AMENDMENT AGREEMENT
Exhibit
4.14
This
Amendment Agreement (the “Agreement”),
dated
as of October 27, 2008, is by and among Drinks Americas Holdings, Ltd., a
Delaware corporation (the “Company”)
and
the investors signatory hereto (each, a “Purchaser”
and
collectively, the “Purchasers”).
WHEREAS,
pursuant to the terms of a securities purchase agreement dated January 30,
2007
(the “January
Purchase Agreement”),
among
the Company and the Purchasers, the Purchasers (or their predecessor) were
issued warrants to purchase an aggregate of ________ shares of Common Stock,
par
value $0.001 per share (the “Common
Stock”),
of
which warrants to purchase ________ shares of Common Stock in the individual
amounts set forth on Schedule
A
hereto
remain outstanding (the “Existing
Warrants”);
WHEREAS,
the January Purchase
Agreement and the Existing Warrants were subsequently amended by a securities
purchase agreement dated December 18, 2007 (the “December
Purchase Agreement”),
among
the Company and the Purchasers in connection with the Company’s sale of _______
shares of its preferred stock to the Purchasers (the January Purchase Agreement
and the December Purchase Agreement are collectively referred to herein as
the
“Purchase Agreements”;
WHEREAS,
the parties wish to amend certain terms of the Purchase Agreements, including
the Existing Warrant and other agreements entered into in connection with the
transactions which were the subject thereof (collectively, the “Transaction
Documents”).
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Purchasers and the Company agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Definitions.
Capitalized terms not defined in this Agreement shall have the meanings ascribed
to such terms in the Purchase Agreements.
ARTICLE
II
AMENDMENTS
AND OTHER AGREEMENTS
Section
2.1 Reduction
in Exercise Price of the Existing Warrants.
From
the date hereof until 6:00 PM (NY time) on the 4th
business
day following the date hereof (the “Adjusted
Price Expiration Date”),
the
Exercise Price (as defined in the Existing Warrants) shall be reduced to $0.20
(the “Reduced
Exercise Price”),
subject to adjustment therein. After the Adjusted Price Expiration Date, the
Exercise Price shall revert to $0.50 per share (subject to any adjustments
for
Dilutive Insurances, as defined in the Existing Warrants, and forward and
reverse stock splits, stock dividends, recapitalizations and the like), subject
to further adjustment therein.
1
Section
2.2 Exercise
of Existing Warrants.
Each
Purchaser hereby agrees, severally and not jointly with the other Purchasers,
that any exercise of the Existing Warrants during the period commencing on
the
date hereof until the Adjusted Price Expiration Date shall be made for cash
which Exercise Price will be wired to the Company’s account pursuant to
instructions to be provided by the Company in writing to the Purchasers. After
the Adjusted Price Expiration Date, the Purchasers shall be entitled to exercise
the Existing Warrants via a cash or cashless exercise as provided
therein.
Section
2.3 Reduction
to Conversion Price.
The
Conversion Price of Preferred Stock shall be reduced to equal $0.35, subject
to
further adjustment pursuant to the terms of the Certificate of Designation
thereof. In addition, each Purchaser hereby consents to the filing of an
amendment to the Certificate of Designation to reflect the foregoing reduction
to the Conversion Price, and the Company agrees to file such amendment to the
Certificate of Designation within two (2) business days of the date
hereof.
Section
2.4 Amendment
to the “Transaction Documents”.
The
Company and the Purchasers hereby agree to acknowledge and amend the Transaction
Documents as follows:
(A)
The
definition of Exempt Issuance in the December Purchase Agreement is hereby
amended by adding new clauses (g), (h) and (i) as follows:
“(g)
the
issuance of shares of Common Stock upon exercise of the Warrants at an exercise
price equal to the Reduced Exercise Price (as defined in that certain Amendment
Agreement dated October 27, 2008 among the Company and the Purchasers (the
“Amendment
Agreement”)
during
the period from October 27, 2008 until the Adjusted Price Expiration Date
pursuant to such Amendment Agreement.”
“(h)
the
reduction of the Conversion Price of Preferred Stock as contemplated in the
Amendment Agreement and the issuance of shares of Common Stock upon conversion
of such Preferred Stock.”
“(i)
the
issuance of shares of Common Stock upon exercise of certain warrants outstanding
on the date of the Amendment Agreement exercisable for up to _________ shares
of
Common Stock, at an exercise price equal to $0.20 during the period from October
27, 2008 until November 3, 2008, on terms and conditions substantially similar
to the terms set forth in the Amendment Agreement.”
(B)
The
definition of Exempt Issuance in the January Purchase Agreement is hereby
amended by adding two new clauses which shall be identical to clauses (g),
(h)
and (i) above, except that such clauses shall be (i), (j) and (k).
(C)
The
following is hereby added as new sub-section 4.12(h) and 4.14(d) to the December
Purchase Agreement and January Purchase Agreement, respectfully:
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“Notwithstanding
anything contained in this agreement or in any Transaction Document to the
contrary, neither the issuance of shares of Common Stock upon the exercise
of
the Existing Warrants at the Reduced Exercise Price nor the reduction in the
Exercise Price of such warrants to the Reduced Exercise Price shall be
considered a Variable Rate Transaction.”
Section
2.5 As
partial consideration for the amendments herein, during the period from the
Adjusted Price Expiration Date until February 28, 2009 (the “Measurement
Period”),
in
the event that the
VWAP
for each of 10 consecutive Trading Days exceeds $1.50 (subject to adjustment
for
forward and reverse stock splits, recapitalizations, stock dividends and the
like after the date hereof), each Purchaser shall, within 5 Trading Days from
the end of such period, pay the Company an amount in cash equal to the product
of (x) the number of Warrant Shares issued at the Reduced Exercise Price during
the period from the date hereof until the Adjusted Price Expiration Date
multiplied by (y) $0.30.
Section
2.6 Effect
on Purchase Agreements. Except
as
expressly set forth herein, all of the terms and conditions of the Transaction
Documents shall continue in full force and effect after the execution of this
Agreement, and shall not be in any way changed, modified or superseded by the
terms set forth herein. This
Agreement shall not constitute a novation or satisfaction and accord of any
Transaction Document. The
respective obligations of the Purchasers hereunder are subject to the following
conditions being met: (a) the accuracy in all material respects of the
representations and warranties of the Company contained herein and (b) the
performance by the Company of all if its obligations, covenants and agreements
required to be performed hereunder.
Section
2.7 Issuing
of Press Release and Filing of Form 8-K and Prospectus
Supplement.
Before
8:30 am (NY time) on the Trading Day immediately following the date hereof,
the
Company shall issue a press release disclosing the terms of this Agreement,
which press release shall be reasonably acceptable to each Purchaser. Within
two
(2) business days of the date hereof, the Company shall issue a Current Report
on Form 8-K, reasonably acceptable to each Purchaser disclosing the material
terms of the transactions contemplated hereby, which shall include this
Agreement as an attachment thereto. In addition, within one (1) business day
of
the date hereof, the Company shall file a prospectus supplement under Rule
424
under the Securities Act to registration statement number 333-141395, disclosing
the terms of the transactions hereunder.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Section
3.1 Representations
and Warranties of the Company.
The
Company hereby makes the representations and warranties set forth below to
the
Purchasers that as of the date of its execution of this Agreement:
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(a) Authorization;
Enforcement.
The
Company has the requisite corporate power
and
authority to enter into and to consummate the transactions contemplated by
this
Agreement and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby have been duly authorized by
all
necessary action on the part of such Company and no further action is required
by such Company, its board of directors or its stockholders in connection
therewith. This Agreement has been duly executed by the Company and, when
delivered in accordance with the terms hereof will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
(b) No
Conflicts.
The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby do not
and
will not: (i) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any lien upon any of the properties or assets of the Company,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any material
agreement, credit facility, debt or other material instrument (evidencing
Company debt or otherwise) or other material understanding to which the Company
is a party or by which any property or asset of the Company is bound or
affected, or (iii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property
or
asset of the Company is bound or affected.
(c) Capitalization.
The
Company is a duly organized and validly existing corporation in good standing
under the laws of the State of Delaware. The Warrant Shares, when issued in
accordance with the terms of this Agreement and the Existing Warrants, will
be
duly authorized, validly issued, fully paid and nonassessable. Except as
described in this Section or as set forth on Schedule 3(c), there are no issued
or outstanding securities and no issued or outstanding options, warrants or
other rights, or commitments or agreements of any kind, contingent or otherwise,
to purchase or otherwise acquire shares of Common Stock or any issued or
outstanding securities of any nature convertible into shares of Common Stock.
There is no proxy or any other agreement, arrangement or understanding of any
kind authorized, effective or outstanding which restricts, limits or otherwise
affects the right to vote any shares of Common Stock.
(d) Acknowledgment
Regarding Purchaser’s Trading Activity.
It is
understood and acknowledged by the Company that: (i) none of the Purchasers
has
been asked to agree by the Company, nor has any Purchaser agreed, to desist
from
purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the
Securities for any specified term, (ii) past or future open market or other
transactions by any Purchaser, specifically including, without limitation,
Short
Sales or “derivative” transactions, before or after the closing of this or
future private placement transactions, may negatively impact the market price
of
the Company’s publicly-traded securities, (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a
party, directly or indirectly, may presently have a “short” position in the
Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one
or
more Purchasers may engage in hedging activities at various times during the
period that the Securities are outstanding, including, without limitation,
during the periods that the value of the Warrant Shares deliverable with respect
to Securities are being determined, and (z) such hedging activities (if any)
could reduce the value of the existing stockholders' equity interests in the
Company at and after the time that the hedging activities are being
conducted. The Company acknowledges that such aforementioned hedging
activities do not constitute a breach of any of the Transaction
Documents.
4
Section
3.2 Representations
and Warranties of the Purchasers.
The
Purchaser hereby makes the representations and warranties set forth below to
the
Company that as of the date of its execution of this Agreement:
(a) Due
Authorization.
Such
Purchaser represents and warrants that (i) the execution and delivery of this
Agreement by it and the consummation by it of the transactions contemplated
hereby have been duly authorized by all necessary action on its behalf and
(ii)
this Agreement has been duly executed and delivered by such Purchaser and
constitutes the valid and binding obligation of such Purchaser, enforceable
against it in accordance with its terms.
ARTICLE
IV
MISCELLANEOUS
Section
4.1 Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be made in accordance with the provisions of the
Purchase Agreement.
Section
4.2 Survival.
All
warranties and representations (as of the date such warranties and
representations were made) made herein or in any certificate or other instrument
delivered by it or on its behalf under this Agreement shall be considered to
have been relied upon by the parties hereto and shall survive for the applicable
statute of limitations. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties;
provided however that no party may assign this Agreement or the obligations
and
rights of such party hereunder without the prior written consent of the other
parties hereto.
Section
4.3 Execution.
This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original
thereof.
5
Section
4.4 Severability.
If any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that is
a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
Section
4.5 Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined pursuant to the Governing Law provision
of
the Purchase Agreement.
Section
4.6 Entire
Agreement.
The
Agreement, together with the exhibits and schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.
Section
4.7 Construction.
The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
Section
4.8 Independent
Nature of Purchasers’ Obligations and Rights.
The
obligations of each Purchaser hereunder are several and not joint with the
obligations of any other Purchasers hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert with respect
to
such obligations or the transactions contemplated by this Agreement. Each
Purchaser shall be entitled to protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
Section
4.9 Fees
and Expenses.
Except
as expressly set forth herein, each party shall pay the fees and expenses of
its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all transfer
agent fees, stamp taxes and other taxes and duties levied in connection with
the
delivery of any Warrants or Warrant Shares.
***********************
6
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
| DRINKS AMERICAS HOLDINGS, LTD. | ||
| |
|
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| By: | ||
|
Name: |
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|
Title:
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7
[PURCHASER
SIGNATURE PAGES TO DKAM
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
by their respective authorized signatories as of the date first indicated
above.
Name
of
Purchaser: ________________________________________________________
Signature
of Authorized Signatory of Purchaser:
__________________________________
Name
of
Authorized Signatory:
____________________________________________________
Title
of
Authorized Signatory:
_____________________________________________________
Email
Address of
Purchaser:________________________________________________
8
Schedule
A
Existing
Warrants
9
