8-K

F\Chock\8-K
2/3/97
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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)   January 16, 1997  


CHOCK FULL O'NUTS CORPORATION
(Exact name of Registrant as specified in its charter)



	  New York                     1-4183                   13-0697025
(State or other jurisdiction         (Commission             (IRS Employer
       of incorporation)             File Number)          Identification No.


370 Lexington Avenue, New York, New York 10017
(Address of principal executive office) (Zip Code)



Registrant's telephone number, including area code (212) 532-0300

None

									     
(Former name or former address, if changed since last report)


Item 5. Other Events.

		As of January 16, 1997, the Company acquired substantially all 
		of the assets of Ireland Coffee-Tea, Inc. ("Ireland"), a 
		leading roaster and distributor to hotels, restaurants and 
		institutions on the East Coast.

		The purchase of Ireland was accomplished pursuant to the terms 
		of an Asset Purchase Agreement, a copy of which is annexed 
		hereto as Exhibit A.



Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

	(c)     Exhibits:

		Exhibit A:  Asset Purchase Agreement dated as of January 16, 
		1997 by and between Chock Full O'Nuts Corporation and Ireland 
		Coffee-Tea, Inc.



SIGNATURES

	Pursuant to the requirements of Securities Exchange Act of 1934, the 
	Registrant has duly caused this Current Report on Form 8-K to be signed
	on its behalf by the undersigned, hereunto duly authorized.

						CHOCK FULL O'NUTS CORPORATION

						By: __________________________
						Howard M. Leitner,
						Executive Vice President and
						Chief Financial Officer

Dated:  February 3, 1997

EX-1

CHOCK\IRELAND\ASSETPUR
1/15/96

ASSET PURCHASE AGREEMENT

	ASSET PURCHASE AGREEMENT (the Agreement) 
dated as of January 16, 1997 by and between CHOCK 
FULL ONUTS CORPORATION, a New York corporation 
(Buyer) and IRELAND COFFEE - TEA, INC., a New 
Jersey corporation (Seller).
WITNESSETH:
WHEREAS, Seller is engaged in the business of 
processing, packaging and selling coffee and 
packaging and selling other related products (the 
Business).
WHEREAS, Buyer wishes to purchase substantially 
all of the assets used in connection with the 
Business; and
	WHEREAS, Seller wishes to sell such assets to 
Buyer.
NOW, THEREFORE, in consideration of the 
premises and the mutual agreements hereinafter set 
forth, the parties hereto hereby agree as follows:
	1.      Purchase and Sale of Assets.
	1.01    Purchase of Assets. On the terms and 
subject to the conditions set forth herein, at the 
Closing (as defined in Section 4.01), effective as 
of the Closing Date (as defined in Section 4.01), 
Buyer shall purchase from Seller, and Seller shall 
sell, assign, transfer, convey and deliver to Buyer, 
all of Sellers right, title and interest in and to 
all of the assets and properties used in connection 
with the Business, as the same shall exist on the 
Closing Date, except for the Excluded Assets as 
described in Section 1.03, all of such assets and 
properties being hereinafter collectively referred 
to as the Purchased Assets.
	1.02    List of Assets.   Except as expressly 
provided in Section 1.03 hereof, the Purchased 
Assets shall include, without limitation, all of 
Seller's right, title and interest in and to: 
	(a)     Cash and cash equivalents
	(b)     Except as described in Section 1.03, all 
receivables (including all trade receivables) to the 
extent included in the Closing Date Financial 
Statement (as defined below)
	(c)     All inventory (including raw materials, 
work-in process and finished goods) and packaging 
supplies 
	(d)     Prepaid licenses and permits relating to 
the Business and/or the Purchased Assets (to the 
extent same are transferable)
	(e)     Miscellaneous deposits and prepaid 
expenses (to the extent Buyer is to receive future 
benefits thereunder) 
(f)     Advances to suppliers
(g)     Machinery and equipment
(h)     Autos and trucks
(i)     Office furniture and fixtures
(j)     All contracts to supply coffee and related 
products to any third party (to the extent same are 
transferable
(k)    All futures or options contracts for the 
purchase of green coffee
(l)     Goodwill of the Business
(m)     All Rights (as defined in Section 5.l4)
(n)     All rights and privileges under and 
pursuant to the Assumed Contracts (as defined in 
Section 3.01) 
(o)     All claims against third parties relating 
to items included in the Purchase Assets, including, 
without limitation, unliquidated rights under 
manufacturer and vendors warranties
(p)     All customer lists, supplier lists, 
production records and other records relating to the 
Business
(q)     The Ireland Coffee & Tea, Lenson and Wayne 
trade name
(r)     Computer software
	1.03    Excluded Assets.   The Purchased Assets 
shall not include:
	(a)     Accounts receivable (i) from any 
shareholder of Buyer set forth on Schedule 5.02 and 
(ii) to the extent not included in the Closing Date 
Financial Statement
	(b)     All real estate
	(c)     Prepaid insurance
	(d)     Prepaid property taxes relating to the 
non-Purchased Assets
	(e)     Seller's accounting and tax records and 
files
	(f)     Seller's incorporation data, corporate 
seals, stock records, minutes of meetings 
of Seller's Boards of Directors and 
Stockholders
	(g)     Any contracts and leases to which Seller 
is a party, except Assumed Contracts
	(h)     Sellers right, title and interest in and 
to those assets held with respect to any 
Employee Plan (as defined in Section 5.23)
	(i)     Those assets set forth on Schedule 1.03
	1.04    Instruments of Transfer.  On the Closing 
Date, Seller shall deliver, or cause to be 
delivered, to Buyer (a) duly executed instruments of 
transfer and assignment, including, without 
limitation, bills of sale and assignments in form 
and substance reasonably satisfactory to Buyer and 
its counsel, sufficient to vest in Buyer valid title 
to all of Seller's right, title and interest in and 
to the Purchased Assets, free and clear of all 
mortgages, claims, liens, charges or encumbrances of 
any kind or nature whatsoever, except for the 
Assumed Liabilities, and (b) a check in the amount 
of all cash and cash equivalents included in the 
Purchased Assets.
	2.      Purchase Price.
2.01    Purchase Price.
(a)     The aggregate price to be paid by Buyer 
(the Purchase Price) for and in consideration of 
the sale and transfer of the Purchased Assets as 
provided herein and for the covenant not to compete 
set forth in Section 7.02 hereof (the Covenant Not 
to Compete) shall consist of (i) the Fixed Price 
(as defined below) plus the Earn Out Price (as 
defined below), which Fixed Price and Earn Out Price 
shall respectively be paid in the manner set forth 
in Sections 2.03 and 2.01 (c) hereof and (ii) the 
agreement by Buyer to assume and pay the Assumed 
Liabilities (as defined below).
(b)     The Fixed Price shall be equal to (i) 
$3,621,890 less the amount, if any, by which the 
Closing Date Book Value (as defined in and 
determined in accordance with the provisions of 
Section 2.04 hereof) is less than $1,890,000.  
Notwithstanding anything to the contrary that may be 
contained herein, if the Closing Date Book Value 
shall exceed $1,890,000 the Fixed Price shall not be 
increased by the amount of any such excess.  The 
parties agree that in computing the Closing Date 
Book Value all business activities through and 
including the close of business on January 17, 1997 
shall be reflected thereon.
(c)     (i)     The Earn Out Price shall be 
calculated annually for each of the four (4) 
calendar years 1997, 1998, 1999 and 2000 (the Earn 
Out Period) and for each such calendar year shall 
be equal to the amount by which number of pounds of 
Eligible Coffee (as defined below) coffee sold by 
Buyer and/or any of its affiliates or successors 
(Buyer Group) to those customers set forth on 
Schedule 2.01 (Customers) hereof exceeds 2,408,500 
multiplied by $.208.  For purposes of this 
Agreement, Eligible Coffee shall include (i) all 
coffee sold to food service Customers (i.e. all non-
retail Customers and distributors to such Customers) 
provided, however, that if Buyer shall after the 
date hereof acquire the business of any other person 
or entity and such person or entity shall, at the 
time of such acquisition, be selling coffee to any 
of such food service Customers then, and in such 
event, the pounds of coffee sold to such food 
service Customers on account of such acquisition 
shall not be considered Eligible Coffee and (ii) all 
coffee sold to retail Customers under one or more of 
the brand names (trademarks) set forth on Schedule 
5.14 annexed hereto.  For purposes of this Agreement 
coffee shall be deemed to be sold when shipped to a 
Customer.  The Earn Out Price for each such calendar 
year shall be paid within thirty five (35) days 
after the end of such calendar year.
	(ii)    During the Earn-Out Period, Buyer 
shall provide to Seller quarterly and annual reports 
of the number of pounds of coffee sold by Buyer 
Group to Customers (hereinafter Sales Reports).  
All Sales Reports shall be certified as being true 
and accurate by an officer of Buyer and each such 
quarterly and annual Sales Report shall be delivered 
to Seller within thirty (30) days after the end of 
each calendar quarter or calendar year, as the case 
may be, during the Earn-Out Period.  In addition 
during the Earn-Out Period, Buyer will use all 
commercially reasonable efforts to maximize sales of 
coffee to Customers.
	(iii)   Seller may, upon prior written 
request to Buyer, audit any of the Sales Reports (a 
Sales Audit Notice); provided, however, that with 
respect to each calendar year during the Earn-Out 
Period, Seller shall not have the right to audit any 
of the Sale Reports with respect to such calendar 
year unless Seller shall have provided a Sales Audit 
Notice to Buyer within respect thereto, within one 
hundred eighty (180) days of the end of such 
calendar year.  If Seller should provide Buyer with 
a Sales Audit Notice, then Seller shall have the 
right to have its employees and/or accountants do on 
site review of the work papers, schedules, memoranda 
and other documents prepared and/or reviewed by 
Buyer and other members of the Buyer Group and/or 
their employees or accountants and to otherwise 
audit the books of the Buyer and other members of 
the Buyer Group with respect to sales of coffee to 
Customers.  Sellers period for completion of any 
such audit shall be forty five (45) days after the 
giving of any Sales Audit Notice.  Buyer and its 
employees shall make available to Seller all of the 
records of Buyer and other members of the Buyer 
Group as are reasonably necessary for Seller to 
perform such audit and shall otherwise cooperate 
with Seller in connection therewith.  If Seller 
shall disagree with any Sales Report, Seller shall 
deliver to Buyer, within such forty-five (45) day 
period, a written notice specifying in reasonable 
detail any such exceptions.  If Seller delivers to 
Buyer a notice setting forth any such exceptions 
within such forty-five (45) day period, Buyer and 
Seller shall promptly endeavor to resolve the 
matters set forth in such notice, and if Buyer and 
Seller fail to reach an agreement with respect to 
such matters on or before the fifteenth day after 
receipt by Buyer of such notice from Seller, then, 
as to any matters in dispute, Buyer and Seller shall 
select a firm of independent public accountants of 
recognized national standing (the Arbiters) who 
has not rendered services to any of Buyer and 
Seller, or any of their affiliates, for at least 
three (3) years, and such firm shall promptly make 
an independent determination of such matters as to 
which disagreement remains, which determination 
shall be conclusive and binding on the parties 
hereto (except that if there is a disagreement with 
respect to whether or not Buyer has used all 
commercially reasonable efforts to maximize sales of 
coffee to Customers such determination shall not be 
submitted to the Arbiters).  If any audit with 
respect to a Sales Report shall result in a 
difference in favor of Seller in excess of 6 1/4% (a 
6 1/4% Discrepancy), then Buyer shall reimburse 
Seller for its actual costs associated with such 
audit and shall pay all of the fees of any Arbiter.  
If such audit shall not result in a 6 1/4% 
Discrepancy, then Seller shall pay all of the fees 
of any Arbiter.
2.02    Allocation of Purchase Price.  The parties 
agree that the Purchase Price shall be allocated to 
the Covenant Not to Compete and the various assets 
and properties included in the Purchased Assets in 
the manner set forth on Schedule 2.02 hereto, which 
Schedule shall be prepared by Buyer and submitted to 
Seller as soon as practicable after the Closing 
Date. 
	2.03    Payment of Fixed Price.
	(a)     The Fixed Price shall be paid as follows:
		(i)     on the Closing Date, Buyer shall (x) 
deliver to Seller by bank or certified check or by 
wire transfer an amount equal to $2,507,861, and (y) 
deliver to Mr. William Schroeder, in consideration 
of his Covenant Not to Compete, by certified or bank 
check or wire transfer the amount of $329,378 (the 
aggregate amount of the payments made pursuant to 
(x) and (y) being hereinafter called the Deposit); 
and (ii) within five (5) days after the 
determination of the Closing Date Book Value (as 
provided in Section 2.04 hereof), Buyer shall pay to 
Seller by certified or bank check or wire transfer 
the amount, if any, by which the Fixed Price exceeds 
the Deposit, or Seller shall pay to Buyer by 
certified or bank check or wire transfer the amount, 
if any, by which exceeds the Deposit exceeds the 
Fixed Price.
	(b)     The Assumed Liabilities (as defined in 
Section 3.01) shall be paid by Buyer in the manner 
agreed in Section 3.01(a), including without 
limitation the payment at Closing of the Long Term 
Debt of up to $3,000,000.
	2.04    Final Determination of Fixed Price.
(a)     Within forty-five (45) days after the 
Closing Date, Seller shall deliver to Buyer the 
Closing Date Financial Statement (as defined below) 
accompanied by a statement setting forth the amount 
of (i) the aggregate amount, on the Closing Date 
Financial Statement, of all of those tangible 
current assets included in the Purchased Assets, 
which shall include cash, accounts receivable, 
prepaids, inventory and other tangible current 
assets (but shall not include advances made by 
Seller to its shareholders, less (ii) the aggregate 
amount of the current liabilities of Seller set 
forth on the Closing Date Financial Statement; it 
being understood that such liabilities shall include 
an amount with respect to accrued vacation pay for 
Transferred Employees (as defined below) through the 
Closing Date and that such liabilities shall not 
include the current portion of Long Term Debt or 
Notes Payable (such amount being hereinafter called 
the Closing Date Book Value).
(b)     The Closing Date Book Value shall be 
determined in conformity with generally accepted 
accounting principles consistently applied (GAAP); 
except that the inventory on the Closing Date 
Financial Statement shall be valued in accordance 
with the method set forth on Schedule 2.04(b) 
notwithstanding that such method may not be 
consistent with the valuation method used for the 
Financial Statements (as defined in Section 
5.07(a)).
	(c)     Within thirty (30) days after receipt of 
the Closing Date Financial Statement from Seller, 
Buyer shall inform Seller whether Buyer has any 
exceptions to the Closing Date Book Value.  During 
such thirty-day period, Ernst & Young, as 
accountants to Buyer (EY), shall have the right to 
communicate with and to do on-site review of the 
work papers, schedules, memoranda and other 
documents prepared or reviewed by Seller and 
Sellers Accountants (as defined below) in 
connection therewith, and EY and Buyer's employees 
shall have access to employees of Seller and 
Sellers Accountants and to all relevant books and 
records to the extent reasonably required by EY or 
Buyer's employees in order to complete their review. 
Unless Buyer delivers to Seller within such thirty-
day period a notice specifying in reasonable detail 
any such exceptions, the Closing Date Book Value 
shall be conclusive and binding on the parties 
hereto. If Buyer delivers to Seller a notice setting 
forth any such exceptions within such thirty-day 
period, Buyer and Seller shall promptly endeavor to 
resolve the matters set forth in such notice, and if 
Buyer and Seller fail to reach an agreement with 
respect to such matters on or before the fifteenth 
day after receipt by Seller of such notice from 
Buyer, then, as to any matters in dispute, Sellers 
Accountants and EY shall select a third firm of 
independent public accountants of recognized 
national standing acceptable to Buyer and Seller who 
has not rendered services to any of Buyer and 
Seller, or any of their affiliates, for at least 
three (3) years, and such third firm shall promptly 
make an independent determination of such matters as 
to which disagreement remains, which determination 
shall be conclusive and binding on the parties 
hereto (and the Closing Date Book Value shall be 
deemed to have been adjusted to reflect such 
determination) and, as so adjusted, shall constitute 
the Closing Date Book Value.
(d)     Buyer and Seller shall each pay the fees 
and expenses of their respective independent 
auditors under this Section 2.04 and the expenses of 
any third accounting firm shall be paid by 50% by 
Buyer and 50% by Seller.
	3.      Post-Closing Obligations.
	3.01    Assumption.
	(a)     Upon the transfer of the Purchased Assets 
to Buyer on the Closing Date, Buyer shall (except as 
may otherwise be specifically agreed to in any other 
provision of this Agreement) assume and agree to 
timely and fully pay, perform and discharge those 
obligations and liabilities of Seller (the Assumed 
Liabilities): (i) which are set forth as current 
liabilities on the Closing Date Financial Statement 
and were included in the determination of the 
Closing Date Book Value; it being understood that 
such liabilities shall include an amount with 
respect to accrued vacation pay for Transferred 
Employees through the Closing Date, (ii) relating to 
up to $3,000,000 the long term debt of Seller set 
forth on Schedule 3.01 hereof which shall include 
the current portion thereof and Notes Payable (the 
Long Term Debt), which Long Term Debt shall be 
paid by Buyer simultaneously with the Closing; 
provided, however, that notwithstanding anything to 
the contrary that may be contained herein, the 
maximum amount of liability to be assumed by Buyer 
with respect to the Long Term Debt shall be 
$3,000,000 (including the current portion thereof) 
and Seller shall remain liable for all amounts in 
excess thereof; and (iii) which arise from and after 
the Closing Date (A) under those contracts of Seller 
set forth on the Schedules 5.19 and 5.20 annexed 
hereto which are specifically designated to be 
assumed by Buyer on such Schedules, and (B) under 
any other contracts of Seller not required to be 
disclosed on either of such Schedules (the Assumed 
Contracts); provided, however, that to the extent 
that (x) consent to the assignment of an Assumed 
Contract is required, or (y) an Assumed Contract is 
not assignable and, in either case, consent to the 
assignment of such Assumed Contract is not obtained, 
then Buyer shall, nevertheless, assume and agree to 
pay, perform and discharge the obligations and 
liabilities of Seller under such Assumed Contract to 
the extent that Buyer receives the benefits thereof, 
and the parties will cooperate with respect to each 
such Assumed Contract so that Buyer performs all 
remaining obligations required of Seller thereunder 
(including, without limitation, paying all sums due) 
and Buyer receives all remaining rights of Seller 
thereunder (including, without limitation, receiving 
any goods or services due).  For example if consent 
is withheld by or not sought from the other party to 
an Assumed Contract (or consent is otherwise not 
obtained), such cooperation shall include Sellers 
receipt of the sum required to be paid under the 
Assumed Contract from Buyer and delivery of same by 
Seller to the other party to the Assumed Contract 
and receipt by Seller of the goods purchased 
thereunder and delivery of same to Buyer.
(b)     Except as set forth in this Agreement, 
Buyer shall not and does not assume any liability or 
obligation of Seller.
3.02    Receivable Payments.   Buyer and Seller 
each hereby agree that if either one of them shall 
have received a payment where all or a portion of 
such payment represents a receivable due to the 
other party then, and in such event, the party 
receiving such payment shall immediately forward to 
the other party that portion of such payment which 
represents the receivable of such other party.
3.03    Endorsement of Checks.   Seller hereby 
agrees that any check received by Buyer on or after 
the Closing Date as payment on account of any trade 
account receivable constituting a part of the 
Purchased Assets, which check is payable to Seller, 
may be endorsed by Buyer for its own account, with 
all such payments being subject to the provisions of 
Sections 3.02 and 5.09 hereof
	4.      Closing.
	4.01    Closing.    The closing of the 
transactions to be effected hereunder (the 
Closing) shall be held at the offices of Morse, 
Zelnick, Rose & Lander, LLP at 10:00 A.M. on January 
17, 1997, or at such other place or at such other 
time as Buyer and Seller may mutually agree (the 
Closing Date).
5.      Representations and Warranties of Seller.   
Seller represents and warrants to and agrees with 
Buyer as follows:
5.01    Organization and Good Standing. Seller is 
a corporation duly organized, validly existing and 
in good standing under the laws of the State of New 
Jersey.  Seller has full corporate power and 
authority to conduct its business as now conducted 
and to own or lease and operate the assets and 
properties now owned or leased and operated by it.  
Seller is duly qualified to do business and is in 
good standing in each jurisdiction in which the 
nature of its business or the character of its 
properties requires such qualification except where 
the failure to be so qualified would not have a 
material adverse effect on the Business or the 
Purchased Assets (a Material Adverse Effect). The 
jurisdictions in which Seller is so qualified are 
set forth on Schedule 5.01.
5.02    Capitalization of Seller.   All of the 
outstanding shares of capital stock of Seller are 
owned beneficially and of record as set forth on 
Schedule 5.02 hereof (such owners hereinafter being 
individually called a Shareholder and collectively 
called the Shareholders).
5.03    Authority and Compliance.   Seller has 
full corporate power and authority to execute and 
deliver this Agreement. The consummation and 
performance by Seller of the transactions 
contemplated by this Agreement have been duly and 
validly authorized by all necessary corporate 
actions (including, without limitation, approval of 
the shareholders of Seller).  This Agreement has 
been duly and validly executed and delivered on 
behalf of Seller and constitutes a valid obligation 
of Seller, enforceable in accordance with its terms, 
except to the extent that such enforceability may be 
limited by applicable insolvency, bankruptcy, 
reorganization or similar laws affecting the 
enforcement of creditors' rights generally and by 
general equity principles.  No consent, 
authorization or approval of, exemption by, or 
filing with, any domestic governmental or 
administrative authority, or any court, is required 
by Seller or any of its shareholders to be obtained 
or made in connection with the execution, delivery 
and performance of this Agreement or the 
consummation of the transactions contemplated 
hereby.
5.04    No Conflict.   Except as set forth on 
Schedule 5.04, the performance of this Agreement and 
the consummation of the transactions contemplated 
hereby will not result in a breach or violation of 
any of the terms or provisions of, or constitute a 
default under (i) any Assumed Contract or other 
agreement or instrument relating to the Purchased 
Assets (subject to obtaining any consents required 
to assign the Assumed Contracts); (ii) the articles 
of incorporation or by-laws of the Seller; or (iii) 
any law, order, rule, regulation, writ, injunction 
or decree applicable to the Seller.
	5.05    Compliance with Law; Environmental.
	(a)     Except as set forth on Schedule 5.05, 
Seller's operation of the Business and use and 
occupancy of the Purchased Assets are (i) in 
compliance with all, and not in violation of any, 
and (ii) Seller has not received any claim or notice 
that such operation or use and occupancy is in 
violation of any, applicable law or ordinance, or 
any order, rule or regulation of any governmental 
agency or body to which the Seller, the Business or 
the Purchased Assets are subject (except where the 
failure to be in compliance does not have a Material 
Adverse Effect), including, without limitation, any 
Occupational Safety Health Administration laws, 
ordinances, orders, rules or regulations; nor has 
the Seller failed to obtain or to adhere to the 
requirements of any government license, permit or 
authorization necessary to the ownership of the 
Purchased Assets or to the conduct of the Business 
(except where such failure does not have a Material 
Adverse Effect). All governmental permits, licenses 
and authorizations which have been obtained in 
connection with the operation of the Business or the 
use of the Purchased Assets are set forth in 
Schedule 5.05.  The Seller has not engaged in any 
transaction, maintained any bank account or used any 
corporate funds except for transactions, bank 
accounts and funds which have been and are reflected 
in the normally maintained books and records of 
Seller.  To the best of Sellers actual knowledge, 
(i) no officer or employee of the Seller has been 
indicted, tried or convicted of a felony or is under 
investigation by any governmental authority with 
respect to any action related to the Business, and 
(ii) no officer or employee of the Seller has made 
any illegal or improper payment to any person or 
entity in connection with the Business.
(b)     Except as disclosed in Schedule 5.05: (i) 
the operations of Seller on the Property (as defined 
in Section 5.19) for all prior periods and through 
Closing have complied in all material respects with 
all Environmental Laws (except where the failure to 
be in compliance does not have a Material Adverse 
Effect); (ii) (intentionally omitted); (iii) the 
operations of Seller on the Property for all prior 
periods and through Closing have not been subject to 
any judicial or administrative proceeding alleging 
the violation of any Environmental Laws; (iv) to the 
best of Seller's actual knowledge, the operations of 
Seller on the Property for all prior periods have 
not been the subject of any federal or state 
investigation evaluating whether any remedial action 
is needed to respond to a release of any Hazardous 
Substances into the environment; (v) with respect to 
the Property, Seller has not filed any notice under 
state or federal law (x) indicating past or present 
treatment, storage or disposal of any Hazardous 
Substances, or (y) reporting a spill or release of 
any Hazardous Substances into the environment; (vi) 
Seller has not released, as defined under CERCLA, 
any Hazardous Substances from the Property into the 
environment in violation of applicable law; (vii) 
none of the operations of Seller involves the 
generation, manufacture, refining, transportation, 
treatment, storage, handling or disposal of any 
Hazardous Substances; (viii) Seller has not disposed 
of any Hazardous Substance by placing it in or on 
the ground of the Property, (ix) Seller has not 
shipped any Hazardous Substances for treatment, 
storage or disposal at any other site or facility, 
except in compliance with all Environmental Laws; 
and (x) there are no underground storage tanks on 
the Property.
	(c)     For purposes of this Agreement, Hazardous 
Substance means hazardous waste, toxic substances, 
polychlorinated biphenyls, friable asbestos or 
asbestos containing materials and also includes, but 
is not limited to substances defined as hazardous 
substances or toxic substances in the 
Comprehensive Environmental Response Compensation 
and Liability Act of 1980, as amended, 42 U.S.C Sec. 
9061, et seq. (CERCLA), the Hazardous Materials 
Transportation Act, 49 U.S.C. Sec. 6901, et seq. 
(HMTA), the New Jersey Industrial Site Recovery 
Act, N.J.S.A. 13.1K-6, et. seq. (ISRA) and the New 
Jersey Spill Compensation and Control Act, N.J.S.A. 
58:10-23.11 et. seq. (Spill Act).  The term 
includes, without limitation, petroleum, including 
crude oil or any fraction thereof, natural gas, 
natural gas liquids, liquefied natural gas, 
synthetic gas usable for fuel or mixtures thereof. 
For purposes of this Agreement, Environment Laws 
means the following laws or acts or any other 
federal state or local laws relating to pollution or 
protection of the environment: CERCLA; HMTA; ISRA; 
Spill Act; the Resource Conservation and Recovery 
Act, 42 U.S.C Sec 6901, et AIL; the Toxic Substances 
Control Act, 15 U.S.C Sec 2601, et seq.; the Federal 
Water Pollution Control Act, 33 U.S.C. Sec. 1251, et 
seq; the Safe Drinking Water Act, 42 U.S.C 
Sec. 300f, et seq.; and the Clean Air Act 42, U.S.C 
Sec 7401, et seq.
5.06    Products.   Schedule 5.06 contains a list 
of all products presently manufactured or sold by 
Seller in the operation of the Business. None of the 
products manufactured or sold by Seller has in the 
past five years been recalled by Seller or, to the 
best of Sellers actual knowledge, by any 
distributor, dealer or other independent agent.
	5.07    Financial Statements.
(a)     Schedule 5.07A contains copies of the 
audited financial statements of the Seller for the 
two years ended December 31, 1995 and December 
31,1994 (the Financial Statements).  The Financial 
Statements are true, complete and correct and fairly 
present in all material respects the financial 
position of the Seller at December 31, 1995 and 
December 31, 1994 and the results of operations for 
the years then ended in conformity with GAAP applied 
on a basis consistent with prior periods.
(b)     Schedule 5.07B contains copies of the 
balance sheet of Seller for the eleven months ended 
November 23, 1996 (the Interim Statements).  The 
Interim Statements are true, complete and correct 
and fairly present in all material respects the 
financial position of the Seller at November 23, 
1996 then ended in conformity with GAAP applied on a 
basis consistent with prior periods; except that the 
inventory at November 23, 1996 has been valued in 
accordance with the method set forth on Schedule 
2.04(b). 
5.08    Books and Records.  The books of account 
and other financial records of Seller are complete 
and correct in all material respects and are 
maintained in accordance with good business 
practices, and accurately reflect the basis for the 
preparation of the Financial Statements.
5.09    Accounts Receivable.  All accounts 
receivable constituting Purchased Assets to be 
reflected on the Closing Date Financial Statement 
arose and/or will arise from bona fide transactions 
in the ordinary course of business. All trade 
accounts receivable are by their terms generally due 
within thirty (30) days after being recorded on the 
books of Seller. All accounts receivable reflected 
on the Closing Date Financial Statement are expected 
to be collected in full within one hundred eighty 
(180) days after Closing.  Following the Closing, 
Buyer shall be entitled to open mail received by the 
Business, even if addressed to Seller, for 
processing or forwarding to Seller, as appropriate. 
In addition, Buyer shall use reasonable efforts to 
effect the collection of the accounts receivable, 
including regular periodic billing and follow-up 
collection by Buyer's collection staff consistent 
with Buyer's customary practices. Reasonable 
collection efforts shall not include referral to a 
collection agency or institution of legal 
proceedings. All of the accounts receivable which 
are part of the Purchased Assets and are not 
collected by Buyer within one hundred eighty (180) 
days after the Closing Date shall, upon notice (the 
Receivable Notice), which notice may be given at 
any time on or before the 270th day after the 
Closing Date (the Notice Period) and assignment by 
Buyer to Seller, be purchased by Seller for cash at 
their gross amount, in which event Buyer shall 
provide Seller all relevant documents reasonably 
necessary for collection, including original 
invoices, billings and complete billing and 
collection files. The parties agree that Buyer may 
give up to three (3) Receivable Notices to Seller 
during the Notice Period.
5.10    Inventory.  All inventory to be reflected 
on the Closing Date Financial Statement will be 
merchantable and of a quality and quantity usable or 
salable in the ordinary course of business. All 
inventory is located at the locations set forth on 
Schedule 5.10. 
5.11 Assets and Properties.  Except as set 
forth on Schedule 5.11, Seller has valid title to 
all personal property included in the Purchased 
Assets, free and clear of all liens, pledges, 
mortgages, security interests, conditional sales 
contracts and other encumbrances or any kind or 
nature, except for the Assumed Liabilities.
5.12    Condition of Assets and Properties.  All 
machinery, tools, equipment and other tangible 
personal property included in the Purchased Assets, 
except for any inventory as to which the 
representation and warranty set forth in Section 
5.10 shall apply, (the Tangible Personal Property) 
are being sold and transferred to Buyer AS IS; 
provided, however, that notwithstanding the 
foregoing, Seller will transfer to Buyer any and all 
manufacturers warranties applicable to the Tangible 
Personal Property to the extent permitted by the 
terms of such warranty.
5.13    Absence of Certain Events.  Except as set 
forth on Schedule 5.13, the Seller has not since 
November 23, 1996:
(a)     incurred any liabilities, other than 
liabilities incurred in the ordinary course of 
business consistent with past practice, or 
discharged or satisfied any lien or encumbrance, or 
paid any liabilities, other than in the ordinary 
course of business consistent with past practice;
(b)     sold, assigned or transferred any of its 
assets or properties except in the ordinary course 
of business consistent with past practice;
	(c)     made any amendment or termination of any 
Assumed Contract;
(d)     suffered any damage, destruction or 
physical loss, whether or not covered by insurance, 
adversely affecting its business, operations, assets 
or properties, or suffered any repeated, recurring 
or prolonged shortage, cessation or interruption of 
inventory shipments, supplies or utility services 
required to conduct its business and operations or 
suffered any material adverse change in its 
financial condition or in the nature of its business 
or operations;
(e) suffered any material adverse change or 
any threat of a material adverse change in its 
business relations with any of its major suppliers 
or major customers;
(f)     received notice or had actual knowledge of 
any strike or disruption of work of a concerted 
nature or any threat thereof;
(g)     other than in the ordinary course of 
business consistent with past practice, increased 
the salaries or other compensation of, or made any 
advance (excluding advances for ordinary and 
necessary business expenses) or loan to, any of its 
shareholders, directors, officers or employees, or 
made any increase in, or any additions to, other 
benefits to which any of its shareholders, 
directors, officers or employees may be entitled;
(h)     made any capital expenditure or capital 
addition or betterment (including any capitalized 
lease transaction) except such which were made in 
the ordinary course of business consistent with past 
practice and which do not exceed $50,000 in amount 
in the aggregate;
(i)     changed any of the accounting principles 
followed by it or the methods of applying such 
principles;
	(j)     amended or modified any Employee Plan (as 
defined in Section 5.23 hereof); or
(k)     entered into any material transaction 
other than in the ordinary course of business 
consistent with past practice.
5.14    Patents. Trademarks, Copyrights, Etc.   
Schedule 5.14 contains a complete and correct list 
of all patents, patent rights, patent applications, 
licenses, shop rights, trademarks, trademark 
applications, tradenames, copyrights and similar 
rights currently used in the Business (collectively 
Rights), indicating the registered owner, the 
registration number, and the expiration date 
thereof. Seller owns or validly licenses all Rights 
and other proprietary information used in the 
conduct of the Business as currently being 
conducted; to the best of Sellers actual knowledge, 
the conduct of the Business as currently operated 
does not conflict with valid rights of others in any 
way, nor has any material use been made of the 
Rights, except by Seller or by other entities duly 
licensed to use the same under agreements set forth 
in Schedule 5.14.
	5.15    Insurance.   Schedule 5.15 contains a 
summary description of all policies or binders of 
fire, liability, product liability, vehicular, title 
and other insurance held by or on behalf of Seller 
and relating to the Business or any of the Purchased 
Assets. The policies and binders summarized in 
Schedule 5.15 are in full force and effect.  Seller 
has not received any written notice in the one (1) 
year period prior to the date hereof from, or on 
behalf of, any insurance carrier issuing such 
policies, that insurance rates will be substantially 
increased (except to the extent that insurance rates 
may be increased for all similarly situated risks), 
that a policy will not be renewed or that alteration 
of any of the Purchased Assets will be required or 
is suggested, or that the purchase of additional 
equipment or the modification of any of Seller's 
methods of doing business, will be required or is 
suggested. Copies of all insurance carrier 
recommendations and requirements since July 1, 1995 
relating to loss prevention with respect to the 
Purchased Assets and the Business have previously 
been provided to Buyer.
5.16    Legal Proceedings. Etc.   Except as set 
forth on Schedule 5.16, there are no claims, 
actions, suits, proceedings, arbitrations or 
investigations, either administrative or judicial, 
pending or, to the best of Sellers actual 
knowledge, threatened by, or against, Seller or any 
of the Purchased Assets, or specifically relating to 
the transactions contemplated by this Agreement, at 
law or in equity or otherwise, before or by any 
court or governmental agency or body, domestic or 
foreign, or before an arbitrator of any kind.  
Except as set forth on Schedule 5.16, neither 
Seller, nor any insurance carrier of Seller, has 
since January 1, 1995, paid or reserved an amount in 
excess of $2,500 with respect to any product 
liability claim for personal injury made or 
threatened against Seller.
5.17    Taxes and Tax Returns.   Seller has duly 
made all deposits required by law to be made with 
respect to employees' withholding taxes. Seller has 
duly filed with all appropriate governmental 
agencies and bodies, whether federal, state or 
local, all income, sales, license, franchise, 
excise, gross receipts, employment and payroll-
related and real and personal property tax returns 
and all other tax returns which were required to be 
filed, all of which properly reflect the taxes owed 
by them for the periods covered thereby and, to the 
extent due, Seller has paid all taxes shown to be 
due on such returns. With respect to sales of goods 
by Seller, Seller's records properly reflect the 
basis for not collecting sales and or use taxes with 
respect to those sales on which such taxes were not 
collected. Schedule 5.17 sets forth a list of all 
jurisdictions with respect to which Seller files tax 
returns with respect to the Business.
5.18    Customers: Suppliers: Adverse Conditions.  
(a)     Except as set forth on Schedule 5.18(a), 
(i) there has not, since January 1, 1995, been any 
termination or cancellation of the business 
relationship of Seller with any of the major 
customers or major suppliers of the Business; and 
(ii) to the best of Sellers actual knowledge, there 
does not exist any facts or circumstances (except 
for general economic conditions affecting business 
generally and economic conditions affecting 
individual hotel-casinos or the Atlantic City Hotel-
Casino industry generally) which have adversely 
affected or will adversely affect the Business with 
such major customers or major suppliers or which 
have prevented or will prevent such Business from 
being carried on after the Closing Date in 
essentially the same manner as is currently carried 
on.
(b)     Except as set forth on Schedule 5.18(b), 
Seller has made a sale to each of the Customers set 
forth on Schedule 2.01 hereof during calendar year 
1996.
5.19    Schedules of Assets: Properties: 
Customers: Suppliers.   Set forth on Schedule 5.19 
are lists, as of November 23, 1996, which are 
complete and accurate in all material respects with 
regard to the following:
(a)     All real property and interests in real 
property (including the location thereof and the 
description of any structures located thereon) under 
lease to Seller (collectively the Property), 
together with the annual rental and unexpired lease 
term and identity of the lessor,
	(b)     A list of machinery, equipment, furniture 
and fixtures;
(c)     A list of the customers of the Business to 
which sales in excess of $50,000 were made during 
the nine months ended September 30, 1996 and the 
volume of sales made to each such customer,
(d)     A list of the suppliers of the Business 
from which purchases in excess of $50,000 were made 
during the nine months ended September 30, 1996 and 
the volume of purchases made from each such 
supplier; 
(e)     All persons (other than suppliers or 
employees) to whom Seller has, with respect to the 
Business, paid aggregate fees to, and/or made 
aggregate purchases from, in excess of $50,000 
during the nine months ended September 30, 1996; and
(f)     All potential material contracts or 
agreements relating to the Business in active 
process of negotiation which are not otherwise 
described on any other Schedule hereto.
	5.20    Contracts and Commitments.
(a)     Except as listed and described on Schedule 
5.20, the Seller is not a party to any:
	(i)     Contract (as defined below) with any 
employee or consultant (including, without 
limitation, any employment agreement);
	(ii)    Future or option Contract for the 
purchase of green coffee;
	(iii)   Contract for the future purchase 
of, or payment for, supplies or products involving 
payment by the Seller of in excess of $25,000 or for 
the performance of services by a third party 
involving payment by Seller in excess of $25,000;
	(iv)    Contract to sell or supply products 
or to perform services involving receipt by Seller 
of an amount in excess of $25,000,
	(v)     Representative, sales agency or 
distribution agreement, contract or commitment, not 
terminable by Seller on thirty (30) days notice or 
less without cost or liability in excess of $10,000 
for any such agreement, contract or commitment;
	(vi)    Lease under which Seller is either 
the lessor or lessee relating to personal property 
and involving annual payments by or to Seller in 
excess of $10,000;
		(vii)   Factoring agreement or agreement 
for the assignment of receivables or inventory,
		(viii)  Advertising agreement;
	(ix)    Contract for any capital expenditure 
involving future payments, which, together with 
future payments under all other existing Contracts 
for all capital projects, are in excess of $25,000;
	(x)     Contract limiting or restraining in 
any respect Seller from engaging or competing in any 
lines of business or with any person;
		(xi)    Contract for any charitable or 
political contribution;
		(xii)   Contract with any labor union; 
and
	(xiii)  Any other Contract (x) wherein 
the amount of payments to be made by Seller 
thereunder exceeds $25,000, or (y) which is not 
cancelable by Seller without penalty on no more than 
thirty (30) days notice.
As used in this Agreement, the term Contract 
includes any mortgage, indenture, agreement, 
contract, commitment or lease. 
(b)     Except as may be otherwise set forth on 
Schedule 5.20 to this Agreement, with respect to 
each of the Contracts listed on Schedule 5.20, to 
the best of Sellers actual knowledge: (i) Seller is 
in compliance with the provisions thereof; (ii) no 
party is in default in the performance, observance 
or fulfillment of any material obligation, covenant 
or condition contained therein; and (iii) no event 
has occurred which with or without the giving of 
notice or lapse of time, or both, would constitute a 
default thereunder by Seller.
	5.21    Employees.
(a)     Set forth on Schedule 5.21 is a complete 
and accurate list of the names, social security 
numbers, dates of hire, dates of birth, sex, annual 
wages or hourly wage rates, as the case may be, 
spouses, dependents and job descriptions of all 
present employees of Seller who are in active 
employment on the date hereof (the Employees).  An 
Employee shall be considered in active employment 
if he or she performs services or is on vacation or 
authorized leave on the date hereof.
(b)     Schedule 5.23 sets forth a complete list 
of all benefits to which any of the Employees set 
forth on Schedule 5.21 are entitled, including, 
without limitation, any vacation, medical, life 
insurance and severance benefits.
5.22    Labor.  Seller is in material compliance 
with all applicable laws respecting employment and 
employment practices, terms and conditions of 
employment, occupational safety and health, and 
wages and hours (except where the failure to be in 
compliance would not have a Material Adverse Effect) 
and Seller has not received any written notice that 
it has failed to comply in any respect with any such 
laws.  To the best of Sellers actual knowledge, 
Seller is not engaged in any unfair labor practice. 
There is no unfair labor practice complaint against 
Seller pending before the National Labor Relations 
Board or, to the best of Sellers actual knowledge, 
threatened. There is no labor strike, dispute, 
slowdown or stoppage, actual, pending or, to the 
best of Sellers actual knowledge, threatened, 
against or affecting Seller.  Except as set forth on 
Schedule 5.22, to the best of Sellers actual 
knowledge, there are no charges, claims, lawsuits or 
proceedings by or on behalf of any of its employees, 
whether threatened or pending, asserting any 
violation of any federal, state or local law 
regarding civil rights, equal employment 
opportunity, fair employment practices, or 
discrimination or harassment based on any legally 
protected status, or asserting any other dispute, 
tort or cause of action related to or growing out of 
the employment relationship or asserted contractual 
relationship of Seller and any employee (except for 
unemployment compensation claims or medical claims).  
Seller has not experienced any work stoppage or 
other labor difficulty.  The Seller is not a party 
to any collective bargaining agreement with any 
union or other representative of employees and no 
question concerning representation exists with 
regard to any group of employees of Seller.
	5.23    Employee Benefit Plans.
(a)      Set forth on Schedule 5.23 is a list and 
summary description of each and every Employee 
benefit plan as defined in Section 3(3) of the 
Employee Retirement Income Security Act of 1974, as 
amended (ERISA), and each and every pension, 
bonus, incentive, deferred compensation, vacation, 
sick pay, severance pay or other plan, program, 
policy, arrangement or agreement (whether written or 
oral) maintained, contributed to, or required to be 
contributed to, by Seller or any of its ERISA 
Affiliates (as defined below) for the benefit of 
Employees and former and retired Employees of Seller 
or any of its ERISA Affiliates (Employee Plans).
(b)     Set forth on Schedule 5.23 is the total 
amount of accrued deferred compensation, bonus or 
incentive benefits and accrued vacation pay to which 
the Employees have accrued entitlement as of 
December 31, 1996.  All amounts required by the 
provisions of any Employee Plan and applicable law 
to be contributed to any Employee Plan, have been or 
will be contributed to such Employee Plan through 
the Closing Date.
(c)     None of the Employee Plans is a multi-
employer plan as defined in Section 3(37) of ERISA, 
and as of the date hereof, neither Seller nor its 
ERISA Affiliates, has withdrawn from any multi-
employer plan or incurred any withdrawal liability 
within the meaning of Section 4201 of ERISA with 
respect to any Employee Plan.
	(d)     Except as set forth in Schedule 5.23, to 
the best of Sellers actual knowledge, all Employee 
Plans are in compliance in all material respects 
with the requirements prescribed by any and all 
applicable statutes, orders or governmental rules or 
regulations currently in effect with respect 
thereto, and Seller has performed all material 
obligations required to be performed by them 
thereunder; and to the best of Sellers actual 
knowledge, Seller is not in default under or in 
violation of, any of the Employee Plans in any 
material respect. Each Employee Plan intended to be 
qualified under Section 401(a) of the Internal 
Revenue Code (the Code) has heretofore been 
determined by the Internal Revenue Service (the 
IRS) to so qualify, taking into account all 
amendments to the Code through December 31, 1994, 
and each trust created thereunder has heretofore 
been determined by the IRS to be exempt from tax 
under the provisions of Section 501(a) of the Code. 
Except as set forth on Schedule 5.23, to the best of 
Sellers actual knowledge, none of the Employee 
Plans nor any of the trusts relating thereto or 
similar plans of the ERISA Affiliates of Seller has 
incurred any accumulated funding deficiency, as 
such term is defined in Section 302 of ERISA.
(e)     To the best of Sellers actual knowledge, 
there are no unions, suits or claims pending, 
threatened or anticipated (other than routine claims 
for benefits) with respect to any Employee Plan or 
against any Employee Plan, the Seller or any 
fiduciary of any Employee Plan, and no person has 
engaged in any transaction involving any Employee 
Plan which is a prohibited transaction under 
Section 406 of ERISA or Section 4975 of the Code.
(f)     Except as set forth on Schedule 5.23, none 
of the transactions contemplated herein will (either 
alone or upon the occurrence of any additional or 
subsequent event) constitute an event under any 
Employee Plan or individual agreement that will or 
may result in any payment (whether of severance pay 
or otherwise), acceleration, vesting or increase in 
benefits with respect to any Employee.
(g)     Copies of all Employee Plans, any related 
trusts and the most recent IRS determination letter 
with respect to each Employee Plan intended to 
qualify under Section 401(a) of the Code, and copies 
of all actuarial reports, and all returns and 
reports filed with the IRS, the Department of Labor 
or the Pension Benefit Guaranty Corporation prepared 
during the past eighteen (18) months with respect to 
any Employee Plans have previously been made 
available to Buyer.
(h)     Seller has fully complied with the 
continuation coverage requirements set forth under 
Part 6 of Title 1 of ERISA so that no tax under 
Section 4980B of the Code would result.
(i)     Except as set forth on Schedule 5.23, 
neither the Seller nor its ERISA Affiliates have 
contributed to, maintained or terminated an Employee 
Plan which was subject to Title IV of ERISA.
	(j)     For purposes of this Section 5.23, the 
term ERISA Affiliate shall mean any corporation 
which is a member of the same controlled group of 
corporations within the meaning of Code Section 
414(b) as Seller, any trade or business which is 
under common control within the meaning of Code 
Section 414(c) as Seller and any service 
organization which is a member of the same 
affiliated service group within the meaning of Code 
Section 414(m) as the Seller.
5.24    Warranties.  All of Seller's standard 
warranties and service policies covering its 
products and services which are in force as of the 
date hereof are set forth in Schedule 5.24.
5.25    Assets Being Transferred.  The Purchased 
Assets being conveyed hereunder constitute such 
assets (except for working capital) as are necessary 
to permit Buyer to continue the Business in a manner 
substantially similar to the manner in which Seller 
is operating the Business on the date hereof
5.26    Renegotiation Act. Seller has not, since 
January 1, 1994, made any repayments pursuant to the 
provisions of the Federal Renegotiation Act on 
account of any contract with the United States 
Government or any agency, department or subdivision 
thereof.
5.27    Finder.   There is no firm, corporation, 
agency or other entity or person that is entitled to 
a finder's fee or any type of brokerage commission 
in relation to or in connection with the 
transactions contemplated by this Agreement as a 
result of any agreement or understanding with Seller 
or any of its directors, officers, employees or 
shareholders, except for any fee payable to The Folk 
Agency, the payment of which will be the sole and 
exclusive obligation of the Seller.
	5.28    Full Disclosure.   No representation or 
warranty by Seller in this Agreement contains or 
will contain any untrue statement of a material fact 
or omits or will omit to state any material fact 
necessary to make any statement herein or therein 
not materially misleading. The parties agree that 
any item disclosed in any Schedule to this Agreement 
shall be deemed to have been disclosed on all 
Schedules to this Agreement wherein such disclosure 
may have been required.
6.       Representations and Warranties of Buyer.  
Buyer hereby represents and warrants to Seller as 
follows:
6.01    Organization and Good Standing.   Buyer is 
a corporation duly organized, validly existing and 
in good standing under the laws of the State of New 
York, with full corporate power and authority to 
conduct its business as now conducted and to own or 
lease and operate the assets and properties now 
owned or leased and operated by it.  Buyer has, or 
will have, at Closing the full corporate power and 
authority to conduct the Business as now conducted 
by Seller and to own or lease and operate the 
Purchased Assets.  Buyer is, or will be, within 
fifteen (15) days after the Closing Date duly 
qualified to do business and in good standing in 
each jurisdiction set forth on Schedule 5.01.
6.02    Authority and Compliance.   Buyer has full 
corporate power and authority to execute and deliver 
this Agreement. The consummation and performance by 
Buyer of the transactions contemplated by this 
Agreement have been duly and validly authorized by 
all necessary corporate and other proceedings. This 
Agreement has been duly and validly executed and 
delivered on behalf of Buyer and constitutes a valid 
obligation of Buyer, enforceable in accordance with 
its terms, except to the extent that such 
enforceability may be limited by applicable 
insolvency, bankruptcy, reorganization or similar 
laws affecting the enforcement of creditors' rights 
generally and by general equity principles. No 
consent, authorization or approval of, exemption by, 
or filing with, any domestic governmental or 
administrative authority, or any court, is required 
to be obtained or made by Buyer in connection with 
the execution, delivery and performance of this 
Agreement or the consummation of the transactions 
contemplated hereby.
6.03    No Conflict.   The performance of this 
Agreement and the consummation of the transactions 
herein contemplated will not result in a breach or 
violation of any of the terms or provisions of, or 
constitute a default under (i) any contract or other 
agreement or instrument to which Buyer is a party or 
by which Buyer or any of its properties or assets is 
bound; (ii) the certificate of incorporation or by-
laws of Buyer; or (iii) any law, order, rule, 
regulation, writ, injunction or decree applicable to 
Buyer. 
	6.04    Finder.   There is no firm, corporation, 
agency or other entity or person that is entitled to 
a finder's fee or any type of brokerage commission 
in relation to or in connection with the 
transactions contemplated by this Agreement as a 
result of any agreement or understanding with Buyer 
or any of its directors, officers, or employees.
	6.05    SEC Filings.   Buyer has delivered to the 
Seller (i) its annual report on Form 10-K with 
respect to the fiscal years ended July 31, 1996 and 
July 31, 1995 and (ii) its quarterly report on Form 
10-Q with respect to the quarter ended October 31, 
1996 (the SEC Filings).  The SEC Filings are 
true, complete and correct in all material respects.  
The Financial Statements contained in the SEC 
Filings are true, complete and correct and fairly 
present in all material respects the financial 
position of the Buyer as of the respective dates 
thereof and the results of operations for the 
periods then ended and have been prepared in 
conformity with GAAP applied on a basis consistent 
with prior periods.  Since October 31, 1996, the 
Buyer has not experienced any material adverse 
change in its business or the value of its assets 
such that the financial position of the Buyer is 
materially worse than the financial position 
reported in the Financial Statements for the quarter 
ended October 31, 1996.
	6.06    Legal Proceedings.  There are no claims, 
actions, suits, proceedings, arbitrations or 
investigations, either administrative or judicial, 
pending or, to the best of Buyers actual knowledge, 
threatened by or against Buyer including without 
limitation, any with respect to relations between 
Buyer and its employees, environmental matters or 
matters specifically relating to the transactions 
contemplated by this Agreement, at law or in equity 
or otherwise, before or by any court, government 
agency or body, domestic or foreign on or before any 
arbitrator of any kind, which are required to be 
disclosed in the SEC Filings and are not so 
disclosed therein.
	6.07    Full Disclosure.   No representation or 
warranty by Buyer in this Agreement contains or will 
contain any untrue statement of a material fact or 
omits or will omit to state any material fact 
necessary to make any statement herein or therein 
not materially misleading.
	7.      Covenants.
7.01 Audited Financial Statements.  On or 
before the forth-fifth (45th) day following the 
Closing Date, Seller shall deliver to Buyer 
financial statements of the Seller for the period 
from January 1, 1996 to January 17, 1997 (the 
Closing Date Financial Statement), which financial 
statements have been reported on by McMahon, 
Hartmann, Amundson & Co., LLP (the Sellers 
Accountants), without qualification as to scope of 
audit, and which financial statements shall be in 
form satisfactory to meet the rules and regulations 
of the Securities and Exchange Commission (SEC) 
applicable to Buyer, including, without limitation, 
the provisions of Regulation S-X promulgated by the 
SEC
	7.02    Covenant Not to Compete.   For a period of 
five (5) years from and after the Closing Date, 
neither Seller nor any affiliate of Seller nor any 
Shareholder will in (i) the State of New Jersey; 
(ii) the State of Pennsylvania; and (iii) the entire 
United States, compete with the Business as now 
conducted; and, in particular, Seller and the 
Shareholders will not in competition with the 
Business (A) solicit or deal with any supplier of 
the Business; (B) solicit or deal with any customer 
of the Business; (C) hire away, interfere with or 
attempt to hire away any Transferred Employee of the 
Business (except that this provision shall not apply 
to Mr. John Lee on and after his employment with 
Buyer terminates); or (D) directly or indirectly, 
own, manage, operate, finance, join, control or 
participate in the ownership, management, operation, 
financing or control of, or be connected as a 
director, officer, employee, partner, consultant or 
agent with, any business in competition with the 
Business. In the event that the provisions of this 
Section 7.02 should ever be deemed to exceed the 
time or geographic limitations or any other 
limitations permitted by applicable laws, then such 
provisions shall be deemed reformed to the maximum 
permitted by applicable laws. Seller and the 
Shareholders specifically acknowledge and agree that 
(x) the foregoing covenant is an essential element 
of this Agreement and that, but for the agreement of 
Seller to comply with such covenant, Buyer would not 
have entered into this Agreement; (y) the remedy at 
law for any breach of the foregoing covenant will be 
inadequate; and (z) Buyer, in addition to any other 
relief available to it, shall be entitled to 
temporary and permanent injunctive relief in the 
event Seller, any affiliate of Seller or any 
Shareholder violates the provisions of this Section 
7.02.
7.03 Consents. Seller shall use its reasonable 
efforts to obtain such approvals and/or consents as 
shall not have been obtained by the Closing Date as 
may be required to transfer the Assumed Contracts to 
Buyer. Buyer shall, as requested, give its 
reasonable cooperation to Seller in connection with 
Sellers efforts to obtain all such approvals and/or 
consents.
7.04    Agreement Regarding Confidentiality.  
Except as required by law after reasonable notice to 
Buyer, Seller shall not (and shall exercise such 
control and influence as Seller is in a position to 
exercise, to cause its affiliates, directors, 
officers, employees, representatives, and agents not 
to), whether before or after the Closing, disclose 
to any person or entity any trade secret, formula, 
process, know-how, business strategies or plans, 
pricing, customers or customer lists, finances, 
costs, marketing plans, or any other information 
relating to the Purchased Assets or the Business 
that was not, prior to such disclosure, a matter of 
public knowledge.
7.05    Change of Seller's Name.   Within ten (10) 
days after the Closing Date, Seller shall change its 
corporate name to a name which does not include 
Ireland Coffee - Tea in such name. Seller shall 
amend any foreign qualifications to do business to 
reflect such name change within two (2) weeks after 
the Closing Date. Seller hereby acknowledges and 
agrees that from and after the Closing Date, Buyer 
shall, as between Buyer and Seller, have the 
exclusive right to use the Ireland Coffee - Tea 
name.
7.06 Seller's Books, Records, Documents, 
Instruments, Etc. Buyer acknowledges and agrees that 
Seller may, at its option, upon and within a 
reasonable time after the Closing take possession of 
certain permanent records of Seller, which records 
shall include but not be limited to articles and 
certificates of incorporation, by-laws, minute books 
and resolutions, shareholder records, general 
ledgers, journal entries, tax returns (state and 
federal), payroll and payroll tax reporting forms 
(state and federal), W-2 employee earnings records, 
worker compensation reports, retirement, pension and 
other benefit plan documents and records, and the 
like. Buyer and its employees shall, at no cost to 
Buyer, provide reasonable assistance to Seller in 
the location of such records.
7.07 Buyer's Payment and Performance of 
Liabilities and Assigned Agreements.   Buyer agrees 
to timely and fully pay, perform and discharge the 
Assumed Liabilities, including the Assumed 
Contracts, pursuant to Section 3.01 hereof.
7.08    Consulting; Lease Payments.   For a period 
of ninety (90) days following the Closing, each of 
Mr. William Schroeder and Mr. John Siracusa shall be 
available to consult with Buyer, by telephone, with 
respect to the Business for one hour per week at 
such time as shall mutually be acceptable to Buyer 
and Mr. Schroeder and/or Mr. Siracusa, as the case 
may be.  In consideration thereof, Buyer hereby 
agrees that it will (i) pay $1,200 month to Mr. 
Schroeder for the six months following the Closing 
and (ii) pay $1,200 month to Mr. Siracusa for the 
six months following the Closing.
7.09    Promotional Costs.   For a period of one 
year following the Closing, Buyer will pay 
promotional costs of $1,600 per month associated 
with the Racing Car owned by an entity owned in the 
majority by William Schroeder.
7.10    Employee Matters
(a)     On the Closing Date, Buyer shall offer 
employment to those employees of Seller set forth on 
Schedule 7.10 hereto (the Designated Employees).  
The Buyer shall offer employment on an at will basis 
to each such Designated Employee on such terms and 
conditions as Buyer, in its sole discretion, shall 
determine; provided, however, that (i) the salary 
initially to be offered to each such Designated 
Employee shall not be less than the salary set forth 
next to such employees name on Schedule 5.21 and 
(ii) the title and duties initially to be offered to 
each such Designated Employee shall be similar to 
the title and duties set forth next to such 
employees name on Schedule 5.21.  All such 
Designated Employees who accept such offer of 
employment of Buyer shall become employees of Buyer 
as of the Closing Date (hereafter the Transferred 
Employees).
(b)     With respect to each Transferred Employee, 
Buyer shall take into account the period of 
continuous employment with Seller solely (i) for the 
purpose of applying the waiting period requirements 
(or any similar provisions) under any group health, 
accident or life insurance plan maintained or 
sponsored by or contributed to by Buyer under which 
coverage of all Transferred Employees will be 
provided as of the Closing Date (Buyers Health and 
Insurance Plan), (ii) for purposes of applying the 
participation requirements (but not for purposes of 
determining the extent of vesting or benefit 
accrual) under Buyers pension, 401(k) savings, 
health and welfare, disability benefit, executive 
compensation, incentive and bonus plans, programs or 
arrangements and (iii) for purposes of determining 
vacation entitlement in accordance with the express 
terms of Buyers vacation policies as may exist for 
time to time.  Buyer shall not recognize the period 
of employment of any Transferred Employee with 
Seller under any other plan or arrangement 
maintained by Buyer or for any purposes other than 
as described above.
	(c)     Notwithstanding anything to the 
contrary contained herein, Buyer may (i) 
unilaterally change the salary (either by increase 
or decrease) and/or the title and duties of any 
Transferred Employee at any time after the Closing 
Date and (ii) at Buyers sole discretion, change or 
eliminate any of the plans, policies or arrangements 
of Buyer applicable to the Transferred Employees, 
including, without limitation, the plans, policies 
and arrangements of Buyer referred to in Section 
7.10(b).
	(d)     Employees of Seller who do not become 
Transferred Employees are collectively referred to 
herein as the Non-transferred Employees.  Buyer 
shall have no liabilities or obligations whatsoever 
with respect to the Non-transferred Employees, which 
liabilities and obligations (including, without 
limitation, all liabilities and responsibility for 
giving notice under the Worker Adjustment Retraining 
and Notification Act and any and all severance or 
employment discrimination claims made by the Non-
transferred Employees) shall be wholly borne by 
Seller.  Seller shall be responsible for satisfying 
obligations under Section 601 et seq. of ERISA and 
Section 4980B of the Code (COBRA), to provide 
continuation coverage to or with respect to any Non-
transferred Employee and to any other person 
entitled to such continuation coverage under 
Sellers group health plan based on a qualifying 
event which occurred prior to the Closing. 
(e)     With respect to the Transferred Employees, 
Buyer and Seller hereby agree as follows:
	(i)     Seller shall be responsible for the 
payment of any health, accident and other employee 
welfare benefit claims of the Transferred Employees 
and their eligible dependents to the extent such 
claims are incurred before the Closing Date and are 
not excludable under the applicable Employee Plans 
of Seller, regardless of when any such claim is 
submitted for payment.  Buyer shall be responsible 
for the payment of health, accident and other 
employee welfare benefit claims of Transferred 
Employees and their eligible dependents to the 
extent such claims are incurred on or after the 
Closing Date and are not excludable under the 
express terms of Buyers Health and Insurance Plan.  
For purposes of this Section 7.10(e), a health or 
accident claim shall be deemed to have been incurred 
when the services relating to the event or condition 
that is the subject of the claim are performed or 
the supplies relating to any such event or condition 
are furnished.
	(ii)    Seller shall be responsible for the 
payment of any workers compensation benefits, 
occupational disease claims and employer liability 
claims (collectively Comp Claims) if the event 
which caused the injury or illness upon which the 
Comp Claim is based occurred on or prior to the 
Closing Date and Buyer shall be responsible for the 
payment of any Comp Claim if the event which caused 
the injury or illness upon which the Comp Claim is 
based occurred after the Closing Date.  With respect 
to a Comp Claim based upon an injury or illness that 
occurred over a period of time (such as exposure to 
asbestos, etc.), Seller shall be solely responsible 
if the Comp Claim was made on or prior to the 
Closing Date and Buyer shall be solely responsible 
if the Comp Claim was made after the Closing Date; 
provided, however, that if Seller had actual 
knowledge that any Comp Claim made after the Closing 
Date was pending or threatened prior to the Closing 
Date and such pending or threatened Comp Claim is 
not set forth on Schedule 5.22 attached hereto, 
then, and in such event, Seller shall be responsible 
for the payment of any such Comp Claim regardless of 
when such Comp Claim is made.
	(iii)   With respect to any other 
employment related claim made by a Transferred 
Employee, Seller shall be responsible for the 
payment of any such claim if the event upon which 
the claim is based occurred on or prior to the 
Closing Date and Buyer shall be responsible for the 
payment of any such claim if the event upon which 
the claim is based occurred after the Closing Date. 
With respect to any claim which is based upon a 
continuing course of conduct (such as a 
discrimination or harassment claim), Seller shall be 
responsible for the payment of all claims made prior 
to the Closing Date and/or all claims based upon a 
course of conduct which was not continuing after the 
Closing Date, and Buyer shall be responsible for the 
payment of all other claims; provided, however, that 
if Seller had actual knowledge that any claim made 
after the Closing Date was pending or threatened 
prior to the Closing Date and such pending or 
threatened claim is not set forth on Schedule 5.22 
attached hereto, then, and in such event, Seller 
shall be responsible for the payment of any such 
claim regardless of when such claim is made; and
	(iv)    Buyer shall assume and pay any 
obligations to Transferred Employees for vacation 
pay entitlements for periods prior to the Closing 
Date up to the amount in the aggregate included as a 
liability therefor on the Closing Date Financial 
Statement (the Vacation Liability).  Seller shall 
pay obligations to Transferred Employees for 
vacation pay entitlement that accrued prior to the 
Closing Date in excess of the Vacation Liability.
(f)     Buyer maintains a 401(k) savings plan 
(Buyers Savings Plan).  Buyer agrees that Buyers 
Savings Plan will accept rollovers (including direct 
rollovers pursuant to Section 401(a)(31) of the 
Code), from or with respect to, any Transferred 
Employee of any eligible rollover distribution 
(within the meaning of Section 401(a)(31) of the 
Code) from Sellers 401(k) plan at any time after 
the Closing, subject to Seller providing Buyer with 
satisfactory evidence that the distributing plan 
meets the requirements for qualification under 
Section 401(a) of the Code in form and in operation 
and distributions may properly be made from such 
Plan in accordance with applicable law.  Except as 
provided above, Buyer and Buyers tax qualified 
retirement plans (including Buyers Savings Plan) 
shall assume no responsibility for accrued benefits 
or accounts under any qualified Employee Plan of 
Seller.
(g)     Seller has previously delivered to Buyer a 
copy of Sellers severance plan referred to on 
Schedule 5.23 hereof (the Severance Plan).  As 
provided herein, Buyer is not providing such 
severance plan or any other severance plan to any of 
the Transferred Employees.  Buyer and Seller hereby 
agree that if any of such Transferred Employees are 
terminated by Buyer for any reason then, and in such 
event, if any such terminated Transferred Employees 
shall claim that they are entitled to receive 
severance pay on account of their service with 
Seller and, an administrative agency or court of 
competent jurisdiction shall finally determine that 
such Transferred Employees are so entitled, Seller 
shall be responsible to make such severance payments 
only with respect to the first five Transferred 
Employees (as provided in the Severance Plan) so 
terminated by Buyer on or before April 19, 1997 and 
Buyer shall be responsible to make such severance 
payments to all other Transferred Employees.
(h)     Neither Buyer nor Seller intends this 
Section 7.10 to create any rights or interest, 
except as between Buyer and Seller and no present or 
future employees of either party (or any dependents 
of such employees) will be treated as third party 
beneficiaries in or under this Agreement.
7.11    Casino Control Act.   Buyer represents 
that it knows of no reason why it will not qualify 
to receive the license from the New Jersey Casino 
Control Commission necessary to conduct business 
with casino hotels in New Jersey.  Buyer further 
represents that it will use its best efforts to 
obtain such license as soon as practicable after 
Closing.
8.      Conditions Precedent to the Obligations of 
Buyer.   The obligations of Buyer pursuant to this 
Agreement are subject to the satisfaction at the 
Closing of each of the following conditions; 
provided, however, that Buyer may, in its sole 
discretion, waive any of such conditions and proceed 
with the transactions contemplated hereby.
	8.01    Accuracy of Representations and 
Warranties.   The representations and warranties of 
Seller contained in this Agreement or any other 
document delivered to Buyer at the Closing in 
connection with this Agreement shall be true in all 
material respects on and as of the Closing Date, as 
if made on and as of the Closing Date.
8.02    Performance of Agreements.   Seller shall 
have performed and complied with all covenants, 
obligations and agreements to be performed or 
complied with by it on or before the Closing Date 
pursuant to this Agreement.
8.03 Litigation. Etc.   No claim, action, suit, 
proceeding, arbitration, hearing or notice of 
hearing shall be pending (and no action or 
investigation by any governmental authority shall be 
threatened) which seeks to enjoin or prevent the 
consummation of the transactions contemplated by 
this Agreement.
8.04    Officer's Certificate.   Buyer shall have 
received a certificate of an officer of Seller, 
dated the Closing Date, certifying as to the 
fulfillment of the conditions set forth in Sections 
8.01, 8.02 and 8.03 hereof.
8.05 Approvals; Consents.   Seller shall have 
obtained all approvals and/or consents required to 
transfer the Assumed Contracts to Buyer. 
8.06    Opinion of Counsel.   Buyer shall have 
received from Levine, Staller, Sklar, Chan, Brodsky 
& Donnelly, P.A., counsel to Seller, a favorable 
opinion addressed to Buyer, dated the Closing Date 
and in form reasonably satisfactory to Buyer and its 
counsel.
8.07    Actions. Proceedings. Etc.   All actions, 
proceedings, instruments and documents required to 
carry out the transactions contemplated by this 
Agreement and all other related legal matters shall 
have been taken, prepared and completed in a manner 
reasonably satisfactory to Buyer and its counsel; 
and Buyer shall have been furnished with such other 
instruments and documents as it shall have 
reasonably requested.
8.08    No Material Adverse Change.   Between the 
date hereof and the Closing Date (i) there shall not 
have occurred any changes in Business which in the 
aggregate are materially adverse; or (ii) Buyer 
shall not have learned of any facts which, in its 
reasonable judgment, it believes are materially 
adverse to the Business or the Purchased Assets.
8.09    Employment Agreement.    John Lee shall 
have executed and delivered to Buyer a one year 
employment agreement in the form annexed hereto as 
Exhibit A (the Lee Employment Agreement).
8.10    Lease.   Seller shall have executed and 
delivered to Buyer a six month lease at a rental of 
$5,000 per month with respect to a warehouse located 
at 16-32 Lincoln Street, East Orange, New Jersey in 
the form annexed hereto as Exhibit B (the East 
Orange Lease).
8.11    Note Repayment.  Seller shall have repaid 
the $100,000 principal amount due to Buyer with 
respect to a loan made to Seller by Buyer on 
December 4, 1996.
9.      Conditions Precedent to the Obligations of 
the Seller.   The obligations of Seller under this 
Agreement are subject to the satisfaction at the 
Closing of the following conditions; provided, 
however, that Seller may, in its sole discretion, 
waive any of such conditions and proceed with the 
transactions contemplated hereby.
9.01    Accuracy of Representations and 
Warranties.   The representations and warranties of 
Buyer contained in this Agreement or any other 
document delivered by Buyer to Seller at the Closing 
in connection with this Agreement shall be true in 
all material respects on and as of the Closing Date, 
as if made on and as of the Closing Date.
9.02    Performance of Agreements. Buyer shall 
have performed and complied with all covenants, 
obligations and agreements to be performed or 
complied with by it on or before the Closing Date 
pursuant to this Agreement.
9.03    Litigation. Etc.   No claim, action, suit, 
proceeding, arbitration, hearing or notice of 
hearing shall be pending (and no action or 
investigation by any governmental authority shall be 
threatened) which seeks to enjoin or prevent the 
consummation of the transactions contemplated by 
this Agreement.
9.04    Officers Certificate.   Seller shall have 
received a certificate of an officer of Buyer, dated 
the Closing Date, certifying as to the fulfillment 
of the conditions set forth in Sections 9.01, 9.02 
and 9.03 hereof. 
9.05    Opinion of Counsel to Buyer.   Seller 
shall have received from Messrs. Morse, Zelnick, 
Rose & Lander, LLP, counsel to Buyer, a favorable 
opinion addressed to Seller, dated the Closing Date 
and in form satisfactory to Seller and its counsel.
9.06    Actions. Proceedings. Etc.   All actions, 
proceedings, instruments and documents required to 
carry out the transactions contemplated by this 
Agreement and all other related legal matters shall 
have been taken, prepared and completed in a manner 
reasonably satisfactory to Seller and its counsel; 
and Seller shall have been furnished with such other 
instruments and documents as they shall have 
reasonably requested.
9.07    Employment Agreement.   Buyer shall have 
executed and delivered the Lee Employment Agreement 
to John Lee.
9.08    Lease.   Buyer shall have executed and 
delivered to Seller the East Orange Lease.
9.09    Assumption of Agreements. Buyer shall 
assume and agree to timely and fully pay, perform 
and discharge the Assumed Liabilities, including the 
Assumed Contracts, pursuant to Section 3.01 hereof.
9.10    Release.   Seller and its shareholders 
shall be released from obligations with respect to 
the Long Term Debt and/or guarantees in connections 
therewith and Sellers shareholders shall be 
released from such other liabilities and obligations 
in connection with the Business as they shall 
require.
	10.     Indemnification.
	10.01   Indemnification by Buyer.    
Buyer hereby covenants and agrees with Seller that 
it shall reimburse and indemnify Seller and their 
successors and assigns (individually an Indemnified 
Party) and hold them harmless from, against and in 
respect of any and all costs, losses, claims, 
liabilities, fines, penalties, damages and expenses 
(including interest which may be imposed in 
connection therewith and court costs and reasonable 
fees and disbursements of counsel) incurred by any 
of them due to, arising out of, or in connection 
with (i) a breach of any of the representations, 
warranties, covenants or agreements made by Buyer in 
this Agreement including, without limitation, the 
covenants set forth in Section 7.10 hereof; (ii) 
Buyer's failure to timely and fully honor, 
discharge, pay or fulfill any Assumed Liability; 
(iii) any warranty, product liability or other claim 
relating to any products manufactured and sold by 
Buyer after the Closing Date; (iv) the operation of 
the Business from and after the Closing Date; and 
(v) any tax liability of Buyer (each a Claim).
10.02   Indemnification by Seller.   Seller 
hereby covenants and agrees with Buyer that it shall 
reimburse and indemnify Buyer and its successors and 
assigns (also individually an Indemnified Party) 
and hold them harmless from, against and in respect 
of any and all costs, losses, claims, liabilities, 
fines, penalties, damages and expenses (including 
interest which may be imposed in connection 
therewith and court costs and reasonable fees and 
disbursements of counsel) incurred by any of them 
due to, arising out of, or in connection with (i) a 
breach of any of the representations, warranties, 
covenants or agreements made by Seller in this 
Agreement including, without limitation, the 
covenants set forth in Section 7.10 hereof; and (ii) 
the failure of Seller to discharge any liability or 
obligation of Seller which is not an Assumed 
Liability including, without limitation, (A) any 
warranty, product liability or other claim relating 
to any products manufactured or sold by Seller on or 
prior to the Closing Date,(B) any liability or other 
claim relating to the employment by Seller of the 
Non-transferred Employees (in each case whether or 
not such liability would be imposed directly upon 
Buyer on account of a successor employer or 
successor enterprise theory) (C) any tax liability 
of Seller (also each a Claim).
	10.03   Right to Defend. etc.
	(a)     If the facts giving rise to any such 
indemnification shall involve any actual Claim or 
demand by any third party against an Indemnified 
Party, the indemnifying party shall be entitled to 
notice of and entitled to defend or prosecute such 
Claim at its expense and through counsel of its own 
choosing if it advises the Indemnified Party in 
writing of its intention to do so within thirty (30) 
days after notice of such Claim has been given to 
the indemnifying party (without prejudice to the 
right of any Indemnified Party to participate at its 
expense through counsel of its own choosing). Such 
Indemnified Party shall cooperate in the defense 
and/or settlement of such Claim, but shall be 
entitled to be reimbursed for all costs and expenses 
incurred by it in connection therewith. No 
settlement of any Claim may be made without the 
consent of the indemnifying party, which consent may 
not be unreasonably withheld; provided, however, 
that if such indemnifying party has been offered the 
opportunity to defend such Claim and has elected not 
to do so then settlement may be made without the 
consent of the indemnifying party.
(b)     Notwithstanding Section 10.03(a) hereof, 
if, in the reasonable opinion of Buyer, any Claim 
involves an issue or matter which could have a 
materially adverse effect on the business, 
operations, assets or prospects of Buyer, then, and 
in such event, Buyer shall have the right to control 
the defense or settlement of any such Claim. If 
Buyer should so elect to exercise such right, Buyer 
shall pay the legal expenses associated with such 
defense and the indemnifying party shall have the 
right at its sole expense to participate in, but not 
control, the defense or settlement of such Claim. No 
settlement of any such Claim may be made without the 
consent of the indemnifying party, which consent may 
not be unreasonably withheld.


	11.     General Provisions.
	11.01   Survival of Representations, 
Warranties, Covenants, and Agreements.   The 
representations, warranties, covenants and 
agreements contained in this Agreement shall survive 
the execution of this Agreement and the closing of 
the transactions contemplated hereby for a period of 
two (2) years; provided, however, that any 
representations, warranties, covenants and 
agreements contained herein which specifically set 
forth longer time periods of effectiveness shall 
survive for the periods indicated therein and 
further provided that (i) the covenants and 
agreements set forth in Sections 2.01(c), 3.01, 
3.02, 3.03, 7.04, 7.07 and 7.10 shall survive 
indefinitely and (ii) the representations and 
warranties set forth in Section 5.05 shall survive 
for a period of four (4) years.  If any claim for 
indemnity has been timely made but has not been 
resolved by the parties prior to the expiration of 
the applicable time period of survival then, and in 
such event, such claim shall survive until finally 
resolved.
	11.02   Expenses.  Whether or not the 
transactions contemplated by this Agreement are 
consummated, all costs and expenses incurred in 
connection with this Agreement and the transactions 
contemplated hereby shall be paid by the party 
incurring such expense.
	11.03   Notices.  All notices, requests, 
demands and other communications which are required 
to be or may be given under this Agreement to any 
party to any of the other parties shall be in 
writing and shall be deemed to have been duly given 
when (a) delivered in person, the day following 
dispatch by an overnight courier service (such as 
Federal Express or UPS, etc.) or (c) five (5) days 
after dispatch by certified or registered first 
class mail, postage prepaid, return receipt 
requested, to the party to whom the same is so given 
or made:
	If to Buyer
	     addressed to:              Chock Full ONuts 
Corporation
					370 Lexington Avenue
					New York, New York 10017
					Attn: Mr. Marvin Haas, 
Chief Executive Officer

	with a copy to:         Morse, Zelnick, Rose & 
Lander, LLP
					450 Park Avenue
					New York, New York 10022
					Attn: George Lander, Esq.

	If to Seller addressed to:      Ireland Coffee - 
Tea, Inc.
					8 Canale Drive
					Pleasantville, New Jersey 
08232
					Attn:  Mr. John J. Lee, 
Jr., President

	with a copy to:         Levine, Staller, 
Sklar, Chan, Brodsky & Donnelly
					3030 Atlantic Avenue
					Atlantic City, New Jersey 
08401
					Attn:  Larry Brodsky, Esq.

	11.04   Assignability and Amendments.  This 
Agreement shall not be assignable by any of the 
parties hereto. This Agreement cannot be altered or 
otherwise amended except pursuant to an instrument 
in writing signed by each of the parties.
	11.05   Entire Agreement.  This Agreement and 
the Exhibits and Schedules which are a part hereof 
and the other writings and agreements specifically 
identified herein contain the entire agreement 
between the parties with respect to the transactions 
contemplated herein and supersede all previous 
written or oral negotiations, commitments and 
understandings.
	11.06   Waivers, Remedies.   Any condition to 
the performance of any party hereto which legally 
may be waived on or prior to the Closing Date may be 
waived by the party entitled to the benefit thereof. 
Any waiver must be in writing and signed by the 
party to be bound thereby. A waiver of any of the 
terms or conditions of this Agreement shall not in 
any way affect, limit or waive a party's rights 
under any other term or condition of this Agreement. 
All remedies under this Agreement shall be 
cumulative and not alternative.
	11.07   Counterparts.   This Agreement may be 
executed in two or more counterparts, each of which 
shall be deemed an original and all of which 
together shall constitute one and the same 
instrument.  
	11.08 Headings.  All headings (including, 
without limitation, Article headings and Section 
titles) are inserted for convenience of reference 
only and shall not affect the meaning or 
interpretation of any such provisions or of this 
Agreement, taken as an entirety.
	11.09   Severability.  If and to the extent 
that any court of competent jurisdiction holds any 
provision (or any part thereof) of this Agreement to 
be invalid or unenforceable, such holding shall in 
no way affect the validity of the remainder of this 
Agreement.
	11.10   No Third Party Beneficiaries.  
Nothing contained in this Agreement shall be deemed 
to confer rights on any Person or to indicate that 
this Agreement has been entered into for the benefit 
of any Person, other than the parties hereto.
	11.11   Governing Law.  This Agreement shall 
be governed by and construed in accordance with the 
laws of the State of New York without regard to 
conflicts of laws provisions.
	11.12   Binding Effects.  This Agreement 
shall be binding upon and inure to the benefit of 
the parties hereto and their respective successors, 
legal representatives and assigns.
11.13   Further Assurances.  At any time 
after the Closing Date, each party shall upon 
request of another party, execute, acknowledge and 
deliver all such further and other assurances and 
documents, and will take such action consistent with 
the terms of this Agreement, as may be reasonably 
requested to carry out the transactions contemplated 
herein and to permit each party to enjoy its rights 
and benefits hereunder.
	IN WITNESS WHEREOF, the parties hereto have 
duly executed this Agreement as of the day and year 
first above written.
				CHOCK FULL ONUTS 
CORPORATION

				By: 
______________________________________
					Marvin I. Haas, Chief 
Executive Officer

				IRELAND COFFEE - TEA, INC.

				By: 
______________________________________
					John J. Lee, Jr., 
President

For purposes of Sections 7.02 and 7.08 only:

_______________________
William Schroeder


________________________
John Siracusa