EXHIBIT 1
AMENDED AGREEMENT
This Amended Agreement is between The Chalone Wine Group, Ltd., a
California corporation (the "Company"), Les Domaines Barons xx Xxxxxxxxxx
(Lafite) ("DBR") and SFI Intermediate Ltd., a Texas limited partnership ("SFI").
On August 22, 2001, a special committee of the Company's Board of
Directors (the "Special Committee") approved a rights offering to the Company's
shareholders. Under the terms of the rights offering, each shareholder was to be
given a pro rata right to buy shares of the Company's common stock. The Company
was to offer a total of 1,500,000 shares of its common stock pursuant to the
rights offering. The Special Committee set the offering price at $10 per share
after considering a variety of factors including the historic and then current
market price of the common stock, the Company's business prospects, the
Company's history of revenue and operating results, general conditions in the
securities market, the Company's need for capital, alternatives available to the
Company for raising capital, the amount of proceeds desired, pricing of similar
transactions, the liquidity of the Company's common stock, the level of risk to
the Company's investors, and the need to offer shares at a price that would be
attractive to the Company's investors relative to the then current trading price
of the Company's common stock. The rights offering was to have permitted
shareholders to oversubscribe for shares which were not purchased through the
exercise of the basic subscription right. DBR and SFI had agreed to exercise all
of the rights they would receive in the rights offering as shareholders of the
Company and in the event not all shareholders exercised their rights pursuant to
the rights offering, DBR and SFI were to have oversubscribed (pro rata as
between DBR and SFI) to the rights offering so that they would acquire all the
shares offered to other holders of rights, to the extent those shares were not
purchased through the exercise of rights or exercise by other persons of the
oversubscription privilege in the rights.
Since the date of that Agreement, the financial markets in general have
fallen and experienced considerable uncertainty and the price of the Company's
common shares has fallen and shown significant volatility on little volume, with
the closing price on certain dates less than the price established in the rights
offering. The $10 price may no longer be as attractive to investors.
Accordingly, the Company has amended the offering. DBR and an affiliate of SFI
have agreed to provide interim financing (the terms and conditions of which are
set forth in the Promissory Notes of the Company to DBR and the SFI affiliate
and a related letter agreement which are attached hereto). DBR and SFI hereby
agree to exercise in full their rights under the amended rights offering for
approximately 1.765 million shares of the Company's common stock at $8.50 a
share, including the over-subscription rights as detailed in the terms of the
former rights offering. The interim financing will be repaid by the proceeds of
the rights offering.
This Amended Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which shall constitute one and the
same instrument. Upon the full execution of this Amended Agreement, the original
Agreement shall terminate and be of no further force and effect.
LES DOMAINES BARONS XX
XXXXXXXXXX (LAFITE)
By: /s/ Baron Xxxx xx Xxxxxxxxxx
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Its: Managing Director
Date: October 9, 2001
THE CHALONE WINE GROUP, LTD.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Its: President & Chief Executive
Officer
Date: October 9, 2001
SFI INTERMEDIATE LTD.
By: /s/ Xxxxxxx X. Xxxxx
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Its: President GHA 1 Holdings, Inc,
its general partner
Date: October 9, 2001