                                  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:

              ------------------------------------------------------------------

<PAGE>

                          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

<PAGE>

                             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.

<PAGE>

                              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.

                                       1

<PAGE>

         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.














                                       2

<PAGE>

                               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;

                                       3

<PAGE>

         -    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

                                       4

<PAGE>

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

                                       5

<PAGE>

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

                                       6

<PAGE>

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.











                                       7

<PAGE>

                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.

                                       8

<PAGE>

         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.

                                       9
<PAGE>

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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<PAGE>

     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

                                       11

<PAGE>

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.

                                       12

<PAGE>

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.










                                       13

<PAGE>

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.


                                       14

<PAGE>

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.

                                       15
<PAGE>

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.

                                       16

<PAGE>

         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.

                                       17

<PAGE>

         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.

                                       18

<PAGE>

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

                                       19

<PAGE>

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

                                       20

<PAGE>

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.

                                       21

<PAGE>

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;

                                       22

<PAGE>

         (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.

                                       23

<PAGE>

         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.

                                       24

<PAGE>

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.

                                       25

<PAGE>

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;

                                       26
<PAGE>

     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

                                       27

<PAGE>

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).

                                       28

<PAGE>

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:



<PAGE>




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.

                                       29

<PAGE>

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.














                                       30

<PAGE>

                                   Appendix A



                            ASSET PURCHASE AGREEMENT














<PAGE>

                            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.

                                      A-1

<PAGE>

                  (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).

                                      A-2

<PAGE>

                  (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).

                                      A-3

<PAGE>

                  (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.

                                      A-4

<PAGE>

                  (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.

                                      A-5

<PAGE>

                  (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

                                      A-6

<PAGE>

                           (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

                                      A-7

<PAGE>

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

                                      A-8

<PAGE>

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;

                                      A-9

<PAGE>

         (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;

                                      A-10

<PAGE>

         (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.

                                      A-11

<PAGE>

         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.

                                      A-12

<PAGE>

                  (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.

                                      A-13

<PAGE>

                           (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.

                                      A-14

<PAGE>

                  (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.

                                      A-15

<PAGE>

                  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

                                      A-16

<PAGE>

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

                                      A-17

<PAGE>

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.

                                      A-18

<PAGE>

                  (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

                                      A-19

<PAGE>

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

                                      A-20

<PAGE>

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

                                      A-21

<PAGE>

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.

                                      A-22

<PAGE>

                  (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

                                      A-23

<PAGE>

         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

                                      A-24

<PAGE>

          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

                                      A-25

<PAGE>

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.

                                      A-26
<PAGE>

                           (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

                                      A-27

<PAGE>

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;

                                      A-28

<PAGE>

                           (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:

                                      A-29

<PAGE>

                           (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;

                                      A-30

<PAGE>

                           (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).

                                      A-31

<PAGE>

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

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

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

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

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

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

                                      A-32

<PAGE>

                           (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.

                                      A-33

<PAGE>

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

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

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

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

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

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

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

                                      A-34

<PAGE>

         16. Miscellaneous.

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

                                          To Seller:

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

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

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

                                          To Purchaser:

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

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

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

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

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

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

                                      A-35

<PAGE>

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

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

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

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

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

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

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

                                      A-36

<PAGE>

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

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

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

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

                          CAPITAL BEVERAGE CORPORATION

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

                          OAK BEVERAGES INC.

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


                                      A-37

<PAGE>

                                   Appendix B



                           SUB-DISTRIBUITON AGREEMENT
















<PAGE>

                           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;

                                      B-1

<PAGE>

         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

                                      B-2

<PAGE>

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.

                                      B-3

<PAGE>

                                    (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

                                      B-4

<PAGE>

                  (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

                                      B-5

<PAGE>

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

                                      B-6

<PAGE>

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

                                      B-7

<PAGE>

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

                                      B-8
<PAGE>

                                    -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

                                      B-9

<PAGE>

                  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

                                      B-10

<PAGE>

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.

                                      B-11

<PAGE>

         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
