Document:

ASSET PURCHASE AGREEMENT

     AGREEMENT,  made as of the  15th day of  September,  2005,  by and  between
Capital Beverage Corporation, a Delaware corporation with offices located at 700
Columbia Street, Erie Basin, Building # 302, Brooklyn, New York 11231 ("Seller")
and Oak  Beverages  Inc., a New York  corporation  with  offices  located at One
Flower Lane, Blauvelt, New York 10913 ("Purchaser").

                               W I T N E S S E T H

     WHEREAS,  Seller is in the business of marketing,  selling and distributing
at wholesale certain alcoholic beverage products (the "Distribution Business");

     WHEREAS, Seller desires to sell, and cause to be transferred,  assigned and
conveyed to  Purchaser,  and Purchaser  desires to accept and purchase,  certain
distribution  rights and related assets of Seller  relating to the  Distribution
Business, subject to the terms and conditions hereinafter set forth;

     NOW,  THEREFORE,  in  consideration of the foregoing  premises,  the mutual
covenants  and  agreements  contained  herein  and for other  good and  valuable
consideration,  the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

     1. Definitions.  For purposes of this Agreement,  the following terms shall
have the following  meanings and, as the context  requires,  the singular  shall
include the plural:

          (a) The term  "Applicable  Laws" shall have the meaning  specified  in
paragraph 5(g).

          (b) The term "Assumption  Notice" shall have the meaning  specified in
paragraph 7(c)(i).

          (c) The term  "Authorizations"  shall have the  meaning  specified  in
paragraph 5(g).

          (d) The term  "Bankruptcy  Code" shall have the meaning  specified  in
paragraph 5(r).

          (e) The term "Bottle Bill" means New York  Environmental  Conservation
Law ss.ss.27-1001 et seq. and the regulations promulgated thereunder.

          (f) The term "Breweries" shall have the meaning specified in paragraph
2(b).

          (g) The term  "Business  Plan"  shall have the  meaning  specified  in
paragraph 8(a)(i).

          (h)  The  term  "Capital  Acquired  Assets"  shall  have  the  meaning
specified in paragraph 2.

          (i) The term  "Case  Equivalents"  means 288 fluid  ounces  (an amount
equivalent to a standard case of 24/12 ounce bottles) whether such Products were
in actual case goods or draught form.

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          (j) The term  "Cash  Portion"  shall  have the  meaning  specified  in
paragraph 3(a)(iii).

          (k) The term "Closing"  shall have the meaning  specified in paragraph
10(a).

          (l) The term  "Closing  Date" means the date  specified  in  paragraph
10(a).

          (m) The term  "Collective  Bargaining  Agreement"  means the agreement
between  Soft Drink and  Brewery Workers  Union Local  812 and  Capital Beverage
Corp., dated February 1, 2000.

          (n) The term  "Competing Bid Notice" shall have the meaning  specified
in paragraph 8(a)(vi)(B).

          (o)  The  term  "Controlling  Shareholders"  shall  have  the  meaning
specified in paragraph 5(e)(ii).

          (p) The term "Damages"  shall have the meaning  specified in paragraph
7(a).

          (q) The term "Defense  Conditions" shall have the meaning specified in
paragraph 7(c)(i).

          (r) The term "Disclosure Schedule" shall have the meaning specified in
paragraph 5(a).

          (s) The term "Distribution  Business" shall have the meaning specified
in the Recitals.

          (t)  The  term  "Distribution   Agreements"  shall  have  the  meaning
specified in paragraph 2(b).

          (u) The term "Environmental  Laws" shall have the meaning specified in
paragraph 5(k).

          (v) The term "Employee  Benefit Plan" shall have the meaning specified
in paragraph 5(j).

          (w) The term "Escrow Agent" means Dealy & Silberstein,  LLP, as escrow
agent.

          (x) The term "Escrow  Agreement"  shall have the meaning  specified in
paragraph 3(b).

          (y) The term  "Escrow  Amount"  shall have the  meaning  specified  in
paragraph 3(a)(iii).

          (z) The term  "Escrow  Property"  shall mean the total  amount held in
escrow by the Escrow Agent pursuant to the terms of the Escrow Agreement.

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          (aa) The term "Exclusive  Distribution  Rights" shall have the meaning
specified in paragraph 2(b).

          (bb) The term  "Fiduciary  Out" shall have the  meaning  specified  in
paragraph 8(a)(vi)(C).

          (cc)  The  term  "Governmental   Authority"  shall  have  the  meaning
specified in paragraph 5(g).

          (dd) The term "Home D Customers"  shall have the meaning  specified in
paragraph 8(a)(iv)(B).

          (ee)  The term  "Increased  Escrow  Amount"  shall  have  the  meaning
specified in paragraph 3(b).

          (ff)  The  term  "Indemnification   Notice"  shall  have  the  meaning
specified in paragraph 7(c).

          (gg) The term "Information Statement" shall have the meaning specified
in paragraph 8(a)(viii).

          (hh) The term  "Initial  Period"  shall have the meaning  specified in
paragraph 8(a)(vi)(B).

          (ii) The term  "Insider  Secondary  Creditors"  shall have the meaning
specified in paragraph 3(a).

          (jj) The term "Liabilities"  shall include,  without  limitation,  any
direct or indirect  indebtedness,  guaranty,  endorsement,  claim, loss, damage,
deficiency,  cost, expense,  obligation or responsibility,  fixed or contingent,
accrued  or  unaccrued,  known or  unknown,  choate  or  inchoate,  asserted  or
unasserted,  conditional or unconditional,  matured or unmatured,  liquidated on
unliquidated, secured or unsecured, secondary or other.

          (kk) The term "Lien" means claims,  restrictions,  charges,  set-offs,
security interests, interests, Liabilities, adverse claims, defects in title and
any other encumbrance, interest or lien.

          (ll) The term  "Other  Benefit  Obligations"  shall  have the  meaning
specified in paragraph 5(j).

          (mm) The term "Person" means any natural person, corporation, division
of a corporation, partnership, trust, joint venture, association, firm, company,
limited liability company, estate,  unincorporated  organization or Governmental
Authority.

<PAGE>

          (nn) The term "Primary  Creditors" shall have the meaning specified in
paragraph 8(a)(xiv).

          (oo)  The  term  "Proceeding"  shall  have the  meaning  specified  in
paragraph 3(c)(xv).

          (pp) The term "Products" shall have the meaning specified in paragraph
2(b).

          (qq) The term  "Proprietary  Rights"  means all  patents,  copyrights,
trademarks,  service marks, trade names,  slogans, and all applications therefor
(together  with  all  amendments,   improvements   and/or  enhancements  to  the
foregoing), trade secrets, customer lists, data bases, ideas, know-how, customer
contacts and other proprietary rights and information (whether or not registered
with any Governmental Authority),  based, in whole or in part, or included in or
covering or relating to Seller's  Distribution Business and the Capital Acquired
Assets, or products or services  relating  thereto,  some of the foregoing being
more specifically  described in Schedule 1(v) of the Disclosure  Schedule.  Such
schedule  shall also identify all  applicable  registration  numbers and pending
registrations.

          (rr) The term "Purchaser" means Oak Beverages, Inc. ("Oak") and/or its
successors and assigns, including, without limitation, any designee appointed by
Oak pursuant to paragraph 16(j).

          (ss) The term  "Purchase  Price"  shall have the meaning  specified in
paragraph 3(a).

          (tt) The term "Related Party Claims" shall have the meaning  specified
in paragraph 9(c)(iii).

          (uu) The term "Saleable Inventory" shall have the meaning specified in
paragraph 4(a).

          (vv) The term "SEC"  shall have the  meaning  specified  in  paragraph
5(e)(iii).

          (ww) The term "SEC  Sign-Off"  shall  have the  meaning  specified  in
paragraph 8(a)(viii).

          (xx) The term "Secondary  Creditors" shall have the meaning  specified
in paragraph 8(a)(xiv).

          (yy) The term  "Secondary  Creditors  Escrow  Amount"  shall  have the
meaning specified in paragraph 3(a).

          (zz) The term "Secondary Creditors Release Amount" shall have
the meaning specified in paragraph 3(a).

          (aaa) The term "Securities  Laws" shall have the meaning  specified in
paragraph 5(e).

<PAGE>

          (bbb) The term "Seller"  means Capital  Beverage  Corporation  and its
successors and assigns.

          (ccc) The term "Seller  Documents" shall have the meaning specified in
paragraph 5(b).

          (ddd) The term "Seller  Retained  Liabilities"  shall have the meaning
specified in paragraph 3(c).

          (eee)  The  term  "Sub-Distribution   Agreement"  means  that  certain
sub-distribution  agreement between Oak and Seller, in a form attached hereto as
Exhibit A.

          (fff) The term  "Superior  Offer" shall have the meaning  specified in
paragraph 8(a)(vi)(C).

          (ggg) The term "Surrender  Letter" shall have the meaning specified in
paragraph 8(a)(xii).

          (hhh) The term  "Termination  Fee" shall have the meaning specified in
paragraph 12(c).

          (iii)  The term  "Territory"  shall  have  the  meaning  specified  in
paragraph 2(b).

          (jjj)  The  term  "Undisclosed   Liability"  shall  have  the  meaning
specified in paragraph 9(c)(iii).

          (kkk) The term "Unresolved  Pre-Closing Claims" shall have the meaning
specified in paragraph 3(b).

          (lll)  The term  "WARN  Act"  shall  have  the  meaning  specified  in
paragraph 3(b)(xiii).

     2.   Purchase  and Sale.  (a) Upon the terms and subject to the  conditions
hereof, at the Closing, Seller shall sell, convey, assign, transfer and set over
to Purchaser  and  Purchaser,  in reliance  upon  Seller's  representations  and
warranties  made herein,  shall  purchase and acquire from Seller on the Closing
Date,  for  the  consideration  hereinafter  set  forth,  the  following  assets
(collectively, the "Capital Acquired Assets"):

          (i)  Exclusive Distribution Rights;

          (ii) Proprietary Rights;

          (iii) Seller's on-premises and off-premises customer lists; and

          (iv) All point-of sale (P.O.S.) materials.

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          (b) For purposes of this Agreement,  the term "Exclusive  Distribution
Rights" means the exclusive  right,  title,  interest and claims (i) to purchase
directly  from  the  breweries  specified  on  Schedule  2(b) of the  Disclosure
Schedule  (collectively,  the  "Breweries")  certain  products  marketed,  sold,
imported  or  supplied by the  Breweries  as set forth on  Schedule  2(b) of the
Disclosure  Schedule  (collectively,  the "Products"),  and to market,  sell and
distribute  at wholesale on an exclusive  basis,  the Products in the  territory
specified on Schedule 2(b) of the Disclosure Schedule (the "Territory")  arising
from or related to one or more oral and/or written  distribution  agreements and
any related commercial relationships between Capital on the one hand and each of
the Breweries on the other hand  (collectively,  the "Distribution  Agreements")
including,  without limitation,  any right or claim Capital may have against the
Breweries  or  their  respective  successors  and  assigns;  and  (ii) in and to
supplier and customer based,  intangible assets and related  distribution rights
derived from marketing,  selling, distributing and merchandising the Products in
the Territory.

     3.   Purchase Price; Credits; Assumption of Liabilities; Payment.

          (a) In  consideration  of the sale of the Capital  Acquired  Assets by
Seller to  Purchaser  pursuant  hereto  and upon the terms  and  subject  to the
conditions hereof,  Purchaser shall pay Nine Million Three Hundred Thousand U.S.
Dollars ($9,300,000.00) (the "Purchase Price").

          At Closing,  the Purchase Price will be reduced by, and Purchaser will
receive a credit in, an aggregate amount equal to the sum of:  twenty-five cents
($0.25) for each case of Products  purchased by Oak and sold by Oak to customers
in the Territory pursuant to the  Sub-distribution  Agreement,  plus fifty cents
($0.50)  for  each  case  of  Products   purchased   by  Oak   pursuant  to  the
Sub-distribution  Agreement,  but not sold to such  customers,  plus One  Dollar
($1.00)  for  each  barrel  of  Products   purchased  by  Oak  pursuant  to  the
Sub-distribution  Agreement, and sold by Oak to customers in the Territory, plus
Two Dollars ($2.00) for each barrel of Products purchased by Oak pursuant to the
Sub-distribution  Agreement, but not sold to such customers, all pursuant to the
Sub-Distribution  Agreement,  in  accordance  with its terms.  In  addition,  at
Closing, the Purchase Price will be reduced by, and Oak will receive a credit at
Closing in, an amount equal to: (i) to all costs and expenses incurred by Oak on
account  of  Oak's  redemption,  collection  and  handling  of all of the  empty
beverage  containers of Products under the Bottle Bill due to Capital's  failure
to do so in accordance  with the  provisions of the Business  Plan; and (ii) the
costs and expenses  incurred by Oak on account of Oak's  redemption,  collection
and  handling of empty  beverage  containers  of Products  under the Bottle Bill
during  the  first   thirty   (30)  days  after  the   effective   date  of  the
Sub-Distribution  Agreement,  but only to the  extent  such  costs and  expenses
exceed Ten Thousand Dollars (US $10,000.00). The amounts of credits specified in
this paragraph 3(a) will be reasonably substantiated by Oak.

          Subject to these  credits,  and the  adjustment set forth in paragraph
3(b) below, the Purchase Price shall be paid as follows:

               (i) by wire  transfer  to the  account  of the  Escrow  Agent  as
specified by the Escrow  Agent,  as escrow  agent,  in the  aggregate  principal
amount  necessary  to pay and  satisfy  in full the  claims  of all the  Primary
Creditors and Secondary Creditors (each as defined in paragraph  8(a)(xiv)),  as

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<PAGE>

determined pursuant to paragraph 8(a)(xiv),  less the initial Secondary Creditor
Release Amount (as hereinafter  defined) made by Purchaser pursuant to paragraph
3(a); and

               (ii) by wire transfer to the account  specified by Seller,  or by
certified or bank check drawn on a New York clearing house bank,  payable to the
order of  Seller,  in the  aggregate  principal  amount of Seven  Million  Eight
Hundred Thousand Dollars  ($7,800,000.00)  minus the amount of credits specified
in  paragraph  3(a),  and the amount wired in the account of the Escrow Agent as
specified  in paragraph  3(a)(i)  (the  aggregate  amounts  payable  pursuant to
paragraphs  3(a)(i)  and  3(a)(ii)  are  collectively  referred  to as the "Cash
Portion"); and

               (iii) by wire  transfer  to the  account  specified  on  Schedule
3(a)(iii) of the Disclosure  Schedule,  or by certified or bank check drawn on a
New York  clearinghouse  bank,  payable to the order of Escrow Agent,  as escrow
agent, in the aggregate  principal  amount of One Million Five Hundred  Thousand
Dollars ($1,500,000.00) (the "Escrow Amount").

               Notwithstanding  paragraph  3(a)(i),  Seller  may elect to have a
portion of the Purchase  Price paid by  instructing  Purchaser to remit payments
directly  to  any  or all  Primary  Creditors  or  certain  Secondary  Creditors
(excluding only "Insider  Secondary  Creditors" (as defined below)),  as and for
payment and  satisfaction  in full of the claims of such Primary  Creditors  and
Secondary  Creditors.  In such event, Seller shall give Purchaser at least three
(3) business  days prior  written  notice  setting  forth that:  (i) it requests
Purchaser remit, as part of the Purchase Price,  payments toward satisfaction in
full of the claims of certain Primary  Creditors and Secondary  Creditors,  (ii)
the name and address of such Primary  Creditors and Secondary  Creditors,  (iii)
the amounts necessary to satisfy in full the claim of such Primary Creditors and
Secondary  Creditors,  and (iv) payoff  letters,  final  invoices or  statements
(including account numbers,  if applicable) issued by such Primary Creditors and
Secondary Creditors,  and verified by Seller as to the total outstanding balance
due to such Primary Creditors and Secondary Creditors.  Purchaser will thereupon
bring to the Closing  certified or bank checks payable to such Primary Creditors
and Secondary  Creditors,  in the amounts  represented  by Seller as required to
satisfy in full the claim of the Primary Creditors and Secondary Creditors,  for
which such respective  payments are to be made. Promptly after the Closing Date,
Seller will submit documentary evidence to Purchaser as proof of satisfaction of
the claims of such Primary Creditors and Secondary Creditors,  to the reasonable
satisfaction of Purchaser. For purposes of this Agreement, an "Insider Secondary
Creditor"   is  a   shareholder,   officer,   director,   affiliate,   agent  or
representative of the Seller.

     The Escrow  Agent will  disburse the amount of funds  received  pursuant to
paragraph 3(a)(i) as follows:

          (A) at the  Closing,  Escrow  Agent shall pay all amounts then due and
owing to each of the Primary Creditors as specified on the creditors list as set
forth on Schedule  8(a)(xiv) of the Disclosure  Schedule (as updated pursuant to
paragraph 8(a)(xiv)) (other than the Primary Creditors that were paid at Closing
by checks  remitted by  Purchaser  as specified  above).  Each of Purchaser  and
Seller  will  provide  Escrow  Agent with a joint  written  instruction  to that
effect, as more particularly specified in paragraph 10(b)(vii); and

          (B) it is the  intention of the parties that the amounts to be held in
escrow by the Escrow Agent for the payment and satisfaction of the claims of all

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<PAGE>

of the  Secondary  Creditors,  pursuant to  paragraph  3(a)(i)  (the  "Secondary
Creditors  Escrow Amount") be released in twenty-five  percent (25%)  increments
(the "Secondary  Creditors Release Amount") to Seller, in trust,  solely for the
purpose of providing  Seller with the ease and flexibility of promptly  settling
and  satisfying  in  full  the  claims  of  all  of  the  Secondary   Creditors.
Accordingly,  and  notwithstanding  paragraph  3(a)(i),  Purchaser  will  pay at
Closing,  as part of the Purchase Price, an initial Secondary  Creditors Release
Amount,  directly to Purchaser.  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  as  specified  on  Schedule
8(a)(xiv)  of  the  Disclosure   Schedule  (as  updated  pursuant  to  paragraph
8(a)(xiv)),  all subject to and in accordance  with the terms and  provisions of
the Escrow Agreement.

     Upon  presentation  by  Seller  to  Purchaser  of proof  to the  reasonable
satisfaction  of  Purchaser  of:  (i)  the  satisfaction  of the  claims  of the
Secondary Creditors paid by Purchaser directly at Closing, if any, and (ii) 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.

     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 this
paragraph 3(a)(iii)(B).  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: (i) 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 (ii) 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 held
in escrow by the Escrow Agent as security for the payment of Secondary Creditors
pursuant to paragraph 3(a)(i).

     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.

     (b) In  the  event  that  third  party  claims  are  asserted,  alleged  or
instituted in writing against Purchaser during the period commencing on the date
hereof and ending on the Closing Date arising out of,  relating to, or resulting
from, Purchaser entering into this Agreement or the  Sub-Distribution  Agreement

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<PAGE>

or the  transactions  contemplated  thereunder  or  hereunder,  and those claims
remain unsatisfied as of the Closing Date (the "Unresolved Pre-Closing Claims"),
then  the  Cash  Portion  shall  be  reduced,  and the  Escrow  Amount  shall be
increased,  each by an amount equal to the amount of the Unresolved  Pre-Closing
Claims (the "Increased Escrow Amount"), provided however, that the Escrow Amount
shall not be increased based upon claims asserted against Purchaser that are (i)
claims for personal  injuries (except product  liability  claims) resulting from
Purchaser's  negligence;  (ii) labor or employment related claims by Purchaser's
employees   against   Purchaser  due  to  Purchaser's   acts  or  omissions  but
specifically excluding (among other things) claims relating to acts or omissions
of Seller or Seller's  employees;  or (iii) claims  resulting  from  Purchaser's
gross  negligence.  Seller  shall use  reasonable  best  efforts to resolve  and
satisfy such Unresolved Pre-Closing Claims (which resolution may occur following
the  Closing  Date).  Upon  prior  written  notice by Seller  to  Purchaser  and
Purchaser's  counsel,  and upon the prior written  consent of Purchaser,  Seller
shall be permitted to utilize the  Increased  Escrow Amount but only as follows:
Seller will be permitted to utilize  only such portion of the  Increased  Escrow
Amount  as  is  necessary  to  resolve  and  satisfy  a  particular   Unresolved
Pre-Closing  Claim,  not to exceed the portion of the  Increased  Escrow  Amount
attributable  to that  particular  claim and only to the extent Seller  provides
Purchaser with reasonable documentation evidencing that such claim is satisfied.
Purchaser  will give such prior written  consent  provided that: (x) such amount
does not exceed the portion of the Increased Escrow Amount  attributable to that
particular  claim, and (y) 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 Seller and Purchaser related
to the  Unresolved  Pre-Closing  Claim in  question,  which  Escrow  Agent  will
promptly  provide to  Purchaser.  The Escrow  Amount will be held and  disbursed
pursuant to the terms of an escrow agreement between  Purchaser,  Seller and the
Escrow Agent (the  "Escrow  Agreement"),  a form of which is attached  hereto as
Exhibit B.

          (c) Seller  acknowledges  and agrees that  Purchaser is acquiring  the
Capital Acquired Assets  hereunder  without any assumption of any obligations or
Liabilities  of  Seller  or the  Distribution  Business  (collectively,  "Seller
Retained  Liabilities")  of any kind,  whether such  Liabilities  or obligations
relate to payment, performance or otherwise, it being understood that all of the
Seller Retained  Liabilities shall remain the sole  responsibility of, and shall
be retained, paid, performed, and/or discharged solely by, the Seller.

     Accordingly,  Purchaser  shall  not be deemed  to have  assumed,  nor shall
Purchaser be liable or responsible for, any of the Seller Retained  Liabilities.
Notwithstanding  anything to the contrary contained herein, and without limiting
the foregoing, the following shall include, without limitation, "Seller Retained
Liabilities" for the purposes of this Agreement:

     (i) any Liability or obligation of the Seller arising under this Agreement;

     (ii) any Liability or obligation  arising from any product  liability claim
in respect of the products sold by Seller prior to the Closing Date;

     (iii)  any  Liability  or  obligation  for  any  Taxes,  including  without
limitation  (1) any Taxes  arising  as a result  of  Seller's  operation  of the
Distribution  Business or ownership of the Capital  Acquired  Assets  before the

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Closing  Date,  (2) any  Taxes  that  will  arise as a result of the sale of the
Capital  Acquired Assets  pursuant to this Agreement,  and (3) any liability for
deferred Taxes of any nature;

     (iv) all personal property sales and use taxes assessed by any Governmental
Authority  with respect to Seller's  operation of the  Distribution  Business or
ownership  of the  Capital  Acquired  Assets to the extent  such  assessment  is
allocable to any period prior to and including the Closing Date;

     (v)  any  cost,   damage,   expense,   Liability,   obligation,   or  other
responsibility  arising from or under any federal,  state,  local or foreign law
(including common law),  statute,  code,  ordinance,  rule,  regulation or other
requirement relating to the Environmental Laws;

     (vi) all Liabilities and obligations of Seller under the Bottle Bill.

     (vii)  any  Liability  or  obligation  arising  under any  written  or oral
agreement that is not expressly transferred to Purchaser under this Agreement;

     (viii) any  Liability or obligation  relating to Employee  Benefit Plan and
Other Benefit Obligations;

     (ix) all Liabilities and obligations of Seller arising under the Collective
Bargaining Agreement;

     (x) any Liability or obligation under any employment,  severance, retention
or termination agreement with any employee of Seller;

     (xi) any Liability or obligation  arising out of or related to any employee
grievance  commenced or relating to periods prior to the Closing Date whether or
not the affected employees become employees of Purchaser;

     (xii) all  Liabilities  and  obligations  of Seller under the  Distribution
Agreements;

     (xiii)  all  Liabilities  and  obligations  of  Seller  under  the  Workers
Adjustment and Retaining Notification Act, as amended ("WARN Act");

     (xiv) any Liability or obligation  to  distribute  to the  shareholders  of
Seller  or  otherwise  apply  all or any  part  of  the  consideration  received
hereunder;

     (xv) any  Liability  or  obligation  arising  out of any  existing  action,
arbitration, audit, hearing, claim, investigation,  litigation, or suit (whether
civil, criminal, administrative, investigative, or informal) commenced, brought,
conducted,  or heard by or before,  or  otherwise  involving,  any  Governmental
Authority or arbitrator  ("Proceeding")  whether or not set forth in any exhibit
or  Schedule  delivered  to  Purchaser,  or any  Proceeding  arising  out of, or
relating to, any occurrence or event happening before the Closing Date;

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<PAGE>

     (xvi) any Liability or obligation arising out of or resulting from Seller's
non-compliance   with  any  Applicable  Laws,   including  without   limitation,
Securities Laws, or any order, injunction,  judgment, decree, ruling, assessment
or arbitration award;

     (xvii) any Liability or  obligation  based upon acts or omissions of Seller
occurring after the Closing Date;

     (xviii)  any  withdrawal  liability  resulting  from or arising  out of the
Collective Bargaining Agreement;

     (xix) any early termination costs, expenses, or other Liabilities resulting
from or  arising  out of the  withdrawal  from the  Workers  Compensation  Group
Self-Insurance Plan; and

     (xx) any other  Liability or obligation of Seller,  including any Liability
or obligation directly or indirectly arising out of or relating to the operation
of the  Distribution  Business or ownership of the Capital Acquired Assets prior
to the Closing Date, whether contingent or otherwise,  fixed or absolute,  known
or unknown, matured or unmatured, or present, future or otherwise.

          (c)  This   Agreement   does  not  constitute  an  assignment  of  the
Distribution  Agreements  to  Purchaser  nor a  delegation  of  Seller's  duties
thereunder.  Accordingly,  Seller hereby  acknowledges and agrees that Purchaser
has not  assumed,  nor  shall  Purchaser  be  liable  for,  any  obligations  or
liabilities arising out of or relating to any of the Distribution Agreements.

          (d) The  Capital  Acquired  Assets  shall  be  transferred,  assigned,
conveyed and delivered to Purchaser free and clear of any and all Liens.

          (e) The Purchase  Price to be paid  hereunder  for the transfer of the
Capital  Acquired Assets shall be allocated by Purchaser and Seller as set forth
on Schedule 3(e) of the Disclosure Schedule.  Purchaser and Seller shall reflect
the  Capital  Acquired  Assets upon their  respective  books and records for tax
reporting  purposes  in  accordance  with such  schedule  and shall file all tax
returns in accordance  with and based upon such  schedule.  Purchaser and Seller
shall  not take a  position  that is  inconsistent  with  such  schedule  in any
proceeding  or  investigations  before any  court,  arbitrator  or  Governmental
Agency.

     4.   Purchase of Inventory from Seller; Assumption of Open Orders.

          (a) Within ten (10) days following the Closing Date,  Purchaser  shall
purchase from Seller and Seller shall sell to Purchaser all of Seller's Saleable
Inventory of Products.  The  purchase  price for Saleable  Inventory is Seller's
"laid in cost" for the respective Products. "Saleable Inventory" means undamaged
Products (including,  without limitation,  packaging) that are within 90 days of
the respective  Brewers'  currently  published date code criteria and applicable
freshness  policies.  Saleable  Inventory  will  be  delivered  f.o.b.  Seller's
Brooklyn plant, loaded onto Purchaser's trucks, at which time Purchaser will pay
Seller for same as it is  delivered.  Saleable  Inventory  will be  delivered to

                                       11

<PAGE>

Purchaser free from any and all Liens. All payments for Saleable  Inventory will
be made by company check.  "Laid in cost" means the price paid by Seller for the
Products in question for delivery at the applicable f.o.b.  shipping points plus
freight  charges  incurred  by Seller in  transporting  the  Products  from such
delivery  point to its  warehouse  plus all state or local  taxes paid by Seller
with  respect  to the  purchase  of such  Product.  Saleable  Inventory  will be
reasonably  determined  by  Purchaser  pursuant  to a physical  inventory  to be
performed by Purchaser and Seller after business hours on a date mutually agreed
upon by them.

          (b) As of the Closing  Date,  Seller  shall  assign to  Purchaser,  at
Purchaser's option, all of Seller's outstanding purchase orders for Products not
yet  delivered  by the  respective  Brewer;  Purchaser  will pay  such  assigned
invoices when due.

     5.   Representations and Warranties of Seller. Seller hereby represents and
          warrants to Purchaser that:

          (a) Corporate  Existence and Rights.  Seller is a corporation  validly
organized, duly existing and in good standing under the laws of the jurisdiction
of its incorporation and as a foreign corporation in each jurisdiction where the
conduct of Seller's  Distribution  Business  requires Seller to be so qualified,
all of  which  jurisdictions  are  listed  on  Schedule  5(a) of the  disclosure
schedule (the "Disclosure Schedule"). Seller has the power and authority and the
legal  right to own and operate its  Distribution  Business,  to own the Capital
Acquired  Assets  and to lease the  property  it  operates  and to  conduct  the
business in which it is currently  engaged.  Seller does not currently  have any
subsidiaries  nor does it have any interest in any other Person not disclosed on
Schedule 5(a) of the Disclosure Schedule.

          (b) Corporate Power, Authorization and Enforceable Obligations. Seller
has the power,  authority and legal right to execute and deliver this  Agreement
and to  consummate  the  transactions  contemplated  hereby  and has  taken  all
necessary  corporate  action duly authorizing the execution and delivery of this
Agreement  and  the  transactions  contemplated  hereunder,  assuming  that  the
Controlling Shareholders execute and deliver the consents specified in paragraph
8(a)(vii),  and subject to the Seller's  compliance  with  Regulation 14C of the
Securities  Exchange  Act of 1934,  as amended.  Assuming  that the  Controlling
Shareholders  execute and deliver the consents specified in paragraph 8(a)(vii),
and subject to the Seller's  compliance  with  Regulation  14C of the Securities
Exchange Act of 1934, as amended,  all shareholder  action will be taken to duly
authorize  the execution  and delivery of this  Agreement  and the  transactions
contemplated hereunder.  This Agreement,  including the Disclosure Schedule have
been,  and the other  documents,  instruments  and  certificates  required to be
delivered  by Seller  pursuant to  paragraph  10(b)  hereof  (collectively,  the
"Seller  Documents") will be, duly executed and delivered on behalf of Seller by
duly  authorized  officers of Seller,  and this Agreement  constitutes,  and the
Seller Documents when executed and delivered will constitute, a legal, valid and
binding  obligation of Seller,  enforceable  against it in accordance with their
respective terms.

          (c) Validity of  Contemplated  Transactions,  etc. Except as otherwise
expressly set forth on Schedule 5(c) of the Disclosure  Schedule,  the execution
and delivery  and  performance  of this  Agreement  and the Seller  Documents by

                                       12

<PAGE>

Seller,  and  the  consummation  of the  transactions  contemplated  hereby  and
thereby,  do not and will not violate,  conflict with or result in the breach of
any term,  condition or  provision  of, or require the consent of or filing with
any other Person under (i) any Applicable Laws to which Seller is subject,  (ii)
any judgment, order, writ, injunction,  decree or award of any court, arbitrator
or Governmental  Authority which is applicable to Seller,  (iii) the articles of
incorporation,  charter  documents or by-laws of Seller or any securities issued
by Seller, or (iv) any mortgage,  indenture,  agreement,  contract,  commitment,
lease  or  other  instrument,  document,  agreement  or  understanding,  oral or
written, to which Seller is a party, by which Seller may have rights or by which
any of the Capital  Acquired Assets may be bound or affected,  or give any party
with rights thereunder the right to terminate,  modify,  accelerate or otherwise
change  the  existing  rights or  obligations  of Seller  thereunder.  Except as
otherwise  expressly set forth on Schedule 5(c) of the Disclosure  Schedule,  no
authorization,  approval  or consent of, and no  registration  or filing with or
other act in respect of, any other  Person is required  in  connection  with the
execution,  delivery or performance of this Agreement or the Seller Documents by
Seller or the consummation of the transactions  contemplated hereby and thereby.
The  execution,  and delivery and  performance  of this  Agreement or the Seller
Documents by Seller and the Controlling  Shareholders do not and will not result
in or require the  creation or  imposition  of any Lien on the Capital  Acquired
Assets or any portion thereof.

          (d) No Interest In Other Entities; No Third Party Options.  Except for
interests in Persons described in Schedule 5(d) of the Disclosure  Schedule,  no
shares of any corporation or any ownership or other investment interest,  either
of record,  beneficially or equitably,  in any association,  partnership,  joint
venture or other legal entity are included in the Capital Acquired Assets. As of
the date of this Agreement there are no, and as of the Closing Date,  there will
be no existing agreements,  contacts, options, commitments or rights with, of or
to any Person to acquire any of the Capital  Acquired  Assets or rights included
in such assets or any interest therein.  Purchaser will not incur any liability,
cost  or  expense  in  connection  with  the  consummation  of the  transactions
contemplated by this Agreement to any third party with whom Seller or its agents
or  representatives  have had  discussions or  negotiations  regarding the sale,
transfer,  assignment or disposition of all or a portion of the Capital Acquired
Assets or the Distribution Business.

          (e)  Capitalization.  (i) The  authorized  capital stock of the Seller
(the "Capital  Stock") consist of Twenty Million  (20,000,000)  shares of common
stock,  with a par value of $0.001  per  share,  of which  3,792,045  shares are
issued and outstanding,  and One Million  (1,000,000) shares of preferred stock,
with a par value of $0.01 per share,  of which none are issued and  outstanding.
Except as set forth in Schedule 5(e) of the  Disclosure  Schedule,  there are no
outstanding subscriptions,  options, convertible security rights (pre-emptive or
otherwise),  warrants,  calls or  agreements  relating  to any shares of Capital
Stock.  Except as set forth in Schedule  5(e) of the  Disclosure  Schedule,  and
other than the Capital Stock, no other equity or other security of the Seller is
issued and  outstanding.  No legend or other  reference to any purported Lien or
transfer restrictions appear upon any certificate  representing the stock or any
of the other capital stock of the Seller. The stock has been duly authorized and
validly issued, is fully paid and non-assessable, was not issued in violation of
the terms of any  agreement  binding on the Seller and was issued in  compliance
with the Seller's certificate of incorporation and by-laws.  Except as otherwise
set forth in Schedule 5(e) of the Disclosure  Schedule,  there are no agreements
relating  to the  issuance,  sale or  transfer  of any  capital  stock  or other
securities of the Seller including, without limitation,  subscriptions, options,

                                       13

<PAGE>

warrants, calls, commitments, debentures or any other rights of any character to
purchase, convert into or otherwise acquire any shares of capital stock or other
securities of the Seller.  None of the  outstanding  Capital Stock of the Seller
was issued in violation of the Securities Act of 1933, as amended, and any other
applicable  federal  or state  securities  laws and the  rules  and  regulations
promulgated  thereunder  (collectively,  the "Securities Laws"). The Seller does
not own, nor does it have any  agreement to acquire,  any capital stock or other
securities,  or any direct or  indirect  equity or other  interest in or to, any
other Person or business.

               (ii) Carmine Stella,  Anthony Stella,  Alex Matrisciani,  Michael
Matrisciani,  Daniel  Matrisciani  and  Monty  Matrisciani  (collectively,   the
"Controlling Shareholders") are the record and beneficial owners of 50.1% of all
of the issued and outstanding Capital Stock of the Seller, free and clear of all
Liens.  Provided the Controlling  Shareholders vote in favor of consummating the
transactions  contemplated hereby, Seller is not and will not be required, under
any circumstances,  to solicit proxies from its remaining  shareholders in order
to  execute  and  perform  this  Agreement  and   consummate  the   transactions
contemplated  hereby.   Instead,  Seller  will  only  be  required  to  file  an
Information  Statement in order to obtain requisite shareholder approval of this
Agreement and the transactions contemplated hereunder.

               (iii) The filing and  distribution of the Information  Statement,
without  initiating a proxy  solicitation  process,  is sufficient to obtain the
requisite  stockholder  approval to execute and deliver  this  Agreement  and to
consummate the transactions  contemplated  hereunder,  and is in accordance with
the  Securities  Laws,  the  regulations  of the U.S.  Securities  and  Exchange
Commission (the "SEC"), and the laws of the State of Delaware.

               (iv) In  connection  with  the  filing  and  distribution  of the
Information  Statement,  Seller  acknowledges  and agrees that  Purchaser has no
obligation to furnish any (A) financial information  concerning Purchaser or any
of its  shareholders,  or (B) any information  which  Purchaser,  in good faith,
believes could put Purchaser at a competitive disadvantage.  Purchaser will have
no liability for failing to provide such  information,  and Purchaser  will have
the right to terminate  this  Agreement  pursuant to  paragraph  12(a)(x) in the
event the SEC requests or requires Purchaser to furnish such information.

          (f) Title to Properties.  Condition of Tangible Assets.  Except as set
forth  in  Schedule  5(f) of the  Disclosure  Schedule,  Seller  is the sole and
exclusive legal and beneficial  owner of the Capital Acquired Assets and has and
will transfer to Purchaser at the Closing,  good,  valid and marketable title in
and to such  assets,  free  and  clear  of any and all  Liens.  The  asset  sale
contemplated  hereby will,  on the Closing  Date,  vest in Purchaser  all right,
title, and interest in and to the Capital Acquired Assets, free and clear of any
and all Liens created by, or imposed upon, Seller or any of its assets.

          (g) Compliance  With Laws.  Except as otherwise  specified in Schedule
5(g) of the Disclosure  Schedule:  (i) as of the date of this Agreement,  Seller
is, and as of the Closing  Date will be, in full  compliance  with all  federal,
state  and  local  laws,  rules,   regulations  and  ordinances   (collectively,
"Applicable  Laws")  that  are or were  applicable  to it or to the  conduct  or
operation  of the  Distribution  Business or the  ownership or use of any of the
Capital Acquired Assets including,  without limitation,  the Securities Laws and

                                       14

<PAGE>

Environmental Laws; (ii) no event has occurred or circumstance exists that (with
or without  notice or lapse of time) (A) may constitute or result in a violation
by the Seller of, or a failure  on the part of the  Seller to comply  with,  any
Applicable Law, or (B) may give rise to any obligation on the part of the Seller
to undertake,  or to bear all or any portion of the cost of, any remedial action
of  any  nature;  (iii)  the  Seller  has  not  received  any  notice  or  other
communication  (whether oral or written) from any applicable federal,  state and
local governmental,  public, or quasi public authorities,  bodies, officials and
agencies (hereinafter collectively referred to as a "Governmental Authority") or
any other  Person  regarding  (A) any actual,  alleged,  possible,  or potential
violation of, or failure to comply with, any Applicable Laws, or (B) any actual,
alleged,  possible,  or  potential  obligation  on the  part  of the  Seller  to
undertake,  or to bear all or any portion of the cost of, any remedial action of
any  nature;  and (iv) Seller has  obtained  and holds all  necessary  licenses,
permits  and  other  consents,   authorizations  and  approvals   (assuming  the
Controlling  Shareholders vote in favor of the transactions  contemplated  under
this   Agreement   as   specified   in   paragraph   8(a)(vii))   (collectively,
"Authorizations")  which  are  necessary  to  (A)  execute  this  Agreement  and
consummate  the   transactions   contemplated   hereby,   and  (B)  conduct  the
Distribution  Business  as now and  previously  conducted  or to own the Capital
Acquired Assets. A list of Authorizations  are specified on Schedule 5(g) of the
Disclosure Schedule. Seller is not in default nor has it received any notices of
any  claim  or  default  with  respect  to  such  Authorizations.  All  of  such
Authorizations  are  renewable  by their  terms  or in the  ordinary  course  of
business.

          (h) INTENTIONALLY OMITTED

          (i) Labor  Matters.  Except for the Collective  Bargaining  Agreement,
Seller  is not a party to any other  collective  bargaining  agreement,  no such
agreement  determines  the terms and conditions of employment of any employee of
Seller, no collective bargaining agent has been certified as a representative of
any of the employees of Seller,  and no  representation  campaign or election is
now in  progress  with  respect to any of the  employees  of Seller.  Seller has
complied in all  respects to  Applicable  Laws  relating  to  employment,  equal
employment opportunity, non-discrimination, immigration, wages, hours, benefits,
collective   bargaining,   payment  of  Social   Security  and  similar   taxes,
occupational  safety  and  health  and  plant  closings.  Except as set forth in
Schedule 5(i) of the Disclosure  Schedule,  Seller is not liable for the payment
of any compensatory damages, taxes, fines, penalties, or other amounts, however,
designated,  for failure to comply with any of the  foregoing  Applicable  Laws.
Except as set forth in Schedule 5(i) of the Disclosure  Schedule,  there has not
been, there is not presently  pending or existing,  and there is not threatened,
(a) any strike,  slowdown,  picketing,  work  stoppage,  or  employee  grievance
process,  (b) any Proceeding against or affecting Seller relating to the alleged
violation of any  Applicable  Laws  pertaining to labor  relations or employment
matters,  including  any charge or complaint  filed by an employee or union with
the National Labor Relations Board, the Equal Employment Opportunity Commission,
or any comparable  Governmental  Authority,  organizational  activity,  or other
labor or employment dispute against or affecting Seller or its premises,  or (c)
any application for certification of a collective  bargaining  agent.  Except as
set forth in Schedule 5(i) of the Disclosure Schedule,  no event has occurred or
circumstances  exist that could provide the basis for any work stoppage or other
labor  dispute.  There is no lock-out of any  employees  by Seller,  and no such
action is contemplated by Seller.

                                       15

<PAGE>

     Except  as set  forth in  Schedule  5(i) of the  Disclosure  Schedule,  the
Collective Bargaining  Agreement:  (i) is in full force and effect and is valid,
binding  and  enforceable  against the parties  thereto in  accordance  with its
terms;  (ii) Seller is, and to the best of Seller's  knowledge after due inquiry
all other parties thereto are, in compliance with the provisions thereof;  (iii)
Seller is, and to the best of Seller's  knowledge,  each of the other parties to
such agreements are in compliance with their respective  obligations  thereunder
and Seller is not, and to the best of Seller's  knowledge no other party thereto
is, in default in the  performance,  observance or  fulfillment  of any material
obligation,  covenant or condition  contained  therein and no event has occurred
which with or  without  the  giving of notice or lapse of time,  or both,  would
constitute a default thereunder. Furthermore, to the best of Seller's knowledge,
and  except  as set  forth in  Schedule  5(i) of the  Disclosure  Schedule,  the
Collective  Bargaining  Agreement does not contain any  contractual  requirement
with  which  there is a  reasonable  likelihood  that  Seller  will be unable to
comply.  Seller  has  delivered  a true  and  correct  copy  of  the  Collective
Bargaining  Agreement  and the  Collective  Bargaining  Agreement  has not  been
assigned,  modified,  supplemented  or amended except as expressly  specified on
Schedule 5(i) of the Disclosure Schedule.

          (j) Employee  Benefit Plans and  Arrangements.  Except as set forth on
Schedule 5(j) of the Disclosure  Schedule,  there are no Employee  Benefit Plans
(as defined  below) or Other  Benefit  Obligations  (as defined  below) of which
Seller  is or  was a  Plan  Sponsor,  or to  which  Seller  contributes  or  has
contributed,  or in which  Seller  otherwise  participates  or  maintains or has
participated   or  maintained  or  under  which  Seller  has  any  Liability  or
obligation.

          For purposes hereof,  the term "Employee Benefit Plan" has the meaning
specified  in Section  3(3) of the Employee  Retirement  Income  Security Act of
1974, as amended ("ERISA"), and shall include, without limitation, all qualified
and  non-qualified  plans under Section  401(a) of the IRC and all pension plans
within the  meaning of ERISA ss.  3(3),  together  with  pension  plans that are
subject  to Title IV of ERISA,  29 U.S.C.  ss.1301  et seq.  The term  "Employee
Benefit  Plan" shall also be deemed to include  multi-employer  plans within the
meaning  specified  in ERISA ss.  3(37)A and  voluntary  employees'  beneficiary
associations  under IRC ss.  501(c)(9).  The term "Plan Sponsor" has the meaning
specified in ERISA ss. 3(16)(B).  The term "Other Benefit Obligations" means all
obligations, arrangements, employee stock-option or profit sharing plans, health
care plans or  benefits,  policies  or  customary  practices,  whether or not in
writing or legally  enforceable,  to provide  benefits,  other than  salary,  as
compensation for services rendered,  to present or former directors,  employees,
or agents, or any beneficiary,  dependent or assignee of any of them, other than
obligations,  arrangements and practices that are Employee Benefit Plans. "Other
Benefit Obligations"  include,  without limitation,  consulting agreements under
which the compensation paid does not depend upon the amount of service rendered,
sabbatical policies,  severance payment policies,  incentive, bonus and deferred
compensation policies,  vacation and holiday policies and fringe benefits within
the meaning of IRC ss. 132.

          (k) Certain  Contingencies.  No  Governmental  Authority  has notified
Seller with respect to Seller's  Distribution  Business or the Capital  Acquired
Assets,  nor,  to the best of  Seller's  knowledge  after due  inquiry,  has any
Governmental  Authority  during the preceding  five (5) years taken any steps to

                                       16

<PAGE>

investigate or inquire about Seller,  the  Distribution  Business or the Capital
Acquired  Assets,  other than on account  of routine  inspections  which did nor
result in any notice of violations.

          Except as  specified  in  Schedule  5(k) of the  Disclosure  Schedule,
Seller does not, nor has it ever, generated, transported, stored, disposed of or
treated hazardous wastes or substances within the meaning of Environmental Laws.
There has been no release  or, to the  knowledge  of the  Seller,  any threat of
release,  of any such  hazardous  materials,  waste or substances at or from any
facilities  of Seller or from or by any other  properties  and  assets  (whether
real, personal,  or mixed) in which the Seller has or had an interest, or to the
knowledge of Seller,  any  geologically or  hydrologically  adjoining  property.
Seller  does not know of, and has never  received  any notice of, any  potential
liability  of Seller or the  Distribution  Business  under the  Applicable  Laws
concerning  environmental  related  issues and  Liabilities,  including  without
limitation,  Comprehensive  Environmental Response,  Compensations and Liability
Act of 1980, as amended,  or any comparable law, rule,  ordinance or regulation,
or  any  other  Applicable  Laws  concerning   hazardous  wastes  or  substances
(collectively, "Environmental Laws").

          (l) Litigation.  Except for matters  specified in Schedule 5(l) of the
Disclosure Schedule, there are no legal actions, suits, governmental proceedings
or  investigations  pending  or, to the best of Seller's  knowledge,  threatened
against or  affecting  Seller,  Seller's  Distribution  Business  or the Capital
Acquired Assets,  and neither Seller nor the Capital Acquired Assets are subject
to any  order,  writ,  injunction,  judgment,  decree  or  award  of any  court,
arbitrator or Governmental Authority. Seller is not a party to or subject to the
provisions of any judgment, order, writ, injunction,  decree, permit or award of
any court,  arbitrator or Governmental  Authority which may adversely affect the
transactions contemplated hereby.

          (m) Taxes. As of the date hereof and on the Closing Date, all federal,
state,  local and foreign tax returns,  reports,  statements  and other  similar
filings  required to be filed by Seller (the "Tax  Returns") with respect to any
federal,  state,  local or  foreign  taxes,  assessments,  interest,  penalties,
deficiencies,  fees and other  governmental  charges or  impositions  (including
without  limitation all income tax,  capital gains tax,  value-added tax, estate
tax, unemployment compensation, social security, payroll, sales and use, excise,
privilege, property, ad valorem, franchise, license, school and any other tax or
similar governmental charge or imposition under laws of the United States or any
state or municipal or political  subdivision  thereof or any foreign  country or
political   subdivision   thereof)  (the  "Taxes")  have  been  filed  with  the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
are  required  to be  filed,  and all  such Tax  Returns  properly  reflect  the
Liabilities  of Seller for Taxes for the  periods,  property  or events  covered
thereby.  Except as set forth in Schedule 5(m) of the Disclosure  Schedule,  all
Taxes,  including  without  limitation  those  which are  called  for by the Tax
Returns,  or heretofore or hereafter  claimed to be due by any taxing  authority
from  Seller,  have been  properly  accrued or paid.  The accruals for Taxes are
adequate to cover the tax Liabilities of Seller with respect to the Distribution
Business  as of the date  hereof.  Except as set forth in  Schedule  5(m) of the
Disclosure  Schedule,  Seller  has not  received  any  notice of  assessment  or
proposed assessment in connection with any Tax Returns and there are not pending
tax  examinations of or tax claims asserted  against Seller or any of its assets
or  properties.  Seller  has not  extended,  or waived the  application  of, any
statute  of  limitations  of  any  jurisdiction   regarding  the  assessment  or
collection of any Taxes.  Except as set forth in Schedule 5(m) of the Disclosure
Schedule,  there are no tax liens (other than any lien for current taxes not yet
due and  payable) on any of the assets or  properties  of Seller.  Except as set
forth in Schedule 5(m) of the  Disclosure  Schedule,  Seller has no knowledge of
any basis for any  additional  assessment  of any Taxes.  Except as set forth in

                                       17

<PAGE>

Schedule 5(m) of the Disclosure Schedule,  Seller has made all deposits required
by law to be made with respect to employees'  withholding  and other  employment
taxes,  including  without  limitation the portion of such deposits  relating to
taxes  imposed  upon  Seller.  Seller will also pay before the Closing  Date all
sales and use taxes and all other  Taxes then due and owing  arising  out of the
operation  of the  Distribution  Business  for all periods  prior to the Closing
Date.

     (n) Brokers and Finders.  No Person has been  authorized  by Seller,  or by
anyone  acting on behalf of  Seller,  to act as  broker,  finder or in any other
similar  capacity  in  connection  with the  transactions  contemplated  by this
Agreement in such a manner as to give rise to any valid claim against  Purchaser
or Seller for any  broker's or finder's  fee or  commission  or similar  type of
compensation.

     (o)  Distribution  Rights.  Except  as set  forth  in the  Sub-Distribution
Agreement, Seller has not sold, transferred,  conveyed, assigned or set over any
of its right, title and interest in and to the Exclusive Distribution Rights, or
any portion thereof, to any Person.  Except as set forth in the Sub-Distribution
Agreement,  to Seller's  knowledge,  no Person  other than Seller has any right,
title,  interest,  encumbrance  or  claim  in or to the  Exclusive  Distribution
Rights. Except as set forth in the Sub-Distribution  Agreement,  and in Schedule
5(o) of the Disclosure Schedule,  Seller holds the Exclusive Distribution Rights
and the Saleable  Inventory free and clear of any Liens.  Except as set forth in
the  Sub-Distribution  Agreement,  Seller is not an agent of any of the Brewers,
has not appointed any  sub-distributors  and has not delegated any of its duties
in  connection  with  the  performance  of  its  obligations  under  any  of the
Distribution Agreements or in connection with the Exclusive Distribution Rights.
Seller is not a party to nor, to the best of its knowledge, threatened with, any
Proceeding related to the Exclusive Distribution Rights.

     (p) Products.  During the consecutive 12 calendar month period ending April
30, 2005,  Seller  distributed and sold at least  1,500,000 Case  Equivalents of
Products in the Territory  and, to the best of Seller's  knowledge,  those cases
were consumed within the Territory and not transshipped outside of the Territory
in any material respect. To the best of Seller's knowledge, all Products located
on the  premises of Seller's  customers  comply  with each  respective  Brewer's
currently published date code criteria and applicable freshness policies;

     (q)  Customer  Reports.  The  information  to be  contained in the customer
reports  it is  providing  to  Purchaser  pursuant  to  paragraph  10(b) of this
Agreement is true, complete and accurate in all material respects.

     (r) Bankruptcy.  Based upon the present  financial  condition of the Seller
and the  reasonably  foreseeable  financial  condition of the Seller between the
date hereof and the Closing Date,  Seller  presently does not intend to, and, in
the absence of a material change in Seller's  financial  condition will not take
any action to,  commence an action or  proceeding  or take  advantage of or file
under any federal or state insolvency  statutes  including,  without limitation,
the United States  Bankruptcy  Code,  seeking to have an order of relief entered
with  respect to it, or seeking  adjudication  as a bankrupt  or  insolvent,  or
seeking reorganization,  arrangement,  adjustment,  liquidation,  dissolution or
other relief with  respect to its debts,  or make a general  assignment  for the
benefit of creditors,  or consent to the appointment of a receiver,  liquidator,
or similar official of all or substantially all of its assets. In the event of a
material change in Seller's financial condition which results in the filing of a
voluntary  petition  under Title 11 of the United  States Code (the  "Bankruptcy

                                       18

<PAGE>

Code"),  Seller  agrees that within  twenty  (20) days of such  filing,  it will
either file a motion under  ss.363 of the  Bankruptcy  Code  seeking  bankruptcy
court approval of this Agreement and the ancillary agreements related hereto, to
sell the Capital Acquired Assets as contemplated  hereby, or it will file a Plan
of  Reorganization  under ss.1121 of the Bankruptcy  Code which provides for the
sale of the Capital Acquired Assets pursuant to the terms of this Agreement.

     (s) Accuracy of  Information.  No  information  contained in the Disclosure
Schedule or Seller  Documents  contains any untrue statement of material fact or
omits any material fact  necessary to make the  statements  therein not false or
misleading.

     6. Representations and Warranties of Purchaser.  Purchaser hereby makes the
following representations and warranties to Seller:

     (a)  Corporate  Existence and Rights.  Purchaser is a  corporation  validly
organized, duly existing and in good standing under the laws of the jurisdiction
of its incorporation and as a foreign corporation in each jurisdiction where the
conduct of its business requires Purchaser to be so qualified. Purchaser has the
power and  authority  and the legal right to own and operate  its  business,  to
lease the  property  it  operates  and to conduct  the  business  in which it is
currently engaged.

     (b) Corporate Power,  Authorization and Enforceable Obligations.  Purchaser
has the power,  authority  and legal right to execute,  deliver and perform this
Agreement and consummate the transactions  contemplated hereby and has taken all
necessary  corporate and  shareholder  action to duly  authorize the  execution,
delivery and  performance  of this Agreement and the  transactions  contemplated
hereby.  This  Agreement  has been,  and the other  documents,  instruments  and
certificates  required to be delivered by Purchaser  pursuant to paragraph 10(c)
(collectively,  the "Purchaser  Documents") will be, duly executed and delivered
on behalf of  Purchaser  by duly  authorized  officers  of  Purchaser,  and this
Agreement  constitutes,  and the Purchaser Documents when executed and delivered
will constitute, a legal, valid and binding obligation of Purchaser, enforceable
against it in accordance with their respective terms.

     (c) Validity of Contemplated Transactions, etc. The execution, delivery and
performance of this Agreement, and the Purchaser Documents by Purchaser, and the
consummation of the  transactions  contemplated  hereby and thereby,  do not and
will not violate,  conflict with or result in the breach of any term,  condition
or  provision  of, or  require  the  consent of any other  Person  under (i) any
Applicable Laws to which Purchaser is subject,  (ii) any judgment,  order, writ,
injunction,  decree or award of any court,  arbitrator or Governmental Authority
which is  applicable  to  Purchaser,  (iii) the  certificate  of  incorporation,
charter documents or by-laws of Purchaser or any securities issued by Purchaser,
or (iv) any mortgage, indenture, agreement, contract, commitment, lease or other
instrument,  document,  agreement or  understanding,  oral or written,  to which

                                       19

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Purchaser is a party,  by which Purchaser may have rights or by which any of its
assets may be bound or affected,  or give any party with rights  thereunder  the
right to terminate,  modify,  accelerate or otherwise change the existing rights
or obligations of Purchaser  thereunder.  No authorization,  approval or consent
of, and no  registration or Bankruptcy Case with or other act in respect of, any
other  Person  is  required  in  connection  with  the  execution,  delivery  or
performance  of this  Agreement and the Purchaser  Documents by Purchaser or the
consummation of the transactions contemplated hereby and thereby.

     (d) Brokers and Finders. No Person has been authorized by Purchaser,  or by
anyone acting on behalf of Purchaser,  to act as broker,  finder or in any other
similar  capacity  in  connection  with the  transactions  contemplated  by this
Agreement in such a manner as to give rise to any valid claim against  Seller or
Purchaser  for any  broker's or finder's  fee or  commission  or similar type of
compensation.

     (e)  Financial  Ability.  The  Purchaser  currently  has,  and  will  have,
sufficient liquid assets to fund the Purchase Price at Closing.

     7. Indemnifications.  (a) From and after the Closing Date, Purchaser hereby
agrees to indemnify,  protect,  reimburse and hold harmless  Seller and Seller's
shareholders,  officers,  directors,  successors  and assigns,  and each of them
(hereinafter  collectively  referred to as the "Seller Group"), from and against
any  and all  Liabilities,  damages,  losses,  obligations,  penalties,  claims,
actions, litigations,  Proceedings,  demands, defenses, judgments, suits, costs,
disbursements and expenses, including, but not limited to, reasonable attorneys'
fees and  expenses,  or  diminution  of value,  whether or not involving a third
party  claim  (hereinafter   collectively  referred  to  as  the  "Damages")  of
whatsoever  kind and nature,  imposed  upon,  incurred by or asserted or awarded
against any of the Seller Group directly or indirectly  arising out of, relating
to or resulting from (i) Purchaser's  breach of any agreement,  covenant,  term,
condition or provisions  contained herein or Purchaser's  failure to perform any
agreements,  covenant, term, condition or provision on its part to be performed,
or  (ii)  Purchaser's  misrepresentation  or  breach  of any  representation  or
warranty made by Purchaser  hereunder as if such representation or warranty were
made  both on the  date  hereof  and as of the  Closing  Date,  or any  material
misstatement or omission in any  certificate or schedule  delivered or caused to
be delivered  by Purchaser  pursuant to or in  furtherance  of the  transactions
contemplated hereby.

     (b) From and after the Closing Date,  subject to the threshold set forth in
paragraph 7(f) below, Seller hereby agrees to indemnify,  protect, reimburse and
hold  harmless  Purchaser and  Purchaser's  shareholders,  officers,  directors,
successors and assigns, and each of them (hereinafter  collectively  referred to
as the  "Purchaser  Group")  from and against any and all Damages of  whatsoever
kind and nature, imposed upon, incurred by or asserted or awarded against any of
the  Purchaser  Group  directly or  indirectly  arising  out of,  relating to or
resulting from (i) any Liabilities or obligations of Seller  including,  without
limitation,  the  Seller  Retained  Liabilities;  (ii)  Seller's  breach  of any
agreement,  covenant,  term, condition or provision contained herein or Seller's
failure to perform any agreement,  covenant, term, condition or provision on its
part to be performed  hereunder;  (iii) Seller's  misrepresentation or breach of

                                       20

<PAGE>

any   representation   or  warranty   made  by  Seller   hereunder  as  if  such
representation  or  warranty  were  made both on the date  hereof  and as of the
Closing  Date, or any  misstatement  or omission in any  certificate,  schedule,
application, exhibit, the Disclosure Schedule or any other document delivered or
caused  to  be  delivered  by  Seller  pursuant  to  or in  furtherance  of  the
transactions  contemplated  hereby; (iv) Seller's breach of paragraph 8(a)(vii);
or (v) Damages to Purchaser caused by Seller's stockholders.

     (c) A party  making  a claim  for  indemnification  hereunder  (hereinafter
referred to as the "Indemnified Party"), shall give the other party (hereinafter
referred to as the  "Indemnifying  Party") written notice of such claim within a
reasonable  time  from  the  actual  discovery  of  same  (the  "Indemnification
Notice");  provided,  however,  that the  failure to give such  notice  will not
relieve  the  Indemnifying  Party  from  any  liability  that it may have to the
Indemnified Party except to the extent that the Indemnifying  Party demonstrates
actual prejudice as a result thereof. Any such  Indemnification  Notice shall be
accompanied by a copy of documents  which have been served upon the  Indemnified
Party, if any.

     (i) With  respect  to claims  for  indemnification  relating  to an action,
claim,  demand or Proceeding  of a third party,  the  Indemnifying  Party shall,
subject to the rights of or duties to any  insurer,  reinsurer  or other  Person
having  liability  therefor,  have the  option to  assume,  at the  Indemnifying
Party's  sole  cost  and  expense,  the  control  of the  defense  of any  legal
proceedings,  including  employment of counsel  reasonably  satisfactory  to the
Indemnified  Party,  provided  each of the  following  conditions  are satisfied
(collectively,  the  "Defense  Conditions"):  (A) the  Indemnifying  Party gives
written notice thereof to the  Indemnified  Party no later than twenty (20) days
from  the  date  of  receipt  of the  Indemnification  Notice  (the  "Assumption
Notice");  (B) the Indemnifying Party is not also a party to such Proceeding and
the Indemnified Party determines in good faith that joint  representation  would
be inappropriate;  (C) the Indemnified Party determines in good faith that joint
representation would not be inappropriate due to a conflict of interest; (D) the
Indemnifying  Party  provides the  Indemnified  Party with  evidence  reasonably
acceptable  to the  Indemnified  Party  that the  Indemnifying  Party  will have
sufficient  financial  resources  to defend  against  the  claims  raised in the
Proceeding and fulfill its indemnification  obligations hereunder; (E) the claim
involves only money  damages and does not seek an injunction or other  equitable
relief (however, if the claim seeks equitable relief, the Indemnified Party will
control, at its option, the defense of the Proceeding at the Indemnified Party's
cost),  and (F) the  Indemnifying  Party  conducts  the  defense  of such  claim
actively and  diligently.  If the  Indemnifying  Party shall have  exercised its
right to assume  control  and  established  its right to do so, the  Indemnified
Party  may,  in its sole  discretion  and at its sole cost and  expense,  employ
counsel to  represent  it in  addition to counsel  employed by the  Indemnifying
Party. If the Indemnifying Party exercises its right to assume control,  it will
be conclusively  established for purposes of this Agreement that the claims made
in that  proceeding  are within the scope and  subject to  indemnification.  The
Indemnified  Party shall cooperate with the Indemnifying  Party assuming control
of legal  proceedings and shall make available all pertinent  information  under
the control of the Indemnified Party as to such legal proceedings and shall make
appropriate personnel reasonably available for discovery and trial. In addition,
in no event  will  Purchaser  be  entitled  to  indemnification  of any  Damages
incurred by it in excess of the Purchase Price.

     In the  event  that the  Indemnifying  Party  shall  exercise  its right to
undertake  control  of  the  defense  of  any  such  legal   proceedings,   such
Indemnifying Party may only compromise or settle such legal proceeding on behalf

                                       21

<PAGE>

of and for the  account of the  Indemnified  Party  after it  obtains  the prior
written  consent  of the  Indemnified  Party;  provided,  however,  that  if the
Indemnifying Party shall receive an offer of a settlement or compromise from the
other  parties in the  applicable  legal  proceedings  at a particular  monetary
amount  excluding  Seller  Creditors (as defined below),  or obtain a commitment
from such  parties that they would accept a  compromise  or  settlement  at such
monetary amount if offered,  and such settlement or compromise requires only the
payment  of such  amount,  the  granting  of an  appropriate  release or similar
accommodation,  and no other relief, and there is (i) no finding or admission of
any  violation  of any  Applicable  Laws or any  violation  of the rights of any
Person  and  no  effect  on any  other  claims  that  may be  made  against  the
Indemnified  Party; (ii) the offer of settlement or compromise would not violate
the restrictions and  qualifications  set forth in paragraph 3(b) concerning use
of the Increased Escrow Amount;  and that (iii) settlement of such claim is not,
in the good faith  judgment  of the  Indemnified  Party,  likely to  establish a
precedential  custom or practice adverse to the continuing business interests of
the Indemnified  Party and the Indemnified  Party refuses to consent thereto and
elects to continue the legal  proceedings,  then the Damages of the  Indemnified
Party which are the subject of the  applicable  legal  proceedings  to which the
settlement or compromise relates shall be deemed to be limited to that amount of
Damages  which  the  Indemnified  Party  would  have had if such  compromise  or
settlement had been effected.  For purposes hereof,  the term "Seller Creditors"
means any third party  asserting a claim  against  Purchaser  relating to Seller
Retained Liabilities. In the event that the Indemnifying Party does not exercise
its  option  to  assume  control  of any such  action  or  proceeding,  then the
Indemnifying  Party shall  nevertheless  be obliged to indemnify the Indemnified
Party pursuant to the provisions  hereof,  and shall promptly pay all Damages as
incurred by the Indemnified Party.

     In the event any of the Defense Conditions is or becomes unsatisfied,  then
(i) the Indemnified  Party may defend  against,  and consent to the entry of any
judgment or enter into any  settlement  with respect to such claim in any manner
it may deem  appropriate  (and the  Indemnified  Party need not consult with, or
obtain any consent from, the Indemnifying Party in connection  therewith),  (ii)
the  Indemnifying  Party will  reimburse  the  Indemnified  Party  promptly  and
periodically for the costs of defending against such claim (including reasonable
attorneys'  fees and expenses) in accordance  with paragraph 7(d), and (iii) the
Indemnifying Party will remain responsible for any Damages the Indemnified Party
may suffer resulting from, arising out of, relating to, or caused by such claim;
and

     (ii) Any claim for  indemnification  with respect to any matter not related
to a third  party claim may be asserted  by  Indemnification  Notice.  The claim
specified in such notice shall be deemed valid and the  Indemnified  Party shall
be entitled to indemnification  hereunder on account of such claim unless within
twenty  (20) days of the  Indemnifying  Party's  receipt of the  Indemnification
Notice,  the  Indemnifying  Party gives notice to the Indemnified  Party that it
disputes the  validity of such claim.  In such event the dispute will be settled
in accordance with the provisions of paragraph 16(g) hereof.

     (d) Any and all amounts due for indemnity hereunder shall be promptly paid,
in lawful money of the United States of America, as Damages are incurred, and in
any event within thirty (30) days after written demand therefor.  Payments shall
be made in accordance with the reasonable instructions of the Indemnified Party.

                                       22

<PAGE>

     (e)  The   Indemnifying   Party  hereby   consents  to  the   non-exclusive
jurisdiction  of any  court  in  which  a  Proceeding  is  brought  against  the
Indemnified  Party for purposes of any claim that an Indemnified  Party may have
under this  Agreement  with respect to such  Proceeding  or the matters  alleged
therein,  and agrees that, in addition to any other method of service of process
available under  applicable law,  process may also be served on the Indemnifying
Party for any such Proceeding in accordance with paragraph 16(a).

     (f) Notwithstanding  the foregoing,  Purchaser may not assert any claim for
indemnification by Seller until the aggregate of all claims exceeds  $20,000.00,
and thereupon,  Seller's obligations for indemnification of Purchaser will be in
full force and effect for all Damages.  In addition,  in no event will Purchaser
be entitled to  indemnification  of any Damages  incurred by it in excess of the
Purchase Price.

     (g)  The  representations,  warranties  and  covenants  made by each of the
Purchaser and the Seller shall survive the Closing Date until the eighteen month
anniversary  thereof,  except for claims for indemnity  made by either Seller or
Purchaser  due  to a  breach  of  any of  the  representations,  warranties  and
covenants occurring during such eighteen (18) month period,  which will survive.
The remedies available under this Section 7 are the exclusive remedies available
to a party as a result of a breach of this Agreement.

     (h) The right to indemnification,  payment of Damages or other remedy based
on any representations,  warranties,  covenants,  or obligations made under this
Agreement will not be affected by any  investigation  conducted with respect to,
or any knowledge  acquired (or capable of being  acquired) at any time,  whether
before or after the  execution  and  delivery of this  Agreement  or the Closing
Date, with respect to the accuracy or inaccuracy of or compliance with, any such
representation,  warranty,  covenant, or obligation. The waiver of any condition
based on the accuracy of any  representation or warranty,  or on the performance
of or compliance  with any covenant or obligation,  will not affect the right to
indemnification,   payment  of   Damages,   or  other   remedy   based  on  such
representations, warranties, covenants, and obligations.

     (i) The Escrow  Amount  shall first be used to satisfy  claims by Purchaser
for  indemnification  under this Section,  before the other assets of Seller are
used for such purpose, subject to the following: (i) the provisions of paragraph
7 of this  Agreement,  (ii) to the extent the Escrow Amount is available,  (iii)
provided the assets of Seller or its  Distribution  Business are not dissipated,
and (iv) Purchaser does not deem itself to be insecure.  The Indemnifying  Party
shall not reduce the Escrow Amount,  the Increased  Escrow Amount,  or any other
amounts held in escrow pursuant to this Agreement, as payment for legal fees and
expenses  incurred by it in assuming the defense of the Indemnified  Party under
this paragraph 7.

     8. Agreements Pending Closing.

     (a) Agreements of Seller Pending the Closing.  Seller  covenants and agrees
that,  pending  the  Closing  and  except as  otherwise  agreed to in writing by
Purchaser:

                                       23

<PAGE>

     (i) Maintenance of Physical Assets.  Seller shall continue and maintain and
service the tangible assets used in the conduct of the Distribution  Business in
the  manner  set forth in the  business  plan  mutually  agreed to in writing by
Seller and  Purchaser  and as set forth on  Schedule  8(a)(i) of the  Disclosure
Schedule (the "Business Plan").

     (ii)  Compliance  with Laws,  etc.  Seller shall comply with all Applicable
Laws applicable to the Distribution  Business,  the noncompliance of which would
reasonably  be expected to  materially  and  adversely  effect the  Distribution
Business or the Capital Acquired Assets.

     (iii) Update Schedules.  Seller shall periodically disclose to Purchaser in
writing any information  contained in its  representations and warranties or the
Disclosure  Schedule which,  because of an event occurring after the date hereof
is incomplete  or is no longer  correct as all times after the date hereof until
the Closing Date;  provided,  however,  that none of such  disclosures  shall be
deemed to modify,  amend or supplement  the  representations  and  warranties of
Seller or the schedules hereto, unless Purchaser shall have consented thereto in
writing.

     (iv) Proprietary Rights. Seller shall not transfer,  license, dispose of or
permit to lapse any Proprietary  Rights or any rights thereto or to disclose the
Proprietary Rights to any Person.

     (v) Conduct of Business. (A) Seller will operate its business in accordance
with, and subject to, the Business Plan concerning the  distribution of Products
including, without limitation, the following:

     (i) use  reasonable  best  efforts to  preserve  existing  shelf  space and
location for Products on the premises of Seller's customers; and

     (ii) use reasonable best efforts to preserve  existing draught lines on the
premises of Seller's customers.

          (B)  Seller  will use its  reasonable  best  efforts  to  promote  and
     distribute  Products to customers  within the Territory in accordance  with
     the  Business  Plan.  Seller will not sell  Products to Home D Customers in
     excess of volumes  customarily  purchased by such  customers  for like time
     intervals,  except as  contemplated  by the Business Plan. The term "Home D
     Customers"  means  the  holder  of a class C or CO  license  under New York
     Alcoholic  Beverage  Control Law permitting the holder to sell beer both at
     wholesale and retail.

          (C) Except as contemplated by the Business Plan,  Seller shall use its
     best  efforts to preserve the  goodwill of Seller's  respective  customers,
     suppliers, employees and others having relations with Seller.

          (D) Seller  shall  conduct  its  business in such a manner that on the
     Closing Date the representations and warranties of Seller contained in this
     Agreement  shall be true and correct,  as though such  representations  and
     warranties  were made on and as of such  date.  Furthermore,  Seller  shall
     cause  all of the  conditions  to the  obligations  of  Seller  under  this
     Agreement to be timely satisfied.

                                       24

<PAGE>

     (vi) Sale of Distribution Business or Assets; Negotiations.  Subject to the
fiduciary  duties of the Board of  Directors  of Seller  set forth in  paragraph
8(a)(vi)(B)  and (C) below,  (A)  Neither  Seller nor its  directors,  officers,
Controlling  Shareholders,  shareholders,  employees,  representatives or agents
shall: (a) directly or indirectly solicit or encourage inquiries or offers from,
or initiate  negotiations  or discussions  with, any Person other than Purchaser
with respect to any acquisition of all or a portion of Seller,  the Distribution
Business or the Capital Acquired Assets (other than the sale of inventory in the
ordinary course of business); (b) enter into any agreement with any Person other
than  Purchaser  with respect to any  acquisition of all or a portion of Seller,
the Distribution Business or the Capital Acquired Assets (other than the sale of
inventory  in the  ordinary  course of  business);  or (c) afford  access to the
books,  records  or  properties  of  Seller  to any  other  Person  that  may be
considering  acquiring all or a portion of seller, the Distribution  Business or
the Capital  Acquired  Assets  (other than the sale of inventory in the ordinary
course of business).

          (B) If at any time during the time period beginning on the date of the
     execution  of this  Agreement  and  ending  on the  initial  filing  of the
     Information  Statement with the SEC (the "Initial  Period"),  a third party
     makes an  unsolicited  offer to the Seller to purchase  all or a portion of
     the Seller,  the Distribution  Business or the Capital Acquired Assets at a
     price  greater  than  the  Purchase  Price,   then  Seller  may  engage  in
     discussions or  negotiations  with such third party during such time period
     only,  provided it gives Purchaser written notice of Seller's  intention to
     have such discussions or negotiations prior to doing so (the "Competing Bid
     Notice").

          (C) However, if at any time following the Initial Period, the board of
     directors  of  Seller   determines   that  Seller's   compliance  with  the
     restrictions set forth in paragraph 8(a)(vi)(A) would cause a breach of the
     fiduciary  duties owed by such directors in their capacity as directors due
     to the receipt of a Superior Offer,  and such  determination  is based on a
     written opinion of Seller's counsel to the effect that the board must, as a
     matter of fiduciary duty,  consider the Superior Offer, then Seller will be
     permitted to receive,  consider and  negotiate  offers  received from third
     parties after the Initial Period for the sale of the Distribution  Business
     or the  Capital  Acquired  Assets and to provide  such third  parties  with
     access to relevant books and records of Seller (the "Fiduciary  Out").  For
     purposes  hereof,  the term  "Superior  Offer" means a bona fide offer of a
     third party to purchase  all or a portion of the Seller,  the  Distribution
     Business or the Capital  Acquired Assets from Seller at a price higher than
     the  Purchase  Price  and  upon  the same or more  favorable  as the  terms
     contained in this Agreement.

     (vii) Controlling Shareholders' Vote.  Contemporaneously with the execution
and delivery of this Agreement, Seller shall deliver a written consent signed by
each of the Controlling Shareholders representing,  and which will consist of, a
majority vote of all of the then issued and outstanding  shares of capital stock
of the Seller,  in favor of the execution and delivery of this Agreement and the
consummation of the transactions  contemplated hereunder. Such consents shall be
sufficient  to authorize  the  execution  and delivery of this  Agreement and to
consummate the transactions  contemplated  hereby without the need to initiate a
proxy solicitation process.

                                       25

<PAGE>

     (viii) Information Statement. With respect to the execution and performance
of this Agreement and the consummation of the transactions  contemplated hereby,
Seller will (A) comply with all Applicable Laws including,  without  limitation,
Securities  Laws and the  regulations of the SEC (except where such inability is
due to Purchaser's  refusal to provide requested  information in connection with
the Information  Statement);  (B) file an Information  Statement on Schedule 14C
with the SEC (the "Information  Statement") as promptly as practicable after the
execution and delivery of this Agreement;  (C) comply with any and all requests,
directives,  comments and inquiries  made by the SEC in order to facilitate  the
expiration  of all  applicable  waiting  periods  thereto,  including  using all
reasonable efforts to follow-up with the SEC in order to obtain the SEC Sign-Off
(as defined below); (D) promptly  distribute to its stockholders the Information
Statement pursuant to Regulation 14C of the Securities  Exchange Act of 1934, as
amended  following  notification  to  Seller,  that  the SEC no  longer  has any
comments or concerns  regarding the Information  Statement (the "SEC Sign-Off");
(E) not  initiate  a  proxy  solicitation  process  to  obtain  the  consent  of
shareholders  (other  than the  Controlling  Shareholders);  and (F) not require
Purchaser to provide any (x) financial  information  concerning Purchaser or any
of its  shareholders,  or (y) any information  which  Purchaser,  in good faith,
believes  could put  Purchaser at a competitive  disadvantage,  in support or in
furtherance of the filing of the Information Statement,  other than the terms of
this  Agreement.  Seller  further  agrees  that prior to filing the  Information
Statement with the SEC pursuant to paragraph  8(a)(viii)(B) above, it will first
provide Purchaser with a copy thereof, for its review and comments, if any.

     (ix) Price List. On the Closing Date, Seller agrees to deliver to Purchaser
Seller's  current  2005 price list for the  Products,  which  shall  contain the
current  and  complete  Product  price  structure  for  each  of its  customers,
including all rebates,  discounts and promotions for the consecutive twelve (12)
month period ending April 30, 2005.

     (x) Customer List. On the Closing Date, Seller shall deliver to Purchaser a
list(s)  of its  currently  active  on-premise  and  off-premise  customers  for
Products in the  Territory  (for resale at retail or at wholesale  and including
customers  which  Seller  reasonably  believes  resell the Products to locations
outside the Territory);  the list(s) will be in a form reasonably  acceptable to
Purchaser  and will  reflect the  purchase  history (by customer and package) of
these  customers for the  consecutive  twelve (12) month period ending April 30,
2005,  as well as  identifying  the  business  name,  address,  New York license
number,  the owner and/or  manager or buyer (if known),  the date and amounts of
Seller's  last  Products'  sale to each  customer  and  appropriate  billing and
redemption  history  information under New York  Environmental  Conservation Law
ss.ss. 27-1001 et. seq.

     (xi) Payment for Products.  Concurrent  with the Closing,  Seller agrees it
shall forthwith  reconcile and pay any  outstanding  amounts owed to each Brewer
for Products  sold and  delivered to it,  including  deposits for  cooperage and
kegs,  net of  verifiable  amounts  due to it from each  respective  Brewer  for
promotional,  incentive and  merchandising  programs and for container,  keg and
other deposits.

                                       26

<PAGE>

     (xii)  Brewer  Approvals.  Seller  will  use its  best  efforts  to  assist
Purchaser in obtaining  the written  approval from the Brewers of Purchaser as a
distributor of Brewer's Products in the Territory.  In this regard, Seller will,
on or before  Closing:  (A) pay all  amounts  which are due and  outstanding  to
Pabst,  (B) provide Pabst with a fully executed copy of this Agreement,  and (C)
will execute and deliver a letter of voluntary  surrender of all of the Products
and the Exclusive  Distribution  Rights (as to the Products) in the Territory in
the form attached hereto as Exhibit C (the "Surrender Letter").

     (xiii) Pension Expense Calculation. Immediately following the execution and
delivery  of this  Agreement,  Seller  shall  engage a qualified  consultant  to
calculate  the expenses and any related  liabilities  associated  with  Seller's
pension  plan,   collective   bargaining  agreement  and  any  other  withdrawal
liabilities  which may arise or  accrue  as a result  of the  execution  of this
Agreement and the transactions contemplated hereunder.

     (xiv)  Creditors List. A list of Seller's  creditors  prepared by Seller is
set forth in  Schedule  8(a)(xiv)  of the  Disclosure  Schedule . Seller  hereby
represents  and warrants that this list  identifies  all creditors of Seller and
the  Distribution  Business  and the  amounts  indicated  as being owed for each
creditor  is the total  amount of  Liability  owed by Seller to such  creditors.
Within five (5) days prior to Closing,  Seller shall deliver (i) payoff  letters
issued by the Primary  Creditors and the Secondary  Creditors  which Seller will
instruct Purchaser to pay directly at Closing,  pursuant to paragraph 3(a). Such
payoff  letters  will  indicate  the  total  Liabilities  owed by Seller to such
creditors as of the Closing Date;  and (ii) an updated list of creditors so that
the list  accurately  reflects  all  creditors of Seller and the total amount of
Liabilities owed by Seller to each of the creditors. This updated creditors list
will be accompanied by a sworn verification  executed by the president of Seller
verifying  the  foregoing.  The  updated  creditors  list will be subject to the
review of Purchaser's  auditors and, if the Liabilities to a particular creditor
cannot be readily ascertained, Seller's auditors shall set a reasonable estimate
to the Liabilities  owed by Seller to such creditor,  which will be reflected on
the  updated  Schedule  8(a)(xiv)  of the  Disclosure  Schedule.  At or prior to
Closing,  Seller will pay and satisfy in full all of the creditors identified as
"Primary  Creditors"  on Schedule  8(a)(xiv)  of the  Disclosure  Schedule  (the
"Primary Creditors"),  to the reasonable satisfaction of Purchaser in accordance
with paragraph  3(a). Any Primary  Creditors whose claims have not been paid and
satisfied in full by the Closing Date, will be paid and satisfied in full on the
Closing Date by Escrow Agent in accordance with paragraph 3(a).  Seller will pay
and  satisfy  in full  all of its  remaining  creditors  specified  in  Schedule
8(a)(xiv) of the Disclosure  Schedule (the "Secondary  Creditors") within ninety
(90) days after the Closing Date in accordance with the procedures  specified in
paragraph 3(a)(iii)(B) and the provisions of the Escrow Agreement.

     (xv) Landlord  Acknowledgement.  Seller will obtain a release issued by the
Landlord in favor of Seller of any Liabilities arising under,  resulting from or
in connection with, the lease between Erie Basin Marine Associates, as Landlord,
and Prospect  Beverages Inc., as tenant,  for the lease of the property known as
700 Columbia Street, Erie Basin, Buildings #300 and 302, Brooklyn, New York (the
"Lease"), and will deliver a copy of such release to Purchaser at the Closing.

                                       27

<PAGE>

     (xvi)  Third  Party  Claims.  In the event  that  third  party  claims  are
asserted,  alleged or instituted against Purchaser after the date hereof arising
out of, relating to, or resulting from,  Purchaser  entering into this Agreement
or the Sub-Distribution  Agreement or the transactions contemplated hereunder or
thereunder  (excluding claims asserted against Purchaser that are (i) claims for
personal   injuries   (excluding   product   liability  claims)  resulting  from
Purchaser's  negligence;  (ii) labor or employment related claims by Purchaser's
employees   against   Purchaser  due  to  Purchaser's   acts  or  omissions  and
specifically  excluding  claims  relating  to acts or  omissions  of  Seller  or
Seller's   employees;   or  (iii)  claims  resulting  from   Purchaser's   gross
negligence),  Seller  will pay and  satisfy  in full all such  claims,  and will
submit  documentary  evidence to Purchaser as proof  thereof,  to the reasonable
satisfaction of the Purchaser, within sixty (60) days after the Closing Date.

     (xvii)  Business  Plan.  Commencing  on  the  date  hereof  and  continuing
thereafter until the termination of the Sub-Distribution  Agreement, Seller will
comply with all of its obligations under the Business Plan.

     (xviii) Indemnification. In the event Purchaser indemnifies Escrow Agent in
an amount in excess of fifty percent (50%) of the aggregate of  Purchaser's  and
Seller's indemnification obligations to the Escrow Agent pursuant to paragraph 8
of the Escrow Agreement,  Seller will reimburse and pay to Purchaser such excess
amount promptly after such excess amount is incurred by Purchaser.

     (xix)  Credits.  In the event this  Agreement is terminated by either party
for any  reason,  Seller  shall  promptly  pay to  Purchaser  all of the credits
specified in paragraph 3(a).

     (xx) Bankruptcy.  Based upon the present financial  condition of the Seller
and the  reasonably  foreseeable  financial  condition of the Seller between the
date hereof and the Closing Date,  Seller  presently does not intend to, and, in
the absence of a material change in Seller's  financial  condition will not take
any action to,  commence an action or  proceeding  or take  advantage of or file
under any federal or state insolvency  statutes  including,  without limitation,
the United States  Bankruptcy  Code,  seeking to have an order of relief entered
with  respect to it, or seeking  adjudication  as a bankrupt  or  insolvent,  or
seeking reorganization,  arrangement,  adjustment,  liquidation,  dissolution or
other relief with  respect to its debts,  or make a general  assignment  for the
benefit of creditors,  or consent to the appointment of a receiver,  liquidator,
or similar official of all or substantially all of its assets. In the event of a
material change in Seller's financial condition which results in the filing of a
voluntary  petition  under Title 11 of the United  States Code (the  "Bankruptcy
Code"),  Seller  agrees that within  twenty  (20) days of such  filing,  it will
either file a motion under  ss.363 of the  Bankruptcy  Code  seeking  bankruptcy
court approval of this Agreement and the ancillary agreements related hereto, to
sell the Capital Acquired Assets as contemplated  hereby, or it will file a Plan
of  Reorganization  under ss.1121 of the Bankruptcy  Code which provides for the
sale of the Capital Acquired Assets pursuant to the terms of this Agreement.

     (b) Sub-Distribution  Agreement.  On the date hereof,  Purchaser and Seller
shall  execute and deliver to each other the  Sub-Distribution  Agreement in the
form as set forth in Schedule  A.  Subject to the terms of this  Agreement,  the
Sub-Distribution  Agreement will become effective upon the initial filing of the
Information  Statement with the SEC pursuant to Regulation 14C of the Securities
Exchange Act of 1934, as amended.  In this regard,  Seller  hereby  acknowledges
that:  (i) it has  scaled  back  its  business  and  operations,  including  the
marketing,  selling and  distribution of the Products of its own free will; (ii)
it has requested Oak to act as Seller's  sub-distributor  of the Products in the
Territory pursuant to the terms of the Sub-Distribution Agreement; (iii) Oak has
indicated  that it does not want to act as  Seller's  sub-distributor;  and (iv)
pursuant to the request of Seller,  and despite the  reluctance  of Oak, Oak has
nevertheless  agreed  to  be  sub-distributor  pursuant  to  the  terms  of  the
Sub-Distribution  Agreement as a financial  accommodation  to Seller in order to
assist  Seller to maintain its  relationships  with its  suppliers,  pending the
consummation of the transactions contemplated hereunder.

                                       28

<PAGE>

     9. Conditions Precedent to Closing.

     (a) Conditions  Precedent to Purchaser's  Obligations.  All  obligations of
Purchaser under this Agreement are subject to the  fulfillment or  satisfaction,
prior to or at the Closing, of each of the following conditions precedent:

     (i)  Purchaser  shall  have  received  (A)  the  written  approval  of this
Agreement and the transactions  contemplated hereby by each of the Brewers;  and
(B) a letter  issued by the Brewers and  addressed to Purchaser  which  appoints
Purchaser  as the  distributor  on an  exclusive  basis for all Products for the
Territory and the trade accounts located therein;

     (ii) In the event the consent  specified in paragraph 9(a)(i) is subject to
the  execution  of a  distribution  agreement  between  any of the  Brewers  and
Purchaser, then the negotiation, execution and delivery of such agreement by and
between each such  respective  Brewer and  Purchaser,  all in form and substance
reasonably satisfactory to Purchaser and its counsel, and, in the case of Pabst,
on terms  substantially  similar to Oak's existing  distribution  agreement with
Pabst;

     (iii)  The  representations  and  warranties  of Seller  contained  in this
Agreement, the Disclosure Schedule and in any schedule,  certificate or document
delivered by Seller to Purchaser  pursuant to the  provisions  hereof shall have
been true and accurate on the date hereof,  or when made,  without regard to any
schedule updates furnished by Seller after the date hereof and shall be true and
accurate on the Closing Date with the same effect as though such representations
and warranties were made as of such date,  except where such inaccuracy  results
in Damages to Purchaser not to exceed Twenty  Thousand  Dollars  ($20,000.00) in
the aggregate;

     (iv)  Seller  shall  have  performed  and  complied  with  all  agreements,
covenants and conditions  required by this Agreement to be performed or complied
with by it on or prior  to the date  specified;  if no date is  specified,  then
prior to or at the Closing;

     (v)  Purchaser  shall have  received a  certificate  from Seller  dated the
Closing Date,  certifying that the conditions  specified in paragraphs (iii) and
(iv) hereof and the covenants set forth in paragraph 8(a) have been fulfilled;

                                       29

<PAGE>

     (vi) Except as expressly set forth in the Business Plan,  the  Distribution
Business  and  Capital  Acquired  Assets  shall  not have  been and shall not be
threatened to be materially  adversely  affected in any way  including,  without
limitation,  Seller's  liabilities  exceeding the Purchase Price, as a result of
any event or occurrence;

     (vii) Seller shall have complied with all applicable  rules and regulations
of the SEC with respect to the execution and delivery of this  Agreement and the
consummation of the transactions contemplated hereby; and

     (viii) Seller shall have  delivered to Purchaser all of the items set forth
in paragraph 10(b).

     (b) Conditions  Precedent to the Obligations of Seller.  All obligations of
Seller under this  Agreement  are subject to the  fulfillment  or  satisfaction,
prior to or at the Closing,  of each of the  following  conditions  precedent or
waiver thereof by Seller:

     (i) The  representations  and  warranties  of  Purchaser  contained in this
Agreement,  the  Disclosure  Schedule  or in any list,  certificate  or document
delivered by Purchaser to Seller pursuant to the provisions hereof shall be true
and accurate in all material respects on the date hereof, or when made,  without
regard to any schedule updates  furnished by Purchaser after the date hereof and
shall be true and accurate in all material respects on the Closing Date with the
same effect as though such  representations  and warranties were made as of such
date;

     (ii)  Purchaser  shall have  performed and complied with all agreements and
conditions  required by this  Agreement to be performed or complied with by them
prior to or at the Closing; and

     (iii) Seller shall have received a  certificate  from  Purchaser  dated the
Closing Date certifying that the conditions specified in Paragraphs (i) and (ii)
hereof have been fulfilled.

     (c)  Conditions  Precedent  to Each  Party's  Obligations.  The  respective
obligations  of each of the Seller and the  Purchaser  under this  Agreement are
subject to the fulfillment or satisfaction prior to or at the Closing of each of
the following conditions, any one or more of which may be waived by them, to the
extent permitted by law:

     (i) Information  Statement.  All applicable waiting periods with respect to
the filing and the  distribution  of the  Information  Statement  required to be
filed and distributed by Seller shall have passed.

     (ii) Litigation.  No action,  suit or proceeding shall have been instituted
and be  continuing  or be  threatened  by any  Governmental  Entity to restrain,
modify or prevent the carrying out of the transactions  contemplated  hereby; no
preliminary   or  permanent   injunction   issued  by  any  court  of  competent
jurisdiction preventing the consummation of the Closing.

                                       30

<PAGE>

     (iii)  The  amount  of  Unresolved   Pre-Closing   Claims  that  constitute
Undisclosed  Liabilities  does not  exceed One  Million  Five  Hundred  Thousand
Dollars ($1,500,000.00) and provided Purchaser does not insist on maintaining an
Increased  Escrow Amount in excess of One Million Five Hundred  Thousand Dollars
($1,500,000.00) for Undisclosed Liabilities.  For purposes hereof,  "Undisclosed
Liabilities" are those Liabilities of Seller  (excluding  Liabilities for Taxes,
labor matters (including,  without limitation,  withdrawal liability) and claims
by any of the  shareholders,  officers,  directors,  agents or  employees of the
Seller (collectively,  "Related Party Claims")) not disclosed on any of Seller's
financial  statements,  the Disclosure  Schedule,  publicly filed reports or the
lists of creditors set forth on Schedule 8(a)(xiv).

     10. The  Closing.  (a) Subject to  paragraph  12, the Closing of the assets
sale  contemplated  hereby  shall  take  place  at the  offices  of  Ettelman  &
Hochheiser,  P.C., 100 Quentin Roosevelt Blvd., Suite 401, Garden City, New York
11530 on the date  that is the later of five (5)  business  days  following  (i)
Purchaser's receipt of (x) the written approval of all Brewers to this Agreement
and the transactions  contemplated hereunder,  and the letters issued by all the
Brewers  appointing  Purchaser as the exclusive  distributor  of Products in the
Territory,  pursuant to  paragraph  9(a)(i) or (y) fully  executed  distribution
agreements pursuant to paragraph 9(a)(ii), if applicable,  or (ii) the Effective
Date of the Information  Statement;  or (iii) at such other time and location as
the parties shall mutually agree. Such closing is hereinafter referred to as the
"Closing" and the date of the Closing is hereinafter referred to as the "Closing
Date".  Subject to the provisions of paragraph 12, the failure to consummate the
purchase and sale provided for in this Agreement on the date and time and at the
place  determined  pursuant  to this  paragraph  10(a),  will not  result in the
termination  of this  Agreement and will not relieve any party of any obligation
under this Agreement.

     (b) Seller agrees to deliver,  or cause to be  delivered,  the following to
Purchaser on the Closing Date:

     (i)  such  bills  of  sale  with   covenants  of   warranty,   assignments,
endorsements,  consents, permits,  approvals,  authorizations and other good and
sufficient instruments and documents of conveyance, transfer and consent in form
reasonably  satisfactory to Purchaser and its counsel, as shall be necessary and
effective  to  transfer  and assign to, and vest in,  Purchaser  all of Seller's
right, title and interest in and to the Capital Acquired Assets;

     (ii) a certificate from the secretary of Seller certifying that attached to
such  certificate  are all requisite  resolutions of Seller's board of directors
approving the execution and delivery of this Agreement and the  consummation  of
the transactions contemplated hereunder;

     (iii) all of the  agreements,  contracts,  commitments,  manuals,  training
materials  and  guidebooks,   price  books  and  price  lists,  on-premises  and
off-premises customer lists and subscriber lists, supplier lists, sales records,
files,   correspondence,   legal   opinions,   rulings  issued  by  Governmental
Authorities, and other documents, books, records, papers, files, office supplies
and data belonging to Seller which are part of the Capital Acquired Assets;

     (iv)  Seller's  current 2005 price list for the  Products,  as specified in
paragraph 8(a)(x);

                                       31

<PAGE>

     (v) a copy of the Escrow Agreement signed by Seller;

     (vi) an updated list of all of the creditors of Seller and the Distribution
Business  and the  total  amounts  of  Liabilities  owed by  Seller to each such
respective  creditor;  payoff  letters  issued by the Primary  Creditors and the
Secondary  Creditors  which  Seller will  instruct  Purchaser to pay directly at
Closing, pursuant to paragraph 3(a). Such payoff letters will indicate the total
Liabilities  owed by Seller to such  creditors as of the Closing  Date;  and the
sworn  verification  of Seller  verifying the foregoing,  all in accordance with
paragraph 8(a)(xiv); and

     (vii) written instructions signed by Seller authorizing the Escrow Agent to
pay all amounts then due and owing to each of the Primary Creditors, pursuant to
paragraph 3(a)(iii)(A).

     Simultaneously with Seller's delivery of the  aforementioned,  Seller shall
take all action as may be  required  to duly and  effectively  deliver and place
Purchaser in actual  possession  and operating  control of the Capital  Acquired
Assets;  provided,  however,  that nothing  contained  herein shall be deemed to
require  Seller  to  deliver  possession  of the  Capital  Acquired  Assets at a
location other than Seller's current business premises.

     (c) Purchaser agrees to deliver, or cause to be delivered, the following on
the Closing Date:

     (i) the Cash Portion pursuant to paragraph 3(a)(i) hereof;

     (ii) the Escrow Amount, pursuant to paragraph 3(a)(ii);

     (iii) a  certificate  from  the  secretary  of  Purchaser  certifying  that
attached to such certificate are all requisite  resolutions of Purchaser's board
of directors  approving  the  execution  and delivery of this  Agreement and the
consummation of the transactions contemplated hereunder;

     (iv) a copy of the Escrow Agreement signed by Purchaser; and

     (v) written  instructions signed by Purchaser  authorizing the Escrow Agent
to pay all amounts then due and owing to each of the Primary Creditors, pursuant
to paragraph 3(a)(iii)(A).

                                       32

<PAGE>

     11. Post Closing Matters.  (a) Seller, from time to time after the Closing,
at Purchaser's request, and at Purchaser's  expense,  will execute,  acknowledge
and deliver to Purchaser  such other  instruments of conveyance and transfer and
will take such other  actions and execute  and  deliver  such other  agreements,
documents,  certificates  and further  assurances  as Purchaser  may  reasonably
request in order to vest more effectively in Purchaser, or to put Purchaser more
fully  in  possession  of,  any of the  Capital  Acquired  Assets  or to  enable
Purchaser to fully obtain the practical realization of the benefits, utilization
and value of the  Capital  Acquired  Assets.  Each of the  parties  hereto  will
cooperate  with the other and execute and deliver to the other party hereto such
other instruments and documents and take such other actions as may be reasonably
requested  from time to time by the other  party to  evidence  and  confirm  the
intended  purposes  of  this  Agreement,   including,  without  limitation,  (i)
executing  documentation  needed in order to assist  Purchaser in obtaining  any
copyrights  or patents  relating  to the Capital  Acquired  Assets to the extent
available,  if at all; and (ii) filing all  instruments  of assignment  with the
applicable  Government  Authority for the purpose of assigning  the  Proprietary
Rights to Purchaser of record.

     (b) Each of the  Controlling  Shareholders  and Seller,  for themselves and
their  respective  heirs,  executors,  successors and assigns,  or affiliates or
related entities (collectively the "Restricted Parties"),  agrees that (i) after
the Closing  Date,  none of the  Restricted  Parties  will act as, or  represent
himself or itself as, an authorized distributor of the Products in the Territory
or any portion thereof;  and (ii) after the Closing Date, none of the Restricted
Parties will  directly or  indirectly  engage in wholesale  transactions  in the
Products  which it  knows,  or has  reason  to  know,  are to be  resold  in the
Territory.

     (c)  Seller  shall  not  disclose  or  use  any  confidential   information
pertaining to the  Distribution  Business or the Capital Acquired Assets without
prior written  consent of Purchaser  except to the extent (i) the information is
then  in the  public  domain  by acts  not  attributable  to  Seller,  (ii)  the
information  is  hereafter  received by Seller  from a third party  source on an
unrestricted  basis or (iii)  Seller is required to  disclose  such  information
under Applicable Law or under court or governmental  order;  provided,  however,
that Seller shall provide  Purchaser with prior notice of such  disclosure and a
reasonable  opportunity to seek a protective order with respect thereto.  In the
event  that such  protective  order is not  obtained  or that  Purchaser  waives
compliance with the provisions hereof, Seller agrees to determine, together with
Purchaser,  what disclosure of such information shall be the minimum required to
satisfy Seller's legal duties,  and the furnish only the minimum portion legally
required.

     12.  Termination.  (a) Subject to paragraph  12(c),  this  Agreement  shall
terminate and neither party shall have any further  obligations  hereunder  upon
the happening of any of the following events (each, a "Termination Event"):

     (i) the mutual written consent of Purchaser and Seller;

     (ii) by Purchaser, at its option, by written notice to Seller, if there has
been  a   material   violation   or  breach  of  any  of   Seller's   covenants,
representations,  warranties or agreements made herein (without giving effect to
any  supplement  to  the  Disclosure  Schedule);   in  order  to  be  considered
"material",  the  violation  or breach  results in Damages to the  Purchaser  of
Twenty Thousand Dollars ($20,000.00) or greater;

     (iii) by Seller,  at its option,  by written notice to Purchaser,  if there
has been a material  violation  or breach of any of  Purchaser's  covenants,  or
agreements  made  herein  or if  any  material  representation  or  warranty  of
Purchaser  made herein shall be breached in any material  respect or shall prove
to be materially inaccurate or misleading;

                                       33

<PAGE>

     (iv) by Seller,  (1) if, during the Initial Period,  Seller has discussions
or negotiations with a third party pursuant to paragraph  8(a)(vi)(B) and Seller
determines  that it is  necessary to terminate  this  Agreement  and pursue such
discussions and  negotiations in order to discharge their fiduciary  duties,  or
(2) if, after the Initial  Period,  its board of directors  duly  exercises  its
Fiduciary  Out,  receives  an opinion  letter of counsel  and accepts a Superior
Offer as stated in paragraph 8(a)(vi)(C);

     (v) by Purchaser, at its option, if any of the conditions in paragraph 9(a)
have not been  satisfied  as of the Closing  Date or if  satisfaction  of such a
condition is or becomes  impossible (other than through the failure of Purchaser
to comply with its  obligations  under this  Agreement)  and  Purchaser  has not
waived such condition on or before the Closing Date;

     (vi) by Seller,  at its option,  if any of the conditions in paragraph 9(b)
have not been  satisfied  as of the Closing  Date or if  satisfaction  of such a
condition is or becomes  impossible (other than through the failure of Seller to
comply with its obligations under this Agreement) and Seller has not waived such
condition on or before the Closing Date;

     (vii) by either Seller or  Purchaser,  if the Closing does not occur (other
than  through the failure of any party  seeking to terminate  this  Agreement to
comply fully with its  obligations  under this  Agreement) on or before the date
that is 90 days after the date of  execution  of this  Agreement,  or such later
date as the parties may mutually agree upon in writing;

     (viii) INTENTIONALLY OMITTED;

     (ix) by Purchaser, (1) at any time following the receipt of a Competing Bid
Notice plus seven (7) days,  so long as Seller has not ceased  discussions  with
the party that gave rise to such  termination  right  within  such seven (7) day
notice period (if Seller has ceased  discussions,  at any time during such seven
(7) day  period,  Seller  will  provide to  Purchaser  a written  letter to that
effect, certified by the President or Chief Executive Officer of Seller), or (2)
if Seller or any of its officers, directors, shareholders,  employees, agents or
representatives engages in any of the activities specified in paragraph 8(a)(vi)
as a result of its  Fiduciary  Out,  irrespective  of whether  Seller  accepts a
Superior Offer;

     (x) by  Purchaser,  if,  in  connection  with  the  Information  Statement,
Purchaser  is  required  to  provide  (A) any  financial  information  regarding
Purchaser or any of its shareholders, or (B) any information in which Purchaser,
in good faith, believes could put Purchaser at a competitive disadvantage; and

     (xi) by Seller, if Purchaser  refuses to provide the information  specified
in  paragraph  12(a)(x)  and the SEC is  unwilling  to provide the SEC  Sign-Off
without such information.

                                       34

<PAGE>

     (b) The parties agree that,  except in the case of a termination  by reason
of the material breach of a covenant, condition or representation, and except as
set forth in  subparagraph  (c)  hereof,  neither  party can be held  liable for
expenses  incurred  or  opportunities  foregone by the other in reliance on this
Agreement in the event of a termination pursuant to the terms hereof.

     (c)  If  this  Agreement  is  terminated  by  the  Seller  pursuant  to the
provisions of paragraph  12(a)(iv) or by Purchaser pursuant to the provisions of
paragraph  12(a)(ix),  the Seller shall immediately upon the termination of this
Agreement,  pay to Purchaser by wire transfer of immediately  available funds an
amount  equal to One Million  Dollars  ($1,000,000.00)(the  "Termination  Fee"),
payable as follows: (i) Two Hundred Fifty Thousand Dollars ($250,000.00) payable
immediately; and (ii) Seven Hundred Fifty Thousand Dollars ($750,000.00) payable
upon the closing of the Superior  Offer.  Subject to Purchaser's  receipt of the
payment in full of the fees set forth in this paragraph  12(c),  Purchaser shall
execute  and  deliver  to Seller a  release,  which  specifically  excludes  and
preserves   Purchaser's   rights  for   indemnification   by  Seller  under  the
Sub-Distribution Agreement.

     (d) Each party's right of termination  under paragraph 12(a) is in addition
to any other  rights it may have  under this  Agreement  or  otherwise,  and the
exercise of a right of termination will not be an election of remedies.  If this
Agreement is terminated  pursuant to paragraph 12(a), all further obligations of
the parties under this Agreement will terminate,  except that the obligations in
paragraphs  8(a)(xix) and 11(c) will survive;  provided,  however,  that if this
Agreement is terminated by a party because of the breach of the Agreement by the
other party or because one or more of the conditions to the terminating  party's
obligations  under  this  Agreement  is not  satisfied  as a result of the other
party's  failure  to comply  with its  obligations  under  this  Agreement,  the
terminating  party's  right to  pursue  all legal  remedies  will  survive  such
termination unimpaired.

     13. Survival.  Notwithstanding  anything to the contrary  contained herein,
all  representations,  warranties,  covenants and obligations in this Agreement,
the  Disclosure  Schedule,  the  supplements  to the  Disclosure  Schedule,  the
Seller's  Documents to be delivered  pursuant to paragraph  10(b), and any other
certificate or document to be delivered pursuant to this Agreement shall survive
the Closing of this Agreement for a period of eighteen (18) months.

     In the event a party gives notice to the other party of the  assertion of a
claim arising out of a provision of this  Agreement  prior to the  expiration of
the applicable  survival  period  pertaining to such  provision,  such provision
shall survive with respect to that claim until the final  settlement or judicial
resolution (after exhausting all appeals) of such claim.

     14. Benefits of Parties.  This Agreement shall be binding upon and inure to
the benefit of the parties  hereto and their  respective  permitted  successors,
heirs, legal representatives and assigns.

     15.  Further  Assurances.  Each of the parties hereto shall do such further
acts and things  and  execute  and  deliver  such  agreements,  instruments  and
documents as may  reasonably  be requested by the other party for the purpose of
consummating the transactions contemplated hereby.

                                       35

<PAGE>

     16. Miscellaneous.

     (a)  Notices.  All notices  permitted,  required  or  provided  for by this
Agreement shall be made in writing,  and shall be deemed adequately delivered if
delivered by hand or by a nationally  recognized  overnight courier service that
regularly  maintains  records of its pick ups and deliveries,  to the parties at
their respective addresses set forth below or to any other address designated by
a party hereto by written notice of such address change:

                                          To Seller:

                                          Carmine N. Stella
                                          700 Columbia Street
                                          Erie Basin, Building #302
                                          Brooklyn, New York 11231

                                          With a copy to:
                                          --------------

                                          William J. Dealy, Esq.
                                          Dealy & Silberstein, LLP
                                          225 Broadway
                                          New York, New York 10007

                                          To Purchaser:

                                          Debra Boening, President
                                          Oak Beverages Inc.
                                          One Flower Lane
                                          Blauvelt, New York 10913

                                          With a copy to:
                                          --------------

                                          Keith B. Hochheiser, Esq.
                                          Ettelman & Hochheiser, P.C.
                                          100 Quentin Roosevelt Blvd., Suite 401
                                          Garden City, New York 11530

     Notices  shall be deemed given as of the date of delivery to the  overnight
courier  service or to the recipient if delivered by hand,  and received one day
after  delivery to the overnight  courier  service or when actually  received if
delivered by hand.

     (b)  Modification  or  Amendment.  This  Agreement  may not be  modified or
amended  except by an  instrument  in  writing  signed  by the party or  parties
against whom enforcement is sought.

     (c) Third  Party  Beneficiaries.  Except for their  proper  successors  and
assigns,  the parties hereto intend that no third party shall have any rights or
claims by  reason of this  Agreement,  nor  shall any party  have any  rights or
claims against any third party.

                                       36

<PAGE>

     (d)  Headings.  The  headings in this  Agreement  are  intended  solely for
convenience  of reference  and shall be given no effect in the  construction  or
interpretation of this Agreement.

     (e) Invalidity of Provision.  Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be  ineffective  to the extent of such  invalidity or  unenforceability  without
rendering  invalid or  unenforceable  the remaining terms and provisions of this
Agreement or affecting  the  validity or  enforceability  of any of the terms or
provisions of this Agreement in any other  jurisdiction.  Further, to the extent
that  any  term or  provision  hereof  is  deemed  invalid,  void  or  otherwise
unenforceable,  but may be made  enforceable by amendment  thereto,  the parties
agree that such amendment may be made so that the same shall,  nevertheless,  be
enforceable to the fullest extent permissible under the laws and public policies
applied in any such jurisdiction in which enforcement is sought.

     (f) Event on Non-Business  Days.  Whenever any action is to be taken or any
event is to occur,  other than the giving of notice for which separate provision
is made above, under or pursuant to this Agreement, on any Saturday, Sunday or a
public holiday under the laws of the place of  performance of such action,  such
action shall be taken and such event shall occur on the next succeeding business
day.

     (g)  Governing  Law  Disputes.  All  questions  pertaining to the validity,
construction, execution and performance of this Agreement shall be construed and
governed in accordance  with the laws of the State of New York,  without  giving
effect to the conflicts or choice of law provisions thereof. Any dispute arising
under this  Agreement  shall be settled in any court of  competent  jurisdiction
located  in the state of New York,  County of New York,  and to the  extent  not
otherwise subject to the jurisdiction of such courts both parties agree to waive
any  objection  to such  jurisdiction  and agree to  subject  themselves  to the
jurisdiction  of such court.  Each of the parties further agrees that service of
process  for any such  action  may be made by  certified  mail,  return  receipt
requested  in addition to any other method of service  permitted  by  applicable
law.

     (h)  Waiver  of  Breach.  Any  waiver  of  any of the  provisions  of  this
Agreement,   or  of  any  inaccuracy  in  or   non-fulfillment  of  any  of  the
representations,  warranties or obligations  hereunder or  contemplated  hereby,
shall not be  effective  unless made in writing and signed by the party  against
whom the  enforcement  of any such waiver is sought.  A waiver given in any case
shall only apply with respect to that  particular act,  omission or breach,  and
shall not be effective as to any further or subsequent act,  omission or breach,
regardless of whether they be of the same or similar nature.

     (i)  Counterparts/Faxes.  This  Agreement  may be  executed  by fax  and in
counterparts,  each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

     (j) Assignment.  Neither party may assign any of its rights or delegate any
of its duties  under this  Agreement  without the prior  written  consent of the
other party, except that Oak may assign its rights and delegate its duties under
this Agreement to its wholly-owned designee, and in such event, Oak shall remain
obligated under the terms and conditions of this Agreement.

                                       37
<PAGE>

     (k)  Entire  Agreement.  (i)  This  Agreement,  the  Disclosure  Schedules,
schedules and exhibits hereto set forth the entire  agreement and  understanding
of the parties hereto in respect of the subject  matter  contained  herein,  and
supersedes all prior agreements,  promises,  understandings,  letters of intent,
covenants, arrangements, communications,  representations or warranties, whether
oral or written, by any party hereto or by any related or unrelated third party.

     (ii) All exhibits,  schedules and the Disclosure Schedules attached hereto,
and  all  certificates,  documents  and  other  instruments  delivered  or to be
delivered  pursuant to the terms hereof are hereby expressly made a part of this
Agreement as fully as those set forth herein,  and all references  herein to the
terms "this  Agreement",  "hereunder",  "herein",  "hereby" or "hereto" shall be
deemed to refer to this  Agreement  and to all such  writings.  Disclosure  of a
specific  item in any  Schedule  shall be deemed to only  apply to the  specific
section of  paragraph 5 to which such  disclosure  specifically  relates  except
where (i) there is an explicit  cross-reference  in the  Disclosure  Schedule to
another section of the Disclosure Schedule,  and (ii) Purchaser could reasonably
be expected  to  ascertain  the scope of the  modification  to a  representation
intended by such cross-reference.

     (l) Publicity.  So long as this  Agreement is in effect,  prior to making a
press  release  or other  public  statement  with  respect  to the  transactions
contemplated  by this  Agreement,  any party (a "Releasing  Party") will consult
with the other party (the "Receiving Party") and provide such other party with a
draft of such press release, except as may otherwise be required by law or stock
exchange regulations.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed and  delivered by a duly  authorized  officer,  all on the day and year
first above written.

                          CAPITAL BEVERAGE CORPORATION

                          By:    /s/ Carmine Stella
                                 -------------------------------------
                          Name:  Carmine Stella
                          Title: President and Chief Executive Officer

                          OAK BEVERAGES INC.

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

                                       38

<PAGE>

                                    EXHIBIT A

                       Form of Sub-Distribution Agreement

                                       39
<PAGE>

                                    EXHIBIT B

                            Form of Escrow Agreement

                                       40

<PAGE>

                                    EXHIBIT C

                                Surrender Letter

                                       41SUB-DISTRIBUTION AGREEMENT

     AGREEMENT,  made as of the  15th day of  September,  2005,  by and  between
Capital Beverage Corporation, a Delaware corporation with offices located at 700
Columbia  Street,  Erie  Basin,  Building  #  302,  Brooklyn,   New  York  11231
("Capital",  "Seller" and/or "Distributor") and Oak Beverages,  Inc., a New York
corporation  with offices located at One Flower Lane,  Blauvelt,  New York 10913
("Oak", "Purchaser", and/or "Subdistributor").

                              W I T N E S S E T H:

     WHEREAS,  Distributor is engaged in the business of  distributing  beverage
products including  distributing Pabst Products (the "Products") pursuant to the
current "Pabst Brewing Company Distributor Agreement" ("Distribution Agreement")
between  the  Pabst  Brewing  Company   ("Pabst"  and/or   "Supplier")  and  the
Distributor.  The  Products  are the  Products  described  in Section 1.0 of the
Distribution Agreement and listed on Exhibit "A" to the Distribution  Agreement.
The exclusive  territory (the "Territory") is the Territory described in Section
3.0 of the  Distribution  Agreement and further  described in Exhibit "B" to the
Distribution  Agreement. (A copy of the Distribution Agreement is annexed hereto
as Schedule "A").

     WHEREAS,  the Distribution  Agreement requires the prior written consent of
Supplier to Capital in order to enter into a Subdistribution Agreement;

     WHEREAS,  Distributor  and Oak have entered into a certain  asset  purchase
agreement dated the date hereof (the "Asset Purchase Agreement")  concerning the
potential  acquisition  of the  exclusive  right to purchase the  Products  from
Supplier and market, sell and distribute same at wholesale on an exclusive basis
in the Territory (the "Exclusive Distribution Rights");

     WHEREAS, the purpose of this  Subdistribution  Agreement is to allow Oak to
make a financial  accommodation to Distributor in order to assist Distributor to
maintain its  relationship  with Supplier and for Oak to distribute the Products
in the  Territory  solely  during the period from the filing of the  Information
Statement with the Securities  and Exchange  Commission  ("SEC") as set forth in
the Asset Purchase Agreement to the end of the limited term of this Agreement.

     WHEREAS, Oak entered into the Letter of Intent with Capital dated April 15,
2005  ("Letter  of  Intent")  and the  negotiations  for  entering  into a Asset
Purchase  Agreement based upon Oak's belief that  Distributor  would continue to
market, sell and distribute the Products in the Territory and otherwise continue
to operate its business in the ordinary course;

     WHEREAS,  Distributor  has, at its own will,  scaled back its  business and
operations, including the marketing, selling and distribution of the Products in
the Territory;

     WHEREAS, in order to induce Oak to market, sell and distribute the Products
in the Territory,  Distributor has agreed to waive any and all rights and claims
it may have  against  Oak and its  affiliates  arising  from  (i)  Distributor's
agreement to enter into this  Subdistribution  Agreement or otherwise  reduce or
modify the operation of its business and (ii) the hiring of any of Distributor's
employees by Oak or its affiliates (collectively, the "Waived Actions");

     WHEREAS,  Oak is willing to market, sell and distribute the Products in the
Territory on the terms and conditions  stated herein  provided that  Distributor
provides  waivers to Oak and its affiliates  (the "Waivers")  which  effectively

<PAGE>

waive any and all rights and claims  Distributor may have against Oak and/or its
affiliates arising from or in connection with the Waived Actions;

     NOW  THEREFORE,  in  consideration  of the mutual  covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency  of  which is  hereby  acknowledged,  the  parties  hereto  agree as
follows:

     1.  Subdistribution  Arrangement.  (a) The purpose of this  Agreement is to
allow Oak to make a financial  accommodation  to  Distributor in order to assist
Distributor to maintain its  relationship  with Supplier and for Oak to purchase
the Products and distribute the same within the Territory as a subdistributor to
the Distributor.  However, it is hereby acknowledged and agreed that Oak has not
assumed nor shall Oak be liable for any  obligations or liabilities  arising out
of or relating to the Distribution  Agreement. In distributing the Products, Oak
will comply  with  Pabst's  established  distribution  procedures  such as those
stated in the  Distribution  Agreement.  The  Distributor  will provide Oak with
Pabst's  prior  express  written   authorization   allowing  Oak  to  act  as  a
subdistributor  to the  Distributor  for the limited time period  stated in this
Subdistribution Agreement.

     (b) Oak may market,  sell and otherwise  distribute  Products to any Person
located and taking  delivery  within the Territory in any reasonable  commercial
manner not inconsistent with this Subdistribution Agreement.

          (i) The parties agree that nothing  contained in this  Subdistribution
Agreement shall be deemed to constitute an agreement between a brewer and a beer
wholesaler or an agent for a beer wholesaler or a course of dealing granting the
right to purchase,  offer for sale, resale, warehouse or physically deliver beer
sold by a brewer for a continuing period of time. Oak hereby waives any right to
claim pursuant to 55 (c) of the Alcoholic  Beverage  Control Law that it has any
continuing  right to distribute the Products in the Territory after  termination
of this  Subdistribution  Agreement or any right to be paid compensation for the
termination  of this  Subdistribution  Agreement.  Said waiver  shall run to the
benefit of both the Distributor  and the Supplier.  In the event that either Oak
is to institute any litigation or proceeding against the Supplier or against the
Distributor  pursuant to Section 55 (c) of the  Alcoholic  Beverage  Control Law
concerning  its alleged  rights  arising  from the course of dealing  under this
Subdistribution  Agreement.  Oak  will be  liable  to the  Supplier  and/or  the
Distributor  for all costs,  expenses  and legal fees  incurred by the  Supplier
and/or the Distributor in defending such action or proceeding.

     2. Supply.  (a) Oak's rights to sell the  Products in the  Territory  arise
pursuant to this  Subdistribution  Agreement.  In this regard,  Distributor,  on
behalf of Oak,  will  issue  purchase  orders  for  Products  requested  by Oak,
representing Oak's specific requirements for Products as specified in writing by
Oak to Distributor from time to time (the "Oak Orders").

          (i) The  Subdistributor,  Oak,  agrees to pay Pabst for the Oak Orders
pursuant  to this  Subdistribution  Agreement.  In  addition,  during  the first
forty-five (45) days from the effective date of this  Subdistribution  Agreement
(the "45-Day  Period"),  Oak will pay Capital the following amounts for Products
received by Oak in good  condition,  pursuant to the applicable Oak Orders:  (x)
fifty ($0.50) cents per case of Products; and (y) two dollars ($2.00) per barrel
of  Products.  Upon the  Closing of the  transaction  contemplated  in the Asset
Purchase  Agreement,  the Purchase  Price will be reduced by, and Purchaser will
receive a credit in, an aggregate amount equal to the sum of:  twenty-five cents
($0.25) for each case of Products  purchased by Oak and sold by Oak to customers
in the Territory,  plus fifty cents ($0.50) for each case of Products  purchased
by Oak but not sold to such  customers,  plus One Dollar ($1.00) for each barrel
of Products purchased by Oak and sold by Oak to customers in the Territory, plus

                                       2

<PAGE>

Two Dollars ($2.00) for each barrel of Products purchased by Oak but not sold to
such customers,  all determined during the 45-Day Period. In the event the Asset
Purchase  Agreement is terminated by either party for any reason,  Capital shall
promptly pay to Oak all of the credits described above in this paragraph.

     (b)  Subdistributor  and Distributor each acknowledges that  Subdistributor
will not be liable for any purchase order or other obligations or liabilities of
Distributor  to Supplier  except for the specific Oak Orders issued  pursuant to
Oak's written instructions.

     (c)  During  the term of this  Agreement,  Distributor  will  continue  its
limited  operations  with respect to its business  and the  distribution  of the
Products  in the  Territory,  and  will  maintain  a  presence  at its  place of
operations and offices at the address  designated in the introductory  paragraph
to this Agreement.

     3.  Delivery,  Risk of Loss  and  Related  Matters.  With  respect  to each
purchase order issued by Distributor pursuant to paragraph 2(a) and submitted to
Supplier,  Distributor  shall  request that Supplier  shall  deliver  conforming
Products  directly  to Oak on  the  delivery  dates  specified  therein.  Unless
otherwise stated in the applicable purchase order,  Products ordered pursuant to
each  Purchase  Order  shall be tendered by Supplier to Oak FOB Oak's plant plus
federal taxes paid.

     4. Purchase  Price and Payment  Terms.  (a) The price for Products  ordered
pursuant to Oak Orders will be the prices  currently in effect for Products sold
to Distributor  for  distribution  in the Territory,  as same may be modified by
Pabst from time to time.

          (i) Nothing  contained herein will prevent Pabst and Oak from mutually
agreeing to modifications of payment terms for the Oak Orders.

     (b) Capital will invoice Oak for Oak Orders after the  underlying  Products
related to the Oak Orders are delivered to the shipping  point and Oak shall pay
each invoice  directly to Supplier  within twenty (20) days from the date of the
invoice.  In  addition,  at that time,  during the 45-Day  Period,  Oak will pay
Capital the following  amounts for Products  received by Oak in good  condition,
pursuant to the  applicable  Oak  Orders:  (x) fifty  ($0.50)  cents per case of
Products;  and (y) two dollars ($2.00) per barrel of Products.  Upon the Closing
of the transaction  contemplated in the Asset Purchase  Agreement,  the Purchase
Price will be reduced by, and  Purchaser  will receive a credit in, an aggregate
amount equal to the sum of:  twenty-five cents ($0.25) for each case of Products
purchased by Oak and sold by Oak to customers in the Territory, plus fifty cents
($0.50)  for  each  case of  Products  purchased  by Oak  but  not  sold to such
customers,  plus One Dollar ($1.00) for each barrel of Products purchased by Oak
and sold by Oak to customers in the Territory, plus Two Dollars ($2.00) for each
barrel  of  Products  purchased  by Oak but not  sold  to  such  customers,  all
determined during the 45-Day Period.  In the event the Asset Purchase  Agreement
is terminated by either party for any reason,  Capital shall promptly pay to Oak
all of the credits described above in this paragraph.

     5. Term. The term of this Agreement shall be for a period commencing on the
date of the filing of the  Information  Statement  with the SEC  pursuant to the
Asset  Purchase  Agreement  and  continuing  thereafter  until  the first of the
following  to occur:  (i) the closing of the  transactions  contemplated  by the
Asset Purchase Agreement,  (ii) the termination of the Asset Purchase Agreement,
(iii)  Ninety  (90) days from the date of this  Agreement,  or (iv) the  earlier
termination of this Agreement.

     6.  Termination.  (a) Subject to  paragraph  7(a),  Oak shall only have the
right to terminate this Agreement as follows:

                                       3

<PAGE>

          (i) in the event  Distributor  breaches any material  provision of the
Asset Purchase Agreement or any material provision hereof and fails to cure same
within thirty (30) days after receiving written notice thereof.

          (ii) if any of the following events occur, Oak shall have the right to
terminate  this  Agreement by giving at least ten (10) days prior written notice
thereof to Distributor:

               (A)  Distributor  makes a general  assignment  for the benefit of
creditors,  or consents to the appointment of a receiver,  liquidator or similar
official  of  all  or  substantially  all of its  assets,  or if a  receiver  is
appointed  for all or a  substantial  portion of  Distributor's  assets and such
appointment is not discharged for a period of ninety (90) days; or

               (B)  Distributor  commences  an  action  or  proceeding  or takes
advantage of or files under any federal or state insolvency  statutes including,
without limitation,  the United States Bankruptcy code, seeking to have an order
of relief entered with respect to it, or seeking  adjudication  as a bankrupt or
insolvent,  or seeking  reorganization,  arrangement,  adjustment,  liquidation,
dissolution or other relief with respect to its debts;

               (C) there shall be commenced  against  Distributor  any action or
proceeding of the nature referred to in the immediately preceding  sub-paragraph
which is not stayed or dismissed within ninety (90) days;

               (D) in the event of a conviction  or plea of guilty or no contest
to a felony by Distributor or by the Controlling Shareholders of Distributor (as
defined in the Asset Purchase  Agreement),  which in the reasonable  judgment of
Oak may adversely affect the goodwill or interests of Products in the Territory;
or

               (E) in the event of the  revocation or suspension  for thirty-one
days or more of any  license or permit  required of  Distributor  for the normal
operation of its business; or

               (F)  court  established   fraudulent   conduct  on  the  part  of
Distributor in its dealings with Oak.

     7.  Relationship  of the  Parties  and Related  Matters.  (a) Oak's  status
hereunder  shall at all times be that of an independent  contractor.  Nothing in
this Agreement is intended, nor shall it be construed,  to (i) make Distributor,
on the one hand, and Oak or any of its affiliates,  on the other hand,  partners
or  joint  venturers  nor  grant  a  right  in or to any  business  activity  or
investments of or to the income or proceeds disbursed therefrom;  or (ii) create
a  relationship  between  Supplier,  on  the  one  hand,  and  Oak or any of its
affiliates, on the other hand, of principal and agent or employer and employee.

     Capital is only concerned with the results to be accomplished by Oak in its
marketing,  distribution and sale of Products  pursuant  hereto;  the manner and
means to be employed by Oak in achieving  such  results are entirely  within its
own authority and control. Oak is free to, and will, schedule its own operations
and truck routing.  Moreover, Oak will be operating out of a location other than
that of the Distributor,  using different equipment and methods of operation and
distribution.   Accordingly,   the  parties   acknowledge  and  agree  that  the
transactions  contemplated  by this  Agreement do not  constitute a  substantial
continuity of the Distributor's business or its operations.

     (b) Distributor  acknowledges  that Oak has agreed to be  subdistributor to
Capital in accordance with the terms of this Agreement solely at the request of,
and  for  the  benefit  of,  Distributor.  In that  regard,  Distributor  hereby
acknowledges  and agrees  that  neither Oak nor any of its  affiliates  shall be

                                       4

<PAGE>

liable  for  any  liabilities,   direct  or  indirect  indebtedness,   guaranty,
endorsement,  claim,  loss, damage,  deficiency,  cost,  expense,  obligation or
responsibility,  fixed or  contingent,  accrued or unaccrued,  known or unknown,
choate or  inchoate,  asserted  or  unasserted,  conditional  or  unconditional,
matured  or  unmatured,  liquidated  or  unliquidated,   secured  or  unsecured,
secondary or other (collectively, the "Liabilities"), which result from or arise
from the Waived Actions, whether or not the transactions  contemplated under the
Asset Purchase Agreement are consummated.

     8.  Representations  and  Warranties.   Pursuant  to  this  Subdistribution
Agreement, Oak will receive the usual representations and warranties made in the
Distribution  Agreement by Pabst to Capital concerning the Products purchased by
Oak to be distributed in the Territory.

     9. Indemnification

     (a) Capital ("Seller") hereby agrees to indemnify,  protect,  reimburse and
hold harmless Oak (Purchaser ), and Purchaser's affiliates, and their respective
shareholders,  officers,  directors,  successors  and assigns,  and each of them
(hereinafter collectively referred to as the "Purchaser Group") from and against
any and all Damages of whatsoever kind and nature,  imposed upon, incurred by or
asserted or awarded  against any of the Purchaser  Group  directly or indirectly
arising out of, relating to or resulting from (i) any Liabilities or obligations
of Seller including,  without  limitation,  the Seller Retained  Liabilities (as
defined in the Asset Purchase Agreement); (ii) Seller's breach of any agreement,
covenant,  term,  condition or provision contained herein or Seller's failure to
perform any agreement,  covenant, term, condition or provision on its part to be
performed  hereunder;   (iii)  Seller's   misrepresentation  or  breach  of  any
representation or warranty made by Seller hereunder as if such representation or
warranty  were made both on the date hereof and as of the Closing  Date,  or any
misstatement or omission in any certificate,  schedule, application,  exhibit or
other document  delivered or caused to be delivered by Seller  pursuant to or in
furtherance of the  transactions  contemplated  hereby;  (iv) Seller's breach of
paragraph 8(a)(vii) of the Asset Purchase Agreement; or (v) Damages to Purchaser
caused by Seller's stockholders.

     (b) A party  making  a claim  for  indemnification  hereunder  (hereinafter
referred to as the "Indemnified Party"), shall give the other party (hereinafter
referred to as the  "Indemnifying  Party") written notice of such claim within a
reasonable  time  from  the  actual  discovery  of  same  (the  "Indemnification
Notice");  provided,  however,  that the  failure to give such  notice  will not
relieve  the  Indemnifying  Party  from  any  liability  that it may have to the
Indemnified Party except to the extent that the Indemnifying  Party demonstrates
actual prejudice as a result thereof. Any such  Indemnification  Notice shall be
accompanied by a copy of documents  which have been served upon the  Indemnified
Party, if any.

          (i) With respect to claims for  indemnification  relating to an action
or Proceeding of a third party,  the  Indemnifying  Party shall,  subject to the
rights of or duties to any insurer,  reinsurer or other Person having  liability
therefor,  have the option to assume, at the Indemnifying  Party's sole cost and
expense,  the  control  of the  defense  of  any  legal  proceedings,  including
employment of counsel reasonably satisfactory to the Indemnified Party, provided

                                       5

<PAGE>

each of the  following  conditions  are  satisfied  (collectively,  the "Defense
Conditions"):  (A) the  Indemnifying  Party gives written  notice thereof to the
Indemnified Party no later than twenty (20) days from the date of receipt of the
Indemnification  Notice (the "Assumption Notice"); (B) the Indemnifying Party is
not also a party to such Proceeding and the Indemnified Party determines in good
faith that joint  representation  would be  inappropriate;  (C) the  Indemnified
Party  determines  in  good  faith  that  joint   representation  would  not  be
inappropriate due to a conflict of interest; (D) the Indemnifying Party provides
the  Indemnified  Party with evidence  reasonably  acceptable to the Indemnified
Party that the Indemnifying  Party will have sufficient  financial  resources to
defend   against  the  claims   raised  in  the   Proceeding   and  fulfill  its
indemnification obligations hereunder; (E) the claim involves only money damages
and does not seek an injunction or other equitable relief (however, if the claim
seeks equitable relief,  the Indemnified Party will control,  at its option, the
defense  of the  Proceeding  at the  Indemnified  Party's  cost),  and  (F)  the
Indemnifying  Party conducts the defense of such claim actively and  diligently.
If the  Indemnifying  Party shall have exercised its right to assume control and
established  its  right  to do so,  the  Indemnified  Party  may,  in  its  sole
discretion  and at its sole cost and expense,  employ counsel to represent it in
addition to counsel  employed by the  Indemnifying  Party.  If the  Indemnifying
Party exercises its right to assume control, it will be conclusively established
for  purposes  of this  Agreement  that the claims made in that  proceeding  are
within the scope and subject to  indemnification.  The  Indemnified  Party shall
cooperate with the Indemnifying  Party assuming control of legal proceedings and
shall  make  available  all  pertinent  information  under  the  control  of the
Indemnified  Party as to such  legal  proceedings  and  shall  make  appropriate
personnel reasonably available for discovery and trial. In addition, in no event
will Purchaser be entitled to  indemnification  of any Damages incurred by it in
excess of the Purchase Price.

     In the  event  that the  Indemnifying  Party  shall  exercise  its right to
undertake  control  of  the  defense  of  any  such  legal   proceedings,   such
Indemnifying Party may only compromise or settle such legal proceeding on behalf
of and for the  account of the  Indemnified  Party  after it  obtains  the prior
written  consent  of the  Indemnified  Party;  provided,  however,  that  if the
Indemnifying Party shall receive an offer of a settlement or compromise from the
other  parties in the  applicable  legal  proceedings  at a particular  monetary
amount  excluding  Seller  Creditors (as defined below),  or obtain a commitment
from such  parties that they would accept a  compromise  or  settlement  at such
monetary amount if offered,  and such settlement or compromise requires only the
payment  of such  amount,  the  granting  of an  appropriate  release or similar
accommodation,  and no other relief, and there is (i) no finding or admission of
any  violation  of any  Applicable  Laws or any  violation  of the rights of any
Person  and  no  effect  on any  other  claims  that  may be  made  against  the
Indemnified  Party; (ii) the offer of settlement or compromise would not violate
the  restrictions  and  qualifications  set forth in paragraph 3(b) of the Asset
Purchase Agreement concerning use of the Increased Escrow Amount; and that (iii)
settlement of such claim is not, in the good faith  judgment of the  Indemnified
Party,  likely to  establish a  precedential  custom or practice  adverse to the
continuing business interests of the Indemnified Party and the Indemnified Party
refuses to consent  thereto and elects to continue the legal  proceedings,  then
the Damages of the  Indemnified  Party  which are the subject of the  applicable
legal proceedings to which the settlement or compromise  relates shall be deemed
to be limited to that amount of Damages which the  Indemnified  Party would have
had if such compromise or settlement had been effected. For purposes hereof, the
term  "Seller  Creditors"  means  any  third  party  asserting  a claim  against
Purchaser  relating  to  Seller  Retained  Liabilities.  In the  event  that the
Indemnifying  Party does not exercise  its option to assume  control of any such
action or proceeding,  then the Indemnifying Party shall nevertheless be obliged
to indemnify the Indemnified Party pursuant to the provisions  hereof, and shall
promptly pay all Damages as incurred by the Indemnified Party.

                                       6

<PAGE>

     In the event any of the Defense Conditions is or becomes unsatisfied,  then
(i) the Indemnified  Party may defend  against,  and consent to the entry of any
judgment or enter into any  settlement  with respect to such claim in any manner
it may deem  appropriate  (and the  Indemnified  Party need not consult with, or
obtain any consent from, the Indemnifying Party in connection  therewith),  (ii)
the  Indemnifying  Party will  reimburse  the  Indemnified  Party  promptly  and
periodically for the costs of defending against such claim (including reasonable
attorneys'  fees and expenses) in accordance  with  paragraph 9(c) and (iii) the
Indemnifying Party will remain responsible for any Damages the Indemnified Party
may suffer resulting from, arising out of, relating to, or caused by such claim;
and

          (ii) Any claim for  indemnification  with  respect  to any  matter not
related to a third party claim may be asserted by  Indemnification  Notice.  The
claim specified in such notice shall be deemed valid and the  Indemnified  Party
shall be entitled to  indemnification  hereunder on account of such claim unless
within   twenty  (20)  days  of  the   Indemnifying   Party's   receipt  of  the
Indemnification  Notice,  the Indemnifying Party gives notice to the Indemnified
Party that it disputes  the  validity  of such claim.  In such event the dispute
will be settled in  accordance  with the  provisions  of paragraph  16(g) of the
Asset Purchase Agreement.

     (c) Any and all amounts due for indemnity hereunder shall be promptly paid,
in lawful money of the United States of America, as Damages are incurred, and in
any event within thirty (30) days after written demand therefor.  Payments shall
be made in accordance with the reasonable instructions of the Indemnified Party.

     (d)  The   Indemnifying   Party  hereby   consents  to  the   non-exclusive
jurisdiction  of any  court  in  which  a  Proceeding  is  brought  against  the
Indemnified  Party for purposes of any claim that an Indemnified  Party may have
under this  Agreement  with respect to such  Proceeding  or the matters  alleged
therein,  and agrees that, in addition to any other method of service of process
available under  applicable law,  process may also be served on the Indemnifying
Party for any such Proceeding by facsimile and by overnight carrier, if sent to:

                           Mr. Carmine N. Stella
                           Capital Beverage Corporation
                           700 Columbia Street
                           Erie Basin, Building # 302
                           Brooklyn, New York  11231

                                    -and-

                           William J. Dealy, Esq.
                           Dealy & Silberstein, LLP
                           225 Broadway, Suite 1405
                           New York, New York  10007

     (e) Notwithstanding  the foregoing,  Purchaser may not assert any claim for
indemnification by Seller until the aggregate of all claims exceeds  $20,000.00,
and thereupon,  Seller's obligations for indemnification of Purchaser will be in

                                       7

<PAGE>

full force and effect for all Damages.  In addition,  in no event will Purchaser
be entitled to  indemnification  of any Damages  incurred by it in excess of the
Purchase Price.

     (f) The right to indemnification,  payment of Damages or other remedy based
on any representations,  warranties,  covenants,  or obligations made under this
Agreement will not be affected by any  investigation  conducted with respect to,
or any knowledge  acquired (or capable of being  acquired) at any time,  whether
before or after the  execution  and  delivery of this  Agreement  or the Closing
Date, with respect to the accuracy or inaccuracy of or compliance with, any such
representation,  warranty,  covenant, or obligation. The waiver of any condition
based on the accuracy of any  representation or warranty,  or on the performance
of or compliance  with any covenant or obligation,  will not affect the right to
indemnification,   payment  of   Damages,   or  other   remedy   based  on  such
representations, warranties, covenants, and obligations.

     (g) The Escrow  Amount  shall first be used to satisfy  claims by Purchaser
for  indemnification  under this Section,  before the other assets of Seller are
used for such purpose, subject to the following: (i) the provisions of paragraph
7 of the Asset  Purchase  Agreement,  (ii) to the extent  the  Escrow  Amount is
available,  (iii) provided the assets of Seller or its Distribution Business are
not  dissipated,  and (iv)  Purchaser  does not deem itself to be insecure.  The
Indemnifying  Party shall not reduce the Escrow Amount or the  Increased  Escrow
Amount as payment for legal fees and  expenses  incurred  by it in assuming  the
defense  of the  Indemnified  Party  under  paragraph  7 of the  Asset  Purchase
Agreement.

10.  Miscellaneous Provisions.

     (a)  Notices.  All notices  permitted,  required  or  provided  for by this
Agreement shall be made in writing,  and shall be deemed adequately delivered if
delivered by facsimile transmission and U.S. Express Mail to the following

                  If to Capital/Distributor:

                           Mr. Carmine N. Stella
                           Capital Beverage Corporation
                           700 Columbia Street
                           Erie Basin, Building # 302
                           Brooklyn, New York  11231

                  With a copy to:

                           William J. Dealy, Esq.
                           Dealy & Silberstein, LLP
                           225 Broadway, Suite 1405
                           New York, New York  10007

                  If to Subdistributor/Oak:

                           Ms. Debra Boening
                           Oak Beverages, Inc.
                           One Flower Lane
                           Blauvelt, New York  10913

                                       8

<PAGE>

                  With a copy to:

                           Keith Hochheiser, Esq.
                           Ettelman & Hochheiser, P.C.
                           100 Quentin Roosevelt Blvd., Suite 401
                           Garden City, New York  11530

     (b)  Modification  or  Amendment.  This  Agreement  may not be  modified or
amended  except by an  instrument  in  writing  signed  by the party or  parties
against whom enforcement is sought.

     (c)  Headings.  The  headings in this  Agreement  are  intended  solely for
convenience  of reference  and shall be given no effect in the  construction  or
interpretation of this Agreement.

     (d) Invalidity of Provision.  Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be  ineffective  to the extent of such  invalidity or  unenforceability  without
rendering  invalid or  unenforceable  the remaining terms and provisions of this
Agreement or affecting  the  validity or  enforceability  of any of the terms or
provisions of this Agreement in any other  jurisdiction.  Further, to the extent
that  any  term or  provision  hereof  is  deemed  invalid,  void  or  otherwise
unenforceable,  but may be made  enforceable by amendment  thereto,  the parties
agree that such amendment may be made so that the same shall,  nevertheless,  be
enforceable to the fullest extent permissible under the laws and public policies
applied in any such jurisdiction in which enforcement is sought.

     (e)  Governing   Law.  (i)  All  questions   pertaining  to  the  validity,
construction, execution and performance of this Agreement shall be construed and
governed in accordance  with the laws of the State of New York,  without  giving
effect to (i) comity of nations;  or (ii)  principles  of conflicts or choice of
law.

          (ii) Any actions or  proceedings  commenced  in  connection  with this
Agreement  shall be brought in a federal or state court  located in the state of
New York,  New York  County,  and to the  extent  not  otherwise  subject to the
jurisdiction  of such courts,  each of the parties agrees to waive any objection
to such jurisdiction and to subject itself to the jurisdiction of such courts.

     (f)  Waiver  of  Breach.  Any  waiver  of  any of the  provisions  of  this
Agreement,   or  of  any  inaccuracy  in  or   non-fulfillment  of  any  of  the
representations,  warranties or obligations  hereunder or  contemplated  hereby,
shall not be  effective  unless made in writing and signed by the party  against
whom the enforcement of any such waiver is sought.

     (g) Counterparts.  This Agreement may be executed in counterparts,  each of
which shall be deemed an original, but all of which shall constitute but one and
the same instrument.

     (h) Assignment Neither Capital nor Oak may assign or otherwise delegate any
of its rights or obligations  hereunder without the prior written consent of the
other party,  which  consent will not be  unreasonably  withheld.  Any attempted
assignment in violation of this paragraph 10 (h) shall be null and void, without
legal force or effect.

     (i) Survival. The terms of this paragraph 10 (i) and paragraphs 7, 8, and 9
shall survive the termination of this Agreement.

                                       9

<PAGE>

     (j) Entire  Agreement.  This Agreement and the applicable  purchase  orders
issued by Oak pursuant  hereto  constitute and contain the entire  agreement and
understanding   between  the  parties,  and  supersede  and  replace  all  prior
negotiations and all agreements, proposed or otherwise, whether written or oral,
concerning the subject  matter hereof.  All exhibits  attached  hereto,  and all
certificates,  documents  and other  instruments  delivered  or to be  delivered
pursuant to the terms hereof are hereby  expressly made a part of this Agreement
as fully as those set forth herein, and all references herein to the terms "this
Agreement",  "hereof",  "hereunder",  "herein",  "hereby" or  "hereto"  shall be
deemed to refer to this Agreement and to all such writings.

     (k) Capitalized  Terms.  Any  Capitalized  Term contained in this Agreement
which is not defined in this  Agreement  shall have the meaning as  described in
the Asset Purchase Agreement.

     No course of  dealing,  usage of trade or  course of  performance  shall be
relevant  to  explain,  supplement  or  modify  any  express  provision  of this
Agreement.

     IN WITNESS  WHEREOF,  each of the parties hereto have caused this Agreement
to be executed and delivered by a duly authorized member or officer, as the case
may be, all on the day and year first above written.

OAK BEVERAGES, INC.

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

CAPITAL BEVERAGE CORPORATION

By:    /s/ Carmine Stella
       -----------------------------------
Name:  Carmine Stella
Title: President and Chief Executive Officer

                                       10

<PAGE>

                                   Schedule A

                   PABST BREWING COMPANY DISTRIBUTOR AGREEMENT

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