Pledge Agreement

PLEDGE AGREEMENT


This Pledge Agreement (the "Agreement") dated as of the 11 day of November, 1997, is made by and between AMERICAN CRAFT BREWING INTERNATIONAL LIMITED, a Bermuda corporation (the "Debtor") and ENTREPRENEURIAL INVESTORS, LTD., a Bahamas company (the "Secured Party").


INTRODUCTORY PROVISIONS:


A. The Debtor has this day executed a Senior Note (the "Note"), payable to the order of the Secured Party, which Note evidences a loan from Secured Party to the Debtor in the original principal amount thereof (the "Loan").


B. As a condition to the making of the Loan to the Debtor, the Secured Party requires that the Debtor pledge to and grant a security interest in certain shares and interests to secure the payment and performance of the Loan.


NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged and confessed, the parties hereto agree as follows:


1. The Pledge and Security Interest. The Debtor hereby grants to the Secured Party security interests in and to any and all present or future rights of the Debtor in and to all of the following rights, interests, and property (all of the following being herein sometimes called the "Collateral"): (a) Nine Hundred Fifty (950) shares of the common stock, no par value per share, of AmBrew USA, Inc. represented by Certificate No. 2 registered in the name of Debtor; (b) Nine Hundred Ninety Nine (999) shares of the capital stock of Cerveceria Rio Bravo, S.A. de C.V. represented by Certificate No. 1 registered in the name of Debtor; (c) the sixty percent (60%) percentage interest of Debtor in Celtic Brew LLC (as evidenced by certified copies of (i) the Articles of Organization of Celtic Brew LLC, and (ii) the Operating Agreement of Celtic Brew LLC, such certified copies to be delivered to Secured Party on or prior to the date hereof), and (d) Four Thousand Seven Hundred and Forty Nine (4,749) shares of South China Brewing Company Limited represented by Certificate No. 17 registered in the name of Debtor and any and all substitutes, replacements, accessions, attachments, increase, profits, revisions, or additions thereto; and (e) any and all proceeds arising from or by virtue of the sale or other disposition of, or from the collection of, the Collateral described in (a), (b), (c), and (d) preceding.


2. The Indebtedness. This Agreement is being executed and delivered to secure, and the security interests herein granted (the "Security Interests") shall secure, (a) full payment and performance of all of the indebtedness and obligations owing to the Secured Party by the Debtor under the Note, together with any and all renewals and extensions of the same, or any part thereof; (b) all indebtedness and liabilities of the Debtor to the Secured Party at any time arising under the terms of any other agreement securing the Note; and (c) all future advances or other value at any time hereafter made or given by the Secured Party to the Debtor, whether or not the advance or value is given pursuant to the Note (all of such debts, indebtedness, liabilities and duties referred to in (a) through (c) of this paragraph are hereinafter collectively referred to as the "Indebtedness").


3. Representations and Warranties of the Debtor. The Debtor represents and warrants to the Secured Party that: (a) the Security Interests are first and prior security interests in and to all of the Collateral; (b) the Debtor is the owner of the Collateral; (c) no dispute, right of set off, counterclaim, or defenses exist with respect to all or any part of the Collateral; and (d) the shares and interests represented by the Certificates are duly authorized shares and interests and are fully paid and non-assessable. The delivery at any time by the Debtor to the Secured Party of Collateral shall constitute a representation and warranty by the Debtor under this Agreement that the matters heretofore warranted in clause (a) of this paragraph remain true and correct.


4. Negative Covenants of the Debtor. The Debtor further covenants and agrees that, without the prior written consent of the Secured Party, the Debtor will not (a) sell, assign or transfer any of the Debtor's rights in the Collateral, or (b) create any other security interest in, mortgage or otherwise encumber the Collateral, or any part thereof, or permit the same to be or become subject to any lien, attachment, execution, sequestration, other legal or equitable process or any encumbrance of any kind or character, except the security interest herein created.


5. Delivery of Collateral to the Escrow Agent. The Debtor, simultaneously with the execution of this Agreement, is delivering to Cardinal International Bank & Trust Co., Ltd. (the "Escrow Agent") at their offices located at Norfolk House, 3rd Floor, Frederick Street, Nassau, Bahamas, or to such other escrow agent chosen by Secured Party and reasonably acceptable to Debtor, stock certificates, endorsed in blank for transfer or accompanied by stock powers appropriate for transfer, representing the portion of the Collateral described in Sections 1(a) and 1(b) above to be held by Escrow Agent in accordance with the terms and provisions of an Escrow Agreement (herein so called) between Debtor, Secured Party and Escrow Agent. The portion of the Collateral described in Section 1(d) above, along with executed stock powers in blank, will be deposited by Debtor with Locke, Purnell, Rain, Harrell, P.C. (New Orleans office), as escrow agent for Secured Party, prior to the funding of the Note.


6. Default. As used herein, the term "Default" or "Event of Default" means the occurrence of one or more of the following: (a) the failure to timely pay or perform any obligations or covenants contained herein, or in the Note or in any other


document evidencing, governing or securing the Note (after any applicable notice or grace period); (b) any warranty, representation or statement made or furnished to the Secured Party by or in behalf of the Debtor is incorrect in any material respect (which remains incorrect after any applicable cure period); (c) the sale, loss, theft, destruction, encumbrance or transfer of any of the Collateral in violation hereof, or substantial damage to any of the Collateral; (d) the dissolution, merger or consolidation, termination of existence, or business failure of the Debtor; (e) appointment of a receiver for any part of the Collateral; (f) assignment for the benefit of creditors or the commencement of any proceeding under any bankruptcy or insolvency law by or against the Debtor or any partnership of which the Debtor is a partner or by or against any maker, or upon the Collateral; (g) the levy on, seizure or attachment of the Collateral, or any part thereof; (h) the filing of any financing statement with regard to the Collateral, other than relating to the security interest herein created; or (i) attachment of any lien or security interest to any portion of the Collateral except the security interests hereunder.


7. Remedies. Upon the occurrence of any Default, in addition to any and all other rights and remedies which the Secured Party may then have hereunder, under the Uniform Commercial Code of the State of Delaware or of any other pertinent jurisdiction (the "Code"), or otherwise, the Secured Party may, at its option: (a) reduce its claim to judgment or foreclose or otherwise enforce the Security Interests, in whole or in part, by any available judicial procedure; (b) after notification provided for herein, sell, lease, or otherwise dispose of, at the office of the Secured Party, on the premises of the Debtor, or elsewhere, all or any part of the Collateral, in its then condition or following any commercially reasonable preparation o ...