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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): JUNE 12, 1997
SARATOGA BEVERAGE GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-62038NY 14-1749554
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
11 GEYSER ROAD
SARATOGA SPRINGS, NEW YORK 12866
(Address of principal executive offices) (Zip Code)
(518) 584-6363
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On June 12, 1997, the registrant ("Saratoga") entered into a
Securities Purchase Agreement with Parley International, as nominee for Maerki
Baumann & Co., A.G. (Zurich) ("Purchaser"), pursuant to which Purchaser acquired
$1,500,000 principal amount of Saratoga's 5% Subordinated Convertible Notes due
2000 (the "Note") for an aggregate purchase price of $1,500,000 in a private
placement effected under Section 4(2) of the Securities Act of 1933. A copy of
the Securities Purchase Agreement is attached hereto as Exhibit 1.
The principal amount of the Note is due and payable on the
third anniversary of the Note and is convertible at the option of the holder
into shares of Saratoga's Class A Common Stock at a conversion price of $3.50
principal amount per share. The Note is mandatorily convertible into shares of
Class A Common Stock in the event that the closing price of Class A Common Stock
exceeds $5.25 for three consecutive trading days. If converted in full, the Note
would convert into 428,571 shares of Class A Common Stock, or approximately
12.3% of the common stock of the Company, based on the 3,045,760 shares of
common stock (including both Class A Common Stock and Class B Common Stock)
outstanding as of May 8, 1997. A form of the Note is attached hereto as Exhibit
2.
Global Financial Group, Inc. acted as placement agent in
connection with the offering of the Note and, in connection therewith, received
a cash commission in the amount of 5% and was issued a warrant to acquire 30,000
shares of Class A Common Stock for an exercise price of $3.50 per share.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
1. Securities Purchase Agreement, dated as of June 12,
1997, by and between Saratoga Beverage Group, Inc.
and Parley International, as nominee.
2. Form of 5% Subordinated Convertible Note due 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SARATOGA BEVERAGE GROUP, INC.
By: /s/ Robin Prever
-------------------------
Robin Prever
Chief Executive Officer
Date: June 13, 1997
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SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of June 12, 1997 by and between Saratoga Beverage Group, Inc., a
Delaware corporation (the "Company"), and Parley International, as nominee for
Maerki Baumann & Co., A.G. (Zurich) (the "Purchaser").
This Agreement sets forth the terms and conditions upon which the
Purchaser is purchasing from the Company, and the Company is issuing to the
Purchaser, for an aggregate purchase price of $1,500,000 (the "Purchase Price"),
$1,500,000 aggregate principal amount of the Company's 5% Subordinated
Convertible Notes due 2000, in the form annexed hereto as Exhibit A (the
"Note"), which Note shall be convertible into shares of the Company's Class A
common stock, $.01 par value per share (the "Class A Common Stock"), based on a
conversion price of $3.50 per share of Class A Common Stock.
In consideration of the premises and of the mutual agreements and
covenants hereinafter set forth, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Purchaser hereby agree as follows:
1. Definitions.
1.1 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Business Day" means a day of the year on which banks are not
required or authorized to be closed in the City of New York.
"Commission" means the Securities and Exchange Commission.
"control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly in any
capacity, including, without limitation, as a trustee or executor (in each case,
acting in a fiduciary capacity), of the power to direct or cause the direction
of the management or policies of a person, whether through the ownership of
voting securities, by contract or otherwise.
"Dollars" or "$" means the legal currency of the United States
of America.
"Encumbrance" means a pledge, lien, security interest,
mortgage, charge, adverse claim of ownership or use, or other encumbrance of any
kind.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means general accepted accounting principles in the
United States.
"Material Adverse Effect" means any change in, or effect on,
the business of the Company, as it is currently conducted, that is or is
reasonably likely to be materially adverse to the business, prospects, property,
condition (financial or otherwise) or operations of the Company.
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"person" means an individual, corporation, partnership, joint
venture, person, trust, estate, association or other entity.
"Securities Act" means the Securities Act of 1933, as amended.
"subsidiary" of any person means any corporation, partnership,
joint venture, trust, association or other legal entity of which such person
(either alone or through or together with any other subsidiary) owns, directly
or indirectly, more than 50% of the voting power of such entity.
1.2 References; Incorporation by Reference. References to a "Schedule"
or an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit
annexed to this Agreement, each of which is deemed to be a part hereof and
incorporated herein by reference.
2. Purchase And Sale.
2.1 Authorization and Description of the Note.
(a) The Company has authorized the issuance and sale of
$1,500,000 aggregate principal amount of the Company's 5% Subordinated
Convertible Notes due 2000 in substantially the form annexed hereto as Exhibit A
(the "Note").
(b) The principal amount of the Note, together with accrued
and unpaid interest thereon, shall be due and payable on the third anniversary
of the date of issuance of the Note. The Note shall bear interest from the date
the Note was issued, and interest shall be paid on each of the first, second and
third anniversaries of the date of issuance of the Note until the principal
amount of the Note shall be due and paid (whether at maturity, by acceleration
or otherwise), at a rate equal to five percent (5%) per annum. Interest shall be
computed on the basis of a 360-day year consisting of twelve (12) 30-day months.
(c) The Note shall be convertible at any time into shares of
Class A Common Stock at a conversion rate equal to $3.50 per share of Class A
Common Stock, subject to adjustment or mandatory conversion under certain
circumstances described in the Note.
2.2 Purchase and Sale of Securities; Closing.
(a) The Company agrees to sell to the Purchaser, and upon and
subject to the terms and conditions hereof and, in reliance upon the
representations and warranties of the Company, the Purchaser agrees to purchase
from the Company, the Note.
(b) The Note is to be sold and delivered at a closing (the
"Closing"), to be held on or about June 12, 1997 (the "Closing Date"). On the
Closing Date, the Company shall deliver to the Purchaser the Note, dated as of
the Closing Date, in the principal amount of $1,500,000 in the Purchaser's name
against payment of the Purchase Price.
3. Representations and Warranties of the Company.
The Company represents and warrants to the Purchaser as follows:
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3.1 Organization and Qualification. The Company is a corporation duly
incorporated, organized, validly existing and in good standing under the laws of
the State of Delaware, and the Company has the requisite corporate power to own
its properties and carry on its business as now being conducted. The Company is
duly qualified as a foreign corporation to do business, and is in good standing,
in each other jurisdiction where the character of its properties owned or held
under lease or the nature of its activities makes such qualification necessary,
except to the extent that any such failure so to qualify is not reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect.
3.2 Capitalization. The authorized capital stock of the Company
consists of 50,000,000 shares of Class A Common Stock, 2,000,000 shares of the
Company's Class B common stock, $.01 par value per share ("Class B Common
Stock") and 5,000,000 shares of preferred stock, $.01 par value, of the Company.
As of May 8, 1997, 2,228,447 shares of Class A Common Stock, 817,313 shares of
Class B Common Stock and no shares of preferred stock of the Company were issued
and outstanding. As of May 8, 1997, options and warrants exercisable to purchase
425,916 and 137,680 shares of Class A Common Stock, respectively, were
outstanding. On the date when the shares of Class A Common Stock issuable upon
conversion of the Note are issued, such shares will be duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights and
Encumbrances. The Company has reserved for issuance 428,571 shares of Class A
Common Stock in connection with this Agreement.
3.3 Authority. The Company has all necessary corporate power and
authority to enter into this Agreement and the Note, to carry out its
obligations hereunder and to consummate the transactions contemplated hereby.
The Company has taken all necessary corporate action to authorize the execution,
delivery and performance by it of this Agreement, the Note and all other
documents or instruments required to consummate the transactions contemplated
hereby. This Agreement and the Note have been duly executed and delivered by the
Company and, assuming due authorization, execution and delivery of the Agreement
by the Purchaser, this Agreement and the Note constitute the legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with their respective terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency (including, without limitation, all laws relating to
fraudulent transfers), moratorium or similar laws affecting creditors' rights
and remedies generally, subject, as to enforceability, to the effect of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and subject to the effect of applicable
securities laws as to rights to indemnification.
3.4 Consents; Compliance.
(a) Other than in connection with or in compliance with the
rules of the Nasdaq Stock Market, the Securities Act and the Exchange Act
applicable to the issuance of shares of Class A Common Stock, the execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company will not, require any consent, approval, authorization
or other action by, or filing with or notification to, any governmental or
regulatory authority, except where failure to obtain such consent, approval,
authorization or action, or to make such filing or notification, would not
prevent the Company from performing any of its material obligations under this
Agreement and would not have a Material Adverse Effect.
(b) The execution, delivery and performance of this Agreement
by the Company do not (i) conflict with or violate the charter or by-laws of the
Company, or (ii) except as would not prevent the Company from performing any of
its material obligations under this Agreement and would not have a
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Material Adverse Effect, (A) conflict with or violate any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award applicable to
the Company, or (B) result in any breach of, or constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of the Company pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument relating to such assets or properties to which the Company is a
party or by which any of such assets or properties is bound.
3.5 Commission Filings. The Company has filed all required forms,
reports and other documents with the Commission for periods from and after
January 1, 1996 (collectively, the "Commission Filings"), each of which has
complied in all material respects with all applicable requirements of the
Securities Act and the Exchange Act. The Company has heretofore made available
to the Purchaser all of the Commission Filings, including the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1996. As of their
respective dates, the Commission Filings (including all exhibits and schedules
thereto and documents incorporated by reference therein) did not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances under which
they were made, not misleading. The audited consolidated financial statements
and unaudited consolidated interim financial statements of the Company and its
subsidiaries included or incorporated by reference in such Commission Filings
have been prepared in accordance with GAAP (except as may be indicated in the
notes thereto or, in the case of the unaudited statements, as permitted by Form
10-QSB), complied as of their respective dates in all material respects with
applicable accounting requirements and the published rules and regulations of
the Commission with respect thereto, and fairly present the consolidated
financial position of the Company and its subsidiaries as of the dates thereof
and the consolidated income and retained earnings and sources and applications
of funds for the periods then ended (subject, in the case of any unaudited
interim financial statements, to the absence of footnotes required by GAAP and
normal year-end adjustments).
3.6 Interim Changes. Since December 31, 1996, except as described in
the Commission Filings, to the knowledge of the Company, there has not been any
event which has had or would be expected to have a Material Adverse Effect.
3.7 Absence of Undisclosed Liabilities. Since December 31, 1996, except
as described in the Commission Filings, the Company has no indebtedness,
liability or obligation of any nature, whether absolute, accrued, contingent or
otherwise, related to or arising from the operation of its business or other
ownership, possession or use of its assets, except for such indebtedness,
liability or obligation incurred in the ordinary course of its business or
except as would not have a Material Adverse Effect.
3.8 Absence of Litigation. No claim, action, proceeding or
investigation is pending, or to the best knowledge of the Company, threatened,
which seeks to delay or prevent the consummation of the transactions
contemplated hereby or which would be reasonably likely to adversely affect the
Company's ability to consummate the transactions contemplated hereby or which
would have a Material Adverse Effect.
3.9 Extent of Offering. Subject in part to the truth and accuracy of
the Purchaser's representations set forth in Article 4 of this Agreement and in
the Subscription Agreement between the Company and the Purchaser, in
substantially the form annexed hereto as Exhibit B, the offer, sale and issuance
of the Note (and the shares of Class A Common Stock issuable upon conversion
thereof) as
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contemplated by this Agreement are exempt from the registration requirements of
the Securities Act and of each state where the Note (and the shares of Class A
Common Stock issuable upon conversion thereof) are offered or sold, and neither
the Company nor, to the best of the Company's knowledge, any agent acting on its
behalf, will take any action hereafter that would cause the loss of such
exemption.
3.10 No Other Representations. Except as set forth in this Agreement
and the Note, the Company is not making any representation, warranty, covenant
or agreement, oral or written, with respect to the matters contained herein and
therein.
3.11 No Brokers. Except with Global Financial Group, Inc., the Company
has not entered into any contract, arrangement or understanding with any Person
which could result in the obligation of any Person to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with this
Agreement or the transactions contemplated hereby or thereby.
4. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Company as follows:
4.1 Authority. The Purchaser has all necessary power and authority to
enter into this Agreement and the Subscription Agreement, to carry out the
Purchaser's obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The Purchaser has taken all
necessary action to authorize the execution, delivery and performance by the
Purchaser of this Agreement and the Subscription Agreement and all other
documents or instruments required to consummate the transactions contemplated
hereby and thereby. This Agreement and the Subscription Agreement each has been
duly executed and delivered by the Purchaser and, assuming due authorization,
execution and delivery by the Company, this Agreement and the Subscription
Agreement each constitutes a legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms,
subject to the effect of any applicable bankruptcy, reorganization, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
moratorium or similar laws affecting creditors' rights and remedies generally,
subject, as to enforceability, to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and subject to the effect of applicable securities laws as to
rights of indemnification.
4.2 Consents and Approvals; No Conflict.
(a) The execution and delivery of this Agreement and the
Subscription Agreement by the Purchaser do not, and the performance of this
Agreement and the Subscription Agreement by the Purchaser will not, require any
consent, approval, authorization or other action by, or filing with or
notification to, any governmental or regulatory authority, except where failure
to obtain such consent, approval, authorization or action, or to make such
filing or notification, would not prevent the Purchaser from performing any of
its material obligations under this Agreement or the Subscription Agreement.
(b) The execution, delivery and performance of this Agreement
by the Purchaser do not (i) in the case of any Purchaser that is not an
individual, conflict with or violate the charter or by-laws, partnership
agreement or other governing documents of such Purchaser, or (ii) except as
would not have a material adverse effect on the ability of the Purchaser to
consummate the transactions contemplated by this
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Agreement, conflict with or violate any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to the
Purchaser.
4.3 Absence of Litigation. No claim, action, proceeding or
investigation is pending, or to the best knowledge of the Purchaser, threatened,
which seeks to delay or prevent the consummation of the transactions
contemplated hereby or which would be reasonably likely to adversely affect or
restrict the Purchaser's ability to consummate the transactions contemplated
hereby.
4.4 RELATIONSHIP WITH HYPE. THE PURCHASER ACKNOWLEDGES THAT THE COMPANY
ENTERED INTO A BOTTLING AGREEMENT, DATED AS OF APRIL 16, 1997, BY AND AMONG THE
COMPANY, HYPERHOLICS INC., HYPE WATER COMPANY, R.J. BARRY COX, NIGEL SPIRO, HYPE
CORPORATION AND HYPE BEVERAGE CORPORATION (THE "BOTTLING AGREEMENT"), WHICH
PROVIDES FOR, AMONG OTHER THINGS, THE GRANT BY HYPERHOLICS AND HYPE WATER
COMPANY OF AN EXCLUSIVE WORLDWIDE LICENSE FOR THE COMPANY TO MANUFACTURE AND
DISTRIBUTE ALL "HYPERHOLICS" PRODUCTS AND A NON-EXCLUSIVE WORLDWIDE LICENSE FOR
THE COMPANY TO MANUFACTURE AND DISTRIBUTE ALL "HYPE 2-0" PRODUCTS. THE PURCHASER
ACKNOWLEDGES THAT THE PARTIES TO THE BOTTLING AGREEMENT ARE DISCUSSING CERTAIN
ADDITIONAL TRANSACTIONS, INCLUDING (I) THE ACQUISITION BY THE COMPANY OF
HYPERHOLICS AND HYPE WATER COMPANY IN CONSIDERATION FOR SHARES OF CLASS A COMMON
STOCK OF THE COMPANY, (II) THE MERGER OF HYPE BEVERAGE CORPORATION WITH AND INTO
THE COMPANY IN A TRANSACTION IN WHICH THE SHAREHOLDERS OF HYPE BEVERAGE
CORPORATION WOULD RECEIVE SHARES OF CLASS A COMMON STOCK OF THE COMPANY AND
(III) OTHER ARRANGEMENTS BETWEEN THE COMPANY AND HYPE BEVERAGE CORPORATION;
HOWEVER, THERE CAN BE NO ASSURANCE THAT ANY OF THE FOREGOING TRANSACTIONS WILL
BE CONSUMMATED BY THE COMPANY WITH ANY OF THE PARTIES TO THE BOTTLING AGREEMENT.
FURTHERMORE, TO THE EXTENT THAT ANY OF THE FOREGOING TRANSACTIONS ARE
CONSUMMATED, THE PURCHASER ACKNOWLEDGES THAT THE PURCHASER'S HOLDINGS OF CLASS A
COMMON STOCK MAY BE SUBSTANTIALLY DILUTED.
4.5 Investment Purpose; Private Placement.
(a) The Purchaser made his or its decision to purchase the
Note (and the shares of Class A Common Stock issuable upon conversion thereof)
based solely on (i) an analysis of the terms of the investment in the Note as
set forth in this Agreement, the Note and in the exhibits and schedules hereto,
(ii) the representations and warranties of the Company set forth in this
Agreement and (iii) a review of the Commission Filings and the Bottling
Agreement (which the Purchaser hereby acknowledges having received and
reviewed).
(b) The Purchaser, either itself or through its duly
authorized officers and employees, has sufficient knowledge and experience in
financial and business matters to be capable of evaluating the merits and risks
of an unregistered, non-liquid, high-risk investment such as an investment in
the Company's securities and has evaluated the merits and risks of such an
investment. The Purchaser's overall commitment to investments which are not
readily marketable is not disproportionate to the Purchaser's net worth, and the
Purchaser's acquisition of the Note will not cause such overall commitment to
become excessive.
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(c) The Purchaser is acquiring the Note (and the shares of
Class A Common Stock issuable upon conversion thereof) solely for the purpose of
investment and not with a view to, or for offer or sale in connection with, any
distribution thereof. The Purchaser acknowledges that neither the Note nor
shares of Class A Common Stock issuable upon conversion thereof are registered
under the Securities Act and that the Note (and the shares of Class A Common
Stock issuable upon conversion thereof) may not be transferred or sold except
pursuant to the registration provisions of the Securities Act or pursuant to an
applicable exemption therefrom and subject to state securities laws and
regulations, as applicable. The Purchaser acknowledges that no public market for
the Note is likely to develop.
(d) The Purchaser understands that the Note has not been and
will not be registered under the Securities Act in reliance upon an exemption
from the registration requirements of the Securities Act for transactions by an
issuer not involving any public offering and the Purchaser will have no right to
require such registration. In addition, the Purchaser understands that the Note
may not be sold or transferred except in compliance with the registration or
other requirements of the Securities Act or pursuant to an applicable exemption
therefrom. The Purchaser agrees that the following legend shall be placed on any
certificate or other instrument evidencing the Note:
"THIS 5% SUBORDINATED CONVERTIBLE NOTE (THIS "NOTE") HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). NO SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION OF
THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE UNLESS THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR UNLESS
SARATOGA BEVERAGE GROUP, INC. HAS RECEIVED A SATISFACTORY
OPINION OF COUNSEL THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION DOES NOT REQUIRE REGISTRATION UNDER THE ACT."
The Company and any transfer agent acting on its behalf may maintain on the
Company's register for the Note appropriate "stop transfer" notations with
respect to the Note. The Purchaser agrees that the legend set forth in Section
9(c) of the Note shall be placed on any certificate or other instrument
evidencing the Class A Common Stock issuable upon conversion of the Note.
(e) The Purchaser further understands that the offer and sale
of the Note have not been approved or disapproved by the Commission, or any
other federal or state office or agency.
(f) The Purchaser acknowledges that the Note (and the shares
of Class A Common Stock issuable upon conversion thereof) involves a great deal
of risk and that there is no public market for such securities. The Purchaser is
able to (i) bear the economic risk of the investment in the Company, (ii) afford
a complete loss of such investment, and (iii) hold indefinitely the Note (and
the shares of Class A Common Stock issuable upon conversion thereof). In
reaching an informed decision to invest in the Company, the Purchaser has
obtained sufficient information to evaluate the merits and risks of an
investment in the securities of the Company. In that connection, representatives
of the Company have (x) fully and satisfactorily answered any questions which
the Purchaser desired to ask concerning the Company, and (y) furnished the
Purchaser with any additional information or documents requested to verify the
accuracy of or supplement any information previously delivered to or discussed
with the Purchaser.
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(g) The Purchaser has not construed the contents of the
Agreement or any additional agreement with respect to the proposed investment in
the Note (and the shares of Class A Common Stock issuable upon conversion
thereof) or any prior or subsequent communications from the Company, or any of
its officers, employees or representatives, as investment, tax or legal advice
or as information necessarily applicable to such Purchaser's particular
financial situation. The Purchaser has consulted his own financial advisor, tax
advisor, legal counsel and accountant, as necessary or desirable, as to matters
concerning his investment in the Note (and the shares of Class A Common Stock
issuable upon conversion thereof).
4.6 Accredited Investor. The Purchaser is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act and has completed the Subscription Agreement annexed hereto as Exhibit B.
The representations and warranties of the Purchaser in the Subscription
Agreement are true and complete as of the date hereof.
4.7 No Other Representations. Except as set forth in this Agreement and
the Note, the Purchaser is not making any representation, warranty, covenant or
agreement, oral or written, with respect to the matters contained herein and
therein.
4.8 No Brokers. The Purchaser has not entered into any contract,
arrangement or understanding with any Person which could result in the
obligation of any Person to pay any finder's fees, brokerage or agent's
commissions or other like payments in connection with this Agreement or the
transactions contemplated hereby or thereby.
5. Additional Agreements and Covenants.
5.1 Conduct of Business. So long as the Note shall be outstanding,
except as otherwise provided in this Agreement or as otherwise consented to in
writing by the holder of the Note, the Company will not: (i) declare or pay any
dividend or distribution in its capital stock in cash or property; or (ii) amend
its charter or Bylaws in a manner which would be reasonably expected to or would
adversely affect the rights and obligations of the Purchaser to receive
principal or interest (or, upon conversion, to receive shares of Class A Common
Stock) in the amounts and on the dates specified in the Note (as this Agreement
and the Note may be amended or supplemented).
5.2 Regulatory and Other Authorizations; Consents. Each party hereto
shall use its best efforts to obtain all authorizations, consents, orders and
approvals of all federal, state, local and foreign regulatory bodies and
officials that may be or become necessary for his or its execution and delivery
of, and the performance of his or its obligations pursuant to, this Agreement
and shall cooperate fully with the other parties in promptly seeking to obtain
all such authorizations, consents, orders and approvals. The parties hereto
shall not take any action that will have the effect of delaying, impairing or
impeding the receipt of any required approvals.
5.3 Further Action. Each of the parties hereto shall use its best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all other things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement and in a timely manner to obtain all waivers, consents and approvals,
and to effect all registrations and filings, necessary to consummate as promptly
as practicable the transactions contemplated by this Agreement.
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5.4 Use of Proceeds. The proceeds of the sale of the Note (net of
expenses and costs) will be used, together with other funds of the Company: (i)
to fund costs anticipated in connection with the consummation of the
transactions contemplated by the Bottling Agreement; (ii) to be used in a
business arrangement with Hype Beverage Corporation or any of its affiliates;
(iii) to acquire the securities or assets of one or more businesses within or
outside of the beverage industry; (iv) for general working capital purposes; (v)
for the purchase of equipment; and/or (vi) to pay the expenses of the
transactions contemplated by this Agreement.
6. Conditions to Closing.
6.1 Conditions to Obligations of the Company. The obligations of the
Company to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Representations and Warranties; Covenants. The
representations and warranties of the of the Purchaser contained in this
Agreement shall be true and correct as of the Closing (except where the failure
to be so true and correct would not have a material adverse effect on such
Purchaser's ability to consummate the transactions contemplated hereby), with
the same force and effect as if made as of the Closing Date, and all the
covenants contained in this Agreement to be complied with by the Purchaser
before the Closing shall have been complied with;
(b) Consents and Approvals. The Purchaser shall have received
all consents, approvals and authorizations from, and shall have made all filings
with and notifications to, any governmental or regulatory authority necessary
for the consummation of the transactions contemplated by this Agreement and no
such regulatory agency shall have taken any action which restrains or prohibits
consummation of such transactions; and
(c) No Order. No United States or state governmental authority
or other agency or commission or United States or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and has the effect of making the
transactions contemplated by this Agreement illegal or otherwise restraining or
prohibiting consummation of such transactions; provided, however, that the
parties hereto shall use their best efforts to have any such order or injunction
vacated.
6.2 Conditions to Obligations of the Purchaser. The obligations of the
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Representations and Warranties; Covenants. The
representations and warranties of the Company contained in this Agreement shall
be true and correct as of the Closing (except where the failure to be so true
and correct would not have a Material Adverse Effect), with the same force and
effect as if made as of the Closing Date, and all the covenants contained in
this Agreement to be complied with by the Company before the Closing shall have
been complied with;
(b) Consents and Approvals. The Company shall have received
all consents, approvals and authorizations from, and shall have made all filings
with and notifications to, all governmental or regulatory authorities necessary
for the consummation of the transactions contemplated by this Agreement
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<PAGE> 10
and no such regulatory agency shall have taken any action which restrains or
prohibits consummation of such transactions; and
(c) No Order. No United States or state governmental authority
or other agency or commission or United States or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and has the effect of making the
transactions contemplated by this Agreement illegal or otherwise restraining or
prohibiting consummation of such transactions; provided, however, that the
parties hereto shall use their best efforts to have any such order or injunction
vacated.
7. Indemnification.
7.1 Survival. Subject to the limitations and other provisions of this
Agreement, the respective indemnity provisions between the Purchaser and the
Company contained in this Article 7 and the representations, warranties,
covenants and agreements of the Company set forth in Sections 3.1, 3.2, 3.3 and
3.9 and the representations, warranties, covenants and agreements of the
Purchaser set forth in Sections 4.1, 4.2, 4.4, 4.5 and 4.6 shall survive the
Closing until the earlier to occur of (i) the first anniversary of the Closing
and (ii) the date of conversion of the Note.
7.2 Indemnification.
(a) General. The Purchaser agrees, subject to the terms and
conditions of this Agreement, to indemnify the Company against and hold it
harmless from all liabilities of and damages to the Company (including
reasonable attorneys' fees) arising out of the breach of any representation,
warranty, covenant or agreement by the Purchaser herein or in the Subscription
Agreement, except to the extent such liability results primarily and directly
from the gross negligence or willful misconduct of the Company. The Company
agrees, subject to the other terms and conditions of this Agreement, to
indemnify the Purchaser against and hold harmless from all liabilities of and
damages to the Purchaser (including reasonable attorneys' fees) arising out of
the breach of any representation, warranty, covenant or agreement of the Company
herein, except to the extent such liability results primarily and directly from
the gross negligence or willful misconduct of the Purchaser; provided, however,
that the Company shall not be liable for any liabilities and damages which,
together with all payments made by the Company pursuant to this Article 7,
exceed the Purchase Price.
(b) Indemnification Procedures. Anything in Section 7.2(a) to
the contrary notwithstanding, no claim may be asserted nor may any action be
commenced against an indemnifying party for breach of any representation,
warranty, covenant or agreement contained herein, unless written notice of such
claim or action is given to the indemnifying party describing in detail the
facts and circumstances with respect to the subject matter of such claim or
action.
(c) Payments to Be Net of Certain Items. Payments by the
indemnifying party pursuant to Section 7.2(a) shall be limited to the amount of
any liability or damage that remains after deduction therefrom of any insurance
proceeds and any indemnity, contribution or other similar payment actually
received by the indemnified party by any third party with respect thereto.
(d) Third Party Claims. The indemnified party agrees to give
the indemnifying party prompt written notice of any claim, assertion, event or
proceeding by or in respect of a third party of which the indemnified party has
knowledge concerning any liability or damage as to which it may request
13
<PAGE> 11
indemnification hereunder. The indemnifying party shall have the right to
assume, through counsel of its own choosing, the defense or settlement of any
such claim or proceeding at its own expense. If the indemnifying party elects to
assume the defense of any such claim or proceeding, the indemnified party may
participate in such defense, but in such case the expenses of the indemnified
party shall be paid by the indemnified party. The indemnified party shall
provide the indemnifying party with access to its records and, if applicable,
personnel relating to any such claim, assertion, event or proceeding during
normal business hours and shall otherwise cooperate with the indemnifying party
in the defense or settlement thereof, and the indemnifying party shall reimburse
the indemnified party for all of its reasonable out-of-pocket expenses in
connection therewith. If the indemnifying party elects to assume the defense of
any such claim or proceeding, the indemnified party shall not pay, or permit to
be paid, any part of any claim or demand arising from such asserted liability,
unless the indemnifying party consents in writing to such payment or unless the
indemnifying party withdraws from the defense of such asserted liability, or
unless a final judgment from which no appeal may be taken by or on behalf of the
indemnifying party is entered against the indemnified party for such liability.
(e) Distribution of Indemnification Payments. The amount of
any payment by the indemnifying party required to be made pursuant to this
Section 7.2 shall be made in cash in immediately available funds to the
indemnified party, promptly after the determination of the amount of the
required payment hereunder.
(f) Recision. Anything herein to the contrary notwithstanding,
no breach of any representation, warranty, covenant or agreement contained
herein shall give rise to any right on the part of any party, after the
consummation of the purchase and sale of the Securities contemplated hereby, to
rescind this Agreement or any of the transactions contemplated hereby; provided,
however, that any party hereto may rescind this Agreement and the transactions
contemplated hereby if the breach of any such representation, warrant, covenant
or agreement by any other party shall be finally judicially determined to have
resulted from the perpetration of a fraud on such party by any other party
hereto.
8. Termination and Waiver.
8.1 Termination. This Agreement may be terminated at any time prior to
the Closing only by the written consent of the Company and the Purchaser.
8.2 Waiver. At any time prior to the Closing, each of the parties
hereto may (a) extend the time for the performance of any of the obligations or
other acts of any other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto or (c) waive compliance with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party to be bound thereby. Any waiver of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of the same or any other provision of this Agreement.
9. Miscellaneous.
9.1 Notices. Any notice, demand, request, waiver, or other
communication under this Agreement shall be in writing (including facsimile or
similar writing) and shall be deemed to have been duly given (i) on the date of
service if personally served, (ii) on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail, registered, return
receipt requested, postage prepaid or (iii) on the date sent if sent by
facsimile, to the parties at the following addresses or facsimile numbers with a
copy
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<PAGE> 12
sent by mail as aforesaid on the same date (or at such other address or
facsimile number for a party as shall be specified by like notice):
(a) if to the Company:
Saratoga Beverage Group, Inc.
11 Geyser Road
Saratoga Springs, New York 12866
Attention: Robin Prever
Fax No.: (518) 584-0380
with a copy to:
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
Attention: Charles I. Weissman, Esq.
Fax No.: (212) 758-9526
(b) if to the Purchaser, at the address set forth on the signature
page of the Subscription Agreement.
(c) if to the Placement Agent (as hereinafter defined):
Global Financial Group, Inc.
100 Washington Square, Suite 1319
Minneapolis, Minnesota 55401
Attention: Kevin S. Miller
Fax No.: (612) 321-9212
9.2 Expenses. The Purchaser hereby agrees that all fees and expenses
incurred by the Purchaser in connection with this Agreement shall be borne by
the Purchaser, and the Company hereby agrees that all fees and expenses incurred
by the Company shall be borne by the Company, in each case including without
limitation all fees and expenses of such party's counsel and accountants.
Notwithstanding anything in this Agreement to the contrary, the Company hereby
agrees to pay all fees and expenses incurred by the Company with respect to Form
D and blue sky filings.
9.3 Public Announcements. Neither the Company, the Purchaser nor the
Placement Agent shall make any public announcements in respect of this Agreement
or the transactions contemplated herein or otherwise communicate with any news
media without prior notification to the Company and the Placement Agent, and the
Company and the Placement Agent, as agent on behalf of the Purchaser, shall
cooperate as to the timing and contents of any such announcement; provided,
however, that nothing herein shall prohibit any party to this Agreement from
making any public disclosure regarding this Agreement and the transactions
contemplated hereby if, in the opinion of counsel to such party, such disclosure
is required by Law or by valid judicial process.
9.4 Headings. Section headings contained in this Agreement are included
for convenience only and shall not affect the interpretation of any provisions
of this Agreement.
15
<PAGE> 13
9.5 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of, this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
9.6 Entire Agreement. This Agreement, the Note, the Subscription
Agreement and the Agency Agreement by and between the Company and Global
Financial Group, Inc., as Placement Agent, set forth the entire understanding
and agreement of the parties with respect to their subject matter and supersede
any and all prior understandings, negotiations or agreements among the parties
hereto, both written and oral, with respect to such subject matter. THE PARTIES
HEREBY ACKNOWLEDGE THAT THIS AGREEMENT IS SEPARATE AND DISTINCT FROM ANY OTHER
AGREEMENT, INCLUDING ANY AGREEMENT REGARDING A MERGER OR BUSINESS COMBINATION OF
HYPE CORPORATION OR ANY AFFILIATE OF HYPE CORPORATION AND THE COMPANY, WHICH MAY
IN THE FUTURE BE ENTERED INTO, AND THE FAILURE TO ENTER INTO ANY OTHER SUCH
AGREEMENT SHALL HAVE NO EFFECT ON THE VALIDITY OF THIS AGREEMENT.
9.7 No Third-Party Beneficiaries; Assignment.
(a) This Agreement is for the sole benefit of and binding upon
the parties hereto and their permitted successors and assigns and nothing
herein, express or implied, is intended to or shall confer upon any other person
or entity any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
(b) Neither the Note nor any of the Class A Common Stock
issuable upon conversion thereof may be pledged, transferred, sold or assigned
(each a "Transfer") until (i) a registration statement with respect thereto is
effective under the Securities Act and any applicable state securities law or
(ii) the Company receives an opinion of counsel to the Company or other counsel
to the holder of such securities, which opinion and other counsel is reasonably
satisfactory to the Company, that such securities may be pledged, sold, assigned
or transferred without an effective registration statement under the Securities
Act or applicable state securities laws.
9.8 Amendment. This Agreement may be amended or modified only by an
instrument in writing signed by the Company and by the holder of the Note.
9.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which,
when taken together, shall constitute one and the same agreement.
9.10 Gender and Number. Whenever used in this Agreement, the singular
number shall include the plural, the plural the singular, and the use of any
gender shall be applicable to all genders.
9.11 Governing Law. This Agreement shall be construed in accordance
with, and governed by, the internal laws of the State of New York, without
giving effect to the principles of conflict of laws thereof. The parties agree
that any dispute arising out of or relating to this Agreement shall be resolved
by binding
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<PAGE> 14
arbitration in the City of Albany, State of New York, under the Commercial
Arbitration Rules of the American Arbitration Association. Each of the parties
hereto consents, for itself and in respect of its property, to the jurisdiction
and venue of the City of Albany, State of New York for purposes of this Section
9.11 and hereby irrevocably waives any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens which it may now
or hereafter have to the bringing of any dispute in the City of Albany, State of
New York, under the Commercial Arbitration Rules of the American Arbitration
Association, in respect of this Agreement or any documents related thereto. Each
of the parties hereto waives personal service of any summons, complaint or other
process, which may be made by any other means permitted under New York law.
IN WITNESS WHEREOF, the Purchaser and the Company have caused this
Agreement to be executed as of the date first written above in their individual
capacities or by their respective representatives thereunto duly authorized, as
applicable.
SARATOGA BEVERAGE GROUP, INC.
By: /s/Robin Prever
-------------------------------
Robin Prever
Chief Executive Officer
PARLEY INTERNATIONAL, as nominee
By: /s/ T.P. Ramsden
-------------------------------
T.P. Ramsden
Power of Attorney
By its signature above, Parley International
represents and warrants that it is not
acting as principal but is acting solely as
a duly authorized nominee for Maerki Baumann
& Co., A.G. (Zurich), an "accredited
investor" under the United States securities
laws, and directs that the Note be issued in
the name of Maerki Baumann & Co., A.G.
(Zurich).
17
<PAGE> 1
SARATOGA BEVERAGE GROUP, INC.
5% Subordinated Convertible Note
Due June 12, 2000
$1,500,000
Saratoga Springs, New York
June 12, 1997
THIS 5% SUBORDINATED CONVERTIBLE NOTE (THIS "NOTE") HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NO SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION OF THIS NOTE OR ANY INTEREST HEREIN MAY BE
MADE UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR UNLESS
SARATOGA BEVERAGE GROUP, INC. HAS RECEIVED A SATISFACTORY OPINION OF COUNSEL
THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION DOES NOT REQUIRE
REGISTRATION UNDER THE ACT.
SARATOGA BEVERAGE GROUP, INC., a Delaware corporation (the "Company"),
for value received, hereby promises to pay to MAERKI BAUMANN & CO., A.G.
(ZURICH) (the "Holder"), the principal amount of One Million Five Hundred
Thousand Dollars ($1,500,000).
This Note is issued pursuant to a Securities Purchase Agreement dated
as of June 12, 1997 by and between the Company and the Holder (the "Purchase
Agreement").
Capitalized terms used herein but not otherwise defined shall have the
meanings ascribed to them in the Purchase Agreement.
10. Principal. The Company will pay to Holder the principal sum of One
Million Five Hundred Thousand Dollars ($1,500,000), plus all unpaid and accrued
interest thereon, on June 12, 2000.
11. Interest. Interest on the unpaid principal amount hereof shall
accrue from the date of issuance of this Note at the rate of five percent (5%)
per annum, computed on the basis of a 360-day year consisting of twelve (12)
30-day months. Interest shall become due and payable on each of the first,
second and third anniversaries of the date of issuance of this Note until the
principal amount of this Note shall be due and paid (whether at maturity, by
acceleration or otherwise), at which time all accrued and unpaid interest on
this Note shall be due and payable.
12. Replacement or Exchange of Note.
<PAGE> 2
12.1 Replacement. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender for cancellation of this Note, if mutilated, the Company will
make and deliver a new Note of like terms, in lieu of this Note. Any Note made
and delivered in accordance with the provisions of this Section 3.1 shall be
dated the date hereof.
12.2 Exchange. In the event that the Company has merged with,
liquidated into, sold substantially all of its assets to or combined with,
another company, the surviving entity will, at the request of the Holder,
exchange this Note for a new instrument with the same terms and covenants,
having substituted said surviving entity for the Company, executed by such
surviving entity and in which the surviving entity assumes all the Company's
rights and obligations hereunder.
12.3 No Service Charge. No service charge shall be made for
any replacement of this Note, but the Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection therewith.
13. Subordination.
13.1 Subordination to Senior Indebtedness. The payment of the
principal of and interest on this Note is expressly subordinated to the payment
of all Senior Indebtedness, as hereinafter defined, to the extent set forth in
this Article 4. The term "Senior Indebtedness" shall mean all indebtedness now
or hereafter incurred by the Company which is not by its terms expressly made
pari passu or subordinated to this Note.
13.2 Priority of Senior Indebtedness of Default. No payment
with respect to this Note shall be made by the Company or received by the Holder
if there is outstanding at the time such payment is to be made any Senior
Indebtedness and there exists at such time, or immediately after giving effect
to such payment there would exist, any default in the payment of principal of or
any premium or interest on any Senior Indebtedness or any other event of default
under the terms of any Senior Indebtedness then outstanding, which default has
not been waived or cured prior thereto.
13.3 Priority of Senior Indebtedness on Liquidation. Upon any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding up or total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due or to become due in respect of any and all
Senior Indebtedness shall first be paid in full and payment or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holder would be entitled shall be paid to the holders
of Senior Indebtedness (pro rata to each such holder on the basis of the
respective amounts of Senior Indebtedness held by such holders of Senior
Indebtedness or on such other basis as the holders of Senior Indebtedness or a
court of competent jurisdiction shall direct) to the extent necessary to pay all
Senior Indebtedness in full after giving effect to any concurrent payment or
distribution to or from the holders of Senior Indebtedness, before any payment
or distribution is made to the Holder.
13.4 Duties of Holder to Holders of Senior Indebtedness. In
the event that any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, shall be received by the
Holder, in violation of Section 4.2 or Section 4.3, or provision made for such
payment, in accordance with its terms, such payment or distribution shall be
(and shall be deemed to be) held in trust for the benefit of, and shall be paid
over or delivered to, the holders of such Senior Indebtedness for application to
the
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<PAGE> 3
payment of all Senior Indebtedness remaining unpaid (pro rata to each holder on
the basis of the amount of Senior Indebtedness held by such holder or on such
other basis as the holders of Senior Indebtedness or a court of competent
jurisdiction shall direct) to the extent necessary to pay all such Senior
Indebtedness in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
13.5 Enforcement by Holders of Senior Indebtedness. The
provisions of Sections 4.2, 4.3 and 4.4 shall be for the benefit of the holders
of the Senior Indebtedness and may be enforced directly by such holders against
the Holder without the necessity of joining the Company as a party.
13.6 Subrogation. Subject to the prior payment in full of all
Senior Indebtedness, to the extent of any payment or distribution to the holders
of Senior Indebtedness which would, except for the provisions of this Article,
have been made to the Holder, the Holder shall be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until the principal
of and accrued and unpaid interest on this Note shall be paid in full, and no
such payment or distribution to the holders of Senior Indebtedness shall, as
among the Company, its creditors (other that the holders of Senior Indebtedness)
and the Holder, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness. The Holder of this Note shall be subrogated to such rights
of the holders of Senior Indebtedness in the same proportion as the principal
amount of this Note then outstanding bears to the aggregate principal amount
then outstanding under all indebtedness of the Company (including this Note)
ranking pari passu with this Note and containing subrogation provisions to the
same effect as those set forth herein.
13.7 Obligations of the Company Unimpaired. It is understood
that the provisions of this Article 4 are intended solely for the purpose of
defining the relative rights of the Holder on the one hand and the rights of
holders of Senior Indebtedness on the other, and nothing contained herein is
intended to or shall impair, as among the Company, its creditors (other than the
holders of Senior Indebtedness) and the Holder of this Note, the obligation of
the Company, which is unconditional and absolute, to pay to the Holder the
principal of and interest on this Note as and when the same shall become due and
payable in accordance with its terms and without giving effect to this Article
4, or to affect the relative rights of the Holder and the other creditors of the
Company other than the holders of Senior Indebtedness, nor shall anything herein
prevent the Holder from exercising all remedies otherwise permitted by
applicable law upon default of this Note, subject to the rights, if any, under
this Article 4 of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company receivable or received upon the exercise
of any such remedy.
14. Conversion.
14.1 Right of Conversion. Subject to and upon the terms and
conditions contained in this Article 5, the Holder may, at its option and at any
time, convert all, but not less than all, of the principal amount of this Note
into fully paid and nonassessable shares of Class A common stock, par value $.01
per share, of the Company ("Class A Common Stock").
14.2 Conversion Price. All of the principal amount of this
Note may be convertible into shares of Class A Common Stock, at a conversion
price equal to $3.50 per share of Class A Common Stock, subject to adjustment
pursuant to Section 5.5. The price, as so adjusted from time to time, is
referred to herein as the "Conversion Price."
20
<PAGE> 4
14.3 Method of Conversion. Upon ten (10) days' prior written
notice to the Company, the Holder may convert this Note into shares of Class A
Common Stock by surrender of this Note to the Company at its principal office,
accompanied by the form of conversion notice annexed hereto as Attachment 1,
duly executed by the Holder. Upon any conversion of this Note the Company shall
forthwith, (i) pay to the Holder all accrued and unpaid interest on the
principal amount to the conversion date in cash and (ii) deliver to the Holder
certificates for the number of full shares of Class A Common Stock.
14.4 Effective Date and Effect of Conversion. The conversion
of this Note shall be deemed to have been effected on the date notice is given
pursuant to Section 5.3 hereof, and, at such time, the rights of the Holder as
such shall cease and the Holder shall be deemed, for all purposes, to have the
rights of a holder of record of the shares of Class A Common Stock deliverable
upon such conversion.
14.5 Adjustment of Conversion Price. The Conversion Price
shall be subject to adjustment with respect to the shares of Class A Common
Stock of the Company as follows:
(a) Combinations and Subdivisions of Class A Common
Stock. Except as provided in Section 5.5(c) below, if at any time the
outstanding Class A Common Stock of the Company shall be subdivided into a
greater or combined into a lesser number of shares (whether with the same or a
different par value or without par value), the number of shares of such Class A
Common Stock transferable upon the conversion of this Note shall be
proportionately increased or decreased and the Conversion Price in effect
immediately prior to the effective date of such subdivision or combination shall
be decreased or increased in inverse proportion to such increase or decrease in
the number of shares so transferable.
(b) Distributions in Respect of Class A Common Stock.
Except as provided in Section 5.5(c) below, if the Company shall distribute by
way of dividend or otherwise upon its Class A Common Stock any cash, securities
or property (excluding cash dividends paid out of earnings or surplus and
dividends or distributions payable in rights, warrants or options to subscribe
for or purchase such Class A Common Stock, or to subscribe for or purchase
securities convertible into or exchangeable for such Class A Common Stock, with
or without payment of additional consideration, such convertible or exchangeable
securities being herein called "Convertible Securities," or payable in
Convertible Securities), then thereafter the Holder, upon the exercise of the
Holder's conversion rights, will be entitled to receive the number of shares of
the Class A Common Stock of the Company then deliverable pursuant to the terms
hereof, and, in addition, the cash, securities or property which the Holder
would have received by way of such dividends or other distributions if,
continuously since the date of delivery hereof, the Holder had been the record
holder of the number of shares of such Class A Common Stock, which would have
been deliverable upon the exercise of the Holder's conversion rights if such
conversion had been effected immediately prior to the record date for such
distribution of cash, securities or property.
(c) Threshold for Adjustments. The Company shall not
be required to make any adjustment of the Conversion Price pursuant to each of
Sections 5.5(a) and 5.5(b) hereof, if the amount of such adjustment would be
less than two percent (2%) of the Conversion Price in effect immediately before
the event which would otherwise have given rise to such adjustment, but, in such
case, any adjustment that would otherwise have been required to be made shall be
made at the time of and together with the next subsequent adjustment which,
together with any adjustment or adjustments to be carried forward, shall amount
to not less than two percent (2%) of the Conversion Price immediately before the
event giving rise to such next subsequent adjustment.
(d) Recapitalization, Reclassification and
Succession. If any recapitalization of the Company or reclassification of shares
of Class A Common Stock of the Company or any merger or
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<PAGE> 5
consolidation of the Company into or with a corporation or other business
entity, or the sale or transfer of all or substantially all of either of the
Company's assets or of any successor corporation's assets to any other
corporation or business entity (any such corporation or business entity being
included within the meaning of the term "successor corporation") shall be
effected, then, the Holder shall thereafter have the right to receive upon the
basis and upon the terms and conditions specified herein and in lieu of the
shares of common stock of such corporation immediately theretofore issuable upon
the exercise of the Holder's conversion rights, such shares of capital stock,
securities or other property as may be issued or payable with respect to or in
exchange for a number of outstanding shares of such Class A Common Stock equal
to the number of shares of Class A Common Stock of the Company immediately
theretofore deliverable upon the exercise of such Holder's conversion rights had
such recapitalization, reclassification, merger, consolidation, sale or transfer
not taken place.
(e) Fractional Shares. In the event that the
application of the provisions of this Article 5 would result in the issuance of
a fraction of a share of Class A Common Stock of the Company, or a number of
full shares plus a fraction of a share of such Common Stock, then such
fractional share shall be disregarded if less than one-half a share, or, if more
than one-half of a share, the number of shares issuable upon such conversion
shall be rounded out to the next full share.
14.6 Notice to the Holder.
(a) If the character of securities or assets
deliverable upon conversion of this Note shall be changed as a result of the
provisions hereof, then in each such case the Company shall forthwith and within
ten (10) days thereafter cause a written certificate of the chief financial or
accounting officer of the Company to be mailed to the Holder specifying the
character of the securities or assets and the amount thereof so deliverable and
the details of the computations thereof.
(b) In case at any time:
(i) the Company shall pay any dividend payable in
shares of Class A Common Stock upon its outstanding
Class A Common Stock or make any distribution (other
than cash dividends out of earned surplus) to the
holders of its shares of Class A Common Stock; or
(ii) the Company shall offer for subscription pro
rata to the holders of its Class A Common Stock any
additional shares of Class A Common Stock or other
rights; or
(iii) there shall be effected any recapitalization
of the Company or reclassification of the shares of
Class A Common Stock of the Company, or any merger or
consolidation of the Company into or with any other
corporation or business entity and as a result of
which the Company is not the surviving corporation,
or the sale or transfer of all or substantially all
of the assets of the Company to any other corporation
or business entity; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the
Company;
then, in any one or more of said cases, the Company shall give written notice to
the Holder of the date which is the record date for such dividend, distribution
or subscription rights, or on which such recapitalization, reclassification,
merger, consolidation, sale, transfer, dissolution, liquidation or winding up
shall take place, as
22
<PAGE> 6
the case may be. Such notice shall also specify the date as of which the holders
of record of Class A Common Stock shall participate in such dividend,
distribution or subscription rights, or shall be entitled to exchange their
Class A Common Stock for securities or other property deliverable upon such
recapitalization, reclassification, merger, consolidation, sale, transfer,
dissolution, liquidation or winding up, as the case may be. Such written notice
shall be given at least ten (10) days prior to the action in question and not
less than ten (10) days prior to the record date.
14.7 Reservation of Shares. The Company will at all times
reserve and keep available out of its authorized shares of Class A Common Stock,
solely for the purpose of issue upon the conversion of this Note, such number of
shares of Class A Common Stock as shall then be issuable upon the conversion of
this Note and all other outstanding Notes. The Company covenants that all shares
of Class A Common Stock which shall be issuable upon conversion of this Note
shall be duly and validly issued and fully paid and nonassessable.
14.8 Exchange Listing by the Company. If any shares of Class A
Common Stock required to be reserved for purposes of conversion of this Note
require listing on any national securities exchange before such shares may be
issued upon conversion, the Company will, at its expense, as expeditiously as
possible cause such shares to be duly listed on the appropriate national
securities exchange.
15. Mandatory Conversion. Subject to earlier conversion pursuant to
Article 5 hereof, this Note shall be converted, without any further action on
the part of the Holder, into shares of Class A Common Stock on the date on which
the Closing Price Hurdle has been satisfied. Notice shall be given to the
Holders of the mandatory conversion under this Article 6. Conversions under this
Article 6 will occur in accordance with the provisions of Section 5.3. For
purposes of this Article 6, "Closing Price Hurdle" means any time after the date
of this Note on which the Closing Price has equaled or exceeded $5.25 per share,
subject to adjustment pursuant to Section 5.5, for three (3) consecutive Trading
Days. For purposes of this Article 6, "Closing Price" means, with respect to the
Class A Common Stock, the reported closing price on a Trading Day on the Nasdaq
Stock Market or, if not quoted on the Nasdaq Stock Market, on the principal
national securities exchange on which the Class A Common Stock is listed or
admitted for trading. In case no reported closing price is quoted on a Trading
Day, the average of the reported closing bid and asked prices on the Nasdaq
Stock Market or, if not quoted on the Nasdaq Stock Market, on the principal
national securities exchange on which the Class A Common Stock is listed or
admitted for trading. If the Class A Common Stock is not listed or admitted for
trading on any national securities exchange, the average of the high closing bid
price and the low closing asked price as furnished by any New York Stock
Exchange member firm selected from time to time by the Board of Directors of the
Purchaser for that purpose. For purposes of this Article 6, "Trading Day" means
a day on which the principal national securities exchange (including the Nasdaq
Stock Market) on which the Class A Common Stock is listed or admitted to trading
is open for the transaction of business or, if the Class A Common Stock is not
listed or admitted to trading on any national securities exchange or the Nasdaq
Stock Market, a day on which any New York Stock Exchange member firm is open for
the transaction of business.
16. Registration Rights.
16.1 Demand Registration.
(a) The holders of not less than a majority of the
shares of Class A Common Stock issuable upon conversion of this Note, once
issued (such shares being referred to herein as "Registrable Securities"), may
request the registration (a "Demand Registration") of all (but not part) of
their outstanding Registrable Securities for sale. Notwithstanding anything to
the contrary contained herein: (i) no request may be made under this Section 7.1
within one hundred twenty (120) days after the effective date of a registration
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<PAGE> 7
statement filed by the Company covering a firm commitment underwritten public
offering; and (ii) the Company shall not be obligated to file a preliminary
registration statement with the Securities and Exchange Commission (the
"Commission") pursuant to this Section 7.1 if the Company gives notice within
thirty (30) days of the request to register Registrable Securities that (A) it
is engaged or has fixed plans to engage within ninety (90) days of the time of
the request in an underwritten registered public offering as to which the
Holders may include all such Registrable Securities pursuant to this Section 7.1
and Section 7.2 hereof, (B) the Company's Board of Directors determines in good
faith that such Demand Registration might reasonably be expected to have an
adverse effect on any proposal or plan by the Company to engage in any
acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or similar transaction or any financing
(including without limitation a primary registration) or (C) such demand is
within sixty (60) days of the Company's fiscal year end and before availability
of its audited annual financial statements. Absent any of the preceding
circumstances and except as otherwise provided herein, the Company shall file a
preliminary registration statement with the Commission within ninety (90) days
of its receipt of a request for a Demand Registration. Under the circumstances
in (ii) above, the Company shall file a preliminary registration statement with
the Commission within forty-five (45) days of the date on which none of the
circumstances in (ii) above are still outstanding. The Company shall keep any
registration statement onto which any holder of Registrable Securities has
requested a Demand Registration current and effective for a period of up to
ninety (90) days from the date on which the Holder is first entitled to sell the
total number of his Registrable Securities registered hereunder.
(b) Following receipt of any notice under this
Section 7.1, the Company shall immediately notify all Holder(s) from whom notice
has not been received, and shall use commercially reasonable efforts to register
under the Act for public sale, the number of Registrable Securities specified in
such notice (and in all notices received by the Company from other Holder(s)
within twenty (20) days after the giving of such notice by the Company). The
rights of any Holder to registration pursuant to this Section 7.1 are
conditional upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent requested and provided herein. Notwithstanding anything to the contrary
contained herein, the Company shall not be obligated to effect more than one (1)
Demand Registration pursuant to this Section 7.1.
(c) The Company shall be entitled to include in any
registration statement referred to in this Section 7.1, for sale in accordance
with the method of disposition specified by the requesting Holders, shares of
Class A Common Stock to be sold by the Company for its own account, except as
and to the extent that, in the opinion of the managing underwriter (if such
method of disposition shall be an underwritten public offering), such inclusion
would adversely affect the marketing of the Registrable Securities to be sold.
(d) If, in an underwritten public offering conducted
pursuant to this Section 7.1, any Holder requesting registration disapproves of
the terms of the underwriting, such person may elect to withdraw therefrom by
written notice to the Company, the underwriter and the other Holders. Any
Registrable Securities so withdrawn from such underwriting shall also be
withdrawn from such registration.
16.2 Piggyback Registration.
(a) Each holder of Registrable Securities is hereby
granted the right to "piggyback" such Registrable Securities, once issued, on
each registration statement filed by the Company so long as the registration
form to be used is suitable for the registration of the Registrable Securities
(a "Piggyback Registration") (it being understood that the Form S-8 and Form S-4
may not be used for such purposes); provided, however, that this Section 7.2
shall not apply to any Registrable Securities if such Registrable Securities may
then be sold under Rule 144 promulgated under the Act (assuming the holder's
compliance with
24
<PAGE> 8
the provisions of the Rule) and the Company delivers an opinion to that effect
to the transfer agent; provided further, however, that if the offering with
respect to which a registration statement is filed is an underwritten primary or
secondary offering of the Company's securities and the managing underwriter
advises the Company in writing that in its opinion the number of securities
requested to be included in such registration exceeds the number that can be
sold in such offering without adversely affecting such underwriter's ability to
effect an orderly distribution of such securities or otherwise adversely
affecting such offering (including, without limitation, causing a diminution in
the offering price of the Company's securities) the Company will include in such
registration statement: (i) first, the securities being sold for the account of
the Company; and (ii) second, the number of securities with respect to which the
Company has granted rights to participate in such registration (including the
Registrable Securities) that, in the opinion of such underwriter, can be sold
pro rata among the respective holders of such securities on the basis of the
amount of such securities then owned by each such holder. The Company shall give
each holder of Registrable Securities at least fifteen (15) days' written notice
of the intended filing date of any registration statement, other than a
registration statement filed on Form S-4 or Form S-8, and each holder of
Registrable Securities shall have seven (7) days after receipt of such notice to
notify the Company of its intent to include the Registrable Securities in the
registration statement. The Company shall keep any registration statement onto
which any holder of Registrable Securities has "piggybacked" its Registrable
Securities current and effective for a period of up to one hundred eighty (180)
days from the date on which the holder is first entitled to sell the total
number of his Registrable Securities registered thereunder.
(b) If, at any time after giving written notice of
its intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to all holders of the Registrable Securities and (i) in the case
of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such abandoned
registration and (ii) in the case of a determination to delay such registration
of its securities, shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other Company securities.
16.3 Registration Fees. The Company shall bear all fees and
expenses attendant to registering the Registrable Securities in a Demand
Registration or a Piggyback Registration (except any underwriters' discounts and
commissions and fees of any of the holders' own professionals, if any). The
Company agrees to use commercially reasonable efforts to cause the filings
required herein to become effective promptly and to qualify to register the
Registrable Securities in such States as are reasonably requested by the
holder(s); provided, however, that in no event shall the Company be required to
register the Registrable Securities in a State in which such registration would
cause (i) the Company to be obligated to register or license to do business in
such State, or (ii) the principal stockholders of the Company to be obligated to
escrow any of their shares of capital stock of the Company.
16.4 Indemnification. The Company shall indemnify and hold
harmless each holder of the Registrable Securities to be sold pursuant to any
registration statement hereunder and each of such holder's officers, directors,
employees, agents, partners, legal counsel and accountants, and each person, if
any, who controls each of the foregoing within the meaning of Section 15 of the
Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), against all loss, claim, damage, expense or liability
(including all reasonable attorneys' fees and other expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever incurred
by the indemnified party in any action or proceeding between the indemnitor and
indemnified party or between the indemnified party and any third party or
otherwise) to which any of them may become subject under the Act, the Exchange
Act or any other statute or at common law or otherwise under laws of foreign
countries, arising from such registration statement or based upon any untrue
25
<PAGE> 9
statement or alleged untrue statement of a material fact contained in (i) any
preliminary prospectus, registration statement or prospectus (as from time to
time each may be amended and supplemented); (ii) in any post-effective amendment
or amendments or any new registration statement and prospectus in which is
included the Registrable Securities; or (iii) any application or other document
or written communication executed by the Company or based upon written
information furnished by the Company in any jurisdiction in order to qualify the
Registrable Securities under the securities laws thereof or filed with the
commission, any state securities commission or agency, the Nasdaq Stock Market
or any securities exchange; or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; unless such statement or omission is made in reliance upon, and in
strict conformity with, written information furnished to the Company with
respect to the holders expressly for use in a preliminary prospectus,
registration statement or prospectus, or any amendment or supplement thereof, or
in any application, as the case may be. The Company agrees promptly to notify
the holders of the Registrable Securities of the commencement of any litigation
proceedings against the Company or any of its officers, directors or controlling
persons in connection with the issue and sale or resale of the Registrable
Securities or in connection with any such registration statement or prospectus.
17. Default. An "Event of Default" shall exist under this Note if any
of the following occurs and is continuing:
(a) default by the Company in the payment of any amount of
this Note that becomes due and payable;
(b) the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due; or
(c) an involuntary case or other proceeding shall have been
commenced against the Company seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property and shall fail to have been dismissed within
sixty (60) days of its filing or commencement;
then and in each and every case, the Holder may declare the entire principal
amount of this Note outstanding and the interest accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become
immediately due and payable, anything contained in this Note to the contrary
notwithstanding; provided, however, that if an Event of Default shall occur as
specified in Section 8(b) and (c) hereof, this Note shall become immediately due
and payable, without any action on the part of Holder.
18. Investment Representations and Restrictions on Transfer. The
Holder, by acceptance hereof, confirms such Holder's representations to and
agreements with the Company as follows:
(a) This Note is being acquired, and any shares of Class A
Common Stock of the Company acquired upon conversion of this Note in accordance
with the provisions of Section 6 hereof, will be acquired,
26
<PAGE> 10
for such Holder's own account, for investment, and not with a view to, or for
sale in connection with the distribution thereof or of any interest therein.
(b) Such Holder will not sell, transfer, pledge or otherwise
dispose of this Note, or any interest herein and will not sell, transfer, pledge
or otherwise dispose of any shares of Class A Common Stock of the Company
acquired upon conversion of this Note in accordance with the provisions of
Article 6 hereof, or any interest herein, and neither the Company nor any
transfer agent acting on its behalf shall be required to register or otherwise
recognize any transfer resulting from any such sale, transfer, pledge or other
disposition of any such shares of Class A Common Stock, unless and until (i) the
securities to be disposed of and the proposed disposition thereof are made the
subject of a currently effective registration statement under the Act, or (ii)
the Company shall have received an opinion of counsel, in form and substance
satisfactory to it, to the effect that the registration of such shares of Class
A Common Stock under the Act is not required in connection with such proposed
disposition by virtue of an exemption from registration contained in the Act or
in the rules and regulations promulgated by the Commission thereunder; and
(c) So long as any of the shares of Class A Common Stock
received by the Holder remain subject to the restrictions set forth in this
Article 9, each certificate representing such shares shall bear a legend in
substantially the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED, UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT GOVERNING THESE SECURITIES, THE SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS MADE IN ACCORDANCE WITH THE ACT OR SARATOGA
BEVERAGE GROUP, INC. (THE "COMPANY") RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT THE
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT."
The Holder acknowledges that the Company and any transfer agent acting on its
behalf may maintain on the stock records of the company appropriate "stop
transfer" notations with respect to such shares.
19. Miscellaneous.
19.1 No Recourse. No recourse shall be permitted for the
payment of the principal sum of or interest on this Note, or for any claim based
hereon, or otherwise in respect hereof, against any incorporator, stockholder,
officer or director, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or otherwise,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof, and as part of the consideration for the issue hereof,
expressly waived and released by the Holder.
19.2 Governing Law. This Note shall be construed in accordance
with, and governed by, the internal laws of the State of New York, without
giving effect to the principles of conflict of laws thereof. Any dispute arising
out of or relating to this Note shall be resolved by binding arbitration in the
City of Albany, State of New York, under the Commercial Arbitration Rules of the
American Arbitration Association. The Company and the Holder each hereby
consents, for itself and in respect of its property, to the jurisdiction and
venue of the City of Albany, State of New York for purposes of this Section 10.2
and hereby irrevocably waives any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens which it may now
27
<PAGE> 11
or hereafter have to the bringing of any dispute in the City of Albany, State of
New York, under the Commercial Arbitration Rules of the American Arbitration
Association, in respect of this Note. The Company and the Holder each waives
personal service of any summons, complaint or other process, which may be made
by any other means permitted under New York law.
19.3 Notices. Any notice, request or other communication
required or permitted by this Note shall be in writing and shall be given or
made by physical delivery, facsimile transmission, or by registered or certified
mail, return receipt requested, or by overnight carrier to the Company at 11
Geyser Road, Saratoga Springs, New York 12866, Attention: Robin Prever, with
copies to Charles I. Weissman, Esq., Shereff, Friedman, Hoffman & Goodman, LLP,
919 Third Avenue, New York, New York 10022, or to the Holder hereof at 14, Quai
du Seujet, Geneva, Switzerland 1201, or at such other address of which Holder
shall have given notice to the Company in the manner herein provided.
19.4 Binding Effect. This Note shall be binding upon and inure
to the benefit of the Company and its successors and assigns and the Holder and
its successors and assigns.
19.5 Amendment. No provision of this Note may be waived,
altered or amended, except by written agreement between the parties.
19.6 Assignment. Neither party, without the written consent of
the other party, which consent shall be exercised in its discretion on a
reasonable basis, shall assign or transfer this Note or any rights or
obligations hereunder.
19.7 Waiver. Any waiver by the Company or the Holder of a
breach of any provision of this Note shall not operate or be construed as a
waiver of any subsequent breach of the same of any other provision hereof.
19.8 Waiver of Presentment. The Company hereby waives
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Company with respect to this Note.
19.9 Paying Agent, Registrar, Conversion Agent. Initially, the
Company will act as Paying Agent, Registrar and Conversion Agent. The Company
may appoint a co-registrar or a Substitute Paying Agent, Registrar and
Conversion Agent.
19.10 Entire Agreement. This Note, the Purchase Agreement and
the Subscription Agreement (as defined in the Purchase Agreement) set forth the
entire agreement between the parties and supersede any prior oral or written
agreement between the parties.
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<PAGE> 12
19.11 Gender and Number. Whenever used in this Note, the
singular number shall include the plural, the plural the singular, and the use
of any gender shall be applicable to all genders.
IN WITNESS WHEREOF, the Company has duly caused this Note to
be duly executed as of this 12th day of June, 1997.
SARATOGA BEVERAGE GROUP, INC.
By: /s/ Robin Prever
-------------------------------
Robin Prever
Chief Executive Officer
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<PAGE> 13
Attachment 1
CONVERSION NOTICE
TO: SARATOGA BEVERAGE GROUP, INC.
The undersigned Holder of the within Note hereby irrevocably exercises
the right and option of such Holder to convert the within Note into shares of
Class A common stock of Saratoga Beverage Group, Inc., in accordance with the
terms of the within Note, and directs that the shares issuable upon such
conversion be issued in the name of and delivered to the undersigned unless a
different name has been indicated below. If the shares are to be issued in the
name of a person other than the undersigned, the undersigned will pay all
transfer taxes, if any, payable with respect thereto.
--------------------------
[Holder]
Please print name and address (including zip code number) and provide taxpayer
identification number of person to whom shares are to be delivered:
---------------------------
---------------------------
---------------------------
30
