SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549


                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

      Date of report (Date of earliest event reported): September 20, 2000



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





             DELAWARE                  0-18761                 39-1679918
(State or other jurisdiction of      (Commission              (IRS employer
           incorporation)            file number)           identification no.)


2380 Railroad Street, Suite 101                                92880-5471
Corona, California                                             (Zip Code)
(Address of principal executive offices)

(909) 739-6200
(Registrant's telephone number, including area code)





<PAGE>




         ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS

                  On  September  20,  2000,  Blue Sky  Natural  Beverage  Co., a
Delaware  corporation and a newly-formed  subsidiary of Hansen Beverage Company
("Purchaser"),  purchased certain assets of Blue Sky Natural Beverage Co., a New
Mexico corporation  ("Seller"),  constituting  Seller's natural carbonated sodas
and seltzers  business for a cash purchase price of $6,500,000.  Comerica Bank -
California  provided  financing to the registrant and Hansen Beverage Company to
pay the purchase  price.  The assets  acquired  include all trademarks and other
proprietary  rights related to the Seller's  business but exclude Seller's cash,
accounts receivable and accounts payable. The only liabilities of Seller assumed
by Purchaser in connection with the  acquisition  were those  liabilities  under
certain contracts  assigned to Purchaser.  There is no relationship  between the
Seller and the registrant or any of its  affiliates,  any director or officer of
the registrant, or any associates of any such director or officer.




         ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

                           (a)                       Financial statements of the
                                                     business acquired.

                                                     Financial        statements
                                                     required  by this item will
                                                     be  filed by  amendment  to
                                                     this   initial   report  no
                                                     later  than   December   4,
                                                     2000.

                           (b)                       Pro forma financial 
                                                     information.

                                                     Pro     forma     financial
                                                     information   required   by
                                                     this  item will be filed by
                                                     amendment  to this  initial
                                                     report   no   later    than
                                                     December 4, 2000.

                           (c)                       Exhibits

         Exhibit Number                           Description

                  2.1                                Form  of   Asset   Purchase
                                                     Agreement,   dated   as  of
                                                     September 20, 2000, between
                                                     Seller and the Purchaser
                                                     (the "Purchase Agreement").



                                      -2-

<PAGE>




                  10.1                               Modification, dated as of 
                                                     September 19, 2000, to     
                                                     Revolving Credit Loan and 
                                                     Security Agreement by and  
                                                     between Hansen Beverage 
                                                     Company and Comerica Bank -
                                                     California.




                                   SIGNATURES



     Pursuant to the  requirements  of the  Securities and Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.


Date: October 4, 2000

                                            HANSEN NATURAL CORPORATION



                                            By:      /s/ Rodney C. Sacks
                                                     Rodney C. Sacks
                                                     Chairman of the Board
                                                     and Chief Executive Officer

--------
1 Hansen Beverage Company is a wholly-owned subsidiary of the registrant, Hansen
Natural Corporation.

                                      -3-




     

                      ASSET PURCHASE AGREEMENT

                                      among

             BLUE SKY NATURAL BEVERAGE CO., a Delaware corporation,

                                  as Purchaser

                                       and

             BLUE SKY NATURAL BEVERAGE CO., a New Mexico corporation

                                    as Seller

                                       and

                                  ROBERT BLACK



                         Dated as of September 20, 2000








                           
                                TABLE OF CONTENTS

                                                                           

                                                                           Page

1.       SALE AND PURCHASE OF ASSETS..........................................1

         1.1      Assets Transferred..........................................1

         1.2      Excluded Assets.............................................4

2.       CONSIDERATION........................................................5

         2.1      Purchase Price..............................................5

         2.2      Payment of Purchase Price...................................5

         2.3      Assumption of Certain Liabilities and Obligations...........5

         2.4      Nonassumption of Other Liabilities..........................5

3.       NON-ASSIGNABLE PURCHASED ASSETS......................................6

4.       TRANSFER OF EMPLOYEES AND EMPLOYEE BENEFITS..........................6

         4.1      Transfer of Employees.......................................6

         4.2      Seller Benefit Plans........................................6

5.       THE CLOSING..........................................................6

         5.1      The Closing.................................................7

         5.2      Certain Events at Closing...................................7

6.       REPRESENTATIONS OF SELLER............................................8

         6.1      Organization................................................8

         6.2      Authority Relative to This Agreement........................9

         6.3      Consents and Approvals; No Violations.......................9

         6.4      Charter Documents and Corporate Records.....................9

         6.5      Subsidiaries................................................9

         6.6      Financial Statements.......................................10

         6.7      Compliance with Laws; Permits..............................10

         6.8      Contracts..................................................10

         6.9      Absence of Undisclosed Liabilities.........................11

         6.10     Operations of Seller; Absence of Certain Changes...........11

         6.11     Brokers and Finders........................................13

         6.12     INTENTIONALLY LEFT BLANK...................................13

         6.13     Title to Properties........................................13

         6.14     Tangible Property..........................................14

                                        - i - 

<PAGE>
         6.15     Inventory..................................................14

         6.16     INTENTIONALLY LEFT BLANK...................................14


         6.17     Litigation and Orders......................................14

         6.18     Proprietary Rights.........................................15

         6.19     Taxes......................................................17

         6.20     Insurance..................................................18

         6.21     Employee Benefit Plans and Employer Relations..............18

         6.22     Suppliers and Customers....................................21

         6.23     Officers, Directors and Employees..........................21

         6.24     Potential Conflicts of Interest............................21

         6.25     Effect of Transaction......................................22

         6.26     Accuracy of Information; Full Disclosure...................22

         6.27     Adequacy of the Purchased Assets...........................22

7.       REPRESENTATIONS OF PURCHASER........................................22

         7.1      Organization and Authority.................................22

         7.2      Authorization of Agreement.................................23

         7.3      Brokers and Finders........................................23

         7.4      Financing..................................................23

         7.5      Bankruptcy, Insolvency, Fraudulent Conveyance..............23

8.       AGREEMENTS OF SELLER AND PURCHASER..................................23

         8.1      No Solicitation of Transactions............................23

         8.2      Interim Operations.........................................24

         8.3      Access to Information......................................26

         8.4      Certain Filings, Consents and Arrangements.................27

         8.5      Notice.....................................................27

         8.6      Transitional Services......................................27

         8.7      Further Assurances.........................................28

         8.8      Use of Firm Name...........................................29

         8.9      Restrictive Covenants......................................29

         8.10     Estoppel; Infringement.....................................30

         8.11     Continuation of Product Liability Insurance................30

         8.12     Disposal of Cans...........................................30

9.       CONDITIONS TO OBLIGATIONS OF PURCHASER..............................31

                                        - ii -

<PAGE>

         9.1      Closing Actions............................................31

         9.2      Continued Truth of Representations and Warranties..........31

         9.3      Consents of Third Parties..................................31

         9.4      Absence of Challenge.......................................31

         9.5      Litigation.................................................31

         9.6      Absence of Material Adverse Change.........................31

         9.7      Employment Arrangements....................................32

10.      CONDITIONS TO OBLIGATIONS OF SELLER.................................32

         10.1     Closing Actions............................................32

         10.2     Continued Truth of Representations and Warranties..........32

         10.3     Litigation.................................................32

11.      TERMINATION PRIOR TO THE CLOSING DATE...............................32

         11.1     Termination................................................32

         11.2     Effect on Obligations......................................33

12.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES..........................33

13.      INDEMNIFICATION.....................................................33

         13.1     Indemnification by Seller..................................33

         13.2     Indemnification by Purchaser...............................34

         13.3     Limitation on Indemnification..............................35

         13.4     Exclusive Remedy...........................................35

14.      EFFECTIVENESS OF THIS AGREEMENT.....................................35

15.      EXPENSES............................................................35

16.      SALES, USE, TRANSFER AND OTHER TAXES................................35

17.      NOTICES.............................................................35

18.      SUCCESSORS..........................................................37

19.      PARAGRAPH HEADINGS..................................................37

20.      GOVERNING LAW; ARBITRATION..........................................37

         20.1     Governing Law..............................................37

         20.2     Arbitration................................................37

21.      ANNOUNCEMENTS.......................................................38

22.      ENTIRE AGREEMENT....................................................38

23.      COUNTERPARTS........................................................38

                                        - iii - 

<PAGE>


                                LIST OF EXHIBITS



Exhibit A - Escrow Agreement  
Exhibit B - Assumption  Agreement 
Exhibit C - Bill of Sale 
Exhibit D - Assignment 
Exhibit E - Opinion of Seller's Counsel 
Exhibit F - Opinion of Purchaser's Counsel
Exhibit G - Seller's Certificate of Continued Truth of Representations
Exhibit H - Purchaser's Certificate of Continued Truth of Representations
Exhibit I - General Release of Seller's Shareholders
Exhibit J - Trademark Assignment




<PAGE>


                                LIST OF SCHEDULES


Schedule 1.1(b)   -     Proprietary Rights
Schedule 1.1(e)   -     Furniture, Fixtures, Equipment and Machinery
Schedule 1.1(h)   -     Contracts (Assumed)
Schedule 1.1(i)   -     Computer Processes and Software
Schedule 2.1      -     Allocation of Purchase Price
Schedule 3        -     Non-Assignable Purchased Assets
Schedule 4.1      -     Workers' Compensation Claims
Schedule 6.1      -     Jurisdictions
Schedule 6.3      -     Violations of Agreements due to Asset Purchase Agreement
Schedule 6.4      -     Charter and By-Laws
Schedule 6.6      -     Financial Statements
Schedule 6.7      -     Compliance; Permits
Schedule 6.8      -     Contracts (Not Assumed)
Schedule 6.9      -     Liabilities
Schedule 6.10     -     Operation of Seller - Extraordinary Events
Schedule 6.13     -     Tax Liens
Schedule 6.14     -     Exceptions to Tangible Property
Schedule 6.17     -     Litigation and Administrative Investigations
Schedule 6.19     -     Taxes
Schedule 6.20     -     Insurance
Schedule 6.21     -     Employee Benefit Plans
Schedule 6.22     -     Suppliers and Customers - Changes
Schedule 6.24     -     Conflicts of Interest
Schedule 6.25     -     Effect of Transaction
Schedule 8.12     -     Disposal of Cans





<PAGE>



                            ASSET PURCHASE AGREEMENT


         ASSET PURCHASE AGREEMENT (the  "Agreement"),  dated as of September 20,
2000 by and  among  Blue  Sky  Natural  Beverage  Co.,  a  Delaware  corporation
("Purchaser"),   Blue  Sky  Natural  Beverage  Co.,  a  New  Mexico  corporation
("Seller"), and Robert Black, a shareholder of Seller ("Black").

                              W I T N E S S E T H :

     WHEREAS,  Seller is in the business of marketing,  selling and distributing
natural soda products (the "Business");

     WHEREAS,  Seller desires to sell to Purchaser substantially all the assets,
properties and Business of Seller;

         WHEREAS,  Purchaser  desires to  purchase  the assets,  properties  and
Business of Seller on the terms and conditions set forth herein;

         NOW, THEREFORE,  in consideration of the premises and the covenants and
agreements herein contained and other good and valuable  consideration,  receipt
of which is hereby acknowledged, it is hereby agreed as follows:

1.       SALE AND PURCHASE OF ASSETS.

1.1 Assets  Transferred.  Subject to the terms and conditions of this Agreement,
and to the continued accuracy of the  representations  and warranties  contained
herein on the Closing Date (as hereinafter defined),  Seller shall sell, convey,
assign, transfer and deliver to Purchaser and Purchaser shall purchase,  receive
and accept  delivery  from  Seller,  at the Closing  provided  for in Article 5,
except for the Excluded  Assets (as defined in paragraph  1.2),  all of Seller's
then existing  properties,  assets and business as a going concern of every kind
and nature, real, personal or mixed,  tangible or intangible,  wherever located,
and  whether on or off the books of Seller  relating  to the  Business,  whether
arising  by  contract,  law or  otherwise,  all as the same  shall  exist on the
Closing  Date  (collectively,   the  "Purchased  Assets"),   including,  without
limitation, the following:

(a) All prepaid  items and deposits  arising out of or relating to the Business,
if any, identified on Schedule 1.1(a);

(b) All right,  title and interest of Seller  throughout  the  universe,  now or
hereafter  known or existing and of every kind and nature,  whether  tangible or
intangible  and  whether  arising by  statute,  common  law,  operation  of law,
ownership,  assignment,  agreement, contract, lease, license, consent, permit or
otherwise, and however designated, in and to:

(i) any and all of the  trademarks,  service marks,  trade names and copyrighted
and copyrightable works listed on Schedule 1.1(b), together with the goodwill of
the business associated therewith and/or symbolized thereby; and

(ii)  any and all of the  following  used  by  Seller  in  connection  with  the
Business, whether or not listed on Schedule 1.1(b):

(A)                            works of  authorship  and  expression,  and other
                               literary property,  whether or not copyrightable,
                               including  copyrights,  author  rights  and moral
                               rights (such as, without limitation, any right to
                               identification  of  authorship  or  limitation on
                               subsequent modification);

(B)                            trademarks,  service marks,  trade names,  logos,
                               trade  dress  (including,   without   limitation,
                               configuration,  design and packaging),  goodwill,
                               rights  of  publicity  and  privacy   (including,
                               without   limitation,   photographic   and  other
                               releases,   whether  published  or  unpublished),
                               marketing rights,  membership  rights,  franchise
                               rights,  rights against unfair  competition,  and
                               any similar rights, together with the goodwill of
                               the   business   associated    therewith   and/or
                               symbolized thereby;

(C)                            inventions,   discoveries,  industrial  property,
                               industrial   designs,   and   patents  and  other
                               government-issued indicia of invention ownership;

(D)                            semiconductor chips and mask works;

(E)                            trade    secrets,    know-how,    research    and
                               development,    work   products,    technologies,
                               confidential   information  and  technical  data,
                               whether or not  protectable by patent,  copyright
                               or trade secret laws;

(F)                            Web addresses, sites and domain names;

(G)                            other intellectual property, industrial property 
                               and proprietary rights, titles, interests and 
                               privileges, however designated, that are similar 
                               or analogous to any of the foregoing, including 
                               without limitation any and all rights in and to 
                               product configurations and designs, label 
                               designs, graphic and artistic designs; artwork; 
                               product formulas and formulations; records, 
                               inventory, general intangibles and rights to 
                               remuneration; character rights; rental rights; 
                               software, programs, object codes, source codes, 
                               algorithms, patches, fixes and work-arounds; 
                               manufacturing, product, software and system
                               documentation, requirements and specifications; 
                               products, products-by-process, apparatuses, 
                               technology and devices; methods, techniques, 
                               processes and procedures; ideas, concepts,
                               information, data and studies; tests, plans and
                               reports; and other tangible and intangible matter
                               of any nature, in and form, format, platform or 
                               medium whatsoever;

(H)                            registrations,       applications,      renewals,
                               extensions,  continuations,  divisions,  reissues
                               and  restorations  with  respect  to  each of the
                               foregoing  now or  hereafter  in force,  in whole
                               and/or in part;

(I)                            associated      documentation,       corrections,
                               enhancements,   modifications,  improvements  and
                               derivative  works  with  respect  to  each of the
                               foregoing;

(J)                            rights   of   possession,   ownership,   use  and
                               enjoyment  with respect to each of the foregoing,
                               including,   without  limitation,  the  right  to
                               license,  sublicense,  franchise, assign, pledge,
                               mortgage,  sell,  transfer,  convey,  grant, gift
                               over,  divide,  partition  or use (or not use) in
                               any way  any of the  foregoing  now or  hereafter
                               (including without limitation any claims, demands
                               or causes  of  action  of any kind  with  respect
                               thereto); and

(K)                            claims,  demands and causes of action of any kind
                               with  respect  to,  and any and all other  rights
                               relating  to  the  enforcement  of,  any  of  the
                               foregoing,  including,  without  limitation,  any
                               claims,  demands  or  causes  of  action  for any
                               infringement,    conversion,    misappropriation,
                               dilution or other  violation  of or injury to any
                               of them;

each and all of the foregoing being hereinafter  referred to collectively as the
"Proprietary  Rights". To the extent, if any, that any moral rights of Seller or
of the  author  of any work  encompassed  by the  Proprietary  Rights  cannot be
legally  transferred  by  Seller,  they  shall be  waived  in a  signed  writing
providing for same;

(c) All of Seller's right,  title and interest in all raw materials which are to
be incorporated into products of the Business,  work in progress,  and packaging
and labeling,  wherever  located,  whether or not owned by Seller,  in each case
which are used or held by Seller,  suppliers or third  parties for use by Seller
in the  conduct of the  Business,  together  with all  rights of Seller  against
suppliers of such inventories ("Closing Date Raw Materials");

(d) All of Seller's right,  title and interest in all finished products relating
to the  Business,  whether or not owned by Seller,  wherever  such  products are
located ("Closing Date Finished Inventory");

(e) All of Seller's furniture,  fixtures,  equipment,  improvements,  machinery,
furnishings,  office equipment,  tools and other articles of personal  property,
whether on or off the books of Seller, used in connection with the Business, the
material items of which are identified on Schedule 1.1(e);

(f) All supplies and sundry items, including all past and current mailing lists,
promotional materials, media kits, materials and records, manuscripts, marketing
studies and reports, price lists, stationery,  forms, labels, telephone numbers,
key and lock  combinations,  computer  software  programs and systems,  existing
files, correspondence,  internal records and reports, discs and tapes, and books
and records of, or relating to and material to the  operation  of, the Business,
the Purchased  Assets and the  obligations  and liabilities of Seller assumed by
Purchaser  hereunder  (including  all customer files and supplier  records,  but
excluding records relating to accounts payable and accounts receivable,  the tax
and accounting  books and returns of Seller,  the corporate  records,  including
minute books and stock ledgers of Seller,  and records to the extent relating to
obligations or liabilities not assumed by Purchaser;

(g) Copies of all personnel records and payroll records for the then current and
three  preceding  calendar years for any employees of Seller who, on the Closing
Date, have been offered and have accepted employment with Purchaser;

(h) All right,  title and interest of Seller in all  agreements,  contracts  and
licenses  related to the Business listed on Schedule 1.1(h)  (collectively,  the
"Contracts");

(i) All right,  title and interest of Seller in all computer  related  processes
and software,  software systems,  databases and database systems, whether owned,
leased or licensed by Seller, including those identified on Schedule 1.1(i); and

(j) All  other  assets  of Seller of  whatever  nature or  description,  whether
tangible  or  intangible,  not  otherwise  detailed  above,  including,  without
limitation,  all of the  goodwill  and  going  concern  value,  relating  to the
Business,  all claims and causes of action against third parties, and, if and to
the extent they may be sold, conveyed,  assigned,  and transferred,  all Permits
(as defined below) affecting or relating to the Business,  so that Purchaser may
carry on the Business as currently conducted by Seller after the Closing Date.

1.2 Excluded Assets.  Seller will retain and not transfer the following  assets,
which shall not  constitute  Purchased  Assets  pursuant to paragraph  1.1 above
(collectively, the "Excluded Assets"):

(a) all bank accounts and cash of Seller;

(b) All  accounts  receivable  arising  out of or  relating  to the  Business in
existence on the Closing Date;

(c) All notes receivable arising out of or relating to the Business,  if any, in
existence on the Closing Date;

(d) the motor vehicle, the Edmund Curtis photographs and prints, and all office,
computer  and  communications  furniture  and  equipment  and  personal  effects
(including  without  limitation  artwork) used by or situated  within the office
spaces (office or home) of Black;

(e)  any  claim  of  Seller  arising  under  any  contract  or  agreement  whose
obligations and liabilities are not assumed by Purchaser;

(f) all rights  under the lease for  premises at 510 Don  Gaspar,  Santa Fe, New
Mexico (the "Leased Premises");


(g) the equipment  lease for the postage meter and telephone  system serving the
Leased Premises;

(h) all  rights,  claims,  prepayments  and  deposits  arising or made under the
policy of  liability  insurance  covering the Leased  Premises,  the keyman life
insurance policy covering Robert Black, and the health insurance policy covering
Sellers employees;

(i) all rights which accrue or will accrue to Seller under this Agreement or any
agreement,  instrument  or  document  executed  or  delivered  pursuant to or in
connection with this Agreement;

(j) the assets of any Seller Benefit Plan;

(k) any right or claim of Seller for any  federal,  state,  local or foreign tax
refund relating to any period before the Closing Date; and

(l) that  Promissory  Note dated  September 14, 1995 given by Bruno  Investments
LLC, a New Mexico limited liability company, to Seller.

2.       CONSIDERATION.

2.1 Purchase  Price.  The total purchase  price (the  "Purchase  Price") for the
Purchased  Assets shall be  $6,500,000.  The  Purchase  Price shall be allocated
among the Purchased Assets in accordance with Schedule 2.1.

2.2 Payment of Purchase Price. At the Closing  Purchaser shall effect payment of
the Purchase Price as follows:

(a) Purchaser shall deposit with Wells Fargo Bank, N.A., 150 Washington  Avenue,
Santa Fe, New  Mexico,  as escrow  agent (the  "Escrow  Agent"),  in an interest
bearing  account,  the amount of $200,000  (together  with any accrued  interest
thereon from time to time,  the "Escrow  Deposit").  The Escrow Deposit shall be
disbursed  in  accordance  with the terms of the Escrow  Agreement  (the "Escrow
Agreement"), substantially in the form of Exhibit A; and

(b)  Purchaser  shall pay to Seller  the  Purchase  Price less the amount of the
Escrow Deposit, by wire transfer of immediately available funds.

2.3  Assumption of Certain  Liabilities  and  Obligations.  On the Closing Date,
Purchaser shall assume and comply with all obligations and liabilities of Seller
whose performance or satisfaction first becomes due on or after the Closing Date
under each Contract  listed on Schedule  1.1(h) (Seller has furnished  Purchaser
with true copies of all such written Contracts). The foregoing liabilities being
assumed by Purchaser are referred to  hereinafter  collectively  as the "Assumed
Liabilities".  Purchaser's  assumption  of  the  Assumed  Liabilities  shall  be
pursuant to an assumption  agreement to be executed and delivered at the Closing
in the form of Exhibit B (the "Assumption Agreement").

2.4  Nonassumption  of Other  Liabilities.  Other than the Assumed  Liabilities,
Purchaser  does not assume and shall in no event be liable for any  liabilities,
debts or obligations of Seller, whether accrued, absolute,  matured,  contingent
or otherwise,  including, without limitation, trade accounts payable and accrued
expenses,  taxes of any kind (except as otherwise provided in paragraph 16), any
liabilities  for fees or expenses  incident to the preparation of this Agreement
or the consummation of the transactions contemplated hereby, including,  without
limitation,  counsel, accountant's or finder's fees of Seller, liabilities under
the Seller Benefit Plans (as defined in paragraph  6.21(a) below),  or any other
expenses, debt, contracts, agreements, leases or other obligations which are not
specifically assumed hereunder.

3.       NON-ASSIGNABLE PURCHASED ASSETS.

     Notwithstanding  anything  to the  contrary  contained  in this  Agreement,
Seller  shall hold in trust for the  benefit of and  account of  Purchaser,  any
non-assignable  Purchased  Assets and all Purchased Assets with respect to which
consents to assignments shall not have been obtained or any attempted assignment
of which  would be  ineffective  or could  reasonably  be expected to impair the
rights of Seller  thereunder,  if any, or could increase or adversely affect its
obligations,  all as listed on Schedule 3 hereto (the "Non-Assignable  Assets"),
and, insofar as permissible,  assign to the Purchaser, from time to time, all of
such  Non-Assignable  Assets,  and remit to the  Purchaser  all amounts  paid to
Seller with respect thereto after the Closing  promptly upon the receipt thereof
less all charges properly  allocable  thereto other than charges  resulting from
new  agreements  entered  into in  connection  with or in  contemplation  of the
consummation of the transactions  contemplated hereby. Except for Non-Assignable
Assets,  nothing  contained  herein  shall  relieve  Seller  of its  obligations
hereunder  either  (i) to  obtain  at its  expense  all  necessary  consents  to
assignment  of the Purchased  Assets or (ii) to indemnify  Purchaser for any and
all Losses (as defined in paragraph 13.1 below) suffered by Purchaser  resulting
from any failure to assign or to obtain necessary  consents to assignment of any
of the Purchased  Assets;  provided,  however,  that, except with respect to the
Non-Assignable  Assets,  nothing in this subsection (ii) shall relieve Seller of
its  obligation  hereunder  to use its best  efforts  to  obtain  all  necessary
consents.

4.       TRANSFER OF EMPLOYEES AND EMPLOYEE BENEFITS.

4.1  Transfer of  Employees.  Purchaser  shall be under no  obligation  to offer
employment on the Closing Date to the present employees of Seller.  Seller shall
exert its  commercially  reasonable  efforts to assist  Purchaser  to retain the
services of the employees  designated by Purchaser for  employment by Purchaser.
Seller shall be  responsible  for all benefits and other  payments to all of its
employees  accrued  through  the  Closing  Date and for all  severance  or other
payments due to its employees who are not employed by Purchaser.

4.2 Seller Benefit Plans. The parties hereto agree that Purchaser shall not have
any liability or obligation to continue or to make any  contribution  or payment
after the Closing  Date with  respect to any Seller  Benefit Plan (as defined in
paragraph  6.21(a) below)  maintained by Seller for  employees.  If Purchaser is
compelled  to make any  contribution  or payment or pay any claim by a competent
authority  in respect  of any  Employee  Benefit  Plan,  Seller and Black  shall
indemnify  and  hold  Purchaser  harmless  against  any and all  Losses  arising
therefrom  or relating  thereto as provided in  paragraph  13.1  hereof.  To the
extent that Seller shall incur liability for withdrawal under any Multi-Employer
Plan (as defined in paragraph  6.21(a) below) to which it may be a party, or for
any other  unfunded  benefit  liabilities,  Seller and Black shall bear all such
liability  and  shall  indemnify  and  hold  Purchaser   harmless  against  such
liability.

5.       THE CLOSING.

5.1 The Closing.  The "Closing" or "Closing Date" means the time at which Seller
effects the transfer of the Purchased  Assets in exchange for the  consideration
to be  delivered by Purchaser  pursuant to Article 2 hereof.  The Closing  shall
take place at the offices of Hansen  Beverage  Company,  2380  Railroad  Street,
Suite 101, Corona,  California 91720, at such time as the parties shall agree in
writing, subject to paragraph 11.1(b).

5.2  Certain  Events at Closing.  In  addition  to such other  actions as may be
provided for herein, the following actions shall be taken at the Closing:

(a) Seller shall deliver to Purchaser a duly executed and  acknowledged  bill of
sale in the form of Exhibit C hereto, duly executed and acknowledged assignments
in the forms of  Exhibit D hereto,  and all such  other  executed  endorsements,
assignments,  vehicle  registrations  and  other  instruments  of  transfer  and
conveyance,  in form and substance  satisfactory  to counsel for  Purchaser,  as
Purchaser  shall request to effectively  vest in Purchaser all right,  title and
interest  in the  Purchased  Assets,  free and clear of all Liens (as defined in
paragraph 6.10(b) below) of any kind whatsoever except as otherwise specifically
contemplated pursuant to the terms of this Agreement.

(b) Purchaser shall deliver to Seller an Assumption Agreement as provided for in
paragraph 2.3.

(c) Purchaser  shall deliver to the Escrow Agent the Escrow  Deposit as provided
for in paragraph 2.2(a).

(d) Purchaser  shall deliver to Seller the cash payment as provided in paragraph
2.2(b).

(e) Seller  shall  deliver to  Purchaser  the opinion  dated the Closing Date of
Schuler, Messersmith, Daly & Lansdowne, counsel for Seller, substantially in the
form  of  Exhibit  E  attached  hereto  and  otherwise  in  form  and  substance
satisfactory to Purchaser.

(f)  Purchaser  shall  deliver to Seller and Black the opinion dated the Closing
Date of  Winston & Strawn,  counsel  for  Purchaser,  substantially  in the form
attached hereto as Exhibit F and otherwise in form and substance satisfactory to
Seller.

(g) Seller and Black shall have  delivered to Purchaser a certificate  addressed
to Purchaser and executed by an authorized officer of Seller and Black dated the
Closing Date in the form attached hereto as Exhibit G.

(h) Purchaser  shall have delivered to Seller and Black a certificate  addressed
to Seller and Black and executed by an authorized officer of Purchaser dated the
Closing Date to the effect set forth in Exhibit H.

(i) Seller shall  deliver to Purchaser  (x) evidence  reasonably  acceptable  to
Purchaser that Seller's  indebtedness  to Los Alamos National Bank has been paid
in  full  (which  indebtedness  is to be paid by  wire  transfer  to Los  Alamos
National  Bank of a portion of the Purchase  Price  otherwise  payable to Seller
pursuant to  paragraph  2.2(a) and which  evidence  may be written  confirmation
faxed by Los Alamos  National  Bank that it has received  such wire transfer and
such payment  constitutes the payment in full of Seller's  indebtedness  and (y)
UCC-3 termination statements and any other documentation required to release and
terminate all Liens (as defined in paragraph  6.10(b)) on the  Purchased  Assets
(which  termination  statements will be delivered by Los Alamos National Bank at
its  principal  office  in  Los  Alamos,  New  Mexico  to  a  representative  of
Purchaser).

(j) Seller  shall  deliver to Purchaser  the  Trademark  Assignment  in the form
attached  hereto as Exhibit J and all such  other  documents,  certificates  and
agreements  necessary  or useful to transfer  and assign to  Purchaser,  and for
Purchaser to record, register and file with the U.S. Patent and Trademark Office
and all other applicable registration authorities,  all of Seller's right, title
and interest in and to, the Proprietary  Rights, free and clear of all Liens, in
form and substance satisfactory to Purchaser and Seller.

(k) Black and his wife shall execute and deliver to Purchaser a general  release
with  respect to all  claims  they have or may have  against  Seller in the form
attached hereto as Exhibit I.

6.       REPRESENTATIONS OF SELLER.

The following  representations  and warranties are made jointly and severally by
Seller and Black to Purchaser as of the date of this  Agreement,  unless another
effective date is specified.  Each representation and warranty is subject to and
modified by any  exceptions or  information  noted in the Schedules  attached to
this Agreement. For purposes of this Article 6, "material" (including,  with its
correlative  meaning,  "materially")  means an effect  which has  resulted or is
reasonably  likely to result in a Loss or Losses (as such  terms are  defined in
paragraph 13.1 below) exceeding $10,000 and "Knowledge" means as to Seller,  any
fact  actually  known by Black or Michael E. Rising  and, as to Black,  any fact
actually known by Black.

6.1 Organization.  Seller is a corporation validly existing and in good standing
under the laws of the State of New Mexico and has the requisite  corporate power
and authority to carry on its business as it is now being  conducted.  Seller is
duly qualified and licensed as a foreign  corporation to do business,  and is in
good standing (and has paid all relevant  franchise or analogous taxes), in each
jurisdiction  where the character of its properties owned or held under lease or
the nature of its activities makes such  qualification  necessary,  except where
the failure to be so qualified and in good standing would not,  individually  or
in the  aggregate,  have a  material  adverse  effect on the  business,  assets,
properties,  prospects,  results of operations or financial  condition of Seller
taken as a whole (a "Material Adverse  Effect").  Set forth on Schedule 6.1 is a
true and complete list of all the jurisdictions in which Seller is registered or
qualified to do business, sells to distributors,  has offices, maintains a stock
of  goods  or  other  property,  or  has  an  agent  who  is a  resident  in the
jurisdiction in which he or she solicits  orders or has registered  trade names.
Seller possesses all governmental franchises,  licenses, permits, authorizations
and approvals necessary to enable it to use its corporate name, to own, lease or
otherwise  hold its  properties  and  assets  and to carry  on its  business  as
presently conducted ("Licenses"),  except where the failure to possess a License
would not, individually or in the aggregate, have a Material Adverse Effect.

6.2 Authority Relative to This Agreement.  Black is an adult and is competent to
execute,  deliver and perform this  Agreement  and to carry out his  obligations
hereunder.  Seller has the requisite corporate power and authority to enter into
this  Agreement  and to carry  out its  obligations  hereunder.  The  execution,
delivery  and  performance  of  this  Agreement  and  the  consummation  of  the
transactions  contemplated  hereby  have  been duly  authorized  by the Board of
Directors and the stockholders of Seller. No other corporate  proceedings on the
part of Seller or its stockholders are necessary to authorize this Agreement and
the transactions  contemplated  hereby. This Agreement has been duly and validly
executed and  delivered by Seller and Black and  constitutes a valid and binding
obligation  of  Seller  and  Black,  enforceable  against  Seller  and  Black in
accordance with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy,  insolvency,  moratorium,  reorganization  and similar statutory and
decisional law affecting creditors' rights and debtors'  obligations  generally,
and to equitable  principles,  the  discretion  of courts in awarding  equitable
relief, and applicable law that may limit or otherwise affect the enforceability
of the provisions of Article 3 and 13 hereof.

6.3 Consents and Approvals;  No Violations.  No filing or registration with, and
no permit,  authorization,  consent or  approval  of,  any  domestic  or foreign
government  or public  body,  agency or  authority  ("Governmental  Entity")  is
necessary for the  consummation  by Seller of the  transactions  contemplated by
this  Agreement.  Neither the execution and delivery of this Agreement by Seller
and  Black  nor  the  consummation  by  Seller  and  Black  of the  transactions
contemplated  hereby  nor  compliance  by  Seller  and  Black  with  any  of the
provisions hereof will (a) conflict with or violate any provision of the charter
or by-laws or similar  organizational  documents of Seller, (b) conflict with or
result in violation or breach of, or  constitute  (with or without due notice or
lapse of time or both) a  default  (or give  rise to any  right of  termination,
cancellation or acceleration) under, any of the terms,  conditions or provisions
of any note, bond, mortgage,  indenture,  license, contract,  agreement or other
instrument  or obligation to which Seller or Black is a party or by which either
of them or any of their  properties  or assets  may be bound,  (c)  violate  any
order, writ, injunction,  decree, statute, treaty, rule or regulation applicable
to Seller or Black or any of their properties or assets, or (d) conflict with or
constitute  or result in a  violation  or breach  (with or without due notice or
lapse of time or both) of any legal or  enforceable  duty or obligation  between
Seller and Black, or between either or both of them and any third party.

6.4 Charter Documents and Corporate  Records.  Attached as Schedule 6.4 are true
and complete  copies of a  Certificate  of Good Standing of Seller issued by the
Public  Regulation  Commission  of the State of New Mexico and the  articles  of
incorporation  and  by-laws   (certified  by  Seller's  secretary  or  assistant
secretary)  of Seller,  each as amended  and in effect on the date  hereof.  The
stock  books of Seller  which  have been made  available  to  Purchaser  for its
inspection are true and complete. The minute books of Seller, as previously made
available to Purchaser, contain records accurate in all material respects of all
meetings of and  resolutions  of, or written  consents by, the  stockholders  or
Board of Directors of Seller since 1987.

6.5  Subsidiaries.  Seller does not own  directly or  indirectly,  any shares of
capital stock of any  corporation or any equity  investment in any  partnership,
association or other business organization.

6.6 Financial  Statements.  Schedule 6.6 sets forth the balance sheets of Seller
at  December  31,  1999,  1998 and 1997  (collectively,  the  "Year-End  Balance
Sheets"),  and the related  statements of income and retained  earnings and cash
flows for the years then  ended,  audited by Arthur  Andersen  LLP,  independent
certified   public   accountants   (collectively,    the   "Year-End   Financial
Statements").  Also set forth on Schedule 6.6 is the interim  unaudited  balance
sheet of Seller for the six months  ended June 30,  2000 (the  "Interim  Balance
Sheet"),  and the related  unaudited  statements of income and retained earnings
for  the  six  months  then  ended   (collectively,   the   "Interim   Financial
Statements").  The  Year-End  Financial  Statements  and the  Interim  Financial
Statements  (a) are in  accordance  with books and  records of Seller  and,  (b)
fairly present the assets and liabilities and results of operations of Seller as
at the respective dates and for the respective periods referred to therein,  and
(c) were prepared in accordance with generally  accepted  accounting  principles
(in the case of the Interim  Financial  Statements,  subject to normal recurring
year-end  adjustments),  uniformly  applied on a basis  consistent  with that of
prior  years.  The Year-End  Balance  Sheets and the Interim  Balance  Sheet are
sometimes referred to herein collectively as the "Balance Sheets".  The books of
account and other  financial  and  corporate  records of Seller are complete and
correct in all material respects.

6.7  Compliance  with Laws;  Permits.  Seller is in compliance  with all orders,
judgments,   decrees,   laws,  statutes,   ordinances,   rules  and  regulations
(collectively,  "Laws")  applicable to it or its business or properties,  except
where any  noncompliance,  individually  or in the  aggregate,  would not have a
Material  Adverse  Effect.  Seller has not  received  any notice of any  alleged
violation of Law applicable to Seller or to its business or  properties,  except
where  such  violation,  individually  or in the  aggregate,  would  not  have a
Material Adverse Effect. Seller has all governmental permits,  licenses,  orders
and  authorizations,  and has made all required filings and registrations  with,
Governmental  Entities,  required  for the conduct of its  business as presently
conducted and the ownership, lease or operation of its properties,  except where
the failure to have obtained any such permit would not,  individually  or in the
aggregate,  have a Material  Adverse  Effect  (the  "Permits").  A complete  and
correct list of the Permits  held by Seller is set forth on Schedule  6.7, and a
true and  complete  copy of each such Permit has been  previously  delivered  to
Purchaser.  All the Permits  are valid and in full force and effect,  and Seller
has duly  performed  and is in  compliance  with all its  obligations  under the
Permits, except where any noncompliance, individually or in the aggregate, would
not have a Material  Adverse  Effect.  No event has occurred with respect to the
Permits which allows,  or after notice or lapse of time or both would allow, the
suspension, limitation, revocation or termination thereof or would result in any
other  material  impairment  of the  rights  of  Seller  in and under any of the
Permits,  except where the  suspension,  limitation,  revocation or termination,
individually or in the aggregate, would not have a Material Adverse Effect, and,
to the Knowledge of Seller and Black, no terminations  thereof or proceedings to
suspend, limit, revoke or terminate any Permit have been threatened.

6.8  Contracts.  (a)  Except as set  forth on  Schedule  1.1(h) or as  otherwise
disclosed on Schedule 6.8, Seller is not a party to any written or oral contract
or agreement in effect on the date of this Agreement  related to the Business or
the Purchased Assets (i) which  constitutes a lease of property from or to third
parties;  (ii) which  involves  more than $10,000 for the purchase of materials,
commodities,  supplies  or other  property or for the receipt of services or for
the sale of property in the ordinary course of business; (iii) which constitutes
a partnership,  joint  venture,  shareholder  or similar  agreement;  (iv) which
constitutes  a  mortgage,  pledge,  deed of  trust,  loan or  credit  agreement,
contract for borrowed money,  guaranty,  letter of credit,  currency or interest
rate exchange  agreement,  keep-well or similar  instrument  or  agreement;  (v)
containing  non-competition or other limitations  restricting the conduct of the
business  of Seller;  (vi) which  constitutes  a  manufacturer's  representative
agreement,  brokers  agreement,  distributorship  or dealer  agreement  or other
agreement  relating to the sale or  distribution of products to or by persons or
other  retailers;  (vii) involving in excess of $10,000 in any year and not made
in the ordinary course of business;  (viii) with any  manufacturer,  supplier or
customer  with  respect  to  discounts  or  allowances;  (ix)  relating  to  the
acquisition or disposition of businesses,  product lines or a material amount of
assets; (x) for the indemnification of an Employee (as defined below) of Seller;
(xi) which is not of the type  referred  to in clauses  (i) through (x) to which
Seller is a party or by which Seller or any of its  properties and assets may be
bound or affected and (A) which involves more than $10,000,  (B) which cannot be
canceled  within 30 days without  penalty,  or (C) is otherwise  material to the
Business;  or (xii) to which any affiliate of Seller is a party. Seller has made
available  to  Purchaser  true and complete  copies of all  Contracts  which are
required to be disclosed pursuant to this Agreement.

(b) All purchase  orders and commitments and all sales orders and commitments of
Seller related to the Business have been entered into in the ordinary  course of
business.

(c) No default or alleged default or any event which,  with the lapse of time or
the election of any person other than Seller, will become a default exists under
any of the  Contracts  listed in Schedule  1.1(h).  Each of the Contracts is now
valid,  in full force and effect and  enforceable  in accordance  with its terms
(subject, as to enforcement of remedies, to applicable  bankruptcy,  insolvency,
moratorium,  reorganization  and similar  statutory and decisional law affecting
creditors' rights and debtors' obligations  generally,  and to general equitable
principles,  and the  discretion  of courts in  awarding  equitable  relief) and
Seller has fulfilled in all material  respects,  all its  obligations  under the
Contracts  whose  performance  or  satisfaction  are due as of the  date of this
Agreement.

6.9  Absence of  Undisclosed  Liabilities.  Seller is not  subject to any debts,
claims,  liabilities  or  obligations,  whether  known or  unknown,  asserted or
unasserted,  accrued,  absolute,  contingent  or otherwise and whether due or to
become due  ("Liabilities")  other than (a) to the  extent  reflected,  reserved
against or otherwise disclosed in the Interim Balance Sheet, and (b) Liabilities
arising since June 30, 2000 in the ordinary  course of business  consistent  (in
amount  and  kind)  with  past  practice  and  which  do not,  singly  or in the
aggregate,  have a Material  Adverse  Effect.  Neither  Seller nor Black has any
knowledge  of any  circumstance,  condition,  event or  arrangement  that  would
hereafter  give  rise to any  Liabilities  of  Seller  or any  successor  to its
business except in the ordinary course of business consistent with past practice
or as otherwise set forth on Schedule 6.9.

6.10 Operations of Seller;  Absence of Certain  Changes.  Except as set forth on
Schedule  6.10,  or  pursuant to or as  contemplated  by this  Agreement,  since
January 1, 2000, Seller has not:

(a) suffered any change, event or series of changes or events which has or could
reasonably be expected to have a Material Adverse Effect, whether or not covered
by insurance;

(b) incurred any indebtedness or assumed,  guaranteed or otherwise become liable
or  responsible  for the  obligations  of any other  person  or made any  loans,
advances or capital  contributions  to, or  investments  in, any other person or
granted  any  security  interest  or created  or  modified  any  liens,  claims,
mortgages,   security  interests,   options,  charges,  restrictions  and  other
encumbrances  of any kind  ("Liens") on any of its  properties or assets,  other
than in the  ordinary  course of business  consistent  with past  practice  with
persons that are not affiliates of Seller or any stockholder of Seller;

(c) modified,  amended,  terminated,  transferred  or waived any material  right
under,  any contract or other  agreement of the type required to be set forth on
any Schedule hereto,  except as disclosed on such Schedule,  or entered into any
agreement,  arrangement or other  understanding  to do any of the foregoing,  or
permitted to lapse any right,  title or interest in to any Proprietary Rights or
sold, assigned, licensed,  transferred or otherwise disposed of any right, title
or interest  therein,  other than in the ordinary course of business  consistent
with  past  practice  with  persons  that are not  affiliates  of  Seller or any
stockholder of Seller;

(d) made any changes in its accounting  methods or practices or made any changes
in depreciation or amortization policies or rates adopted by it;

(e)  materially  changed any of its business  operations  or business  policies,
including,  without limitation,  advertising,  investment,  marketing,  pricing,
purchasing,  production,  personnel,  sales,  returns,  budget or other  product
acquisition policies;

(f)  except  for sales of  inventory  or  equipment  in the  ordinary  course of
business,  sold,  abandoned,  transferred,  leased,  licensed  or made any other
disposition of any of its material  properties or assets or acquired any capital
stock or business of any other person (or reached an agreement,  arrangement  or
understanding to do the same);

(g) paid,  directly or indirectly,  any of its material  Liabilities  before the
same became due in accordance  with its terms or otherwise  than in the ordinary
course of business;

(h) entered into,  amended or terminated,  or made any commitment to enter into,
amend or terminate any Seller Benefit Plan,  Employee  Agreement or Welfare Plan
(each  as  defined  below),  employment,   consulting,  severance,  termination,
retirement or indemnification  agreement,  contract,  policy,  plan, practice or
arrangement  (other than the hiring or  dismissal  of at will  employees  in the
ordinary  course of  business  consistent  with past  practice),  or granted any
increase  in the  compensation  payable  or to become  payable  by Seller to any
employee,  or paid any bonus,  fee or other  compensation  to any such  employee
other than in the ordinary  course of business  consistent  (in amount and kind)
with past  practice,  or entered  into or  increased  the amounts  payable or to
become  payable by Seller with respect to any employee  pursuant to any Employee
Agreement or Seller Benefit Plan;

(i) terminated or failed to renew,  or received any written threat (that was not
subsequently  withdrawn) to terminate or fail to renew, any material Contract or
other  agreement to which it is or was a party except in the ordinary  course of
business;

(j) amended its charter or by-laws or merged with or into or  consolidated  with
any other person, subdivided,  combined or in any way reclassified any shares of
its capital stock or changed or agreed to change in any manner the rights of its
outstanding capital stock or the character of its business;

(k) engaged in any other transaction  involving the expenditure or incurrence of
a liability of more than $25,000  other than in the ordinary  course of business
consistent  (in amount and kind) with past  practice  or agreed to do any of the
foregoing;

(l) suffered any material  damage,  destruction or casualty loss to its physical
properties, whether or not covered by insurance;

(m) made any  declaration  of,  or set  aside or  paid,  any  dividend  or other
distribution  (whether in cash,  stock or property)  with respect to the capital
stock of  Seller,  or issued,  pledged  or sold any  shares of capital  stock of
Seller, or any other securities or rights,  convertible into or exchangeable for
or  conferring  the right to  purchase  shares of  capital  stock of Seller  (or
entered into any agreement,  arrangement or other  understanding to do the same)
or directly or indirectly purchased, redeemed, retired or otherwise acquired any
shares  of  capital  stock of  Seller  or  other  securities  convertible  into,
exchangeable  for or conferring the right to purchase shares of capital stock of
Seller (or entered into any agreement,  arrangement or other understanding to do
the same);

(n) to the Knowledge of Seller and Black,  been the subject of any investigation
by a Governmental Entity or litigation  commenced or threatened since January 1,
2000 which may have a Material Adverse Effect;

(o) offered any unusual or extraordinary promotions, discounts, price reductions
or other  inducements  to  purchase  its  products  to any of its  customers  or
prospective customers; or

(p) engaged in any transaction with an affiliate of Seller or any stockholder of
Seller other than the Contracts disclosed in Schedule 1.1(h).

6.11 Brokers and Finders. Except for Montery Bay Corporate Development,  neither
Seller nor any of its stockholders has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions  contemplated  hereby.  Seller shall be solely responsible
for the  payment  of all of the fees  and  expenses  of  Montery  Bay  Corporate
Development.

6.12     INTENTIONALLY LEFT BLANK.

6.13 Title to Properties. (a) Seller has good, valid and marketable title to, or
good,  valid leasehold and/or license rights and interests in, all the Purchased
Assets,  each  of  which  rights  and  titles  are  transferable  to  Purchaser,
including,  without limitation, (i) all of the Purchased Assets reflected on the
Balance Sheets,  (ii) those properties  described in paragraphs 6.14, 6.15, 6.16
and 6.18 which are Purchased  Assets,  and (iii) the Proprietary  Rights and all
other  Purchased  Assets of any kind  used or held for use by  Seller  which the
Seller purports to own, lease,  license or otherwise hold, in each case free and
clear of any Liens or exceptions to title,  except for: (A) properties  disposed
of, or subject to purchase or sales orders or conditional sale arrangements,  in
the  ordinary  course  of  business  consistent  with past  practice;  (B) Liens
securing  taxes,  all of which are due but not delinquent or are being contested
in good faith and are set forth on  Schedule  6.13;  and (C) Liens which do not,
individually  or in the  aggregate,  materially  detract  from the value of such
property,  interfere  with the use,  occupancy or operation of such  property as
currently used or otherwise have a Material Adverse Effect.

6.14 Tangible  Property.  Except as set forth on Schedule  6.14,  the machinery,
equipment,  furniture,  fixtures,  vehicles,  any related  capitalized items and
other  tangible  property  material to the Business or operations of Seller (the
"Tangible Property") are in good operating condition and repair (normal wear and
tear  excepted),  have  received  through the date hereof  continued  repair and
replacement in accordance with past practice, are suitable for their current use
and are  currently  in use by Seller in the  operation  of its  Business  in the
ordinary course.  To the knowledge of Seller and Black, the Tangible Property is
free of any material structural or engineering  defects.  Except as set forth on
Schedule  6.14,  during the past five years  there has not been any  significant
interruption  of the  operations  of Seller  due to  inadequate  maintenance  or
obsolescence of the Tangible Property.

6.15  Inventory.  All the inventory of Seller (the  "Inventory") in existence on
the Closing Date will be suitable,  usable or (in the case of finished goods and
products)  salable at market  prices in the ordinary  course of business for the
purpose  for  which  intended.  Seller  does not know of any  adverse  condition
affecting a material  source of materials  available to Seller.  The quantity of
the Inventory on hand at the Closing Date will be at levels customary for Seller
for  that  time  of  year  and  sufficient  to  meet  the  requirements  of then
outstanding  and  projected  sales  Contracts of Seller,  or, if at greater than
customary  levels,  then  consistent with the  requirements of then  outstanding
sales Contracts of Seller.

6.16     INTENTIONALLY LEFT BLANK.

6.17     Litigation and Orders.  Except as set forth on Schedule 6.17:

(a)  There  are  no  actions,   suits  or  legal,   administrative  or  arbitral
proceedings,  charges or investigations  (collectively "Litigation") pending or,
to the knowledge of Seller and Black, threatened against, affecting or involving
Seller or any of its  rights or  properties,  assets  or  operations,  including
without limitation the Proprietary Rights, or which seek to prevent or challenge
the transactions contemplated hereby;

(b)  There  are no  judgments,  decrees,  injunctions,  rules or  orders  of any
Governmental Entity (collectively, "Orders" and, Orders together with Litigation
being referred to herein as "Claims") outstanding against Seller;

(c) All notices  required to have been given by Seller to any insurance  company
have been  timely and duly  given,  and no  insurance  company  has  asserted in
writing that any Claim is not covered by the applicable  policy relating to such
Claim;

(d) There are no product liability  claims,  or claims of warranty  liability or
field failure involving  product recall,  pending or, to the Knowledge of Seller
and Black,  threatened against or involving Seller or any products manufactured,
sold or distributed by Seller;

(e) There are no Claims pending  against  Seller,  or to the Knowledge of Seller
and Black, threatened in respect of or for any deposits, containers,  redemption
or recycling of any products of Seller; and

(f) There are no  Claims  pending  or, to the  Knowledge  of Seller  and  Black,
threatened  (other than worker's  compensation  claims in the ordinary course of
business,  all of which are covered by insurance and set forth on Schedule 6.17)
that could  reasonably be expected to give rise to any right of  indemnification
on  the  part  of  any   employee  of  Seller,   or  his  heirs,   executors  or
administrators, against Seller, or any successor to the business of Seller.

6.18 Proprietary  Rights. (a) Upon Closing and thereafter,  Purchaser shall have
and receive,  by purchase and assignment  from Seller,  all  Proprietary  Rights
necessary  and  sufficient  to  authorize  and enable  Purchaser  to operate the
Business for the uses and purposes and in the manner  conducted by Seller on and
immediately  before the date of Seller's  execution of this Agreement.  Upon the
execution of this Agreement and thereafter  through and upon Closing,  no right,
title or  interest  of Seller in or to the  Proprietary  Rights will lapse or be
sold, assigned,  licensed,  transferred or otherwise disposed of, in whole or in
part,  except  pursuant to the  purchase  and sale,  assignment  and transfer to
Purchaser of the Proprietary Rights prescribed by this Agreement.  All rights to
works of authorship,  inventions and other intellectual properties (as comprised
of the categories and examples set forth in the  description of the  Proprietary
Rights), and all registrations and applications for registration  thereof,  that
have  heretofore  been owned or held at any time by any  employee  of Seller and
used in the  Business  of  Seller  in any  manner  have  been  duly,  fully  and
effectively   transferred  to  Seller.  The  consummation  of  the  transactions
contemplated  hereby will result in the valid transfer by Seller to Purchaser of
the  rights  and  interests  of Seller  in all  Proprietary  Rights  of  Seller,
including without limitation all of the items listed on Schedule 1.1(b).  Except
as is expressly disclosed on Schedule 1.1(b) or Schedule 6.18:


(i)  Seller  is,  as of the  date of its  execution  hereof,  and will as of the
Closing Date be, the sole and exclusive owner and possessor of all right,  title
and  interest  in and to the  Proprietary  Rights  listed  on  Schedule  1.1(b),
including without  limitation,  all registrations and registration  applications
listed on Schedule 1.1(b) in connection  with such  Proprietary  Rights,  in and
with respect to the countries and jurisdictions  set forth therein;  said right,
title and  interest  of  Seller in the  Proprietary  Rights  listed on  Schedule
1.1(b), as well as the registrations and registration  applications with respect
thereto,  are valid and subsisting as of the date of Seller's  execution hereof,
and will be valid and  subsisting as of the Closing Date and the  assignment and
transfer to Purchaser of the Proprietary Rights thereupon;


(ii) Seller owns,  or possesses  adequate  licenses or other valid rights to use
and to transfer to Purchaser the right to use (without  Seller's or  Purchaser's
incurring any  obligation  to make any payment,  or to grant any rights or other
consideration,  to any third party in exchange therefor), all Proprietary Rights
necessary to the conduct of the Business as presently  being  conducted,  except
when the  failure  to have such  licenses  or rights  would not singly or in the
aggregate have a Material Adverse Effect;

(iii)  neither  Seller  nor Black has any  Knowledge  of any  limitation  on the
ability of Seller to extend the use of the Proprietary Rights outside the United
States;

(iv) none of the validity,  ownership,  enforceability or use of the Proprietary
Rights, or any right,  title or interest of Seller therein,  is being questioned
in any Claim to which  Seller  is a party or  subject,  nor,  do Seller or Black
know,  or have reason to know,  that any such Claim is  threatened or would have
any merit if asserted,  irrespective of whether Seller is or is not made a party
or subject thereto;

(v) to the Knowledge of Seller and Black, neither the conduct of the Business as
now conducted,  nor the use of the Proprietary  Rights in connection  therewith,
does or will  infringe,  convert,  misappropriate,  dilute,  violate,  injure or
conflict  with  any  rights  of  others,   including   without   limitation  any
intellectual property rights of others (as comprised by the categories of rights
included among the Proprietary Rights);

(vi) none of the Proprietary  Rights is as of the date of execution  hereof,  or
will upon Closing be, subject to any license, sublicense,  transfer, conveyance,
assignment,  agreement,  commitment,  instrument,  arrangement,   understanding,
undertaking,    indenture,    duty,   obligation,    indemnification,    pledge,
hypothecation,  security  interest,  Liens, or any other encumbrance of any kind
(collectively, "Impairments"), except such licenses as have been duly granted by
Seller in the Proprietary  Rights under a Contract disclosed on Schedule 1.1(h);
neither  Seller nor Black is aware of any use of any of the  Proprietary  Rights
that is now being made,  except by Seller or by the  person(s)  duly licensed by
Seller to use the same under a Contract  disclosed  on  Schedule  1.1(h),  which
license(s) neither Seller nor Black knows or believes,  or has reason to know or
believe, will singly or in aggregate have a Material Adverse Effect; and none of
the  Proprietary  Rights  is as of the date of  execution  hereof,  or will upon
Closing be, subject to any other Impairments,  or any requirements,  limitations
or  restrictions,  that would  singly or in  aggregate  have a Material  Adverse
Effect;

(vii) neither  Seller nor Black has Knowledge of any  infringement  by others of
any of the Proprietary Rights;

(viii) neither Seller nor Black,  nor any of Seller's  parents,  subsidiaries or
affiliates, nor any person or entity controlled by any of them, (i) is as of the
date of execution  hereof,  or will upon Closing be, in breach of any agreement,
commitment,  instrument,  arrangement,  contractual understanding,  undertaking,
indenture,  license,  sublicense,  assignment,  indemnification  or  any  legal,
equitable or other  enforceable  duty or obligation  which relates to any of the
Proprietary  Rights,  or (ii)  has  taken,  or will  take,  any  action,  or has
permitted,  or will permit, any omission, that would adversely effect any right,
title or interest of the Purchaser in or to any of the Proprietary Rights;

(ix) the  transactions  contemplated  by this Agreement will not have an adverse
effect on the ownership, use, validity, transferability or enforceability of any
of the Proprietary  Rights, and Purchaser will, upon Closing,  receive,  possess
and  enjoy  the  entire  right,  title  and  interest  of  Seller  in and to the
Proprietary  Rights  without   Purchaser's   sufferance  of  any  diminution  or
limitation of any such right,  title or interest  existing  immediately prior to
the Closing,  including  but not limited to any  diminution or limitation of any
right to  assert  any  claim,  cause of  action  or  right to  petition,  sue or
otherwise  seek  monetary,  injunctive,  declaratory  or any other  recovery  or
relief,   for  any   past,   present   or   future   infringement,   conversion,
misappropriation or dilution of, or other injury, offense,  violation, breach of
duty or wrong relating to, the Proprietary Rights;

(x) all  necessary  steps have been,  or promptly  can be and will be,  taken by
Seller  and  Black  to  obtain,  protect,  maintain,  enforce  and  perfect  the
Proprietary Rights to be received by Purchaser from Seller;

(xi) upon the execution  hereof,  and  thereafter  through and upon Closing,  no
right, title or interest in or to any of the Proprietary Rights will lapse or be
sold, assigned, licensed,  transferred or otherwise disposed of, except pursuant
to  the  purchase  and  sale,  assignment  and  transfer  to  Purchaser  of  the
Proprietary Rights prescribed by this Agreement.

(b) Seller and its predecessors in interest have made continuous use of the BLUE
SKY mark in commerce in  connection  with soft drinks and syrups for soft drinks
since  January  22,  1985 and there  have been no breaks or gaps in said  mark's
chain of title.

6.19  Taxes.  Seller has duly  filed all  payroll,  income,  sales and other tax
reports and returns  required to be filed by it and has duly paid all such taxes
and other charges due or claimed to be due from it by federal,  state,  local or
foreign taxing authorities (including,  without limitation,  taxes in respect of
or for redemption,  deposits, recycling and containers, and those due in respect
of the properties,  income, franchises,  licenses, sales or payrolls of Seller);
and there are no tax liens upon any of the  Purchased  Assets  except  liens for
current  taxes not yet due.  The federal  income tax returns of Seller have been
filed with the IRS for all periods to and including 1998; and, all  deficiencies
asserted as a result of examinations, if any, of those returns have been paid or
finally  settled and, to the  Knowledge  of Seller and Black,  no issue has been
raised by the IRS in any such  examination  which, by application of the same or
similar  principles,  reasonably  could be  expected  to  result  in a  proposed
deficiency  for any other  period not so  examined.  Further,  to  Seller's  and
Black's  Knowledge,  no  state  of  facts  exists  or has  existed  which  would
constitute  grounds for the  assessment of any tax liability with respect to the
periods which have not been audited by the Internal Revenue  Service.  There are
no outstanding  agreements or waivers extending the three-year  statutory period
of limitation applicable to any federal income tax return for any period. Copies
of all federal  income tax returns for Seller in respect of all years not barred
by the  statute of  limitations  have  heretofore  been  delivered  by Seller to
Purchaser and all such returns are listed in Schedule 6.19. Seller has not, with
regard to any assets or property held, acquired or to be acquired by it, filed a
consent to the application of Section 341(f)(2) of the Code.

6.20  Insurance.  Schedule  6.20 sets forth a list of all policies or binders of
fire, liability, product liability,  worker's compensation,  vehicular and other
insurance  held  by or on  behalf  of  Seller,  including  the  amounts  of such
insurance and annual  premiums with respect  thereto.  Such policies and binders
are valid and binding in  accordance  with their terms and are in full force and
effect.  Seller  is  not in  material  default  with  respect  to any  provision
contained  in any such  policy or binder nor has it failed to give any notice or
present  any claim  under any such  policy or binder in due and timely  fashion.
Except for claims set forth on Schedule 6.20, there are no material  outstanding
unpaid  claims under any such policy or binder,  and Seller has not received any
written  notice of  cancellation  or  non-renewal  of any such policy or binder.
Except as set forth on Schedule 6.20, Seller has not received any written notice
from any of its  insurance  carriers  that any  insurance  premiums  (including,
without limitation, workers' compensation premiums) will be materially increased
in the future or that any insurance coverage listed on Schedule 6.20 will not be
available in the future on substantially the same terms as now in effect.

6.21  Employee  Benefit Plans and Employer  Relations.  (a) For purposes of this
Agreement:

     "Benefit  Plan"  means  each  plan,  program,   policy,  payroll  practice,
contract, agreement or other arrangement providing for compensation,  severance,
termination  pay,  performance  awards,  stock or stock-related  awards,  fringe
benefits or other  employee  benefits of any kind,  whether  formal or informal,
funded  or  unfunded,  written  or oral  and  whether  or not  legally  binding,
including,  without limitation, each "employee benefit plan", within the meaning
of Section  3(3) of ERISA and each  "multi-employer  plan" within the meaning of
Sections 3(37) or 4001(a)(3) of ERISA.

     "Seller  Benefit  Plan"  means each  Benefit  Plan  (other than an Employee
Agreement)   which  is  now  or  previously  has  been  sponsored,   maintained,
contributed  to, or required to be contributed  to, or with respect to which any
withdrawal  liability  (within  the  meaning of Section  4201 of ERISA) has been
incurred, by Seller or any ERISA Affiliate for the benefit of any Employee,  and
pursuant to which Seller,  or any ERISA Affiliate has or may have any liability,
contingent or otherwise.

     "Department" means the U.S. Department of Labor.

     "Employee"  means  each  current,  former,  or retired  employee,  officer,
consultant,  independent  contractor,  agent or  director  of Seller or an ERISA
Affiliate.

     "Employee   Agreement"  means  each  management,   employment,   severance,
retirement,    termination,     consulting,    non-compete,     confidentiality,
indemnification or similar agreement or contract between Seller and any Employee
pursuant to which Seller has or may have any liability contingent or otherwise.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended and any regulations promulgated or proposed thereunder.

     "ERISA  Affiliate"  means each  business  or entity  which is a member of a
"controlled  group of  corporations",  under "common  control" or an "affiliated
service group" with Seller within the meaning of Sections 414(b),  (c) or (m) of
the Code, or required to be aggregated  with Seller under Section  414(o) of the
Code,  or is under "common  control" with Seller,  within the meaning of Section
4001(a)(14) of ERISA.

     "IRS" means the Internal Revenue Service.

     "Multi-Employer   Plan"   means   each   Seller   Benefit   Plan  which  is
"multi-employer  plan"  within the meaning of Sections  3(37) or  4001(a)(3)  of
ERISA.

     "PBGC" means the Pension Benefit Guaranty Corporation.

     "Pension Plan" means each Seller Benefit Plan (other than a  Multi-Employer
Plan) which is an "employee  pension benefit plan" within the meaning of Section
3(2) of ERISA.

     "Welfare Plan" means each Seller Benefit Plan which is an "employee welfare
benefit plan" within the meaning of Section 3(2) of ERISA.

(b) Schedule 6.21 contains a true and complete list of each Seller  Benefit Plan
and each Employee Agreement. Neither Seller nor any ERISA Affiliate has any plan
or  commitment,  whether  legally  binding or not, to  establish  any new Seller
Benefit Plan, to enter into any Employee  Agreement or to modify or to terminate
any Seller Benefit Plan or Employee  Agreement (except to the extent required by
law or to conform any such Seller  Benefit  Plan or  Employee  Agreement  to the
requirements  of any  applicable  law, in each case as  previously  disclosed to
Purchaser, or as required by this Agreement), nor has any intention to do any of
the foregoing been communicated to Employees.

(c) Seller  has  provided,  or has  caused to be  provided,  to  Purchaser:  (i)
current,  accurate and complete copies of all documents embodying or relating to
each Seller Benefit Plan and each Employee  Agreement,  including all amendments
thereto,  written  interpretations  thereof and trust or funding agreements with
respect thereto.

(d) Neither the Seller nor any entity (whether or not incorporated)  that was at
any time during the past six years an ERISA Affiliate has ever maintained or had
any liability  (contingent or otherwise) with respect to any plan that is or was
subject to Title IV of ERISA or section 412 of the Code.

(e) Seller is in  compliance  in all  material  respects  with the  Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA").

(f) (i) Each  Seller  Benefit  Plan  has  been  established  and  maintained  in
accordance with its terms and in compliance with all applicable laws,  statutes,
orders, rules and regulations,  including but not limited to ERISA and the Code,
including,  without  limiting the  foregoing,  the timely filing of all required
reports,  documents  and  notices,  where  applicable,  with  the  IRS  and  the
Department;  (ii) each Seller Benefit Plan intended to qualify under Section 401
of  the  Code  is,  and  since  its  inception  has  been,  so  qualified  and a
determination  letter has been  issued by the IRS to the  effect  that each such
Seller  Benefit Plan is so qualified  and that each trust  forming a part of any
such Seller  Benefit Plan is exempt from tax  pursuant to Section  501(a) of the
Code and no circumstances  exist which would adversely affect this qualification
or exemption;  (iii) no "prohibited transaction",  within the meaning of Section
4975 of the Code or  Section  406 of ERISA,  has  occurred  with  respect to any
Seller Benefit Plan; (iv) there are no actions, proceedings, arbitrations, suits
or claims  pending,  or to the  knowledge of the Seller or any ERISA  Affiliate,
threatened  or  anticipated  (other than routine  claims for  benefits)  against
Seller or any ERISA Affiliate or any  administrator,  trustee or other fiduciary
of any Seller  Benefit Plan with respect to any Seller  Benefit Plan or Employee
Agreement,  or against  any  Seller  Benefit  Plan or against  the assets of any
Seller Benefit Plan;  (v) no event or  transaction  has occurred with respect to
any Seller  Benefit  Plan that would result in the  imposition  of any tax under
Chapter  43 of  Subtitle D of the Code;  (vi) each  Seller  Benefit  Plan can be
amended, terminated or otherwise discontinued without liability to Purchaser, or
any of their respective ERISA Affiliates; (vii) Seller, and each ERISA Affiliate
have made all payments with respect to all periods through the date hereof,  and
will make a pro-rata  payment for the period  ending as of the Closing  Date, in
each case which are required by each Seller  Benefit Plan,  each related  trust,
each collective bargaining agreement or by law to be made to, or with respect to
each Seller  Benefit Plan  (including  all  insurance  premiums or  intercompany
charges with respect to each Seller Benefit Plan);  and (viii) no Seller Benefit
Plan is under audit or investigation by the IRS, the Department or the PBGC, and
to the knowledge of any Seller, Seller, any Subsidiary or any ERISA Affiliate no
such audit or investigation is pending or threatened.

(g) The present value of all accrued  benefits of each Pension Plan,  determined
on a plan termination basis using the actuarial  assumptions  established by the
PBGC as in effect on the date of  determination,  does not as of the date hereof
and will not as of the Closing  Date exceed the fair market  value of the assets
(which for this purpose shall not include any accrued but unpaid  contributions)
of such Pension Plan.

(h) At no time has Seller or any ERISA Affiliate contributed to or been required
to contribute  to, or incurred any withdrawal  liability  (within the meaning of
Section 4201 of ERISA) to any Multi-Employer Plan.

(i) Neither  Seller nor any ERISA  Affiliate (i) maintains or contributes to any
Seller  Benefit  Plan which  provides,  or has any  liability  to provide,  life
insurance, medical, severance or other employee welfare benefits to any Employee
upon his retirement or  termination of employment,  except as may be required by
Section 4980B of the Code, or (ii) has ever represented,  promised or contracted
(whether in oral or written  form) to any Employee  (either  individually  or to
Employees  as a group)  that  such  Employee(s)  would  be  provided  with  life
insurance,  medical,  severance or other  employee  welfare  benefits upon their
retirement  or  termination  of  employment,  except to the extent  required  by
Section 4980B of the Code.

(j) Seller:  (i) is in compliance with all applicable  federal,  state and local
laws,  rules and  regulations  (domestic  and  foreign)  respecting  employment,
employment  practices,  labor,  terms and conditions of employment and wages and
hours, in each case, with respect to Employees,  except where any noncompliance,
individually or in the aggregate, would not have a Material Adverse Effect; (ii)
has withheld all amounts required by law or by agreement to be withheld from the
wages,  salaries and other  payments to  Employees;  (iii) is not liable for any
arrears of wages or any taxes or any  penalty  for failure to comply with any of
the foregoing; and (iv) is not liable for any payment to any trust or other fund
or to any governmental or administrative authority, with respect to unemployment
compensation benefits, social security or other benefits for Employees.

(k) No work stoppage or labor strike  against Seller by Employees is pending or,
to the Knowledge of Seller and Black, threatened. Seller: (i) is not involved in
or  threatened  to the  Knowledge  of Seller and Black  with any labor  dispute,
grievance,  or  litigation  relating to labor matters  involving any  Employees,
including,  without limitation,  violation of any federal, state or local labor,
safety or  employment  laws  (domestic  or  foreign),  charges  of unfair  labor
practices or discrimination complaints; (ii) has not engaged in any unfair labor
practices  within the meaning of the National Labor Relations Act or the Railway
Labor Act; and (iii) is not  currently,  nor has been in the past a party to, or
bound by, any collective  bargaining agreement or union contract with respect to
Employees  and no such  agreement or contract is currently  being  negotiated by
Seller.  No Employees are currently  represented by any labor union for purposes
of collective  bargaining  and no activities  the purpose of which is to achieve
such representation of all or some of such Employees are threatened or ongoing.

(l) With respect to each Welfare Plan,  all claims  incurred  (including  claims
incurred but not reported) by Employees  thereunder for which Seller is, or will
become,  liable are (i) insured pursuant to a contract of insurance  whereby the
insurance  company  bears any risk of loss with  respect  to such  claims,  (ii)
covered  under a  contract  with a health  maintenance  organization  (an "HMO")
pursuant  to  which  the HMO  bears  the  liability  for such  claims,  or (iii)
reflected as a liability or accrued for on the Interim Balance Sheet.

6.22 Suppliers and Customers.  (a) Other than in the ordinary course of business
or except as set forth on Schedule 6.22, no supplier of materials or services to
Seller has during the last 12 months decreased or, to the Knowledge of Seller or
Black,  threatened  to decrease or limit  materially,  by an amount in excess of
$10,000 per year,  its  provision  of  services  or supplies to Seller.  Neither
Seller  nor  Black  has  Knowledge  of  any  planned  or  intended  termination,
cancellation  or limitation of, or any  modification  or change in, the business
relationships  of Seller with any  supplier or customer of materials or services
to Seller by an amount in excess of $10,000 per year. To the Knowledge of Seller
and  Black,  there  will not be any  such  change  in  relations  with  material
suppliers  or customers of Seller as a result of  transactions  contemplated  by
this Agreement which could have a Material Adverse Effect.

(b) Since January 1, 2000,  there have been no increases in Seller's cost of raw
materials,  components,  ingredients, packing fees or other services provided in
connection with the manufacture of Seller's products.

6.23 Officers,  Directors and Employees.  (a) Seller has previously  supplied to
Purchaser  the total current  annual rate of  compensation  (including  bonuses,
commissions  or incentive  compensation)  of Randy  Hopkinson  and Chuck Cassidy
(collectively, the "Retained Employees").

6.24 Potential  Conflicts of Interest.  Except as set forth on Schedule 6.24, to
the  Knowledge of Seller and Black,  no Employee or affiliate of Seller,  and no
spouse or lineal descendant of any such person,  and no person controlled by one
or more of the foregoing persons shall, on and immediately after the Closing:

(a) own,  directly  or  indirectly,  any  interest  in  (excepting  less than 5%
stockholdings for investment  purposes in securities of publicly held and traded
companies),  or serve as an officer,  director,  employee or consultant  of, any
person which is, or is engaged in business  as, a  competitor,  lessor,  lessee,
supplier, distributor, sales agent or customer of Seller;

(b) own,  directly or indirectly,  in whole or in part, any property that Seller
uses in the conduct of its business; or

(c) have any cause of  action  or other  Claim  whatsoever  against,  or owe any
amount to, Seller,  except for claims in the ordinary course of business such as
for accrued salary, bonus, commissions, and vacation pay, accrued benefits under
Seller  Benefit  Plans and Welfare  Plans,  and similar  matters and  agreements
existing on the date hereof which have been disclosed to Purchaser.

6.25 Effect of Transaction.  Except as otherwise  disclosed in Schedule 6.25, no
creditor,  key-employee  or customer or other person having a material  business
relationship  with Seller has informed Seller that such person intends to change
the relationship  because of the purchase and sale of the Purchased Assets,  nor
do Seller or Black have Knowledge of any such intent.

6.26 Accuracy of Information;  Full Disclosure. All documents delivered by or on
behalf of Seller in connection  with this Agreement are complete and accurate in
all material  respects as of the dates of the documents.  No  representation  or
warranty of Seller and Black  contained  in this  Agreement  or in any  Schedule
hereto  delivered to Purchaser or any of its  affiliates  pursuant  hereto or in
connection  herewith contains an untrue statement of a material fact or omits to
state a material  fact  required to be stated  therein or  necessary to make the
statements  made,  in the  context  in  which  made,  not  materially  false  or
misleading.  None of the written data or information furnished or made available
to Purchaser by Seller,  (including,  without limitation, the Year-End Financial
Statements and the Interim Financial Statements) contains an untrue statement of
a material fact or omits to state a material fact required to be stated  therein
or  necessary to make the  statements  made,  in the context in which made,  not
materially false or misleading, as of the date of the subject document.

6.27  Adequacy of the  Purchased  Assets.  The  Purchased  Assets are all of the
property,  real and personal,  tangible and  intangible,  used or intended to be
used in connection  with the ownership and operation of the Business  other than
the Excluded Assets.

7.       REPRESENTATIONS OF PURCHASER.

     Purchaser represents and warrants to Seller:

7.1  Organization and Authority.  Purchaser is a corporation duly  incorporated,
validly  existing and in good  standing  under the laws of its  jurisdiction  of
incorporation,  has all  requisite  corporate  power  and  authority  to own its
properties,  to carry on its businesses as now being  conducted,  to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.

7.2  Authorization  of Agreement.  Purchaser has the full power and authority to
enter  into this  Agreement  and to carry  out its  obligations  hereunder.  The
execution and delivery of this  Agreement by Purchaser and the  consummation  by
Purchaser of all  obligations  contemplated  hereby have been duly authorized by
all requisite  corporate  action.  This  Agreement and all other  agreements and
written   obligations  entered  into  and  undertaken  in  connection  with  the
transactions  contemplated  hereby and thereby  constitute the valid and legally
binding  obligations  of Purchaser,  enforceable  against it in accordance  with
their  respective  terms subject,  as to enforcement of remedies,  to applicable
bankruptcy,  insolvency,  moratorium,  reorganization  and similar statutory and
decisional law affecting creditors' rights and debtors'  obligations  generally,
and to  general  equitable  principles,  the  discretion  of courts in  awarding
equitable  relief,  and  applicable  law that may limit or otherwise  affect the
enforceability  of the  provisions  of  Articles 3 and 13  hereof.  No filing or
registration  with,  and no permit,  authorization,  consent or approval of, any
Governmental  Entity is  necessary  for the  consummation  by  Purchaser  of the
transactions  contemplated  by  this  Agreement.  The  execution,  delivery  and
performance  of this  Agreement  and the  transactions  contemplated  hereby  by
Purchaser  will not,  with or without the giving of notice and/or the passage of
time,  (a) violate any order,  writ,  injunction,  decree or  provisions  of law
applicable  to  Purchaser,  or (b)  conflict  with or  result  in the  breach or
termination of any provision of,  constitute a default  under,  or result in the
creation of any lien, charge or encumbrance upon any of the properties or assets
pursuant to any corporate charter, by-law, indenture, mortgage, deed of trust or
other agreement or instrument to which Purchaser is a party or by which it is or
may be bound.

7.3 Brokers and  Finders.  Purchaser  has not  employed  any broker or finder or
incurred any liability for any brokerage  fees,  commissions or finders' fees in
connection with the transactions contemplated hereby.

7.4 Financing.  The Purchaser has, or will have at the Closing Date,  sufficient
funds, or commitments for financing, or both, necessary to insure the payment on
the Closing Date of the sums required to be paid to Black and Seller pursuant to
paragraph 2.3.

7.5  Bankruptcy,  Insolvency,  Fraudulent  Conveyance.  Purchaser is not, and by
virtue of the execution and delivery of this Agreement and the  consummation  of
the  transactions  contemplated  by  this  Agreement,  will  not  be,  bankrupt,
insolvent or unable to pay its debts as they become due. Purchaser has not filed
or brought,  and does not contemplate bringing or filing, any petition or action
seeking  relief  from  creditors,  or its  own  reorganization,  dissolution  or
insolvency,  and no other  person or entity  has  filed,  threatened,  or to the
knowledge of Purchaser, threatened, to file or bring any such petition or action
against  Purchaser.  The consummation of the  transactions  contemplated by this
Agreement will not constitute a fraudulent conveyance with respect to Purchaser.

8.       AGREEMENTS OF SELLER AND PURCHASER.

8.1 No Solicitation of  Transactions.  Seller and Black will not, and Seller and
Black  will  cause  their  respective  Employees,  representatives,   investment
bankers,  consultants,  advisors,  agents and  affiliates  not to,  directly  or
indirectly,  (a) initiate contact with,  solicit or encourage  submission of any
inquiries,  proposals or offers by, or (b)  participate  in any  discussions  or
negotiations  with, or disclose any information  concerning Seller to, or afford
any  access to the  properties,  books or  records  of Seller  to, or  otherwise
assist,   facilitate  or  encourage,  any  person  (other  than  Purchaser,  its
affiliates, agents and representatives) in connection with any possible proposal
(an  "Acquisition  Proposal")  regarding  a sale  or  acquisition  of any of the
capital stock or any other equity interest in Seller, or a merger, consolidation
or business  combination  involving Seller, or the liquidation or reorganization
of Seller,  or a sale of all or (other than in the  ordinary  course of business
consistent  with past  practice)  any  portion  of the  Purchased  Assets or any
similar  transaction.  Seller,  (i) will  notify  Purchaser  immediately  if any
inquiry or proposal is made or any such  information  or access is  requested in
connection with an Acquisition Proposal, or potential Acquisition Proposal,  and
(ii) will  immediately  communicate to Purchaser the terms and conditions of any
such Acquisition  Proposal or potential  Acquisition Proposal or inquiry and the
identity of the offeror or potential offeror.

8.2 Interim Operations. During the period from the date of this Agreement to the
Closing  Date,  except as  specifically  contemplated  by this  Agreement  or as
otherwise approved in writing by Purchaser, Seller shall:

(a)  conduct  its  business  only in,  and not take any  action  except  in, the
ordinary and usual course of business and consistent with past practice;

(b) not make or propose  any change or  amendment  in its charter or by-laws (or
equivalent documents);

(c)  perform  in all  material  respects  its  obligations  under  all  material
Contracts  (except those being  contested in good faith) and,  other than in the
ordinary course of business  consistent  with past practice,  and subject to the
other  covenants  contained in this  paragraph 8.2, not enter into or assume any
Contract and, if Seller enters into a Contract  after the date hereof that would
have been required to be on Schedule 1.1(h) had the Contract existed on the date
hereof,  Seller shall  promptly  inform  Purchaser of such  Contract and provide
copies of all documentation relating thereto;

(d) not issue, pledge or sell, or issue options,  warrants or rights of any kind
to acquire, or issue or sell any securities  convertible into,  exchangeable for
or  representing  a right to purchase or  receive,  or enter into any  contract,
understanding  or  arrangement  with  respect to the  issuance of, any shares of
capital stock or any other securities of Seller, or, except for the transactions
contemplated hereby, enter into any arrangement,  understanding or contract with
respect to the  purchase  or voting of shares of its capital  stock,  or adjust,
split, combine or reclassify any of its securities, or make any other changes in
its capital structure;

(e) not declare,  set aside,  pay or make any dividend or other  distribution or
payment  (whether in cash,  stock or property or any  combination  thereof) with
respect to, or purchase  or redeem,  any shares of its capital  stock to or from
any person other than Seller;

(f) use  commercially  reasonable  efforts  to  preserve  intact  its  corporate
existence, goodwill and business organization, to keep available the services of
its present officers and key employees,  and to preserve its relationships  with
suppliers and customers and others having business relations with it;

(g) except as required by law, not adopt,  enter into,  amend or  terminate  any
Employee  Agreements,  Seller Benefit Plans or Welfare Plans, or increase in any
manner the  compensation or fringe benefits of, or forgive  indebtedness of, any
Employee or pay any benefit not  required by any  existing  Employee  Agreement,
Seller  Benefit  Plan or  Welfare  Plan,  or grant any  awards  under any bonus,
incentive,  performance or other  compensation  plan or arrangement  (including,
without limitation,  the granting of stock options,  stock appreciation  rights,
stock related or based awards,  or the removal of existing  restrictions  in any
benefit  plans or agreements  or awards made  thereunder),  or (except as may be
required  under the terms of any Employee  Agreements,  Seller  Benefit Plans or
Welfare  Plans as in effect  on the date of this  Agreement),  contribute  to or
otherwise fund or secure the benefits or compensation provided under, any of the
Employee  Agreements,  Seller Benefit Plans or Welfare Plans,  or enter into any
contract,  agreement,  commitment  or  arrangement  to do any  of the  foregoing
provided,  however,  that  notwithstanding  anything in this  paragraph  8.2(g),
Seller  shall be entitled but not  obligated  to terminate  the Blue Sky Natural
Beverage  Co.  Incentive  Stock  Option  Plan,  amend  or  terminate  Employment
Agreements  with  employees  other than Retained  Employees,  and pay or provide
severance or other termination benefits to employees.

(h) except in the ordinary course of its business consistent with past practice,
not (i) incur or assume  any  indebtedness,  (ii) make any  loans,  advances  or
capital  contributions  to, or  investments  in, any other person,  (iii) offer,
issue or sell any debt securities or guarantee any indebtedness,  and (iv) enter
into  any  contract,  agreement,  commitment  or  arrangement  to do  any of the
foregoing;

(i) not (i) encumber,  sell, lease or otherwise dispose of or acquire any assets
other than in the ordinary  course of business  consistent  with past  practice,
(ii)  authorize,  propose or enter into or announce an intention  to  authorize,
propose or enter into or recommend,  or announce an intention to  recommend,  an
agreement  in  principle  or  definitive  agreement  with respect to any merger,
consolidation,  other business combination,  liquidation or dissolution pursuant
to which  Seller  would be acquired or would  acquire or dispose of (in any such
case, by merger,  consolidation,  acquisition or disposition of stock or assets,
or similar transaction) material assets (other than sales of inventory by Seller
in the ordinary course of business),  (iii) waive,  release,  grant, or transfer
any rights of material value,  (iv) modify or change in any material respect any
existing  material  license,  lease,  contract,  other document,  arrangement or
understanding,  (v) assume,  guarantee,  endorse or otherwise  become  liable or
responsible (whether directly, contingently or otherwise) for the Liabilities of
any other person, (vi) make any capital expenditures or enter into or materially
modify any material Contract or transaction other than in the ordinary course of
business,  and  (vii)  enter  into  any  contract,   agreement,   commitment  or
arrangement to do any of the foregoing;

(j) not allow or permit any insurance  policy  naming it as a  beneficiary  or a
loss payee to be canceled or  terminated  other than in the  ordinary  course of
business consistent with past practice;

(k) not make any  changes in its  accounting  methods or  practices  or make any
change in depreciation or amortization policies or rates adopted by it;

(l) not make any tax election or settle or  compromise  any  liability for taxes
either not in  accordance  with prior  practice  or which  would have a Material
Adverse Effect;

(m) in  connection  with the  continuing  operation  of the  business  of Seller
between the date of this Agreement and the Closing Date, use all reasonable best
efforts  to  consult  in  good  faith  on a  regular  and  frequent  basis  with
representatives of Purchaser to report material operational developments and the
general  status  of  ongoing  operations.  Seller  acknowledges  that  any  such
consultation  shall not  constitute  a waiver by  Purchaser of any rights it may
have  under  this  Agreement  and that  Purchaser  shall  have no  liability  or
responsibility  for any actions of Seller or any of its  officers  or  directors
with respect to matters which are the subject of such consultations; and

(n) not take, or agree to take, any of the actions  prohibited in this paragraph
8.2 or, except for entering into commitments in the ordinary course of business,
any action which would make any  representation  or warranty of Seller contained
in this  Agreement  untrue or incorrect  in any material  respect as of the date
when made or as of any future date on or prior to the Closing Date.

8.3 Access to  Information.  (a) From the date hereof  until the  Closing  Date,
Seller shall, and shall cause its officers, directors,  employees and agents to,
afford  to  Purchaser  and  its   officers,   directors,   employees,   counsel,
accountants,   advisors,  representatives  and  agents  access  (during  regular
business  hours with  reasonable  notice) to the  officers,  employees,  agents,
properties,  offices and other facilities,  and to the accounts,  books, records
(including,  without  limitation,  tax  returns  and  work  papers  of  Seller's
independent  auditors) and Contracts of Seller,  and shall furnish Purchaser and
such others with access to all  financial,  operating,  technical and other data
and information which Purchaser,  through its officers, employees or agents, may
from time to time reasonably  request.  Following the Closing,  Seller and Black
shall  afford to  Purchaser  reasonable  access  to its  corporate  records  not
constituting a part of the Purchased Assets.

(b) Purchaser will treat,  and will use its reasonable best efforts to cause its
officers, directors, employees, counsel, accountants,  advisors, representatives
and agents to treat, confidentially all non-public information concerning Seller
furnished to Purchaser in connection with the transactions  contemplated by this
Agreement,  and the  content  and  existence  of this  Agreement  ("Confidential
Information").    Notwithstanding   the   foregoing,    Purchaser   and/or   its
representatives  may  disclose  Confidential  Information  (i) if  compelled  to
disclose  the same by judicial or  administrative  process  (including,  without
limitation,  in  connection  with  obtaining  the  necessary  approvals  of this
Agreement and the transactions  contemplated hereby of Governmental Entities) or
by  other   requirements  of  law,  provided  that  Purchaser  or  its  affected
representative  shall  have  given  prompt  notice  to  Seller  and Black of any
judicial,  administrative or legal process  purporting to require disclosure and
shall  have  cooperated  with  Seller  and Black to  attempt  to afford  them an
opportunity  to  participate  in such process for the purpose of  preventing  or
limiting the  disclosure,  (ii) in any action,  suit or proceeding  brought by a
party  hereto in  pursuit  of its  rights  or in the  exercise  of its  remedies
hereunder,  (iii) if the same can be shown to have been previously known by such
person,  (iv) if the same  hereafter is in the public domain through no fault of
such  person,  or (v) if the same is later  acquired by such person from another
source and such  person  reasonably  believes  that such  source is not under an
obligation  to  another  party  hereto  to keep  such  Confidential  Information
confidential.

(c)  With  the  advance  permission  of  Seller,  which  shall  not be  withheld
unreasonably,  Purchaser shall be entitled to contact and have  discussions with
Seller's  customers,  suppliers  and employees and Seller and Black shall assist
Purchaser in facilitating such contact and discussions.

(d) The restrictions set forth in this paragraph 8.3 will not apply to Purchaser
following the Closing;  except that  following the Closing Seller shall have the
right to  reasonable  access to such books and  records as may be  necessary  or
convenient to permit Seller or Black to (i) prepare, file and amend tax returns,
and to defend such returns in administrative and legal  proceedings,  or (ii) to
bring,  defend,  or  otherwise  participate  in any action,  suit or  proceeding
brought by a party  hereto in pursuit  of its rights or in the  exercise  of its
remedies hereunder.

(e) In the event of  termination  of this  Agreement for any reason,  each party
shall  promptly  return to Seller all  Confidential  Information  obtained  from
Seller,  and any  copies  made  of,  or  reports  or  analyses  based  on,  such
Confidential  Information,  and  Purchaser  shall  make  no  further  use of the
Confidential Information.

8.4 Certain Filings,  Consents and Arrangements.  Purchaser and Seller (a) shall
cooperate with each other in promptly determining whether any other submissions,
notifications  or filings  are  required  to be or should be made or whether any
consents, approvals, permits, authorizations, exemptions or waivers are required
to be or should be  obtained  under any other  federal,  state or foreign law or
regulation  or from other  parties to  Contracts  material  to the  Business  in
connection  with the  consummation  of the  purchase  and sale of the  Purchased
Assets,  and (b) shall  cooperate  with each other in  promptly  making any such
submissions,  notifications  or  filings,  furnishing  information  required  in
connection therewith and seeking timely to obtain any such consents,  approvals,
permits, authorizations, exemptions or waivers. Each of the parties hereto shall
provide all reasonable  assistance to, and shall  cooperate  with, each other to
bring about the consummation of the purchase and sale of the Purchased Assets in
accordance with the terms and conditions of this Agreement.

8.5 Notice.  Each party shall give prompt written notice to the other of (a) the
occurrence,  or failure to occur, of any event which occurrence or failure would
be likely to cause any representation or warranty of Seller or Purchaser, as the
case may be,  contained in this Agreement to be untrue or inaccurate at any time
from the date  hereof  to the  Closing  Date or that  will or may  result in the
failure to satisfy any of the  conditions  specified in  paragraphs 9 or 10, and
(b) any  failure of Seller or  Purchaser,  as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder.

8.6 Transitional  Services. For a period of up to thirty (30) days following the
Closing,  Seller and Black will  cooperate  with  Purchaser  to achieve a smooth
transition  of the  Business  from Seller to  Purchaser.  Without  limiting  the
generality of the foregoing,  during such 30-day period (without further cost or
expense to Purchaser except for out-of-pocket  expenses incurred by Black) Black
will  make  himself  available  primarily  in Santa  Fe,  New  Mexico  to assist
Purchaser in respect of such transition. To the extent that Black is unavailable
during such 30-day  period,  the 30-day  period  shall be extended  for each day
Black is unavailable.

8.7 Further  Assurances.  (a) From and after the Closing Date,  Seller and Black
shall  take all such  steps  as may be  necessary  to put  Purchaser  in  actual
possession and operating control of the Purchased  Assets,  and Seller and Black
agree that at any time or from time to time (without  further cost or expense to
Purchaser except for  out-of-pocket  expenses incurred by Black or Seller) after
the Closing Date, upon the request of Purchaser,  Seller and Black will execute,
acknowledge  and deliver such other  instruments  of conveyance and transfer and
take  such  other  action  as  Purchaser  may  reasonably  require  to vest more
effectively in the Purchaser  good and marketable  title to any of the Purchased
Assets.  Without  limiting  the  generality  of the  foregoing,  Seller  and the
Purchaser  shall  participate  in  taking  such  action as may be  necessary  to
substitute  the  Purchaser  for Seller as plaintiff or claimant of record in any
action,  suit,  proceeding  or claim by Seller with  respect to or based upon or
arising  out of the  business of Seller  except to the extent that such  action,
suit or  proceeding  affects  the  Excluded  Assets and to the extent  that such
substitution  will  not  materially  adversely  affect  any such  action,  suit,
proceeding or claim, in which event Seller shall remain as plaintiff or claimant
with  counsel  approved  by  Purchaser  on  behalf  of and  for the  benefit  of
Purchaser.  In the event that Seller  remains as  plaintiff or claimant it shall
remit to Purchaser all amounts paid to Seller on account of any judgment, order,
settlement or payment resulting from any such action, suit,  proceeding or claim
except to the extent it relates to the Excluded  Assets and Purchaser shall bear
the costs and  expenses  incurred  by Seller  after the  Closing  in  connection
therewith.

(b)  Following  the  execution of this  Agreement,  and upon and after  Closing,
Seller  and  Black  will  provide  such  full  and  continuing  cooperation  and
assistance to Purchaser as may be reasonable  and necessary to obtain,  protect,
maintain, enforce and/or perfect any right, title or interest of Purchaser in or
to any of the  Proprietary  Rights  to be  received  by  Purchaser  from  Seller
hereunder,  provided that  Purchaser  shall  reimburse  Seller and Black for any
reasonable  out of pocket  expenses  incurred in connection  with the foregoing.
Such  cooperation and assistance shall include without  limitation  Seller's and
Blacks receipt, preparation, execution and delivery to or on behalf of Purchaser
of all such documents,  instruments  and materials,  and performance of all such
acts,  including the  participation as a party or witness,  as may reasonably be
requested  by  Purchaser  for  the  purposes  of  obtaining  any   applications,
registrations,  recordations  or  other  filings,  or  initiating,  prosecuting,
defending or  participating  in any action or proceeding,  of or relating to the
Proprietary Rights, this Agreement, or the validity,  performance or enforcement
of any of the  transactions,  rights or  obligations  provided  for herein.  The
cooperation  and assistance  obligations  prescribed by this paragraph 8.7 shall
survive the  execution,  delivery  and  performance  of this  Agreement  and the
consummation of the transactions contemplated by this Agreement.

(c) Notwithstanding  anything in this paragraph 8.7 to the contrary: Black shall
not be  required to travel to satisfy  his or  Seller's  obligations  under this
paragraph 8.7; Purchaser shall reimburse Seller and Black for any reasonable out
of pocket costs or expenses incurred by them in connection with the satisfaction
of their  respective  obligations  under  this  paragraph  8.7 within 14 days of
written  notice of and evidence  documenting  the cost and  expense;  and Seller
shall be entitled to make use of the assets  described in Schedule  1.1(e) until
October 31, 2000, at which time they will be shipped at  Purchaser's  expense to
the address designated by Purchaser.

8.8 Use of Firm Name. As of the Closing  Date,  Seller shall assign and transfer
to  Purchaser  all of its  right,  title and  interest  in and to the  corporate
business name of "Blue Sky Natural Beverage Co." (the "Firm Name") and any other
trade  names  or  logos  used to  identify  the  Business,  and  Seller  and its
affiliates  shall  relinquish and  discontinue  the use of the Firm Name and any
other  name,  mark or other  designation  of  service,  origin,  sponsorship  or
association  containing  the words "Blue Sky";  provided,  however,  that Seller
shall have the right to use the Firm Name for a period of six  months  following
the Closing Date for the sole  purpose of  collecting  the  accounts  receivable
referred to in paragraph 1.2(b) of this Agreement.

8.9 Restrictive Covenants. (a) Each of Seller and Black agrees that for a period
of five (5) years following the Closing Date that it or he shall not directly or
indirectly:  (i) own, manage, operate, control,  participate in, or be connected
in any  manner  with the  ownership,  management,  operation  or  control of any
business or enterprise, other than Purchaser and/or Purchaser's affiliates, that
is otherwise  competitive with the Business transferred to Purchaser pursuant to
this  Agreement or any other  non-alcoholic  beverage  business  (excluding  any
coffee roasting business) (except that mere ownership as an investor of not more
than 5% of the  publicly-traded  securities of a corporation shall not be deemed
an  association  with such  corporation)  or (ii) provide or offer or attempt to
provide such services to any business, person, or enterprise (or successor(s) to
any of the same),  wherever located, who or which is or was a customer of Seller
on or within five (5) years prior to the date of this Agreement, as conclusively
evidenced by the accounts receivable, invoices and other records of Seller where
such services are similar to or directly or indirectly competitive with services
offered or  provided  by Seller or  Purchaser;  or (iii) make any  statement  or
perform  any act  intended  to  advance  an  interest  of any such  existing  or
prospective competitor with the business transferred to Purchaser or which would
in any way injure an interest of Purchaser,  its successors  and assigns,  or be
detrimental  to  its  relationships  or  dealings  with  existing  or  potential
customers.  In recognition of the geographic extent of the parties'  operations,
the  restrictive  covenants  provided for in this  paragraph  8.8(a) shall apply
throughout the world.

(b)  Each of  Seller  and  Black  agrees  that for a  period  of five (5)  years
following the Closing Date it or he shall not directly or indirectly  (i) use or
divulge,  publish or otherwise reveal to any person, firm,  corporation or other
entity  for  any  reason  or  purpose  whatsoever,  any  Proprietary  Rights  or
Confidential Information related to the Business;  provided, however, Seller and
Black  may  disclose  Proprietary  Rights  or  Confidential  Information  (x) if
compelled to disclose the same by judicial or administrative process or by other
requirements  of law,  provided  that  Seller or Black  shall have given  prompt
written  notice to Purchaser of any  judicial,  administrative  or legal process
purporting to require  disclosure  and shall have  cooperated  with Purchaser to
attempt to afford  Purchaser an  opportunity  to participate in such process for
the purpose of  preventing  or limiting the  disclosure,  and (y) in any action,
suit or proceeding  brought by a party hereto in pursuit of its rights or in the
exercise of its remedies  hereunder;  or (ii) interfere with, disrupt or attempt
to disrupt any past,  present or prospective  contractual or other  relationship
between  Purchaser,  and its  successors  and  assigns,  and any of the clients,
customers,  suppliers,  advertisers,  subscribers,  or  employees  of  Seller or
Purchaser; or (iii) hire or attempt to hire the Retained Employees.

(c) Each of Seller and Black  agree that  following  the  Closing  Date it or he
shall not make any  statement or  encourage  others to make any  statement  that
would  reasonably be expected to disparage,  denigrate or criticize the Business
or Purchaser.

(d) Because the breach or  attempted  or  threatened  breach of the  restrictive
covenants  contained  in  paragraphs  8.9(a),  8.9(b) and 8.9(c)  will result in
immediate  and  irreparable  injury to  Purchaser  for which it will not have an
adequate remedy at law,  Purchaser  shall be entitled,  in addition to all other
remedies,  to a decree  of  specific  performance  of these  covenants  and to a
temporary and permanent injunction enjoining such breach.

8.10  Estoppel;   Infringement.  Upon  the  execution  of  this  Agreement,  and
thereafter  through  and after  Closing,  neither  Seller nor Black,  nor any of
Seller's  parents,   subsidiaries  or  affiliates,  nor  any  person  or  entity
controlled  by any of them,  will  (i)  contest,  directly  or  indirectly,  the
Purchaser's  right,  title and interest in and to the Proprietary  Rights or the
validity,  transferability or enforceability  thereof, in whole or in part, with
respect  to any  country  or  jurisdiction  whatsoever,  nor  will  any of  them
voluntarily  assist or aid others in so doing or (ii) make,  use, offer for sale
or sell, or grant any license or consent to make,  use,  offer for sale or sell,
in any country or jurisdiction whatsoever, any trademarks,  works of authorship,
inventions or other intellectual  properties (as comprised of the categories and
examples  encompassed  by  the  Proprietary  Rights),  that  infringe,  convert,
misappropriate,  dilute, violate, injure or conflict with any of the Proprietary
Rights,  or constitute a copy,  adaptation  or colorable  imitation of any items
encompassed  by the  Proprietary  Rights,  or bear a  substantial  or  confusing
similarity thereto.

8.11 Continuation of Product Liability Insurance.  For a period of not less than
one year  following the Closing Date,  Seller agrees to maintain for its benefit
and the benefit of Purchaser its product liability insurance upon terms not less
beneficial to the insured party or parties as is currently in effect.

8.12 Disposal of Cans.  Seller shall be responsible  for the payment for and the
disposal  of any  cans  indicated  on  Schedule  8.12 as  being  subject  to the
provisions of this paragraph  which have not been used by Purchaser or otherwise
disposed of on or before the ninetieth  (90) day following the Closing Date. Any
payments to be made to co-packers or can  manufacturers  for these cans or their
disposal shall be drawn from the Escrow Deposit.

8.13  Notwithstanding  the provisions of paragraph  13.1(e),  if Seller contends
that absent this Agreement,  the customer to whom a payment or credit is allowed
under  paragraph  13.1(e) is not  entitled to that  payment or credit,  then the
payment or credit will be made without  prejudice  to Seller's  right to recover
the same from the customer,  and such  assignments as may be necessary to permit
Seller to seek recovery from the customer will be made by Purchaser to Seller.

9.       CONDITIONS TO OBLIGATIONS OF PURCHASER.

     The obligations of Purchaser under this Agreement are subject,  on or prior
to  the  Closing  Date,  to the  fulfillment  in all  material  respects  of the
following  conditions  precedent,  each of which may be waived in writing at the
sole discretion of Purchaser:

9.1 Closing  Actions.  Seller shall have executed and delivered all  agreements,
certificates  and  instruments,  and shall  have  taken all such  other  actions
required of Seller under paragraph 5.2.

9.2  Continued  Truth  of  Representations  and  Warranties.  (i)  Each  of  the
representations  and warranties of Seller and Black in this  Agreement  shall be
true in all  material  respects  on and as of the  Closing  Date as though  such
representations  and warranties were made on and as of such date, except for any
changes  permitted by the terms hereof or consented to in writing by  Purchaser,
(ii) Seller and Black shall have  performed  and complied with all of the terms,
conditions,  obligations, agreements and restrictions required by this Agreement
to be performed or complied  with by them prior to or on the Closing  Date,  and
(iii)  Purchaser's  due  diligence  investigation  shall not have  disclosed any
material misstatement or omission by Seller or Black.

9.3  Consents of Third  Parties.  Seller shall have  received  and  delivered in
writing to Purchaser all requisite waivers,  consents and approvals of all third
parties whose  waiver,  consent or approval is required to be obtained by Seller
to  consummate  the  transactions   contemplated   hereby,  in  form  reasonably
satisfactory to Purchaser.  Seller agrees to use its best efforts to obtain such
waivers,  approvals and consents prior to the Closing Date, provided that Seller
shall not be obligated to provide  compensation  or other  consideration  to any
third  party in  exchange  for any such  waiver,  consent or  approval.  Without
limiting the generality of the foregoing, (a) Purchaser shall have received from
Trader Joe's, Whole Foods Market Inc. d/b/a Whole Foods Brand 365 and Wild Oats,
(i) written or oral consent to the transfer of Seller's private label agreements
with such firms to Purchaser  and (ii)  assurances  reasonably  satisfactory  to
Purchaser that such firms intend to continue their private label agreements with
Purchaser,  subject to Purchaser maintaining the current pricing structure,  and
(b) Purchaser  shall have received  written  confirmation  from Claredon  Flavor
Engineering  that it will continue to supply  syrups to Purchaser  upon the same
essential terms as it currently supplies syrups to Seller.

9.4  Absence of  Challenge.  No action or  proceeding  by or before any court or
other  Governmental  Entity  shall have been  instituted  or  threatened  by any
Governmental  Entity  whatsoever  against  any of  the  parties  hereto,  or any
director,  officer,  employee or other  representative of Seller with respect to
this  Agreement or any  transaction  provided for herein or connected  herewith,
whether  preceding  the  execution  and  delivery of this  Agreement  or arising
subsequently.

9.5 Litigation. No action or proceeding shall have been instituted or threatened
by any  public  authority  prior  to the  Closing  Date  before a court or other
Governmental  Entity of any kind for the  stated  purpose  or with the  probable
effect of enjoining or preventing  the  consummation  of this  Agreement and the
transactions  contemplated  herein or to recover damages by reason  thereof.  No
action or proceeding  shall have been  instituted by any private person prior to
the Closing  Date before a court or other  Governmental  Entity of any kind with
the  probable  effect  of  enjoining  or  preventing  the  consummation  of this
Agreement and the transactions contemplated hereby.

9.6 Absence of Material Adverse Change. No event shall have occurred which would
have a  Materially  Adverse  Effect on the value of the Business of Seller or on
the  condition  (financial  or  otherwise),   operations,   assets,  properties,
business, prospects or results of operations of the Business or Seller.

9.7 Employment  Arrangements.  Purchaser shall have made  arrangements to employ
the Retained Employees upon such terms as are satisfactory to it.

10.      CONDITIONS TO OBLIGATIONS OF SELLER.

         The  obligations  of Seller under this  Agreement  are subject,  at the
Closing  Date,  to the  fulfillment  in all material  respects of the  following
conditions  precedent,  each of which may be waived in writing at the discretion
of Seller:

10.1  Closing   Actions.   Purchaser  shall  have  executed  and  delivered  all
agreements,  certificates and  instruments,  and shall have taken all such other
actions required of Purchaser under paragraph 5.2.

10.2 Continued Truth of Representations and Warranties.  (i) The representations
and warranties made by Purchaser in this Agreement shall be true in all material
respects  on and as of the  Closing  Date as  though  such  representations  and
warranties were made on and as of such date, except for any changes permitted by
the terms hereof or consented to in writing by Seller,  and (ii) Purchaser shall
have performed and complied with all terms, conditions,  obligations, agreements
and restrictions  required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.

10.3  Litigation.  No  action  or  proceeding  shall  have  been  instituted  or
threatened by any public  authority  prior to the Closing Date before a court or
other  Governmental  Entity  of any  kind  for the  stated  purpose  or with the
probable  effect of enjoining or preventing the  consummation  of this Agreement
and the  transactions  contemplated  herein  or to  recover  damages  by  reason
thereof.  No action or  proceeding  shall have been  instituted  by any  private
person prior to the Closing Date before a court or other Governmental  Entity of
any kind with the probable effect of enjoining or preventing the consummation of
this Agreement and the transactions contemplated hereby.

11.      TERMINATION PRIOR TO THE CLOSING DATE.

11.1  Termination.  Subject to paragraph  11.2, this Agreement may be terminated
and the purchase and sale of the  Purchased  Assets  contemplated  hereby may be
abandoned at any time prior to the Closing Date:

(a) by mutual consent of Purchaser and Seller;

(b) by  Purchaser  or Seller,  without  liability  to the  terminating  party on
account of such termination  (provided the terminating party is not otherwise in
default or in breach of this Agreement),  if the Closing shall not have occurred
by September  30, 2000 or such later date as may  hereafter  be mutually  agreed
upon by the parties hereto;

(c) by  Purchaser  or Seller if the Closing  shall be  prohibited  by any order,
decree or  injunction  of any  Governmental  Entity  and such  order,  decree or
injunction shall remain in effect after the parties hereto shall have used their
reasonable best efforts to have such order or decree reversed or such injunction
lifted.

11.2  Effect on  Obligations.  Termination  of this  Agreement  pursuant to this
Article 11 shall terminate all obligations of the parties hereunder,  except for
the  obligations  under  paragraphs  8.3(e)  and  15;  provided,  however,  that
termination  pursuant  to  paragraphs  11.1(b) or 11.1(c)  shall not relieve the
defaulting or breaching party from any liability to any other party hereto.

12.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

         Any   investigation  or  examination  by  Purchaser  of  the  business,
properties  or  affairs  of Seller  shall not  affect  the  representations  and
warranties of Seller and Black herein contained, and except as set forth in this
paragraph  12, the  respective  representations  and  warranties  of the parties
herein  contained  in  Articles 6 and 7 shall  survive  for a period of one year
following the Closing Date.  The  representations  and  warranties  set forth in
paragraphs  6.19 and 6.9 (but only  insofar as  paragraph  6.9 relates to taxes)
("Tax Warranties") shall survive the Closing and remain in full force and effect
for the applicable  statute of limitations  for such tax matters  (including any
extension of such statute of limitations).  The  representations  and warranties
set forth in  paragraphs  6.1,  6.2, 6.5, 6.11 and 7.3 shall survive the Closing
and  remain  in full  force  and  effect  without  limitation  as to  time.  The
respective  covenants  and  agreements  of the parties  herein  contained  shall
survive indefinitely, except as otherwise limited by their terms.

13.      INDEMNIFICATION.

13.1 Indemnification by Seller.  Seller and Black jointly and severally agree to
indemnify  Purchaser  and  hold it  harmless  from any and all  claims,  losses,
liabilities,   actions  or  causes  of  action,  assessments,   fines,  damages,
penalties,   costs  or   expenses   (including   reasonable   attorneys'   fees)
(collectively,  "Losses") which  Purchaser,  or any of its officers,  directors,
parents or  subsidiaries  or other  affiliates (all of which are included in the
term  "Purchaser" for purposes of this Article 13), may incur,  suffer or become
liable for as a result of or in connection  with (a) the inaccuracy or breach of
any agreement, covenant, representation or warranty of Seller or Black contained
in this Agreement,  any Exhibit or Schedule or other document or agreement to be
delivered  pursuant hereto occurring or developing during the period of survival
of such agreement,  covenant,  representation or warranty, provided that written
notice thereof is given to Seller before the expiration of any applicable period
of survival; (b) non-compliance with any applicable bulk sales law, registration
of bills of sale law, or other  applicable  law for the protection of creditors,
except for such Losses,  resulting from Purchaser's  failure to pay or discharge
in due course any Assumed Liability;  (c) any assertion against Purchaser of any
claim or liability of Seller not expressly assumed  hereunder by Purchaser;  (d)
unless expressly assumed by Purchaser hereunder, the assertion against Purchaser
by any person,  firm,  corporation or  Governmental  Entity of any obligation or
liability  of Seller  accruing on or prior to, or existing  on, the Closing Date
and thereafter accrued, including without limitation, tax claims or liabilities;
(e) any amounts  paid in good faith by  Purchaser  to or charged to Purchaser by
its customers in respect of goods  purchased by Seller's  customers on or before
the Closing Date,  provided that written  notice  thereof is given to Seller and
Black  within  one-year of the  Closing;  (f) subject to paragraph 3, failure of
Seller  to obtain  necessary  consents  to  assignment  of any of the  Purchased
Assets;  (g) any assertion against Purchaser of any claim or liability  relating
to or arising out of  Purchaser's  use of the trademarks  "GINGER GALE",  "PRIME
LIME CREAM" and "ROOT BEER ENCORE",  including without  limitation any claim for
infringement of the rights of a third party; or (h) any and all actions,  suits,
proceedings,  claims,  demands,  assessments,   judgments,  costs  and  expenses
incident to any of the foregoing or in enforcing this indemnity. Notwithstanding
anything to the contrary set forth in this Agreement,  Purchaser may recover any
amounts due to it from Seller and Black pursuant to this paragraph 13.1 from the
Escrow  Deposit  pursuant to the provisions of the Escrow  Agreement.  Purchaser
shall give Seller and Black prompt written  notice of any claim,  suit or demand
which Purchaser  believes will give rise to  indemnification by Seller and Black
under this paragraph;  provided,  however,  that the failure to give such notice
shall not affect the liability of Seller and Black hereunder  unless the failure
to give such notice  adversely and materially  affects the ability of Seller and
Black to defend  themselves  against a claim or to cure the breach or inaccuracy
giving  rise to the claim for  indemnification  on  account  thereof.  Except as
hereinafter  provided,  Seller  and Black  shall have the right to defend and to
direct the defense against any such claim,  suit or demand,  in Seller's name at
Seller's  and  Black's  expense  and with  counsel of  Seller's  and Black's own
choosing, which counsel shall be reasonably satisfactory to Purchaser. Purchaser
shall,  at Seller's  and Black's  expense,  cooperate in the defense of any such
claim, suit or demand. If Seller and Black,  within reasonable time after notice
of  a  claim,  fail  to  defend  Purchaser  or  if  the  facts  giving  rise  to
indemnification  hereunder shall involve a possible claim by Purchaser or any of
its affiliates  against a third party, or the facts concern a claim constituting
or  challenging  any material  rights or assets of Seller  acquired by Purchaser
pursuant to this  Agreement or seeking an injunction or other  equitable  relief
against  Purchaser  or any of its  affiliates,  Purchaser  shall be  entitled to
undertake the defense,  compromise or settlement of such claim at the expense of
and for the account and risk of Seller and Black  subject to the right of Seller
and  Black  to  assume  the  defense  of such  claim  at any  time  prior to the
settlement,  compromise  or  final  determination  thereof  if the  only  issues
remaining  therein involve  liability for, or the amount of, money damages to be
assessed  against  Purchaser,  provided  Seller  and  Black  will  not,  without
Purchaser's  written  consent,  settle or compromise any claim or consent to any
entry of judgment  which does not include as an  unconditional  term thereof the
giving  by the  claimant  or the  plaintiff  to  Purchaser  a  release  from all
liability in respect of such claim.

13.2 Indemnification by Purchaser. Purchaser agrees to indemnify Seller and hold
it  harmless  from any and all  Losses,  which  Seller  or any of its  officers,
directors,  parents  or other  affiliates,  including  Black  (all of which  are
included in the term  "Seller"  for  purposes of this  Article  13),  may incur,
suffer  or  become  liable  for as  result  of or in  connection  with  (a)  the
inaccuracy or breach of any agreement,  covenant,  representation or warranty of
Purchaser  contained in this Agreement or other document or agreement  delivered
pursuant  hereto  occurring or developing  during the period of survival of such
agreement,  covenant,  representation  or warranty,  including any claims by any
third parties alleging facts or  circumstances  which, if true, would constitute
such  inaccuracy  or breach,  provided that written  notice  thereof is given to
Purchaser  before the  expiration  of any period of survival;  (b) any assertion
against  Seller  of any  claim or  liability  of  Purchaser,  including  without
limitation those assumed  hereunder by Purchaser,  but excluding any as to which
Purchaser is entitled to  indemnification  pursuant to paragraph  13.1;  (c) the
assertion against Seller by any person, firm, corporation or Governmental Entity
of any obligation or liability caused by or resulting from Purchaser's ownership
or use of the  Purchased  Assets or the conduct of the  Business  following  the
Closing hereunder,  including without limitation any liability and penalties for
taxes of  Purchaser;  or (d) any and all actions,  suits,  proceedings,  claims,
demands,  assessments,  judgments,  costs and  expenses  incident  to any of the
foregoing  or in enforcing  this  indemnity.  In case any claim,  suit or demand
shall arise  hereunder  Purchaser shall have the same rights and duties given to
Seller and Black under paragraph 13.1 hereof.

13.3 Limitation on Indemnification. Neither Seller nor Purchaser shall be liable
to indemnify the other for its Losses under paragraphs 13.1(a) and 13.2(a) until
such time as the aggregate amount of otherwise  indemnifiable  Losses exceeds an
amount equal to $20,000, and thereafter the indemnification  obligations of each
party shall apply to Losses in excess of such  amount,  provided,  however,  the
limitation  set forth in this paragraph 13.3 shall not apply with respect to the
payment of the Purchase Price..

13.4  Exclusive  Remedy.  Except for actions  based upon fraud or for  equitable
relief,  or for the  payment of any  amount due under  Article 2, the rights and
remedies  conferred in this Article 13 are intended to and shall  constitute the
sole and exclusive remedies of the parties.

14.      EFFECTIVENESS OF THIS AGREEMENT.

         This Agreement  shall become  effective upon the execution and delivery
of this Agreement (or  counterpart  thereof) by all parties hereto and shall not
be binding upon any party  executing  this  Agreement (or  counterpart  thereof)
until executed by all parties hereto.

15.      EXPENSES.

         Except as may otherwise be expressly provided herein, Purchaser, on the
one hand, and Seller and Black, on the other hand,  shall pay their own expenses
in connection  with this  Agreement and the  transactions  contemplated  hereby,
including attorneys' and accountants' fees.

16.      SALES, USE, TRANSFER AND OTHER TAXES.

         Purchaser  shall pay all sales  taxes and  transfer  taxes  incurred in
connection with the transfer of the Purchased Assets by Seller to Purchaser.

17.      NOTICES.

         Any notices or other  communications  required or  permitted  hereunder
shall be in writing and shall be deemed  given when:  actually  delivered to the
person to whom notice is directed;  on the date of the first attempted  delivery
by the U.S.  Postal  Service if mailed by registered or certified  mail,  return
receipt requested,  postage prepaid;  on the date of first attempted delivery if
sent by  documented  overnight  delivery  service  or, to the extent  receipt is
confirmed,  by telecopy to the  parties  addressed  as follows (or to such other
address of which the  parties  may have  given  notice in  accordance  with this
paragraph 17):




<PAGE>


                  In the case of Seller or Black:

                  Before 10/25/00:

                  Blue Sky Natural Beverage Co.
                  510 Don Gaspar Avenue
                  Santa Fe, NM  87501
                  Attn:  Robert Black
                  Telecopy No.: (505) 982-4004
                  Confirmation No.:  (505) 986-8777

                  After 10/25/00:

                  c/o Robert Black
                  308 Madrid Lane
                  Santa Fe, NM  87501
                  Telecopy No.:  (505) 989-3999
                  Confirmation No.:  (505) 988-1982


                  with a copy to:

                  Schuler, Messersmith, Daly & Lansdowne
                  4300 San Mateo NE, Suite B380
                  Albuquerque, NM  87110
                  Attn:  Joseph K. Daly, Esq.
                  Telecopy No.:  (505) 872-0900
                  Confirmation No.:  (505) 872-0800

                  In the case of Purchaser:

                  Before 10/15/00:

                  c/o Hansen Beverage Company
                  2380 Railroad Street
                  Corona, California  91720
                  Attn:  Rodney C. Sacks
                  Telecopy No.:  (909) 739-6210
                  Confirmation No.:  (909) 739-6200




<PAGE>


                  After 10/15/00:

                  c/o Hansen Beverage Company
                  1010 Railroad Street
                  Corona, California  91720
                  Attn:  Rodney C. Sacks
                  Telecopy No.:  (909) 739-6210
                  Confirmation No.:  (909) 739-6200

                  with a copy to:

                  Winston & Strawn
                  200 Park Avenue
                  New York, New York 10166
                  Attn:  Benjamin M. Polk, Esq.
                  Telecopy No.:  (212) 294-4700
                  Confirmation No.:  (212) 294-6700



18.      SUCCESSORS.

         This  Agreement  shall be binding  upon and inure to the benefit of the
parties  hereto  and  their  respective  successors  and  assigns,  except  that
Purchaser,  on the one hand, and Seller and Black, on the other hand,  shall not
assign their  respective  obligations  hereunder,  other than an  assignment  by
Purchaser to one of its  subsidiaries or affiliates or to a lender of Purchaser,
without the prior written consent of the other parties.

19.      PARAGRAPH HEADINGS.

         The paragraph headings are for the convenience of the parties and in no
way alter, modify, amend, limit, or restrict the contractual  obligations of the
parties.

20.      GOVERNING LAW; ARBITRATION.

20.1  Governing  Law.  This  Agreement  shall be  governed by and  construed  in
accordance  with the laws of the State of California  (without  giving effect to
the conflict of law provisions of such State).

20.2 Arbitration.  Any dispute,  controversy or claim arising out of or relating
to  this  Agreement  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 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 Seller and
Purchaser waive the right, if any, to obtain any award for exemplary or punitive
damages or any other amount for the purpose of 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 this  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. The
obligations  herein to  arbitrate  shall not  prevent  any  party  from  seeking
temporary restraining orders,  preliminary  injunctions or other procedures in a
court of competent  jurisdiction to obtain interim relief when deemed  necessary
by such party and court to preserve the status quo or prevent irreparable injury
pending  resolution  by  arbitration  of the actual  dispute or to seek a remedy
specifically provided for in this Agreement.  All parties hereto acknowledge and
agree that the state and federal courts of the State of California are courts of
competent  jurisdiction  for purposes of this  paragraph and do hereby submit to
the  jurisdiction of the  appropriate  court in the State of California to which
the matter is first  submitted  by a party for  enforcement  of any  arbitration
award or to obtain any such interim relief as herein provided.

21.      ANNOUNCEMENTS.

         No press releases,  announcements or other disclosure  relating to this
Agreement or the transactions  contemplated herein will be made or issued to the
press,  employees,  customers,  suppliers or any other person  without the joint
approval  of  Purchaser  and Seller  (which  approval  will not be  unreasonably
withheld or delayed),  except that in the case of any public disclosure required
by law,  Seller's  approval  will not be required but Seller shall be afforded a
reasonable opportunity to review and comment upon the required disclosure.

22.      ENTIRE AGREEMENT.

         This Agreement,  including all Schedules and Exhibits  hereto,  and all
agreements to be delivered by the parties  pursuant hereto  represent the entire
understanding and agreement among the parties hereto with respect to the subject
matter  hereof and,  therefore,  supersede all prior  negotiations  between such
parties and cannot be amended,  supplemented or changed  orally,  but only by an
agreement in writing  which makes  specific  reference to this  Agreement or the
agreement  delivered pursuant hereto, as the case may be, and which is signed by
the  party  against  whom  enforcement  of any  such  amendment,  supplement  or
modification is sought.

23.      COUNTERPARTS.

         This Agreement may be signed in two or more  counterparts,  each signed
by one or more of the  parties  hereto so long as each party shall sign at least
one counterpart of this Agreement,  all of which taken together shall constitute
one and the same instrument.




<PAGE>


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



         PURCHASER:                         BLUE SKY NATURAL BEVERAGE CO., a
                                                     Delaware corporation




                                                    By:/s/ Rodney C. Sacks
                                                    Title: Chairman and CEO



         SELLER:                            BLUE SKY NATURAL BEVERAGE CO., a
                             New Mexico corporation



                                                     By:/s/ Robert Black
                                                     Title: CEO

                                                     By: /s/ Michael Rising
                                                     Title: Executive Vice
                                                            President



         SHAREHOLDER:                                /s/ Robert Black
                                                       Robert Black






                             SEVENTH MODIFICATION TO
                   REVOLVING CREDIT LOAN & SECURITY AGREEMENT
                            (ACCOUNTS AND INVENTORY)
                                       AND
                         FIRST AMENDMENT TO ADDENDUM TO
                   REVOLVING CREDIT LOAN & SECURITY AGREEMENT


     This  SEVENTH  MODIFICATION  TO LOAN &  SECURITY  AGREEMENT  (ACCOUNTS  AND
INVENTORY) AND FIRST  AMENDMENT TO ADDENDUM TO REVOLVING  CREDIT LOAN & SECURITY
AGREEMENT (this  "Modification") is entered into as of September 19, 2000 by and
between  HANSEN  BEVERAGE  COMPANY,  a  Delaware  corporation  ("Borrower")  and
COMERICA BANK-CALIFORNIA, a California banking corporation ("Bank").

                                    RECITALS

                  A. Borrower and Bank have previously entered into that certain
Revolving Credit Loan & Security Agreement  (Accounts and Inventory) dated as of
May 15, 1997, as amended by that certain First  Modification  to Loan & Security
Agreement  dated  May 11,  1998,  as  further  amended  by that  certain  Second
Modification  to Loan &  Security  Agreement  dated  July 27,  1998,  as further
amended by that certain Third  Modification  to Loan & Security  Agreement dated
December  1,  1998,  as further  amended by that  certain  Fourth  Amendment  to
Revolving  Credit Loan and Security  Agreement  dated March 28, 2000, as further
amended by that certain  Fifth  Amendment to Revolving  Credit Loan and Security
dated
 April 27, 2000, as further  amended by that certain Sixth  Modification to
Amendment  to  revolving  Credit  Loan  and  Security  Agreement  (Accounts  and
Inventory)  dated  May  23,  2000   (collectively   referred  to  as  the  "Loan
Agreement"),  together  with the  Addendum to  Revolving  Credit Loan & Security
Agreement  dated December 1, 1998 (the "LIBOR  Addendum"),  the Inventory  Rider
(Revolving  Advance)  dated May 15, 1997,  as amended by that certain  Inventory
Rider to Revolving  Credit Loan and Security  Agreement  dated  December 1, 1998
(the  "Inventory  Rider"),  the  Environmental  Rider  dated  May 15,  1997 (the
"Environmental  Rider"),  the Equipment Rider dated May 15, 1997 (the "Equipment
Rider") and UCC-1 Financing Statement (the "UCC-1").

                  B. Pursuant to the Loan Agreement,  Bank has made available to
Borrower a  revolving  line of credit  (the "Line of  Credit")  in an  aggregate
principal amount not to exceed Three Million and 00/100 Dollars  ($3,000,000.00)
at any one time, as further  provided in the terms and conditions set forth more
completely in the Loan Agreement.

                  C.  Borrower  has  previously  executed  in favor of Bank that
certain Amended and Restated  Variable Rate  Installment  Note dated as of April
20, 2000 made by Borrower payable to the order of Bank in the original principal
amount of Four Million and 00/100 Dollars ($4,000,000.00) (as amended, the "Term
Loan Note").

                  D. As additional  security for the  Obligations (as defined in
the Loan Agreement),  including the Term Loan Note, Borrower has pledged to Bank
those  certain  Trademark  Rights as defined  in and  pursuant  to that  certain
Security  Agreement in License Agreement and Other Agreements dated May 15, 1997
by and between Bank and Borrower (the "License Security Agreement").

                  E. Hansen Natural Corporation, a Delaware corporation ("Hansen
Natural"), and Hard e Beverage Company, a Delaware corporation formerly known as
CVI Ventures,  Inc. ("Hard e Beverage")  (Hansen Natural and Hard e Beverage are
collectively  referred to as the "Guarantors")  have each executed those certain
guaranty  agreements  each dated as of May 15, 1997  (respectively,  the "Hansen
Guaranty"and the "Hard e Beverage Guaranty"and collectively,  the "Guaranties"),
pursuant  to  which  Guarantors  guaranteed  the  Obligations  owing  to Bank by
Borrower, as set forth more completely in the Guaranties.




<PAGE>



                  F. Hansen Natural's  obligations under the Hansen Guaranty are
secured by the capital stock of Borrower  owned by Hansen  Natural,  which stock
has been pledged pursuant to the terms of that certain  Security  Agreement (All
Assets) dated May 15, 1997,  together with that certain  endorsement in blank of
stock  certificates,  the  Environmental  Rider  dated May 15,  1997,  and UCC-1
Financing  Statement  (collectively  referred  to as the "Hansen  Natural  Stock
Pledge Documents").

                  G. The Loan Agreement,  LIBOR Addendum,  the Inventory  Rider,
the  Environmental  Rider,  the Equipment Rider, the Term Loan Note, the License
Security  Agreement,  the  Guaranties,  and  the  Hansen  Natural  Stock  Pledge
Documents are collectively referred to as the "Loan Documents".

                  H. Blue Sky  Natural  Beverage  Co., a  Delaware  corporation,
("Blue Sky") has purchased or will purchase  certain assets (the  "Acquisition")
of Blue Sky Natural Beverage Co., a New Mexico corporation,  ("Seller") pursuant
to the terms of that certain Asset Purchase  Agreement dated as of September 19,
2000 by and  between  Blue Sky and Seller  (as the same may be further  amended,
modified  or  supplemented  from time to time the  "Acquisition  Agreement")(the
Acquisition  Agreement and each  schedule,  exhibit,  document,  instrument  and
certificate  incorporated  therein or delivered  in  connection  therewith,  are
referred to as the "Acquisition Documents").

                  I. In order to finance the  Acquisition,  payoff the Term Loan
Note,  and for  additional  working  capital,  Borrower has requested  that Bank
increase   the  Line  of  Credit   to  Twelve   Million   and   00/100   Dollars
($12,000,000.00),  and Bank has  agreed to  increase  the Line of Credit to said
amount  pursuant to certain terms and  conditions,  as set forth more completely
herein.


                                    AGREEMENT

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
agreements, provisions and covenants herein contained, Borrower and Lender agree
as follows

1. Incorporation by Reference; Definitions. The foregoing Loan Documents and the
Recitals are  incorporated  herein by this reference as though set forth in full
herein.  Any term not defined  herein  shall have the meaning  given in the Loan
Documents.

2. Modifications to the Loan Agreement. The Loan Agreement is hereby modified as
set forth below.

2.1 Section 1 of the Loan  Agreement.  Section 1 of the Loan Agreement is hereby
amended by adding the following new subsection:

                           "1.42 "Subsidiary"means,  with respect to any Person,
                  any corporation, association or other business entity 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."

2.2  Modification of Section 2.1 of the Loan Agreement.  Section 2.1 of the Loan
Agreement is hereby amended by deleting it in its entirety and replacing it with
the following provision:




<PAGE>



                           "Notwithstanding any prior agreement to the contrary,
                  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
                  not to exceed the principal  sum of Twelve  Million and 00/100
                  ($12,000,000.00)  at any one time (the "Committed Line"), with
                  any amount in excess of the Committed  Line being  referred to
                  hereinafter  as  an   ("Overadvance").   Notwithstanding   the
                  foregoing,  the credit  limit of the  Committed  Line shall be
                  reduced  by the  following  amounts  as of the dates set forth
                  below:

                           As of September 19, 2001           $1,300,000.00
                           As of September 19, 2002           $1,400,000.00
                           As of September 19, 2003           $1,500,000.00
                           As of September 19, 2004           $1,800,000.00

                  provided  however,  that upon the Committed Line being reduced
                  to  Six  Million  and  00/100  Dollars  ($6,000,000.00)  after
                  September 19, 2004, the foregoing  annual  reductions shall no
                  longer be in effect."

2.3  Modification to Section 3.1 of the Loan Agreement.  Section 3.1 of the Loan
Agreement is hereby  modified by deleting the first sentence in its entirety and
substituting the following provision:

                           "Notwithstanding any prior agreement to the contrary,
                  this Agreement shall remain in full force and effect until the
                  earlier of (a)  acceleration of the Obligations for any reason
                  under the terms of this  Agreement;  or (b) the specific  date
                  sixty (60) months after the funding of the Acquisition."

2.4  Modification of Section 6.15 (c) of the Loan Agreement.  Section 6.15(c) of
the Loan  Agreement  is  hereby  amended  by  deleting  it in its  entirety  and
replacing it with the following:

                                    "Quarterly  A/R and A/P  Agings.  As soon as
                  available,  and in any event within thirty (30) days after the
                  end of each of  Borrower's  fiscal  quarters,  Borrower  shall
                  deliver  to Bank,  on a  quarterly  basis,  aged  listings  of
                  accounts receivable and accounts payable.

                           Quarterly Inventory Report. As soon as available, and
                  in  any  event  within  thirty  (30)  days  after  the  end of
                  Borrower's fiscal quarters, Borrower shall deliver to Bank, on
                  a quarterly  basis,  inventory  reports in form and  substance
                  acceptable to Bank."

2.5  Modification to Section  6.16(b) of the Loan Agreement.  Section 6.16(b) of
the Loan  Agreement is hereby  deleted in its  entirety  and  replaced  with the
following:
                           "b. Borrower shall maintain, on a consolidated basis,
                  as of the end of each fiscal  quarter of Borrower,  a Book Net
                  Worth of not less than Twenty One  Million and 00/100  Dollars
                  ($21,000,000.00).  As used  herein,  the term "Book Net Worth"
                  means Borrower's consolidated Net Worth, plus the net value of
                  Borrower's and Blue Sky's trademarks,  plus, commencing at the
                  start of  Borrower's  fiscal year 2002,  seventy  five percent
                  (75%) of annual consolidated Net Income."

2.6  Modification to Section  6.16(c) of the Loan Agreement.  Section 6.16(c) of
the Loan  Agreement is hereby  deleted in its  entirety  and  replaced  with the
following:




<PAGE>



                           "c. Borrower shall maintain,  as of the first quarter
                  following the Acquisition,  on a consolidated basis, as of the
                  end of each fiscal  quarter,  a ratio of senior Funded Debt to
                  EBITDA of less than  2.00:1.00,  provided,  however that as of
                  the date twelve (12) months from the date of the  Acquisition,
                  the  ratio  shall  be  1.75:1.00.  As used  herein,  the  term
                  "EBITDA"  means,  for  any  period,   Borrower's  consolidated
                  pre-tax Net Income  ("pre-tax"  being determined in accordance
                  with GAAP);  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,  all as determined in accordance  with GAAP; 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 deducted in determining
                  Net Income for such period.  In calculating  this ratio,  Bank
                  (i) in determining EBITDA shall use the current quarter EBITDA
                  and the  previous  three  (3)  quarters  EBITDA;  and  (ii) in
                  determining  Funded Debt, shall use Funded Debt as of the date
                  of calculating this ratio."

2.7  Modification to Section  6.16(d) of the Loan Agreement.  Section 6.16(d) of
the Loan  Agreement  is  hereby  amended  by  deleting  it in its  entirety  and
replacing it with the following:

                           "d. Borrower shall maintain, on a consolidated basis,
                  as of the end of each fiscal  quarter of Borrower,  a ratio of
                  (a)  the sum of (i)  Cash  Flow  plus  (ii)  non-cash  charges
                  deducted   in   determining   Net  Income;   less   dividends,
                  distributions  and  withdrawals  to (b)  the  sum  of (i)  the
                  Current  Maturities on Long Term Debt (not  including the Line
                  of  Credit);   plus  the  current  portion  of  capital  lease
                  obligations; plus the greater of (1) One Million Three Hundred
                  Thousand and 00/100 Dollars ($1,300,000.00); or (2) the amount
                  of the credit limit  reduction set forth in Section 2.1 of the
                  Loan  Agreement  for the relevant  period,  to the extent that
                  such  reduction is then payable,  of not less than  1.30:1.00,
                  provided  however  that as of the date twenty four (24) months
                  from  the  date of  this  Modification,  the  ratio  shall  be
                  1.35:1.00.  In calculating this ratio, Bank (i) in determining
                  Cash Flow  shall  use the  current  quarter  Cash Flow and the
                  previous three (3) quarters Cash Flow; and (ii) in determining
                  the Current  Maturities  on Long Term Debt (not  including the
                  Line of Credit)  and the  current  portion  of  capital  lease
                  obligations,  shall use the  Current  Maturities  on Long Term
                  Debt  (not  including  the  Line of  Credit)  and the  current
                  portion  of  capital  lease  obligations  as of  the  date  of
                  calculating this ratio."

2.8  Modification to Section  6.16(e) of the Loan Agreement.  Section 6.16(e) of
the Loan  Agreement  is  hereby  amended  by  deleting  it in its  entirety  and
replacing it with the following:

                           "e. Commencing at the start of Borrower's fiscal year
                  2001, and for each fiscal year thereafter, Borrower shall not,
                  and shall  not  permit  any of its  Subsidiaries  directly  or
                  indirectly to, without Bank's prior written  consent,  acquire
                  or expend for or commit  itself to acquire or expend for fixed
                  assets by lease, purchase or otherwise or incur new debt in an
                  aggregate  amount that exceeds One Million and 00/100  Dollars
                  ($1,000,000.00) in any fiscal year; and"

2.9 Modification to Section 6.16 of the Loan Agreement.  Section 6.16 is amended
by adding the following new subsections:



<PAGE>



                           "f. Borrower shall maintain, on a consolidated basis,
                  and as of the end of each fiscal quarter of Borrower,  a ratio
                  of  (a)  current   assets  to  (b)  the  sum  of  (i)  current
                  liabilities;  plus the unpaid principal balance of the Line of
                  Credit of not less than 1.0:1.0.

                           g.  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 and normal  course of its 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  to for  purposes of
                  completion of production of such Inventory"

3. Modifications to the LIBOR Addendum. The LIBOR Addendum is hereby modified as
set forth below.

3.1  Modification  to  Section 2 of the LIBOR  Addendum.  Section 2 of the LIBOR
Addendum is hereby  amended by deleting it in its entirety and replacing it with
the following:

                           "2.      Interest Rate Options.  Borrower  shall have
                  the  following  options  regarding the interest rate to be 
                  paid by Borrower on Advances under the Note:

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

                  If Borrower's ratio of Senior   Base Rate Option          LIBOR Option
                  Funded Debt to EBITDA as set    Advances shall bear       Advances shall bear
                  forth in Section 6.16(c) of     interest at a floating    interest at a fixed
                  this Loan Agreement is:         rate per annum equal to:  rate per annum equal
                                                                            to:
                  ------------------------------- ------------------------- ----------------------
                  
                        less than 2.0:1.0                Base Rate            LIBOR plus 2.00%
                  ------------------------------- ------------------------- ----------------------
                 
                    more than 2.0:1.0 and less      Base Rate plus .25%       LIBOR plus 2.25%
                           than 3.0:1.0
                  ------------------------------- ------------------------- ----------------------
                
                        more than 3.0:1.0           Base Rate plus .50%       LIBOR plus 2.50%
                  ------------------------------- ------------------------- ----------------------
</TABLE>


                  As used herein,  "Base Rate Option" means any Advance when and
                  to the extent that the interest rate therefor is determined by
                  a reference  to the Base Rate,  and "LIBOR  Option"  means any
                  Advance when and to the extent that the interest rate therefor
                  is determined by a reference to LIBOR.

4.  Conditions  Precedent.  Bank's  consent  to  this  Modification  subject  to
satisfaction of all of the conditions set forth below.

4.1  Financial  Condition.  Borrower  shall  have  delivered  to Bank (i) a fair
saleable value balance sheet and income statement reasonably  acceptable to Bank
in form and substance  satisfactory  to Bank dated the date hereof,  and setting
forth valuations of Borrower and its  Subsidiaries on a consolidated  basis; and
(ii) the unaudited  consolidated  balance sheet of Borrower and its Subsidiaries
as of  the  date  hereof  giving  effect  to  the  Acquisition  together  with a
certificate of Borrower,  executed by the chief financial officer of Borrower in
such  Person's  capacity  as an  officer  of  Borrower,  in form  and  substance
satisfactory to Bank certifying  that,  after giving effect to the  Acquisition,
the fair saleable  value of the assets of Borrower,  on a going  concern  basis,
will exceed the probable  liability on its debts,  that Borrower will be able to
pay its debts as they mature and that Borrower will not have unreasonably  small
capital to conduct its business,  together with  attachments  demonstrating  the
basis of such conclusions.

4.2 Seller  Financial  Statements.  Borrower  shall deliver to Bank, the balance
sheet  of  Seller  as of the end of  Seller's  two (2)  previous  fiscal  years,
together with the related  statements  of income and retained  earnings for such
fiscal  years,  and the  statements  of changes in  financial  position,  all in
reasonable  detail  and  standing  in  comparative  form  and  all  prepared  in
accordance with GAAP consistently  applied and as to the statements  accompanied
by an opinion thereon acceptable to Bank by independent accountants.


<PAGE>

4.3 Fee.  Borrower  shall have paid the  commitment  fee in the amount of Thirty
Thousand and 00/100 Dollars ($30,000.00).

4.4 Acquisition.  The Acquisition shall have been consummated in accordance with
the terms of the Acquisition Documents.

4.5  Acquisition  Documents.  Bank (a) shall  have  received  true and  complete
executed or conformed  copies of the  Acquisition  Documents and any  amendments
thereto; (b) the Acquisition  Documents shall be in full force and effect and no
material term or condition  thereof shall have been amended,  modified or waived
after the execution  thereof  (other than solely to extend the date by which the
Acquisition  is  required to occur);  (c) neither  Seller or Blue Sky shall have
failed  to  perform  any  material   obligation  or  covenant  required  by  the
Acquisition  Documents to be  performed or complied  with by it on or before the
date  hereof;  and (d) Bank  shall  have  received  a  certificate  of Blue Sky,
executed  by Blue  Sky's  chief  executive  or chief  financial  officer in such
Person's  capacity as an officer of Blue Sky, to the effect set forth in clauses
(a), (b) and (c) above.

4.6  Security  Interests,  UCC Filings and Stock  Certificates.  Bank shall have
received  satisfactory  evidence  that  Bank  has a valid  and  perfected  first
priority security interest as of the date hereof in the Collateral, subject only
to liens permitted under the Loan Agreement. Borrower shall have delivered to or
caused  to  be  delivered  to  Bank  executed  documents   (including  financing
statements  under the UCC and other  applicable  documents under the laws of any
jurisdiction with respect to the perfection of liens) as Bank may deem necessary
to perfect its security interests in the Collateral.  Borrower,  pursuant to the
stock pledge agreements,  shall have delivered or caused to be delivered to Bank
certificates  (which  certificates  shall be  properly  endorsed  in  blank  for
transfer or  accompanied  by  irrevocable  undated stock powers duly endorsed in
blank)  representing all of the capital stock of Borrower and each Subsidiary of
Borrower whose capital stock is subject to the stock pledge agreements.

4.7 Termination of Liens.  Bank shall have received,  duly executed,  such UCC-3
termination  statements,  mortgage releases and other  instruments,  in form and
substance  satisfactory  to Bank, as shall be necessary to terminate and satisfy
all liens except permitted encumbrances on the Collateral.

4.8 Borrower Documents.  Borrower shall deliver or cause to be delivered to Bank
the documents listed below, each, unless otherwise noted, dated the date hereof,
duly executed, in form and substance satisfactory to Bank:

4.8.1    this Modification;

4.8.2    the Security Agreement (All Assets) of Hard e Beverage;

4.8.3    the UCC-1 Financing Statement of Hard e Beverage;

4.8.4    the Security Agreement (All Assets) of Blue Sky;

4.8.5    the UCC-1 Financing Statement of Blue Sky;

4.8.6    the Guaranty of Blue Sky;

4.8.7    the Stock Pledge Agreement of Hansen Natural;

4.8.8    the Stock Pledge Agreement of Borrower;

4.8.9    the Trademark Security Agreement of Borrower;

4.8.10   the Patent Security Agreement of Borrower;


<PAGE>

4.8.11   the Trademark Security Agreement of Blue Sky;

4.8.12   the Patent Security Agreement of Blue Sky;

4.8.13  to the  extent  requested  by  Bank  on or  prior  to the  date  hereof,
agreements  with the landlords of all premises  leased by Borrower or any of its
Subsidiaries  containing  such  consents  and  waivers as  required  by Bank and
non-disturbance  agreements  with the holders of any mortgages or deeds of trust
on the real estate  which is leased by Borrower  or any of its  Subsidiaries  on
terms and conditions reasonably satisfactory to Bank;

4.8.14 to the extent requested by Bank, bailee letters from each warehouseman or
bailee,  if any,  having  possession of any Inventory with an aggregate value in
excess of Fifty Thousand and 00/100 Dollars ($50,000.00);

4.8.15  a  certificate  of  the  secretary  of  Borrower  with  respect  to  (a)
resolutions of the Board of Directors of Borrower  approving and authorizing the
execution,  delivery and  performance  of this  Modification  and the  documents
executed  pursuant  thereto  to which  Borrower  is to be a  party;  and (b) the
signature and incumbency of the officers of Borrower executing such documents;

4.8.16  a  certificate  of  the  secretary  of  Blue  Sky  with  respect  to (a)
resolutions of the Board of Directors of Blue Sky approving and  authorizing the
execution, delivery and performance of the documents executed pursuant hereto to
which Blue Sky is to be a party;  and (b) the  signature  and  incumbency of the
officers of Blue Sky executing such documents;

4.8.17 a  certificate  of the  secretary of Hard e Beverage  with respect to (a)
resolutions  of the  Board  of  Directors  of  Hard  e  Beverage  approving  and
authorizing the execution,  delivery and  performance of the documents  executed
pursuant hereto to which Hard e Beverage is to be a party; and (b) the signature
and incumbency of the officers of Hard e Beverage executing such documents;

4.8.18 a  certificate  of the  secretary  of Hansen  Natural with respect to (a)
resolutions  of  the  Board  of  Directors  of  Hansen  Natural   approving  and
authorizing the execution,  delivery and  performance of the documents  executed
pursuant hereto to which Hansen Natural is to be a party;  and (b) the signature
and incumbency of the officers of Hansen Natural executing such documents;

4.8.19 payment by Borrower of Bank's  attorneys'  fees and costs incurred in the
preparation of this  Modification and the documents  executed  pursuant thereto;
and

4.8.20  such  other and  further  documents,  and  completion  of such other and
further matters, as Bank may reasonably deem necessary or appropriate.

5. No Modification of Other Obligations;  No Effect on Collateral.  Except as is
otherwise  specifically  set  forth  herein  or  in  any  document  executed  in
connection  herewith,  the Loan  Agreement and the Loan  Documents are and shall
remain unmodified and in full force and effect.  Borrower ratifies and reaffirms
the Obligations,  without setoff, defense, or counterclaim, and agrees fully and
faithfully to pay, perform and discharge,  as and when payment,  performance and
discharge are due, all of the Obligations  under the Loan Agreement,  as amended
hereby.  Nothing herein shall be deemed to affect in anyway the Collateral  that
secures  the  obligations   under  the  Loan  Agreement  (as  modified  by  this
Modification) or under any other agreement now or in the future.

6.  Conflicts.  If any  conflict  exists  between  the  provisions  of the  Loan
Documents  and the  provisions  of this  Modification,  the  provisions  of this
Modification shall control.


<PAGE>

7.  Ratification  of the  Guaranties  and Security  Therefor.  By executing this
Modification below where indicated,  Guarantors  acknowledge and agree that they
have read and are familiar with, and consent to, all of the terms and conditions
of this Modification. In light of the foregoing, by executing this Modification,
Guarantors further confirm and agree that all of the terms and provisions of the
Guaranties are ratified and  reaffirmed,  and that the  Guaranties  shall and do
continue in full force and effect.  Although Bank has informed Guarantors of the
terms of this  Modification,  Guarantors  understand  and agree that Bank has no
duty  whatsoever  to do so,  nor to  seek  this  or any  future  acknowledgment,
consent, or reaffirmation,  and that nothing contained herein is intended to, or
shall create, such a duty on the part of Bank as to any transactions hereafter.

8. Further Assurances.  Borrower agrees to make and execute such other documents
and/or take such other action and/or  provide such further  assurances as may be
requested by Bank in connection  with the  Obligations or as may be necessary or
required to effectuate  the terms and  conditions of this  Modification  and any
documents executed in connection herewith.

9. Future  Modifications.  Neither this  Modification nor any document  executed
herein  entitles,  or implies any consent or agreement to, any further or future
modification  of,  amendment  to,  waiver  of, or  consent  with  respect to any
provision of the Modification or the Loan Documents. Any modifications hereto or
to the Loan Documents shall be in writing and signed by the parties.

10.  Integration.  This  Modification  and any documents  executed in connection
herewith  are  integrated   agreements,   and  supersede  all  negotiations  and
agreements  regarding the subject matter hereof and thereof,  and taken together
with the Loan  Documents  and any  documents  executed in  connection  herewith,
constitute the final agreement of the parties with respect to the subject matter
hereof and thereof.

11.  Severability.  In the event any one or more of the provisions  contained in
this  Modification  is held  to be  invalid,  illegal  or  unenforceable  in any
respect,  then such provision  shall be  ineffective  only to the extent of such
prohibition or invalidity, and the validity, legality, and enforceability of the
remaining  provisions  contained  herein  shall  not in any way be  affected  or
impaired thereby.

12. Interpretation. This Modification and all agreements relating to the subject
matter hereof are the product of negotiation  and  preparation by and among each
party and its  respective  attorneys,  and shall be construed  accordingly.  The
parties waive the provisions of California Civil Code ss.1654.

13. Counterparts. This Modification may be signed in any number of counterparts,
each of which shall be an  original,  with the same effect as if all  signatures
were  upon the same  instrument.  Delivery  of an  executed  counterpart  of the
signature  page to this  Modification  by  telefacsimile  shall be  effective as
delivery of a manually executed counterpart of this Modification,  and any party
delivering  such  an  executed   counterpart  of  the  signature  page  to  this
Modification by  telefacsimile to any other party shall thereafter also promptly
deliver a  manually  executed  counterpart  of this  Modification  to such other
party,  provided that the failure to deliver such manually executed  counterpart
shall  not  affect  the  validity,  enforceability,  or  binding  effect of this
Modification.

                                              [signature page follows]



<PAGE>



     IN WITNESS  WHEREOF,  the  parties  have  caused  this  Modification  to be
executed as of the day and year first written above.

                             HANSEN BEVERAGE COMPANY




                             By:    /s/ Rodney C. Sacks            
                             Title: Chairman and CEO                      


                            COMERICA BANK-CALIFORNIA



                                      /s/ James L. Bradley
                             By:      James L. Bradley
                             Its:     Vice President


CONSENT OF GUARANTORS:

HANSEN NATURAL CORPORATION




By:    /s/ Rodney C. Sacks                                         

Title: Chairman and CEO                                     


HARD E BEVERAGE COMPANY
formerly known as CVI VENTURES, INC.




By:    /s/ Rodney C. Sacks                                 

Title: Chairman and CEO