.10. Limitation on Indebtedness.

            (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (including any Acquired Indebtedness),
except that the Company and any Guarantor may Incur Indebtedness (including any
Acquired Indebtedness) and any Restricted Subsidiary that is not a Guarantor may
Incur Acquired Indebtedness if, in each case, the Consolidated Fixed Charge
Coverage Ratio for the Company for the four full fiscal quarters immediately
preceding the Incurrence of such Indebtedness taken as one period (and after
giving pro forma effect to (i) the Incurrence of such Indebtedness and (if
applicable) the application of the net proceeds therefrom, including to
refinance other Indebtedness, as if such Indebtedness was Incurred, and the
application of such proceeds occurred, at the beginning of such four-quarter
period; (ii) the Incurrence, repayment or retirement of any other Indebtedness
by the Company and its Restricted Subsidiaries since the first day of such
four-quarter period as if such Indebtedness was Incurred, repaid or retired at
the beginning of such four-quarter period (except that, in making such
computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average daily balance of such Indebtedness
during such four-quarter period); (iii) in the case of Acquired Indebtedness,
the related acquisition as if such acquisition occurred at the beginning of such
four-quarter period; and (iv) any acquisition or disposition by the Company and
its Restricted Subsidiaries of any company or any business or any assets out of
the ordinary course of business, whether by merger, stock purchase or sale or
asset purchase or sale, or any related repayment of Indebtedness, in each case
since the first day of such four-quarter period, assuming such acquisition or
disposition had been consummated on the first day of such four-quarter period)
is equal to at least 2.00:1.00.

            (b) The foregoing limitation will not apply to the Incurrence of any
of the following (collectively "Permitted Indebtedness"):

            (i) Indebtedness of the Company and any Restricted Subsidiary under
      the Credit Agreement in an aggregate principal amount at any one time
      outstanding not to exceed an amount equal to the greater of (x) $1.0
      billion, minus the amount of any repayment of such Indebtedness under the
      Credit Agreement pursuant to Section 4.10, and (y) the Borrowing Base;


                                      -35-
<PAGE>

            (ii) Indebtedness of the Company pursuant to the Notes outstanding
      on the Issue Date and other Indebtedness of the Company and its Restricted
      Subsidiaries outstanding on the Issue Date (other than Indebtedness under
      the Credit Agreement);

            (iii) Indebtedness of any Guarantor pursuant to a Guarantee;

            (iv) Indebtedness of the Company owing to a Restricted Subsidiary;
      provided that any Indebtedness of the Company owing to a Restricted
      Subsidiary that is not a Guarantor is made pursuant to an intercompany
      note in the form attached to this Supplemental Indenture as Exhibit F and
      is subordinated in right of payment from and after such time as the Notes
      shall become due and payable (whether at Stated Maturity, acceleration or
      otherwise) to the payment and performance of the Company's obligations
      under the Notes; provided, further, that any disposition, pledge or
      transfer of any such Indebtedness to a Person (other than a disposition,
      pledge or transfer to a Restricted Subsidiary or a pledge to or for the
      benefit of the lenders under the Credit Agreement) shall be deemed to be
      an Incurrence of such Indebtedness by the obligor not permitted by this
      clause (iv);

            (v) Indebtedness of a Restricted Subsidiary owing to the Company or
      a Wholly Owned Restricted Subsidiary; provided that, with respect to
      Indebtedness owing to a Wholly Owned Restricted Subsidiary that is not a
      Guarantor, (x) any such Indebtedness is made pursuant to an intercompany
      note in the form attached to this Supplemental Indenture as Exhibit F and
      (y) any such Indebtedness shall be subordinated in right of payment from
      and after such time as the obligations under the Guarantee by such Wholly
      Owned Restricted Subsidiary shall become due and payable to the payment
      and performance of such Wholly Owned Restricted Subsidiary's obligations
      under its Guarantee; provided, further that (a) any disposition, pledge or
      transfer of any such Indebtedness to a Person (other than a disposition,
      pledge or transfer to the Company or a Restricted Subsidiary or a pledge
      to or for the benefit of the lenders under the Credit Agreement) shall be
      deemed to be an Incurrence of such Indebtedness by the obligor not
      permitted by this clause (v), and (b) any transaction pursuant to which
      any Restricted Subsidiary which has Indebtedness owing to the Company or
      any other Restricted Subsidiary, ceases to be a Restricted Subsidiary
      shall be deemed to be the Incurrence of Indebtedness by such Restricted
      Subsidiary that is not permitted by this clause (v);

            (vi) guarantees of any Restricted Subsidiary made in accordance with
      the provisions of Section 4.15 of this Supplemental Indenture;

            (vii) Hedging Obligations of the Company or any Guarantor entered
      into in the ordinary course of business (and not for speculative purposes)
      designed to protect against fluctuations in: (x) interest rates in respect
      of Indebtedness of the Company or any of its Restricted Subsidiaries, as
      long as such obligations at the time Incurred do not exceed the aggregate
      principal amount of such Indebtedness then outstanding or in good faith
      anticipated to be outstanding within 90 days of such Incurrence, (y)
      currencies or (z) commodities;

            (viii) any renewals, extensions, substitutions, refundings,
      refinancings or replacements (collectively, a "refinancing") of any
      Indebtedness described in clauses (ii) and (iii) of this definition of
      "Permitted Indebtedness," including any successive refinancings so long as
      the aggregate principal amount of Indebtedness represented thereby is not
      increased by such refinancing plus the lesser of (1) the stated amount of
      any premium, interest or other payment required to be paid in connection
      with such a refinancing pursuant to the terms of the Indebtedness being
      refinanced or (2) the amount of premium, interest or other payment
      actually paid at such time to refinance the Indebtedness, plus, in either
      case, the amount of expenses of the Company incurred in connection with
      such refinancing and, in the case of Pari Passu Indebtedness or
      Subordinated Indebtedness, such refinancing does not reduce the Average
      Life to Stated Maturity or the Stated Maturity of such Indebtedness; and


                                      -36-
<PAGE>

            (ix) Indebtedness, in addition to that described in clauses (i)
      through (viii) of this definition of "Permitted Indebtedness," and any
      renewals, extensions, substitutions, refinancings or replacements of such
      Indebtedness, not to exceed $75.0 million outstanding at any one time in
      the aggregate.

Section 4.11. Limitation on Restricted Payments.

            (a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly:

            (i) declare or pay any dividend on, or make any distribution to
      holders of, any shares of the Company's Capital Stock (other than
      dividends or distributions payable solely in shares of its Qualified
      Capital Stock or in options, warrants or other rights to acquire such
      Qualified Capital Stock);

            (ii) purchase, redeem or otherwise acquire or retire for value,
      directly or indirectly, any shares of the Capital Stock of the Company or
      any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary
      of the Company) or options, warrants or other rights to acquire such
      Capital Stock;

            (iii) make any principal payment on, or repurchase, redeem, defease,
      retire or otherwise acquire for value, prior to any scheduled principal
      payment, sinking fund or maturity, any Subordinated Indebtedness;

            (iv) declare or pay any dividend or distribution on any Capital
      Stock of any Restricted Subsidiary to any Person (other than the Company
      or any of its Restricted Subsidiaries) or purchase, redeem or otherwise
      acquire or retire for value any Capital Stock of any Restricted Subsidiary
      held by any Person (other than the Company or any of its Wholly Owned
      Restricted Subsidiaries);

            (v) Incur, create or assume any guarantee of Indebtedness of any
      Affiliate (other than a Wholly Owned Restricted Subsidiary of the
      Company); or

            (vi) make any Investment in any Person (other than any Permitted
      Investments);

(any of the foregoing payments described in clauses (i) through (vi), other than
any such action that is a Permitted Payment, collectively, "Restricted
Payments") unless after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a board resolution), (1) no Default or Event of Default shall have
occurred and be continuing and such Restricted Payment shall not be an event
which is, or after notice or lapse of time or both, would be, an "event of
default" under the terms of any Indebtedness of the Company or its Restricted
Subsidiaries; (2) immediately before and immediately after giving effect to such
transaction on a pro forma basis, the Company could Incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under the provisions contained
in Section 4.10; and (3) the aggregate amount of all such Restricted Payments
declared or made after the date of this Supplemental Indenture does not exceed
the sum of:

            (A) 50% of the aggregate cumulative Consolidated Net Income of the
      Company accrued on a cumulative basis during the period beginning on
      December 1, 1998 and ending on the last day of the Company's last fiscal
      quarter ending prior to the date of the Restricted Payment (or, if such
      aggregate cumulative Consolidated Net Income shall be a loss, minus 100%
      of such loss); plus

            (B) the aggregate Net Cash Proceeds received after November 17, 1999
      by the Company from the issuance or sale (other than to any of its
      Subsidiaries) of its shares of Qualified Capital Stock or any options,
      warrants or rights to purchase such shares of Qualified Capital Stock of
      the Company


                                      -37-
<PAGE>

      (except, in each case, to the extent such proceeds are used to purchase,
      redeem or otherwise retire Capital Stock or Subordinated Indebtedness as
      set forth below); plus

            (C) the aggregate Net Cash Proceeds received after November 17, 1999
      by the Company (other than from any of its Subsidiaries) upon the exercise
      of any options or warrants to purchase shares of Qualified Capital Stock
      of the Company; plus

            (D) the aggregate Net Cash Proceeds received after November 17, 1999
      by the Company from debt securities or Redeemable Capital Stock that has
      been converted into or exchanged for Qualified Capital Stock of the
      Company to the extent such debt securities or Redeemable Capital Stock are
      originally sold for cash plus the aggregate Net Cash Proceeds received by
      the Company at the time of such conversion or exchange; plus

            (E) in the event the Company or any Restricted Subsidiary has made
      since November 17, 1999 or makes an Investment in a Person that, as a
      result of or in connection with such Investment, becomes a Restricted
      Subsidiary, an amount equal to the Company's or any Restricted
      Subsidiary's existing Investment in such Person that was previously
      treated as a Restricted Payment; plus

            (F) so long as the Designation thereof was treated as a Restricted
      Payment made after November 17, 1999, with respect to any Unrestricted
      Subsidiary that has been redesignated as a Restricted Subsidiary after the
      Issue Date in accordance with Section 4.19, an amount equal to the
      Company's Investment in such Unrestricted Subsidiary (provided that such
      amount shall not in any case exceed the Designation Amount with respect to
      such Restricted Subsidiary upon its Designation); plus

            (G) $50.0 million; minus

            (H) the Designation Amount (measured as of the date of Designation)
      with respect to any Subsidiary of the Company which has been designated as
      an Unrestricted Subsidiary after November 17, 1999 in accordance with
      Section 4.19; minus

            (I) all Restricted Payments made after November 17, 1999 (other than
      Permitted Payments made and calculated on the basis set forth below).

            (b) Notwithstanding the foregoing, and in the case of clauses (ii),
(iii) and (iv) below, so long as there is no Default or Event of Default
continuing, the foregoing provisions shall not prohibit the following actions
(clauses (i) through (iv) being referred to as a "Permitted Payment"):

            (i) the payment of any dividend within 60 days after the date of
      declaration thereof, if at such date of declaration such payment would be
      permitted by the provisions of paragraph (a) of this Section 4.11 and such
      payment shall be deemed to have been paid on such date of declaration for
      purposes of the calculation required by paragraph (a) of this Section
      4.11;

            (ii) the repurchase, redemption or other acquisition or retirement
      of any shares of any class of Capital Stock of the Company in exchange for
      (including any such exchange pursuant to the exercise of a conversion
      right or privilege or in which cash is paid in lieu of the issuance of
      fractional shares or scrip), or out of the Net Cash Proceeds of, a
      substantially concurrent issue and sale for cash (other than to a
      Subsidiary) of other shares of Qualified Capital Stock of the Company;
      provided that the Net Cash Proceeds from the issuance of such shares of
      Qualified Capital Stock are excluded from clause (3)(B) of paragraph (a)
      of this Section 4.11;


                                      -38-
<PAGE>

            (iii) any repurchase, redemption, defeasance, retirement,
      refinancing or acquisition for value or payment of principal of any
      Subordinated Indebtedness in exchange for, or out of the Net Cash Proceeds
      of, a substantially concurrent issuance and sale for cash (other than to
      any Subsidiary of the Company) of any Qualified Capital Stock of the
      Company, provided that the Net Cash Proceeds from the issuance of such
      shares of Qualified Capital Stock are excluded from clause (3)(B) of
      paragraph (a) of this Section 4.11;

            (iv) the repurchase, redemption, defeasance, retirement, refinancing
      or acquisition for value or payment of principal of any Subordinated
      Indebtedness (other than Redeemable Capital Stock) (a "refinancing")
      through the issuance of new Subordinated Indebtedness of the Company,
      provided that any such new Subordinated Indebtedness (1) shall be in a
      principal amount that does not exceed the principal amount so refinanced
      (or, if such Subordinated Indebtedness provides for an amount less than
      the principal amount thereof to be due and payable upon a declaration or
      acceleration thereof, then such lesser amount as of the date of
      determination), plus the lesser of (x) the stated amount of any premium,
      interest or other payment required to be paid in connection with such a
      refinancing pursuant to the terms of the Indebtedness being refinanced or
      (y) the amount of premium, interest or other payment actually paid at such
      time to refinance the Indebtedness, plus, in either case, the amount of
      expenses of the Company Incurred in connection with such refinancing; (2)
      has an Average Life to Stated Maturity greater than the remaining Average
      Life to Stated Maturity of the Notes; (3) has a Stated Maturity for its
      final scheduled principal payment later than the Stated Maturity for the
      final scheduled principal payment of the Notes; and (4) is expressly
      subordinated in right of payment to the Notes at least to the same extent
      as the Indebtedness to be refinanced.

Section 4.12. Limitation on Transactions with Affiliates.

            The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with any
Affiliate of the Company (other than the Company or a Wholly Owned Restricted
Subsidiary) unless (i) such transaction or series of transactions is in writing
on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than would be available in a comparable
transaction in arm's-length dealings with an unrelated third party, (ii) with
respect to any transaction or series of transactions involving aggregate
payments in excess of $10.0 million, the Company delivers an Officers'
Certificate to the Trustee certifying that such transaction or series of related
transactions complies with clause (i) above and such transaction or series of
related transactions has been approved by the Board of Directors of the Company,
and (iii) with respect to a transaction or series of related transactions
involving aggregate value in excess of $25.0 million, the Company delivers to
the Trustee an opinion of either an independent investment banking firm of
national standing in the United States or an independent public accounting firm
of national standing in the United States, stating that the transaction or
series of transactions is fair to the Company or such Restricted Subsidiary;
provided, however, that this provision shall not apply to any transaction with
an officer or director of the Company entered into in the ordinary course of
business (including compensation or employee benefit arrangements with any
officer or director of the Company).

Section 4.13. Limitations on Liens.

            The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create, Incur, affirm or suffer to exist any Lien of
any kind upon any of its property or assets (including any intercompany notes),
owned at the date of this Supplemental Indenture or acquired after the date of
this Supplemental Indenture, or any income or profits therefrom, except if the
Notes (or a Guarantee, in the case of Liens of a Guarantor) are directly secured
equally and ratably with (or prior to in the case of Liens with respect to
Subordinated Indebtedness or Indebtedness of a Guarantor subordinated in right
of payment to any Guarantee) the


                                      -39-
<PAGE>

obligation or liability secured by such Lien, excluding, however, from the
operation of the foregoing any of the following:

            (a) any Lien existing as of the Issue Date;

            (b) any Lien arising by reason of (1) any judgment, decree or order
      of any court, so long as such Lien is adequately bonded and any
      appropriate legal proceedings which may have been duly initiated for the
      review of such judgment, decree or order shall not have been finally
      terminated or the period within which such proceedings may be initiated
      shall not have expired; (2) taxes not yet delinquent or which are being
      contested in good faith; (3) security for payment of workers' compensation
      or other insurance; (4) good faith deposits in connection with tenders,
      leases or contracts (other than contracts for the payment of money); (5)
      zoning restrictions, easements, licenses, reservations, provisions,
      covenants, conditions, waivers, restrictions on the use of property or
      minor irregularities of title (and with respect to leasehold interests,
      mortgages, obligations, liens and other encumbrances incurred, created,
      assumed or permitted to exist and arising by, through or under a landlord
      or owner of the leased property, with or without consent of the lessee),
      none of which materially impairs the use of any parcel of property
      material to the operation of the business of the Company or any Restricted
      Subsidiary or the value of such property for the purpose of such business;
      (6) deposits to secure public or statutory obligations, or in lieu of
      surety or appeal bonds; (7) certain surveys, exceptions, title defects,
      encumbrances, easements, reservations of, or rights of others for, rights
      of way, sewers, electric lines, telegraph or telephone lines and other
      similar purposes or zoning or other restrictions as to the use of real
      property not interfering with the ordinary conduct of the business of the
      Company or any of its Restricted Subsidiaries; (8) operation of law in
      favor of mechanics, materialmen, laborers, employees or suppliers,
      incurred in the ordinary course of business for sums which are not yet
      delinquent or are being contested in good faith by negotiations or by
      appropriate proceedings which suspend the collection thereof; or (9)
      standard custodial, bailee or depository arrangements (including (x) in
      respect of deposit accounts with banks and other financial institutions
      and (y) standard customer agreements in respect of accounts for the
      purchase and sale of securities and other property with brokerage firms or
      other types of financial institutions);

            (c) any Lien now or hereafter existing on property of the Company or
      any Guarantor securing Indebtedness outstanding under the Credit
      Agreement;

            (d) any Lien securing Acquired Indebtedness created prior to (and
      not created in connection with, or in contemplation of) the incurrence of
      such Indebtedness by the Company or any Restricted Subsidiary, in each
      case which Indebtedness is permitted under the provisions of Section 4.10;
      provided that any such Lien only extends to the assets that were subject
      to such lien securing such Acquired Indebtedness prior to the related
      transaction by the Company or its Restricted Subsidiaries; and

            (e) any extension, renewal, refinancing or replacement, in whole or
      in part, of any Lien described in the foregoing clauses (a) through (d) so
      long as the amount of security is not increased thereby.

Section 4.14. Limitation on Sale of Assets.

            (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate an Asset Sale (other than an
Asset Swap permitted by clause (g) below of this Section 4.14) unless (i) at
least 75% of the proceeds from such Asset Sale are received in cash; provided,
however, that the amount of (A) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet or the notes thereto) of
the Company or any Restricted Subsidiary that are assumed by the transferee in
such Asset Sale and from which the Company or such Restricted Subsidiary is
released and (B) any


                                      -40-
<PAGE>

notes or other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are immediately converted by the Company or
such Restricted Subsidiary into cash, shall be deemed cash for purposes of this
Section 4.14, and (ii) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the shares or assets sold (other than in the case of an involuntary
Asset Sale, as determined by the Board of Directors of the Company and evidenced
in a board resolution).

            (b) If all or a portion of the Net Cash Proceeds of any Asset Sale
are not required to be applied to repay permanently any secured Indebtedness
then outstanding as required by the terms thereof, or the Company determines not
to apply such Net Cash Proceeds to the permanent repayment of such secured
Indebtedness or if no such secured Indebtedness is then outstanding, then the
Company may within 12 months of the Asset Sale, invest the Net Cash Proceeds in
other properties and assets that (as determined by the Board of Directors of the
Company) replace the properties and assets that were the subject of the Asset
Sale or in properties and assets that will be used in the businesses of the
Company or its Restricted Subsidiaries as existing at such time or reasonably
related thereto. The amount of such Net Cash Proceeds neither used to
permanently repay or prepay secured Indebtedness nor used or invested as set
forth in this paragraph constitutes "Excess Proceeds."

            (c) When the aggregate amount of Excess Proceeds equals $10.0
million or more, the Company shall apply the Excess Proceeds to the repayment of
the Notes and any Pari Passu Indebtedness required to be repurchased under the
instrument governing such Pari Passu Indebtedness as follows: (a) the Company
shall make an offer to purchase (an "Offer") from all holders of the Notes in
accordance with the procedures set forth in this Supplemental Indenture in the
maximum principal amount (expressed as a multiple of (pound)1,000) of Notes that
may be purchased out of an amount (the "Note Amount") equal to the product of
such Excess Proceeds multiplied by a fraction, the numerator of which is the
outstanding principal amount of the Notes, and the denominator of which is the
sum of the outstanding principal amount of the Notes and such Pari Passu
Indebtedness (subject to proration in the event such amount is less than the
aggregate Offered Price (as defined below) of all Notes tendered) and (b) to the
extent required by such Pari Passu Indebtedness to permanently reduce the
principal amount of such Pari Passu Indebtedness, the Company shall make an
offer to purchase or otherwise repurchase or redeem Pari Passu Indebtedness (a
"Pari Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the
excess of the Excess Proceeds over the Note Amount; provided that in no event
shall the Pari Passu Debt Amount exceed the principal amount of such Pari Passu
Indebtedness plus the amount of any premium required to be paid to repurchase
such Pari Passu Indebtedness. The offer price shall be payable in cash in an
amount equal to 100% of the principal amount of the Notes plus accrued and
unpaid interest, if any, to the date (the "Offer Date") such Offer is
consummated (the "Offered Price"), in accordance with the procedures set forth
in this Supplemental Indenture. To the extent that the aggregate Offered Price
of the Notes tendered pursuant to the Offer is less than the Note Amount
relating thereto or the aggregate amount of Pari Passu Indebtedness that is
purchased is less than the Pari Passu Debt Amount (the amount of such shortfall,
if any, constituting a "Deficiency"), the Company shall use such Deficiency in
the business of the Company and its Restricted Subsidiaries. Upon completion of
the purchase of all the Notes tendered pursuant to an Offer and the purchase of
the Pari Passu Indebtedness pursuant to a Pari Passu Offer, the amount of Excess
Proceeds, if any, shall be reset at zero.

            (d) If the Company becomes obligated to make an Offer pursuant to
clause (c) above, the Notes shall be purchased by the Company, at the option of
the holder thereof, in whole or in part in integral multiples of (pound)1,000,
on a date that is not earlier than 45 days and not later than 60 days from the
date the notice is given to holders, or such later date as may be necessary for
the Company to comply with the requirements under the Exchange Act, subject to
proration in the event the Note Amount is less than the aggregate Offered Price
of all Notes tendered.


                                      -41-
<PAGE>

            (e) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer.

            (f) The Company will not, and will not permit any Subsidiary to,
create or permit to exist or become effective any restriction (other than
restrictions existing under Indebtedness as in effect on the date of this
Supplemental Indenture) as such Indebtedness may be refinanced from time to
time, provided that such restrictions are no less favorable to the Holders of
Notes than those existing on the date of this Supplemental Indenture that would
materially impair the ability of the Company to make an Offer to purchase the
Notes or, if such Offer is made, to pay for the Notes tendered for purchase.

            (g) The Company will not, and will not permit any Restricted
Subsidiary to, engage in any Asset Swaps, unless: (i) at the time of entering
into such Asset Swap, and immediately after giving effect to such Asset Swap, no
Default or Event of Default shall have occurred and be continuing or would occur
as a consequence thereof; (ii) in the event such Asset Swap involves an
aggregate amount in excess of $10.0 million, the terms of such Asset Swap have
been approved by a majority of the members of the board of directors of the
Company which determination shall include a determination that the Fair Market
Value of the assets being received in such swap are at least equal to the Fair
Market Value of the assets being swapped and (iii) in the event such Asset Swap
involves an aggregate amount in excess of $20.0 million, the Company has also
received a written opinion from an independent investment banking firm of
nationally recognized standing or an independent public accounting firm of
nationally recognized standing that such Asset Swap is fair to the Company or
such Restricted Subsidiary, as the case may be, from a financial point of view.

            (h) Subject to paragraphs (c) and (f) above, within 30 days after
the date on which the amount of Excess Proceeds equals or exceeds $10.0 million,
the Company shall send or cause to be sent by first-class mail, postage prepaid,
to the Trustee and to each Holder of the Notes, at its address appearing in the
Register, in the case of Definitive Notes, or the books and records of the
Principal Paying Agent, in the case of Global Notes, a notice stating or
including:

            (1) that the Holder has the right to require the Company to
      repurchase, subject to proration, such Holder's Notes at the Offered
      Price;

            (2) the Offer Date;

            (3) the instructions a Holder must follow in order to have its Notes
      purchased in accordance with paragraph (c) of this Section; and

            (4) (i) the most recently filed Annual Report on Form 10-K
      (including audited consolidated financial statements) of the Company, the
      most recent subsequently filed Quarterly Report on Form 10-Q and any
      Current Report on Form 8-K of the Company filed subsequent to such
      Quarterly Report, other than Current Reports describing Asset Sales
      otherwise described in the offering materials (or corresponding successor
      reports) (or in the event the Company is not required to prepare any of
      the foregoing Forms, the comparable information required pursuant to
      Section 4.02), (ii) a description of material developments in the
      Company's business subsequent to the date of the latest of such Reports,
      (iii) if material, appropriate pro forma financial information, and (iv)
      such other information, if any, concerning the business of the Company
      which the Company in good faith believes will enable such Holders to make
      an informed investment decision.

            (i) Holders electing to have Notes purchased hereunder will be
required to surrender such Notes at the address specified in the notice at least
three Business Days prior to the Offer Date. Holders will be entitled to
withdraw their election to have their Notes purchased pursuant to this Section
4.14 if the


                                      -42-
<PAGE>

Company receives, not later than three Business Days prior to the Offer Date, a
telegram, telex, facsimile transmission or letter setting forth (1) the name of
the Holder, (2) the certificate number of the Note in respect of which such
notice of withdrawal is being submitted, (3) the principal amount of the Note
(which shall be (pound)1,000 or an integral multiple thereof) delivered for
purchase by the Holder as to which its election is to be withdrawn, (4) a
statement that such Holder is withdrawing its election to have such principal
amount of such Note purchased, and (5) the principal amount, if any, of such
Note (which shall be (pound)1,000 or an integral multiple thereof) that remains
subject to the original notice of the Offer and that has been or will be
delivered for purchase by the Company.

            (j) The Company shall (i) not later than the Offer Date, accept for
payment Notes or portions thereof tendered pursuant to the Offer, (ii) not later
than 10:00 a.m. (New York time) on the Offer Date, deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 2.05) an amount of money in
same day funds (or New York Clearing House funds if such deposit is made prior
to the Offer Date) sufficient to pay the aggregate Offered Price of all the
Notes or portions thereof which are to be purchased on that date and (iii) not
later than the Offer Date, deliver to the Paying Agent (if other than the
Company) an Officers' Certificate stating the Notes or portions thereof accepted
for payment by the Company.

            Subject to applicable escheat laws, as provided in the Notes, the
Trustee and the Paying Agent shall return to the Company any cash that remains
unclaimed, together with interest, if any, thereon, held by them for the payment
of the Offering Price; provided, however, that, (x) to the extent that the
aggregate amount of cash deposited by the Company with the Trustee in respect of
an Offer exceeds the aggregate Offered Price of the Notes or portions thereof to
be purchased, then the Trustee shall hold such excess for the Company and (y)
unless otherwise directed by the Company in writing, promptly after the Business
Day following the Offer Date the Trustee shall return any such excess to the
Company together with interest or dividends, if any, thereon.

            (k) Notes to be purchased shall, on the Offer Date, become due and
payable at the Offered Price and from and after such date (unless the Company
shall default in the payment of the Offered Price) such Notes shall cease to
bear interest. Such Offered Price shall be paid to such Holder promptly
following the later of the Offer Date and the time of delivery of such Note to
the relevant Paying Agent at the office of such Paying Agent by the Holder
thereof in the manner required. Upon surrender of any such Note for purchase in
accordance with the foregoing provisions, such Note shall be paid by the Company
at the Offered Price; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Offer Date shall be payable to the Holders
of such Notes, registered as such on the relevant record dates according to the
terms and the provisions of Section 2.04 of this Supplemental Indenture;
provided, further, that Notes to be purchased are subject to proration in the
event the Excess Proceeds are less than the aggregate Offered Price of all Notes
tendered for purchase, with such adjustments as may be appropriate by the
Trustee so that only Notes in denominations of (pound)1,000 or integral
multiples thereof, shall be purchased. If any Note tendered for purchase shall
not be so paid upon surrender thereof by deposit of funds with the Trustee or a
Paying Agent in accordance with paragraph (j) above, the principal thereof (and
premium, if any, thereon) shall, until paid, bear interest from the Offer Date
at the rate borne by such Note. Any Note that is to be purchased only in part
shall be surrendered to a Paying Agent at the office of such Paying Agent (with,
if the Company, the note registrar designated pursuant to Section 2.03 of this
Supplemental Indenture or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the note
registrar or the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Note, without
service charge, one or more new Notes of any authorized denomination as
requested by such Holder in an aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Note so surrendered
that is not purchased.


                                      -43-
<PAGE>

Section 4.15. Limitation on Guarantees by Restricted Subsidiaries.

            In the event the Company (i) organizes or acquires any Domestic
Restricted Subsidiary after November 17, 1999 that is not a Guarantor and causes
or permits such Restricted Subsidiary to, directly or indirectly, guarantee the
payment of any Indebtedness ("Other Indebtedness") of the Company or any
Guarantor or (ii) causes or permits any Foreign Restricted Subsidiary that is
not a Guarantor to, directly or indirectly, guarantee the payment of any Other
Indebtedness, then, in each case the Company shall cause such Restricted
Subsidiary to simultaneously execute and deliver a supplemental indenture to the
Supplemental Indenture and the Indenture pursuant to which it will become a
Guarantor under the Supplemental Indenture and the Indenture; provided, however,
that in the event a Domestic Restricted Subsidiary is acquired in a transaction
in which a merger agreement is entered into, such Domestic Restricted Subsidiary
shall not be required to execute and deliver such supplemental indenture until
the consummation of the merger contemplated by any such merger agreement;
provided, further, that if such Other Indebtedness is (i) Indebtedness that is
ranked pari passu in right of payment with the Notes or the Guarantees of such
Restricted Subsidiary, as the case may be, the Guarantee of such Restricted
Subsidiary shall be pari passu in right of payment with the guarantee of the
Other Indebtedness; or (ii) Subordinated Indebtedness, the Guarantees of such
Restricted Subsidiary shall be senior in right of payment to the guarantee of
the Other Indebtedness (which guarantee of such Subordinated Indebtedness shall
provide that such guarantee is subordinated to the Guarantees of such Subsidiary
to the same extent and in the same manner as the Other Indebtedness is
subordinated to the Notes or the Guarantee of such Restricted Subsidiary, as the
case may be).

            If the Notes are defeased in accordance with the terms of Article
Nine of this Supplemental Indenture, or if, subject to the requirements of
Article Five of this Supplemental Indenture, all or substantially all of the
assets of any Guarantor or all of the Capital Stock of any Guarantor are sold
(including by issuance or otherwise) by the Company in a transaction
constituting an Asset Sale, and if (x) the Net Cash Proceeds from such Asset
Sale are used in accordance with Section 4.14 or (y) the Company delivers to the
Trustee an Officers' Certificate to the effect that the Net Cash Proceeds from
such Asset Sale shall be used in accordance with Section 4.14 and within the
time limits specified by such Section, then such Guarantor or the Guarantors, as
the case may be (in the event of a defeasance of the Notes or sale or other
disposition of all of the Capital Stock of such Guarantor), or the corporation
acquiring such assets (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) shall be released and
discharged of its Guarantee obligations in respect of this Supplemental
Indenture and the Indenture and the Notes.

            Any Guarantor that is designated an Unrestricted Subsidiary pursuant
to and in accordance with Section 4.19 shall upon such Designation be released
and discharged of its Guarantee obligations in respect of this Supplemental
Indenture and the Indenture and the Notes and any Unrestricted Subsidiary whose
Designation is revoked pursuant to Section 4.19 will be required to become a
Guarantor in accordance with Article Ten. In the case where a Guarantor is
released and discharged of its Guarantee, the Company will, if listed on the
Luxembourg Stock Exchange, inform the Luxembourg Stock Exchange and notify
Holders in accordance with Section 10.02.

            In addition, a Guarantee of a Guarantor shall be released upon the
sale or transfer of all or substantially all of the assets or all of the Capital
Stock of such Guarantor; provided, that either (i) such sale or transfer
complies with the provisions set forth in Section 4.14 or (ii) such sale or
transfer need not comply with the provisions set forth in Section 4.14 because
the assets or Capital Stock so sold or transferred does not constitute an "Asset
Sale" by operation of the provisions of clause (y) of the last sentence of the
definition of Asset Sale.


                                      -44-
<PAGE>

Section 4.16. Purchase of Notes upon a Change of Control.

            (a) If a Change of Control shall occur at any time, then each Holder
of Notes shall have the right to require that the Company purchase such Holder's
Notes in whole or in part in integral multiples of (pound)1,000, at a purchase
price (the "Change of Control Purchase Price") in cash in an amount equal to
101% of the principal amount of such Notes, plus accrued and unpaid interest, if
any, to the date of purchase (the "Change of Control Purchase Date"), pursuant
to the offer described in subsection (b) of this Section (the "Change of Control
Offer") and in accordance with the procedures set forth in subsections (b), (c),
(d) and (e) of this Section.

            (b) Within 15 days following any Change of Control, the Company
shall notify the Trustee thereof, give written notice (a "Change of Control
Purchase Notice") of such Change of Control to each Holder by first-class mail,
postage prepaid, at its address appearing in the Register, in the case of
Definitive Notes, or in the books and records of the Principal Paying Agent, in
the case of Global Notes and publish such notice in a leading Luxembourg
newspaper, if the Company is then listed on the Luxembourg Stock Exchange
stating or including:

            (1) that a Change of Control has occurred, the date of such event,
      and that such Holder has the right to require the Company to repurchase
      such Holder's Notes at the Change of Control Purchase Price;

            (2) the circumstances and relevant facts regarding such Change of
      Control (including but not limited to information with respect to pro
      forma historical income, cash flow and capitalization after giving effect
      to such Change of Control, if any);

            (3) (i) the most recently filed Annual Report on Form 10-K
      (including audited consolidated financial statements) of the Company, the
      most recent subsequently filed Quarterly Report on Form 10-Q, as
      applicable, and any Current Report on Form 8-K of the Company filed
      subsequent to such Quarterly Report (or in the event the Company is not
      required to prepare any of the foregoing Forms, the comparable information
      required to be prepared by the Company and any Guarantor pursuant to
      Section 4.19), (ii) a description of material developments in the
      Company's business subsequent to the date of the latest of such reports
      and (iii) such other information, if any, concerning the business of the
      Company which the Company in good faith believes will enable such Holders
      to make an informed investment decision;

            (4) that the Change of Control Offer is being made pursuant to this
      Section 4.16 and that all Notes properly tendered pursuant to the Change
      of Control Offer will be accepted for payment at the Change of Control
      Purchase Price;

            (5) the Change of Control Purchase Date, which shall be a Business
      Day no earlier than 30 days nor later than 60 days from the date such
      notice is mailed, or such later date as is necessary to comply with
      requirements under the Exchange Act;

            (6) the Change of Control Purchase Price;

            (7) the names and addresses of the Paying Agent and the offices or
      agencies referred to in Section 2.03;

            (8) that Notes must be surrendered on or prior to the Change of
      Control Purchase Date to the Paying Agent at the office of the Paying
      Agent or to an office or agency referred to in Section 2.03 to collect
      payment;


                                      -45-
<PAGE>

            (9) that the Change of Control Purchase Price for any Note which has
      been properly tendered and not withdrawn will be paid promptly following
      the Change of Control Offer Purchase Date;

            (10) the procedures for withdrawing a tender of Notes and Change of
      Control Purchase Notice;

            (11) that any Note not tendered will continue to accrue interest;
      and

            (12) that, unless the Company defaults in the payment of the Change
      of Control Purchase Price, any Notes accepted for payment pursuant to the
      Change of Control Offer shall cease to accrue interest after the Change of
      Control Purchase Date.

            (c) Upon receipt by the Company of the proper tender of Notes, the
Holder of the Note in respect of which such proper tender was made shall (unless
the tender of such Note is properly withdrawn) thereafter be entitled to receive
solely the Change of Control Purchase Price with respect to such Note. Upon
surrender of any such Note for purchase in accordance with the foregoing
provisions, such Note shall be paid by the Company at the Change of Control
Purchase Price; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Change of Control Purchase Date shall be payable
to the Holders of such Notes registered as such on the relevant record dates
according to the terms and the provisions of Section 2.04. If any Note tendered
for purchase shall not be so paid upon surrender thereof, the principal thereof
(and premium, if any, thereon) shall, until paid, bear interest from the Change
of Control Purchase Date at the rate borne by such Note. Holders electing to
have Notes purchased will be required to surrender such Notes to the Paying
Agent at the address specified in the Change of Control Purchase Notice at least
two Business Days prior to the Change of Control Purchase Date. Any Note that is
to be purchased only in part shall be surrendered to a Paying Agent at the
office of such Paying Agent (with, if the note registrar designated pursuant to
Section 2.03 or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the note
registrar or the Trustee, as the case may be, duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note, without service charge, one or more new Notes of any authorized
denomination as requested by such Holder in an aggregate principal amount equal
to, and in exchange for, the portion of the principal amount of the Note so
surrendered that is not purchased.

            (d) The Company shall (i) not later than the Change of Control
Purchase Date, accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (ii) not later than 5:00 p.m. (London time) on the
day preceding Change of Control Purchase Date (unless the Company and the
Principal Paying Agent agree to a different time), deposit with the Principal
Paying Agent an amount of cash sufficient to pay the aggregate Change of Control
Purchase Price of all the Notes or portions thereof which are to be purchased as
of the Change of Control Purchase Date and (iii) not later than the Change of
Control Purchase Date, deliver to the Paying Agent an Officers' Certificate
stating the Notes or portions thereof accepted for payment by the Company. The
Paying Agent shall promptly mail or deliver to Holders of Notes so accepted
payment in an amount equal to the Change of Control Purchase Price of the Notes
purchased from each such Holder, and the Company shall execute and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new Note equal
in principal amount to any unpurchased portion of the Note surrendered. Any
Notes not so accepted shall be promptly mailed or delivered by the Paying Agent
at the Company's expense to the Holder thereof. The Company will publicly
announce the results of the Change of Control Offer on the Change of Control
Purchase Date. For purposes of this Section 4.16, the Company shall choose a
Paying Agent which shall not be the Company.

            (e) A Change of Control Purchase Notice may be withdrawn before or
after delivery by the Holder to the Paying Agent at the office of the Paying
Agent of the Note to which such Change of Control Purchase Notice relates, by
means of a written notice of withdrawal delivered by the Holder to the Paying
Agent


                                      -46-
<PAGE>

at the office of the Paying Agent or to the office or agency referred to in
Section 2.03 to which the related Change of Control Purchase Notice was
delivered not later than three Business Days prior to the Change of Control
Purchase Date specifying, as applicable:

            (1) the name of the Holder;

            (2) the certificate number of the Note in respect of which such
      notice of withdrawal is being submitted;

            (3) the principal amount of the Note (which shall be (pound)1,000 or
      an integral multiple thereof) delivered for purchase by the Holder as to
      which such notice of withdrawal is being submitted; and

            (4) the principal amount, if any, of such Note (which shall be
      (pound)1,000 or an integral multiple thereof) that remains subject to the
      original Change of Control Purchase Notice and that has been or will be
      delivered for purchase by the Company.

            (f) Subject to applicable escheat laws, as provided in the Notes,
the Trustee and the Paying Agent shall return to the Company any cash that
remains unclaimed, together with interest or dividends, if any, thereon, held by
them for the payment of the Change of Control Purchase Price; provided, however,
that, (x) to the extent that the aggregate amount of cash deposited by the
Company pursuant to clause (ii) of paragraph (d) above exceeds the aggregate
Change of Control Purchase Price of the Notes or portions thereof to be
purchased, then the Trustee shall hold such excess for the Company and (y)
unless otherwise directed by the Company in writing, promptly after the Business
Day following the Change of Control Purchase Date the Trustee shall return any
such excess to the Company together with interest, if any, thereon.

            (g) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with a Change of Control Offer.

            (h) The Company will not, and will not permit any Subsidiary to,
create or permit to exist or become effective any restriction (other than
restrictions existing under Indebtedness as in effect on the date of this
Supplemental Indenture) that would materially impair the ability of the Company
to make a Change of Control Offer to purchase the Notes or, if such Change of
Control Offer is made, to pay for the Notes tendered for purchase.

Section 4.17. Limitation on Restricted Subsidiary Capital Stock.

            The Company will not permit any Restricted Subsidiary of the Company
to issue any Capital Stock, except for (i) Capital Stock issued to and held by
the Company or a Wholly Owned Restricted Subsidiary, (ii) Capital Stock issued
by a Person prior to the time (A) such Person becomes a Restricted Subsidiary,
(B) such Person merges with or into a Restricted Subsidiary or (C) a Restricted
Subsidiary merges with or into such Person, provided that such Capital Stock was
not issued or incurred by such Person in anticipation of the type of transaction
contemplated by subclauses (A), (B) or (C), and (iii) Capital Stock issued or
sold by a Restricted Subsidiary where, immediately after giving effect to such
issuance or sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary.

Section 4.18. Limitation on Dividends and Other Payment Restrictions Affecting
              Restricted Subsidiaries.

            The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the


                                      -47-
<PAGE>

ability of any Restricted Subsidiary of the Company to (i) pay dividends or make
any other distribution on its Capital Stock, (ii) pay any Indebtedness owed to
the Company or a Restricted Subsidiary of the Company, (iii) make any Investment
in the Company or a Restricted Subsidiary of the Company or (iv) transfer any of
its properties or assets to the Company or any Restricted Subsidiary, except (a)
any encumbrance or restriction pursuant to an agreement in effect on the date of
this Supplemental Indenture; (b) any encumbrance or restriction, with respect to
a Restricted Subsidiary that was not a Restricted Subsidiary of the Company on
the date of this Supplemental Indenture, in existence at the time such Person
becomes a Restricted Subsidiary of the Company and, in the case of clauses (a)
and (b), not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary; (c) any encumbrance or restriction existing
under any agreement that extends, renews, refinances or replaces the agreements
containing the encumbrances or restrictions in the foregoing clauses (a) and
(b), or in this clause (c), provided that the terms and conditions of any such
encumbrances or restrictions are not materially less favorable to the holders of
the Notes than those under or pursuant to the agreement evidencing the
Indebtedness so extended, renewed, refinanced or replaced (except that an
encumbrance or restriction that is not more restrictive than those set forth in
this Supplemental Indenture and the Indenture shall in any event be permitted
hereunder); and (d) any encumbrance or restriction created pursuant to an asset
sale agreement, stock sale agreement or similar instrument pursuant to which an
Asset Sale permitted under Section 4.14 is to be consummated, so long as such
restriction or encumbrance shall be effective only for a period from the
execution and delivery of such agreement or instrument through a termination
date not later than 270 days after such execution and delivery.

Section 4.19. Designation of Unrestricted Subsidiaries.

            The Company may designate after the Issue Date any Subsidiary of the
Company as an "Unrestricted Subsidiary" under this Supplemental Indenture and
the Indenture (a "Designation") only if:

            (i) no Default or Event of Default shall have occurred and be
      continuing at the time of or after giving effect to such Designation;

            (ii) at the time of and after giving effect to such Designation, the
      Company could Incur $1.00 of additional Indebtedness (other than Permitted
      Indebtedness) under the Consolidated Fixed Charge Coverage Ratio of the
      first paragraph of Section 4.10(a); and

            (iii) the Company would be permitted to make an Investment (other
      than a Permitted Investment) at the time of Designation (assuming the
      effectiveness of such Designation) pursuant to Section 4.11(a) above in an
      amount (the "Designation Amount") equal to the amount of the Company's
      Investment in such Subsidiary on such date.

            Neither the Company nor any Restricted Subsidiary shall at any time
(x) provide credit support for, subject any of its property or assets (other
than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of,
or guarantee, any Indebtedness of any Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness) or (y) be
directly or indirectly liable for any Indebtedness of any Unrestricted
Subsidiary. For purposes of the foregoing, the Designation of a Subsidiary of
the Company as an Unrestricted Subsidiary shall be deemed to include the
Designation of all of the Subsidiaries of such Subsidiary.

            The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") only if:

            (i) no Default or Event of Default shall have occurred and be
      continuing at the time of and after giving effect to such Revocation; and


                                      -48-
<PAGE>

            (ii) all Liens and Indebtedness of such Unrestricted Subsidiary
      outstanding immediately following such Revocation would, if Incurred at
      such time, have been permitted to be Incurred for all purposes of this
      Supplemental Indenture and the Indenture.

            All Designations and Revocations must be evidenced by resolutions of
the Board of Directors of the Company, delivered to the Trustee certifying
compliance with the foregoing provisions.

Section 4.20. [Intentionally Omitted]

Section 4.21. Waiver of Certain Covenants.

            The Company may omit in a particular instance to comply with any
covenant or condition set forth in Sections 4.01 through 4.21, if, before or
after the time for such compliance, the Holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding or shall, by Act
of such Holders, waive such compliance in such instance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.

Section 4.22. Limitation of Applicability of Certain Covenants if Notes Rated
              Investment Grade.

            Notwithstanding the foregoing, the Company's and its Restricted
Subsidiaries' obligations to comply with the provisions of this Supplemental
Indenture described in Sections 4.10, 4.11, 4.12, 4.17, 4.18, 4.19 and
5.01(a)(iv) will terminate and cease to have any further effect from and after
the first date when the Notes are rated Investment Grade.

                                    ARTICLE 5

                              SUCCESSOR CORPORATION

            The provisions of this Article 5 shall apply to the Notes (but not
with respect to any other series of Debt Securities), and shall replace in its
entirety Section 10.1 of the Indenture as it applies to the Notes (but not with
respect to any other series of Debt Securities). To the extent that any
provisions of this Article 5 are inconsistent with or conflict with any
provisions of Article X of the Indenture, the provisions of this Article 5 shall
govern (but not with respect to any other series of Debt Securities).

Section 5.01. Company or Any Guarantor May Consolidate, etc., Only on Certain
              Terms.

            (a) The Company shall not, in a single transaction or through a
series of related transactions, consolidate with or merge with or into any other
Person or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets as an entirety to any Person or
group of affiliated Persons, or permit any of its Restricted Subsidiaries to
enter into any such transaction or transactions if such transaction or
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or disposal of all or substantially all of the properties and
assets of the Company and its Restricted Subsidiaries on a Consolidated basis to
any other Person or group of affiliated Persons, unless at the time and after
giving effect thereto:


                                      -49-
<PAGE>

            (i) either (a) the Company shall be the continuing corporation, or
      (b) the Person (if other than the Company) formed by such consolidation or
      into which the Company is merged or the Person which acquires by sale,
      assignment, conveyance, transfer, lease or disposition of all or
      substantially all of the properties and assets of the Company and its
      Restricted Subsidiaries on a Consolidated basis (the "Surviving Entity")
      shall be a corporation duly organized and validly existing under the laws
      of the United States of America, any state thereof or the District of
      Columbia and such Person assumes, by a supplemental indenture in a form
      reasonably satisfactory to the Trustee, all the obligations of the Company
      under the Notes and this Supplemental Indenture shall remain in full force
      and effect;

            (ii) immediately before and immediately after giving effect to such
      transaction, no Default or Event of Default shall have occurred and be
      continuing;

            (iii) immediately after giving effect to such transaction on a pro
      forma basis, the Consolidated Net Worth of the Company (or the Surviving
      Entity if the Company is not the continuing obligor under this
      Supplemental Indenture and the Indenture) is equal to or greater than the
      Consolidated Net Worth of the Company immediately prior to such
      transaction;

            (iv) immediately before and immediately after giving effect to such
      transaction on a pro forma basis (on the assumption that the transaction
      occurred on the first day of the four-quarter period immediately prior to
      the consummation of such transaction with the appropriate adjustments with
      respect to the transaction being included in such pro forma calculation),
      the Company (or the Surviving Entity if the Company is not the continuing
      obligor under this Supplemental Indenture and the Indenture) could incur
      $1.00 of additional Indebtedness under Section 4.10 (other than Permitted
      Indebtedness);

            (v) each Guarantor, if any, unless it is the other party to the
      transactions described above, shall have by supplemental indenture
      confirmed that its Guarantee shall apply to such Person's obligations
      under this Supplemental Indenture and the Indenture and the Notes;

            (vi) if any of the property or assets of the Company or any of its
      Restricted Subsidiaries would thereupon become subject to any Lien, the
      provisions of Section 4.13 are complied with; and

            (vii) the Company or the Surviving Entity shall have delivered, or
      caused to be delivered, to the Trustee, in form and substance reasonably
      satisfactory to the Trustee, an Officers' Certificate and an Opinion of
      Counsel, each to the effect that such consolidation, merger, transfer,
      sale, assignment, conveyance, lease or other transaction and the
      supplemental indenture in respect thereto comply with this Supplemental
      Indenture and the Indenture and that all conditions precedent therein or
      herein provided for relating to such transaction have been complied with.

            (b) Each Guarantor shall not, and the Company will not permit a
Guarantor to, in a single transaction or through a series of related
transactions, merge or consolidate with or into any other corporation (other
than the Company or any other Guarantor) or other entity, or sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially all of its
properties and assets on a consolidated basis to any entity (other than the
Company or any other Guarantor) unless at the time and after giving effect
thereto:

            (i) either (1) such Guarantor shall be the continuing corporation or
      partnership or (2) the entity (if other than such Guarantor) formed by
      such consolidation or into which such Guarantor is merged or the entity
      which acquires by sale, assignment, conveyance, transfer, lease or
      disposition the properties and assets of such Guarantor shall be a
      corporation duly organized and validly existing under the laws of the
      United States, any state thereof or the District of Columbia and shall
      expressly assume by an indenture supplemental hereto, executed and
      delivered to the Trustee, in a form reasonably satis-


                                      -50-
<PAGE>

      factory to the Trustee, all the obligations of such Guarantor under its
      Guarantee and this Supplemental Indenture and the Indenture;

            (ii) immediately before and immediately after giving effect to such
      transaction, no Default or Event of Default shall have occurred and be
      continuing; and

            (iii) such Guarantor shall have delivered to the Trustee an
      Officers' Certificate and an Opinion of Counsel in form and substance
      reasonably satisfactory to the Trustee, each stating that such
      consolidation, merger, sale, assignment, conveyance, transfer, lease or
      disposition and such supplemental indenture comply with this Supplemental
      Indenture and the Indenture, and thereafter all obligations of the
      predecessor shall terminate.

The provisions of this Section 5.01(b) shall not apply to any transaction
(including any Asset Sale made in accordance with Section 4.14) with respect to
any Guarantor (i) if the Guarantee of such Guarantor is released in connection
with such transaction in accordance with the last sentence of Section 4.15 or
(ii) if such transaction need not comply with the provisions set forth in
Section 4.14 because the properties or assets so sold, assigned, conveyed,
transferred, leased or otherwise disposed of do not constitute an "Asset Sale"
by operation of the provisions of clause (y) of the last sentence of the
definition of Asset Sale.

Section 5.02. Successor Substituted.

            Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company or any Guarantor (except, in the case of a
Guarantor, pursuant to a transaction set forth in the last paragraph of Section
5.01(b)) in accordance with Section 5.01, the successor Person formed by such
consolidation or into which the Company or such Guarantor, as the case may be,
is merged or the successor Person to which such sale, assignment, conveyance,
transfer, lease or disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company or such Guarantor, as the
case may be, under this Supplemental Indenture and the Indenture, the Notes
and/or the Guarantees, as the case may be, with the same effect as if such
successor had been named as the Company or such Guarantor, as the case may be,
herein, in the Notes and/or in the Guarantees, as the case may be. When a
successor assumes all the obligations of its predecessor under this Supplemental
Indenture and the Indenture, the Notes or a Guarantee, as the case may be, the
predecessor shall be released from those obligations; provided that in the case
of a transfer by lease, the predecessor shall not be released from the payment
of principal and interest on the Notes or a Guarantee, as the case may be.

                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

            The provisions of this Article 6 shall apply to the Notes (but not
with respect to any other series of Debt Securities), and shall replace in its
entirety Section 7.1 of the Indenture as it applies to the Notes (but not with
respect to any other series of Debt Securities). To the extent that the
provisions of this Article 6 are inconsistent with or conflict with any
provisions of Article VII of the Indenture, the provisions of this Article 6
shall govern (but not with respect to any other series of Debt Securities).

Section 6.01. Events of Default.

            Whenever used herein or in the Indenture, an "Event of Default"
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be occasioned by the provisions


                                      -51-
<PAGE>

of this Article Six or be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):

            (a) there shall be a default in the payment of any interest on any
      Note when it becomes due and payable, and such default shall continue for
      a period of 30 days;

            (b) there shall be a default in the payment of the principal of (or
      premium, if any, on) any Note at its Maturity (upon acceleration, optional
      or mandatory redemption, required repurchase or otherwise);

            (c) (i) there shall be a default in the performance, or breach, of
      any covenant or agreement of the Company or any Guarantor under this
      Supplemental Indenture or the Indenture (other than a default in the
      performance, or breach, of a covenant or agreement which is specifically
      dealt with in clauses (a) or (b) or in clauses (ii), (iii) and (iv) of
      this clause (c)) and such default or breach shall continue for a period of
      30 days after written notice has been given, by certified mail, (x) to the
      Company by the Trustee or (y) to the Company and the Trustee by the
      holders of at least 25% in aggregate principal amount of the outstanding
      Notes, specifying such default or breach and requiring it to be remedied
      and stating that such notice is a "Notice of Default" hereunder; (ii)
      there shall be a default in the performance or breach of the provisions of
      Article Five; (iii) the Company shall have failed to make or consummate an
      Offer in accordance with the provisions of Section 4.14; or (iv) the
      Company shall have failed to make or consummate a Change of Control Offer
      in accordance with the provisions of Section 4.16;

            (d) one or more defaults shall have occurred under any agreements,
      indentures or instruments under which the Company, any Guarantor or any
      Subsidiary then has outstanding Indebtedness in excess of $10.0 million in
      the aggregate and, if not already matured at its final maturity in
      accordance with its terms, such Indebtedness shall have been accelerated;

            (e) any Guarantee shall for any reason cease to be, or be asserted
      in writing by any Guarantor or the Company not to be, in full force and
      effect and enforceable in accordance with its terms, except to the extent
      contemplated by this Supplemental Indenture or the Indenture and any such
      Guarantee;

            (f) one or more judgments, orders or decrees for the payment of
      money in excess of $15.0 million either individually or in the aggregate
      (net of amounts covered by insurance, bond, surety or similar instrument),
      shall be entered against the Company, any Guarantor, any Subsidiary or any
      of their respective properties and shall not be discharged and either (a)
      any creditor shall have commenced an enforcement proceeding upon such
      judgment, order or decree or (b) there shall have been a period of 60
      consecutive days during which a stay of enforcement of such judgment or
      order, by reason of an appeal or otherwise, shall not be in effect;

            (g) any holder or holders of at least $10.0 million in aggregate
      principal amount of Indebtedness of the Company, any Guarantor or any
      Subsidiary after a default under such Indebtedness shall notify the
      Trustee of the intended sale or disposition of any assets of the Company,
      any Guarantor or any Subsidiary that have been pledged to or for the
      benefit of such holder or holders to secure such Indebtedness or shall
      commence proceedings, or take any action (including by way of set-off), to
      retain in satisfaction of such Indebtedness or to collect on, seize,
      dispose of or apply in satisfaction of Indebtedness, assets of the
      Company, any Guarantor or any Subsidiary (including funds on deposit or
      held pursuant to lock-box and other similar arrangements);


                                      -52-
<PAGE>

            (h) there shall have been the entry by a court of competent
      jurisdiction of (i) a decree or order for relief in respect of the
      Company, any Guarantor or any Subsidiary in an involuntary case or
      proceeding under any applicable Bankruptcy Law or (ii) a decree or order
      adjudging the Company, any Guarantor or any Subsidiary bankrupt or
      insolvent, or seeking reorganization, arrangement, adjustment or
      composition of or in respect of the Company, any Guarantor or any
      Subsidiary under any applicable federal or state law, or appointing a
      custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
      similar official) of the Company, any Guarantor or any Subsidiary or of
      any substantial part of their respective properties, or ordering the
      winding up or liquidation of their affairs, and any such decree or order
      for relief shall continue to be in effect, or any such other decree or
      order shall be unstayed and in effect, for a period of 60 consecutive
      days; or

            (i) (i) the Company, any Guarantor or any Subsidiary commences a
      voluntary case or proceeding under any applicable Bankruptcy Law or any
      other case or proceeding to be adjudicated bankrupt or insolvent, (ii) the
      Company, any Guarantor or any Subsidiary consents to the entry of a decree
      or order for relief in respect of the Company, any Guarantor or such
      Subsidiary in an involuntary case or proceeding under any applicable
      Bankruptcy Law or to the commencement of any bankruptcy or insolvency case
      or proceeding against it, (iii) the Company, any Guarantor or any
      Subsidiary files a petition or answer or consent seeking reorganization or
      relief under any applicable federal or state law, (iv) the Company, any
      Guarantor or any Subsidiary (1) consents to the filing of such petition or
      the appointment of, or taking possession by, a custodian, receiver,
      liquidator, assignee, trustee, sequestrator or similar official of the
      Company, any Guarantor or such Subsidiary or of any substantial part of
      their respective properties, (2) makes an assignment for the benefit of
      creditors or (3) admits in writing its inability to pay its debts
      generally as they become due, or (v) the Company, any Guarantor or any
      Subsidiary takes any corporate action in furtherance of any such actions
      in this paragraph (i).

            The Company shall deliver to the Trustee within five days after the
occurrence thereof, written notice, in the form of an Officers' Certificate, of
any Default, its status and what action the Company is taking or proposes to
take with respect thereto.

Section 6.02. Acceleration of Maturity; Rescission and Annulment.

            If an Event of Default (other than an Event of Default specified in
Sections 6.01(h) and (i)) shall occur and be continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Notes then
outstanding may, and the Trustee at the request of the Holders of not less than
25% in aggregate principal amount of the Notes then outstanding shall, declare
all unpaid principal of, premium, if any, and accrued interest on all the Notes
to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by the Holders of the Notes). If an Event of Default
specified in clause (h) or (i) of Section 6.01 occurs and is continuing, then
all the Notes shall ipso facto become and be immediately due and payable, in an
amount equal to the principal amount of the Notes, together with accrued and
unpaid interest, if any, to the date the Notes become due and payable, without
any declaration or other act on the part of the Trustee or any Holder.

            At any time after such declaration of acceleration has been made but
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in aggregate principal amount of the Notes outstanding, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:

            (a) the Company has paid or deposited with the Trustee a sum
      sufficient to pay


                                      -53-
<PAGE>

                  (i) all sums paid or advanced by the Trustee under Section
            11.2 of the Indenture and the reasonable compensation, expenses,
            disbursements and advances of the Trustee, its agents and counsel,

                  (ii) all overdue interest on all Notes, and

                  (iii) to the extent that payment of such interest is lawful,
            interest upon overdue interest at the rate borne by the Notes;

            (b) all Events of Default, other than the non-payment of principal
      of the Notes which have become due solely by such declaration of
      acceleration, have been cured or waived as provided in Section 6.03; and

            (c) the rescission will not conflict with any judgment or decree.

No such rescission shall affect any subsequent Default or impair any right
consequent thereon.

Section 6.03. Waiver of Past Defaults and Events of Default.

            Subject to Sections 2.10 and 6.02 hereof, the Holders of a majority
in principal amount of the Notes then outstanding have the right to waive past
Defaults under this Supplemental Indenture and the Indenture except a Default in
the payment of the principal of, or interest or premium, if any, on any Note as
specified in clauses (a) and (b) of Section 6.01 or in respect of a covenant or
a provision which cannot be modified or amended without the consent of all
Holders as provided for in Section 8.02. The Company shall deliver to the
Trustee an Officers' Certificate stating that the requisite percentage of
Holders have consented to such waiver and attaching copies of such consents. In
case of any such waiver, the Company, the Trustee and the Holders shall be
restored to their former positions and rights hereunder and under the Notes,
respectively. This paragraph of this Section 6.03 shall be in lieu of ss.
316(a)(1)(B) of the TIA and ss. 316(a)(1)(B) of the TIA is hereby expressly
excluded from this Supplemental Indenture and the Indenture and the Notes, as
permitted by the TIA.

            Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Supplemental Indenture and the Indenture, but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.

                                    ARTICLE 7

                             [INTENTIONALLY OMITTED]

                                    ARTICLE 8

                             SUPPLEMENTAL INDENTURES

            The following provisions of this Article 8 shall apply to the Notes
(but not with respect to any other series of Debt Securities), and shall replace
in their entirety Sections 12.1 and 12.2 of the Indenture (but not with respect
to any other series of Debt Securities). To the extent that the provisions of
this Article 8 are inconsistent with or conflict with any provisions of Article
XII of the Indenture, the provisions of this Article 8 shall govern (but not
with respect to any other series of Debt Securities).


                                      -54-
<PAGE>

Section 8.01. Supplemental Indentures and Agreements Without Consent of Holders.

            Without the consent of any Holders, the Company and the Guarantors,
if any, when authorized by a board resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto or
agreements or other instruments with respect to any Guarantee, in form and
substance satisfactory to the Trustee, for any of the following purposes:

            (a) to evidence the succession of another Person to the Company, any
      Guarantor or any other obligor upon the Notes, and the assumption by any
      such successor of the covenants of the Company or such Guarantor or
      obligor herein and in the Notes and in any Guarantee;

            (b) to add to the covenants of the Company, any Guarantor or any
      other obligor upon the Notes for the benefit of the Holders, or to
      surrender any right or power herein conferred upon the Company, any
      Guarantor or any other obligor upon the Notes, as applicable, herein, in
      the Notes or in any Guarantee;

            (c) to cure any ambiguity, to correct or supplement any provision
      herein which may be defective or inconsistent with any other provision
      herein, in the Notes or in any Guarantee, or to make any other provisions
      with respect to matters or questions arising under this Supplemental
      Indenture and the Indenture, the Notes or any Guarantee; provided that, in
      each case, such provisions shall not adversely affect the interests of the
      Holders;

            (d) to comply with the requirements of the Commission in order to
      effect or maintain the qualification of this Supplemental Indenture and
      the Indenture under the Trust Indenture Act, as contemplated by Section
      12.4 of the Indenture or otherwise;

            (e) to add a Guarantor pursuant to the requirements of Section 4.15;

            (f) to evidence and provide the acceptance of the appointment of a
      successor trustee hereunder; or

            (g) to mortgage, pledge, hypothecate or grant a security interest in
      favor of the Trustee for the benefit of the Holders as additional security
      for the payment and performance of the Indenture Obligations, in any
      property or assets, including any which are required to be mortgaged,
      pledged or hypothecated, or in which a security interest is required to be
      granted to the Trustee pursuant to this Supplemental Indenture and the
      Indenture or otherwise.

Section 8.02. Supplemental Indentures and Agreements with Consent of Holders.

            With the consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding Notes, by act of said Holders
delivered to the Company, each Guarantor, if any, and the Trustee, the Company
and each Guarantor (if a party thereto) when authorized by a board resolution,
and the Trustee, may enter into an indenture or indentures supplemental hereto
or agreements or other instruments with respect to any Guarantee in form and
substance satisfactory to the Trustee, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Supplemental Indenture and the Indenture or of modifying in any manner the
rights of the Holders under this Supplemental Indenture and the Indenture, the
Notes or any Guarantee; provided, however, that no such supplemental indenture,
agreement or instrument shall, without the consent of the Holder of each
outstanding Note affected thereby:


                                      -55-
<PAGE>

            (a) change the Stated Maturity of the principal of, or any
      installment of interest on, any Note, or reduce the principal amount
      thereof or the rate of interest thereon or any premium payable upon the
      redemption thereof, or change the coin or currency in which the principal
      of any Note or any premium or the interest thereon is payable, or impair
      the right to institute suit for the enforcement of any such payment on or
      after the Stated Maturity thereof (or, in the case of redemption, on or
      after the redemption date thereof);

            (b) amend, change or modify the obligation of the Company to make
      and consummate an Offer with respect to any Asset Sale or Asset Sales in
      accordance with Section 4.14 or the obligation of the Company to make and
      consummate a Change of Control Offer in the event of a Change of Control
      in accordance with Section 4.16, including amending, changing or modifying
      any definitions with respect thereto;

            (c) reduce the percentage in principal amount of the outstanding
      Notes, the consent of whose Holders is required for any such supplemental
      indenture, or the consent of whose Holders is required for any waiver of
      compliance with certain provisions of this Supplemental Indenture and the
      Indenture or certain defaults hereunder and their consequences provided
      for in this Supplemental Indenture and the Indenture or with respect to
      any Guarantee;

            (d) modify any of the provisions of this Section 8.02, Section 4.21
      or Section 6.03, except to increase any such percentage or to provide that
      certain other provisions of this Supplemental Indenture and the Indenture
      cannot be modified or waived without the consent of the Holder of each
      Note affected thereby;

            (e) except as otherwise permitted under Article Five, consent to the
      assignment or transfer by the Company or any Guarantor of any of its
      rights and obligations under this Supplemental Indenture and the
      Indenture; or

            (f) amend or modify any of the provisions of this Supplemental
      Indenture and the Indenture to cause the Notes or any Guarantee to be
      subordinate to any other Indebtedness.

            Upon the written request of the Company and each Guarantor, if any,
accompanied by a copy of a board resolution authorizing the execution of any
such supplemental indenture or Guarantee, and upon the filing with the Trustee
of evidence of the consent of Holders as aforesaid, the Trustee shall join with
the Company and each Guarantor in the execution of such supplemental indenture
or Guarantee.

            It shall not be necessary for any act of Holders under this Section
8.02 to approve the particular form of any proposed supplemental indenture or
Guarantee or agreement or instrument relating to any Guarantee, but it shall be
sufficient if such act shall approve the substance thereof.

                                    ARTICLE 9

                       DISCHARGE OF INDENTURE; DEFEASANCE

            The following provisions of this Article Nine shall apply to the
Notes (but not with respect to any other series of Debt Securities) and shall
replace in its entirety the provisions set forth in Article VI of the Indenture
(but not with respect to any other series of Debt Securities).


                                      -56-
<PAGE>

Section 9.01. Satisfaction and Discharge of Supplemental Indenture and the
              Indenture.

            This Supplemental Indenture and the Indenture (solely with respect
to the Notes and not with respect to any other series of Debt Securities) shall
cease to be of further effect (except as to surviving rights of registration of
transfer or exchange of the Notes herein expressly provided for) and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Supplemental
Indenture and the Indenture (solely with respect to the Notes and not with
respect to any other series of Debt Securities), when

            (a) either

                  (1) all the Notes theretofore authenticated and delivered
            (other than (i) Notes which have been destroyed, lost or stolen and
            which have been replaced or paid as provided in Section 2.08 or (ii)
            all Notes for whose payment in Sterling have theretofore been
            deposited in trust or segregated and held in trust by the Company
            and thereafter repaid to the Company or discharged from such trust,
            as provided in Section 3.05) have been delivered to the Trustee
            canceled or for cancellation; or

                  (2) all such Notes not theretofore delivered to the Trustee
            canceled or for cancellation (x) have become due and payable, (y)
            will become due and payable at their Stated Maturity within one
            year, or (z) are to be called for redemption within one year under
            arrangements satisfactory to the Trustee for the giving of notice of
            redemption by the Trustee in the name, and at the expense, of the
            Company, and the Company or any Guarantor has irrevocably deposited
            or caused to be deposited with the Trustee in trust for such purpose
            an amount in Sterling sufficient to pay and discharge the entire
            Indebtedness on the Notes not theretofore delivered to the Trustee
            canceled or for cancellation, including principal of, premium, if
            any, and accrued interest at such Stated Maturity or redemption
            date;

            (b) the Company or any Guarantor has paid or caused to be paid all
      other sums payable hereunder by the Company or any Guarantor; and

            (c) the Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel stating that (i) all conditions
      precedent herein provided relating to the satisfaction and discharge of
      this Supplemental Indenture and the Indenture have been complied with and
      (ii) such satisfaction and discharge will not result in a breach or
      violation of, or constitute a default under, this Supplemental Indenture
      or the Indenture or any other material agreement or instrument to which
      the Company or any Guarantor is a party or by which the Company or any
      Guarantor is bound.

            Opinions of Counsel required to be delivered under this Section 9.01
may have qualifications customary for opinions of the type required and counsel
delivering such opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.

            Notwithstanding the satisfaction and discharge of this Supplemental
Indenture and the Indenture, the obligations of the Company to the Trustee under
Section 11.2 of the Indenture and, if Sterling shall have been deposited with
the Trustee pursuant to subclause (2) of Subsection (a) of this Section 9.01,
the obligations of the Trustee under Section 2.05 and Section 9.02 of this
Supplemental Indenture shall survive.


                                      -57-
<PAGE>

Section 9.02. Application of Trust Money.

            Subject to the provisions of Section 2.05, all Sterling deposited
with the Trustee pursuant to Section 9.01 shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Supplemental
Indenture and the Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal of,
premium, if any, and interest on the Notes for whose payment such Sterling have
been deposited with the Trustee, but such money need not be segregated from
other funds except to the extent required by law or GAAP.

Section 9.03. Termination of the Company's Obligation.

            The Company may, provided that no Default or Event of Default has
occurred and is continuing or would arise therefrom (or, with respect to a
Default or Event of Default specified in Section 6.01(h) or (i), occurs at any
time on or prior to the 91st calendar day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until after
such 91st day)), terminate its and its Restricted Subsidiaries' substantive
obligations in respect of Article Four of this Supplemental Indenture (other
than Sections 4.01, 4.02, 4.04 and 4.06), Article Five hereof and Article Nine
hereof (other than Sections 9.01, 9.02 and 9.03) and any Event of Default
specified in Section 6.01(c) or (d) by (i) depositing with the Trustee, under
the terms of an irrevocable trust agreement for the benefit of the Holders, cash
in Sterling or United Kingdom Government Obligations (or a combination thereof)
sufficient in the opinion of an internationally recognized firm of independent
public accountants (without reinvestment) to pay all remaining Indebtedness on
the Notes, (ii) delivering to the Trustee opinions of counsel in the United
States and the United Kingdom reasonably acceptable to the Trustee confirming
that the holders of the Notes will not recognize income, gain or loss for United
States federal income tax purposes or United Kingdom income tax purposes as a
result of such termination and will be subject to United States federal income
tax and United Kingdom income tax on the same amounts, in the same manner and at
the same times as would have been the case if such termination had not occurred,
(iii) delivering to the Trustee an officers' certificate stating that the
deposit was not made by the Company with the intent of preferring the holders of
the Notes over any other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Company
or others, (iv) delivering to the Trustee Opinions of Counsel to the effect that
(A) the trust funds will not be subject to any rights of holders of Indebtedness
of the Company other than the Notes and (B) assuming no intervening bankruptcy
of the Company between the date of deposit and the 91st day following the
deposit and that no Holder of the Notes is an insider of the Company, after the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally, (v) delivering to the Trustee Opinions of
Counsel to the effect that the Company's exercise of its option under this
Section 9.03 will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds pursuant to this provision becoming or
being deemed to be an "investment company" under the Investment Company Act of
1940, as amended (the "Investment Company Act"), and (vi) delivering to the
Trustee an Officers' Certificate and Opinions of Counsel each stating compliance
with all conditions precedent provided for herein. In addition, the Company may,
provided that no Default or Event of Default has occurred and is continuing or
would arise therefrom (or, with respect to a Default or Event of Default
specified in Section 6.01(h) or (i), occurs at any time on or prior to the 91st
calendar day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 91st day)) and provided
that no default under any Indebtedness would arise therefrom, terminate all of
its and the Guarantors' substantive obligations in respect of the Notes
(including its obligations to pay the principal of and interest on the Notes and
the Guarantors' Guarantee thereof) by (i) depositing with the Trustee, under the
terms of an irrevocable trust agreement, cash in Sterling or United Kingdom
Government Obligations sufficient (without reinvestment) to pay all remaining
Indebtedness on the Notes, (ii) delivering to the Trustee an opinion of counsel
in the United States reasonably acceptable to the Trustee confirming that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Supplemental Indenture,
there has been a change in the applicable


                                      -58-
<PAGE>

federal income tax law, in either case to the effect that, and based thereon
such opinion of counsel shall confirm that, the holders of the Notes will not
recognize income, gain or loss for United States federal income tax and United
Kingdom income tax purposes as a result of such termination and will be subject
to United States federal income tax and United Kingdom income tax on the same
amounts, in the same manner and at the same times as would have been the case
had such termination not occurred, (iv) delivering to the Trustee an officers'
certificate stating that the deposit was not made by the Company with the intent
of preferring the holders of the Notes over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others, (v) delivering to the Trustee Opinions of
Counsel to the effect that (A) the trust funds will not be subject to any rights
of holders of Indebtedness of the Company other than the Notes and (B) assuming
no intervening bankruptcy of the Company between the date of deposit and the
91st day following the deposit and that no Holder of the Notes is an insider of
the Company, after the 91st day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally, (vi)
delivering to the Trustee Opinions of Counsel to the effect that the Company's
exercise of its option under this Section 9.03 will not result in any of the
Company, the Trustee or the trust created by the Company's deposit of funds
pursuant to this provision becoming or being deemed to be an "investment
company" under the Investment Company Act and (vii) delivering to the Trustee an
Officers' Certificate and Opinions of Counsel each stating compliance with all
conditions precedent provided for herein.

            Notwithstanding the foregoing paragraph, the Company's obligations
in Sections 2.02, 2.07, 2.08, 2.11, 2.13, 4.01, 4.06, 6.01, 9.02, 9.05 and 9.06
of this Supplemental Indenture and Sections 4.1, 11.2 and 11.6 of the Indenture
shall survive until the Notes are no longer outstanding. Thereafter, the
Company's obligations in Sections 9.02, 9.05 and 9.06 of this Supplemental
Indenture shall survive.

            After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Notes, this Supplemental Indenture and the Indenture
except for those surviving obligations specified above.

            The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United Kingdom Government
Obligations deposited pursuant to this Section 9.03 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.

Section 9.04. Application of Trust Money.

            The Trustee shall hold in trust money or United Kingdom Government
Obligations deposited with it pursuant to Section 9.03, and shall apply the
deposited money and the proceeds from United Kingdom Government Obligations in
accordance with this Supplemental Indenture and the Indenture solely to the
payment of principal of and interest on the Notes.

Section 9.05. Repayment to Company.

            Subject to Section 11.2 of the Indenture and Section 9.03 of this
Supplemental Indenture, the Trustee shall promptly pay to the Company upon
written request any excess money held by it at any time. The Trustee shall pay
to the Company upon written request any money held by it for the payment of
principal or interest that remains unclaimed for two years; provided, however,
that the Trustee before being required to make any payment may at the expense of
the Company cause to be published once in a newspaper of general circulation in
The City of New York and London, England or mail to each Holder entitled to such
money notice that such money remains unclaimed and that, after a date specified
therein which shall be at least 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining shall be repaid to
the


                                      -59-
<PAGE>

Company. After payment to the Company, Holders entitled to money must look
solely to the Company for payment as general creditors unless an applicable
abandoned property law designates another person and all liability of the
Trustee or Paying Agent with respect to such money shall thereupon cease.

Section 9.06. Reinstatement.

            If the Trustee is unable to apply any money or United Kingdom
Government Obligations in accordance with Section 9.03 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and the Guarantors' obligations under this Supplemental Indenture and
the Indenture, the Notes and the Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to Section 9.03 until such time as the
Trustee is permitted to apply all such money or United Kingdom Government
Obligations in accordance with Section 9.03; provided, however, that if the
Company has made any payment of interest on or principal of any Notes because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
United Kingdom Government Obligations held by the Trustee.

                                   ARTICLE 10

                                   GUARANTEES

            The provisions of this Article 10 shall apply to the Notes (but not
with respect to any other series of Debt Securities), and shall replace in its
entirety Article XIV of the Indenture as it applies to the Notes (but not with
respect to any other series of Debt Securities).

Section 10.01. Guarantors' Guarantee.

            For value received, each of the Guarantors, in accordance with this
Article Ten, hereby absolutely, unconditionally and irrevocably guarantees,
jointly and severally, to the Trustee and the Holders, as if the Guarantors were
the principal debtor, the punctual payment and performance when due of all
Indenture Obligations (which for purposes of this Guarantee shall also be deemed
to include all commissions, fees, charges, costs and other expenses (including
reasonable legal fees and disbursements of one counsel) arising out of or
incurred by the Trustee or the Holders in connection with the enforcement of
this Guarantee).

Section 10.02. Continuing Guarantee; No Right of Set-Off; Independent
               Obligation.

            (a) This Guarantee shall be a continuing guarantee of the payment
and performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
or the Holders; and this Guarantee shall not be considered as wholly or
partially satisfied by the payment or liquidation at any time or from time to
time of any sum of money for the time being due or remaining unpaid to the
Trustee or the Holders. Each Guarantor, jointly and severally, covenants and
agrees to comply with all obligations, covenants, agreements and provisions
applicable to it in this Supplemental Indenture and the Indenture including
those set forth in Article Five hereof. Without limiting the generality of the
foregoing, each of the Guarantors' liability shall extend to all amounts which
constitute part of the Indenture Obligations and would be owed by the Company
under this Supplemental Indenture and the Indenture and the Notes but for the
fact that they are unenforceable, reduced, limited, impaired, suspended or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Company.


                                      -60-
<PAGE>

            (b) Each Guarantor, jointly and severally, hereby guarantees that
the Indenture Obligations will be paid to the Trustee without set-off or
counterclaim or other reduction whatsoever (whether for taxes, withholding or
otherwise) in Sterling.

            (c) Each Guarantor, jointly and severally, guarantees that the
Indenture Obligations shall be paid strictly in accordance with their terms
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the holders of the
Notes.

            (d) Each Guarantor's liability to pay or perform or cause the
performance of the Indenture Obligations under this Guarantee shall arise
forthwith after demand for payment or performance by the Trustee has been given
to the Guarantors in the manner prescribed in Section 4.15.

            (e) Except as provided herein, the provisions of this Article Ten
cover all agreements between the parties hereto relative to this Guarantee and
none of the parties shall be bound by any representation, warranty or promise
made by any Person relative thereto which is not embodied herein; and it is
specifically acknowledged and agreed that this Guarantee has been delivered by
each Guarantor free of any conditions whatsoever and that no representations,
warranties or promises have been made to any Guarantor affecting its liabilities
hereunder, and that the Trustee shall not be bound by any representations,
warranties or promises now or at any time hereafter made by the Company to any
Guarantor.

Section 10.03. Guarantee Absolute.

            The obligations of the Guarantors hereunder are independent of the
obligations of the Company under the Notes and this Supplemental Indenture and
the Indenture and a separate action or actions may be brought and prosecuted
against any Guarantor whether or not an action or proceeding is brought against
the Company and whether or not the Company is joined in any such action or
proceeding. The liability of the Guarantors hereunder is irrevocable, absolute
and unconditional and (to the extent permitted by law) the liability and
obligations of the Guarantors hereunder shall not be released, discharged,
mitigated, waived, impaired or affected in whole or in part by:

            (a) any defect or lack of validity or enforceability in respect of
      any Indebtedness or other obligation of the Company or any other Person
      under this Supplemental Indenture and the Indenture or the Notes, or any
      agreement or instrument relating to either of the foregoing;

            (b) any grants of time, renewals, extensions, indulgences, releases,
      discharges or modifications which the Trustee or the Holders may extend
      to, or make with, the Company, any Guarantor or any other Person, or any
      change in the time, manner or place of payment of, or in any other term
      of, all or any of the Indenture Obligations, or any other amendment or
      waiver of, or any consent to or departure from, this Supplemental
      Indenture and the Indenture or the Notes, including any increase or
      decrease in the Indenture Obligations;

            (c) the taking of security from the Company, any Guarantor or any
      other Person, and the release, discharge or alteration of, or other
      dealing with, such security;

            (d) the occurrence of any change in the laws, rules, regulations or
      ordinances of any jurisdiction by any present or future action of any
      governmental authority or court amending, varying, reducing or otherwise
      affecting, or purporting to amend, vary, reduce or otherwise affect, any
      of the Indenture Obligations and the obligations of any Guarantor
      hereunder;

            (e) the abstention from taking security from the Company, any
      Guarantor or any other Person or from perfecting, continuing to keep
      perfected or taking advantage of any security;


                                      -61-
<PAGE>

            (f) any loss, diminution of value or lack of enforceability of any
      security received from the Company, any Guarantor or any other Person, and
      including any other guarantees received by the Trustee;

            (g) any other dealings with the Company, any Guarantor or any other
      Person, or with any security;

            (h) the Trustee's or the Holders' acceptance of compositions from
      the Company or any Guarantor;

            (i) the application by the Holders or the Trustee of all monies at
      any time and from time to time received from the Company, any Guarantor or
      any other Person on account of any indebtedness and liabilities owing by
      the Company or any Guarantor to the Trustee or the Holders, in such manner
      as the Trustee or the Holders deems best and the changing of such
      application in whole or in part and at any time or from time to time, or
      any manner of application of collateral, or proceeds thereof, to all or
      any of the Indenture Obligations, or the manner of sale of any Collateral;

            (j) the release or discharge of the Company or any Guarantor of the
      Notes or of any Person liable directly as surety or otherwise by operation
      of law or otherwise for the Notes, other than an express release in
      writing given by the Trustee, on behalf of the Holders, of the liability
      and obligations of any Guarantor hereunder;

            (k) any change in the name, business, capital structure or governing
      instrument of the Company or any Guarantor or any refinancing or
      restructuring of any of the Indenture Obligations;

            (l) the sale of the Company's or any Guarantor's business or any
      part thereof;

            (m) subject to Section 10.14, any merger or consolidation,
      arrangement or reorganization of the Company, any Guarantor, any Person
      resulting from the merger or consolidation of the Company or any Guarantor
      with any other Person or any other successor to such Person or merged or
      consolidated Person or any other change in the corporate existence,
      structure or ownership of the Company or any Guarantor;

            (n) the insolvency, bankruptcy, liquidation, winding-up,
      dissolution, receivership or distribution of the assets of the Company or
      its assets or any resulting discharge of any obligations of the Company
      (whether voluntary or involuntary) or of any Guarantor or the loss of
      corporate existence;

            (o) subject to Section 10.14, any arrangement or plan of
      reorganization affecting the Company or any Guarantor;

            (p) any other circumstance (including any statute of limitations)
      that might otherwise constitute a defense available to, or discharge of,
      the Company or any Guarantor; or

            (q) any modification, compromise, settlement or release by the
      Trustee, or by operation of law or otherwise, of the Indenture Obligations
      or the liability of the Company or any other obligor under the Notes, in
      whole or in part, and any refusal of payment by the Trustee, in whole or
      in part, from any other obligor or other guarantor in connection with any
      of the Indenture Obligations, whether or not with notice to, or further
      assent by, or any reservation of rights against, each of the Guarantors.


                                      -62-
<PAGE>

Section 10.04. Right to Demand Full Performance.

            In the event of any demand for payment or performance by the Trustee
from any Guarantor hereunder, the Trustee or the Holders shall have the right to
demand its full claim and to receive all dividends or other payments in respect
thereof until the Indenture Obligations have been paid in full, and the
Guarantors shall continue to be jointly and severally liable hereunder for any
balance which may be owing to the Trustee or the Holders by the Company under
this Supplemental Indenture and the Indenture and the Notes. The retention by
the Trustee or the Holders of any security, prior to the realization by the
Trustee or the Holders of its rights to such security upon foreclosure thereon,
shall not, as between the Trustee and any Guarantor, be considered as a purchase
of such security, or as payment, satisfaction or reduction of the Indenture
Obligations due to the Trustee or the Holders by the Company or any part
thereof.

Section 10.05. Waivers.

            (a) Each Guarantor hereby expressly waives (to the extent permitted
by law) notice of the acceptance of this Guarantee and notice of the existence,
renewal, extension or the non-performance, non-payment, or non-observance on the
part of the Company of any of the terms, covenants, conditions and provisions of
this Supplemental Indenture and the Indenture or the Notes or any other notice
whatsoever to or upon the Company or such Guarantor with respect to the
Indenture Obligations. Each Guarantor hereby acknowledges communication to it of
the terms of this Supplemental Indenture and the Indenture and the Notes and all
of the provisions therein contained and consents to and approves the same. Each
Guarantor hereby expressly waives (to the extent permitted by law) diligence,
presentment, protest and demand for payment.

            (b) Without prejudice to any of the rights or recourses which the
Trustee or the Holders may have against the Company, each Guarantor hereby
expressly waives (to the extent permitted by law) any right to require the
Trustee or the Holders to:

            (i) initiate or exhaust any rights, remedies or recourse against the
      Company, any Guarantor or any other Person;

            (ii) value, realize upon, or dispose of any security of the Company
      or any other Person held by the Trustee or the Holders; or

            (iii) initiate or exhaust any other remedy which the Trustee or the
      Holders may have in law or equity;

before requiring or becoming entitled to demand payment from such Guarantor
under this Guarantee.

Section 10.06. The Guarantors Remain Obligated in Event the Company Is No Longer
               Obligated to Discharge Indenture Obligations.

            It is the express intention of the Trustee and the Guarantors that
if for any reason the Company has no legal existence, is or becomes under no
legal obligation to discharge the Indenture Obligations owing to the Trustee or
the Holders by the Company or if any of the Indenture Obligations owing by the
Company to the Trustee or the Holders becomes irrecoverable from the Company by
operation of law or for any reason whatsoever, this Guarantee and the covenants,
agreements and obligations of the Guarantors contained in this Article Ten shall
nevertheless be binding upon the Guarantors, as principal debtor, until such
time as all such Indenture Obligations have been paid in full to the Trustee and
all Indenture Obligations owing to the Trustee or the Holders by the Company
have been discharged, or such earlier time as Section 9.01 shall apply to the
Notes and the Guarantors shall be responsible for the payment thereof to the
Trustee or the Holders upon demand.


                                      -63-
<PAGE>

Section 10.07.    Fraudulent Conveyance; Subrogation.

            (a) Any term or provision of this Guarantee to the contrary
notwithstanding, (i) the aggregate amount of the Indenture Obligations
guaranteed hereunder shall be reduced to the extent necessary to prevent this
Guarantee from violating or becoming voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally and (ii) with respect to the liability of
Canandaigua B.V. only, the liability of Canandaigua B.V. under its Guarantee
shall not exceed the net intrinsic value of Canandaigua B.V. without leaving the
other creditors of Canandaigua B.V. unpaid.

            (b) Each Guarantor hereby waives all rights of subrogation or
contribution, whether arising by contract or operation of law (including without
limitation, any such right arising under federal bankruptcy law) or otherwise by
reason of any payment by it pursuant to the provisions of this Article Ten.

Section 10.08. Guarantee Is Additional to Other Security.

            This Guarantee shall be in addition to and not in substitution for
any other guarantees or other security which the Trustee may now or hereafter
hold in respect of the Indenture Obligations owing to the Trustee or the Holders
by the Company and (except as may be required by law) the Trustee shall be under
no obligation to marshal in favor of each of the Guarantors any other guarantees
or other security or any moneys or other assets which the Trustee may be
entitled to receive or upon which the Trustee or the Holders may have a claim.

Section 10.09. No Recourse Against Others.

            A director, officer, employee, stockholder or incorporator, as such,
of the Company shall not have any liability for any obligations of the Company
under the Notes or this Supplemental Indenture and the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.

Section 10.10. No Bar to Further Actions.

            Except as provided by law, no action or proceeding brought or
instituted under Article Ten and this Guarantee and no recovery or judgment in
pursuance thereof shall be a bar or defense to any further action or proceeding
which may be brought under this Article Ten and the Guarantee by reason of any
further default or defaults under this Article Ten and the Guarantee or in the
payment of any of the Indenture Obligations owing by the Company.

Section 10.11. Failure To Exercise Rights Shall Not Operate as a Waiver; No
               Suspension of Remedies.

            (a) No failure to exercise and no delay in exercising, on the part
of the Trustee or the Holders, any right, power, privilege or remedy under this
Article Ten and the Guarantee shall operate as a waiver thereof, nor shall any
single or partial exercise of any rights, power, privilege or remedy preclude
any other or further exercise thereof, or the exercise of any other rights,
powers, privileges or remedies. The rights and remedies herein provided for are
cumulative and not exclusive of any rights or remedies provided in law or
equity.

            (b) Nothing contained in this Article Ten shall limit the right of
the Trustee or the Holders to take any action to accelerate the maturity of the
Notes pursuant to Article Six or to pursue any rights or remedies hereunder or
under applicable law.


                                      -64-
<PAGE>

Section 10.12. Trustee's Duties; Notice to Trustee.

            (a) Any provision in this Article Ten or elsewhere in this
Supplemental Indenture or the Indenture allowing the Trustee to request any
information or to take any action authorized by, or on behalf of any Guarantor,
shall be permissive and shall not be obligatory on the Trustee except as the
Holders may direct in accordance with the provisions of this Supplemental
Indenture and the Indenture or where the failure of the Trustee to request any
such information or to take any such action arises from the Trustee's negligence
or willful misconduct.

            (b) The Trustee shall not be required to inquire into the existence,
powers or capacities of the Company, any Guarantor or the officers, directors or
agents acting or purporting to act on their respective behalf.

Section 10.13. Successors and Assigns.

            All terms, agreements and conditions of this Article Ten shall
extend to and be binding upon each Guarantor and its successors and permitted
assigns and shall inure to the benefit of and may be enforced by the Trustee and
its successors and assigns; provided, however, that the Guarantors may not
assign any of their rights or obligations hereunder other than in accordance
with Article Five.

Section 10.14. Release of Guarantee.

            Concurrently with the payment in full of all of the Indenture
Obligations, the Guarantors shall be released from and relieved of their
obligations under this Article Ten. Upon the delivery by the Company to the
Trustee of an Officer's Certificate and, if requested by the Trustee, an Opinion
of Counsel to the effect that the transaction giving rise to the release of this
Guarantee was made by the Company in accordance with the provisions of this
Supplemental Indenture and the Indenture and the Notes, the Trustee shall
execute any documents reasonably required in order to evidence the release of
the Guarantors from their obligations under this Guarantee. If any of the
Indenture Obligations are revived and reinstated after the termination of this
Guarantee, then all of the obligations of the Guarantors under this Guarantee
shall be revived and reinstated as if this Guarantee had not been terminated
until such time as the Indenture Obligations are paid in full, and each
Guarantor shall enter into an amendment to this Guarantee, reasonably
satisfactory to the Trustee, evidencing such revival and reinstatement.

            This Guarantee shall terminate with respect to each Guarantor and
shall be automatically and unconditionally released and discharged as provided
in Section 4.15.

Section 10.15. Execution of Guarantee.

            To evidence the Guarantee, each Guarantor hereby agrees to execute
the guarantee substantially in the form set forth in Exhibit C hereto, to be
endorsed on each Note authenticated and delivered by the Trustee and that this
Supplemental Indenture shall be executed on behalf of each Guarantor by one if
its Officers, or one of its other officers (or officer's of the Company) or any
other person (through power of attorney or otherwise) in each case duly
authorized by such Guarantor's board of directors. The signature of any of these
officers on the Notes may be manual or facsimile.


                                      -65-
<PAGE>

                                   ARTICLE 11

                                  MISCELLANEOUS

Section 11.01. Ratification of the Indenture.

            Except as expressly modified or amended hereby, the Indenture
continues in full force and effect and is in all respects confirmed and
preserved.

Section 11.02. Notices.

            Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

            If to the Company:

                  Canandaigua Brands, Inc.
                  300 WillowBrook Office Park
                  Fairport, New York  14450
                  Attention: David Sorce,
                    Vice President and Corporate Counsel
                  Fax: (716) 218-2165

            Copy to:

                  McDermott Will & Emery
                  227 West Monroe Street
                  Chicago, Illinois  60606
                  Attention: Bernard Kramer, Esq.
                  Fax: (312) 984-7700

            If to the Trustee:

                  Harris Trust and Savings Bank
                  2 North LaSalle
                  Chicago, Illinois  60602
                  Attention: Daniel G. Donovan
                  Fax: (312) 827-8542

            The Company or the Trustee by written notice to the others may
designate additional or different addresses for subsequent notices or
communications. Any notice or communication to the Company or the Trustee, shall
be deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and five (5) calendar days after mailing if sent by mail, postage
prepaid (except that a notice of change of address shall not be deemed to have
been given until actually received by the addressee).

            All notices to the Holders will be valid if (i) (A) so long as the
Notes are listed on the Luxembourg Stock Exchange and the rules of such Stock
Exchange shall so require, published in the Luxemburger Wort or another
newspaper having general circulation in Luxembourg and (B) (in addition to


                                      -66-
<PAGE>

publication as described above) also given by substantially concurrent delivery
of the relevant notice to DTC, Euroclear and/or Cedelbank (as the case may be)
for communication to the holders of the Book-Entry Interests, or (ii) in the
case of a Holder of a Definitive Registered Note, including any notice delivered
in connection with TIA ss. 310(b), TIA ss. 313(c), TIA ss. 314(a) and TIA ss.
315(b), mailed to such Holders by first-class mail at their respective addresses
as they appear in the Register (and, if and so long as the Notes are listed on
the Luxembourg Stock Exchange and the rules of such Stock Exchange shall
require, published in a newspaper having general circulation in Luxembourg). If
publication as provided above is not practicable, notice will be given in such
other manner, and shall be deemed to have been given on such date, as the
Trustee may approve. Copies of any such communication or notice to a Holder
shall also be mailed to the Trustee, the Registrar and each Agent at the same
time. To the extent required by the Trust Indenture Act, any notice or
communication shall also be mailed to any Person described in TIA ss. 313(c).

            Failure to deliver a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
Except for a notice to the Trustee, which is deemed given only when received,
and except as otherwise provided in this Supplemental Indenture or the
Indenture, if a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.

Section 11.03. Governing Law.

            This Supplemental Indenture, the Notes and the Guarantees will be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the conflicts of law principles thereof. This
Supplemental Indenture is subject to the provisions of the TIA, and shall, to
the extent applicable, be governed by such provisions.

Section 11.04. Counterparts.

            This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.

Section 11.05. Table of Contents, Headings, etc.

            The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Supplemental Indenture and the Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

Section 11.06. Separability.

            Each provision of this Supplemental Indenture shall be considered
separable and if for any reason any provision which is not essential to the
effectuation of the basic purpose of this Supplemental Indenture and the
Indenture or the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

Section 11.07. Benefits of Supplemental Indenture and the Indenture.

            Nothing in this Supplemental Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders of Notes, any benefit or any legal or
equitable right, remedy or claim under this Supplemental Indenture and the
Indenture.


                                      -67-
<PAGE>

            IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be duly executed all as of the date and year first written above.


                                    CANANDAIGUA BRANDS, INC.

                                    By:   /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Executive Vice President and Chief
                                              Financial Officer

                                    BATAVIA WINE CELLARS, INC.

                                    By:   /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Treasurer


                                    BARTON INCORPORATED

                                    By:   /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President


                                    BARTON BRANDS, LTD.

                                    By:   /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President


                                    BARTON BEERS, LTD.

                                    By:   /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President


                                    BARTON BRANDS OF CALIFORNIA, INC.

                                    By:   /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President


                                      S-1
<PAGE>

                                    BARTON BRANDS OF GEORGIA, INC.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President


                                    BARTON DISTILLERS IMPORT CORP.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President


                                    BARTON FINANCIAL CORPORATION

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President


                                    STEVENS POINT BEVERAGE CO.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President


                                    CANANDAIGUA LIMITED

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Finance Director
                                              (Principal Financial Officer and
                                               Principal Accounting Officer)


                                    MONARCH IMPORT COMPANY

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President


                                      S-2
<PAGE>

                                    CANANDAIGUA WINE COMPANY, INC.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Treasurer


                                    CANANDAIGUA EUROPE LIMITED

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Treasurer


                                    ROBERTS TRADING CORP.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: President and Treasurer


                                    POLYPHENOLICS, INC.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President and Treasurer


                                    FRANCISCAN VINEYARDS, INC.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President and Treasurer


                                    ALLBERRY, INC.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Vice President and Treasurer


                                      S-3
<PAGE>

                                   CLOUD PEAK CORPORATION

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name: Thomas S. Summer
                                       Title: Vice President and Treasurer


                                    M.J. LEWIS CORP.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name: Thomas S. Summer
                                       Title: Vice President and Treasurer


                                    MT. VEEDER CORPORATION

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name: Thomas S. Summer
                                       Title: Vice President and Treasurer


                                    CANANDAIGUA B.V.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name:  Thomas S. Summer
                                       Title: Authorized Representative


                                    BARTON CANADA, LTD.

                                    By: /s/ Thomas S. Summer
                                       -----------------------------------------
                                       Name: Thomas S. Summer
                                       Title: Vice President


                                      S-4
<PAGE>

                                    HARRIS TRUST AND SAVINGS BANK,
                                      as Trustee


                                    By:/s/ D. G. Donovan
                                       -----------------------------------------
                                       Name: D. G. Donovan
                                       Title: Assistant Vice President

                                      S-5
<PAGE>

                                                                       EXHIBIT A

                                                        [CUSIP/ISIN No.:       ]

                                 {Face of Note}

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY OR A SUCCESSOR DEPOSITORY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF [   ], OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 2.01 AND 2.07 OF SUPPLEMENTAL INDENTURE NO.
4.(1)

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(2)

                            CANANDAIGUA BRANDS, INC.

                                 ---------------

                      8 1/2% SERIES C SENIOR NOTE DUE 2009

                                                              [CUSIP/ISIN] NO.

No. C-                                                                   (pound)

            CANANDAIGUA BRANDS, INC., a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to   , or
registered assigns, the principal sum of    United Kingdom pounds sterling on
November 15, 2009, at the office or agency of the Company referred to below, and
to pay interest thereon from May 15, 2000, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on May 15 and November 15, in each year, commencing November 15, 2000,

- ----------

(1)   Include this legend on any Global Security.

(2)   Include this legend on any Global Security issued to Cede & Co. as nominee
      of The Depository Trust Company.


                                      A-1
<PAGE>

at the rate of 8 1/2% per annum, in United Kingdom pounds sterling, until the
principal hereof is paid or duly provided for. Interest shall be computed on the
basis of a 360-day year comprised of twelve 30-day months.


            The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the regular record date for such interest, which
shall be May 1 or November 1 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Any such interest not so
punctually paid, or duly provided for, and interest on such defaulted interest
at the interest rate borne by the Notes, to the extent lawful, shall forthwith
cease to be payable to the Holder on such regular record date, and may be paid
to the Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on a special record date for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.

            Subject to the terms of Supplemental Indenture No. 4 hereinafter
referred to, payment of the principal of, premium, if any, and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose, in such coin or currency of the United Kingdom as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company, (i)
in the case of a Global Note, by wire or book entry transfer to the Depository
Trust Company, Morgan Guaranty Trust Company of New York, Brussels office, as
the operator of the Euroclear System or Clearstream Banking or their respective
nominees, or (ii) in all other cases, by check mailed to the address of the
Person entitled thereto as such address shall appear on the Register. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months.

            Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

            This Note is entitled to the benefits of Guarantees by each of the
Guarantors of the punctual payment when due of the Indenture Obligations made in
favor of the Trustee for the benefit of the Holders. Reference is hereby made to
Article Ten of Supplemental Indenture No. 4 hereinafter referred to for a
statement of the respective rights, limitations of rights, duties and
obligations under the Guarantees of each of the Guarantors.

            Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof or by the
authenticating agent appointed as provided in the Indenture by manual signature,
this Note shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.

            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed by the manual or facsimile signature of its authorized officers.

Dated:
                                       CANANDAIGUA BRANDS, INC.


                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:


                                      A-2
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

            This is one of the 8 1/2% Series C Senior Notes due 2009 referred to
in the within-mentioned Indenture.

                                       As Trustee, Harris Trust and Savings Bank


                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:


                                      A-3
<PAGE>

                                {Reverse of Note}

                            CANANDAIGUA BRANDS, INC.

                           8 1/2% SENIOR NOTE DUE 2009

            This Note is one of a duly authorized issue of Notes of the Company
designated as its 8 1/2% Senior Notes due 2009 (herein called the "Notes"),
limited in aggregate principal amount to (pound)300,000,000, issued under an
indenture (the "Base Indenture"), dated as of February 25, 1999, among the
Company, certain of the Guarantors and Harris Trust and Savings Bank, as trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), as supplemented by Supplemental Indenture No. 3 ("Supplemental
Indenture No. 3"), dated as of August 6, 1999, among the Company, certain of the
Guarantors and the Trustee, as further supplemented by Supplemental Indenture
No. 4 ("Supplemental Indenture No. 4" and together with the Base Indenture and
Supplemental Indenture No. 3, the "Indenture"), dated as of May 15, 2000, among
the Company, the Guarantors and the Trustee and all further indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, the Guarantors, the Trustee and the Holders of the Notes, and of
the terms upon which the Notes are, and are to be, authenticated and delivered.
Capitalized terms used herein without definition have the meanings assigned to
such terms in the Indenture.

            The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Notes or (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.

            The Notes will be redeemable, in whole or in part, at the option of
the Company at any time at a redemption price equal to the greater of (i) 100%
of the principal amount of such Notes, and (ii) as determined by the Quotation
Agent, the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of
interest accrued as of the date of redemption) discounted to the date of
redemption on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Gilt Rate plus 50 basis points, plus, in each
case, accrued interest thereon to the date of redemption.

            Upon the occurrence of a Change of Control, each Holder may require
the Company to repurchase all or a portion of such Holder's Notes in an amount
of (pound)1,000 or integral multiples of (pound)1,000, at a purchase price in
cash equal to 101% of the principal amount thereof, together with accrued and
unpaid interest, if any, to the date of repurchase.

            Under certain circumstances, in the event the Net Cash Proceeds
received by the Company from any Asset Sale, which proceeds are not used to
repay secured Indebtedness or invested in properties or assets used in the
businesses of the Company or reasonably related thereto, exceeds a specified
amount the Company will be required to apply such proceeds to the repayment of
the Notes and certain indebtedness ranking pari passu to the Notes.

            The Notes of any Holder will be subject to a Tax Redemption at 100%
of the principal amount thereof on the Redemption Date, plus accrued and unpaid
interest, if any, to the Redemption Date under the circumstances and subject to
the limitations described in the Indenture.

            In the case of any redemption or repurchase of Notes in accordance
with the Indenture, interest installments whose Stated Maturity is on or prior
to the redemption date will be available to the Holders of such


                                      A-4
<PAGE>

Notes of record as of the close of business on the relevant regular record date
referred to on the face hereof. Notes (or portions thereof) for whose redemption
and payment provision is made in accordance with the Indenture shall cease to
bear interest from and after the date of redemption.

            In the event of redemption or repurchase of this Note in accordance
with the Indenture in part only, a new Note or Notes for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the cancellation
hereof.

            If an Event of Default shall occur and be continuing, the principal
amount of all the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.

            The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Guarantors and the Holders under the Indenture and
the Notes and the Guarantees at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company and the Guarantors with certain provisions of
the Indenture and the Notes and the Guarantees and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note.

            No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Notes (in the event such Guarantor or
other obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.

            This Global Note will be exchangeable for Definitive Notes only (i)
(in whole but not in part) if either DTC, the Euroclear or Clearstream is closed
for business for a continuous period of 14 days (other than by reason of
holiday, statutory or otherwise) or announces an intention permanently to cease
business or does in fact do so and no alternative clearing system satisfactory
to the Trustee is available, or (ii) (in part) if an Event of Default under the
Indenture occurs and is continuing, upon the request delivered in writing to
DTC, Euroclear and/or Clearstream, the Trustee, the Common Depositary or the
Custodian by the owner of a Book-Entry Interest (as defined in the Indenture),
(iii) (in whole but not in part) if at any time the Company in its sole
discretion determines that this Global Note should be exchanged for Definitive
Notes or (iv) (in whole but not in part) if either the Custodian or the Common
Depositary is at any time unwilling or unable to continue as the Common
Depositary or the Custodian, as the case may be, and a successor Common
Depositary or Custodian, as the case may be, is not able to be appointed by the
Company within 90 days. Thereupon (in the case of (i), (ii) and (iv) above, the
holder of this Global Note (acting on the instructions of (a) holder(s) of (a)
Book-Entry Interest(s) may give notice to the Company and (in the case of (iii)
above) the Company may give notice to the Trustee and the Holders, of its
intention to exchange this Global Note for Definitive Notes on or after the
Exchange Date (as defined below).

            On or after the Exchange Date the holder of this Global Note may or,
in the case of (iii) above, shall surrender this Global Security to or to the
order of the Principal Paying Agent. In exchange for this Global Security the
Company will deliver, or procure the delivery of, Definitive Notes in registered
form in denominations of (pound)1,000 each or any integral multiple thereof in
exchange for the whole or, in the case of (ii) above, the relevant part of this
Global Note).


                                      A-5
<PAGE>

            "Exchange Date" means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Principal Paying Agent is located and in the city in which the
relevant clearing system is located.

            Upon (i) any exchange of a part of this Global Note for all or a
part another Global Note or for Definitive Notes or (ii) the purchase by or on
behalf of the Company, or any Subsidiary of the Company and cancellation of a
part of this Global Note in accordance with the Section 2.12 of Supplemental
Indenture No. 4, the portion of the principal amount hereof so exchanged or so
purchased and canceled shall be endorsed by or on behalf of the Principal Paying
Agent on behalf of the Company on Part II of the Schedule hereto, whereupon the
principal amount of this Global Note shall be reduced by the principal amount so
exchanged or so purchased and canceled and endorsed. Upon the exchange of the
whole of this Global Note for another Global Note or for Definitive Notes, this
Global Note shall be surrendered to or to the order of the Principal Paying
Agent and canceled and, if the holder of this Global Note requests, returned to
it together with any relevant Definitive Notes, if applicable.

            The Notes in certificated form are issuable only in registered form
without coupons in denominations of (pound)1,000 and any integral multiple
thereof.

            No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

            Prior to and at the time of due presentment of this Note for
registration of transfer, the Company, any Guarantor, the Trustee and any agent
of the Company, any Guarantor or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note is overdue, and neither the Company, the Trustee nor any agent shall
be affected by notice to the contrary.

            THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.


                                      A-6
<PAGE>

                             FORM OF TRANSFER NOTICE

I or we assign and transfer this Note to:

Please insert social security or other identifying number of assignee

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

Print or type name, address and zip code of assignee and irrevocably appoint

(Agent), to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.

Dated _______________________________Signed ____________________________________

(Sign exactly as name appears on the other side of this Note)

{Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17 Ad-15}


                                      A-7
<PAGE>

                                  THE SCHEDULES

                                     PART I

                   PAYMENTS OF PRINCIPAL, PREMIUM AND INTEREST

The following payments on this Global Note have been made:

                                            Remaining principal
                                            amount of this         Notation
                                            Global                 made on
Date    Interest     Premium    Principal   Note following         behalf of
made    paid         paid       paid        such payment           the Company
       (pound)       (pound)     (pound)        (pound)

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________

____    ________    __________  _________   ___________________   ______________


                                      A-8
<PAGE>

                                     PART II

                                    EXCHANGES
                         AND PURCHASES AND CANCELLATIONS

The following exchanges of a part of this Global Note for a like part of another
Global Note, of this Global Note for Definitive Notes and purchases and
cancellations of a part of this Global Note have been made:

<TABLE>
<CAPTION>
             Part of principal
             amount of this Global
             Note exchanged for a
             like part of another     Part of principal
             Global Note or vice      amount of this      Aggregate principal amount of
             versa or of this         Global Note         this Global Note following
             Global Note for          purchased and       such exchange or purchase and   Notation made on
Date made    Definitive Notes         canceled            cancellation                    behalf of the Company
                  (pound)               (pound)                  (pound)                      (pound)
<S>          <C>                      <C>                 <C>                             <C>

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________

_________    _____________________    _________________   _____________________________   _____________________
</TABLE>


                                      A-9
<PAGE>

                                                                       EXHIBIT B

                                 {Face of Note}

                            CANANDAIGUA BRANDS, INC.

                                 ---------------

                      8 1/2% SERIES C SENIOR NOTE DUE 2009

No. C-                                                                   (pound)

            CANANDAIGUA BRANDS, INC., a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to , or
registered assigns, the principal sum of United Kingdom pounds sterling on
November 15, 2009, at the office or agency of the Company referred to below, and
to pay interest thereon from May 15, 2000 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on May 15 and November 15, in each year, commencing November 15, 2000, at the
rate of 8 1/2% per annum, in United Kingdom pounds sterling, until the principal
hereof is paid or duly provided for. Interest shall be computed on the basis of
a 360-day year comprised of twelve 30-day months.

            The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the regular record date for such interest, which
shall be May 1 or November 1 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Any such interest not so
punctually paid, or duly provided for, and interest on such defaulted interest
at the interest rate borne by the Notes, to the extent lawful, shall forthwith
cease to be payable to the Holder on such regular record date, and may be paid
to the Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on a special record date for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.

            Subject to the terms of Supplemental Indenture No. 4 hereinafter
referred to, payment of the principal of, premium, if any, and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose, in such coin or currency of the United Kingdom as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company, (i)
in the case of a Global Note, by wire or book entry transfer to the Depository
Trust Company, Morgan Guaranty Trust Company of New York, Brussels office, as
the operator of the Euroclear System or Clearstream Banking or their respective
nominees, or (ii) in all other cases, by check mailed to the address of the
Person entitled thereto as such address shall appear on the Register. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months.

            Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

            This Note is entitled to the benefits of Guarantees by each of the
Guarantors of the punctual payment when due of the Indenture Obligations made in
favor of the Trustee for the benefit of the Holders. Reference is hereby made to
Article Ten of Supplemental Indenture No. 4 hereinafter referred to for a
statement of


                                      B-1
<PAGE>

the respective rights, limitations of rights, duties and obligations under the
Guarantees of each of the Guarantors.

            Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof or by the
authenticating agent appointed as provided in the Indenture by manual signature,
this Note shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.

            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed by the manual or facsimile signature of its authorized officers.

Dated:
                                       CANANDAIGUA BRANDS, INC.


                                       By:
                                          --------------------------------------
                                           Name:
                                           Title:

Attest:


- -----------------------------
Authorized Officer


                                      B-2
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

            This is one of the 8 1/2% Series C Senior Notes due 2009 referred to
in the within-mentioned Indenture.

                                       As Trustee, Harris Trust and Savings Bank


                                       By:
                                          --------------------------------------
                                           Name:
                                           Title:


                                      B-3
<PAGE>

                                {Reverse of Note}

                            CANANDAIGUA BRANDS, INC.

                           8 1/2% SENIOR NOTE DUE 2009

            This Note is one of a duly authorized issue of Notes of the Company
designated as its 8 1/2% Senior Notes due 2009 (herein called the "Notes"),
limited in aggregate principal amount to (pound)300,000,000, issued under an
indenture (the "Base Indenture"), dated as of February 25, 1999, among the
Company, certain of the Guarantors and Harris Trust and Savings Bank, as trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), as supplemented by Supplemental Indenture No. 3 ("Supplemental
Indenture No. 3"), dated as of August 6, 1999, among the Company, certain of the
Guarantors and the Trustee, as further supplemented by Supplemental Indenture
No. 4 (the "Supplemental Indenture No. 4" and together with the Base Indenture
and Supplemental Indenture No. 3, the "Indenture"), dated as of May 15, 2000,
among the Company, the Guarantors and the Trustee and all further indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, the Guarantors, the Trustee and the Holders of the Notes, and of
the terms upon which the Notes are, and are to be, authenticated and delivered.
Capitalized terms used herein without definition have the meanings assigned to
such terms in the Indenture.

            The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Notes or (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.

            The Notes will be redeemable, in whole or in part, at the option of
the Company at any time at a redemption price equal to the greater of (i) 100%
of the principal amount of such Notes, and (ii) as determined by the Quotation
Agent, the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of
interest accrued as of the date of redemption) discounted to the date of
redemption on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Gilt Rate plus 50 basis points, plus, in each
case, accrued interest thereon to the date of redemption.

            Upon the occurrence of a Change of Control, each Holder may require
the Company to repurchase all or a portion of such Holder's Notes in an amount
of (pound)1,000 or integral multiples of (pound)1,000, at a purchase price in
cash equal to 101% of the principal amount thereof, together with accrued and
unpaid interest, if any, to the date of repurchase.

            Under certain circumstances, in the event the Net Cash Proceeds
received by the Company from any Asset Sale, which proceeds are not used to
repay secured Indebtedness or invested in properties or assets used in the
businesses of the Company or reasonably related thereto, exceeds a specified
amount the Company will be required to apply such proceeds to the repayment of
the Notes and certain indebtedness ranking pari passu to the Notes.

            The Notes of any Holder will be subject to a Tax Redemption at 100%
of the principal amount thereof on the Redemption Date, plus accrued and unpaid
interest, if any, to the Redemption Date under the circumstances and subject to
the limitations described in the Indenture.

            In the case of any redemption or repurchase of Notes in accordance
with the Indenture, interest installments whose Stated Maturity is on or prior
to the redemption date will be available to the Holders of such


                                      B-4
<PAGE>

Notes of record as of the close of business on the relevant regular record date
referred to on the face hereof. Notes (or portions thereof) for whose redemption
and payment provision is made in accordance with the Indenture shall cease to
bear interest from and after the date of redemption.

            In the event of redemption or repurchase of this Note in accordance
with the Indenture in part only, a new Note or Notes for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the cancellation
hereof.

            If an Event of Default shall occur and be continuing, the principal
amount of all the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.

            The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Guarantors and the Holders under the Indenture and
the Notes and the Guarantees at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company and the Guarantors with certain provisions of
the Indenture and the Notes and the Guarantees and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note.

            No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Notes (in the event such Guarantor or
other obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.

            The Notes in certificated form are issuable only in registered form
without coupons in denominations of (pound)1,000 and any integral multiple
thereof.

            No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

            Prior to and at the time of due presentment of this Note for
registration of transfer, the Company, any Guarantor, the Trustee and any agent
of the Company, any Guarantor or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note is overdue, and neither the Company, the Trustee nor any agent shall
be affected by notice to the contrary.

            THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.


                                      B-5
<PAGE>

                             FORM OF TRANSFER NOTICE

I or we assign and transfer this Note to:

Please insert social security or other identifying number of assignee

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

Print or type name, address and zip code of assignee and irrevocably appoint____

_______________________

(Agent), to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.


Dated ___________________________ Signed _______________________________________

(Sign exactly as name appears on the other side of this Note)

{Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17 Ad-15}


                                      B-6
<PAGE>

                                                                       EXHIBIT C

                                   GUARANTEES

            For value received, each of the undersigned hereby unconditionally
guarantees, jointly and severally, to the holder of this Note the payment of
principal of, premium, if any, and interest on the Note upon which these
Guarantees are endorsed in the amounts and at the time when due and payable
whether by declaration thereof, or otherwise, and interest on the overdue
principal and interest, if any, of this Note, if lawful, and the payment or
performance of all other obligations of the Company under the Indenture or the
Notes, to the holder of this Note and the Trustee, all in accordance with and
subject to the terms and limitations of this Note and Article Ten of
Supplemental Indenture No. 4. These Guarantees will not become effective until
the Trustee duly executes the certificate of authentication on this Note.

Dated:_________________


                                          BATAVIA WINE CELLARS, INC.

                                          By:
                                             -----------------------------------


                                          BARTON INCORPORATED

                                          By:
                                             -----------------------------------


                                          BARTON BRANDS, LTD.

                                          By:
                                             -----------------------------------


                                          BARTON BEERS, LTD.

                                          By:
                                             -----------------------------------


                                      C-1
<PAGE>

                                          BARTON BRANDS OF CALIFORNIA, INC.

                                          By:
                                             -----------------------------------


                                          BARTON BRANDS OF GEORGIA, INC.

                                          By:
                                             -----------------------------------


                                          BARTON DISTILLERS IMPORT CORP.

                                          By:
                                             -----------------------------------


                                          BARTON FINANCIAL CORPORATION

                                          By:
                                             -----------------------------------


                                          STEVENS POINT BEVERAGE CO.

                                          By:
                                             -----------------------------------


                                      C-2
<PAGE>

                                          CANANDAIGUA LIMITED

                                          By:
                                             -----------------------------------


                                          MONARCH IMPORT COMPANY

                                          By:
                                             -----------------------------------


                                          CANANDAIGUA WINE COMPANY, INC.

                                          By:
                                             -----------------------------------


                                          CANANDAIGUA EUROPE LIMITED

                                          By:
                                             -----------------------------------


                                          ROBERTS TRADING CORP.

                                          By:
                                             -----------------------------------


                                      C-3
<PAGE>

                                          POLYPHENOLICS, INC.

                                          By:
                                             -----------------------------------


                                          FRANCISCAN VINEYARDS, INC.

                                          By:
                                             -----------------------------------


                                          ALLBERRY, INC.

                                          By:
                                             -----------------------------------


                                          CLOUD PEAK CORPORATION

                                          By:
                                             -----------------------------------


                                          M.J. LEWIS CORP.

                                          By:
                                             -----------------------------------


                                      C-4
<PAGE>

                                          MT. VEEDER CORPORATION

                                          By:
                                             -----------------------------------


                                          CANANDAIGUA B.V.

                                          By:
                                             -----------------------------------


                                          BARTON CANADA, LTD.

                                          By:
                                             -----------------------------------


                                      C-5
<PAGE>

                                                                       EXHIBIT D

                         FORM OF CERTIFICATE OF TRANSFER

      Re:   Canandaigua Brands, Inc. ("the Company")
            8 1/2% Series C Senior Notes due 2009 (the "Notes")

            Reference is hereby made to the Indenture, dated as of February 25,
1999 (the "Base Indenture"), among the Company, the Guarantors party thereto and
Harris Trust and Savings Bank, as trustee (the "Trustee"), as Supplemented by
Supplemental Indenture No. 3 ("Supplemental Indenture No. 3"), dated as of
August 6, 1999, among the Company, the Guarantors party thereto and the Trustee
and as further supplemented by Supplemental Indenture No. 4 ("Supplemental
Indenture No. 4" and, together with the Base Indenture and Supplemental
Indenture No. 3, the "Indenture"), among the Company, the Guarantors and the
Trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

            _______________________________ (the "Transferor") owns and proposes
to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto,
in a principal amount at maturity of $ _______________ (the "Transfer"), to
_______________________________ (the "Transferee"), as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby certifies
that:

                             [CHECK ALL THAT APPLY]

            1. |_| Check if Transferee will take delivery of a beneficial
interest in the 144A Global Note or a Definitive Note pursuant to Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the Book-Entry
Interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the Book-Entry Interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred Book-Entry Interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.

            2. |_| Check if Transferee will take delivery of a Book-Entry
Interest in the Regulation S Global Note or a Definitive Note pursuant to
Regulation S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act and (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred Book-Entry Interest or Definitive
Note


                                      D-1
<PAGE>

will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.

            3. |_| Check and complete if Transferee will take delivery of a
Book-Entry Interest in the 144A Global Note or a Definitive Note pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to Book-Entry Interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

            (a) |_| such Transfer is being effected pursuant to and in
      accordance with Rule 144 under the Securities Act;

            - or -

            (b) |_| such Transfer is being effected to the Company or a
      subsidiary thereof.

            4. |_| Check if Transferee will take delivery of a Book-Entry
Interest in an Unrestricted Global Note or an Unrestricted Definitive Note. The
Transfer is being effected pursuant to an effective registration statement under
the Securities Act and in compliance with the prospectus delivery requirements
of the Securities Act. Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred Book-Entry Interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend.

            This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.


                                    ____________________________________________

                                    [Insert Name of Transferor]


                                    By:_________________________________________
                                       Name:
                                       Title:

Dated:


                                      D-2
<PAGE>

                       ANNEX A TO CERTIFICATE OF TRANSFER

1.    The Transferor owns and proposes to transfer the following:

                            [CHECK ONE OF (a) or (b)]

      (a)   |_| a Book-Entry Interest in the:

            (i)   |_|  144A Global Note (ISIN _____________; Common Code
                       ________), held through Participant Account __________,
                       or

            (ii)  |_|  Regulation S Global Note (ISIN _______________; Common
                       Code ________), held through Participant Account
                       __________, or

      (b)   |_| a Restricted Definitive Note.

2.    After the Transfer the Transferee will hold:

                                   [CHECK ONE OF (a) or (b)]

      (a)   |_| a Book-Entry Interest in the:

            (i)   |_|  144A Global Note (ISIN _______________; Common Code
                       ________), held through Participant Account __________,
                       or

            (ii)  |_|  Regulation S Global Note (ISIN ______________; Common
                       Code ________), held through Participant Account
                       __________, or

            (iii) |_|  Unrestricted Global Note (ISIN _________________; Common
                       Code ________), held through Participant Account________.

      (b)   |_| a Restricted Definitive Note; or

      (c)   |_| a Unrestricted Definitive Note.


                                      D-3
<PAGE>

                                                                       EXHIBIT E

                         FORM OF CERTIFICATE OF EXCHANGE
               (BETWEEN BOOK-ENTRY INTERESTS AND DEFINITIVE NOTES)

      Re:   Canandaigua Brands, Inc. ("the Company")
            8 1/2% Series C Senior Notes due 2009 (the "Notes")

            Reference is hereby made to the Indenture, dated as of February 25,
1999 (the "Base Indenture"), among the Company, the Guarantors party thereto and
Harris Trust and Savings Bank, as trustee (the "Trustee"), as Supplemented by
Supplemental Indenture No. 3 ("Supplemental Indenture No. 3"), dated as of
August 6, 1999, among the Company, the Guarantors party thereto and the Trustee
and as further supplemented by Supplemental Indenture No. 4 ("Supplemental
Indenture No. 4" and, together with the Base Indenture and Supplemental
Indenture No. 3, the "Indenture"), among the Company, the Guarantors and the
Trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

            __________________________ (the "Owner") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified on Annex A hereto, in
a principal amount at maturity of $____________ (the "Exchange"). In connection
with the Exchange, the Owner hereby certifies that:

            1. Exchange of Book-Entry Interests in Restricted Global Notes for
Restricted Definitive Notes or Book-Entry Interests in Restricted Global Notes

            In connection with the Exchange of the Owner's Book-Entry Interest
      in a Restricted Global Note for a Restricted Definitive Note with an equal
      principal amount, the Owner hereby certifies that the Restricted
      Definitive Note is being acquired for the Owner's own account without
      transfer. Upon consummation of the proposed Exchange in accordance with
      the terms of the Indenture, the Restricted Definitive Note issued will
      continue to be subject to the restrictions on transfer enumerated in the
      Private Placement Legend printed on the Restricted Definitive Note and in
      the Indenture and the Securities Act.

              The Owner requests that Definitive Notes be registered in the
              following name:

                          ____________________________

                          ____________________________

                          and sent to the Owner at the following address:

                          ____________________________

                          ____________________________


                                      E-1
<PAGE>

            This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.

                                       [Insert Name of Owner]


                                       By: _____________________________________
                                           Name:
                                           Title:

Dated:


                                      E-2
<PAGE>

                                                                       EXHIBIT F

                                   [FORM OF ]
                                INTERCOMPANY NOTE

                                                                     ___________

            Evidences of all loans or advances ("Loans") made hereunder shall be
reflected on the grid attached hereto. FOR VALUE RECEIVED, __________, a
__________ corporation (the "Maker"), HEREBY PROMISES TO PAY ON DEMAND to the
order of __________ (the "Holder") the principal sum of the aggregate unpaid
principal amount to all Loans (plus accrued interest thereon) at any time and
from time to time made hereunder which has not been previously paid.

            Reference is hereby made to the Indenture, dated as of February 25,
1999 (the "Base Indenture"), among the Company, the Guarantors party thereto and
Harris Trust and Savings Bank, as trustee (the "Trustee"), as Supplemented by
Supplemental Indenture No. 3 ("Supplemental Indenture No. 3"), dated as of
August 6, 1999, among the Company, the Guarantors party thereto and the Trustee
and as further supplemented by Supplemental Indenture No. 4 ("Supplemental
Indenture No. 4" and, together with the Base Indenture and Supplemental
Indenture No. 3, the "Indenture"), among the Company, the Guarantors and the
Trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

                                    ARTICLE I

                           TERMS OF INTERCOMPANY NOTE

            Section 1.01 Note Forgivable. Unless the Maker of the Loan hereunder
is either of the Company or any Guarantor, the Holder may not forgive any
amounts owing under this intercompany note.

            Section 1.02 Interest: Prepayment. (a) The interest rate ("Interest
Rate") on the Loans shall be a rate per annum reflected on the grid attached
hereto.

            (b) The interest, if any, payable on each of the Loans shall accrue
from the date such Loan is made and, subject to Section 2.01, shall be payable
upon demand of the Holder.

            (c) If the principal or accrued interest, if any, of the Loans is
not paid on the date demand is made, interest on the unpaid principal and
interest will accrue at a rate equal to the Interest Rate, if any, plus 100
basis points per annum from maturity until the principal and interest on such
Loans are fully paid.

            (d) Subject to Section 2.01, any amounts hereunder may be prepaid at
any time by the Maker.

            Section 1.03 Subordination. All loans made to either of the Company
or any Guarantor shall be subordinated in right of payment to the payment and
performance of the obligations of the Company and any Subsidiary under the
Indenture, the Notes, the Guarantees or any other Indebtedness ranking pari
passu with the Notes, or any Guarantees, including, without limitation, any
Indebtedness incurred under the Credit Agreement; provided that with respect to
a Subsidiary in any specific instance, such Subsidiary is also an obligor under
the Indenture, the Notes, a Guarantee or such other senior or pari passu
Indebtedness, as the case may be, whether as a borrower, guarantor or pledgor of
collateral.


                                      F-1
<PAGE>

                                   ARTICLE II

                               EVENTS OF DEFAULT

            Section 2.01 Events of Default. If after the date of issuance of
this Loan (i) an Event of Default has occurred under the Indenture, (ii) an
"Event of Default" (as defined) has occurred under the Credit Agreement, or any
refinancing of the Credit Agreement or (iii) an "event of default" (as defined)
has occurred on any other Indebtedness of the Company or any Guarantor, then (x)
in the event the Maker is not either one of the Company or a Guarantor, all
amounts owing under the Loans hereunder shall be immediately due and payable to
the Holder, and (y) in the event the Maker is either the Company or a Guarantor,
the amounts owing under the Loans hereunder shall not be due and payable;
provided, however, that if such Event of Default or event of default has been
waived, cured or rescinded, such amounts shall no longer be due and payable in
the case of clause (x), and such amounts may be payable in the case of clause
(y). If the Holder is a Subsidiary, then the Holder hereby agrees that if it
receives any payments or distributions on any Loan from the Company or a
Guarantor which is not payable pursuant to clause (y) of the prior sentence
after any Event of Default or event or default described in clauses (i), (ii) or
(iii) above has occurred, is continuing and has not been waived, cured or
rescinded, it will pay over and deliver forthwith to the Company or such
Guarantor, as the case may be, all such payments and distributions.

                                   ARTICLE III

                                  MISCELLANEOUS

            Section 3.01 Amendments, Etc. No amendment or waiver of any
provision of this intercompany note, or consent to depart herefrom is permitted
at any time for any reason, except with the consent of the Holders of not less
than a majority in aggregate principal amount of the outstanding Notes.

            Section 3.02 Assignment. No party to this Agreement may assign, in
whole or in part, any of its rights and obligations under this intercompany
note, except to its legal successor in interest.

            Section 3.03 Third Party Beneficiaries. The holders of the Notes or
any other Indebtedness ranking pari passu with or senior to, the Notes or any
Guarantees, including without limitation, any Indebtedness incurred under the
Credit Agreement, shall be third party beneficiaries to this intercompany note
and shall have the right to enforce this intercompany note against the Company
or any of its Subsidiaries.

            Section 3.04 Headings. Article and Section headings in this
intercompany note are included for convenience of reference only and shall not
constitute a part of this intercompany note for any other purpose.

            Section 3.05 Entire Agreement. This intercompany note sets forth the
entire agreement of the parties with respect to its subject matter and
supersedes all previous understandings, written or oral, in respect thereof.

            Section 3.06 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).

            Section 3.07 Waivers. The Maker hereby waives presentment, demand
for payment, notice of protest and all other demands and notices in connection
with the delivery, acceptance, performance or enforcement hereof.


                                      F-2
<PAGE>

                                       By:
                                          --------------------------------------
                                          Name:
                                          Title:


                                      F-3
<PAGE>

                BORROWINGS, MATURITIES, AND PAYMENTS OF PRINCIPAL

                                            Amount
               Amount of    Maturity of   Principal      Unpaid
               Borrowing/    Borrowing/    Paid or     Principal    Notation
    Date       Principal     Principal     Prepaid      Balance      Made By
- -----------   -----------  ------------- -----------  -----------  ------------


                                      F-4
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>0003.txt
<TEXT>

                                 EXHIBIT 10.16
                                 -------------


[LOGO]    Canandaigua Wine Company








March 10, 1997


Mr. Thomas S. Summer
2332 Bryden Rd.
Columbus, OH 43209

Dear Tom:

I am pleased to submit to you, the following  employment offer for a position at
Canandaigua  Wine Company,  Inc. (the  "Company").  As we discussed the position
would be Senior Vice  President  and Chief  Financial  Officer  reporting to me,
President and Chief Executive Officer of the Company.

With respect to your compensation, the following describes the package:

1.  Starting  biweekly  salary of  $8,654.00,  subject to all  withholdings  and
deductions required by law.

2.  You will be eligible for a discretionary  bonus with a target of 45% of your
annualized  compensation  and a  maximum  amount  of  67.5%  of your  annualized
compensation.  The amount and specific terms of the bonus shall be determined by
the President and Chief Executive  Officer of the Company.  Notwithstanding  the
foregoing,  in no event,  shall your bonus for this fiscal year  constitute less
than 30% of your earned base salary specified in Section 1 hereof.

3.  A grant of  50,000  options  to  purchase  Company  Class  A  stock  if your
employment  commences as provided in Section  10(i) or 40,000 of such options if
your employment commences as provided in Section 10(ii). These options will have
an  exercise  price as of the date of grant  which  shall be your  first  day of
employment  and shall be subject to the terms of Exhibit A attached  hereto.  If
the price of the stock is higher  on your  first day of  employment  than on the
date of your  execution  of this  Agreement,  the  number  of  options  shall be
increased by a fraction the  numerator of which is the stock price on your first
day of employment and the denominator of which is the stock price on the date of
your execution of this Agreement.  In such event,  the vesting  schedule will be
adjusted pro rata with the schedule in Exhibit A.

         Canandaigua Wine Company, Inc. 116 Buffalo Street, Canandaigua,
                              New York 14424-1086
 Telephone (716) 394-7900 / Telex 856762 (CDGWINE) / Corp. Fax (716) 394-6017 /
                           Winery Fax (716) 394-4839

<PAGE>

Mr. Thomas S. Summer
Page 2
March 10, 1997


Currently the Company  issues  options to senior  executives on a  discretionary
basis.  The  Company  is  considering  an  option  grant  plan  for  its  senior
executives.  This plan may contemplate the granting of options  equaling 125% of
annual  earned  salary  and bonus if any.  If,  during  your  employment  in the
capacity  herein  provided,  such a plan is  proposed to the Board and the Board
were to approve such a plan,  subject to all the terms and  conditions of such a
plan, it is currently contemplated that you would be eligible therefor.

4.  On your first day of  employment,  you will receive a $50,000  bonus (pretax
amount) subject to all withholdings and deductions  required by law. If you were
to  terminate  your  employment  with the  Company at any time  during the first
twelve month period of your  employment,  except under the conditions of Section
8(ii) or (iii) hereof, you will reimburse to the Company an amount  constituting
a percentage of the $50,000 calculated on a pretax basis equal to the percentage
of the period remaining in the twelve months.

5.  Participation in all existing  employee benefit plans as you become eligible
per the terms of such plans as amended,  added to or  discontinued  from time to
time in the sole  discretion  of the Company,  such as health  care,  disability
insurance, life insurance, profit sharing, 401K and stock purchase plan.

6.  You will be eligible for four (4) weeks vacation  during each  calendar year
until such time you are eligible for more vacation under our vacation  policy as
such policy is amended from time to time.

7.  Relocation  expenses will be reimbursed as per the Company's  most inclusive
option under its relocation policy.

8.  In the event that the Company (i) terminates your employment  without cause,
(ii) demotes you without cause resulting in your voluntary  resignation from the
Company's employment within 30 days thereof or (iii) materially  diminishes your
responsibilities  without cause resulting in your resignation from the Company's
employment within 30 days thereof,  the Company shall provide you with severance
compensation   ("Severance")  equal  to  your  then  current  base  compensation
(excluding  bonus) for a period of twelve months,  subject to your entering into
the  Company's  standard  form  of  Severance  Agreement.  In  addition  to  the
foregoing,  should  there be a change in control as defined in Section  16(i) or
(ii) of the Company's Stock Option and Stock  Appreciation  Right Plan resulting
in the  occurrence  of items (i),  (ii) or (iii)  above you will be  entitled to
receive the Severance, subject to your entering into the Company's standard form
of Severance Agreement.  For purposes hereof,  "cause" shall be defined as gross
insubordination, a criminal act of moral turpitude or theft.

         Canandaigua Wine Company, Inc. 116 Buffalo Street, Canandaigua,
                              New York 14424-1086
 Telephone (716) 394-7900 / Telex 856762 (CDGWINE) / Corp. Fax (716) 394-6017 /
                           Winery Fax (716) 394-4839

<PAGE>

Mr. Thomas S. Summer
Page 3
March 10, 1997


9.  This  offer is  subject  to the  terms of the  Canandaigua  Wine  Employment
Application  ("Application").  In the event there is any  inconsistency  between
this letter of  agreement  and the  Application,  the terms of this letter shall
govern.

10. You shall have the option to commence your  employment  with the Company on:
(i) April 9, 1997, or (ii) a later date not beyond April 23, 1997.

Lastly,  by executing this letter of agreement,  you  acknowledge and agree that
your  employment  with  the  Company  is at will and can be  terminated  with or
without  cause  and  with or  without  notice.  Notwithstanding  this,  any such
termination  without  cause  shall not affect the  Company's  obligations  under
Sections 3 and 8 hereof.  You further  understand  and agree that this letter of
agreement  constitutes the entire  agreement of the parties;  is governed by New
York State law; there are no other written or oral agreements of the parties and
that this letter of  agreement  cannot be modified or amended  except in writing
executed by you and the President of the Company.

We look forward to your joining the Company.

Sincerely,

CANANDAIGUA WINE COMPANY, INC.

/s/ Richard Sands

Richard Sands
President

AGREED TO:

/s/ Thomas S. Summer
- --------------------------
Thomas S. Summer

Att.

RS/kjm



         Canandaigua Wine Company, Inc. 116 Buffalo Street, Canandaigua,
                              New York 14424-1086
 Telephone (716) 394-7900 / Telex 856762 (CDGWINE) / Corp. Fax (716) 394-6017 /
                           Winery Fax (716) 394-4839
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>0004.txt
<TEXT>

                                 EXHIBIT 10.17
                                 -------------



                                =================
                                Matthew Clark plc
                                =================
                        Whitchurch Lane, Bristol BS14 OJZ
                Tel: 01275 830345 Telex: 445565 Fax: 01275 890697



ATC/MCS/2000

P Aikens Esq
Princes Lodge
Shepton Mallet
BA4 5HN

24 June 1999



Dear Peter,

Further to our recent discussions,  I am writing to confirm that, with immediate
effect, the terms of your Service Agreement dated 27th September 1991 and varied
by  letters  dated  19th  August  1993 and 9th July  1996 be  further  varied to
continue  your  employment   without   providing  for  its  termination  due  to
retirement.

Accordingly  Clause 2(B) of said Service  Agreement is hereby deleted,  together
with the reference to your retirement at aged 62 years, contained in said letter
of 9th July 1996.

Further,  the Company will continue to contribute to your personal pension plans
at the  rate  of  36% of  your  basic  salary,  as  the  agreed  alternative  to
contributions to the Matthew Clark Pension Plan.

Lastly,  to the extent your Service  Agreement  provides  that various  matters,
including  but  not  limited  to,  decisions  relating  to your  employment  and
compensation are to be made by the Company or the Board, such decisions shall be
subject to  ratification  by appropriate  officers of Canandaigua  Brands,  Inc.
("CBI") or may be made in the first instance by CBI at its option.

In all other  respects  the  terms  and  conditions  of your  employment  remain
unaltered.

Yours sincerely,

/s/ Anne T. Colquhoun

Company Secretary

                                     Agreed

                                     P. Aikens
                                     -------------------
                                     Peter Aikens           24th June 1999

<PAGE>


                                =================
                                MATTHEW CLARK plc
                                =================
                       Whitchurch Lane, Briustol BS14 OJZ
               Tel: 01275 830345 Telex: 445565 Fax: 01275 890697


Our ref. MNFC/KC/118

9th July, 1996


Mr. P. Aikens
Princes Lodge,
Shepton Mallet,
Somerset,
BA4 5HN

Dear Peter,

Following the decisions of the meeting of the  Remuneration  Committee  today in
respect of your  Service  Agreement  with the  Company,  I am writing to confirm
that, with immediate effect, its' term be varied as follows.

The agreement  currently  provides for not less than  thirty-six  months notice.
This letter  confirms that this period of notice will be changed to  twenty-four
months. The notice from you to the Company of six months remains unchanged.

The normal  retirement  date stated in the  agreement is at aged 60 years.  This
letter confirms that this has been extended to at aged 62 years.

I would be grateful if you would acknowledge  acceptance of the above by signing
and returning a copy of this letter to me.

Yours sincerely,

/s/ Michael Cottrell

Michael Cottrell
Chairman
- --------

<PAGE>

[LOGO]
                                MATTHEW CLARK plc

             The Clock House, London Road, Guildford, Surrey GU1 1UW
                Telephone [Illegible] Facsimile [Illegible]


19 August 1993


AC/A349

P Aikens Esq
Old Meadows
3 Alders Road
Reigate, Surrey
RG2 OEA

Dear Peter,

Following our recent  discussions,  I am writing to confirm that with  immediate
effect,  the terms of your Service  Agreement,  dated 27 September  1991 will be
varied in respect of notice of termination of employment.

The contract  currently  provides for not less than twenty four months of notice
of termination to you from the Company. This letter confirms that this period of
notice  will be  increased  to thirty six  months.  The  notice  from you to the
Company will remain unchanged.

I would be grateful if you would acknowledge  acceptance of the above by signing
and returning a copy of this letter to me.

Yours sincerely

/s/ Michael Cottrell

M N F Cottrell


I agree to the change in my Service Agreement as detailed in the above letter.

Signature /s/ P Aikens     Date: 23 August 1993
          ------------     --------------------

<PAGE>



                            DATED 27th SEPTEMBER 1991
                            -------------------------



                                MATTHEW CLARK PLC

                                     - and -

                                  PETER AIKENS

                          -----------------------------



                                SERVICE AGREEMENT



                          -----------------------------











                                SLAUGHTER AND MAY
                              35 Basinghall Street
                                 London EC2V 5DB.


<PAGE>


T H I S  A G R E E M E N T  is made on 27th Sept 1991

B E T W E E N

(1) MATTHEW CLARK plc (registered in England No. 163952) whose registered office
is at The Clock House London Road Guildford Surrey GU1 1UW ("the Company")

     and

(2) PETER  AIKENS of Old  Meadows 3 Alders  Road,  Reigate  Surrey RH2 OEA ("the
Executive")

     W H E R E B Y  IT  IS AGREED as follows: -

1.   Definitions
     -----------

     In   this Agreement:

     "Associated  Company"  means  a  company  which  is  from  time  to  time a
     subsidiary or a holding company of the Company or a subsidiary  (other than
     the  Company)  of a holding  company  of the  Company.  In this  definition
     "subsidiary" and "holding company" have the same meanings as in Section 736
     of the Companies Act 1985, as originally enacted.

     "the Board" means the Board of Directors from time to time of the Company.

2.   Term of Appointment
     -------------------

     (A)  The Executive shall serve the Company as Chief Executive or

<PAGE>

          in such other  capacity  of a like  status as the  Company may require
          unless and until his  employment  shall be  terminated  by the Company
          giving to the Executive not less than 24 months'  notice in writing or
          the  Executive  giving  to the  Company  (at any time) not less than 6
          months' notice in writing.

     (B)  The Executive's employment shall in any event terminate on the date on
          which the Executive reaches the age of 60

3.   Powers and Duties
     -----------------

     (A)  The  Executive  shall  exercise such powers and perform such duties in
          relation to the business of the Company or any  Associated  Company as
          may from time to time be vested in or assigned to him by the  Company.
          The Executive  shall comply with all reasonable  directions  from, and
          all regulations of, the Company.

     (B)  The Executive, who shall work such hours as may reasonably be required
          for the proper  performance  of his duties,  shall devote the whole of
          his time,  attention and abilities  during those hours to carrying out
          his duties in a proper, loyal and efficient manner.

     (C)  The Executive shall travel to such places as the Company may from time
          to time require.

     (D)  The  Executive's  normal  place  of  work  shall  be at the  Company's
          premises  in London  Road,  Guildford,  Surrey or at such other  place
          within  the  United  Kingdom  as the  Company  may  from  time to time
          determine.   This   does  not   exclude   any   statutory   redundancy
          entitlements.

     (E)  The Company  shall be under no  obligation to vest in or assign to the
          Executive  any  powers  or  duties  or to  provide  any  work  for the
          Executive, and the Company may at any time or from

<PAGE>

          time to time during any period of notice as  specified  in Clause 2(A)
          of this Agreement or in circumstances in which it reasonably  believes
          that the  Executive  is  guilty  of  misconduct  or in  breach of this
          Agreement in order that the  circumstances  giving rise to that belief
          may be investigated  suspend the Executive from the performance of his
          duties or exclude  him from any  premises  of the Company and need not
          give any reason for so doing.  Salary  will not cease to be payable by
          reason only of such suspension or exclusion.

4.   Salary
     ------

     (A)  The Executive shall be paid monthly in arrears for his services during
          his  employment  a salary at the rate of 230,000  pounds  sterling per
          annum or at such  higher  rate or rates as the  Board may from time to
          time determine and notify to the Executive in writing.

     (B)  The  Executive  shall also be paid such  bonuses as the Board,  in its
          absolute discretion, may from time to time determine.

     (C)  At least once in each 12 months the Company  shall  review,  but shall
          not be obliged to increase, the salary payable under this Agreement.

     (D)  The Executive  shall not be entitled to any other salary or fees as an
          ordinary  or  executive  director  or  employee  of the Company or any
          Associated Company and the Executive shall, as the Company may direct,
          either  waive his right to any such  salary or fees or account for the
          same to the Company.

5.   Pensions
     --------

     The  Executive may join the Matthew Clark Pension Plan subject to the trust
     deed  and  rules,  which  are  available  for  inspection  at  the  Company
     Secretary's office at any time upon reasonable

<PAGE>

     notice. His contributions to the Scheme will be deducted from salary.

     A contracting out certificate issued by the Occupational  Pensions Board is
     in force in respect of the employment under this Agreement.

6.   Car
     ---

     The Company shall provide for the Executive (subject to his being qualified
     to drive) a motor car of a make and model selected by the Company (which in
     the  reasonable  opinion of the board having  regard to the  Company's  car
     policy from time to time in force, is  commensurate  with the status of the
     executive)  and shall bear or  reimburse  all of its costs.  The  Executive
     shall take good care of the car,  procure that the provisions of any policy
     of insurance  are observed and return the car to the  Company's  registered
     office or such other place as may be notified to him  immediately  upon the
     termination of his employment.

7.   Other Benefits
     --------------

     (A)  The Company shall provide for the  Executive  membership  for himself,
          his  spouse  and  dependant  children  up to the age of 18  years in a
          private  medical  expenses  insurance  scheme  approved by the Company
          subject always to the rules of such scheme;

     (B)  If the Executive becomes a member of the Matthew Clark Pension Plan he
          shall be  entitled  subject  to the  rules  thereof  to  receive  life
          insurance cover as a benefit thereof.  Payment of Life Insurance cover
          for  Executives  who are not members of the Company's  pension plan is
          only undertaken at the sole discretion of the Chairman of the Board.

<PAGE>

8.   Medical Examination
     -------------------

     The  Executive  shall at the  expense of the Company  submit  annually to a
     medical examination by a registered medical  practitioner  nominated by the
     Company and shall  authorise  such  medical  practitioner  to disclose  and
     discuss with the Company's  medical  adviser the results of the examination
     and the matters which arise from it so that the Company's  medical  adviser
     can  notify the  Company of any  matters  he  considered  might  impair the
     Executive from properly discharging his duties.

9.   Expenses
     --------

     The Company  shall  reimburse to the Executive on production of receipts if
     requested  all  reasonable  travelling,   hotel,  entertainment  and  other
     out-of-pocket  expenses  which he may from  time to time be  authorised  to
     incur in the execution of his duties hereunder.

10.  Holidays
     --------

     In  addition  to bank and  other  public  holidays  the  Executive  will be
     entitled to twenty five working days paid holiday in every calendar year to
     be taken at such time or times as may be approved  by the Chief  Executive.
     Holidays  not  taken  in  the  calendar  year  of  entitlement  or  by  the
     termination  of employment  will be lost and upon  termination by dismissal
     with  cause  the  Executive  will  not be  entitled  to any  pay in lieu of
     holiday.

11.  Inventions and Improvements
     ---------------------------

     (A)  It shall be part of the normal duties of the Executive at all times:-

          (i)  to consider in what manner and by what new methods or devices the
               products,  services,  processes,  equipment  or  systems  of  the
               Company, or any Associated Company, with

<PAGE>

               which he is  concerned  or for which he is  responsible  might be
               improved; and

          (ii) promptly to give the Secretary of the Company full details of any
               invention or  improvement  which he may from time to time make or
               discover in the course of his duties; and

          (iii)to  further  the  interests  of the  Company's  undertaking  with
               regard thereto.

          Subject to the Patents Act 1977, the Company shall be entitled free of
          charge to the sole ownership of any such invention or improvement  and
          to the exclusive use thereof.

     (B)  The  Executive  shall  forthwith and from time to time both during his
          employment and thereafter at the request and cost of the Company apply
          for and  execute and do all such  documents  acts and things as may in
          the opinion of the Board be necessary  or conducive to obtain  letters
          patent or other  protection  for any such  invention or improvement in
          any  part of the  world  and to vest  such  letters  patent  or  other
          protection in the Company or its nominees.

     (C)  The  Executive  hereby  irrevocably  authorises  the  Company  for the
          purposes of this Clause to make use of the name of the  Executive  and
          to sign and to execute any documents or do any thing on his behalf (or
          where  permissible to obtain the patent or other protection in its own
          name or in that of its nominees).

     (D)  The Executive  shall not knowingly do anything to imperil the validity
          of any patent or protection or any  application  therefor but shall at
          the cost of the Company render all possible assistance to the Company,
          or any Associated  Company,  both in obtaining and in maintaining such
          patents or other protection.

<PAGE>

     (E)  The  Executive  shall not either  during his  employment or thereafter
          exploit or assist others to exploit any invention or improvement which
          he may from time to time make or  discover in the course of his duties
          or (unless the same shall have become public knowledge) make public or
          disclose any such invention or improvement or give any  information in
          respect of it except to the Company or as it may direct.

12.  Confidential Information etc.
     -----------------------------

     The Executive shall not, either during his employment or thereafter, use to
     the  detriment or prejudice  of the Company or any  Associated  Company or,
     except in the proper course of his duties,  divulge to any person any trade
     secret or any other  confidential  information  concerning  the business or
     affairs of the Company or any Associated Company which may have come to his
     knowledge during his employment.

13.  Non-Solicitation
     ----------------

     The Executive will not for a period of twelve months after the  termination
     of his employment with the Company  (howsoever caused) wither personally or
     by an agent directly or indirectly:

          (i)  either  on his own  account  or for  any  other  person,  firm or
               company or in association  with or in the employment of any other
               person,  firm or company  solicit or serve or  interfere  with or
               endeavour  to entice  away  from the  Company  or any  Associated
               Company any person firm or company who within twelve months prior
               to or at the date of such termination was a customer of or in the
               habit of dealing with the Company or any  Associated  Company and
               with whom the Executive had contact or about whom he became aware
               or informed in the course of his employment; or

<PAGE>

          (ii) either on his own account or for any other person firm or company
               solicit or  interfere  with or  endeavour to entice away from the
               Company any employee director or consultant of the Company or any
               Associated Company; or

          (iii)represent   himself  as  being  in  any  way  connected  with  or
               interested  in the  business  of the  Company  or any  Associated
               Company.

14.  Non-Competition
     ---------------

     (A)  The Executive shall not during his employment  hereunder without prior
          consent in writing of the Company be directly or  indirectly  engaged,
          concerned or interested in any other business which:-

          (i)  is wholly or partly in competition  with any business  carried on
               by the Company or any Associated  Company or any of the foregoing
               by itself or themselves or in partnership, common ownership or as
               a joint venture with any third party; or

          (ii) as regards  any goods or services is a supplier to or customer of
               any such company;

          PROVIDED THAT the  Executive may hold directly or through  nominees up
          to five per cent. of the issued shares, debentures or other securities
          of any class of any company  whose  shares are listed on a  Recognised
          Investment  Exchange or in respect of which dealing takes place in the
          Stock  Exchange of Great Britain and Northern  Ireland  Limited or the
          Unlisted  Securities  Market or the Third  Market.  The prior  written
          consent of the Board shall be  required  before the  Executives  shall
          hold in excess of five per cent.  of the issued  shares  debentures or
          other securities of any class of any one such company.

<PAGE>

     (B)  The  Executive  will  not for a  period  of  three  months  after  the
          termination  of his  employment  with the Company  (howsoever  caused)
          either  personally or by an agent directly or indirectly either on his
          own account or for any other person, firm or company or in association
          with or in the  employment  of any other  person,  firm or  company be
          engaged in or  concerned  directly  or  indirectly  in any  executive,
          technical or advisory  capacity in any  business  concern (of whatever
          kind) which is in competition  with the business of the Company or any
          Associated Company.  This clause shall not restrain the Executive from
          being  engaged or concerned  in any business  concern in so far as the
          Executive's duties or work shall relate solely:-

          (i)  to  geographical  areas  where  the  business  concern  is not in
               competition with the Company or any Associated Company; or

          (ii) to services or  activities of a kind with which the Executive was
               not concerned to a material extent during his employment with the
               Company or any Associated Company.

15.  Return of Papers etc.
     ----------------------

     The Executive shall promptly  whenever  requested by the Company and in any
     event upon the termination of his employment  deliver up to the Company all
     lists of  clients or  customers,  correspondence  and all other  documents,
     papers and  records  which may have been  prepared by him or have come into
     his possession, custody or control in the course of his employment, and the
     Executive shall not be entitled to and shall not retain any copies thereof.
     Title and copyright therein shall vest in the Company.

16.  Directorship
     ------------

     (A)  The  removal  of the  Executive  from the  office of  Director  of

<PAGE>

          the  Company  or the  failure of the  Company  in  general  meeting to
          re-elect  the  Executive  as a  Director  of the  Company if under the
          Articles of Association  for the time being of the company he shall be
          obliged  to  retire by  rotation  or  otherwise  shall  terminate  his
          employment under this Agreement. Such termination shall be taken to be
          a  breach  by the  Company  of this  Agreement  unless  at the time of
          removal or failure to re-elect  the Company was  entitled to terminate
          the Executive's employment in accordance with Clause 18. The Executive
          shall not during his employment resign his office as a Director of the
          Company or any Associated Company or do anything which could cause him
          to be disqualified from continuing to act as such a Director.

     (B)  Upon the termination of his employment  howsoever  arising and without
          prejudice  to any rights  which he may have under this  Agreement  the
          Executive  shall  forthwith  resign  from  office as a Director of the
          Company and any Associated  Company in default of which the Company is
          hereby  irrevocably  authorised to appoint some person in his name and
          on his behalf to sign and do any documents or things necessary to give
          effect thereto.

17.  Sickness
     --------

     (A)  If the  Executive  shall be prevented  by illness or other  incapacity
          from  properly  performing  his duties  hereunder he shall report this
          fact forthwith to the Chairman of the Board and shall state, if known,
          the expected date of his resumption of normal duties. If the Executive
          is  so  prevented  for  eight  or  more  consecutive  days  (including
          Saturdays  and  Sundays)  he shall  provide a  medical  practitioner's
          statement  on  the  ninth  day  and  weekly  thereafter.   Immediately
          following  his return to work after a period of absence the  Executive
          shall complete a self-certification  form detailing the reason for his
          absence.

<PAGE>

     (B)  Subject  to  the   Executive's   compliance  with  the  provisions  of
          sub-clause (A) above and the Executive  having completed three months'
          continuous  employment  with the Company and subject to the  Executive
          undergoing a medical  examination by the Company Doctor if so required
          by the Chairman of the Board,  the Company  shall pay to the executive
          his full  remuneration  hereunder  for up to 26 weeks  absence  in any
          period of twelve months and thereafter such  remuneration,  if any, as
          the  Chairman of the Board shall in his  discretion  from time to time
          allow  provided  that there shall be deducted  from or set off against
          such  remuneration  any  statutory  sick pay to which the Executive is
          entitled.

18.  Termination of Employment
     -------------------------

     If the Executive:-

          (i)  shall be or become  incapacitated  from any cause whatsoever from
               efficiently  performing his duties  hereunder for six consecutive
               months or for one hundred and thirty working days in aggregate in
               any period of twelve consecutive months; or

          (ii) shall have an order under Section 252 of the  Insolvency Act 1986
               made in respect of him or if an interim  receiver of his property
               is appointed under Section 286 of that Act; or

          (iii) shall be or become prohibited by law from being a Director; or

          (iv) shall be guilty of  misconduct  or shall  commit  any  serious or
               persistent breach of any of his obligations to the Company or any
               Associated  Company  (whether under this Agreement or otherwise);
               or

<PAGE>

          (v)  shall refuse or neglect to comply with any lawful orders given to
               him by the Company

     then the Company shall be entitled by notice in writing to the Executive to
     terminate  forthwith his  employment  under this  Agreement.  The Executive
     shall have no claim against the Company by reason of such termination.

     Any  delay  or  forbearance  by the  Company  in  exercising  any  right of
     termination shall not constitute a waiver of it.

19.  Miscellaneous Matters
     ---------------------

     (A) The Executive's  employment with the Company  (formerly  called Matthew
     Clark & Sons  (Holdings) plc) which began on 1st May 1990 counts as part of
     the  Executive's  continuous  period of employment with the Company for the
     purpose of the Employment Protection (Consolidation) Act 1978.

     (B) The Executive is subject to the Company's  Disciplinary Rules from time
     to time in force.

     (C) If the Executive has a grievance  relating to his  employment he should
     first apply in person to the Chairman of the Company.  If the matter is not
     then settled the Executive may apply to the Board.

20.  Notices
     -------

     Any notice may be given  personally to the Executive or to the Secretary of
     the Company  (as the case may be) or may be posted to the Company  (for the
     attention of its Secretary) at its registered  office for the time being or
     to the  Executive  either at his  address  given above or at his last known
     address.  Any such notice sent by post shall be deemed  served  forty-eight
     hours after it is posted and in proving such service it shall be sufficient
     to prove that the notice was properly addressed and put in the post.

<PAGE>

21.  Other Agreements
     ----------------

     The  Executive  acknowledges  and warrants  that there are no agreements or
     arrangements  whether  written,  oral or implied between the Company or any
     Associated  Company and the  Executive  relating to the  employment  of the
     Executive  other than those expressly set out in this Agreement and that he
     is not entering into this Agreement in reliance on any  representation  not
     expressly set out herein.

     I N W I T N E S S whereof this Agreement has been signed by or on behalf of
     the parties hereto the day and year first before written.

SIGNED by                       )                    /s/ Francis Gordon Clark
on behalf of the company        )
in the presence of :- )                              /s/ Susanna Heinneman




SIGNED by the Executive         )                    /s/ P Aikens  27/9/91
in the presence of :- )                              /s/ Unknown   27/9/91



TGMB0058.91D


<PAGE>

               ======================
               Matthew Clark and Sons
[Logo]         (Holdings) Plc.
               ======================
               Registered Office:  183-185 Central Street, London EC1V 8DR
               Telephone:  01-253 7646   Telex:  24357   Facsimile:  01-251 0263
                               Registered in England 163952



Peter Aikens Esq
Old Meadows                                                      22nd March 1990
3 Alders Road
Reigate
RH2 OEA

Dear Peter:

     Thank you for  returning  your  acceptance  of our offer of the position of
Chief Executive of the Group. As agreed on the telephone I confirm that,  should
you decide to take out a personal  pension plan,  the company will pay into such
plan the equivalent percentage of your basic salary which would apply were you a
member of the Company  Pension Scheme in every year that you make a contribution
to that plan.  Therefore  should the company decide not to make a payment to its
own scheme in any year (take a pension  holiday) it will make a contribution  to
your personal plan in that year.

                                           Yours sincerely,



                                           F.W. Gordon Clark








Directors:  F.W. Gordon Clark, Chairman, C.S. Gordon Clark, G.L. Gordon Clark,
OBE, J.V.M. Gordon Clark, FCA, Secretary, M. Cowen, B.N.A. Hardman, P.D. Kelley,
FCA, Mrs. M. Maxwell, I.E. Thomas, BSc, ACA, R.H. Walters


<PAGE>

               ======================
               Matthew Clark and Sons
[Logo]         (Holdings) Plc.
               ======================
               Registered Office:  183-185 Central Street, London EC1V 8DR
               Telephone:  01-253 7646   Telex:  24357   Facsimile:  01-251 0263
                               Registered in England 163952


PRIVATE AND STRICTLY CONFIDENTIAL
- ---------------------------------

Peter Aikens Esq
Old Meadows                                                      16th March 1990
3 Alders Road
Reigate
RH2 OEA

Dear Mr Aikens,

     Following the  conversations we have had with you recently,  I am delighted
to offer you the  position  as a director of Matthew  Clark and Sons  (Holdings)
Plc. For an appointment of this seniority we would normally expect the candidate
to  undergo  a  medical  examination.  However,  since you have told me that you
recently  had a BUPA  examination,  I would be happy to accept this if you could
provide me with a copy of the report as agreed.  Should this not be forthcoming,
I  would  ask you to  arrange  with  Michael  Cottrell  for you to have  another
examination.

     We all look forward to working with you and we believe that you will play a
very significant role in the future development of the Group.

1.   Position
     --------

     Your  position  will be that of Chief  Executive of the Group  reporting to
     myself as Chairman and to the Group Board.

2.   Responsibilities
     ----------------

     You will be responsible  for the executive  management of the Group and for
     all management matters affecting its interests, within strategies, policies
     and  plans  agreed  by the  Board  and  subject  to  established  levels of
     authority.   In  particular,   you  will  be  responsible  for  the  profit
     performance of the Group and for the achievement of business plans.

3.   Base Salary
     -----------

     Your base salary will be (pound) 95,000 p.a. Salaries are reviewed annually
     on the May 1st.  The first  renewal  date for your  salary will be May 1st,
     1991.

Directors:  F.W. Gordon Clark, Chairman, C.S. Gordon Clark, G.L. Gordon Clark,
OBE, J.V.M. Gordon Clark, FCA, Secretary, M. Cowen, B.N.A. Hardman, P.D. Kelley,
FCA, Mrs. M. Maxwell, I.E. Thomas, BSc, ACA, R.H. Walters


<PAGE>
MATTHEW CLARK & SONS (HOLDINGS) PLC


4.   Performance Related Bonus
     -------------------------

     This will be payable on the Group's  pre-tax  profit  achievement  measured
     against the budgeted result.

     However, for your first financial year, i.e. 1990/91, we will guarantee you
     a (pound) 20,000 bonus.  In subsequent  years,  your bonus will be governed
     according to the rules currently in place for members of the Plc Board.

5.   Company Car
     -----------

     You will be provided  with a company  car,  the make and model to be agreed
     with the Chairman, by May 1992. In the interim period the company agrees to
     purchase your present car, a Mercedes  420SE, at its market value as at 1st
     May 1990.

6.   Holidays
     --------

     You are entitled to 25 working days per annum with additional days for long
     service in line with company policy.

7.   Pension Scheme
     --------------

     It is  likely  that  the  most  advantageous  arrangement  for you may be a
     personal  pension plan. The Company  undertakes to pay into such a plan the
     equivalent  percentage  of your basic  salary  which would apply were you a
     member of the Company pension scheme.

8.   Share Options
     -------------

     These are issued at the  discretion  of the Board.  It is our  intention to
     issue you with 50,000 share options during a permitted period within twelve
     months after you join.  In addition you may subscribe up to (pound) 100 per
     month to the Company's Share Save Scheme.

9.   Period of Notice
     ----------------

     Your contract of employment may be terminated by the Company at any time by
     giving  twenty-four  months  notice in writing.  You may terminate the same
     contract by giving the Company twelve months notice in writing at any time.
     We will arrange for a full Service Agreement to be drawn up.

10.  Health Insurance and Screening
     ------------------------------

     The company's WPA health  insurance scheme will cover you and your wife and
     children up to the age of twenty-one.

<PAGE>

MATTHEW CLARK & SONS (HOLDINGS) PLC


11.  Sick Pay
     --------

     This will be paid in line with Company policy up to twenty-six weeks.

     I note that you are currently  negotiating your pension  arrangements  with
Elders and that you expect these to be finalised  within the next ten days.  You
do not expect to have to work out three months'  notice with them and hope to be
able to join us by the end of April 1990.

     Both on a  professional  and  personal  basis I am very pleased to make you
this offer and those of my colleagues  who have met you are  enthusiastic  about
what  they see as your  potential  to do well in this  business  and to  provide
strong leadership to the Group.

     I would be  grateful  if you were to sign both copies of this letter at the
foot of this page and return one copy to me, indicating your acceptance.

                                        Yours sincerely,

                                        /s/ F.W. Gordon Clark

                                        F.W. Gordon Clark




I have read the above letter of offer and understood  its terms and  conditions,
which I accept.

Signed     Peter Aikens                                Dated    20 March 1990
           ------------                                         -------------





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-11
<SEQUENCE>5
<FILENAME>0005.txt
<TEXT>

                                             EXHIBIT 11.1
                                             ------------
<TABLE>

                              CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES

                               COMPUTATION OF EARNINGS PER COMMON SHARE

                                 (in thousands, except per share data)

<CAPTION>

                                              For the Year Ended
                                                 February 29,             For the Years Ended February 28,
                                              -------------------    ------------------------------------------

                                                     2000                   1999                   1998
                                              -------------------    -------------------    -------------------

                                               Basic     Diluted      Basic     Diluted      Basic     Diluted
                                              --------   --------    --------   --------    --------   --------

<S>                                           <C>        <C>         <C>        <C>         <C>        <C>
Income before extraordinary item              $ 77,375   $ 77,375    $ 61,909   $ 61,909    $ 47,130   $ 47,130
Extraordinary item, net of income taxes           --         --       (11,437)   (11,437)       --         --
                                              --------   --------    --------   --------    --------   --------
Income applicable to common shares            $ 77,375   $ 77,375    $ 50,472   $ 50,472    $ 47,130   $ 47,130
                                              ========   ========    ========   ========    ========   ========
Shares:
Weighted average common shares outstanding      18,054     18,054      18,293     18,293      18,672     18,672
Adjustments:
  Stock options                                   --          445        --          461        --          433
                                              --------   --------    --------   --------    --------   --------
Adjusted weighted average common shares
  outstanding                                   18,054     18,499      18,293     18,754      18,672     19,105
                                              ========   ========    ========   ========    ========   ========
Earnings per common share:
  Income before extraordinary item            $   4.29   $   4.18    $   3.38   $   3.30    $   2.52   $   2.47
  Extraordinary item                              --         --         (0.62)     (0.61)       --         --
                                              --------   --------    --------   --------    --------   --------
Earnings per common share                     $   4.29   $   4.18    $   2.76   $   2.69    $   2.52   $   2.47
                                              ========   ========    ========   ========    ========   ========
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>6
<FILENAME>0006.txt
<TEXT>

                                  EXHIBIT 21.1
                                  ------------


                    SUBSIDIARIES OF CANANDAIGUA BRANDS, INC.


             PLACE OF INCORPORATION     SUBSIDIARY

             New York                   Batavia Wine Cellars, Inc.
             New York                   Canandaigua Wine Company, Inc.
             New York                   Canandaigua Europe Limited
             Netherlands                Canandaigua B.V.
             England and Wales          Canandaigua Limited
             New York                   Polyphenolics, Inc.
             New York                   Roberts Trading Corp.
             Delaware                   Franciscan Vineyards, Inc.
             California                 Allberry, Inc.
             California                 Cloud Peak Corporation
             California                 M.J. Lewis Corp.
             California                 Mt. Veeder Corporation
             Delaware                   Barton Incorporated
             Delaware                   Barton Brands, Ltd.
             Maryland                   Barton Beers, Ltd.
             Connecticut                Barton Brands of California, Inc.
             Georgia                    Barton Brands of Georgia, Inc.
             Illinois                   Barton Canada, Ltd.
             New York                   Barton Distillers Import Corp.
             Delaware                   Barton Financial Corporation
             Canada                     Schenley Distilleries Inc. / Les
                                           Distilleries Schenley Inc.
             Wisconsin                  Stevens Point Beverage Co.
             Illinois                   Monarch Import Company
             England and Wales          Matthew Clark plc
             England and Wales          Freetraders Group Limited
             England and Wales          Matthew Clark Wholesale Limited
             England and Wales          Matthew Clark Brands Limited
             England and Wales          The Gaymer Group Europe Limited

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>7
<FILENAME>0007.txt
<TEXT>

                                   EXHIBIT 23.1
                                   ------------

                                                           [LOGO]
                                                                 ARTHUR ANDERSEN









CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
report  included  in  this  Form  10-K,  into  the  Company's  previously  filed
Registration  Statements  on  Form  S-8  file  numbers  33-26694,  33-56557  and
333-88391 and Form S-3 file number 333-91587.

                                                /s/ Arthur Andersen LLP

Rochester, New York
May 30, 2000

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>8
<FILENAME>0008.txt
<TEXT>

<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's February 29, 2000 Form 10-K and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000016918
<NAME> CANANDAIGUA BRANDS, INC.
<MULTIPLIER> 1,000

<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          FEB-29-2000
<PERIOD-END>                               FEB-29-2000
<CASH>                                          34,308
<SECURITIES>                                         0
<RECEIVABLES>                                  291,108
<ALLOWANCES>                                         0
<INVENTORY>                                    615,700
<CURRENT-ASSETS>                               995,997
<PP&E>                                         707,338
<DEPRECIATION>                                 164,367
<TOTAL-ASSETS>                               2,348,791
<CURRENT-LIABILITIES>                          438,217
<BONDS>                                      1,237,135
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                           220
<OTHER-SE>                                     520,620
<TOTAL-LIABILITY-AND-EQUITY>                 2,348,791
<SALES>                                      2,340,469
<TOTAL-REVENUES>                             2,340,469
<CGS>                                        1,618,009
<TOTAL-COSTS>                                1,618,009
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             106,082
<INCOME-PRETAX>                                128,959
<INCOME-TAX>                                    51,584
<INCOME-CONTINUING>                             77,375
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    77,375
<EPS-BASIC>                                       4.29
<EPS-DILUTED>                                     4.18


</TABLE>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
