EXHIBIT 10.12
 
SUBORDINATION AGREEMENT

THIS SUBORDINATION AGREEMENT ("Agreement") is entered into as of the 5th day of
June, 2014, by and among (i) CONSILIUM CORPORATE RECOVERY MASTER FUND, LTD., a
company organized under the laws of the Cayman Islands with an address of 3101
N. Federal Highway, Suite 502, Fort Lauderdale, FL 33306 ("Subordinate Lender"),
(ii) DOUGLAS JOINT VENTURE, a Florida general partnership, V-3 JOINT VENTURE,
LLC, a Florida limited liability company, and EMPIRE JOINT VENTURE, a Florida
general partnership (jointly and severally “Senior Lender”), such entities
sharing an address of 3021 Countryside Boulevard, Apartment 34-A, Clearwater, FL
33761, and (iii) PANACHE DISTILLERY, LLC, a Florida limited liability company
with an address of 40 W. 23rd St., 2nd Floor, New York, NY 10010 (''Borrower'').

RECITALS

A.           Senior Lender made a purchase money loan to Borrower in the
original principal amount of $3,500,000.00 (“Senior Loan”). The Senior Loan is
evidenced by a promissory note dated August 23, 2013 (“Senior Note”). The Senior
Note is secured by that certain Purchase Money First Mortgage, Security
Agreement, Assignment of Rents and Leases, and Fixture Filing with respect to
that certain real and personal property described therein (collectively, the
“Property”), recorded in Official Records Book 8922, Page 2057, Public Records
of Pasco County, Florida ("Senior Security Instrument"), .

B.           Subordinate Lender has previously made loans to the Borrower
pursuant to the Amended and Restated Loan Agreement, dated as of May 9, 2013 (as
amended, supplemented, modified and in effect from time to time, the “Loan
Agreement”), by and between Consilium, the Borrower and certain other parties in
an original principal amount of $6,100,000.00 (collectively, with any future
extensions of credit by the Subordinate Lender to Borrower, the "Subordinate
Loans"). The Subordinate Loans are secured by that certain Mortgage and Security
Agreement upon the Property, dated May 8, 2014, executed and delivered by the
Borrower to the Subordinate Lender and to be recorded in the public records of
Pasco County, Florida (the "Subordinate Security Instrument").

NOW, THEREFORE, in order to induce and to permit the Senior Lender to modify,
extend, renew and/or restructure the Senior Loan and in consideration thereof
and other valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Senior Lender, the Subordinate Lender and the Borrower agree
as follows:

1. Recitals; Definitions.

The foregoing Recitals are true and correct and incorporated herein by this
reference. In addition to the terms defined in the Recitals to this Agreement,
for purposes of this Agreement the following terms have the respective meanings
set forth below:

 
1

--------------------------------------------------------------------------------

 
 
"Affiliate" means, when used with respect to a Person, any corporation,
partnership, joint venture, limited liability company, limited liability
partnership, trust or individual controlled by, under common control with, or
which controls such Person (the term "control" for these purposes shall mean the
ability, whether by the ownership of shares or other equity interests, by
contract or otherwise, to elect a majority of the directors of a corporation, to
make management decisions on behalf of, or independently to select the managing
partner of, a partnership, or otherwise to have the power independently to
remove and then select a majority of those individuals exercising managerial
authority over an entity, and control shall be conclusively presumed in the case
of the ownership of 50% or more of the equity interests).

“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. § 101 et.
seq.) or any replacement or supplemental federal statute dealing with the
bankruptcy of debtors.
 
"Borrower" means the Person named as such in the first paragraph of this
Agreement and any other Person (other than the Senior Lender or the Subordinate
Lender) who acquires title to the Property after the date of this Agreement.

"Business Day" means any day other than Saturday, Sunday or a day on which banks
in the State of Florida are permitted to close.

"Default Notice" means (a) a written notice from the Senior Lender to the
Subordinate Lender stating that a Senior Loan Default exists under the Senior
Loan or (b) a written notice from the Subordinate Lender to the Senior Lender
stating that a Subordinate Loan Default exists under the Subordinate Loan. Each
Default Notice shall specify all of the Events of Default on which such Default
Notice is based or which exist to the knowledge of the notifying party as of the
date of such Notice.

"Person" means an individual, estate, trust, partnership, corporation, limited
liability company, limited liability partnership, governmental department or
agency or any other entity which has the legal capacity to own property.

“Proceeding” means any voluntary or involuntary proceeding commenced by or
against Borrower under any provision of the Bankruptcy Code, or under any other
bankruptcy or insolvency law, including assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
its creditors, or proceedings seeking dissolution, receivership, reorganization,
arrangement, or other similar relief.
 
"Senior Lender" means the Person named as such in the first paragraph on page 1
of this Agreement.

"Senior Loan Default" means an “Event of Default” as defined in the Senior Loan
Documents.

"Senior Loan Documents" means the Senior Note, the Senior Security Instrument,
and all other documents evidencing, securing or otherwise executed and delivered
in connection with the Senior Loans as in effect on the date hereof or as
amended or modified in accordance with this Agreement.

 
2

--------------------------------------------------------------------------------

 
 
"Standstill Period" means any period commencing from the date of a Senior Loan
Default or a Subordinate Loan Default and continuing until the earlier of (a)
six (6) months after the date the Default Notice is given or required to be
given; (b) the date after which the indebtedness under and with respect to the
Senior Loan is paid and satisfied in full; or (c) the date on which all of the
Events of Defaults giving rise to the Standstill Period have been cured or have
been waived with the Senior Lender's unconditional written permission.

"Subordinate Lender" means the Person named as such in the first paragraph on
page 1 of this Agreement and any other Person who becomes the legal holder of
the Subordinate Note after the date of this Agreement.

"Subordinate Loan Default" means an “Event of Default” as defined in the
Subordinate Loan Documents.

"Subordinate Loan Documents" means the Subordinate Note, the Subordinate
Mortgage and all other documents evidencing, securing or otherwise executed and
delivered in connection with the Subordinate Loan.

2. Permission to Place and Maintain Mortgage Lien Against Property. Senior
Lender agrees, notwithstanding any prohibition against transfers of interests in
the Property or inferior liens on the Property contained in the Senior Loan
Documents, and subject to the provisions of this Agreement, that the recording
of the Subordinate Security Instrument and other recordable Subordinate Loan
Documents against the Property (which are subordinate in all respects to the
lien of the Senior Security Instrument) to secure the Borrower's obligations,
indebtedness and liabilities under and in connection with the Subordinate Loan
shall not constitute a Senior Loan Default. The Subordinate Security Instrument
shall bear a legend, placed prominently on the first page thereof, indicating
that it and the collateral secured thereby is subject in all respects to the
terms of this Agreement.

3. Agreement to Subordinate. Notwithstanding the respective dates of attachment
or perfection of the mortgage and/or other security interest of either the
Senior Lender or the Subordinate Lender in the Property, the security interest
of Senior Lender in the Property shall at all times be prior to the security
interest of the Subordinate Lender in the Property. The Senior Lender and the
Subordinate Lender agree that (i) the indebtedness evidenced by the Subordinate
Loan Documents is and shall be subordinated in right of payment, to the extent
and in the manner provided in this Agreement to the prior payment in full of the
indebtedness evidenced by the Senior Loan Documents (provided, that prior to (A)
the receipt by the Subordinated Lender of a Default Notice from the Senior
Lender or (B) the occurrence of a Subordinate Loan Default, the Borrower shall
be permitted to make and the Subordinate Lender shall be permitted to receive
regularly scheduled payments of interest as permitted by the Subordinate Loan
Documents), and (ii) the Subordinate Loan Documents are and shall be subject and
subordinate in all respects to the liens, terms, covenants and conditions of the
Senior Security Instrument and to all advances heretofore made or which may
hereafter be made pursuant to the Senior Security Instrument for the purposes of
protecting or further securing the lien of the Senior Security Instrument or
curing defaults by the Borrower under the Senior Loan Documents.

 
3

--------------------------------------------------------------------------------

 
 
4.  Default Under Subordinate Loan Documents.

(a)           Notice of Default and Cure Rights. The Subordinate Lender agrees
to deliver a Default Notice to the Senior Lender within three (3) Business Days
after any Subordinate Loan Default, but only in those instances where (i) the
Subordinate Lender actually has given notice to the Borrower or (ii) the
Subordinate Lender is not required to provide notice to the Borrower in order to
exercise its remedies available upon a Subordinate Loan Default; provided, that
in the event the Subordinate Loan Default was already included in the Default
Notice, the Subordinate Lender shall not be obligated to provide any additional
Default Notice. Upon the date of delivery by the Subordinate Lender to the
Senior Lender of a Default Notice (or the expiration of the three (3) day period
in which the Subordinate Lender is required to provide such Default Notice), a
Standstill Period shall commence without further action by any party. The Senior
Lender shall have the right, but not the obligation, to cure any Subordinate
Loan Default within the same time period for curing a default which is given to
the Borrower under the Subordinate Loan Documents, except that the Senior
Lender's time period for cure shall begin on the date on which it receives the
Default Notice from the Subordinate Lender; provided, however that the
Subordinate Lender shall be entitled to continue under the Subordinate Loan
Documents to pursue its rights and remedies to the fullest extent of the law
(except as provided otherwise herein). All amounts advanced or expended by the
Senior Lender in accordance with the Senior Loan Documents to cure a Subordinate
Loan Default shall be deemed to have been advanced by the Senior Lender pursuant
to, and shall be secured by the lien of, the Senior Security Instrument.

(b)           Cross Default. The Borrower and the Subordinate Lender agree that
a Subordinate Loan Default shall, automatically and without further action by
any party hereto, constitute a Senior Loan Default, and the Senior Lender shall
have the right to exercise all rights or remedies under the Senior Loan
Documents in the same manner as in the case of any other default thereunder. If
the Subordinate Lender notifies the Senior Lender that any Subordinate Loan
Default of which the Senior Lender has received a Default Notice has been cured
or waived, as determined by the Subordinate Lender in its sole discretion, then
provided that Senior Lender has not conducted, or caused to be conducted, a sale
of the Property pursuant to its rights under the Senior Loan Documents, any
default under the Senior Loan Documents arising solely from such Subordinate
Loan Default shall be deemed cured and the Senior Loan shall be reinstated;
provided, however, that the Senior Lender shall not be required to return or
otherwise credit for the benefit of the Borrower any default rate interest or
other payments received by the Senior Lender during such Senior Loan Default.

5.  Default Under Senior Loan Documents.

(a)           Notice of Default and Cure Rights. The Senior Lender shall deliver
to the Subordinate Lender a Default Notice within three (3) Business Days after
notice of the Senior Loan Default has been given to the Borrower, but only in
those instances where (i) the Senior Lender actually has given notice to the
Borrower or (ii) the Senior Lender is not required to provide notice to the
Borrower in order to exercise its remedies available upon a Senior Loan Default;
provided, that the Senior Lender shall not deliver a Default Notice (x) with
respect to any Event of Default under the Senior Loan Documents other than a
payment default more than 3 times in any 365 consecutive days or (y) on the
basis of any Event of Default that existed as of the date of the giving of a
prior Default Notice. Failure of the Senior Lender to send a Default Notice to
the Subordinate Lender shall not prevent the exercise of the Senior Lender's
rights and remedies under the Senior Loan Documents, subject to the provisions
of this Agreement. Upon the date of delivery by the Senior Lender to the
Subordinate Lender of a Default Notice (or the expiration of the three (3) day
period in which the Senior Lender is required to provide such Default Notice), a
Standstill Period shall commence without further action by any party; provided,
that no such Standstill Period shall commence if the Event of Default giving
rise to the Default Notice was the basis of a previous Standstill Period which
has expired. The Subordinate Lender shall have the right, but not the
obligation, during such Standstill Period, to cure any such Senior Loan Default;
provided, however, that the Senior Lender shall be entitled, during such
Standstill Period, to initiate remedies under the Senior Loan Documents without
notice to or consultation with the Subordinate Lender. If the Subordinate Lender
elects to cure such default, upon completion of such cure the Senior Loan
Documents shall be reinstated, nunc pro tunc, and any judicial proceedings
initiated against the Property shall be dismissed. Senior Lender further agrees
that any non-monetary default by the Borrower that the Subordinate Lender has
initiated action to cure such Borrower default but that cannot be cured within
the Standstill Period will be suspended for an additional six (6) month if
Subordinate Lender keeps current all payments required by the Senior Loan
Documents. All amounts paid by the Subordinate Lender to the Senior Lender to
cure a Senior Loan default shall be deemed to have been advanced by the
Subordinate Lender pursuant to, and shall be secured by the lien of, the
Subordinate Security Instrument.

 
4

--------------------------------------------------------------------------------

 
 
(b)           Cross Default. The Borrower and the Senior Lender agree that a
Senior Loan Default shall constitute a default under the Subordinate Loan
Documents. If at any time the Borrower cures any Senior Loan Default to the
satisfaction of the Senior Lender in its sole discretion, any default under the
Subordinate Loan Documents arising from such Senior Loan Default shall be deemed
cured and upon notice of same from Senior Lender to Subordinate Lender, the
Subordinate Loan shall be reinstated; provided, however, that the Subordinate
Lender shall not be required to return or otherwise credit for the benefit of
the Borrower any default rate interest or other payments received by the
Subordinate Lender during such default period. All expenses incurred by
Subordinate Lender in pursuing its remedies during any default period shall be
the obligation of the Borrower in accordance with the Subordinate Loan
Documents.

(c)           Standstill Period and Default. For so long as a Standstill Period
is in effect, and until any Senior Loan Default and/or Subordinate Loan Default
giving rise to such Standstill Period has been remedied to the satisfaction of
or waived by the Senior Lender:

(1)             except with respect to any equity securities received by the
Subordinate Lender upon conversion or satisfaction of any part or all of the
Subordinate Loans, the Subordinate Lender shall promptly deliver to the Senior
Lender in the form received (except for endorsement or assignment by such
Subordinate Lender where required by the Senior Lender) for application to the
Senior Loan any payment, distribution, security or proceeds received with
respect to the Subordinate Loans; and

(2)             the Subordinate Lender shall not take any legal action, initiate
any legal proceeding, issue any demands or otherwise seek to collect on the
Subordinate Notes or enforce its rights under the Subordinate Security
Instrument other than (a) filing a claim or statement of interest with respect
to the Subordinate Loans, (b) filing any necessary responsive or defensive
pleadings in opposition to a motion, claim, adversary proceeding or other
pleading made by any person objecting to or otherwise seeking the disallowance
of the claims under the Subordinate Loan Agreements, (c) filing any pleadings,
objections motions or agreements which assert rights or interests available to
unsecured creditors of the Borrower arising under the Bankruptcy Code
(including, without limitation, the filing and/or voting proofs of claim, and
voting to confirm a plan of reorganization, in connection with a legal
proceeding) or applicable non-bankruptcy law, in each case not inconsistent with
this Agreement. The parties hereto acknowledge and agree that the statute of
limitations with respect to any claim that the Subordinate Lender may have
against the Borrower but that cannot be brought or prosecuted as a result of the
Standstill Period shall be tolled for and extended by the duration of the
Standstill Period.

6. Conflict. The Borrower, the Senior Lender and the Subordinate Lender each
agree that, in the event of any conflict or inconsistency between the terms of
the Senior Loan Documents, the Subordinate Loan Documents and the terms of this
Agreement, the terms of this Agreement shall govern and control as to (a) the
relative priority of the security interests of the Senior Lender and the
Subordinate Lender in the Property; (b) the timing of the exercise of remedies
by the Senior Lender and the Subordinate Lender under the Senior Security
Instrument and the Subordinate Security Instrument, respectively; and (c) solely
as between the Senior Lender and the Subordinate Lender, the notice
requirements, cure rights, and the other rights and obligations to which the
Senior Lender and the Subordinate Lender have agreed as expressly provided in
this Agreement. Borrower acknowledges that the terms and provisions of this
Agreement shall not, and shall not be deemed to (i) extend Borrower's time to
cure any Senior Loan Default or Subordinate Loan Default, as the case may be,
(ii) give the Borrower the right to notice of any Senior Loan Default or
Subordinate Loan Default, as the case may be, or (iii) create any other right or
benefit for Borrower as against Senior Lender or Subordinate Lender.

 
5

--------------------------------------------------------------------------------

 
 
7. Rights and Obligations of the Subordinate Lender Under the Subordinate Loan
Documents and Senior Lender under the Senior Loan Documents.

Subject to each of the other terms of this Agreement, all of the following
provisions shall supersede any provisions of the Subordinate Loan Documents and
the Senior Loan Documents covering the same subject matter:

(a)           Protection of Security Interest. The Senior Lender shall not,
without the prior written consent of the Subordinate Lender in each instance,
take any action which has the effect of increasing the indebtedness in excess of
$4,500,000, or secured by the Senior Loan Documents, except that the Senior
Lender shall have the right (i) to advance funds to cure Senior Loan Defaults or
Subordinate Loan Defaults pursuant to Sections 4 and 5 above, and (ii) to
advance funds pursuant to the Senior Security Instrument for the purpose of
paying real estate taxes and insurance premiums, making necessary repairs to the
Property and curing other defaults by the Borrower under the Senior Loan
Documents; provided, that the total advances under clauses (i) and (ii) above
shall not exceed $1,000,000 in the aggregate (collectively, the “Permitted
Overages”), and, in each case, such Permitted Overages shall increase the amount
of the Senior Loan notwithstanding the maximum amount set forth above.

(b)           Condemnation or Casualty. In the event of (i) a taking or
threatened taking by condemnation or other exercise of eminent domain of all or
a portion of the Property (collectively, a "Taking"), or (ii) the occurrence of
a fire or other casualty resulting in damage to all or a portion of the Property
(collectively, a "Casualty"), at any time or times when the Senior Security
Instrument remains a lien on the Property the following provisions shall apply:

(1)             The Subordinate Lender hereby agrees that its rights (under the
Subordinate Loan Documents or otherwise) to participate in any proceeding or
action relating to a Taking and/or a Casualty, or to participate or join in any
settlement of, or to adjust, any claims resulting from a Taking or a Casualty
shall be and remain subordinate in all respects to the Senior Lender's rights
under the Senior Loan Documents with respect thereto, and the Subordinate Lender
shall be bound by any settlement or adjustment of a claim resulting from a
Taking or a Casualty made by the Senior Lender;

(2)             All proceeds received or to be received on account of a Taking
or a
Casualty, or both, shall be applied (either to payment of the costs and expenses
of repair and restoration and/or to payment of the Senior Loan) in the manner
determined by the Senior Lender in its sole discretion; provided, however, that
if the Senior Lender elects to apply such proceeds to payment of the principal
of, interest on and other amounts payable under the Senior Loan, any proceeds
remaining after the satisfaction in full of the principal of, interest on and
other amounts payable under the Senior Loan shall be paid to, and may be applied
by, the Subordinate Lender in accordance with the applicable provisions of the
Subordinate Loan Documents; provided however, the Senior Lender agrees to
consult with the Subordinate Lender in determining the application of Casualty
proceeds; provided further however, that in the event of any disagreement
between the Senior Lender and the Subordinate Lender over the application of
Casualty proceeds, the decision of the Senior Lender, in its reasonable
discretion, shall prevail; and
 
(3)             Both the Senior Lender and the Subordinate Lender agree to
execute and deliver, at no expense to the other, all documents, instruments,
agreements or further assurances required to effectuate the provisions of this
subsection.

 
6

--------------------------------------------------------------------------------

 
 
(c)           No Modification of Senior Loan Documents. The Borrower and the
Senior Lender each agree that, while this Agreement is in effect, they will not,
without the prior written consent of the Subordinate Lender in each instance
make any other modification which would (i) increase the interest rates on the
Senior Debt to an amount greater than 6% per annum above rates as in effect on
the date hereof, (ii) change the final maturity date of the Senior Loans to a
date later than the originally scheduled maturity date of the Subordinate Loan,
(iii) increase the principal amount of the Senior Loan in excess of the amount
provided for in this Agreement, (iv) modify or add a covenant or event of
default under the Senior Loan Documents which directly restricts the Borrower
from making payments under the Subordinate Loan Documents which would otherwise
be permitted hereunder and under the Senior Loan Documents as of the date
hereof, or (v) modify the Senior Loan Documents in a manner which would
materially and adversely affect the Subordinate Lender except as expressly
permitted by this Agreement.

(d)           No Modification of Subordinate Loan Documents. The Borrower and
the Subordinate Lender each agree that, until the principal of, interest on and
all other amounts payable under the Senior Loan Documents have been paid in
full, they will not, without the prior written consent of the Senior Lender in
each instance (i) take any action which would result in an increase in the total
indebtedness other than the receipt of payment in kind interest, or (ii) make
any other modification to the Subordinate Loan Documents which would materially
and adversely affect the Senior Lender.

(e)           Refinance of the Senior Loans by Senior Lender. The Senior Lender
reserves the right to refinance the existing balance of the Senior Loan and to
make future advances to the Borrower from time to time which, when added to the
principal balance then outstanding under the Senior Loan shall not exceed a
total of $4,500,000, provided that any Permitted Overages shall not be counted
in determining the amount of the Senior Loan under this section for purposes of
considering whether the $4,500,000 maximum has been reached. The Senior Lender
agrees to provide to the Subordinate Lender prompt notice in writing of each
such future advance.

(f)           Buyout of Senior Loan. On and after the delivery of a Default
Notice and so long as a Standstill Period is in effect, the Subordinate Lender
will have the right at any time to purchase the Senior Loan from the Senior
Lender for an amount equal to all outstanding obligations under the Senior Loan
Documents at such time.

8. Dissolution, Liquidation, Reorganization or Bankruptcy.
 
(a)           In the event of any Proceeding involving the Borrower and/ or its
Affiliate during the continuance of any Senior Loan Default or Subordinated Loan
Default:
 
(i)              the Senior Loan shall be paid in full before the Subordinated
Lender shall be entitled to receive any payment on account of any Subordinated
Loan; and
 
(ii)            except as provided in Section 5(c) above, any payment or
distribution of assets of such Person of any kind or character, whether in cash,
property or securities, to which the Subordinated Lender would be entitled
except for these provisions, shall be paid by the liquidating trustee or agent
or other Person making such payment or distribution directly to the Senior
Lender, to the extent necessary to make payment in full of the Senior Loan
remaining unpaid, after giving effect to any concurrent payment or distribution
or provision therefor to the holders of such Senior Loan. The Subordinated
Lender irrevocably authorizes, empowers and directs any debtor,
debtor-in-possession, receiver, trustee or agent or other Person having
authority, to pay or otherwise deliver all such payments or distributions to the
Senior Lender.
 
 
7

--------------------------------------------------------------------------------

 
 
(b)           The Subordinated Lender agrees, in connection with any such
Proceeding, that it will not take any action or vote in any way so as to (i)
contest the validity of the liens securing the Senior Note, (ii) contest the
enforceability of any of the Senior Loan Documents, (iii) contest the Senior
Lender’s priority position over the Subordinated Lender created by this
Agreement or (iv) except as permitted by Section 5(c) above, take any position
or action which would have directly or indirectly any of the following effects:
(A) extension of the final maturity of and/or forgiveness, reduction or
cram-down of the Senior Loan or deferral of any required payment in respect of
Senior Loan, (B) opposing or objecting to initiatives or claims by the Senior
Lender for adequate protection or relief from the automatic stay, use of cash
collateral or super-priority expense of administration for failure of adequate
protection, (C) challenging in any respect treatment of the Senior Loan as a
first priority perfected fully secured claim, (D) blocking current payment of
any obligation in respect of Senior Indebtedness, (E) assenting to or supporting
any requested extension of the exclusivity period for the submission by the
Borrower of any plan of reorganization or liquidation under the Bankruptcy Code
unless such extension is assented to or supported by the Senior Lender; and (F)
opposing or objecting to any sale or lease of any property that has been
consented to by the holders of Senior Note. Notwithstanding the foregoing, the
Subordinate Lender shall be entitled to replacement or supplemental liens to the
same extent (and subordinated on the same basis as under this Agreement) in the
event the Senior Lender receives replacement or supplemental liens as adequate
protection.
 
8. Default by the Subordinate Lender or Senior Lender. If the Subordinate Lender
or Senior Lender defaults in performing or observing any of the terms, covenants
or conditions to be performed or observed by it under this Agreement, the other
shall have the right to all available legal and equitable relief.

9. Notices. Each notice, request, demand, consent, approval or other
communication (hereinafter in this Section referred to collectively as "notices"
and referred to singly as a ''notice'') which the Senior Lender or the
Subordinate Lender is required or permitted to give to the other party pursuant
to this Agreement shall be in writing and shall be deemed to have been duly and
sufficiently given if (a) personally delivered with proof of delivery thereof
(any notice so delivered shall be deemed to have been received at the time so
delivered), or (b) sent by Federal Express (or other similar national overnight
courier) designating early morning delivery (any notice so delivered shall be
deemed to have been received on the next Business Day following receipt by the
courier), or (c) sent by United States registered or certified mail, return
receipt requested, postage prepaid, at a post office regularly maintained by the
United States Postal Service (any notice so sent shall be deemed to have been
received two days after mailing in the United States), addressed to the
respective parties as follows:

If to Subordinate Lender:
 
Consilium Corporate Recovery Master Fund, LTD.
c/o Consilium Investment Management LLC
3101 N. Federal Highway, Suite 502
Fort Lauderdale, FL 33306
Attention: Charles T. Cassell III
E-mail: ccassel@consimllc.com
 
 
8

--------------------------------------------------------------------------------

 
 
with a copy to:
 
Greenberg Traurig, LLP
One International Place
Boston, MA 02110
Attention: Jeffrey M. Wolf
E-mail: WOLFJE@GTLAW.com
 
If to the Borrower:

c/o Panache Beverage, Inc.
150 5th Avenue
New York, NY 10010
Attention: Michael Romer
E-mail: mike@panachespirits.com
 
with a copy to:
 
Morrison Cohen LLP
909 Third Avenue
New York, New York 10022
Attention: Josh Saviano
E-mail: jsaviano@morrisoncohen.com

If to the Senior Lender:

c/o Douglas Joint Venture
3021 Countryside Blvd., # 34-A
Clearwater, FL 33671
Attention: Lester M. Unger, Managing Partner

with a copy to:

Trenam Kemker
101 E. Kennedy Boulevard
Suite 2700
Tampa, FL 33602
Attention: Lara Fernandez, Esq.
E-mail: lfernandez@trenam.com

 
9

--------------------------------------------------------------------------------

 
 
Any party may, by notice given pursuant to this Section, change the person or
persons and/or additional address or addresses, or designate an additional
person or persons or an additional address or addresses for its notices, but
notice of a change of address shall only be effective upon receipt.
 
10. General.

(a)           Application of Proceeds. All payments of proceeds of the Property
that are not the result of an enforcement action shall be applied in accordance
with the terms of the applicable credit documents as in effect on the date
hereof. All payments of proceeds of the Property resulting from an enforcement
action shall be applied as set forth below:
 
First: to the payment of all costs and expenses (including reasonable legal
fees) incurred by the Senior Lender or the Subordinate Lender (or each of their
authorized representatives, agents or subagents) in connection with the
enforcement action;
 
Second: to the obligations under the Senior Loan Documents up to the amount
permitted under this Agreement;
 
Third: to the obligations under the Subordinate Loan Documents; and
 
Fourth: to any remaining obligations under the Senior Loan Documents; and
 
Fifth: after payment in full of the obligations under the Senior Loan Documents
and the Subordinate Loan Documents, to the Borrower
 
(b)           Assignment/Successors. This Agreement shall be binding upon the
Borrower, the Senior Lender and the Subordinate Lender and shall inure to the
benefit of the respective legal successors and assigns of the Senior Lender and
the Subordinate Lender, including any successor by merger or consolidation of
the Senior Lender.

(c)           No Partnership or Joint Venture. The Senior Lender's permission
for the placement of the Subordinate Security Instrument does not constitute the
Senior Lender as a joint venturer or partner of the Subordinate Lender. Neither
party hereto shall hold itself out as a partner, agent or Affiliate of the other
party hereto.

(d)           Further Assurances. The Subordinate Lender, the Senior Lender and
the
Borrower each agree, at the Borrower's expense, to execute and deliver all
additional instruments and/or documents reasonably required by any other party
to this Agreement in order to evidence that the Subordinate Security Instrument
is subordinate to the lien, covenants and conditions of the Senior Security
Instrument, or to further evidence the intent of this Agreement.

(e)           Amendment. This Agreement shall not be amended except by written
instrument signed by all parties hereto.

 
10

--------------------------------------------------------------------------------

 
 
(f)           Governing Law. This Agreement shall be governed by the laws of the
State of Florida.

(g)          Severable Provisions. If any provision of this Agreement shall be
invalid or unenforceable to any extent, then the other provisions of this
Agreement, shall not be affected thereby and shall be enforced to the greatest
extent permitted by law.
 
(h)          Term. The term of this Agreement shall commence on the date hereof
and shall continue until the earliest to occur of the following events: (i) the
payment of all of the principal of, interest on and other amounts payable under
the Senior Loan Documents; (ii) the payment of all of the principal of, interest
on and other amounts payable under the Subordinate Loan Documents, other than by
reason of payments which the Subordinate Lender is obligated to remit to the
Senior Lender pursuant to Section 5 hereof; (iii) the acquisition by the Senior
Lender of title to the Property pursuant to a foreclosure; or (iv) the
acquisition by the Subordinate Lender of title to the Property pursuant to a
foreclosure.
 
(i)           Captions/Headings. The captions and/or headings herein are
included for convenience of reference only and shall be ignored in the
construction or interpretation hereof.

(j)           CONSENT TO JURISDICTION. EACH OF THE SUBORDINATED LENDER, THE
SENIOR LENDER, AND BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF HILLSBOROUGH, STATE OF FLORIDA AND
IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH OF THE SUBORDINATED
LENDER, THE SENIOR LENDER, AND BORROWER EXPRESSLY SUBMITS AND CONSENTS TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS. EACH OF THE SUBORDINATED LENDER, THE SENIOR LENDER, AND BORROWER
HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO THE SUBORDINATED LENDER AND BORROWER AT THEIR
RESPECTIVE ADDRESSES SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE
COMPLETE 10 DAYS AFTER THE SAME HAS BEEN POSTED.

[BALANCE OF PAGE INTENTIONALLY BLANK]

[EXECUTION APPEARS ON THE FOLLOWING PAGES]

 
11

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
 

Signed and Sealed Before:   SUBORDINATE LENDER:            
 
 
CONSILIUM CORPORATE RECOVERY MASTER FUND, LTD.,
a company, organized under the laws of the Cayman Islands
          /s/ ANGEL HERNANDEZ, JR.   By: /s/ CHARLES T. CASSEL, III   Print
Name: Angel Hernandez, Jr.   Name: Charles T. Cassel, III       Title:
Authorized Person   /s/ VICTOR MALDONADO         Print Name: Victor Maldonado  
                STATE OF FLORIDA         COUNTY OF BROWARD        

 
The foregoing instrument was acknowledged before me this 5th day of June, 2014,
by Charles T. Cassel, III, as Authorized Person of CONSILIUM CORPORATE RECOVERY
MASTER FUND, LTD., a company, organized under the laws of the Cayman Islands, on
behalf of the association. He x is personally known to me or o has produced
_____________________ as identification.
 
 
By: /s/ MARTA C. NOVICK       Print name: Marta C. Novick       NOTARY PUBLIC  
    My commission expires: 3/25/15  

 
12

--------------------------------------------------------------------------------

 
 
Signed, sealed and delivered
  SENIOR LENDER:   in the presence of:                   /s/ LINDA MARSELLA    
DOUGLAS JOINT VENTURE, a Florida   (Witness Signature)     general partnership  
Print Witness Name: Linda Marsella                   /s/ TINA M. TOWERS   By:
/s/ LESTER M. UNGER    (Witness Signature)     Lester M. Unger,   Print Witness
Name: Tina M. Towers     Managing Partner             STATE OF FLORIDA        
COUNTY OF PINELLAS        

 
The foregoing instrument was acknowledged before me this 5th day of June, 2014,
by LESTER M. UNGER, as Managing Partner of DOUGLAS JOINT VENTURE, a Florida
general partnership, on behalf of entity. He/She is [select one]:

(X)          personally known to me;
or
(   )          produced a valid driver’s license as identification.
 
 
By:
/s/ TINA M. TOWERS       Notary Public - (Signature)       Print Name:          
      My Commission Expires: 12/19/17    

 
13

--------------------------------------------------------------------------------

 
 

Signed, sealed and delivered       in the presence of:        
 
        /s/ LINDA MARSELLA     DOUGLAS JOINT VENTURE, a Florida   (Witness
Signature)     general partnership   Print Witness Name: Linda Marsella        
          /s/ TINA M. TOWERS   By: /s/ SPENCER WOLF   (Witness Signature)    
Spencer Wolf,   Print Witness Name: Tina M. Towers     Managing Partner        
    STATE OF FLORIDA         COUNTY OF PINELLAS        

 
The foregoing instrument was acknowledged before me this 5th day of June, 2014,
by SPENCER WOLF, as Managing Partner of DOUGLAS JOINT VENTURE, a Florida general
partnership, on behalf of entity. He/She is [select one]:

(X)          personally known to me;
or
(   )          produced a valid driver’s license as identification.
 
 
By:
/s/ TINA M. TOWERS       Notary Public - (Signature)       Print Name:        My
Commission Expires: 12/19/17            

 
14

--------------------------------------------------------------------------------

 
 

Signed, sealed and delivered       in the presence of:        
 
        /s/ LINDA MARSELLA      V-3 JOINT VENTURE, a Florida limited   (Witness
Signature)     liability company   Print Witness Name: Linda Marsella          
        /s/ TINA M. TOWERS   By: /s/ LESTER M. UNGER   (Witness Signature)    
Lester M. Unger,   Print Witness Name: Tina M. Towers     Managing Member      
      STATE OF FLORIDA         COUNTY OF PINELLAS        

The foregoing instrument was acknowledged before me this 5th day of June, 2014,
by LESTER M. UNGER, as Managing Member of V-3 JOINT VENTURE, a Florida limited
liability company, on behalf of entity. He/She is [select one]:

(X)          personally known to me;
or
(   )          produced a valid driver’s license as identification.
 

 
By:
/s/ TINA M.
TOWERS                                                                     
Notary Public - (Signature)       Print Name:        My Commission Expires:
12/19/17            

 
15

--------------------------------------------------------------------------------

 

Signed, sealed and delivered       in the presence of:                   /s/
LINDA MARSELLA     V-3 JOINT VENTURE, a Florida limited   (Witness Signature)  
  liability company   Print Witness Name: Linda Marsella                   /s/
TINA M. TOWERS   By: /s/ DOUGLAS C. ZAHM   (Witness Signature)     Douglas C.
Zahm,   Print Witness Name: Tina M. Towers     Managing Member             STATE
OF FLORIDA         COUNTY OF PINELLAS        

    
 
The foregoing instrument was acknowledged before me this 5th day of June, 2014,
by DOUGLAS C. ZAHM, as Managing Member of V-3 JOINT VENTURE, a Florida limited
liability company, on behalf of entity. He/She is [select one]:

(X)          personally known to me;
or
(   )          produced a valid driver’s license as identification.
 
 
By:
/s/ TINA M. TOWERS       Notary Public - (Signature)       Print Name:       My
Commission Expires: 12/19/17            

 
16

--------------------------------------------------------------------------------

 
 

Signed, sealed and delivered       in the presence of:        
 
        /s/ LINDA MARSELLA     V-3 JOINT VENTURE, a Florida limited   (Witness
Signature)     liability company   Print Witness Name: Linda Marsella          
        /s/ TINA M. TOWERS   By: /s/ WOLFGANG OELKERS   (Witness Signature)    
Wolfgang Oelkers,   Print Witness Name: Tina M. Towers     Managing Member      
      STATE OF FLORIDA         COUNTY OF PINELLAS        

The foregoing instrument was acknowledged before me this 5th day of June, 2014,
by WOLFGANG OELKERS, as Managing Member of V-3 JOINT VENTURE, a Florida limited
liability company, on behalf of entity. He/She is [select one]:

(X)          personally known to me;
or
(   )          produced a valid driver’s license as identification.
 
 
By:
/s/ TINA M. TOWERS       Notary Public - (Signature)       Print Name:        My
Commission Expires: 12/19/17            

 
17

--------------------------------------------------------------------------------

 
                                                                 

Signed, sealed and delivered       in the presence of:        
 
        /s/ LINDA MARSELLA     V-3 JOINT VENTURE, a Florida limited   (Witness
Signature)       liability company   Print Witness Name: Linda Marsella        
          /s/ TINA M. TOWERS   By: /s/ ANNA MARIE OELKERS   (Witness Signature)
    Anna Marie Oelkers,   Print Witness Name: Tina M. Towers     Managing Member
            STATE OF FLORIDA         COUNTY OF PINELLAS        

The foregoing instrument was acknowledged before me this 5th day of June, 2014,
by ANNA MARIE OELKERS, as Managing Member of V-3 JOINT VENTURE, a Florida
limited liability company, on behalf of entity. He/She is [select one]:

(X)          personally known to me;
or
(   )          produced a valid driver’s license as identification.
 
 
By:
/s/ TINA M. TOWERS       Notary Public - (Signature)       Print Name:       My
Commission Expires: 12/19/17            

 
18

--------------------------------------------------------------------------------

 
                                                                

Signed, sealed and delivered       in the presence of:                   /s/
LINDA MARSELLA     EMPIRE JOINT VENTURE, a Florida   (Witness Signature)    
general partnership   Print Witness Name: Linda Marsella                   /s/
TINA M. TOWERS   By: /s/ LESTER M. UNGER   (Witness Signature)     Lester M.
Unger,   Print Witness Name: Tina M. Towers     Managing Partner            
STATE OF FLORIDA         COUNTY OF PINELLAS        

 
The foregoing instrument was acknowledged before me this 5th day of June, 2014,
by LESTER M. UNGER, as Managing Partner of EMPIRE JOINT VENTURE, a Florida
general partnership, on behalf of entity. He/She is [select one]:

(X)          personally known to me;
or
(   )          produced a valid driver’s license as identification.
 

 
By:
/s/ TINA M. TOWERS       Notary Public - (Signature)       Print Name:        My
Commission Expires: 12/19/17            

 
19

--------------------------------------------------------------------------------

 
                                                               

Signed, sealed and delivered       in the presence of:        
 
        /s/ LINDA MARSELLA     EMPIRE JOINT VENTURE, a Florida   (Witness
Signature)     general partnership   Print Witness Name: Linda Marsella        
          /s/ TINA M. TOWERS   By: /s/ SPENCER
WOLF                                                                  (Witness
Signature)     Spencer Wolf,   Print Witness Name: Tina M. Towers     Managing
Partner             STATE OF FLORIDA         COUNTY OF PINELLAS                
 

The foregoing instrument was acknowledged before me this5th day of June, 2014,
by SPENCER WOLF, as Managing Partner of EMPIRE JOINT VENTURE, a Florida general
partnership, on behalf of entity. He/She is [select one]:

(X)          personally known to me;
or
(   )          produced a valid driver’s license as identification.
 
 
By:
/s/ TINA M. TOWERS       Notary Public - (Signature)       Print Name:       My
Commission Expires: 12/19/17            

 
20

--------------------------------------------------------------------------------

 
                                                                

Signed and Sealed Before:   BORROWER:             /s/ NATALIE ANDRIANO    
PANACHE DISTILLERY, LLC, a Florida limited   Print Name: Natalie Andriano    
liability company
            /s/ ANTHONY RIVERA   By: /s/ MICHAEL ROMER    Print Name: Anthony
Rivera   Name: Michael Romer       Title: Manager, Interim CEO PBI  
STATE OF NEW YORK,
        COUNTY OF NEW YORK        

The foregoing instrument was acknowledged before me this 5th day of June, 2014,
by Michael Romer, as Interim CEO of Managing Member of PANACHE DISTILLERY, LLC,
a Florida limited liability company on behalf of the company. He/She o is
personally known to me or x has produced _____________________ as
identification.
 
 
By:
/s/ JERAMANE G. BLACKWOOD        Print name: Jeramane G. Blackwood       NOTARY
PUBLIC       My commission expires: 01/03/15            

 
21

--------------------------------------------------------------------------------

 

EXHIBIT A
Legal Description of Property

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF PASCO, STATE OF
FLORIDA, AND IS DESCRIBED AS FOLLOWS:
 
A portion of the Northeast 1/4 of Section 11, Township 25 South, Range 16 East,
Pasco County, Florida, being further described as follows:

Commence at the Northeast corner of the Northeast 1/4 of said Section 11; thence
run along the East boundary line of the Northeast 1/4 of said Section 11, South
00°16'53" East, a distance of 139.20 feet to the South right-of-way line of
State Road No. 52, as it is now established; thence along the South right-of-way
line of said State Road No. 52, North 89°38'01" West, a distance of 33.90 feet
to the West right-of-way line of Plaza Drive, as it is now established; thence
along the West right-of-way line of said Plaza Drive, South 00°02'12" East, a
distance of 750.02 feet for a POINT OF BEGINNING, said Point of Beginning being
a distance of 750.00 feet South of the South right-of-way line of said State
Road No. 52, said 750.00 feet being measured at right angles to the South
right-of-way line of said State Road 52; thence continue along the West
right-of-way line of said Plaza Drive, South 00°02'12" East, a distance of
250.00 feet; thence parallel with the South right-of-way line of said State Road
No. 52, North 89°38'01" West, a distance of 1032.22 feet; thence parallel with
the West right-of way line of said Plaza Drive, North 00°02'12" West, a distance
of 250.00 feet; thence parallel with the South right-of-way line of State Road
No. 52, South 89°38'01" East, a distance of 1032.22 feet to the POINT OF
BEGINNING.

LESS the following described portion for road right of way:

A tract of land located in the Northeast 1/4 of Section 11, Township 25 South,
Range 16 East, Pasco County, Florida, being more particularly described as
follows:

Commencing at the Northeast corner of Section 11; thence South 00°16'53" East,
along the East boundary of Section 11, a distance of 139.23 feet; thence South
89°38'01" West, a distance of 33.90 feet to a point, said point being on the
existing Westerly right-of-way line of Little Road and the existing Southerly
right-of-way of Gulf Boulevard (SR. 52); thence South 00°02'12" East, a distance
of 750.02 feet to the grantors Northeast property corner for a POINT OF
BEGINNING; thence continue South 00°02'12" East, a distance of 250.00 feet;
thence North 89°38'01" West, a distance of 14.49 feet; thence North 00°57'43"
West, a distance of 250.06 feet; thence South 89°38'01" East, a distance of
18.53 feet to the POINT OF BEGINNING. 
 
 
22

--------------------------------------------------------------------------------