Exhibit 10.12

                              EMPLOYMENT AGREEMENT


     THIS  EMPLOYMENT  AGREEMENT is made and entered into as of this 29th day of
June, 2001, by and between Alex Matrisciani  ("Matrisciani" and/or "Executive"),
and Capital  Beverage  Corporation,  a Delaware  corporation  ("Capital"  and/or
"Company").  Executive's  address is 6 Kent  Street,  Staten  Island,  New York.
Capital's address is 1111 East Tremont Avenue, Bronx, New York.

W I T N E S S E T H :

     WHEREAS,  Capital  wishes  to  enter  into  an  employment  agreement  with
Executive  for a period of three (3) years from June 29, 2001  through  June 28,
2004 with options in favor of Executive to continue  this  Employment  Agreement
for an additional two (2) years; and

     WHEREAS,  Capital  agrees to employ  Executive  as its Director of Supplier
Relationships in accordance with the terms and conditions set forth below:

     1. TERM:  Executive will be employed by Capital as the Director of Supplier
Relationships  for a period of three (3) years  from the date of this  Agreement
("Effective  Date") with  options in favor of the  Executive  to  continue  this
Employment Agreement for an additional two (2) years, as provided in Section 16.

     2. DUTIES AND  RESPONSIBILITIES  OF EMPLOYEE:  The Executive shall serve as
the  Director  of  Supplier  Relationships  of the  Company  and shall have such
authority,  duties and responsibilities  that are consistent with those commonly
given to an executive of the Company  (which duties are executive in nature) and
such additional authority,  duties and responsibilities as may from time to time
be  conferred  upon or assigned  to the  Executive  by or pursuant to  authority
delegated  by  the  President  of the  Company  which  duties  may  include  the
performance of services for  subsidiaries  of the Company.  The Executive  shall
devote all of his working  time and efforts to the  business  and affairs of the
Company and/or its subsidiaries. Reasonable travel outside the State of New York
may  be   required   in  order  to   perform   Executive's   duties   hereunder.
Notwithstanding  the  foregoing,  Executive  shall be entitled to maintain other
passive business interests or holdings that do not interfere with his ability to
provide the services required hereunder.

     3.  BASE  SALARY:  Capital  will pay to  Executive  the base  salary of One
Hundred  and  Seventy  Two  Thousand  ($172,000)  Dollars  per  year,  less such
deductions  as shall be required to be withheld by  applicable  law,  payable in
equal weekly  installments  over a period of three (3) years from the  Effective
Date, plus any extension of the agreement (as provided in Section 16).



<PAGE>

     3.1 ADDITIONAL COMPENSATION: In addition to the base salary, Executive will
receive the following additional compensation from the Company:

     a.  Executive will  participate  in any stock option plan,  401(k) plan and
other pension and benefit plans made  available to other  executive  officers of
the Company, as determined by the Board of Directors;

     b.  Executive  will receive  reimbursement  with respect to leased or owned
vehicle  payments,  gas, tolls,  parking,  mileage and other automobile  related
expenses  not to exceed  $1,000 per month and  subject to  appropriate  receipts
being presented by Executive to the appropriate financial officer of Capital; c.
Capital  will  continue  to  maintain  in full  force and  effect the health and
welfare  coverage for the  Executive and his family  providing  such benefits as
were previously maintained by Prospect and/or Capital or any equivalent coverage
through a different  carrier;  d.  Capital  will pay up to Five  Hundred  ($500)
Dollars per month for Executive to lease and use a mobile or cellular  telephone
to be used in the course of the  business of Capital and subject to  appropriate
receipts being  presented by Executive to the appropriate  financial  officer of
Capital;  and e. Capital will  reimburse  Executive  for up to $833 per month in
travel and  entertainment  expenses  incurred  in the course of the  business of
Capital and subject to the Executive presenting to Capital's financial staff the
proper and necessary receipts and documentation, as required by Capital.

     4. BUSINESS EXPENSES: In the event that the Executive is required to expend
money for travel or for any  extraordinary  expense  relating to the business of
Capital in excess of $833 per month (as provided in 3(e) above),  the  Executive
must procure prior written  authorization  from Carmine N. Stella,  President or
Carol Russell, Secretary/Treasurer of Capital.

     5. VACATION  POLICY:  Executive  shall be entitled to paid vacation of four
(4) weeks per calendar  year,  pro rated as  applicable  for any partial year of
employment.  If Executive does not use his allotted  vacation,  he may carry any
unused  vacation over to the following  years.  Upon  termination of employment,
Executive shall not be paid for any unused vacation days.

     6. PERSONAL DAYS AND HOLIDAYS: Executive shall be entitled to be reimbursed
for six (6)  personal  leave days per year (earned at the rate of 1 personal day
for every 2 months of employment) and sick days in keeping with Capital's policy
regarding executives. Executive shall be entitled to holidays in accordance with
Capital's company policy.


<PAGE>

     7. BEREAVEMENT LEAVE: Executive shall be afforded five (5) days bereavement
leave in the event of the death of any member of his immediate family.

     8. SEVERANCE: If Executive ceases to be employed by Capital for any reason,
Executive  will receive four (4) weeks base salary for each year of service with
Capital,  which salary shall be paid within 1 week of termination of employment.
Such payment will be pro-rated  for the portion of  Executive's  first and final
year of service, if any year is a partial year. Executive will receive severance
pay only if  Executive  releases  Capital  of all  claims.  Notwithstanding  the
foregoing,  nothing contained herein will waive the Executive's right to contest
any  termination  and seek damages  pursuant to the  "Disputes  and  Arbitration
Provision"  in Paragraph  15, in which case the  severance  pay will not be paid
until the matter has been resolved.

     9. TERMINATION: The Executive's employment hereunder may be terminated upon
the following circumstances:

          (a) Death.  The Executive's  employment  hereunder shall be terminated
     upon his death.  Executive's base salary and other compensation shall cease
     on such date, but  Executive's  estate shall be entitled to payment of base
     salary and other compensation through the date of death.

          (b) Disability.  If, as a result of the Executive's  incapacity due to
     physical or mental  illness,  the Executive shall have been absent from his
     duties  hereunder  for ninety  (90)  consecutive  days or for an  aggregate
     period of  one-hundred-eighty  (180) days  during a  consecutive  period of
     twelve (12) months,  the Company may terminate the  Executive's  employment
     hereunder.  Upon  termination for disability,  Executive's  base salary and
     other compensation shall cease on such date but Executive shall be entitled
     to  payment  of base  salary  and other  compensation  through  the date of
     termination.


          (c) Cause. The Company (upon majority vote of the Board) may terminate
     the  Executive's  employment  hereunder  for "Cause".  For purposes of this
     Agreement,  "Cause" shall mean: (i) repeated violations by the Executive of
     the Executive's  assigned duties (other than any such violations  resulting
     from the  Executive's  incapacity  due to physical or mental  illness)  and
     which are not  remedied  within ten (10) days after  receipt of notice from
     the Company specifying such violations; or (ii) immediately, after any such
     actual  violations  after the  issuance  of a "Notice of  Termination"  (as
     defined in Section 9 (d) hereof which  specifies the same  violation in (i)
     above);  (iii) a material  breach by the Executive of any provision of this
     Agreement if such  material  breach has not been cured within ten (10) days
     after receipt of notice from the Company specifying such breach or (iv) any
     illegal  act  or  acts  of  the  Executive   involving   moral   turpitude,
     embezzlement, misappropriation of property of the Company or any subsidiary
     thereof or any other act involving  dishonesty or fraud with respect to the
     Company or any subsidiary thereof.
<PAGE>

          (d) Any  termination  of the  Executive's  employment  by the  Company
     (other  than  termination   pursuant  to  Section  9(a)  hereof)  shall  be
     communicated   by  written  Notice  of  Termination  to  the  Executive  in
     accordance  with  Section 19 hereof.  For  purposes  of this  Agreement,  a
     "Notice  of  Termination"  shall mean a notice  which  shall  indicate  the
     specific termination  provision in this Agreement relied upon and shall set
     forth in reasonable detail the facts and circumstances claimed to provide a
     basis for termination of the Executive's  employment under the provision so
     indicated.

          (e)  "Date  of  Termination"  shall  mean  the  following:  (i) if the
     Executive's  employment is terminated by his death,  the date of his death;
     (ii) if the Executive's  employment is terminated  pursuant to Section 9(b)
     hereof,  ten (10) days after the Notice of Termination  is given;  (iii) if
     the Executive's  employment is terminated  pursuant to Section 9(c) hereof,
     the later of the date that the Notice of  Termination is given and the date
     specified in the Notice of Termination.

          (f) If any third party shall bring an action against the Company,  its
     subsidiaries,  agents,  servants,  shareholders,   directors,  officers  or
     employees due to an alleged breach of an employment  agreement or violation
     of a non-compete  agreement by Executive,  the Company may give a Notice of
     Termination  to the Executive  terminating  his employment on ten (10) days
     notice  if  Executive  is  ultimately  found,  by a court  or  tribunal  of
     competent jurisdiction, to have violated such provisions.  Executive hereby
     represents  that  he is not a  party  to any  agreement  of  employment  or
     agreement that restricts him from competition in any matter whatsoever.


          (g) If the  Executive  wishes to contest  the right of the  Company to
     terminate the Executive, the Executive may do so pursuant to the provisions
     of Paragraph 15, "Disputes and Arbitration."

          (h) Capital may not terminate  Executive's  employment without "cause"
     prior to the next annual meeting of shareholders of Capital.


     10.  CONFIDENTIALITY:  During the period of his employment and for a period
of six (6) months from the Date of Termination  hereunder,  the Executive  shall
keep  confidential  and shall  not  divulge  to any  other  party or use for the
Executive's  benefit,  directly or indirectly,  any and all private,  secret and
confidential  information  relating to such matters as the finances,  methods of
operation and competition,  pricing,  marketing plans and strategies,  equipment
and operational  requirements  and  information of the Company,  other than such
information which (a) is or becomes generally available to the public other than
as a result of a  disclosure  by Executive or (b) is required to be disclosed by
law or by a judicial, administrative or regulatory authority.
<PAGE>


     11. NON SOLICITATION OF EMPLOYEES:  During the period of his employment and
for a period of six (6) months from the Date of Termination hereunder, Executive
shall  not,  either  for his own  account  or for any  person  firm or  company,
solicit,  interfere with or endeavor to cause any employee of the Company or any
subsidiary of the Company to leave his or her employment or induce or attempt to
induce any such employee to terminate or breach his or her employment  agreement
with the Company or any subsidiary of the Company.  Executive shall not be bound
by the provisions of this Section if either (a) Capital ceases  operations,  (b)
Capital  sells its  business  to a third  party and  Executive's  employment  is
terminated  prior to the expiration of the term, (c) Capital merges with another
entity,  is not the surviving  entity and  Executive's  employment is terminated
prior to the expiration of the term or (d) if Executive is terminated by Capital
without "cause".


     12. NONSOLICITATION OF CLIENTS: During the period of his employment and for
a period of six (6) months  from the Date of  Termination  hereunder,  Executive
shall not  solicit,  induce or  attempt  to induce  any past,  current or future
client of the Company or any  subsidiary of the Company  located  within the New
York Area, to cease or refrain from doing  business in whole or in part with the
Company or any  subsidiary of the Company.  Executive  shall not be bound by the
provisions of this Section if either (a) Capital ceases  operation,  (b) Capital
sells its business to a third party and Executive's  employment is terminated by
such third party prior to the  expiration of the term,  (c) Capital  merges with
another  entity,  is not the  surviving  entity and  Executive's  employment  is
terminated  by such other entity prior to the  expiration  of the term or (d) if
Executive is terminated by Capital without "cause".

     13. INJUNCTIVE  RELIEF:  The remedy at law for any breach of this Agreement
is and will be  inadequate.  In the  event of a breach or  threatened  breach by
Executive of the provisions of this Agreement,  the Company shall be entitled to
an injunction  restraining Executive from soliciting employees or clients of the
Company or any subsidiary or from disclosing,  in whole or in part, the private,
secret and confidential information described herein. Executive will be enjoined
from  rendering any services to any person,  firm,  corporation,  association or
other entity to whom such  information has been disclosed or is threatened to be
disclosed  to any  business  described  in  Section 10 or from  otherwise  being
connected with any business described in Sections 10, 11 or 12 or from otherwise
violating the provisions of this Agreement. Nothing herein shall be construed as
prohibiting  the Company from  pursuing any other  remedies  available  for such
breach or threatened breach including the recovery of damages from Executive.

     14.  SEPARATE  COVENANTS:  This  Agreement  shall be deemed to consist of a
series of separate  covenants.  Executive  expressly  agrees that the character,
duration and geographical scope of this Agreement are reasonable in light of the
circumstances as they exist on the date upon which this Agreement are reasonable
in  light  of the  circumstances  as they  exist on the  date  upon  which  this
Agreement has been executed. However, should a determination nonetheless be made
by a court of competent  jurisdiction at a later date, that character,  duration
or  geographical  scope  of  this  Agreement  is  unreasonable,  then  it is the
intention and the such a manner as to impose only restrictions on the conduct of
Executive which are reasonable in light of the  circumstances as they then exist
and as necessary  to assure the Company or Executive of the intended  benefit of
this  Agreement,  enforced  in such  proceeding  shall,  for the purpose of such
proceeding, be deemed eliminated from this Agreement.
<PAGE>

     15. DISPUTES AND ARBITRATION: In the event that a dispute arises, including
an alleged  breach of this  Agreement,  and the  parties are not able to resolve
such dispute,  then they shall submit their dispute to arbitration in the County
and City of New York in accordance with the prevailing Labor  Arbitration  Rules
of the  American  Arbitration  Association.  Additionally,  any  party  may seek
injunctive  relief from any Court of competent  jurisdiction  in the City of New
York or Long Island.  Any party may enter any award made by the  arbitrator as a
judgment in any Court of competent jurisdiction,  including State and/or Federal
Courts located in the City of New York or Long Island.  In the event that either
party has to seek injunctive  relief or any provisional  remedy,  the parties to
this  Agreement  consent to  jurisdiction  in the Federal  and/or  State  Courts
located in the City of New York or Long Island.  Nothing  contained herein shall
limit the right of the Company to seek immediate relief if injunctive  relief is
necessary to protect the Company's rights.

     16. OPTIONS:

          A. This Employment  Agreement shall be automatically  extended for one
     year from June 29,  2004  through  June 28,  2005  unless  Executive  gives
     Capital at least  thirty (30) days  written  notice  pursuant to the Notice
     provision  contained in Paragraph  19(B) of his intention to terminate this
     Employment Agreement on June 28, 2004.

          B. If this  Employment  Agreement  is  extended  for the  fourth  year
     pursuant to  Paragraph  16(A) above,  this  Employment  Agreement  shall be
     automatically  extended  for a second year from June 29, 2005  through June
     28, 2006 unless  Executive  gives Capital at least thirty (30) days written
     notice pursuant to the Notice provision contained in Paragraph 19(B) of his
     intention to terminate this Employment Agreement on June 28, 2005.

     17.  RELOCATION  OF CAPITAL:  In the event that Capital moves its principal
offices more than fifty miles from New York City,  Long Island and  Westchester,
the  Executive  may at his  election,  upon  twenty  (20) days  written  notice,
terminate this Employment Agreement.  In such event, the Executive will continue
to receive  twenty-six  (26) weeks of severance pay (base salary only)  provided
that the Executive executes full and complete General Releases to Capital in the
form acceptable to Capital.

     18. RIGHT TO SET-OFF: Executive acknowledges that if it is adjudicated that
Capital  is  entitled  to  payment  due to its  rights of  indemnification  from
Executive pursuant to the terms of that certain Asset Purchase Agreement,  dated
as of May 4, 2001, between Capital,  Prospect Beverage Inc. ("Prospect") and the
shareholders  of  Prospect,  that  Capital may off-set  and  withhold  any bonus
payment  payable to  Executive  hereunder.  Capital may apply all of any bonuses
towards  repayment  of  Executive's  indemnification  obligations.  Any of  such
bonuses that would  otherwise be paid to Executive,  shall be deposited  into an
escrow  account (with a third party to be mutually  agreed upon between  Capital
and Executive) pending the resolution of the matter.
<PAGE>

     19. MISCELLANEOUS:

          A. Advice of Counsel.  The parties  acknowledge  and confirm that they
     have been advised by counsel as to the  consequences  of this Agreement and
     that they  fully  intend  to be bound by these  provisions  and that  their
     respective  counsel have advised them that they believe that this Agreement
     is valid and binding on all parties.


          B. Notices.  All notices made pursuant to the terms of this Agreement,
     shall be made in writing, sent by Express Mail or by Federal Express, or by
     personal delivery, to the parties at the following addresses:


               a. If to Prospect or to any or all of the Matriscianis, or to the
          Prospect  Shareholders,  notices to be sent to:

                        (i) Alex Matrisciani
                            6 Kent Street
                            Staten Island, NY 10306

                                      -and-

                       (ii) Barry Wadler, Esq. at
                            630 Third Avenue
                            New York, New York 10017

               b. If to Capital, notices to be sent to:

                        (i) Mr. Carmine Stella
                            Capital Beverage Corp.
                            700 Columbia Street
                            Erie Basin, Building 302
                            Brooklyn, New York 11231-1919

                                      -and-

                       (ii)William J. Dealy, Esq.
                           Dealy & Trachtman, LLP
                           225 Broadway, Suite 1405
                           New York, New York 10007-3001
<PAGE>

               C. Construction.  This Agreement is made in the State of New York
          and shall be governed by and construed in accordance  with the laws of
          the State of New York;


          i. The parties agree that the language of this Agreement  shall not be
     interpreted against the drafter; and


          ii. Should any provision of this Agreement be held to be illegal, void
     or unenforceable,  such provision shall be of no force and effect. However,
     the  illegality or  unenforceability  of any such  provision  shall have no
     effect  upon,  and  shall  not  impair  the  enforceability  of,  any other
     provision of this Agreement.

     D. Headings.  The headings in this Agreement are solely for convenience and
shall be given no effect in the interpretation of this Agreement.


     E. Waiver. Waiver by any party of any breach or its failure to exercise any
right under this Agreement  shall not be deemed a continuing  waiver or a waiver
of any  subsequent  breach or right.  The failure of any party to take action at
the  earliest  possible  time to redress any such breach or to exercise any such
right shall not deprive such party of the right to take action at any subsequent
time while such breach or condition giving rise to such right continues.

     F.  Severability.  If any provision of this Agreement shall be held invalid
or unlawful,  such invalidity shall not affect the other provisions  hereof, and
to this extent the  provisions of this Agreement are intended to be and shall be
deemed severable.

     G. Binding.  This Agreement  shall be binding upon and inure to the benefit
of the respective successors and assigns of the parties.


     H. Entire  Agreement.  This  Agreement  contains the full  agreement of the
parties hereto concerning the subject matter hereof. This Agreement shall not be
modified,  amended,  altered,  discharged or  terminated,  except  pursuant to a
writing  signed by the  party(ies)  charged  hereof  all prior  representations,
promises or discussions are merged and superseded by this written contract.

CAPITAL BEVERAGE CORP.



BY: /s/ Carmine N. Stella
         Carmine N. Stella
         President

EXECUTIVE:


/s/ Alex Matrisciani
    Alex Matrisciani