Exhibit 10.1

June 30, 1999

CONFIDENTIAL
------------

Snyder International Brewing Group, LLC
C/O Crooked River Brewing Company, LLC
1101 Center Street
Cleveland, Ohio 44114

Gentleman:

         We understand that, in connection with a proposed investment by you or
your affiliate in Frederick Brewing Co. (the "Company"), you wish to update and
complete your due diligence review of the Company and its business, financial,
environmental and legal affairs. In consideration of the time and resources that
you will devote to such diligence review as well as the preparation and
negotiation of definitive agreements relating to such investment, we hereby
agree that from the date hereof through and including July 25, 1999 (the
"Exclusive Period"), the Company will not, and will cause its affiliates and
representatives not to, take any action to solicit, initiate or encourage any
Acquisition Proposal (as hereinafter defined) or engage in negotiations with, or
disclose any non-public information relating to, the Company to any person or
entity that may be considering making an Acquisition Proposal with respect to
the Company. During the Exclusive Period, you agree that nothing contained in
this letter shall prevent the Board of Directors of the Company from
considering, negotiating, discussing, approving and recommending to the
stockholders of the Company a bona fide Acquisition Proposal not solicited in
violation of this letter, provided the Board of Directors of the Company
determines in good faith (upon advice of outside counsel) that it is required to
do so in order to discharge properly its fiduciary duties. If the Company takes
any action during the Exclusive Period based on the immediately preceding
sentence, the Company shall reimburse you for your reasonable out-of-pocket
expenses (including legal, accounting and other professional fees, travel
expenses, etc.) incurred on and after June 24, 1999 in connection with the
transactions referred to herein. As used herein, "Acquisition Proposal" means an
offer or proposal for, or any indication of interest in, (i) a merger or other
business combination involving the Company or any subsidiary thereof, or (ii)
the acquisition in any manner of any equity interest in, or a portion of the
assets of, the Company or any subsidiary thereof, in each case other than the
transactions contemplated hereby. During the Exclusive period, the Company shall
promptly notify you of any Acquisition Proposal or any request for non-public
information by any person or entity that informs the Company that it is
considering making or has made an Acquisition Proposal.
<PAGE>

         Other than as expressly set forth herein and in the Confidentiality
Agreement, dated June 22, 1999, between the company and you, neither you nor the
Company undertakes any binding obligation with respect to a possible transaction
or investment. Such binding commitments will be made only upon the execution and
delivery of a definitive agreement setting forth the obligations of the parties.
Until such a definitive agreement is executed and delivered, you and we agree
that there has been no meeting of the minds as to the material terms of any
proposal.


Very truly yours,


FREDERICK BREWING CO.


---------------------------
By: Kevin E. Brannon
    Chairman and CEO


The foregoing is hereby agreed to and accepted:

Snyder International
Brewing Group, LLC


---------------------------
By: C. David Snyder
    Chairman