On December 21, 2012, Panache Beverage Inc. entered into definitive agreements relating to a Promissory Note with Consilium Corporate Recovery Master Fund, LTD due on December 21, 2015. The closing of the Note occurred on December 21, 2012. The Note will be issued pursuant to a Term Loan Agreement, dated December 21, 2012, among the Company and the holders of the Note. On the tenth day of each quarter beginning on April 10, 2013 through and including October 10, 2015, the Company will pay to the holder of the Note an amount equal to the accrued and unpaid interest with respect to such principal plus the accrued and unpaid late charges (if any) with respect to such principal and interest. Prior to maturity, the Notes will bear interest at 12% per annum (or 17% per annum during an event of default) with interest payable quarterly in arrears on the Installment Dates. A final payment of all principal due under the Note, plus accrued interest to date, shall be made on December 21, 2015. The Company has the right, at any time, without penalty, to prepay the Note in part or in full. The Note will result in gross proceeds of $2.1 million before broker fees and other expenses associated with the transaction. The proceeds will be used for general corporate purposes, and for the purpose of repaying debt of the company, and buying debt instruments held by third parties.

Pursuant to the Loan Agreement, a Managing Director of Consilium Investment Management, LLC shall be appointed to the Board of Directors of the Company for a term coterminous with the Maturity Date of the Loan. That appointee to the Board of Directors will be Mr. Charles Cassel. Mr. Cassel is responsible for the day-to-day management of Consilium Investment Management, LLC. He selects all fixed income trades and implements all strategies, both debt and equity, within the confines of the portfolio's constraints. Before Consilium, Mr. Cassel held the position as Head of Emerging Markets Portfolio Management at Standard Asset Management. Prior to that, Mr. Cassel spent two years at Americas Trust Bank as an Emerging Market debt portfolio manager and was earlier the Chief Financial Officer for the US subsidiary of Banco Cafetero de Colombia, where he ran the bank's international treasury book. Earlier, he was a Portfolio Manager of mortgage-backed securities at Bank Atlantic, a federally chartered savings bank.