Document:

Exhibit 10.1

                           GREENMAN TECHNOLOGIES, INC.

                              Employment Agreement

      THIS EMPLOYMENT AGREEMENT ("Agreement"), effective as of April 12, 2006,
by and between GreenMan Technologies, Inc., a Delaware corporation (the
"Company"), and Lyle E. Jensen (the "Employee");

      WHEREAS, the Company desires to obtain the employment of the Employee and
the Employee desires to be so employed by the Company;

      NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which consideration are hereby acknowledged, the parties agree as
follows:

      1.    Employment

            The Company hereby employs the Employee, and the Employee hereby
accepts employment with the Company, upon the terms and conditions hereinafter
set forth.

      2.    Duties

            The Employee shall serve as President and Chief Executive Officer.
In such capacity, the Employee will report to the Board of Directors of the
Company and will perform such duties on behalf of the Company consistent with
such office as may be assigned to him from time to time by the Board of
Directors of the Company including, without limitation, (a) managing all aspects
of the Company as it works to restructure the Company into a profitable entity:
(b) working with the Board of Directors to ensure that the best interests of the
Shareholders are met; and (c) working with the Chairman of the Board, other
members of the Board of Directors, corporate staff, and outside advisors in
support of their ongoing work with financing, corporate development, and any
regulatory issues which might arise, including, without limitation, those issues
regulated by the U.S. Securities Exchange Commission. The Employee agrees to
abide by the rules, regulations, instructions, personnel practices, and policies
of the Company and any changes therein which may be adopted from time to time by
the Board of Directors of the Company.

      3.    Term

            Unless sooner terminated as provided in Section 7 and subject to
Section 7, the term of the Employee's employment under this Agreement will be
five (5) years from the date first above written (such period, as it may be
extended or reduced, is referred to in this Agreement as the "Employment
Period"). On April 12 of each calendar year during the Employment Period the
term of this Agreement and the Employment Period shall automatically be renewed
for an additional one year term unless either party gives written notice to the
other party sixty days prior to that April 12 of its intention that this
Agreement not renew beyond the remaining term as provided for in this section.

      4.    Extent of Services

            During the term of his employment, the Employee shall devote his
full time and best efforts to the performance of his duties under this
Agreement. Under no circumstances will the Employee knowingly take any action
contrary to the best interests of the Company.
<PAGE>

      5.    Compensation

            In consideration of his employment and the services rendered by the
Employee under this Agreement, the Company shall pay the Employee compensation
as follows:

            5.1 Relocation Allowance. The Company will reimburse the Employee,
upon substantiation thereof, for all reasonable expenses incurred by him in the
relocation of personal possessions from California to Iowa and for two
house-hunting trips for one family member up to a total allowance of $25,000.

            5.2 Base Salary. A base salary ("Base Salary") payable at the rate
of Sixteen Thousand Two Hundred Fifty Dollars ($16,250) per month (One Hundred
Ninety Five Thousand Dollars ($195,000) per year) during the Employment Period,
payable in accordance with the Company's ordinary payroll practices. Any
increase in Base Salary shall be at the sole discretion of the Board of
Directors.

            5.3 Payment in Stock. At Employee's sole option, Employee may elect,
by giving written notice to the Company, to receive any amount of his Base
Salary, Incentive Compensation (as provided in Section 5.4 of this Agreement),
or Expense Reimbursement (as provided in Section 6.2 of this Agreement) in the
form of Company stock at a per share price equal to the market price of such
stock on the date any such amount becomes due and payable by Company to
Employee. The Employee acknowledges that the Company may withhold shares and/or
require the Employee to pay the Company an amount, in cash, equal to the
Company's tax withholding obligations upon the issuance of any such shares.

            5.4 Annual Incentive Compensation.

      a) Annual Financial Performance Incentive: The Employee shall be eligible
to receive incentive compensation ("Incentive Compensation"), based on annual
Net Income Before Interest, Income Taxes, Depreciation and Amortization
("EBITDA") as a Percent of annual audited consolidated revenue, excluding all
intercompany revenue ("Revenue"). To be eligible to receive Incentive
Compensation with respect to any fiscal year, the Employee must be employed by
the Company on the last day of such fiscal year. Any amount due under this
section relating to the fiscal year ended September 30, 2006 shall be prorated
from the date of this Agreement to September 30, 2006.

                       EBITDA as a           Performance
                       % of Revenue          Incentive
                       ------------          ---------

Base:                  10.0 % or Less        None
Level I:               10.1% - 12.0%         10% of EBITDA dollars above Base.
Level II:              12.1% - 15.0%         12% of EBITDA dollars above Base.
Level III:              > 15.0%              15% of EBITDA dollars above Base

      b) Non-financial Performance Incentives: The Employee shall be eligible to
receive such additional Incentive Compensation as is determined at the sole
discretion of the Board of Directors and approved by the Compensation Committee,
based on the achievement of any non-financial goals established at the approval
of each Annual Operating Plan.

            5.5 Annual Incentive Stock Options. In addition to the annual
Incentive Compensation described in Paragraph 5.4, Employee may be granted up to
100,000 incentive stock options (ISO's) per year under the 2005 Stock Option
Plan for achieving certain levels of EBITDA performance as noted below:

<TABLE>
<CAPTION>
EBITDA as a           Performance
% of Revenue          Incentive Earned
------------          ----------------
<S>                   <C>
<11.0%                None
11.1% - 11.99%        Options to purchase 20,000 shares of the Company's common stock.
12.0% - 12.99%        Options to purchase 40,000 shares of the Company's common stock.
13.0% - 13.99%        Options to purchase 60,000 shares of the Company's common stock.
14.0% - 14.99%        Options to purchase 80,000 shares of the Company's common stock.
> 15.0%               Options to purchase 100,000 shares of the Company's common stock.
</TABLE>
<PAGE>

Any amounts due under this section relating to the fiscal year ended September
30, 2006 shall be prorated from the date of this Agreement to September 30,
2006. The exercise price of any such options granted pursuant to this Section
5.5 will be equal to the market value of the Company's common stock on the date
of grant, and any such option shall vest immediately on the date of grant At the
Board's discretion, additional stock options may be awarded to the Employee
following significant contracting activities, mergers, or other significant
events.

            5.6 Stock Option Grant. In addition to any other stock options
previously granted by the Company to the Employee, the Company shall upon
execution of this Agreement grant to Employee incentive stock options (ISO's) to
purchase up to a maximum of Five Hundred Thousand (500,000) shares of the
Company's common stock. The exercise price of all options granted pursuant to
this Section 5.6 will be equal to the market value of the Company's common stock
on the date of grant and shall vest in equal annual installments over a period
of five years from date of grant.

            5.7 Accelerated Vesting Irrespective of the schedules required in
Paragraph 5.6 above, all option grants under this Agreement shall vest and be
exercisable by the Employee immediately prior to any transaction or series of
sequenced events in which all or substantially all of the Company's assets or
common stock are sold to or merged with a third party or third parties. The
relevant stock option agreements shall provide that, in such an event the
Employee will not sell more than 250,000 shares of common stock during any
subsequent twelve (12) month period commencing on the closing of such an event.

            5.8 Terms of Options. All Incentive Stock Options and all Stock
Option Grants shall be governed by the terms of the Company's 2005 Stock Option
Plan and, except as specifically set forth in this Agreement, the Company's
customary form of stock option agreement.

            5.9 Purchase of Shares of Common Stock. The Employee agrees to
purchase from the Company, 500,000 unregistered shares of the Company's common
stock at a price equal to the closing bid price of the Company's common stock on
the date this Agreement is executed.

      6.    Other Benefits

            6.1 Additional Compensation and Benefits. The Employee shall be
entitled to receive the same health, disability and other benefits as are
offered by the Company to all full-time employees from time to time. The
Company, at its own expense, shall obtain, if available at commercially
reasonable rates officers' and directors' errors and omissions insurance in
respect of Employee's tenure as an officer and, as a director of the Company.

            6.2 Expenses. The Company will, upon substantiation thereof,
reimburse Employee for all reasonable expenses of types authorized by the Board
of Directors of the Company in the ordinary course of business and incurred by
the Employee in connection with the Company's business affairs. The Employee
must regularly submit, for approval by the Chief Financial Officer of the
Company, a statement of these expenses and will comply with such other
accounting and reporting requirements as the Company may from time to time
establish. In addition, the Company shall reimburse the employee for reasonable
annual premiums associated a life insurance policy on Employee's life in the
maximum benefit amount of $1,000,000 and for which benefit payments shall
payable to the Employee's designated beneficiary.

            6.4 Car Allowance. The Employee shall receive a car allowance in the
amount of $600 per month.
<PAGE>

      7.    Termination

            7.1 By the Company. The Company may terminate the Employee's
employment with the Company (a) in accordance with the provisions of Section 3
of this Agreement, (b) at any time without notice for "cause", as defined below,
(c) at any time without cause upon thirty (30) days' advance notice, subject to
Section 7.4 below and subject to the requirement that the Company pay to the
Employee the amount set forth in Section 7.4 herein, (d) upon the death of the
Employee, or (e) in the event of the Employee's disability preventing him from
rendering services to the Company consistent with his duties hereunder for a
period of six (6) consecutive months.

            7.2 By the Employee. The Employee may terminate his employment with
the Company in accordance with the provisions of Section 3 or at any time upon
one hundred and twenty (120) days' advance notice.

            7.3 Cause. For the purposes of this Section 7, "cause" means:

                  (a) engaging in any crime or offense involving money or other
property of the Company, or

                  (b) conviction of a felony, or pleading guilty or "no contest"
to, or

                  (c) continuing, repeated willful failure or refusal to perform
specific written directives of the Company's Board of Directors consistent with
the Employee's duties after notice that such failure will be deemed to
constitute cause for termination and a reasonable opportunity to cure such
failure or refusal, or

                  (d) excessive absenteeism, or

                  (e) owning, engaging in, conducting, managing, operating,
participating in, being employed by, being connected in any manner whatsoever
with, or rendering services or advice to (whether for compensation or without
compensation), any other person or business entity which is engaged in the same
business as conducted by the Company at the time, provided that nothing shall
restrict the Employee's right to invest in the securities (not to exceed 1% of
the outstanding securities of any class) of any publicly-held corporation in the
management of which the Employee does not participate.

            7.4 Amounts Payable Upon Termination. Upon termination of the
Employee's employment with the Company in accordance with clause (a), (b), (d)
or (e) of Section 7.1, all compensation and benefits under this Agreement will
cease, effective the date of termination. Upon termination of the Employee's
employment with the Company in accordance with clause (c) of Section 7.1, all
compensation under Sections 5.2, 5.3, 5.4, 5.5, and 5.6 shall cease, effective
upon the date of termination, but the Employee shall receive, for one year from
the date of Employee's notice of termination given pursuant to Section 7.1(c)
the following: (i) Base Salary at the same salary rate being paid on the date of
termination and (ii) the benefits described in Section 6. Other than as
specifically set forth in Sections 6.2, 7.1, and this Section 7.4, the Employee
will not be entitled to receive any compensation or benefits after termination
of his employment with the Company.

            7.5 Termination of Benefits. Notwithstanding anything to the
contrary in this Agreement, in the event that the Employee is determined in an
arbitration conducted pursuant to Section 11.7 to have violated his obligations
under Section 8 of this Agreement, or if the Employee shall be enjoined by a
court from violating his obligations under Section 8.3 of this Agreement, then,
in addition to any other remedies which may be available to the Company at law
or in equity, all of the Company's obligations under Section 7.4 shall
immediately cease, and all then unexercised stock options shall immediately be
forfeited.
<PAGE>

      8.    Non-Disclosure: Non-Competition

            8.1 Proprietary Information.

                  (a) The Employee agrees that all information and know-how,
whether or not in writing, of a private, secret or confidential nature
concerning the Company's business or financial affairs (collectively,
"Proprietary Information") is and will be the exclusive property of the Company.
By way of illustration, but not limitation, Proprietary Information includes
contemplated or planned marketing, sales, advertising, or public relations
plans, methods or techniques; inventions, products, projects, developments,
compositions, plans, research data, financial data, manufacturing processes or
techniques, trade secrets, personnel data, computer programs, designs, and
client and supplier lists, whether or not copyrightable, trademarketable or
licensable. The Employee will not disclose any Proprietary Information to others
outside the Company or use the Proprietary Information for any unauthorized
purposes without written approval by an officer of the Company, either during or
after his employment, unless and until such Proprietary Information has become
public knowledge without the fault of the Employee.

                  (b) The Employee agrees that all files, letters, memoranda,
reports, records, data sketches, drawings, notebooks, notes, specifications,
programs, computer program listings, or other written photographic, or other
tangible material containing Proprietary Information, whether created by the
Employee or others, which comes into his custody or possession, is the exclusive
property of the Company, to be used by the Employee only in the performance of
his duties for the Company.

                  (c) The Employee agrees that his obligation not to disclose or
use information, know-how and records of the types set forth in Paragraphs (a)
and (b) above also extends to such types of information, know-how, records and
tangible property of customers of the Company or suppliers to the Company or
other third parties who may have disclosed or entrusted the same to the Company
or to the Employee in the course of the Company's business.

            8.2 Developments.

                  (a) The Employee will make full and prompt disclosure to the
Company of all inventions, improvements, ideas, concepts, approaches,
discoveries, methods, developments, software, and works of authorship, whether
or not copyrightable, trademarketable or licensable, which are created, made,
conceived or reduced to practice by the Employee or under his direction or
jointly with others in connection with his employment by the Company, whether or
not during normal working hours or on the premises of the Company (all of which
are collectively referred to in this Agreement as "Developments").

                  (b) Employee hereby assigns irrevocably and unconditionally,
to the fullest extent permitted by law, all right, title and interest embodied
in or associated with any and all Development

                  (c) The Employee agrees to cooperate fully with the Company,
both during and after his employment with the Company, with respect to the
procurement, maintenance and enforcement of patents, copyrights, and trademarks
(both in the United States and foreign countries) relating to Developments. When
requested by the Company, Employee agrees to sign all papers, including, without
limitation, copyright applications, trademark applications, patent applications,
declarations, oaths, formal assignments, assignments of priority rights and
powers of attorney, which the Company, in its sole discretion, may deem
necessary or desirable in order to protect its rights and interest in any
Development.

            8.3 Non-Competition.

                  (a) During the Employment period and for a period of two years
after Employee's employment is terminated, for any reason, by the Company or the
Employee, the Employee will not, without the Company's prior written approval,
directly or indirectly:
<PAGE>

                        (i) recruit, solicit or knowingly induce, or attempt to
induce, any employee or consultant of the Company to terminate his or her
employment or consulting relationship with, or otherwise cease their
relationship with, the Company; or

                        (ii) solicit, divert or take away, or attempt to divert
or to take away, the business or patronage of any of the clients, customers or
accounts, or prospective clients, customers or accounts of the Company. For
purposes of this Agreement, a prospective client, customer or account is any
individual or entity whose business is solicited by the company, proposed to be
solicited by the Company, or who approaches the Company, with respect to
possibly become a client, customer or account during the Employment Period; or

                        (iii) engage (whether for compensation or without
compensation) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, or in any other capacity
whatsoever (otherwise than as the holder of not more than one percent (1%) of
the total outstanding stock of a publicly-held company), in any business
activity which competes with any business then being conducted by the Company or
any business proposed to be conducted by the Company at the time of the
termination of the Employee's employment with the Company.

                  (b) If any restriction set forth in this Subsection 8.3 is
found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities or
in too broad a geographic area, it shall be interpreted to the extent only over
the maximum period of time, range of activities or geographic areas to which it
may be enforceable.

                  (c) The restrictions contained in this Subsection 8.3 are
necessary for the protection of the business and goodwill of the Company and are
considered by the Employee to be reasonable for these purposes. The Employee
agrees that any breach of this Subsection 8.3 will cause the Company substantial
and irrevocable damage and, therefore, in the event of any such breach, in
addition to such other remedies which may be available, the Company will have
the right to equitable remedies, including, without limitation, specific
performance and injunctive relief.

            8.4 Survival of Obligations. The obligations of the Employee under
this Section 8 shall survive the termination of this Agreement.

      9.    Notices

            All notices under this Agreement must be in writing and must be
delivered by hand or mailed by certified or registered mail, postage prepaid,
return receipt requested, to the parties as follows:

               If to the Company:        GreenMan Technologies, Inc.
                                         7 Kimball Lane, Building A.
                                         Lynnfield, Massachusetts 01940
                                         Attention: Maurice E. Needham

               with a copy to:
                                         Carl Barnes, Esq.
                                         Morse, Barnes-Brown & Pendleton, P.C.
                                         Reservoir Place
                                         1601 Trapelo Road
                                         Waltham, MA 02451

               If to the Employee:       To the address set forth below the
                                         signature of the Employee;

or to such other address as is specified in a notice complying with this Section
9. Any such notice is deemed given on the date delivered by hand or three days
after the date of mailing.

      10.   Other Agreements

            The Employee hereby represents that he is not bound by the terms of
any agreement with any previous employer or other party to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party. The Employee further represents that his performance of all
the terms of this Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him in confidence or in trust prior to his
employment with the Company.
<PAGE>

      11.   Miscellaneous

            11.1 Entire Agreement. This Agreement constitutes the entire
Agreement between the parties with regard to the subject matter hereof,
superseding all prior understandings and agreements, whether written or oral.

            11.2 Modification. This Agreement may not be amended or revised
except by a writing signed by the parties.

            11.3 Successors and Assigns. This Agreement is binding upon and
inures to the benefit of both parties and their respective successors and
assigns, including any entity with which or into which the Company may be merged
or which may succeed to its assets or business, although the obligations of the
Employee are personal and may be performed only by him.

            11.4 Captions. Captions have been inserted in this Agreement solely
for convenience of reference, and in no way define, limit or affect the scope or
substance of any provision of this Agreement.

            11.5 Severability. The provisions of this Agreement are severable,
and the invalidity of any provision shall not affect the validity of any other
provision. In the event that any court of competent jurisdiction determines that
any provision of this Agreement or the application thereof is unenforceable
because of its duration or scope, the parties agree that the court in making
such determination shall have the power to reduce the duration and scope of such
provision to the extent necessary to make it enforceable, and that the Agreement
in its reduced form is valid and enforceable to the full extent permitted by
law.

            11.6 Governing Law. This Agreement is to be construed under and
governed by the laws of the Commonwealth of Massachusetts, without regard to
conflicts of laws principles.

            11.7 Dispute Resolution

                  a) Arbitration The parties agree that any and all disputes,
claims or controversies arising out of or relating to this Agreement that are
not resolved by mutual negotiation shall be submitted to final and binding
arbitration before the AAA, or its successor, pursuant to the United States
Arbitration Act, 9 U.S.C. Sec. 1 et seq. Either party may commence the
arbitration process called for in this Agreement by filing a written demand for
arbitration with the AAA Commercial Arbitration Rules in effect at the time of
filing of the demand for arbitration, in Suffolk County in the Commonwealth of
Massachusetts. The parties will cooperate under the AAA and with one another in
selecting an arbitrator from the AAA's panel of neutrals and in scheduling the
arbitration proceedings. The parties covenant that they will participate in the
arbitration in good faith, and that they will share equally in its costs. The
provision of this section, and any award made pursuant to this section, may be
enforced by any court of competent jurisdiction, and the party seeking
enforcement shall be entitled to an award of all reasonable costs, fees, and
expenses, including attorney's fees, to be paid by the party against whom
enforcement is ordered. Notwithstanding the foregoing, however, the
arbitrator(s) shall not have the power to award indirect, consequential,
punitive or exemplary damages.

                  b) Waiver of Right to Litigation in Court NOTICE: By
initialing in the space below, you are agreeing to have all disputes, claims, or
controversies arising out of or relating to this Agreement decided by neutral
arbitration, and you are giving up any rights you might possess to have those
matters litigated in a court or a jury trial. By initialing in the space below,
you are giving up your judicial rights to discovery and appeal except to the
extent that they are specifically provided for under this Agreement. If you
refuse to submit to arbitration after agreeing to this provision, you may be
compelled to arbitrate under federal or state law. Your agreement to this
arbitration provision is voluntary.
<PAGE>

      We have read and understand the foregoing and agree to submission of all
disputes, claims or controversies arising out of or relating to this Agreement
to neutral arbitration in accordance with this Agreement.

--------------------                        ----------------------------
Company                                              Employee

      11.8 Withholding. All payments made by the Company under this Agreement
shall be net of any tax or other amounts required to be withheld by the Company
under applicable law.

         [The remainder of this page has intentionally been left blank.]
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.

                              GREENMAN TECHNOLOGIES, INC. ("Company")

                               By: /s/ Maurice E. Needham
                                   ----------------------
                                       Maurice E. Needham
                                       Chairman of the Board of Directors

                               By: /s/ Lew Boyd
                                   ------------
                                       Lew Boyd
                                       Chairman of the Compensation Committee

                              EMPLOYEE

                                   /s/ Lyle E. Jensen
                                   ------------------
                                   Lyle E. Jensen

                                   Lyle E. Jensen
                                   35760 Iodine Springs
                                   Wilomar, CA 92595FORM OF ESCROW AGREEMENT

This Escrow Agreement, dated December 16, 2005 (the "Closing Date"), among
Victoria Beverage, Inc., a New York corporation ("Purchaser"), Capital Beverage
Corporation, a Delaware corporation (the "Seller"), and Dealy & Silberstein,
LLP, as escrow agent ("Escrow Agent") (collectively, the "Parties").

This is the Escrow Agreement referred to in the Asset Purchase Agreement dated
as of September 15, 2005 (the "Purchase Agreement") by and between the
Purchaser, as assignee of Oak Beverages Inc. and the Seller.

The parties, intending to be legally bound, and for good and valuable
consideration, receipt and sufficiency of which is hereby acknowledged, agree as
follows:

Section 1.        Definitions

         "Business Day" means any day during which the offices of the Escrow
Agent in New York are open for business.

         "Claims Amount" shall mean the aggregate amount of all Claims, Third
Party Claims, Primary Creditor Claims and Secondary Creditor Claims (each as
hereinafter defined).

          "Distribution Amount" means with respect to each Distribution Date, an
amount equal to the Escrow Amount, less the Claims Amount, if any, multiplied by
one third (1/3).

         "Distribution Date" means each of June 16, 2006, December 16, 2006 and
June 16, 2007.

         "Eligible Investments" means (a) direct, short-term obligations of the
United States Government or its instrumentalities; (b) variable rate
certificates of deposit; or (c) short-term investments in money market accounts
of one or more United States banks having total assets in excess of
$100,000,000, in each case having maturities of not more than ninety (90) days.

         "Final Distribution Date" means June 16, 2007.

         "Primary Creditor Claims" means the aggregate of all claims of Primary
Creditors.

         "Purchaser" shall include Victoria Beverage Inc.'s successors and
assigns, including, without limitation, any designee appointed by Victoria
Beverage Inc. pursuant to paragraph 16(j) of the Purchase Agreement.

         "Secondary Creditor Claims" means the aggregate of all claims of
Secondary Creditors.

         "Termination Date," means the later of (i) the Final Distribution Date,
or (ii) the date on which no Claims, Third Party Claims, Primary Creditor Claims
or Secondary Creditor Claims are outstanding.

Capitalized terms used in this agreement without definition shall have the
respective meanings given to them in the Purchase Agreement.

                                        1

<PAGE>

Section 2.        Establishment of Escrow; Deposit of Escrow Property

     (a) The Purchaser shall on this date deposit with the Escrow Agent in
immediately available funds, as part of the Purchase Price, the amount of Two
Million Eight Hundred Thirty-Four Thousand Nine Hundred Twenty-Five and 22/100
Dollars ($2,834,925.22), which will consist of the Escrow Amount, plus the
Increased Escrow Amount, plus the amounts deposited with Escrow Agent toward
satisfaction of Primary Creditor Claims, if any, pursuant to paragraph 3(a) of
the Purchase Agreement, and Secondary Creditor Claims pursuant to paragraph
3(a)(i) of the Purchase Agreement, all in accordance with the provisions of the
Purchase Agreement (together with any investment income or proceeds received by
the Escrow Agent from the investment thereof from time to time pursuant to this
Escrow Agreement, collectively, the "Escrow Property").

     (b)  The  Escrow  Agent  agrees  to  hold  the  Escrow  Property  in an
account established  with JPMorgan Chase Bank, 386 Park Avenue South, New York,
New York 10016,  Account  #008619223565  (the "Escrow  Account"),  and to
administer  the Escrow  Property  in  accordance  with the terms of this Escrow
Agreement and Sections 3 and 7 of the Purchase Agreement.

Section 3.        Claims

     (a)  Subject to the  provisions  of Section  3(d),  from time to time on or
before  the  Termination  Date,  Purchaser  may give  written  notice  (a "Claim
Notice") to the Escrow Agent and the Seller  specifying in reasonable detail the
nature and dollar amount of any direct claim made by Purchaser against Seller (a
"Claim"),  which  it  may  have  under  the  Purchase  Agreement,  that  certain
sub-distribution  agreement between Seller and Purchaser (the  "Sub-Distribution
Agreement") or the transactions  contemplated by either of those agreements.  If
Seller gives written notice to Purchaser and Escrow Agent disputing any Claim (a
"Counter  Notice")  within 10 days  following  receipt  by Escrow  Agent and the
Seller of the Claim Notice regarding such Claim, such Claim shall be resolved as
provided in this Section 3(a). If no Counter  Notice is received by Escrow Agent
within  such 10 day  period,  then the  dollar  amount  of  damages  claimed  by
Purchaser  as set forth in the Claim  Notice  shall be  deemed  established  for
purposes of this Escrow Agreement and the Purchase  Agreement and, at the end of
such 10 day period,  Escrow Agent shall  promptly  pay to  Purchaser  the dollar
amount  claimed in the Claim  Notice from (and only to the extent of) the Escrow
Property.  If a Counter  Notice is given with  respect to a Claim,  Escrow Agent
shall be entitled to retain the Escrow  Property  until  Escrow Agent shall have
received (i) a final non-appealable  order of a court of competent  jurisdiction
directing  delivery of the Escrow Property pursuant to the procedures  specified
in paragraph 7 of the Purchase  Agreement,  or (ii) a written agreement executed
by Purchaser  and Seller  directing  delivery of the Escrow  Property,  in which
event Escrow Agent shall  disburse the Escrow  Property in accordance  with such
order or  agreement.  Escrow  Agent shall not be  obligated  to inquire  into or
consider  whether  a  Claim  complies  with  the  requirements  of the  Purchase
Agreement.

(b) Subject to the provisions of Section 3(d), from time to time on or before
the Termination Date, Purchaser may provide Escrow Agent with a written
instruction (an "Instruction Notice") to reimburse Purchaser for Damages as they
are incurred by Purchaser pursuant to paragraph 7(d) of the Purchase Agreement
on account of claims covered by paragraph 7(c)(i) of the Purchase Agreement

                                       2
<PAGE>

("Third Party Claims"). Such Instruction Notice will contain written
instructions to Escrow Agent to pay all Damages stated in the particular
Instruction Notice. Purchaser will send a copy of the Instruction Notice to
Seller at the same time it sends the Notice to Escrow Agent. Within ten (10)
days following receipt by Escrow Agent of the Instruction Notice, the Escrow
Agent will promptly pay Purchaser the dollar amount specified in such notice
from the Escrow Property. The Parties acknowledge and agree that payment by the
Escrow Agent of such amounts to Purchaser will not be subject to the prior
consent or approval of Seller or Escrow Agent. For purposes of determining the
Claims Amount, and related Distribution Amount on a particular Distribution
Date, the amount of any then outstanding Third Party Claim shall be deemed to
be: (i) the monetary amount of damages claimed in a summons and complaint, in
the event the particular Third Party Claim is commenced by the service of a
summons and complaint upon Purchaser, or (ii) the amount that Purchaser
reasonably determines in good faith to be the amount of such Third Party Claim,
in the event the Third Party Claim is a claim other than that which is commenced
by the service of a summons and complaint upon Purchaser, or if any such summons
and complaint does not set forth a sum certain as claimed damages.

      (c) Escrow Agent shall not, and it shall not be authorized to, distribute
any Escrow Property as payment for legal fees or expenses incurred by Seller on
account of: (i) disputes with Purchaser concerning a Counter Notice, or (ii)
defending any Indemnified Party pursuant to paragraph 7 of the Purchase
Agreement. Similarly, Escrow Agent shall not, and it shall not be authorized to,
distribute any Escrow Property as payment for any legal fees or expenses
incurred by it in the performance of its obligations hereunder.

      (d) It is understood that Purchaser will not be entitled to submit a Claim
Notice or Instruction Notice after the Final Distribution Date unless such
notice directly relates to an earlier Claim Notice or Instruction Notice
asserted by Purchaser against Seller prior to the Final Distribution Date.

Section 4.        Distribution of Increased Escrow Amount; Payment of Primary
                  Creditors and Secondary Creditors

(a) From time to time on or before the Termination Date, Seller may give written
notice (a "Seller Notice") to the Escrow Agent and the Purchaser specifying in
reasonable detail the nature and dollar amount of any particular Unresolved
Pre-Closing Claim that resulted in all or part of the Increased Escrow Amount
being deposited with the Escrow Agent, including without limitation, the name of
the claimant (the "Unresolved Pre-Closing Claimant") and the amount required to
satisfy such claim (the "Satisfaction Amount"). Within 5 business days following
receipt by Escrow Agent of the Seller Notice and upon Purchaser's prior written
consent, Escrow Agent shall issue a check payable to the Unresolved Pre-Closing
Claimant in an amount equal to the Satisfaction Amount. Purchaser will give such
written consent provided: (i) that such amount does not exceed the portion of
the Increased Escrow Amount attributable to that particular claim, and (ii) that
the Escrow Agent shall have in its possession, prior to the payment of such
funds, a full general release signed by the Unresolved Pre-Closing Claimant
releasing all claims against the Seller and Purchaser related to the Unresolved
Pre-Closing Claim in question, in a form reasonably satisfactory to Purchaser.
Contemporaneously with the payment of the Satisfaction Amount to the Unresolved
Pre-Closing Claimant, Seller shall provide Purchaser with the general release
specified in the preceding sentence.

                                       3

<PAGE>

     (b) In the event that the Increased Escrow Amount relating to a particular
Unresolved Pre-Closing Claim is more than the Satisfaction Amount for that
claim, the Escrow Agent shall, upon written notice to Purchaser, distribute from
the Escrow Property the amount by which that particular Increased Escrow Amount
exceeds the Satisfaction Amount to Seller at the same time that it distributes
funds to the Unresolved Pre-Closing Claimant in accordance with the provisions
of this Agreement and provides Purchaser with the full general release specified
in paragraph 4(a).

     (c) To the extent funds have been deposited with the Escrow Agent pursuant
to paragraph 3(a) of the Purchase Agreement, at the Closing, Escrow Agent will
issue a check to each of the Primary Creditors and Secondary Creditors for whose
account funds were deposited in escrow (other than the Primary Creditors and
Secondary Creditors that were paid at Closing by checks remitted by Purchaser
pursuant to paragraph 3(a) of the Purchase Agreement), in accordance with the
joint written instructions of Seller and Purchaser for the purpose of satisfying
in full each of such creditors claims against Seller.

     (d)          (i) After the Closing, and provided Seller presents to
Purchaser proof to the reasonable satisfaction of Purchaser of the satisfaction
of the claims of the Secondary Creditors for which it received the initial
Secondary Creditors Release Amount at Closing and of the claims of the Secondary
Creditors which Purchaser directly paid at Closing, if any, pursuant to Seller's
instructions, Purchaser will authorize the Escrow Agent to release the next
Secondary Creditors Release Amount to the Seller, in trust, in accordance with
the terms of this Agreement. Seller will use such Secondary Creditors Release
Amount to pay at least twenty-five percent (25%) of the aggregate claims of all
the Secondary Creditors specified on Schedule 8(a)(xiv) of the Disclosure
Statement (as updated pursuant to paragraph 8(a)(xiv)) of the Purchase
Agreement, all subject to and in accordance with the terms and provisions of
this Agreement.

                  (ii) Upon presentation by Seller to Purchaser of proof to the
reasonable satisfaction of Purchaser of (x): the satisfaction of the claims of
the Secondary Creditors paid by Purchaser directly at Closing, if any, and (y)
that not less than fifty percent (50%) of the aggregate claims of Secondary
Creditors have been paid and satisfied in full, Purchaser will authorize Escrow
Agent to release the next Secondary Creditors Release Amount to the Seller.

                  (iii) With respect to such next Secondary Creditors Release
Amount, Seller shall remit payments toward the satisfaction in full of the
claims of such other Secondary Creditors in accordance with the procedures set
forth in paragraph 3(a)(iii)(B) of the Purchase Agreement. This procedure shall
be repeated until the aggregate of all claims of Secondary Creditors have been
paid and satisfied in full, as established by proof to the reasonable
satisfaction of Purchaser. In any event, all claims of Secondary Creditors shall
be paid and satisfied in full within ninety (90) days after the Closing Date. To
the extent there are any funds remaining in escrow on account of claims of
Secondary Creditors after ninety (90) days, such funds will be released to
Seller upon the earlier of: (x) the presentation to Purchaser of proof to the
reasonable satisfaction of Purchaser that the aggregate of all claims of
Secondary Creditors have been paid and satisfied in full; or (y) twelve (12)
months after the Closing Date, provided that no claim of any Secondary Creditors
has been made, asserted, alleged or instituted against Purchaser for which a
portion of the Purchase Price is being held in escrow by the Escrow Agent as
security for the payment of Secondary Creditors pursuant to paragraph 3(a)(i) of
the Purchase Agreement.

                                       4
<PAGE>

                  (iv) In the event any Secondary Creditors Release Amount
exceeds the amounts expended by Seller to pay and satisfy in full twenty-five
percent (25%) of the aggregate claims of all Secondary Creditors for which it
has been released, Seller will be entitled to retain the difference thereof.

Section 5.        Distribution of Escrow Property to Seller; Termination of
                  Escrow

     (a) Subject to the terms of this Agreement, on each Distribution Date,
Escrow Agent shall pay and distribute to Seller the Distribution Amount;
provided however, that on the Final Distribution Date, the Distribution Amount
shall be increased to include all of the Escrow Property, less any outstanding
Claims Amount.

     (b) Subject to the terms of this Agreement, not later than the fifth
Business Day after the Termination Date, Escrow Agent shall pay and distribute
to Seller the then amount of Escrow Property, if any.

Section 6.        Investment of Funds

Except as Purchaser and Seller may from time to time jointly instruct Escrow
Agent in writing, the Escrow Property shall be invested from time to time in
Eligible Investments until disbursement of the entire Escrow Property. Escrow
Agent is authorized to liquidate in accordance with its customary procedures any
portion of the Escrow Property consisting of Eligible Investments to provide for
payments required to be made under this Escrow Agreement.

Section 7.        Duties of Escrow Agent

     (a) The Escrow Agent shall not be responsible for any of the agreements
referred to or described herein (including without limitation the Purchase
Agreement), or for determining or compelling compliance therewith, except this
Escrow Agreement.

     (b) The Escrow Agent shall be obligated only for the performance of such
duties as are expressly and specifically set forth in this Escrow Agreement on
its part to be performed, each of which is ministerial (and shall not be
construed to be fiduciary) in nature, and no implied duties or obligations of
any kind shall be read into this Escrow Agreement against or on the part of the
Escrow Agent.

     (c) Escrow Agent shall not be liable for any actions or omissions hereunder
except for its own gross negligence or willful misconduct.

     (d) Escrow Agent shall not be under any duty to give the Escrow Property
held by it hereunder any greater degree of care than it gives its own similar
property.

                                       5
<PAGE>

     (e) The Escrow Agent shall not be obligated to take any legal or other
action hereunder which might in its judgment involve or cause it to incur any
expense or liability unless it shall have been furnished with acceptable
indemnification.

     (f) The Escrow Agent may consult counsel satisfactory to it, and the
opinion or advice of such counsel in any instance shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with the opinion or advice of
such counsel reasonably acceptable to Purchaser.

     (g) The Escrow Agent may rely on and shall be protected in acting or
refraining from acting upon any written notice, instruction (including, without
limitation, wire transfer instructions, whether incorporated herein or provided
in a separate written instruction), instrument, statement, certificate, request
or other document furnished to it hereunder and believed by it to be genuine and
to have been signed or presented by the proper person, and shall have no
responsibility to make inquiry as to or to determine the genuineness, accuracy
or validity thereof (or any signature appearing thereon), or of the authority of
the person signing or presenting the same, unless the Escrow Agent has reason to
believe the signature is not genuine or the person signing same is without
authority to do so. Escrow Agent may conclusively presume that the undersigned
representative of any party hereto which is an entity other than a natural
person has full power and authority to instruct Escrow Agent on behalf of that
party unless written notice to the contrary is delivered to Escrow Agent.

     (h) In no event shall the Escrow Agent be liable for: (i) indirect,
punitive, special or consequential damage or loss (including but not limited to
lost profits) whatsoever, even if the Escrow Agent has been informed of the
likelihood of such loss or damage and regardless of the form of action, or (ii)
its investment or reinvestment of any property held by it hereunder in good
faith in Eligible Investments, in accordance with the terms hereof, including,
without limitation, any liability for any delays (not resulting from its gross
negligence or willful misconduct) in the investment or reinvestment of the
Escrow Property, or any loss of interest incident to any such delays.

     (i) Escrow Agent does not have any interest in the Escrow Property
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other document or
instrument held by or delivered to it.

     (j) Escrow Agent shall not be called upon to advise any party as to the
wisdom in selling or retaining or taking or refraining from any action with
respect to any securities or other property deposited hereunder.

        (k) Escrow Agent (and any successor Escrow Agent) may at any time resign
as such by delivering the Escrow Property to any successor Escrow Agent jointly
designated by the other parties hereto in writing, or to any court of competent
jurisdiction, whereupon Escrow Agent shall be discharged of and from any and all
further obligations arising in connection with this Escrow Agreement. The
resignation of Escrow Agent will take effect on the earlier of (i) the time of
appointment of a successor (including a court of competent jurisdiction) or (ii)
the day which is 30 days after the date of delivery of its written notice of
resignation to the other parties hereto. If at that time Escrow Agent has not
received a designation of a successor Escrow Agent, Escrow Agent's sole
responsibility after that time shall be to retain and safeguard the Escrow
Property until receipt of a designation of successor Escrow Agent or a joint
written disposition instruction by the other parties hereto or a final
non-appealable order of a court of competent jurisdiction.

                                       6
<PAGE>

     (l) No printed or other matter in any language (including, without
limitation, prospectuses, notices, reports and promotional material) that
mentions Escrow Agent's name or the rights, powers, or duties of Escrow Agent
shall be issued by the other parties hereto or on such parties' behalf unless
Escrow Agent shall first have given its specific written consent thereto.

Section 8.        Indemnification of Escrow Agent

     (a) Each of the Parties agree, jointly and severally, to indemnify the
Escrow Agent (and its directors, officers and employees) and hold it (and such
directors, officers and employees) harmless from and against any loss,
liability, damage, cost and expense, including reasonable attorney's fees
("Damages") incurred by the Escrow Agent as a result of a claim made, asserted,
alleged or instituted by a third party as a result of Escrow Agent's performance
under this Agreement.

     (b) Each of the Parties agree, jointly and severally, to indemnify the
Escrow Agent (and its directors, officers and employees) and hold it (and such
directors, officers and employees) harmless from and against any Damages
incurred by the Escrow Agent as a result of a claim made, asserted, alleged or
instituted by Purchaser against Escrow Agent as a result of Escrow Agent's
performance under this Agreement, provided however, that if such claim by
Purchaser is due to the Escrow Agent's failure to disburse the Escrow Property,
or any portion thereof, pursuant to: (i) paragraph 3(b) of this Agreement, or
(ii) or pursuant to an Instruction Notice, then Escrow Agent shall not be
entitled to indemnification by Purchaser under this paragraph 8(b).

     (c) Each of the Parties agree to jointly indemnify the Escrow Agent (and
its directors, officers and employees) and hold it (and such directors, officers
and employees) harmless from and against fifty percent (50%) of any Damages
incurred by the Escrow Agent as a result of a claim made, asserted, alleged or
instituted by Seller against Escrow Agent as a result of Escrow Agent's
performance under this Agreement. Escrow Agent shall be entitled to reimburse
itself from the Escrow Property for reasonable legal fees actually incurred in
the defense of the Escrow Agent against any claims instituted by either
Purchaser or Seller against the Escrow Agent, up to an aggregate amount of One
Hundred Thousand Dollars ($100,000.00).

     (d) In the event Purchaser indemnifies Escrow Agent from and against an
amount in excess of fifty percent (50%) of any Damages incurred by Escrow Agent
as a result of claim made asserted, alleged or instituted by Seller, Seller
shall promptly reimburse Purchaser for all Damages resulting thereby, as such
Damages are incurred. In the event Seller indemnifies Escrow Agent from and
against an amount in excess of fifty percent (50%) of any Damages incurred by
Escrow Agent as a result of claim made asserted, alleged or instituted by
Purchaser, Purchaser shall promptly reimburse Seller for all Damages resulting
thereby, as such Damages are incurred.

                                       7
<PAGE>

     (e) Escrow Agent may retain such portion of the Distribution Amount to
reimburse itself for Damages incurred by Escrow Agent as a result of a claim
made, asserted, alleged or instituted against it as a result of Escrow Agent's
performance under this Agreement, provided however, that Escrow Agent retains an
amount up to and only to the extent that there is a Distribution Amount to be
distributed to Purchaser in accordance with the terms of this Agreement.

Section 9.        Ownership for Tax Purposes

     (a) Each of the parties agrees that, solely for purposes of reporting and
paying federal and other taxes based on income, Seller will be treated as the
owner of the Escrow Property, respectively, and that it will report all income,
if any, that is earned on, or derived from, the Escrow Property as their income,
in such proportions, in the taxable year or years in which such income is
properly includible and pay any taxes attributable thereto.

     (b) Any payments of income from this Escrow Property shall be subject to
withholding regulations then in force with respect to United States taxes.
Seller hereto agree to provide the Escrow Agent with a certified tax
identification number by signing and returning a Form W-9 (or Form W-8 BEN, in
case of non-U.S. persons) to the Escrow Agent, upon the execution and delivery
of this Escrow Agreement. Seller understands that, in the event their tax
identification numbers are not certified to the Escrow Agent, the Internal
Revenue Code, as amended from time to time, may require withholding of a portion
of any interest or other income earned on the investment of the Escrow Property.

Section 10.       Intentionally Omitted

Section 11.       Notices

All notices, consents, waivers and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt) provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set forth below
(or to such other addresses and telecopier numbers as a party may designate by
notice to the other parties):

SELLER

Capital Beverage Corporation
700 Columbia Street, Erie Basin, Building # 302
Brooklyn, New York 11231
Facsimile No:  (718) 488-8693

                                       8
<PAGE>

PURCHASER

Victoria Beverage, Inc.
One Flower Lane
Blauvelt, New York 10913
Facsimile No.:    (845) 353-3745

ESCROW AGENT

William J. Dealy, Esq.
Dealy & Silberstein, LLP
225 Broadway, Suite 1405
New York, NY  10007-3001
Facsimile No.:  212-385-2117

Section 12.       Dispute Resolution

It is understood  and agreed that,  should any dispute arise with respect to the
delivery,  ownership,  right of  possession,  and/or  disposition  of the Escrow
Property,  or  should  any  claim be made upon the  Escrow  Agent or the  Escrow
Property  by a third  party,  the Escrow  Agent  upon  receipt of notice of such
dispute  or claim is  authorized  and  shall be  entitled  (at its sole  option,
election and expense) to retain in its possession  without  liability to anyone,
all or any of said Escrow  Property  until such dispute  shall have been settled
either by the mutual  written  agreement  of the parties  involved or by a final
order,  decree or judgment of a court in the United States of America,  the time
for perfection of an appeal of such order,  decree or judgment  having  expired.
The Escrow Agent may,  but shall be under no duty  whatsoever  to,  institute or
defend any legal proceedings which relate to the Escrow Property.

Section 13.       Jurisdiction; Service Of Process

Any action or  proceeding  seeking to enforce any  provision of, or based on any
right arising out of, this  Agreement may be brought  against any of the parties
in the courts of the State of New York, County of New York, or, if it has or can
acquire  jurisdiction,  in the United  States  District  Court for the  Southern
District of New York, and each of the parties  consents to the  jurisdiction  of
such  courts  (and of the  appropriate  appellate  courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding  referred to in the preceding  sentence may be served on any party
anywhere in the world in accordance with applicable law.

Section 14.       Counterparts

This Agreement may be executed in one or more  counterparts,  each of which will
be deemed to be an  original  and all of which,  when  taken  together,  will be
deemed to constitute one and the same.

Section 15.       Section Headings

The headings of sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation.

                                       9
<PAGE>

Section 16.       Waiver

The rights and remedies of the parties to this  Agreement are cumulative and not
alternative.  Neither the failure nor any delay by any party in  exercising  any
right,  power, or privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power, or privilege,  and
no single or partial  exercise  of any such  right,  power,  or  privilege  will
preclude any other or further exercise of such right, power, or privilege or the
exercise  of any  other  right,  power,  or  privilege.  To the  maximum  extent
permitted by applicable law, (a) no claim or right arising out of this Agreement
or the documents  referred to in this  Agreement can be discharged by one party,
in whole or in part, by a waiver or renunciation of the claim or right unless in
writing  signed by the other  party;  (b) no waiver that may be given by a party
will be applicable  except in the specific  instance for which it is given;  and
(c) no notice  to or  demand  on one party  will be deemed to be a waiver of any
obligation  of such  party or of the right of the party  giving  such  notice or
demand to take  further  action  without  notice or demand as  provided  in this
Agreement or the documents referred to in this Agreement.

Section 17.       Exclusive Agreement And Modification

This Agreement supersedes all prior agreements among the parties with respect to
its subject matter and constitutes (along with the documents referred to in this
Agreement) a complete  and  exclusive  statement  of the terms of the  agreement
between the parties with respect to its subject  matter.  This Agreement may not
be amended except by a written agreement  executed by the Purchaser,  the Seller
and the Escrow Agent.

Section 18.       Governing Law

This Agreement  shall be governed by the laws of the State of New York,  without
regard to conflicts of law principles.

Section 19.       Counsel to Seller

Each of Purchaser and Seller acknowledge that Escrow Agent has, and may continue
to serve as, legal counsel to Seller.

                           [Signature Page to Follow]

                                       10

<PAGE>

IN WITNESS WHEREOF, the parties have executed and delivered this Escrow
Agreement as of the date first written above.

                                                VICTORIA BEVERAGE, INC.

                                                By:    /s/ Debra Boening
                                                       -----------------
                                                Name:  Debra Boening
                                                Title: President

                                                CAPITAL BEVERAGE CORPORATION

                                                By:    /s/ Carmine N. Stella
                                                       ---------------------
                                                Name:  Carmine Stella
                                                Title: President and CEO

Escrow Agent:

DEALY & SILBERSTEIN, LLP

By:    /s/ William J. Dealy
       --------------------
Name:  William J. Dealy
Title: Partner

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