Nor-Cal Beverage Company Agrees to Sell Vending Assets

11/12/06 Nor-Cal Beverage Company, Inc. announced that it agreed to sell a substantial portion of its vending route assets to 24seven Vending (US), Inc. in a transaction valued at approximately $2.8 million. 24seven intends to sell vending routes to franchised owners/operators. Nor-Cal will manage the day-to-day operations of the franchisees and provide a suite of fee-based services through a separate Management Agreement. 24seven is a subsidiary of VTL Group Limited, a New Zealand based global franchisor, and 24seven has been selling vending route franchises in California since July 2003.

Over the next twelve months Nor-Cal will sell the assets associated with the vending routes, including related vending machines and equipment, to 24seven. 24seven intends to convert the assets to its franchise business model and sell franchised routes. Shannon Deary-Bell, Vice President, said, "Under our agreement, Nor-Cal will manage routes located in a northern California territory ranging from Fresno to Redding. We will continue to be actively involved in customer relations, and intend to obtain new customers and build additional routes for subsequent sale to 24seven."

Rather than running vending routes, Nor-Cal's new business strategy is to focus on providing services to customers and route operators. The foundation for this new direction is Nor-Cal's business relationship with 24seven and VTL. Ms. Deary-Bell added, "In addition to route management, we plan to sell services to franchisees that include vendor refurbishing and repair, product storage, equipment moving, and cash counting. Nor-Cal will be a supplier of vending consumables as well. We also plan to expand and enhance this service model to other vending operators."

In connection with providing 24seven franchisee services and products, Nor-Cal will use VTL's proprietary software for vending machine management. The software will allow Nor-Cal to monitor consumption trends and improve customer service by reducing product shortages. "The new technology will allow the franchisee to offer a level of service not otherwise available in the marketplace. This should prove to be a competitive advantage," said Ms. Deary-Bell.