On June 18, 2014, in connection with that certain Loan Agreement, dated as of February 14, 2013, by and among Consilium Corporate Recovery Master Fund Ltd. (Consilium), Wodka, LLC (Wodka) and Panache, LLC (Panache), and the ancillary promissory note and related loan documents related thereto (collectively, the Wodka Loan Agreement"), Panache Beverage Inc. received written notice from Consilium (the Default Notice) of an event of default under the Loan Agreement in connection with a missed quarterly payment of interest of $62,533,33. On July 2, 2014, the cure period for remedying this event of default expired without payment. The aggregate principal amount due under the Loan Agreement as of the date hereof is $1,400,000.

The loan agreement provides that upon the occurrence of an event of default, among other things, all obligations of the company owed to Consilium will bear the interest at the default rate of 17% per annum while such defaults exist and the company is required to pay Consilium a late fee of 5% of any monthly installment of principal, interest and/or fees and expenses. In addition, upon the election of Consilium, all obligations under the loan agreement may become immediately due and payable. Pursuant to the default notice, Consilium has stated that it has certain rights and remedies available to it under the loan agreement which it has not waived and that it expressly reserves all of its rights under the loan agreement, including, but not limited to, the right to assert the existence of an event of default (as defined in the loan agreement); to declare all obligation due under the Loan Agreement immediately due and payable, to commence any legal or other action to collect any of the obligations owed Consilium or foreclose or otherwise realize on the collateral secured under the loan agreement.

Consilium has agreed that is not at this time seeking to charge the default interest rate or late fee on the outstanding obligations and that it does not currently intend to exercise any other rights and remedies available to it at this time.