Capital Beverage Corp – ‘8-K’ for 9/14/05 – EX-10.2

On:  Wednesday, 9/21/05, at 2:06pm ET   ·   For:  9/14/05   ·   Accession #:  1172665-5-505   ·   File #:  1-13181

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report -- form8k                               3     14K 
 2: EX-10.1     Material Contract                                     41    147K 
 3: EX-10.2     EX-10.2 Sub-Distribution Agreement                    11     44K 

EX-10.2   —   EX-10.2 Sub-Distribution Agreement
Exhibit Table of Contents

EX-10.2
1st Page of 11
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
SUB-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

EX-10.2
2nd Page of 11
TOC
1st
Previous
Next
↓Bottom
Just 2nd
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 

EX-10.2
3rd Page of 11
TOC
1st
Previous
Next
↓Bottom
Just 3rd
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 

EX-10.2
4th Page of 11
TOC
1st
Previous
Next
↓Bottom
Just 4th
          (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 

EX-10.2
5th Page of 11
TOC
1st
Previous
Next
↓Bottom
Just 5th
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 

EX-10.2
6th Page of 11
TOC
1st
Previous
Next
↓Bottom
Just 6th
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 

EX-10.2
7th Page of 11
TOC
1st
Previous
Next
↓Bottom
Just 7th
     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 

EX-10.2
8th Page of 11
TOC
1st
Previous
Next
↓Bottom
Just 8th
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 

EX-10.2
9th Page of 11
TOC
1st
Previous
Next
↓Bottom
Just 9th
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 

EX-10.2
10th Page of 11
TOC
1st
Previous
Next
↓Bottom
Just 10th
     (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

EX-10.2
Last Page of 11
TOC
1st
Previous
Next
↓Bottom
Just 11th
Schedule A

 PABST BREWING COMPANY DISTRIBUTOR AGREEMENT

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
Filed on:		9/21/05
For Period End:		9/14/05
		4/15/05		1					10-K
									List all Filings