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Midtown Partners & Co., LLC
4902 Eisenhower Blvd., Suite 185
Tampa, FL 33634
Phone: 813.885.5744 ? Fax: 813.885.5911
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PLACEMENT AGENT AGREEMENT
This agreement (the "Agreement"), made as of this 25th day of
October, 2006, by
and between Drinks Americas Holdings, Ltd., a Delaware corporation,
(the
"Company"), with its principal place of business at 372 Danbury
Road, Wilton,
Connecticut 06997 and MIDTOWN PARTNERS & CO., LLC, (the
"Placement Agent",
"Midtown" or "Midtown Partners"), a Florida limited liability
company, with its
principal place of business at 4902 Eisenhower Blvd., Suite 185,
Tampa, Fl
33634, confirms the understanding and agreement between the Company
and the
Placement Agent as follows:
SECTION I
The
Company hereby engages the Placement Agent as the Company's
exclusive
placement agent in connection with a proposed private placement in
the United
States (the "Offering") of up to ten million dollars
(US$10,000,000) of the
Company's securities (the "Financing"). The Offering will be made
to solely
"accredited investors" (the "Accredited Investors"), as such term
is defined in
Rule 501(a) of Regulation D ("Regulation D") promulgated under the
United States
Securities Act of 1933, as amended (the "Securities Act"), pursuant
to an
exemption from registration under applicable federal and state
securities laws
available under Rule 506 of Regulation D and in accordance with the
terms of
this Agreement. The terms and conditions of the Financing shall be
similar to
those terms and provisions as attached in Exhibit A hereto subject
to a final
term Sheet to be set forth at a later date to be approved by the
Company. The
Placement Agent hereby accepts such engagement upon the terms and
conditions set
forth in this Agreement. This Agreement shall not give rise to any
commitment or
obligation by the Placement Agent to purchase any of the Financing
or, except as
set forth herein, to find purchasers for the Financing.
The
Placement Agent shall provide the following services (the
"Services"):
(a) Advise
the Company with regard to the size of the Offering and the
structure and terms of the Financing in light of the current market
environment;
(b) Assist
the Company in identifying and evaluating prospective qualified
Accredited Investors;
(c)
Approach such investors on a "best efforts basis" regarding an
investment in the Company; and
(d) Work
with the Company to develop a negotiating strategy and assist
with the negotiations with such potential investors.
In
connection with the Placement Agent providing the Services, the
Company
agrees to keep the Placement Agent up to date and apprised of all
material
business, market and legal developments related to the Company and
its
operations and management. The Placement Agent shall devote such
time and
effort, as it deems commercially reasonable under the circumstances
in rendering
the Services. The Placement Agent shall not provide any work that
is in the
ordinary purview of a certified public accountant. The Placement
Agent cannot
guarantee results on behalf of the Company, but shall pursue all
avenues that it
deems reasonable through its network of contacts.
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<PAGE>
SECTION II
The
Placement Agent, its affiliates and any person acting on its or
their
behalf hereby represent, warrant and agree as follows (the
"Placement Agent
Parties"):
(a) The
Financing offered and sold by the Placement Agent have been and
will be offered and sold in compliance with all federal and state
securities
laws and regulations governing the registration and conduct of
broker-dealers,
and each Placement Agent Party making an offer or sale of Financing
was or will
be, at the time of any such offer or sale, registered as a
broker-dealer
pursuant to Section 15(b) of the United States Securities Exchange
Act of 1934,
as amended (the "Exchange Act"), and under the laws of each
applicable state of
the United States (unless exempted from the respective state's
broker-dealer
registration requirements), and in good standing with the National
Association
of Securities Dealers, Inc.
(b) The
Financing offered and sold by the Placement Agent have been and
will be offered and sold only to Accredited Investors in accordance
with Rule
506 of Regulation D and applicable state securities laws; provided,
however, the
Company shall make all necessary filings under Rule 503 of
Regulation D and such
similar notice filings under applicable state securities laws. The
Placement
Agent Parties represent and warrant that they have reasonable
grounds to believe
and do believe that each person to whom a sale, offer or
solicitation of an
offer to purchase Financing was or will be made was and is an
Accredited
Investor. Prior to the sale and delivery of a Financing to any such
investor,
the Placement Agent Parties will obtain an executed subscription
agreement and
an executed investors' rights agreement in the form agreed upon by
the Company
and the Placement Agent (the "Subscription Documents").
(c) In
connection with the offers and sales of the Financing, the
Placement Agent Parties have not and will not
(1) Offer
or sell, or solicit any offer to buy, any Financing by any form
of "general solicitation" or "general advertising", as such terms
are used in
Regulation D, or in any manner involving a public offering within
the meaning of
Section 4(2) of the Securities Act;
(2) Use
any written material other than the term sheet, that will be
approved by the Company at a later date, and the Placement Agent, a
copy of
which is attached hereto as Exhibit A, and the Subscription
Documents, and shall
only rely upon and communicate information that is publicly
available regarding
the Company to any potential investors (without limiting the
foregoing, none of
the Placement Agent Parties is authorized to make any
representation or warranty
to any offeree concerning the Company or an investment in the
Financing); or
(3) Take
any action that would constitute a violation of Regulation M
under the Exchange Act.
(d) The
Placement Agent shall cause each affiliate or each party acting
on
its or their behalf with whom they enter into contractual
arrangements relating
to the offer and sale of any Financing to agree, for the benefit of
the Company,
to the same provisions contained in this Agreement.
SECTION III
During the Term (as defined below), the Placement Agent is hereby
retained by
the Company to make limited introductions on a best efforts basis
to provide
financing for the Company in an amount and form to be mutually
determined by the
Company and the Placement Agent.
SECTION IV
The
Company hereby represents, warrants and agrees as follows:
(a) This
Agreement has been authorized, executed and delivered by the
Company and, when executed by the Placement Agent will constitute
the valid and
binding agreement of the Company enforceable against the Company in
accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy,
insolvency or reorganization, moratorium or other similar laws
relating to or
affecting creditors' rights generally or by general equitable
principles.
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<PAGE>
(b) The
offer and sale of the Financing, the Shares, and the Warrants
shall be exempt from registration under the Securities Act, and
will comply, in
all material respects with the requirements of Rule 506 of
Regulation D
promulgated under the Securities Act and any applicable state
securities laws.
No documents prepared by the Company in connection with the
Offering, or any
amendment or supplement thereto, contain any untrue statement of a
material fact
or omit to state any material fact required to be stated therein or
necessary to
make the statements therein, in light of the circumstances under
which they were
made, not misleading.
(c) The
financial statements, audited and unaudited (including the
notes
thereto), included in the Company's latest annual information form
and
subsequent quarterly reports (the "Financial Statements"), present
fairly the
financial position of the Company as of the dates indicated and the
results of
operations and cash flows of the Company for the periods specified.
Such
Financial Statements have been prepared in conformity with
generally accepted
accounting principles applied on a consistent basis throughout the
periods
involved except as otherwise stated therein.
(d) No
federal, state or foreign governmental agency has issued any
order
preventing or suspending the Offering.
(e) The
Company is a Delaware corporation organized, existing and with
active status under the laws of Connecticut, with corporate power
and authority
under such laws to own, lease and operate its properties and
conduct its
business as now conducted. The Company has all power, authority,
authorization
and approvals as may be required to enter into this Agreement and
each of the
Subscription Documents, and to carry out the provisions and
conditions hereof
and thereof, and to issue and sell the Financing, the Shares, and
Warrants.
(f) The
Financing, the Shares, the Warrants, and common shares issuable
upon exercise of the Warrants (the "Warrant Shares"), have all been
authorized
for issuance and sale pursuant to the Subscription Documents, and
when issued
and delivered by the Company against payment therefore in
accordance with the
terms of the Subscription Documents, will be validly issued and
fully paid and
non-assessable.
(g) With
the exception of any approvals required by the Securities and
Exchange Commission related to the Offering, no further approval
or
authorization of any shareholder of the Company, its Board of
Directors or other
person or group is required for the issuance and sale of the
Financing, the
Shares, the Warrants or the Warrant Shares.
(h) Since
the July 31st Form 10Q-SB there has not been any (A) material
adverse change in the business, properties, assets, rights,
operations,
condition (financial or otherwise) or prospects of the Company, (B)
transaction
that is material to the Company, except transactions in the
ordinary course of
business, (C) obligation that is material to the Company, direct or
contingent,
incurred by the Company, except obligations incurred in the
ordinary course of
business, (D) change that is material to the Company or in the
common shares or
outstanding indebtedness of the Company, or (E) dividend or
distribution of any
kind declared, paid, or made in respect of the common shares.
SECTION V
The
parties agree that the close of the Offering (the "Closing") shall
be
subject to the satisfaction of the following conditions, unless
expressly waived
in writing by the parties:
(a) The
Offering shall not be subject to any regulatory or judicial
proceeding questioning or reviewing its effectiveness for the
purpose of
offering the Financing for sale and issuance.
(b) The
Company shall deliver a certificate of an officer of the
Company
dated as of the Closing that affirms the accuracy of the
representations and
warranties contained in Section IV hereof.
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<PAGE>
(c) The
Agent shall have received an opinion of counsel to the Company,
dated as of the Closing, that the Financing offered and sold in
compliance with
this Agreement are not required to be registered under the
Securities Act.
(d) The
Company shall have paid, or made arrangements satisfactory to
the
Agent for the payment of, all such expenses as required by Section
VIII below.
(e) The
Placement Agent and the Company shall have finalized and agreed
to
the form of the warrant agreement and registration rights agreement
referred to
in Section VIII below.
SECTION VI
(a) The
term of this Agreement shall commence on the date first written
above and shall expire the earlier of thirty (30) days after the
date the
Company (1) provides the Placement Agent with requested due
diligence materials
and (2) the Company and the Placement Agent mutually agree that
information
documents (including, but not limited to: a business plan;
executive summary;
three-year historical income statement, statement of cash flows,
and balance
sheet; five-year projected financial statements; use of proceeds
statement;
investor presentation; valuation analysis), to be provided and
approved by the
Company, are ready for presentation to the Placement Agent's
network of
potential financing
