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EXHIBIT 10.29
SECURITIES PURCHASE AGREEMENT WITH XXXX X. XXXX DATED FEBRUARY 12, 1998
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SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of February 12, 1998 by and between Saratoga Beverage Group,
Inc., a Delaware corporation (the "Company"), and Xxxx X. Xxxx, a resident of
South Orange, New Jersey (the "Purchaser").
WHEREAS, the Company is desirous of selling, and the Purchaser is
desirous of acquiring, 150,000 shares of the Company's Class A common stock,
$.01 par value per share (the "Class A Common Stock"), for a per share purchase
price of $2.25 per share of Class A Common Stock (in the aggregate, the
"Purchase Price");
WHEREAS, on February 4, 1998, the Board of Directors appointed the
Purchaser to be a director of the Company and, as such, to act as co-Chairman of
the Board pursuant to which the Purchaser shall spend approximately 15% of his
business time;
WHEREAS, on February 4, 1998, in connection with the Purchaser's
appointment as a director, the Purchaser waived his right to receive options
under the Company's 1993 Stock Option Plan (the "1993 Plan") and was granted
options (the "Options") outside of the 1993 Plan to purchase an aggregate of
200,000 shares of Class A Common Stock at a per share purchase price of $2.875;
NOW, THEREFORE, 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:
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Purchase And Sale.
Purchase and Sale of Securities.
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 Shares for the Purchase Price.
The Purchaser hereby acknowledges receipt of the
Option, a copy of which is annexed hereto as Exhibit A.
Closing. The sale of the Shares by the Company to the
Purchase shall take place at a closing (the "Closing"), to be held
simultaneously with the execution of this Agreement (the "Closing Date"). On the
Closing Date, the Company shall deliver to the Purchaser the Shares, free and
clear of any pledge, lien, security interest, mortgage, charge, adverse claim of
ownership or use, or other encumbrance of any kind (each, an "Encumbrances"),
against payment of the Purchase Price. The Company shall cause a certificate
evidencing the Shares to be issued to the Purchaser as soon as practicable after
the Closing.
Representations and Warranties of the Company.
The Company represents and warrants to the Purchaser as follows:
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
and authority 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 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 (a "Material Adverse Effect").
Authorized Capital. 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 February 9, 1998, 2,407,039 shares of Class A Common Stock, 562,055 shares
of Class B Common Stock and no shares of preferred stock of the Company were
issued and outstanding. As of February 9, 1998, options and warrants exercisable
to purchase 670,841 and 167,680 shares of Class A Common Stock, respectively,
were outstanding, and a promissory note convertible into 428,571 shares of Class
A Common Stock was outstanding.
Authority. The Company has all necessary corporate power and
authority to enter into this Agreement and the Option, to carry out its
obligations hereunder and to consummate the transactions contemplated hereby and
thereby. The Company has taken all
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necessary corporate action to appoint the Purchaser, effective February 4, 1998,
as a director of the Company and, as such, as co-Chairman of the Board. The
Company has taken all necessary corporate action to authorize the execution,
delivery and performance by it of this Agreement, the Option and all other
documents or instruments required to consummate the transactions contemplated
hereby and thereby. This Agreement and the Option have been duly executed and
delivered by the Company and, assuming due authorization, execution and delivery
of this Agreement by the Purchaser, this Agreement and the Option 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.
Consents; Compliance.
Other than in connection with or in compliance with
the rules of the Nasdaq SmallCap Market applicable to the listing 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.
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 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.
Commission Filings. The Company has filed all required forms,
reports and other documents with the Securities and Exchange Commission (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 of 1933, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as amended. 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, and the Company's Quarterly Reports on Form 10-QSB for the
quarterly periods ended March 31, 1997, June 30, 1997 and September 30, 1997. 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
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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 general accepted accounting principles in the United
States consistently applied ("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). Since September 30, 1997, except as described in
the Commission Filings, there has not been any event which has had or would be
expected to have a Material Adverse Effect.
Extent of Offering. Subject in part to the truth and accuracy
of the Purchaser's representations set forth in Article 3 of this Agreement, the
offer, sale and issuance of the Shares as contemplated by this Agreement are
exempt from the registration requirements of the Securities Act and of each
state where the Shares 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.
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 or
restrict the Company's ability to consummate the transactions contemplated
hereby.
No Other Representations. Except as set forth in this
Agreement and the Option, the Company is not making any representation,
warranty, covenant or agreement, oral or written, with respect to the matters
contained herein and therein.
No Brokers. The Company has not entered into any contract,
arrangement or understanding with any individual, corporation, partnership,
joint venture, person, trust, estate, association or other entity (each, a
"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.
Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Company as follows:
Authority. The Purchaser has all necessary power and authority
to enter into this Agreement, to carry out the Purchaser's obligations hereunder
and thereunder and to consummate the transactions contemplated hereby. The
Purchaser has taken all necessary action to authorize the execution, delivery
and performance by the Purchaser of this Agreement and all other documents or
instruments required to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Purchaser and, assuming
due authorization, execution and delivery by the Company, this Agreement
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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.
Consents and Approvals; No Conflict.
The execution and delivery of this Agreement do not,
and the performance of this 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.
The execution, delivery and performance of this
Agreement by the Purchaser do not, except as would not have a material adverse
effect on the ability of the Purchaser to consummate the transactions
contemplated by this Agreement, conflict with or violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
applicable to the Purchaser.
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.
Investment Purpose; Private Placement.
The Purchaser made his or its decision to purchase
the Shares based solely on (i) an analysis of the representations and warranties
of the Company set forth in this Agreement and (ii) a review of the Commission
Filings (which the Purchaser hereby acknowledges having received and reviewed).
The Purchaser 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 Shares will not cause such overall commitment to
become excessive.
The Purchaser is acquiring the Shares solely for the
purpose of investment and not with a view to, or for offer or sale in connection
with, any distribution thereof in violation of the Securities Act. The Purchaser
acknowledges that the Shares are not registered under the Securities Act and
that the Shares 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
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Purchaser agrees that the following legend shall be placed on any certificate or
other instrument evidencing the Shares:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). NO SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION OF THE SHARES OF COMMON STOCK REPRESENTED BY
THIS CERTIFICATE 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 appropriate "stop transfer" notations.
The Purchaser further understands that the offer and
sale of the Shares have not been approved or disapproved by the Commission, or
any other federal or state office or agency.
The Purchaser acknowledges that an investment in the
Shares involves a great deal of risk. 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 Shares. 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.
The Purchaser has not construed the contents of the
Agreement or any additional agreement with respect to the proposed investment in
the Shares 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 Shares.
Accredited Investor. The Purchaser is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act.
No Other Representations. Except as set forth in this
Agreement, the Purchaser is not making any representation, warranty, covenant or
agreement, oral or written, with respect to the matters contained herein and
therein.
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
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finder's fees, brokerage or agent's commissions or other like payments in
connection with this Agreement.
Piggyback Registration.
Piggyback Registration.
(a) If, at any time, the Company proposes to file a
registration statement on either Form X-0, Xxxx X-0 or Form S-3 (or any
successor forms) under the Securities Act with respect to an offering for its
own account or for the account of others of any class of equity security, then
the Company shall give written notice of such proposed filing to the Purchaser
at least twenty-five (25) days before the anticipated filing date, and such
notice shall offer the Purchaser the opportunity to register such Shares
(whether or not vested under the installment provisions of subparagraph 1(b) at
such time) as such Purchaser may request in writing to the Company within
fifteen (15) days after the date such Purchaser first received notice of such
registration (a "Piggyback Registration"); provided, however, that the Company
shall have no obligation to register any Shares of the Purchaser pursuant to
this Section 4.1(a) unless the Purchaser shall request that 50% or more (or all
outstanding Shares, if less than 50% of the initial aggregate number of Shares)
of the initial aggregate number of Shares be registered.
(b) The Purchaser may not participate in any
registration initiated as a Piggyback Registration which is underwritten for the
benefit of the Company or its stockholders unless the Purchaser (i) agrees to
sell his Shares on the basis provided in any underwriting agreements approved by
the Company; (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting agreements and which are customary with
industry practice; and (iii) agrees that if an underwriter advises the Company
in writing that the number of shares proposed to be sold by the Company and/or
the Purchaser is greater than the number of shares of Class A Common Stock which
the underwriter believes is feasible to sell at that time, at the price and
under the terms approved by the Company, then the underwriter may exclude some
or all of the Shares from such Piggyback Registration to the extent necessary to
reduce the total number of shares of Class A Common Stock recommended by the
underwriter. Such reduction or limitation by the underwriter shall be made in
the manner set forth in the immediately following sentence. Any reduction or
limitation of Shares by the underwriter shall be made on a pro rata basis in
proportion to the relative number of Shares then held by the Purchaser and the
number of shares of Class A Common Stock requested to be underwritten on behalf
of the Company or its stockholders. The Company shall advise the Purchaser of
any such reduction or limitation, and that the number of shares of Shares to be
offered by the Purchaser will be reduced or limited to the number calculated
pursuant to the immediately preceding sentence.
(c) In any registration initiated as a Piggyback
Registration, whether or not the registration statement becomes effective, the
Company will pay or cause to be paid all costs, fees and expenses in connection
therewith, including, without limitation, the Company's legal and accounting
fees, printing expenses and "blue sky" fees and expenses, except that the
Company shall not pay for (i) underwriting discounts and commissions, (ii) state
transfer taxes, (iii) brokerage commissions, (iv) fees and expenses of counsel
and accountants for the Purchaser and (v) blue sky fees and expenses in
jurisdictions where the Company is not currently registered or qualified.
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(d) To the extent not inconsistent with applicable
law, the Purchaser agrees not to effect any public sale or distribution of Class
A Common Stock, including a sale pursuant to Rule 144 or in reliance on any
other exemption from registration under the Securities Act, during the fourteen
(14) days prior to, and during the ninety (90) days beginning on, the effective
date of a registration statement that includes Shares (except as part of such
registration), but only if and to the extent requested in writing (with
reasonable prior written notice) by the underwriter(s) in the case of an
underwritten public offering by the Company of securities similar to the Shares.
(e) The Company and the Purchaser agree to indemnify
and hold harmless each other (and, in the case of the Company, its directors and
officers and each person who controls the Company (within the meaning of the
Securities Act)) against all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) (collectively, "Losses") arising
out of or based upon any untrue or alleged untrue statement of material fact
contained in any registration statement with respect to a Piggyback
Registration, any amendment or supplement thereto, any prospectus or preliminary
prospectus or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided, however, that the Purchaser shall not be indemnified for
Losses insofar as such Losses arise out of or are based upon any such untrue
statement or omission based upon information furnished in writing to the Company
by or on behalf of the Purchaser (in his individual capacity) expressly for use
therein; provided further, however, that in the event the prospectus shall have
been amended or supplemented and copies thereof, as so amended or supplemented,
shall have been furnished to the Purchaser prior to the confirmation of any
sales of registered Shares, such indemnity with respect to the prospectus shall
not inure to the benefit of the Purchaser if the person asserting such Loss did
not, at or prior to the confirmation of the sale of the registered Shares to
such person, receive a copy of the prospectus, as so amended or supplemented,
and the untrue statement or omission of a material fact contained in the
prospectus was corrected in the prospectus, as so amended or supplemented.
Termination and Waiver.
Termination. This Agreement may be terminated at any time
prior to the Closing only by the written consent of the Company and the
Purchaser.
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.
Miscellaneous.
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
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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 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):
if to the Company:
Saratoga Beverage Group, Inc.
00 Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
Fax No.: (000) 000-0000
with a copy to:
Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax No.: (000) 000-0000
if to the Purchaser:
Xxxx X. Xxxx
000 Xxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Fax No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Fax No.: (000) 000-0000
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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.
Headings. Section headings contained in this Agreement are
included for convenience only and shall not affect the interpretation of any
provisions of this Agreement.
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.
Entire Agreement. This Agreement and the Option 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.
No Third-Party Beneficiaries. 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 any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
Amendment. This Agreement may be amended or modified only by
an instrument in writing signed by the Company and the Purchaser.
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.
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.
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 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 6.10 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
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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/ Xxxx T, Xxxx By: /S/ Xxxxx Xxxxxx
-------------------------- --------------------------------
Xxxx X. Xxxx Xxxxx Xxxxxx
Chief Executive Officer
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EXHIBIT A STOCK
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") is made and entered into
as of the 4th day of February, 1998, by and between Saratoga Beverage Group,
Inc. (the "Company"), a Delaware corporation, and Xxxx X. Xxxx (the "Optionee"),
residing at 000 Xxxxxx Xxxx, Xxxxx Xxxxxx, Xxx Xxxxxx 00000.
The Board of Directors (the "Board") of the Company adopted on February
4, 1998 (the "Grant Date") a resolution granting the Optionee a stock option
(the "Option") to purchase 200,000 shares (the "Shares") of the Company's Class
A common stock, par value $.01 per share (the "Common Stock"), for the price, on
the terms and subject to the conditions set forth in this Agreement. The Option
was not granted under the Company's 1993 Stock Option Plan. In connection with
the grant of the Option, the Optionee waived his rights to receive stock options
under the Company's 1993 Stock Option Plan.
The Option is not intended to satisfy the requirements for an incentive
stock option (an "ISO") under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). The Company makes no representations or warranties as
to the income, estate or other tax consequences to the Optionee of the grant or
exercise of the Option or the sale or other disposition of the Shares acquired
pursuant to the exercise thereof.
1. (a) The price at which the Optionee shall have the right to purchase
the Shares under this Agreement is $2.875 per Share, subject to adjustment as
provided in Paragraph 4 below.
(b) Unless the Option is previously terminated or accelerated
pursuant to this Agreement, the Option shall be exercisable in installments of
100,000 Shares on each of February 4, 1998 and February 4, 1999; provided,
however, that the February 4, 1999 installment shall not be exercisable if the
Optionee is not serving as Chairman of the Board or co-Chairman of the Board on
such date. In no event shall any Shares be purchasable under this Agreement
after February 3, 2008 (the "Expiration Date"). The Option shall cease to be
exercisable three (3) months (or such longer period which may at such time be
provided for directors under the Company's 1993 Stock Option Plan) after the
date the Optionee no longer serves as a director of the Company.
2. Nothing contained herein shall be construed to confer on the
Optionee any right to continue as a director of the Company or to derogate from
any right of the Board or stockholders of the Company, free from liability, to
remove the Optionee as a director at any time, with or without cause.
3. (a) Subject to Section 422 of the Code, neither the Option nor any
right under the Option shall be assignable, alienable, saleable or transferable
by the Optionee otherwise than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder; provided, however, that, if so determined by the Board or a
committee thereof, the Optionee may, in the manner established by the Board or a
committee thereof in its sole discretion, designate a beneficiary or
beneficiaries to exercise the
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rights of the Optionee, and to receive any property distributable, with respect
to any Option upon the death of the Optionee.
(b) The Option shall not be pledged, alienated, attached, or
otherwise encumbered or transferred in any manner except to the extent that the
Option may be exercised by an executor or administrator or beneficiary as
provided in subparagraph 3(a) above, and any purported pledge, alienation,
attachment, encumbrance, or transfer thereof shall be void and unenforceable
against the Company. The Option may be exercised, during the lifetime of the
Optionee, only by the Optionee or his duly appointed guardian or legal
representative.
4. (a) In the event that the Board or a committee thereof shall
determine that the outstanding shares of Common Stock are affected by any (i)
subdivision or consolidation of shares, (ii) dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property) or
(iii) recapitalization or other capital adjustment of the Company, such that an
adjustment is determined to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
hereunder, then the Board or a committee thereof shall, in such manner as it may
deem necessary to prevent dilution or enlargement of the benefits or potential
benefits intended to be made hereunder, adjust any or all of (x) the number and
type of Shares which may be subject to the Option, (y) the number and type of
Shares subject to the unexercised portion of the Option, and (z) the exercise
price per Share with respect to the Option; provided, however, that the exercise
price per Share shall not be adjusted below the par value per Share of the
Common Stock. In computing any adjustment under this paragraph, any fractional
share shall be eliminated.
(b) In the event of the dissolution or liquidation of the
Company, or in the event of a Change in Control (as defined in the Company's
1983 Stock Option Plan), the Optionee shall have the right, immediately prior to
the record date for the determination of stockholders entitled to participate in
such dissolution, liquidation or Change in Control, to exercise the Option, in
whole or in part, without regard to any installment provisions contained in
subparagraph 1(b). In such event, the Company will mail or cause to be mailed to
the Optionee a notice specifying the date of such dissolution, liquidation or
Change in Control. Such notice shall be mailed at least ten (10) days prior to
the date therein specified to the address of the Optionee specified on page 1 of
this Agreement or to such other address as the Optionee delivers or transmits by
registered or certified mail to the Secretary of the Company at its principal
office.
5. The Option shall be exercised when written notice of such exercise,
signed by the person entitled to exercise the Option, has been delivered or
transmitted by registered or certified mail, to the Secretary of the Company at
its principal office. Said written notice shall specify the number of Shares
purchasable under the Option which such person then wishes to purchase and shall
be accompanied by such documentation, if any, as may be required by the Company
as provided in Paragraph 7 below and be accompanied by payment of the aggregate
Option price. Such payment of the aggregate Option price shall be, without
limitation, in the form of (i) cash, Shares, outstanding Options or other
consideration, or any combination thereof, having a Fair Market Value on the
exercise date equal to the exercise price of the Option or portion thereof being
exercised or (ii) a broker-assisted cashless exercise program established by the
Board or a committee thereof. Delivery of said notice and such documentation
shall constitute an irrevocable election to purchase the Shares specified in
said notice and the date on which the Company receives said notice and
documentation shall,
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subject to the provisions of Paragraph 7, be the date as of which the Shares so
purchased shall be deemed to have been issued. The person entitled to exercise
the Option shall not have the right or status as a holder of the Shares to which
such exercise relates prior to receipt by the Company of such payment, notice
and documentation. For purposes of this Agreement, "Fair Market Value" shall
mean, with respect to Shares or other securities, (i) the closing price per
Share of the Shares on the principal exchange on which the Shares are then
trading, if any, on such date, or, if the Shares were not traded on such date,
then on the next preceding trading day during which a sale occurred; or (ii) if
the Shares are not traded on an exchange but are quoted on Nasdaq or a successor
quotation system, (1) the last sales price (if the Shares are then listed on the
Nasdaq National Market) or (2) the mean between the closing representative bid
and asked prices (in all other cases) for the Shares on such date as reported by
Nasdaq or such successor quotation system; or (iii) if the Shares are not
publicly traded on an exchange and not quoted on Nasdaq or a successor quotation
system, the mean between the closing bid and asked prices for the Shares on such
date as determined in good faith by the Committee; or (iv) if the Shares are not
publicly traded, the fair market value established by the Committee acting in
good faith.
6. (a) In combination with or in substitution for cash withholding or
any other legal method of satisfying federal and state withholding tax
liability, the Optionee may elect to have Shares withheld by the Company in
order to satisfy federal and state withholding tax liability (a "share
withholding election"); provided, however, that (i) the Board or a committee
thereof shall not have revoked its advance approval of the Optionee's share
withholding election; and (ii) the share withholding election is made on or
prior to the date on which the amount of withholding tax liability is determined
(the "Tax Date"). If the Optionee elects within thirty (30) days of the date of
exercise to be subject to withholding tax on the exercise date pursuant to the
provisions of Section 83(b) of the Code, then the share withholding election may
be made during such thirty (30) day period. Notwithstanding the foregoing, the
Optionee may make a share withholding election only if the following additional
conditions are met: (i) the share withholding election is made no sooner than
six (6) months after the date of grant of the Option; and (ii) the share
withholding election is made (x) at least six (6) months prior to the Tax Date,
or (y) during the period beginning on the third business day following the date
of release of the Company's quarterly or annual financial results and ending on
the twelfth business day following such date.
(b) A share withholding election shall be deemed made when
written notice of such election, signed by the Optionee, has been delivered or
transmitted by registered or certified mail to the Secretary of the Company at
its principal office. Delivery of such notice shall constitute an irrevocable
election to have Shares withheld.
(c) If the Optionee has made a share withholding election
pursuant to this Section 6; and (i) within thirty (30) days of the date of
exercise of the Option, the Optionee elects pursuant to the provisions of
Section 83(b) of the Code to be subject to withholding tax on the date of
exercise of the Option, then the Optionee will be unconditionally obligated to
immediately tender back to the Company the number of Shares having an aggregate
Fair Market Value equal to the amount of tax required to be withheld plus cash
for any fractional amount, together with written notice to the Company informing
the Company of the Optionee's election pursuant to Section 83(b) of the Code; or
(ii) if the Optionee has not made an election pursuant to the provisions of
Section 83(b) of the Code, then on the Tax Date, such Optionee will be
unconditionally obligated to tender back to the Company the number of Shares
having
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an aggregate Fair Market Value equal to the amount of tax required to be
withheld plus cash for any fractional amount.
7. The Board or a committee thereof may require as a condition to the
right to exercise the Option hereunder that the Company receive from the person
exercising the Option, representations, warranties and agreements, at the time
of any such exercise, to the effect that the Shares are being purchased for
investment only and without any present intention to sell or otherwise
distribute such Shares and that the Shares will not be disposed of in
transactions which, in the opinion of counsel to the Company, would violate the
registration provisions of the Securities Act of 1933, as then amended (the
"Securities Act"), and the rules and regulations thereunder. The certificate
issued to evidence such Shares shall bear appropriate legends summarizing such
restrictions on the disposition thereof.
8. (a) If, at any time, the Company proposes to file a registration
statement on Form S-8 under the Securities Act with respect to an offering for
its own account or for the account of others of any class of equity security,
then the Company shall give written notice of such proposed filing to the
Optionee at least twenty-five (25) days before the anticipated filing date, and
such notice shall offer the Optionee the opportunity to register such Shares
(whether or not vested under the installment provisions of subparagraph 1(b) at
such time) as such Optionee may request in writing to the Company within fifteen
(15) days after the date such Optionee first received notice of such
registration (a "Piggyback Registration"); provided, however, that the Company
shall have no obligation to register any Shares of the Optionee pursuant to this
Section 8(a) unless the Optionee shall request that 50% or more (or all
outstanding Shares, if less than 50% of the initial aggregate number of Shares)
of the initial aggregate number of Shares be registered.
(b) The Optionee may not participate in any registration
initiated as a Piggyback Registration which is underwritten for the benefit of
the Company unless the Optionee (i) agrees to sell his Shares on the basis
provided in any underwriting agreements approved by the Company; (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting agreements and which are customary with industry practice; and
(iii) agrees that if an underwriter advises the Company in writing that the
number of shares proposed to be sold by the Company and/or the Optionee is
greater than the number of shares of Common Stock which the underwriter believes
is feasible to sell at that time, at the price and in the terms approved by the
Company, then the underwriter may exclude some or all of the Shares from such
Piggyback Registration. The Company shall advise the Optionee of the limitation,
and that the number of shares of Shares to be offered by the Optionee will be
reduced to the number recommended by the underwriter.
(c) In any registration initiated as a Piggyback Registration,
whether or not the registration statement becomes effective, the Company will
pay or cause to be paid all costs, fees and expenses in connection therewith,
including, without limitation, the Company's legal and accounting fees, printing
expenses and "blue sky" fees and expenses, except that the Company shall not pay
for (i) underwriting discounts and commissions, (ii) state transfer taxes, (iii)
brokerage commissions, (iv) fees and expenses of counsel and accountants for the
Optionee and (v) blue sky fees and expenses in jurisdictions where the Company
is not currently registered or qualified.
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(d) To the extent not inconsistent with applicable law, the
Optionee agrees not to effect any public sale or distribution of Common Stock,
including a sale pursuant to Rule 144 or in reliance on any other exemption from
registration under the Securities Act, during the fourteen (14) days prior to,
and during the ninety (90) days beginning on, the effective date of a
registration statement that includes Shares (except as part of such
registration), but only if and to the extent requested in writing (with
reasonable prior written notice) by the underwriter(s) in the case of an
underwritten public offering by the Company of securities similar to the Shares.
(e) The Company and the Optionee agree to indemnify and hold
harmless each other (and, in the case of the Company, its directors and officers
and each person who controls the Company (within the meaning of the Securities
Act)) against all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) (collectively, "Losses") arising out of or
based upon any untrue or alleged untrue statement of material fact contained in
any registration statement with respect to a Piggyback Registration, any
amendment or supplement thereto, any prospectus or preliminary prospectus or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
provided, however, that the Optionee shall not be indemnified for Losses insofar
as such Losses arise out of or are based upon any such untrue statement or
omission based upon information furnished in writing to the Company by or on
behalf of the Optionee (in his individual capacity) expressly for use therein;
provided further, however, that in the event the prospectus shall have been
amended or supplemented and copies thereof, as so amended or supplemented, shall
have been furnished to the Optionee prior to the confirmation of any sales of
Registrable Securities, such indemnity with respect to the prospectus shall not
inure to the benefit of the Optionee if the person asserting such Loss did not,
at or prior to the confirmation of the sale of the Registrable Securities to
such person, receive a copy of the prospectus, as so amended or supplemented,
and the untrue statement or omission of a material fact contained in the
prospectus was corrected in the prospectus, as so amended or supplemented.
9. The Option shall be exercisable in accordance with the terms hereof
even if (i) any ISO to purchase Common Stock in the Company, in any parent or
subsidiary of the Company or in any predecessor corporation of such
corporations, was granted to the Optionee and (ii) such previously granted ISO
remains outstanding. For purposes of this Paragraph, an ISO shall be treated as
outstanding until such option is exercised in full or expires by reason of lapse
of time.
10. All certificates for Shares delivered pursuant to any Option or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Board or a committee thereof may deem advisable under the
rules, regulations, and other restrictions of the Securities and Exchange
Commission, any stock exchange upon which such Shares or other securities are
then listed, and any applicable federal or state securities laws, and the Board
or a committee thereof may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
11. This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware and applicable federal law. Subject to
subparagraph 3(a) hereof, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors or assigns, as the case may be.
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IN WITNESS WHEREOF, the parties have witnessed this Agreement to be
duly executed and delivered as of the date first above written.
SARATOGA BEVERAGE GROUP, INC.
By: /S/ Xxxx X. Xxxx By: /S/ Xxxxx Xxxxxx
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Xxxx X. Xxxx Xxxxx Xxxxxx
President and Chief
Executive Officer
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