SECURITY
AGREEMENT


 


THIS SECURITY AGREEMENT (the “Agreement”),
is entered into and made effective as of MAY 15, 2013, by and among PREMIER BEVERAGE GROUP, CORP., a Nevada corporation
(“Company”), and Company’s undersigned subsidiaries (the “Subsidiaries” and, collectively
with the Company, the “Grantors”), in favor of [ ] (“the “Secured Party”).


 


WHEREAS, the
Secured Party holds those certain secured convertible debentures issued by the Company numbered PBGC – 59FF 101 and
PBGC – 59FF 102, with an aggregate principal balance of $375,000.00;


 


WHEREAS, the
Secured Party has provided certain financial accommodations to Grantors as provided in that certain Securities Purchase Agreement
by and between Grantors and Secured Party of even date herewith, as well as all agreements, instruments and documents executed
in connection therewith (collectively, the “Transaction Documents”); and,


 


WHEREAS, Grantors
have and will directly benefit from the financial accommodations provided by the Secured Party.


 


NOW, THEREFORE,
in consideration of the promises and the mutual covenants herein contained, and for other good and valuable consideration,
the adequacy and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:


 


ARTICLE 1.


 


DEFINITIONS
AND INTERPRETATIONS


 


Section 1.1.          Recitals.
The above recitals are true and correct and are incorporated herein, in their entirety, by this reference.


 


Section 1.2.          Interpretations.
Nothing herein expressed or implied is intended or shall be construed to confer upon any person other than the Secured Party any
right, remedy or claim under or by reason hereof.


 


Section 1.3.          Definitions.
All capitalized terms used in this Agreement and the recitals hereto and not defined herein shall have the meanings set forth in
the Securities Purchase Agreement, or in Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State
of New Jersey (the “Code”).


 


ARTICLE 2.


 


COLLATERAL


 


Section 2.1.          Grant
of Security Interest.


 


(a)          As
collateral security for all of the Obligations (as defined in Section 2.2 hereof), the Grantors hereby pledge and assign
to the Secured Party, and grant to the Secured Party for its benefit, a continuing security interest in and to the personal property
described on Exhibit A attached hereto (collectively, the “Collateral”).


 


(b)          Simultaneously
with the execution and delivery of this Agreement, the Grantors shall make, execute, acknowledge, file, record and deliver to the
Secured Party such documents, instruments, and agreements, including, without limitation, financing statements, certificates, affidavits
and forms as may, in the Secured Party’s sole and exclusive judgment, be reasonably necessary to effectuate, complete or
perfect, or to continue and preserve, the security interest of the Secured Party in the Collateral.


 


Section 2.2          Security
for Obligations. The security interest created hereby in the Collateral constitutes continuing collateral security for all
of the following obligations, whether now existing or hereinafter incurred (collectively, the “Obligations”):


 


any and all debts,
liabilities, obligations, covenants and duties owing by the Grantors to the Secured Party, including without limitation, now existing
or hereafter arising of every nature, type, and description, whether liquidated, unliquidated, primary, secondary, secured, unsecured,
direct, indirect, absolute, or contingent, and whether or not evidenced by a note, guaranty or other instrument, and any amendments,
extensions, renewals or increases thereof, and including any interest accruing thereon after insolvency, reorganization or like
proceeding relating to the Grantors, whether or not a claim for post-petition interest is allowed in such proceeding, and all costs
and expenses of the Secured Party incurred in the enforcement, collection or otherwise in connection with any of the foregoing,
including, but not limited to, reasonable attorneys’ fees and expenses and all obligations of any Grantors to the Secured
Party to perform acts or refrain from taking any action.


 




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Section 2.3. No
Assumption of Liability. The security interest in the Collateral is granted as security only and shall not subject the Secured
Party to, or in any way alter or modify any obligation or liability of any Grantors with respect to or arising out of the Collateral.


 


ARTICLE 3.


 


attorney-in-fact;
performance


 


Section 3.1.          Secured
Party Appointed Attorney-In-Fact.


 


Each of the Grantors
hereby appoints the Secured Party as its attorney-in-fact, with full authority in the place and stead of the Grantors and in the
name of the Grantors or otherwise, exercisable after and during the continuance of an Event of Default, from time to time in the
Secured Party’s discretion to take any action and to execute any instrument which the Secured Party may reasonably deem necessary
to accomplish the purposes of this Agreement, including, without limitation, to (a) receive and collect all instruments made payable
to the Grantors representing any payments in respect of the Collateral or any part thereof and to give full discharge for the same;
(b) demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as and when the
Secured Party may determine, and (c) to facilitate collection, the Secured Party may notify account debtors and obligors on any
Collateral to make payments directly to the Secured Party. The foregoing power of attorney is a power coupled with an interest
and shall be irrevocable until all Obligations are paid and performed in full. The Grantors agree that the powers conferred on
the Secured Party hereunder are solely to protect the Secured Party’s interests in the Collateral and shall not impose any
duty upon the Secured Party to exercise any such powers.


 


Section 3.2.          Secured
Party May Perform.


 


If the Grantors fail
to perform any agreement contained herein, the Secured Party, at its option, may itself perform, or cause performance of, such
agreement, and the expenses of the Secured Party incurred in connection therewith shall be included in the Obligations secured
hereby and payable by the Grantors under Section 8.3.


 


ARTICLE 4.


 


representations
and warranties


 


Section 4.1.          Authorization;
Enforceability.


 


Each of the Grantors
represents and warrants that it has taken all action necessary to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby; and upon execution and delivery, this Agreement shall constitute a valid and binding
obligation of the respective party, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights or by the principles governing the availability of equitable remedies.


 


Section 4.2.          Ownership
of Collateral.


 


Each of the Grantors
represents and warrants that it is the legal and beneficial owner of the Collateral free and clear of any lien, security interest,
option or other charge or encumbrance (each, a “Lien”) except for Permitted Liens. For purposes of this Agreement,
“Permitted Liens” means: (a) the security interest created by this Agreement, (b) Liens in favor of the Secured
Party; (c) liens listed on the attached Schedule 4.2; and (d) inchoate Liens for taxes, assessments or governmental charges
or levies not yet due, as to which the grace period, if any, related thereto has not yet expired, or being contested in good faith
and by appropriate proceedings for which adequate reserves have been established in accordance with generally accepted accounting
principles consistently applied (“GAAP”).


 


Section 4.3           Location
of Collateral.


 


The Collateral is or
will be kept at the address(es) of each Grantor set forth on Schedule 4.3 attached hereto. Unless otherwise provided herein,
the Grantors will not remove any Collateral from such locations without the prior written consent of the Secured Party.


 


Section 4.4           Location,
State of Incorporation and Name of Grantors.


 


Each Grantor principal
place of business; state of incorporation, organization or formation, organization id, and exact legal name is set forth on Schedule
4.4 attached hereto.


 




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Section 4.5           Priority
of Security Interest.


 


Subject only to the
Permitted Liens, the security interest granted to the Secured Party hereunder shall be a first priority security interest subject
to no other Liens and no financing statement, other than those in favor of the Secured Party or one of its affiliates, covering
any of the Collateral or any proceeds thereof is on file in any public office.


 


ARTICLE 5.


 


default;
remedies


 


Section
5.1           Events of Default. For purposes of this Agreement,
the occurrence of one or more of the following after the date hereof shall be deemed an “Event of Default”:


 


(a)          Payment
Default. If the Grantors shall fail to pay any amount due under any Transaction Document (as defined in subsection (l) below)
as and when due, or any fee or charge due and payable under any Transaction Document, as and when the same shall become due and
payable; or 


 


(b)          Representations.
If any representation or warranty made by or on behalf of the Grantors, whether contained in this Agreement, or in any other document
or instrument between one or more of the Grantors and the Secured Party shall prove to have been false or incorrect in any material
respect when made; or 


 


(c)          Voluntary
Insolvency Proceedings. If a Grantor that is not an Inactive Subsidiary shall (i) apply for or consent to or acquiesce in the
appointment of or the taking of possession by a receiver, liquidator, custodian or trustee of itself or of all or any part of its
property, (ii) admit in writing its inability, or be generally unable, to pay its debts as such debts become due, (iii) make a
general assignment for the benefit of its creditors, (iv) commence a voluntary case under the bankruptcy laws of the United States
of America (as now or hereafter in effect) or any similar foreign law, (v) file a petition seeking to take advantage of any other
law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, or (vi) take any action
for the purpose of effecting any of the foregoing; or


 


(d)          Involuntary
Insolvency Proceedings. A proceeding or case shall be commenced, without the application or consent of a Grantor (that is not
an Inactive Subsidiary) in any court of competent jurisdiction, seeking (i) liquidation, reorganization, dissolution, winding-up
or composition or adjustment of debts of a Grantor, (ii) the appointment of a trustee, receiver, liquidator, custodian or the like
of a Grantor, or of all or any part of any of their assets, (iii) similar relief under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, and such proceeding or case shall continue undismissed, for a
period of forty five (45) days; or (iv) any order for relief against a Grantor, shall be entered in an involuntary case under bankruptcy
laws of the United States of America, or any similar foreign law, and shall continue undismissed for a period of forty five (45)
days; or


 


(e)          Divestiture
of Assets. If any order, judgment, or decree shall be entered in any proceeding requiring a Grantor to divest itself of any
material part of its assets, and if, within forty-five (45) days after entry thereof (unless or until enforcement is sooner commenced),
such order, judgment or decree shall not have been discharged or execution thereof stayed pending appeal; or if, within ten (10)
days after the expiration of any such stay (unless or until enforcement is sooner commenced), such judgment, order or decree shall
not have been discharged; or


 


(f)          Judgments
and Tax Liens. If one or more judgments, attachments, or tax liens exceeding $100,000 in the aggregate are entered against
a Grantor (that is not an Inactive Subsidiary), or against the Grantors’ property, and remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of thirty (30) days, or enforcement proceedings are commenced with respect to
any judgment, attachment, or tax lien against a Grantor; or


 


(g)          Dissolution;
Suspension of Business. If a Grantor that is not an Inactive Subsidiary shall suspend or have suspended (voluntarily or involuntarily
and for whatever reason) the operation of a material portion of its business for a period of twenty (20) days or a Grantor dissolves
or otherwise ceases to exist; or 


 




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(h)         Change
in Condition. Any change in the condition or affairs (financial or otherwise) of a Grantor shall occur which, in the Secured
Party’s reasonable opinion, increases the material risk with respect to the Guaranty or impairs any of the Secured Party’s
security therefore; or


 


(i)          Revocation
of Guaranty. Any Grantors revokes or terminates, or purports to revoke or terminate, or fails to perform any of the terms,
covenants, conditions or provisions of, any guaranty, including without limitation, the Guaranty, endorsement or other agreement
of such party in favor of Secured Party; or


 


(j)          Indictment.
The indictment of a Grantor by any Governmental Authority the effect of which could be to restrain in any material way the conduct
by a Grantor of its business in the ordinary course; or


 


(k)          Lack
of Enforceability; Invalidity. Any material provision hereof or of any of the other agreements, documents, or instruments between
a Grantor and the Secured Party (together with this Agreement, collectively, the “Transaction Documents”) shall
for any reason cease to be valid, binding and enforceable with respect to any party hereto or thereto (other than Secured Party)
in accordance with its terms, or any such party shall challenge the enforceability hereof or thereof, or shall assert in writing,
or take any action or fail to take any action based on the assertion that any provision hereof or of any of the other Transaction
Documents has ceased to be or is otherwise not valid, binding or enforceable in accordance with its terms, or any security interest
provided for in any of the Transaction Documents shall cease to be a valid and perfected first priority security interest in any
of the Collateral purported to be subject thereto (except as otherwise permitted herein or therein); or


 


(l)          Cross
Default. The occurrence of any default or event of default under any other agreement between the Secured Party and the Grantors,
including, without limitation, the Transaction Documents.


 


Section 5.2           Method
of Realizing Upon the Collateral: Other Remedies.


 


If any Event of Default
shall have occurred and be continuing:


 


(a)          The
Secured Party may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein or otherwise
available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not the Code applies
to the affected Collateral), and also may (i) take absolute control of the Collateral, including, without limitation, transfer
into the Secured Party’s name or into the name of its nominee or nominees (to the extent the Secured Party has not theretofore
done so) and thereafter receive, for the benefit of the Secured Party, all payments made thereon, give all consents, waivers and
ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof, (ii) require
the Grantors to assemble all or part of the Collateral as directed by the Secured Party and make it available to the Secured Party
at a place or places to be designated by the Secured Party that is reasonably convenient to both parties, and the Secured Party
may enter into and occupy any premises owned or leased by a Grantor where the Collateral or any part thereof is located or assembled
for a reasonable period in order to effectuate the Secured Party’s rights and remedies hereunder or under law, without obligation
to the Grantors in respect of such occupation, and (iii) without notice except as specified below and without any obligation
to prepare or process the Collateral for sale, (x) sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Secured Party’s offices or elsewhere, for cash, on credit or for future delivery, and at such
price or prices and upon such other terms as the Secured Party may deem commercially reasonable, (y) accept the Collateral in partial
or full satisfaction of the Obligations in accordance with Sections 9-620 and 9-621 of the Code, and/or (z) lease, license
or dispose of the Collateral or any part thereof upon such terms as the Secured Party may deem commercially reasonable. The Grantors
agree that, to the extent notice of sale or any other disposition of the Collateral shall be required by law, at least ten (10)
days’ notice to the Grantors of the time and place of any public sale or the time after which any private sale or other disposition
of the Collateral is to be made shall constitute commercially reasonable notification. The Secured Party shall not be obligated
to make any sale or other disposition of any Collateral regardless of notice of sale having been given. The Secured Party may adjourn
any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Each of the Grantors hereby waives any claims against the Secured
Party arising by reason of the fact that the price at which the Collateral may have been sold at a private sale was less than the
price which might have been obtained at a public sale or was less than the aggregate amount of the Obligations, even if the Secured
Party accepts the first offer received and does not offer such Collateral to more than one offeree, and waives all rights that
the Grantors may have to require that all or any part of such Collateral be marshaled upon any sale (public or private) thereof.
Each of the Grantors hereby acknowledges that (i) any such sale of the Collateral by the Secured Party may be made without
warranty, (ii) the Secured Party may specifically disclaim any warranties of title, possession, quiet enjoyment or the like,
and (iii) such actions set forth in clauses (i) and (ii) above shall not adversely affect the commercial reasonableness
of any such sale of Collateral.


 




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(b)          Any
cash held by the Secured Party as Collateral and all cash proceeds received by the Secured Party in respect of any sale of or collection
from, or other realization upon, all or any part of the Collateral shall be applied (after payment of any amounts payable to the
Secured Party pursuant to Section 8.3 hereof) by the Secured Party against, all or any part of the Obligations in such order
as the Secured Party shall elect in its sole and exclusive discretion. Any surplus of such cash or cash proceeds held by the Secured
Party and remaining after the indefeasible payment in full in cash of all of the Obligations shall be paid over to whomsoever shall
be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.


 


(c)          In
the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which the Secured
Party is legally entitled, the Grantors shall be liable for the deficiency, together with interest thereon at the higher interest
rate permitted by applicable law, together with the costs of collection and the reasonable fees, costs, expenses and other client
charges of any attorneys employed by the Secured Party to collect such deficiency.


 


(d)          Each
of the Grantors hereby acknowledges that if the Secured Party complies with any applicable state, provincial, or federal law requirements
in connection with a disposition of the Collateral, such compliance will not adversely affect the commercial reasonableness of
any sale or other disposition of the Collateral.


 


(e)          The
Secured Party shall not be required to marshal any present or future collateral security (including, but not limited to, this Agreement
and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security
or other assurances of payment in any particular order, and all of the Secured Party’s rights hereunder and in respect of
such collateral security and other assurances of payment shall be cumulative and in addition to all other rights, however existing
or arising. To the extent that the Grantors lawfully may, the Grantors hereby agree that they will not invoke any law relating
to the marshaling of collateral which might cause delay in or impede the enforcement of the Secured Party’s rights under
this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations
is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it
lawfully may, the Grantors hereby irrevocably waive the benefits of all such laws.


 


Section 5.3           Duties
Regarding Collateral.


 


The Secured Party shall
have no duty as to the collection or protection of the Collateral or any income thereon or as to the preservation of any rights
pertaining thereto, beyond the safe custody and reasonable care of any of the Collateral actually in the Secured Party’s
possession.


 


Section 5.4           License
Grant.


 


Each Grantor hereby
assigns, transfers, and conveys to the Secured Party, effective upon the occurrence of any Event of Default hereunder, the nonexclusive
right and license to use all Intellectual Property owned or used by the Company together with any goodwill associated therewith,
all to the extent necessary to enable the Secured Party to realize on the Collateral and any successor or assign to enjoy the benefits
of the Collateral. This right and license shall inure to the benefit of all successors, assigns and transferees of the Secured
Party and its successors, assigns and transferees, whether by voluntary conveyance, operation of law, assignment, transfer, foreclosure,
deed in lieu of foreclosure or otherwise.


 


ARTICLE 6.


 


AFFIRMATIVE
COVENANTS


 


So long as any of the
Obligations shall remain outstanding, unless the Secured Party shall otherwise consent in writing:


 


Section 6.1.          Existence,
Properties, Etc.


 


(a)          Each
Grantor that is not an Inactive Subsidiary shall do, or cause to be done, all things, or proceed with due diligence with
any actions or courses of action, that may be reasonably necessary (i) to maintain such Grantors’ due organization,
valid existence and good standing under the laws of its state of incorporation, and (ii) to preserve and keep in full force
and effect all qualifications, licenses and registrations in those jurisdictions in which the failure to do so could have a Material
Adverse Effect (as defined below), as determined by the Secured Party in its sole and exclusive discretion; and


 




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(b)         the Grantors
shall not do, or cause to be done, any act impairing the Grantors’ corporate power or authority (i) to carry on the
Grantors’ respective business as now conducted, and (ii) to execute or deliver this Agreement or any other document
delivered in connection herewith, including, without limitation, the First Debenture and the Second Debenture, as well as any other
loan instrument or UCC-1 Financing Statements pertaining thereto as required by the Secured Party (which debentures and any
other loan instruments collectively shall be referred to as the “Loan Instruments”) to which it is or will
be a party, or perform any of its obligations hereunder or thereunder. For purpose of this Agreement, the term “Material
Adverse Effect” shall mean any material and adverse effect, as determined by the Secured Party in its reasonable discretion,
whether individually or in the aggregate, upon (a) the Grantors’ assets, business, operations, properties or condition,
financial or otherwise; (b) the Grantors’ ability to make payment as and when due of all or any part of the Obligations;
or (c) the Collateral.


 


Section 6.2.          Financial
Statements and Reports.


 


The Grantors shall
furnish to the Secured Party within a reasonable time such financial data as the Secured Party may reasonably request.


 


Section 6.3.          Accounts
and Reports.


 


The Grantors shall
maintain a standard system of accounting in accordance with GAAP, and provide, at their sole expense, to the Secured Party the
following:


 


(a)          as
soon as available, a copy of any notice or other communication alleging any nonpayment or other material breach or default, or
any foreclosure or other action respecting any material portion of its assets and properties, received respecting any of the indebtedness
of the Grantors in excess of $50,000 (other than the Obligations), or any demand or other request for payment under any guaranty,
assumption, purchase agreement or similar agreement or arrangement respecting the indebtedness or obligations of others in excess
of $50,000; and


 


(b)          within
fifteen (15) days after the making of each submission or filing, a copy of any report, financial statement, notice or other
document, whether periodic or otherwise, submitted to the shareholders of a Grantor, or submitted to or filed by a Grantor with
any governmental authority involving or affecting (i) a Grantor that could reasonably be expected to have a Material Adverse Effect;
(ii) the Obligations; (iii) any part of the Collateral; or (iv) any of the transactions contemplated in this Agreement
or the Loan Instruments (except, in each case, to the extent any such submission, filing, report, financial statement, notice or
other document is posted on EDGAR Online).


 


Section 6.4.          Maintenance
of Books and Records; Inspection.


 


Each of the Grantors
shall maintain its books, accounts and records in accordance with GAAP, and permit the Secured Party, its officers and employees
and any professionals designated by the Secured Party in writing, at any time during normal business hours and upon reasonable
notice to visit and inspect any of its properties (including but not limited to the Collateral), corporate books and financial
records, and to discuss its accounts, affairs and finances with any employee, officer or director thereof (it being agreed that,
unless an Event of Default shall have occurred and be continuing, there shall be no more than two (2) such visits and inspections
in any fiscal year).


 


Section 6.5.          Maintenance
and Insurance.


 


(a)          Each
of the Grantors shall maintain or cause to be maintained, at its own expense, all of its material assets and properties in good
working order and condition, ordinary wear and tear excepted, making all necessary repairs thereto and renewals and replacements
thereof.


 


(b)          The
Grantors shall maintain or cause to be maintained, at their own expense, insurance in form, substance and amounts (including deductibles),
which the Grantors deems reasonably necessary to the Grantors’ business, (i) adequate to insure all assets and properties
of the Grantors of a character usually insured by persons engaged in the same or similar business against loss or damage resulting
from fire or other risks included in an extended coverage policy; (ii) against public liability and other tort claims that
may be incurred by the Grantors; (iii) as may be required by applicable law and (iv) as may be reasonably requested by Secured
Party, all with financially sound and reputable insurers.


 




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Section 6.6.          Contracts
and Other Collateral.


 


Each of the Grantors
shall perform all of its obligations under or with respect to each instrument, receivable, contract and other intangible included
in the Collateral to which such Grantors is now or hereafter will be party on a timely basis and in the manner therein required,
including, without limitation, this Agreement, except to the extent the failure to so perform such obligations would not reasonably
be expected to have a Material Adverse Effect.


 


Section 6.7.          Defense
of Collateral, Etc.


 


Each of the Grantors
shall defend and enforce its right, title and interest in and to any part of: (a) the Collateral; and (b) if not included
within the Collateral, those assets and properties whose loss would reasonably be expected to have a Material Adverse Effect, each
against all manner of claims and demands on a timely basis to the full extent permitted by applicable law (other than any such
claims and demands by holders of Permitted Liens).


 


Section 6.8.          Taxes
and Assessments.


 


Each of the Grantors
shall (a) file all material tax returns and appropriate schedules thereto that are required to be filed under applicable law,
prior to the date of delinquency (taking into account any extensions of the original due date), (b) pay and discharge all
material taxes, assessments and governmental charges or levies imposed upon a Grantor, upon its income and profits or upon any
properties belonging to it, prior to the date on which penalties attach thereto, and (c) pay all material taxes, assessments
and governmental charges or levies that, if unpaid, might become a lien or charge upon any of its properties; provided,
however, that the Grantors in good faith may contest any such tax, assessment, governmental charge or levy described in
the foregoing clauses (b) and (c) so long as appropriate reserves are maintained with respect thereto if and to the extent required
by GAAP.


 


Section 6.9.          Compliance
with Law and Other Agreements.


 


Each of the Grantors
shall maintain its business operations and property owned or used in connection therewith in compliance with (a) all applicable
federal, state and local laws, regulations and ordinances governing such business operations and the use and ownership of such
property, and (b) all agreements, licenses, franchises, indentures and mortgages to which a Grantor is a party or by which
such Grantors or any of its properties is bound, except where the failure to so comply would not reasonably be expected to have
a Material Adverse Effect.


 


Section 6.10.         Notice
of Default.


 


The Grantors will immediately
notify the Secured Party of any event causing a substantial loss or diminution in the value of all or any material part of the
Collateral and the amount or an estimate of the amount of such loss or diminution. The Grantors shall promptly notify the Secured
Party of any condition or event which constitutes, or would constitute with the passage of time or giving of notice or both, an
Event of Default, and promptly inform the Secured Party of any events or changes in the financial condition of any Grantors occurring
since the date of the last financial statement of such Grantors delivered to the Secured Party, which individually or cumulatively
when viewed in light of prior financial statements, which might reasonably be expected to have a Material Adverse Effect on the
business operations or financial condition of the Grantors.


 


Section 6.11.         Notice
of Litigation.


 


The Grantors shall
give notice, in writing, to the Secured Party of (a) any actions, suits or proceedings wherein the amount at issue is in excess
of $50,000, instituted by any persons against a Grantor, or affecting any of the assets of a Grantor, and (b) any dispute,
not resolved within fifteen (15) days of the commencement thereof, between a Grantor on the one hand and any governmental or regulatory
body on the other hand, which might reasonably be expected to have a Material Adverse Effect on the business operations or financial
condition of such Grantors.


 


Section 6.12.         Changes
to Identity.


 


Each Grantor that is
not an Inactive Subsidiary will (a) give the Secured Party at least 30 days’ prior written notice of any change in such Grantors’
name, identity or organizational structure, (b) maintain its jurisdiction of incorporation, organization or formation as set forth
on Schedule 4.4 attached hereto, (c) immediately notify the Secured Party upon obtaining an organizational identification number,
if on the date hereof such Grantors did not have such identification number.


 




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Section 6.13.        Perfection
of Security Interests.


 


(a)          Financing
Statements. The Grantors hereby irrevocably authorize the Secured Party, at its sole cost and expense, at any time and from
time to time to file in any filing office in any jurisdiction any initial financing statements and amendments thereto that (i)
indicate the Collateral (x) as all assets of the Grantors or words of similar effect, regardless of whether any particular asset
comprised in the Collateral falls within the scope of Article 9 of the Code of such jurisdiction, or (y) as being of an equal or
lesser scope or with greater detail, and (ii) contain any other information required by Part 5 of Article 9 of the Code for the
sufficiency or filing office acceptance of any financing statement or amendment, including (x) whether such Grantors is an organization,
the type of organization and any organization identification number issued to such Grantors, and (y) in the case of a financing
statement filed as a fixture filing, a sufficient description of real property to which the Collateral relates. The Grantors agree
to furnish any such information to the Secured Party promptly upon request. The Grantors also ratify their authorization for the
Secured Party to have filed in any jurisdiction any initial financing statements or amendments thereto if filed prior to the date
hereof. The Grantors acknowledge that they are not authorized to file any financing statement or amendment or termination statement
with respect to any financing statement without the prior written consent of the Secured Party, which will not be withheld upon
the payment of all amounts due to the Secured Party under the Transaction Documents, and agree that they will not do so without
the prior written consent of the Secured Party. The Grantors acknowledge and agree that this Agreement constitutes an authenticated
record.


 


(b)          Possession.
The Grantors (i) shall have possession of the Collateral, except where expressly otherwise provided in this Agreement or where
the Secured Party chooses to perfect its security interest by possession in addition to the filing of a financing statement; and
(ii) will, where the Collateral is in the possession of a third party, join with the Secured Party in notifying the third party
of the Secured Party’s security interest and obtaining an acknowledgment from the third party that it is holding the Collateral
for the benefit of the Secured Party.


 


(c)          Control.
The Grantors will cooperate with the Secured Party in obtaining control with respect to any portion of the Collateral consisting
of (i) Investment Property, (ii) Letters of Credit and Letter-of-Credit Rights and (iii) electronic Chattel Paper.


 


(d)          Marking
of Chattel Paper. The Grantors will not create any Chattel Paper without placing a legend on the Chattel Paper acceptable to
the Secured Party in all respects indicating that the Secured Party has a security interest in the Chattel Paper.


 


Section 6.14         Notice
of Commercial Tort Claims. Attached as Schedule 6.14 is a list of all Commercial Tort Claims of the Grantors (as such
Schedule may be amended, modified or supplemented from time to time). If any Grantors shall at any time acquire a Commercial Tort
Claim, such Grantors shall immediately notify the Secured Party in a writing signed by such Grantors which shall (a) provide brief
details of said claim and (b) grant to the Secured Party a security interest in said claim and in the proceeds thereof, all upon
the terms of this Agreement, in such form and substance satisfactory to the Secured Party.


 


ARTICLE 7.


 


negative
covenants


 


So long as any of the
Obligations shall remain outstanding, unless the Secured Party shall otherwise consent in writing each Grantor covenants and agrees
that it shall not:


 


Section 7.1.          Transfers,
Liens and Encumbrances.


 


(a)          Sell,
assign (by operation of law or otherwise), lease, license, exchange or otherwise transfer or dispose of any of the Collateral,
except the Grantors may (i) sell or dispose of Inventory in the ordinary course of business, and (ii) sell or dispose of assets
the Grantors have determined, in good faith, not to be useful in the conduct of its business, and (iii) sell or dispose of accounts
in the course of collection in the ordinary course of business consistent with past practice.


 


(b)          Directly
or indirectly make, create, incur, assume or permit to exist any Lien in, to or against any part of the Collateral other than Permitted
Liens.


 


Section 7.2.          Restriction
on Redemption and Cash Dividends


 


Directly or indirectly,
redeem, repurchase or declare or pay any cash dividend or distribution on its capital stock without the prior express written consent
of the Secured Party.


 




    	Exhibit 10.20	PAGE 8



    	 



    

 


Section 7.3.          Incurrence
of Indebtedness.


 


Directly or indirectly,
incur or guarantee, assume or suffer to exist any indebtedness, other than the indebtedness evidenced by the Permitted Indebtedness.
“Permitted Indebtedness” means: (i) indebtedness in favor of the Secured Party or one of its affiliates; (ii)
indebtedness which is not secured by any assets of the Grantors; and (iii) indebtedness solely between the Grantors and/or one
of its domestic affiliates or subsidiaries, on the one hand, and the Grantors and/or one of its domestic affiliates or subsidiaries,
on the other which indebtedness is not secured by any assets of the Grantors or any of its subsidiaries, provided that (x) in each
case a majority of the equity of any such domestic subsidiary is directly or indirectly owned by the Grantors, such domestic subsidiary
is controlled by the Grantors and such domestic subsidiary has executed a security agreement in the form of this Agreement and
(y) any such loan shall be evidenced by an intercompany note that is pledged by a Grantor or its subsidiary, as applicable, as
collateral pursuant to this Agreement.


 


Section 7.4.          Places
of Business.


 


Change the location
of its chief place of business, chief executive office or any place of business disclosed to the Secured Party, unless such change
in location is to a different location within the United States and the Grantors provides notice to the Secured Party of new location
within 10 days’ of such change in location.


 


ARTICLE 8.


 


MISCELLANEOUS


 


Section 8.1.          Notices.


 


All notices or other
communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as duly
given on: (a) the date of delivery, if delivered in person or by nationally recognized overnight delivery service or (b) five (5) days
after mailing if mailed from within the continental United States by certified mail, return receipt requested to the party entitled
to receive the same. Any party may change its address by giving notice to the other party stating its new address. Commencing on
the tenth (10th) day after the giving of such notice, such newly designated address shall be such party’s
address for the purpose of all notices or other communications required or permitted to be given pursuant to this Agreement.


 


Section 8.2.          Severability.


 


If any provision of
this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision
and shall not in any manner affect or render invalid or unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision were not contained herein.


 


Section 8.3.          Expenses.


 


In the event of an
Event of Default, the Grantors will pay to the Secured Party the amount of any and all reasonable out-of-pocket expenses, including
the reasonable fees and expenses of its counsel, which the Secured Party may incur in connection with: (a) the custody or
preservation of, or the sale, collection from, or other realization upon, any of the Collateral; (b) the exercise or enforcement
of any of the rights of the Secured Party hereunder or (c) the failure by a Grantor to perform or observe any of the provisions
hereof.


 


Section 8.4.          Waivers,
Amendments, Etc.


 


The Secured Party’s
delay or failure at any time or times hereafter to require strict performance by a Grantor of any undertakings, agreements or covenants
shall not waive, affect, or diminish any right of the Secured Party under this Agreement to demand strict compliance and performance
herewith. Any waiver by the Secured Party of any Event of Default shall not waive or affect any other Event of Default, whether
such Event of Default is prior or subsequent thereto and whether of the same or a different type. None of the undertakings, agreements
and covenants of a Grantor contained in this Agreement, and no Event of Default, shall be deemed to have been waived by the Secured
Party, nor may this Agreement be amended, changed or modified, unless such waiver, amendment, change or modification is evidenced
by an instrument in writing specifying such waiver, amendment, change or modification and signed by the Secured Party in the case
of any such waiver, and signed by the Secured Party and the Grantors in the case of any such amendment, change or modification.
Further, no such document, instrument, and/or agreement purported to be executed on behalf of the Secured Party shall be binding
upon the Secured Party unless executed by a duly authorized representative of the Secured Party.


 




    	Exhibit 10.20	PAGE 9



    	 



    

 


Section 8.5.          Continuing
Security Interest.


 


This Agreement shall
create a continuing security interest in the Collateral and shall: (a) remain in full force and effect so long as any of the
Obligations shall remain outstanding; (b) be binding upon each Grantor and its successors and assigns; and (c) inure
to the benefit of the Secured Party and its successors and assigns. Upon the payment or satisfaction in full of the Obligations,
this Agreement and the security interest created hereby shall terminate, and, in connection therewith, each Grantor shall be entitled
to the return, at its expense, of such of the Collateral as shall not have been sold in accordance with this Agreement or otherwise
accepted or applied pursuant to the terms hereof and the Secured Party shall deliver to the Grantors such documents as the Grantors
shall reasonably request to evidence such termination.


 


Section 8.6.          Independent
Representation.


 


Each party hereto acknowledges
and agrees that it has received or has had the opportunity to receive independent legal counsel of its own choice and that it has
been sufficiently apprised of its rights and responsibilities with regard to the substance of this Agreement.


 


Section 8.7.          Applicable
Law: Jurisdiction.


 


This Agreement shall
be governed by and interpreted in accordance with the laws of the State of New Jersey, without regard to the principles of conflict
of laws. Grantors and Secured Party expressly consent to the jurisdiction and venue of the Superior Court of New Jersey, Bergen
County, for any litigation between the parties, provided, however, that nothing herein shall prevent the Secured
Party from enforcing its rights and remedies (including, without limitation, by filing a civil action) with respect to the Collateral
and/or the Grantors in any other jurisdiction in which the Collateral and/or the Grantors may be located.


 


Section 8.8.          Waiver
of Jury Trial.


 


AS A FURTHER INDUCEMENT
FOR THE SECURED PARTY TO MAKE FINANCIAL ACCOMMODATIONS TO THE COMPANIES OR ANY GRANTOR, EACH GRANTOR HEREBY WAIVES, TO THE FULLEST
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT
AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.


 


Section 8.9.          Indemnification.


 


Except with respect
to the Secured Party’s gross negligence, willful misconduct or fraud, the Grantors shall indemnify, defend, and hold the
Secured Party, or any agent, employee, officer, attorney, or representative of the Secured Party, harmless of and from any claim
brought or threatened against the Secured Party or any such person so indemnified by: any Grantors; any other obligor or endorser
of the Obligations or any other person (as well as from attorneys' fees and expenses in connection therewith) on account of the
Secured Party's relationship with the Grantors, or any other obligor or endorser of the Obligations (each of which may be defended,
compromised, settled, or pursued by the Secured Party with counsel of the Secured Party's selection, but at the expense of the
undersigned).


 


Section 8.10.         Right
of Set Off.


 


The Grantors hereby
grants to the Secured Party, a lien, security interest and right of setoff as security for all liabilities and obligations to the
Secured Party, whether now existing or hereafter arising, upon and against all deposits, credits, collateral and property, now
or hereafter in the possession, custody, safekeeping or control of the Secured Party or any of its affiliates, or any entity under
the control of the Secured Party, or in transit to any of them. At any time, without demand or notice, the Secured Party may set
off the same or any part thereof and apply the same to any liability or obligation of the Grantors even though unmatured and regardless
of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE THE SECURED PARTY TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF
WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE GRANTORS, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.


 




    	Exhibit 10.20	PAGE 10



    	 



    

 


Section 8.11.         Secured
Party’s Right to Assign Agreement.


 


The Grantors acknowledges
and agrees that the Secured Party has the right to transfer and assign this Agreement and the Secured Party’s rights hereunder
to a third party without prior notice to the Grantors. The Grantors shall cooperate with the Secured Party in effecting any transfer
and assignment of this Agreement and shall sign any documentation requested by the Secured Party in connection therewith.


 


Section 8.12.         Liability
of Grantors.


 


Notwithstanding any
provision herein or in any other Transaction Document and/or Loan Instrument, the Grantors, and each of them, are and shall be
jointly and severally liable for any and all Obligations (whether any such Obligation is specified as an obligation of the Grantors
or of any of them).


 


Section 8.13.         Waiver
of Claims.


 


The Grantors acknowledge
and agree that they have no offsets, defenses, claims, or counterclaims against the Secured Party or its officers, directors, employees,
attorneys, representatives, parents, affiliates, predecessors, successors, or assigns with respect to the Obligations or otherwise,
and that if the Grantors now has, or ever did have, any offsets, defenses, claims, or counterclaims against the Secured Party or
its officers, directors, employees, attorneys, representatives, affiliates, predecessors, successors, or assigns, whether known
or unknown, at law or in equity, from the beginning of the world through this date and through the time of execution of this Agreement,
all of them are hereby expressly WAIVED, and the Grantors hereby RELEASE the Secured Party and its officers, directors,
employees, attorneys, representatives, affiliates, predecessors, successors, and assigns from any liability therefor.


 


Section 8.14.         Counterparts;
Facsimile Signatures. This Agreement may be executed and delivered by exchange of facsimile signatures of the Secured Party
and the Grantors, and those signatures need not be affixed to the same copy. This Agreement may be executed in any number of counterparts.


 


Section 8.15.         Entire
Agreement.


 


This Agreement constitutes
the entire agreement among the parties and supersedes any prior agreement or understanding among them with respect to the subject
matter hereof.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


- SIGNATURE PAGE FOLLOWS]


 




    	Exhibit 10.20	PAGE 11



    	 



    

 


IN WITNESS WHEREOF the parties have
duly executed, or caused their duly authorized representative, to execute this Security Agreement as of the date first above
written.


 


	 	SECURED PARTY:
	 	[                                               ]
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	Manager


 


	PREMIER BEVERAGE GROUP, CORP.	 
	 	 	 
	By:	 	 
	Name:	Fouad Kallamni	 
	Title:	President	 
	 	 	 
	SUBSIDIARIES:	 
	TBD	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	TBD	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	TBD	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 


 




    	Exhibit 10.20	[SIGNATURE PAGE TO SECURITY AGREEMENT]



    	 



    

 


EXHIBIT A TO SECURITY
AGREEMENT


DEFINITION
OF COLLATERAL


 


For the purpose of
securing prompt and complete payment and performance by the Grantors of all of the Obligations, each Grantor unconditionally and
irrevocably hereby grants to the Secured Party a continuing security interest in and to, and lien upon, the following “Collateral”
of such Grantors (all capitalized terms used herein and not defined in the Agreement shall have the respective meanings ascribed
thereto in the UCC):


 


All personal property
of such Grantors, wherever located and whether now or hereinafter existing and whether now owned or hereafter acquired, of every
kind and description, tangible or intangible, including without limitation, all:


 


1.          Goods;


 


2.          Inventory, including,
without limitation, all goods, merchandise and other personal property which are held for sale or lease, or are furnished or to
be furnished under any contract of service or are raw materials, work-in-process, supplies or materials used or consumed in the
Grantors’ business, and all products thereof, and all substitutions, replacements, additions or accessions therefor and thereto;
and any cash or non-cash Proceeds of all of the foregoing;


 


3.          Equipment, including,
without limitation, all machinery, equipment, furniture, parts, tools and dies, of every kind and description, of the Grantors
(including automotive equipment and motor vehicles), now owned or hereafter acquired by the Grantors, and used or acquired for
use in the business of the Grantors, together with all accessions thereto and all substitutions and replacements thereof and parts
therefor and all cash or non-cash Proceeds of the foregoing;


 


4.          Fixtures,
including, without limitation, all goods which are so related to particular real estate that an interest in them arises under real
estate law and all accessions thereto, replacements thereof and substitutions therefor, including, but not limited to, plumbing,
heating and lighting apparatus, mantels, floor coverings, furniture, furnishings, draperies, screens, storm windows and doors,
awnings, shrubbery, plants, boilers, tanks, machinery, stoves, gas and electric ranges, wall cabinets, appliances, furnaces, dynamos,
motors, elevators and elevator machinery, radiators, blinds and all laundry, refrigerating, gas, electric, ventilating, air-refrigerating,
air-conditioning, incinerating and sprinkling and other fire prevention or extinguishing equipment of whatsoever kind and nature
and any replacements, accessions and additions thereto, Proceeds thereof and substitutions therefor;


 


5.          Instruments
(including promissory notes);


 


6.          Documents;


 


7.          Accounts,
including, without limitation, all Contract Rights and accounts receivable, health-care-insurance receivables, and license fees;
any other obligations or indebtedness owed to the Grantors from whatever source arising; all rights of Grantors to receive any
payments in money or kind; all guarantees of Accounts and security therefor; all cash or non-cash Proceeds of all of the foregoing;
all of the right, title and interest of Grantors in and with respect to the goods, services or other property which gave rise to
or which secure any of the accounts and insurance policies and proceeds relating thereto, and all of the rights of the Grantors
as an unpaid seller of goods or services, including, without limitation the rights of stoppage in transit, replevin, reclamation
and resale and all of the foregoing, whether now existing or hereafter created or acquired;


 


8.          Contracts and
Contract Rights, including, to the extent not included in the definition of Accounts, all rights to payment or performance under
a contract not yet earned by performance and not evidenced by an Instrument or Chattel Paper;


 


9.          Chattel Paper
(whether tangible or electronic);


 


10.         Deposit
Accounts (and in and to any deposits or other sums at any time credited to each such Deposit Account);


 


11.         Money,
cash and cash equivalents;


 


12.         Letters
of Credit and Letter-of-Credit Rights (whether or not the Letter of Credit is evidenced by a writing);


 


13.         Commercial
Tort Claims;


 




    	Exhibit 10.20	[DEFINITION OF COLLATERAL]



    	 



    

 


14.         Securities
Accounts, Security Entitlements, Securities, Financial Assets and all other Investment Property, including, without limitation,
all ownership or membership interests in any subsidiaries or affiliates (whether or not controlled by the Grantors);


 


15.         General
Intangibles, including, without limitation, all Payment Intangibles and Intellectual Property, tax refunds and other claims of
the Grantors against any governmental authority, and all choses in action, insurance proceeds, goodwill customer lists, formulae,
permits, research and literary rights, and franchises.


 


16.         Farm
Products;


 


17.         All
books and records and information (including all ledger sheets, files, computer programs, tapes and related data processing software)
evidencing an interest in or relating to any of the foregoing and/or to the operation of the Grantors’ business, and all
rights of access to such books and records, and information, and all property in which such books and records, and information
are stored, recorded and maintained.


 


18.         To
the extent not already included above, all Supporting Obligations, and any and all cash and non-cash Proceeds, products, accessions,
and/or replacements of any of the foregoing, including proceeds of insurance covering any or all of the foregoing.


 




    	Exhibit 10.20	[DEFINITION OF COLLATERAL]



    	 



    

 


SCHEDULE 1


 


(Subsidiaries and Affiliates)


 




    	Exhibit 10.20	 



    	 



    

 


SCHEDULE 4.2


 


(Permitted Liens)


 




    	Exhibit 10.20