Capital Beverage Corp – ‘DEF 14C’ for 12/31/05

On:  Monday, 11/14/05, at 12:17pm ET   ·   Effective:  11/14/05   ·   For:  12/31/05   ·   Accession #:  1172665-5-615   ·   File #:  1-13181

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Definitive Proxy Information Statement   —   Schedule 14C
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14C     Schedule 14C Information                              85    329K 

Document Table of Contents

DEF 14C
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SCHEDULE 14C
(Rule 14c-101)

 INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
 Information Statement Pursuant to Section 14(c)
 of the Securities Exchange Act of 1934 (Amendment No. ______)

Check the appropriate box:                                                      
[ ] Preliminary Information Statement     [ ] Confidential, for use of the      
[X] Definitive Information Statement          Commission only (as permitted by  
                             Rule 14c-5(d)(2))

CAPITAL BEVERAGE CORPORATION
(Name of Registrant as Specified in Its Charter)

Payment of Filing Fee (Check the appropriate box):                              

[X] No Fee Required.                                                
      [ ] Fee computed on table below per Exchange Act Rules 14c- 5(g) and 0-11.

    1) Title of each class of securities to which transaction applies:

 Common Stock, par value $.001 per share

 2) Aggregate number of securities to which transaction applies:

3,792,045 shares of Common Stock Outstanding

     3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):                                 
 N/A

4) Proposed maximum aggregate value of transaction:           
             -------------------------------------------------------------------

5) Total Fee Paid.                                            
             -------------------------------------------------------------------

        Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid   
previously. Identify the previous filing by registration statement number, or   
the Form or Schedule and the date of its filing.                                

1) Amount Previously Paid:                                    

             -------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:              

             -------------------------------------------------------------------
3) Filing Party:                                              

             -------------------------------------------------------------------
4) Date Filed:                                                

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CAPITAL BEVERAGE CORPORATION
 700 Columbia Street
 Erie Basin, Building #302
Brooklyn, New York 11231
(718) 488-8500

Dear Stockholder:                                                               

    We are furnishing this Information Statement to the holders of the
Common Stock of Capital Beverage Corporation, a Delaware corporation (the       
"Company"), in connection with the sale of substantially all of the Company's   
assets consisting of its exclusive distribution rights and saleable inventory to
Oak Beverages, Inc. ("Oak"), pursuant to an asset purchase agreement dated as of
September 15, 2005. A copy of the asset purchase agreement is included as       
Appendix A to the Information Statement.                                        

      The asset purchase agreement and the sale of assets to Oak have been
approved unanimously by our Board of Directors. As permitted by Delaware law and
our Certificate of Incorporation, the Company has received a written consent    
from the majority stockholders of the Company approving the asset purchase      
agreement and the related asset sale.                                           

         ACCORDINGLY, STOCKHOLDERS ARE NOT BEING ASKED FOR PROXIES TO VOTE THEIR
SHARES WITH RESPECT TO THE ASSET PURCHASE AGREEMENT OR THE ASSET SALE. NO PROXY 
CARD HAS BEEN ENCLOSED WITH THIS INFORMATION STATEMENT AND NO MEETING OF        
STOCKHOLDERS WILL BE HELD TO CONSIDER THE ASSET PURCHASE AGREEMENT OR THE SALE  
OF OUR ASSETS.                                                                  

        The asset sale described in this Information Statement will not become
effective until at least 20 calendar days following the date of mailing of this 
Information Statement to our stockholders.                                      

        WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.                                                                        

      This Information Statement is being provided to you pursuant to Rule
14c-2 under the Securities Exchange Act of 1934, as amended. It contains a      
description of the asset purchase agreement and the asset sale, as well as      
summary information regarding the contract of sale and the sale of assets. We   
encourage you to read the Information Statement, including Appendix A,          
thoroughly. You may also obtain information about us from publicly available    
documents filed with the Securities and Exchange Commission. We may provide only
one copy of the Information Statement to stockholders who share an address,     
unless we have received instructions otherwise. If you share an address, your   
household has received only one copy of this Information Statement and you wish 
to receive another copy, please contact our corporate secretary at the address  
or telephone number above. If you have received multiple copies and only wish to
receive one copy of our SEC materials, you also may contact us at the address   
and phone number above.                                                         

         Very truly yours,

            /s/Carmine N. Stella
                                    --------------------------------------------
         Carmine N. Stella
                             President and Chief Executive Officer

Brooklyn, New York                                                              
November 10, 2005                                                               

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 CAPITAL BEVERAGES, INC.
 INFORMATION STATEMENT

 TABLE OF CONTENTS

Introduction...................................................................1

Summary Term Sheet.............................................................3

Summary Information In Question And Answer Format..............................8

Prior Stockholder Approval....................................................14

The Sale Of Assets To Oak.....................................................14

Parties To The Asset Sale; Relationship Of The Company To Oak.................15

     Information About the Company............................................15

     Information About Oak....................................................15

     Relationship Of The Company And Oak......................................16

Background Of And Reasons For The Asset Sale..................................18

Special Factors Regarding The Asset Sale......................................19

Assets Subject To Sale........................................................19

Consideration; Use Of Proceeds; Structure Of The Company                        
After The Asset Sale..........................................................19

Payment of Accrued Unpaid Salaries and Severance..............................20

Termination of Personal Guaranties and Release of Pledged Collateral..........21

Terms Of The Asset Purchase Agreement.........................................21

Purchase Price................................................................21

Escrow........................................................................22

Representations And Warranties................................................22

Covenants And Agreements Of The Company And Oak...............................23

Conditions To Closing; Closing Date...........................................25

Termination...................................................................26

Indemnification...............................................................27

Terms of the Sub-Distribution Agreement.......................................27

Dissenters' Rights............................................................28

Certain Federal Income Tax Consequences.......................................28

Accounting Treatment..........................................................28

Government Approvals..........................................................28

Voting Securities And Principal Holders Thereof...............................29

Where You Can Find Additional Information.....................................30

Appendix                                                                        

A. Asset Purchase Agreement dated as of September 15, 2005 between the Company  
and Oak Beverages Inc.                                          

B. Sub-Distribution Agreement dated as of September 15, 2005 between the Company
and Oak Beverages Inc.                                          

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 INFORMATION STATEMENT

CAPITAL BEVERAGE CORPORATION
 700 Columbia Street
 Erie Basin, Building #302
Brooklyn, New York 11231
(718) 488-8500

Introduction                                                                    

      This Information Statement is being furnished to the stockholders of
Capital Beverage Corporation, a Delaware corporation (the "Company"), in        
connection with the prior approval by our Board of Directors of, and receipt of 
approval by written consent of the majority stockholders of the Company for, the
proposed sale of substantially all of our assets (together with related         
transactions, the "Asset Sale"), to Oak Beverages, Inc. ("Oak").                

The Asset Sale will be effective pursuant to an asset purchase
agreement, dated as of September 15, 2005, by and between the Company and Oak   
(the "Asset Purchase Agreement"), as more fully described in this Information   
Statement. A copy of the Asset Purchase Agreement is included as Appendix A to  
this Information Statement and is incorporated herein by reference.             

       The Board of Directors believes that approval and consummation of the
Asset Purchase Agreement and the Asset Sale are in the best interests of the    
Company and its stockholders. Accordingly, on September 14, 2005, the Board     
unanimously approved the Asset Purchase Agreement and the Asset Sale and        
directed that they be submitted for stockholder approval.                       

Under Delaware law and our Certificate of Incorporation, the  
affirmative vote of a majority of the votes entitled to be cast by holders of   
all shares of the Company's Common Stock, par value $.001 per share ("Common    
Stock"), outstanding as of the close of business on September 15, 2005, is      
required to approve the Asset Purchase Agreement and the Asset Sale. Under our  
Certificate of Incorporation, each share of Common Stock is entitled to one vote
per share. As of September 15, 2005, there were outstanding 3,792,045 shares of 
Common Stock, representing a total of 3,792,045 votes. As permitted by the      
Delaware General Corporation Law, on September 15, 2005, the Company received a 
written consent in lieu of a meeting of stockholders from holders of 1,900,000  
shares of Common Stock representing 50.1% of the total issued and outstanding   
shares of voting stock of the Company approving the Asset Purchase Agreement and
the Asset Sale.                                                                 

        WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY. NO PROXY CARD HAS BEEN ENCLOSED AND NO MEETING OF STOCKHOLDERS WILL BE 
HELD TO CONSIDER THE ASSET PURCHASE AGREEMENT OR THE SALE OF ASSETS.            

     The Asset Sale will not become effective until at least 20 calendar
days following the date of mailing of this Information Statement to our         
stockholders.                                                                   

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       This Information Statement is furnished for the purposes of informing
stockholders, in the manner required under the Securities Exchange Act of 1934, 
as amended, of the Asset Sale before it is consummated. This Information        
Statement is first being mailed on or about November 10, 2005 to holders of     
record of Common Stock as of the close of business on November 4, 2005.         

       THE INFORMATION IN THIS INFORMATION STATEMENT REGARDING  OAK HAS BEEN
SUPPLIED BY OAK.                                                                

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Summary Term Sheet

      This Information Statement is being furnished to the stockholders of
Capital Beverage Corporation, a Delaware corporation, in connection with the    
prior approval by our Board of Directors, and receipt by the Board of approval  
by written consent of our majority stockholders, for the Asset Sale, which is   
the sale of substantially all of assets to Oak Beverages Inc., or "Oak",        
pursuant to the Asset Purchase Agreement. The terms "we," "our," and the        
"Company" in this Information Statement refer to Capital Beverage Corporation.  
References to "you" are to the stockholders of Capital Beverage Corporation.    

    The summary that follows highlights selected information contained
elsewhere in this Information Statement. It may not contain all of the          
information that is important to you. To fully understand the sale of           
substantially all of our assets to Oak, and for a more complete description of  
the Asset Sale and related matters, you should carefully read this Information  
Statement (including the Asset Purchase Agreement included as Appendix A) in its
entirety.                                                                       

The Parties                                                                     

  Capital Beverage Corporation (the "Company") is a publicly owned
Delaware corporation currently operating a beer and malt beverage distribution  
business. The Company's principal office is located at 700 Columbia Street, Erie
Basin, Building #302, Brooklyn , NY 11231 where its telephone number is (718)   
488-8500. See "Information about the Company" at page 2.                        

       Oak Beverages, Inc. ("Oak") is a privately owned New York corporation
currently operating a beer and malt beverage distribution business. Oak's       
principal office is located at One Flower Lane, Blauvelt, NY 10913. See         
"Information about Oak" at page 15.                                             

The Asset Sale                                                                  

On September 14, 2005, our Board of Directors, acting by written consent,       
approved an asset purchase agreement, dated as of September 15, 2005, between   
Oak and the Company, a copy of which is included as Appendix A to this          
Information Statement (the "Asset Purchase Agreement"), pursuant to which the   
Company intends to sell, and Oak intends to purchase, substantially all of the  
Company's assets (the "Asset Sale"). The Asset Sale will consist of our         
distribution rights for the Pabst, Pittsburgh and Ballantine brands of beer and 
malt beverages in New York City. As consideration for these assets, Oak has     
agreed to pay the Company $9.3 million (subject to certain adjustments based    
upon sales made by Oak under the Sub-Distribution Agreement), of which at least 
$1.5 million will be deposited with an escrow agent for 18 months (or longer if 
claims remain unresolved) for post closing indemnification claims which may be  
asserted by Oak. See "The Sale of Assets to Oak at page 14."                    

If the proposed Asset Sale is consummated:                                      

-    The Company will continue to be a public company;        

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    -    The  Company's  common  stock will  continue  to trade in the
      over-the-counter  market or be quoted on the OTC  Bulletin
Board(R);                                           

        -    The Company will use the proceeds from the Asset Sale for working
          capital purposes, including the payment of indebtedness, trade
             payables and other outstanding obligations. Following the payment
              of its creditors, the Company may elect to acquire another entity,
            issue dividend(s) to its stockholders or invest the net proceeds
             in the discretion of the Board of Directors and management of the
Company.                                            

Reasons For The Asset Sale                                                      

The Board of Directors and management of the Company have concluded that based  
on the Company's relatively small size, the illiquidity of the trading market   
for the Company's common stock, the Company's lack of growth, thin profit       
margins in the beer and malt beverage distribution industry, and the fact that  
the beverage distribution industry favors relatively large distributors because 
of economies of scale; it would be in the stockholders' interests to sell       
substantially all of the Company's assets at a fair price. In addition, for the 
years ended December 31, 2004 and 2002, the Company recorded net losses of      
approximately $4.3 million and $1.8, respectively, and a net profit of $24,000  
for the year ended December 31, 2003. For the years ended December 31, 2004 and 
2003, the Company's accumulated deficit totaled approximately $9.5 million and  
$5.2 million, respectively. The Company has also received a "going concern"     
opinion from its independent auditors for the last three fiscal years. As a     
result, the Board of Directors and management decided that it is in the best    
interest of the Company to pursue a sale transaction to Oak, a well capitalized 
and substantial competitor. See "Special Factors Regarding the Asset Sale" at   
page 19.                                                                        

Approval Of The Board Of Directors and Stockholders                             

         The Board of Directors of the Company, after careful consideration, has
approved the Asset Purchase Agreement and the Asset Sale and has recommended    
that the Company's stockholders vote for its adoption. Immediately following the
execution of the Asset Purchase Agreement by Oak and the Company on September   
15, 2005, stockholders holding 50.1% of the Company's shares of common stock    
outstanding executed a written consent in lieu of a stockholders meeting        
approving the Asset Purchase Agreement and the Asset Sale. See "Voting          
Securities and Principal Holders Thereof" at page 29.                           

Use of Proceeds                                                                 

      The Asset Purchase Agreement provides that, the Company will receive
and Oak shall pay $9.3 million (subject to certain adjustments based upon sales 
made by Oak under the Sub-Distribution Agreement) payable as follows: (1) $7.8  
million to be paid at the closing of the transaction in immediately available   
funds and (ii) $1.5 million to be paid at the closing of the transaction in     
immediately available funds to an escrow agent. In addition, within ten (10)    
days following the closing of the transaction, Oak will purchase from Company   
its saleable inventory at an amount equal to the price paid by the Company for  
the inventory. Assuming the ultimate release to the Company of the entire       
escrowed amount, and after deduction of transaction costs in connection with the

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Asset Sale, the Company anticipates that net proceeds will be approximately $8.8
million. Of this amount, the Company anticipates that approximately $7.7 million
will be applied to repay outstanding indebtedness.                              

         After the repayment of outstanding indebtedness, the Board of Directors
anticipates that it will undertake one or more transactions designed to maximize
stockholder value. Management currently anticipates that additional transactions
may take the form of a dissolution of the corporation, the liquidation of its   
remaining assets, and the ultimate distribution to stockholders of any assets   
remaining after satisfaction of our liabilities, including personnel termination
and related costs, sale transaction expenses and final liquidation costs. In    
event of such dissolution, the residual proceeds of the Asset Sale would become 
part of a pool of assets governed by the plan of dissolution. Alternatively,    
management may elect to invest the net proceeds from the Asset Sale in assets or
operations acquired by the Company. In such an event, no assets will be         
distributed to the stockholders. See "Consideration; Use of Proceeds; Structure 
of the Company After the Asset Sale" at page 19.                                

Structure of the Company After the Asset Sale                                   

        After completion of the Asset Sale and application of the net proceeds
in the manner contemplated, and assuming ultimate release to us of the entire   
escrowed amount, and after deduction of transaction costs in connection with the
Asset Sale, the Company will hold:                                              

o residual inventory and equipment not part of the Asset Sale; and    
o accounts receivable in the approximate amount of $250,000.          

    The Company will not have any ongoing operations subsequent to the
Asset Sale, except for the collection of accounts receivable and the payment of 
its liabilities. See "Consideration; Use of Proceeds; Structure of the Company  
After the Asset Sale" at page 19.                                               

The Sub-Distribution Agreement with Oak                                         

        The Company and Oak entered into a Sub-Distribution Agreement dated as
of September 15, 2005 (the "Sub-Distribution Agreement"), pursuant to which Oak 
has become a sub-distributor of the Company of certain Pabst beers and malt     
beverages. A copy of the Sub-Distribution Agreement is included as Appendix B to
this Information Statement and is incorporated herein by reference. The         
Sub-Distribution Agreement became effective when the Company filed this         
Information Statement with the Securities and Exchange Commission and shall     
terminate on the earlier of (i) the closing of the transactions contemplated by 
the Asset Purchase Agreement, (ii) the termination of the Asset Purchase        
Agreement, (iii) 90 days following September 15, 2005, or (iv) the earlier      
termination of the Sub-Distribution Agreement in accordance with its terms.     
Under the terms of the Sub-Distribution Agreement, Oak has the right to         
distribute the Pabst products to customers located in the five boroughs of New  
York City, and in exchange for such rights, Oak will pay Pabst directly for its 
product purchases and, during the first 45 days following the effective date of 
the Sub-Distribution Agreement, Oak will pay to the Company the following       
amounts for products received by Oak: (x) $.50 for each case of products and (y)
$2.00 for each barrel of products. The purchase price to be paid by Oak to the  

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Company in connection with the closing of the transactions contemplated by the  
Asset Purchase Agreement shall be reduced by an amount equal to the sum of: (i) 
$.25 for each case of products purchased by Oak and sold by Oak to customers in 
the territory, plus (ii) $.50 for each case of products purchased by Oak but not
sold to such customers, plus (iii) $1.00 for each barrel of products purchased  
by Oak and sold by Oak to customers in the territory, plus (iv) $2.00 for each  
barrel of products purchased by Oak but not sold to such customers, all         
determined during such 45-day period. If the Sub-Distribution Agreement is      
terminated by either party for any reason, the Company will be required to      
promptly pay to Oak the credits described above.                                

Dissenters' Rights                                                              

        Company stockholders are not entitled to seek dissenters' or appraisal
rights under Delaware law in connection with the Asset Sale. See "Dissenters'   
Rights" at page at page 28.                                                     

Certain Federal Income Tax Consequences                                         

        The Asset Sale will be treated by the Company as a taxable transaction
for federal and New York State income tax purposes. It is anticipated that any  
gain resulting from the Asset Sale will be offset against the Company's net     
operating loss carryforwards. However, utilization of these carryforwards       
generates an alternative minimum tax for both government bureaus. We do not     
expect the combination of both alternative tax liabilities for the two bureaus  
to exceed $100,000. See " Certain Federal Income Tax Consequences" at page 28.  

Accounting Treatment                                                            

     Upon completion of the Asset Sale, the Company will remove from its
consolidated balance sheet the assets sold to Oak and will reflect therein the  
effect of the receipt and the use of the proceeds of the Asset Sale. The Company
will record a gain on the sale of assets to Oak equal to the difference between 
the purchase price received and the book value of the assets sold in its        
consolidated statement of operations. See "Accounting Treatment" at page 28.    

Interests Of The Continuing Stockholders                                        

     Assuming closing of the Asset Sale, the current stockholders of the
Company will continue to own 100% of the outstanding common stock of the        
Company.                                                                        

 A NOTE ABOUT FORWARD-LOOKING STATEMENTS

         This Information Statement contains certain forward-looking statements,
including statements regarding our "expectations," "beliefs," "goals," "hopes," 
"strategies," and the like. We intend such forward-looking statements to be     
covered by the safe harbor provisions for forward-looking statements contained  
in the Private Securities Litigation Reform Act of 1995, and are including this 
statement for purposes of invoking those safe harbor provisions. Such           
forward-looking statements involve known and unknown risks, uncertainties and   

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other important factors that are subject to change at any time and from time to 
time and that could cause our actual results, performance or achievements to    
differ materially from our expectations of future results, performance or       
achievements expressed or implied by such forward-looking statements. Factors   
that could cause actual results or developments to differ materially from those 
described in or contemplated or implied by such forward-looking statements      
include, without limitation, the risk that the assumptions upon which the       
forward-looking statements are based ultimately may prove to be incorrect or    
incomplete, that the transactions contemplated by the Asset Purchase Agreement  
will not be consummated in a timely manner or at all and that Oak will make     
claims against the portion of the purchase price placed in escrow or otherwise, 
as well as other risks and uncertainties that are described in the Company's    
filings with the Securities and Exchange Commission. Although we believe that   
the expectations reflected in our forward-looking statements are reasonable, we 
cannot guarantee future events or results. Except as may be required under      
federal law, we undertake no obligation to update publicly any forward-looking  
statements for any reason, even if new information becomes available or other   
events occur.                                                                   

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 Summary Information In Question And Answer Format

     The following information in question and answer format, summarizes
many of the material terms of the Company's proposed Asset Sale to Oak. For a   
complete description of the terms and conditions of the Asset Sale, you are     
advised to carefully read this entire Information Statement and the other       
documents referred to herein. The actual terms and conditions of the Asset Sale 
are contained in the Asset Purchase Agreement and the exhibits thereto. The     
Asset Purchase Agreement is included as Appendix A to this Information          
Statement.                                                                      

What Vote Is Required To Approve The Asset Sale?                                

         Approval of the Asset Sale requires the affirmative vote of the holders
of not less than a majority of the Company's outstanding common stock.          

What Constitutes A Majority Of The Company's Outstanding Common Stock?          

         On September 15, 2005, the Company had 3,792,045 shares of Common Stock
issued and outstanding and 1,896,226 constitutes a majority of the shares of    
Common Stock issued and outstanding.                                            

Who Voted In Favor Of The Asset Sale?                                           

      Carmine Stella, the Company's President, Chief Executive Officer and
Chairman of the Board, Anthony Stella, the Company's Vice President of Sales and
Marketing (and the brother of Carmine Stella), Michael Mastrisciani, a director 
of the Company, Daniel Mastrisciani, the Company's Vice President of Operations 
and a director of the Company, Alex Mastrisciani and Monty Mastrisciani, (each  
of whom are the brothers of Michael and Daniel Mastrisciani), voted an aggregate
of 1,900,000 shares in favor of the Asset Sale and the approval of the Asset    
Purchase Agreement. Such shares represent 50.1% of the shares of common stock   
outstanding. Such individuals shall be referred to as the" Majority             
Stockholders". See "Voting Securities and Principal Holders Thereof" at page 29.

Will The Stockholders That Voted In Favor Of The Asset Sale Have Any            
Relationship With Oak Following The Closing Of The Asset Sale?                  

    No. None of the stockholders that voted in favor of the Asset Sale
anticipate working for or with Oak, or otherwise have any direct or indirect    
financial relationship with Oak. In addition, none of the stockholders that     
voted in favor of the Asset Sale anticipate owning any securities of Oak or have
any other right to payment from Oak. However, it should be noted that certain   
members of management have not received their salaries since May 1, 2005.       
Accordingly, the following individuals are entitled to be paid accrued and      
unpaid salaries from the proceeds from the Asset Sale received by the Company in
the amounts set forth adjacent to their names (such amounts calculated as of    
October 31, 2005): Carmine Stella ($105,000); Anthony Stella ($67,000); Michael 
Mastrisciani ($67,000); Daniel Mastrisciani ($67,000); Monty Mastrisciani       
($67,000); and Alex Mastrisciani ($73,000). The Company will also reimburse such
employees for out-of-pocket expenses incurred by them in connection with the    
performance of their duties which, as of October 31, 2005, is expected to be a  
total of approximately $60,000.                                                 

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   In addition, under the terms of employment agreements between the
Company and such members of management, such employees are, upon the termination
of their employment with the Company, entitled to severance payments equal to   
four (4) weeks of a base salary for each year of service provided to the        
Company. The proceeds from the Asset Sale will also be used to pay severance to 
following employees each of whom will be terminated as of the closing date of   
the Asset Sale in the amounts set forth adjacent to their names: Anthony Stella 
($102,000); Michael Mastrisciani ($47,000); Daniel Mastrisciani ($47,000); Monty
Mastrisciani ($47,000); and Alex Mastrisciani ($41,000). Carmine Stella will not
be terminated as of the closing date, and therefore, he will not be entitled to 
any severance payment. He will, however, continue to serve as the Company's     
Chief Executive Officer, and will be paid $210,000 per annum. See "Payment of   
Accrued and Unpaid Salaries and Severance" at page 20.                          

Why Isn't The Company Holding A Stockholders Meeting To Vote On The Proposed    
Asset Sale?                                                                     

     In order to lawfully close on the proposed Asset Sale, Delaware law
requires that a majority of shares of Common Stock vote in favor of the proposed
Asset Sale. The stockholders voting in favor of the proposed Asset Sale         
represent 50.1% of the shares outstanding, or a majority of the outstanding     
shares. Therefore, management concluded that because approving a transaction by 
the written consent of stockholders can be faster than distributing a notice of 
meeting and proxy statement, and conducting a stockholders meeting, and in light
of the fact that Company management and Oak wanted to expedite the closing of   
the proposed Asset Sale, management and the Board of Directors decided not to   
conduct a meeting of stockholders. Instead, promptly following the execution of 
the Asset Purchase Agreement, stockholders owning approximately 50.1% of the    
shares signed a written consent approving the Asset Purchase Agreement and the  
transactions contemplated thereby.                                              

What Are The Terms Of The Asset Purchase Agreement?                             

   On September 14, 2005, our Board of Directors, acting by written consent,
approved an asset purchase agreement, dated as of September 15, 2005, between   
Oak and the Company, a copy of which is included as Appendix A to this          
Information Statement (the "Asset Purchase Agreement"), pursuant to which the   
Company intends to sell, and Oak intends to purchase, the Company's distribution
rights for the Pabst, Pittsburgh and Ballantine brands of beer and malt         
beverages in New York City. As consideration for these assets, Oak has agreed to
pay the Company $9.3 million (subject to certain adjustments based upon sales   
made by Oak under the Sub-Distribution Agreement), of which at least $1.5       
million will be deposited with an escrow agent for 18 months for post closing   
indemnification claims which may be asserted by Oak.                            

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Why Is The Company Selling its Assets?                                          

     The Board of Directors and Management of the Company have concluded
that based on the Company's relatively small size, the illiquidity of the       
trading market for the Common Stock, the Company's lack of growth, thin gross   
profit margins in the beer and malt beverage distribution industry, and the fact
that the beverage distribution industry favors relatively large distributors    
because of economies of scale; it would be in the stockholders' interests to    
sell substantially all of the Company's assets at a fair price. In addition, for
the years ended December 31, 2004 and 2002, the Company recorded net losses of  
approximately $4.3 million and $1.8, respectively, and a net profit of $24,000  
for the year ended December 31, 2003. For the years ended December 31, 2004 and 
2003, the Company's accumulated deficit totaled approximately $9.5 million and  
$5.2 million, respectively. The Company has also received a "going concern"     
opinion from its independent auditors for the last three fiscal years. As a     
result, the Board of Directors and management decided that it is in the best    
interest of the Company to pursue a sale transaction to Oak, a well capitalized 
and substantial competitor.                                                     

What Will Happen To The Company After The Asset Sale?                           

Following the Asset Sale, the Company is expected to repay its
outstanding indebtedness. Surplus funds will either be distributed to Company   
stockholders as a dividend, or retained to pay for ongoing expenses associated  
with identifying assets or operations to be acquired. All employees will be     
terminated, except for Carmine Stella who will continue to serve as the         
Company's Chief Executive Officer and will earn an annual salary of $210,000.   

What Steps Has The Board Of Directors Taken To Assure That The Price To Be Paid 
By Oak Is Fair To The Public Stockholders?                                      

        Company management has been in the beer and malt beverage industry for
a very long time. The Company has acquired several brands and is well acquainted
with the market for beverage distribution assets. Since the first quarter of    
2004, the Company has been in discussions with several potential buyers         
interested in purchasing the Company's assets or entering into strategic        
transactions. After discussions with these parties, Company management and the  
Board of Directors determined that the purchase price to be paid by Oak pursuant
to the Asset Purchase Agreement was the highest and best price.                 

What Factors Were Considered By Management And The Board Of Directors In        
Deciding To Sell Substantially All Of The Company's Assets?                     

      Management and the Board of Directors considered a number of factors
before deciding to execute the Asset Purchase Agreement, including but not      
limited to, the following:                                                      

     o    the nature of the beer and malt beverage  distribution business in the
Company's distribution territory;                           

     o    the  Company's   deteriorating   financial   condition  and  declining
operating results;                                          

     o    the relative  lack of growth in the  Company's  revenues over the past
four years;                                                 

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     o    the  Company's  limited  ability  to expand its  current  distribution
business due to a lack of available funding;                

     o    the required future capital investment in order to purchase additional
beer or malt beverage brands;                               

o    Oak's agreement to enter into a Sub-Distribution Agreement;      

o        the relatively low market prices for the Common Stock in the           
        over-the-counter market over the past three years and the inability to
  use that security as consideration to acquire other distribution
businesses;                                                   

o        the terms and conditions of the proposed Asset Sale; and               

     o    the belief  that the  offered  purchase  price by Oak,  is the highest
price that the Company will obtain for its assets.          

How Is The Purchase Price For The Asset Sale Being Financed By Oak?             

        Oak has advised the Company that the total amount of funds required to
deliver the Purchase Price to the Company at closing will be funded from Oak's  
cash reserves. See "Information About Oak" at page 15.                          

Why Did The Company Enter Into A Sub-Distribution Agreement With Oak?           

        The Company entered into a Sub-Distribution Agreement with Oak because
the Company has been generating net losses and a reduction in its operating     
expenses is necessary to preserve the value of its assets. Under the            
Sub-Distribution Agreement, Oak will distribute the Company's beer and malt     
beverage brands to the Company's customers and, at the same time, the Company   
will reduce its operating expenses because the costs of such distribution will  
be incurred by Oak. See "Terms of the Sub-Distribution Agreement" at page 27.   

What Are the Terms of the Sub-Distribution Agreement                            

        The Company and Oak entered into a Sub-Distribution Agreement dated as
of September 15, 2005 (the "Sub-Distribution Agreement"), pursuant to which Oak 
has become a sub-distributor of the Company of certain Pabst beers and malt     
beverages. The Sub-Distribution Agreement became effective when the Company     
filed this Information Statement with the Securities and Exchange Commission and
shall terminate on the earlier of (i) the closing of the transactions           
contemplated by the Asset Purchase Agreement, (ii) the termination of the Asset 
Purchase Agreement, (iii) 90 days following September 15, 2005, or (iv) the     
earlier termination of the Sub-Distribution Agreement in accordance with its    
terms. Under the terms of the Sub-Distribution Agreement, Oak has right to      
distribute the Pabst products to customers located in the five boroughs of New  
York City, and in exchange for such rights, Oak will pay Pabst directly for its 

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product purchases and, during the first 45 days following the effective date of 
the Sub-Distribution Agreement, Oak will pay to the Company the following       
amounts for products received by Oak: (x) $.50 for each case of products and (y)
$2.00 for each barrel of products. The purchase price to be paid by Oak to the  
Company in connection with the closing of the transactions contemplated by the  
Asset Purchase Agreement shall be reduced by an amount equal to the sum of: (i) 
$.25 for each case of products purchased by Oak and sold by Oak to customers in 
the territory, plus (ii) $.50 for each case of products purchased by Oak but not
sold to such customers, plus (iii) $1.00 for each barrel of products purchased  
by Oak and sold by Oak to customers in the territory, plus (iv) $2.00 for each  
barrel of products purchased by Oak but not sold to such customers, all         
determined during such 45-day period. If the Sub-Distribution Agreement is      
terminated by either party for any reason, the Company will be required to      
promptly pay to Oak the credits described above.                                

What Rights Do Stockholders Have To Dissent From The Asset Sale?                

     Company Stockholders do not have the right to seek the appraisal of
their shares under Delaware law. Furthermore, no provision has been made to     
grant any public stockholder access to the corporate files of the Company or to 
the files of any Continuing Stockholder or to obtain counsel for or appraisal   
services for any public stockholder at the expense of the Company or any        
Continuing Stockholder.                                                         

What Are The Conditions Of The Asset Sale?                                      

The following list includes what the Board of Directors and Management
believe are the material conditions to the Asset Sale, all of which must be     
satisfied at the time of the closing. In view of the fact that interpretations  
of "materiality" can be subjective, the list is qualified by reference to the   
Asset Purchase Agreement which is attached as Appendix A to this Information    
Statement. You are urged to carefully read this entire document including the   
Asset Purchase Agreement.                                                       

     o    stockholders  owning at least a majority of the outstanding  shares of
          Common Stock must approve and adopt the Asset  Purchase  Agreement and
the Asset Sale;                                             

     o    there are no legal restraints rendering the Asset Purchase unlawful or
          preventing  the   consummation   of  the   transactions   contemplated
          thereunder  and no  pending  litigation  that  could  have a  material
adverse effect on the Company;                              

     o    the Brewers (Pabst,  Pittsburgh and Best Brands) must approve Oak as a
distributor of their brands in the Company's territories;   

     o    all authorizations, consents and waivers required for the consummation
of the Asset Purchase shall have been obtained.             

     o    the  respective  representations  and  warranties  made  in the  Asset
          Purchase  Agreement  by  each of the  parties  to the  Asset  Purchase
Agreement shall be true and correct.                        

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What Are The Income Tax Consequences Of The Asset Sale?                         

        The Asset Sale will be treated by the Company as a taxable transaction
for federal and New York State income tax purposes. It is anticipated that any  
gain resulting from the Asset Sale will be offset against the Company's net     
operating loss carryforwards. However, utilization of these carryforwards       
generates an alternative minimum tax for both government bureaus to exceed      
$100,000. See "Certain Federal Income Tax Consequences" at page 28.             

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Prior Stockholder Approval                                                      

         Our ability to sell our assets without a meeting of our stockholders is
authorized by Section 228 of the Delaware General Corporation Law. That section 
generally provides that a Delaware corporation may substitute for action on a   
matter by its stockholders at a meeting the written consent of the holders of   
outstanding shares of capital stock holding at least the minimum number of votes
which would be necessary to authorize or take the action at a meeting at which  
all shares entitled to vote on the matter are present and voted. In accordance  
with this provision, we obtained the written consent of the Majority            
Stockholders, approving the sale of substantially all of the Company's assets to
Oak pursuant to the Asset Purchase Agreement. As a result of the action of the  
Majority Stockholders, we are not soliciting proxies, and there will be no      
further stockholder action on the Asset Purchase Agreement or Asset Sale.       

         Holders of record of the Company's Common Stock, are entitled to notice
of the action taken by written consent approving the Asset Sale and the Asset   
Purchase Agreement.                                                             

Under Delaware law and our Certificate of Incorporation, the  
affirmative vote of a majority of the votes entitled to be cast by holders of   
all shares of our Common Stock outstanding as of the close of business on the   
Record Date, was required to approve the Asset Purchase Agreement and the Asset 
Sale. Each holder of Common Stock was entitled to one vote on each of the       
foregoing matters, for each share of Common Stock held by such stockholder. As  
of September 15, 2005, there were outstanding 3,792,045 shares of Common Stock. 
As of that date, the Majority Stockholders held 1,900,000 shares of Common Stock
and were entitled to cast a total of 1,900,000 votes, or 50.1% of the total     
votes entitled to be cast by all holders of our Common Stock.                   
      The action by written consent approving the Asset Sale and the Asset
Purchase Agreement was effective on September 15, 2005.                         

The Sale Of Assets To Oak                                                       

  The terms and conditions of the Asset Sale, which is the sale of
substantially all of our assets to Oak, are set forth in the Asset Purchase     
Agreement, dated as of September 15, 2005. A copy of the Asset Purchase         
Agreement, excluding the exhibits or schedules thereto, is included as Appendix 
A to this Information Statement. The description in this Information Statement  
of the terms and conditions of the Asset Sale and of the Asset Purchase         
Agreement is a summary only and may not contain all of the information that is  
important to you. To fully understand the Asset Sale and the terms of the Asset 
Purchase Agreement, you should carefully read in its entirety the copy of the   
Asset Purchase Agreement included as Appendix A.                                

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Parties To The Asset Sale; Relationship Of The Company To Oak                   

Information About the Company                                                   

       The Company is in the business of marketing, selling and distributing
at wholesale certain alcoholic beverage products. The Company was incorporated  
under the laws of the State of Delaware on December 5, 1995. In January 1996,   
the Company acquired from Consolidated Beverage Corporation, the right to become
the exclusive distributor for certain beer and malt liquor products manufactured
by Pabst Brewing Company. The consideration paid by the Company for the pabst   
distribution rights was $1.6 million, payable $800,000 in cash and the balance  
by delivery of a series of 120 promissory notes, each in the amount of $10,000. 

        On July 18, 1998 and July 30, 1998, the Company signed two distributor
agreements with Pittsburgh Brewing Company ("Pittsburgh") to distribute on an   
exclusive basis in the entire state of New York, several brands of beer and malt
beverage products.                                                              

  On June 29, 2001, the Company purchased all of the assets of the
business of Prospect Beverage, Inc. which related to Prospect's business of     
distributing beverages, including among other things, beer distribution rights, 
properties, rights, leases, interests, goods and customer lists of Prospect. The
purchase price of the assets consisted of the assumption by the Company of      
certain liabilities of Prospect and the issuance of an aggregate of five hundred
thousand (500,000) shares of the common stock of the Company to the shareholders
of Prospect. Inclusive with the acquisition came the following national brands: 
Colt 45, Old Milwaukee, Schaefer, Schlitz, Champale, Schmidts, Stroh, Piels,    
McSorleys and also an extensive list of various imports.                        

Information About Oak                                                           

         Oak is a privately owned corporation, currently engaged in business and
duly licensed as a multi-brand distributor of beer and other alcoholic malt     
beverages as well as non-alcoholic beverages. Oak's exclusive sales territory   
differs according to its brands, however, its primary sales territory includes  
the five boroughs of New York City, Westchester, Rockland, Putnam, Orange,      
Sullivan, Dutchess and Ulster counties, all within the State of New York. Oak   
was incorporated under the laws of the State of New York on January 25, 1980.   
Oak was formed as an independent, but related, company, to its affiliate Boening
Bros., Inc. (which has been engaged in business as a multi-brand distributor of 
alcoholic and non-alcoholic beverages since 1901). Debra Boening is the         
President of Oak. Oak's principal office is located at One Flower Lane,         
Blauvelt, NY 10913.                                                             

       The funds required by Oak to pay the purchase price to the Company as
set forth in the Asset Purchase Agreement will be funded from Oak's cash        
reserves.                                                                       

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Relationship Of The Company And Oak                                             

       Current Negotiations. On January 31, 2005, at the suggestion of Pabst
Brewing Company, Debora Boening, President of Oak, met with Carmine Stella,     
President, Chief Executive Officer and Chairman of the Company and Michael      
Matrisciani, a director of the Company, to discuss Oak's interest in the        
potential acquisition of the Company's distribution business.                   

       On February 17, 2005, management of Oak and the Company discussed the
possibility of a sale by the Company to Oak of the Pabst distribution rights and
Pabst's related approval of the proposed transaction. In addition, on February  
17, 2005, Oak's management team began its review of the Company's finance and   
sale information and the Company and Oak entered into a confidentiality         
agreement. Subsequently, Oak and its legal and financial advisors continued to  
conduct business, legal and financial due diligence.                            

        On February 15, 2005, Mr. Stella discussed with the Board of Directors
of the Company at a regularly scheduled meeting the progress of his discussions 
to date with Ms. Boening and the possibility of a transaction between the       
Company and Oak.                                                                

       On March 16, 2005, Messrs. Stella and Matrisciani and Ms. Boening and
Mr. Scapperotti, General Manager of Oak, met to discuss and conduct business and
financial due diligence.                                                        

        On March 29, 2005, senior management and outside legal counsel of each
of Oak and the Company met to negotiate a purchase price, discuss the terms of  
the letter of intent and otherwise conduct negotiations. Following that meeting,
Oak's legal counsel, Ettelman & Hochheiser, P.C., distributed a draft of the    
proposed letter of intent to the Company and its outside legal counsel, Brown   
Rudnick Berlack Israels LLP and Dealy & Silberstein, LLP.                       

         On April 7, 2005, representatives of Oak and the Company met to discuss
sales and employee matters.                                                     

       Following that meeting, on April 15, 2005, Oak and the Company signed
the letter of intent.                                                           

       On April 11, 2005 , the Board of Directors of Company met and heard a
presentation from its officers regarding the then-current status of negotiations
and a summary of contemplated deal terms, including a proposed price. Following 
that presentation, the Board of Directors of the Company authorized proceeding  
with negotiations consistent with the terms presented and ultimate consummation 
of a transaction consistent with such terms. Following those presentations,     
those Boards likewise authorized further negotiations consistent with the       
summary terms presented.                                                        

        On April 18, 2005, the Company sent a letter to Pabst seeking approval
of the proposed transaction with Oak.                                           

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     On April 19, 2005, senior management of each of the Company and Oak
identified and reviewed various developments concerning the transaction.        

      On April 20, 2005, the Company received a voluntary surrender letter
from Pabst providing its approval of the proposed transaction with Oak.         

      On April 26, 2005, Messrs.  Stella and Matrisciani,  Ms. Boening and
Mr. Scapperotti  reviewed pricing,  sales and projections data.                 

         On April 28, 2005,  Mr.  Stella and Ms.  Boening met to continue  their
prior  discussions.  They  reviewed and  discussed due diligence matters and    
developed a projected timetable of the transaction.  After this meeting,        
Mr. Stella and Ms. Boening communicated on several occasions regarding various  
issues related to the transaction.                                              

         Following that meeting on May 4, 2005, Oak provided the Company and its
outside legal counsel with the initial draft of a proposed asset purchase       
agreement. Shortly thereafter, the Company's management and its legal advisors  
discussed the issues raised by Oak's draft asset purchase agreement.            

       On May 10, 2005 Mr. Stella and Ms. Boening met to discuss various due
diligence issues and Oak's concern about sub-distribution matters.              

       On May 17, 2005, legal counsel for the Company, Brown Rudnick Berlack
Israels LLP, and legal counsel for Oak, Ettelman & Hochheiser, P.C., held a     
conference call to discuss the terms of the proposed asset purchase agreement.  

      On May 31, 2005, Mr. Stella and the Company's legal advisors and Ms.
Boening and Oak's legal advisors continued to discuss, telephonically, the terms
of the asset purchase agreement and issues relating to distribution.            

       On June 15, 2005, senior management and outside legal counsel of each
of Oak and the Company continued to hold discussions about the terms of the     
asset purchase agreement and Oak's concern about sub-distribution matters.      

        On June 21, 2005, representatives of the Company and Oak continued its
discussions and review of financial due diligence.                              

    On July 7, 2005, legal advisors of each the Company and Oak held a
conference call to review the terms of the asset purchase agreement and legal   
issues.                                                                         

   On July 13, 2005, senior management and legal counsel of each the
Company and Oak met to review and discuss the revisions to the asset purchase   
agreement and otherwise conduct negotiations. The Company subsequently consulted
with its outside counsel and continued negotiations with Oak toward a final form
of asset purchase agreement.                                                    

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   On July 20, 2005, senior management and legal counsel of each the
Company and Oak continued their discussions by teleconference.                  

        On July 26, 2005, Mr. Stella and Ms. Boening met to discuss the status
of the agreements and the progress to date of the transaction.                  

         During August and September, several telephone conversations took place
between Mr. Stella and Ms. Boening regarding various business issues.           

   On September 14, 2005, the Board of Directors of the Company were
presented a final form of Asset Purchase Agreement for consideration and        
approval. Upon review and discussion with outside counsel, the Company's Board  
authorized the execution of the final Asset Purchase Agreement and recommended  
that it be submitted to the stockholders of the Company.                        

Background Of And Reasons For The Asset Sale                                    

The Board of Directors and Management of the Company have concluded that based  
on the Company's relatively small size, the illiquidity of the trading market   
for the Common Stock, the Company's lack of growth, thin profit margins in the  
beer and malt beverage distribution industry, and the fact that the beverage    
distribution industry favors relatively large distributors because of economies 
of scale; it would be in the stockholders' interests to sell substantially all  
of the Company's assets at a fair price. In addition, for the years ended       
December 31, 2004 and 2002, the Company recorded net losses of approximately    
$4.3 million and $1.8, respectively, and a net profit of $24,000 for the year   
ended December 31, 2003. For the years ended December 31, 2004 and 2003, the    
Company's accumulated deficit totaled approximately $9.5 million and $5.2       
million, respectively. The Company has also received a "going concern" opinion  
from its independent auditors for the last three fiscal years. As a result, the 
Board of Directors and management decided that it is in the best interest of the
Company to pursue a sale transaction to Oak, a well capitalized and substantial 
competitor. See "Special Factors - Regarding the Asset Sale" at page 19.        

   The foregoing factors, among, all were considered by our Board of
Directors during the course of its deliberations prior to authorizing execution 
of the Asset Purchase Agreement, in light of the Board's knowledge of our       
business and each director's business judgment. In its deliberations, the Board 
of Directors did not quantify or otherwise attempt to assign relative weights to
the specific factors considered in determining to approve (and to recommend that
the stockholders approve) the Asset Sale and the Asset Purchase Agreement.      
Rather, the Board made its determination based on the total mix of information  
available to it, and the judgments of the individual directors may have been    
influenced to different degrees by various factors. In light of the foregoing,  
the Board of Directors unanimously approved and adopted the Asset Purchase      
Agreement, and unanimously recommended that the Company's stockholders approve  
it and the Asset Sale.                                                          

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Special Factors Regarding The Asset Sale                                        

 There are many factors that our stockholders should consider in
reviewing the information contained in this Information Statement. Such factors 
include, but are not limited to, those set forth below and elsewhere in this    
Information Statement.                                                          

        We will continue to incur claims, liabilities and expenses, which will
reduce the realizable value of our remaining assets and the amount potentially  
available for distribution to stockholders.                                     

     Claims, liabilities and expenses from operations (such as salaries,
directors' and officers' insurance, payroll and taxes, legal, accounting and    
consulting fees and miscellaneous office expenses) will continue to be incurred 
subsequent to the Asset Sale. These expenses will have to be satisfied from our 
remaining assets and, therefore, will reduce the net realizable value of those  
assets.                                                                         

         We will continue to incur the expenses of complying with public company
reporting requirements.                                                         

 We have an obligation to continue to comply with the applicable
reporting requirements of the Securities Exchange Act of 1934, as amended, even 
though compliance with such reporting requirements is economically burdensome.  

Assets Subject To Sale                                                          

      The assets to be sold by the Company to Oak consist of substantially
all of the Company's assets, and include the following:                         

         (a) Exclusive distribution rights with respect to the Pabst, Pittsburgh
and Ballantine brands of beer and malt beverage products;                       

(b) the Company's customer lists;                             

(c) all point-of sale materials; and                          

(d) saleable inventory of products.                           

Consideration; Use Of Proceeds; Structure Of The Company After The Asset Sale   

      The Asset Purchase Agreement provides that, the Company will receive
from Oak, in consideration of the sale of the assets $9.3 million payable as    
follows: (1) $7.8 million to be paid at the closing of the transaction in       
immediately available funds and (ii) $1.5 million (subject to certain           
adjustments based upon sales made by Oak under the Sub-Distribution Agreement)  
to be paid at the closing of the transaction in immediately available funds to  
an escrow agent. The escrowed funds shall be held and disbursed pursuant to the 
terms of an escrow agreement between the Company, Oak and the escrow agent. In  
addition, within ten (10) days following the closing of the transaction, Oak    

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will purchase from Company its saleable inventory at an amount equal to the     
price paid by the Company for the inventory. At Oak's option, the Company shall 
assign to Oak all of its outstanding purchase orders for products not yet       
delivered by the respective brewer. Oak will pay such assigned invoices when    
due. Assuming ultimate release to the Company of the entire escrowed amount, and
after deduction of transaction costs in connection with the Asset Sale, the     
Company anticipates that net proceeds will be approximately $8.8 million. Of    
this amount, the Company anticipates that approximately $7.7 million will be    
applied to repay outstanding indebtedness.                                      

        After completion of the Asset Sale, the Board of Directors anticipates
that, after consideration in due course, it will undertake one or more          
transactions designed to maximize stockholder value. Management currently       
anticipates that additional transactions may take the form of a dissolution of  
the corporation, the liquidation of its remaining assets, and the ultimate      
distribution to stockholders of any assets remaining after satisfaction of      
liabilities, including personnel termination and related costs, sale transaction
expenses and final liquidation costs. In the event of such a dissolution, the   
residual proceeds of the Asset Sale would become part of a pool of assets       
governed by the plan of dissolution. Alternatively, management may elect to     
invest the net proceeds from the Asset Sale in assets or operations acquired by 
the Company. In such event, no assets will be distributed to the stockholders.  

        After completion of the Asset Sale and application of the net proceeds
in the manner contemplated, and assuming ultimate release of the entire escrowed
amount, and after deduction of transaction costs in connection with the Asset   
Sale, the Company will hold:                                                    

o    residual inventory and equipment not part of the Asset Sale; and 

o    accounts receivable in the approximate amount of $250,000.       

The Company will not have any ongoing operations subsequent to the Asset Sale.  

Payment of Accrued Unpaid Salaries and Severance                                

      Certain members of management have not received their salaries since
May 1, 2005. Accordingly, the following individuals are entitled to be paid     
accrued and unpaid salaries from the proceeds from the Asset Sale received by   
the Company in the amounts set forth adjacent to their names (such amounts      
calculated as of October 31, 2005): Carmine Stella ($105,000); Anthony Stella   
($67,000); Michael Mastrisciani ($67,000); Daniel Mastrisciani ($67,000); Monty 
Mastrisciani ($67,000); and Alex Mastrisciani ($73,000). The Company will also  
reimburse such employees for out-of-pocket expenses incurred by them in         
connection with the performance of their duties which, as of October 31, 2005,  
is expected to be a total of approximately $60,000.                             

   In addition, under the terms of employment agreements between the
Company and such members of management, such employees are, upon the termination
of their employment with the Company, entitled to severance payments equal to   
four (4) weeks of a base salary for each year of service provided to the        

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Company. The proceeds from the Asset Sale will also be used to pay severance to 
following employees each of whom will be terminated as of the closing date of   
the Asset Sale in the amounts set forth adjacent to their names: Anthony Stella 
($102,000); Michael Mastrisciani ($47,000); Daniel Mastrisciani ($47,000); Monty
Mastrisciani ($47,000); and Alex Mastrisciani ($41,000). Carmine Stella will not
be terminated as of the closing date, and therefore, he will not be entitled to 
any severance payment. He will, however, continue to serve as the Company's     
Chief Executive Officer, and will be paid $210,000 per annum.                   

Termination of Personal Guaranties and Release of Pledged Collateral            

     In connection with a loan in the aggregate principal amount of $2.5
million provided to the Company by Seaway Capital, each of Alex Mastrisciani,   
Daniel Mastrisciani, Michael Mastrisciani and Monty Mastrisciani pledged real   
property owned by them located in Brooklyn, New York as collateral for such     
loan. The security interest held by Seaway Capital in such collateral will be   
released on the closing date upon the repayment of the loan by the Company.     

        In connection with a revolving line of credit provided by Entrepreneur
Capital to the Company, the Company pledged all of its assets as collateral for 
such loan. In addition, Carmine Stella, the Company's President, and Chief      
Executive Officer personally guaranteed the Company's obligations to            
Entrepreneur Capital. The guaranty provided by Mr. Stella will terminate on the 
closing date upon repayment of the line of credit by the Company.               

Terms Of The Asset Purchase Agreement                                           

       The following is a summary of the significant provisions of the Asset
Purchase Agreement. To fully understand the Asset Sale and the terms of the     
Asset Purchase Agreement, you should carefully read in its entirety the copy of 
the Asset Purchase Agreement that is included as Appendix A to this Information 
Statement and is incorporated herein by reference.                              

Purchase Price                                                                  

      The Asset Purchase Agreement provides that, the Company will receive
$9.3 million (subject to certain adjustments based upon sales made by Oak under 
the Sub-Distribution Agreement) payable as follows: $7.8 million to be paid at  
the closing of the transaction in immediately available funds and (ii) $1.5     
million to be paid at the closing of the transaction in immediately available   
funds to the escrow agent. The Escrow Amount shall be held and disbursed        
pursuant to the terms of an escrow agreement between the Company, Oak and the   
Escrow Agent. In addition, within ten (10) days following the closing of the    
transaction, Oak will purchase from the Company its saleable inventory at an    
amount equal to the price paid by the Company for the inventory. At Oak's       
option, the Company shall assign to Oak all of its outstanding purchase orders  
for products not yet delivered by the respective brewer. Oak will pay such      
assigned invoices when due.                                                     

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Escrow                                                                          

       On the closing date of the Asset Sale, the Company, Oak and Dealy and
Silberstein LLP, as escrow agent, will enter into an Escrow Agreement. Pursuant 
to the terms of the Escrow Agreement, at the closing, Oak will deposit $1.5     
million of the purchase price in an escrow account with the escrow agent. This  
amount will be held to satisfy potential purchase price adjustments and any     
claims for indemnification that Oak may have for breaches of the Company's      
representations, warranties, covenants or other obligations in the Asset        
Purchase Agreement. Upon each of the 6 month, 12 month and 18 month             
anniversaries of the closing date, one third of this amount (less any           
outstanding claims for indemnification) shall be delivered by the escrow agent  
to Capital. The final distribution of these funds shall be delivered by the     
escrow agent to Capital upon the later of the 18 month anniversary of the       
closing date, or the date upon which all pending claims are resolved.           

        In addition, from the $7.8 million cash purchase price to be delivered
by Oak at closing, certain sums will be retained by the escrow agent            
specifically to repay outstanding creditors of Capital. It is currently         
anticipated that approximately $750,000 will be deposited with the escrow agent 
for this purpose.                                                               

Representations And Warranties                                                  

   The Asset Purchase Agreement contains various representations and
warranties made by us for the benefit of Oak relating to, among other things:   

     (a) Our organization, good standing, corporate power and authority;

   (b) Our corporate authorization in relation to the Asset Purchase
       Agreement, the related transactions and related transaction documents
to which we are a party;                                      

       (c) The absence of conflict with our organization documents, material
        contracts, or applicable law as a result of the execution and delivery
of, and performance under, the Asset Purchase Agreement;      

       (d) the absence of third party approvals required for consummation of
       the transactions contemplated by the Asset Purchase Agreement, except
as disclosed in the Asset Purchase Agreement;                 

(e) the capitalization of the Company;                        

       (f) the title to and condition of the Assets and lack of encumbrances
upon such Assets;                                             

        (h) except as otherwise disclosed, compliance in all material respects
       with applicable federal, state and local laws, rules, regulations and
       ordinances in connection with the Distribution Business and ownership
of the Assets being sold,                                     

(i) Employee and labor matters;                               

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         (j) Absence of governmental investigations relating to the Distribution
Business;                                                     

(k) Absence of claims for brokers' fees; and                  

      (m) legal proceedings relating to our exclusive distribution rights.

        The Asset Purchase Agreement also contains various representations and
warranties made by Oak for our benefit relating to, among other things:         

(a) Its organization and good standing;                       

   (b) Its corporate authorization in relation to the Asset Purchase
Agreement and the related transactions and related transaction
documents to which it is a party;                             

  (c) The absence of conflict with Oak's organizational documents,
        contracts, or applicable law as a result of its execution and delivery
of, and performance under, the Asset Purchase Agreement;      

(d) Absence of claims for brokers' fees; and                  

    (e) Its sufficient liquid assets to fund the purchase price at the
closing of the transaction.                                   

Covenants And Agreements Of The Company And Oak                                 

        The Company and Oak have set forth various covenants and agreements in
the Asset Purchase Agreement, including the following:                          

        Maintenance of Physical Assets. We have agreed to 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 by the Company and Oak 
(the "Business Plan").                                                          

      Compliance with Laws. We will comply with all laws applicable to the
Distribution Business, the noncompliance of which would reasonably be expected  
to materially and adversely effect the Distribution Business or the related     
Assets.                                                                         

         Proprietary Rights. We have agreed to not transfer, license, dispose of
or permit to lapse any intellectual property right related to the Distribution  
Business or to disclose such intellectual property right to any person.         

  Conduct of Business Pending Closing. We have generally agreed to
conduct our business in accordance with the Business Plan. In furtherance of the
foregoing, we have agreed, among other things: (i) to preserve existing shelf   
space and location for products on the premises of our customers; (ii) use      
reasonable best efforts to preserve existing draught lines on the premises of   
our customers; (iii) use reasonable best efforts to promote and distribute      
products to customers within a specified territory in accordance with the       
Business Plan; (iv) not sell products to certain customers in excess of volumes 
customarily purchased by such customers for like time intervals; and (v) use    
best efforts to preserve the goodwill of our customers, suppliers, and          
employees.                                                                      

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   No Solicitation of Similar Transactions. Subject to the fiduciary
duties of our Board of Directors set forth in the Asset Purchase Agreement, we  
have agreed on our behalf and on behalf of our stockholders, directors,         
officers, employees, representatives, and agents not to directly or indirectly  
solicit or encourage any inquiry or offer, or initiate negotiations or          
discussions with, any other third party with respect to the purchase or sale of 
any of the Assets of the Company being sold to Oak in the Asset Sale, other than
the consumption of inventory in the ordinary course. We have also agreed not to 
enter into any agreement with a third party with respect to the purchase or sale
of any of the Assets of the Company being sold to Oak in the Asset Sale, other  
than the consumption of inventory in the ordinary course or afford access to our
books, records or properties to any third party.                                

       Lists. We have agreed to deliver to Oak, on the closing date, (i) our
current 2005 price list for products, (ii) our currently active on-premise and  
off-premise customers for products in the territory and (iii) a list of our     
creditors and the amounts due in respect thereof. We have agreed to pay and     
satisfy in full certain creditors to the reasonable satisfaction of Oak at or   
prior to the closing of the transaction and pay and satisfy in full all of our  
remaining creditors within ninety (90) days following the closing of the        
transaction.                                                                    

        Brewer Approvals. We have agreed to use our best efforts to assist Oak
in obtaining the written consent from certain brewers (as set forth in the Asset
Purchase Agreement) of Oak as a distributor of brewer's products in a specified 
territory.                                                                      

       Landlord Acknowledgement. We agreed to obtain a release issued by our
landlord in favor of the Company 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 deliver a copy of such release to Oak at the closing of 
the transaction.                                                                

         Post-Closing Actions by the Company. We have agreed that, after closing
of the Asset Sale, that we will execute and deliver to Oak such other           
instruments of conveyance and take such other actions as Oak may reasonably     
request in order to put Oak more fully in possession of any of the Assets or to 
better enable Oak to fully obtain the practical realization of the benefits,    
utilization and value of the Assets. The Company and each of the Majority       
Stockholders agreed to refrain from (i) acting as an authorized distributor of  
the products in the territory and (ii) engaging in wholesale transactions in the
products resold in the territory.                                               

     Confidentiality. After the closing, all information relating to our
business and the acquired Assets will be deemed to be the confidential          
information of Oak. We have agreed to hold such confidential information in the 
strictest confidence, and not to disclose such confidential information without 
the prior written consent of Oak, except as required by law.                    

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Conditions To Closing; Closing Date                                             

    The closing of the transactions contemplated by the Asset Purchase
Agreement is scheduled to take place five business days after at least 20       
calendar days have elapsed following the date on which we send this Information 
Statement to our stockholders. Our obligation to complete the Asset Sale is     
subject to the satisfaction or waiver of, among others, the following           
conditions:                                                                     

(a) Oak's representations and warranties in the Asset Purchase
Agreement that are qualified by materiality must be true and correct, and Oak's 
representations and warranties not so qualified must be true and correct in all 
material respects;                                                              

     (b) Oak must have complied in all material respects with the terms,
covenants and conditions set forth in the Asset Purchase Agreement; and         

   (c) Oak must have paid the purchase price and executed the Escrow
Agreement.                                                                      

 Oak's obligations to complete the Asset Sale are subject to the
satisfaction or waiver of, among others, the following conditions:              

        (a) Oak shall receive written approval of the Asset Purchase Agreement
and Asset Sale by certain brewers named therein and a letter from such brewers  
appointing Oak as the distributor on an exclusive basis for certain products in 
a specified territory and the trade accounts located therein;.                  

        (b) Our representations and warranties in the Asset Purchase Agreement
must be true and correct in all material respects;                              

    (c) We must have complied in all material respects with the terms,
covenants and conditions set forth in the Asset Purchase Agreement;             

(d) The Majority Stockholders of the Company have approved the
transaction;                                                                    

        (e) Nothing shall have occurred resulting in a material adverse effect
on the Distribution Business and the Assets;                                    

         The condition set out in clause (d) has been satisfied by the delivery,
by the Majority Stockholders, of a written consent dated September 15, 2005     
approving the Asset Sale and the Asset Purchase Agreement.                      

        The parties are working toward completing the Asset Sale as quickly as
possible. This Information Statement is being sent to you on or about November  
10, 2005. We currently expect that the Asset Sale will close on or after        
December 5, 2005, which is the fifth business day after 20 calendar days have   
elapsed following the mailing date of this Information Statement.               

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Termination                                                                     

        The Asset Purchase Agreement and the transactions contemplated thereby
may be terminated at any time prior to the closing of the Asset Sale:           

o    The mutual written agreement of the Company and Oak;             

     o    by Oak,  at its  option,  if there has been a  material  violation  or
          breach  of  any  of  the  covenants,  representations,  warranties  or
agreements made by us in the Asset Purchase Agreement;      

     o    by the Company,  at its option, if there has been a material violation
          or  breach of any of the  covenants,  representations,  warranties  or
agreements made by Oak in the Asset Purchase Agreement      

     o    by Company (1) if, during the time period beginning on the date of the
          execution of the Asset  Purchase  Agreement  and ending on the initial
          filing  of the  Information  Statement  (the  "Initial  Period"),  the
          Company has discussions or negotiations with a third party the Company
          determines  that it is  necessary  to  terminate  the  Asset  Purchase
          Agreement and pursue such  discussions  and  negotiations  in order to
          discharge their fiduciary duties, or (2) if, after the Initial Period,
          our board of directors duly  exercises its fiduciary out,  receives an
          opinion  letter of counsel and  accepts a superior  offer from a third
party.                                                      

     o    by Oak, at its option, if any of the closing  conditions  precedent to
          its  obligations  have not been  satisfied  as of the  closing  of the
          transaction  or if  satisfaction  of such a  condition  is or  becomes
          impossible  (other than  through the failure of Oak to comply with its
          obligations)  and Oak has not waived such  condition  on or before the
closing of the transaction;                                 

     o    by the  Company,  at its  option,  if  any of the  closing  conditions
          precedent to its obligations 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 the  Company to comply with its
          obligations)  and the  Company  has not waived  such  condition  on or
before the closing of the transaction;                      

     o    by either Oak or the  Company if the closing of the  transaction  does
          not occur  within 90 days  after  the date of  execution  of the Asset
Purchase Agreement;                                         

     o    by Oak,  (1) at any time  following  the  receipt of a  competing  bid
          notice  plus  seven  (7) days so long as the  Company  has not  ceased
          discussions  with the party that gave rise to such  termination  right
          within such seven (7) day period,  or (2) if the Company exercises its
          fiduciary out,  irrespective of whether the Company accepts a superior
offer;                                                      

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

     o    by the Company,  if Oak refuses to provide the  financial  information
          and  the  SEC  is  unable  to  provide  its   approval   without  such
information.                                                

Indemnification                                                                 

       Oak has agreed to indemnify, defend and hold harmless the Company and
its directors, officers, stockholders, employees, representatives and agents    
from and against any and all damages or losses suffered or incurred arising     
from; (i) its breach or non-fulfillment of any agreement or covenant, or (ii)   
its breach or misrepresentation of any representations and warranties.          

   We have agreed to indemnify, defend and hold harmless Oak and its
directors, officers, stockholders, employees, representatives and agents from   
and against any and all damages or losses suffered or incurred arising from; (i)
any of our liabilities or obligations, (ii) our breach or non-fulfillment of any
agreement or covenant, (iii) our breach or misrepresentation of any             
representations and warranties and (iv) certain damages to Oak caused by our    
stockholders. To the extent that Oak's indemnification claims exceed the amounts
placed in escrow, Oak will have a right of action against us for the excess. Our
aggregate liability for such indemnification claims is limited to the purchase  
price under the Asset Purchase Agreement.                                       

  The parties have agreed that the representations, warranties and
covenants shall survive for 18 months from the closing date, except for claims  
for indemnity made by either the Company or Oak due to a breach of any of the   
representations, warranties and covenants occurring during such eighteen (18)   
month period, which will survive. The Company is not obligated to indemnify Oak 
unless the aggregate of all claims exceeds $20,000.                             

Terms of the Sub-Distribution Agreement                                         

        The Company and Oak entered into a Sub-Distribution Agreement dated as
of September 15, 2005 (the "Sub-Distribution Agreement"), pursuant to which Oak 
has become a sub-distributor of the Company of certain Pabst beers and malt     
beverages. A copy of the Sub-Distribution Agreement is included as Appendix B to
this Information Statement and is incorporated herein by reference. The         
Sub-Distribution Agreement became effective when the Company filed this         
Information Statement with the Securities and Exchange Commission and shall     
terminate on the earlier of (i) the closing of the transactions contemplated by 
the Asset Purchase Agreement, (ii) the termination of the Asset Purchase        
Agreement, (iii) 90 days following September 15, 2005, or (iv) the earlier      
termination of the Sub-Distribution Agreement in accordance with its terms.     
Under the terms of the Sub-Distribution Agreement, Oak has the right to         
distribute the Pabst products to customers located in the five boroughs of New  
York City, and in exchange for such rights, Oak will pay Pabst directly for its 

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product purchases and, during the first 45 days following the effective date of 
the Sub-Distribution Agreement, Oak will pay to the Company the following       
amounts for products received by Oak: (x) $.50 for each case of products and (y)
$2.00 for each barrel of products. The purchase price to be paid by Oak to the  
Company in connection with the closing of the transactions contemplated by the  
Asset Purchase Agreement shall be reduced by an amount equal to the sum of: (i) 
$.25 for each case of products purchased by Oak and sold by Oak to customers in 
the territory, plus (ii) $.50 for each case of products purchased by Oak but not
sold to such customers, plus (iii) $1.00 for each barrel of products purchased  
by Oak and sold by Oak to customers in the territory, plus (iv) $2.00 for each  
barrel of products purchased by Oak but not sold to such customers, all         
determined during such 45-day period. If the Sub-Distribution Agreement is      
terminated by either party for any reason, the Company will be required to      
promptly pay to Oak the credits described above.                                

       As a result of entering into the Sub-Distribution Agreement, Oak will
service approximately 80% of existing customers and operating expenses for the  
Company will also be reduced by approximately 70%.                              

Dissenters' Rights                                                              

In accordance with the Delaware General Corporation Law, our  
stockholders do not have dissenters' or appraisal rights in connection with the 
Asset Sale.                                                                     

Certain Federal Income Tax Consequences                                         

        The Asset Sale will be treated by the Company as a taxable transaction
for federal and New York State income tax purposes. Any gain resulting from the 
sale will be offset against the Company's net operating loss carryforwards.     
However, utilization of these carryforwards generates an alternative minimum tax
for both government bureaus. We do not expect the combination of both           
alternative tax liabilities for the two bureaus to exceed $100,000.             

Accounting Treatment                                                            

     Upon completion of the Asset Sale, the Company will remove from its
consolidated balance sheet the assets sold to Oak and will reflect the effect of
the receipt and the use of the proceeds of the sale therein. The Company will   
record a gain on the sale of assets to Oak equal to the difference between the  
purchase price received and the book value of the assets sold in its            
consolidated statement of operations.                                           

Government Approvals                                                            

         Except for compliance with the applicable regulations of the Securities
and Exchange Commission in connection with this Information Statement and of the
Delaware General Corporation Law in connection with the Asset Sale, we are not  
required to comply with any federal or state regulatory requirements, and no    
federal or state regulatory approvals are required in connection with Asset Sale
(although we are required to obtain approvals for the assignment of certain     
contracts with governmental entities and for permits proposed to be transferred 
to Oak).                                                                        

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Voting Securities And Principal Holders Thereof                                 

   As of the Record Date, there were outstanding 3,792,045 shares of
Common Stock, $0.001 par value.                                                 

  The following table sets forth as of September 15, 2005, certain
information with respect to the beneficial ownership of Common Stock by each    
person or entity known by the Company to be the beneficial owner of 5% or more  
of such shares, each officer and director of the Company, and all officers and  
directors of the Company as a group:                                            

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Name and Address of              Shares of Common             Percentage (%) of 
Beneficial Owner(1)               Stock Owned(3)              Common Stock (3)  
-----------------                ------------------          -------------------

Carmine Stella                        712,500                          18.8%    

Anthony Stella                        237,500                           6.3%    

Alex Matrisciani(2)                   237,500                           6.3%    

Michael Matrisciani(2)                237,500                           6.3%    

Daniel Matrisciani(2)                 237,500                           6.3%    

Monty Matrisciani(2)                  237,500                           6.3%    

Casimir Capital L.P.                1,000,000(4)                       20.9%    
100 Broadway, 11th Floor                                                        
New York, NY 10005                                                              

All officers and  directors          1,900,000                         50.1%    
as a group (nine (9) persons)                                                   

     (1)  The  address  of each  Stockholder  shown  above  except as  otherwise
          indicated is c/o Capital  Beverage  Corporation,  700 Columbia Street,
Erie Basin, Building # 302, Brooklyn, New York 11231.       

     (2)  Alex Matrisciani,  Michael  Matrisciani,  Daniel Matrisciani and Monty
          Matrisciani are brothers.  Daniel Matrisciani and Michael Mastrisciani
are each a director of the Company.                         

     (3)  Beneficial   ownership  as  reported  in  the  table  above  has  been
          determined  in  accordance  with  Item  403 of  Regulation  S-K of the
          Securities  Act of 1933 and Rule  13(d)-3 of the  Securities  Exchange
     Act, and based upon 3,792,045 shares of Common Stock outstanding.

     (4)  Includes  warrants to purchase an  aggregate  of  1,000,000  shares of
          Common Stock,  exercisable at $1.00 per share. Casimir Capital L.P. is
          delinquent  in its  filing  of  Schedule  13D  and  Form  3  with  the
Securities and Exchange Commission.                         

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Where You Can Find Additional Information                                       

      We file annual, quarterly and current reports, proxy and information
statements and other information with the Securities and Exchange Commission    
under the Securities Exchange Act of 1934, as amended. You may read and copy    
this information at the Public Reference Section at the Securities and Exchange 
Commission at 450 Fifth Street, NW, Judiciary Plaza, Washington, DC 20549. You  
may obtain information on the operation of the Public Reference Room by calling 
the SEC at 1-800-732-0330. The SEC maintains an Internet site that contains     
reports, proxy and information statements, and other information about issuers  
that file electronically with the SEC. The address of that site is              
http://www.sec.gov. Our public filings are also available to the public from    
commercial document retrieval services.                                         

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Appendix A

ASSET PURCHASE AGREEMENT

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ASSET PURCHASE AGREEMENT

       AGREEMENT, made as of the 14th 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.                                                       

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              (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.                             
                (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).                                                         

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              (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.                                                                      

                (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.                                                         

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

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                  (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).                                                    

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

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            (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 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                                       

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                       (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 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      

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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 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   

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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    
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;  

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(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;         

    (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;                                                

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   (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 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.                                                              

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       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 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.

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              (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, 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.                                                                      

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                          (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  
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.                                                                       

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(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.                                               

      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.                                                                     

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                 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 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 

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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    
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    

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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 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.                                      

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      (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 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    

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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 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           

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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) 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   

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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.                                                       

     (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.                        

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                  (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:                                                           

                      (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

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     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.

                   (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

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          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.                                                     

                       (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          

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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.                             

                      (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.                                         

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                         (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.                     

                       (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      

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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.                        

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;                   

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                        (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;                                                            

                        (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:                                 

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                       (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.                                                

                       (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;                                                                      

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                          (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);                                    

                          (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).     

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   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; 

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                          (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;                                                                     

                        (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.                                      

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       (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.                              

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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.                                       

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             (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.    

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     (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    

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Appendix B

SUB-DISTRIBUITON AGREEMENT

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SUB-DISTRIBUTION AGREEMENT

         AGREEMENT, made the 14th 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;                                 

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         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, 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 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    

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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 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.                                                        

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                                 (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:                                   

                                 (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              

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              (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      

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affiliates shall be 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  

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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
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

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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 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  

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-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 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  

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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 

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

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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.                    

         (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.                                                             

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        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

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
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