1.
The undersigned, J. Patrick Kenny, (the
“ Guarantor ”), for good and valuable
consideration and to induce St. George Investments, LLC, an
Illinois limited liability company, (the “ Creditor
”) to extend financial accommodations to Drinks Americas
Holdings, Ltd., a Delaware corporation (the “ Debtor
”) pursuant to the Drinks Debenture issued by
the Debtor to the Creditor of even date herewith (as such
debenture may be amended from time to time, shall hereinafter be
referred to as the “ Drinks Debenture ”), hereby
(a) irrevocably and unconditionally guarantees to the Creditor the
faithful and timely payment when due under the Drinks Debenture of
the lesser of: (i) $375,000; or (ii) the amount due under the
Drinks Debenture (collectively, the “ Guaranteed
Obligations ”). If Debtor fails at any time to promptly
and fully to pay any amount under the Drinks Debenture, the
Guarantor shall satisfy the unpaid obligation subject to the
limitations provided therein and herein. The Creditor may at any
time require the Guarantor to pay such amount by giving notice to
such effect to the Guarantor in any manner prescribed for the
giving of notices to Debtor under the Drinks Debenture, addressed
to the Guarantor at the address indicated below.
The obligations of the Guarantor
hereunder are primary and direct, and are in addition to, and
independent of, the obligations, covenants and conditions required
to be performed or satisfied by Debtor under the Drinks Debenture
or any other document executed between the Debtor and the Creditor
on the date hereof ( the “Transaction Documents”). The
Guarantor hereby waives all rights that such Guarantor might
otherwise have to require the Creditor to commence any proceeding
against Debtor or the Collateral Shares (as defined in the
Transaction Documents) or to exhaust the Creditor’s remedies
against Debtor before seeking to enforce this Guarantee.
The validity of this Guarantee and
the obligations of the Guarantor hereunder shall in no manner be
terminated, impaired or in any way modified or affected by reason
of:
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(a)
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the
enforcement by the Creditor against Debtor of any of the
Creditor’s rights or remedies under the Drinks
Debenture;
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(b)
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the
granting to the Creditor, under the Transaction Documents or
otherwise, of any collateral security for the performance or
satisfaction of Debtor’s obligations, covenants or conditions
under the Drinks Debenture, any action of the Creditor to proceed
against or realize upon such collateral security, or an impairment
or release of any such collateral security;
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(c)
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commencement by or against Debtor of
any bankruptcy or other insolvency proceeding or any stay,
discharge or other relief granted or issued thereunder;
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(d)
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any
extension of time or other indulgence or forbearance by the
Creditor, or an amendment, modification, renewal or extension of
any Transaction Document or waiver of any of the obligations,
covenants or conditions of Debtor under the Drinks Debenture;
or
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(e)
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any
other defense, set-off, counterclaim or discharge that might
otherwise be available to Debtor or any Guarantor.
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2.
Notwithstanding the foregoing, the
liability of the Guarantor hereunder is further limited to the
lesser of the following amounts minus, in either case, one dollar
($1):
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(a)
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The
lowest amount which would render this Guarantee a fraudulent
conveyance under the Uniform Fraudulent Transfer Act, or other
similar or analogous law or statute of the appropriate
jurisdiction; and
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(b)
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The
lowest amount which would render this Guarantee a fraudulent
transfer under Section 548 of the Bankruptcy Code of 1978, as
amended.
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It is presumed that the liability
of the Guarantor hereunder is equal to the amount of the Guaranteed
Obligations. Therefore, in the event that any Guarantor, or
successor-in-interest thereof (&ldqu
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