AMENDED AND RESTATED PROMISSORY NOTE
US $1,129,334.00
December 6, 2005
RECITAL. Reference is made to that certain promissory note dated October 15,
2004 (the "Original Note") by and between Drinks Americas Holdings, Ltd., a
Delaware corporation (the "Company"), as borrower, and Xxxxxxx X. Xxxxx, an
individual, as lender, in the principal amount of $352,167.00 (the "Original
Amount"). The Original Note is secured with a perfected security interest in the
tangible and intangible assets of the Company pursuant to a Security Agreement
between the Company and Xxxxxxx X. Xxxxx (the "Security Agreement"). At this
time, Xxxxxxx X. Xxxxx, together with X. Xxxxxxx Xxxxx, Greenwich Beverage
Group, LLC (by Xxxxxx Xxxxxxx, Managing Member), Hebrides L.P., and Hebrides II
Offshore Fund Limited, wish to amend the Original Note (without changing the
terms, conditions, provisions, rights, or obligations under the Security
Agreement) to increase the borrowings of the Company by an additional
$777,167.00 (the "Additional Amount"), receipt of which Additional Amount is
hereby acknowledged by the Company, to a total (exclusive of any accrued and
unpaid interest or other charges under the Original Note) of $1,129,334.00.
The terms and conditions associated with the Original Amount pursuant to the
Original Note shall remain unchanged and in full force and effect, except that
the Additional Amount shall be secured by the collateral securing the Original
Amount under the and the terms and conditions of the Security Agreement (pro
rata). The rights of the lenders and the obligations of the Company with respect
to the Additional Amount shall be as stated below, which terms and conditions
shall not apply to the Original Amount which shall continue to be governed by
the Original Note.
ADDITIONAL AMOUNT:
FOR VALUE RECEIVED, the Company hereby promises to pay to the order of
Xxxxxxx X. Xxxxx (in the amount of $100,000.00), Greenwich Beverage Group, LLC
(in the amount of $100,000), X. Xxxxxxx Xxxxx (in the amount of $25,000.00),
Hebrides L.P. (in the amount of $440,000.00), and Hebrides II Offshore Fund
Limited (in the amount of $112,167) ( the "Lenders", or with respect to one of
them, the "Lender"), the aggregate principal amount of Seven Hundred
Seventy-Seven Thousand One Hundred Sixty-Seven Dollars ($777,167.00), together
with interest on such principal amount under this note (this "Note") at the per
annum rate of twelve (12%) percent (calculated daily on the basis of a 360-day
year and actual calendar days elapsed), which principal shall be payable within
two business days after demand by the Lenders (the "Maturity Date") together
with any unpaid interest accrued as of such date, and in the absence of such
demand, interest shall be payable on a monthly basis on the 1st day of January,
2006 and continuing on the same day of each succeeding month. All amounts which
are not paid when due hereunder, after the expiration of any applicable grace
period, shall bear interest at the rate of 14% per annum, but in no event higher
than the maximum rate of interest permitted by law.
The payments due under this Note shall be paid in lawful money of the
United States of America to the Lenders at the address as the Lenders may
designate by notice in writing to the Company, in immediately available funds.
1. Prepayment. The Company may prepay this Note in whole or in part
without penalty upon not less than ten (10) days' prior notice, together with
accrued interest to the date of prepayment. Upon prepayment of this Note in
part, the Lender shall surrender this Note and the Maker shall issue a
substitute note of like tenor in the amount of the then unpaid principal amount.
Upon prepayment of this Note in full, this Note shall be surrendered by the
Lender and cancelled.
2. Withholding. If required by any Federal, state or local law, the
Company shall withhold any required amounts from payments due to the Lenders for
payment to the appropriate taxing authority. Any amounts so withheld hereunder
will be treated as a payment by the Company to the Lenders.
3. Events of Default. The entire unpaid principal amount under this Note
and the interest due thereon shall forthwith become and be due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, if any one or more of the following events (herein
called "Events of Default") shall have occurred and be continuing:
(a) (i) the Company shall fail to pay any amounts owed hereunder
when due and such default continues for a period of five (5) days (referred to
herein as the "grace period") or (ii) an event of default shall have occurred
and be continuing under material indebtedness of the Company ;
(b) if the Company shall:
(i) admit in writing its inability to pay its debts generally
as they become due;
(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act;
(iii) make an assignment for the benefit of creditors; or
(iv) consent to the appointment of a receiver of the whole or
any substantial part of its assets;
(c) if a court of competent jurisdiction shall enter an order,
judgment, or decree appointing, without the consent of the Company, a receiver
of the whole or any substantial part of Company's assets, and such order,
judgment or decree shall not be vacated or set aside or stayed within 90 days
from the date of entry thereof;
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(d) if, under the provisions of any other law for the relief or aid
of debtors, any court of competent jurisdiction shall assume custody or control
of the whole or any substantial part of Company's assets and such custody or
control shall not be terminated or stayed within 90 days from the date of
assumption of such custody or control; or
(e) any final non-appealable judgment is entered against the Company
for an amount exceeding $100,000 or any of the Company's properties or assets,
with a fair market value of at least $100,000, is attached or levied or a
restraining notice is placed thereon and such judgment or encumbrance is not
satisfied or cancelled in full within 30 days after it is entered.
4. Remedies. In case any one or more of the Events of Default specified in
Section 3 hereof shall have occurred and be continuing, the Lenders may proceed
to protect and enforce its rights either by suit in equity and/or by action at
law, whether for the specific performance of any covenant or agreement contained
in this Note or in aid of the exercise of any power granted in this Note, or the
Lenders may proceed to enforce the payment of all sums due upon this Note or to
enforce any other legal or equitable right of the Lenders.
5. Amendments and Waivers. Any term of this Note may be amended and the
observance of any term of this Note may be waived (either generally or in a
particular instance and either retroactively or prospectively) with the written
consent of the Company and the Lenders.
7. Notices. All notices, requests, consents, and other communications
under this Note shall be in writing and shall be deemed delivered (i) three (3)
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (ii) one (1) business day after being sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, in each case to the intended recipient as set forth below:
If to the Company:
Drinks Americas Holdings, Ltd.
000 Xxxxxxx Xxxx
Xxxxxx, Xx 00000
Attn: X Xxxxxxx Xxxxx
Fax: (000) 000-0000
If to Lenders:
Xxxxxxx X. Close
00 Xxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Fax: ( 203 ) 000- 0000
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Greenwich Beverage Group, LLC
c/o Xxxxxx Xxxxxxx, Managing Member
0000 Xxxxxxxxx Xxxxxxxx Xxxx Xxx
Xxxx Xxxxx, XX 00000
X. Xxxxxxx Xxxxx
00 Xxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Hebrides L.P.
000 Xxxxx Xxxxxx , 00xx xxxxx
Xxx Xxxx, XX 00000
Hebrides II Offshore Fund Limited
Vanterpool Plaza, 2nd floor
Wickhams Cay I
Road Town, Tortola
British Virgin Islands
(ii) Any party may give any notice, request, consent or other
communication under this Note using any other means (including, without
limitation, personal delivery, messenger service, telecopy, first class mail or
electronic mail), but no such notice, request, consent or other communication
shall be deemed to have been duly given unless and until it is actually received
by the party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
8. Warrants. Promptly after the execution of this Note by the Company, the
Company shall issue to the Lenders a Warrant to purchase such number of shares
of its common stock as equals twenty five percent of the principal amount of the
Additional Amount, for an exercise price of $.45 per share of common stock. Such
warrant will be exercisable for a five year period, have cashless exercise
provisions, full-ratchet anti-dilution protection and contain such other
provisions as are typically found in Warrants issued to lenders. The failure of
the Company to satisfy the requirements of this provision will constitute an
Event of Default under this Note. The common shares underlying such warrants
shall be included with the next registration statement (the "Registation"), to
be filed with the Securities and Exchange Commission (on Form SB-2 or otherwise)
within ninety (90) days from the date hereof.
9. Option to Convert. Each of the Lenders shall have the right, by written
notice to the Company, to convert all or any unpaid portion of the Additional
Amount, including, without limitation, any accrued and unpaid interest on the
Additional Amount, into the debt or equity securities of the Company pursuant to
the terms of any private placement equal to or in excess of $5 million closed by
the Company on or before December 31, 2006, at a price equal to the lower of (a)
twenty per cent (20%) below the price at which the Company issues any such
securities, or (b) $0.45 per common share. Upon any such conversion, the common
shares underlying such securities shall be included in the Registration
following the date(s) of any conversion pursuant to the terms of this Paragraph.
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10. Conflicting Agreements. In the event of any inconsistencies between
the terms of this Note and the terms of any other document related to the loan
evidenced by this Note, the terms of this Note shall prevail.
11. Severability. The unenforceability or invalidity of any provision or
provisions of this Note as to any persons or circumstances shall not render that
provision or those provisions unenforceable or invalid as to any other
provisions or circumstances, and all provisions hereof, in all other respects,
shall remain valid and enforceable.
12. Governing Law. This Note shall be governed by and construed under the
laws of the State of New York as applied to agreements among New York residents
entered into and to be performed entirely within New York. THE PARTIES HERETO
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY DOCUMENT OR AGREEMENT
CONTEMPLATED HEREBY.
13. Waivers. The nonexercise by either party of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.
14. Lost Documents. Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Note or any Note
exchanged for it, and (in the case of loss, theft or destruction) of indemnity
satisfactory to it, and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such Note,
if mutilated, the Company will make and deliver in lieu of such Note a new Note
of like tenor and unpaid principal amount and dated as of the original date of
this Note.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Note as of the date first written above.
Drinks Americas Holdings, Ltd.
By: __________________________
Name:
Title:
