EXHIBIT 10.20
                               PERRY'S MAJESTIC


May 4, 1998


Village Cannery of Vermont, Inc.
291 Barre Montpelier Road
Barre, Vermont 05641

Att: Claire Maguire

Dear Ms. Maguire:

  Perry's Majestic Beer, Inc., a Delaware corporation (the "'Buyer"), is pleased
to make this proposal whereby Buyer will acquire substantially all of the assets
and the business  (collectively,  the  "Assets") of Village  Cannery of Vermont,
Inc., a Vermont corporation  ("Village Cannery"),  upon terms and conditions set
forth below.

      1. Purchase Price. Seller agrees to sell and convey to Buyer the Assets of
Village Cannery (the  "transaction").  In  consideration  for the Assets,  Buyer
agrees that at closing on the transaction  (the  "Closing"),  Buyer shall pay to
Village Cannery the sum of $2,000,000 in cash.

      Additionally,  as and for further consideration for the Assets, Buyer will
enter into written  employment  agreements  with Jack Maguire and Claire Maguire
(the  "Employment  Agreements").  Such Employment  Agreements  shall provide for
annual  compensation to Mr. and Mrs.  Maguire in the aggregate  amount of (to be
allocated at their  direction) of $100,000 (the "Base Salary').  Each employment
agreement  shall  (i) be for a term of five (5)  years,  with  the  Base  Salary
adjusted  annually to account for cost of living increase,  if any; (ii) provide
for medical insurance coverage for Mr. and Mrs. Maguire,  (iii) grant to Mr. and
Mrs. Maguire options to purchase (a) 200,000 shares of Common Stock (the "Common
Stock") of Buyer each year during the term of the  Employment  Agreement and (b)
200,000  shares of Common Stock of Buyer upon execution of the letter of intent,
all at an exercise price based upon fair market value of the Common Shares;  and
(iv) appoint Jack Maguire and Claire Maguire to the Board of Directors of Buyer.
Mr. and Mrs.  Maguire  shall have the right to  designate a third  member of the
Board of Directors  unless one of the present  members of the Board of Directors
resigns prior to closing.

      The Buyer and  Village  Cannery  hereby  agree that Buyer has the right to
convert  this  Transaction  into  a  Stock  Purchase  Agreement,  on  terms  and
conditions  acceptable  to all parties,  at any time prior to the execution of a
definitive agreement which contains the provisions outlined above in Section 1.

      2.  Exclusivity.  The  acceptance  of this letter by Village  Cannery will
constitute  Village  Cannery's grant to the Buyer of an exclusive option for the
period  commencing on the date hereof through and ending  September 1, 1998 (the
"Option  Period") to consummate the  Transaction in accordance with the terms of
the Definitive Agreement (as hereinafter defined) and your agreement that during
the Option Period neither  Village  Cannery nor any of its officers,  directors,
representatives  or affiliates shall directly or indirectly  solicit,  initiate,
engage in or continue any discussions with respect to the possible sale or other
disposition  of all or part of  Village  Cannery's  business,  assets or capital
stock  including  the  Assets,   whether  by  sale,  merger  or  other  business
combination,  or enter into any other transaction which is inconsistent with the
transaction  contemplated  hereby.  In consideration  for the Option,  the Buyer
shall pay to Seller, upon execution of this Agreement, the


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sum of One Thousand  Dollars ($1,000) which sum shall be applied against the the
purchase  price at  Closing.  The  Buyer and  Village  Cannery  agree  that upon
execution  of this  Agreement  they shall  negotiate  in good  faith  toward the
execution of the Definitive Agreement. In the event the Buyer determines that it
will not proceed with the transaction,  it shall promptly notify Village Cannery
in writing whereupon Village Cannery's  obligations pursuant to this paragraph 2
shall terminate with no further force and effect;  provided however, that such a
determination  was a result of a breach of Village  Cannery  of its  obligations
under this paragraph 2, then, in addition to any other remedies available to the
Buyer,  Village  Cannery shall be obligated to reimburse the Buyer for all costs
and expenses incurred by the Buyer in connection  herewith;  provided,  however,
that in no event will Village Cannery be required to pay in excess of $10,000 in
the event of such breach by Village Cannery.

      3. Investigation.  From the date hereof,  Village Cannery shall (i) permit
the Buyer and its  accounting,  legal and other  representatives  to  conduct an
investigation and evaluation of Village Cannery, (ii) provide such assistance to
any one of the  foregoing as is  reasonably  requested,  and (ii) give access at
mutually  agreeable times during business hours to all things related to Village
Cannery.  Jack  Maguire  shall have the right to be  present at all times  Buyer
conducts suet, investigation and evaluation.

      4. Principal Conditions. The parties hereby agree to commence negotiations
in good faith toward the execution and delivery of a definitive  agreement  (the
"Definitive Agreement"), subject to the satisfaction of the following conditions
precedent:

      a. Further  Investigation.  The Buyer and its agents  and  representatives
shall have completed, and shall be satisfied with the results of, its continuing
due diligence review of Village Cannery;

      b. Material Adverse Changes. The absence of any material adverse change in
the financial condition,  assets, liabilities,  business or prospects of Village
Cannery;

      c. Definitive Agreement.  The Definitive Agreement shall contain customary
representations,  warranties,  covenants,  indemnities  and  conditions  to  the
Closing   of  the   Transaction,   including   inter   alia:   (i)   traditional
representations  and  warranties,  which will  survive  the  Closing,  as to the
condition and value of the Assets; (ii) satisfactory  compliance with applicable
laws;  (iii)  obtaining  all  necessary  consents  in  order to  consummate  the
Transaction including landlord and other third party consents;  (iv) non-compete
provisions; (v) obtaining required Vermont and Federal licenses and permits; and
(vi) the fulfillment of other conditions as the Buyer may reasonably request.

      d. Financing.  The Transaction is expressly contingent upon the ability of
the Buyer to secure  financing  of the  $2,000,000  cash portion of the Purchase
Price on terms and conditions acceptable to Buyer.

      e.  Required  Approvals.  Seller and Buyer  shall have  received  all such
approvals of their  respective  directors  and  stockholders  as may be required
pursuant  to the  laws of  their  respective  states  of  incorporation  and any
regulatory authorities.

      5. Press Release.  Except as otherwise  required under applicable  federal
securities  law,  Village  Cannery  and the Buyer shall agree on the content and
timing of all public announcements  relating to the Transaction to the financial
community, governmental agencies and the public generally.

      6. Confidential Business  Information.  Buyer agrees end acknowledges that
in  connection  with its  review of  Village  Cannery's  records  and  financial
information  as called  for  hereunder  it shall  have  access  to  confidential
business information, the use or disclosure of which could result in serious


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damage or harm to Village Cannery. As a consequence and as a material inducement
to Village  Cannery to enter into this  letter of intent,  Buyer  agrees that it
shall not at any time furnish,  publish or disclose to any person or entity,  or
make  use in  any  way,  any  trade  secrets  or  other  business  or  financial
information,  data  or  other  expertise  acquired  through  review  of  Village
Cannery's  financial or business  information  as called for  hereunder or which
relates to Village Cannery's business,  products,  processes,  methods, recipes,
formulas, sales techniques,  routes, customers, equipment or services including,
but not limited to,  customer  lists,  route lists and pricing and profit margin
information. Buyer acknowledges and agrees that all of the information described
above is the exclusive  property of and belongs  absolutely to Village  Cannery,
and Buyer hereby  acknowledges and agrees that all right,  title and interest in
and to said  information  is,  and shall  remain at all  times  exclusively  the
property by Village Cannery.  Buyer agrees to keep all such information strictly
secret and confidential at all times and not to make any use of such information
except as may be expressly  authorized by Village  Cannery.  Upon termination of
this  letter  of  intent  without   execution  of  a  Definitive   Agreement  as
contemplated hereunder,  Buyer shall, without further demand by Village Cannery,
immediately and  unconditionally  return all copies or originals of all records,
documents,  information  and other  property of or  regarding  Village  Cannery,
including  computer  records,  magnetic and other  electronic  media, to Village
Cannery.

      This  paragraph 6 shall survive the  termination of this letter of intent.
Upon breach of any of the covenants  contained herein,  Village Cannery may have
resort  to  all  rights  and  remedies  available  to it at  law  or in  equity,
including,  but not limited to, money damages,  recovery of profits derived from
unauthorized use of disclosure of trade secrets or other  confidential  business
information  and  injunctive  relief  restraining  disclosure or use of any such
information  by Buyer or any third party to whom  disclosure  is made,  it being
expressly  acknowledged by Buyer that money damages alone may not be an adequate
remedy for breach of this Covenant.

      7. Legal Effect: Acquisition of the Buyer's Securities. Your acceptance of
this letter will  constitute your  representation  to the Buyer that neither the
Buyer, its agents,  employees,  affiliates or controlling persons will incur any
liability in connection  with the  consummation  of the Transaction to any third
party with whom you or your directors, employees, agents or representatives have
had discussions  regarding the  disposition of the assets,  stock or business of
Village  Cannery,  including  without any  limitation  to any broker,  finder or
investment  banker.  Village Cannery and its affiliates and controlling  persons
agree that for a period of three (3) years  following  the date hereof will not,
without the prior written consent of the Buyer (i) acquire, offer to acquire, or
agree to acquire,  directly or indirectly,  by purchase or otherwise, any voting
securities  of the  Buyer,  or any  successor  thereto  (ii)  make or in any way
participate,  directly or indirectly in any  "solicitation" or "proxies" to vote
(as such terms are defined and used in the rules,  regulations  and  releases of
the Securities and Exchange  Commission),  (iii) make any public announcement or
offer with respect to, or submit  proposal  for, any  transaction  involving the
Buyer or its  securities or assets,  or (iv) in connection  with the  foregoing,
seek to advise or  influence  any person or entity or form or join or in any way
participate  in a "group"  as  defined in  Section  13(d)(3)  of the  Securities
Exchange Act of 1934, as amended.

      It is expressly  understood that this Agreement is a non-binding letter of
intent  and that no  obligation  of any  nature  whatsoever  is  intended  to be
created,  except as set forth in paragraphs 2,5 and 7 hereof. This letter may be
signed in  counterparts.  If you are in agreement with the terms of this letter,
please  execute the enclosed copy of this letter in the space provided below and
return it to the undersigned by no later than May 11, 1998.




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      The Buyer looks forward to your response to this offer and to working with
you on a mutually beneficial and successful transaction.

Very truly yours,

PERRY'S MAJESTIC BEER, INC.


By:/s/ Robert J. Sipper
-----------------------
    Robert J. Sipper, President

Agreed to and Accepted as of
the Date First Written Above:

VILLAGE CANNERY OF VERMONT, INC.



By: /s/ Claire Maguire
    Claire Maguire, President