Document:

Unassociated Document

     

    THIS
DEBENTURE AND ANY SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND THIS DEBENTURE, THE SECURITIES AND ANY INTEREST THEREIN MAY
NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS, WHICH, IN THE
OPINION OF COUNSEL FOR THE LENDER, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.

     

    DRINKS
AMERICAS HOLDINGS, LTD.

    DEBENTURE

     

     

    
      	
              Issue
      Amount:  $4,000,000

            	
              June
      18, 2009

            

    

    

    FOR VALUE
RECEIVED, the undersigned, Drinks Americas Holdings, Ltd., a Delaware
corporation  (referred to herein as the “Borrower”), with
offices at  372 Danbury Road, Suite 163, Wilton, Connecticut 06897,
hereby unconditionally promises to pay to the order of St. George Investments,
LLC, its endorsees, successors and/or assigns (the “Lender”), in lawful
money of the United States, at 303 East Wacker Drive, Suite 311, Chicago,
Illinois 60601 or such other address as the Lender may from time to time
designate, the principal sum of Four Million Dollars ($4,000,000) (the “Issue
Amount”).  This Debenture shall mature and become due and
payable in full on June 18, 2013 (the “Maturity
Date”).

     

    Capitalized
terms used herein have the respective meanings ascribed thereto in the
Securities Purchase Agreement dated of even date herewith unless otherwise
defined herein.

     

    1.           Original
Issue Discount.  The Lender shall purchase this Debenture at a
price equal to 75% of the Issue Amount; 25% of the issue amount shall represent
Original Issue Discount.

     

    2.           Terms of
Repayment.  Principal of and interest on this Debenture shall
be paid by the Borrower as follows:

     

    (a)         Unless
otherwise stated herein, this Debenture shall not accrue interest.

     

    (b)         Principal
shall be due and payable in full on the Maturity Date and shall be paid in cash,
unless permitted to be paid in shares of common stock pursuant to Section 3,
below.

     

    (c)         The
Borrower further agrees that, if any payment made by the Borrower or any other
person is applied in payment of this Debenture and is at any time annulled, set
aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of any property
hereafter pledged as security for this Debenture which has been applied in
payment of this Debenture is required to be returned by Lender to the pledgor,
its estate, trustee, receiver or any other party, including, without limitation,
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, the Borrower’s liability
hereunder shall be and remain in full force and effect, as fully as if such
payment had never been made, or, if prior thereto any such lien, security
interest or other collateral hereunder securing the Borrower’s liability
hereunder shall have been released or terminated, this Debenture (and such lien,
security interest or other collateral) shall be reinstated in full force and
effect, and such prior release or termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the Borrower in respect
to the amount of such payment (or any lien, security interest or other
collateral securing such obligation).

     

    
      
        
        

      

      
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    (d)         All
computations of interest, if any, shall be made by Lender on the basis of a year
of 360 days for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest is
payable.  Whenever any payment to be made hereunder shall be stated to
be due on a day which is not a business day, such payment shall be made on the
next succeeding day and such extension of time shall in such case be included in
the computation of payment of interest.

     

    (e)         At
anytime after the issuance of this Debenture, the Borrower may prepay all or any
part of the outstanding principal amount of this Debenture, together with
interest accrued, if any, upon not fewer than ten (10) trading days’ prior
written notice to the Lender.  In the event the Borrower elects to
prepay any portion of this Debenture prior to the Maturity Date, the Borrower
shall be entitled to satisfy a portion of the amount outstanding under this
Debenture by offsetting the amount owed under this Debenture by an amount equal
to 125% of the amount owed under the Investor Notes which amount will satisfy a
corresponding portion of this Debenture.  Such satisfaction of the
Debenture shall be considered an offset of liabilities and shall be considered,
in full or partial, payment and satisfaction of this Debenture.

     

    For the
avoidance of any doubt, if the Borrower elects to offset this Debenture with the
Investor Notes at a time when no Investor Notes have been paid and satisfied by
the Lender, then the Borrower shall be entitled to offset the amount owed under
this Debenture by $3,281,250 (which is the amount of Investor Notes outstanding,
$2,625,000, times 1.25%).

     

    (f)         The
Issue Amount may be increased to include any costs, fees or other reasonable
expenses incurred by the Lender in connection with this Debenture and the
related documents.

     

    3.           Repayment
in Common Stock.

     

    (a)         From
the date that is six (6) months from the date hereof, the Lender shall have the
option, at any time, to request to be re-paid (the “Request for
Repayment”) its Issue Amount, in full or in part, in fully-paid and
nonassessable shares of Borrower’s Common Stock at the rate per share equal to
the Fixed Re-Payment Price (the “Re-Payment Rate”),
provided, however, that the Lender shall not be permitted to deliver a Request
for Repayment where the dollar amount of the Request for Repayment would exceed
the dollar amount represented by the difference between (i) the amount
outstanding under this Debenture at the time of the Request for Repayment; and
(ii) one hundred twenty five percent (125%) of the aggregate amount of all of
the notes issued by the Lender to the Borrower on the date hereof (the “Investor
Notes”) and remaining outstanding and not satisfied in cash by the Lender as of
the date of such Request for Repayment.

     

    
      
        
        

      

      
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    For
purposes of this Debenture, the term “Fixed Re-Payment Price” means the Market
Price.

     

    For
purposes of this Debenture, the term “Market Price” shall mean the lower of: (i)
the closing price of the Company’s common stock on the OTC Bulletin Board for
the prior business day; or (ii) the volume weighted average sales prices of the
Company’s common stock on such market for the prior ten (10) business days, in
each case as recorded by Bloomberg, L.P.

     

    (b)         As
promptly as practicable after notice of the Request for Repayment, pursuant to
this Section 3, the Borrower shall deliver or cause to be delivered to the
Lender certificates for the full number of shares of Common Stock issuable upon
Request for Repayment of this Debenture, in accordance with the provisions
hereof. Any such repayment shall be deemed to have been made at the time that
such notice for the Request for Repayment shall have been received by the
Borrower.  If, however, the Borrower fails to deliver the full number
of shares due upon any repayment of common stock within three (3) business days
following the Borrower’s receipt of the request for repayment in common stock,
the Borrower shall pay liquidated damages in cash equal to $1,500 per day for
each day the Shares are not delivered to the Lender.  The Lender is
not obligated nor required to surrender this Debenture upon the Request for
Repayment.

     

    (c)         Percentage
Cap.  Notwithstanding the provisions of this Debenture, in no
event (except as specifically provided in the Debenture as an exception to this
provision), (i) during the forty-five (45) day period prior to the Maturity
Date, or (ii) while there is outstanding a tender offer for any or all of the
shares of the Borrower's Common Stock) shall the Lender be entitled to request
re-payment of this Debenture, or the Borrower have the obligation or option to
issue shares upon such request or in lieu of cash payments hereunder, to the
extent that, after such payment of common stock or issuance the sum of (1) the
number of shares of Common Stock beneficially owned by the Lender and its
affiliates, and (2) the number of shares of Common Stock issuable upon the
request of repayment of the Debenture with respect to which the determination of
the proviso is being made, would result in beneficial ownership by the Lender
and its affiliates of more than 9.99% (the “Percentage Cap”) of
the outstanding shares of Common Stock (after taking into account the shares to
be issued to the Lender upon such repayment).  For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 12(d) of the Securities Exchange Act of
1934, as amended.

     

    4.           Liability
of the Borrower.  The Borrower is unconditionally, and without
regard to the liability of any other person, liable for the payment and
performance of this Debenture and such liability shall not be affected by an
extension of time, renewal, waiver, or modification of this Debenture or the
release, substitution, or addition of collateral for this
Debenture.  Each person signing this Debenture consents to any and all
extensions of time, renewals, waivers, or modifications, as well as to release,
substitution, or addition of guarantors or collateral security, without
affecting the Borrower’s liabilities hereunder.

     

    5.           Representations
and Warranties.  The Borrower represents and warrants as
follows:

     

    
      
        
        

      

      
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              (i)

            	
              the
      Borrower is a corporation duly organized, validly existing and in good
      standing under the laws of the State of
  Delaware;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      execution, delivery and performance by the Borrower of this Debenture are
      within the Borrower's powers, have been duly authorized by all necessary
      action, and do not contravene: (A) the Borrower's certificate of
      incorporation or by-laws; or (B) any law or agreement or document binding
      on or affecting the Borrower;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              no
      authorization or approval or other action by, and no notice to or filing
      with, any governmental authority, regulatory body or third person is
      required for the due execution, delivery and performance by the Borrower
      of this Debenture;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              this
      Debenture constitutes the legal, valid and binding obligation of the
      Borrower, enforceable against the Borrower in accordance with its terms
      except as enforcement hereof may be limited by bankruptcy, insolvency or
      other similar laws affecting the enforcement of creditors' rights
      generally and subject to the applicability of general principles of
      equity;

            

    

     

    
      	
               
      

            	
              (v)

            	
              the
      Borrower has all requisite power and authority to own and operate its
      property and assets and to conduct its business as now conducted and
      proposed to be conducted and to consummate the transactions contemplated
      hereby;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              the
      Borrower is duly qualified to conduct its business and is in good standing
      in each jurisdiction in which the character of the properties owned or
      leased by it, or in which the transaction of its business makes such
      qualification necessary except to the extent such failure to qualify would
      not have a material adverse effect on the
  Company;

            

    

     

    
      	
               
      

            	
              (vii)

            	
              there
      is no pending or, to the Borrower 's knowledge, threatened action or
      proceeding affecting the Borrower before any governmental agency or
      arbitrator which challenges or relates to this Debenture or which may
      otherwise have a material adverse effect on the
  Borrower;

            

    

     

    
      	
               
      

            	
              (viii)

            	
              after
      giving effect to the transactions contemplated by this Debenture, the
      Borrower is Solvent;

            

    

     

    
      	
               
      

            	
              (ix)

            	
              the
      Borrower is not in violation or default of any provision of its
      certificate of incorporation or by-laws, each as currently in effect, or
      any instrument, judgment, order, writ, decree or contract, statute, rule
      or regulation to which the Borrower is
subject;

            

    

     

    
      	
               
      

            	
              (x)

            	
              this
      Debenture is validly issued, free of any taxes, liens, and encumbrances
      related to the issuance, hereof and is not subject to preemptive right or
      other similar right of members of the Borrower;
  and

            

    

     

    
      	
               
      

            	
              (xi)

            	
              the
      Borrower has taken all required action to reserve for issuance fifty
      million (50,000,000) shares of Common Stock as may be issuable from time
      to time upon a request for repayment of this Debenture in common
      stock.

            

    

     

    
      
        
        

      

      
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    6.           Covenants.  So
long as any principal or interest, if any, is due hereunder and shall remain
unpaid, the Borrower will, unless the Lender shall otherwise consent in
writing:

     

    (a)         Maintain
and preserve its existence, rights and privileges;

     

    (b)         The
Company will not consummate an equity line of credit facility or conduct a
similar financing transaction where the Company sells in satisfaction of all or
a portion of the amount owed under the credit facility common stock or
convertible securities at a fluctuating prices that varies with the trading
prices of or quotations for the shares of Common Stock;

     

    (c)         Not:
(i) directly or indirectly sell, lease or otherwise dispose of any of its
property or assets other than in its ordinary course of business, in the
aggregate, to any person(s), whether in one transaction or in a series of
transactions over any period of time; (ii) merge into, with or consolidate with
any other person unless this Debenture is assumed by the surviving entity; or
(iii) adopt any plan or arrangement for the dissolution or liquidation of the
Borrower;

     

    (d)         Give
written notice to Lender upon the occurrence of a Trigger Event (as defined
below) or Event of Default (as defined below) within five (5) Business Days of
such event;

     

    (e)         Not
use the proceeds from the issuance of this Debenture in any way for any purpose
that entails a violation of, or is inconsistent with, Regulation U of the Board
of Governors of the Federal Reserve System of the United States of
America;

     

    (f)         Comply
in all material respects with all applicable laws (whether federal, state or
local and whether statutory, administrative or judicial or other) and with every
applicable lawful governmental order (whether administrative or
judicial);

     

    (g)         Not
redeem or repurchase any of its capital stock;

     

    (h)         Not:
make any advance or loan to any person, firm or corporation, except for
reasonable travel or business expenses advanced to the Company's employees or
independent contractors in the ordinary course of business;

     

    (i)         Cause
its transfer agent to issue shares of common stock upon written notice of
Lender’s request to receive repayment of this Debenture in shares of common
stock pursuant to the terms herein within five (5) business days of
notification; or (b) at the request of the Lender, cause the removal of any
restrictive legend on any certificate or cause its transfer agent to remove such
legend where such removal is lawful within five (5) business days;
and

     

    (j)         Not
take any action which would impair the rights and privileges of this Debenture
set forth herein or the rights and privileges of the holder of this
Debenture.

     

    7.           Trigger
Event.  Upon the occurrence of one of the following Trigger
Events, (i) the amount due under this Debenture shall increase to 110% of such
amount outstanding immediately before such Trigger Event, including all
interest, fees, costs and penalties and, if unsatisfied such amount will accrue
interest at a rate of twelve percent (12%) per annum until fully paid or
exercised; and (ii) the Lender may, at its sole and exclusive option, accelerate
the maturity of this Debenture and demand immediate payment in full, whereupon
the outstanding principal amount of the Debenture and all obligations of
Borrower to Lender hereunder, together with accrued interest thereon and accrued
charges and costs, if any, shall become immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived, provided, however, that this remedy shall not preclude
the Lender from exchanging this Debenture for shares of Common Stock pursuant to
Section 3 hereof; and (iii) exercise all legally available rights and
privileges.

     

    
      
        
        

      

      
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    Notwithstanding
the occurrence of any Trigger Event, the Lender will still be obligated to make
any mandatory prepayments as required by Section 1(d) of the Investor
Notes.

     

    If a
Trigger Event occurs, then such Trigger Event shall constitute a continuing
default which will permit the Lender to exercise its rights under this Section
at any time.

     

    A
“Trigger Event” shall be when any of the following occur:

     

    (a)         Any
material default, material misrepresentation, or material breach of a covenant,
representation or warranty or other agreement under the Transaction
Documents,

     

    (b)         Any
default in any payment of principal or interest in the form of cash or stock
under the Transaction Documents within five (5) business days of written
notice,

     

    (c)         Any
transfer, conveyance, or assignment of substantial Company assets or substantial
assets of any of its subsidiaries, in each case not in the ordinary course of
business, except for a merger in which the Company is the surviving Corporation
or in which the surviving corporation assumes the Company’s obligations under
the Transaction Documents,

     

    (d)         Any
money judgment, writ or warrant of attachment, or similar process against
Company or any of its properties or other assets, or defaults on obligations, in
amount in excess of $100,000 unless such are being contested by the
Company,

     

    (e)         The
Company (a) fails to cause its transfer agent to issue shares of common stock
upon written notice of Lender’s request to receive repayment of this Debenture
in shares of common stock pursuant to the terms herein within five (5) business
days of receipt of a Request for Repayment; or (b) upon written request of the
Lender, fails to remove any restrictive legend on any certificate or fails to
cause its transfer agent to remove such legend where such removal is lawful
within five (5) business days of receipt of a written demand
therefore,

     

    (f)         If,
at any time, the average value of the Collateral Shares pledged in the Pledge
Agreement (regardless of whether or not such Collateral Shares are previously
transferred or sold) falls below One Million Six Hundred Thousand Dollars
($1,600,000) (the “Required Level”) for
any five consecutive trading days during the term of this Debenture; provided,
that subject to the consent of the Lender, which consent may be granted or
withheld at Lender’s sole discretion, the Borrower may provide additional
Collateral Shares in order to raise the value above the Required
Level.  For purposes of measuring compliance with this provision, the
value of the Common Stock shall be deemed to be the Market Price;

     

    
      
        
        

      

      
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    (g)         The
average daily dollar volume of Common Stock traded per day for any consecutive
ten (10) trading-day period is less than ten thousand dollars ($10,000) (the
“Volume
Default”), provided, however that the Borrower shall have five (5)
business days after written notice unless the Borrower is previously aware of
the volume to cure any Volume Default.  For purposes of measuring
compliance with this covenant, the value of the Common Stock traded for each
trading day shall be deemed to be equal to the average of the VWAP of Common
Stock times the volume, each as reported by Bloomberg, L.P.; Note the cure
period in the term sheet.

     

    (h)         Any
governmental agency or any court of competent jurisdiction at the instance of
any governmental agency shall assume custody or control of the whole or any
substantial portion of the properties or assets of the Company, or

     

    (i)         The
entry of a decree or order by a court having jurisdiction adjudging the Company
a bankrupt or insolvent, or approving a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company, under
federal bankruptcy law, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law; or the
commencement against the Company of a proceeding under the federal bankruptcy
law or any applicable federal or state bankruptcy, insolvency or similar law and
the continuance of any such proceedings unstayed and in effect for a period of
90 days or more; or the commencement by the Company of a voluntary case under
federal bankruptcy law, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency, or other similar law, or the consent by
it to the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief
under federal bankruptcy law or any other applicable federal or state law, or
the consent by it to the filing of such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or similar official of the
Company or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action.

     

    (j)         Failure
of Company to continuously maintain its status as a reporting company under the
federal securities laws,

     

    (k)         Failure
to timely file all reports required to be filed by it with the SEC pursuant to
Section 12, 13 or 15(d) of the Securities Exchange Act of 1934, or otherwise
required by the Securities Exchange Act of 1934 (the Company can cure any late
filing by filing a timely notice of late filing and filing such periodic report,
provided, however, that any such late filing shall not prevent the Lender from
selling its shares under Rule 144), or

     

    (l)         Halt
or suspension of trading of its Common Stock for any period of
time.

     

    8.           Lender’s
Rights Upon Default.  Upon the occurrence of any Event of
Default or Trigger Event pursuant to this Debenture, the Lender may, at its sole
and exclusive option, do any or all of the following, either concurrently or
separately: (a) accelerate the maturity of this Debenture and demand immediate
payment in full, whereupon the outstanding principal amount of the Debenture and
all obligations of Borrower to Lender hereunder, together with accrued interest
thereon and accrued charges and costs, including costs incurred by the Company
with respect to the collection of this Purchase Note (including reasonable legal
fees), if any, shall become immediately due and payable without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived; (b) offset, recoup or exercise any other legal remedy to offset any
liabilities due by the Lender, including but not limited to any offset of this
Debenture against the Investor Notes being delivered by the Lender to the
Borrower at Closing, as provided under Section 3 of the Investor Notes issued by
the Lender to the Company on the date hereof; and (c) exercise all legally
available rights and privileges.  If an Event of Default occurs
hereunder, the Borrower will be responsible for all costs incurred by the Lender
in collection of this Debenture, including reasonable legal fees, which costs
will constitute part of the obligations of the Borrower hereunder.

     

    
      
        
        

      

      
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    9.           Default
Interest Rate.   Upon an Event of Default, without any
further action on the part of Lender, interest will thereafter accrue at the
rate of twelve percent (12%) per annum (the “Default Rate”), until
all outstanding principal, interest and fees are repaid in full by
Borrower.

     

    10.           Usury.  In
no event shall the amount of interest paid or agreed to be paid hereunder exceed
the highest lawful rate permissible under applicable law.  Any excess
amount of deemed interest shall be null and void and shall not interfere with or
affect the Borrower’s obligation to repay the principal of and interest on the
Debenture.  This confirms that the Borrower and, by its acceptance of
this Debenture, the Lender intend to contract in strict compliance with
applicable usury laws from time to time in effect.  Accordingly, the
Borrower and the Lender stipulate and agree that none of the terms and
provisions contained herein shall ever be construed to create a contract to pay,
for the use or forbearance of money, interest in excess of the maximum amount of
interest permitted to be charged by applicable law from time to time in
effect.

     

    11.           Costs of
Enforcement. Borrower hereby covenants and agrees to indemnify, defend
and hold Lender harmless from and against all costs and expenses, including
reasonable attorneys’ fees and their costs, together with interest thereon at
the Prime Rate, incurred by Lender in enforcing its rights under this Debenture;
or if Lender is made a party as a defendant in any action or proceeding arising
out of or in connection with its status as a lender, or if Lender is requested
to respond to any subpoena or other legal process issued in connection with this
Debenture; or reasonable disbursements arising out of any costs and expenses,
including reasonable attorneys’ fees and their costs incurred in any bankruptcy
case; or for any legal or appraisal reviews, advice or counsel performed for
Lender following a request by Borrower for waiver, modification or amendment of
this Debenture or any of the other Transaction Documents.

     

    12.           Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.  This
Debenture shall be governed by, and construed in accordance with, the internal
laws of the State of Illinois, without reference to the choice of law provisions
thereof.  The Borrower and, by accepting this Debenture, the Lender,
each irrevocably submits to the exclusive jurisdiction of the courts of the
State of Illinois located in Cook County and any United States District Court
for the Northern District of Illinois for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Debenture and the
transactions contemplated hereby.  Service of process in connection
with any such suit, action or proceeding may be served on each party hereto
anywhere in the world by the same methods as are specified for the giving of
notices under this Debenture.  The Company and, by accepting this
Debenture, the Lender, each irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such
court.  The Borrower and, by accepting this Debenture, the Lender,
each irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE BORROWER AND, BY ITS
ACCEPTANCE HEREOF, THE LENDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY
IN ANY LITIGATION WITH RESPECT TO THIS DEBENTURE AND REPRESENTS THAT COUNSEL HAS
BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

     

    
      
        
        

      

      
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    13.           Miscellaneous.

     

    (a)
Borrower hereby waives protest, notice of protest, presentment, dishonor, and
demand.

     

    (b) The
rights and privileges of Lender under this Debenture shall inure to the benefit
of its successors and assigns.  All obligations of Borrower in
connection with this Debenture shall bind Borrower’s successors and assigns, and
Lender’s repayment rights shall succeed to any successor securities to
Borrower’s common stock.

     

    (c) If
any provision of this Debenture shall for any reason be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof, but this Debenture shall be construed as if such invalid or
unenforceable provision had never been contained herein.

     

    (d) The
waiver of any Event of Default or the failure of Lender to exercise any right or
remedy to which it may be entitled shall not be deemed a waiver of any
subsequent Event of Default or Lender’s right to exercise that or any other
right or remedy to which Lender is entitled.   No delay or
omission by Lender in exercising, or failure by Lender to exercise on any one or
more occasions, shall be construed as a waiver or novation of this Debenture or
prevent the subsequent exercise of any or all such rights.

     

    (e) This
Debenture may not be waived, changed, modified, or discharged orally, but only
in writing.

     

    14.           Notice,
Etc.  Any notice required by the provisions of this Debenture
will be in writing and will be deemed effectively given:  (a) upon
personal delivery to the party to be notified; (b) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient; if not, then
on the next business day; (c) five (5) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid; or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt, and delivered as
follows:

     

    If to the
Borrower:

    

    Drinks
Americas Holdings, Ltd.

    
      	
               
      

            	
              Attn:

            	
              J.
      Patrick Kenny

            

    

    372
Danbury Road, Suite 163

    Wilton,
Connecticut 06897

    Phone
Number: (203) 762-7000

    Facsimile
Number: (203) 762-8992

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    With a
copy to:

    

    Eaton
& Van Winkle LLP

    
      	
               
      

            	
              Attn:

            	
              Joseph
      L. Cannella, Esq.

            

    

    3 Park
Avenue

    New York,
NY 10016

    Phone
Number: (212) 561-3633

    Facsimile
Number: (212) 779-9928

    

    

    If to
Lender:

    

    St.
George Investments, LLC

    
      	
               
      

            	
              Attn:

            	
              John
      Fife

            

    

    303 East
Wacker Drive, Suite 311

    Chicago,
Illinois 60601

    Phone:
(312) 297-7000

    Facsimile:
(312) 819-9701

    

    With a
copy to (which shall not constitute notice):

    

    Anslow
& Jaclin, LLP

    
      	
               
      

            	
              Attn.:

            	
              Gregg
      E. Jaclin, Esq.

            

    

    Eric M
Stein, Esq.

    Joy Hui,
Esq.

    195 Route
9 South, Suite 204

    Manalapan,
New Jersey 07726

    Phone:
(732) 409-1212

    Facsimile:
(732) 577-1188

    

    or, as to
each party, at such other address as shall be designated by such party in a
written notice to the other parties.

     

    15.           Definitions.  As
used herein, the following terms shall have the meaning ascribed to them
below:

     

    (a)           “Solvent”
shall mean, with respect to any person or entity on a particular date, that on
such date: (i) the fair value of the property of such person or entity is not
less than the total amount of the liabilities of such person or entity; (ii) the
present fair salable value of the assets of such person or entity is not less
than the amount required to pay the probable liability on such person's existing
debts as they become absolute and matured; and (iii) such person is able to
realize upon its assets an amount sufficient to and pay its debts and other
liabilities;

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (b)           “Securities
Purchase Agreement” shall mean the Securities Purchase Agreement dated the date
hereof among the Borrower, the Lender and the other purchasers identified
therein.

     

    

     

    [REMAINDER
OF PAGE LEFT BLANK]

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
PAGE TO SELLER DEBENTURE]

     

    IN WITNESS WHEREOF, the
undersigned has executed this Debenture as of the date first set forth
above.

     

    
      
        	 	DRINKS AMERICAS
      HOLDINGS, LTD.	 
	 	 	 	 
	 	 	 	 
	
              	
                By:
      

              	          	 
	 	Name:  
      	J.
      Patrick Kenny	 
	 	Title:  	Chairman
      and CEO	 

      

    

     

     

    
      
        	STATE
      OF 	
                      
      

              	)	
              	 
	 	 	)  ss:	 	 
	COUNTY
      OF 	     	)	
              	 

      

    

     

    On this
_____ day of January, 2008, before me, personally came _____________, to me
known, who being by me duly sworn, did depose and say that he resides in
____________________________________, that he is the President and Chief
Executive Officer of Drinks Americas Holdings, Ltd., the corporation described
in and which executed the above instrument; and that he signed his name by
authority of the board of directors of said corporation.

     

    

    
      
        	
              	
              	   	 
	 	 	

                Notary
      Public

              	 

      

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    

    REQUEST
FOR REPAYMENT IN COMMON SHARES

    

    (to be
signed upon request for repayment in common shares of the
Debenture)

    

    

    TO DRINKS
AMERICAS HOLDINGS, LTD.:

    

    The
undersigned, the holder of the foregoing Debenture, hereby requests for
repayment of such Debenture in ______ shares of Common Stock of Drinks Americas
Holdings, Ltd., and requests that the certificates for such shares be issued in
the name of, and delivered to, _________________, whose address is
________________________________________.

     

    
      
        	Dated:  	
                   
      

              	 	
              	
              	 
	 	 	 	 	 	 
	 	 	 	 	

                 

              	 
	 	 	 	 	

                (signature)

              	 
	 	 	 	 	 	 
	 	 	 	 	  
      	 
	 	 	 	 	
                (address)Unassociated Document

     

    PLEDGE
AGREEMENT

     

    THIS PLEDGE AGREEMENT (the “Agreement”), dated
June 18, 2009, by and among St. George Investments, LLC, an Illinois limited
liability company, (the “Investor”), Drinks
Americas Holdings, Ltd., a Delaware corporation, (the “Company”) and J.
Patrick Kenny, an affiliate of the Company, and certain other affiliates
signatory hereto (the “Affiliates,” together
with the Company and the Investor, the “Parties”), shall
become effective upon the execution thereof by all parties. All capitalized
terms not otherwise defined herein shall have the same meaning ascribed to them
in the Securities Purchase Agreement dated of even date herewith.

    

    WHEREAS, the Company has
authorized the sale and issuance of the Drinks Debenture, the Warrant, and
common stock issuable upon exercise of the Warrant and full or partial
satisfaction of the Drinks Debenture as provided in the Securities Purchase
Agreement and the Transaction Documents;

     

    WHEREAS, the Investor has
agreed to deliver to the Company at Closing the total of: (i) $375,000 in cash;
(ii) ten (10) $250,000 Investor Notes; and (iii) one (1) $125,000 Investor Note;
and

     

    WHEREAS, as an inducement
to the Investor to enter into the Securities Purchase Agreement, the Affiliates
have also agreed to the pledge 12,000,000 shares of Common Stock issued to the
Affiliates with an aggregate market value of $1,600,000, of which 9,000,000
shares shall have been issued six (6) months or more prior to the
Closing.

    

    NOW, THEREFORE, in
consideration of the covenants, promises and representations set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

    

    1.           Delivery of Collateral
Shares.

    

    
      	
               
      

            	
              (a)

            	
              Delivery of
      Shares.  Concurrent with the Closing, the Affiliates
      shall deliver to the Investor 12,000,000 shares of common stock (the
      “Collateral
      Shares”), of which 9,000,000 shares, shall have been issued six (6)
      months or more prior to the Closing, with stock powers executed in blank
      in form and substance reasonably satisfactory to the
      Investor.  The Collateral Shares shall include all dividends and
      other distributions and payments thereon, if
  any.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Required Level.
      The Collateral Shares shall have a value equal to $1,600,000 valued at the
      Market Price as defined in the Drinks Debenture (“the “Required
      Level”). If the average value of the Collateral Shares for any
      consecutive five-day period declines below the Required Level for any
      trading day, then subject to the consent of the Investor, which consent
      may be granted or withheld at the Investor’s sole discretion, the Company
      or such Affiliates shall deliver additional shares of Common Stock to be
      included with the Collateral Shares to the Investor in order to raise the
      value of the Collateral Shares to the Required
  Level.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Fees and
      Expenses.  The Affiliates shall be responsible for any
      and all fees and costs related to the Collateral
  Shares.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.           Grant of Security
Interest.  The Affiliates hereby grants to the Investor, to
secure the payment and performance in full of all of the obligations under the
Transaction Documents, a security interest in and so pledges and assigns to the
Investor the Collateral Shares.  Specifically, the Investor shall have
a first lien security interest in the Collateral Shares.

    

    3.           Disbursement of Collateral
Shares.

    

    (a)           Failure to Deliver
Shares.  In the event that the Company fails to deliver the
Shares of common stock after delivery of a Request for Repayment under the
Debenture to the Investor within five (5) days of notice, the Investor shall be
entitled to receive the Collateral Shares to the extent that would enable the
Investor to take possession of the number of shares of Common Stock deliverable
by the Company under the Request for Repayment.  Upon such delivery,
such shares will be owned by the Investor and treated as having been delivered
by the Company under the Debenture.

    

    (b)           Prohibit the Sale of Common
Stock.  In the event that the Company inappropriately
prohibits, hinders or in any way attempts to prevent the Investor from selling
any amount of common stock issuable under the Transaction Documents, the
Investor shall be entitled to an equal amount of Collateral Shares and will
return to the Company for cancellation the number of shares equal to the
Collateral Shares that has been released hereunder.

    

    (c)           Occurrence of Trigger
Events.  In the event that a Trigger Event (as defined in the
Drinks Debenture) occurs, the Investor shall be entitled to sell such portion of
the Collateral Shares that would satisfy the outstanding amount owed upon the
occurrence of a Trigger Event and shall credit a corresponding amount in
satisfaction of a corresponding portion of the Debenture.  Any sale of
Collateral Shares under this Section shall be made on a pro-rata basis to each
Affiliate based on the number of Collateral Shares held by each of the
Affiliates, provided, that on the date of the Trigger Event the Investor has a
sufficient number of medallion guarantees to be able to sell any portion of an
Affiliate’s Collateral Shares remaining after the initial sale of the Collateral
Shares without having to obtain a new medallion guarantee.  In the
event, the Investor does not have sufficient medallion guarantees, the Investor
shall be entitled to determine which of the Collateral Shares are
sold.  For purposes of determining the number of Collateral Shares,
the Collateral Shares shall be valued at the Market Value on the date that such
Trigger Event occurred.

     

    (d)           Repayment of the Loan
Amount. In the event that the Loan Amount, including any fees, costs,
damages and penalties, has been paid in full, then any Collateral Shares not
otherwise previously disbursed shall be returned to the Affiliate.

    

    (e)           Fair Market Value of the
Collateral Shares.  In the event that the Investor shall be
entitled to sell all or any portion of the Collateral Shares to satisfy any
outstanding amount owed under this Section 3, the Investor shall be deemed to
have sold that portion of the Collateral Shares at a fair market price if such
sale was made publicly on a trading exchange, including the Over-the-Counter
Bulletin Board or the pink sheets.  In the event that either (i) the
Common Stock is no longer traded on a public exchange or (ii) a Trigger Event
occurs based on the average daily dollar volume of Common Stock traded per day
for any consecutive ten (10) trading-day period is less than ten thousand
dollars ($10,000), then if any such portion of the Collateral Shares are sold in
a private transaction, such private sale shall be deemed to be at fair market
value if such sale is made at or above fifty percent (50%) of the Market Price
as of the last day the Company was quoted on the Over-the-Counter Bulletin Board
or other trading exchange.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (f)           Percentage
Cap.  Notwithstanding the provisions of this Pledge Agreement,
in no event (except (i) as specifically provided as an exception to this
provision, (ii) during the forty-five (45) day period prior to the Maturity Date
(as defined in the Debenture), or (iii) while there is outstanding a tender
offer for any or all of the shares of the Borrower's Common Stock) shall the
Investor be entitled to transfer ownership of the Collateral Shares to itself,
to the extent that, after such transfer of common stock the sum of (1) the
number of shares of Common Stock beneficially owned by the Investor and its
affiliates, and (2) the number of shares of Common Stock issuable upon the
transfer of the Collateral Shares with respect to which the determination of the
proviso is being made, would result in beneficial ownership by the Investor and
its affiliates of more than 9.99% (the “Percentage Cap”) of
the outstanding shares of Common Stock (after taking into account the shares to
be issued to the Investor upon such repayment).  For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 12(d) of the Securities Exchange Act of
1934, as amended.

    

               4.           Representations and
Warranties of the Affiliate.  The Affiliates hereby represents
and warrants with respect to only itself that:

    

    (a)           Legal Capacity;
Organization.  The Affiliates has the legal capacity and right
to execute, deliver, enter into, consummate and perform the transactions
contemplated by hereby and otherwise to carry out its obligations hereunder and
thereunder.

    

    (b)           Securities
Ownership.  As of the Closing, the Affiliates owns the common
stock to be deposited hereunder in the amounts set forth on Schedule 1, attached
hereto (i) as the sole record and beneficial owner, free from all taxes,
liens, claims, encumbrances and charges and there are no outstanding rights,
options, subscriptions or other agreements or commitments obligating the
Affiliates to sell or transfer such common stock and such common stock are not
subject to any lock-up or other restriction on their transfer or on the ability
of the Investor to sell or transfer such common stock.  As of the
Closing, the Affiliates shall have paid any and all amounts and charges due and
owing to the Company with respect to the common stock and there shall be no
unpaid amounts or charges claimed to be due to the Company from the Affiliates
with respect to the common stock.

    

    (c)           Authorization; Enforcement;
Validity.  This Agreement has been duly authorized, executed
and delivered by the Affiliates and constitutes a valid and legally binding
agreement of the Affiliates enforceable against the Affiliates in accordance
with its terms, except as such enforceability may be limited by general
principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and
remedies.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (d)           Consents.  All
government and other consents that are required to have been obtained by the
Affiliates with respect to this Agreement have been obtained and are in full
force and effect and all conditions of any such consents have been complied
with.  The Affiliates has complied and will comply with all applicable
disclosure or reporting requirements in respect of the transaction contemplated
hereby.

    

    (e)           No
Conflicts.  The execution and delivery by the Affiliates of
this Agreement, the performance by the Affiliates of its obligations under this
Agreement do not and will not violate or conflict with (i) any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the stock market, or
(ii) any order or judgment of any court or other agency of government or
any of the Affiliate’s assets or any contractual restriction binding on or
affecting the Affiliates or any of the Affiliates’ assets.

    

    (f)           Independent
Decision.  The Affiliates is acting solely for his own account,
and has made his own independent decision to enter into this Agreement and as to
whether this Agreement is appropriate or proper for the Affiliates based upon
his own judgment and upon advice of such advisors as the Affiliates deem
necessary.  The Affiliates acknowledge and agrees that he is not
relying, and has not relied, upon any communication (written or oral) of any
Investor or any affiliate, employee or agent of any Investor with respect to the
legal, accounting, tax or other implications of this Agreement and that he has
conducted his own analyses of the legal, accounting, tax and other implications
hereof and thereof; it being understood that information and explanations
related to the terms and conditions of this Agreement shall not be considered
investment advice or a recommendation to enter into this
Agreement.  The Affiliates acknowledge that no Investor nor any
affiliate, employee or agent of any Investor is acting as a fiduciary for or an
advisor to the Affiliates in respect of this Agreement.

    

    (g)           Brokerage
Fees.  Other than amounts payable to the Investor or its
affiliates, the Affiliates has taken no action that would give rise to any claim
by any person for brokerage commissions, finder’s fees or similar payments
relating to this Agreement or the transactions contemplated hereby.

    

    (h)           Litigation.  There
is no action, suit, claim, proceeding, inquiry or investigation before or by any
court, public board, government agency or self regulatory organization or body
pending or, to the knowledge of the Affiliate, threatened against or affecting
the Affiliates that could reasonably be expected to have a material adverse
affect on his ability  to perform its obligations
hereunder.

    

    (i)           Other Transaction
Documents. Entry into this Pledge Agreement shall in no way alter, amend
or terminate the other Transaction Documents.  The Transaction
Documents shall continue to operate in full force and effect and all rights,
obligations and remedies of all parties thereto shall survive the signing of
this Pledge Agreement.

    

               5.           Termination.  This
Agreement shall terminate at such time as all of the Collateral Shares shall
have been either transferred by the Investor or returned to the Affiliates in
accordance with Section 3
hereof; provided however, that Sections , 5, 6
and 10 shall survive any such termination.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    6.           Indemnification.

     

    (a)           The
Company will indemnify and hold the Investor and their directors, officers,
shareholders, partners, employees and agents (each, an “Investor Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation (collectively, “Losses”) that the
Investor may suffer or incur as a result of or relating to any
misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the Company in any of the Transaction
Documents.  In addition to the indemnity contained herein, the Company
will reimburse each Investor for its reasonable legal and other expenses
(including the cost of any investigation, preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred.  In the event of any
litigation or dispute arising from this agreement, the parties agree that the
party who is awarded the most money shall be deemed the prevailing party for all
purposes and shall therefore be entitled to an additional award of the full
amount of the attorneys' fees and expenses paid by said prevailing party in
connection with the litigation and/or dispute without reduction or apportionment
based upon the individual claims or defenses  giving rise to the fees and
expenses.  Nothing herein shall restrict or impair a court's power to award
fees and expenses for frivolous or bad faith pleading."

     

    (b)           Conduct of
Indemnification Proceedings. Promptly after receipt by any
Person (the “Indemnified Person”)
of notice of any demand, claim or circumstances which would or might give rise
to a claim or the commencement of any action, proceeding or investigation in
respect of which indemnity may be sought, such Indemnified Person shall promptly
notify the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any
Indemnified Person so to notify the Company shall not relieve the Company of its
obligations hereunder except to the extent that the Company is materially
prejudiced by such failure to notify.  In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed to
the retention of such counsel; or (ii) in the reasonable judgment of counsel to
such Indemnified Person representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them.  The Company shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Company shall indemnify and hold harmless such
Indemnified Person from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment.  Without the prior
written consent of the Indemnified Person, which consent shall not be
unreasonably withheld, the Company shall not effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such
proceeding

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    7.           Remedies.  Whenever
the Investor is entitled to take possession of the Collateral Shares pursuant
the Section 3 hereof, the Investor may, without notice to or demand upon the
Affiliate, declare this Agreement to be in default, and the Investor shall
thereafter have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party of any jurisdiction in which the Collateral Shares are located, including,
without limitation, the right to take possession of the Collateral
Shares.  The Investor may in its discretion require the Affiliates to
assemble all or any part of the Collateral Shares at such location or locations
within the jurisdiction(s) of the Investor’s principal office(s) or at such
other locations as the Investor may reasonably designate.  The
Affiliates hereby acknowledge that they effectively waive any notice
requirements allowed by law.  In addition, the Affiliates waive any
and all rights that it may have to a judicial hearing in advance of the
enforcement of any of the Investor’s rights hereunder, including, without
limitation, the Investor’s right following a Trigger Event to take immediate
possession of the Collateral and to exercise its rights with respect
thereto.

    

    8.           No Waiver by
Investor.  The Investor shall not be deemed to have waived any
of its rights upon or under the Transaction Documents or the Collateral Shares
unless such waiver shall be in writing and signed by the Investor and any other
person or entity required by the Transaction Documents to sign such
waiver.  No delay or omission on the part of the Investor in
exercising any right shall operate as a waiver of such right or any other
right.  A waiver on any one occasion shall not be construed as a bar
to or waiver of any right on any future occasion.  All rights and
remedies of the Investor with respect to the Collateral Shares, whether
evidenced hereby or by any other instrument or papers, shall be cumulative and
may be exercised singularly, alternatively, successively or concurrently at such
time or at such times as the Investor deems expedient.

    

    9.           Suretyship Waivers by
Affiliates.  The Affiliates waive demand, notice, protest,
notice of acceptance of this Agreement, the Collateral Shares received or
delivered or other action taken in reliance hereon and all other demands and
notices of any description.  With respect to the Collateral Shares,
the Affiliates assents to any extension or postponement of the time of payment
or any other indulgence, to any substitution, exchange or release of or failure
to perfect any security interest in the Collateral Shares, to the addition or
release of any party or person primarily or secondarily liable, to the
acceptance of partial payment thereon and the settlement, compromising or
adjusting of any thereof, all in such manner and at such time or times as the
Investor may deem advisable.  The Investor shall have no duty as to
the collection or protection of the Collateral Shares or any income thereon. The
Affiliates further waives any and all other suretyship defenses.

    

    10.           Miscellaneous.

    

    (a)           Notices.  Any
communication, notice or document required or permitted to be given under this
Agreement shall be given in writing and shall be deemed received (i) when
personally delivered to the relevant party at such party’s address as set forth
below, (ii) if sent by mail (which must be certified or registered mail,
postage prepaid) or overnight courier, when received or rejected by the relevant
party at such party’s address indicated below, or (iii) if sent by
facsimile, when confirmation of delivery is received by the sending
party:

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    If to the
Investor, to:

    

    St. George Investments,
LLC

    
      	
               
      

            	
              Attn:

            	
              John
  Fife

            

    

    303 East Wacker Drive, Suite
311

    Chicago, Illinois
60601

    Phone:
(312) 297-7000

    Facsimile:
(312) 819-9701

    

    with a
copy (which shall not constitute a notice) to:

    

    Anslow
& Jaclin, LLP

    
      	
               
      

            	
              Attn.:

            	
              Gregg
      E. Jaclin, Esq.

            

    

    Eric M.
Stein, Esq.

    Joy Hui,
Esq.

    195 Route
9 South, Suite 204

    Manalapan,
New Jersey 07726

    Phone:
(732) 409-1212

    Facsimile:
(732) 577-1188

    

    If to the
Company:

    

    Drinks
Americas Holdings, Ltd.

    Attn.: J.
Patrick Kenny

    372
Danbury Road, Suite 163

    Wilton,
Connecticut 06897

    Phone:
(203) 762-7000

    Facsimile:
(203) 762-8992

    

    If to an
Affiliate:

    

    J.
Patrick Kenny

    c/o
Drinks Americas Holdings, Ltd.

    372
Danbury Road, Suite 163

    Wilton,
Connecticut 06897

    Phone:
(203) 762-7000

    Facsimile:
(203) 762-8992

    

    Any document shall be deemed to have
been duly served if marked for the attention of the agent at its address as set
forth in this Section 10(a) or
such other address in the United States as may be notified to the party wishing
to serve the document and (a) left at the specified address if its receipt
is acknowledged in writing; or (b) sent to the specified address by post,
registered mail return receipt requested.  In the case of (a), the document
will be deemed to have been duly served when it is left and signed
for.  In the case of (b), the document
shall be deemed to have been duly served when received and
acknowledged.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    If any Foreign Party’s agent at any
time ceases for any reason to act as such, such Foreign Party shall appoint a
replacement agent having an address for service in the United States and shall
notify the Investor of the name and address of the replacement
agent.  Failing such appointment and notification, the holders of a
majority of the Shares (as defined in the Securities Purchase Agreement) shall
be entitled by notice to such Foreign Party to appoint a replacement agent to
act on such Foreign Party’s behalf.  The provisions of this Section 10(a)
applying to service on an agent apply equally to service on a replacement
agent.

    

    (c)           Currency.  As
used herein, “Dollar,” “US Dollar” and “$” each mean the
lawful money of the United States.

    

    (d)           Assignment;
Amendment.  This Agreement and the rights and obligations
hereunder of any of the parties hereto may be assigned to any third party
without the prior written consent of the other parties
hereto.  Subject to the foregoing, this Agreement will be binding upon
and inure to the benefit of each of the parties hereto and their respective
successors and permitted assigns.  No portion of the Collateral Shares
shall be subject to interference or control by any creditor to any party hereto,
or be subject to being taken or reached by any legal or equitable process in
satisfaction of any debt or other liability of any such party hereto prior to
the disbursement thereof to such party hereto in accordance with the provisions
of this Agreement.  This Agreement may be changed or modified only in
writing signed by all of the parties hereto.  No provision hereof may
be waived other than by an instrument in writing signed by the party against
whom enforcement is sought.  A waiver or amendment of any term or
provision of this Agreement shall not be construed as a waiver or amendment of
any other term or provision of this Agreement or any other Transaction
Document.

    

    (e)           Entire
Agreement.  This Agreement and the other Transaction Documents,
contains the entire understanding and agreement between the parties hereto with
respect to the subject matter of this Agreement, and all prior writings and
discussions are hereby merged into this Agreement.

    

    (f)           Counterparts.  This
Agreement may be executed by facsimile signatures and in multiple counterparts,
each of which shall be deemed an original. It shall not be necessary that each
party executes each counterpart, or that any one counterpart be executed by more
than one party so long as each party executes at least one
counterpart.

    

    (g)           Headings.  The
headings contained in this Agreement are for convenience or reference only and
shall not affect the construction of this Agreement.

    

    (h)           Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial.  This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
Illinois, without reference to the choice of law provisions
thereof.  The Company and, by accepting this Agreement, each of the
Parties irrevocably submits to the exclusive jurisdiction of the courts of the
State of Illinois located in Cook County and any United States District Court
for the Northern District of Illinois for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Agreement and the
transactions contemplated hereby.  Service of process in connection
with any such suit, action or proceeding may be served on each party hereto
anywhere in the world by the same methods as are specified for the giving of
notices under this Agreement.  The Company and, by accepting this
Agreement, each of the Parties irrevocably consents to the jurisdiction of any
such court in any such suit, action or proceeding and to the laying of venue in
such court.  The Company and, by accepting this Agreement, each of the
Parties irrevocably waives any objection to the laying of venue of any such
suit, action or proceeding brought in such courts and irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. EACH OF THE PARTIES HEREBY WAIVES ANY
RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT
AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (i)           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 this Agreement is not affected in
any manner materially 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 terms of this
Agreement remain as originally contemplated to the fullest extent
possible.

    

    (j)           Dispute
Resolution.  In the case of a dispute as to any issue in this
Agreement, the Company shall submit the disputed determinations or arithmetic
calculations via facsimile within one (1) Business Day (as defined in the
Securities Purchase Agreement) of receipt, or deemed receipt, of the event
giving rise to such dispute, as the case may be, to the Investor.  If
the Investor  and the Company are unable to agree upon such
determination or calculation within one (1) Business Day of such disputed
determination or arithmetic calculation being submitted to the Investor, then
the Company shall, within one Business Day submit via facsimile the disputed
determination or (the disputed arithmetic calculation to the Independent
Accountant. The Company at the Company’s expense, shall cause the Independent
Accountant to perform the determinations or calculations and notify the Company
and the Investor of the results no later than five (5) Business Days from the
time it receives the disputed determinations or calculations.  The
Independent Accountant’s determination or calculation, as the case may be, shall
be binding upon all parties absent demonstrable error.

    

    

    [REMAINDER
OF PAGE LEFT BLANK]

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
PAGE TO THE PLEDGE AGREEMENT]

     

    IN WITNESS WHEREOF, each of
the parties hereto has executed this Agreement by the authorized officer named
below.

     

     

    
      
        	 	

                INVESTOR:

              	 	 	

                THE
      AFFILIATES:

              	 
	 	

                 

              	 	 	 	 
	 	ST.
      GEORGE INVESTMENTS, LLC 	 	By:	 	 
	 	 	 	 	Kenny
      LLC 1	 
	 	
              	 	Name: 	J. Patrick Kenny	 
	By:
      	
                 

              	 	Dated: 	
                 

              	 
	Name:	

                John
      Fife

              	 	 	 	 
	Its: 	Managing
      Member	 	By:	 	 
	Dated: 
      	 	 	 	Lazo,
      LLC	 
	 	 	 	Name:	Jason
      Lazo	 

      

      
        
          	 	

                  

                    THE
      COMPANY:

                  

                	 	Dated:
      	 	 
	 	

                  

                     

                  

                	 	 	 	 
	 	DRINKS
      AMERICAS HOLDINGS, LTD.	 	By: 	 
      	 
	 	 	 	Name:	Marvin
      Traub	 
	By:
      	 	 	Dated: 	 	 
	Name:	
                  J.
      Patrick Kenny

                	 	 	
                	 
	Its: 	Managing Member	 	By:
      	 	 
	Dated:	Chairman
      and CEO	 	Name:
      	Kenneth
      Close	 
	 	 	 	Dated:	 	 
	 	 	 	 	 	 
	 	 	 	By: 	 
      	 
	 	 	 	Name:  	Bruce
      Klein	 
	 	 	 	Dated: 	 	 
	 	 	 	 	 	 
	 	 	 	By:  	  	 
	 	 	 	Name:
      	Frederick
      Schulman	 
	 	 	 	Dated:

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