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                                                                   EXHIBIT 10.17

                              PRODUCTION AGREEMENT


Agreement dated this ___12th__ day of ___July___________, 2002 between Frederick
Brewing Company, a Maryland brewer ("Brewer"), and Penn Brewery, Pittsburgh,
Pennsylvania ("Customer").


     1.   TERM

          The term of this Agreement shall continue for two years unless
          terminated by either party upon sixty days prior written notice.


     2.   PRODUCTION AND PACKAGING

          Brewer shall produce and package for Customer the malt beverage
          products set forth on Exhibit A attached hereto ("the Products"), as
          Customer, in its discretion, may order from time to time. Unless
          otherwise specified on Exhibit A, the Products shall be produced in
          accordance with Customer's standard formula for malt beverage products
          as provided in writing to Brewer prior to execution of this Agreement.
          Brewer requires a minimum order of 200 bbl per month and Brewer and
          Customer anticipate an annual production of approximately 4800 barrels
          for Year One.


     3.   ORDERING AND DELIVERY

          Customer shall order the Products not less than seven weeks in advance
          of the desired date of delivery of lagers, and not less than five
          weeks for ales. Customer shall order Products in case equivalents not
          less than 650 (approximately 50 barrels per style). Customer shall
          take delivery of the Products FOB Frederick, Maryland brewery on the
          date specified for delivery. Products not picked up by Customer within
          15 business days of the date of production shall be assessed a
          warehousing charge of $4.00 per pallet per month.


     4.   PACKAGING MATERIALS

          Customer shall be responsible for the cost of all labels and packaging
          materials except as defined further in Exhibit A. All packaging
          materials must be compatible with Brewer's packaging machinery. The
          cost of any required change parts shall be negotiated between the
          parties. Brewer agrees that liquid loss will not exceed 5% and
          packaging loss shall not exceed 5% per barrel. In the event actual
          loss should exceed percentages set forth above, appropriate credits
          will be provided by Brewer to Customer. The amount of such credits
          will be based on how much the actual percentage of loss exceeds the
          target percentages set forth in the immediately preceding sentence.
          The Brewer represents that all Customer products will be of
          merchantable quality.

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     5.   PRICING

          Customer will pay Brewer the prices set forth on Exhibit A for each
          case of the Products ordered by Customer and produced by Brewer under
          this Agreement pursuant to Customer's order. Invoices shall be due and
          payable net 3 days from production. Prices may be changed by Brewer
          upon thirty days prior written notice to Customer for any increase or
          decrease in the cost of raw materials and packaging materials
          purchased by Brewer, which are non-controllable by the Brewer. The
          respective co-packing fees include the cost of loading Products and
          shrink wrapping pallets.


     6.   SALES AND MARKETING

          Customer is exclusively responsible for all sales and marketing for
          the Products.


     7.   WARRANTIES

          Brewer warrants that the Products shall be free from adulterations as
          defined in the US Food, Drug and Cosmetics Act. Customer warrants that
          the trademarks and artwork applied to the Products shall not infringe
          upon the trademark rights of any other person. In no event does Brewer
          have any ownership rights in, or any right to the use of Customer's
          trademarks or copyrights related to the Products provided. Brewer
          acknowledges that the Products are confidential information of the
          Customer and include, without limitation, trademarks, copyrights and
          trade secrets that have been developed by Customer at great expense.
          All confidential information of Customer disclosed under this
          Agreement will remain the exclusive property of Customer. Brewer
          agrees to take all reasonable measures necessary to safeguard the
          confidential nature of Customer's confidential information disclosed
          to Brewer, including notifying its employees, agents, contractors,
          distributors and customers or anyone else with whom the Brewer works
          to complete the purposes of this Agreement of the confidential nature
          of Customer's confidential information.


     8.   ALTERNATING PROPRIETORSHIP

          If applicable, upon the request of Customer, Brewer agrees to
          cooperate in arranging for alternation of proprietorship of the
          brewery. Customer shall pay Brewer a fee of 4 (cents) per case for
          administration of the alternating proprietorship. Appropriate
          production and brewing information needed for proper completion of all
          federal and state reporting to be timely provided by Brewer.


     9.   INDEMNIFICATION

          Brewer and Customer shall indemnify and hold the other party harmless
          from all liability arising out of breach of their respective
          warranties.


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     10.  DISPUTE RESOLUTION

          All disputes arising under the Agreement shall be resolved by
          arbitration. The parties shall attempt to resolve any dispute before
          demanding arbitration.


     11.  PRODUCTION DEPOSIT

          Simultaneously upon execution of this Agreement, Customer will deposit
          with Brewer $6,000 (US), which is refundable 9 months from signing of
          this production agreement.


     12.  ENTIRE AGREEMENT

          This Agreement sets forth the entire agreement between the parties
          with respect to the subject matter stated therein and there are no
          other understandings or agreements. The Agreement may not be modified
          except in writing signed by both parties.


     13.  NOTICE

          Notice under this Agreement shall be deemed delivered if deposited in
          first class US mail to addressee as follows:

                  Brewer:           John Niziolek
                                    Frederick Brewing Company
                                    4607 Wedgewood Blvd.
                                    Frederick, MD  21703

                  Customer:         Pennsylvania Brewing Company
                                    800 Vinal Street
                                    Pittsburgh, PA 15212



     14.  DELIVERY

          Customer shall pay a refundable deposit on all related pallets used in
          shipment of Products (current deposit is $8 for case and keg pallets).
          Brewer shall use reasonable commercial efforts to meet Customer's
          requested shipping dates. Brewer, at Customer's request, may ship to
          Customer by common carrier. Brewer, at its discretion, may load
          appropriate POS materials onto specific destinations.


     15.  TEST BREWS

          Customer will reimburse Brewer for reasonable liquid cost and expenses
          incurred by Brewer for such test brewing of the Products.

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     16.  INSURANCE

          Brewer will maintain all respective insurance and standard coverage
          limits standard for the industry. Brewer will, if requested, add
          Customer as an additional insured party for all policies whereby it is
          deemed appropriate by both Customer and Brewer.


     17.  QUALITY ASSURANCE AND REPORTING

          Brewer will conduct at least four quality checks, which consist of
          air, fill, CO2 and package appearance per each run. Brewer is also
          responsible for providing Daily Production Reports.



IN WITNESS THEREOF, the parties have caused this Agreement to be duly executed
on the date first above written.



SNYDER INTERNATIONAL                          PENNSYLVANIA BREWING CO
BREWING GROUP



By       /s/ John Niziolek                    By     /s/ Thomas V. Pastorius
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         John Niziolek                               Thomas V. Pastorius
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Print Name                                    Print Name



         Plant Manager                               President
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Title                                         Title