UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-K
                                   (Mark One)
     [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2004

                                       OR

[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934

                 For the transition period from _____ to _____

                         Commission File Number 0-18761

                           HANSEN NATURAL CORPORATION
             (Exact name of Registrant as specified in its charter)

                              Delaware 39-1679918
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)

                 1010 Railroad Street, Corona, California 92882
              (Address of principal executive offices) (Zip Code)

      Registrant's telephone number, including area code: (951) 739 - 6200

          Securities registered pursuant to Section 12(b) of the Act:

                                                Name of each exchange
              Title of each class               on which registered
              -------------------               ---------------------
              Not Applicable                    Not Applicable

          Securities registered pursuant to Section 12(g) of the Act:

                                 Title of class
                                 --------------
                    Common Stock, $0.005 par value per share

     Indicate by check mark  whether the  Registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

     Indicate by check mark whether the Registrant is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes [X] No [ ]

     The aggregate market value of the voting stock held by nonaffiliates of the
Registrant  was  $317,035,186  computed by  reference to the sale price for such
stock on the NASDAQ Small-Cap Market on February 23, 2005.

     The number of shares of the Registrant's common stock, $0.005 par value per
share (being the only class of common stock of the  Registrant),  outstanding on
February 23, 2005 was 10,935,189 shares.


<PAGE>

                           HANSEN NATURAL CORPORATION

                                   FORM 10-K

                               TABLE OF CONTENTS



Item Number                                                     Page Number
-----------                                                     -----------

                                     PART I
                                     ------


1.  Business                                                             3
2.  Properties                                                          15
3.  Legal Proceedings                                                   15
4.  Submission of Matters to a Vote of Security Holders                 15

                                    PART II

5.  Market for the Registrant's Common Equity and Related
      Shareholder Matters                                               16
6.  Selected Consolidated Financial Data                                17
7.  Management's Discussion and Analysis of Financial
      Condition and Results of Operations                               18

7a. Qualitative and Quantitative Disclosures about Market Risks         33
8.  Financial Statements and Supplementary Data                         33
9.  Changes in and Disagreements with Accountants on
     Accounting and Financial Disclosure                                33
9a. Controls and Procedures                                             33

                                    PART III
                                    --------
10. Directors and Executive Officers of the Registrant                  35
11. Executive Compensation                                              38
12. Security Ownership of Certain Beneficial Owners and Management      42
13. Certain Relationships and Related Transactions                      44
14. Principal Accountant Fees and Services                              45

                                    PART IV
                                    -------

15. Exhibits, Financial Statement Schedules and Reports on Form 8-K     46

Signatures                                                              47
                                       2

<PAGE>


                                     PART I


ITEM 1. BUSINESS

Overview

     Hansen Natural  Corporation was incorporated in Delaware on April 25, 1990.
Its principal place of business is at 1010 Railroad Street,  Corona,  California
92882 and its  telephone  number is (951)  739-6200.  When this  report uses the
words "Hansen",  "HBC", "the Company",  "we", "us", and "our", these words refer
to Hansen Natural  Corporation and our  subsidiaries  other than Hard e Beverage
Company ("HEB"), unless the context otherwise requires.

     We are a holding company and carry on no operating  business except through
our direct wholly owned subsidiaries,  Hansen Beverage Company ("HBC") which was
incorporated in Delaware on June 8, 1992, and HEB, formerly known as Hard Energy
Company,  and previously known as CVI Ventures,  Inc., which was incorporated in
Delaware on April 30, 1990.  HBC  generates  substantially  all of our operating
revenues.

Corporate History

     In the 1930's,  Hubert Hansen and his three sons started a business to sell
fresh  non-pasteurized  juices  in  Los  Angeles,   California.   This  business
eventually became Hansen's Juices,  Inc., which subsequently became known as The
Fresh Juice  Company of  California,  Inc.  ("FJC").  FJC  retained the right to
market and sell fresh  non-pasteurized  juices  under the Hansen  trademark.  In
1977, Tim Hansen, one of the grandsons of Hubert Hansen,  perceived a demand for
pasteurized  natural  juices and juice  blends that are shelf  stable and formed
Hansen Foods, Inc. ("HFI"). HFI expanded its product line from juices to include
Hansen's(r)  Natural Sodas.  California  Co-Packers  Corporation  (d/b/a/ Hansen
Beverage Company) ("CCC") acquired certain assets of HFI, including the right to
market the  Hansen's(r)  brand name,  in January  1990.  On July 27,  1992,  HBC
acquired the  Hansen's(r)  brand natural soda and apple juice business from CCC.
Under our ownership, the Hansen beverage business has significantly expanded and
includes a wide range of  beverages  within the growing  "alternative"  beverage
category. In September 1999 we acquired all of FJC's rights to manufacture, sell
and  distribute  fresh  non-pasteurized  juice  products  under the  Hansen's(r)
trademark  together with certain  additional  rights.  In 2000, HBC, through its
wholly-owned  subsidiary,  Blue Sky Natural Beverage Co. ("Blue Sky"), which was
incorporated  in Delaware  on  September  8, 2000,  acquired  the  natural  soda
business  previously  conducted by Blue Sky Natural  Beverage  Co., a New Mexico
corporation  ("BSNBC"),  under the Blue Sky(r) trademark.  In 2001, HBC, through
its wholly-owned subsidiary Hansen Junior Juice Company, ("Junior Juice"), which
was incorporated in Delaware on May 7, 2001,  acquired the Junior Juice business
previously  conducted by Pasco Juices,  Inc. ("Pasco") under the Junior Juice(r)
trademark.

Industry Overview

     The alternative  beverage category combines  non-carbonated  ready-to-drink
iced teas, lemonades, juice cocktails, single serve juices,  ready-to-drink iced
coffees,  energy drinks,  sports drinks, soy drinks and single-serve still water
(flavored and  unflavored)  with "new age"  beverages,  including sodas that are
considered  natural,   sparkling  juices  and  flavored  sparkling  waters.  The
alternative  beverage  category is the fastest  growing  segment of the beverage
marketplace according to Beverage Marketing  Corporation.  Sales in 2004 for the
alternative beverage category of the market are estimated at approximately $16.3
billion at wholesale, representing a growth rate of approximately 10.7% over the
revised  estimated  wholesale  sales  in 2003 of  approximately  $14.8  billion.
(Source: Beverage Marketing Corporation).

                                       3

<PAGE>

Products

     We develop,  market,  sell and distribute  "alternative"  beverage category
natural sodas, fruit juices, energy drinks and energy sports drinks, fruit juice
and soy smoothies,  "functional  drinks",  sparkling  lemonades and  orangeades,
non-carbonated ready-to-drink iced teas, lemonades, juice cocktails,  children's
multi-vitamin  juice drinks and  non-carbonated  lightly  flavored energy waters
under the  Hansen's(r)  brand name. We also market,  sell and distribute  energy
drinks under the MonsterTM  brand name. In addition,  we market  nutrition  food
bars under the  Hansen's(r)  brand name.  We also market,  sell and  distribute,
natural sodas,  premium natural sodas with  supplements,  organic natural sodas,
seltzer  waters and energy  drinks under the Blue Sky(r)  brand name.  Our fruit
juices for toddlers are marketed under the Junior Juice(r) brand name.

     Natural  Sodas.  Hansen's  natural  sodas have been a leading  natural soda
brand in  Southern  California  for the past 25  years.  In 2004,  according  to
Information Resources, Inc.'s Analyzer Reports for California, our natural sodas
recorded  the  highest  sales  among  comparable  carbonated  new  age  category
beverages  measured by unit volume in the California  market.  Our natural sodas
are available in thirteen regular flavors consisting of mandarin lime, key lime,
grapefruit,  raspberry,  creamy root beer,  vanilla cola,  cherry vanilla creme,
orange mango, kiwi strawberry,  tropical passion,  black cherry,  ginger ale and
tangerine.  In  early  2001,  we  introduced  a new  line  of diet  sodas  using
Splenda(r) sweetener as the primary sweetener. We initially introduced this line
in four flavors:  peach,  black cherry,  tangerine lime, and kiwi strawberry and
have since added two  additional  flavors,  ginger ale and creamy root beer. Our
natural sodas contain no preservatives,  sodium, caffeine or artificial coloring
and are made with high quality  natural  flavors,  citric acid and high fructose
corn syrup or, in the case of diet sodas, with Splenda(r) and  Acesulfame-K.  We
package our natural  sodas in 12-ounce  aluminum  cans. In 2002, we introduced a
line of natural  mixers in 8-ounce  aluminum cans  comprising  club soda,  tonic
water and ginger ale.

     In January 1999, we introduced a premium line of Signature  Sodas in unique
proprietary 14-ounce glass bottles. This line was marketed under the Hansen's(r)
brand name,  primarily through our distributor network, in six flavors. In early
2003 we  repositioned  this line into lower cost  12-ounce  glass  packaging  to
market our  repositioned  Signature Soda line at lower price points  directly to
our retail  customers  such as grocery  chains,  club stores,  specialty  retail
chains and mass  merchandisers  and to the health food sector through  specialty
and health food  distributors  (collectively  referred to as our "direct  retail
customers").  Signature  Soda is  available  in 12-ounce  glass  bottles in five
flavors:  orange  creme,  vanilla  creme,  ginger beer,  sarsaparilla  and black
cherry.

     In September  2000,  we acquired the Blue Sky Natural  Soda  business  from
BSNBC. Our Blue Sky product line comprises natural sodas, premium sodas, organic
natural sodas,  seltzer water,  energy drinks and tea sodas. Blue Sky(r) natural
sodas are  available  in  thirteen  regular  flavors  consisting  of lemon lime,
grapefruit,  cola,  root beer,  raspberry,  cherry vanilla creme,  truly orange,
Jamaican ginger ale, black cherry,  orange creme, Dr. Becker,  grape and private
reserve cream soda. We also offer a Blue Sky(r)  product line, a premium line of
natural sodas which contain supplements such as ginseng.  This line is available
in six flavors  consisting of ginseng  creme,  ginseng cola,  ginseng root beer,
ginseng very berry creme,  ginseng ginger ale, and ginseng  cranberry-raspberry.
During 1999, Blue Sky(r)  introduced a line of organic natural sodas,  which are
available  in six  flavors  consisting  of prime lime cream,  new century  cola,
orange divine,  ginger gale, black cherry cherish, and root beer. We also market
a seltzer water under the Blue Sky(r) label in three flavors:  natural, lime and
lemon.  In 2002, we introduced a lightly  carbonated Blue Sky(r) energy drink in
an 8.3-ounce  slim can. In 2004 we introduced a new line of Blue Sky natural tea
sodas in four flavors  consisting of Imperial  Lime Green Tea,  Peach Mist Green
Tea,  Pomegranate  White Tea and  Raspberry  Red Tea.  The Blue Sky(r)  products
contain no  preservatives,  sodium or caffeine  (other than the energy drink) or
artificial coloring and are made with high quality natural flavors.  Blue Sky(r)
natural  sodas,  seltzer  waters  and tea sodas  are all  packaged  in  12-ounce
aluminum cans and are marketed primarily to our direct retail customers.

                                       4

<PAGE>

     In 2001, we introduced a new line of sparkling lemonades (regular and pink)
and orangeades in unique  proprietary  1-liter glass bottles and towards the end
of 2002, we  introduced  diet  versions of our regular  sparkling  lemonades and
orangeades,   also  in  1-liter  glass  bottles.  The  sparkling  lemonades  and
orangeades  contain  real juice and pulp.  In 2003,  we extended  this line into
unique  proprietary  12-ounce  glass bottles in both regular and diet  versions.
This  product  line is marketed to our direct  retail  customers.  The  contract
packer who produced these products on our behalf underwent a change of ownership
and experienced  production  difficulties  which adversely affected this product
line.  We expect to  reevaluate  this  product line once  production  issues are
resolved.  Additionally,  we are currently  evaluating  alternative packages for
this line.

     Hansen's Energy Drinks. In 1997, we introduced a lightly  carbonated citrus
flavored Hansen's(r) energy drink. Our energy drink competes in the "functional"
beverage category, namely, beverages that provide a real or perceived benefit in
addition to simply  delivering  refreshment.  We offer our energy drink in three
versions:  original  citrus,  tropical and wild berry. We also offer  additional
functional  drinks  including a ginger  flavored  d-stress(r)  drink,  an orange
flavored  b-well(tm)  drink, a guarana berry flavored  stamina(r) drink, a grape
flavored power drink,  and a berry flavored  "slim-down"  drink that contains no
calories.   Each  of  our  energy  and  functional   drinks  contain   different
combinations   of  vitamins,   minerals,   nutrients,   herbs  and   supplements
("supplements").  Our energy drinks and functional  drinks are sold in 8.3-ounce
cans and bottles.  In 2004 we  commenced  to offer our Hansen's  energy drink in
16-ounce  cans as well. In 2001, we  introduced  Energade(r),  a  non-carbonated
energy sports drink in 23.5-ounce  cans in two flavors,  citrus and orange,  and
subsequently  introduced a third  flavor,  red rocker.  We also  introduced  E2O
Energy  Water(r),  a  non-carbonated  lightly  flavored  water, in 24-ounce blue
polyethylene   terephthalate   ("P.E.T.")  plastic  bottles,  in  four  flavors,
tangerine,  apple, berry and lemon. In 2002, we expanded our E2O Energy Water(r)
line with four additional flavors in clear P.E.T. plastic bottles,  mango melon,
kiwi  strawberry,  grapefruit  and green  tea.  Our  Energade(r)  and E2O Energy
Water(r) drinks also contain  different  combinations and levels of supplements.
At the end of 2002,  we  introduced  a lightly  carbonated  diet energy drink in
8.3-ounce  cans under the  Hansen's(r)  Diet Red brand name. Our Diet Red energy
drink is sweetened  with  Splenda and  Acesulfame-K.  We market our energy,  and
Energade drinks through our full service distributor  network. We market our E2O
Energy Water(r) drinks in blue bottles to our direct retail  customers.  In 2003
we introduced a new carbonated  energy drink under the  Hansen's(r)  Deuce brand
name,  in a  16-ounce  can,  but  with a  different  flavor  than  our  existing
Hansen's(r) Energy drinks in 8.3-ounce cans.

     Monster EnergyTM Drinks. In 2002, we launched a new carbonated energy drink
under the Monster  EnergyTM brand name, in 16-ounce cans, which is almost double
the size of our regular energy drinks in 8.3-ounce cans and the vast majority of
competitive  energy drinks  currently on the market.  Our Monster EnergyTM drink
contains  different types and levels of supplements than our Hansen's(r)  energy
drinks and is marketed through our full service distributor network. In 2003, we
introduced a low carbohydrate ("Lo-Carb") version of our Monster EnergyTM energy
drink. In 2004 we introduced  4-packs of our Monster Energy(tm) drinks including
our Lo-Carb  version  thereof  and,  towards the end of 2004,  we launched a new
Monster Energy(tm) "Assault" (tm) energy drink in 16-ounce cans.

     Lost(r) Energy Drinks.  In 2004, we launched a new carbonated  energy drink
under the Lost(r) brand name, in 16-ounce  cans. The Lost(r) brand name is owned
by Lost  International LLC and the drinks are produced,  sold and distributed by
us under exclusive license from Lost International LLC.

     Rumba(tm) Energy Juice. In December 2004, we launched a new  non-carbonated
energy  juice under the  Rumba(tm)  brand name in 16 ounce cans.  Rumba(tm) is a
100% juice product that targets male and female morning  beverage  consumers and
is positioned as a substitute for coffee,  caffeinated  sodas and 100% orange or
other juices.

                                       5

<PAGE>

     Juice  Products  and  Smoothies.  Our fruit  juice  product  line  includes
Hansen's(r)  Natural  Old  Fashioned  Apple  Juice which is packaged in 64-ounce
P.E.T. plastic bottles and 128-ounce  polypropylene  bottles and White Grape and
Concord Grape and Pomegranate juice, and Apple Strawberry, Apple Grape and Apple
Cranberry juice blends,  in 64-ounce P.E.T.  plastic bottles.  These Hansen's(r)
juice products contain 100% juice (except Apple Cranberry and Pomegranate  which
contain 27% juice) as well as Vitamin C. Certain of these  products also contain
added calcium.  Hansen's(r)  juice products  compete in the  shelf-stable  juice
category.  In 2002,  we extended our fruit juice and juice blend product line by
introducing certain of these products in 10-ounce P.E.T.  plastic bottles and in
2003 further  extended our fruit juice product line by  introducing a 100% Apple
Juice in aseptic pouches in a 6.75-ounce size.

     In March  1995,  we  introduced  a line of fruit juice  smoothie  drinks in
11.5-ounce aluminum cans. Certain flavors were subsequently offered in glass and
P.E.T.  plastic  bottles.  Hansen's fruit juice  smoothies have a smooth texture
that is thick  but  lighter  than a nectar.  Hansen's  smoothies  in  11.5-ounce
aluminum cans contain approximately 35% juice while the juice levels of Hansen's
smoothies in glass and P.E.T.  plastic bottles is 25%. Our fruit juice smoothies
provide 100% of the recommended daily intake for adults of Vitamins A, C & E and
represented Hansen's entry into what is commonly referred to as the "functional"
beverage  category.  Hansen's(r)  fruit  juice  smoothies  are  available  in 15
flavors:  strawberry  banana,  peach berry,  mango pineapple,  guava strawberry,
pineapple coconut,  apricot nectar, tropical passion,  whipped orange, cranberry
twist, as well as the blast line comprising  Island Blast,  Colada Blast,  Power
Berry Blast, Vita Blast and Banana Blast. In 2004, we repositioned our cranberry
raspberry  lite  smoothie  as part of our new  lo-carb  line of  smoothies.  Our
lo-carb  smoothie line  currently  consists of peach,  mango and  cran-raspberry
flavors in 12-ounce cans.

     In 2001,  we  introduced  a new line of soy  smoothies  in 32- and 11-ounce
aseptic packaging in five flavors: berry splash,  tropical breeze, orange dream,
lemon chiffon and peach passion. The soy smoothies contain soy protein and fruit
juices.  During  2004 we  discontinued  all of our  soy  smoothies  in  32-ounce
asceptic  packaging and four of the five flavors in 11-ounce aseptic  packaging,
leaving Berry Splash.

     Sparkling  Apple Cider. In 2002, we introduced a Sparkling Cider 100% juice
drink in a 1.5-  liter  Magnum  glass  bottle.  However,  due to reports of some
bottles  breaking we  promptly  voluntarily  recalled  the product in the fourth
quarter of 2003. We are pursuing a claim against the third-party bottler for the
costs and losses  incurred by us. We will  reevaluate  relaunching  this product
once certain  production  issues are resolved and a suitable  co-packer has been
identified.

     We market  the above  juice and  smoothie  products  to our  direct  retail
customers.

     Iced  Teas,  Lemonades  and  Juice  Cocktails.  We  introduced  Hansen's(r)
ready-to-drink iced teas and lemonades in 1993. Hansen's(r)  ready-to-drink iced
teas are available in three  flavors:  Original with Lemon,  Tropical  Peach and
Wildberry.  Lemonades  are  available  in one  flavor:  Original  Old  Fashioned
Lemonade.  Hansen's(r) juice cocktails were introduced in 1994 and are available
in three flavors: kiwi strawberry melon, tangerine pineapple with passion fruit,
and  California  paradise  punch.  We  introduced a variety 12 pack of iced teas
during  the  first  half of 2001,  which  experienced  limited  success.  We are
continuing  to  market  this  package.  Hansen's(r)  ready-to-drink  iced  teas,
lemonades  and juice  cocktails  were  packaged  in  16-ounce  wide-mouth  glass
bottles.  At the end of 2002, we converted this line from 16-ounce glass bottles
to 16-ounce polypropylene bottles.

     Hansen's(r)  ready-to-drink  iced  teas are made  with  decaffeinated  tea.
Hansen's(r)  juice  products and smoothies are made with high quality juices and
products  that  contain  less than 100% fruit  juice are also made with  natural
flavors, high fructose corn syrup, citric acid and other ingredients.

     In 1999, we introduced a line of specialty  teas in 20-ounce glass bottles,
which  we named  our  "Gold  Standard"  line.  We  subsequently  introduced  two
additional  green tea  flavors as well as two diet green  flavors  and six juice
cocktails.  We are  discontinuing  certain of the specialty  teas and all of the
juice cocktails but are continuing to market three regular green tea flavors and
the diet peach green tea flavor.  Our Gold Standard  line contains  supplements,
but at lower levels than in our  functional  drinks.  We continue to package our
Gold Standard Line in unique 20-ounce glass bottles.  We discontinued  marketing
green tea and original tea with lemon in 10.14-ounce aseptic packages.

                                       6

<PAGE>

     Juices for Children.  In 1999,  we  introduced  two new lines of children's
multi-vitamin  juice drinks in 8.45-ounce aseptic packages.  Each drink contains
eleven  essential  vitamins  and six  essential  minerals.  Each  line has three
flavors.  We  introduce  new flavors in place of existing  flavors  from time to
time.  One of these two lines is a  dual-branded  100% juice  line named  "Juice
Blast(r)" that was launched in  conjunction  with Costco  Wholesale  Corporation
("Costco") and is sold  nationally  through Costco stores.  The other line was a
10% juice line named  "Hansen's  Natural  Multi-Vitamin  Juice Slam(r)" that was
available to all of our customers.  During 2000, we repositioned  that line as a
100% juice  line under the Juice  Slam(r)  name and are  marketing  that line to
grocery store chain customers, the health food trade, and other customers.  Both
the Juice  Blast(r) and Juice Slam(r)  lines are marketed in 6.75-ounce  aseptic
packages.

     In May 2001, we acquired the Junior Juice(r) beverage business.  The Junior
Juice(r)  product line is comprised of seven flavors of 100% juice in 4.23-ounce
aseptic packages and is targeted at toddlers. Six flavors of the Junior Juice(r)
line have  calcium  added and all  flavors  have  vitamin C added.  The  current
flavors in the Junior Juice(r) line are apple, apple berry,  orange twist, apple
grape, mixed fruit, fruit punch, and white grape.

     Nutrition  Bars. In 2000, we introduced a line of nutrition food bars under
the Hansen's(r)  brand name.  This line is made from grains and fruit.  Sales of
this product line are very limited.

     Hard e. In 2000,  we  introduced a malt-based  drink under the name Hard e,
which contains up to  five-percent  alcohol.  The Hard e product is not marketed
under the Hansen's(r) name. In 2004 we discontinued this line.

     Bottled  Water.  Our still water  products were  introduced in 1993 and are
primarily sold in 0.5-liter plastic bottles to the food service trade.

Other Products

     We  continue to  evaluate  and,  where  considered  appropriate,  introduce
additional  flavors and other types of  beverages  to  complement  our  existing
product lines.  We will also evaluate,  and may, where  considered  appropriate,
introduce  functional   foods/snack  foods  that  utilize  similar  channels  of
distribution  and/or are  complementary to our existing products and/or to which
our brand names are able to add value.

Manufacture and Distribution

     We do not  directly  manufacture  our products  but instead  outsource  the
manufacture to third party bottlers and contract packers.

     We purchase concentrates,  juices, flavors, vitamins, minerals,  nutrients,
herbs,  supplements,  caps,  labels,  trays, boxes and other ingredients for our
beverage  products  which are delivered to our various third party  bottlers and
co-packers.  Depending on the product,  the third party  bottlers or packers add
filtered  water and/or high  fructose corn syrup,  or sucrose,  or cane sugar or
Splenda(r) brand sweetener, Acesulfame-K and/or citric acid or other ingredients
and supplements for the manufacture and packaging of the finished  products into
approved containers.  In the case of sodas and other carbonated  beverages,  the
bottler/packer  adds  carbonation  to the  products  as part  of the  production
process.

     We are generally responsible for arranging for the purchase of and delivery
to our third  party  bottlers  and  co-packers  of the  containers  in which our
beverage products are packaged.

     The ingredients for our nutrition food bars are purchased by our co-packers
from various suppliers for manufacturing and packaging of the finished bars.

     All of our  beverage  products  are  manufactured  by various  third  party
bottlers and co-packers  situated  throughout the United States and Canada under
separate   arrangements  with  each  of  such  parties.   The  majority  of  our
co-packaging arrangements are on a month-to-month basis. However, certain of our
material co-packing arrangements are described below:

                                       7

<PAGE>

     (a) Our agreement with Southwest Canning and Packaging,  Inc. ("Southwest")
pursuant to which Southwest packages a portion of our Hansen's(r) natural sodas.
This contract continues  indefinitely and is subject to termination upon 60 days
written notice from either party.

     (b) Our agreement with Nor-Cal Beverage Co., Inc.  ("Nor-Cal")  pursuant to
which Nor-Cal  packages a portion of our  Hansen's(r)  juices in P.E.T.  plastic
bottles. This contract continues until 2008 and is renewable annually thereafter
from year-to-year unless terminated by Hansen's not less than 60 days before the
end of the then current term.

     (c) Our agreement with Seven-Up/RC Bottling Company of Southern California,
Inc. ("Seven-Up") pursuant to which Seven-Up packages a portion of our MonsterTM
and Lost(r) brand energy drinks and a portion of our Hansen's(r)  natural sodas.
This contract continues until March 2008 and is renewable  annually  thereafter.
Upon termination prior to such time we are entitled to recover certain equipment
we have purchased and installed at Seven-Up's facility.

     (d)  Our   agreement   with   Southeast   Atlantic   Beverage   Corporation
("Southeast")  pursuant  to which  Southeast  packages a portion of our  Monster
Energy(tm) and Lost(r) brand energy drinks.  This contract  continues until July
2007 and is renewable annually thereafter.

     (e) Our agreement with City Brewing  Company LLC ("City Brew")  pursuant to
which City Brew packages a portion of our Energade  energy sports  drinks.  This
contract  continues until December 2006. Either party is entitled,  at any time,
to  terminate  the  agreement on ninety (90) day's prior  written  notice to the
other party.

     (f) Our agreement with Pri-Pak,  Inc. ("Pri-Pak") pursuant to which Pri-Pak
packages  a  portion  of our  energy  drinks in 8.3 ounce  cans.  This  contract
continues  indefinitely  but may be  terminated  at any time by either  party on
ninety (90) day's prior written notice to the other.

     In many  instances,  equipment  is  purchased  by us and  installed  at the
facilities of our co-packers to enable them to produce  certain of our products.
In general, such equipment remains our property and is to be returned to us upon
termination  of the packing  arrangements  with such  co-packers or is amortized
over a pre-determined  number of cases that are to be produced at the facilities
concerned.

     We pack certain  products  outside of the West Coast region to enable us to
produce  products  closer to the markets where they are sold and thereby  reduce
freight costs. As volumes in markets outside of California  grow, we continue to
secure additional packing  arrangements closer to such markets to further reduce
freight costs.

     Our ability to estimate demand for our products is imprecise,  particularly
with new  products,  and may be less  precise  during  periods of rapid  growth,
particularly  in new  markets.  If we  materially  underestimate  demand for our
products  or are  unable  to  secure  sufficient  ingredients  or raw  materials
including,  but not limited to, glass,  P.E.T./plastic  bottles,  cans,  labels,
flavors  or   supplement   ingredients   or  certain   sweeteners,   or  packing
arrangements,  we might not be able to satisfy demand on a short-term basis. The
supplier of sucralose  has notified the Company that our  purchases of sucralose
during  2005  will be  subject  to  volume  limitations  due to the  demand  for
sucralose exceeding their production capacity.  While we believe that we will be
able to secure sufficient quantities of sucralose during 2005 to meet the demand
for our products  that  contain  sucralose,  we are taking steps to  reformulate
those products that contain  sucralose  with  alternative  sweetener  systems to
avoid an interruption in supply of those products.

     Although our production arrangements are generally of short duration or are
terminable  upon  request,  we  believe a short  disruption  or delay  would not
significantly  affect our revenues since alternative  packing  facilities in the
United  States with  adequate  capacity  can usually be obtained for many of our
products at commercially reasonable rates and/or, within a reasonably short time
period.  However, there are limited packing facilities in the United States with
adequate  capacity  and/or  suitable  equipment for many of our newer  products,
including Hansen's(r) brand energy drinks and functional drinks in 8.3-ounce and

                                       8

<PAGE>

16-ounce  cans,  Gold  Standard  line,  aseptic  juice  products,   Energade(r),
sparkling  apple  cider  in  1.5-liter  magnum  glass  bottles,  soy  smoothies,
MonsterTM and Lost(r) energy drinks in 16-ounce cans and sparkling lemonades and
orangeade  lines.  There are also  limited  shrink  sleeve  labeling  facilities
available to us in the United States with  adequate  capacity for our E2O Energy
Water(r).  A disruption or delay in  production  of any of such  products  could
significantly  affect our revenues from such products as alternative  co-packing
facilities in the United States with adequate  capacity may not be available for
such  products  either  at  commercially   reasonable  rates,  and/or  within  a
reasonably  short  time  period,  if  at  all.  Consequently,  a  disruption  in
production  of such  products  could  affect our  revenues.  We continue to seek
alternative  and/or  additional  co-packing  facilities  in the United States or
Canada with  adequate  capacity for the  production  of our various  products to
minimize the risk of any disruption in production.

     We have entered  into  distribution  agreements  for  distribution  in most
states of Hansen's(r)  brand energy drinks,  Monster  EnergyTM  drinks,  Lost(r)
energy drinks,  and Energade(r) energy sports drinks.  Distribution  levels vary
from state to state and from  product to product.  Certain of our  products  are
sold in Canada.  We also sell a limited  range of our  products to  distributors
outside of the United States, including Mexico, Japan, Korea, the Caribbean, and
Saudi Arabia.

     We continually seek to expand distribution of our products by entering into
agreements  with regional  bottlers or other direct store delivery  distributors
having established sales, marketing and distribution organizations.  Many of our
bottlers and distributors are affiliated with and manufacture  and/or distribute
other soda and non-carbonated brands and other beverage products. In many cases,
such products compete directly with our products.

     We continue to take steps to reduce our inventory  levels in an endeavor to
lower our warehouse and distribution costs.

     During 2004, we continued to expand  distribution  of our natural sodas and
smoothies outside of California. We expanded our national sales force to support
and grow sales, primarily of Hansen's(r) energy drinks, Monster EnergyTM drinks,
Lost(r) energy  drinks,  and  Energade(r)  energy sports drinks and we intend to
continue to build such sales force in 2005.

     Our Blue  Sky(r)  products  are sold  primarily  to the health  food trade,
natural food chains and  mainstream  grocery  store  chains,  through  specialty
health food distributors.

     We concluded  exclusive  contracts  with the State of California  ("State")
Department of Health Services,  Women, Infant and Children ("WIC")  Supplemental
Nutrition  Branch ("DHS") to supply 100% apple juice and 100% blended juice,  in
64-ounce P.E.T.  plastic  bottles.  The contracts are each for a period of three
years with a further  one-year  extension  option to be mutually  agreed between
Hansen's  and the State of  California.  We bid the  lowest net cost per unit in
terms  of the  wholesale  price,  less a rebate  to the  State.  Formal  written
agreements  were signed with the State in accordance  with the bid process.  The
contracts  commenced  on July 12,  2004.  

     Under the contracts Hansen's is the exclusive supplier for both Apple Juice
and the blended  juice  category,  a new WIC category,  initially  with our 100%
Apple Grape Juice.  The WIC contracts are expected to expand the distribution of
Hansen's  juices,  resulting  in  increased  exposure  for the  Hansen's  brand.
WIC-approved  items are  stocked by the grocery  trade and by  WIC-only  stores.
Products  are  purchased  by WIC  consumers  with  vouchers  given by the DHS to
qualified  participants.  The DHS estimates that Hansen's will be supplying 24.5
million  units per year of 64 oz. apple juice and 5.4 million  units per year of
64 oz. apple grape juice pursuant to these  contracts.  These estimates from the
State,  which we cannot  independently  verify or  confirm,  could  result in an
increase  in net  sales for the  company  of more than $20  million  per  annum.
However,  juices sold pursuant to these  contracts will be at lower margins than
those of the Company's traditional juice business.  Initial volumes suggest that
annual volumes are likely to be slightly lower than the DHS' estimates. However,
during 2005,  Apple  Strawberry  juice will become eligible for redemption under
the WIC contracts.

                                       9

<PAGE>

     Our principal  warehouse  and  distribution  center and  corporate  offices
relocated to our current  facility in October 2000. In January 2004 we leased an
additional warehouse facility in Corona to consolidate additional space that had
been leased by us on short term  leases from time to time to meet our  increased
warehousing  needs due to  increases  in both sales  volumes  and  products  and
terminated  the two short term  leases  concerned.  We continue to take steps to
reduce our  inventory  levels  wherever  possible,  in an  endeavor to lower our
warehouse and distribution costs. See also "ITEM 2 - PROPERTIES."

Raw Materials and Suppliers

     The  principal  raw  materials  used by us comprise  aluminum  cans,  glass
bottles and P.E.T.  plastic bottles as well as juices, high fructose corn syrup,
sucrose and sucralose,  the costs of which are subject to  fluctuations.  Due to
the consolidations that have taken place in the glass industry over the past few
years,  the prices of glass  bottles  continue to increase.  The price of P.E.T.
plastic  bottles and aluminum cans has increased  over the past year.  This will
continue to exert  pressure on our gross margins.  We are uncertain  whether the
prices of those products will continue to rise in the future.

     Generally,  raw  materials  utilized  by us in  our  business  are  readily
available from numerous sources. However, certain raw materials are manufactured
by only one  company.  Sucralose,  which is used  alone or in  combination  with
Acesulfame-K in the Company's  low-calorie  products,  is purchased by us from a
single manufacturer.  Cans for our energy and functional drinks (8.3 ounces) are
only manufactured by one company in the United States.

     With  regard to fruit  juice and  juice-drink  products,  the  industry  is
subject to variability of weather conditions,  which may result in higher prices
and/or lower consumer demand for juices.

     We  purchase   beverage   flavors,   concentrates,   juices,   supplements,
high-fructose corn syrup, cane sugar, sucrose, sucralose and other sweeteners as
well as other  ingredients  and nutrition food bars from  independent  suppliers
located in the United States and abroad.

     Generally,  flavor suppliers hold the proprietary  rights to their flavors.
Consequently, we do not have the list of ingredients or formulae for our flavors
and certain of our concentrates  readily available to us and we may be unable to
obtain these flavors or concentrates from alternative suppliers on short notice.
We have identified alternative suppliers of many of the supplements contained in
many of our beverages.  However,  industry-wide  shortages of certain fruits and
fruit juices,  and supplements and sweeteners have been and could,  from time to
time in the future,  be  experienced,  which could  interfere  with and/or delay
production of certain of our products.

     We continually endeavor to develop back-up sources of supply for certain of
our  flavors  and  concentrates  from  other  suppliers  as well as to  conclude
arrangements  with  suppliers  which would enable us to obtain access to certain
concentrates  or  product  formulae  in  certain  circumstances.  We  have  been
partially  successful in these endeavors.  Additionally,  in a limited number of
cases,  contractual  restrictions  and/or  the  necessity  to obtain  regulatory
approvals  and  licenses  may limit our  ability to enter into  agreements  with
alternative suppliers and manufacturers and/or distributors.

     In connection with the development of new products and flavors, independent
suppliers  bear a large portion of the expense of product  development,  thereby
enabling us to develop new products and flavors at relatively  low cost. We have
historically developed and successfully  introduced new products and flavors and
packaging  for our products and intend to continue  developing  and  introducing
additional new beverages and flavors.

                                       10

<PAGE>

Competition

     The  beverage  industry  is  highly  competitive.  The  principal  areas of
competition are pricing, packaging,  development of new products and flavors and
marketing  campaigns.  Our products compete with a wide range of drinks produced
by a relatively large number of manufacturers,  most of which have substantially
greater financial, marketing and distribution resources than we do.

     Important  factors  affecting our ability to compete  successfully  include
taste and flavor of products, trade and consumer promotions, rapid and effective
development  of new,  unique  cutting edge  products,  attractive  and different
packaging,  branded  product  advertising  and  pricing.  We  also  compete  for
distributors  who will  concentrate  on marketing our products over those of our
competitors,  provide stable and reliable distribution and secure adequate shelf
space in retail outlets.  Competitive  pressures in the alternative,  energy and
functional  beverage  categories as well as in the nutrition food bar categories
could  cause our  products  to be unable to gain or to lose  market  share or we
could  experience  price erosion,  which could have a material adverse affect on
our business and results.

     Over the past four years we have experienced  substantial  competition from
new entrants in the energy drink category.  A number of companies who market and
distribute iced teas and juice cocktails in larger volume packages,  such as 16-
and 20-ounce glass bottles,  including Sobe, Snapple Elements, Arizona and Fuse,
have added supplements to their products with a view to marketing their products
as  "functional"  or "energy"  beverages or as having  functional  benefits.  We
believe that many of those  products  contain  lower levels of  supplements  and
principally  deliver  refreshment.  In addition,  many competitive  products are
positioned  differently than our energy or functional  drinks. Our smoothies and
Gold Standard lines are positioned more closely against those products.

     We compete not only for consumer acceptance, but also for maximum marketing
efforts by multi-brand  licensed  bottlers,  brokers and  distributors,  many of
which have a principal  affiliation  with  competing  companies and brands.  Our
products  compete with all liquid  refreshments and with products of much larger
and  substantially  better  financed  competitors,  including  the  products  of
numerous  nationally and  internationally  known producers such as The Coca Cola
Company, PepsiCo, Inc., Cadbury Schwepps, which includes Dr. Pepper/Seven-up, RC
Cola, Snapple,  Mistic and Stewart's brands,  Nestle Beverage Company,  Anheuser
Busch and Ocean  Spray.  More  specifically,  our  products  compete  with other
alternative beverages,  including new age beverages, such as Snapple,  Elements,
Mistic,  Arizona,  Clearly  Canadian,  Sobe,  Stewart's,   Everfresh,  Nantucket
Nectars,  Vitamin Water,  Fuse,  VeryFine,  V8 Splash and Smoothies,  Calistoga,
Propel Fitness Water,  AquaFina,  Dasani, Reebok, and Crystal Geyser brands. Due
to the  rapid  growth  of  the  alternative  beverage  segment  of the  beverage
marketplace,  certain large companies such as The Coca-Cola Company and PepsiCo,
Inc. have introduced products in that market segment which compete directly with
our  products  such as Nestea,  Fruitopia,  Lipton,  Propel,  AquaFina,  Dasani,
Adrenaline Rush, Amp, KMX and Dole. Our products also compete with private label
brands such as those carried by grocery store chains and club stores.

     Our fruit juice smoothies  compete directly with Kern's,  Jumex,  Jugos del
Valle and Libby's  nectars,  V8  Smoothies,  as well as with single  serve juice
products produced by many competitors. Such competitive products are packaged in
glass and P.E.T.  bottles ranging from 8- to 48-ounces in size and in 11.5-ounce
aluminum cans. The juice content of such competitive  products ranges from 1% to
100%.

     Our apple and other juice products  compete directly with Tree Top, Mott's,
Martinelli's,  Welch's, Ocean Spray, Tropicana,  Minute Maid, Langers, Apple and
Eve,  Seneca,  Northland  and also with  other  brands of apple  juice and juice
blends, especially store brands.

     Our energy  drinks,  including  Hansen's(r)  energy,  Diet Red,  Hansens(r)
energy Deuce,  Monster  EnergyTM,  Lost(r) Energy and Rumba(tm)  Energy Juice in
8.3- and 16-ounce cans,  compete  directly with Red Bull,  Adrenaline Rush, Amp,
180, KMX,  Venom,  Extreme Energy Shot,  Rockstar,  No Fear,  Full Throttle,  US
energy, Red Devil,  Lipovitan,  MET-Rx, Hype, XTC, and many other brands and our
other functional drinks compete directly with Elix,  Lipovitan,  MET-Rx,  Think,
and other brands.

                                       11

<PAGE>

     Our E2O Energy  Water(r) and still water  products  compete  directly  with
Vitamin Water, Reebok, Propel, Dasani, Aquafina, Fruit2O, Evian, Crystal Geyser,
Naya,  Palomar Mountain,  Sahara,  Arrowhead,  Dannon, and other brands of still
water especially store brands.

     The nutrition food bar category is also highly competitive. Principal areas
of competition are pricing,  packaging,  development of new products and flavors
and marketing campaigns.  Our nutrition food bars compete with products of other
independent bar companies such as Power Bar, Balance Bar, Gatorade, Kashi, Cliff
Bar, MET-Rx, and numerous other bars.

Sales and Marketing

     We focus on consumers  who seek  products  that are perceived to be natural
and  healthy  and  emphasize  the  natural   ingredients   and  the  absence  of
preservatives,  sodium, artificial coloring and caffeine in our beverages (other
than our energy drinks) and the addition to most of our products, of one or more
supplements.  We reinforce this message in our product packaging.  Our marketing
strategy  with  respect  to our  nutrition  food bars is  similarly  to focus on
consumers  who seek  bars that are  perceived  to be  natural  and  healthy.  We
emphasize the natural ingredients and the absence of preservatives.

     Our sales and  marketing  strategy  is to focus our  efforts on  developing
brand  awareness  and trial  through  sampling  both in stores  and at events in
respect of all our beverage and food products.  We use our branded  vehicles and
other  promotional  vehicles at events at which we  distribute  our  products to
consumers for sampling.  We utilize "push-pull" methods to achieve maximum shelf
and display space  exposure in sales outlets and maximum  demand from  consumers
for our  products  including  advertising,  in  store  promotions  and in  store
placement  of  point  of sale  materials  and  racks,  prize  promotions,  price
promotions,  competitions,  endorsements from selected public and extreme sports
figures,  coupons,  sampling and  sponsorship of selected  causes such as breast
cancer  research  and  SPCA's as well as  extreme  sports  teams such as the Pro
Circuit - Kawasaki  Motocross  team,  extreme sports figures and sporting events
such as the  Energy  Pro  Pipeline  Surfing  competition,  marathons,  10k runs,
bicycle  races,  volleyball  tournaments  and other  health and  sports  related
activities,  including extreme sports, particularly supercross,  freestyle motor
cross, surfing, skateboarding, wakeboarding, skiing, snowboarding, BMX, mountain
biking,  snowmobile racing, etc. and also participate in product demonstrations,
food tasting and other related  events.  Posters,  print,  radio and  television
advertising  together with price promotions and coupons are also used to promote
the Hansen's(r) brand.

     Additionally, in 2003 we entered into a multi-year sponsorship agreement to
advertise  on the new Las Vegas  Monorail  ("Monorail  Agreement")  with the Las
Vegas  Monorail  Company  ("LVMC")  which includes the right to vend our Monster
EnergyTM  drinks and natural  sodas on all  stations.  The  initial  term of the
Monorail  Agreement  commenced in July 2004. For technical  reasons the Monorail
did not operate for some months in 2004 but recommenced  carrying  passengers at
the end of December 2004. The initial term of the Monorail Agreement ends on the
first  anniversary of its  commencement  date. Not less than 120 days before the
expiration  of the initial  term and each renewal  term,  as the case may be, we
have the right to renew the Monorail Agreement for a further one year term up to
a maximum of nine  additional  one year  terms and the LVMC has the  right,  not
withstanding  such  election by us, to terminate  the Monorail  Agreement at the
expiration of the then current term.  Due to the  interruption  in operations of
the Monorail,  it is likely that the commencement  date of the initial term will
be extended.

     We  believe  that one of the keys to success in the  beverage  industry  is
differentiation  such as making Hansen's(r)  products visually  distinctive from
other  beverages  on the  shelves  of  retailers.  We review  our  products  and
packaging  on an  ongoing  basis and,  where  practical,  endeavor  to make them
different,  better and unique.  The labels and graphics for many of our products
are   redesigned   from  time  to  time  to  maximize   their   visibility   and
identification,  wherever  they may be placed in stores and we will  continue to
reevaluate the same from time to time.

                                       12

<PAGE>

     Where  appropriate  we  partner  with  retailers  to assist  our  marketing
efforts.  For example,  while we retain  responsibility for the marketing of the
Juice  Slam(r)  line  of  children's  multi-vitamin  juice  drinks,  Costco  has
undertaken partial responsibility for the marketing of the Juice Blast(r) line.

     We  increased   expenditures  for  our  sales  and  marketing  programs  by
approximately 75% in 2004 compared to 2003. As of December 31, 2004, we employed
217 employees in sales and marketing activities.

Customers

     Our customers are typically retail and specialty chains,  club stores, mass
merchandisers,  convenience  chains,  food  service  and full  service  beverage
distributors  and  health  food  distributors.   In  2004,  sales  to  retailers
represented 35% of our revenues,  sales to full service distributors represented
52% of our revenues, and sales to health food distributors represented 6% of our
revenues.

     Our major  customers  include  Costco,  Trader  Joe's,  Sam's  Club,  Vons,
Ralph's,  Wal-Mart, Safeway and Albertson's. A decision by any major customer to
decrease  amounts  purchased  from the Company or to cease carrying our products
could  have  a  material   negative  effect  on  our  financial   condition  and
consolidated results of operations.

Seasonality

     Sales of ready-to-drink  beverages are somewhat  seasonal,  with the second
and third calendar quarters accounting for the highest sales volumes. The volume
of sales in the beverage business may be affected by weather  conditions.  Sales
of  our  beverage   products  may  become   increasingly   subject  to  seasonal
fluctuations as more sales occur outside of California.

Intellectual Property

     We own  numerous  trademarks  that  are  very  important  to our  business.
Depending upon the jurisdiction, trademarks are valid as long as they are in use
and/or their  registrations are properly maintained and they have not been found
to have become generic.  Registrations of trademarks can generally be renewed as
long as the  trademarks are in use. We also own the copyright in and to numerous
statements made and content appearing on the packaging of our products.

     We own the Hansen's(r) trademark. This trademark is crucial to our business
and is  registered  in the U.S.  Patent  and  Trademark  Office  and in  various
countries  throughout the world. We own a number of other trademarks  including,
but not  limited  to, A New  Kind a  Buzz(r),  Unleash  the  Beast(r),  Hansen's
energy(r), Blue Energy(r),  Energade(r),  Hansen's E2O Energy Water(r), Hansen's
slim-down(r), Power Formula(r), THE REAL DEAL(r), LIQUIDFRUIT(r),  Imported from
Nature(r),  California's  Natural Choice(r),  California's  Choice(r),  Medicine
Man(r), Dyna Juice(r),  Equator(r),  Hansen's power(r),  b*well(r),  anti-ox(r),
d-stress(r),   stamina(r),   Aqua  Blast(r),   Antioxjuice(r)   Intellijuice(r),
Defense(r), Immunejuice(r),  Hansen's Natural Multi-Vitamin Juice Slam(r), Juice
Blast(r)  and  Red  Rocker(r)  in the  United  States  and the  Hansen's(r)  and
"Smoothie(r)" trademarks in a number of countries around the world.

     We have applied to register a number of trademarks in the United States and
elsewhere  including,  but  not  limited  to,  Monster  EnergyTM,  M  (stylized)
MonsterTM,  M (stylized) Monster EnergyTM, M (stylized) TM, Assault(tm),  Energy
Pro(tm) and Rumba(tm).

     In September  2000,  in  connection  with the  acquisition  of the Blue Sky
Natural  Beverage  business,  we, through our wholly owned  subsidiary Blue Sky,
acquired the Blue Sky(r) trademark, which is registered in the United States and
Canada.

                                       13

<PAGE>

     In May  2001,  in  connection  with the  acquisition  of the  Junior  Juice
beverage  business,  we,  through  our wholly  owned  subsidiary  Junior  Juice,
acquired  the  Junior  Juice(r)  trademark,  which is  registered  in the United
States.

     On April 4, 2000,  the United States  Patent and Trademark  Office issued a
patent to us for an invention  related to a shelf structure  (rolling rack) and,
more particularly,  a shelf structure for a walk-in cooler. Such shelf structure
is utilized by us to secure  shelf space for and to  merchandise  our energy and
functional  drinks in cans in  refrigerated  Visi coolers and walk-in coolers in
retail stores.

Government Regulation

     The production,  distribution  and sale in the United States of many of our
products is subject to the Federal  Food,  Drug and  Cosmetic  Act;  the Dietary
Supplement Health and Education Act of 1994; the Occupational  Safety and Health
Act; various environmental  statutes; and various other federal, state and local
statutes and  regulations  applicable to the production,  transportation,  sale,
safety, advertising,  labeling and ingredients of such products.  California law
requires that a specific warning appear on any product that contains a component
listed by the State as having been found to cause cancer or birth  defects.  The
law exposes all food and  beverage  producers  to the  possibility  of having to
provide  warnings on their  products  because the law  recognizes  no  generally
applicable  quantitative  thresholds  below  which a  warning  is not  required.
Consequently,  even trace  amounts  of listed  components  can  expose  affected
products  to  the  prospect  of  warning  labels.   Products  containing  listed
substances  that occur  naturally in the product or that are  contributed to the
product solely by a municipal water supply are generally exempt from the warning
requirement.  While  none of our  beverage  products  are  required  to  display
warnings under this law, we cannot predict whether an important component of any
of our products might be added to the California list in the future. We also are
unable to predict  whether or to what extent a warning under this law would have
an impact on costs or sales of our products.

     Measures  have been enacted in various  localities  and states that require
that a deposit be charged for certain  non-refillable  beverage containers.  The
precise requirements imposed by these measures vary. Other deposit, recycling or
product  stewardship  proposals  have been  introduced  in  certain  states  and
localities  and in  Congress,  and we  anticipate  that similar  legislation  or
regulations  may be  proposed  in the  future at the  local,  state and  federal
levels, both in the United States and elsewhere.

     Our facilities in the United States are subject to federal, state and local
environmental  laws and  regulations.  Compliance with these  provisions has not
had, and we do not expect such  compliance to have, any material  adverse effect
upon our capital expenditures, net income or competitive position.

Employees

     As of December 31, 2004,  we employed a total of 293 employees of which 205
were  employed  on a  full-time  basis.  Of our 293  employees,  we employ 76 in
administrative and operational capacities and 217 persons in sales and marketing
capacities.  We  have  not  experienced  any  work  stoppages,  and we  consider
relations with our employees to be good.

Compliance with Environmental Laws

     In  California,  we are  required  to collect  redemption  values  from our
customers  and to remit  such  redemption  values  to the  State  of  California
Department of Conservation  based upon the number of cans and bottles of certain
carbonated and non-carbonated  products sold. In certain other states and Canada
where  Hansen's(r)  products are sold, we are also required to collect  deposits
from our customers and to remit such deposits to the  respective  state agencies
based  upon  the  number  of  cans  and  bottles  of  certain   carbonated   and
non-carbonated products sold in such states.

                                       14

<PAGE>

Available Information

     Our  Internet  address is  www.hansens.com.  Information  contained  on our
website is not part of this  annual  report on Form 10-K.  Our annual  report on
Form 10-K and  quarterly  reports  on Form 10-Q will be made  available  free of
charge  on  www.hansens.com,   as  soon  as  reasonably   practicable  after  we
electronically  file such material with, or furnish it to, the SEC. In addition,
you may  request  a copy of these  filings  (excluding  exhibits)  at no cost by
writing or telephoning us at the following address or telephone number:

                            Hansen Beverage Company
                              1010 Railroad Street
                                Corona, CA 92882
                                 (951) 739-6200
                                 (800) HANSENS


I
TEM 2. PROPERTIES

     Our  corporate  offices and main  warehouse  are  located at 1010  Railroad
Street, Corona, California 92882. Our lease for this facility expires in October
2010.  The  area  of  the  facility  is   approximately   113,600  square  feet.
Additionally,  in January 2004 we entered into a lease for additional  warehouse
space in Corona,  California.  The area of this facility is approximately 80,000
square  feet.  This lease will expire at the end of March 2008 with an option to
extend the lease until October 2010. We also rent additional  warehouse space on
a short-term basis from time to time in public  warehouses  situated  throughout
the United States and Canada.


ITEM 3. LEGAL PROCEEDINGS

     In  September  2004  Barrington  Capital  Corporation  through  an  alleged
successor in interest,  Sandburg Financial  Corporation (both entities with whom
the Company has never had any dealings) served a Notice of Motion  ("Motion") on
the  Company  and  each of its  subsidiaries  as well as on a  number  of  other
unrelated entities and individuals. The Motion seeks to amend a default judgment
granted against a completely unconnected company, Hansen Foods, Inc., to add the
Company  and  its  subsidiary  companies,  as  well as the  other  entities  and
individuals  cited,  as judgment  debtors.  The default  judgment was entered on
February 15, 1996, for $7,626,000 plus legal interest and attorneys' fees in the
sum of  $211,000  arising  out of a breach  of  contract  claim  that  allegedly
occurred  in the 1980's.  Barrington  Capital  Corporation's/Sandburg  Financial
Corporation's claim is based on the misconceived and unsubstantiated theory that
the Company and its  subsidiaries  are alter egos  and/or  successors  of Hansen
Foods,  Inc. The Motion is based on demonstrably  false  allegations,  misstated
legal propositions and lacks any substantial  supporting  evidence.  The Company
and its subsidiaries intend to vigorously oppose the Motion and believe that the
Motion is without any merit.

     Furthermore,  we are subject to litigation  from time to time in the normal
course of  business.  Although it is not possible to predict the outcome of such
litigation,  based on the facts known to us and after consultation with counsel,
we believe that such litigation  will not have a material  adverse effect on our
financial position or results of operations.

     Except as described above,  there are no material pending legal proceedings
to  which  we or any of our  subsidiaries  is a  party  or to  which  any of our
properties is subject,  other than ordinary and routine litigation incidental to
our business.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The annual meeting of  stockholders  of the Company was held on November 5,
2004. At the meeting, the following individuals were elected as directors of the
Company and received the number of votes set opposite their respective names:

                                       15

<PAGE>

                Director                         Votes For
                --------                         ---------
                Rodney C. Sacks                  9,196,568
                Hilton H. Schlosberg             9,183,521
                Benjamin M. Polk                 9,128,394
                Norman C. Epstein                9,952,134
                Harold C. Taber, Jr.             9,117,996
                Mark S. Vidergauz               10,008,409
                Sydney Selati                   10,006,957


     In addition,  at the meeting our  stockholders  ratified the appointment of
Deloitte & Touche LLP as independent  auditors of the Company for the year ended
December  31,  2004,  by a vote of  10,054,675  for,  22,954  against  and 3,937
abstaining.


PART II


ITEM 5.  MARKET  FOR THE  REGISTRANT'S  COMMON  EQUITY AND  RELATED  SHAREHOLDER
MATTERS

Principal Market

     The Company's Common Stock began trading in the over-the-counter  market on
November 8, 1990 and is quoted on the NASDAQ  Small-Cap  Market under the symbol
"HANS".  As of February 24, 2005, there were 10,935,189  shares of the Company's
Common Stock outstanding held by approximately 587 holders of record.

Stock Price and Dividend Information

     The following  table sets forth high and low bid closing  quotations of our
Common Stock for the periods indicated:


                                         High                 Low
                                       ---------            --------
Year Ended December 31, 2003
----------------------------
First Quarter                          $  4.50              $  3.17
Second Quarter                         $  4.50              $  3.89
Third Quarter                          $  6.24              $  4.20
Fourth Quarter                         $  9.40              $  5.79

Year Ended December 31, 2004
----------------------------
First Quarter                          $ 14.43              $  7.92
Second Quarter                         $ 27.25              $ 13.51
Third Quarter                          $ 28.48              $ 18.14
Fourth Quarter                         $ 36.41              $ 23.09


     The  quotations  for  the  Common  Stock  set  forth  above  represent  bid
quotations  between  dealers,  do not  include  retail  markups,  mark-downs  or
commissions and bid quotations may not necessarily represent actual transactions
and "real time" sale  prices.  The source of the bid  information  is the NASDAQ
Stock Market, Inc.

                                       16

<PAGE>

     We have not paid dividends to our  stockholders  since our inception and do
not anticipate paying dividends in the foreseeable future.

Equity Compensation Plan Information

     The  following  table sets forth  information  as of December 31, 2004 with
respect  to shares of our  common  stock  that may be  issued  under our  equity
compensation plans.

                                                            Number of securities
                   Number                                   remaining available
               of securities        Weighted-average        for future issuance
                to be issued        exercise price of           under equity 
              upon exercise of         outstanding            compensation plans
             outstanding options,    options, warrants     (excluding securities
             warrants and rights       and rights       reflected in column (a))
Plan category      (a)                    (b)                       (c)
---------------------------------  -------------------  ------------------------
Equity 
 compensation
 plans
 approved by
 stockholders      1,298,400              $ 6.09                  824,900

Equity 
 compensation
 plans not
 approved by
 stockholders         -                      -                       -
            ---------------------  -------------------  ------------------------
Total              1,298,400              $ 6.09                  824,900
            =====================  ===================  ========================
                        

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

     The consolidated statements of operations data set forth below with respect
to each of the years ended  December 31, 2000 through 2004 and the balance sheet
data  as of  December  31,  for  the  years  indicated,  are  derived  from  our
consolidated  financial statements audited by Deloitte & Touche LLP, independent
auditors,  and should be read in conjunction with those financial statements and
notes thereto,  and with the  Management's  Discussion and Analysis of Financial
Condition and Results of Operations  included as Item 7 of this Annual Report on
Form 10-K.

(in thousands, 
except per 
share
information)       2004         2003         2002         2001         2000
--------------   --------     --------     --------     ---------    ---------
Gross Sales      $226,984     $138,454     $115,490     $99,693      $86,072
Net sales        $180,341     $110,352     $ 92,046     $80,658      $71,706
Net income       $ 20,387     $  5,930     $  3,029     $ 3,019      $ 3,915
Net income
 per common share
  Basic          $   1.91     $   0.58     $   0.30     $  0.30      $  0.39
  Diluted        $   1.73     $   0.55     $   0.29     $  0.29      $  0.38
Total assets     $ 82,022     $ 47,997     $ 40,464     $38,561      $38,958
Long-term debt   $    146     $    358     $  3,606     $ 5,851      $ 9,732

                                       17

<PAGE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

     The  following  discussion  ("MD&A") is provided as a  supplement  to - and
should  be  read  in  conjunction  with  -  our  financial  statements  and  the
accompanying  notes  ("Notes")  included  elsewhere  in  this  Form  10-K.  This
discussion  contains  forward-looking  statements that are based on management's
current   expectations,   estimates  and  projections  about  our  business  and
operations.  Our actual  results  may  differ  materially  from those  currently
anticipated and expressed in such forward-looking statements.

     This overview provides our perspective on the individual  sections of MD&A.
MD&A includes the following sections:

     *    Our  Business  - a  general  description  of our  business;  the value
          drivers of our business; and opportunities and risks;

     *    Results of  Operations  - an analysis of our  consolidated  results of
          operations for the three years presented in our financial statements;

     *    Liquidity  and  Capital  Resources  - an  analysis  of our cash flows,
          sources and uses of cash and contractual obligations;

     *    Application of Critical  Accounting  Policies and  Pronouncements  - a
          discussion of accounting  policies that require critical judgments and
          estimates including newly issued accounting pronouncements;

     *    Sales - details of our sales  measured  on a  quarterly  basis in both
          dollars and cases;

     *    Inflation - information about the impact that inflation may or may not
          have on our results;

     *    Forward  Looking  Statements - cautionary  information  about  forward
          looking   statements   and  a   description   of  certain   risks  and
          uncertainties that could cause our actual results to differ materially
          from the company's  historical results or our current  expectations or
          projections; and

     *    Market Risks - Information about market risks and risk management. See
          "Forward   Looking   Statements"  and  "ITEM  7A.  -  QUALITATIVE  AND
          QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS."

Our Business

        Overview

     We  develop,  market,  sell and  distribute,  in the main,  a wide range of
branded  beverages.  The  majority  of our  beverages  fall  within the  growing
"alternative"  beverage  category.  The  principal  brand  names under which our
beverages are marketed are Hansen's(r),  Monster Energy(tm), Blue Sky(r), Junior
Juice(r),  Lost(r) and  Rumba(tm).  We own all of our  above-listed  brand names
other than  Lost(r)  which we  produce,  market,  sell and  distribute  under an
exclusive licensing arrangement with Lost International LLC.

     Our  company  principally  generates  revenues,  income  and cash  flows by
developing,  producing,  marketing,  selling and distributing  finished beverage
products. We generally sell these products to retailers as well as distributors.

     We incur significant marketing expenditures to support our brands including
advertising costs,  sponsorship fees and special promotional events. We focus on
developing  brand  awareness  and trial  through  sampling both in stores and at
events.  Retailers and distributors receive rebates,  promotions,  point of sale
materials, merchandise displays and coolers. We also use in-store promotions and
in-store placement of point-of-sale materials and racks, prize promotions, price
promotions,  competitions,  and sponsorship of, and endorsements from.  selected
public and  extreme  sports  teams and figures  and  causes.  Consumers  receive
coupons, discounts and promotional incentives. These marketing expenditures help
to enhance  distribution  and  availability of our products as well as awareness
and  increase  consumer  preference  for our brands.  Greater  distribution  and
availability, awareness and preference promotes long term growth.

                                       18

<PAGE>

     During 2004, we continued to expand our existing  product lines and further
develop our  markets.  In  particular,  we continue to focus on  developing  and
marketing  beverages  that fall within the category  generally  described as the
"alternative" beverage category, with particular emphasis on energy type drinks.

     We  believe  that one of the keys to success in the  beverage  industry  is
differentiation;  such as making Hansen's(r)  products visually distinctive from
other  beverages  on the  shelves  of  retailers.  We review  our  products  and
packaging  on an  ongoing  basis and,  where  practical,  endeavor  to make them
different,  better and unique.  The labels and graphics for many of our products
are   redesigned   from  time  to  time  to  maximize   their   visibility   and
identification,  wherever  they may be placed in stores and we will  continue to
reevaluate the same from time to time.

     We again achieved record sales in 2004. The increase in gross and net sales
in 2004 was primarily  attributable to increased sales of our Monster  Energy(r)
drink,  which was  introduced  in April  2002,  including  our low  carbohydrate
("lo-carb")  Monster  Energy(r)  drink which was introduced in 2003 and sales of
Lost(r) energy drinks which were introduced at the beginning of 2004, as well as
increased  sales of apple juice and apple grape juice,  private label  beverages
and our  Energade(r)  energy sports drinks.  The increase in gross and net sales
was partially  offset by decreased sales primarily of energy drinks in 8.3-ounce
cans, children's multi-vitamin juice drinks, and teas, lemonades and cocktails.

     During 2004, sales outside of California  represented 56 % of our aggregate
sales, as compared to  approximately  47 % of our aggregate sales in 2003. Sales
to  distributors  outside the United  States  during 2004 amounted to $2,282,000
compared to $1,612,000 in 2003.

     Our customers are typically retail and specialty chains,  club stores, mass
merchandisers, convenience chains, full service beverage distributors and health
food distributors.  In 2004, sales to retailers represented 35% of our revenues,
sales to full service distributors  represented 52% of our revenues and sales to
health food distributors represented 6 % of our revenues.

     In 2004, we introduced a carbonated  Lost(r) Energy drink in 16-ounce cans,
a carbonated Monster Energy  "Assault"(tm) drink in 16-ounce cans, a new line of
Blue Sky natural tea sodas in 12-ounce cans,  Hansen's Energy Drinks in 16-ounce
cans, Rumba(tm) Energy Juice in 15.5-once cans and also introduced a new line of
lo-carb smoothies in 11.5-ounce cans.

     Sales of our dual-branded 100% juice line named "Juice Blast(r)", which was
launched in conjunction with Costco and is sold through Costco stores, were $2.0
million  in 2004 as  compared  to $6.0  million in 2003,  primarily  due to lost
distribution in certain regions. We have since managed to resecure  distribution
of such juice line in certain of those  regions.  We have, in  conjunction  with
Costco,  introduced  new flavors in place of certain  existing  flavors and will
continue to  introduce  new flavors in an effort to ensure that the variety pack
remains fresh and  different  for consumers and retain and if possible  increase
current distribution levels.

     In  September  2000,  HBC,  through its wholly owned  subsidiary  Blue Sky,
acquired the Blue Sky(r)  Natural Soda  business.  The Blue Sky(r)  Natural Soda
brand is the leading  natural  soda in the health  food  trade.  Blue Sky offers
natural sodas,  premium natural sodas with added ingredients such as Ginseng and
anti-oxidant  vitamins,  organic sodas and seltzer waters in 12-ounce cans and a
Blue Energy  drink in 8.3-ounce  cans and in 2004  introduced a new line of Blue
Sky natural tea sodas in 12-ounce  cans. We plan to introduce a new line of Blue
Sky Lite natural sodas in 2005.

                                       19

<PAGE>

     In May 2001,  HBC,  through  its  wholly  owned  subsidiary  Junior  Juice,
acquired the Junior Juice(r) beverage business. The Junior Juice(r) product line
is comprised of a line of 100% juices packed in 4.23-ounce  aseptic packages and
is targeted at toddlers.

     During 2004, we entered into several new  distribution  agreements  for the
sale of our products both within and outside the United States and substantially
expanded our national sales force and marketing and support staff.  As discussed
under "ITEM 1 BUSINESS - MANUFACTURE  and  DISTRIBUTION",  we anticipate that we
will continue building our national sales force in 2005 as well as our marketing
and support staff to support and grow the sales of our products.

     A chain grocery store strike in Southern California, which commenced during
the last quarter of 2003 and terminated in the first quarter of 2004,  adversely
affected  sales  of  those of our  products  that  were  carried  by the  stores
concerned.  However,  the drop in sales of such products was partially offset by
increased sales of certain of those products that are carried by other retailers
in Southern California.

     In 2002,  we  introduced a Sparkling  Cider 100% juice drink in a 1.5-liter
Magnum glass bottle. However, due to limited reports of some bottles breaking in
2003,  we promptly  recalled the product.  We are pursuing a claim for the costs
and losses  incurred by us. We will  reevaluate  relaunching  this  product once
certain  production  issues  are  resolved  to our  satisfaction  and a suitable
co-packer has been identified.

     During 2004, we concluded exclusive contracts with the State of California,
Department of Health Services Women, Infant and Children Supplemental  Nutrition
Branch,  to supply  100% Apple  juice and 100%  blended  juice in  64-ounce  PET
plastic bottles.  The contracts commenced on July 12, 2004. See "ITEM 1 BUSINESS
- MANUFACTURE and DISTRIBUTION."

     We continue to incur  expenditures  in connection  with the development and
introduction of new products and flavors.

     Value Drivers of our Business

     We  believe  that  the  key  value  drivers  of our  business  include  the
following:

     *    Profitable Growth - We believe natural, better for you brands properly
          supported by marketing and  innovation,  targeted to a broad  consumer
          base-drive  profitable  growth.  We  continue to broaden our family of
          brands.  In  particular,  we are  expanding  and growing our specialty
          beverages and energy drinks to provide more alternatives to consumers.
          We are focused on maintaining or increasing profit margins. We believe
          that  tailored  brand,  package,  price and  channel  strategies  help
          achieve profitable growth. We are implementing these strategies with a
          view to accelerating profitable growth.

     *    Cost Management - The principal focus of cost management will continue
          to be on  supplies  and cost  reduction.  One key area of  focus,  for
          example,  is to  decrease  raw  material  costs,  co-packing  fees and
          general and  administrative  costs as a  percentage  of net  operating
          revenues.  Another  key area of focus is the  reduction  in  inventory
          levels. However, due to the expansion in the number of our products as
          well as  increased  sales  levels in 2004,  overall  inventory  levels
          increased.  Additionally,  the costs of aluminum  cans and PET plastic
          bottles  which  represent  a large  portion of our  ingredient  costs,
          increased in 2004 and could continue to rise during 2005.

     *    Efficient  Capital  Structure - Our capital  structure  is intended to
          optimize our costs of capital. We believe our strong capital position,
          our ability to raise funds at low effective cost and overall low costs
          of borrowing provide a competitive advantage.

                                       20

<PAGE>

     We believe that, subject to increases in the costs of certain raw materials
being contained, these value drivers, when properly implemented,  will result in
(1) maintaining and improving our gross profit margin; (2) providing  additional
leverage  over time through  reduced  expenses as a percentage  of net operating
revenues;  and (3)  optimizing  our cost of  capital.  The  ultimate  measure of
success  is and  will  be  reflected  in  our  current  and  future  results  of
operations.

     Gross and net operating revenues, gross profits,  operating income, and net
income and net income per share  represent key  measurements  of the above value
drivers.  In 2004,  gross operating  revenues  totaled $227.0  million,  a 63.9%
increase over 2003. Net operating  revenues totaled $180.3 million,  an increase
of 63.4% over 2003. Gross profit totaled $83.5 million in 2004, a 90.7% increase
from 2003. Operating income was $33.9 million compared to $9.8 million for 2003.
Net income was $20.4  million as compared to $5.9  million for 2003.  Net income
per share  (diluted)  was $1.73  from  $0.55 per  diluted  share in 2003.  These
measurements will continue to be a key management focus in 2005 and beyond.  See
also "Results of Operations for the Year Ended December 31, 2004 Compared to the
Year Ended December 31, 2003."

     In 2004, the Company had working capital of $41.6 million compared to $17.2
million as of December 31,  2003.  In 2004,  our net cash  provided by operating
activities  was  approximately  $20.1  million,  a 265.6%  increase  from  2003.
Principal  uses of cash flows are purchases of inventory,  increases in accounts
receivable and other assets, acquisition of property and equipment and trademark
licenses and trademarks. Repayment of our debt and accounts payable are expected
to be and remain our principal  recurring use of cash and working capital funds.
See also "--LIQUIDITY AND CAPITAL RESOURCES. "

     Opportunities, Challenges and Risks

     Looking forward, our management has identified certain challenges and risks
that demand the attention of the beverage industry and our company.  Increase in
consumer and regulatory  awareness of the health  problems  arising from obesity
and inactive lifestyles  represents a challenge.  We recognize that obesity is a
complex and serious public health  problem.  Our commitment to consumers  begins
with our broad  product  line and a wide  selection  of diet,  light and lo-carb
beverages,  juices and juice drinks, sports drinks and waters and energy drinks.
We  continuously  strive  to  meet  changing  consumer  needs  through  beverage
innovation, choice and variety.

     Our historical  success is  attributable,  in part, to our  introduction of
different and innovative  beverages.  Our future  success will depend,  in part,
upon our  continued  ability to develop and introduce  different and  innovative
beverages,  although there can be no assurance of our ability to do so. In order
to retain and expand our market share, we must continue to develop and introduce
different and  innovative  beverages and be competitive in the areas of quality,
health,   method  of  distribution,   brand  image  and  intellectual   property
protection.  The beverage industry is subject to changing  consumer  preferences
and shifts in consumer  preferences may adversely affect companies that misjudge
such preferences.

     In addition, other key challenges and risks that could impact our company's
future financial results include, but are not limited to:

     *    maintenance of our brand images and product quality;

     *    profitable  expansion  and  growth  of our  family  of  brands  in the
          competitive  market place (See also Item 1 "BUSINESS - COMPETITION and
          "SALES AND MARKETING");

     *    restrictions  on imports  and  sources of supply;  duties or  tariffs;
          changes in government regulations;

                                       21

<PAGE>

     *    protection  of  our  existing   intellectual   property  portfolio  of
          trademark  licenses and trademarks  and the continuous  pursuit of new
          and innovative trademarks for our expanding product lines; and

     *    limitations  on  available  quantities  of  sucralose,  a  non-caloric
          sweetener that is used in many of our beverage products,  during 2005,
          due to demand for such sweetener  exceeding the supplier's  production
          capacity

     *    the imposition of additional restrictions.

We believe that the following opportunities exist for us:

     *    growth  potential  for  non-alcoholic  beverage  categories  including
          energy drinks, carbonated soft drinks, juices and juice drinks, sports
          drinks and water;

     *    new product  introductions  intended  to  contribute  to higher  gross
          profits;

     *    premium packages intended to generate strong revenue growth;

     *    significant  package,  pricing and channel  opportunities  to maximize
          profitable growth; and

     *    proper positioning to capture industry growth.

                                       22

<PAGE>

Results of Operations

<TABLE>
<S>                                     <C>                 <C>                  <C>                <C>          <C>

                                                                                                       Percentage Change
                                                                                                    -------------------------
                                               2004                 2003                2002         04 vs. 03    03 vs. 02
                                        ------------------- -------------------- ------------------ ------------ ------------
Gross sales                                   $226,984,231         $138,454,345       $115,490,019        63.9%        19.9%
Less:  Discounts, allowances                    
   and promotional payments                     46,643,096           28,102,149         23,443,657        66.0%        19.9%
                                        ------------------- -------------------- ------------------ ------------ ------------
Net sales                                      180,341,135          110,352,196         92,046,362        63.4%        19.9%
Cost of sales                                   96,874,750           66,577,168         58,802,669        45.5%        13.2%
                                        ------------------- -------------------- ------------------ ------------ ------------
Gross profit                                    83,466,385           43,775,028         33,243,693        90.7%        31.7%
Gross profit margin                                  46.3%                39.7%              36.1%

Selling, general and                            49,507,137           33,887,045         27,896,202        46.1%        21.5%
   administrative expenses
Amortization of trademark                           
   license and trademarks                           73,046               61,888             54,558        18.0%        13.4%
                                        ------------------- -------------------- ------------------ ------------ ------------
Operating income                                33,886,202            9,826,095          5,292,933       244.9%        85.6%
Operating income as a percent                       
   of net sales                                      18.8%                 8.9%               5.8%

Net nonoperating (income) expense                  (51,995)              67,013            227,758      (177.6%)      (70.6%)
                                        ------------------- -------------------- ------------------ ------------ ------------
Income before provision for                     
   income taxes                                 33,938,197            9,759,082          5,065,175       247.8%        92.7%

Provision for income taxes                      13,551,393            3,828,678          2,035,980       253.9%        88.1%
                                        ------------------- -------------------- ------------------ ------------ ------------
Effective tax rate                                   39.9%                39.2%              40.2%

Net income                                    $ 20,386,804          $ 5,930,404        $ 3,029,195       243.8%        95.8%
                                        =================== ==================== ================== ============ ============
Net income as a percent of net                      
   sales                                             11.3%                 5.4%               3.3%

Net income per common share:
   Basic                                      $       1.91          $      0.58        $      0.30       229.3%        93.3%
   Diluted                                    $       1.73          $      0.55        $      0.29       214.5%        89.7%

</TABLE>


     Results of Operations  for the Year Ended December 31, 2004 Compared to the
Year Ended December 31, 2003

     Gross Sales.  For the year ended December 31, 2004, gross sales were $227.0
million, an increase of $88.5 million or 63.9% higher than gross sales of $138.5
million for the year ended  December  31,  2003.  The increase in gross sales is
primarily  attributable to increased  sales of certain of our existing  products
and the introduction of new products as discussed below in "Net Sales."

     Net Sales.  For the year ended  December  31,  2004,  net sales were $180.3
million,  an increase of $70.0  million or 63.4% higher than net sales of $110.4
million for the year ended December 31, 2003. We again achieved  record sales in
2004. The increase in gross and net sales in 2004 was primarily  attributable to
increased sales by volume of our Monster  Energy(r) drink,  which was introduced
in April 2002,  including our low  carbohydrate  ("lo-carb")  Monster  Energy(r)
drink which was  introduced in 2003 and sales by volume of Lost(r) energy drinks
which were  introduced at the  beginning of 2004, as well as increased  sales by
volume of apple juice and apple grape juice,  private  label  beverages  and our
Energade(r)  energy sports drinks.  Additionally,  the increase in gross and net
sales was  attributable to the increased sales prices and reduced  allowances of
smoothies  in cans and natural  sodas.  The  increase in gross and net sales was
partially offset by decreased sales by volume primarily of Hansens energy drinks
in 8.3-ounce cans,  children's  multi-vitamin juice drinks, and teas,  lemonades
and cocktails.

                                       23

<PAGE>

     Gross Profit.  Gross profit was $83.5  million for the year ended  December
31, 2004,  an increase of $39.7  million or 90.7% over the $43.8  million  gross
profit for the year ended December 31, 2003. Gross profit as a percentage of net
sales was 46.3% for the year ended December 31, 2004 which was higher than gross
profit as a  percentage  of net sales of 39.7 % for the year ended  December 31,
2003,  due  primarily to higher gross profit  margins  achieved on the increased
sales of  Monster Energy(r)  and  Lost(r)  energy  drinks.  Although  a  greater
percentage of our sales comprised  products having higher gross margins than the
prior year,  the  increase in profit  margins  was  partially  reduced by higher
promotional payments and allowances to promote our products.

     Total Operating  Expenses.  Total operating expenses were $49.6 million for
the year ended  December  31, 2004,  an increase of $15.6  million or 46.0% over
total operating  expenses of $33.9 million for the year ended December 31, 2003.
Total  operating  expenses as a percentage  of net sales  decreased  slightly to
27.5% for the year  ended  December  31,  2004,  from  30.8% for the year  ended
December  31,  2003.  The increase in total  operating  expenses  was  primarily
attributable to increased  selling,  general and  administrative  expenses.  The
decrease in total operating  expenses as a percentage of net sales was primarily
attributable  to the  comparatively  lower  increase  in  selling,  general  and
administrative expenses than the increase in net sales.

     Selling,  General and Administrative.  Selling,  general and administrative
expenses were $49.5 million for the year ended December 31, 2004, an increase of
$15.6  million or 46.1% over  selling,  general and  administrative  expenses of
$33.9  million  for the year ended  December  31,  2003.  Selling,  general  and
administrative  expenses as a percentage of net sales decreased to 27.5% for the
year ended  December  31, 2004 from 30.7% for the year ended  December 31, 2003.
Selling  expenses  were $29.2  million for the year ended  December 31, 2004, an
increase of $9.1 million or 45.5% over selling expenses of $20.1 million for the
year ended  December 31,  2003.  Selling  expenses as a percentage  of net sales
decreased to 16.2% for the year ended  December 31, 2004 from 18.2% for the year
ended  December  31,  2003.  The  increase  in selling  expenses  was  primarily
attributable  to increased  distribution  (freight) and storage  expenses  which
increased  by  $4.1  million,   increased  expenditures  for  trade  development
activities and cooperative arrangements with our customers and distributors, and
royalties  which  increased by $2.4  million,  and  increased  expenditures  for
merchandise displays,  point-of-sale materials, and premiums, which increased by
$2.0  million.  General and  administrative  expenses were $20.3 million for the
year ended  December 31, 2004, an increase of $6.5 million or 47.0% over general
and  administrative  expenses of $13.8  million for the year ended  December 31,
2003. General and administrative expenses as a percentage of net sales decreased
to 11.2% for the year  ended  December  31,  2004 from  12.5% for the year ended
December  31,  2003.  The  increase in general and  administrative  expenses was
primarily  attributable  to payroll  expenses  which  increased by $3.3 million,
professional services,  consisting of legal,  consulting and accounting services
primarily   related  to  the   implementation   and  testing   required  by  the
Sarbanes-Oxley Act of 2002, and legal services related to protecting  trademarks
which  increased by $1.5 million,  and travel and  entertainment  expenses which
increased by $622,000.

     Amortization of Trademark License and Trademarks. Amortization of trademark
license and  trademarks  was $73,000 for the year ended  December 31,  2004,  an
increase of $11,000 over  amortization  of trademark  license and  trademarks of
$62,000 for the year ended  December 31, 2003. The increase in  amortization  of
trademark license and trademarks was due to the acquisition of trademarks during
the year ended December 31, 2004.

     Operating  Income.  Operating  income was $33.9  million for the year ended
December  31,  2004,  compared to $9.8  million for the year ended  December 31,
2003. The $24.1 million increase in operating income was primarily  attributable
to increased gross profits,  which was partially  offset by increased  operating
expenses.

                                       24

<PAGE>

     Net Nonoperating  Income/Expense.  Net nonoperating  income was $52,000 for
the year ended  December 31, 2004,  as compared to net  nonoperating  expense of
$67,000 for the year ended  December 31, 2003. Net  nonoperating  income/expense
consists of interest  income and interest and  financing  expense.  Interest and
financing  expense for the year ended  December 31, 2004 was $42,000 as compared
to $73,000 for the year ended  December 31,  2003.  The decrease in interest and
financing expense was primarily attributable to the decrease in outstanding loan
balances and lower interest  rates.  Interest income for the year ended December
31, 2004 was  $94,000,  as  compared  to interest  income of $6,000 for the year
ended  December  31,  2003.  The  increase  in  interest  income  was  primarily
attributable to an increase in the cash investment in interest  bearing accounts
during the year ended December 31, 2004.

     Provision for Income  Taxes.  Provision for income taxes for the year ended
December  31, 2004 was $13.6  million  which was an increase of $9.7  million as
compared to the  provision  for income  taxes of $3.8 million for the year ended
December 31, 2003.  The  increase in  provision  for income taxes was  primarily
attributable to the increase in operating income. The effective combined federal
and state tax rate for 2004 was 39.9%,  which was higher than the  effective tax
rate of 39.2% for 2003 due to the increase in the statutory  federal  income tax
rate applicable to the Company's pre-tax income.

     Net Income.  Net income was $20.4  million for the year ended  December 31,
2004,  which was an increase of $14.5  million as compared to net income of $5.9
million for the year ended  December  31,  2003.  The increase in net income was
primarily  attributable  to the  $39.7  million  increase  in gross  profit  and
decrease in nonoperating expense and increase in nonoperating income of $119,000
for the year ended  December  31, 2004 which was  partially  offset by increased
operating  expenses of $15.6 million and an increase in the provision for income
taxes of $9.7 million.

     Results of Operations  for the Year Ended December 31, 2003 Compared to the
Year Ended December 31, 2002

     Gross Sales.  For the year ended December 31, 2003, gross sales were $138.5
million, an increase of $23.0 million or 19.9% higher than gross sales of $115.5
million for the year ended  December  31,  2002.  The increase in gross sales is
primarily  attributable to the  introduction of new products and increased sales
of certain of our existing products as discussed below in "Net Sales."

     Net Sales.  For the year ended  December  31,  2003,  net sales were $110.4
million,  an increase of $18.3  million or 19.9%  higher than net sales of $92.0
million for the year ended  December  31,  2002.  The  increase in net sales was
primarily  attributable  to sales  of our  Monster  EnergyTM  drink,  which  was
introduced in April 2002, as well as increased  sales of Natural  Sodas,  Junior
Juice and, to a lesser extent,  sparkling  beverages.  The increase in net sales
was partially  offset by decreased sales of functional  drinks,  smoothies,  E2O
Energy Water,  Energade(r)  energy sports drinks,  and children's  multi-vitamin
juice drinks as well as an increase in  discounts,  allowances  and  promotional
payments.

     Gross Profit.  Gross profit was $43.8  million for the year ended  December
31, 2003,  an increase of $10.5  million or 31.7% over the $33.2  million  gross
profit for the year ended December 31, 2002. Gross profit as a percentage of net
sales was 39.7% for the year ended  December 31, 2003 which was slightly  higher
than  gross  profit as a  percentage  of net  sales of 36.1% for the year  ended
December 31, 2002.  The increase in gross profit was primarily  attributable  to
increased  net  sales.  Although  a greater  percentage  of our sales  comprised
products having higher gross margins than the prior year, the increase in profit
margins was partially reduced by higher  promotional  payments and allowances to
promote our products.

     Total Operating  Expenses.  Total operating expenses were $33.9 million for
the year ended  December  31,  2003,  an increase of $6.0  million or 21.5% over
total operating  expenses of $28.0 million for the year ended December 31, 2002.
Total  operating  expenses as a percentage  of net sales  slightly  increased to
30.8% for the year  ended  December  31,  2003,  from  30.4% for the year  ended
December  31,  2002.  The increase in total  operating  expenses  was  primarily
attributable to increased  selling,  general and  administrative  expenses.  The
increase in total operating  expenses as a percentage of net sales was primarily
attributable  to the  comparatively  larger  increase  in  selling,  general and
administrative expenses than the increase in net sales.

                                       25

<PAGE>

     Selling,  General and Administrative.  Selling,  general and administrative
expenses were $33.9 million for the year ended December 31, 2003, an increase of
$6.0 million or 21.5% over selling, general and administrative expenses of $27.9
million  for  the  year  ended   December   31,  2002.   Selling,   general  and
administrative  expenses as a percentage of net sales increased to 30.7% for the
year ended  December 31, 2003,  from 30.3% for the year ended December 31, 2002.
Selling  expenses  were $20.1  million for the year ended  December 31, 2003, an
increase of $4.0 million or 25.1% over selling expenses of $16.1 million for the
year ended  December 31,  2002.  Selling  expenses as a percentage  of net sales
increased to 18.2% for the year ended December 31, 2003, from 17.4% for the year
ended  December  31,  2002.  The  increase  in selling  expenses  was  primarily
attributable to increased  distribution  (freight) and storage  expenses,  trade
development activities including cooperative arrangements with our distributors,
sponsorships and promotions,  in-store  demonstrations and merchandise  displays
which was partially  offset by decreased  expenditures  for graphic  design.  In
addition,  we  incurred  expenses  of  approximately  $267,000  during  2003  in
connection with our sponsorship of the Las Vegas Monorail as part of our efforts
to promote our Monster product line.  General and  administrative  expenses were
$13.8 million for the year ended  December 31, 2003, an increase of $2.0 million
or 16.6% over general and administrative  expenses of $11.8 million for the year
ended December 31, 2002. General and administrative  expenses as a percentage of
net sales were 12.5% for the year ended  December  31,  2003 which was  slightly
lower than general and  administrative  expenses as a percentage of net sales of
12.9% for the year  ended  December  31,  2002.  The  increase  in  general  and
administrative  expenses was  primarily  attributable  to an increase in payroll
costs  as we  expanded  our  headcount,  as well  as fees  paid  for  legal  and
accounting services and increased travel and insurance expenses. The decrease in
general and  administrative  expenses as a percentage of net sales was primarily
attributable to the increase in net sales and the  comparatively  lower increase
in payroll costs.

     Amortization of Trademark License and Trademarks. Amortization of trademark
license and  trademarks  was $62,000 for the year ended  December 31,  2003,  an
increase of $7,000 from  amortization  of trademark  license and  trademarks  of
$55,000 for the year ended  December 31, 2002. The increase in  amortization  of
trademark license and trademarks was due to the acquisition of trademarks during
the year ended December 31, 2003.

     Operating  Income.  Operating  income was $9.8  million  for the year ended
December  31,  2003,  compared to $5.3  million for the year ended  December 31,
2002. The $4.5 million increase in operating  income was primarily  attributable
to increased gross profits,  which was partially  offset by increased  operating
expenses.

     Net Nonoperating Expense. Net nonoperating expense was $67,000 for the year
ended December 31, 2003, which was $161,000 lower than net nonoperating  expense
of $228,000  for the year ended  December  31, 2002.  Net  nonoperating  expense
consists of interest and  financing  expense and interest  income.  Interest and
financing expense for the year ended December 31, 2003 was $73,000,  as compared
to $231,000 for the year ended  December 31, 2002.  The decrease in interest and
financing  expense was  primarily  attributable  to decreased  interest  expense
incurred on our borrowings  which was primarily  attributable to the decrease in
outstanding loan balances and lower interest rates.  Interest and royalty income
for the year ended December 31, 2003 was $6,000,  as compared to interest income
of $3,000 for the year ended December 31, 2002. The increase in interest  income
was primarily  attributable  to an increase in the cash available for investment
during the year ended December 31, 2003.

     Provision for Income  Taxes.  Provision for income taxes for the year ended
December  31, 2003 was $3.8  million  which was an  increase of $1.8  million as
compared to the  provision  for income  taxes of $2.0 million for the year ended
December 31, 2002.  The  increase in  provision  for income taxes was  primarily
attributable to the increase in operating income. The effective combined federal
and state tax rate for 2003 was 39.2%,  which was lower than the  effective  tax
rate of 40.2% for 2002 due to the  increase  in the  apportionment  of sales and
related state taxes to various states outside of California.

                                       26

<PAGE>

     Net Income.  Net income was $5.9  million for the year ended  December  31,
2003,  which was an increase  of $2.9  million as compared to net income of $3.0
million for the year ended  December  31,  2002.  The increase in net income was
primarily  attributable  to the  $10.5  million  increase  in gross  profit  and
decrease in  nonoperating  expense of $161,000  for the year ended  December 31,
2003 which was partially offset by increased  operating expenses of $6.0 million
and an increase in the provision of income taxes of $1.8 million.

Liquidity and Capital Resources

     As of December 31, 2004,  the Company had working  capital of  $41,639,000,
compared to working  capital of  $17,196,000  as of December 31, 2003.  

     Net cash provided by operating  activities  for the year ended December 31,
2004 was $20,051,000,  compared to net cash provided by operating  activities of
$5,484,000  during 2003.  The increase in cash provided by operating  activities
was  primarily  attributable  to an increase in net income as well as,  accounts
payable,  income taxes payable,  accrued  compensation  and accrued  liabilities
which was partially  offset by increases in accounts  receivable and inventories
as well as prepaid  expenses.  Purchases of  inventories,  increases in accounts
receivable and other assets, acquisition of property and equipment,  acquisition
of trademark  licenses and  trademarks,  and repayment of our line of credit and
accounts payable are expected to remain our principal  recurring use of cash and
working capital funds.

     Net cash used in investing  activities for the year ended December 31, 2004
was  $1,471,000  as  compared  to net  cash  used in  investment  activities  of
$2,438,000 in 2003.  The decrease in net cash used in investing  activities  was
primarily  attributable  to decreased  purchases of property and equipment and a
decrease  in  expenditures  for  trademarks  which  was  partially  offset by an
increase in deposits  and other assets as well as  decreased  proceeds  from the
sale of property and  equipment.  Management,  from time to time,  considers the
acquisition  of capital  equipment,  particularly,  specific items of production
equipment  required  to produce  certain of our  products,  merchandise  display
racks, vans and promotional  vehicles,  coolers and other promotional  equipment
and businesses  compatible with the image of the  Hansen's(r)  brand, as well as
the introduction of new product lines.

     Net cash  provided by  financing  activities  was  $1,298,000  for the year
ending  December 31, 2004, as compared to net cash used in financing  activities
of $2,486,000 in 2003. The increase in net cash provided by financing activities
as compared to the prior year was primarily  attributable to increased  proceeds
from the issuance of common stock during  2004,  which was  partially  offset by
principal payments of long-term debt.

     HBC has a  credit  facility  from  Comerica  Bank-California  ("Comerica"),
consisting of a revolving line of credit and a term loan. The utilization of the
revolving  line of credit by HBC is dependent  upon  certain  levels of eligible
accounts  receivable  and inventory  from time to time.  Such  revolving line of
credit and term loan are secured by substantially all of HBC's assets, including
accounts  receivable,  inventory,  trademarks,  trademark  licenses  and certain
equipment.  In accordance  with the provisions of the credit  facility,  HBC can
borrow up to 6.0 million under its line of credit.  The revolving line of credit
remains in full force and effect through September 2005.  Interest on borrowings
under  the  line of  credit  is based  on  bank's  base  (prime)  rate,  plus an
additional  percentage  of up to  0.5% or the  LIBOR  rate,  plus an  additional
percentage of up to 2.5%,  depending upon certain  financial  ratios of HBC from
time to time. At December 31, 2004,  HBC had no balances  outstanding  under the
credit facility.

                                       27

<PAGE>

     On March 1, 2005,  the  Company  entered  into an  amendment  of its credit
facility with Comerica in terms of which HBC can borrow up to $7.8 million under
its revolving line of credit. Under the amendment,  the revolving line of credit
remains in full force and effect  through June 1, 2006.  Interest on  borrowings
under  the line of  credit  varies  depending  on a  predetermined  ratio of the
Company's funded senior debt to Earnings Before Interest Taxes  Depreciation and
Amortization.  The  current  rate of  interest is prime minus 1.5% or the 30 day
LIBOR rate plus 1.25%.

     The  terms  of the  Company's  line of  credit  contain  certain  financial
covenants including certain financial ratios. The Company was in compliance with
its covenants at December 31, 2004

     If any event of default  shall occur for any reason,  whether  voluntary or
involuntary,  Comerica may declare all or any portion outstanding on the line of
credit  immediately due and payable,  exercise rights and remedies  available to
secured parties under the Uniform  Commercial Code,  institute legal proceedings
to foreclose upon the lien and security  interest granted or for the sale of any
or all collateral.

     Purchase  obligations  represent  commitments  made by the  Company and its
subsidiaries  to various  suppliers for raw materials used in the  manufacturing
and packaging of our products. These obligations vary in terms.

     Other  commitments  represent our obligations  under our agreement with the
Las Vegas Monorail Company. See also "ITEM 1 - SALES AND MARKETING."

     The following represents a summary of the Company's contractual obligations
and related scheduled maturities as of December 31, 2004:


<TABLE>
<CAPTION>

                                 Long-Term         
                                  Debt &            
                               Capital Lease       Operating         Purchase            Other             
                                Obligations         Leases         Obligations        Commitments          Total
                             ----------------- ---------------- ------------------ ----------------- ------------------
<S>                          <C>               <C>              <C>                <C>               <C>

Year ending December 31:
2005                          $       437,366   $      980,473   $      8,332,590    $    1,042,000   $     10,792,429
2006                                  146,486        1,027,242          5,022,648                            6,196,376
2007                                                 1,040,332          4,380,000                            5,420,332
2008                                                   775,683                                                 775,683
2009                                                   685,560                                                 685,560
Thereafter                                             514,170                                                 514,170
                             ----------------- ---------------- ------------------ ----------------- ------------------
                              $       583,852   $    5,023,460   $     17,735,238    $    1,042,000   $     24,384,550
                             ================= ================ ================== ================= ==================

</TABLE>


     Management  believes that cash  available from  operations,  including cash
resources and the revolving  line of credit,  will be sufficient for our working
capital needs,  including purchase  commitments for raw materials and inventory,
increases in accounts receivable,  payments of tax liabilities,  debt servicing,
expansion and  development  needs,  purchases of shares of our common stock,  as
well as any purchases of capital assets or equipment through December 31, 2005.

Accounting Policies and Pronouncements

Critical Accounting Policies

     The Company's  consolidated financial statements are prepared in accordance
with accounting  principals  generally  accepted in the United States of America
("GAAP".)  GAAP  requires the Company to make  estimates  and  assumptions  that
affect the reported amounts in our consolidated  financial  statements including
various  allowances and reserves for accounts  receivable and  inventories,  the
estimated  lives of long-lived  assets and trademarks and trademark  licenses as
well as claims and contingencies arising out of litigation or other transactions
that occur in the normal course of business.  The  following  summarize the most
significant accounting and reporting policies and practices of the Company:

                                       28

<PAGE>

     Trademark  License  and  Trademarks  -  Trademark  license  and  trademarks
     primarily  represent the Company's  exclusive  ownership of the Hansen's(r)
     trademark in connection  with the  manufacture,  sale and  distribution  of
     beverages and water and non-beverage products. The Company also owns in its
     own right, a number of other  trademarks in the United States as well as in
     a number of  countries  around the world.  The  Company  also owns the Blue
     Sky(r)  trademark,  which was  acquired in September  2000,  and the Junior
     Juice(r)  trademark,  which was  acquired  in May 2001.  During  2002,  the
     Company adopted SFAS No. 142, Goodwill and Other Intangible  Assets.  Under
     the provisions on SFAS No. 142, the Company  discontinued  amortization  on
     indefinite-lived  trademark  licenses and  trademarks  while  continuing to
     amortize remaining trademark licenses and trademarks over one to 25 years.

     In  accordance  with SFAS No. 142, we evaluate  our  trademark  license and
     trademarks  annually for impairment or earlier if there is an indication of
     impairment.   If  there  is  an  indication  of  impairment  of  identified
     intangible  assets not subject to  amortization,  management  compares  the
     estimated fair value with the carrying  amount of the asset.  An impairment
     loss is recognized to write down the intangible  asset to its fair value if
     it is less than the carrying amount. The fair value is calculated using the
     income  approach.  However,  preparation of estimated  expected future cash
     flows is inherently  subjective and is based on management's  best estimate
     of assumptions concerning expected future conditions. Based on management's
     annual  impairment  analysis  performed for the fourth quarter of 2004, the
     estimated  fair values of  trademark  license and  trademarks  exceeded the
     carrying value.

     Long-Lived Assets - Management regularly reviews property and equipment and
     other long-lived assets,  including certain identifiable  intangibles,  for
     possible  impairment.  This review occurs  annually,  or more frequently if
     events or changes in  circumstances  indicate  the  carrying  amount of the
     asset may not be  recoverable.  If there is  indication  of  impairment  of
     property and equipment or amortizable  intangible  assets,  then management
     prepares  an  estimate  of future  cash  flows  (undiscounted  and  without
     interest  charges)  expected  to  result  from the use of the asset and its
     eventual disposition. If these cash flows are less than the carrying amount
     of the asset,  an impairment  loss is recognized to write down the asset to
     its estimated fair value.  The fair value is estimated at the present value
     of  the  future  cash  flows  discounted  at  a  rate   commensurate   with
     management's  estimates of the  business  risks.  During  2004,  management
     recognized  an  impairment to property and equipment as discussed in Note 3
     of the attached financial statements.

     Management  believes that the accounting  estimate related to impairment of
     its long lived assets, including its trademark license and trademarks, is a
     "critical  accounting  estimate"  because:  (1) it is highly susceptible to
     change from period to period because it requires company management to make
     assumptions  about cash flows and discount  rates;  and (2) the impact that
     recognizing  an  impairment  would  have  on  the  assets  reported  on our
     consolidated  balance  sheet,  as well as net  income,  could be  material.
     Management's  assumptions  about  cash  flows and  discount  rates  require
     significant  judgment  because actual revenues and expenses have fluctuated
     in the past and are expected to continue to do so.

     In estimating future revenues,  we use internal  budgets.  Internal budgets
     are developed  based on recent revenue data and future  marketing plans for
     existing  product lines and planned timing of future  introductions  of new
     products and their impact on our future cash flows.

     Revenue  Recognition - The Company  records revenue at the time the related
     products  are  shipped  and the risk of  ownership  and title  has  passed.
     Management  believes an adequate  provision against net sales has been made
     for estimated returns, allowances and cash discounts based on the Company's
     historical experience.

     Advertising  and  Promotional   Allowances  -  The  Company   accounts  for
     advertising  production  costs by expensing such production costs the first
     time the related advertising takes place. In addition, the Company supports
     its customers with promotional  allowances,  a portion of which is utilized
     for marketing and indirect  advertising  by them. In certain  instances,  a
     portion of the  promotional  allowances  payable to customers  based on the
     levels of sales to such customers,  promotion  requirements or expected use
     of the  allowances,  are  estimated by the Company.  If the level of sales,
     promotion  requirements  or use of the  allowances  are different from such
     estimates,  the  promotional  allowances  could,  to the  extent  based  on
     estimates,  require adjustments.  During 2002, the Company adopted Emerging
     Issues Task Force ("EITF") No. 01-9 which requires certain sales promotions
     and  customer  allowances  previously  classified  as selling,  general and
     administrative expenses to be classified as a reduction of sales or as cost
     of goods sold. The Company presents advertising and promotional  allowances
     in accordance with the provisions of EITF No. 01-9.

                                       29

<PAGE>

     Accounts Receivable - The Company evaluates the collectibility of its trade
     accounts  receivable based on a number of factors.  In circumstances  where
     the Company  becomes aware of a specific  customer's  inability to meet its
     financial  obligations to the Company,  a specific reserve for bad debts is
     estimated  and recorded  which  reduces the  recognized  receivable  to the
     estimated  amount the Company  believes will  ultimately  be collected.  In
     addition to specific  customer  identification  of potential bad debts, bad
     debt charges are recorded  based on the Company's  recent past loss history
     and  an  overall   assessment  of  past  due  trade   accounts   receivable
     outstanding.

     Inventories  -  Inventories  are  stated at the  lower of cost to  purchase
     and/or  manufacture the inventory or the current  estimated market value of
     the inventory.  The Company regularly  reviews its inventory  quantities on
     hand and  records a  provision  for excess  and  obsolete  inventory  based
     primarily on the Company's  estimated forecast of product demand and/or its
     ability  to sell the  product(s)  concerned  and  production  requirements.
     Demand for the  Company's  products can  fluctuate  significantly.  Factors
     which could affect demand for the Company's products include  unanticipated
     changes  in  consumer  preferences,  general  market  conditions  or  other
     factors, which may result in cancellations of advance orders or a reduction
     in the rate of reorders placed by customers and/or  continued  weakening of
     economic conditions. Additionally, management's estimates of future product
     demand  may  be  inaccurate,  which  could  result  in  an  understated  or
     overstated provision required for excess and obsolete inventory.

     Income  Taxes - Current  income tax  expense is the amount of income  taxes
     expected to be payable for the current year. A deferred income tax asset or
     liability is established for the expected future  consequences of temporary
     differences  in the  financial  reporting  and  tax  bases  of  assets  and
     liabilities.  The Company  considers  future  taxable  income and  ongoing,
     prudent and feasible tax planning  strategies in assessing the value of its
     deferred tax assets. If the Company  determines that it is more likely than
     not that these  assets will not be  realized,  the Company  will reduce the
     value  of  these  assets  to  their  expected  realizable  value,   thereby
     decreasing net income.  Evaluating the value of these assets is necessarily
     based on the Company's  judgment.  If the Company  subsequently  determined
     that the  deferred  tax  assets,  which  had been  written  down,  would be
     realized  in the  future,  the value of the  deferred  tax assets  would be
     increased,   thereby   increasing  net  income  in  the  period  when  that
     determination  was  made.  See Note 7 in Notes  to  Consolidated  Financial
     Statements.

Newly Issued Accounting Pronouncements

     Information  regarding newly issued accounting  pronouncements is contained
in Note 1 to the Consolidated  Financial  Statements for the year ended December
31, 2004, which note is incorporated herein by this reference.

Sales

     The table set forth below discloses selected quarterly data regarding sales
for the past five years.  Data from any one or more quarters is not  necessarily
indicative of annual results or continuing trends.

     Sales of beverages are expressed in unit case volume. A "unit case" means a
unit of  measurement  equal to 192 U.S.  fluid  ounces of finished  beverage (24
eight-ounce  servings) or concentrate sold that will yield 192 U.S. fluid ounces
of finished beverage. Unit case volume of the Company means number of unit cases
(or unit case  equivalents)  of  beverages  directly or  indirectly  sold by the
Company. Sales of food bars and cereals are expressed in actual cases. A case of
food bars and cereals is defined as follows:

                                       30

<PAGE>

* A fruit and grain  bar and  functional  nutrition  bar case  equals  ninety
  1.76-ounce bars.
* A natural cereal case equals ten 13-ounce boxes measured by volume.
* An active nutrition bar case equals thirty-two 1.4-ounce bars.

     The Company's  quarterly results of operations reflect seasonal trends that
are primarily  the result of increased  demand in the warmer months of the year.
It has been our experience that beverage sales tend to be lower during the first
and fourth quarters of each fiscal year.  Because the primary  historical market
for Hansen's products is California,  which has a year-long  temperate  climate,
the  effect  of  seasonal  fluctuations  on  quarterly  results  may  have  been
mitigated; however, such fluctuations may be more pronounced as the distribution
of Hansen's  products  expands  outside of  California.  The Company has not had
sufficient   experience  with  many  of  its  newer  product  introductions  and
consequently  has no knowledge of the trends which may occur with such products.
Quarterly  fluctuations  may also be affected  by other  factors  including  the
introduction  of new  products,  the  opening of new markets  where  temperature
fluctuations are more pronounced, the addition of new bottlers and distributors,
changes in the mix of the sales of its finished  products and soda  concentrates
and increased advertising and promotional expenses. See also "ITEM 1. BUSINESS -
SEASONALITY."

Unit Case Volume / Case Sales (in Thousands)

                2004         2003         2002         2001         2000
             ---------    ---------    ---------    ---------    ---------
Quarter 1       5,368        4,219        3,597        3,091        2,451
Quarter 2       7,605        5,356        4,977        4,171        3,323
Quarter 3       8,916        6,221        5,146        4,271        3,157
Quarter 4       7,871        4,625        3,885        3,583        2,859
             ---------    ---------    ---------    ---------    ---------
Total          29,760       20,421       17,605       15,116       11,790
             =========    =========    =========    =========    =========

Net Revenues (in Thousands)

                2004         2003         2002         2001         2000
             ---------    ---------    ---------    ---------    ---------
Quarter 1    $ 31,299     $ 22,086     $ 18,592     $ 16,908     $ 14,236
Quarter 2      46,064       28,409       26,265       22,337       20,702
Quarter 3      52,641       33,291       26,985       23,011       20,434
Quarter 4      50,337       26,566       20,204       18,402       16,334
             ---------    ---------    ---------    ---------    ---------
Total        $180,341     $110,352     $ 92,046     $ 80,658     $ 71,706
             =========    =========    =========    =========    =========
Inflation

     The Company does not believe that inflation had a significant impact on the
Company's results of operations for the periods presented.

Forward Looking Statements

     The Private Security  Litigation  Reform Act of 1995 (the "Act") provides a
safe harbor for forward looking  statements made by or on behalf of the Company.
The Company and its  representatives  may from time to time make written or oral
forward looking statements,  including  statements  contained in this report and
other  filings with the  Securities  and Exchange  Commission  and in reports to
shareholders  and  announcements.  Certain  statements  made in this  report may
constitute forward looking statements (within the meaning of Section 27.A of the
Securities Act 1933, as amended, and Section 21.E of the Securities Exchange Act
of 1934, as amended)  regarding the  expectations  of management with respect to
revenues,  profitability,  adequacy of funds from  operations  and our  existing
credit  facility,  among other things.  All statements  which address  operating
performance,  events or developments that management expects or anticipates will
or may occur in the future including statements related to new products,  volume
growth, revenues,  profitability,  adequacy of funds from operations, and/or the
Company's  existing  credit  facility,  earnings  per share  growth,  statements
expressing  general optimism about future  operating  results and non historical
information, are forward looking statements within the meaning of the Act.

                                       31

<PAGE>

     These  statements  are qualified by their terms and/or  important  factors,
many of which are outside our control, involve a number of risks,  uncertainties
and  other  factors,  that  could  cause  actual  results  and  events to differ
materially  from  the  statements  made  including,  but  not  limited  to,  the
following:

     Company's  ability to  generate  sufficient  cash flows to support  capital
expansion plans and general operating activities;

*    Decreased  demand for our  products  resulting  from  changes  in  consumer
     preferences;
*    Changes in demand that are weather  related,  particularly in areas outside
     of California;
*    Competitive  products and pricing  pressures and the  Company's  ability to
     gain or  maintain  its  share of sales in the  marketplace  as a result  of
     actions by competitors;
*    The introduction of new products;
*    An  inability  to achieve  volume  growth  through  product  and  packaging
     initiatives;
*    Laws and  regulations,  and/or any changes  therein,  including  changes in
     accounting standards,  taxation  requirements  (including tax rate changes,
     new tax laws and revised tax law interpretations) and environmental laws as
     well as the Federal  Food Drug and  Cosmetic  Act,  the Dietary  Supplement
     Health and Education Act, and regulations  made thereunder or in connection
     therewith,  as well as changes in any other food and drug laws,  especially
     those that may affect the way in which the Company's  products are marketed
     and/or labeled and/or sold, including the contents thereof, as well as laws
     and   regulations   or  rules  made  or  enforced  by  the  Food  and  Drug
     Administration and/or the Bureau of Alcohol,  Tobacco and Firearms,  and/or
     Federal Trade Commission, and/or certain state regulatory agencies;
*    Changes in the cost and  availability  of raw  materials and the ability to
     maintain favorable supply arrangements and relationships and procure timely
     and/or adequate production of all or any of the Company's products;
*    The Company's ability to achieve earnings forecasts,  which may be based on
     projected  volumes and sales of many  product  types  and/or new  products,
     certain of which are more profitable than others. There can be no assurance
     that the Company will achieve projected levels or mixes of product sales;
*    The Company's ability to penetrate new markets;
*    The marketing  efforts of distributors of the Company's  products,  most of
     which  distribute  products that are  competitive  with the products of the
     Company;
*    Unilateral  decisions by  distributors,  grocery  chains,  specialty  chain
     stores, club stores and other customers to discontinue  carrying all or any
     of the Company's products that they are carrying at any time;
*    The terms and/or  availability  of the  Company's  credit  facility and the
     actions of its creditors;
*    The effectiveness of the Company's  advertising,  marketing and promotional
     programs;
*    Changes in product category consumption;
*    Unforeseen economic and political changes;
*    Possible recalls of the Company's products; and
*    The Company's  ability to make suitable  arrangements for the co-packing of
     any of  its  products  including,  but  not  limited  to,  its  energy  and
     functional  drinks in 8.3-ounce slim cans and 16-ounce  cans,  smoothies in
     11.5-ounce  cans, E2O Energy  Water(r),  Energade(r),  Monster EnergyTM and
     Lost(r) energy drinks, RumbaTM energy juice, juices in 64-ounce PET plastic
     bottles and aseptic  packaging,  soy  smoothies,  sparkling  orangeades and
     lemonades and apple cider in glass bottles and other products.

The foregoing list of important factors is not exhaustive.

                                       32

<PAGE>

     Our actual results could be materially different from the results described
or anticipated by our forward-looking statements due to the inherent uncertainty
of  estimates,  forecasts  and  projections  and may be  better  or  worse  than
anticipated.  Given these uncertainties,  you should not rely on forward-looking
statements.  Forward-looking  statements represent our estimates and assumptions
only as of the date that they  were  made.  We  expressly  disclaim  any duty to
provide updates to forward-looking statements, and the estimates and assumptions
associated with them, after the date of this report, in order to reflect changes
in  circumstances  or  expectations  or the occurrence of  unanticipated  events
except to the extent required by applicable securities laws.


I
TEM 7A.        QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS

     In the normal  course of  business,  our  financial  position is  routinely
subject to a variety of risks.  The  principal  market risks (i.e.,  the risk of
loss arising from adverse  changes in market rates and prices) which the Company
is exposed to are  fluctuations  in commodity  prices  affecting the cost of raw
materials and changes in interest  rates of the Company's long term debt and the
limited  availability  of certain raw materials  such as sucralose.  We are also
subject to market  risks with  respect to the cost of  commodities  because  our
ability to recover  increased  costs  through  higher  pricing is limited by the
competitive  environment in which we operate. We are also subject to other risks
associated  with the business  environment  in which we operate,  including  the
collectability of accounts receivable.

     At December 31, 2004, the majority of the Company's debt consisted of fixed
rather than  variable  rate debt.  The amount of variable  rate debt  fluctuates
during the year based on the Company's cash  requirements.  If average  interest
rates were to increase one percent for the year ended December 31, 2003, the net
impact on the Company's pre-tax earnings would have been insignificant.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The information required to be furnished in response to this Item 8 follows
the signature page hereto at pages 51 through 69.


     ITEM 9. CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.


ITEM 9A.        CONTROLS AND PROCEDURES

     Evaluation of Disclosure  Controls and  Procedures - Under the  supervision
and with the  participation  of the  Company's  management,  including our Chief
Executive   Officer  and  Chief  Financial   Officer,   we  have  evaluated  the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures as of the end of the period  covered by this report.  Based upon this
evaluation,  the Chief  Executive  Officer  and  Chief  Financial  Officer  have
concluded that the Company's disclosure controls and procedures are adequate and
effective  to ensure that  material  information  we are required to disclose in
reports  that we file or submit  under the  Securities  Exchange  Act of 1934 is
recorded,  processed,  summarized and reported within the time periods specified
in SEC rules and forms.

     There have been no significant  changes in internal  control over financial
reporting  that occurred  during the fiscal  period  covered by this report that
have materially  affected,  or are reasonably likely to materially  affect,  the
registrant's internal control over financial reporting.

     Management's  Report on Internal Control Over Financial Reporting - Company
management is responsible for  establishing  and maintaining  adequate  internal
control over  financial  reporting,  as defined in Exchange Act Rule  13a-15(f).
Under  the  supervision  and  with  the  participation  of  company  management,
including the principal executive officer and principal  financial officer,  the
company  conducted an evaluation of the  effectiveness  of its internal  control
over financial reporting based on the framework in Internal Control - Integrated
Framework  issued by the Committee of Sponsoring  Organizations  of the Treadway
Commission as of December 31, 2004. Based on the company's  evaluation under the
framework in Internal Control - Integrated Framework,  management concluded that
the  company's  internal  control over  financial  reporting was effective as of
December 31, 2004.

                                       33

<PAGE>

     Management's  assessment  of the  effectiveness  of internal  control  over
financial  reporting  as of  December  31,  2004 has been  audited by Deloitte &
Touche LLP, an independent  registered  public accounting firm, as stated in its
report, which is included herein.


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
Hansen Natural Corporation
Corona, California

We have audited management's assessment, included in the accompanying Management
Report on  Internal  Control  over  Financial  Reporting,  that  Hansen  Natural
Corporation and  subsidiaries  (the  "Company")  maintained  effective  internal
control over  financial  reporting  as of December  31, 2004,  based on criteria
established in Internal Control-Integrated  Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. The Company's management is
responsible for maintaining  effective internal control over financial reporting
and for its assessment of the  effectiveness  of internal control over financial
reporting.   Our  responsibility  is  to  express  an  opinion  on  management's
assessment and an opinion on the effectiveness of the Company's internal control
over financial reporting based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial reporting,  evaluating management's assessment, testing and evaluating
the design and operating  effectiveness of internal control, and performing such
other  procedures as we considered  necessary in the  circumstances.  We believe
that our audit provides a reasonable basis for our opinions.

A company's internal control over financial  reporting is a process designed by,
or under the  supervision  of, the company's  principal  executive and principal
financial officers, or persons performing similar functions, and effected by the
company's  board of  directors,  management,  and  other  personnel  to  provide
reasonable  assurance  regarding the reliability of financial  reporting and the
preparation  of financial  statements for external  purposes in accordance  with
generally  accepted  accounting  principles.  A company's  internal control over
financial  reporting  includes those policies and procedures that (1) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of  unauthorized  acquisition,  use, or  disposition  of the company's
assets that could have a material effect on the financial statements.

Because  of  the  inherent   limitations  of  internal  control  over  financial
reporting,  including  the  possibility  of  collusion  or  improper  management
override of controls,  material  misstatements  due to error or fraud may not be
prevented or detected on a timely basis. Also,  projections of any evaluation of
the  effectiveness  of the internal  control over financial  reporting to future
periods are subject to the risk that the controls may become inadequate  because
of changes in conditions,  or that the degree of compliance with the policies or
procedures may deteriorate.

                                       34

<PAGE>

In our opinion,  management's  assessment that the Company maintained  effective
internal  control over  financial  reporting as of December 31, 2004,  is fairly
stated, in all material respects,  based on the criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.  Also in our opinion, the Company maintained, in all
material  respects,  effective  internal control over financial  reporting as of
December   31,   2004,   based  on  the   criteria   established   in   Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.

We have also  audited,  in accordance  with the standards of the Public  Company
Accounting   Oversight  Board  (United  States),   the  consolidated   financial
statements and financial  statement  schedule listed in Item 15(b) as of and for
the years ended  December  31, 2004 and 2003 of the Company and our report dated
March 14, 2005 expressed an unqualified  opinion on those  financial  statements
and financial statement schedule.


DELOITTE & TOUCHE LLP
Costa Mesa, California
March 14, 2005


 

PART III


ITEM 10.        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Directors of the Company are elected  annually by the holders of the common
stock and executive officers are elected annually by the Board of Directors,  to
serve until the next annual meeting of  stockholders  or the Board of Directors,
as the case may be, or until their  successors are elected and qualified.  It is
anticipated that the next annual meeting of stockholders will be held in October
or November, 2005.

The members of our Board of Directors and our executive officers are as follows:

Name                          Age                       Position
------------------------    -------     ----------------------------------------
Rodney C. Sacks(1)            55        Chairman of the Board of Directors and
                                        Chief Executive Officer

Hilton H. Schlosberg(1)       52        Vice Chairman of the Board of
                                        Directors, Chief Financial Officer,
                                        Chief Operating Officer and
                                        Secretary

Benjamin M. Polk              53        Director

Norman C. Epstein(2),(3),(4)  64        Director

Sydney Selati(2)              66        Director

Harold C. Taber, Jr.(2),(4)   65        Director

Mark S. Vidergauz(3)          51        Director

Mark Hall                     49        Senior Vice President,
                                        Single-Serve Products, HBC

Michael B. Schott             56        Vice President, National Sales,
                                        Single-Serve Products, HBC

Kirk Blower                   54        Senior Vice President, Juice and 
                                        Non-Carbonated Products, HBC

Thomas J. Kelly               50        Vice President - Finance and
                                        Secretary, HBC

1  Member of the Executive Committee of the  Board of Directors
2  Member of the Audit Committee of the Board of Directors
3  Member of the Compensation Committee of the Board of Directors
4  Member of the Nominating Committee of the Board of Directors

                                       35

<PAGE>

     Rodney C. Sacks - Chairman of the Board of Directors of the Company,  Chief
Executive Officer and director of the Company from November 1990 to the present.
Member of the Executive Committee of the Board of Directors of the Company since
October 1992. Chairman and a director of HBC from June 1992 to the present.

     Hilton H.  Schlosberg  - Vice  Chairman  of the Board of  Directors  of the
Company,  President,  Chief Operating Officer,  Secretary, and a director of the
Company from  November  1990 to the present and Chief  Financial  Officer of the
Company  since  July 1996.  Member of the  Executive  Committee  of the Board of
Directors of the Company  since  October 1992.  Vice  Chairman,  Secretary and a
director of HBC from July 1992 to the present.

     Benjamin  M. Polk -  Director  of the  Company  from  November  1990 to the
present.  Assistant  Secretary  of HBC since  October 1992 and a director of HBC
since July 1992.  Partner  with  Schulte  Roth & Zabel LLP(1) since May 2004 and
previously  a partner with Winston & Strawn LLP where.  Mr. Polk  practiced  law
with that firm and its predecessors, from August 1976 to May 2004.

     Norman C. Epstein - Director of the Company and member of the  Compensation
Committee of the Board of Directors of the Company since June 1992 and member of
the  Nominating  Committee  of the  Board  of  Directors  of the  Company  since
September  2004.  Member and  Chairman  of the Audit  Committee  of the Board of
Directors of the Company since September 1997.  Director of HBC since July 1992.
Director of Integrated Asset Management  Limited, a company listed on the London
Stock Exchange since June 1998.  Managing  Director of Cheval  Property  Finance
PLC, a mortgage  finance  company based in London,  England.  Partner with Moore
Stephens,  an international  accounting firm, from 1974 to December 1996 (senior
partner beginning 1989 and the managing partner of Moore Stephens, New York from
1993 until 1995).

     Sydney  Selati - Director of the Company and member of the Audit  Committee
of the Board of Directors  since  September 2004. Mr. Selati has been a director
of Barbeques  Galore Ltd. since July 1997 and Chairman of the Board of Directors
of Galore USA since May 1988.  Mr.  Selati was president of Sussex Group Limited
from 1984 to 1988.

     Harold C. Taber,  Jr. - Director of the Company since July 1992.  Member of
the Audit Committee of the Board of Directors since April 2000 and member of the
Nominating  Committee of the Board of Directors of the Company  since  September
2004.  President and Chief Executive Officer of HBC from July 1992 to June 1997.
Consultant  for The Joseph Company from October 1997 to March 1999 and for Costa
Macaroni  Manufacturing  Company  from July 2000 to January  2002.  Director  of
Mentoring at Biola University from July 2002 to present.

     Mark S. Vidergauz - Director of the Company and member of the  Compensation
Committee of the Board of Directors  of the Company  since June 1998.  Member of
the Audit  Committee of the Board of Directors from April 2000 through May 2004.
Managing  Director and Chief Executive Officer of Sage Group LLC from April 2000
to present.  Managing  director at the Los Angeles  office of ING Barings LLC, a
diversified financial service institution  headquartered in the Netherlands from
April 1995 to April 2000.

     Mark Hall - Senior Vice  President,  Single-Serve  Products,  joined HBC in
1997. Prior to joining HBC, Mr. Hall spent three years with Arizona Beverages as
Vice President of Sales where he was responsible  for sales and  distribution of
Arizona products through a national network of beer  distributors and soft drink
bottlers.

     Michael Schott - Vice  President,  National Sales,  Single-Serve  Products,
joined HBC in 2002. Prior to joining HBC, Mr. Schott held a number of management
positions in the beverage industry including  president of Snapple Beverage Co.,
SOBE Beverage Co. and Everfresh Beverages,  respectively. Mr. Schott has over 30
years of experience in sales and marketing, primarily with beverage companies in
key executive and operational roles.

     Kirk Blower - Senior Vice President,  Juice and Non-Carbonated Products, of
HBC  since  1992.  Mr.  Blower  has  over 30 years of  experience  in sales  and
marketing, primarily with the Coca-Cola organization.

     Thomas J. Kelly - Vice President - Finance and Secretary of HBC since 1992.
Prior to joining HBC, Mr. Kelly served as controller  for  California  Copackers
Corporation.  Mr. Kelly is a Certified  Public  Accountant and has worked in the
beverage business for over 20 years.

(1)  Mr. Polk and his law firm,  Schulte  Roth & Zabel LLP,  serve as counsel to
     the Company.
                                       36

<PAGE>

Audit Committee and Audit Committee Financial Expert

     The  Company  has  a  separately   designated   standing  Audit   Committee
established in accordance  with Section  3(a)(58)(A) of the Securities  Exchange
Act of 1934, as amended (the "Exchange Act"). The members of the Audit Committee
are Messrs.  Epstein  (Chairman),  Taber and Selati.  The Board of Directors has
determined  that Mr. Epstein is (1) an "audit  committee  financial  expert," as
that term is defined in Item 401(h) of  Regulation  S-K of the Exchange Act, and
(2)  independent  as  defined by the  listing  standards  of Nasdaq and  Section
10A(m)(3) of the Exchange Act.

Nominating Committee

     The Board of Directors of the Company established a Nominating Committee in
September  2004  consisting  of Norman C.  Epstein  and  Harold C. Taber Jr. and
adopted a  Nominating  Committee  Charter  which is  available on our website at
www.hansens.com.

Code of Ethics

     We have  adopted  a Code  of  Ethics  that  applies  to all our  directors,
officers (including its principal executive officer, principal financial officer
and controller) and employees.  The Code of Ethics and any amendment to the Code
of Ethics, as well as any waivers that are required to be disclosed by the rules
of the SEC or Nasdaq may be obtained at no cost to you by writing or telephoning
us at the following address or telephone number:

                            Hansen Beverage Company
                              1010 Railroad Street
                                Corona, CA 92882
                                 (951) 739-6200
                                 (800) HANSENS


Section 16(a) Beneficial Ownership Reporting Compliance

     Section  16(a) of the Exchange Act requires  the  Company's  directors  and
executive  officers,  and persons who own more than ten percent of a  registered
class of the Company's equity securities, to file by specific dates with the SEC
initial  reports of  ownership  and  reports of changes in  ownership  of equity
securities of the Company.  Executive  officers,  directors and greater than ten
percent  stockholders are required by SEC regulation to furnish the Company with
copies of all  Section  16(a)  forms that they file.  The Company is required to
report in this  annual  report on Form 10-K any  failure  of its  directors  and
executive  officers  and greater  than ten percent  stockholders  to file by the
relevant  due date any of these  reports  during the most recent  fiscal year or
prior fiscal years.

     To the  Company's  knowledge,  based  solely  on  review  of copies of such
reports  furnished to the Company  during the year ended  December 31, 2004, all
Section  16(a)  filing  requirements   applicable  to  the  Company's  executive
officers,  directors  and greater than ten percent  stockholders  were  complied
with,  except for several  Section 16(a) filings that were  inadvertently  filed
late by various  officers and directors  during the year and, as reported in the
annual  report on Form 10-K for the year ended  December 31,  2003,  Form 5's in
respect  of option  grants  required  to be filed by each of Rodney C. Sacks and
Hilton H. Schlosberg were inadvertently filed late.

                                       37

<PAGE>


ITEM 11.        EXECUTIVE COMPENSATION

     The  following  tables set forth  certain  information  regarding the total
remuneration  earned and grants of options/ made to the chief executive  officer
and each of the four most highly  compensated  executive officers of the Company
and its  subsidiaries  who earned total cash  compensation in excess of $100,000
during the year ended  December  31,  2004.  These  amounts  reflect  total cash
compensation  paid by the  Company  and its  subsidiaries  to these  individuals
during the years December 31, 2002 through 2004.

                           SUMMARY COMPENSATION TABLE
================================================================================
                                                                    Long Term
                                 ANNUAL COMPENSATION               Compensation
--------------------------------------------------------------------------------
Name and                                                  Other       Securities
Principal                      Salary(1)    Bonus        Annual       underlying
Positions              Year       ($)      (2)($)     Compensation   Options (#)
--------------------------------------------------------------------------------
Rodney C. Sacks        2004     245,000    100,000      27,948(3)        -
Chairman, CEO          2003     225,833     35,000      19,333(3)     150,000
and Director           2002     225,504       -         10,331(3)     150,000
--------------------------------------------------------------------------------
Hilton H. Schlosberg   2004     245,000    100,000       9,671(3)        -
Vice-Chairman, CFO,    2003     225,833     35,000       7,753(3)     150,000
COO, President,        2002     225,504       -          7,753(3)     150,000
Secretary and 
Director
--------------------------------------------------------------------------------
Mark J. Hall           2004     200,000    150,000       8,356(3)      60,000
Senior Vice President  2003     175,000     70,000       9,554(3)        -
Single Serve Products  2002     160,000     10,000       7,733(3)      20,000
--------------------------------------------------------------------------------
Michael Schott         2004     160,000     20,000      29,027(6)      32,000
Vice President         2003     140,000     50,000      24,572(4)        -
National Sales         2002      57,256     20,000       7,311(5)      72,000
Single Serve Products
--------------------------------------------------------------------------------
Thomas J. Kelly        2004     125,000     40,000       9,319(3)      25,000
Vice President         2003     115,000     15,000       6,937(3)        -
Finance                2002     110,000      7,000       7,847(3)      10,000
--------------------------------------------------------------------------------

1    SALARY - Pursuant to employment  agreements,  Messrs.  Sacks and Schlosberg
     were entitled to an annual base salary of $245,000,  $225,833, and $226,748
     for 2004, 2003 and 2002 respectively.

2    BONUS - Payments  made in 2005,  2004 and 2003 are for  bonuses  accrued in
     2004, 2003 and 2002 respectively.

3    OTHER  ANNUAL  COMPENSATION  - The cash value of  perquisites  of the named
     persons  did not total  $50,000 or 10% of  payments of salary and bonus for
     the years shown.

4    Includes  $7,200  for  auto  reimbursement  expense,  $10,000  for  housing
     expenses,  $1,200 for travel expenses,  and $6,172 for other  miscellaneous
     perquisites.

5    Includes  $2,945  for  auto  reimbursement  expenses,  $4,090  for  housing
     expenses and $276 for other miscellaneous perquisites.

6    Includes  $7,200  for  auto  reimbursement  expense,  $10,000  for  housing
     expenses,  $4,800 for travel expenses,  and $7,027 for other  miscellaneous
     perquisites.

                                       38

<PAGE>


               OPTION GRANTS FOR THE YEAR ENDED DECEMBER 31, 2004

<TABLE>
<S>                       <C>                 <C>               <C>          <C>             <C>          <C>
============================================================================================ ===========================
                                                                                                Potential  realizable
                                                                                               value at assumed annual
                                                                                                rates of stock price
                                                                                               appreciation for option 
                                     Individual  Grants                                               term(3)
-------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
                                Number of         Percent of      
                               Securities       total Options      Exercise
                               underlying         granted to       or base
                             Options granted     employees in       price      Expiration        5%            10%
Name                               (#)              2004          ($/Share)       Date           ($)           ($)
-------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
Rodney C. Sacks                     -                 -               -            -              -             -
-------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
Hilton H. Schlosberg                -                 -               -            -              -             -
-------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
Mark J. Hall                     60,000(1)          16.2%           $8.15       1/15/14       $307,530      $779,340
-------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
Michael Schott                   32,000(2)           8.6%           $8.15       1/15/14       $164,016      $415,648
-------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
Thomas J. Kelly                  25,000(1)           6.7%           $8.15       1/15/14       $128,137      $324,725
-------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
</TABLE>


1    Options to purchase the Company's common stock become  exercisable in equal
     annual increments over 5 years beginning January 15, 2005.

2    Options to purchase the Company's common stock become  exercisable in equal
     annual increments over 4 years beginning January 15, 2005.

3    The 5% and 10%  assumed  annual  rates  of  appreciation  are  provided  in
     accordance  with the rules and  regulations of the SEC and do not represent
     our estimates or projections of our future Common Stock price growth.


               AGGREGATED OPTION EXERCISES DURING THE YEAR ENDED
            DECEMBER 31, 2004 AND OPTION VALUES AT DECEMBER 31, 2004


<TABLE>
=======================================================================================
<CAPTION>
<S>                 <C>          <C>        <C>                    <C>
                                                   Number of             Value of
                                                   underlying           unexercised
                                                  unexercised          in-the-money
                                                  Options at            options at
                                               December 31, 2004     December 31, 2004
                        Shares                        (#)                  ($)
                       acquired      Value    -----------------------------------------
                      on exercise   Realized      Exercisable/         Exercisable/
Name                     (#)          ($)        Unexercisable        Unexercisable
--------------------- ------------ ---------- -------------------- --------------------
Rodney C. Sacks          107,500    1,901,750  130,000/200,000(1)   4,182,300/6,492,400
--------------------- ------------ ---------- -------------------- --------------------
Hilton H. Schlosberg     107,500    1,901,750  130,000/200,000(1)   4,182,300/6,492,400
--------------------- ------------ ---------- -------------------- --------------------
Mark J. Hall               8,000      147,200        0/72,000(2)            0/2,089,680
-------------------- ------------- ---------- -------------------- --------------------
Michael Schott            24,000      565,320        0/80,000(3)            0/2,467,200
-------------------- ------------- ---------- -------------------- --------------------
Thomas J. Kelly           14,000      263,200        0/31,000(4)            0/  903,540
==================== ============= ========== ==================== ====================
</TABLE>



1    Includes  options to purchase  100,000  shares of common stock at $4.25 per
     share which are exercisable at December 31, 2004, granted pursuant to Stock
     Option  Agreements  dated  February 2, 1999 between the Company and Messrs.
     Sacks and  Schlosberg,  respectively;  options to purchase 80,000 shares of
     common stock at $3.57 per share of which none are  exercisable  at December
     31, 2004,  granted pursuant to Stock Option  Agreements dated July 12, 2002
     between the Company and Messrs.  Sacks and  Schlosberg,  respectively;  and
     options to purchase  150,000  shares of common  stock at $4.20 per share of
     which 30,000 are exercisable at December 31, 2004 granted pursuant to Stock
     Option Agreements dated May 28, 2003 between the Company and Messrs.  Sacks
     and Schlosberg, respectively.

2    Includes  options to purchase  12,000  shares of common  stock at $3.57 per
     share of which none are exercisable at December 31, 2004,  granted pursuant
     to a Stock Option Agreement dated July 12, 2002 between the Company and Mr.
     Hall;  and options to purchase  60,000  shares of common stock at $8.15 per
     share of which none are exercisable at December 31, 2004,  granted pursuant
     to a Stock Option  Agreement dated January 15, 2004 between the Company ant
     Mr. Hall.

                                       39

<PAGE>

3    Includes  options to purchase  48,000  shares of common  stock at $3.85 per
     share of which none are exercisable at December 31, 2004,  granted pursuant
     to a Stock  Option  Agreement  dated August 9, 2002 between the Company and
     Mr. Schott;  and options to purchase 32,000 shares of common stock at $8.15
     per share of which none are  exercisable  at  December  31,  2004,  granted
     pursuant to a Stock  Option  Agreement  dated  January 15, 2004 between the
     Company and Mr. Schott.

4    Includes  options to  purchase  6,000  shares of common  stock at $3.57 per
     share of which none are exercisable at December 31, 2004,  granted pursuant
     to a stock Option Agreement dated July 12, 2002 between the Company and Mr.
     Kelly;  and options to purchase  25,000 shares of common stock at $8.15 per
     share of which none are exercisable at December 31, 2004,  granted pursuant
     to a Stock Option  Agreement dated January 15, 2004 between the Company and
     Mr. Kelly.

Performance Graph

     The  following  graph  shows a five-year  comparison  of  cumulative  total
returns:(1)

                           Total Shareholder Returns

                            ANNUAL RETURN PERCENTAGE

For the years ended December 31,

Company Name/Index               2000      2001      2002      2003      2004
----------------------        ---------  --------  --------  --------   --------
HANSEN NATURAL CORP            (10.14)     8.39      0.50     99.48    332.42
S&P SMALLCAP 600 INDEX          11.80      6.54    (14.63)    38.79     22.65
PEER GROUP                       8.06     82.83     17.06     41.59     (1.94)

                                 INDEX RETURNS
For the years ended December 31,

                        Base                             
                       Period
Company Name/Index      1999     2000      2001      2002      2003      2004
---------------------------------------  --------  --------  --------  ---------
HANSEN NATURAL CORP     100     89.86     97.39     97.88    195.25    844.29
S&P SMALLCAP 600 INDEX  100    111.80    119.11    101.68    141.13    173.09
PEER GROUP              100    108.06    197.56    231.26    327.44    321.08


1    Annual return assumes  reinvestment of dividends.  Cumulative  total return
     assumes an initial  investment of $100 on December 31, 1999.  The Company's
     self-selected  peer group is  comprised of National  Beverage  Corporation,
     Clearly Canadian Beverage Company, Triarc Companies,  Inc., Leading Brands,
     Inc., Cott Corporation, Northland Cranberries and Jones Soda Co. All of the
     companies in the peer group traded during the entire  five-year period with
     the exception of Triarc Companies, Inc., which sold their beverage business
     in October 2000,  Jones Soda Co., which started trading in August 2000, and
     Northland Cranberries, which began trading November 2001.

Employment Agreements

     The Company  entered into an employment  agreement dated as of June 1, 2003
with Rodney C. Sacks pursuant to which Mr. Sacks renders services to the Company
as its  Chairman  and  Chief  Executive  Officer  for an annual  base  salary of
$230,000 for the 7-months  ended  December  31,  2003,  $245,000 for 2004,  with
subsequent increases of a minimum of 5% for each subsequent year, plus an annual
bonus in an amount  determined  at the  discretion of the Board of Directors and
certain fringe  benefits.  The employment  period  commenced on June 1, 2003 and
ends on December 31, 2008.

                                       40

<PAGE>

     The Company also entered into an employment  agreement  dated as of June 1,
2003 with Hilton H. Schlosberg pursuant to which Mr. Schlosberg renders services
to the Company as its Vice Chairman,  President,  Chief Operating Officer, Chief
Financial  Officer and  Secretary  for an annual base salary of $230,000 for the
7-months ended December 31, 2003,  $245,000 for 2004, with subsequent  increases
of a minimum of 5% for each  subsequent  year, plus an annual bonus in an amount
determined  at the  discretion  of the Board of  Directors  and  certain  fringe
benefits.  The employment  period commenced on June 1, 2003 and ends on December
31, 2008.

     The employment  agreements for Messrs. Sacks and Schlosberg,  and the terms
and  conditions  thereof,  were  discussed  and  approved  by  the  Compensation
Committee of the Board of Directors.

     The preceding  descriptions of the employment  agreements for Messrs. Sacks
and Schlosberg are qualified in their entirety by reference to such  agreements,
which have been filed or incorporated by reference as exhibits to this report.

Directors' Compensation

     In 2004,  outside  directors were entitled to an annual fee of $10,000 plus
$1,000 for each meeting of the Board of Directors  attended.  Outside  directors
were also  entitled to $500 for each  committee  meeting  attended in person and
$250 for each committee meeting attended by telephone.

Compensation  Committee  Interlocks and Insider  Participation  in  Compensation
Decisions

     The  Company's  Compensation  Committee is composed of Mr.  Epstein and Mr.
Vidergauz.  No  interlocking  relationships  exist  between  any  member  of the
Company's  Board of Directors or  Compensation  Committee  and any member of the
board of directors or compensation  committee of any other company,  nor has any
such  interlocking   relationship   existed  in  the  past.  No  member  of  the
Compensation  Committee  is or was  formerly  an officer or an  employee  of the
Company.

Employee Stock Option Plans

     The Company has a stock  option plan (the  "Plan")  that  provided  for the
grant of options to purchase up to  3,000,000  shares of the common stock of the
Company to certain key  employees of the Company and its  subsidiaries.  Options
granted  under the Plan may either be incentive  stock options  qualified  under
Section 422 of the Internal  Revenue Code of 1986, as amended,  or non-qualified
options.  Such options are exercisable at fair market value on the date of grant
for a period of up to ten years.  Under the Plan,  shares subject to options may
be purchased for cash, or for shares of common stock valued at fair market value
on the date of purchase.  Under the Plan, no  additional  options may be granted
after July 1, 2001.

     During 2001, the Company adopted the Hansen Natural  Corporation 2001 Stock
Option Plan ("2001 Option Plan"). The 2001 Option Plan provides for the grant of
options to purchase up to 2,000,000 shares of the common stock of the Company to
certain key employees of the Company and its subsidiaries. Options granted under
the 2001 Stock Option Plan may be incentive  stock  options under Section 422 of
the Internal Revenue Code, as amended (the "Code"),  nonqualified stock options,
or stock appreciation rights.

     The Plan and the 2001  Option  Plan are  administered  by the  Compensation
Committee of the Board of Directors of the Company,  comprised of directors  who
satisfy  the  "non-employee"  director  requirements  of Rule  16b-3  under  the
Securities  Exchange Act of 1934 and the "outside director" provision of Section
162(m) of the Code.  Grants  under  the Plan and the 2001  Option  Plan are made
pursuant to  individual  agreements  between the Company and each  grantee  that
specifies the terms of the grant, including the exercise price, exercise period,
vesting and other terms thereof.

Outside Directors Stock Option Plan

     The Company has an option plan for its outside  directors  (the  "Directors
Plan") that  provides for the grant of options to purchase up to an aggregate of
100,000  shares of common  stock of the Company to  directors of the Company who
are not and have not been employed by or acted as consultants to the Company and

                                       41

<PAGE>

its  subsidiaries  or affiliates  and who are not and have not been nominated to
the Board of Directors of the Company pursuant to a contractual arrangement.  On
the date of the annual meeting of stockholders at which an eligible  director is
initially  elected,  each  eligible  director  is entitled to receive a one-time
grant of an option to purchase  6,000 shares  (12,000  shares if the director is
serving on a committee of the Board) of the Company's  Common Stock  exercisable
at the closing  price for a share of common stock on the date of grant.  Options
become exercisable  one-third each on the first, second and third anniversary of
the date of grant; provided that all options held by an eligible director become
fully and  immediately  exercisable  upon a change in  control  of the  Company.
Options granted under the Directors Plan that are not exercised generally expire
ten years after the date of grant. Option grants may be made under the Directors
Plan for ten years from the effective date of the Directors  Plan. The Directors
Plan is a "formula plan" so that a non-employee director's  participation in the
Directors  Plan does not  affect  his  status as a  "disinterested  person"  (as
defined in Rule 16b-3 under the Securities Exchange Act of 1934).


ITEM 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The disclosure set forth in Item 5 of this report is incorporated herein.

(a) The  following  table sets forth  information,  as of February 23, 2005,  in
respect of the only persons known to the Company who  beneficially own more than
5% of the  outstanding  common  stock of the  Company:  

                                                       Amount
                                                    and Nature of
Title              Name and Address                   Beneficial       Percent
Of Class         of Beneficial Owner                   Ownership       of Class 
--------------------------------------------------------------------------------
Common Stock   Brandon Limited Partnership No. 1(1)     297,822         2.6%
               Brandon Limited Partnership No. 2(2)   1,591,667        14.1%
               Rodney C. Sacks (3)                    2,514,489(4)     22.3%
               Hilton H. Schlosberg (5)               2,475,586(6)     21.9%
               Kevin  Douglas, Douglas Family Trust
               and James Douglas and Jean Douglas
               Irrevocable Descendants' Trust(7)      1,078,561(8)      9.5%
               Fidelity Low Priced Stock Fund (9)     1,008,875         8.9%

1    The mailing  address of Brandon No. 1 is P.O. Box 30749,  Seven Mile Beach,
     Grand Cayman,  British West Indies.  The general  partners of Brandon No. 1
     are Rodney C. Sacks and Hilton H. Schlosberg.

2    The mailing  address of Brandon No. 2 is P.O. Box 30749,  Seven Mile Beach,
     Grand Cayman,  British West Indies.  The general  partners of Brandon No. 2
     are Rodney C. Sacks and Hilton H. Schlosberg.

3    The  mailing  address  of  Mr.  Sacks  is  1010  Railroad  Street,  Corona,
     California 92882.

4    Includes 495,000 shares of common stock owned by Mr. Sacks;  297,822 shares
     beneficially  held by Brandon No. 1 because Mr. Sacks is one of Brandon No.
     1's general partners; and 1,591,667 shares beneficially held by Brandon No.
     2 because  Mr.  Sacks is one of Brandon  No.  2's  general  partners.  Also
     includes options to purchase 100,000 shares of common stock  exercisable at
     $4.25  per  share,  granted  pursuant  to a Stock  Option  Agreement  dated
     February 2, 1999 between the Company and Mr. Sacks;  and options  presently
     exercisable  to purchase  30,000 shares of common stock,  out of options to
     purchase a total of 150,000 shares, exercisable at $4.20 per share, granted
     pursuant to a Stock Option Agreement dated May 28, 2003 between the Company
     and Mr. Sacks.

     Mr. Sacks disclaims  beneficial ownership of all shares deemed beneficially
     owned by him hereunder except: (i) 495,000 shares of common stock; (ii) the
     130,000 shares presently  exercisable  under Stock Option  Agreements;  and
     (iii)  65,046  shares  held by  Brandon  No.  1  allocable  to the  limited
     partnership  interests in Brandon No. 1 held by Mr. Sacks, his children,  a
     limited  partnership  of which Mr.  Sacks is the  general  partner  and his
     children  and he are the limited  partners,  and a trust for the benefit of
     his children.

5    The mailing  address of Mr.  Schlosberg  is 1010 Railroad  Street,  Corona,
     California 92882.

                                       42

<PAGE>

6    Includes 456,097 shares of common stock owned by Mr.  Schlosberg,  of which
     2,000  shares are jointly  owned by Mr.  Schlosberg  and his wife,  297,822
     shares  beneficially held by Brandon No. 1 because Mr. Schlosberg is one of
     Brandon No. 1's general partners; and 1,591,667 shares beneficially held by
     Brandon  No. 2 because  Mr.  Schlosberg  is one of Brandon  No. 2's general
     partners.  Also includes options to purchase 100,000 shares of common stock
     exercisable  at  $4.25  per  share,  granted  pursuant  to a  Stock  Option
     Agreement  dated  February 2, 1999 between the Company and Mr.  Schlosberg;
     and  options  presently  exercisable  to purchase  30,000  shares of common
     stock, out of options to purchase a total of 150,000 shares, exercisable at
     $4.20 per share, granted pursuant to a Stock Option Agreement dated May 28,
     2003  between the  Company and Mr.  Schlosberg. 

     Mr.  Schlosberg   disclaims  beneficial  ownership  of  all  shares  deemed
     beneficially  owned by him hereunder  except:  (i) 456,097 shares of common
     stock,  (ii) the 130,000 shares  presently  exercisable  under Stock Option
     Agreements;  and (iii) 69,411 shares held by Brandon No. 1 allocable to the
     limited  partnership  interests in Brandon No. 1 held by Mr. Schlosberg and
     his children.

7    The mailing  address of this reporting  person is 1101 Fifth Avenue,  Suite
     360, San Rafael, California 94901.

8    Includes  414,786  shares  of  common  stock  owned by Kevin  and  Michelle
     Douglas;  311,499  shares of common  stock owned by James  Douglas and Jean
     Douglas  Irrevocable  Descendants'  Trust;  329,056  shares of common stock
     owned by Douglas  Family Trust;  and 23,220 shares of common stock owned by
     James E. Douglas III. Kevin Douglas, James E. Douglas, Douglas Family Trust
     and James  Douglas  and Jean  Douglas  Irrevocable  Descendants'  Trust are
     deemed members of a group that shares voting and dispositive power over the
     shares.

9    The  mailing  address of this  reporting  person is 82  Devonshire  Street,
     Boston, Massachusetts, 02109.


(b) The following table sets forth information as to the beneficial ownership of
shares of common  stock,  as of  February  23,  2005,  held by  persons  who are
directors of the Company and certain executive officers,  naming them, and as to
directors and all executive  officers of the Company as a group,  without naming
them:

Title of Class    Name                    Amount Owned     Percent of Class
---------------------------------------------------------------------------
Common Stock      Rodney C. Sacks         2,514,489(1)      22.3%
                  Hilton H. Schlosberg    2,475,586(2)      21.9%
                  Mark J. Hall               42,000(3)         *%
                  Michael Schott             26,384(4)         *%
                  Thomas J. Kelly             5,000(5)         *%
                  Harold C. Taber, Jr.         -              
                  Mark S. Vidergauz            -              
                  Sydney Selati                -          
                  Benjamin M. Polk             -
                  Norman C. Epstein            -


Executive  Officers and Directors as a group:  11 members;  3,188,271  shares or
28.2% in aggregate(6).

*Less than 1%

1    Includes 495,000 shares of common stock owned by Mr. Sacks;  297,822 shares
     beneficially  held by Brandon No. 1 because Mr. Sacks is one of Brandon No.
     1's general partners; and 1,591,667 shares beneficially held by Brandon No.
     2 because  Mr.  Sacks is one of Brandon  No.  2's  general  partners.  Also
     includes options to purchase 100,000 shares of common stock  exercisable at
     $4.25  per  share,  granted  pursuant  to a Stock  Option  Agreement  dated
     February 2, 1999 between the Company and Mr. Sacks;  and options  presently
     exercisable  to purchase  30,000 shares of common stock,  out of options to
     purchase a total of 150,000 shares, exercisable at $4.20 per share, granted
     pursuant to a Stock Option Agreement dated May 28, 2003 between the Company
     and Mr. Sacks.

     Mr. Sacks disclaims  beneficial ownership of all shares deemed beneficially
     owned by him hereunder except: (i) 495,000 shares of common stock; (ii) the
     130,000 shares presently  exercisable  under Stock Option  Agreements;  and
     (iii)  65,046  shares  held by  Brandon  No.  1  allocable  to the  limited
     partnership  interests in Brandon No. 1 held by Mr. Sacks, his children,  a
     limited  partnership  of which Mr.  Sacks is the  general  partner  and his
     children  and he are the limited  partners,  and a trust for the benefit of
     his children;

                                       43

<PAGE>

2    Includes 456,097 shares of common stock owned by Mr.  Schlosberg,  of which
     2,000  shares are owned  jointly by Mr.  Schlosberg  and his wife;  297,822
     shares  beneficially held by Brandon No. 1 because Mr. Schlosberg is one of
     Brandon No. 1's general partners; and 1,591,667 shares beneficially held by
     Brandon  No. 2 because  Mr.  Schlosberg  is one of Brandon  No. 2's general
     partners.  Also includes options to purchase 100,000 shares of common stock
     exercisable  at  $4.25  per  share,  granted  pursuant  to a  Stock  Option
     Agreement  dated  February 2, 1999 between the Company and Mr.  Schlosberg;
     options  presently  exercisable to purchase  30,000 shares of common stock,
     out of and  options  presently  exercisable  to purchase  30,000  shares of
     common  stock,  out of  options  to  purchase  a total of  150,000  shares,
     exercisable  at  $4.20  per  share,  granted  pursuant  to a  Stock  Option
     Agreement  dated May 28, 2003 between the Company and Mr.  Schlosberg. 

     Mr.  Schlosberg   disclaims  beneficial  ownership  of  all  shares  deemed
     beneficially  owned by him hereunder  except:  (i) 456,097 shares of common
     stock,  (ii) the 130,000 shares  presently  exercisable  under Stock Option
     Agreements;  and (iii) 69,411 shares held by Brandon No. 1 allocable to the
     limited  partnership  interests in Brandon No. 1 held by Mr. Schlosberg and
     his children.

3    Includes  27,000  shares  of common  stock  owned by Mr.  Hall and  options
     presently  exercisable  to purchase  12,000 shares of common stock,  out of
     options to  purchase  a total of 60,000  shares,  exercisable  at $8.15 per
     share,  granted pursuant to a Stock Option Agreement dated January 15, 2004
     between the Company and Mr.  Hall;  and options  presently  exercisable  to
     purchase 3,000 shares of common stock out of options to purchase a total of
     15,000  shares of common  stock  exercisable  at $8.15 per  share,  granted
     pursuant to a Stock  Option  Agreement  dated  January 15, 2004 between the
     Company and Mrs. Hall.

4    Includes  22,384  shares of common  stock  owned by Mr.  Schott and options
     presently  exercisable  to purchase  4,000 shares of common  stock,  out of
     options to  purchase  a total of 32,000  shares,  exercisable  at $8.15 per
     share,  granted pursuant to a Stock Option Agreement dated January 15, 2004
     between the Company and Mr. Schott.

5    Includes options  presently  exercisable to purchase 5,000 shares of common
     stock and out of options to purchase a total of 25,000 shares,  exercisable
     at $8.15 per share,  granted  pursuant to a Stock  Option  Agreement  dated
     January 15, 2004 between the Company and Mr. Kelly.

6    Includes  securities  beneficially  owned by all  directors  and  executive
     officers of the Company including those listed above.

     There are no arrangements known to the Company,  the operation of which may
at a subsequent date result in a change of control of the Company.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Benjamin M. Polk is a partner in Schulte  Roth & Zabel LLP, a law firm that
has been  retained by the Company since May 2004,  and was  previously a partner
with Winston & Strawn LLP, a law firm (together with its predecessors)  that had
been retained by the company since 1992.

     Rodney C. Sacks is  currently  acting as the sole Trustee of a trust formed
pursuant to an Agreement of Trust dated July 27, 1992 for the purpose of holding
the Hansen's  (r)  trademark.  The Company and HBC have agreed to indemnify  Mr.
Sacks and hold him harmless  from any claims,  loss or liability  arising out of
his acting as Trustee.

     During 2004, the Company  purchased  promotional items from IFM Group, Inc.
("IFM"). Rodney C. Sacks, together with members of his family, own approximately
27% of the issued shares in IFM. Hilton H. Schlosberg,  together with members of
his family,  own approximately  43% of the issued shares in IFM.  Purchases from
IFM of  promotional  items in 2004,  2003 and 2002 were  $638,590,  $331,478 and
$164,199, respectively. The Company continues to purchase promotional items from
IFM Group, Inc. in 2005.

     The preceding descriptions of agreements are qualified in their entirety by
reference to such agreements, which have been filed as exhibits to this Report.

                                       44

<PAGE>


ITEM 14.         PRINCIPAL ACCOUNTANT FEES AND SERVICES

Accounting Fees

     Aggregate fees billed and unbilled to the company for service  provided for
the  years  ended  December  31,  2004,  and  2003  by the  Company's  principal
accounting  firm,  Deloitte & Touche LLP,  the member  firms of Deloitte  Touche
Tohmatsu, and their respective affiliates (collectively, "Deloitte & Touche"):


                                       Year ended December 31,
                                        2004             2003
                                    -----------      -----------
Audit Fees                           $ 153,750        $ 132,500
Audit-Related Fees(1)                  310,825            5,000
                                    -----------      -----------
Total audit and audit-related fees     464,575          137,500
Tax Fees(2)
All other Fees                           8,360
                                    -----------      -----------
Total Fees(3)                        $ 472,935        $ 137,500
                                    ===========      ===========

1    Audit   related  fees   consist  of   consultation   services   related  to
     Sarbanes-Oxley Section 404 Implementation.

2    Tax fees consisted of fees for tax consultation services including advisory
     services for state tax analysis and tax audit assistance.

3    For years ended December 31, 2004 and 2003,  all of the services  performed
     by Deloitte & Touche have been pre-approved by the Audit Committee.

     The Audit Committee has considered whether Deloitte & Touche's provision of
the non-audit  services covered above is compatible with maintaining  Deloitte &
Touche's independence and has determined that it is.

Audit  Committee  Pre-Approval of Audit and  Permissible  Non-Audit  Services of

Independent Auditors

     The Audit  Committee's  policy is to  pre-approve  all audit and  non-audit
services  provided by the Company's  independent  auditors.  These  services may
include audit services, audit-related services, tax services and other services.
Pre-approval is generally  provided for up to one year, and any  pre-approval is
detailed as to the  particular  service or category of services and is generally
subject to a specific  budget.  The Audit  Committee has delegated  pre-approval
authority to its  Chairman  when  necessary  due to timing  considerations.  Any
services  approved by the Chairman must be reported to the full Audit  Committee
at its next  scheduled  meeting.  The  independent  auditors and  management are
required to periodically report to the full Audit Committee regarding the extent
of  services  provided  by the  independent  auditors  in  accordance  with  the
pre-approval policies, and the fees for the services performed to date.

                                       45

<PAGE>


PART IV


ITEM 15.        EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  1. Exhibits
     See the Index to Exhibits included hereinafter.

     2. Index to Financial Statements filed as part of this Report

     Report of Independent Registered Public Accounting Firm                  50

     Consolidated Balance Sheets as of December 31, 2004 and 2003             51

     Consolidated  Statements  of Income for the years ended 
     December 31, 2004, 2003 and 2002                                         52

     Consolidated  Statements  of  Shareholders'  Equity  for  the  years  
     ended December 31, 2004, 2003 and 2002                                   53

     Consolidated  Statements  of Cash Flows for the years  ended  
     December  31, 2004, 2003 and 2002                                        54

     Notes to Consolidated Financial Statements for the years ended 
     December 31, 2004, 2003 and 2002                                         56

(b)  Financial Statement Schedule
     Valuation and  Qualifying  Accounts for the years ended 
     December 31, 2004, 2003 and 2002                                         69

(c)  Reports on From 8-K
     None

                                       46

<PAGE>


SIGNATURES

     Pursuant to the  requirements  of  Sections  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

HANSEN NATURAL CORPORATION


/s/ RODNEY C. SACKS           Rodney C. Sacks             Date:   March 15, 2005

-------------------           Chairman of the Board

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant in the capacities and on the dates indicated.

Signature                     Title                           Date
------------------------      -------------------------       ------------------

/s/ RODNEY C. SACKS           Chairman of the Board of        March 15,  2005
------------------------      Directors and Chief Executive
Rodney C. Sacks               Officer (principal executive       
                              officer)
                              
                             
/s/ HILTON H. SCHLOSBERG      Vice Chairman of the Board of   March 15, 2005
------------------------      Directors, President, Chief
Hilton H. Schlosberg          Operating Officer, Chief    
                              Financial Officer and Secretary
                              (principal financial officer,
                              controller and principal
                              accounting officer)

/s/ NORMAN C. EPSTEIN         Director                        March 15, 2005
------------------------
Norman C. Epstein

/s/ BENJAMIN M. POLK          Director                        March 15, 2005  
------------------------
Benjamin M. Polk

 /s/ SYDNEY SELATI            Director                        March 15, 2005
------------------------      
Sydney Selati

/s/ HAROLD C. TABER, JR.      Director                        March 15, 2005
------------------------
Harold C. Taber, Jr.

/s/ MARK S. VIDERGAUZ         Director                        March 15, 2005
------------------------
Mark S. Vidergauz

                                       47

<PAGE>


INDEX TO EXHIBITS

     The following  designated  exhibits,  as indicated  below, are either filed
herewith  or have  heretofore  been  filed  with  the  Securities  and  Exchange
Commission  under the Securities  Act of 1933 or the Securities  Exchange Act of
1934 as indicated by footnote.

--------  ----------------------------------------------------------------------
Exhibit 

No.       Document Description
--------  ----------------------------------------------------------------------
10.23     Stock  option  Agreement  dated as of January  15, 2004 by and between
          Hansen Natural Corporation and Mark Hall.
--------  ----------------------------------------------------------------------
10.24     Stock  option  Agreement  dated as of January  15, 2004 by and between
          Hansen Natural Corporation and Michael Schott.
--------  ----------------------------------------------------------------------
10.25     Stock  option  Agreement  dated as of January  15, 2004 by and between
          Hansen Natural Corporation and Kirk Blower.
--------  ----------------------------------------------------------------------
10.26     Stock  option  Agreement  dated as of January  15, 2004 by and between
          Hansen Natural Corporation and Thomas J. Kelly.
--------  ----------------------------------------------------------------------
10.27     Contract  Packing   Agreement  by  and  between  Southwest  Canning  &
          Packaging and Hansen Beverage Company dated April 5, 1996.
--------  ----------------------------------------------------------------------
10.28     Contract  Manufacturing and Packaging Agreement by and between Nor-Cal
          Beverage  Co., Inc. and Hansen  Beverage  Company dated March 1, 2004;
          First Amendment to the Contract  Manufacturing and Packaging Agreement
          dated March 4, 2004.
--------  ----------------------------------------------------------------------
10.29     Product  Manufacture and Supply  Agreement by and between  Seven-Up/RC
          Bottling Company of Southern California dated April 15, 2003.
--------  ----------------------------------------------------------------------
10.30     Contract Packer Agreement by and between  Southeast  Atlantic Beverage
          Corporation and Hansen Beverage Company dated July 24, 2004.
--------  ----------------------------------------------------------------------
10.31     Beverage  Production  and  Packaging  Agreement  by and  between  City
          Brewing  Company,  LLC and Hansen Beverage  Company dated February 23,
          2005.
--------  ----------------------------------------------------------------------
10.32     Manufacturing  Contract  by  and  between  Pri-Pak,  Inc.  and  Hansen
          Beverage Company dated October 16, 2003.
--------  ----------------------------------------------------------------------
10.33     Amended  and  Restated  Loan and  Security  Agreement  by and  between
          Comerica Bank - California and Hansen Beverage  Company dated December
          1, 2004.
--------  ----------------------------------------------------------------------
21        Subsidiaries(1) 
--------  ----------------------------------------------------------------------
23        Independent Auditors' Consent
--------  ----------------------------------------------------------------------
31.1      Certification  by CEO  pursuant to Rule  13A-14(a) or 15D-14(a) of the
          Securities Exchange Act of 1934, as adopted pursuant to Section 302 of
          the Sarbanes-Oxley Act of 2002
--------  ----------------------------------------------------------------------
31.2      Certification  by CFO  pursuant to Rule  13A-14(a) or 15D-14(a) of the
          Securities Exchange Act of 1934, as adopted pursuant to Section 302 of
          the Sarbanes-Oxley Act of 2002
--------  ----------------------------------------------------------------------
32.1      Certification  by CEO pursuant to 18 U.S.C.  Section  1350, as adopted
          pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
--------  ----------------------------------------------------------------------
32.2      Certification  by CFO pursuant to 18 U.S.C.  Section  1350, as adopted
          pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
--------  ----------------------------------------------------------------------

(1) Filed  previously  as an exhibit to Form 10-KSB for the year ended  December
    31, 1992. 
                                       48

<PAGE>

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

                                                                        Page
                                                                  --------------
HANSEN NATURAL CORPORATION AND SUBSIDIARIES


Report of Independent Registered Public Accounting Firm                  50

Consolidated Balance Sheets as of December 31, 2004 and 2003             51

Consolidated  Statements of Income for the years ended  December 31, 
2004,  2003 and 2002                                                     52

Consolidated Statements of Shareholders' Equity for the years ended 
December 31, 2004, 2003 and 2002                                         53

Consolidated Statements of Cash Flows for the years ended December 31, 
2004, 2003 and 2002                                                      54

Notes to Consolidated Financial Statements for the years ended

December 31, 2004, 2003 and 2002                                         56

Financial Statement Schedule - Valuation and Qualifying Accounts 
for the years ended December 31, 2004, 2003 and 2002                     69

                                       49

<PAGE>


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



The Board of Directors and Shareholders
Hansen Natural Corporation
Corona, California



We have audited the accompanying  consolidated  balance sheets of Hansen Natural
Corporation and  subsidiaries  (the "Company") as of December 31, 2004 and 2003,
and the related  consolidated  statements of income,  shareholders'  equity, and
cash flows for each of the three years in the period  ended  December  31, 2004.

Our audits also included the financial  statement schedule listed in Item 15(b).
These   financial   statements   and  financial   statement   schedule  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on the financial  statements and financial  statement schedules based on
our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the financial  position of Hansen Natural  Corporation  and
subsidiaries  as of  December  31,  2004  and  2003,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2004, in conformity with accounting  principles  generally accepted
in the United States of America.  Also, in our opinion, such financial statement
schedule,  when  considered  in  relation  to the basic  consolidated  financial
statements  taken as a whole,  present  fairly,  in all material  respects,  the
information set forth therein.

We have also  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the effectiveness of the Company's
internal control over financial  reporting as of December 31, 2004, based on the
criteria  established  in Internal  Control-Integrated  Framework  issued by the
Committee of Sponsoring  Organizations of the Treadway Commission and our report
dated March 14, 2005 expressed an unqualified opinion on management's assessment
of the effectiveness of the Company's internal control over financial  reporting
and an  unqualified  opinion  on the  effectiveness  of the  Company's  internal
control over financial reporting.


DELOITTE & TOUCHE LLP
Costa Mesa, California
March 14, 2005


                                       50

<PAGE>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2004 AND 2003
--------------------------------------------------------------------------------

<TABLE>
<S>                                                                        <C>                   <C>    
                                                                                  2004                  2003
                                                                           -------------------   --------------------
                                ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                                        $ 20,976,119           $  1,098,785
Accounts receivable, net                                                           12,650,055              5,372,983
Inventories, net (Note 2)                                                          22,406,054             17,643,786
Prepaid expenses and other current assets                                             638,967                481,777
Deferred income tax asset (Note 7)                                                  3,708,942              2,080,609
                                                                           -------------------   --------------------
     Total current assets                                                          60,380,137             26,677,940

PROPERTY AND EQUIPMENT, net (Note 3)                                                2,964,064              2,803,282

INTANGIBLE AND OTHER ASSETS:
Trademark license and trademarks (net of accumulated
     amortization of $219,264 in 2004 and $146,218 in 2003)
     (Note 1)                                                                      18,351,804             18,293,704
Deposits and other assets                                                             326,312                222,102
                                                                           -------------------   --------------------
                                                                                   18,678,116             18,515,806
                                                                           -------------------   --------------------
                                                                                 $ 82,022,317           $ 47,997,028
                                                                           ===================   ====================

                 LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                                                                 $ 14,542,753           $  6,521,402
Accrued liabilities                                                                 1,582,968              1,185,342
Accrued compensation                                                                1,831,627                883,459
Current portion of long-term debt (Note 4)                                            437,366                244,271
Income taxes payable                                                                  346,449                647,263
                                                                           -------------------   --------------------
     Total current liabilities                                                     18,741,163              9,481,737

LONG-TERM DEBT, less current portion (Note 4)                                         146,486                358,064

DEFERRED INCOME TAX LIABILITY (Note 7)                                              4,563,439              3,107,649

COMMITMENTS AND CONTINGENCIES (Note 6)                                                   -                      -

STOCKHOLDERS' EQUITY (Note 8):
Common stock - $0.005 par value; 30,000,000 shares                                     
     authorized; 11,119,864 shares issued, 10,913,013
     outstanding in 2004; 10,624,864 shares issued, 10,418,103
     outstanding in 2003                                                               55,599                 53,124
Additional paid-in capital                                                         15,813,541             12,681,169
Retained earnings                                                                  43,516,634             23,129,830
Common stock in treasury, at cost; 206,761 in 2004 and 2003                          (814,545)              (814,545)
                                                                           -------------------   --------------------
     Total shareholders' equity                                                    58,571,229             35,049,578
                                                                           -------------------   --------------------
                                                                                 $ 82,022,317           $ 47,997,028
                                                                           ===================   ====================

</TABLE>


          See accompanying notes to consolidated financial statements.

                                       51

<PAGE>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
--------------------------------------------------------------------------------

<TABLE>
<S>                                                      <C>                  <C>                  <C>   
                                                               2004                 2003                 2002
                                                         ------------------   ------------------   -----------------

GROSS SALES                                                  $ 226,984,231        $ 138,454,345       $ 115,490,019

LESS:  Discounts, allowances and                                
     promotional payments                                       46,643,096           28,102,149          23,443,657
                                                         ------------------   ------------------   -----------------

NET SALES                                                      180,341,135          110,352,196          92,046,362

COST OF SALES                                                   96,874,750           66,577,168          58,802,669
                                                         ------------------   ------------------   -----------------

GROSS PROFIT                                                    83,466,385           43,775,028          33,243,693

OPERATING EXPENSES:
Selling, general and administrative                             49,507,137           33,887,045          27,896,202
Amortization of trademark license and                               
     trademarks                                                     73,046               61,888              54,558
                                                         ------------------   ------------------   -----------------

     Total operating expenses                                   49,580,183           33,948,933          27,950,760
                                                         ------------------   ------------------   -----------------

OPERATING INCOME                                                33,886,202            9,826,095           5,292,933

NONOPERATING (INCOME) EXPENSE:
Interest and financing expense                                      41,988               72,592             230,732
Interest and royalty income                                        (93,983)              (5,579)             (2,974)
                                                         ------------------   ------------------   -----------------

     Net nonoperating (income) expense                             (51,995)              67,013             227,758
                                                         ------------------   ------------------   -----------------

INCOME BEFORE PROVISION FOR                                     
     INCOME TAXES                                               33,938,197            9,759,082           5,065,175

PROVISION FOR INCOME TAXES                                      
     (Note 7)                                                   13,551,393            3,828,678           2,035,980
                                                         ------------------   ------------------   -----------------

NET INCOME                                                   $  20,386,804        $   5,930,404       $   3,029,195
                                                         ==================   ==================   =================

NET INCOME PER COMMON SHARE:
     Basic                                                   $        1.91        $        0.58       $        0.30
                                                         ==================   ==================   =================
     Diluted                                                 $        1.73        $        0.55       $        0.29
                                                         ==================   ==================   =================

WEIGHTED AVERAGE SHARES
  OUTSTANDING:
     Basic                                                      10,666,892           10,278,710          10,052,499
                                                         ==================   ==================   =================
     Diluted                                                    11,809,940           10,762,157          10,339,604
                                                         ==================   ==================   =================

</TABLE>


          See accompanying notes to consolidated financial statements.

                                       52

<PAGE>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
--------------------------------------------------------------------------------

<TABLE>
<S>                     <C>            <C>            <C>            <C>             <C>          <C>          <C>
                                                                                                                   
                                Common stock           Additional                        Treasury stock                Total
                        ----------------------------     paid-in        Retained     -------------------------     shareholders'
                            Shares        Amount         capital        earnings       Shares        Amount           equity
                        -------------- -------------  --------------    --------     -----------  ------------  ------------------
 Balance,
      January 1, 2002      10,251,764      $ 51,259    $ 11,926,604    $ 14,170,231    (206,761)   $ (814,545)       $ 25,333,549

 Exercise of stock                                                                      
     options                    8,000            40           7,960                                                         8,000

 Net income                                                               3,029,195                                     3,029,195
                        -------------- -------------  -------------- --------------- -----------  ------------ -------------------

 Balance,
      December 31, 2002    10,259,764        51,299      11,934,564      17,199,426    (206,761)     (814,545)         28,370,744

 Exercise of stock                                                                                                        
     options                  365,100         1,825         746,605                                                       748,430

 Net income                                                               5,930,404                                     5,930,404
                        -------------- -------------  -------------- --------------- -----------  ------------ -------------------

 Balance,
      December 31, 2003    10,624,864        53,124      12,681,169      23,129,830    (206,761)     (814,545)         35,049,578

 Exercise of stock            
     options                  495,000         2,475       1,717,453                                                     1,719,928

 Reduction of tax liability 
 in connection with the 
 exercise of certain
 stock options                                            1,414,919                                                     1,414,919

 Net income                                                              20,386,804                                    20,386,804
                        -------------- -------------  -------------- --------------- -----------  ------------ -------------------

 Balance,
      December 31, 2004    11,119,864      $ 55,599    $ 15,813,541    $ 43,516,634    (206,761)   $ (814,545)       $ 58,571,229
                        ============== =============  ============== =============== ===========  ============ ===================

</TABLE>


          See accompanying notes to consolidated financial statements.
                                       53

<PAGE>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
--------------------------------------------------------------------------------

<TABLE>
<S>                                                                  <C>                  <C>                  <C>    
                                                                           2004                 2003                 2002
                                                                     ------------------   ------------------   ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                $ 20,386,804          $ 5,930,404          $ 3,029,195
Adjustments to reconcile net income to
     net cash provided by operating activities:
     Amortization of trademark license and trademarks                           73,046               61,888               54,558
     Depreciation and other amortization                                       770,413              584,197              493,894
     Impairment of operating equipment                                         587,877                 -                    -
     Loss on disposal of plant and equipment                                   120,200               31,992                5,318
     Deferred income taxes                                                    (172,543)            (360,524)             522,462
     Provision for allowance for doubtful accounts                            (116,311)              16,996               52,122
     Effect on cash of changes in operating assets
         and liabilities:
         Accounts receivable                                                (7,160,761)             559,423           (1,589,102)
         Inventories                                                        (4,762,268)          (6,000,052)             312,946
         Prepaid expenses and other current assets                            (157,190)             500,713              (35,704)
         Accounts payable                                                    8,021,351            1,789,141              812,520
         Accrued liabilities                                                   397,626              504,383             (190,882)
         Accrued compensation                                                  948,168              573,395             (122,832)
         Income taxes payable/receivable                                     1,114,105            1,292,458             (617,826)
                                                                     ------------------   ------------------   ------------------
            Net cash provided by operating activities                       20,050,517            5,484,414            2,726,669

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                                         (1,260,068)          (1,627,490)            (416,873)
Proceeds from sale of property and equipment                                    24,698               70,826
Additions to trademark license and trademarks                                 (131,146)            (995,137)             (64,792)
(Increase) decrease in deposits and other assets                              (104,210)             114,267              389,456
                                                                     ------------------   ------------------   ------------------
            Net cash used in investing activities                           (1,470,726)          (2,437,534)             (92,209)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt                                          (422,385)          (3,234,445)          (2,352,197)
Proceeds from issuance of common stock                                       1,719,928              748,430                8,000
                                                                     ------------------   ------------------   ------------------

            Net cash provided by (used in) financing activities              1,297,543           (2,486,015)          (2,344,197)
                                                                     ------------------   ------------------   ------------------

NET INCREASE IN CASH AND
     CASH EQUIVALENTS                                                       19,877,334              560,865              290,263
CASH AND CASH EQUIVALENTS, beginning
     of year                                                                 1,098,785              537,920              247,657
                                                                     ------------------   ------------------   ------------------
CASH AND CASH EQUIVALENTS, end of year                                    $ 20,976,119          $ 1,098,785          $   537,920
                                                                     ==================   ==================   ==================
                                                                                                              
SUPPLEMENTAL INFORMATION:
  Cash paid during the year for:
     Interest                                                             $     35,510          $    76,306          $   235,779
                                                                     ==================   ==================   ==================
     Income taxes                                                         $ 12,538,355          $ 2,896,743          $ 2,131,344
                                                                     ==================   ==================   ==================

</TABLE>


          See accompanying notes to consolidated financial statements.
                                       54

<PAGE>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

NONCASH TRANSACTIONS:

     During 2004, the Company  entered into capital leases of $403,902,  for the
acquisition of promotional vehicles.

     During 2004, the Company reduced current income taxes payable and increased
additional  paid-in  capital in the amount of $1,414,919 in connection  with the
exercise of certain stock options.

          See accompanying notes to consolidated financial statements.

                                       55

<PAGE>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization - Hansen Natural  Corporation  (the "Company" or "Hansen") was
incorporated in Delaware on April 25, 1990. The Company is a holding company and
has no operating business except through its direct  wholly-owned  subsidiaries,
Hansen Beverage  Company  ("HBC") which was  incorporated in Delaware on June 8,
1992 and Hard e Beverage  Company ("HEB") formerly known as Hard Energy Company,
and previously  known as CVI Ventures,  Inc., which was incorporated in Delaware
on April 30, 1990.  HBC conducts the vast  majority of the  Company's  operating
business and generates  substantially all of the Company's  operating  revenues.
References  herein  to  "Hansen"  or the  "Company"  when used to  describe  the
operating  business of the Company are  references to the business of HBC unless
otherwise  indicated,  and  references  herein to HEB when used to describe  the
operating  business of HEB, are  references to the Hard e brand  business of HEB
unless otherwise indicated.

     In addition, HBC, through its wholly-owned  subsidiaries,  Blue Sky Natural
Beverage Co. ("Blue Sky") and Hansen Junior Juice Company  ("Junior Juice") owns
and operates the natural soda business  under the Blue Sky(r)  trademark and the
Junior Juice beverage business under the Junior Juice trademarks, respectively.

     Nature of Operations  -Hansen markets and distributes  Hansen's(r)  Natural
Sodas,   Signature  Sodas,  fruit  juice  and  soy  Smoothies,   Energy  drinks,
Energade(r)  energy  sports  drinks,  E20 Energy  Water(r),  functional  drinks,
Sparkling  Lemonades  and  Orangeades,  multi-vitamin  juice  drinks in  aseptic
packaging,  Junior Juice(r)  juice,  iced teas,  lemonades and juice  cocktails,
apple juice,  cider and juice  blends,  as well as nutrition  bars,  Blue Sky(r)
brand  carbonated  beverages,  Monster  EnergyTM brand energy drinks and Lost(r)
Energy brand energy drinks and RumbaTM brand Energy Juice.

     Basis of Presentation - The accompanying  consolidated financial statements
have been prepared in accordance with accounting  principles  generally accepted
in the United States of America ("generally accepted accounting principles").

     Principles  of  Consolidation  - The  accompanying  consolidated  financial
statements  include the  accounts of Hansen and its wholly  owned  subsidiaries,
HBC,  HEB,  Blue  Sky  and  Junior  Juice  since  their   respective   dates  of
incorporation.  All intercompany  balances and transactions have been eliminated
in consolidation.

     Reclassifications  -  Certain  reclassifications  have  been  made  in  the
consolidated financial statements to conform to the 2004 presentation.

     Cash and Cash Equivalents - The Company  considers  certificates of deposit
with  original  maturities  of  three  months  or  less  to  be  cash  and  cash
equivalents.  The Company  maintains  cash  deposits with major banks which from
time to time may exceed  federally  insured  limits.  The  Company  periodically
assesses the financial  condition of the institutions and believes that the risk
of any loss is minimal.

     Inventories  - Inventories  are valued at the lower of first-in,  first-out
(FIFO) cost or market value (net realizable value).

     Property  and  Equipment  -  Property  and  equipment  are  stated at cost.
Depreciation of furniture, office equipment,  equipment and vehicles is based on
their  estimated  useful lives (three to ten years) and is calculated  using the
straight-line  method.  Amortization  of leasehold  improvements is based on the
lesser of their estimated useful lives or the terms of the related leases and is
calculated using the straight-line method.

                                       56

<PAGE>

     Trademark  License  and  Trademarks  -  Trademark  license  and  trademarks
represents the Company's  exclusive  ownership of the  Hansen's(r)  trademark in
connection with the  manufacture,  sale and  distribution of beverages and water
and non-beverage products. The Company also owns a number of other trademarks in
the United  States as well as in a number of  countries  around  the world.  The
Company  also owns the Blue Sky(r)  trademark,  which was  acquired in September
2000,  and the Junior  Juice(r)  trademark,  which was acquired in May 2001. The
Company  amortizes its trademark license and trademarks over 1 to 25 years. Upon
the adoption of Statement of Financial  Accounting  Standards  ("SFAS") No. 142,
the Company ceased the amortization of indefinite life assets.

     Long-Lived Assets - Management regularly reviews property and equipment and
other  long-lived  assets,  including  certain  identifiable  intangibles,   for
possible impairment.  This review occurs annually,  or more frequently if events
or changes in circumstances indicate the carrying amount of the asset may not be
recoverable.  If there is  indication of impairment of property and equipment or
amortizable  intangible assets,  then management  prepares an estimate of future
cash flows  (undiscounted  and without interest charges) expected to result from
the use of the asset and its eventual disposition.  If these cash flows are less
than the carrying amount of the asset, an impairment loss is recognized to write
down the asset to its estimated  fair value.  The fair value is estimated at the
present value of the future cash flows  discounted at a rate  commensurate  with
management's  estimates of the business risks. Annually, or earlier, if there is
indication  of  impairment  of  identified  intangible  assets  not  subject  to
amortization,  management  compares the  estimated  fair value with the carrying
amount  of the  asset.  An  impairment  loss is  recognized  to  write  down the
intangible  asset to its  fair  value if it is less  than the  carrying  amount.
Preparation of estimated expected future cash flows is inherently subjective and
is based on management's best estimate of assumptions concerning expected future
conditions.  During 2004,  management  recognized  an impairment to property and
equipment as discussed in Note 3.

     Revenue  Recognition - The Company  records revenue at the time the related
products are shipped and the risk of ownership and title has passed.  Management
believes an  adequate  provision  against net sales has been made for  estimated
returns,  allowances  and  cash  discounts  based  on the  Company's  historical
experience.

     Freight  Costs and  Reimbursement  of Freight  Costs - In  accordance  with
Emerging  Issues Task Force  ("EITF")  No.  00-10,  Accounting  for Shipping and
Handling Fees and Costs,  reimbursements  of freight charges are recorded in net
sales in the accompanying consolidated statements of income. For the years ended
December 31, 2004, 2003 and 2002,  freight-out  costs amounted to $10.7 million,
$7.0 million and $5.8 million,  respectively, and have been recorded in selling,
general and administrative expenses in the accompanying  consolidated statements
of income.

     Advertising  and  Promotional   Allowances  -  The  Company   accounts  for
advertising  production  costs by expensing such production costs the first time
the related  advertising  takes place.  Advertising  expenses  amounted to $11.5
million,  $8.8 million and $7.3  million for the years ended  December 31, 2004,
2003 and 2002,  respectively.  Advertising  expenses  were  included in selling,
general and administrative  expenses with the exception of coupon expenses which
were included as a reduction of net sales. In addition, the Company supports its
customers,  including distributors,  with promotional  allowances,  a portion of
which is utilized for  marketing  and indirect  advertising  by them. In certain
instances, a portion of the promotional allowances payable to customers is based
on the levels of sales to such customers. Promotion requirements or expected use
of the  allowances,  are  estimated  by the  Company.  If the  level  of  sales,
promotion  requirements  or  use of  the  allowances  are  different  from  such
estimates,  the promotional  allowances could, to the extent based on estimates,
require  adjustments.  Such  promotional  allowances  amounted to $35.5 million,
$17.2 million and $13.5 million for the years ended December 31, 2004,  2003 and
2002,  respectively  and were included in discounts,  allowances and promotional
payments.


                                       57

<PAGE>

     Income Taxes - The Company  accounts for income taxes under the  provisions
of SFAS No. 109,  Accounting  for Income  Taxes.  This  statement  requires  the
recognition of deferred tax assets and liabilities  for the future  consequences
of events that have been recognized in the Company's financial statements or tax
returns.  Measurement of the deferred items is based on enacted tax laws. In the
event the future  consequences of differences  between financial reporting bases
and tax bases of the Company's  assets and liabilities  result in a deferred tax
asset,  SFAS No. 109 requires an evaluation of the  probability of being able to
realize  the future  benefits  indicated  by such asset.  A valuation  allowance
related to a deferred tax asset is recorded when it is more likely than not that
some portion or all of the deferred tax asset will not be realized.

     Stock-Based  Compensation - The Company accounts for its stock option plans
in  accordance  with  Accounting   Principles  Board  ("APB")  Opinion  No.  25,
Accounting for Stock Issued to Employees, and related Interpretations. Under APB
Opinion No. 25, no compensation expense is recognized because the exercise price
of  the  Company's  employee  stock  options  equals  the  market  price  of the
underlying  stock at the date of the grant.  In  December  2002,  the  Financial
Accounting  Standards  Board  ("FASB")  issued  SFAS  No.  148,  Accounting  for
Stock-Based Compensation-Transition and Disclosure. SFAS No. 148 amends SFAS No.
123, Accounting for Stock-based Compensation, and was effective immediately upon
issuance.  The Company  follows the  requirements  of APB Opinion No. 25 and the
disclosure-only  provision  of SFAS No.  123,  as amended by SFAS No.  148.  Had
compensation  cost for the Company's  option plans been determined  based on the
fair value at the grant date for awards  consistent  with the provisions of SFAS
No. 123, the  Company's net income and net income per common share for the years
ended  December  31,  2004 and 2003  would  have been  reduced  to the pro forma
amounts indicated below:

                                         2004            2003           2002
                                         ----            ----           ----

Net income, as reported              $20,386,804     $5,930,404      $3,029,195
Less: total stock-based employee 
      compensation expense 
      determined under fair value
      based method for all awards,
      net of related tax effects         356,156        216,250         212,363
                                   -------------   ------------     -----------
Net income, pro forma                $20,030,648     $5,714,154      $2,816,832
                                   =============   ============     ===========

Net income per common share,
      as reported:
         Basic                       $      1.91     $     0.58      $      0.30
         Diluted                     $      1.73     $     0.55      $      0.29


Net income per common share,
      pro forma:
         Basic                       $      1.88     $     0.56      $      0.28
         Diluted                     $      1.70     $     0.53      $      0.27

     The fair value of each option grant is estimated on the date of grant using
the  Black-Scholes  option-pricing  model  with the  following  weighted-average
assumptions used:

                                                 Risk-Free
        Dividend Yield   Expected Volatility   Interest Rate    Expected Lives
        --------------   -------------------   --------------   --------------
2004          0%                 46%                4.0%           8 years
2003          0%                 12%                3.5%           8 years
2002          0%                 8%                 4.6%           6 years

     Net Income Per Common Share - In accordance with SFAS No. 128, Earnings per
Share,  net income per common share,  on a basic and diluted basis, is presented
for all  periods.  Basic net income per share is computed by dividing net income
by the weighted average number of common shares outstanding.  Diluted net income
per share is computed by dividing net income by the weighted  average  number of
common and dilutive common equivalent shares outstanding,  if dilutive. Weighted
average  common  equivalent  shares  include  stock options and purchases of the
Company's common stock, held in treasury, using the treasury stock method.

                                       58

<PAGE>

     Concentration  Risk - Certain of the Company's  products utilize components
(raw materials and/or co-packing  services) from a limited number of sources.  A
disruption  in the  supply of such  components  could  significantly  affect the
Company's  revenues  from  those  products,   as  alternative  sources  of  such
components  may not be available at  commercially  reasonable  rates or within a
reasonably short time period.  The Company continues to take steps on an ongoing
basis to secure the availability of alternative  sources for such components and
minimize the risk of any disruption in production.

     One customer  accounted for  approximately 8%, 15% and 18% of the Company's
sales for the years ended  December 31,  2004,  2003 and 2002,  respectively.  A
decision by that, or any other major customer,  to decrease the amount purchased
from the  Company  or to cease  carrying  the  Company's  products  could have a
material  adverse effect on the Company's  financial  condition and consolidated
results of operations.

     During 2004, 2003 and 2002,  sales outside of California  represented  56%,
47% and 42% of the aggregate sales of the Company, respectively.

     Credit Risk - The  Company  sells its  products  nationally,  primarily  to
retailers  and  beverage  distributors.  The  Company  performs  ongoing  credit
evaluations  of its  customers and generally  does not require  collateral.  The
Company maintains reserves for estimated credit losses,  and historically,  such
losses have been within management's expectations.

     Fair Value of Financial  Instruments  - At December 31, 2004 and 2003,  the
carrying values of cash,  accounts  receivable and accounts payable  approximate
fair  value  because  of the  short  maturity  of these  financial  instruments.
Long-term debt bears interest at a rate comparable to the prime rate; therefore,
management  believes  the  carrying  amount for the  outstanding  borrowings  at
December 31, 2004 approximates fair value.

     Use of Estimates - The preparation of the consolidated financial statements
in conformity with generally accepted accounting  principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

     Segment Information - The Company's operating segments have been aggregated
into one reportable segment due to similarities of the economic  characteristics
and nature of  operations  among the  operations  represented  by the  Company's
various product lines.

     Change in Accounting for Goodwill and Other  Intangible  Assets - Effective
January 1, 2002, the Company  adopted the  provisions of SFAS No. 142,  Goodwill
and Other  Intangible  Assets.  This statement  discontinued the amortization of
goodwill and indefinite-lived  intangible assets, subject to periodic impairment
testing.  Upon adoption of SFAS No. 142, the Company  evaluated the useful lives
of its various  trademark  licenses and trademarks and concluded that certain of
the  trademark  licenses  and  trademarks  have  indefinite  lives.  Unamortized
trademark  licenses and trademarks  deemed to have indefinite lives ceased to be
amortized  effective  January  1,  2002 and are  subject  to  annual  impairment
analysis.

     As of December 31, 2003 and 2004,  the  trademark  licenses and  trademarks
were tested for  impairment in accordance  with the  provisions of SFAS No. 142.
Fair values were estimated  based on the Company's best estimate of the expected
present value of future cash flows. No amounts were impaired at those times. The
following provides  additional  information  concerning the Company's  trademark
licenses and trademarks as of December 31:

                                       59

<PAGE>

                                       2004                2003
                                       ----                ----
Amortizing trademark licenses
 and trademarks                   $  1,169,248        $  1,155,803
Accumulated amortization              (219,264)           (146,218)
                                  -------------       -------------
                                       949,984           1,009,585
Nonamortizing trademark 
 licenses and trademarks            17,401,820          17,284,119
                                  -------------       -------------
                                   $18,351,804         $18,293,704
                                  =============       =============

     All  amortizing  trademark  licenses and  trademarks  have been assigned an
estimated  finite useful life, and are amortized on a  straight-line  basis over
the number of years that approximate  their respective useful lives ranging from
1 to 25 years  (weighted-average  life of 23 years). The straight-line method of
amortization  allocates  the cost of the  trademark  licenses and  trademarks to
earnings over the period of expected benefit.  Total amortization expense during
the year ended  December 31, 2004 was $73,046.  As of December 31, 2004,  future
estimated  amortization  expense  related to amortizing  trademark  licenses and
trademarks through the year ended December 31, 2009 is:

                        2005                    $55,214
                        2006                     55,214
                        2007                     55,214
                        2008                     55,066
                        2009                     55,066

     Newly Issued  Accounting  Pronouncements  - In November  2004,  FASB issued
statement of Financial  Accounting  Standard No. 151, "Inventory Costs". The new
Statement  amends  Accounting  Research  Bulletin No. 43, Chapter 4,  "Inventory
Pricing,"  to clarify  the  accounting  for  abnormal  amounts of idle  facility
expense,  freight,  handling costs, and wasted material. This Statement requires
that those items be  recognized  as  current-period  charges and  requires  that
allocation of fixed  production  overheads to the cost of conversion be based on
the normal  capacity of the production  facilities.  This statement is effective
for fiscal  years  beginning  after June 15,  2005.  The Company does not expect
adoption of this statement to have a material impact on our financial  condition
or results of operations.

     In December  2004,  the FASB issued SFAS No. 153,  Exchanges of Nonmonetary
Assets  - An  Amendment  of APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions.  This  statement  amends  APB  Opinion  No.  29 to  eliminate  the
exception for nonmonetary exchanges of similar productive assets and replaces it
with a general  exception for exchanges of  nonmonetary  assets that do not have
commercial  substance.  A nonmonetary  exchange has commercial  substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange.  The  provision in SFAS No. 153 are  effective for  nonmonetary
asset exchanges  incurred during fiscal years beginning after June 15, 2005. The
Company is currently evaluating the effect, if any, of adopting SFAS No. 153.

     In December 2004, FASB issued Statement of Financial  Accounting  Standards
No. 123 (revised  2004),  Share-Based  Payment.  This  Statement  replaces  FASB
Statement No. 123 and supersedes  APB Opinion No. 25.  Statement No. 123(R) will
require the fair value of all stock  option  awards  issued to  employees  to be
recorded as an expense  over the related  vesting  period.  The  Statement  also
requires  the  recognition  of  compensation  expense  for the fair value of any
unvested stock option awards outstanding at the date of adoption.  This standard
is effective  for the company as of July 1, 2005.  Management  has not completed
their evaluation of the effect of these new rules on future statements.

                                       60

<PAGE>

2. INVENTORIES

Inventories consist of the following at December 31:

                                     2004             2003
                                     ----             ----
Raw materials                    $ 7,204,741      $ 6,979,701
Finished goods                    16,157,000       11,900,304
                                 -----------      -----------
                                  23,361,741       18,880,005
Less inventory reserves             (955,687)      (1,236,219)
                                 -----------      -----------
                                 $22,406,054      $17,643,786
                                 ===========      ===========

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31:


                                     2004             2003
                                     ----             ----
Leasehold improvements           $   268,068      $   230,027
Furniture and office equipment     1,193,741          881,741
Equipment                          1,488,571        2,481,917
Vehicles                           2,359,264        1,636,878
                                 -----------      -----------
                                   5,309,644        5,230,563
Less accumulated depreciation 
and amortization                  (2,345,580)      (2,427,281)
                                 -----------      -----------
                                 $ 2,964,064      $ 2,803,282
                                 ===========      ===========

     A portion of the  equipment  owned by the Company is comprised of equipment
and  machinery  that was  utilized  on a can line  operated  by a third party to
manufacture certain products,  who subsequently  ceased operations.  At December
31, 2004, such equipment and machinery was idle and management had not finalized
its review of  alternatives  regarding the use thereof in  prospective  periods.
Accordingly,  such equipment and machinery is included in Property and Equipment
as idle. Based on management's  assessment of the marketplace for this equipment
and  machinery  with advice from an  independent  equipment  broker,  management
recorded  an  impairment  charge  in cost of sales of  $587,876  to  reduce  the
carrying cost of this asset to its fair value of $232,308.  If the equipment and
machinery is reinstated  or  refurbished,  management  will amortize the reduced
carrying value over an estimate of its productive life when placed in service.


4. DEBT

     HBC has a  credit  facility  from  Comerica  Bank-California  ("Comerica"),
consisting of a revolving line of credit and a term loan. Such revolving line of
credit  and term  loan  were  secured  by  substantially  all of  HBC's  assets,
including accounts  receivable,  inventory,  trademarks,  trademark licenses and
certain equipment. In accordance with the provisions of the credit facility, HBC
can borrow up to $6.0 million under its revolving line of credit.  The revolving
line of credit remains in full force and effect through September 2005. Interest
on borrowings under the line of credit is based on the bank's base (prime) rate,
plus  an  additional  percentage  of up to  0.5%  or the  LIBOR  rate,  plus  an
additional  percentage of up to 2.5%, depending upon certain financial ratios of
the Company. The Company had no outstanding  borrowings on the line of credit at
December 31, 2004.

     On March 1, 2005,  the  Company  entered  into an  amendment  of its credit
facility with Comerica in terms of which HBC can borrow up to $7.8 million under
its revolving line of credit. Under the amendment,  the revolving line of credit
remains in full force and effect  through June 1, 2006.  Interest on  borrowings
under  the line of  credit  varies  depending  on a  predetermined  ratio of the
Company's funded senior debt to Earnings Before Interest Taxes  Depreciation and
Amortization.  The  current  rate of  interest is prime minus 1.5% or the 30 day
LIBOR rate plus 1.25%.

                                       61

<PAGE>

     The  terms  of the  Company's  line of  credit  contain  certain  financial
covenants including certain financial ratios. The Company was in compliance with
its covenants at December 31, 2004.

     During 2000,  the Company  entered into capital  leases for  acquisition of
certain  vehicles,  payable  over a  five-year  period and  having an  effective
interest rate of 8.8%.  During 2004, the Company entered into capital leases for
acquisition  of certain  vehicles,  payable over a 12 month period and having an
average effective interest rate of 5.4%.

     Long-term debt consists of the following
     at December 31:

                                                     2004             2003
                                                     ----             ----
     Note payable to Pasco Juices, Inc., 
     collateralized by the Junior Juice
     trademark, payable in quarterly  
     installments of varying amounts
     through May 2006, net of unamortized
     discount (based on imputed interest 
     rate of 4.5%) of $13,329 and $29,547
     at December 31, 2004 and 2003, 
     respectively                                 $ 267,390         $ 392,263

     Capital leases, collateralized by 
     vehicles acquired, payable over 60
     months in monthly  installments at an
     effective interest rate of 8.8%,
     with final payments ending in 2005              86,828           210,072

     Capital leases, collateralized by 
     vehicles acquired,  payable over 12
     months in monthly  installments at an 
     average effective  interest rate of 5.4%,
     with final payments ending in 2005             229,634              -
                                                   ---------        ----------
                                                    583,852           602,335
Less: current portion of 
 long-term debt                                    (437,366)         (244,271)
                                                 -----------        ----------
                                                  $ 146,486         $ 358,064
                                                 ===========        ==========

Long-term debt is payable as follows:

                           Year ending December 31:

                        2005                      $ 437,366
                        2006                        146,486
                                                   ---------
                                                  $ 583,852
                                                   =========

     At December 31, 2004 and 2003, the assets acquired under capital leases had
a net book value of $379,775 and $121,178,  net of accumulated  depreciation  of
$518,988 and $418,465, respectively.

     Interest  expense  amounted to $35,988,  $66,592 and $224,748 for the years
ended December 31, 2004, 2003 and 2002, respectively.

                                       62

<PAGE>

5. EARNINGS PER SHARE

     A  reconciliation  of the  weighted  average  shares  used in the basic and
diluted  earnings  per common share  computations  for the three and years ended
December 31, 2004 and 2003 is presented below:

                                                     2004              2003
                                               ---------------   ---------------
     Weighted-average shares outstanding:
         Weighted-average shares outstanding -
              Basic                                10,666,892        10,278,710
              Dilutive securities                   1,143,048           483,447
                                               ---------------   ---------------

         Weighted-average shares outstanding -
              Diluted                              11,809,940        10,762,157
                                               ===============   ===============

     For the  years  ended  December  31,  2004 and  2003,  options  outstanding
totaling  34,500  and  20,000  shares  respectively,   were  excluded  from  the
calculations, as their effect would have been antidilutive.

6. COMMITMENTS AND CONTINGENCIES

     Operating Leases - The Company leases its warehouse  facility and corporate
offices under a 10 year lease  beginning  October  2000,  when the Company first
occupied  the  facility.  The  facility  lease and certain  equipment  and other
noncancelable  operating  leases  expire  through 2010.  The facility  lease has
scheduled rent increases which are accounted for on a straight-line  basis. Rent
expense under such leases amounted to $965,730,  $660,616,  and $643,827 for the
years ended December 31, 2004, 2003 and 2002, respectively. In January 2004, the
Company entered into a lease for additional  warehouse space. This lease expires
in March 2008 with an option to renew through 2010.

     Future  minimum  rental  payments  at  December  31,  2004 under the leases
referred to above are as follows:

                Year ending December 31:
                2005                            $     980,473
                2006                                1,027,242
                2007                                1,040,332
                2008                                  775,683
                2009                                  685,560
                Thereafter                            514,170
                                                 ------------
                                                 $  5,023,460
                                                 ============

     Purchase  Commitments  - The Company has purchase  commitments  aggregating
approximately  $17,735,238,  which represent commitments made by the Company and
its subsidiaries to various suppliers of raw materials for the manufacturing and
packaging of its products. These obligations vary in terms.

     Advertising  Commitment - In March 2003,  HBC entered  into an  advertising
display  agreement  ("Monorail  Agreement")  with the Las Vegas Monorail Company
("LVMC") in terms of which HBC was granted the right,  in  consideration  of the
payment by HBC to LVMC of the sum of $1,000,000 per year, payable quarterly,  to
advertise and promote its products on a designated four car monorail  vehicle as
well as the right to sell certain of its  products on all monorail  stations for
payment of additional consideration.

     The initial term of the  Monorail  Agreement  commenced  in July 2004.  The
initial  term of the Monorail  Agreement  ends on the first  anniversary  of its
commencement  date.  However  due  to  interruptions  in the  operations  of the
Monorail,  it is  likely  the  commencement  date of the  initial  term  will be
extended.  Not less than 120 days before the  expiration of the initial term and
each renewal  term,  as the case may be, HBC has the right to renew the Monorail
Agreement  for a further  one year term up to a maximum of nine  additional  one
year terms and the LVMC has the right,  notwithstanding such election by HBC, to
terminate the Monorail Agreement at the expiration of the then current term.

                                       63

<PAGE>

     Licensing Agreements - The Company produces,  sells and distributes Lost(r)
Energy  drinks  under an  exclusive  license  with Lost  International  LLC. The
license  agreement  requires  certain royalty payments to be made related to the
sale of Lost(r) brand products.

     Employment and Consulting Agreements - On June 1, 2003, the Company entered
into an  employment  agreement  with  Rodney C. Sacks and  Hilton H.  Schlosberg
pursuant to which Mr. Sacks and Mr. Schlosberg render services to the Company as
its Chairman and Chief Executive Officer,  and its Vice Chairman,  President and
Chief Financial Officer, respectively. The agreements provide for an annual base
salary of $230,000 each for the 7 months ended December 31, 2003,  increasing to
$245,000 for the year ending December 31, 2004 and increasing by a minimum of 5%
for each  subsequent  twelve-month  period  during  the  employment  period.  In
addition,  the agreement provides for an annual bonus in an amount determined at
the  discretion  of the Board of  Directors  of the  Company  as well as certain
fringe  benefits for the period  commencing June 1, 2003 and ending December 31,
2008.

     Litigation  - The  Company  is  subject  to, and  involved  in,  claims and
contingencies  related to lawsuits and other  matters  arising out of the normal
course of  business.  The  ultimate  liability  associated  with such claims and
contingencies,  if any, is not likely to have a material  adverse  effect on the
financial condition of the Company.

     In  September  2004  Barrington  Capital  Corporation  through  an  alleged
successor in interest,  Sandburg Financial  Corporation (both entities with whom
the Company has never had any dealings) served a Notice of Motion  ("Motion") on
the  Company  and  each of its  subsidiaries  as well as on a  number  of  other
unrelated entities and individuals. The Motion seeks to amend a default judgment
granted against a completely unconnected company, Hansen Foods, Inc., to add the
Company  and  its  subsidiary  companies,  as  well as the  other  entities  and
individuals  cited,  as judgment  debtors.  The default  judgment was entered on
February 15, 1996, for $7,626,000 plus legal interest and attorneys' fees in the
sum of  $211,000  arising  out of a breach  of  contract  claim  that  allegedly
occurred  in the 1980's.  Barrington  Capital  Corporation's/Sandburg  Financial
Corporation's claim is based on the misconceived and unsubstantiated theory that
the Company and its  subsidiaries  are alter egos  and/or  successors  of Hansen
Foods,  Inc. The Motion is based on demonstrably  false  allegations,  misstated
legal propositions and lacks any substantial  supporting  evidence.  The Company
and its subsidiaries intend to vigorously oppose the Motion and believe that the
Motion is without any merit. The Company does not believe the Motion will have a
material adverse effect on the financial condition of the Company.

     Guarantees  - The Company  from time to time enters into  certain  types of
contracts that  contingently  require the Company to indemnify  parties  against
third party claims.  These contracts primarily relate to: (i) certain agreements
with the Company's officers, directors and employees under which the Company may
be required to  indemnify  such  persons  for  liabilities  arising out of their
employment relationship,  (ii) certain distribution or purchase agreements under
which the Company may have to indemnify the Company's  customers from any claim,
liability  or loss  arising  out of any  actual or  alleged  injury  or  damages
suffered  in  connection  with the  consumption  or  purchase  of the  Company's
products,  and (iii) certain real estate leases,  under which the Company may be
required to indemnify  property  owners for liabilities and other claims arising
from the Company's use of the applicable premises.

     The terms of such obligations vary. Generally,  a maximum obligation is not
explicitly  stated.  Because the obligated  amounts of these types of agreements
often are not explicitly  stated,  the overall maximum amount of the obligations
cannot be reasonably estimated. Further, the Company believes that its insurance
coverage  is  adequate to cover any  liabilities  or claims  arising out of such
instances referred to above. Historically, the Company has not been obligated to
make significant payments for these obligations and accordingly, the Company has
valued these obligations at $0 on its consolidated balance sheets as of December
31, 2004 and 2003.

                                       64

<PAGE>

7. INCOME TAXES

Components of the income tax provision are as follows:

                                       Year Ended December 31,
                                2004            2003            2002
                                ----            ----            ----
Current income taxes:
  Federal                    $11,305,019    $  3,386,946     $ 1,173,693
  State                        2,418,917         802,256         339,825
                             ------------   -------------    ------------
                              13,723,936       4,189,202       1,513,518
Deferred income taxes:
  Federal                       (218,967)       (290,357)        448,239
  State                           46,424         (70,167)         74,223
                             ------------   -------------     -----------
                                (172,543)       (360,524)        522,462
                             ------------   -------------     -----------
                             $13,551,393    $  3,828,678     $ 2,035,980
                             ============   =============     ===========

     The  differences  between the income tax  provision  that would result from
applying the 35% federal  statutory  rate to income before  provision for income
taxes and the reported provision for income taxes are as follows:

                                       Year Ended December 31,
                                  2004           2003             2002
                                  ----           ----             ----
Income tax provision 
  using the statutory rate    $11,878,369   $  3,318,088     $ 1,722,160
State taxes, net of federal
  tax benefit                   1,602,471        521,475         267,440
Permanent differences              74,374         39,895          46,380
Rate change                        23,735           -               -
Other                             (27,556)       (50,780)
                               -----------  -------------    ------------
                              $13,551,393   $  3,828,678     $ 2,035,980
                              ============  =============    ============

     Major  components of the  Company's  deferred tax assets  (liabilities)  at
December 31 are as follows:

                                                  2004              2003
                                                  ----              ----
Reserves for returns                        $    385,371     $     98,556
Reserves for doubtful accounts                    45,838           93,623
Reserves for obsolescence                        410,945          519,212
Reserves for marketing development fund        1,542,576          754,517
Capitalization of inventory costs                199,462          169,317
State franchise tax                            1,014,799          348,351
Accrued compensation                             109,951           47,433
Amortization of graphic design                      -             297,760
Other accrued expenses                              -              54,602
                                            -------------    ------------
     Total deferred tax asset                  3,708,942        2,378,371

Amortization of trademark license             (3,857,784)      (3,160,401)
Depreciation                                    (583,708)        (245,010)
Amortization of graphic design                  (121,947)            -
                                            -------------    ------------
     Total deferred tax liability             (4,563,439)      (3,405,411)
                                            -------------    ------------
          Net deferred tax liability        $   (854,497)    $ (1,027,040)
                                            =============    ============

     The Company  believes it has adequately  provided for income tax issues not
yet resolved with state tax  authorities.  At December 31, 2004,  $394,597,  was
accrued for such matters.  Although not probable, the most adverse resolution of
these issues could result in additional  charges to earnings in future  periods.
Upon consideration of all relevant facts and circumstances, the Company does not
believe  the  ultimate  resolution  of these tax issues for all open tax periods
will have a material  adverse effect upon its results of operations or financial
condition.


                                       65

<PAGE>

8. STOCK OPTIONS

     The Company has three stock option plans,  the Hansen  Natural  Corporation
2001 Stock Option Plan ("2001 Option Plan"), the Employee Stock Option Plan (the
"Plan") and the Outside Directors Stock Option Plan ("Directors Plan").

     During 2001,  the Company  adopted the 2001 Option Plan which  provides for
the grant of options to purchase up to  2,000,000  shares of the common stock of
the  Company to certain  key  employees  of the  Company  and its  subsidiaries.
Options  granted under the 2001 Option Plan may be incentive stock options under
Section 422 of the Internal Revenue Code, as amended (the "Code"),  nonqualified
stock options,  or stock appreciation  rights.  Stock options are exercisable at
such time and in such amounts as determined by the Compensation Committee of the
Board of  Directors  of the Company up to a ten-year  period after their date of
grant. As of December 31, 2004,  options to purchase  1,227,100 shares of Hansen
common stock had been granted under the 2001 Option Plan and options to purchase
772,900 shares of Hansen common stock remain  available for grant under the 2001
Option Plan.

     The Plan, as amended,  provided for the granting of options to purchase not
more than  3,000,000  shares  of Hansen  common  stock to key  employees  of the
Company and its subsidiaries through July 1, 2001. Stock options are exercisable
at such time and in such amounts as determined by the Compensation  Committee of
the Board of Directors  of the Company up to a ten-year  period after their date
of grant,  and no options may be granted  after July 1, 2001.  The option  price
will not be less than the fair market value at the date of grant. As of December
31, 2004,  options to purchase  2,095,700 shares of Hansen common stock had been
granted under the Plan, net of options that have expired.

     The  Directors  Plan  provides  for the grant of options to  purchase up to
100,000  shares of common  stock of the Company to  directors of the Company who
are not and have not been employed by or acted as consultants to the Company and
its  subsidiaries  or affiliates  and who are not and have not been nominated to
the Board of Directors of the Company (the  "Board")  pursuant to a  contractual
arrangement.  On the date of the  annual  meeting of  shareholders,  at which an
eligible  director is initially  elected,  each eligible director is entitled to
receive a one-time grant of an option to purchase 6,000 shares (12,000 shares if
the  director is serving on a committee  of the Board) of the  Company's  common
stock,  exercisable one-third each on the first, second and third anniversary of
the date of grant;  provided,  however,  that options granted as of February 14,
1995,  are  exercisable  66 2/3% on the date of grant and 100% on July 8,  1995;
provided,  further,  that all options held by an eligible  director become fully
and  immediately  exercisable  upon a change in control of the Company.  Options
granted under the Directors  Plan that are not  exercised  generally  expire ten
years  after the date of grant.  Option  grants may be made under the  Directors
Plan for ten years from the effective date of the Directors  Plan. The Directors
Plan is a "formula" plan so that a nonemployee  director's  participation in the
Directors  Plan does not  affect  his  status as a  "disinterested  person"  (as
defined in Rule 16b-3 under the Securities Exchange Act of 1934). As of December
31,  2004,  options to purchase  48,000  shares of Hansen  common stock had been
granted under the Directors Plan and options to purchase 52,000 shares of Hansen
common stock remained available for grant.

     During the years  ended  December  31,  2004,  2003 and 2002,  the  Company
granted  371,000,  355,000 and 529,500 options to purchase shares under the 2001
Option Plan and the Directors Plan at a  weighted-average  grant date fair value
of $6.68, $1.27 and $1.12,  respectively.  Additional  information regarding the
plans is as follows:

                                       66

<PAGE>

                          2004                 2003                 2002
                  -------------------- -------------------- --------------------
                            Weighted-            Weighted-             Weighted-
                             average              average               average
                            exercise              exercise              exercise
                  Shares      price     Shares      price    Shares       price 
                  -------------------- -------------------- --------------------
Options
  outstanding,
  beginning
  of year         1,469,800   $ 3.87   1,501,900    $3.29   1,053,400    $3.04
Options granted     371,000   $11.39     355,000    $4.43     529,500    $3.64
Options 
  exercised        (495,000)  $ 3.47    (365,100)   $2.05      (8,000)   $1.00
Options 
  canceled
  or expired        (47,400)  $ 6.02     (22,000)   $3.53     (73,000)   $2.54
                  -------------------- -------------------- --------------------
Options
  outstanding,
  end of year     1,298,400   $ 6.09   1,469,800    $3.87   1,501,900    $3.29
Option 
  price range
  end of year                 $ 3.02                $1.13                $1.00
                                to                    to                   to
                              $32.50                $8.23                $5.25

     The following table summarizes  information about fixed-price stock options
outstanding at December 31, 2004:
------------------------------------------------------ -------------------------
                      Options Outstanding                   Options Exercisable
------------------------------------------------------ -------------------------
                                Weighted-
                   Number        average                  Number 
                outstanding     remaining    Weighted-  exercisable    Weighted-
Range of             at         contractual   average       at         average
exercise        December 31,       life      exercise   December 31,   exercise
prices              2004        (in years)     price        2004          price
--------------------------------------------------------------------------------
$ 3.02 to $ 3.95    379,900         7         $ 3.60       30,600        $3.57
$ 4.05 to $ 5.25    549,500         7           4.24      277,500         4.26
$ 8.11 to $ 8.23    272,500         9           8.15        2,000         8.23
$10.32 to $18.17     62,000         9          16.77         -             -
$25.01 to $32.50     34,500         8          27.33         -             -
                  ----------                             ---------              
                  1,298,400                               310,100
                  ==========                             =========       


9. EMPLOYEE BENEFIT PLAN

     Employees  of Hansen  Natural  Corporation  may  participate  in the Hansen
Natural  Corporation  401(k) Plan, a defined  contribution plan, which qualifies
under Section 401(k) of the Internal Revenue Code.  Participating  employees may
contribute up to 15% of their pretax salary up to statutory limits.  The Company
contributes  25% of  the  employee  contribution,  up to 8% of  each  employee's
earnings. Matching contributions were $98,494, $70,518 and $64,949 for the years
ended December 31, 2004, 2003 and 2002, respectively.

10. RELATED-PARTY TRANSACTIONS

     A director of the Company is a partner in a law firm that serves as counsel
to the Company and was a partner in another law firm that  previously  served as
counsel to the Company.  Expenses  incurred in connection with services rendered
by such firms to the Company during the years ended December 31, 2004,  2003 and
2002 were $173,878, $59,146 and $79,843, respectively.

                                       67

<PAGE>

     Two directors and officers of the Company are principal owners of a company
that provides  promotional  materials to the Company.  Expenses incurred to such
company in connection  with  promotional  materials  purchased  during the years
ended  December 31, 2004,  2003 and 2002 were  $638,590,  $331,478 and $164,199,
respectively.

11.     QUARTERLY FINANCIAL DATA (Unaudited)


<TABLE>
<S>                 <C>              <C>               <C>                <C>         <C>    



                                                                             Net Income per
                                                                              Common Share
                                                                          --------------------
                      Net Sales       Gross Profit       Net Income         Basic     Diluted
                    --------------   --------------    -------------      ---------   --------
Quarter ended:
  March 31, 2004     $ 31,298,783     $ 13,907,821      $ 2,183,281        $ 0.21      $ 0.19
  June 30, 2004        46,063,543       20,758,929        5,078,149          0.48        0.43
  September 30, 2004   52,641,477       23,809,208        5,798,648          0.54        0.49
  December 31, 2004    50,337,332       24,990,427        7,326,726          0.68        0.62
                    --------------   --------------    -------------      ---------  ---------
                     $180,341,135     $ 83,466,385      $20,386,804        $ 1.91      $ 1.73
                    ==============   ==============    =============      =========  =========

Quarter ended:
  March 31, 2003     $ 22,086,348     $  8,299,821      $   633,071        $ 0.06      $ 0.06
  June 30, 2003        28,409,138       11,448,565        1,977,184          0.19        0.19
  September 30, 2003   33,291,088       13,286,852        2,093,835          0.21        0.19
  December 31, 2003    26,565,622       10,739,790        1,226,314          0.12        0.11
                    --------------   --------------    -------------      --------   ---------
                     $110,352,196     $ 43,775,028      $ 5,930,404        $ 0.58      $ 0.55
                    ==============   ==============    =============      ========   =========

</TABLE>


     Certain of the figures  reported above may differ from previously  reported
figures for individual quarters due to rounding.

                                       68

<PAGE>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002


               Balance at   Charged to                      Balance at
               beginning     cost and                         end of
Description    of period     expenses        Deductions       period
--------------------------------------------------------------------------------

Allowance for doubtful accounts, sales returns and cash discounts:

2004          $  875,351      3,585,153      (3,208,403)     $1,252,101
2003          $1,098,645      2,936,429      (3,159,723)     $  875,351
2002          $  625,270      3,108,031      (2,634,656)     $1,098,645

Promotional allowances:

2004          $4,666,770     29,939,960     (28,336,986)     $6,269,744
2003          $3,170,171     15,139,959     (13,643,360)     $4,666,770
2002          $2,981,556     12,660,386     (12,471,771)     $3,170,171

Inventory reserves:

2004          $1,236,219        184,472        (465,004)     $  955,687
2003          $  646,439        589,780            -         $1,236,219
2002          $  400,767        269,530         (23,858)     $  646,439

                                       69

<PAGE>

CONSENT OF INDEPENDENT PUBLIC ACCOUNTING FIRM


We consent to the  incorporation  by reference in  Registration  Statements  No.
33-92526,  No.  333-41333,  No.  333-89123 and No.  333-112482 of Hansen Natural
Corporation  on Form S-8 of our report  dated  March 14,  2005,  relating to the
consolidated  financial  statements and financial  statement  schedule of Hansen
Natural Corporation and subsidiaries and management's report on internal control
over financial  reporting  appearing in the Annual Report on Form 10-K of Hansen
Natural Corporation for the year ended December 31, 2004.



/s/ DELOITTE & TOUCHE LLP

Costa Mesa, California
March 14, 2005

                                       70



                 CONTRACT MANUFACTURING AND PACKAGING AGREEMENT

This Contract  Manufacturing  and Packaging  Agreement  ("Agreement") is entered
into  effective  March  1,  2004,  by  and  between  Hansen   Beverage   Company
("Customer"),  a corporation  organized and existing under the laws of the State
of  Delaware  with its  principle  place of business  at 1010  Railroad  Street,
Corona,   CA  92882,   on  the  one  hand,   and  Nor-Cal   Beverage  Co.,  Inc.
("Contractor"), a corporation organized and existing under the laws of the State
of California with its principal place of business at 2286 Stone Boulevard, West
Sacramento, California 95691. 

                                    Recitals

WHEREAS, Customer desires that Contractor pack apple juice and apple grape juice
products in 64 ounce PET plastic  packaging  for the WIC program on an exclusive
basis as well as such juice products and  additional  juice products in 64 ounce
PET plastic packing for general sale by Customer as well as other juice products
in different  size  containers as Customer and  Contractor may from time to time
agree on Said  Products  are set forth in Exhibit I  attached  hereto and made a
part hereof. The aforesaid products are hereinafter  collectively referred to as
"Product";

WHEREAS,  Contractor  desires  to pack  Product
  for  Customer  at  Contractor's
facility at Anaheim, California ("Contractor's Facility" or "Anaheim Facility");

NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  and  conditions
hereinafter set forth, Customer and Contractor mutually agree as follows:

     1.   SPECIFICATIONS;   FORMULAS,  MANUFACTURING  PROCESS;  QUALITY  CONTROL
          STANDARDS AND CODING SYSTEMS

1.1. Contractor  shall  produce,  package,  store and ship Product in accordance
     with Good Manufacturing  Practices prevailing in the industry and in strict
     compliance  with the  specifications,  manufacturing  process  and  quality
     control  standards  and coding  systems  set forth in  Exhibit II  attached
     hereto and made a part hereof.  Contractor  shall implement such changes in
     such  specifications,  manufacturing  process and quality control standards
     and coding  systems as  Customer  may from time to time  request in writing
     provided that such changes do not alter  Contractor's  costs.  Such changes
     shall not be  effective  unless in writing and signed by a duly  authorized
     officer of Customer. Changes which would increase Contractor's cost must be
     mutually agreed to in writing by a duly authorized  officer of Customer and
     Contractor.

1.2  Contractor  agrees  to  pack  Customer's  requirements  for  Product  up to
     __________ cases per year.  Customer  may  increase  production  volumes if
     additional  line time is available and such  additional  line time does not
     conflict with Contractor's commitments to other customers. All such packing
     shall  be  performed  in  accordance  with  good  manufacturing   practices
     prevailing  in the  industry  and  in  strict  compliance  with  all  HACCP
     regulations  and  procedures  and  with the  specifications,  manufacturing
     process  and  quality  control  standards  and coding  systems set forth in
     Exhibit 2 attached hereto and made a part hereof.


<PAGE>

1.3  Contractor  warrants  that its Anaheim  Facility  currently  has and at all
     times during the term of this Agreement shall have a fully documented HACCP
     program which details all required  principals and which has identified all
     critical  control  points.  Contractor  further  warrants that all critical
     control points will be monitored at regularly  scheduled intervals and such
     monitoring will be appropriately  documented.  Contractor  further warrants
     that all  employees  involved  in its HACCP plan have been  trained and are
     aware of all HACCP  related  activities in their  immediate  work areas and
     that  the  training  and  activities  of such  persons  have  been and will
     continue to be duly documented and that all necessary sanitation SOP's will
     be established, documented and implemented from time to time throughout the
     term of this Agreement.

1.4  Contractor shall prepare and submit to Customer the quality control records
     and  reports  set forth in Exhibit II and shall  also  furnish to  Customer
     without charge a reasonable  number of samples from each  production run of
     Product as set forth in Exhibit II for quality control purposes.

1.5  Prior to commencement  of, and at any time during,  production,  packaging,
     storage  and  shipping  operations,  Customer  shall  have the  right  upon
     reasonable  notice  to  send  one or more of its  authorized  employees  or
     representatives  to observe and inspect,  during  regular  business  hours,
     manufacturing,  warehousing and other facilities used to produce,  package,
     store  and ship  Product  and to  inspect  all  documentation  and  records
     pertaining to the operation of the Anaheim  Facility and  production of the
     Products.

1.6  If any of Contractor's Facility,  process,  inventories or equipment are in
     an unsanitary  condition or do not otherwise  comply with applicable  laws,
     rules and regulations or with the terms and conditions of this Agreement or
     the Contractor's HACCP Plan,  Contractor shall promptly take such action to
     correct the deficiencies  and bring such  Contractor's  Facility,  process,
     inventories and equipment into compliance with applicable  laws,  rules and
     regulations and in particular,  but without  limitation,  the  Contractor's
     HACCP plan, all within the terms and conditions of this Agreement

1.7  Contractor  agrees to produce and package  Product in  compliance  with the
     specifications,  formulas and  standards set forth or referenced in Exhibit
     II.

1.8  If Customer  has  previously  paid  Contractor  for Product  which is later
     rejected by Customer and which (Subject to paragraph 2.3 below) was (i) not
     rejected  because of  inferior  materials  supplied  by  Customer;  or (ii)
     Customer  handling  and  storage of Product  then  Customer  shall  invoice
     Contractor  for the Pack Fee amounts of such  rejected  Product and for any
     freight;  handling  or other  disposition  costs or  expenses  incurred  by
     Customer in connection with such rejected  Product.  Customer shall receive
     credit  from  Contractor  within  thirty  (30)  days  of such  invoice.  In
     addition, the costs for raw materials,  ingredients and packaging materials
     of rejected  Product shall be applied towards the annual loss allowance for
     the year in question and any amount in excess of the annual loss  allowance
     for the year in question shall be credited to Customer.

                                       2

<PAGE>

1.9  Contractor shall make available,  at Customer's request, the results of all
     federal,   state  and  local  inspection  reports  and  sanitation  audits,
     conducted  from  thirty (30) days before to thirty (30) days after the term
     of this Agreement,  and relating to or affecting (i) Contractor's Facility;
     or (ii)  equipment,  raw produce,  raw  materials,  ingredients,  packaging
     materials, work-in-process or Product located therein.

                                 2. PROCUREMENT

2.1. Customer shall have full  responsibility for payment for all raw materials,
     ingredients,  and packaging materials  (collectively  "Product  Supplies"),
     provided  by  Customer,  except  miscellaneous  ingredients  and  materials
     ("collectively   Miscellaneous   Supplies")  which  shall  be  supplied  by
     Contractor  and which are  necessary  to produce  and  package  Product for
     Customer  under  this  Agreement,  the costs of which are  included  in the
     Contractor's pack fee.  Miscellaneous  Supplies are described in Exhibit I.
     Customer  shall provide to Contractor  blanket  purchase  order numbers for
     Contractor's use in ordering Product  Supplies.  Contractor shall store all
     Product Supplies in accordance with Good Manufacturing Practices prevailing
     in the industry and in strict  compliance with the terms and conditions set
     forth in Exhibit II. Such Product  Supplies  shall be ordered in quantities
     mutually agreed to by Customer and Contractor.

2.2. Contractor  shall  examine  all  Product  Supplies  and  shall  have  final
     responsibility  for accepting or rejecting  Product  Supplies  which do not
     conform with: (i) the  specifications,  formulas and standards set forth or
     referenced  in Exhibit  II;  (ii) the other  terms and  conditions  of this
     Agreement;  and (iii) federal, state and local laws, rules, regulations and
     guidelines.

2.3. Customer will pay for all shipper  damage and shortage  claims  relating to
     Product  Supplies  furnished  by  Customer.  Contractor  agrees to  provide
     whatever assistance Customer may need to prosecute such claims.

     3.   PRODUCTION  SCHEDULING;   PALLETS;  STORAGE  AND  HANDLING;  SHIPMENT;
          DOCUMENTS

3.1. Contractor's  obligations with respect to scheduling of production,  use of
     pallets,  storage,  handling and shipment of Product are as set forth below
     and in Exhibit I attached hereto and made a part hereof.

3.2. Unless  Customer and  Contractor  mutually  agree in writing on a different
     system,  Customer  agrees to provide  Contractor  with a weekly schedule of
     production  requirements  for an eight  (8) week  rolling  forecast.  These
     schedules shall include a firm commitment for the first two (2) weeks and a
     non-binding estimate for the remaining six (6) weeks of the schedule.

3.3. Unless  Customer and Contractor  mutually agree in writing upon a different
     system, Contractor shall ship Product unitized in a pallet pattern supplied
     by Customer.  Contractor will provide pallets to Customer's  specifications
     as part of the fee set forth in Exhibit I.

                                       3

<PAGE>

3.4. Contractor  shall  store  and  handle  Product  in the  Anaheim  Production
     Facility.  Charges and maximum storage obligations are described in Exhibit
     I

3.5. Contractor shall prepare and submit to Customer the shipping  documents and
     production and inventory  control reports set forth herein, as well as such
     other reports and records as Customer may  reasonably  require to determine
     Contractor's compliance with the terms and conditions of this Agreement.

                      4. INVOICING OF PRODUCT AND PAYMENTS

4.1. Contractor's  total price for all services rendered  hereunder is set forth
     in Exhibit I.

4.2. Contractor shall invoice Customer on a weekly basis for Product produced at
     the Contractor's Facility. All invoices shall accurately reflect Customer's
     item number for all Product produced as invoiced.

4.3. Storage,  handling,  and modular pallet charges will be billed on a monthly
     basis.

4.4. Invoices are due and payable in full within fifteen (15) days from the date
     of the invoice. Late payments will be subject to a finance charge of 1% per
     month.

                                5. RISK OF LOSS

5.1. Risk of  damage or loss to  Product  shall  remain  with  Contractor  until
     Product is shipped F.O.B.  Contractor's  Facility to Customer or a Customer
     consignee in accordance  with the terms and  conditions of this  Agreement.
     Contractor  shall  insure all  Product  Supplies  and  Product in its care,
     custody or control  against  loss or damage from perils  covered by an "all
     risk" property  insurance  policy in the amount of the replacement  cost of
     such Product  Supplies and Product less the maximum  yield loss  allowance.
     Such insurance shall be written by an insurance  carrier as specified under
     Part 13. Its terms and conditions shall not be altered, canceled or changed
     without  Customer's prior consent until ten (10) days after  termination or
     cancellation  of this Agreement.  A certificate of such insurance  coverage
     shall be furnished  to Customer  upon  request.  Contractor  shall  further
     assume full  responsibility  for, and indemnify and hold Customer  harmless
     from and against,  any and all  liability,  loss,  damage,  cost or expense
     (including  court costs and attorney fees but not any indirect,  special or
     consequential damages or lost profits) with respect to Product Supplies and
     Product in the care,  custody or control of  Contractor  to the extent such
     loss or damage is not covered by the insurance described in this paragraph.

                                    6. TERM

6.1. This Agreement  shall take effect on March 1, 2004 (the  "Effective  Date")
     and shall  continue in effect until August 31, 2007 (the  "Initial  Term").
     Subject to paragraph 6.2, this Agreement  shall be renewed for  consecutive
     one-year terms  beginning  September 1, 2007 and each year  thereafter (the
     "Renewal Term(s)").  Notwithstanding  the foregoing,  this Agreement may be
     canceled or  terminated as provided in paragraph 6.2 or paragraph 16 at any
     time during the Initial Term or any Renewal Term.

                                       4

<PAGE>

6.2. Either  party may cancel this  Agreement  at the end of the Initial Term or
     any Renewal  Term  provided  written  notice to that effect is given to the
     other party at least  (ninety) 90 days prior to the end of the Initial Term
     or any Renewal Term. Either party may terminate this Agreement  immediately
     provided cause exists  pursuant to paragraph 16 and the procedure set forth
     in paragraph 16 of this Agreement is followed.

6.3. The  representations,  warranties and guarantees of Contractor and Customer
     contained in this Agreement  shall survive the  termination or cancellation
     of this Agreement.

                             7. RECORDS AND AUDITS

7.1. Contractor  shall  maintain  and retain  complete  and  accurate  books and
     records  relating to the  production,  packaging,  storage and  shipment of
     Product  Supplies  and  Product,  rejected  Product  Supplies  and rejected
     Product.

7.2. All books and records  maintained  or retained  pursuant to this  Agreement
     shall be made available to Customer for inspection upon  reasonable  notice
     at any time during  Contractor's  regular  business hours. All such records
     shall be retained by Contractor for a period of at least three (3) years or
     longer  if  so  required  by  federal,   state  or  local  laws,  rules  or
     regulations.

                  8. CONFIDENTIAL AND PROPRIETARY INFORMATION

8.1. All business and technical information, whether in written or oral form and
     including,   but  not  limited  to,  technical  know-how,   specifications,
     formulas,  manufacturing  process and  quality  control  standards,  coding
     systems,  instructions  and  procedures,  which  Customer  may  disclose to
     Contractor or to any employee, agent or representative of Contractor, shall
     be  received  and  retained by  Contractor  and its  employees,  agents and
     representatives  as  strictly  confidential  and,  except as  provided  for
     herein,  may not be  disclosed  to any third  party.  Contractor  shall not
     disclose any such  information  to any person within its  organization  not
     having a need to know and shall  only use such  information  in  connection
     with the production and packaging of Product.

8.2. Notwithstanding  paragraph 8.1,  Contractor shall not have an obligation of
     confidentiality with respect to information which:

     8.2.a. was in the public  domain at the time of receipt from  Customer,  or
          which comes into the public  domain  without  breach of an  obligation
          assumed hereunder; or

     8.2.b. was known and can be shown to have been known by  Contractor  at the
          time  of  receipt  from  Customer  and was not  acquired  directly  or
          indirectly from Customer on a confidential basis; or

                                       5

<PAGE>

     8.2.c. becomes known to Contractor  on a  non-confidential  basis through a
          third  source  whose own  acquisition  and  disclosure  were  entirely
          independent of Contractor,  not in breach of any obligation  hereunder
          and not on a confidential basis; or

     8.2.d. approved for disclosure by Customer in writing.

8.3. All originals and copies of documented  business and technical  information
     identified or reasonably  identifiable  as  confidential  or proprietary to
     Customer  shall be and remain the  exclusive  property  of  Customer at all
     times  and  shall  be  returned  to  Customer  upon  the   cancellation  or
     termination of this Agreement.

8.4. The terms and conditions of this Agreement may be disclosed by either party
     to their respective attorneys,  accountants and tax preparers, or as may be
     required by legal process or contract.

                             9. PURE FOOD GUARANTEE

9.1. Contractor warrants and guarantees that its obligations  hereunder shall be
     performed in full  compliance with the United States Federal Food, Drug and
     Cosmetic Act (as amended the "Act") and all  applicable  federal  state and
     local laws, rules, regulations and guidelines. Specifically, but not by way
     of  limitation,  Contractor  warrants that all Product which is produced or
     packaged for Customer,  and all packaging and other materials which come in
     contact with such Product,  will not at the time of shipment to Customer or
     Customer's consignee be adulterated,  contaminated or misbranded within the
     meaning of the Act or any other  federal,  provincial,  state or local law,
     rule or regulation,  and that such Product,  packaging and other  materials
     will not constitute  articles  prohibited from introduction into interstate
     commerce  under the  provisions of Sections 301 (d), 404, 405 or 505 of the
     Act.

9.2. Customer  warrants  that,  as of the date of  delivery to  Contractor,  the
     Product  Supplies  provided by Customer to Contractor shall meet Customer's
     standards  of quality  and  manufacturing  specifications  and shall not be
     adulterated or misbranded with in the meaning of the Federal Fair Packaging
     and  Labeling  Act and the Food  Drug and  Cosmetic  Act,  their  attendant
     regulations,  and  similar  state and local food and drug  laws,  rules and
     regulations,  as the same may be  amended  (collectively,  the  "Applicable
     Laws").  Customer  further warrants that any labels provided by Customer to
     Contractor shall properly  describe the Products to be packed in accordance
     with  Customer's  manufacturing  specifications  and that such  labels will
     comply in all material respects with the applicable laws.  Contractor shall
     promptly notify Customer when it knows or believes any Product  Supplies do
     not comply with the standards and Applicable Laws set forth in this Section
     9.

                                 10. COMPLIANCE

10.1 All  Products  shall be produced  and  packaged and all Product and Product
     Supplies shall be stored under sanitary conditions and in strict compliance
     with all federal state and local laws,  rules,  regulations and guidelines.
     All Product  shall be produced  and  packaged,  and all Product and Product
     Supplies shall be stored,  in strict  compliance  with any applicable  Good
     Manufacturing Practices, including but not limited to those set forth in 21
     C.F.R.   Section  110  et.  seq.,   and  any   applicable   Food  and  Drug
     Administration, United States Department of Agriculture and Food Safety and
     Quality Services guidelines and regulations, as well as the specifications,
     formulas,  manufacturing  process and quality control  standards and coding
     systems set forth in the Customer's Quality Assurance Manual which has been
     provided to Contractor under separate cover.

                                       6

<PAGE>

               11. TRADEMARKS; TRADE NAMES; PRINTED MATTER; ETC.

11.1 All Products shall be packaged under Customer-owned trademarks,  trademarks
     licensed to Customer or such private  trademarks  as Customer may from time
     to time designate.

11.2 Contractor agrees that, as between Contractor and Customer,  all trademarks
     identified by Customer as being  Customer-owned or licensed to Customer are
     valid  and  existing  trademarks  of  Customer  and the sole and  exclusive
     property of Customer.  Nothing in this Agreement  shall give Contractor any
     right, title or interest in (i) any Customer-owned trademark, any trademark
     licensed to Customer or any private trademark designated by Customer;  (ii)
     any Customer or other trade name; or (iii) the goodwill  connected with any
     such  trademark  or trade name,  except the right to use the same in strict
     accordance  with the terms and  conditions  of this  Agreement.  Contractor
     shall not contest the  validity or  ownership  of a trademark  described in
     paragraph  11.1 or assist others in contesting the validity or ownership of
     any such trademark.

11.3 Contractor shall promptly notify Customer,  in writing, of any infringement
     or potential  infringement  of a trademark  described in paragraph  11.1 of
     which Contractor  becomes aware.  Without the express written permission of
     Customer,  Contractor shall have no right to bring any action or proceeding
     relating to such infringement or potential  infringement or which involves,
     directly or  indirectly,  any issue the  litigation of which may affect the
     interest of Customer.  Nothing in this Agreement shall obligate Customer to
     take  any  action   relating  to  any  such   infringement   or   potential
     infringement.


11.4 Customer agrees to indemnify,  defend and hold harmless Contractor from and
     against any and all liability  resulting from any claim of  infringement of
     trademarks arising out of or relating to the use of a trademark in a manner
     authorized by this Agreement. Customer's total obligation to Contractor for
     such infringement or claim of infringement expressed or implied as a matter
     of law or otherwise,  shall be  conditioned on Contractor  giving  Customer
     reasonably prompt notice of any such claim of infringement.  Customer shall
     have the sole  authority  to conduct  the defense of and settle any action,
     proceeding or claim relating to such  infringement or claim of infringement
     with the  understanding,  however,  that  Contractor may retain  additional
     counsel at its expense and participate in any such action or proceeding.

11.5 Contractor  agrees  that  Customer  shall  determine  and first  approve in
     writing  the  printed  matter to be  carried  on  packaging  materials  and
     labeling utilized pursuant to this Agreement.

                                       7

<PAGE>

               12 ENFORCEMENT COSTS, JURY TRIAL WAIVER, REFERENCE

12.1 In the event of any  action  or  proceeding  that  involves  the  rights or
     obligations of the Parties under this  Agreement,  the Prevailing  Party or
     Parties shall be entitled to reimbursement  from the other Party or Parties
     of all costs  and  expenses  associated  with  said  action or  proceeding,
     including reasonable attorney fees,  litigation expenses and expert witness
     fees.

12.2 In any  controversy,  claim or judicial  action arising from or relating to
     this Agreement or any of the transactions  contemplated hereby: (i) each of
     the  Parties  waive any  rights to trial by jury it may have,  whether  the
     action  is  before  a  court  of any  judicial  district  in the  State  of
     California,  the  United  States of  America or  otherwise;  and,  (ii) all
     decisions  of fact and law shall at the request of any Party be  determined
     by reference in  accordance  with Code of Civil  Procedure  Section 638, et
     seq., if the action is before a court of any judicial district of the State
     of California.  The Parties shall designate to the Court a referee of their
     mutual  selection.  In the event that they are unable to mutually  select a
     referee,  the  presiding  judge  of the  Superior  Court  shall  make  such
     selection.   The  referee  shall  prepare  written  findings  of  fact  and
     conclusions  of law.  Judgment  upon award shall be entered in the court in
     which the  proceeding  was  commended.  No provision of this section  shall
     limit the  right of any  party to  exercise  self-help  remedies  or obtain
     provisional or ancillary remedies such as injunctive relief from a court of
     competent  jurisdiction  before,  after,  or  during  the  pendency  of any
     referenced proceeding.

                           13 WARRANTY AND INDEMNITY

13.1 To the extent the  Liabilities  (defined below) are not paid from insurance
     required  to be  maintained  under this  Agreement,  each party does hereby
     agree to indemnify,  protect,  defend, and hold harmless (such indemnifying
     party  being  referred  to  as  the  "indemnitor")  the  other  party  (the
     "indemnitee") and the indemnitee's officers, agents, attorneys,  customers,
     directors,   subsidiaries,   affiliates,   parents,  employees,   licensees
     (collectively, the "Indemnified Parties") for, from and against all claims,
     demands,  liabilities,  damages,  costs, suits,  losses,  liens,  expenses,
     causes of action,  judgments and fees  (including  court costs,  reasonable
     attorneys' fees, costs of investigation,  penalties,  interest, and amounts
     paid in settlement) of any nature,  kind or description or of any person or
     entity  whomsoever,  arising  out of, or alleged to have  arisen out of (in
     whole or in part) the  performance  of this  Agreement and arising from the
     breach or warranties  and guarantees set forth in Part 9; the negligence or
     misconduct  of  the  indemnitor  or  any  act  outside  the  scope  of  the
     indemnitor's   authority   under   this   Agreement   (collectively,    the
     "Liabilities").  When the Liabilities are caused by the joint negligence or
     misconduct of both parties,  or by the indemnitor and a third party (except
     the indemnitor's agents, employees,  customers, licensees or invitees), the
     indemintor's  duty to defend,  indemnify and hold the  indemnitee  harmless
     shall be in proportion  to the  indemnitor's  allocable  share of the joint
     negligence or misconduct.  Upon either party's receipt of written notice of
     any action,  administrative  or legal  proceeding or investigation to which
     this  indemnification may apply, such party shall promptly advise the other
     party in writing of the same, and the indemnitor  shall assume on behalf of
     the  indemnitee  (and the other  Indemnified  Parties) and conduct with due
     diligence and in good faith the defense  thereof with counsel  satisfactory
     to the indemnitee;  provided,  however,  that the indemnitee shall have the
     right,  at its option,  to be  represented  by advisory  counsel of its own
     selection and at its own expense. In the event of failure by the indemnitor
     to fully perform in accordance with this paragraph, the indemnitee,  at its
     option, and without relieving the indemnitor of its obligations, subject to
     the notice requirements of Paragraph 18, may so perform,  but all costs and
     expenses so incurred by the indemnitee in that event shall be reimbursed by
     the indemnitor to the  indemnitee,  together with interest on the same from
     the date of the indemnitee's payment of such expense to the date of payment
     by the indemnitor at the rate of interest  provided to be paid on judgments
     signed and entered in the State Superior  Courts of California.  Payment of
     any amount  payable  under this  Paragraph 13 shall be made within five (5)
     days after receipt of written demand  therefore.  Such demand shall contain
     sufficient facts to apprise the indemnitor of the basis for such demand for
     indemnity.  The  indemnitee  shall  be  entitled  to any and  all  remedies
     available at law or in equity,  including without  limitation,  damages and
     all equitable  remedies,  as a means of collecting the  indemnification  to
     which  entitled.  All remedies for which the  indemnitee  shall be entitled
     shall be deemed independent and cumulative of one another.  The obligations
     and  indemnity  provided for in this  Paragraph  13 and  Paragraph 9, shall
     survive the termination of this Agreement.

                                       8

<PAGE>

13.2 Contractor  shall  maintain,  at its  cost,  throughout  the  term  of this
     Agreement and for at least one year following the  termination,  expiration
     or non-renewal of this Agreement for any reason the following  insurance of
     the type specified below:

     13.2.a Commercial General Liability:  $5,000,000 per occurrence;  including
          Product Liability of not less then $5,000,000 per occurrence; and

     13.2.b Worker's  Compensation  coverage in accordance  with all  applicable
          laws including Employer's Liability: $1,000,000 per occurrence.

13.3 Contractor  shall  furnish  Customer  with a  certificate(s)  of insurance,
     executed  by a duly  authorized  representative  of each  insurer,  showing
     compliance   with  the  insurance   requirements   set  forth  above.   All
     certificates  shall provide for thirty (30) days written notice to Customer
     prior to the  cancellation or material change of any insurance  referred to
     therein.

13.4 Such insurance shall be carried with an insurance carrier with an A.M. Best
     rating of A- or in the absence of an AM Best rating, a full BBB rating from
     S&P.

13.5 Failure of Customer to demand such  certificate  or other  evidence of full
     compliance  with these  insurance  requirements  or failure of  Customer to
     identify a deficiency from evidence that is provided shall not be construed
     as a waiver of  Contractor's  obligation  to maintain  such  insurance.  By
     requiring  insurance herein,  Customer does not represent that coverage and
     limits will necessarily be adequate to protect Contractor and such coverage
     and limits shall not be deemed as a limitation  on  Contractor's  liability
     under the indemnities granted to Customer in this contract.

                                       9

<PAGE>

                                14 FORCE MAJEURE

14.1 Either party shall be excused from  performance  and  liability  under this
     Agreement while and to the extent that such  performance is prevented by an
     Act of  God,  strike  or  other  labor  dispute,  labor  stoppage,  acts of
     terrorism,  war  or  war  condition,   riot,  civil  disorder,   government
     regulation, embargo, fire, flood, accident or any other casualty beyond the
     reasonable control of such party.

                                15 RELATIONSHIP

15.1 The  relationship  which  Contractor  holds  as to  Customer  is that of an
     independent contractor.  This Agreement is not intended to create and shall
     not  be  construed  as  creating   between   Customer  and  Contractor  the
     relationship of principal and agent,  joint  venturers,  co-partners or any
     other  similar  relationship,  the  existence of which is hereby  expressly
     denied,  nor shall  Contractor  be  considered in any sense an affiliate or
     subsidiary  of  Customer  other  than  as  provided  for  in  paragraph  0.
     Contractor  shall not have any  authority to create or assume in Customer's
     name or on its behalf any  obligation,  expressed or implied,  or to act or
     purport to act as Customer's agent or legally empowered  representative for
     any purpose whatsoever. Neither party shall be liable to any third party in
     any   way   for   any   engagement,   obligation,   commitment,   contract,
     representation,  transaction or act or omission to act of the other, except
     as expressly provided herein.

15.2 Contractor  shall have  exclusive  control over  production,  packaging and
     storage  operations  at  Contractor's  Facility  and  shall  direct  and be
     responsible for the performance of all operations at Contractor's Facility.

                                 16 TERMINATION

16.1 Customer  reserves  the  right  to  immediately  terminate  this  Agreement
     (subject to paragraph 16.3) in the following circumstances:

     16.1.a Where Contractor has failed to perform or meet any term or condition
          hereof and has  failed to correct  the same  within  thirty  (30) days
          after written notice of such failure by Customer;

     161.b Where (i) Contractor  fails to  vacate  an  involuntary  bankruptcy,
          insolvency or  reorganization  petition or petition for an arrangement
          or composition  with creditors filed against  Contractor  within sixty
          (60) days after the date of such filing, or files such a petition on a
          voluntary  basis;  or (ii)  Contractor  makes  an  assignment  for the
          benefit  of  creditors;  or  (iii)  Contractor  fails  to  vacate  the
          appointment  of a  receiver  or  trustee  for  Contractor  or for  any
          interest in  Contractor's  business  within sixty (60) days after such
          appointment;  or ; or (iv) Contractor's  interest or rights under this
          Agreement,  or any part thereof,  pass to another by operation of law;
          or (v)  Contractor  ceases to do business as a going concern or ceases
          to conduct its operations in the normal course of business.

                                       10

<PAGE>

     16.1.c Where  Contractor or its agents or  representatives  has adulterated
          any  Product  or  has  substituted  or  added,  with  respect  to  any
          instruction,  specification, formula, manufacturing process or quality
          control  standard or any procedure set forth in this  Agreement or any
          exhibit  hereto,  an ingredient,  component,  process or procedure not
          called  for  thereby,   or  has  altered  or  omitted  an  ingredient,
          component, process or procedure called for thereby.

16.2 The termination rights granted under this paragraph are cumulative with and
     in  addition  to any other  rights or  remedies  to which  Customer  may be
     entitled arising from any violation, default or breach of this Agreement.

16.3 Contractor  agrees  that,  in the event that any of the events set forth in
     paragraph 0 (v) or 0 (vii) should occur,  Customer may, at its sole option,
     elect to terminate this  Agreement (i)  immediately or (ii) sixty (60) days
     from the date of Customer's  notice of termination;  during such sixty (60)
     day period Contractor shall continue to produce,  package,  store, ship and
     sell Product to Customer in  accordance  with the terms and  conditions  of
     this Agreement.

16.4 Contractor  reserves the right to  immediately  terminate this Agreement in
     the following circumstances:

     16.4.a Where  Customer has failed to perform or meet any  material  term or
          condition hereof,  including the nonpayment of any uncontested  amount
          owed under this  Agreement,  and has failed to correct the same within
          thirty (30) days after written  notice of such failure by  Contractor.
          In the event such default, other than for nonpayment of an uncontested
          amount due  hereunder,  cannot be reasonably  cured within such thirty
          (30) day period,  this  Agreement  shall not be  terminated as long as
          Customer  commences  such cure  within said thirty (30) day period and
          diligently pursues such cure to completion;

     16.4.b Where  (i)  Customer  fails to  vacate  an  involuntary  bankruptcy,
          insolvency or  reorganization  petition or petition for an arrangement
          or composition with creditors filed against Customer within sixty (60)
          days after such filing, or files such a petition on a voluntary basis;
          or (ii) Customer makes an assignment for the benefit of creditors;  or
          (iii)  Customer  fails to vacate  the  appointment  of a  receiver  or
          trustee for Customer or for any interest in Customer's business within
          sixty (60) days after such  appointment , (iv)  Customer  ceases to do
          business as a going  concern or ceases to conduct its operation in the
          normal course of business or (v)  Customer's  interest or rights under
          this  Agreement,  or to  any  part  thereof,  pass  to  PepsiCo  Inc.,
          including any of its subsidiaries or affiliates.

                                       11

<PAGE>

16.5 The termination rights granted under this paragraph are cumulative with and
     in addition to any other  rights or  remedies  to which  Contractor  may be
     entitled arising from any violation, default or breach of this Agreement.

16.6 In the event  this  Agreement  is  terminated  by  Contractor  pursuant  to
     paragraph  0, or  payment  default  under  0,  and  this  Agreement  is not
     otherwise  in  dispute  between  the  parties,   Customer  shall  reimburse
     Contractor for all amounts owed to Contractor  that are  outstanding  under
     this Agreement and which are not subject of a dispute  between the parties.
     All such amounts shall be paid by Customer to Contractor within thirty (30)
     days of Contractor's termination of this Agreement.

16.7 Any  failure  by either  party to notify  the other  party of a  violation,
     default or breach of this  Agreement,  or to  terminate  this  Agreement on
     account thereof,  shall not constitute a waiver of such violation,  default
     or  breach or a  consent,  acquiescence  or waiver of any later  violation,
     default or breach, whether of the same of a different character.

16.8 Upon  termination  or  cancellation  of this  Agreement the rights  granted
     hereunder  shall  immediately  become null and void, and  Contractor  shall
     discontinue  all use of the  trademarks  referred  to in Part 11 hereof and
     shall  return to  Customer  all  originals  and  copies of the  information
     subject to Part 8 hereof,  but such  termination or cancellation  shall not
     affect  any  obligation  or  liability  incurred  by  Contractor  prior  to
     termination or cancellation.

16.9 Upon termination or cancellation of this Agreement for any reason, Customer
     shall pick up from Contractor,  within a reasonable period of time (but not
     to exceed  thirty  (30) days),  all Product  owned by Customer or for which
     Customer has paid, in useable condition,  as well as all other inventory of
     Customer  in the  possession,  custody or control  of  Contractor  provided
     Customer  will  reimburse  Contractor  as set forth herein at  Contractor's
     cost.

16.10 Except as provided in paragraph  14.1 of this  Agreement,  in the event of
     Contractor  failing or being unable for whatsoever reason to produce all or
     any  portion of the  Customer's  requirements  of  Product as  contemplated
     herein, Customer shall be entitled to have all or any portion of Customer's
     Product produced at another facility and in such event shall be entitled to
     enforce all of its rights under this Agreement.

              17 SEVERABILITY; GOVERNING LAW; JURISDICTION; VENUE

17.1 In the event that any  provision of this  Agreement is declared  invalid or
     contrary to any law, rule, regulation or public policy of the United States
     or any state or province,  all of the remainder of this  Agreement,  or the
     application  of such term or  provision to persons or  circumstances  other
     than those as to which it is held  invalid or  unenforceable,  shall not be
     affected  thereby,  and each term and provision of this agreement  shall be
     valid and enforceable to the fullest extent permitted by law. Moreover,  if
     a court of competent  jurisdiction deems any provision shall be reformed to
     the minimum degree that would render it enforceable.

                                       12

<PAGE>

17.2 This Agreement shall in all respects be governed by, construed and enforced
     in  accordance  with the laws of the  State of  California,  applicable  to
     contracts executed and to be wholly performed therein.  The parties further
     specifically  agree  that any  action or  proceeding  arising  out of or in
     connection  with this Agreement shall be venued in the State of California,
     Sacramento County.

                                   18 NOTICES

18.1 Any  notice  or  other  communication  required  or  permitted  to be given
     pursuant to this Agreement shall be deemed to have been sufficiently  given
     if in writing and either delivered against receipt or sent by registered or
     certified mail addressed as indicated below; such notice if mailed shall be
     deemed  completed  on the third day  following  the deposit  thereof in the
     United States mail:


If to Customer:
Hansen Beverage Company
1010 Railroad Street, Corona, CA 92882
Attn: Chairman and President (Rodney Sacks/Hilton Schlosberg)

If to Contractor:
Nor-Cal Beverage Co., Inc.
2286 Stone Boulevard
West Sacramento, CA  95691
     Attn: President 

18.2 Either party may, by notice as aforesaid,  designate a different address or
     addresses for notices or other communications intended for it.

                                19 MISCELLANEOUS

Contractor  shall not assign,  convey or transfer this  Agreement or any part of
its rights under this Agreement without the express written consent of Customer.
Customer shall not  unreasonably  withhold  written  consent.  In the event such
written consent is obtained, the holder or holders through assignment,  transfer
or conveyance of this Agreement or the rights granted  hereunder  shall be bound
by all of the terms and conditions thereof. Customer shall not assign, convey or
transfer this Agreement or any part of its rights under this  Agreement  without
the express written  consent of Contractor.  Contractor  shall not  unreasonably
withhold  written  consent.  In the event such written consent is obtained,  the
holder or holders through  assignment,  transfer or conveyance of this Agreement
or the  rights  granted  hereunder  shall  be  bound  by all  of the  terms  and
conditions thereof.

19.1 This Agreement  constitutes  the entire  understanding  between the parties
     relating to Product and, as of the Effective  Date,  supersedes and cancels
     any and all  previous  contracts  or  agreements  between the parties  with
     respect to any  Product.  This  Agreement  may not be  altered,  amended or
     modified  except  by a  written  instrument  executed  by  duly  authorized
     officers of Customer and Contractor.

                                       13

<PAGE>

19.2 The headings  contained  herein are inserted for convenience only and shall
     not be deemed to have any substantive meaning.

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


HANSEN BEVERAGE COMPANY

By:   /s/ Rodney C. Sacks
      -------------------
      Rodney C. Sacks

Chairman
-------------------------
(Title)



NOR-CAL BEVERAGE CO., INC.

By:   /s/ Donald R. Deary
      --------------------
      Donald R.Deary
         
President 
--------------------------
(Title)

                                       14

                    PRODUCT MANUFACTURE AND SUPPLY AGREEMENT
                               (The "Agreement")



This Agreement  made this 15th day of April 2003 by and between Hansen  Beverage
Company,  a Delaware  corporation,  having a principal place of business at 1010
Railroad  Street,  Corona,  CA 92882,  ("Purchaser")  and  Seven-Up/RC  Bottling
Company of Southern California, Inc., a Delaware corporation, having a principal
place of business at 3220 East 26th St., Los Angeles, CA 90023 ("7UP/RC").

WHEREAS,  the Purchaser  desires 7UP/RC to manufacture and supply Purchaser with
Monster  Energy Drink in 16 oz.  packages and 7UP/RC agrees to  manufacture  and
supply such products under the terms and conditions contained herein.

NOW THEREFORE,  in consideration of the mutual covenants hereinafter  expressed,
the parties agree as follows:

                                I - DEFINITIONS

     1.1  "FDA" means the United States Food and Drug Administration.

     1.2  "Product(s)" means an energy drink, more fully described in Exhibit A,
          meeting  Purchaser's  specifications and manufactured for Purchaser by
          7UP/RC in finished form suitable for use by the consumer, packaged and
          labeled under the Purchaser's  trademark for marketing by Purchaser or
          its   subsidiaries   in  the  United  States,   its   territories  and
          possessions.

     1.3  "Specifications"
   mean  the   written   specifications   for  Product
          including,  but not limited to, written formulations,  specifications,
          process   instructions,   bottle  quantity,   packaging  and  labeling
          instructions, which are attached as Exhibit A.

     1.4  "Branded Materials" means all finished Product and raw materials which
          are  unique  to  Product  and may only be used by  7UP/RC  to  produce
          Product.


                       II - PURCHASE AND SALE OF PRODUCTS

     2.1  Obligations of Parties.  Purchaser shall purchase Products from 7UP/RC
          from  time  to  time  on the  terms  and  conditions  set  out in this
          Agreement,  during the Term of this  Agreement.  7UP/RC shall process,
          test, label,  store, and sell Products to Purchaser in accordance with
          the terms and conditions set out in this Agreement, during the term of
          this Agreement.


<PAGE>

          7UP/RC agrees that it shall not use the  Equipment  referred to in 2.8
          below for the production,  at its Buena Park,  California facility, of
          any  competitive  energy  drinks  without  Purchaser's  prior  written
          approval; provided however that if Purchaser fails to purchase _______
          cases of Products  with a tolerance  of 20% i.e., a minimum of _______
          cases, per year from 7UP/RC during the term of this Agreement,  7UP/RC
          shall  thereafter be entitled to use the Equipment for the  production
          of other  energy  drinks  provided  that in such event 7UP/RC shall be
          obliged to make payment to the  Purchaser of an agreed  royalty fee in
          respect of such  other  energy  drinks on a per case  basis  until the
          Purchaser is reimbursed  for the costs  incurred by it to purchase the
          Equipment concerned.

     2.2  Forecasts.  Prior to the beginning of each calendar quarter, Purchaser
          shall  provide to 7UP/RC a written  forecast of the number of cases of
          Product  by flavor  and  package  size  expected  to be ordered in the
          following three (3) month period. Based on the forecast,  7UP/RC shall
          purchase raw materials (sodium citrate,  citric acid), in amounts,  in
          7UP/RC's reasonable  opinion,  are required to fill orders during such
          period.  All other raw materials shall be supplied by Purchaser at its
          expense  including the expense of delivering raw materials to 7UP/RC's
          facility for  production of Product.  Purchaser  shall be  financially
          responsible for all out-of-date Product and raw materials.

     2.3  Orders.  Purchaser shall fax a purchase order for Product to 7UP/RC at
          least ten (10)  business  days prior to the  expected  delivery  date.
          Product will be  scheduled  for  production  by 7UP/RC at the earliest
          possible date.  All orders shall be for full  truckload  quantities of
          Product.  The terms and conditions  contained in any order form issued
          by Purchaser  under this Agreement shall be null and void and entirely
          surpassed by the terms and  conditions  of this  Agreement  except for
          those terms proposed by Purchaser and specifically accepted by 7UP/RC.

     2.4  Rejected Products/Shortages.  Purchaser shall notify 7UP/RC in writing
          of any claim relating to damaged,  defective or nonconforming  Product
          or any shortage in quantity of any  shipment of Product.  In the event
          such  rejection or shortage is due to 7UP/RC fault,  error or neglect,
          7UP/RC shall  replace the rejected  Product or make up the shortage in
          the next production run following receipt of such notice at no cost to
          Purchaser  and  shall  make   arrangements   with  Purchaser  for  the
          disposition of any rejected Product.

     2.5  Title and Risk of Loss.  Purchaser shall assume title and risk of loss
          for Product ordered upon delivery of Product to transport.


<PAGE>

     2.6  Price and Payment.  7UP/RC shall charge  Purchaser and Purchaser shall
          pay for Product as specified in Exhibit A, unless 7UP/RC and Purchaser
          agree in writing to a  different  price.  Such  prices  shall be fixed
          during the term of this Agreement  except as provided by Paragraph 2.7
          below. 7UP/RC shall invoice Purchaser for each shipment of Product and
          Purchaser  shall  receive a 2% discount to the extent such  invoice is
          paid within ten (10) days from the  invoice  date with all amounts due
          within thirty (30) days of the invoice date.

     2.7  Pass  Through  Costs.  At any time during the term of this  Agreement,
          7UP/RC may pass through and  otherwise  charge  Purchaser for any cost
          increases  for raw  materials,  labor or as a  result  of  changes  in
          specifications.  Further,  if any  law or  regulation  is  enacted  or
          imposed  anywhere,  the effect of which is to impose  upon or to cause
          7UP/RC to incur any cost or  expense  (which did not exist on the date
          of this Agreement) with respect to container  deposits,  used or empty
          container  collection,  container  recycling or disposal,  beverage or
          package  labeling  requirements,  any tax or duty in the  nature of an
          excise  tax or  otherwise,  upon or with  respect  to  Product  or the
          performance of 7UP/RC  services,  7UP/RC shall be entitled to increase
          the price of Product by an amount sufficient and in such manner and to
          such extent that none of the burden of such costs or expenses is borne
          by 7UP/RC.  If requested by Purchaser,  7UP/RC shall provide Purchaser
          with suitable evidence establishing that a cost increase did occur.

     2.8  Equipment. Purchaser shall purchase the equipment specified in Exhibit
          B (the "Equipment') at its sole cost and expense. All payments for the
          Equipment  shall  be  made  by  Purchaser  directly  to the  Equipment
          supplier.  Exhibit  B is  only an  estimate  of the  Equipment  costs.
          Purchaser  shall be responsible  for the actual cost of the Equipment.
          Purchaser  shall also be  responsible  for all  property  taxes on the
          equipment.  7UP/RC agrees to supervise and direct the  procurement and
          installation   of  the   Equipment.   7UP/RC  shall  perform   routine
          maintenance on the Equipment and shall be financially  responsible for
          minor  repairs.  7UP/RC  agrees  not  to use  the  Equipment  for  the
          production,  at its  Buena  Park,  California  facility,  of any other
          energy drink reasonably  similar to Product without  Purchaser's prior
          written approval. At the end of the term of this Agreement, 7UP/RC may
          use the Equipment to produce  Products as well as other energy drinks.
          Should this Agreement terminate early, 7UP/RC shall have the right but
          not the obligation to purchase the Equipment at the fair value thereof
          at that time.


                           III - TERM AND TERMINATION

     3.1  Term. This Agreement will commence on April 1, 2003 and shall continue
          until March 31, 2008 unless  sooner  terminated  pursuant to paragraph
          3.2 herein.


<PAGE>

     3.2  Termination.  This Agreement may be terminated prior to the end of its
          term (i) upon written notice by either party to the other party in the
          event that the other party  breaches  any  material  provision of this
          Agreement  and fails to remedy the breach prior to  expiration  of the
          thirty (30) day period or (ii) following notice by either party to the
          other upon the insolvency or bankruptcy of the other party.


                               IV - RAW MATERIALS

     4.1  Purchase of Raw Materials. 7UP/RC shall acquire and store, at its sole
          cost and expense,  the raw materials  identified in Section 2.2 herein
          to meet the quarterly forecast.

     4.2  Branded  Materials.  Purchaser shall reimburse 7UP/RC for any finished
          Product  and  Branded  Materials  which  remain in  7UP/RC  possession
          following  the   termination   of  this   Agreement  or  a  change  in
          Specifications  or other  decisions  of  Purchaser  which  render such
          Branded Materials obsolete or not useable by 7UP/RC.

     4.3  Pallets.  7UP/RC shall ship Product using pallets and a pallet pattern
          reflected in Exhibit A. Pallets  shall be exchanged  upon  delivery of
          Product or purchased by Purchaser of 7UP/RC  standard  cost if pallets
          are not exchanged.

     4.4  Shells. To the extent requested by Purchaser, Product shall be shipped
          to Purchaser in plastic  shells.  Purchaser shall pay 7UP/RC a deposit
          equal to 7UP/RC  standard  rate which shall be  refunded to  Purchaser
          when the shells are returned.


               V - PRODUCT ANALYSIS AND MANUFACTURING COMPLIANCE

     5.1  Product. 7UP/RC shall test or cause to be tested each batch of Product
          purchased  pursuant to this  Agreement  before  delivery to Purchaser.
          Such  testing  shall be  conducted  according  to  7UP/RC  established
          practice  and  procedures,  which  Purchaser  has  reviewed and deemed
          suitable.

     5.2  Manufacturing  Compliance.  While  manufacturing,  bottling,  canning,
          labeling, packaging and storing Product, 7UP/RC shall conform strictly
          with the  formula,  methods of  manufacture,  standards of quality and
          sanitation,  bottling, canning, labeling, package design and packaging
          instructions and other specifications and instructions which Purchaser
          shall furnish from time to time. 7UP/RC shall also:


<PAGE>

          (a)  maintain and operate its bottling and canning plants at all times
               in good and sanitary operating order, condition and repair and in
               compliance  with any standards  required by applicable  law, with
               sufficient   production   and  storage   capacity  to  fully  and
               faithfully to perform its obligations under this Agreement;

          (b)  date and production  code each production run of the Product by a
               legible  means to identify at least the date when and the packing
               such Product were produced,  and keep Purchaser fully apprised of
               the coding systems used and all changes therein; and

          (c)  package all Product in accordance  with  manufacturing  standards
               (if any)  specified  by  Purchaser  and to such  standards as are
               required by applicable law.



                               VI-PRODUCT RECALLS

     In the event (a) any government  authority  issues a request,  directive or
order that Product be recalled, or (b) a court of competent  jurisdiction orders
such a recall,  or (c) 7UP/RC  reasonably  determines  after  consultation  with
Purchaser  that  Product  should  be  recalled,   the  parties  shall  take  all
appropriate  corrective  actions. In the event that such recall results from any
cause or event  arising  from  defective  manufacture  of the Product by 7UP/RC,
7UP/RC shall be responsible for all expenses of the recall.  For the purposes of
this Agreement,  the expenses of recall shall include,  without limitation,  the
expenses of notification  and destruction or return of the recalled  Product and
Purchaser's  cost for  Product  recalled  but not the  expense  or  service  fee
associated with sales representatives' or management's time which shall be borne
by Purchaser.

                                VII - WARRANTIES

     7.1  Compliance  with the  Federal  Food,  Drug and  Cosmetic  Act.  7UP/RC
          warrants  that all Product  delivered  to  Purchaser  pursuant to this
          Agreement  will at the time of such  delivery  not be  adulterated  or
          misbranded  within the meaning of the Federal Food,  Drug and Cosmetic
          Act, as amended, ("Act") or within the meaning of any applicable state
          or  municipal  law  in  which  the  definitions  of  adulteration  and
          misbranding are  substantially  the same as that contained in the Act,
          as such Act and such laws are constituted and effective at the time of
          delivery  and  will  not  be an  article  which  may  not,  under  the
          provisions of such Act, be introduced into interstate commerce.

     7.2  Conformity with Specifications.  7UP/RC warrants that Product sold and
          delivered  pursuant to this  Agreement  will conform when delivered to
          the Specifications.

     7.3  Extent of  Warranty.  Except as  provided  in  Paragraphs  7.1 and 7.2
          herein,  7UP/RC  does not make any  warranty  of any kind,  express or
          implied,  with respect to Product including,  without limitation,  any
          warranty of fitness for a particular purpose or merchantability.


<PAGE>

                              VIII - FORCE MAJEURE

     Failure of either  party to perform its  obligations  under this  Agreement
(except the  obligation  to make  payments)  shall not subject such party to any
liability  to the other if such  failure  is  caused  by acts  such as,  but not
limited to, acts of God, fire,  explosion,  flood, drought, war, riot, sabotage,
embargo,  strikes  or  other  labor  trouble,  failure  in  whole  or in part of
suppliers to deliver on schedule materials, equipment or machinery, interruption
of or delay in  transportation,  compliance  with any order or regulation of any
government  entity  acting with color of right or by any other cause  beyond the
reasonable control of the parties.

                              IX - CONFIDENTIALITY

7-Up/ RC shall not be liable for indirect, special, incidental, consequential or
penal damages,  based on or attributable to the formulation of Product, but this
limitation shall not apply to or have any effect in respect of any damages based
on or attributable to any defects in the manufacture of Product or the packaging
thereof.

                              X - CONFIDENTIALITY

     10.1 Confidentiality. Each party hereto shall not disclose any confidential
          information  received  by it pursuant  to this  Agreement  without the
          prior written consent of the other.  This  obligation  shall not apply
          to:

          (a)  information  which is known to the receiving party at the time of
               disclosure  and  documented by written  records made prior to the
               date of this Agreement;

          (b)  information disclosed to the receiving party by a third party who
               has a right to make such disclosure;

          (c)  information which becomes  patented,  published or otherwise part
               of the public domain or information from a third person obtaining
               such information as a matter of right.

This obligation will continue for a period of three (3) years after  termination
of this Agreement or any extension thereof.

     10.2 Disclosure to Government.  Nothing  contained in this Article shall be
          construed to restrict Purchaser or 7UP/RC from disclosing confidential
          information as required:

          (a)  for regulatory, tax, customs or other governmental reasons;
          (b)  for audit purposes;
          (c)  by court order;
          (d)  from  using  such  confidential   information  as  is  reasonably
               necessary to perform acts permitted by this Agreement.


<PAGE>

                              XI - INDEMNIFICATION

     11.1 By  Purchaser.  Purchaser  will  indemnify  and hold  7UP/RC  harmless
          against  any and all  liability,  damages,  losses,  costs or expenses
          resulting  from any third party claims made or suits  brought  against
          7UP/RC  which  arise  out  of  the   promotion,   storage,   handling,
          distribution,   sale  of  Product  by  Purchaser,   from   Purchaser's
          negligence or from the negligence of Purchaser's  officers,  agents or
          employees.

     11.2 By 7UP/RC.  7UP/RC will indemnify and hold Purchaser  harmless against
          any and all liability,  damages,  costs or expenses resulting from any
          third party claims made or suits brought against Purchaser which arise
          out of the manufacture of Product by 7UP/RC, from 7UP/RC negligence or
          from the negligence of 7UP/RC's officers, agents or employees.

     11.3 Conditions of  Indemnification.  The  obligations of the  indemnifying
          party under this Article XI are conditioned upon the written notice to
          the  indemnifying  party with  regard to a claim or  lawsuit  which is
          alleged to be covered within  fifteen (15) days after the  indemnified
          party  has  received  notice  of said  claim  or  lawsuit.  The  above
          indemnities  are  further  conditioned  upon  the  cooperation  of the
          indemnified  party  with the  indemnifying  party in any regard in the
          investigation  and  defense  of any  claim or  lawsuit  alleged  to be
          covered by the above  indemnities.  Any indemnity  shall be void as to
          any  claim  or legal  action  for  which  settlement  or any  offer of
          settlement  is  made  without  the  prior   written   consent  of  the
          indemnifying party.


                               XII - ARBITRATION

Any dispute,  controversy  or claim arising out of or relating to this Agreement
or the breach or  termination  hereof  shall be  settled by binding  arbitration
conducted by  JAMS/Endispute.  ("JAMS") in  accordance  with JAMS  Comprehensive
Arbitration  Rules and Procedures (the "Rules").  The arbitration shall be heard
by one arbitrator to be selected in accordance with the Rules, in Orange County,
California.  Judgment upon any award rendered may be entered in any court having
jurisdiction  thereof.  Within seven (7)  calendar  days after  appointment  the
arbitrator  shall set the hearing date,  which shall be within 90 days after the
filing date of the demand for  arbitration  unless a later date is required  for
good cause shown and shall order a mutual exchange of what he/she  determines to
be relevant documents and the dates thereafter for the taking of up to a maximum
of 5 depositions by each party to last no more than 2 days in aggregate for each
party.  Both parties waive the right,  if any, to obtain any award for exemplary
or  punitive  damages or any other  amount for the purpose or imposing a penalty
from the other in any arbitration or judicial  proceeding or other  adjudication
arising  out of or  with  respect  to  this  Agreement,  or any  breach  hereof,
including any claim that said Agreement, or any part hereof, is invalid, illegal
or otherwise  voidable or void. In addition to all other relief,  the arbitrator
shall  have the  power to award  reasonable  attorneys'  fees to the  prevailing
party.  The arbitrator shall make his or her award no later than 7 calendar days
after the close of evidence or the submission of final briefs,  whichever occurs
later.


<PAGE>

                           XIII - GENERAL PROVISIONS

     13.1 Notices.  Any notices permitted or required by this Agreement shall be
          sent by telex,  telecopy,  registered mail or other recognized private
          mail carrier  service and shall be effective when received if sent and
          addressed as follows or to such other  address as may be designated by
          a party in writing:


               If to Purchaser: Hansens Beverage Company

                                1010 Railroad St

                                Corona, Ca 92882

               Attention:       Rodney Sacks

               Copy to:         Hilton Schlosberg





               If to 7UP/RC:    3220 East 26th St.
                                Los Angeles, CA  90023


               Attention:       Steve Walb

               Copy to:         Mike Nelson, Esq.

     13.2 Entire Agreement,  Amendment. The parties hereto acknowledge that this
          document  sets forth the entire  agreement  and  understanding  of the
          parties  and  supersedes  all  prior  written  or oral  agreements  or
          understandings   with  respect  to  the  subject  matter  hereof.   No
          modification  of any of the terms of this Agreement shall be deemed to
          be valid unless it is in writing and signed by the party  against whom
          enforcement is sought. No course of dealing or usage of trade shall be
          used to modify the terms and conditions herein.

     13.3 Waiver.  No waiver by either  party of any default  shall be effective
          unless in writing,  nor shall any such  waiver  operate as a waiver of
          any other default or of the same default on a future occasion.


<PAGE>

     13.4 Assignment.  This  Agreement  shall be  binding  upon and inure to the
          benefit of the successors or permitted  assigns of each of the parties
          and may not be assigned or  transferred  by either  party  without the
          prior written consent of the other.

     13.5 Governing Law. This Agreement shall be governed by and construed under
          the laws of the State of New York, U.S.A.

     13.6 Severability.  In the  event  that  any  term  or  provision  of  this
          Agreement shall violate any applicable  statute,  ordinance or rule of
          law in any  jurisdiction  in which it is used, such provision shall be
          ineffective to the extent of such violation  without  invalidating any
          other provision hereof.

     13.7 Heading,  Interpretation.  The headings  used in the Agreement are for
          convenience only and are not a part of this Agreement.


     IN WITNESS  WHEREOF,  the parties hereto have each caused this Agreement to
be duly executed as of the date first above written.

Seven-Up/RC Bottling Company                            (Purchaser)
Of Southern California, Inc.

By:  /s/Charles F. Shanley                              By:  /s/ Rodney C. Sacks
     ---------------------                                   -------------------
Name: Charles F. Shanley                                Name:  Rodney C. Sacks
     ---------------------                                   -------------------
Title:  President                                       Title:  Chairman
     ---------------------                                   -------------------

                                                        By:
                                                             -------------------
                                                        Name:
                                                             -------------------
                                                        Title:
                                                             -------------------


<PAGE>

                                  ADDENDUM TO
                    PRODUCT MANUFACTURE AND SUPPLY AGREEMENT
                                    BETWEEN
                            HANSEN BEVERAGE COMPANY
                                      AND
           SEVEN-UP/RC BOTTLING COMPANY OF SOUTHERN CALIFORNIA, INC.
                              DATED APRIL 15, 2003
                               ("The Agreement")

     This  Addendum  to the  Agreement  ("Addendum)  is made this  _9th__ day of
December,  2003  by  and  between  Hansen  Beverage  Company  ("Purchaser")  and
Seven-Up/RC  Bottling  Company of  Southern  California,  Inc.  ("7UP/RC")  with
reference to the following:

     WHEREAS:

     A.   On April 15, 2003 Purchaser and 7UP/RC entered into the Agreement.

     B.   Pursuant to the Agreement the Purchaser  purchased  certain  equipment
          specified in Exhibit B to the  Agreement  ("Exhibit B") which has been
          installed at 7UP/RC and 7UP/RC has commenced with the  manufacture and
          supply to Purchaser of Monster  Energy(tm)  drinks in 16 oz.  packages
          pursuant thereto.

     C.   Subsequent to the commencement of production,  7UP/RC determined that,
          to enable  them to meet the  Purchaser's  volume  requirements,  it is
          necessary that certain further equipment be purchased and installed on
          their line and have requested the Purchaser to purchase such equipment
          in  connection  with the  Agreement.  The  Purchaser  is  agreeable to
          purchasing  the further  equipment  concerned and to the  installation
          thereof on the 7UP/RC line  provided that and subject to the Agreement
          being  amended in  accordance  with the terms set out in this Addendum
          and 7UP/RC is agreeable thereto.

     NOW, THEREFORE, it is agreed as follows:

     1.   The  "Products"  as  defined  in  the  Agreement   shall  include  any
          additional  energy  drinks in 16 oz.  packages  that the Purchaser may
          require  7UP/RC to  manufacture  and supply to it from time to time in
          terms of and during the term of the Agreement.

     2.   Clause 2.8 of the  Agreement  is amended by the addition at the end of
          that clause of the following:  "Purchaser shall, in addition, purchase
          and pay for a 30 h.p. 4329  Tri-Blender  Tri-Clover  machine  together
          with two 328 Waukesha  transfer  pumps with 10 h.p.  wash down motors,
          interconnecting  piping,  control panels,  etc. ("New  Equipment") and
          assume  financial  responsibility  for  the  installation  and  wiring
          thereof,  in accordance with the estimate from BEECO which is attached
          hereto as Exhibit C. Purchaser  shall pay for the New Equipment  after
          confirmation  from  7UP/RC  that the same has been  supplied  and duly
          installed at 7UP/RC and is fully operational.  Purchaser shall also be
          financially  responsible  for all taxes and freight in connection with
          the New  Equipment.  7UP/RC  assumes  responsibility  to supervise the
          installation of the New Equipment and to perform  routine  maintenance
          on the New Equipment and to be financially responsible for all repairs
          to the New Equipment during the term of this Agreement.


<PAGE>

     3.   7UP/RC  represents to the Purchaser that the purchase and installation
          of the New Equipment  will enable it to produce  larger  quantities of
          Products with less lead time and enable 7UP/RC to meet  unexpected and
          increased  volume  demands from  Purchaser for the Products  including
          during  Buena  Park's peak  season and will  eliminate  conflicts  and
          achieve more consistent emulsification and result in superior products
          being produced by 7UP/RC for Purchaser.

     4.   The term of the  Agreement  is  extended  until  March 31, 2009 unless
          sooner  terminated  pursuant to the provisions of Paragraph 3.2 of the
          Agreement.

     5.   7UP/RC agrees not to use the New Equipment for the production,  at its
          Buena Park,  California facility of any other energy drinks similar to
          the Products, without Purchaser's prior written consent.

     6.   Upon the termination of the Agreement for whatever  reason,  Purchaser
          shall be entitled to remove the New  Equipment or,  alternatively,  to
          negotiate  the sale of the New  Equipment to 7UP/RC at the fair market
          value thereof at that time.  Should 7UP/RC and the Purchaser  agree to
          the sale of the New Equipment to 7UP/RC upon the  termination  of this
          Agreement,  7UP/RC  shall  be  entitled  to use the New  Equipment  to
          produce other energy drinks as well as Products.

     7.   Save as aforesaid the Agreement  shall be unaffected  hereby and shall
          continue in full force and effect between the parties.

     IN WITNESS WHEREOF, the parties hereto have each caused this Addendum to be
duly executed as of the date first above written.

Seven-Up Bottling Company of                         Hansen Beverage Company
Southern California, Inc.

By: /s/Charles F. Shanley                            By: /s/Rodney C. Sacks
    ------------------------------                       -----------------------
Name: Charles F. Shanley                             Name:Rodney C. Sacks
    ------------------------------                       -----------------------
Title:President                                      Title:Chairman of the Board
    ------------------------------                       -----------------------


                           CONTRACT PACKER AGREEMENT


THIS CONTRACT PACKER AGREEMENT (the "Agreement") made on JULY 24, 2004 between

     SOUTHEAST ATLANTIC BEVERAGE CORPORATION,  a corporation  incorporated under
     the laws of the State of  Florida,  having  an  office  at 6001  Bowdendale
     Avenue, Jacksonville, Florida 32216 (hereinafter called the "Company"),

     and Hansen Beverage Company,  a corporation  incorporated under the laws of
     the State of Delaware,  having an office at 1010 Railroad  Street,  Corona,
     California 92882 (hereinafter called the "Customer").

WHEREAS  the  Customer  wishes the  Company to produce  and bottle  flavored  or
non-flavored,  carbonated or  non-carbonated  beverage  products under its trade
names or trademarks;

WHEREAS the Company is engaged in the business of bottling  beverage products at
its place of business in Jacksonville, Florida.

AND WHEREAS  the parties  hereto are  desirous of entering  into this  Agreement
pursuant to which the Company shall bottle the products as  hereinafter  defined
in  accordance  with  specifications  to be  supplied  by the  Customer,  all in
accordance with the terms and conditions set forth in this Agreement.

NOW,  THEREFORE,  in  consideration of the promises and covenants and agreements
herein container,
 the parties agree as follows:
        
1.      Definitions.

1.1  In this  Agreement,  unless  something in the subject  matter or context is
     inconsistent therewith:

     a.   Bottling  Facility  means  the  lands,  buildings,   warehouse,  plant
          equipment   and  other   facilities   in  6045   Bowdendale.   Avenue,
          Jacksonville,  Florida  32216  leased,  or operated by the Company and
          used for the bottling of beverage products.

     b.   Commencement Date means such date as the parties agree in writing.

     c    Finished Case Goods means Products bottled and made ready for delivery
          pursuant to this Agreement.

     d.   Ingredients mean  sweeteners,  preservative,  acidulates,  CO?, flavor
          components,  water  and all  other  components  that are  combined  to
          produce the Products.

                                       1

<PAGE>

     e.   Packaging Materials means can bodies, can ends, bottles, caps, labels,
          cartons, and all other components used to package the Products.

     f.   Production  Run  means  an  order  by the  Customer  for a  continuous
          bottling of a  scheduled  quantity of each  product  size,  flavor and
          package.

     h.   Products   means   flavored   and    non-flavored,    carbonated   and
          non-carbonated,  beverages sold under the trademark and brand names of
          the Customer, as specified on Schedule A hereto.

     i.   Schedule  means any of the  schedules  designated  by  letters,  e.g.,
          Schedule  "A",  which  are  attached  to and  incorporated  herein  by
          reference.  The  Schedules  may be  modified  from time to time by the
          mutual written consent of the parties.

     l.   Term means as set forth in section 2.1 hereof.

2.      Term.

2.1  The Term of this  Agreement  shall be three  (3)  years  commencing  on the
     Commencement Date subject to renewal as herein provided.

2.2  This Agreement shall be  automatically  extended for additional  periods of
     one (1) year each,  unless  either  party  notifies the other in writing at
     least one hundred  eighty (180) days prior to the then last day of the Term
     that it does not wish to extend  this  Agreement  or unless  terminated  as
     provided herein.

3.      Storage.

3.1  Reasonable  inventories of Extracts,  Packaging Materials and Finished Case
     Goods shall be held by the  Company.  The Company  agrees to hold  Finished
     Case  Goods  inventories  for not more than five (5)  business  days  after
     scheduled  Production Run and shall have the right to charge the Customer a
     warehousing  fee of $___ per Finished Case Goods per week commencing on the
     sixth (6)  business  day  after the  scheduled  Production  Run,  excluding
     weekends and holidays.

4.      Packaging Material and Ingredients.

4.1  The Customer  shall make available to and order in for the Company prior to
     the start of any Production Run, all  Ingredients  and Packaging  Materials
     needed for the bottling of the Products  requested for that  Production Run
     and Packaging Materials set forth in Schedule "A".

4.2  The Customer  shall  maintain  ownership of all  Ingredients  and Packaging
     Materials set forth in Schedule "A" unless  Customer is indebted to Company
     for materials and/or services provided by Company at which time the Company
     may take possession of all Ingredients and Packaging  Materials held at the
     Bottling Facility. Upon receipt of debt owed, the Company will then release
     all  Ingredients and Packaging  Materials to the Customer.  

                                       2

<PAGE>

4.3  The Company shall supply the Ingredients and Packaging  Materials set forth
     in Schedule "A" or as mutually agreed to by the Company and the Customer.

5.      Quality Standards and Specifications.

5.1  The Company, shall bottle the Products and store the Ingredients, Packaging
     Materials and Finished Goods in compliance with the Product Specifications,
     normal industry standards and all applicable federal,  state and local laws
     and  regulations in effect as of the date of this Agreement and as they may
     exist from time to time.  The  Company  shall  maintain  pest  control  and
     sanitation practices in strict compliance with the federal, state and local
     laws and regulations in effect as of the date of this Agreement and as they
     may be amended from time to time.

5.2  The Company  represents  and  warrants  that the  manufacture,  storage and
     handling of the Finished  Goods and the  component  parts thereof will take
     place under  conditions  that conform to the  standards  of sound  storage,
     handling, mixing, bottling, manufacturing,  sanitation and safety practices
     in the soft drink manufacturing industry.

6.      Maximum Loss Allowance.

6.1  Subject to sections  6.2 and 6.3  herein,  in bottling  the  Products,  the
     Company  shall be  allowed  the  percentage  loss  allowance  of ____%  for
     Finished Case Goods, Ingredients, and Packaging Materials.

6.2  If Ingredients of unacceptable quality, based on the Company's standards or
     any  applicable  laws and  regulations,  are received from the customer and
     rejected  by the  Company for use during any  Production  Run,  the Company
     shall notify and report to the Customer  quantity of such  material and the
     Customer shall deduct that amount in calculating the Company's maximum Loss
     Allowance.  The  Customer is then  responsible  for all  disposing  cost of
     unacceptable materials.

6.3  The  Maximum  Loss  Allowance  referred  to  herein  shall not apply to any
     Production  Run which is less than the minimum  run and flavor  quantity of
     ______Finished Case Goods rounded to formula yield.

7.      Bottling Schedule.

7.1  On or before the  Commencement  Date and  thereafter  the  Company  and the
     Customer  shall agree upon a production  schedule for the Products in terms
     of quantity, package size and flavor mix.

7.2  The Customer agrees that the Company, in its sole discretion may change the
     Bottling  Schedule  upon  five (5)  business  days  written  notice  to the
     Customer,  however,  should not delay the production more than fifteen (15)
     days.

7.3  All  Production  Runs must conform with the Company's  minimum run of _____
     cases and minimum flavor of _____  Finished Case Goods,  rounded to formula
     yield unless otherwise agreed to by the Company.

                                       3

<PAGE>

8.      Pallets.

8.1  The Company will make  available to the Customer 48 x 40 four-way  hardwood
     pallets in quantities  sufficient to store and ship all Finished Case Goods
     at a cost of $___ each.

8.2  The Customer shall be allowed to return 48 x 40 four-way  hardwood  pallets
     and to  receive  credit  for  those  returned  as  long as the  Company  is
     satisfied with the condition of such pallet.

9.      Payment of Fees.

9.1  In  consideration  of the  services  provided  by the  Company  under  this
     Agreement,  the  Customer  shall  pay to the  Company  the  fees set out in
     Schedule "A".

9.2  Payment  of fees  shall  be due and  payable  within  ten (10)  days  after
     submission of an invoice to Customer following Production.

9.3  Confirmation  of fees shall be  invoiced  weekly  upon  completion  of each
     Production Run.

9.4  The fees referred to herein are  exclusive of all federal,  state and local
     sales,   goods,   and  services  and  similar  taxes  which  shall  be  the
     responsibility of the Customer.

9.5  The Company shall  provide to the Customer  written  notification  not less
     than thirty (30) days of any changes to the fees  referred to herein due to
     direct increase/decrease costs by Company.

10.     Warranties and Representation.

10.1 The Company hereby covenants, represents and warrants to the Customer that:

     (a). It is a corporation duly organized and validly existing under the laws
          of the State of Florida.

     (b). It has all necessary  corporate  power,  authority and capacity and is
          properly  authorized  and licensed to enter into this Agreement and to
          perform it obligations  hereunder.  The execution and delivery of this
          Agreement and the performance of the transactions  contemplated hereby
          have been duly authorized by it.

     (c). The  Company  acknowledges  and  agrees  that  all  Products  shall be
          produced,  bottled and stored in strict compliance with all applicable
          federal,  state  and local  laws and  regulations,  including  but not
          limited to , the  Federal  Food,  Drug and  Cosmetic  Act of 1938,  as
          amended, in force and as they may be amended from time to time.

     (d). It has and  during  the  term of this  Agreement  shall  maintain  all
          applicable state licenses required.

                                       4

<PAGE>

CONTRACT PACKER AGREEMENT


10.2 The Customer hereby covenants, represents and warrants to the Company that:
     
     (a). It is a corporation duly organized and validly existing under the laws
          of the Delaware.

     (b). It has all necessary  corporate  power,  authority and capacity and is
          properly  authorized  and licensed to enter into this Agreement and to
          perform it's obligations hereunder. The execution and delivery of this
          Agreement and the performance of the transactions  contemplated hereby
          have been duly authorized by it.

     (c). To the best of the Customer's  knowledge,  all Product  Specification,
          Ingredients  and Packaging  Materials  supplied by the Customer to the
          Company,  pertaining to the  Products,  shall comply with all federal,
          state  and local  laws and  regulations  in force,  and as they may be
          amended  from time to time,  including  by not limited to, the Federal
          Food, Drug and Cosmetic Act of, as amended from time to time.

     (d). It has and  during  the  term of this  Agreement  shall  maintain  all
          applicable state licenses required.

Trademarks and Confidentiality.

11      All trademarks, trade names and all trade secrets,  technical  know-how,
specifications,    formulae,   standards,   procedures,   new   product   ideas,
manufacturing  processes and the like (the  "Proprietary  information"  owned by
Customer  shall at all times be and remain the  exclusive  property of Customer,
and this  Agreement  shall not in any manner  constitute a license to company to
use the trademarks, trade names or proprietary information of Customer except to
the extent required to satisfy its obligations under this agreement.

11.1    At all  times  during  the term of  this  Agreement and thereafter, both
parties agree not to disclose to anyone  outside of the Company or the Customer,
nor use for any purpose other than in  connection  with the  performance  of the
services pursuant to the Agreement, or unless prior written consent is obtained,
(a) any confidential  information,  proprietary  information or trade secrets of
the Company or the Customer,  including,  without limitation  concepts,  Product
Specifications,  formulas, techniques,  methods, systems, designs, pricing, sale
projections,  production volumes,  research,  computer programs,  development or
experimental work, clients, suppliers, companies, and service providers, (b) any
information  the parties have  received  from others which they are obligated to
treat as confidential or proprietary,  or (c) and  confidential,  or proprietary
information  which is  circulated  within the  Company or the  Customer  via its
internal   mail   system   or   otherwise   (collectively,   the   "Confidential
Information").  The  obligation  not to use or disclose any of the  Confidential
Information  shall  not  apply  to any  information  that is or  becomes  public
knowledge in the industry,  through no fault of the Company or the Customer, and
that may be utilized by the public without any direct or indirect  obligation to
the Company or the Customer;  provided,  that the  termination of the obligation
for non-use or  non-disclosure  by reason of such  information  becoming  public
shall be only from the date such information becomes public knowledge.

                                       5

<PAGE>
       
11.2    The Customer agrees that all business records and documents, including, 
but not limited to,  notes,  manuals,  photographs  or the like,  and any copies
thereof,  provided to the Customer or kept or made by the  Customer  relating to
the  business of the Company  shall  remain the  property  of the  Company.  The
Customer  agrees that upon  termination  of this  Agreement,  the Customer shall
immediately  cease  using and  surrender  and  deliver to the Company all of the
property and other  materials in its  possession,  or in the  possession  of any
person or entity under its control, that relate, directly or indirectly,  to any
Confidential  Information or to the business of the Company,  including  without
limitation,  all personal  notes,  drawings,  manuals,  documents,  photographs,
videos, and computer disks and software and any copies thereof.

11.3    The Company  agrees  business  records and  documents,  including,  but
not limited to, notes, manuals, photographs or the like, and any copies thereof,
provided to the Company or kept or made by the Company  relating to the business
of the Customer  shall remain the property of the Customer.  The Company  agrees
that upon  termination of this Agreement,  the Company shall  immediately  cease
using and  surrender  and deliver to the  Customer all of the property and other
materials in its possession,  or in the possession of any person or entity under
its  control,  that  relate,   directly  or  indirectly,   to  any  Confidential
Information or to the business of the Customer,  including  without  limitation,
all personal notes,  drawings,  manuals,  documents,  photographs,  videos,  and
computer disks and software and any copies thereof.

12.     Indemnification, Damages and Insurance.

12.1    The Company agrees to defend, indemnify and hold the  Customer  harmless
against any and all claims, expenses,  losses, causes of action (including,  but
not  limited  to,  reasonable  attorney's  fees and  court  costs),  damages  or
liabilities (collectively, in this paragraph, called "Losses") on account of the
death of and/or  injury to any  person(s) or damage to any property  arising out
of, due to, or in any way connected  with any Finished Case Goods,  Ingredients,
Packaging Materials or other substances furnished by the Company and/or any act,
omission  or  failure  to  act  by  the  Company,   its  employees,   agents  or
representatives  which act,  omission or failure to act is in  violation  of the
Company's  obligations  under this Agreement;  provided however that in no event
shall the Company be liable under this  paragraph for Losses  resulting from the
negligence or willful or reckless  misconduct of the Customer or its  employees,
agents, or representatives.

12.2    The  Customer agrees to defend, indemnify and hold the Company  harmless
against any and all claims, expenses,  losses, causes of action (including,  but
not  limited  to,  reasonable  attorney's  fees and  court  costs),  damages  or
liabilities (collectively, in this paragraph, called "Losses") on account of the
death of and/or  injury to any  person(s) or damage to any property  arising out
of, due to, or in any way connected with any Ingredients, Packaging Materials or
other  substances  furnished  by the  Customer  to the  Company  and/or any act,
omission  or  failure  to  act  by  the  Customer,  its  employees,   agents  or
representatives  which act,  omission or failure to act is in  violation  of the
Customer's  obligations under this Agreement;  provided however that in no event
shall the Customer be liable under this paragraph for Losses  resulting from the
negligence or willful or reckless  misconduct  of the Company or its  employees,
agents, or representatives.

12.3    Notwithstanding  any other term or  condition of this Agreement, neither
party  shall be  liable  to the other for any  indirect,  punitive,  special  or
consequential  losses  or  damages  arising  out of or in  connection  with this
Agreement. 

                                       6

<PAGE>

12.4    Each of the parties  hereto shall  maintain and  keep in full force and 
effect   Comprehensive   General  Liability  Insurance  in  reference  to  their
respective obligations and liabilities hereunder including coverage for personal
injury,  product liability and contractual  liability  insuring it and the other
party and their officers, directors and employees in the amount of US $1 million
in aggregate. The Company shall additionally maintain and keep in full force and
effect insurance sufficient to provide coverage for the Customer's  Ingredients,
Packaging Materials,  Finished Case Goods, and other personal property stored or
used at the Bottling  Facility;  including but not limited to fire and windstorm
insurance. It is further stipulated that each party shall furnish the other with
evidence of such  insurance in the form of a certificate  issued by an insurance
carrier.  These  certificates  must provide that there shall be no change in the
areas of vendor  liability or our  contractual  assumptions  or reduction of the
above  referenced  limits or cancellations of the insurance unless 30 days prior
written  notice of such change is given to the party to whom the  certificate is
addressed.

13.     Default and Termination.

13.1    In the event  that  either  party  hereto  fails to comply  with any of 
its obligations  hereunder,  becomes insolvent or goes into liquidation or has a
receiver appointed to any of its assets, then such party shall be in default and
upon receipt of written  notice from the  non-defaulting  party,  the defaulting
party shall have thirty (30) days in which to cure a monetary default or fifteen
(15) days in which to cure a non-monetary default provided,  however,  that if a
party is in default because it becomes insolvent or goes in liquidation or has a
Receiver appointed to any of its assets, it shall have ninety (90) days in which
to cure. If a default is not timely cured, the  non-defaulting  party shall have
the option to terminate this  Agreement  effective  immediately.  The defaulting
party shall be fully  liable for all monies owed by the  defaulting  party under
this Agreement.

13.2    In  the  event  this  Agreement  is  terminated,   the  Customer  shall 
be responsible  for payment within fifteen (15) business days to the Company for
any inventory of Finished Case Goods,  Raw Materials,  Ingredients and any other
substances  which  the  Customer  required  the  Company  to  purchase  for  the
production of the Customer's products.  The Company shall have the right to take
title,  possess  and  sell  all or any  part of the  Finished  Case  Goods,  Raw
Materials and Ingredients to offset any monies owed by the Customer after giving
fifteen (15) business days notice.

13.3    In the  event  of a  significant  change  in the Company's' Direct Store
Delivery  (DSD)  business  or  a  change  in  national  level  contract  packing
arrangements,  the  Company  may  provide 90 day notice to the  Customer  of the
intent to terminate the contract. The Company may terminate the contract without
cause and at no liability to the Company.

                                       7

<PAGE>

14.     Notice.

14.1    Any notice  required  or  permitted to be given hereunder  shall  be  in
writing and may be given by serving personally or mailing the same by registered
mail,  postage  pre-paid,  return  receipt  requested or, by sending the same by
telex, facsimile or of the similar form of communication,  and such notice shall
be sufficiently given by the Customer to the Company, if addressed to:

                                Southeast Atlantic Corporation
                                6001 Bowdendale Avenue
                                Jacksonville, Florida  32216
                                Telephone:  (904) 739-1000
                                Tele-fax:  (904) 737-2880
                                Attn:  Steve Landsgaard, Director of Operations 
                                Copy To:  Chris Paul: President/ COO

and to the Customer, if addressed to:           

                                        
                                Hansen Beverage Company 
                                Attn:  Rodney C. Sacks, Chairman
                                Address:
                                1010 Railroad Street
                                Corona, CA  92882

                                Phone:  (951) 739-6200
                                Fax:     (951) 739-6210


                                       8

<PAGE>

Any such notice shall be deemed to have been received on the date on which it is
delivered if served  personally or by telex,  facsimile or other similar form of
communication or on the fifth (5th) business day following  mailing,  if sent by
registered mail, unless there is an interruption of postal service in which case
it shall be  deemed to have  been  received  on the  fifth  (5th)  business  day
following resumption of postage service.

15.     Assignment.

15.1    Neither  party shall  transfer or assign this  Agreement or any interest
in this  Agreement,  either  voluntarily  or by operation  of law or  otherwise,
without  the prior  written  consent of the other.  Any  attempted  transfer  or
assignment by a party without prior consent of the other party shall be null and
void and shall permit the other party, at its option,  to immediately  terminate
this Agreement.

16.      Force Majeure.

16.1    Failure  of either  party to perform any of its obligations  under  this
Agreement as a result of reasons  beyond its reasonable  control,  including but
not limited to,  strikes,  labor  disputes,  suits,  fire,  acts of God, acts or
orders  of any  government  relating  to civil  disturbances  or war,  shall not
constitute default or breach of this Agreement;  provided, however, that if such
an event shall prevent the Company from performing  hereunder during a period of
ninety (90)  consecutive  days during which all or part of a  Production  Run is
scheduled,  the Company or the  Customer,  at its  option,  may  terminate  this
Agreement by giving thirty (30) days written notice to the other party.

17.     No Waiver.

17.1    The failure of either party to assert any right  hereunder or to insist 
upon  compliance  with  any  term or  condition  of  this  Agreement  shall  not
constitute  a waiver  of that  right or excuse  the  subsequent  performance  or
non-performance of any such term or condition by the other party or constitute a
waiver of either party's right to demand exact compliance with the terms of this
Agreement.

                                       9

<PAGE>

18.     Independent Contractors.

18.1    The  parties  hereto  acknowledge  and  confirm that in performing their
obligations  under this Agreement,  each is acting as an independent  contractor
and they are not and  shall  not be  considered  as  joint  ventures,  partners,
agents,  franchisers/franchisees,  or  employers/employees  of  each  other  and
neither  shall have the power to bind or  obligate  the other or contract in the
other's name.

19.     Entire Agreement.

19.1    This Agreement sets forth the entire agreement and understanding between
the parties and supersedes all prior agreements and  understanding  between them
with respect to the subject matter hereof and not representations,  inducements,
promise or agreement,  oral or otherwise,  not embodied herein,  shall be of any
force or effect.

20.     Records.

20.1    The Company agrees to  maintain  complete  records on  Products bottled 
under this Agreement in a form reasonably satisfactory to the Customer.

21.     Applicable Law.

21.1    This agreement shall be governed by the laws of the State of Florida.

21.2    If either party brings suit to enforce any of the terms and  conditions 
of this  Agreement,  the parties agree that venue shall be the state and federal
courts located in Miami-Dade County,  Florida.  In addition and without limiting
the  foregoing,  the Company may initiate and prosecute any legal  proceeding in
any  state or  jurisdiction  in which  the  Customer  may be  domiciled  or does
business, or seek enforcement of any judgment o\in any other proper court having
jurisdiction in any other state in the United States.

21.3    In  the  event  of  any  litigation  or  proceeding arising out of or in
connection with this Agreement,  the prevailing  party, in addition to any other
remedy  that may be awarded,  shall be entitled to recover  from the other party
its reasonable attorneys' fees and costs.

22.     Survival of Warranties and Indemnifications.

22.1    The  warranties, representations, guarantees indemnifications  contained
herein shall continue in full force and effect notwithstanding any expiration or
other termination of the Agreement.

23.     Counterparts.

23.1    This Agreement may  be executed in any  number of  counterparts, each of
which  shall  be  deemed  to be an  original,  but all of which  together  shall
constitute one agreement.

                                       10

<PAGE>


     IN WITNESS  WHEREOF this  Agreement has been executed by the parties hereto
as of the date and year first above written.


                                Southeast-Atlantic Beverage Corporation


                                /s/Steve Landsgaard                             
                                ---------------------------------------
                                Print Name: Steve Landsgaard
                                            ---------------------------
                                Title:Director of Operations
                                      ---------------------------------
                                Date: August 10, 2004
                                      ---------------------------------



                                HANSEN BEVERAGE COMPANY
                                /s/Rodney C. Sacks     
                                ---------------------------------------
                                Print Name: Rodney C. Sacks
                                Title:Chairman
                                Date: August 2, 2004

                                       11

          




                  BEVERAGE PRODUCTION AND PACKAGING AGREEMENT





                                    BETWEEN



                            HANSEN BEVERAGE COMPANY

                            Hansen Beverage Company
                              1010 Railroad Street
                                Corona, CA 92882
                                     U.S.A.
                           Telephone: (951) 739-6200
                              Fax: (951) 739-6210
            Attention: Rodney Sacks, Chairman/CEO, or his successor




                                      AND



                        CITY BREWING COMPANY, LLC d/b/a
                            MIDWEST BEVERAGE PACKERS

                           City Brewing Company, LLC
                             925 South Third Street
                              La Crosse, WI 54601
                                     U.S.A.
                           Telephone: (608) 785-4200
                              Fax: (608) 785-4300
   Attention: Randy Hull, Director of Business Development, or his successor


<PAGE>

                  BEVERAGE PRODUCTION AND PACKAGING AGREEMENT


AGREEMENT dated this 23rd day of February,  2005 between City Brewing Company, a
Wisconsin  limited  liability company doing business as Midwest Beverage Packers
("Packer") and Hansen Beverage Company, a Delaware Corporation("Customer").

WHEREAS,  Packer owns and operates a beverage  production and packaging facility
in La Crosse, Wisconsin, and

WHEREAS,  Customer  desires  that  Packer  produce  and  package a beverage  for
Customer in accordance with terms and conditions set forth herein

NOW, THEREFORE,  in consideration of the mutual covenants herein contained,  the
parties agree:


1.      GENERAL TERMS AND CONDITIONS

This is an agreement by which Packer will produce and package a beverage(s)
  for
Customer.  Packer will perform  services in accordance with methods  utilized by
Packer to meet Packaged Beverage  Specifications set forth more fully herein. In
the event  that  Customer  requests  and  Packer  agrees to  perform  additional
services or meet  different  specifications,  the parties  shall  document  said
agreement  in a Special  Services  Exhibit  attached  to and made a part of this
Agreement.


2.      DEFINITIONS

As used  herein,  the  following  capitalized  terms  shall  have the  following
meanings:

     2.1  Beverage: The liquid derived from ingredients formulated in the manner
          set forth in the Beverage Product Exhibit.

     2.2  Beverage   Specifications:   The   written   statement   of   Beverage
          characteristics set forth in the Beverage Product Exhibit.

     2.3  Change  Parts:   Packaging  machinery  parts  necessary  for  handling
          Packages not used by Packer.

     2.4  Closure:  A metal or plastic  device  used to seal the  Beverage  into
          Containers.
   
     2.5  Container(s): A glass, metal or plastic vessel into which the Beverage
          is filled and sealed.

                                       2

<PAGE>

     2.6  Formula:  The written  instructions  set forth in the Beverage Product
          Exhibit for combining  specified  quantities of Ingredients with water
          to produce the Beverage.

     2.7  Ingredients:  The raw  materials  set  forth in the  Beverage  Product
          Exhibit used in production of the Beverage.

     2.8  Intellectual Property:  Trademarks,  trade names, copyrights and other
          artwork owned and specified by Customer for  application  to Packaging
          Materials.

     2.9  Label:  Printed  paper or other  material  affixed to or  imbedded  in
          Containers setting forth information concerning the Beverage and other
          Intellectual Property.

     2.10 Package: Beverage Containers and the Secondary Package into which they
          are enclosed for delivery to Customer.

     2.11 Package    Specifications:    The   written   statement   of   Package
          characteristics set forth in the Beverage Package Exhibit.

     2.12 Packaged  Beverage:  A Beverage that has been packaged into  Packaging
          Materials as provided in this Agreement.

     2.13 Packaged Beverage Specifications: The written specifications set forth
          in the Beverage  Package  Exhibit  applied after the Beverage has been
          filled and sealed into a Container.

     2.14 Packaging  Materials:   Containers,  Closures,  Labels  and  Secondary
          Packaging set forth in the Beverage Package Exhibit.

     2.15 Production Fee: Packer's charge for production and packaging Beverages
          generally charged per each Shipping Unit

     2.16 Secondary Packaging:  Paper cartons, cases, carriers,  trays and other
          devices used to hold Containers for shipment.

     2.17 Shipping Unit: The equivalent of one Package  regardless of the number
          of  Containers  or their fluid  capacity  ordered by and  delivered to
          Customer.

     2.18 Special Services: Additional services ordered by Customer and provided
          by Packer set forth in the Special Services Exhibit.

     2.19 Warehousing   Fee:   Packer's  charge  for  transporting  and  storing
          Beverages, generally charged per Shipping Unit.

     2.20 Storage  Fee:  Packer's  charge for storing  Beverages  for periods in
          excess  of thirty  (30)  days,  generally  charged  on a per  Packaged
          Beverage pallet basis.

                                       3

<PAGE>

3.      TERM OF AGREEMENT

The initial term of this Agreement  shall be from the date first set forth above
and continue through December 31, 2006.


4.      PRODUCTION ORDERS

Packer shall  produce and package one or more  Beverages  upon receipt of orders
from Customer and Customer shall purchase from Packer all packaged  Beverages so
ordered subject to the terms and conditions of this Agreement.  Customer's order
shall  specify  the  Beverage(s)  to be  produced  and the type and  quantity of
Packages into which the Beverage shall be packed.

     4.1  Production  Estimates.  Customer shall provide Packer with a six month
          rolling forecast of customers' beverage production needs by package by
          month.  Said  forecast  to be  updated  monthly.  Customer  may change
          production  orders no later than 30 days from production date.  Unless
          otherwise  agreed in writing,  Packer shall not be obligated to accept
          monthly  production orders that exceed Customer's  monthly  production
          estimates by more than ___ percent (__%).

     4.2  Production  Orders.  Production  shall be ordered and  performed  on a
          monthly basis.  Customer shall submit to Packer one written production
          order per month no later than the 10th day of the month  preceding the
          desired month of production. All production orders shall be subject to
          acceptance  by Packer.  Packer's  acceptance  shall be  evidenced by a
          written   acknowledgement  to  Customer  scheduling   delivery.   Upon
          acknowledgement,  the  order  shall  be  deemed a  binding  obligation
          between the parties.

     4.3  Order Limits. Customer's orders to produce and/or package any Beverage
          shall be not more than the  maximum  quantity or less than the minimum
          quantity  specified in the Beverage  Product  Exhibit and the Beverage
          Package Exhibit.


5.      BEVERAGE

Each  Beverage  shall be  produced in  accordance  with a Formula  furnished  by
Customer. Each Formula shall be subject to approval by Packer. Approved Formulas
shall be set forth in the Beverage  Product  Exhibit.  Notwithstanding  Packer's
approval,  Customer  shall be exclusively  responsible  for the Formula used for
each  Beverage  including,  but not limited to consumer  acceptance  thereof and
compliance with federal, state and local law (statutory or common law) governing
the composition of food and beverage products.

     5.1  Modifications. There shall be no change in the Formula of the Beverage
          to be packed by the Packer  without the prior written  consent of both
          parties.
 
     5.2  Specifications.  Each Beverage shall meet Beverage  Specifications set
forth in the Beverage Product Exhibit. 

                                       4

<PAGE>

6.      PACKAGING

Each Beverage  shall be filled and sealed into  Containers  and, if  applicable,
Labels shall be applied to Containers.  Containers  shall be packed in Secondary
Packages.  Secondary  Packages  shall be  placed  on  pallets  for  delivery  to
Customer.  All Packaging  Materials and vendors of Packaging  Materials shall be
subject to Packer's approval,  which approval shall not be unreasonably withheld
or delayed.  Approved  Packaging  Materials  shall be set forth in the  Beverage
Package Exhibit.

     6.1  Composition  and  Dimensions.  The  composition  and dimensions of all
          Packaging  Materials are set forth in the Beverage Package Exhibit and
          there shall be no deviation or  modification  there from except as may
          be agreed by the parties in writing.

     6.2  Package   Specifications.   Each   Package   shall  meet  the  Package
          Specifications set forth in the Beverage Package Exhibit.

     6.3  Package Coding.  Unless otherwise agreed upon in writing,  Packer will
          apply a printed code agreed to with  Customer or failing  agreement as
          customarily used by Packer on all packages.

     6.3  Change Parts.  Packer shall have no obligation to install Change Parts
          to  its  packaging   machinery  in  order  to  accommodate   Packaging
          Materials.  In the event that  Customer  requests and Packer agrees to
          use Packaging  Materials that require the acquisition and installation
          of Change Parts, the work associated therewith shall be deemed to be a
          Special  Service  subject  to the  terms and  conditions  set forth in
          writing in the Special Services Exhibit.

     6.4  Pallets.  Unless  otherwise  agreed  between  the  parties in writing,
          Packer shall place packaged  Beverages on standard  beverage  industry
          pallets  in  Packer's  standard  pattern  for  delivery  to  Customer.
          Customer shall pay Packer's  standard pallet fee in effect at the time
          of delivery unless otherwise specified in the Product Pricing Exhibit.


7.      PROCUREMENT

Except for items  specifically  identified  in the Beverage  Product  Exhibit or
Beverage  Packaging  Exhibit,  Customer shall be responsible  for purchasing and
storing all  Ingredients  used in formulation of each Beverage and all Packaging
Materials  used in packaging  each  Beverage.  For  purposes of this  Agreement,
Packaging  Materials  shall be  deemed  to  include  packaging  artwork  and the
cylinders,  plates,  tools and dies used in the creation thereof.  Customer will
purchase Ingredients and Packaging Materials from sources approved in advance by
Packer,  but  Packer may only  limit its  approval  of  suppliers  of  Packaging
Materials if Packer's packaging equipment requires a specific supplier.
 
     7.1  Release  From  Suppliers.   Customer  shall  make   arrangements  with
          suppliers to release  Ingredients and Packaging Materials to Packer to
          be used in production  and packaging of Beverages in quantities and at
          times  ordered by Packer.  Except as needed  for  current  production,
          Packer  shall  not  inventory  and  store  Ingredients  and  Packaging
          Materials  for  Customer  beyond  the  time  necessary  for  the  next
          production  run.  Packer  shall not be  obligated  to  inspect or test
          materials purchased by Customer prior to their use in production.

                                       5

<PAGE>

     7.2  Rejected Items.  Customer shall ensure that all items furnished by its
          suppliers  conform to  specifications  set forth in this Agreement and
          are fit for their intended use.  Packer shall have the right to reject
          any item  that  fails to meet such  requirements.  Packer  shall  give
          notice to  Customer  of said  rejection.  Packer  shall be entitled to
          suspend its performance  under this Agreement if the item(s)  rejected
          cause  Packer to be  unable  to  perform  in the  manner  contemplated
          herein.  Customer  shall be liable to Packer  for any  financial  loss
          suffered by Packer as a result thereof.

     7.3  Material Safety Data Sheets. Customer will provide or arrange with its
          suppliers  to provide  Packer with any required  Material  Safety Data
          Sheets for any Ingredient.

     7.4  Disposition of Materials Following Termination.  Following termination
          of this Agreement,  Ingredients or Packaging  Materials held by Packer
          on behalf of Customer shall be returned to Customer  provided there is
          no  outstanding  balance due Packer from  Customer.  Packer shall also
          have  the  right  to  discard  or sell any  Ingredients  or  Packaging
          Materials  held by Packer  for more than  thirty  (30) days  following
          termination of this  Agreement.  Upon  termination of this  agreement,
          Customer will purchase, at Packer's cost, any and all unused Packaging
          and Raw Materials, to include work in process,  purchased by Packer on
          behalf of Customer,  and held in inventory at Packers  warehouse or at
          supplier locations. Should Customer be unwilling or unable to purchase
          said materials, Customer hereby grants Packer the right to produce and
          sell Packaged Beverages under the Energade  Tradenames until such time
          as either:
               7.4a. The material is completely disposed of; or,
               7.4b.Any   outstanding   balance  due  Packer  from  Customer  is
                    offset."


8.      DELIVERY.

Customer  shall take delivery of each Packaged  Beverage FOB Packer's La Crosse,
Wisconsin  production  facility.  Packer  assumes  the cost and risk of  loading
trucks at Packers'  dock on the date  scheduled  for delivery or such other date
agreed upon by the parties in writing.  Any other provision of this Agreement to
the contrary  notwithstanding,  Packer shall have the right to withhold delivery
to Customer of any Beverage that fails to meet Packaged Beverage Specifications.

     8.1  Loading.  Packer  shall load  Packaged  Beverage  pallets on  delivery
          vehicles  furnished by Customer.  Unless  expressly  provided  herein,
          Packer  shall not be required  to custom  load or arrange  loading for
          more than one destination per delivery vehicle.

     8.2  Carriers. All carriers selected by Customer to take delivery on behalf
          of Customer  shall be subject to  Packer's  approval,  which  approval
          shall not be  unreasonable  withheld or delayed.  

                                       6

<PAGE>

     8.3  Storage. Unless otherwise expressly provided herein, Packer shall have
          no obligation to store Beverages for Customer more than seven (7) days
          following the latter of the scheduled or actual date of delivery.

     8.4  Warehousing  Charge. In the event that Customer fails to take delivery
          of the  Beverage  within  the time  specified,  Packer  shall have the
          right, at its option, to do one or both of the following on reasonable
          notice to Customer:  (i) store the  Beverage at Packer's  warehouse at
          the rate of $_ per pallet per month including any portion thereof,  or
          (ii)  transport  the  Beverage to a commercial  warehouse  for storage
          under terms and conditions  established by the storage  provider.  The
          cost of storage  shall be due and payable prior to any delivery of the
          Product to  Customer.  Packer  shall have no liability to Customer for
          damage  to or  loss  of any  Packaged  Beverages  stored  at  Packer's
          production  facility or at any commercial  warehouse  unless caused by
          negligence of Packer or Packer's employees.


9.      PRODUCTION AND OTHER SERVICE FEES

     9.1  Production  Fee. In  consideration  of production and packaging of the
          Beverage, Customer shall pay Packer a Production Fee for each Shipping
          Unit of the  Packaged  Beverage  delivered as set forth in the Product
          Pricing  Exhibit.  Production  Fees shall be paid in  accordance  with
          Packer's  credit  terms.  Initial  credit  terms  are net  15.  Packer
          maintains  the  right  to   reestablish   credit  terms  at  its  sole
          discretion.  Prices may be increased by Packer upon written  notice to
          Customer  for any  increase in the cost of raw  materials or packaging
          supplies  purchased by Packer on Customer's  behalf.  Production  Fees
          will be reestablished annually, with an effective date of January 1st.

     9.2  Special   Services   Fees.   The  Production  Fee  is  established  as
          consideration  for standard methods of production and packaging of the
          Beverage in the manner set forth in this Agreement.  In the event that
          Customer  requests and Packer agrees to perform  services beyond those
          expressly  provided  herein,  the work  associated  therewith shall be
          deemed  to be a Special  Service  expressly  set forth in the  Special
          Services Exhibit.  In consideration of performing Special  Service(s),
          Packer shall be compensated  through payment of Special  Services Fees
          as set forth in the Pricing  Exhibit.  Special  Service  Fees shall be
          paid by Customer in the same manner as Production Fees.

     9.3  Invoicing.  Packer shall provide  Customer a final invoice for the Raw
          Materials,    Packaging   Supplies,   Production   Fees,   Alternating
          Proprietorship and Special Services Fees, if any, at the conclusion of
          each Production Run.

     9.4  Taxes.  The Production Fee does not include any Federal or other taxes
          imposed upon the Product.  In the event that Packer is required to pay
          any such tax as a result of production  of the  Beverage,  the cost of
          such tax shall be in addition to the Production Fee.

     9.5  Packaging  Materials.  In the event that Packer agrees to the purchase
          of Packaging Materials  specifically on behalf of Customer, and not on
          behalf of any  specific  other  customer,  or itself,  the cost of any
          Packaging   Materials  purchased  in  excess  of  those  required  for
          scheduled production shall be in addition to the Production Fee.

                                       7

<PAGE>

10.     PRODUCTION YIELDS

Customer and Packer acknowledge that in the normal course of beverage production
and packaging,  the number of Shipping Units of Packaged Beverage delivered will
be less than the sum of Ingredients and Packaging Materials supplied. Production
and  packaging  losses will vary by the type of Beverage  produced,  the type of
Packaging Materials used, production and packaging methods specified by Customer
and the size of Customer's  Order.  Unless  otherwise  agreed in writing and set
forth in a Special Services Exhibit,  Packer shall have no liability to Customer
for the amount of  Packaged  Beverage  yielded  from  Ingredients  or  Packaging
Materials  consumed in the course of production  unless  exceeding _% for liquid
contents and _% for Beverage Containers except where losses arise as a result of
theft, misappropriation or intentional acts causing loss of yield.


11.     LIMITED INTELLECTUAL PROPERTY LICENSE

Customer  hereby grants Packer a non-exclusive  license to use the  Intellectual
Property  strictly limited to uses in fulfillment of Packer's  obligations under
this Agreement. Customer retains all rights to the Intellectual Property and all
goodwill accruing as a result of any use thereof shall accrue to Customer.  Upon
termination  of  this  Agreement,  Packer  shall  immediately  cease  use of the
Intellectual  Property  except in connection  with any  post-termination  use of
Packages provided herein.


12.     WARRANTIES

Each party  warrants  to the other party that it is duly  organized  and in good
standing  in its  respective  jurisdiction  of  organization,  that  it has  the
authority to enter into and perform this Agreement and that the  consummation of
this Agreement will not violate any agreement or judicial order to which it is a
party or by which it is bound. EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE PARTIES
MAKE NO OTHER  WARRANTIES AND HEREBY DISCLAIM ALL OTHER  WARRANTIES , EXPRESS OR
IMPLIED. Packer and Customer individually warrant as follows:

12.1    Packer Warranties.

     12.1.1 Packer shall produce each Beverage in accordance with the formula.

     12.1.2 Each Beverage  shall meet Packaged  Beverage  Specifications  at the
          time of delivery to Customer.

                                       8

<PAGE>

     12.1.3 Each  Beverage  shall be free from  adulteration  as  defined by the
          United States Food, Drug and Cosmetics Act.

12.2    Customer Warranties.

     12.2.1 Ingredients furnished by Customer or Customer's suppliers shall meet
          all applicable legal  requirements and be fit for use as an ingredient
          in food or beverage products.

     12.2.2 Customer owns the Formula used in production of each  Beverage.  The
          Formula  and the  Beverage  derived  from  proper  application  of the
          Formula will not violate the laws and  regulations  of any  government
          having  jurisdiction over the Beverage or injure or illegally infringe
          upon the rights of any other person.

     12.2.3 Customer owns the Intellectual Property applied to the Packages. The
          Intellectual Property will not violate the laws and regulations of any
          government  having   jurisdiction  over  the  Packages  or  injure  or
          illegally infringe upon the rights of any other person.


13.     QUALITY ASSURANCE  

     Packer will monitor production and packaging of each Beverage in accordance
     with Packer's standard quality assurance monitoring  procedures as detailed
     in the  Quality  Assurance  Exhibit.  Under such  procedures,  Packer  will
     examine samples of each Beverage prior to and after packaging. In the event
     that Customer  requests and Packer  agrees to engage in additional  quality
     assurance monitoring prescribed by Customer,  the work associated therewith
     shall be deemed to be a Special Service subject to the terms and conditions
     set forth in writing in the Special Services Exhibit.

14.     INDEMNFICATION AND INSURANCE

Each party shall  indemnify and hold the other party harmless from all liability
arising  out of claims made  against  the party for damage  caused by actions in
breach of the other party's respective warranties as set forth herein.

Packer and Customer  shall each  purchase and  maintain the  following  forms of
insurance:

     (i)  Product  liability  insurance  with  coverage  limits not less than $1
          million.  
     (ii) Property   insurance   with  limits   sufficient  to  cover   property
          replacement value.

The parties shall obtain  waivers from their  insurance  carriers of subrogation
rights against the other party.

In the event  that  Customer  requests  and  Packer  agrees  to extend  Packer's
insurance coverage to Customer, the cost associated therewith shall be deemed to
be a Special Service subject to the terms and conditions set forth in writing in
the Special Services Exhibit.

                                       9

<PAGE>

15.     ALTERNATING PROPRIETORSHIP

In  the  event  that   Customer   requests   and  Packer   agrees  to  alternate
proprietorship of Packer's production facility,  the burden associated therewith
shall be deemed to be a Special  Service subject to the terms and conditions set
forth in writing in the Special Services Exhibit.


16.     FORCE MAJEURE

Notwithstanding any other provision contained in this Agreement, if either party
is delayed or prevented from performing its obligations  under this Agreement by
any cause beyond its reasonable control  including,  but not limited to, acts of
God, war, terror,  fire,  traffic  interruptions,  governmental  laws or orders,
shortage  of  materials,  strikes  or  labor  disturbances,  then  that  party's
performance  shall be suspended or excused without  damages,  costs or penalties
while such cause exists.  The party whose  performance  is affected by the Force
Majeure shall use its best efforts to overcome the event.


17.     TERMINATION

Either party may terminate this Agreement for any reason  whatsoever on not less
than ninety (90) days prior written notice to the other Party,  effective at any
time on or after the effective date, or upon written notice following occurrence
of any of the following  events.  Termination of the Agreement  shall not affect
the right of either party to obtain such  additional  relief in law or in equity
to which it may be entitled.
        
     17.1 Payment Breach.  Either party fails to make payment for any amount due
          under this  Agreement  (net of any  amount  due from the other  party)
          following  ten (10) days  written  notice of payment  breach  from the
          other party,

     17.2 Material Breach.  Either party materially  breaches this Agreement and
          fails to cure said breach  within  thirty (30) days of written  notice
          thereof by the other party,

     17.3 Orders and Acceptance. Either party fails to order or accept orders to
          produce  and  package  not  less  than  ______  Shipping  Units of the
          Beverages for more than one hundred eight (180) consecutive days,

     17.4 Force  Majeure.  A  Force  Majeure  causes  either  party  to  suspend
          performance for more than ninety (90) consecutive days, or

     17.5 Bankruptcy.  Bankruptcy  proceedings  are brought by or against either
          party in U.S. Bankruptcy Court.

                                       10

<PAGE>

18.     CLAIM LIMITATIONS

     18.1 Time of  Assertion.  Any  claim  by  either  party  arising  out of or
          relating to this Agreement must be brought no later than one year (360
          days) after the latter of: (i) the date the claim arises,  or (ii) the
          date the claimant first becomes aware of the claim. Claims not brought
          within  the  time   provided   herein  shall  be  barred  and  forever
          discharged.

     18.2 Damages.  Claims for money damages arising out of any action amounting
          to a breach of this  Agreement by either party shall be limited to the
          actual damages caused by said breach.  Neither party shall be entitled
          to any consequential, special or exemplary damages.

     18.3 Equitable Relief. Either party may make a claim for equitable relief.


19.     DISPUTE RESOLUTION  

Any claim or dispute arising between the parties that cannot be resolved through
negotiation  shall be exclusively  resolved through  arbitration under rules and
auspices  of the  American  Arbitration  Association  or such other  alternative
dispute-settling  forum  approved in writing by both parties.  The venue for any
arbitration  shall be Chicago,  Illinois.  The arbitrator  shall be empowered to
allow  discovery and decide claims subject only to the  limitations set forth in
this Agreement.  The decision of the arbitrator and damages or equitable  relief
provided  therein  may be  entered  as a  judgment  in any  court  of  competent
jurisdiction.

 
20.     MARKETING AND SALES OF BEVERAGE

Customer is exclusively  responsible  for marketing and sale of all Products and
nothing  contained in this  Agreement  shall be  interpreted as creating a joint
venture or other business  association  other than the contractual  relationship
between  Packer and  Customer.  Customer  will be  exclusively  responsible  for
compliance  with all laws or regulations  governing sale or  distribution of the
Beverage. In the event that state alcoholic beverage control laws require Packer
to file  certain  information  as  producer of record for  Customer's  products,
Customer  acknowledges  that in doing so, Packer assumes no  responsibility  for
marketing and sale of the Products.

21.     ACCESS TO PRODUCTION FACILITY

Except for public tours to a limited portion of Packer's facility, Packer denies
public access to its facility.  Customer or Customer's representative shall have
the right,  at any time, to monitor and review the  practices and  procedures of
Packer in the production of Customers' products at Packers' facility during such
periods that Customer's products are being prepared and packaged.  Customer will
use its best efforts to notify  Packer at least 24 hours in advance of any visit
to the facility, except in the case of emergency.

                                       11

<PAGE>

22.     CONFIDENTIALITY

Packer and Customer acknowledge that in the performance of this Agreement,  each
party may obtain  information from the other party deemed  confidential.  Packer
and Customer will identify in writing all information  deemed  confidential  and
the recipient thereof will not use or disclose such information to anyone except
employees  with a need to know in  order  to  accomplish  the  purposes  of this
Agreement. Information shall not be deemed confidential if such information: (i)
was in the  public  domain  at the time of  disclosure  to the  recipient,  (ii)
subsequently  becomes  available to the public  without act or negligence of the
recipient,  (iii)  can  demonstrably  be shown to have  been in the  recipient's
possession  prior to its receipt from the other party,  or (iv) is  subsequently
obtained by recipient from an  independent  third party having a lawful right to
disclose the information.

Packer and Customer shall not disclose the terms, conditions or other details of
this  Agreement  without the prior written  consent of the other party except as
required by law and then, to the extent possible,  only upon prior notice to the
other party.


23.     ASSIGNMENTS

Neither this  Agreement nor any right or obligation  under this Agreement may be
assigned by either party  without the prior  written  consent of the other party
hereto,  provided  that such consent  shall not be  unreasonably  withheld.  Any
attempt to assign this  Agreement  without such consent  shall be deemed void. A
change  in  controlling  ownership  of  either  party  shall  not be  deemed  as
assignment  unless  such  change has a material  adverse  impact on the  party's
ability  to  perform  its  obligations   under  this  Agreement.   Either  party
experiencing a change in controlling  ownership  shall provide written notice to
the other party immediately upon its occurrence.


24.     SUCCESSORS

Subject to the  limitations  on assignment  set forth herein,  this Agreement is
binding  upon,  and the benefits  hereof inure to, the parties  hereto and their
respective successors and assigns.


25.     ENTIRE AGREEMENT

This Agreement  including its Exhibits sets forth the entire  agreement  between
the parties with respect to the subject  matter hereof and  supercedes all prior
agreements  and  understandings.  This  Agreement may not be modified  except by
written amendment signed by both parties.


26.     COUNTERPARTS

This Agreement may be executed in one or more counterparts.

                                       12

<PAGE>

27.     GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
the State of Wisconsin.



28.     NOTICES

Notices  under this  Agreement  shall be deemed  given  when sent via  facsimile
transmission  and confirmed the same day via overnight mail to the addresses set
forth on the cover page of this Agreement.




IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly executed
on the date first above written.


                                CITY BREWING COMPANY, LLC



                                By: /s/ Randy Hull        2/28/05
                                   ------------------------------
                                   Randy Hull              Date
                                   Director
                                   Business Development
                                   City Brewing Company




                                HANSEN BEVERAGE COMPANY



                                By:/s/Rodney Sacks        2/28/05
                                   ------------------------------
                                   Rodney Sacks            Date
                                   Chairman/CEO
                                   Hansen Beverage Company


                                       13

                                 PRI- PAK, INC
                             MANUFACTURING CONTRACT
                                    DOMESTIC

This  Manufacturing  Contract is made as of the 16th day of October  2003 by and
between  Pri-Pak,  Inc.,  an  Indiana  corporation  ("Pri-Pak")  with  plant and
equipment  ("Facilities")  at Lawrenceburg,  Indiana and Hansen Beverage Company
with offices at Corona, Califorina.  ("Buyer") evidences the following agreement
between Pri-Pak and buyer.

Section . Pri-Pak's Obligation, During the term of ths contract, Pri-Pak will:

     1)   Provide all labor, equipment and services at its facilitices necessary
          to  produce  bottles  or canned  drinks in the  flavors  and  packages
          ("Finish-  ed  Product")  listed on the  attached  Exhibit A, and such
          Exhibit  A is an  integral  part of this  Contract  and  shall  not be
          amended except in writing signed by both parties.

     2)   Receive  at its dock and  store all  packaging  and  Finished  Product
          materials supplied by Buyer and load all Finished Product at Pri-Pak's
          docks on trucks furnished by Buyer.

     3)   Complete the production of Finished  Product within fourteen (14) days
          after receipts of an order from Buyer.

     4)   Store  finished  product  for a  maximum  of twenty  (20)  days  after
          production,  after which  buyer shall pay Pri-Pak a storage  charge of
          $____ per pallet of Finished Product per month.

     5)   Furnish  carbonic
  gas  (CO2),  Fruotose  and other  Finished  Product
          materials not supplied by Buyer, pallets, adhesives for packaging, and
          See Schedule A. Cost to be reimbursted by Buyer pursuant to Section 2.

     6)   Order and install,  at Buyer's cost, any parts or equipment  necessary
          to run Buyer's packages.

Section 2. Buyer's Obligations: In consideration of Pri-Pak's performance under 
Section 1, Buyer shall:

     1)   Pay  Pri-Pak  a  packaging  fee of See  Schedule  B for  each  case of
          Finished Product produced by Pri-Pak.

     2)   Furnish at buyer's cost any unique equipment  necessary to run buyer's
          packages.


<PAGE>

     3)   Reimberse Pri-Pak for all costs of items furnished by Pri-Pak pursuant
          to Section 1.(5).

     4)   Pay Pri-Pak's  invoices for payment and / or  reimbursement  within 10
          days after the date of  production.  Buyer shall pay a penalty of 1.5%
          per month on any unpaid balance over 30 days.

     5)   Supply at the faclities all ingredients,  packaging material and other
          items to be supplied  by Buyer as listed on  Schedule A in  sufficient
          quanitities  and in a  timely  manner  to  allow  Pri-Pak  to  produce
          finished product in a normal and orderly fashion.

     6)   Order finished  product for at least the minimum amount of _____ cases
          per flavor per package size.

     7)   Purchase a minimum of ______  cases of Hnsen's  Citrus  Energy cans of
          Finshed Product before October 15, 2004.

Section  3. Title and Lien for  Payment.  Title to any and all  ingredients  and
material supplied by Pri-Pak incorporated in the Finished Product shall not pass
to Buyer  until such  finished  Product is loaded on Buyers  trucks and  Pri-Pak
shall have a lien for labor and material  furnished and warehousing  provided on
all  Finished  Product and on all  ingredients,  packaging  materials  and other
materials and supplies furnished by Buyer abd delivered to Pri-Paks faclities

Section 4. Pri-Pak's  Warranty.  Pri-Pak  warrents to Buyer that it will produce
the Finished Product in accordance with the  specifications set forth on Exhibit
A. and under conditions that conform to the standards of sound handling, mixing,
bottling,  manufacturing,  sanitation  and  safety  practices  in the soft drink
manufacturing  industry,  which include, but are not limited to a _% loss factor
on both  ingredients  and packaging.  EXCEPT FOR THE EXPRESS  WARRANTY  PROVIDED
HEREIN,  PRI-PAK HEREBY DISCLAIMS ALL WARRANTIES WHETHER STATUORY,  EXPRESS,  OR
IMPLIED,  INCLUDING  ANY AND ALL  WARRANTIES  ARISING  FROM COURSE OF DEALING OR
USAGE OF TRADE IN REGARD TO ANY FINISHED PRODUCT.

Section 5. Buyer's  Warranty and  Indemnity.  Buyer warrents to Pri-Pak that all
materials and items  supplied to Pri-Pak for  theproduction  of Finshed  Product
shall be free from defects and conform to the  standards of  ingredients  in the
soft drink  industry,  and except  for losses  resulting  from any breach of the
warranties of Pri-Pak  above,  shall identify and hold Pri-Pak free and harmless
from and against any and all claims and losses,  including legal fees, costs and
expenses of  investigations  and  defense,  arising from any claims by any third
party.


<PAGE>

Section 6.  Successors and Assigns.  The rights,  duties and  obligations of the
parties  under this  cotract  shall  insure to the  benefit of their  respective
sucessors or assigns.

Section 7. Termanition This contract shall be of an indefinite  duration but may
be  terminated  at any time by either  party  giving the other  ninety (90) days
prior written notice thereof,  sent by certified mail,  return receipt requested
or upon exhausting raw materials manufactored specifically for Buyer.

Section 8. Entire Contract. This contract,  including Exhibit A, constitutes the
entire  agreement  between the parties  hereto with respect to the  transactions
herein  described and no amendment  hereto shall be valid unless it is contained
in a  writing  duly  executed  by both  Buyer and  Pri-Pak.  In the event of any
conflict  between the terms,  conditions  and  provisions  of this  contract any
purchase  order of Buyer,  or any invoice  confirmation  or similar  document of
Pri-Pak, this contract control shall be governed by the laws of Indiana.

Pri-Pak, Inc. is not responsible for typographical errors.

IN WITNESS  WHEREOF,  the parties have  executed  this  contract as of this day,
month, and year first written above at Lawrenceburg, Indian.

PRI-PAK, INC.
PO Box 4010 
2000 Schenley Place
Lawrenceburg, IN 47025


BY:  /s/ Jan Hollowell
  --------------------
TITLE: V. P. Sales
  --------------------
DATE: 10/16/03
  --------------------
"BUYER"

BY: Rodney Sacks
  --------------------
TITLE: Chairman, Hansen Beverage Co.
  ----------------------------------
DATE: 10/16/03
  --------------------





COMERICA
                                                            AMENDED AND RESTATED
                                                     LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
OBLIGOR#        NOTE #                                    AGREEMENT DATE
--------        ------                                    --------------
342341064       42                                        December 1, 2004

CREDIT LIMIT    INTEREST RATE                             OFFICER NO./INITIALS
------------    -------------                             ----------------------
$7,800,000      In accordance with the table in Section   TMH/48497
                2.2
--------------------------------------------------------------------------------

THIS  AGREEMENT is entered into on December 1, 2004,  between  Comerica  Bank, a
Michigan banking  corporation  ("Bank") as secured party, whose Western Division
headquarters  office is 333 West Santa Clara Street,  San Jose,  California  and
Hansen Beverage  Company  ("Borrower"),  whose sole place of business (if it has
only one), chief executive office (if it has more than one place of business) or
residence (if an  individual) is located at the address set forth below its name
on the signature page to this Agreement. The parties agree as follows:

Bank and  Borrower  are parties  that that  Revolving  Credit Loan and  Security
Agreement (Accounts And Inventory), dated May 15, 2007 as previously amended (as
so amended the "1997 Agreement");

The Bank and the  Borrower  wish to amend  and  restate  in full the 1997 on the
terms and conditions contained here.

NOW  THEREFORE,  the  parties  hereto  agree that the 1997  Agreement  is hereby
amended, restated and superseded in full to read as follows:

1. DEFINITIONS. 

     1.1 "Accounts" shall mean
 and includes all presently existing and hereafter
arising accounts, including without limitation all accounts receivable, contract
rights  and  other  forms  of right  to  payment  for  monetary  obligations  or
receivables  for  property  sold or to be sold,  leased,  licensed,  assigned or
otherwise  disposed  of, or for services  rendered or to be rendered  (including
without limitation all health-care-insurance receivables) owing to Borrower, and
any supporting obligations,  credit insurance,  guaranties or security therefor,
irrespective of whether earned by performance.

     1.2 "Agreement"  shall mean and includes this Amended and Restated Loan and
Security Agreement, any concurrent or subsequent rider to this Loan and Security
Agreement and any extensions,  supplements,  amendments or modifications to this
Loan and Security Agreement and/or to any such rider.

     1.3 "Bank Expenses" shall mean and includes: all costs or expenses required
to be paid by Borrower under this Agreement  which are paid or advanced by Bank;
taxes and insurance  premiums of every nature and kind of Borrower paid by Bank;
filing, recording, publication and search fees, appraiser fees, auditor fees and
costs, and title insurance  premiums paid or incurred by Bank in connection with
Bank's  transactions  with  Borrower;  costs and  expenses  incurred  by Bank in
collecting the Accounts (with or without suit) to correct any default or enforce
any  provision of this  Agreement,  or in gaining  possession  of,  maintaining,
handling,  preserving,  storing, shipping,  selling, disposing of, preparing for
sale  and/or  advertising  to  sell  the  Collateral,  whether  or not a sale is
consummated;  costs  and  expenses  of suit  incurred  by Bank in  enforcing  or
defending this Agreement or any portion hereof,  including,  but not limited to,
expenses  incurred  by Bank in  attempting  to  obtain  relief  from  any  stay,
restraining  order,  injunction  or similar  process which  prohibits  Bank from
exercising  any of its rights or remedies;  and reasonable  attorneys'  fees and
expenses  incurred  by  Bank  in  advising,  structuring,  drafting,  reviewing,
amending, terminating, enforcing, defending or concerning this Agreement, or any
portion hereof or any agreement related hereto,  whether or not suit is brought.
Bank Expenses shall include Bank's in-house legal charges at reasonable rates.

     1.4 "Base Rate" shall mean that  variable  rate of interest so announced by
Bank at its headquarters office in San Jose,  California as its "Base Rate" from
time to time and  which  serves  as the  basis  upon  which  effective  rates of
interest are calculated for those loans making reference thereto.

     1.5 "Borrower's  Books" shall mean and includes all of Borrower's books and
records including but not limited to minute books; ledgers;  records indicating,
summarizing or evidencing Borrower's assets (including,  without limitation, the
Accounts),  liabilities,  business  operations or financial  condition,  and all
information  relating thereto,  computer programs;  computer disk or tape files;
computer printouts;  computer runs; and other computer prepared  information and
equipment of any kind.

     1.6 "Book Net Worth" shall mean as of the date of determination, Borrower's
consolidated  Net Worth which  includes  the net value of  Borrower's,  Blue Sky
Natural Beverage Co.'s and Hansen Junior Juice Company's trademarks.

     1.7 "Collateral" shall mean and includes all personal property of Borrower,
including without  limitation each and all of the following:  the Accounts;  the
Inventory; the General Intangibles; the Negotiable Collateral; Borrower's Books;
all Borrower's deposit accounts;  all Borrower's  investment property (including
without  limitation   securities  and  securities   entitlements);   all  goods,
instruments,  documents, policies and certificates of insurance, deposits, money
or other  personal  property  of  Borrower  in which  Bank  receives  a security
interest and which now or later come into the possession,  custody or control of
Bank;  all  Borrower's  equipment  and  fixtures;  all  additions,   accessions,
attachments, parts, replacements,  substitutions, renewals, interest, dividends,
distributions  or rights of any kind for or with respect to any of the foregoing
(including without limitation any stock splits, stock rights,  voting rights and
preferential rights); any supporting  obligations for any of the foregoing;  and
the products and proceeds of any of the  foregoing,  including,  but not limited
to,  proceeds of insurance  covering the  Collateral,  and any and all Accounts,
General Intangibles, Negotiable Collateral, Inventory, equipment, money, deposit
accounts,  investment  property,  equipment,  fixtures  or  other  tangible  and
intangible  property of Borrower resulting from the sale or other disposition of
the  Collateral  and the  proceeds  thereof and any  supporting  obligations  or
security therefor and any right to payment  thereunder,  and including,  without
limitation,  cash or other  property  which were proceeds and are recovered by a
bankruptcy  trustee  or  otherwise  as  a  preferential  transfer  by  Borrower.
Notwithstanding anything to the contrary contained herein,  Collateral shall not
include any waste or other  materials,  which have been or may be  designated as
toxic or hazardous by Bank.

     1.8 "Credit" shall mean all Indebtedness,  except that Indebtedness arising
pursuant to any other  separate  contract,  instrument,  note, or other separate
agreement which, by its terms, provides for a specified interest rate and term.

     1.9 "Credit Limit" shall mean Seven Million Eight Hundred  Thousand Dollars
($7,800,000).

                                       1

<PAGE>

     1.10  "Current  Assets"  shall  mean,  in respect of a Person and as of any
applicable date of  determination,  all current assets of such Person determined
in accordance with GAAP.

     1.11 "Current Liabilities" shall mean, in respect of a Person and as of any
applicable date of determination,  all liabilities of such Person that should be
classified as current in accordance with GAAP.

     1.12 "Current  Maturities of Long Term Indebtedness" shall mean, in respect
of a Person and as of any applicable date of determination thereof, that portion
of Long Term  Indebtedness  that should be  classified  as current in accordance
with GAAP.

     1.13  "Current  Ratio"  shall  mean,  in  respect of a Person and as of any
applicable  date of  determination,  Current Assets plus the amount  outstanding
under the Credit  Limit,  divided by Current  Liabilities  including  the amount
outstanding under the Credit Limit.

     1.14 "Daily Balance" shall mean the amount  determined by taking the amount
of the  Credit  owed at the  beginning  of a given  day,  adding  any new Credit
advanced or incurred on such date, and  subtracting  any payments or collections
which are deemed to be paid and are applied by Bank in  reduction  of the Credit
on that date under the provisions of this Agreement.

     1.15 "Debt" shall mean, as of any  applicable  date of  determination,  all
items of indebtedness,  obligation or liability of a Person,  whether matured or
unmatured,   liquidated  or  unliquidated,   direct  or  indirect,  absolute  or
contingent,  joint or  several,  that should be  classified  as  liabilities  in
accordance  with GAAP. In the case of Borrower,  the term "Debt" shall  include,
without limitation, the Indebtedness.

     1.16  "EBITDA"  shall  mean,  as  of  any  applicable  period,   Borrower's
consolidated  pre-tax Net Income; plus (a) the aggregate of all interest paid or
accrued by Borrower and its  Subsidiaries  including,  without  limitation,  all
interest,  fees and costs payable with respect to Indebtedness  and the interest
portion of capitalized lease payments;  paid or accrued during such period; plus
(b) amortization  and  depreciation  deducted in determining Net Income for such
period; plus (c) any non-cash charge in determining Net Income for such period.

     1.17 "Event of Default" shall mean one or more of those events described in
Section 7 contained herein below.

     1.18 "GAAP" shall mean, as of any  applicable  period,  generally  accepted
accounting principles in effect during such period.

     1.19  "General  Intangibles"  shall  mean and  includes  all of  Borrower's
present and future general  intangibles and other personal  property  (including
without limitation all payment intangibles,  electronic chattel paper,  contract
rights,  rights arising under common law,  statutes,  or regulations,  choses or
things in action,  goodwill,  patents,  trade names,  trademarks,  servicemarks,
copyrights,  blueprints, drawings, plans, diagrams, schematics, purchase orders,
customer  lists,  monies due or  recoverable  from pension  funds,  route lists,
rights to payment (including without limitation,  rights to payment evidenced by
chattel paper,  documents or instruments)  and other rights under any royalty or
licensing   agreements,   infringement   claims,   software  (including  without
limitation any computer program that is embedded in goods that consist solely of
the medium in which the program is embedded),  information contained on computer
disks or tapes, literature,  reports,  catalogs,  insurance premium rebates, tax
refunds,  and  tax  refund  claims),  other  than  goods,  Accounts,  Inventory,
Negotiable Collateral, and Borrowers Books.

     1.20  "Hansen  Natural"  means  Hansen  Natural  Corporation,   a  Delaware
Corporation.

     1.21  "Indebtedness"  shall mean and includes any and all loans,  advances,
Letter of Credit Obligations, overdrafts, debts, liabilities (including, without
limitation,  any and all amounts charged to Borrower's loan account  pursuant to
any agreement authorizing Bank to charge Borrower's loan account),  obligations,
lease  payments,  guaranties,  covenants and duties owing by Borrower to Bank of
any kind and  description  whether  advanced  pursuant to or  evidenced  by this
Agreement;  by any note or other  Instrument;  or by any other agreement between
Bank and Borrower and whether or not for the payment of money, whether direct or
indirect, absolute or contingent, due or to become due now existing or hereafter
arising, including,  without limitation, any interest, fees, expenses, costs and
other  amounts  owed to Bank that but for the  provisions  of the United  States
Bankruptcy  Code would have accrued  after the  commencement  of any  Insolvency
Proceeding,   and  including,   without  limitation,  any  debt,  liability,  or
obligations  owing  from  Borrower  to others  which Bank may have  obtained  by
assignment, participation, purchase or otherwise, and further including, without
limitation,  all interest not paid when due and all Bank Expenses which Borrower
is required to pay or reimburse by this Agreement, by law, or otherwise.

     1.22 "Insolvency Proceeding" shall mean and includes any proceeding or case
commenced by or against Borrower,  or any guarantor of Borrower's  Indebtedness,
or any of Borrower's  account  debtors,  under any  provisions of the Bankruptcy
Code, as amended, or any other bankruptcy or insolvency law, including,  but not
limited  to  assignments  for the  benefit  of  creditors,  formal  or  informal
moratoriums,   composition  or  extensions  with  some  or  all  creditors,  any
proceeding  seeking a reorganization,  arrangement or any other relief under the
Bankruptcy Code, as amended, or any other bankruptcy or insolvency law.

     1.23  "Inventory"  shall mean and includes all present and future inventory
in which Borrower has any interest, including, but not limited to, goods held by
Borrower  for sale or lease or to be  furnished  under a contract of service and
all of Borrower's  present and future raw materials,  work in process,  finished
goods (including  without limitation any computer program embedded in any of the
foregoing goods and any supporting  information provided in connection therewith
that (i) is  associated  with  the  goods  in such a  manner  that  the  program
customarily  is considered  part of the goods or that (ii) by becoming the owner
of the goods,  a person  acquires a right to use the program in connection  with
the goods),  together  with any  advertising  materials and packing and shipping
materials,  wherever located and any documents of title  representing any of the
above,  and any  equipment,  fixtures  or other  property  used in the  storing,
moving,  preserving,  identifying,  accounting for and shipping or preparing for
the shipping of  inventory,  and any and all other items  hereafter  acquired by
Borrower by way of substitution, replacement, return, repossession or otherwise,
and all additions and accessions thereto, and the resulting product or mass, and
any documents of title respecting any of the above.

     1.24  "Judicial  Officer or Assignee"  shall mean and includes any trustee,
receiver,  controller,  custodian,  assignee for the benefit of creditors or any
other person or entity having powers or duties like or similar to the powers and
duties of trustee, receiver,  controller,  custodian or assignee for the benefit
of creditors.

                                       2

<PAGE>

     1.25 "Letter of Credit  Obligations"  shall mean, as of any applicable date
of  determination,  the sum of the  undrawn  amount of any  letter(s)  of credit
issued by Bank upon the application of and/or for the account of Borrower,  plus
any unpaid reimbursement obligations owing by Borrower to Bank in respect of any
such letter(s) of credit.

     1.26 "Long Term Indebtedness"  shall mean, in respect of a Person and as of
any  applicable  date  of  determination  thereof,  all  Debt  which  should  be
classified as "funded  indebtedness"  or "long term  indebtedness"  on a balance
sheet of such Person as of such date in accordance with GAAP.

     1.27 "Net  Income"  shall mean the net income (or loss) of a person for any
period of determination, determined in accordance with GAAP but excluding in any
event:

     a.   any  gains or  losses  on the sale or  other  disposition,  not in the
          ordinary  course  of  business,  of  investments  or fixed or  capital
          assets,  and any taxes on the excluded gains and any tax deductions or
          credits on account on any excluded losses; and

     b.   in the case of Borrower,  net earnings of any Person in which Borrower
          has an  ownership  interest,  unless  such  net  earnings  shall  have
          actually been received by Borrower in the form of cash distributions.

     1.28  "Negotiable  Collateral"  shall mean and  include  all of  Borrower's
present  and  future  letters of  credit,  advises  of credit,  letter-of-credit
rights,  certificates of deposit,  notes,  drafts,  money,  documents (including
without  limitation all negotiable  documents),  instruments  (including without
limitation all promissory  notes),  tangible  chattel paper or any other similar
property.

     1.29  "Person"  or  "person"  shall  mean  and  includes  any   individual,
corporation,    partnership,   joint   venture,   firm,   association,    trust,
unincorporated  association,  joint  stock  company,  government,  municipality,
political subdivision or agency or other entity.

     1.30  "Senior  Funded  Debt"  shall  mean,  as of  an  applicable  date  of
determination  total funded Debt under this Agreement plus all standby Letter of
Credit Obligations outstanding.

     1.31  "Subordinated  Debt"  shall mean  indebtedness  of  Borrower to third
parties  which  has  been  subordinated  to  the  Indebtedness   pursuant  to  a
subordination agreement in form and content satisfactory to Bank.

     1.32  "Subsidiary"  shall me, with respect to any Person,  any corporation,
association or other business  enttity of which more than fifty percent (50%) of
the  total  voting  power of  shares of stock  entitled  (without  regard to the
occurrence of any  contingency) to vote in the election of directors,  managers,
or trustees thereof, is at the time owned or controlled, directly or indirectly,
by that  Person or one or more of the  other  Subsidiaries  of that  Person or a
combination thereof.

     1.33 "Tangible  Effective Net Worth" shall mean, with respect to any Person
and  as of any  applicable  date  of  determination,  Tangible  Net  Worth  plus
Subordinated Debt.

     1.34 "Tangible Net Worth" shall mean,  with respect to any Person and as of
any applicable date of determination, the excess of:

     a.   the net book value of all assets of such Person  (excluding  affiliate
          receivables,   patents,  patent  rights,   trademarks,   trade  names,
          franchises,  copyrights,  licenses, goodwill, and all other intangible
          assets of such Person) after all appropriate  deductions in accordance
          with  GAAP  (including,  without  limitation,  reserves  for  doubtful
          receivables, obsolescence, depreciation and amortization), over

     b.   all Debt of such Person at such time.

     1.35  "Trademark  Rights"  shall mean all  Borrower's  rights under license
agreements  and revenue  sharing  agreements  for  trademarks and all trademarks
which the Borrower now owns or acquires in the future.

     1.36  "Working   Capital"  shall  mean,  as  of  any  applicable   date  of
determination, Current Assets less Current Liabilities.

     1.37 Compliance with financial  covenants contained in this Agreement shall
be determined based upon the financial condition of Hansen Natural  corporation,
on a  consolidated  basis,  and  all  references  to  financial  statements  and
financial  information shall be deemed to refer to the financial  statements and
financial  information  of  Hansen  Natural  Corporation  and  its  consolidated
subsidiaries.

Any and all  terms  used in the  foregoing  definitions  and  elsewhere  in this
Agreement  shall be  construed  and defined in  accordance  with the meaning and
definition of such terms under and pursuant to the California Uniform Commercial
Code  (hereinafter  referred to as the  "Uniform  Commercial  Code") as amended,
revised  or  replaced  from time to time.  Notwithstanding  the  foregoing,  the
parties  intend  that the terms used  herein  which are  defined in the  Uniform
Commercial  Code have, at all times,  the broadest and most  inclusive  meanings
possible.  Accordingly,  if the Uniform  Commercial  Code shall in the future be
amended  or held by a court to  define  any term used  herein  more  broadly  or
inclusively  than the  Uniform  Commercial  Code in  effect  on the date of this
Agreement,  then  such  term,  as used  herein,  shall be given  such  broadened
meaning.  If the Uniform  Commercial Code shall in the future be amended or held
by a court to define any term used herein more  narrowly,  or less  inclusively,
than the Uniform  Commercial Code in effect on the date of this Agreement,  such
amendment  or  holding  shall be  disregarded  in  defining  terms  used in this
Agreement.

2. LOAN AND TERMS OF PAYMENT.

For value received,  Borrower  promises to pay to the order of Bank such amount,
as provided for below, together with interest, as provided for below.

     2.1 Upon the  request of  Borrower,  made at any time and from time to time
during the term hereof,  and so long as no Event of Default has  occurred,  Bank
shall lend to Borrower an amount  equal to the Credit  Limit minus all Letter of
Credit  Obligations.  If at any time for any reason,  the amount of Indebtedness
owed by  Borrower to Bank  pursuant to this  Section 2.1 and Section 2.3 of this
Agreement is greater than the aggregate  amount available to be drawn under this
Section 2.1, Borrower shall immediately pay to Bank, in cash, the amount of such
excess.

                                       3

<PAGE>

     2.2 Except as hereinafter provided,  the Credit shall bear interest, on the
Daily Balance owing, at a fluctuating rate of interest,  depending on the Hansen
Natural's  consolidated  Senior EBITDA in accordance with the table below, equal
to the Base Rate plus the Applicable Base Margin or at the LIBOR Option Rate (as
defined and determined in accordance  with the LIBOR Addendum  attached  hereto)
plus the Applicable LIBOR Margin.


                           Applicable         Applicable       Applicable Letter
Senior Debt To EBITDA     LIBOR Margin     Base Rate Margin       of Credit Fee
---------------------     ------------     ----------------    -----------------
Less than 1.5:1.00           1.25%           Minus 1.50%             1.25 %

Equal to or greater 
than 1.5:1.00 but
Less than 2.51.00            1.50%           Minus 1.25%             1.50%

Equal to or greater 
than 2.5:1.00                1.75            Minus 1.00%             1.75%


Each semi annual period of the Borrower,  the Applicable  Base Rate Margin,  the
Applicable  LIBOR Rate  Margin and the  applicable  Letter of Credit Fee will be
determined  by the Bank  after  review  of the  Senior  Debt to EBITDA of Hansen
Natural on a consolidated  basis  according to the June 30 10Q's and December 31
10-K's of Hansen  Natural.  The Bank will  determine  the  Applicable  Base Rate
Margin and the Applicable LIBOR Rate Margin for each  semi-annual  period on the
60th day following  the last day of each such period.  The Senior Debt to EBITDA
at June 30 and December 31, must meet the above  referenced  thresholds  for any
decrease in the Applicable LIBOR Rate Margin and the Applicable Base Rate Margin
to occur and the  Applicable  Letter  of Credit  Fee to  decrease.  The  initial
Applicable  LIBOR  Margin is 1.25% the  initial  Applicable  Base Rate margin is
minus 1.50 % and the initial Letter of Credit Fee is 1.25%.

All  interest  chargeable  under this  Agreement  that is based upon a per annum
calculation  shall be computed on the basis of a three  hundred  sixty (360) day
year for actual days elapsed.  The Base Rate as of the date of this Agreement is
five percent  (5.00%) per annum.  In the event that the Base Rate  announced is,
from time to time hereafter,  changed, adjustment in the Base Rate shall be made
and based on the Base Rate in effect on the date of such change.  The Base Rate,
as adjusted, shall apply to the Credit until the Base Rate is adjusted again.

All  interest  payable by Borrower  under the Credit shall be due and payable on
the first day of each calendar month during the term of this  Agreement.  A late
payment charge equal to five percent (5%) of each late payment may be charged on
any payment not received by Bank within ten (10) calendar days after the payment
due date,  but acceptance of payment of this charge shall not waive any Event of
Default  under  this  Agreement.  Upon the  occurrence  of an  Event of  Default
hereunder,  and without constituting a waiver of any such Event of Default, then
during  the  continuation  thereof,  at Bank's  option,  the  Credit  shall bear
interest,  on the Daily Balance owing, at a rate equal to three percent (3%) per
year in excess of the rate applicable immediately prior to the occurrence of the
Event of Default, and such rate of interest shall fluctuate thereafter from time
to time at the same time and in the same amount as any  fluctuation  in the rate
of interest applicable immediately prior to any such occurrence.

     2.3 Subject to the terms and conditions of this  Agreement,  Bank agrees to
issue or cause to be issued letters of credit for the account of Borrower during
the term of this  Agreement  in the  aggregate  outstanding  face  amount not to
exceed the Credit Limit minus the then outstanding Daily Balance,  provided that
the Letter of Credit  Obligations  shall not in any case  exceed One Million Two
Hundred Thousand Dollars  ($1,200,000).  All letters of credit shall be, in form
and substance, acceptable to Bank in its sole discretion and shall be subject to
the terms and conditions of Bank's form of standard Letter of Credit Application
and Agreement.

The obligation of Borrower to immediately reimburse Bank for drawings made under
letters of credit shall be absolute, unconditional and irrevocable in accordance
with the  terms of this  Agreement  and the  Letter of  Credit  Application  and
Agreement with respect to each such letter of credit.  Borrower shall indemnify,
defend,  protect  and hold  Bank  harmless  from any  loss,  cost,  expense,  or
liability, including, without limitation, reasonable attorney's fees incurred by
Bank,  whether  in-house  or  outside  counsel  is  used,  arising  out of or in
connection with any letters of credit.

3. TERM.

     3.1 This  Agreement  shall  remain in full force and  effect  until June 1,
2006,  unless  earlier  terminated  by  notice  by  Borrower.   Notice  of  such
termination  by Borrower  shall be  effectuated  by mailing of a  registered  or
certified  letter not less than thirty (30) days prior to the effective  date of
such  termination,  addressed  to Bank at the address  set forth  herein and the
termination shall be effective as of the date so fixed in such notice.

     3.2 Notwithstanding the foregoing,  should Borrower be in default of one or
more of the provisions of this  Agreement,  Bank may terminate this Agreement at
any time without notice.  Notwithstanding  the foregoing,  should either Bank or
Borrower become  insolvent or unable to meet its debts as they mature,  or fail,
suspend,  or go out of  business,  the  other  party  shall  have  the  right to
terminate this Agreement at any time without notice.  On the date of termination
all  Indebtedness  shall become  immediately  due and payable  without notice or
demand; provided,  however, that no such notice of termination by Borrower shall
be  effective  until the  payment  in full in cash of all  Indebtedness  to Bank
(including  without limitation the expiration or cash  collateralization  of all
Letter of Credit Obligations in accordance with the terms and conditions of this
Agreement).  Any notice of  termination  given by Borrower  shall be irrevocable
unless Bank  otherwise  agrees in writing,  and Bank shall have no obligation to
make any loans or issue any letters of credit on or after the  termination  date
stated in such notice.  Borrower may elect to  terminate  this  Agreement in its
entirety only. No section of this Agreement or type of loan available  hereunder
may be terminated singly.

     3.3   All   undertakings,    agreements,    covenants,    warranties,   and
representations  of Borrower  contained in this Agreement or any other document,
instrument  or  agreement  entered  into with or in favor of Bank in  connection
herewith shall survive any such termination,  and Bank shall retain its security
interest in and to all existing  Collateral and Collateral  arising  thereafter,
any and all  liens  thereon,  and all of its  rights  and  remedies  under  this
Agreement or any other document, instrument or agreement entered into with or in
favor of Bank in connection herewith  notwithstanding such termination until the
payment  in  full  in  cash of all  Indebtedness  to  Bank  (including,  without
limitation,  the  expiration or cash  collateralization  of all of all Letter of
Credit Obligations in accordance with the terms and conditions of this Agreement
and  the  payment  in full  of all  applicable  termination  charges,  if  any).
Notwithstanding the satisfaction in full of the Indebtedness,  Bank shall not be
required to terminate  its security  interests in the  Collateral  unless,  with
respect to any loss or damage Bank may incur as a result of dishonored checks or
other items of payment  received by Bank and applied to the  Indebtedness,  Bank
shall,  at its  option,  (a) have  received  a written  agreement,  executed  by
Borrower and by any Person whose loans or other advances to Borrower are used in
whole or in part to satisfy the  Indebtedness,  indemnifying  Bank from any such
loss or damage,  or (b) have retained  such  monetary  reserves and liens on the
Collateral  for such period of time as Bank, in its reasonable  discretion,  may
deem necessary to protect Bank from any such loss or damage.

                                       4

<PAGE>

     3.4  After  termination  and when  Bank  has  received  payment  in full of
Borrower's  Indebtedness to Bank, Bank shall reassign to Borrower all Collateral
held by Bank,  and shall execute a termination  of all security  agreements  and
security interests given by Borrower to Bank.

4. CREATION OF SECURITY INTEREST.

     4.1 Borrower  hereby grants to Bank a continuing  security  interest in all
presently  existing and hereafter  arising  Collateral in order to secure prompt
repayment of any and all  Indebtedness  owed by Borrower to Bank and in order to
secure  prompt  performance  by  Borrower of each and all of its  covenants  and
obligations under this Agreement and otherwise created. Bank's security interest
in the Collateral shall attach to all Collateral without further act on the part
of Bank or Borrower.  In the event that any Collateral,  including proceeds,  is
evidenced by or consists of Negotiable  Collateral,  Borrower,  immediately upon
the request of Bank,  shall (a) endorse or assign such Negotiable  Collateral to
Bank, (b) deliver actual physical  possession of such  Negotiable  Collateral to
Bank,  and  (c)  mark  conspicuously  all  of its  records  pertaining  to  such
Negotiable Collateral with a legend, in form and substance  satisfactory to Bank
(and in the case of Negotiable  Collateral consisting of tangible chattel paper,
immediately  mark all such tangible  chattel paper with a conspicuous  legend in
form and  substance  satisfactory  to  Bank),  indicating  that  the  Negotiable
Collateral is subject to the security interest granted to Bank hereunder.

     4.2 Bank's  security  interest in the Accounts shall attach to all Accounts
without  further act on the part of Bank or  Borrower.  Upon  request from Bank,
Borrower  shall provide Bank with schedules  describing all Accounts  created or
acquired by Borrower  (including without limitation agings listing the names and
addresses of, and amounts owing by date by account  debtors),  and shall execute
and deliver written assignments of all Accounts to Bank all in a form acceptable
to Bank;  provided,  however,  Borrower's  failure to execute and  deliver  such
schedules and/or  assignments shall not affect or limit Bank's security interest
and other rights in and to the Accounts.  Together with each schedule,  Borrower
shall  furnish  Bank  with  copies  of  Borrower's  customers'  invoices  or the
equivalent, and original shipping or delivery receipts for all merchandise sold,
and Borrower warrants the genuineness  thereof.  Upon the occurrence of an Event
of Default,  Bank or Bank's designee may notify  customers or account debtors of
Bank's security  interest in the Collateral and direct such customers or account
debtors to make payments  directly to Bank, but unless and until Bank does so or
gives Borrower other written  instructions,  Borrower shall collect all Accounts
for Bank,  receive in trust all payments  thereon as Bank's trustee,  and, if so
requested to do so from Bank,  Borrower shall immediately  deliver said payments
to Bank in their  original  form as  received  from the  account  debtor and all
letters of credit, advices of credit, instruments,  documents,  chattel paper or
any similar  property  evidencing or  constituting  Collateral.  Notwithstanding
anything to the contrary  contained  herein,  if sales of Inventory are made for
cash,  Borrower shall  immediately  deliver to Bank, in identical form, all such
cash, checks, or other forms of payment which Borrower receives.  The receipt of
any check or other item of payment by Bank shall not be  considered a payment on
account until such check or other item of payment is honored when  presented for
payment,  in which event, said check or other item of payment shall be deemed to
have  been paid to Bank two (2)  calendar  days  after  the date  Bank  actually
receives such check or other item of payment.

     4.3 Bank's  security  interest in Inventory  shall attach to all  Inventory
without further act on the part of Bank or Borrower. Borrower will at Borrower's
expense pledge,  assemble and deliver such Inventory to Bank or to a third party
as Bank's bailee; or hold the same in trust for Bank's account or store the same
in  a  warehouse  in  Bank's  name;  or  deliver  to  Bank  documents  of  title
representing  said Inventory;  or evidence of Bank's  security  interest in some
other  manner  acceptable  to Bank.  Until a  default  by  Borrower  under  this
Agreement  or any other  Agreement  between  Borrower  and Bank,  Borrower  may,
subject to the provisions  hereof and consistent  herewith,  sell the Inventory,
but only in the ordinary course of Borrower's  business.  A sale of Inventory in
Borrower's  ordinary  course of  business  does not  include  an  exchange  or a
transfer in partial or total satisfaction of a debt owing by Borrower.

     4.4 Concurrently  with Borrower's  execution of this Agreement,  and at any
time or times  hereafter at the request of Bank,  Borrower shall (a) execute and
deliver to Bank security  agreements,  mortgages,  assignments,  certificates of
title, affidavits, reports, notices, schedules of accounts, letters of authority
and all other documents that Bank may reasonably  request,  in form satisfactory
to Bank,  to perfect and  maintain  perfected  Bank's  security  interest in the
Collateral and in order to fully consummate all of the transactions contemplated
under this Agreement,  (b) cooperate with Bank in obtaining a control  agreement
in form and substance satisfactory to Bank with respect to all deposit accounts,
electronic chattel paper, investment property, and letter-of-credit  rights, and
(c) in the event that any  Collateral  is in the  possession  of a third  party,
Borrower shall join with Bank in notifying  such third party of Bank's  security
interest  and  obtaining  an  acknowledgment  from such  third  party that it is
holding such Collateral for the benefit of Bank. By  authenticating  or becoming
bound by this  Agreement,  Borrower  authorizes the filing of initial  financing
statement(s),  and any  amendment(s)  covering  the  Collateral  to perfect  and
maintain  perfected  Bank's  security  interest  in  the  Collateral.  Upon  the
occurrence  of  an  Event  of  Default,   Borrower  hereby   irrevocably  makes,
constitutes and appoints Bank (and any of Bank's  officers,  employees or agents
designated by Bank) as Borrower's true and lawful attorney-in-fact with power to
sign the name of  Borrower  on any  security  agreement,  mortgage,  assignment,
certificate of title,  affidavit,  letter of authority,  notice of other similar
documents  which must be executed  and/or  filed in order to perfect or continue
perfected Bank's security  interest in the Collateral,  and to take such actions
in its own name or in  Borrower's  name as Bank, in its sole  discretion,  deems
necessary  or  appropriate  to  establish  exclusive  possession  or control (as
defined in the Uniform  Commercial Code) over any Collateral of such nature that
perfection  of Bank's  security  interest may be  accomplished  by possession or
control.

     4.5 Borrower shall make appropriate  entries in Borrower's Books disclosing
Bank's  security  interest in the  Accounts.  Bank (through any of its officers,
employees  or  agents)  shall  have the  right  at any time or times  hereafter,
provided that reasonable  notice is provided,  during  Borrower's usual business
hours, or during the usual business hours of any third party having control over
the  records of  Borrower,  to inspect and verify  Borrower's  Books in order to
verify  the amount or  condition  of, or any other  matter,  relating  to,  said
Collateral and Borrower's financial condition.

     4.6 Effective  only upon the  occurrence  of an Event of Default,  Borrower
appoints  Bank or any  other  person  whom  Bank  may  designate  as  Borrower's
attorney-in-fact,  with power: to endorse Borrower's name on any checks,  notes,
acceptances,  money order, drafts or other forms of payment or security that may
come into Bank's  possession;  to sign Borrower's name on any invoice or bill of
lading relating to any Accounts, on drafts against account debtors, on schedules
and  assignments  of Accounts,  on  verifications  of Accounts and on notices to
account debtors;  to establish a lock box arrangement  and/or to notify the post
office  authorities  to change the  address  for  delivery  of  Borrower's  mail
addressed to Borrower to an address  designated by Bank, to receive and open all
mail  addressed to Borrower,  and to retain all mail relating to the  Collateral
and  forward  all other  mail to  Borrower;  to send,  whether  in writing or by
telephone, requests for verification of Accounts; and to do all things necessary
to carry out this  Agreement.  Borrower  ratifies  and  approves all acts of the
attorney-in-fact.  Neither Bank nor its attorney-in-fact  will be liable for any
acts or omissions or for any error of judgement or mistake of fact or law.  This
power being coupled with an interest,  is irrevocable so long as any Accounts in
which Bank has a security  interest remain unpaid and until the Indebtedness has
been fully satisfied.

                                       5

<PAGE>

     4.7 In order to protect  or perfect  any  security  interest  which Bank is
granted  hereunder,  Bank may,  in its sole  discretion,  discharge  any lien or
encumbrance or bond the same, pay any insurance,  maintain guards, warehousemen,
or any personnel to protect the Collateral,  pay any service bureau,  or, obtain
any records,  and all costs for the same shall be added to the  Indebtedness and
shall be payable on demand.

     4.8  Borrower  agrees  that Bank may provide  information  relating to this
Agreement or relating to Borrower to Bank's parent, affiliates, subsidiaries and
service providers.

5. CONDITIONS PRECEDENT.

     5.1  Conditions  precedent to the making of the loans and the  extension of
the financial accommodations  hereunder,  Borrower shall execute, or cause to be
executed,  and deliver to Bank, in form and substance  satisfactory  to Bank and
its counsel, the following:

     a.   This  Agreement   executed  by  the  Borrower  and  other   documents,
          instruments and agreements required by Bank;

     b.   Security  Agreements,  Pledge  Agreements  or  reaffirmations  thereof
          executed by the Borrower, Hansen Natural Corporation, Blue Sky Natural
          Beverage Co., Hansen Junior Juice Company, and Hard e Beverage Company
          as required by Bank to continue its security interest in the assets of
          these  entities as  previously  granted and the stock of Hansen Junior
          Juice.

     c.   Guarantees  executed by Hansen Natural  Corporation,  Blue Sky Natural
          Beverage  Co.,  Hansen  Junior  Juice  Company,  and  Hard e  Beverage
          Company.

     d.   If Borrower  is a  corporation,  limited  liability  company,  limited
          partnership  or other such  entity,  certified  copies of all  actions
          taken by  Borrower,  any  grantor  of a security  interest  to Bank to
          secure  the  Indebtedness,  and  any  guarantor  of the  Indebtedness,
          authorizing the execution,  delivery and performance of this Agreement
          and any other  documents,  instruments  or agreements  entered into in
          connection herewith,  and authorizing specific officers to execute and
          deliver any such documents, instruments and agreements;

     e.   If Borrower  is a  corporation,  limited  liability  company,  limited
          partnership or other such entity,  then a certificate of good standing
          showing that Borrower is in good standing  under the laws of the state
          of its  incorporation  or formation and  certificates  indicating that
          Borrower is qualified to transact  business and is in good standing in
          any other state in which it conducts business;

     f.   If Borrower is a  partnership,  then a copy of Borrower's  partnership
          agreement certified by each general partner of Borrower;

     g.   UCC  searches  and  financing  statements,  tax  lien  and  litigation
          searches,    fictitious   business   statement   filings,    insurance
          certificates,  notices  or  other  similar  documents  which  Bank may
          require  and in such form as Bank may  require,  in order to  reflect,
          perfect or protect  Bank's  first  priority  security  interest in the
          Collateral and in order to fully  consummate  all of the  transactions
          contemplated under this Agreement;

     h.   Evidence   that  Borrower  has  obtained   insurance  and   acceptable
          endorsements;

     i.   Such  depository  control  agreements  from  each  Person  as Bank may
          require;

     j.   Such  collateral  access  agreements  from each lessor,  warehouseman,
          bailee,  and other Person as Bank may require,  duly  executed by each
          such Person; and

6. .WARRANTIES. REPRESENTATIONS AND COVENANTS.

     6.1 If so requested by Bank,  Borrower shall, at such intervals  designated
by Bank,  during  the term  hereof  execute  and  deliver a Report  of  Accounts
Receivable or similar report, in form customarily used by Bank.

     6.2 Returns and allowances,  if any, as between Borrower and its customers,
will be on the same basis and in accordance with the usual  customary  practices
of Borrower, as they exist at this time. Any merchandise which is returned by an
account  debtor or otherwise  recovered  shall be set aside,  marked with Bank's
name, and Bank shall retain a security interest therein. Borrower shall promptly
notify  Bank of all  disputes  and  claims  and  settle or adjust  them on terms
approved by Bank. After default by Borrower  hereunder,  no discount,  credit or
allowance  shall be granted to any account  debtor by Borrower  and no return of
merchandise  shall be accepted by Borrower  without  Bank's  consent.  Bank may,
after default by Borrower,  settle or adjust  disputes and claims  directly with
account debtors for amounts and upon terms which Bank considers  advisable,  and
in such cases Bank will credit Borrower's loan account with only the net amounts
received by Bank in payment of the Accounts,  after  deducting all Bank Expenses
in connection therewith.


     6.3 Borrower warrants, represents, covenants and agrees that:

     a.   Borrower has good and marketable title to the Collateral. Bank has and
          shall continue to have a first priority perfected security interest in
          and to the Collateral.  The Collateral  shall at all times remain free
          and clear of all liens,  encumbrances and security  interests  (except
          those in favor of Bank);

     b.   All Accounts are and will, at all times pertinent hereto, be bona fide
          existing  obligations  created by the sale and delivery of merchandise
          or the rendition of services to account debtors in the ordinary course
          of  business,  free  of  liens,  claims,   encumbrances  and  security
          interests  (except as held by Bank and except as may be consented  to,
          in writing, by Bank) and are unconditionally  owed to Borrower without
          defenses,  disputes,  offsets  counterclaims,   rights  of  return  or
          cancellation,  and Borrower shall have received no notice of actual or
          imminent bankruptcy or insolvency of any account debtor at the time an
          Account due from such account debtor is assigned to Bank; and

                                       6

<PAGE>

     c.   At the time each Account is assigned to Bank, all property giving rise
          to such Account shall have been  delivered to the account debtor or to
          the agent for the  account  debtor  for  immediate  shipment  to,  and
          unconditional  acceptance  by,  the  account  debtor.  Borrower  shall
          deliver  to  Bank,  as Bank may from  time to time  require,  delivery
          receipts, customer's purchase orders, shipping instructions,  bills of
          lading and any other evidence of shipping arrangements.  Absent such a
          request  by Bank,  copies of all such  documentation  shall be held by
          Borrower as custodian for Bank.

     6.4 Unless  Borrower has given Bank thirty (30) days advanced notice of its
intent  to change  the  Location  of  Inventory  to a  location  other  than the
locations listed in Schedule 6.4 attached  hereto,  and unless Bank has approved
such change of location, Borrower shall keep the Inventory (other than Inventory
with an  aggregate  value of  $20,000 or less)  only at the  locations  shown on
Schedule 6.4 attached hereto.

     a.   Borrower, immediately upon demand by Bank therefor, shall now and from
          time to time hereafter,  at such intervals as are reasonably requested
          by  Bank,  deliver  to  Bank,  designations  of  Inventory  specifying
          Borrower's cost of Inventory,  the wholesale  market value thereof and
          such other matters and  information  relating to the Inventory as Bank
          may request;

     b.   All of the Inventory is and shall remain free from all purchase  money
          or other security interests, liens or encumbrances,  except as held by
          Bank and except for warehouse  liens,  packer's  liens and  copacker's
          liens arising in the ordinary course of business;

     c.   Borrower  does now keep and  hereafter at all times shall keep correct
          and accurate records itemizing and describing the kind, type,  quality
          and quantity of the  Inventory,  its cost  therefor and selling  price
          thereof,  and the daily withdrawals  therefrom and additions  thereto,
          all of which records  shall be available  upon demand to any of Bank's
          officers, agents and employees for inspection and copying;

     d.   All Inventory,  now and hereafter at all times, shall be new Inventory
          of good and merchantable quality free from material defects;

     e.   Inventory  is not now and shall not at any time or times  hereafter be
          located or stored  with a bailee,  warehouseman  or other  third party
          without  Bank's prior written  consent,  and, in such event,  Borrower
          will  concurrently  therewith  cause any such bailee,  warehouseman or
          other third party to issue and deliver to Bank,  warehouse receipts in
          Bank's   name   evidencing   the  storage  of   Inventory   and/or  an
          acknowledgment by such bailee of Bank's prior rights in the Inventory,
          in each case in form and substance  acceptable to Bank,. In any event,
          Borrower shall instruct any third party to hold all such Inventory for
          Bank's  account   subject  to  Bank's   security   interests  and  its
          instructions; and

     f.   Bank  shall  have the  right  upon  demand  now  and/or  at all  times
          hereafter,  during  Borrower's usual business hours,  after reasonable
          notice, to inspect and examine the Inventory and to check and test the
          same as to quality,  quantity, value and condition and Borrower agrees
          to  reimburse  Bank for Bank's  reasonable  costs and  expenses  in so
          doing; and

     g.   Borrower hall deliver to Bank duly executed certificates of title with
          respect  to  that  portion  of  the  Collateral  that  is  subject  to
          certificates of title.

     6.5 Borrower  represents,  warrants and  covenants  with Bank that Borrower
will not, without Bank's prior written consent:

     a.   Grant a security  interest in or permit a lien,  claim or  encumbrance
          upon  any  of  the  Collateral  to  any  person,  association,   firm,
          corporation, entity or governmental agency or instrumentality,  except
          for warehouse  liens,  packer's liens and copacker's  liens arising in
          the ordinary course of business;

     b.   Permit any levy,  attachment or restraint to be made  affecting any of
          Borrower's assets;

     c.   Permit any  Judicial  Officer or Assignee to be  appointed  or to take
          possession of any or all of Borrower's assets;

     d.   Other than sales of  Inventory in the  ordinary  course of  Borrower's
          business,  to sell, lease, or otherwise dispose of, move, or transfer,
          whether by sale or otherwise, any of Borrower's assets;

     e.   Change its name,  the  location of its sole place of  business,  chief
          executive office or residence, business structure,  corporate identity
          or structure,  form of  organization or the state in which it has been
          formed or organized; add any new fictitious names, liquidate, merge or
          consolidate with or into any other business organization;

     f.   Move or relocate any Collateral;

     g.   Acquire any other business organization;

     h.   Enter  into any  transaction,  or series of  transactions  aggregating
          $100,000  or more,  which  are not in the usual  course of  Borrower's
          business;

     i.   Make any change in  Borrower's  financial  structure  or in any of its
          business  objectives,  purposes or operations  which would  materially
          adversely   affect  the  ability  of  Borrower  to  repay   Borrower's
          Indebtedness;

     j.   Incur any debts  outside the ordinary  course of  Borrower's  business
          except renewals or extensions of existing debts and interest thereon;

     k.   Make loans,  advances or  extensions of credit to any Person in excess
          of $50,000 (was $5,000), except in the ordinary course of business;

     l.   Guarantee  or  otherwise,  directly  or  indirectly,  in any way be or
          become  responsible  for  obligations of any other Person,  whether by
          agreement to purchase the indebtedness of any other Person,  agreement
          for the furnishing of funds to any other Person through the furnishing
          of goods,  supplies or  services,  by way of stock  purchase,  capital
          contribution,   advance  or  loan,   for  the  purpose  of  paying  or
          discharging (or causing the payment or discharge of) the  indebtedness
          of any other  Person,  or  otherwise,  except for the  endorsement  of
          negotiable  instruments by Borrower in the ordinary course of business
          for deposit or collection;

                                       7

<PAGE>

     m.   Make any  payment  on  account  of any  Subordinated  Debt  except for
          regularly  scheduled  payments of interest and principal in accordance
          with the provisions of any  Subordination  Agreement  executed by Bank
          and the subordinated debt holder, or amend any provision  contained in
          any  documentation  relating  to any such  Subordinated  Debt  without
          Bank's prior written consent;

     n.   (a) Sell,  lease,  transfer or  otherwise  dispose of  properties  and
          assets  having  an  aggregate  book  value of more  than  One  Hundred
          Thousand  Dollars  ($100,000  ) (whether  in one  transaction  or in a
          series  of  transactions)  except as to the sale of  Inventory  in the
          ordinary course of business;  (b) change its name, consolidate with or
          merge into any other corporation,  permit another corporation to merge
          into it, acquire all or substantially  all the properties or assets of
          any other Person, enter into any reorganization or recapitalization or
          reclassify  its capital  stock,  or (c) enter into any  sale-leaseback
          transaction;

     o.   Purchase or hold  beneficially  any stock or other  securities  of, or
          make any  investment  or  acquire  any  securities  or other  interest
          whatsoever  in, any other  Person,  except for the common stock of the
          Subsidiaries  owned  by  Borrower  on the date of this  Agreement  and
          except for certificates of deposit with maturities of one year or less
          of United States commercial banks with capital,  surplus and undivided
          profits in excess of One Hundred  Million Dollars  ($100,000,000)  and
          the  securities  or other  direct  obligations  of the  United  States
          Government  maturing  within  one year  from  the date of  acquisition
          thereof;

     p.   Allow any fact,  condition  or event to occur or exist with respect to
          any employee pension or profit sharing plans established or maintained
          by it which might constitute  grounds for termination of any such plan
          or for the court appointment of a trustee to administer any such plan;

     q.   Use any loan or other  extension of credit under this Agreement or any
          other document,  instrument or agreement entered into by Borrower with
          or in favor of Bank in connection  with this Agreement for any purpose
          other than to refinance  existing  revolving  debt, to provide working
          capital for its operations and for other general business purposes. In
          no event  shall the funds  from any such  loan or other  extension  of
          credit be used  directly  or  indirectly  by any Person for  personal,
          family, household or agricultural purposes or for the purpose, whether
          immediate,  incidental  or  ultimate,  of  purchasing,   acquiring  or
          carrying any "margin stock" or any "margin  securities" (as such terms
          are defined  respectively in Regulation U and Regulation G promulgated
          by the Board of Governors of the Federal  Reserve System) or to extend
          credit to others  directly or indirectly for the purpose of purchasing
          or  carrying  any such  margin  stock or margin  securities.  Borrower
          hereby   represents   and  warrants   that  Borrower  is  not  engaged
          principally,  or as one of  Borrower's  important  activities,  in the
          business of extending  credit to others for the purpose of  purchasing
          or carrying such margin stock or margin securities; and

     r.   Borrower  shall not  downstream  any of the funds from the loan or any
          extension of credit under this  Agreement to Hard e Beverage  Company,
          Hansen Junior Juice Company or Blue Sky Natural Beverage Co.

     s.   Borrower  shall not Sublicense  Trademark  Rights other than contracts
          for the sale or distribution of finished products utilizing  Specified
          Trademarks  entered  into  in the  ordinary  course  of its  business;
          provided, however, Borrower may sublicense Specified Trademarks in the
          ordinary  course of business  so long as ten (10) days after  entering
          into each such sublicense,  Borrower shall give notice to Bank of such
          sublicense  and the name and address of the  sublicense  and a copy of
          the sublicense.

     6.6 Borrower represents, warrants, covenants and agrees that:

     a.   Borrower's  true  and  correct  legal  name is that  set  forth on the
          signature  page to this  Agreement.  Except as disclosed in writing to
          Bank on or before the date of this  Agreement,  Borrower  has not done
          business  under any name  other  than that set forth on the  signature
          page to this Agreement;

     b.   If Borrower is a registered  organization  that is organized under the
          laws of any one of the  states  comprising  the  United  States  (e.g.
          corporation,   limited   partnership,   registered  limited  liability
          partnership  or  limited  liability  company),   and  is  located  (as
          determined pursuant to the Uniform Commercial Code) in the state under
          the laws of which it was organized,  Borrower's  form of  organization
          and the  state in which it has been  organized  are  those  set  forth
          immediately  following  Borrower's  name on the signature page to this
          Agreement;

     c.   If Borrower is a registered  organization  organized under the laws of
          the United  States,  and  Borrower is located in the state that United
          States  law  designates  as its  location  or,  if United  States  law
          authorizes Borrower to designate the state for its location, the state
          designated by Borrower, or if neither of the foregoing are applicable,
          at the District of Columbia (in each case as  determined in accordance
          with the Uniform Commercial Code), Borrower's form of organization and
          the  state or  district  in which it is  located  are  those set forth
          immediately  following  Borrower's  name on the signature page to this
          Agreement;

     6.7  If  Borrower  is a  corporation,  Borrower  represents,  warrants  and
covenants as follows:

     a.   Borrower will not make any distribution or declare or pay any dividend
          (in  stock  or in cash) to any  shareholder  or on any of its  capital
          stock,  of  any  class,  whether  now  or  hereafter  outstanding,  or
          purchase,  acquire,  repurchase,  or redeem or retire any such capital
          stock,  provided  however,  that  Borrower  may decalre and pay a cash
          dividend  in cash or in stock in an amount  not in  excess of  current
          retained earnings.

     b.   Borrower is and shall at all times  hereafter  be a  corporation  duly
          organized and existing in good standing under the laws of the state of
          its  incorporation  and  qualified  and  licensed  to do  business  in
          California or any other state in which it conducts its business;

     c.   Borrower has the right and power and is duly  authorized to enter into
          this Agreement; and

     d.   The  execution by Borrower of this  Agreement  shall not  constitute a
          breach  of  any  provision   contained  in   Borrower's   articles  of
          incorporation or by-laws.

                                       8

<PAGE>

     6.8 The  execution of and  performance  by Borrower of all of the terms and
provisions  contained  in this  Agreement  shall  not  result  in a breach of or
constitute an event of default  under any agreement to which  Borrower is now or
hereafter becomes a party.

     6.9 Borrower  shall promptly  notify Bank in writing of its  acquisition by
purchase, lease or otherwise of any after acquired property of the type included
in the  Collateral  having an aggregate  value in excess of  $100,000,  with the
exception of purchases of Inventory in the ordinary course of business.

     6.10 All assessments and taxes, whether real, personal or otherwise, due or
payable  by, or  imposed,  levied or  assessed  against,  Borrower or any of its
property  have  been  paid,  and  shall  hereafter  be  paid  in  full,   before
delinquency.  Borrower  shall  make due and  timely  payment  or  deposit of all
federal,  state and local taxes,  assessments or contributions required of it by
law, and will execute and deliver to Bank, on demand,  appropriate  certificates
attesting to the payment or deposit  thereof.  Borrower will make timely payment
or deposit of all F.I.C.A.  payments  and  withholding  taxes  required of it by
applicable  laws, and will upon request furnish Bank with proof  satisfactory to
it that Borrower has made such payments or deposit. If Borrower fails to pay any
such  assessment,  tax,  contribution,  or make such  deposit,  or  furnish  the
required proof, Bank may, in its sole and absolute discretion and without notice
to Borrower,  (I) make payment of the same or any part  thereof,  or (ii) set up
such reserves in Borrower's  loan account as Bank deems necessary to satisfy the
liability therefor,  or both. Bank may conclusively rely on the usual statements
of the  amount  owing or other  official  statements  issued by the  appropriate
governmental agency. Each amount so paid or deposited by Bank shall constitute a
Bank Expense and an additional advance to Borrower.

     6.11 There are no actions or proceedings  pending by or against Borrower or
any guarantor of Borrower before any court or administrative agency and Borrower
has no knowledge of any pending, threatened or imminent litigation, governmental
investigations or claims, complaints, actions or prosecutions involving Borrower
or any  guarantor of Borrower,  except as heretofore  specifically  disclosed in
writing to Bank. If any of the foregoing arise during the term of the Agreement,
Borrower shall immediately notify Bank in writing.

6.12 Insurance.

     a.   Borrower,  at its expense,  shall keep and maintain its assets insured
          against loss or damage by fire, theft,  explosion,  sprinklers and all
          other hazards and risks ordinarily insured against by other owners who
          use such properties in similar businesses for the full insurable value
          thereof.  Borrower shall also keep and maintain business  interruption
          insurance and public liability and property damage insurance  relating
          to  Borrower's  ownership  and use of the  Collateral  and  its  other
          assets.  All such  policies of insurance  shall be in such form,  with
          such  companies,  and in such amounts as may be  satisfactory to Bank.
          Borrower  shall deliver to Bank  certified  copies of such policies of
          insurance and evidence of the payments of all premiums  therefor.  All
          such  policies of  insurance  (except  those of public  liability  and
          property  damage) shall contain an endorsement in a form  satisfactory
          to Bank  showing  Bank  as a loss  payee  thereof,  with a  waiver  of
          warranties  satisfactory to Bank, and all proceeds payable  thereunder
          shall be payable to Bank and,  upon receipt by Bank,  shall be applied
          on account of the Indebtedness owing to Bank. To secure the payment of
          the  Indebtedness,  Borrower grants Bank a security interest in and to
          all such policies of insurance  (except those of public  liability and
          property damage) and the proceeds  thereof,  and Borrower shall direct
          all  insurers  under such  policies of  insurance  to pay all proceeds
          thereof directly to Bank.

     b.   Borrower hereby irrevocably appoints Bank (and any of Bank's officers,
          employees or agents designated by Bank) as Borrower's attorney for the
          purpose of making, selling and adjusting claims under such policies of
          insurance,  endorsing  the  name  of  Borrower  on any  check,  draft,
          instrument  or other item of payment for the proceeds of such policies
          of insurance  and for making all  determinations  and  decisions  with
          respect to such policies of insurance. Borrower will not cancel any of
          such policies without Bank's prior written consent.  Each such insurer
          shall agree by  endorsement  upon the policy or policies of  insurance
          issued  by  it to  Borrower  as  required  above,  or  by  independent
          instruments  furnished  to Bank,  that it will  give Bank at least ten
          (10)  days  written  notice  before  any such  policy or  policies  of
          insurance shall be altered or canceled,  and that no act or default of
          Borrower,  or any  other  person,  shall  affect  the right of Bank to
          recover under such policy or policies of insurance  required  above or
          to pay any premium in whole or in part relating thereto. Bank, without
          waiving or releasing any  Indebtedness  or any Event of Default,  may,
          but shall  have no  obligation  to do so,  obtain  and  maintain  such
          policies of insurance  and pay such premiums and take any other action
          with respect to such policies which Bank deems advisable.  All sums so
          disbursed by Bank, as well as reasonable  attorneys'  fees incurred by
          Bank,  whether  in-house  or  outside  counsel is used,  court  costs,
          expenses and other charges  relating  thereto,  shall  constitute Bank
          Expenses and are payable on demand.

     6.13 All financial  statements and  information  relating to Borrower which
have been or may hereafter be delivered by Borrower to Bank are true and correct
and have been prepared in accordance  with GAAP  consistently  applied and there
has been no material adverse change in the financial condition of Borrower since
the submission of such financial information to Bank.

     6.14 Financial Reporting.

     a.   Borrower at all times  hereafter  shall maintain a standard and modern
          system of accounting in accordance with GAAP consistently applied with
          ledger and account  cards and/or  computer  tapes and computer  disks,
          computer  printouts and computer records  pertaining to the Collateral
          which  contain  information  as may from time to time be  requested by
          Bank,  not modify or change its method of  accounting  or enter  into,
          modify or terminate any agreement presently  existing,  or at any time
          hereafter  entered  into with any third party  accounting  firm and/or
          service  bureau  for the  preparation  and/or  storage  of  Borrower's
          accounting  records without the written consent of Bank first obtained
          and without said  accounting  firm and/or service  bureau  agreeing to
          provide   information   regarding   the  Accounts  and  Inventory  and
          Borrower's  financial  condition  to Bank;  permit Bank and any of its
          employees,  officers or agents,  upon demand,  during Borrower's usual
          business  hours,  or the usual  business hour of third persons  having
          control thereof, to have access to and examine all of Borrower's Books
          relating  to  the   Collateral,   Borrower's   Indebtedness  to  Bank,
          Borrower's   financial   condition   and  the  results  of  Borrower's
          operations  and in  connection  therewith,  permit  Bank or any of its
          agents, employees or officers to copy and make extracts therefrom.

     b.   Borrower shall deliver to Bank within sixty (60) days after the end of
          each  quarter a company  prepared  balance  sheet and  profit and loss
          statement  (Form 10-Q as filed  with the US  Securities  and  Exchange
          Commission) covering Borrower's  operations and deliver to Bank within
          ninety five (95) days after the end of each of Borrower's fiscal years
          an unqualified  audited  financial  statement (Form 10-K as filed with
          the US Securities and Exchange  Commission) of the financial condition
          of Borrower for each such fiscal year, including but not limited to, a
          balance  sheet and  profit  and loss  statement  and any other  report
          requested  by  Bank  relating  to the  Collateral  and  the  financial
          condition  of  Borrower,  and a  certificate  signed by an  authorized
          employee  of  Borrower  to the effect  that all  reports,  statements,
          computer disk or tape files,  computer  printouts,  computer  runs, or
          other computer prepared  information of any kind or nature relating to
          the foregoing or documents delivered or caused to be delivered to Bank
          under this subparagraph are complete,  correct and thoroughly  present
          the financial  condition of Borrower and that there exists on the date
          of delivery to Bank no condition or event which  constitutes  a breach
          or Event of Default under this Agreement.

                                       9

<PAGE>

     c.   In addition to the  financial  statements  requested  above,  Borrower
          agrees to provide Bank with the following schedules:

          (1)  Accounts  Receivable Agings and Accounts Payable Agings within 30
               days of the end of each quarter;

          (2)  Compliance  Certification  within  30  days  of the  end of  each
               quarter, and

          (3)  Inventory report within 30 days of the end of each quarter.

     6.15 Hansen  Natural  shall  maintain the  following  financial  ratios and
covenants  on a  consolidated  basis,  which shall be  monitored  on a quarterly
basis, except as noted below:

          a.   A Book Net Worth of not less than $35,000,000.

          b.   a Current Ratio of not less than 1.25:1.00

          c.   a  ratio  of  Senior  Funded  Debt to  EBITDA  of not  more  than
               1.75:1.00.  Bank shall (i) in determining EBITDA, use the current
               quarter of EBITDA and previous three (3) quarters of EBITDA;  and
               (ii) in determining Senior Funded debt, use Senior Funded Debt as
               of the date of calculating this ratio.

     All  financial   covenants  shall  be  computed  in  accordance  with  GAAP
consistently  applied  except  as  otherwise  specifically  set  forth  in  this
Agreement.  All monies due from affiliates  (including  officers,  directors and
shareholders)  shall  be  excluded  from  Borrower's  assets  for  all  purposes
hereunder.

     In  the  event  that  Borrower   reasonably  expects  that  it  may  be  in
noncompliance  with one or more of the financial  covenants set forth in Section
6.15 in the following period of determination by virtue of the operation of SFAS
123 or any other accounting changes  hereinafter adopted as GAAP, Borrower shall
so  notify  the  Bank and  thereafter,  to the  extent  permitted  by law,  such
compliance  shall be  determined  without  regard to SFAS 123 or such changes to
GAAP.

     6.16 Borrower shall promptly supply Bank (and cause any guarantor to supply
Bank)  with such  other  information  (including  tax  returns)  concerning  its
financial  affairs (or that of any  guarantor)  as Bank may request from time to
time hereafter, and shall promptly notify Bank of any material adverse change in
Borrower's financial condition and of any condition or event which constitutes a
breach  of or an  event  which  constitutes  an  Event  of  Default  under  this
Agreement.

     6.17 Borrower is now and shall be at all times  hereafter  solvent and able
to pay its debts (including trade debts) as they mature.

     6.18 Borrower shall  immediately and without demand  reimburse Bank for all
sums expended by Bank in connection  with any action  brought by Bank to correct
any default or enforce  any  provision  of this  Agreement,  including  all Bank
Expenses; Borrower authorizes and approves all advances and payments by Bank for
items described in this Agreement as Bank Expenses.

     6.19  Each  warranty,   representation  and  agreement  contained  in  this
Agreement shall be automatically  deemed repeated with each advance and shall be
conclusively  presumed  to  have  been  relied  on by  Bank  regardless  of  any
investigation   made  or  information   possessed  by  Bank.   The   warranties,
representations  and  agreements  set forth  herein shall be  cumulative  and in
addition to any and all other warranties,  representations  and agreements which
Borrower shall give, or cause to be given, to Bank, either now or hereafter.

     6.20 Borrower  shall keep all of its principal  bank accounts with Bank and
shall  notify Bank  immediately  in writing of the  existence  of any other bank
account,  deposit  account,  or  any  other  account  into  which  money  can be
deposited.

     6.21  Borrower  shall furnish to Bank:  (a) as soon as possible,  but in no
event  later than thirty  (30) days after  Borrower  knows or has reason to know
that any  reportable  event with respect to any deferred  compensation  plan has
occurred,  a statement of the chief financial  officer of Borrower setting forth
the details  concerning  such  reportable  event and the action  which  Borrower
proposes to take with  respect  thereto,  together  with a copy of the notice of
such reportable  event given to the Pension Benefit Guaranty  Corporation,  if a
copy of such notice is  available to  Borrower;  (b)  promptly  after the filing
thereof  with the  United  States  Secretary  of Labor  or the  Pension  Benefit
Guaranty Corporation, copies of each annual report with respect to each deferred
compensation  plan;  (c) promptly  after receipt  thereof,  a copy of any notice
Borrower  may  receive  from the Pension  Benefit  Guaranty  Corporation  or the
Internal  Revenue  Service  with  respect  to any  deferred  compensation  plan;
provided,  however,  this  subparagraph  shall not  apply to  notice of  general
application  issued by the Pension Benefit Guaranty  Corporation or the Internal
Revenue Service;  and (d) when the same is made available to participants in the
deferred compensation plan, all notices and other forms of information from time
to time  disseminated to the  participants by the  administrator of the deferred
compensation plan.

     6.22 Borrower is now and shall at all times hereafter  remain in compliance
with all federal,  state and municipal laws, regulations and ordinances relating
to the  handling,  treatment  and  disposal  of  toxic  substances,  wastes  and
hazardous material and shall maintain all necessary authorizations and permits.

     6.23 Absent the  occurrence of an Event of Default under the loan documents
which is  continuing,  Bank shall not require  that Bank be permitted to conduct
audits of the Accounts or Inventory  of  Borrower.  In the Event of Default,  by
Borrower under the loan documents, Bank shall be entitled to conduct such audits
of  Borrower's  Accounts  and  Inventory  as Bank  reasonably  may  require,  at
Borrower's expense.

     6.24 Borrower shall not loan,  advance,  make capital  contributions  to or
otherwise transfer cash or assets in any manner to any Subsidiary, or permit any
Subsidiary  to do so  with  respect  to any  other  Subsidiary,  except  for (I)
transfers of working capital by Borrower to any Subsidiary when and as necessary
to meet the working  capital needs of such  Subsidiary in the ordinary course of
business and so long as such transfer would not impair Borrower's  operations or
its ability to perform the  Obligations;  or (ii)  transfers of raw material and
work-in-process  Inventory  for purposes of  completion  of  production  of such
Inventory
 
                                       10

<PAGE>

7. EVENTS OF DEFAULT.

Any one or more of the following  events shall constitute an Event of Default by
Borrower under this Agreement:

     a.   If Borrower  fails or  neglects to perform,  keep or observe any term,
          provision,  condition, covenant, agreement, warranty or representation
          contained in this Agreement,  or any other present or future document,
          instrument or agreement between Borrower and Bank;

     b.   If any  representation,  statement,  report  or  certificate  made  or
          delivered by Borrower, or any of its officers,  employees or agents to
          Bank is not true and correct;

     c.   If  Borrower  fails to pay when due and  payable or  declared  due and
          payable,  all or any portion of  Borrower's  Indebtedness  (whether of
          principal,   interest,  taxes,  reimbursement  of  Bank  Expenses,  or
          otherwise)  and such failure  continues  for three (3)  business  days
          after  notice of such failure is delivered by the Bank to the Borrower
          in accordance with Section 12 of this Agreement;

     d.   If there is a material  impairment of the prospect of repayment of all
          or any portion of Borrower's  Indebtedness or a material impairment of
          the value or priority of Bank's  security  interest in the Collateral,
          including,  without  limitation,  any action by any  subcontractor  or
          warehouseman  holding or asserting a lien in Collateral or asserting a
          setoff right;

     e.   If all or any of Borrower's assets are attached,  seized, subject to a
          writ or  distress  warrant,  or are  levied  upon,  or come  into  the
          possession  of any  Judicial  Officer or Assignee and the same are not
          released,   discharged  or  bonded   against   within  ten  (10)  days
          thereafter;

     f.   If any  Insolvency  Proceeding  is filed or  commenced  by or  against
          Borrower without being dismissed within ten (10) days thereafter;

     g.   If any proceeding is filed or commenced by or against Borrower for its
          dissolution or liquidation;

     h.   If Borrower is enjoined,  restrained  or in any way prevented by court
          order from  continuing  to  conduct  all or any  material  part of its
          business affairs;

     i.   If a notice  of lien,  levy or  assessment  is  filed of  record  with
          respect  to any  or all of  Borrower's  assets  by the  United  States
          Government,  or any department,  agency or instrumentality thereof, or
          by any state, county,  municipal or other government agency, or if any
          taxes or debts owing at any time  hereafter to any one or more of such
          entities becomes a lien,  whether  inchoate or otherwise,  upon any or
          all of Borrower's  assets and the same is not paid on the payment date
          thereof;

     j.   If a judgment or other claim becomes a lien or encumbrance upon any or
          all of Borrower's  assets and the same is not satisfied,  dismissed or
          bonded against within ten (10) days thereafter;

     k.   If  Borrower's  records are prepared  and kept by an outside  computer
          service  bureau at the time this  Agreement  is entered into or during
          the term of this Agreement  such an agreement with an outside  service
          bureau is entered  into,  and at any time  thereafter,  without  first
          obtaining the written consent of Bank, Borrower terminates,  modifies,
          amends or changes  its  contractual  relationship  with said  computer
          service  bureau or said computer  service bureau fails to provide Bank
          with any requested  information or financial data pertaining to Bank's
          Collateral,   Borrower's   financial   condition  or  the  results  of
          Borrower's operations;

     l.   If  Borrower  permits a default  in any  material  agreement  to which
          Borrower  is a  party  with  third  parties  so  as  to  result  in an
          acceleration  of the maturity of  Borrower's  indebtedness  to others,
          whether under any indenture, agreement or otherwise;

     m.   If  Borrower  makes any payment on account of  indebtedness  which has
          been  subordinated  to  Borrower's  Indebtedness  to  Bank  except  as
          otherwise permitted under the terms of this Agreement;

     n.   If any  misrepresentation  exists now or thereafter in any warranty or
          representation made to Bank by any officer or director of Borrower, or
          if any such warranty or  representation is withdrawn by any officer or
          director;

     o.   If any  party  subordinating  its  claims  to  that of  Bank's  or any
          guarantor   of   Borrower's    Indebtedness   dies,   terminates   its
          subordination or guaranty,  violates the terms of the subordination or
          guaranty,  becomes insolvent, or an Insolvency Proceeding is commenced
          by or against any such subordinating party or guarantor;

     p.   If there is a change of  ownership or control of Twenty Five percent (
          25 %) or more of the issued and outstanding stock of Borrower; or

     q.   If any reportable event, which Bank determines constitutes grounds for
          the  termination  of any  deferred  compensation  plan by the  Pension
          Benefit Guaranty Corporation or for the appointment by the appropriate
          United States District Court of a trustee to administer any such plan,
          shall have occurred and be  continuing  thirty (30) days after written
          notice of such  determination  shall  have been given to  Borrower  by
          Bank, or any such Plan shall be terminated within the meaning of Title
          IV of the Employment  Retirement  Income Security Act ("ERISA"),  or a
          trustee shall be appointed by the  appropriate  United States District
          Court to  administer  any such plan, or the Pension  Benefit  Guaranty
          Corporation  shall institute  proceedings to terminate any plan and in
          case of any event described in this Section 7, the aggregate amount of
          Borrower's liability to the Pension Benefit Guaranty Corporation under
          Sections 4062, 4063 or 4064 of ERISA shall exceed five percent (5%) of
          Borrower's Tangible Effective Net Worth.

     r.   If Borrower shall default under,  or permit any other party to default
          under, any of the Trademark Rights.

                                       11

<PAGE>

Notwithstanding  anything  contained  in Section 7 to the  contrary,  Bank shall
refrain  from  exercising  its rights and  remedies  and Event of Default  shall
thereafter  not be deemed to have occurred by reason of the occurrence of any of
the events set forth in Sections  7.e, 7.f or 7.j of this  Agreement  if, within
ten  (10)  days  from  the  date  thereof,  the  same is  released,  discharged,
dismissed,  bonded against or satisfied;  provided, however, if the event is the
institution  of  Insolvency  Proceedings  against  Borrower,  Bank  shall not be
obligated to make advances to Borrower during such cure period.

8. BANK'S RIGHTS AND REMEDIES.

     8.1 Upon the  occurrence  of an Event of  Default  by  Borrower  under this
Agreement, Bank may, at its election, without notice of its election and without
demand,  do any one or more of the  following,  all of which are  authorized  by
Borrower:

     a.   Declare Borrower's Indebtedness,  whether evidenced by this Agreement,
          installment  notes,  demand notes or  otherwise,  immediately  due and
          payable to Bank;

     b.   Cease  advancing  money or  extending  credit to or for the benefit of
          Borrower under this Agreement, or any other agreement between Borrower
          and Bank;

     c.   Terminate this  Agreement as to any future  liability or obligation of
          Bank, but without  affecting  Bank's rights and security  interests in
          the Collateral, and the Indebtedness of Borrower to Bank;

     d.   Without notice to or demand upon Borrower or any guarantor,  make such
          payments and do such acts as Bank considers necessary or reasonable to
          protect its security  interest in the  Collateral.  Borrower agrees to
          assemble the Collateral if Bank so requires and to make the Collateral
          available to Bank as Bank may designate.  Borrower  authorizes Bank to
          enter the premises where the Collateral is located,  take and maintain
          possession of the  Collateral and the premises (at no charge to Bank),
          or any part thereof,  and to pay, purchase,  contest or compromise any
          encumbrance, charge or lien which in the opinion of Bank appears to be
          prior or superior to its  security  interest  and to pay all  expenses
          incurred in connection therewith;

     e.   Without  limiting Bank's rights under any security  interest,  Bank is
          hereby  granted  a  license  or other  right to use,  without  charge,
          Borrower's  labels,  patents,  copyrights,  rights of use of any name,
          trade secrets, trade names,  trademarks and advertising matter, or any
          property  or a similar  nature as it pertains  to the  Collateral,  in
          completing  production  of,  advertising  for  sale  and  selling  any
          Collateral and Borrower's  rights under all licenses and all franchise
          agreement shall inure to Bank's benefit, and Bank shall have the right
          and power to enter into sublicense agreements with respect to all such
          rights with third parties on terms acceptable to Bank;

     f.   Ship, reclaim,  recover, store, finish, maintain,  repair, prepare for
          sale, advertise for sales and sell (in the manner provided for herein)
          the Inventory;

     g.   Sell or dispose the  Collateral at either a public or private sale, or
          both, by way of one or more contracts or transactions,  for cash or on
          terms,  in  such  manner  and at  such  places  (including  Borrower's
          premises) as is commercially  reasonable in the opinion of Bank. It is
          not necessary  that the Collateral be present at any such sale. At any
          sale or other disposition of the Collateral  pursuant to this Section,
          Bank disclaims all warranties which would otherwise be given under the
          Uniform Commercial Code,  including without limitation a disclaimer of
          any warranty  relating to title,  possession,  quiet  enjoyment or the
          like,  and Bank may  communicate  these  disclaimers to a purchaser at
          such  disposition.  This  disclaimer of warranties will not render the
          sale commercially unreasonable;

     h.   Bank  shall  give  notice  of the  disposition  of the  Collateral  as
          follows:

          (1)  Bank shall give  Borrower and each holder of a security  interest
               in the Collateral  who has filed with Bank a written  request for
               notice, a notice in writing of the time and place of public sale,
               or, if the sale is a private sale or some disposition  other than
               a  public  sale is to be made of the  Collateral,  the time on or
               after which the private sale or other disposition is to be made;

          (2)  The notice  shall be  personally  delivered  or  mailed,  postage
               prepaid,  to Borrower's  address appearing in this Agreement,  at
               least ten (10)  calendar days before the date fixed for the sale,
               or at least ten (10)  calendar  days  before the date on or after
               which the private sale or other disposition is to be made, unless
               the Collateral is perishable or threatens to decline  speedily in
               value. Notice to persons other than Borrower claiming an interest
               in the  Collateral  shall be sent to such  addresses as have been
               furnished to Bank or as otherwise  determined in accordance  with
               Section 9611 of the Uniform Commercial Code; and

          (3)  If the sale is to be a public  sale,  Bank shall also give notice
               of the time and place by  publishing  a notice  one time at least
               ten (10) calendar days before the date of the sale in a newspaper
               of general  circulation  in the county in which the sale is to be
               held; and

          (4)  Bank may credit bid and purchase at any public sale.

     i.   Borrower  shall pay all Bank  Expenses  incurred  in  connection  with
          Bank's  enforcement  and exercise of any of its rights and remedies as
          herein provided, whether or not suit is commenced by Bank;

     j.   Any  deficiency  which exists after  disposition  of the Collateral as
          provided above will be paid  immediately by Borrower.  Any excess will
          be  returned,  without  interest  and  subject  to the rights of third
          parties,  to Borrower by Bank, or, in Bank's discretion,  to any party
          who Bank believes, in good faith, is entitled to the excess;

     k.   Without  constituting a retention of Collateral in  satisfaction of an
          obligation  within the meaning of 9620 of the Uniform  Commercial Code
          or an action under  California  Code of Civil Procedure 726, apply any
          and all amounts  maintained  by Borrower as deposit  accounts (as that
          term is defined  under 9102 of the Uniform  Commercial  Code) or other
          accounts that Borrower maintains with Bank against the Indebtedness;

                                       12

<PAGE>

     l.   The proceeds of any sale or other disposition of Collateral authorized
          by this  Agreement  shall be applied  by Bank first upon all  expenses
          authorized by the Uniform Commercial Code and all reasonable  attorney
          fees and legal expenses incurred by Bank,  whether in-house or outside
          counsel  is used,  the  balance of the  proceeds  of the sale or other
          disposition shall be applied in the payment of the Indebtedness, first
          to interest, then to principal, then to remaining Indebtedness and the
          surplus,  if any,  shall be paid  over to  Borrower  or to such  other
          person(s)  as may be entitled  to it under  applicable  law.  Borrower
          shall  remain  liable for any  deficiency,  which it shall pay to Bank
          immediately  upon demand.  Borrower agrees that Bank shall be under no
          obligation to accept any noncash  proceeds in connection with any sale
          or  disposition  of  Collateral  unless  failure  to  do so  would  be
          commercially  unreasonable.  If Bank agrees in its sole  discretion to
          accept  noncash  proceeds  (unless  the  failure  to  do so  would  be
          commercially   unreasonable),   Bank  may  ascribe  any   commercially
          reasonable  value to such  proceeds.  Without  limiting the foregoing,
          Bank may apply any discount factor in determining the present value of
          proceeds to be  received in the future or may elect to apply  proceeds
          to be  received  in the  future  only as and when  such  proceeds  are
          actually received in cash by Bank; and

     m.   The   following   shall  be  the  basis  for  any   finder  of  fact's
          determination  of the  value of any  Collateral  which is the  subject
          matter of a disposition giving rise to a calculation of any surplus or
          deficiency  under Section 9615(f) of the Uniform  Commercial Code: (i)
          The Collateral which is the subject matter of the disposition shall be
          valued  in an "as is"  condition  as of the  date of the  disposition,
          without any assumption or  expectation  that such  Collateral  will be
          repaired or improved in any manner;  (ii) the valuation shall be based
          upon an assumption  that the transferee of such  Collateral  desires a
          resale of the Collateral for cash promptly (but no later than 30 days)
          following  the  disposition;   (iii)  all  reasonable   closing  costs
          customarily  borne by the  seller  in  commercial  sales  transactions
          relating  to  property  similar to such  Collateral  shall be deducted
          including, without limitation,  brokerage commissions, tax prorations,
          attorney's  fees,  whether  in-house or outside  counsel is used,  and
          marketing costs; (iv) the value of the Collateral which is the subject
          matter of the disposition  shall be further  discounted to account for
          any  estimated   holding  costs   associated  with   maintaining  such
          Collateral  pending  sale (to the  extent not  accounted  for in (iii)
          above), and other maintenance, operational and ownership expenses; and
          (v) any expert  opinion  testimony  given or  considered in connection
          with a determination  of the value of such Collateral must be given by
          persons  having at least 5 years  experience  in  appraising  property
          similar  to the  Collateral  and who have  conducted  and  prepared  a
          complete   written   appraisal   of  such   Collateral   taking   into
          consideration  the  factors set forth  above.  The "value" of any such
          Collateral  shall be a factor in  determining  the amount of  proceeds
          which would have been realized in a disposition to a transferee  other
          than a  secured  party,  a  person  related  to a  secured  party or a
          secondary  obligor  under  Section  9615(f) of the Uniform  Commercial
          Code.

     8.2 In addition to any and all other rights and remedies  available to Bank
under or  pursuant  to this  Agreement  or any other  documents,  instrument  or
agreement contemplated hereby,  Borrower acknowledges and agrees that (i) at any
time  following  the  occurrence  and  during  the  continuance  of any Event of
Default,  and/or (ii)  termination  of Bank's  commitment  or obligation to make
loans or  advances  or  otherwise  extent  credit  to or in  favor  of  Borrower
hereunder,  in the event  that and to the  extent  that  there are any Letter of
Credit Obligations outstanding at such time, upon demand of Bank, Borrower shall
deliver to Bank, or cause to be delivered to Bank,  cash collateral in an amount
not less than such Letter of Credit Obligations,  which cash collateral shall be
held and retained by Bank as cash collateral for the repayment of such Letter of
Credit Obligations,  together with any and all other Indebtedness of Borrower to
Bank  remaining  unpaid,  and  Borrower  pledges  to Bank and  grants  to Bank a
continuing first priority security interest in such cash collateral so delivered
to  Bank.  Alternatively,  Borrower  shall  cause  to be  delivered  to  Bank an
irrevocable  standby  letter  of  credit  issued  in  favor  of  Bank  by a bank
acceptable  to Bank,  in its sole  discretion,  in an amount  not less than such
Letter of Credit  Obligations,  and upon terms  acceptable  to Bank, in its sole
discretion.

     8.3  Bank's  rights  and  remedies  under  this  Agreement  and  all  other
agreements  shall be  cumulative.  Bank shall have all other rights and remedies
not inconsistent  herewith as provided by law or in equity.  No exercise by Bank
of one right or remedy shall be deemed an election, and no waiver by Bank of any
default on Borrower's part shall be deemed a continuing waiver. No delay by Bank
shall constitute a waiver, election or acquiescence by Bank.

     9. TAXES AND EXPENSES REGARDING BORROWER'S  PROPERTY.  If Borrower fails to
pay promptly  when due to another  person or entity,  monies  which  Borrower is
required to pay by reason of any provision in this Agreement, Bank may, but need
not,  pay the same and charge  Borrower's  loan account  therefor,  and Borrower
shall  promptly   reimburse   Bank.  All  such  sums  shall  become   additional
Indebtedness  owing  to  Bank,  shall  bear  interest  at the  rate  hereinabove
provided,  and shall be secured by all  Collateral.  Any  payments  made by Bank
shall not  constitute  (i) an agreement  by it to make  similar  payments in the
future or (ii) a waiver by Bank of any default under this  Agreement.  Bank need
not inquire as to, or contest the validity of, any such expense,  tax,  security
interest,  encumbrance or lien and the receipt of the usual  official  notice of
the payment  thereof shall be conclusive  evidence that the same was validly due
and owing. Such payments shall constitute Bank Expenses and additional  advances
to Borrower.

10. WAIVERS.  

     10.1 Borrower agrees that checks and other instruments  received by Bank in
payment or on account of Borrower's  Indebtedness  constitute  only  conditional
payment until such items are actually paid to Bank and Borrower waives the right
to direct the application of any and all payments at any time or times hereafter
received by Bank on account of Borrower's  Indebtedness and Borrower agrees that
Bank  shall  have the  continuing  exclusive  right to apply  and  reapply  such
payments in any manner as Bank may deem advisable,  notwithstanding any entry by
Bank upon its books.

     10.2 Borrower waives demand,  protest, notice of protest, notice of default
or dishonor, notice of payment and nonpayment, notice of any default, nonpayment
at maturity, release, compromise, settlement, extension or renewal of any or all
commercial  paper,  accounts,   documents,   instruments,   chattel  paper,  and
guarantees at any time held by Bank on which Borrower may in any way be liable.

     10.3 Bank shall not in any way or manner be liable or  responsible  for (a)
the  safekeeping of the Inventory;  (b) any loss or damage thereto  occurring or
arising in any manner or fashion from any cause; (c) any diminution in the value
thereof;  or (d)  any  act or  default  of any  carrier,  warehouseman,  bailee,
forwarding  agency  or other  person  whomsoever.  All risk of loss,  damage  or
destruction of Inventory shall be borne by Borrower.

     10.4  Borrower  waives  the right  and the  right to assert a  confidential
relationship,  if any, it may have with any  accountant,  accounting firm and/or
service  bureau or consultant in connection  with any  information  requested by
Bank pursuant to or in accordance  with this  Agreement,  and agrees that a Bank
may contact directly any such accountants, accounting firm and/or service bureau
or consultant in order to obtain such information.

     10.5 JURY WAIVER AND REFERENCE PROVISIONS.

     10.5.1 JURY WAIVER

                                       13

<PAGE>

THE  UNDERSIGNED AND THE BANK  ACKNOWLEDGE  THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL  ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE  OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,  KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION  REGARDING THE  PERFORMANCE OR ENFORCEMENT  OF, OR IN
ANY WAY RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.

          10.5.2

          REFERENCE PROVISIONS

     a.   The  parties  prefer  that any  dispute  between  them be  resolved in
          litigation  subject  to a Jury  Trial  Waiver as set forth in the Loan
          Documents  (defined below), but the availability of that process is in
          doubt  because  of the  opinion of the  California  Court of Appeal in
          Grafton  Partners  LP v.  Superior  Court,  9  Cal.Rptr.3d  511.  This
          Reference  Provision will be applicable  until the California  Supreme
          Court  completes  its review of that  case,  and will  continue  to be
          applicable  if  either  that  court or a  California  Court of  Appeal
          publishes a decision  holding  that a  pre-dispute  Jury Trial  Waiver
          provision  similar to that  contained in the Loan Documents is invalid
          or unenforceable. Delay in requesting appointment of a referee pending
          review of any such decision,  or participation  in litigation  pending
          review, will not be deemed a waiver of this Reference Provision.

     b.   Other than (i) nonjudicial  foreclosure of security  interests in real
          or personal property,  (ii) the appointment of a receiver or (iii) the
          exercise of other provisional  remedies (any of which may be initiated
          pursuant to applicable law), any controversy,  dispute or claim (each,
          a "Claim")  between  the  parties  arising  out of or relating to this
          Agreement or any other document,  instrument or agreement  between the
          Bank and the  undersigned  (collectively  in this  Section,  the "Loan
          Documents"),  will be resolved by a reference proceeding in California
          in  accordance  with the  provisions  of  Section  638 et seq.  of the
          California  Code  of  Civil  Procedure  ("CCP"),  or  their  successor
          sections,   which  shall  constitute  the  exclusive  remedy  for  the
          resolution of any Claim, including whether the Claim is subject to the
          reference  proceeding.  Except  as  otherwise  provided  in  the  Loan
          Documents,  venue for the reference proceeding will be in the Superior
          Court or Federal  District  Court in the County or District  where the
          real  property,  if any, is located or in a County or  District  where
          venue is otherwise appropriate under applicable law (the "Court").

     c.   The  referee  shall be a retired  Judge or Justice  selected by mutual
          written  agreement  of the parties.  If the parties do not agree,  the
          referee shall be selected by the Presiding  Judge of the Court (or his
          or her representative).  A request for appointment of a referee may be
          heard on an ex parte or expedited  basis,  and the parties  agree that
          irreparable  harm would result if ex parte relief is not granted.  The
          referee shall be appointed to sit with all the powers provided by law.
          Each party shall have one peremptory challenge pursuant to CCP Section
          170.6.  Pending  appointment  of the  referee,  the Court has power to
          issue temporary or provisional remedies.

     d.   The  parties  agree  that time is of the  essence  in  conducting  the
          reference proceedings.  Accordingly, the referee shall be requested to
          (a) set the matter for a status and trial- setting  conference  within
          fifteen (15) days after the date of  selection of the referee,  (b) if
          practicable,  try all issues of law or fact  within  ninety  (90) days
          after  the  date of the  conference  and (c)  report  a  statement  of
          decision  within twenty (20) days after the matter has been  submitted
          for  decision.  Any  decision  rendered by the referee  will be final,
          binding and conclusive,  and judgment shall be entered pursuant to CCP
          Section 644.

     e.   The referee will have power to expand or limit the amount and duration
          of  discovery.  The referee may set or extend  discovery  deadlines or
          cutoffs  for good  cause,  including  a  party's  failure  to  provide
          requested  discovery  for  any  reason  whatsoever.  Unless  otherwise
          ordered,  no party  shall be  entitled  to  "priority"  in  conducting
          discovery,  depositions  may be taken by either  party  upon seven (7)
          days written  notice,  and all other  discovery  shall be responded to
          within  fifteen  (15) days after  service.  All  disputes  relating to
          discovery  which cannot be resolved by the parties  shall be submitted
          to the referee whose decision shall be final and binding.

     f.   Except as expressly  set forth in this  Agreement,  the referee  shall
          determine  the manner in which the  reference  proceeding is conducted
          including the time and place of hearings, the order of presentation of
          evidence,  and all other  questions  that  arise  with  respect to the
          course of the  reference  proceeding.  All  proceedings  and  hearings
          conducted  before the  referee,  except for trial,  shall be conducted
          without a court  reporter,  except that when any party so requests,  a
          court  reporter  will be  used at any  hearing  conducted  before  the
          referee,  and the  referee  will be  provided a  courtesy  copy of the
          transcript.  The party making such a request shall have the obligation
          to arrange for and pay the court  reporter.  Subject to the  referee's
          power to award costs to the prevailing party, the parties will equally
          share the cost of the referee and the court reporter at trial.

     g.   The referee  shall be required to determine  all issues in  accordance
          with  existing  case  law  and the  statutory  laws  of the  State  of
          California.  The rules of evidence applicable to proceedings at law in
          the  State  of   California   will  be  applicable  to  the  reference
          proceeding.  The referee shall be empowered to enter equitable as well
          as legal relief, provide all temporary or provisional remedies,  enter
          equitable  orders  that will be binding on the parties and rule on any
          motion  which  would  be  authorized  in a  trial,  including  without
          limitation motions for summary judgment or summary  adjudication.  The
          referee  shall  issue  a  decision  at  the  close  of  the  reference
          proceeding  which  disposes of all claims of the parties  that are the
          subject of the reference.  The referee's  decision shall be entered by
          the  Court as a  judgment  or an order  in the same  manner  as if the
          action had been tried by the Court.  The parties  reserve the right to
          appeal  from the  final  judgment  or  order  or from  any  appealable
          decision or order  entered by the  referee.  The  parties  reserve the
          right to findings of fact, conclusions of laws, a written statement of
          decision,  and  the  right  to move  for a new  trial  or a  different
          judgment,  which new  trial,  if  granted,  is also to be a  reference
          proceeding under this provision.

     h.   If the  enabling  legislation  which  provides  for  appointment  of a
          referee is repealed (and no successor statute is enacted), any dispute
          between the parties that would  otherwise be  determined  by reference
          procedure  will  be  resolved  and  determined  by  arbitration.   The
          arbitration  will be  conducted  by a  retired  judge or  Justice,  in
          accordance  with the California  Arbitration  Act Section 1280 through
          Section  1294.2  of  the  CCP  as  amended  from  time  to  time.  The
          limitations  with respect to discovery  set forth above shall apply to
          any such arbitration proceeding.

     i.   THE PARTIES  RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS
          REFERENCE  PROVISION  WILL BE DECIDED BY A REFEREE  AND NOT BY A JURY,
          AND THAT THEY ARE IN EFFECT  WAIVING  THEIR  RIGHT TO TRIAL BY JURY IN
          AGREEING TO THIS REFERENCE PROVISION.  AFTER CONSULTING (OR HAVING HAD
          THE  OPPORTUNITY  TO CONSULT)  WITH COUNSEL OF THEIR OWN CHOICE,  EACH
          PARTY  KNOWINGLY AND  VOLUNTARILY  AND FOR THEIR MUTUAL BENEFIT AGREES
          THAT THIS REFERENCE  PROVISION WILL APPLY TO ANY DISPUTE  BETWEEN THEM
          WHICH  ARISES  OUT OF OR IS  RELATED  TO THIS  AGREEMENT  OR THE  LOAN
          DOCUMENTS

                                       14

<PAGE>

     10.6 In the  event  that  Bank  elects  to waive  any  rights  or  remedies
hereunder,  or compliance  with any of the terms  hereof,  or delays or fails to
pursue or enforce any term,  such waiver,  delay or failure to pursue or enforce
shall  only be  effective  with  respect  to that  single  act and  shall not be
construed to affect any subsequent  transactions or Bank's right to later pursue
such rights and remedies.

     11. ONE CONTINUING LOAN TRANSACTION. All loans and advances heretofore, now
or at any time or times  hereafter made by Bank to Borrower under this Agreement
or any other  agreement  between Bank and Borrower,  shall  constitute  one loan
secured by Bank's security interests in the Collateral and by all other security
interests,  liens,  encumbrances heretofore,  now or from time to time hereafter
granted by Borrower to Bank.

Notwithstanding   the  above,  (i)  to  the  extent  that  any  portion  of  the
Indebtedness  is a consumer loan,  that portion shall not be secured by any deed
of trust or  mortgage on or other  security  interest  in  Borrower's  principal
dwelling  which is not a purchase  money  security  interest as to that portion,
unless expressly  provided to the contrary in another place, or (ii) if Borrower
(or any of them) has (have)  given or give(s)  Bank a deed of trust or  mortgage
covering real property, that deed of trust or mortgage shall not secure the loan
and any  other  Indebtedness  of  Borrower  (or any of them),  unless  expressly
provided  to the  contrary  in another  place.  

     12. NOTICES.  Unless otherwise  provided in this Agreement,  all notices or
demands by either  party on the other  relating  to this  Agreement  shall be in
writing  and sent by regular  United  States  mail,  postage  prepaid,  properly
addressed to Borrower or to Bank at the addresses  stated in this Agreement,  or
to such other addresses as Borrower or Bank may from time to time specify to the
other in writing. Requests for information made to Borrower by Bank from time to
time hereunder may be made orally or in writing, at Bank's discretion.

     13. AUTHORIZATION TO DISBURSE.  Bank is hereby authorized to make loans and
advances  hereunder upon telephonic or other  instructions  received from anyone
purporting to be an officer,  employee, or representative of Borrower, or at the
discretion  of Bank  if said  loans  and  advances  are  necessary  to meet  any
Indebtedness  of  Borrower to Bank.  Bank shall have no duty to make  inquiry or
verify the  authority of any such party,  and Borrower  shall hold Bank harmless
from any damage, claims or liability by reason of Bank's honor of, or failure to
honor, any such instructions.

     14. PAYMENTS.  Borrower hereby authorizes Bank to deduct the full amount of
any interest,  fees,  costs,  or Bank Expenses due under this  Agreement and not
paid or collected when due in accordance  with the terms and  conditions  hereof
from any account  maintained by Borrower with Bank. Should there be insufficient
funds in any such account to pay all such sums when due, the full amount of such
deficiency shall be immediately due and payable by Borrower;  provided, however,
that Bank shall not be obligated to advance funds to cover any such payment.

     15. DESTRUCTION OF BORROWER'S DOCUMENTS. Any documents, schedules, invoices
or other papers delivered to Bank, may be destroyed or otherwise  disposed of by
Bank six (6) months  after they are  delivered  to or received  by Bank,  unless
Borrower  requests,  in writing,  the return of the said  documents,  schedules,
invoices or other papers and makes  arrangements,  at  Borrower's  expense,  for
their return.

     16.  CHOICE OF LAW.  The  validity  of this  Agreement,  its  construction,
interpretation  and  enforcement,  and the rights of the parties  hereunder  and
concerning  the  Collateral,  shall be  determined  according to the laws of the
State of California.  The parties agree that all actions or proceedings  arising
in connection with this Agreement shall be tried and litigated only in the state
and federal courts in the Northern District of California or the County of Santa
Clara.

     17. GENERAL PROVISIONS.

          17.1 This  Agreement  shall  be  binding  and  deemed  effective  when
               executed by Borrower  and  accepted  and  executed by Bank at its
               headquarters office.

          17.2 This  Agreement  shall  bind  and  inure  to the  benefit  of the
               respective  successors  and  assigns  of  each  of  the  parties;
               provided, however, that Borrower may not assign this Agreement or
               any rights hereunder without Bank's prior written consent and any
               prohibited  assignment shall be absolutely void. No consent to an
               assignment by Bank shall release  Borrower or any guarantor  from
               their obligations to Bank. Bank may assign this Agreement and its
               rights and duties  hereunder.  Bank  reserves  the right to sell,
               assign, transfer, negotiate or grant participations in all or any
               part of, or any interest in Bank's rights and benefits hereunder.
               In  connection  therewith,  Bank may disclose all  documents  and
               information  that  Bank now or  hereafter  may have  relating  to
               Borrower or Borrower's business.

          17.3 Paragraph  headings  and  paragraph  numbers  have been set forth
               herein for convenience  only; unless the contrary is compelled by
               the  context,  everything  contained  in each  paragraph  applies
               equally to this  entire  Agreement.  Unless  the  context of this
               Agreement  clearly requires  otherwise,  references to the plural
               include the  singular,  references  to the  singular  include the
               plural,  and the term  "including"  is not  limiting.  The  words
               "hereof," "herein,"  "hereby,"  "hereunder," and similar terms in
               this Agreement  refer to this Agreement as a whole and not to any
               particular provision of this Agreement.

          17.4 Neither this Agreement nor any  uncertainty  or ambiguity  herein
               shall be construed or resolved against Bank or Borrower,  whether
               under any rule of  construction  or  otherwise;  on the contrary,
               this  Agreement  has been  reviewed  by all  parties and shall be
               construed and  interpreted  according to the ordinary  meaning of
               the  words  used so as to  fairly  accomplish  the  purposes  and
               intentions of all parties hereto.

          17.5 Each  provision of this  Agreement  shall be severable from every
               other  provision of this Agreement for the purpose of determining
               the legal enforceability of any specific provision.

          17.6 This  Agreement  cannot be changed  or  terminated  orally.  This
               Agreement contains the entire agreement of the parties hereto and
               supersedes all prior agreements, understandings, representations,
               warranties  and  negotiations,  if any,  related  to the  subject
               matter hereof, and none of the parties shall be bound by anything
               not expressed in writing.

          17.7 The  parties  intend  and agree  that  their  respective  rights,
               duties, powers, liabilities, obligations and discretions shall be
               performed,  carried out, discharged and exercised  reasonably and
               in good faith.

          17.8 In addition,  if this  Agreement is secured by a deed of trust or
               mortgage  covering real  property,  then the trustor or mortgagor
               shall not mortgage or pledge the  mortgaged  premises as security
               for  any  other  indebtedness  or  obligations.  This  Agreement,
               together  with all  other  indebtedness  secured  by said deed of
               trust or  mortgage,  shall  become due and  payable  immediately,
               without  notice,  at the option of Bank,  (a) if said  trustor or
               mortgagor shall mortgage or pledge the mortgaged premises for any
               other  indebtedness  or  obligations  or shall convey,  assign or
               transfer  the  mortgaged  premises  by  deed,   installment  sale
               contract or other  instrument;  (b) if the title to the mortgaged
               premises  shall become vested in any other person or party in any
               manner  whatsoever,  or (c) if there is any disposition  (through
               one or more  transactions)  of  legal  or  beneficial  title to a
               controlling interest of said trustor or mortgagor.

                                       15

<PAGE>

          17.9 Each  undersigned  Borrower  hereby agrees that it is jointly and
               severally, directly, and primarily liable to Bank for payment and
               performance in full of all duties,  obligations  and  liabilities
               under this  Agreement  and each other  document,  instrument  and
               agreement  entered  into by Borrower  with or in favor of Bank in
               connection  herewith,  and that such  liability is independent of
               the duties,  obligations and liabilities of any other Borrower or
               any other  guarantor of the  Indebtedness,  as  applicable.  Each
               reference  herein to Borrower  shall mean each and every Borrower
               party  hereto,   individually  and   collectively,   jointly  and
               severally.

IN WITNESS  WHEREOF,  the parties  hereto have caused this  Amended and Restated
Loan and  Security  Agreement  to be executed  as of the date first  hereinabove
written.
                                              HANSEN BEVERAGE COMPANY
                                                
Accepted and effective as of:                 -----------------------
at Bank's Headquarters Office                 a Delaware Corporation



COMERICA BANK,
a Michigan banking corporation

                                              By: /s/Rodney C. Sacks
                                              ----------------------
                                              Name:Rodney C. Sacks  
                                              Title: Chairman       
By:/s/Thomas M. Hicks
---------------------------------             By:
Name:   Thomas M. Hicks                       Name:
Title:  Vice President-Western Division       Title:          

Address for Notices:

75 East Trimble Road                          1010 Railroad St. Corona, CA 92882
San Jose, California 95131                    Fax Number: 951-739-6212
Attn:  Credit Manager
Fax number:  (408) 556-5097
Address for Notices:

                                       16

<PAGE>

 
                                 LIBOR Addendum
                                       To
                Amended and Restated Loan and Security Agreement
 
     This Addendum to Loan and Security  Agreement (this  "Addendum") is entered
into as of this 1st Day of December 2004, by and between  Comerica Bank ("Bank")
and Hansen Beverage Company ("Borrower"). This Addendum supplements the terms of
the Amended and Restated Loan and Security Agreement of even date herewith.

1.      Definitions.

          a.   Agreement.  As used  herein,  "Agreement"  means the  Amended and
               Restated Loan and Security Agreement of even date herewith.

          b.   Advance. As used herein, "Advance" means a borrowing requested by
               Borrower and made by Bank under the Agreement,  including a LIBOR
               Option Advance and/or a Base Rate Option Advance.

          c.   Applicable Base Rate Margin.  As used herein means the Applicable
               Base Rate Margin determined in accordance with the Agreement.

          d.   Business Day. As used herein, "Business Day" means any day except
               a Saturday, Sunday or any other day designated as a holiday under
               Federal or California statute or regulation.

          e.   LIBOR. As used herein,  "LIBOR" means the rate per annum (rounded
               upward  if  necessary,  to the  nearest  whole  1/8  of  1%)  and
               determined pursuant to the following formula:

                LIBOR =             Base LIBOR  
                        --------------------------------
                        100% - LIBOR Reserve Percentage

     (1)  "Base  LIBOR"  means  the rate per annum  determined  by Bank at which
          deposits for the relevant LIBOR Period would be offered to Bank in the
          approximate  amount  of  the  relevant  LIBOR  Option  Advance  in the
          inter-bank  LIBOR  market  selected by Bank,  upon  request of Bank at
          10:00 a.m.  California  time, on the day that is the first day of such
          LIBOR Period.

     (2)  "LIBOR Reserve Percentage" means the reserve percentage  prescribed by
          the  Board  of  Governors  of  the  Federal  Reserve  System  (or  any
          successor) for "Eurocurrency  Liabilities" (as defined in Regulation D
          of the  Federal  Reserve  Board,  as  amended),  adjusted  by Bank for
          expected  changes in such  reserve  percentage  during the  applicable
          LIBOR Period.
                
          f.   LIBOR Business Day. As used herein,  "LIBOR Business Day" means a
               Business day on which dealings in Dollar  deposits may be carried
               out in the interbank LIBOR market.

          g.   LIBOR Period. As used herein,  "LIBOR Period" means, with respect
               to a LIBOR Option Advance:

     (1)  initially,  the period commencing on, as the case may be, the date the
          Advance  is made or the date on which the  Advance is  converted  to a
          LIBOR Option Advance,  and continuing for, in every case, a 30, 60, 90
          or 180 day period thereafter so long as the LIBOR Option is quoted for
          such period in the applicable  interbank LIBOR market,  as such period
          is  selected  by  Borrower in the notice of Advance as provided in the
          Agreement or in the notice of conversion as provided in this Addendum;
          and

     (2)  thereafter,  each  period  commencing  on the  last  day  of the  next
          preceding  LIBOR Period  applicable  to such LIBOR Option  Advance and
          continuing  for,  in  every  case,  a 30,  60,  90 or 180  day  period
          thereafter  so long as the LIBOR  Option is quoted for such  period in
          the applicable  interbank LIBOR market,  as such period is selected by
          Borrower in the notice of continuation as provided in this Addendum.
        
          h.   Note. As used herein,  "Note" means the Amended and Restated Loan
               and Security Agreement of even date herewith.

          i.   Regulation D. As used herein,  "Regulation D" means  Regulation D
               of the  Board of  Governors  of the  Federal  Reserve  System  as
               amended or supplemented from time to time.

          j.   Regulatory Development.  As used herein, "Regulatory Development"
               means  any or all of the  following:  (i) any  change in any law,
               regulation  or  interpretation  thereof by any  public  authority
               (whether or not having the force of law); (ii) the application of
               any existing law, regulation or the interpretation thereof by any
               public  authority  (whether or not having the force of law);  and
               (iii)  compliance by Bank with any request or directive  (whether
               or not having the force of law) of any public authority.

     2.  Interest  Rate  Options.  Borrower  shall  have the  following  options
regarding  the  interest  rate to be paid by  Borrower  on  Advances  under  the
Agreement:

     a.   A rate equal to the Applicable  LIBOR Margin above Bank's LIBOR,  (the
          "LIBOR  Option"),  which LIBOR  Option  shall be in effect  during the
          relevant LIBOR Period; or

     b.   A rate equal to the Base Rate plus or minus the  Applicable  Base Rate
          Margin.  The "Base Rate" is defined in the  Agreement  and quoted from
          time to time by Bank as such  rate may  change  from time to time (the
          "Base Rate Option").

     3. LIBOR Option Advance.  The minimum LIBOR Option Advance will not be less
than Five Hundred  Thousand and 00/100  Dollars  ($500,000) for any LIBOR Option
Advance.

                                       17

<PAGE>

     4.  Payment of Interest on LIBOR  Option  Advances.  Interest on each LIBOR
Option Advance shall be payable pursuant to the terms of the Agreement. Interest
on such LIBOR  Option  Advance  shall be computed on the basis of a 360-day year
and shall be assessed  for the actual  number of days elapsed from the first day
of the LIBOR Period applicable thereto but not including the last day thereof.

     5. Bank's  Records Re:  LIBOR Option  Advances.  With respect to each LIBOR
Option Advance,  Bank is hereby  authorized to note the date,  principal amount,
interest rate and LIBOR Period applicable  thereto and any payments made thereon
on Bank's books and records (either  manually or by electronic  entry) and/or on
any schedule  attached to the Agreement,  which  notations  shall be prima facie
evidence of the accuracy of the information noted.

     6.  Selection/Conversion  of Interest Rate Options. At the time any Advance
is requested  under the  Agreement  and/or  Borrower  wishes to select the LIBOR
Option  for  all  or a  portion  of the  outstanding  principal  balance  of the
Agreement,  and at the end of each LIBOR Period, Borrower shall give Bank notice
specifying (a) the interest rate option selected by Borrower;  (b) the principal
amount subject thereto;  and (c) if the LIBOR Option is selected,  the length of
the applicable  LIBOR Period.  Any such notice may be given by telephone so long
as, with respect to each LIBOR Option  selected by Borrower,  (i) Bank  receives
written  confirmation from Borrower not later than three (3) LIBOR Business Days
after  such  telephone  notice is given;  and (ii) such  notice is given to Bank
prior to 10:00 a.m.,  California time, on the first day of the LIBOR Period. For
each LIBOR Option  requested  hereunder,  Bank will quote the  applicable  fixed
LIBOR Rate to Borrower at  approximately  10:00 a.m.,  California  time,  on the
first day of the LIBOR Period. If Borrower does not immediately  accept the rate
quoted by Bank,  any  subsequent  acceptance  by Borrower  shall be subject to a
redetermination of the rate by Bank; provided,  however,  that if Borrower fails
to accept any such quotation  given,  then the quoted rate shall expire and Bank
shall have no obligation to permit a LIBOR Option to be selected on such day. If
no specific designation of interest is made at the time any Advance is requested
under the Agreement or at the end of any LIBOR Period,  Borrower shall be deemed
to have selected the Base Rate Option for such Advance or the  principal  amount
to which such LIBOR Period  applied.  At any time the LIBOR Option is in effect,
Borrower may, at the end of the  applicable  LIBOR  Period,  convert to the Base
Rate Option. At any time the Base Rate Option is in effect, Borrower may convert
to the LIBOR OPTION, and shall designate a LIBOR Period.

     7.  Default  Interest  Rate.  From  and  after  the  maturity  date  of the
Agreement, or such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise,  the outstanding  principal balance of the
Agreement  shall bear interest until paid in full at an increased rate per annum
(computed on the basis of a 360-day year,  actual days  elapsed)  equal to three
percent  (3.00%) above the rate of interest from time to time  applicable to the
Agreement.

     8.  Prepayment.  In the  event  that the  LIBOR  Option  is the  applicable
interest rate for all or any part of the  outstanding  principal  balance of the
Agreement,  and any  payment or  prepayment  of any such  outstanding  principal
balance of the  Agreement  shall occur on any day other than the last day of the
applicable LIBOR Period (whether voluntarily, by acceleration, required payment,
or otherwise), or if Borrower elects the LIBOR Option as the applicable interest
rate for all or any part of the outstanding  principal  balance of the Agreement
in accordance  with the terms and  conditions  hereof,  and,  subsequent to such
election, but prior to the commencement of the applicable LIBOR Period, Borrower
revokes such election for any reason whatsoever,  or if the applicable  interest
rate in respect of any outstanding  principal balance of the Agreement hereunder
shall be changed,  for any reason whatsoever,  from the LIBOR Option to the Base
Rate Option prior to the last day of the applicable LIBOR Period, or if Borrower
shall fail to make any payment of  principal  or interest  hereunder at any time
that the LIBOR Option is the  applicable  interest rate  hereunder in respect of
such outstanding  principal  balance of the Agreement,  Borrower shall reimburse
Bank, on demand,  for any resulting loss, cost or expense  incurred by Bank as a
result thereof,  including,  without limitation,  any such loss, cost or expense
incurred in obtaining, liquidating, employing or redeploying deposits from third
parties.  Such  amount  payable  by  Borrower  to  Bank  may  include,   without
limitation, an amount equal to the excess, if any, of (a) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed,  refunded
or converted, for the period from the date of such prepayment or of such failure
to borrow, refund or convert, through the last day of the relevant LIBOR Period,
at the applicable rate of interest for such outstanding principal balance of the
Agreement, as provided under this Agreement, over (b) the amount of interest (as
reasonably  determined  by Bank) which would have accrued to Bank on such amount
by placing such amount on deposit for a comparable  period with leading banks in
the interbank  LIBOR market.  Calculation  of any amounts  payable to Bank under
this  paragraph  shall be made as though  Bank  shall  have  actually  funded or
committed to fund the relevant  outstanding  principal  balance of the Agreement
hereunder  through the purchase of an  underlying  deposit in an amount equal to
the amount of such outstanding  principal  balance of the Agreement and having a
maturity comparable to the relevant LIBOR Period;  provided,  however, that Bank
may fund the  outstanding  principal  balance of the Agreement  hereunder in any
manner it deems fit and the foregoing assumptions shall be utilized only for the
purpose of the  calculation of amounts  payable under this  paragraph.  Upon the
written  request of  Borrower,  Bank shall  deliver  to  Borrower a  certificate
setting forth the basis for determining such losses,  costs and expenses,  which
certificate shall be conclusively  presumed correct,  absent manifest error. Any
prepayment hereunder shall also be accompanied by the payment of all accrued and
unpaid interest on the amount so prepaid.  Any outstanding  principal balance of
the Agreement which is bearing interest at such time at the Base Rate Option may
be prepaid without penalty or premium.  Partial  prepayments  hereunder shall be
applied to the installments hereunder in the inverse order of their maturities.

BY INITIALING BELOW, BORROWER  ACKNOWLEDGE(S) AND AGREE(S) THAT: (A) THERE IS NO
RIGHT TO PREPAY ANY LIBOR OPTION  ADVANCE,  IN WHOLE OR IN PART,  WITHOUT PAYING
THE  PREPAYMENT  AMOUNT  SET  FORTH  HEREIN  ("PREPAYMENT  AMOUNT"),  EXCEPT  AS
OTHERWISE  REQUIRED  UNDER  APPLICABLE  LAW;  (B)  BORROWER  SHALL BE LIABLE FOR
PAYMENT  OF THE  PREPAYMENT  AMOUNT IF BANK  EXERCISES  ITS RIGHT TO  ACCELERATE
PAYMENT  OF ANY LIBOR  OPTION  ADVANCE AS PART OR ALL OF THE  OBLIGATIONS  OWING
UNDER  THE  AGREEMENT,  INCLUDING  WITHOUT  LIMITATION,   ACCELERATION  UNDER  A
DUE-ON-SALE  PROVISION;  (C) BORROWER WAIVES ANY RIGHTS UNDER SECTION 2954.10 OF
THE CALIFORNIA CIVIL CODE OR ANY SUCCESSOR  STATUTE;  AND (D) BANK HAS MADE EACH
LIBOR OPTION ADVANCE PURSUANT TO THE AGREEMENT IN RELIANCE ON THESE AGREEMENTS.


--------------------        
BORROWER'S INITIALS

     9. Hold Harmless and Indemnification. Borrower agrees to indemnify Bank and
to hold Bank harmless  from, and to reimburse Bank on demand for, all losses and
expenses which Bank sustains or incurs as a result of (i) any payment of a LIBOR
Option  Advance  prior to the last day of the  applicable  LIBOR  Period for any
reason,  including,  without limitation,  termination of the Agreement,  whether
pursuant to this  Addendum or the  occurrence  of an Event of Default;  (ii) any
termination  of a LIBOR  Period  prior  to the date it  would  otherwise  end in
accordance with this Addendum; or (iii) any failure by Borrower, for any reason,
to borrow any portion of a LIBOR Option Advance.

                                       18

<PAGE>

     10. Funding Losses. The  indemnification  and hold harmless  provisions set
forth in this  Addendum  shall  include,  without  limitation,  all  losses  and
expenses  arising  from  interest and fees that Bank pays to lenders of funds it
obtains  in order  to fund  the  loans to  Borrower  on the  basis of the  LIBOR
Option(s) and all losses incurred in liquidating or  re-deploying  deposits from
which  such  funds  were  obtained  and  loss of  profit  for the  period  after
termination. A written statement by Bank to Borrower of such losses and expenses
shall be conclusive and binding,  absent manifest error, for all purposes.  This
obligation shall survive the termination of this Addendum and the payment of the
Agreement.

     11. Regulatory  Developments Or Other Circumstances  Relating To Illegality
or Impracticality of LIBOR. If any Regulatory Development or other circumstances
relating to the  interbank  Euro-dollar  markets  shall,  at any time, in Bank's
reasonable  determination  , make it unlawful or impractical for Bank to fund or
maintain,  during any LIBOR Period,  to determine or charge interest rates based
upon LIBOR, Bank shall give notice of such circumstances to Borrower and:

          (i) In the case of a LIBOR  Period in  progress,  Borrower  shall,  if
     requested by Bank,  promptly pay any  interest  which had accrued  prior to
     such  request and the date of such  request  shall be deemed to be the last
     day of the term of the LIBOR Period; and

          (ii) No  LIBOR  Period  may  be  designated   thereafter   until  Bank
               determines that such would be practical.

     12.  Additional  Costs.  Borrower shall pay to Bank from time to time, upon
Bank's  request,  such amounts as Bank  determines are needed to compensate Bank
for any  costs  it  incurred  which  are  attributable  to Bank  having  made or
maintained a LIBOR Option Advance or to Bank's obligation to make a LIBOR Option
Advance,  or any  reduction  in any amount  receivable  by Bank  hereunder  with
respect to any LIBOR  Option or such  obligation  (such  increases  in costs and
reductions  in amounts  receivable  being  herein  called  "Additional  Costs"),
resulting  from any  Regulatory  Developments,  which  (i)  change  the basis of
taxation of any amounts  payable to Bank  hereunder  with respect to taxation of
any amounts  payable to Bank  hereunder with respect to any LIBOR Option Advance
(other than taxes imposed on the overall net income of Bank for any LIBOR Option
Advance by the  jurisdiction  where Bank is  headquartered  or the  jurisdiction
where Bank extends the LIBOR Option Advance;  (ii) impose or modify any reserve,
special deposit, or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other  liabilities  of, Bank (including
any LIBOR  Option  Advance or any  deposits  referred  to in the  definition  of
LIBOR);  or (iii) impose any other condition  affecting this Addendum (or any of
such  extension of credit or  liabilities).  Bank shall  notify  Borrower of any
event  occurring  after the date  hereof  which  entitles  Bank to  compensation
pursuant to this paragraph as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation.  Determinations by Bank for
purposes  of  this   paragraph,   shall  be   conclusive,   provided  that  such
determinations are made on a reasonable basis.

     13. Legal Effect.  Except as specifically modified hereby, all of the terms
and conditions of the Agreement remain in full force and effect.

     IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date
first set forth above.

HANSEN BEVERAGE COMPANY                 COMERICA BANK
Borrower

By: /s/Rodney C. Sacks                  By:/s/Thomas Hicks
----------------------                  ---------------------------------
Rodney C. Sacks                         Thomas Hicks
Title:Chairman                          Vice President - Western Division

By:     

Title:  

                                       19

                           CONTRACT PACKING AGREEMENT


     This  Agreement  made and entered  into this 5 day of April,  1996,  by and
between  HANSEN  BEVERAGE  COMPANY  (hereinafter  referred to as "Company")  and
SOUTHWEST CANNING & PACKAGING, INC., (hereinafter referred to as "Packer").

                                   "RECITALS"

     "A. A Packer is in the business of packaging various carbonated beverages.

     "B. Company sells and distributes  carbonated beverages under its own brand
name and other brand names.

     "C.  Packer and Company wish to provide for the terms and  conditions  upon
which package Packer's products."

                                  "COVENANTS"

     "For  and  in  consideration  of  the  mutual  covenants,   conditions  and
provisions contained herein, the parties hereto agree as follows:"

     1.  Packer  agrees to pack  carbonated  beverages  of  Company  as shown on
Schedule 'A' (the "Product"),  in accordance with written formulas and standards
set by the Company and provided to Packer,  which  formulas and standards may be
omitted from time to time."

     2. The packaging for the Product shall be in accordance  with the rates and
prices as set forth in Schedule 'A.' In the event of a default in the payment as
provided in Schedule  'B' Packer  shall give  Company  five (5)  business  days'
notice and if the default is not cured and the Letter of Credit is  insufficient
to
 cover any  outstanding  balance,  then  Packer  shall  have the right to sell
wherever necessary including but not limited to California,  any and all Product
inventory and raw  materials in Packer's  possession to satisfy any of Company's
obligations to Packer under this Agreement."

     3.  Packer  agrees to package for Company the flavors and sizes in Schedule
'A', at such times and in such quantities as may be mutually agreed upon between
Company and Packer during the terms of this Agreement.

     4. Packer will schedule  production of products when  inventory of products
reaches the minimum  reasonable stock levels or at such other intervals as maybe
mutually  agreed  upon  between  Packer and  Company  from time to time.  Packer
further agrees to code-date  products so as to make possible  identification  of
date of production in accordance with coding system as required by Company.

     5. Packer and Company will each  provide raw  materials  for the  Company's
product as outlined in Schedule 'C'.


<PAGE>

     6. Packer  agrees to maintain  sufficient  materials  in its  inventory  to
accommodate  normal  production  requirements of Company.  It is understood that
inventory  levels of  materials  ordered by Packer  specifically  for  Company's
product will be maintained at a level that will  consider  supplier  minimum run
requirements,  Packer's  minimum run  requirements,  historical  sales data when
available  and Company's  sales  projections.  Company  agrees to maintain a two
months supply of concentrate at Packers location.

     7.  Packer  agrees to send  samples of  products  at  Company's  expense to
Company at places and intervals reasonably determined by Company.

     8.  Packer  agrees to allow  representatives  of  Company  to  inspect  its
production facilities including observing the syrup making'' process and Quality
Control functions at any time during normal business hours.

     9. Title to all finished  goods shall  remain with Packer.  Packer shall be
responsible  for  warehousing  such  inventories,  which cost is included in the
rates as shown  in  Schedule  'A'.  A  shrinkage  allowance  of two  percent  on
concentrate  usage shall be allowed Packer under this  Agreement.  Any losses in
excess  of  this  amount,   as  determined  by  the  Company  during   month-end
inventories, shall be the sole responsibility of Packer.

     10. Finished goods will be released from Packer's  inventory by Packer only
upon  specific  orders from  Company and shall be shipped as agreed upon between
the parties.  Company shall provide Packer seven (7) working day's notice of its
shipping requirements.

     11.  Packer  agrees to routinely  keep and maintain  daily  production  and
quality  control  reports of  Company's  products  and to supply said reports to
Company  upon  request.  Company  shall at all  reasonable  times be entitled to
access to the  business  records  and  reports  of Packer as they  relate to the
production, quality control and shipment of Company's products.

     12. This  Agreement  shall  become and be  effective  immediately  upon the
execution of the same by the parties herein. This Agreement shall remain in full
force and effect  until  terminated  by either  party as  hereinafter  provided.
Either party,  for any reason  whatsoever  shall have the right to terminate the
Agreement  upon 60 days written  notice of its  intention to  terminate.  In the
event of a termination,  all of the  obligations of either party hereunder shall
be adjusted up to and including the effective date of said  termination.  Within
ten days Company shall pay Packer for all unpaid  invoices for finished  product
produced for Company and for all unused raw  materials at Packers  plant ordered
specifically  for Company's  product which cannot be utilized for Packer's other
products.  Also within ten days Company will arrange to assume the liability for
all unused raw materials in the hands of Packer's suppliers ordered specifically
for Company's product which cannot be utilized for Packer's other products. Upon
receipt of payment from Company and release of liability from suppliers,  as the
case maybe,  Packer will ship to Company,  at  Company's  expense,  all finished
product ingredients and raw materials in possession of Packer owned by Company.

     13. Packer will comply with all  applicable  federal,  state and local laws
and  regulations,  governing the portion of the  manufacturing  process that the
Packer performs and the materials the Packer supplies.


<PAGE>

     14. Company will comply with all applicable  federal,  state and local laws
and regulations governing the materials supplied by Company and the labeling and
formula specifications.
 
     15.  Packer  agrees to indemnify  and hold Company  harmless from any loss,
claim,  damage,  lawsuit, or expense for injury to person or property occasioned
by or  incident to its  manufacture,  bottling or  preparation  for  delivery of
Company's  products.  Company agrees to indemnify and hold packer  harmless from
any claim,  loss,  damage or lawsuit  caused by  materials  supplied by Company.
"Packer and Company during the term of this Agreement  shall carry at their sole
cost broad comprehensive  liability insurance with limits of at least $1 million
per occurrence to provide for the  indemnification  set forth in this paragraph.
Each party shall furnish the other with evidence of the insurance required under
this paragraph in a form of certificate issued by the insurance  carrier,  which
certificate shall provide that there shall be no material change or cancellation
of the coverage  without ten (10) days' prior  written  notice of such change to
the party to whom the certificate is addressed.

     16.  Neither  party may assign  transfer  this  Agreement  or any  interest
therein without the prior written consent of the other.

     17.  Neither  party shall be liable for any delay or failure to perform any
of its obligations hereunder,  which delay may be due in whole or in part to any
caused or contingencies beyond said party's control,  including, but not limited
to,  fires,  accidents,  acts of God,  war,  strikes  or other  labor  disputes,
governmental action, orders, or regulations, and any and all matters beyond said
party's control.

     18. "In the event that any party hereto shall become insolvent,  shall file
or have filed  against it a voluntary or  involuntary  petition  pursuant to the
United  States  Bankruptcy  Act, or the  institution  of any  proceedings  by or
against either party for relief under any law relating to the relief of debtors,
or the making of any assignment for the benefit of creditors, or the appointment
of a receiver,  and such condition  remains unchanged for thirty (30) days', the
other  party may at its option  terminate  this  Agreement  on thirty (30) days'
notice to the other party."

     19. It is expressly understood between the parties hereto that any material
or  information  revealed  to Packer  regarding  the  Company's  products or the
formulae for the Company's products or identity of any concentrate suppliers for
the Company's  products,  Company's  customers or sales figures are confidential
and shall be treated as such by Packer and are  revealed  to Packer for the sole
purpose of enabling Packer to comply with its  obligations  under this Agreement
and are not to be used for any other  purpose or  revealed or  disclosed  to any
other parties under, any circumstances.

     20.  Disputes;  Arbitration.  If there is any  dispute  among  the  parties
regarding this  Agreement,  the parties hereto agree to submit the resolution of
the  dispute  to  arbitration  with the  arbitrator  to be  selected  by  mutual
agreement among the parties from a list of seven potential  arbitrators provided
by the American  Arbitration  Association with each party  alternately  striking
names,  with the last name  remaining to be the  arbitrator  so  selected.  Such
arbitration  shall take place in  Phoenix,  Arizona  and shall  comply  with the
Commercial  Arbitration  Rules  of the  American  Arbitration  Association.  The
decision  in writing of the  arbitrator  so  selected  in  accordance  with this
paragraph shall be conclusive on both parties hereto. Each party agrees that any
decision rendered by such arbitrator shall be enforced by any court of competent
jurisdiction over such party


<PAGE>

     21.  This  Agreement,  along  with  the  schedules  represents  the  entire
understanding  between  Company and  Packer,  and  supercedes  all prior oral or
written  understandings  on the same  subject.  It may not be changed in any way
unless such change is in writing approved by both parties.

     22. This agreement does not constitute Packer an agent of Company.

     23. Any notice,  request or other  communication  given  hereunder shall be
deemed to have been  properly  given if in writing  and  delivered  or mailed by
prepaid and registered mail in the United States of America addressed:

a) if to Packer, to it at: 931 S. Highland Avenue Tucson, Arizona 85719

b) if to Company, to it at: 2401 E. Katella Ave., Suite 650 Anaheim,  California
92806

     24.  The  parties  further   acknowledge  that  Packer  has  transportation
equipment  which will be available to deliver  Company's  finished  product.  By
mutual consent,  the Company may contract with Packer to perform these services,
at rates of compensation to Packer as detailed in Schedule 'A'.






     IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and date first  above  written . 

HANSEN  BEVERAGE  COMPANY                    SOUTHWEST CANNING & PACKAGING, INC.

BY: /s/ Harold C. Taber Jr.                BY: /s/ Georoge Kalil
    -------------------------                ---------------------------
TITLE: President / CEO                       TITLE: President       
    -------------------------                ---------------------------


EXHIBIT 31.2


    CERTIFICATION PURSUANT TO RULE 13A-14(a) OR 15D-14(a) OF THE SECURITIES
        EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, Hilton Schlosberg, certify that: 

1.   I have  reviewed  this  annual  report  on  Form  10-K  of  Hansen  Natural
     Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

          a.   designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,
  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b.   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          c.   disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's most recent fiscal quarter (the registrant's  fourth
               fiscal  quarter  in the case of an  report)  that has  materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent function):

          a.   all  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b.   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

Date:   March 15, 2005

                                       /s/Hilton H. Schlosberg
                                       -----------------------------------------
                                       Hilton H. Schlosberg
                                       Vice Chairman of the Board of Directors, 
                                       President, Chief Operating Officer, Chief
                                       Financial Officer and Secretary



EXHIBIT 32.1


                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with the  annual  report  of  Hansen  Natural  Corporation  (the
"Company")  on Form 10-K for the year ended  December 31, 2004 as filed with the
Securities and Exchange  Commission (the "Report"),  the undersigned,  Rodney C.
Sacks,  Chairman of the Board of Directors  and Chief  Executive  Officer of the
Company,  certifies,  pursuant to 18 U.S.C. 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:

     1.   The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.


Date:   March 15, 2005

                                              /s/Rodney C. Sacks
                                              ----------------------------------
                                              Rodney C. Sacks
                                              Chairman of the Board of Directors
                                              and Chief Executive Officer



















EXHIBIT 32.2


                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with the  annual  report  of  Hansen  Natural  Corporation  (the
"Company")  on Form 10-K for the year ended  December 31, 2004 as filed with the
Securities and Exchange  Commission (the "Report"),  the undersigned,  Hilton H.
Schlosberg, Vice Chairman of the Board of Directors,  President, Chief Operating
Officer,  Chief  Financial  Officer and  Secretary  of the  Company,  certifies,
pursuant  to 18  U.S.C.  1350,  as  adopted  pursuant  to  Section  906  of  the
Sarbanes-Oxley Act of 2002, that:

     1.   The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.


Date:   March 15, 2005

                                       /s/Hilton H. Scholosberg
                                       -----------------------------------------
                                       Hilton H. Schlosberg
                                       Vice Chairman of the Board of Directors, 
                                       President, Chief Operating Officer, Chief
                                       Financial Officer and Secretary


















EXHIBIT 31.1


    CERTIFICATION PURSUANT TO RULE 13A-14(a) OR 15D-14(a) OF THE SECURITIES
        EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, Rodney Sacks, certify that:

1.   I have  reviewed  this  annual  report  on  Form  10-K  of  Hansen  Natural
     Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a.   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,
  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c.   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent function):

     a.   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.

Date:   March 15, 2005

                                              /s/Rodney C. Sacks
                                              --------------------------------
                                              Rodney C. Sacks
                                              Chairman of the Board of Directors
                                              and Chief Executive Officer



        STOCK OPTION AGREEMENT


This Stock Option Agreement ("Agreement") is made as of January 15, 2004, by and
between Hansen Natural Corporation,  a Delaware corporation (the "Company"), and
Michael B. Schott ("Holder").

                              Preliminary Recitals

     A.   Holder is an  employee of the  Company or one of its  subsidiaries  or
          affiliates. 

     B.   Pursuant to the Hansen Natural Corporation 2001 Stock Option Plan (the
          "Plan"), the Company desires to grant Holder an incentive stock option
          to purchase shares of the Company's  common stock, par value $.005 per
          share (the "Common Stock").

     NOW, THEREFORE, the Company and Holder agree as follows:

     1. Grant of Incentive  Stock Option.  The Company  hereby grants to Holder,
subject to the terms and conditions set forth herein, the incentive stock option
("ISO") to purchase up to 32,000 shares of Common Stock,  at the purchase  price
of $8.15 per share,  such ISO to be  exercisable  and  exercised as  hereinafter
provided.
        
     2. Exercise Period. The ISO shall expire three months after the termination
of the Holder's  employment with the Company and its subsidiaries and affiliates
(the "Hansen  Natural Group") unless the employment is terminated by a member of
the Hansen  Natural Group for Cause (as defined  below) or unless the employment
is terminated
 by reason of the death or Total  Disability  (as defined below) of
Holder.  If the  Holder's  employment  is  terminated  by a member of the Hansen
Natural  Group  for  Cause,  the ISO  shall  expire  as of the  date  employment
terminates.  If the  Holder's  employment  terminates  due to his death or Total
Disability,  then the ISO may be exercised by Holder or the person or persons to
which  Holder's  rights under this  Agreement pass by will, or if no such person
has such right, by his executors or administrators,  within six months after the
date of death or  Total  Disability,  but no  later  than  the  expiration  date
specified  in  Section  3(c)  below.  "Cause"  means the  Holder's  act of fraud
dishonesty,  knowing  and  material  failure to comply with  applicable  laws or
regulations or satisfactorily perform his duties of employment,  insubordination
or drug or alcohol  abuse,  as determined by the Committee of the Hansen Natural
Corporation Stock Option Plan (the  "Committee").  "Total  Disability" means the
complete  and  permanent  inability  of Holder to  perform  all of his duties of
employment  with the Company,  as determined by the Committee  upon the basis of
such evidence,  including independent medical reports and data, as the Committee
deems appropriate or necessary.
        

<PAGE>

     3.  Exercise  of Option 

     (a)  Subject  to  the  other  terms  of  this   Agreement   regarding   the
exercisability  of the ISO, and provided  that Holder is employed by a member of
the Hansen  Natural Group on the relevant date, the ISO may only be exercised in
respect of the number of shares  listed in column A from and after the  exercise
dates listed in column B,

                      Column "A"                 Column "B" 
                   Number of Shares            Exercise Date
                   ----------------          ----------------
                           8,000             January 15, 2005
                           8,000             January 15, 2006
                           8,000             January 15, 2007
                           8,000             January 15, 2008

     (b) This ISO may be exercised, to the extent exercisable by its terms, from
time to time in whole or in part at any time  prior to the  expiration  thereof.
Any exercise shall be accompanied by a written notice to the Company  specifying
the  number of  shares  as to which  this ISO is being  exercised  (the  "Option
Shares").  Notations of any partial exercise or installment  exercise,  shall be
made by the Company on Schedule A hereto.
              

<PAGE>

     (c)  Notwithstanding  anything else herein to the contrary,  this ISO shall
expire ten years from the date of this agreement.
      
     (d) The Holder  hereby agrees to notify the Company in writing in the event
shares acquired pursuant to the exercise of this ISO are transferred, other than
by will or by the laws of descent and  distribution,  within two years after the
date of this  agreement  or within one year after the  issuance  of such  shares
pursuant to such exercise.
        
     4. Payment of Purchase Price Upon Exercise.  At the time of any exercise of
the ISO the  purchase  price of the ISO shall be paid in full to the  Company in
either of the following ways or in any combination of the following ways:

     (a) By check or other immediately available funds.

     (b) With  property  consisting  of shares of Common  Stock.  (The shares of
Common Stock to be used as payment shall be valued as of the date of exercise of
the ISO at the Closing Price as defined below. For example,  if Holder exercises
the  option  for 4,000  shares at a total  Exercise  Price of  $8,000,  assuming
exercise  price of $2.00 per share,  and the Closing Price is $5.00,  he may pay
for the 4,000 Option Shares by transferring  1,600 shares of Common Stock to the
Company.)

     (c) For purposes of this Agreement,  the term "Closing  Price" means,  with
respect to the Company's  Common Stock,  the last sale price  regular-way or, in
case no such sale takes  place on such date,  the average of the closing bid and
asked prices regular-way on the principal national  securities exchange on which
the securities are listed or admitted to trading;  or, if they are not listed or
admitted to trading on any national securities exchange,  the last sale price of
the securities on the consolidated  transaction reporting system of the National
Association of Securities  Dealers  ("NASD"),  if such last sale  information is
reported on such system or, if not so  reported,  the average of the closing bid
and asked prices of the  securities  on the National  Association  of Securities
Dealers  Automatic  Quotation System  ("NASDAQ") or any comparable system or, if
the securities are not listed on NASDAQ or a comparable  system,  the average of
the closing bid and asked prices as  furnished  by two members of NASD  selected
from time to time by the Company for that purpose.


<PAGE>
        
     5.  Purchase for  Investment;  Resale  Restrictions.  Unless at the time of
exercise of the ISO there shall be a valid and effective  registration statement
under the Securities Act of 1933 ("'33 Act") and appropriate  qualification  and
registration  under  applicable  state  securities  laws  relating to the Option
Shares  being   acquired,   Holder  shall  upon  exercise  of  the  ISO  give  a
representation  that  he is  acquiring  such  shares  for his  own  account  for
investment and not with a view to, or for sale in connection with, the resale or
distribution of any such shares. In the absence of such registration  statement,
Holder shall execute a written affirmation, in a form reasonably satisfactory to
the Company,  of such investment intent.  Holder further agrees that he will not
sell or transfer any Option  Shares until he requests and receives an opinion of
the Company's counsel or other counsel reasonably satisfactory to the Company to
the effect that such  proposed sale or transfer will not result in a violation o
the '33 Act, or a  registration  statement  covering the sale or transfer of the
shares has been declared effective by the Securities and Exchange Commission, or
he obtains a no-action  letter from the Securities and Exchange  Commission with
respect to the proposed transfer.
       
     6.  Nontransferability.  This ISO shall not be  transferable  other than by
will or by the laws of descent and distribution.  During the lifetime of Holder,
this ISO shall be exercisable only by Holder.


<PAGE>
        
     7. (a)  Adjustments.  In the event of any change in the outstanding  Common
Stock  of  the  Company  by  reason  of  any  stock  recapitalization,   merger,
consolidation,  combination or exchange of shares, the kind of shares subject to
the ISO and their  purchase price per share (but not the number of shares) shall
be  appropriately  adjusted  consistent  with such  change in such manner as the
Board of  Directors of the Company may deem  equitable.  In the event of a stock
dividend or stock split the kind of shares,  their  purchase price per share and
the  number of shares  shall be  appropriately  adjusted,  consistent  with such
change  in such  manner  as the  Board  of  Directors  may deem  equitable.  Any
adjustment so made shall be final and binding on Holder. No adjustments shall be
made that would have the effect of modifying an ISO under Internal  Revenue Code
Section 422 and 424.
          
     (b)  Notwithstanding  anything  else  herein  to  the  contrary,  upon  the
occurrence of a change in control (as defined in 7(c) below), 50% of any portion
of the option not theretofore exercisable,  shall immediately become exercisable
and such  portion of the option  (being the Option to purchase  shares of Common
Stock subject to the applicable provisions of the Plan and awarded in accordance
with the Plan in terms of section 1 above) may,  with the consent of the Holder,
be  purchased by the Company at a fair value (as defined in 7(c) below) less the
purchase  price payable by Holder to exercise the option as set out in Article 1
above for one (1) share of Common Stock of the Company  multiplied by the number
of shares of Common  Stock  which  Holder has the option to purchase in terms of
Article 1 above.  

     Further,  notwithstanding  anything  herein to the  contrary  if, after the
occurrence  of a change in  control  (as  defined in 7(c)  below)  the  Holder's
employment by the Hansen  Natural group is terminated  (unless his employment is
terminated by the Hansen  Natural  group for cause as defined  above) and on the
date of  termination  any  portion  of the  option  has not  theretofore  become
exercisable,  then such remaining portion shall immediately  become  exercisable
and that  portion of the option  (being the option to purchase  shares of common
stock subject to the applicable provisions of the plan and awarded in accordance
with the plan in terms of section 1 above) may,  with the consent of Holder,  be
purchased  by the Company  for cash at a price  equal to the fair  market  value
(defined in 7(c) below) less the  purchase  price  payable by Holder to exercise
the  option as set out in  Article 1 above for one (1) share of common  stock of
the Company  multiplied by the number of shares of common stock which Holder has
the option to purchase in terms of Article 1 above.
               

<PAGE>

        (c)  For the purposes of this Agreement
                    
             (i)  "Change in Control" means;
                              
                    (A) the acquisition of "Beneficial  Ownership" by any person
(as  defined  in  rule  13(d) - 3  under  the  Securities  Exchange  Act  1934),
corporation or other entity other than the Company or a wholly owned  subsidiary
of the Company of 50% or more of the outstanding Stock,
 
                    (B) the  sale or  disposition  of  substantially  all of the
assets of the Company, or
                                
                    (C) the merger of the Company  with another  corporation  in
which the  Common  Stock of the  Company  is no longer  outstanding  after  such
merger.
   
             (ii) "Fair Market Value" means,  as of any date, the Closing  Price
for one share of the common Stock of the company on such date.
      
 
     8. No Rights as  Stockholder.  Holder shall have no rights as a stockholder
with respect to any shares of Common Stock subject to this ISO prior to the date
of issuance to him of a certificate or certificates for such shares.
        

<PAGE>

     9. No Right to Continue  Employment.  This Agreement  shall not confer upon
Holder any right with respect to  continuance  of employment  with any member of
the Hansen Natural Group nor shall it interfere in any way with the right of any
such member to terminate his employment at any time.
       
     10.  Compliance With Law and Regulation.  This Agreement and the obligation
of the Company to sell and deliver  shares of Common  Stock  hereunder  shall be
subject to all applicable  federal and state laws,  rules and regulations and to
such approvals by any government or regulatory agency as may be required.  If at
any time the Board of  Directors  of the Company  shall  determine  that (i) the
listing,  registration or qualification of the shares of Common Stock subject or
related thereto upon any securities  exchange or under any state or federal law,
or (ii) the consent or approval of any government  regulatory body, is necessary
or desirable as a condition  of or in  connection  with the issue or purchase of
shares of Common Stock  hereunder,  this ISO may not be exercised in whole or in
part unless such  listing,  registration,  qualification,  consent,  approval or
agreement  shall have been  effected  or  obtained  free of any  conditions  not
acceptable to the Board of Directors.
        
     11.  Tax  Withholding  Requirements.  The  Company  shall have the right to
require  Holder to remit to the  Company an amount  sufficient  to  satisfy  any
federal,  state or local  withholding tax requirements  prior to the delivery of
any certificate or certificates for Common Stock.
        
     12.  Fractional  Shares.   Notwithstanding  any  other  provision  of  this
Agreement,  no  fractional  shares of stock shall be issued upon the exercise of
this ISO and the Company shall not be under any obligation to compensate  Holder
in any way for such fractional shares.


<PAGE>
        
     13. Notices.  Any notice  hereunder to the Company shall be addressed to it
at its office at 1010 Railroad  Street,  Corona,  California  92882,  Attention:
Rodney C. Sacks with a copy to Benjamin Polk, Winston & Strawn, 200 Park Avenue,
New York, New York 10166,  and any notice hereunder to Holder shall be addressed
to him at 283 Lincoln Road,  Grosse Point City,  Michigan 48230,  subject to the
right of either party to  designate at any time  hereafter in writing some other
address.

     14.  Amendment.  No  modification,  amendment  or  waiver  of  any  of  the
provisions of this Agreement shall be effective  unless in writing  specifically
referring hereto, and signed by both parties.
        
     15. Governing Law. This Agreement shall be construed  according to the laws
of the  State of  Delaware  and all  provisions  hereof  shall  be  administered
according to and its validity shall be determined under, the laws of such State,
except where preempted by federal laws.

     16.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of which shall  constitute one and the same  instrument.  IN
WITNESS  WHEREOF,  Hansen  Natural  Corporation  has caused this Agreement to be
executed by a duly  authorized  officer and Holder has executed  this  Agreement
both as of the day and year first above written.

                                            HANSEN NATURAL CORPORATION


                                            By:/s/Rodney C. Sacks
                                            -----------------------------
                                            Title:  Chairman of the Board


/s/Michael B. Schott
--------------------
Michael B. Schott



        
                             STOCK OPTION AGREEMENT


     This Stock Option  Agreement  ("Agreement") is made as of January 15, 2004,
by  and  between  Hansen  Natural  Corporation,   a  Delaware  corporation  (the
"Company"), and Kirk Blower ("Holder").

                              Preliminary Recitals

     A.  Holder is an  employee  of the  Company or one of its  subsidiaries  or
affiliates.
        
     B.  Pursuant  to the Hansen  Natural  Corporation  Stock  Option  Plan (the
"Plan"),  the  Company  desires to grant  Holder an  incentive  stock  option to
purchase  shares of the Company's  common stock,  par value $.005 per share (the
"Common Stock").

     NOW, THEREFORE, the Company and Holder agree as follows:
       
     1. Grant of Incentive  Stock Option.  The Company  hereby grants to Holder,
subject to the terms and conditions set forth herein, the incentive stock option
("ISO") to purchase  12,500  shares of Common  Stock,  at the purchase  price of
$8.15  per  share,  such ISO to be  exercisable  and  exercised  as  hereinafter
provided.
        
     2. Exercise Period. The ISO shall expire three months after the termination
of the Holder's  employment with the Company and its subsidiaries and affiliates
(the "Hansen  Natural Group") unless the employment is terminated by a member of
the Hansen  Natural Group for Cause (as defined  below) or unless the employment
is terminated by reason of
 the death or Total  Disability  (as defined below) of
Holder.  If the  Holder's  employment  is  terminated  by a member of the Hansen
Natural  Group  for  Cause,  the ISO  shall  expire  as of the  date  employment
terminates.  If the  Holder's  employment  terminates  due to his death or Total
Disability,  then the ISO may be exercised by Holder or the person or persons to
which  Holder's  rights under this  Agreement pass by will, or if no such person
has such right, by his executors or administrators,  within six months after the
date of death or  Total  Disability,  but no  later  than  the  expiration  date
specified  in  Section  3(c)  below.  "Cause"  means the  Holder's  act of fraud
dishonesty,  knowing  and  material  failure to comply with  applicable  laws or
regulations or satisfactorily perform his duties of employment,  insubordination
or drug or alcohol  abuse,  as determined by the Committee of the Hansen Natural
Corporation Stock Option Plan (the  "Committee").  "Total  Disability" means the
complete  and  permanent  inability  of Holder to  perform  all of his duties of
employment  with the Company,  as determined by the Committee  upon the basis of
such evidence,  including independent medical reports and data, as the Committee
deems appropriate or necessary.
        

<PAGE>

     3. Exercise of Option
             
          (a)  Subject  to the  other  terms  of this  Agreement  regarding  the
exercisability  of the ISO, and provided  that Holder is employed by a member of
the Hansen  Natural Group on the relevant date, the ISO may only be exercised in
respect of the number of shares  listed in column A from and after the  exercise
dates listed in column B,

                     Column "A"                       Column "B"
                  Number of Shares                  Exercise Date
                  ----------------                 ----------------
                       2,500                       January 15, 2005
                       2,500                       January 15, 2006
                       2,500                       January 15, 2007
                       2,500                       January 15, 2008
                       2,500                       January 15, 2009

          (b) This ISO may be exercised, to the extent exercisable by its terms,
from  time to time in  whole  or in part at any  time  prior  to the  expiration
thereof.  Any exercise  shall be  accompanied by a written notice to the Company
specifying  the  number of shares as to which this ISO is being  exercised  (the
"Option  Shares").  Notations of any partial  exercise or installment  exercise,
shall be made by the Company on Schedule A hereto.
                
          (c)  Notwithstanding  anything else herein to the  contrary,  this ISO
shall expire ten years from the date of this agreement.

          (d) The Holder  hereby  agrees to notify the Company in writing in the
event  shares  acquired  pursuant to the  exercise of this ISO are  transferred,
other than by will or by the laws of descent and distribution,  within two years
after the date of this  agreement  or within one year after the issuance of such
shares pursuant to such exercise.

     4. Payment of Purchase Price Upon Exercise.  At the time of any exercise of
the ISO the  purchase  price of the ISO shall be paid in full to the  Company in
any of the following ways or in any combination of the following ways:

          (a) By check or other immediately available funds.

          (b) With property consisting of shares of Common Stock. (The shares of
Common Stock to be used as payment shall be valued as of the date of exercise of
the ISO at the Closing Price as defined below. For example,  if Holder exercises
the  option  for 4,000  shares at a total  Exercise  Price of  $8,000,  assuming
exercise  price of $2.00 per share,  and the Closing Price is $5.00,  he may pay
for the 4,000 Option Shares by transferring  1,600 shares of Common Stock to the
Company.)


<PAGE>

          (c) By delivering a properly  executed  exercise  notice together with
irrevocable  instructions  to a broker to deliver  promptly  to the  company the
amount  of  sale or loan  proceeds  necessary  to pay  the  purchase  price  and
applicable  withholding  taxes,  and such other  documents as the  Committee may
determine.

          (d) For purposes of this  Agreement,  the term "Closing  Price" means,
with respect to the Company's Common Stock, the last sale price  regular-way or,
in case no such sale takes  place on such date,  the  average of the closing bid
and asked prices  regular-way on the principal national  securities  exchange on
which the  securities  are listed or admitted  to  trading;  or, if they are not
listed or admitted to trading on any national securities exchange, the last sale
price of the securities on the consolidated  transaction reporting system of the
National  Association  of  Securities  Dealers  ("NASD"),   if  such  last  sale
information  is reported on such system or, if not so  reported,  the average of
the closing bid and asked prices of the  securities on the National  Association
of Securities  Dealers  Automatic  Quotation System ("NASDAQ") or any comparable
system or, if the  securities  are not listed on NASDAQ or a comparable  system,
the average of the closing bid and asked  prices as  furnished by two members of
NASD selected from time to time by the Company for that purpose.

     5.  Purchase for  Investment;  Resale  Restrictions.  Unless at the time of
exercise of the ISO there shall be a valid and effective  registration statement
under the Securities Act of 1933 ("'33 Act") and appropriate  qualification  and
registration  under  applicable  state  securities  laws  relating to the Option
Shares  being   acquired,   Holder  shall  upon  exercise  of  the  ISO  give  a
representation  that  he is  acquiring  such  shares  for his  own  account  for
investment and not with a view to, or for sale in connection with, the resale or
distribution of any such shares. In the absence of such registration  statement,
Holder shall execute a written affirmation, in a form reasonably satisfactory to
the Company,  of such investment intent.  Holder further agrees that he will not
sell or transfer any Option  Shares until he requests and receives an opinion of
the Company's counsel or other counsel reasonably satisfactory to the Company to
the effect that such  proposed sale or transfer will not result in a violation o
the '33 Act, or a  registration  statement  covering the sale or transfer of the
shares has been declared effective by the Securities and Exchange Commission, or
he obtains a no-action  letter from the Securities and Exchange  Commission with
respect to the proposed transfer.


<PAGE>

     6.  Nontransferability.  This ISO shall not be  transferable  other than by
will or by the laws of descent and distribution.  During the lifetime of Holder,
this ISO shall be exercisable only by Holder.

     7. Adjustments.
            
          (a) Subject to clause 7(b) below, if the  outstanding  shares of stock
of the Company are increased,  decreased, or exchanged for a different number or
kind of shares or other securities,  or if additional shares or new or different
shares or other  securities are distributed with respect to such shares of stock
or securities,  through merger, consolidation,  sale of all or substantially all
of   the   property   of   the   Company,   reorganization,    recapitalization,
reclassification,  stock  dividend,  stock split,  reverse  stock split or other
distribution with respect to such shares of stock or other securities,  then, to
the  extent  permitted  by  the  Board  of  the  Company,   an  appropriate  and
proportionate  adjustment  shall be made in (1) the  maximum  number and kind of
shares  provided  in clause 1 above;  (2) the number and kind of shares or other
securities  subject to the outstanding  options and tandum SARs, if any; and (3)
the  price  for each  share or other  unit of any other  securities  subject  to
outstanding  opti without change in the aggregate  purchase price or value as to
which the options remain exercisable or subject to restrictions.  Any adjustment
under  this  clause  7(a)  shall  be made by the  Board  of the  Company,  whose
determination  as to what  adjustments  shall be made,  if any,  and the  extent
thereof, will be final, binding and conclusive.  No fractional interests will be
issued under this agreement resulting from any such adjustment.
            
          (b) Notwithstanding anything else herein to the contrary, the Board of
the Company  may, at any time,  in its sole  discretion,  provide  that upon the
occurrence  of a change in control of the Company (as  determined by the Board),
all  or  a  specified  portion  of  any  outstanding   options  not  theretofore
exercisable  shall  immediately  become  exercisable  and  that any  option  not
exercised prior to such change in control shall be canceled.
    
     8. No Rights as  Stockholder.  Holder shall have no rights as a stockholder
with respect to any shares of Common Stock subject to this ISO prior to the date
of issuance to her of a certificate or certificates for such shares.

     9. No Right to Continue  Employment.  This Agreement  shall not confer upon
Holder any right with respect to  continuance  of employment  with any member of
the Hansen Natural Group nor shall it interfere in any way with the right of any
such member to terminate her employment at any time.


<PAGE>

     10.  Compliance With Law and Regulation.  This Agreement and the obligation
of the Company to sell and deliver  shares of Common  Stock  hereunder  shall be
subject to all applicable  federal and state laws,  rules and regulations and to
such approvals by any government or regulatory agency as may be required.  If at
any time the Board of  Directors  of the Company  shall  determine  that (i) the
listing,  registration or qualification of the shares of Common Stock subject or
related thereto upon any securities  exchange or under any state or federal law,
or (ii) the consent or approval of any government  regulatory body, is necessary
or desirable as a condition  of or in  connection  with the issue or purchase of
shares of Common Stock  hereunder,  this ISO may not be exercised in whole or in
part unless such  listing,  registration,  qualification,  consent,  approval or
agreement  shall have been  effected  or  obtained  free of any  conditions  not
acceptable to the Board of Directors.

     11.  Tax  Withholding  Requirements.  The  Company  shall have the right to
require  Holder to remit to the  Company an amount  sufficient  to  satisfy  any
federal,  state or local  withholding tax requirements  prior to the delivery of
any certificate or certificates for Common Stock.

     12.  Fractional  Shares.   Notwithstanding  any  other  provision  of  this
Agreement,  no  fractional  shares of stock shall be issued upon the exercise of
this ISO and the Company shall not be under any obligation to compensate  Holder
in any way for such fractional shares.

     13. Notices.  Any notice  hereunder to the Company shall be addressed to it
at its office at 1010 Railroad  Street,  Corona,  California  92882,  Attention:
Rodney C. Sacks with a copy to Benjamin Polk, Winston & Strawn, 200 Park Avenue,
New York, New York 10166,  and any notice hereunder to Holder shall be addressed
to him at 3 Promontory,  Dove Canyon,  California 92679, subject to the right of
either party to designate at any time hereafter in writing some other address.

     14.  Amendment.  No  modification,  amendment  or  waiver  of  any  of  the
provisions of this Agreement shall be effective  unless in writing  specifically
referring hereto, and signed by both parties.

     15. Governing Law. This Agreement shall be construed  according to the laws
of the  State of  Delaware  and all  provisions  hereof  shall  be  administered
according to and its validity shall be determined under, the laws of such State,
except where preempted by federal laws.

     16.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts, each of which shall constitute one and the same instrument.


<PAGE>

     IN WITNESS WHEREOF, Hansen Natural Corporation has caused this Agreement to
be executed by a duly authorized  officer and Holder has executed this Agreement
both as of the day and year first above written.


                                            HANSEN NATURAL CORPORATION


                                            By:/s/Rodney C. Sacks
                                            -----------------------------
                                            Title:  Chairman of the Board

/s/Kirk Blower
----------------------
Holder



        
                             STOCK OPTION AGREEMENT


     This Stock Option  Agreement  ("Agreement") is made as of January 15, 2004,
by  and  between  Hansen  Natural  Corporation,   a  Delaware  corporation  (the
"Company"), and Thomas J. Kelly ("Holder").

                              Preliminary Recitals

     A.  Holder is an  employee  of the  Company or one of its  subsidiaries  or
affiliates.
 
     B.  Pursuant  to the Hansen  Natural  Corporation  Stock  Option  Plan (the
"Plan"),  the  Company  desires to grant  Holder an  incentive  stock  option to
purchase  shares of the Company's  common stock,  par value $.005 per share (the
"Common Stock").

     NOW, THEREFORE, the Company and Holder agree as follows:

     1. Grant of Incentive  Stock Option.  The Company  hereby grants to Holder,
subject to the terms and conditions set forth herein, the incentive stock option
("ISO") to purchase  25,000  shares of Common  Stock,  at the purchase  price of
$8.15  per  share,  such ISO to be  exercisable  and  exercised  as  hereinafter
provided.
        
     2. Exercise Period. The ISO shall expire three months after the termination
of the Holder's  employment with the Company and its subsidiaries and affiliates
(the "Hansen  Natural Group") unless the employment is terminated by a member of
the Hansen  Natural Group for Cause (as defined  below) or unless the employment
is terminated by reason
 of the death or Total  Disability  (as defined below) of
Holder.  If the  Holder's  employment  is  terminated  by a member of the Hansen
Natural  Group  for  Cause,  the ISO  shall  expire  as of the  date  employment
terminates.  If the  Holder's  employment  terminates  due to his death or Total
Disability,  then the ISO may be exercised by Holder or the person or persons to
which  Holder's  rights under this  Agreement pass by will, or if no such person
has such right, by his executors or administrators,  within six months after the
date of death or  Total  Disability,  but no  later  than  the  expiration  date
specified  in  Section  3(c)  below.  "Cause"  means the  Holder's  act of fraud
dishonesty,  knowing  and  material  failure to comply with  applicable  laws or
regulations or satisfactorily perform his duties of employment,  insubordination
or drug or alcohol  abuse,  as determined by the Committee of the Hansen Natural
Corporation Stock Option Plan (the  "Committee").  "Total  Disability" means the
complete  and  permanent  inability  of Holder to  perform  all of his duties of
employment  with the Company,  as determined by the Committee  upon the basis of
such evidence,  including independent medical reports and data, as the Committee
deems appropriate or necessary.


<PAGE>
       
     3. Exercise of Option
          
          (a)  Subject  to the  other  terms  of this  Agreement  regarding  the
exercisability  of the ISO, and provided  that Holder is employed by a member of
the Hansen  Natural Group on the relevant date, the ISO may only be exercised in
respect of the number of shares  listed in column A from and after the  exercise
dates listed in column B,

              Column "A"                          Column "B"
          Number of Shares                      Exercise Date
        ------------------                    ----------------
                5,000                         January 15, 2005
                5,000                         January 15, 2006
                5,000                         January 15, 2007
                5,000                         January 15, 2008
                5,000                         January 15, 2009

          (b) This ISO may be exercised, to the extent exercisable by its terms,
from  time to time in  whole  or in part at any  time  prior  to the  expiration
thereof.  Any exercise  shall be  accompanied by a written notice to the Company
specifying  the  number of shares as to which this ISO is being  exercised  (the
"Option  Shares").  Notations of any partial  exercise or installment  exercise,
shall be made by the Company on Schedule A hereto.
                
          (c)  Notwithstanding  anything else herein to the  contrary,  this ISO
shall expire ten years from the date of this agreement.
                
          (d) The Holder  hereby  agrees to notify the Company in writing in the
event  shares  acquired  pursuant to the  exercise of this ISO are  transferred,
other than by will or by the laws of descent and distribution,  within two years
after the date of this  agreement  or within one year after the issuance of such
shares pursuant to such exercise.

     4. Payment of Purchase Price Upon Exercise.  At the time of any exercise of
the ISO the  purchase  price of the ISO shall be paid in full to the  Company in
any of the following ways or in any combination of the following ways:

          (a) By check or other immediately available funds.

          (b) With property consisting of shares of Common Stock. (The shares of
Common Stock to be used as payment shall be valued as of the date of exercise of
the ISO at the Closing Price as defined below. For example,  if Holder exercises
the  option  for 4,000  shares at a total  Exercise  Price of  $8,000,  assuming
exercise  price of $2.00 per share,  and the Closing Price is $5.00,  he may pay
for the 4,000 Option Shares by transferring  1,600 shares of Common Stock to the
Company.)


<PAGE>

          (c) By delivering a properly  executed  exercise  notice together with
irrevocable  instructions  to a broker to deliver  promptly  to the  company the
amount  of  sale or loan  proceeds  necessary  to pay  the  purchase  price  and
applicable  withholding  taxes,  and such other  documents as the  Committee may
determine.

          (d) For purposes of this  Agreement,  the term "Closing  Price" means,
with respect to the Company's Common Stock, the last sale price  regular-way or,
in case no such sale takes  place on such date,  the  average of the closing bid
and asked prices  regular-way on the principal national  securities  exchange on
which the  securities  are listed or admitted  to  trading;  or, if they are not
listed or admitted to trading on any national securities exchange, the last sale
price of the securities on the consolidated  transaction reporting system of the
National  Association  of  Securities  Dealers  ("NASD"),   if  such  last  sale
information  is reported on such system or, if not so  reported,  the average of
the closing bid and asked prices of the  securities on the National  Association
of Securities  Dealers  Automatic  Quotation System ("NASDAQ") or any comparable
system or, if the  securities  are not listed on NASDAQ or a comparable  system,
the average of the closing bid and asked prices as furnished by two members o
NASD selected from time to time by the Company for that purpose.
       
     5.  Purchase for  Investment;  Resale  Restrictions.  Unless at the time of
exercise of the ISO there shall be a valid and effective  registration statement
under the Securities Act of 1933 ("'33 Act") and appropriate  qualification  and
registration  under  applicable  state  securities  laws  relating to the Option
Shares  being   acquired,   Holder  shall  upon  exercise  of  the  ISO  give  a
representation  that  he is  acquiring  such  shares  for his  own  account  for
investment and not with a view to, or for sale in connection with, the resale or
distribution of any such shares. In the absence of such registration  statement,
Holder shall execute a written affirmation, in a form reasonably satisfactory to
the Company,  of such investment intent.  Holder further agrees that he will not
sell or transfer any Option  Shares until he requests and receives an opinion of
the Company's counsel or other counsel reasonably satisfactory to the Company to
the effect that such  proposed sale or transfer will not result in a violation o
the '33 Act, or a  registration  statement  covering the sale or transfer of the
shares has been declared effective by the Securities and Exchange Commission, or
he obtains a no-action  letter from the Securities and Exchange  Commission with
respect to the proposed transfer.


<PAGE>
       
     6.  Nontransferability.  This ISO shall not be  transferable  other than by
will or by the laws of descent and distribution.  During the lifetime of Holder,
this ISO shall be exercisable only by Holder.

     7. Adjustments.

          (a) Subject to clause 7(b) below, if the  outstanding  shares of stock
of the Company are increased,  decreased, or exchanged for a different number or
kind of shares or other securities,  or if additional shares or new or different
shares or other  securities are distributed with respect to such shares of stock
or securities,  through merger, consolidation,  sale of all or substantially all
of   the   property   of   the   Company,   reorganization,    recapitalization,
reclassification,  stock  dividend,  stock split,  reverse  stock split or other
distribution with respect to such shares of stock or other securities,  then, to
the  extent  permitted  by  the  Board  of  the  Company,   an  appropriate  and
proportionate  adjustment  shall be made in (1) the  maximum  number and kind of
shares  provided  in clause 1 above;  (2) the number and kind of shares or other
securities  subject to the outstanding  options and tandum SARs, if any; and (3)
the  price  for each  share or other  unit of any other  securities  subject  to
outstanding  opti without change in the aggregate  purchase price or value as to
which the options remain exercisable or subject to restrictions.  Any adjustment
under  this  clause  7(a)  shall  be made by the  Board  of the  Company,  whose
determination  as to what  adjustments  shall be made,  if any,  and the  extent
thereof, will be final, binding and conclusive.  No fractional interests will be
issued under this agreement resulting from any such adjustment.

          (b) Notwithstanding anything else herein to the contrary, the Board of
the Company  may, at any time,  in its sole  discretion,  provide  that upon the
occurrence  of a change in control of the Company (as  determined by the Board),
all  or  a  specified  portion  of  any  outstanding   options  not  theretofore
exercisable  shall  immediately  become  exercisable  and  that any  option  not
exercised prior to such change in control shall be canceled.

     8. No Rights as  Stockholder.  Holder shall have no rights as a stockholder
with respect to any shares of Common Stock subject to this ISO prior to the date
of issuance to her of a certificate or certificates for such shares.

     9. No Right to Continue  Employment.  This Agreement  shall not confer upon
Holder any right with respect to  continuance  of employment  with any member of
the Hansen Natural Group nor shall it interfere in any way with the right of any
such member to terminate her employment at any time.


<PAGE>

     10.  Compliance With Law and Regulation.  This Agreement and the obligation
of the Company to sell and deliver  shares of Common  Stock  hereunder  shall be
subject to all applicable  federal and state laws,  rules and regulations and to
such approvals by any government or regulatory agency as may be required.  If at
any time the Board of  Directors  of the Company  shall  determine  that (i) the
listing,  registration or qualification of the shares of Common Stock subject or
related thereto upon any securities  exchange or under any state or federal law,
or (ii) the consent or approval of any government  regulatory body, is necessary
or desirable as a condition  of or in  connection  with the issue or purchase of
shares of Common Stock  hereunder,  this ISO may not be exercised in whole or in
part unless such  listing,  registration,  qualification,  consent,  approval or
agreement  shall have been  effected  or  obtained  free of any  conditions  not
acceptable to the Board of Directors.

     11.  Tax  Withholding  Requirements.  The  Company  shall have the right to
require  Holder to remit to the  Company an amount  sufficient  to  satisfy  any
federal,  state or local  withholding tax requirements  prior to the delivery of
any certificate or certificates for Common Stock.

     12.  Fractional  Shares.   Notwithstanding  any  other  provision  of  this
Agreement,  no  fractional  shares of stock shall be issued upon the exercise of
this ISO and the Company shall not be under any obligation to compensate  Holder
in any way for such fractional shares.

     13. Notices.  Any notice  hereunder to the Company shall be addressed to it
at its office at 1010 Railroad  Street,  Corona,  California  92882,  Attention:
Rodney C. Sacks with a copy to Benjamin Polk, Winston & Strawn, 200 Park Avenue,
New York, New York 10166,  and any notice hereunder to Holder shall be addressed
to him at 4472 Torrey Pines Drive,  Chino Hills, CA 91709,  subject to the right
of either  party to  designate  at any time  hereafter  in  writing  some  other
address.

     14.  Amendment.  No  modification,  amendment  or  waiver  of  any  of  the
provisions of this Agreement shall be effective  unless in writing  specifically
referring hereto, and signed by both parties.

     15. Governing Law. This Agreement shall be construed  according to the laws
of the  State of  Delaware  and all  provisions  hereof  shall  be  administered
according to and its validity shall be determined under, the laws of such State,
except where preempted by federal laws.

     16.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts, each of which shall constitute one and the same instrument.


<PAGE>

     IN WITNESS WHEREOF, Hansen Natural Corporation has caused this Agreement to
be executed by a duly authorized  officer and Holder has executed this Agreement
both as of the day and year first above written.


                                            HANSEN NATURAL CORPORATION


                                            By:/s/Rodney C. Sacks
                                            -----------------------------
                                            Title:  Chairman of the Board


/s/Thomas J. Kelly
----------------------
Holder

                             STOCK OPTION AGREEMENT


     This Stock Option  Agreement  ("Agreement") is made as of January 15, 2004,
by  and  between  Hansen  Natural  Corporation,   a  Delaware  corporation  (the
"Company"), and Mark J. Hall ("Holder").

                              Preliminary Recitals

     A.  Holder is an  employee  of the  Company or one of its  subsidiaries  or
affiliates. 

     B. Pursuant to the Hansen Natural  Corporation  2001 Stock Option Plan (the
"Plan"),  the  Company  desires to grant  Holder an  incentive  stock  option to
purchase  shares of the Company's  common stock,  par value $.005 per share (the
"Common Stock").

     NOW, THEREFORE, the Company and Holder agree as follows:

     1. Grant of Incentive  Stock Option.  The Company  hereby grants to Holder,
subject to the terms and conditions set forth herein, the incentive stock option
("ISO") to purchase up to 60,000 shares of Common Stock,  at the purchase  price
of $8.15 per share,  such ISO to be  exercisable  and  exercised as  hereinafter
provided.
        
     2. Exercise Period. The ISO shall expire three months after the termination
of the Holder's  employment with the Company and its subsidiaries and affiliates
(the "Hansen  Natural Group") unless the employment is terminated by a member of
the Hansen  Natural Group for Cause (as defined  below) or unless the employment
is terminated by
 reason of the death or Total  Disability  (as defined below) of
Holder.  If the  Holder's  employment  is  terminated  by a member of the Hansen
Natural  Group  for  Cause,  the ISO  shall  expire  as of the  date  employment
terminates.  If the  Holder's  employment  terminates  due to his death or Total
Disability,  then the ISO may be exercised by Holder or the person or persons to
which  Holder's  rights under this  Agreement pass by will, or if no such person
has such right, by his executors or administrators,  within six months after the
date of death or  Total  Disability,  but no  later  than  the  expiration  date
specified  in  Section  3(c)  below.  "Cause"  means the  Holder's  act of fraud
dishonesty,  knowing  and  material  failure to comply with  applicable  laws or
regulations or satisfactorily perform his duties of employment,  insubordination
or drug or alcohol  abuse,  as determined by the Committee of the Hansen Natural
Corporation Stock Option Plan (the  "Committee").  "Total  Disability" means the
complete  and  permanent  inability  of Holder to  perform  all of his duties of
employment  with the Company,  as determined by the Committee  upon the basis of
such evidence,  including independent medical reports and data, as the Committee
deems appropriate or necessary.
     

<PAGE>

     3. Exercise of Option
            
          (a)  Subject  to  the  other  terms  of  this   Agreement   regarding 
the  exercisability of the ISO, and provided that Holder is employed by a member
of the Hansen  Natural Group on the relevant date, the ISO may only be exercised
in  respect  of the  number  of  shares  listed  in  column A from and after the
exercise dates listed in column B,

                Column "A"                         Column "B"
            Number of Shares                     Exercise Date
            ----------------                   ----------------
                 12,000                        January 15, 2005
                 12,000                        January 15, 2006
                 12,000                        January 15, 2007
                 12,000                        January 15, 2008
                 12,000                        January 15, 2009

          (b) This ISO may be exercised, to the extent exercisable by its terms,
from  time to time in  whole  or in part at any  time  prior  to the  expiration
thereof.  Any exercise  shall be  accompanied by a written notice to the Company
specifying  the  number of shares as to which this ISO is being  exercised  (the
"Option  Shares").  Notations of any partial  exercise or installment  exercise,
shall be made by the Company on Schedule A hereto.
                
          (c)  Notwithstanding  anything else herein to the  contrary,  this ISO
shall expire ten years from the date of this agreement.

          (d) The Holder  hereby  agrees to notify the Company in writing in the
event  shares  acquired  pursuant to the  exercise of this ISO are  transferred,
other than by will or by the laws of descent and distribution,  within two years
after the date of this  agreement  or within one year after the issuance of such
shares pursuant to such exercise.

     4. Payment of Purchase Price Upon Exercise.  At the time of any exercise of
the ISO the  purchase  price of the ISO shall be paid in full to the  Company in
any of the following ways or in any combination of the following ways:

          (a) By check or other immediately available funds.

          (b) With property consisting of shares of Common Stock. (The shares of
Common Stock to be used as payment shall be valued as of the date of exercise of
the ISO at the Closing Price as defined below. For example,  if Holder exercises
the  option  for 4,000  shares at a total  Exercise  Price of  $8,000,  assuming
exercise  price of $2.00 per share,  and the Closing Price is $5.00,  he may pay
for the 4,000 Option Shares by transferring  1,600 shares of Common Stock to the
Company.)

          (c) By delivering a properly  executed  exercise  notice together with
irrevocable  instructions  to a broker to deliver  promptly  to the  company the
amount  of  sale or loan  proceeds  necessary  to pay  the  purchase  price  and
applicable  withholding  taxes,  and such other  documents as the  Committee may
determine.


<PAGE>

          (d) For purposes of this  Agreement,  the term "Closing  Price" means,
with respect to the Company's Common Stock, the last sale price  regular-way or,
in case no such sale takes  place on such date,  the  average of the closing bid
and asked prices  regular-way on the principal national  securities  exchange on
which the  securities  are listed or admitted  to  trading;  or, if they are not
listed or admitted to trading on any national securities exchange, the last sale
price of the securities on the consolidated  transaction reporting system of the
National  Association  of  Securities  Dealers  ("NASD"),   if  such  last  sale
information  is reported on such system or, if not so  reported,  the average of
the closing bid and asked prices of the  securities on the National  Association
of Securities  Dealers  Automatic  Quotation System ("NASDAQ") or any comparable
system or, if the  securities  are not listed on NASDAQ or a comparable  system,
the average of the closing bid and asked  prices as  furnished by two members of
NASD selected from time to time by the Company for that purpose.

     5.  Purchase for  Investment;  Resale  Restrictions.  Unless at the time of
exercise of the ISO there shall be a valid and effective  registration statement
under the Securities Act of 1933 ("'33 Act") and appropriate  qualification  and
registration  under  applicable  state  securities  laws  relating to the Option
Shares  being   acquired,   Holder  shall  upon  exercise  of  the  ISO  give  a
representation  that  he is  acquiring  such  shares  for his  own  account  for
investment and not with a view to, or for sale in connection with, the resale or
distribution of any such shares. In the absence of such registration  statement,
Holder shall execute a written affirmation, in a form reasonably satisfactory to
the Company,  of such investment intent.  Holder further agrees that he will not
sell or transfer any Option  Shares until he requests and receives an opinion of
the Company's counsel or other counsel reasonably satisfactory to the Company to
the effect that such  proposed sale or transfer will not result in a violation o
the '33 Act, or a  registration  statement  covering the sale or transfer of the
shares has been declared effective by the Securities and Exchange Commission, or
he obtains a no-action  letter from the Securities and Exchange  Commission with
respect to the proposed transfer.


<PAGE>

     6.  Nontransferability.  This ISO shall not be  transferable  other than by
will or by the laws of descent and distribution.  During the lifetime of Holder,
this ISO shall be exercisable only by Holder.

     7. Adjustments.
                
          (a) In the  event of any  change  in the  outstanding  Common Stock of
the  Company  by reason of any stock  recapitalization,  merger,  consolidation,
combination  or  exchange of shares,  the kind of shares  subject to the ISO and
their  purchase  price  per  share  (but  not the  number  of  shares)  shall be
appropriately  adjusted  consistent with such change in such manner as the Board
of Directors of the Company may deem equitable. In the event of a stock dividend
or stock split the kind of shares, their purchase price per share and the number
of shares shall be appropriately  adjusted,  consistent with such change in such
manner as the Board of Directors  may deem  equitable.  Any  adjustment  so made
shall be final and binding on Holder.  No  adjustments  shall be made that would
have the effect of modifying an ISO under Internal Revenue Code Sections 422 and
424.
               
          (b)  Notwithstanding  anything else herein to the  contrary,  upon the
occurrence of a change in control (as defined in 7(c) below), any portion of the
option not theretofore excercisable, shall immediately become exercisable in its
entirety  and the option  (being the Option to purchase  shares of Common  Stock
subject to the applicable  provisions of the Plan and awarded in accordance with
the Plan in terms of  section 1 above)  may,  with the  consent  of  Holder,  be
purchased  by the Company for cash at a price equal to the fair market value (as
defined in 7(c) below) less the purchase price payable by Holder to exercise the
option as set out in  Article  1 above for one (1) share of Common  Stock of the
Company  multiplied by the number of shares of Common Stock which Holder has the
option to purchase in terms of Article 1 above.


<PAGE>

          (c) For the purposes of this Agreement
                       
               (i) "Change in Control" means;
                              
                    (A) the acquisition of "Beneficial  Ownership" by any person
(as  defined  in  rule  13(d) - 3  under  the  Securities  Exchange  Act  1934),
corporation or other entity other than the Company or a wholly owned  subsidiary
of the Company of 50% or more of the outstanding Stock,
                              
                    (B) the  sale or  disposition  of  substantially  all of the
assets of the Company, or
                               
                    (C) the merger of the Company  with another  corporation  in
which the  Common  Stock of the  Company  is no longer  outstanding  after  such
merger.
                        
               (ii) "Fair Market Value" means, as of any date, the Closing Price
for one share of the common Stock of the company on such date.
        
     8. No Rights as  Stockholder.  Holder shall have no rights as a stockholder
with respect to any shares of Common Stock subject to this ISO prior to the date
of issuance to him of a certificate or certificates for such shares.
       
     9. No Right to Continue  Employment.  This Agreement  shall not confer upon
Holder any right with respect to  continuance  of employment  with any member of
the Hansen Natural Group nor shall it interfere in any way with the right of any
such member to terminate his employment at any time.
      
     10.  Compliance With Law and Regulation.  This Agreement and the obligation
of the Company to sell and deliver  shares of Common  Stock  hereunder  shall be
subject to all applicable  federal and state laws,  rules and regulations and to
such approvals by any government or regulatory agency as may be required.  If at
any time the Board of  Directors  of the Company  shall  determine  that (i) the
listing,  registration or qualification of the shares of Common Stock subject or
related thereto upon any securities  exchange or under any state or federal law,
or (ii) the consent or approval of any government  regulatory body, is necessary
or desirable as a condition  of or in  connection  with the issue or purchase of
shares of Common Stock  hereunder,  this ISO may not be exercised in whole or in
part unless such  listing,  registration,  qualification,  consent,  approval or
agreement  shall have been  effected  or  obtained  free of any  conditions  not
acceptable to the Board of Directors.
       
     11.  Tax  Withholding  Requirements.  The  Company  shall have the right to
require  Holder to remit to the  Company an amount  sufficient  to  satisfy  any
federal,  state or local  withholding tax requirements  prior to the delivery of
any certificate or certificates for Common Stock.


<PAGE>
      
     12.  Fractional  Shares.   Notwithstanding  any  other  provision  of  this
Agreement,  no  fractional  shares of stock shall be issued upon the exercise of
this ISO and the Company shall not be under any obligation to compensate  Holder
in any way for such fractional shares.
       
     13. Notices.  Any notice  hereunder to the Company shall be addressed to it
at its office at 1010 Railroad  Street,  Corona,  California  92882,  Attention:
Rodney C. Sacks with a copy to Benjamin Polk, Winston & Strawn, 200 Park Avenue,
New York, New York 10166,  and any notice hereunder to Holder shall be addressed
to him at 22433 Stanley Lane,  Wildomar,  California 92595, subject to the right
of either  party to  designate  at any time  hereafter  in  writing  some  other
address.
       
     14.  Amendment.  No  modification,  amendment  or  waiver  of  any  of  the
provisions of this Agreement shall be effective  unless in writing  specifically
referring hereto, and signed by both parties.
       
     15. Governing Law. This Agreement shall be construed  according to the laws
of the  State of  Delaware  and all  provisions  hereof  shall  be  administered
according to and its validity shall be determined under, the laws of such State,
except where preempted by federal laws.
       
     16.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts, each of which shall constitute one and the same instrument.
       
     IN WITNESS WHEREOF, Hansen Natural Corporation has caused this Agreement to
be executed by a duly authorized  officer and Holder has executed this Agreement
both as of the day and year first above written. HANSEN NATURAL CORPORATION


                                            By:s/Rodney C. Sacks
                                               --------------------------
                                            Title:  Chairman of the Board
/s/Mark J. Hall
--------------------
   Mark J. Hall