SEC Contract Filing

Filing Date: 2016-05-16

Document Content:
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>5
<FILENAME>s103220_ex10-2.htm
<DESCRIPTION>EXHIBIT 10-2
<TEXT>
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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Exhibit 10.2</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: right">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: right">EXECUTION
COPY</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">SECURITY
AND PLEDGE AGREEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>SECURITY AND PLEDGE
AGREEMENT</B>, dated as of May 13, 2016 (this &ldquo;<B>Agreement</B>&rdquo;), made by Eastside Distilling, Inc., a Nevada corporation
(the &ldquo;Company&rdquo;) (the &ldquo;<B>Company</B>&rdquo;), and each of the undersigned direct and indirect Domestic Subsidiaries
of the Company from time to time, if any (each a &ldquo;<B>Grantor</B>&rdquo; and together with the Company, collectively, the
&ldquo;<B>Grantors</B>&rdquo;), in favor of Magna Equities II LLC, a New York limited liability company, in its capacity as collateral
agent (in such capacity, the &ldquo;<B>Collateral Agent</B>&rdquo; as hereinafter further defined) for the Noteholders (as defined
below) party to the Exchange Agreement (as defined below).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>WITNESSETH</U>:</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">WHEREAS, on May 13, 2016,
MR Group I, LLC (&ldquo;<B>Investor</B>&rdquo;) purchased from the Company pursuant to that certain Exchange Agreement (the &ldquo;<B>Exchange
Agreement</B>&rdquo;) dated May 13, 2016 by and between the Company and MR Group I, LLC (i) that certain Secured Convertible Promissory
Note (as such note may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance
with the terms thereof, collectively, the &ldquo;<B>Note</B>&rdquo;), in the aggregate initial principal amount of $219,200.65
and (ii) that certain Secured Convertible Promissory Note (as such note may be amended, modified, supplemented, extended, renewed,
restated or replaced from time to time in accordance with the terms thereof, collectively, the &ldquo;<B>Note</B>&rdquo;), in the
aggregate initial principal amount of $302,646.58 (the &ldquo;<B>Second Note</B>&rdquo; and together with the Note, the &ldquo;<B>Notes</B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">WHEREAS, certain Grantors
(other than the Company) from time to time (each a &ldquo;<B>Guarantor</B>&rdquo; and collectively, the &ldquo;<B>Guarantors</B>&rdquo;)
may execute and deliver one or more guarantees (each, a &ldquo;<B>Guaranty</B>&rdquo; and collectively, the &ldquo;<B>Guaranties</B>&rdquo;)
in form and substance acceptable to and in favor of the Collateral Agent, for the benefit of itself and the Noteholders (as defined
below), with respect to the Company&rsquo;s obligations under the Exchange Agreement, the Notes and the other &ldquo;Transaction
Documents&rdquo; (as defined below);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">WHEREAS, it is a condition
precedent to the Investor&rsquo;s obligation to purchase the Notes issued pursuant to the Exchange Agreement that the Grantors
shall enter into this Agreement providing for the grant to the Collateral Agent, for the benefit of the Noteholders, of a valid,
enforceable, and perfected security interest in all personal property of each Grantor to secure all of the Company&rsquo;s obligations
under the Transaction Documents and the Guarantors&rsquo; obligations under the Guaranties, as applicable; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">WHEREAS, each Grantor
has determined that the execution, delivery and performance of this Agreement directly benefits, and is in the best interest of,
such Grantor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Investor to perform under the Exchange Agreement, each Grantor
agrees with the Collateral Agent, for the benefit of the Collateral Agent and the Noteholders, as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

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