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                                                                     Exhibit 4.2
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                  AMERICAN CRAFT BREWING INTERNATIONAL LIMITED

                                      AND

                              THE BANK OF NEW YORK

                                      AND

                        NATIONAL SECURITIES CORPORATION

                                  -----------

                               WARRANT AGREEMENT

                         DATED AS OF SEPTEMBER 11, 1996

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         AGREEMENT,  dated  this  11th  day of  September,  1996,  by and  among
AMERICAN CRAFT BREWING INTERNATIONAL LIMITED, a Bermuda company (the "Company"),
THE BANK OF NEW YORK,  as Warrant  Agent (the  "Warrant  Agent"),  and  NATIONAL
SECURITIES CORPORATION, its successors and assigns (collectively,  "National" or
the "Representative") .

                              W I T N E S S E T H:

         WHEREAS,  in  connection  with (i) the  offering to the public of up to
1,580,000  shares of Common  Stock  (as  defined  in  Section  1) and  1,580,000
redeemable  common  stock  purchase  warrants  (the  "Warrants"),  each  Warrant
entitling the holder thereof to purchase one  additional  share of Common Stock,
(ii) the over-allotment option to purchase up to an additional 237,000 shares of
Common Stock and/or 237,000 Warrants (the  "Over-allotment  Option"),  and (iii)
the sale to National of warrants (the  "Representative's  Warrants") to purchase
up to 158,000 shares of Common Stock and/or 158,000  Warrants,  the Company will
issue up to 1,975,000  Warrants  (subject to increase as provided  herein and in
the Representative's Warrant Agreement); and

         WHEREAS,   the  Company   desires  to  provide  for  the   issuance  of
certificates representing the Warrants; and

         WHEREAS,  the Company desires the Warrant Agent to act on behalf of the
Company,  and the  Warrant  Agent is willing to so act, in  connection  with the
issuance,  registration,  transfer, exchange and redemption of the Warrants, the
issuance of certificates representing the Warrants, the exercise of the Warrants
and the rights of the holders thereof.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
agreements  hereinafter  set forth and for the purpose of defining the terms and
provisions of the Warrants



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and the  certificates  representing  the Warrants and the respective  rights and
obligations  thereunder of the Company,  National,  the holders of  certificates
representing  the Warrants and the Warrant  Agent,  the parties  hereto agree as
follows:

         SECTION 1. Definitions.  As used herein, the following terms shall have
the following meanings, unless the context shall otherwise require:

              (a) "Act" shall mean the Securities Act of 1933, as amended.

              (b) "Common Stock" shall mean the authorized  stock of the Company
of any  class,  whether  now or  hereafter  authorized,  which  has the right to
participate in the voting and in the  distribution of earnings and assets of the
Company  without  limit as to  amount  or  percentage  which at the date  hereof
consists of 10,000,000 shares of Common Stock, par value $0.01 per share.

              (c)   "Commission"   shall  mean  the   Securities   and  Exchange
Commission.

              (d) "Corporate  Office" shall mean the office of the Warrant Agent
(or its successor) at which at any particular time its business in New York, New
York, shall be  administered,  which office is located on the date hereof at 101
Barclay Street (12 West), New York, New York 10286.

              (e) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

              (f)  "Exercise  Date" shall  mean,  subject to the  provisions  of
Section 5(b)  hereof,  as to any  Warrant,  the date on which the Warrant  Agent
shall have received both (i) the Warrant Certificate  representing such Warrant,
with the exercise form thereon duly executed by the Registered Holder thereof or
his attorney duly authorized in writing, and (ii) payment in cash or by official
bank or certified check made payable to the Warrant Agent for the account


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of the Company,  of the amount in lawful  money of the United  States of America
equal to the applicable Purchase Price (as hereinafter defined) in good funds.

              (g) "Initial Warrant Exercise Date" shall mean March 11, 1997.
   
              (h) "Initial Warrant Redemption Date" shall mean March 11, 1998.

              (i)  "NASD"  shall mean the  National  Association  of  Securities
Dealers, Inc.

              (j) "Nasdaq" shall mean the Nasdaq SmallCap Market.
         
              (k)  "Purchase  Price"  shall mean,  subject to  modification  and
adjustment as provided in Section 8, $6.875 and further subject to the Company's
right,  in its sole  discretion,  to decrease the Purchase Price for a period of
not less than 30 days on not less than 30 days'  prior  written  notice from the
Company to the Registered Holders and National.

              (l)  "Redemption  Date"  shall mean the date  (which may not occur
before the Initial  Warrant  Redemption  Date) fixed for the  redemption  of the
Warrants in accordance with the terms hereof.

              (m)  "Redemption  Price" shall mean the price at which the Company
may, at its option,  redeem the Warrants,  in accordance  with the terms hereof,
which price shall be $0.10 per Warrant,  subject to adjustment from time to time
pursuant to the provisions of Section 9 hereof.

              (n)  "Registered  Holder"  shall mean the person in whose name any
certificate   representing  the  Warrants  shall  be  registered  on  the  books
maintained by the Warrant Agent pursuant to Section 6.

              (o)  "Transfer  Agent"  shall  mean The Bank of New  York,  or its
authorized successor.

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              (p) "Underwriting Agreement" shall mean the underwriting agreement
dated as of September 10, 1996 between the Company and the several  underwriters
listed  therein  relating to the  purchase for resale to the public of 1,580,000
shares of Common Stock and 1,580,000 Warrants.

              (q) "Representative's  Warrant Agreement" shall mean the agreement
dated as of September 11, 1996 between the Company and National  relating to and
governing the terms and provisions of the Representative's Warrants.

              (r) "Warrant  Certificate"  shall mean a certificate  representing
each of the Warrants substantially in the form annexed hereto as Exhibit A.

              (s) "Warrant  Expiration Date" shall mean, unless the Warrants are
redeemed as provided in Section 9 hereof prior to such date, 5:30 p.m. (New York
time),  on  September  11,  2001,  or the  Redemption  Date as  defined  herein,
whichever date is earlier;  provided that if such date shall in the State of New
York be a holiday or a day on which  banks are  authorized  to close,  then 5:30
p.m. (New York time) on the next following day which,  in the State of New York,
is not a holiday  or a day on which  banks are  authorized  to close.  Upon five
business days' prior written notice to the Registered Holders, the Company shall
have the right to extend the Warrant Expiration Date.

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         SECTION 2. Warrants and Issuance of Warrant Certificates.

              (a) Each Warrant shall initially  entitle the Registered Holder of
the Warrant  Certificate  representing  such Warrant to purchase at the Purchase
Price  therefor  from the  Initial  Warrant  Exercise  Date  until  the  Warrant
Expiration  Date  one  share  of  Common  Stock  upon the  exercise  thereof  in
accordance  with the terms hereof,  subject to  modification  and  adjustment as
provided in Section 8.

              (b)  Upon  execution  of  this  Agreement,   Warrant  Certificates
representing the number of Warrants sold pursuant to the Underwriting  Agreement
(subject  to  modification  and  adjustment  as  provided in Section 8) shall be
executed by the Company and delivered to the Warrant Agent.

              (c) Upon  exercise  of the  Representative's  Warrants as provided
therein, Warrant Certificates  representing all or a portion of 158,000 Warrants
to purchase up to an  aggregate of 158,000  shares of Common  Stock  (subject to
modification  and  adjustment  as  provided  in  Section  8  hereof  and  in the
Representative's Warrant Agreement) shall be countersigned, issued and delivered
by the Warrant Agent upon written order of the Company signed by its Chairman of
the Board,  Chief  Executive  Officer,  President or a Vice President and by its
Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary.

              (d) From time to time,  up to the Warrant  Expiration  Date or the
Redemption Date,  whichever date is earlier, the Warrant Agent shall countersign
and  deliver  Warrant  Certificates  in required  denominations  of one or whole
number  multiples  thereof to the person entitled thereto in connection with any
transfer or exchange permitted under this Agreement.  Except as provided herein,
no  Warrant  Certificates  shall  be  issued  except  (i)  Warrant  Certificates
initially  issued  hereunder,  those  issued  pursuant  to the  exercise  of the
Over-

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allotment Option and those issued on or after the Initial Warrant Exercise Date,
upon the exercise of fewer than all Warrants held by the  exercising  Registered
Holder,  (ii)  Warrant  Certificates  issued  upon any  transfer  or exchange of
Warrants,  (iii) Warrant  Certificates  issued in replacement  of lost,  stolen,
destroyed or mutilated Warrant Certificates  pursuant to Section 7, (iv) Warrant
Certificates issued pursuant to the Representative's  Warrant Agreement, and (v)
at the  option  of the  Company,  Warrant  Certificates  in such  form as may be
approved by its Board of Directors,  to reflect any  adjustment or change in the
Purchase Price,  the number of shares of Common Stock  purchasable upon exercise
of the Warrants or the  Redemption  Price  therefor  made  pursuant to Section 8
hereof.

         SECTION 3. Form and Execution of Warrant Certificates.

              (a) The Warrant  Certificates  shall be  substantially in the form
annexed  hereto as Exhibit A (the  provisions  of which are hereby  incorporated
herein) and may have such letters,  numbers or other marks of  identification or
designation and such legends, summaries or endorsements printed, lithographed or
engraved thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement,  or as may be required to comply with any
law or with any rule or  regulation  made  pursuant  thereto or with any rule or
regulation  of any stock  exchange on which the  Warrants  may be listed,  or to
conform to usage. The Warrant  Certificates  shall be dated the date of issuance
thereof  (whether  upon  initial  issuance,  transfer,  exchange  or in  lieu of
mutilated,  lost,  stolen  or  destroyed  Warrant  Certificates)  and  issued in
registered  form.  Warrants shall be numbered  serially with the letter W on the
Warrants.

              (b)  Warrant  Certificates  shall be  executed  on  behalf  of the
Company by its Chairman of the Board, Chief Executive Officer,  President or any
Vice President and by its

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Treasurer or an Assistant Treasurer or its Secretary or an Assistant  Secretary,
by manual signatures or by facsimile  signatures printed thereon, and shall have
imprinted thereon a facsimile of the Company's seal. Warrant  Certificates shall
be manually  countersigned  by the Warrant  Agent and shall not be valid for any
purpose  unless so  countersigned.  In case any officer of the Company who shall
have signed any of the Warrant  Certificates  shall cease to be such  officer of
the Company  before the date of issuance of the Warrant  Certificates  or before
countersignature  by the  Warrant  Agent and issue and  delivery  thereof,  such
Warrant Certificates,  nevertheless,  may be countersigned by the Warrant Agent,
issued  and  delivered  with the same  force and effect as though the person who
signed  such  Warrant  Certificates  had not  ceased to be such  officer  of the
Company. After countersignature by the Warrant Agent, Warrant Certificates shall
be delivered by the Warrant Agent to the Registered  Holder promptly and without
further  action by the  Company,  except as  otherwise  provided by Section 4(a)
hereof.

         SECTION 4. Exercise.

              (a) Warrants in  denominations  of one or whole  number  multiples
thereof may be exercised by the Registered Holder thereof commencing at any time
on or after the  Initial  Warrant  Exercise  Date,  but not  after  the  Warrant
Expiration  Date,  upon the terms and subject to the conditions set forth herein
and in the  applicable  Warrant  Certificate.  A Warrant shall be deemed to have
been exercised  immediately  prior to the close of business on the Exercise Date
and the person entitled to receive the securities deliverable upon such exercise
shall be treated for all purposes as the holder,  upon exercise  thereof,  as of
the close of business on the Exercise Date. If Warrants in  denominations  other
than whole number  multiples  thereof shall be exercised at one time by the same
Registered  Holder,  the number of full  shares of Common  Stock  which shall be
issuable upon  exercise  thereof shall be computed on the basis of 


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the aggregate number of full shares of Common Stock issuable upon such exercise.
As soon as  practicable  on or after the  Exercise  Date and in any event within
five business days after such date, if one or more Warrants have been exercised,
the  Warrant  Agent on behalf  of the  Company  shall  cause to be issued to the
person or persons  entitled to receive the same a Common  Stock  certificate  or
certificates for the shares of Common Stock deliverable upon such exercise,  and
the  Warrant  Agent  shall  deliver  the same to the person or persons  entitled
thereto. Upon the exercise of any one or more Warrants,  the Warrant Agent shall
promptly  notify  the  Company  in  writing  of such  fact and of the  number of
securities  delivered  upon such exercise and,  subject to subsection (b) below,
shall cause all  payments  of an amount in cash or by check made  payable to the
order of the Company,  equal to the Purchase Price, to be deposited  promptly in
the Company's bank account.

              (b) At any time upon the exercise of any  Warrants  after one year
and one day from the date hereof,  the Warrant  Agent  shall,  on a daily basis,
within two business days after such exercise, notify National of the exercise of
any such Warrants and shall,  on a weekly basis  (subject to collection of funds
constituting  the  tendered  Purchase  Price,  but in no  event  later  than ten
business  days after the last day of the calendar  week in which such funds were
tendered),  remit  to  National  an  amount  equal to five  percent  (5%) of the
Purchase Price of such Warrants then being exercised  unless National shall have
notified the Warrant Agent within the time period  specified in subsection (vii)
below that the payment of such amount with  respect to such Warrant is violative
of the General Rules and Regulations  promulgated under the Exchange Act, or the
rules and regulations of the NASD or applicable  state  securities or "blue sky"
laws,  or the Warrants are those  underlying  the  Representative's  Warrants in
which  event,  the Warrant  Agent shall have to pay such amount to the  Company;
provided, that the Warrant Agent shall

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not be  obligated  to pay any amounts  pursuant to this  Section 4(b) during any
week that such  amounts  payable are less than  $1,000 and the  Warrant  Agent's
obligation to make such  payments  shall be suspended  until the amount  payable
aggregates  $1,000,  and provided further,  that, in any event, any such payment
(regardless  of  amount)  shall  be  made  not  less  frequently  than  monthly.
Notwithstanding  the  foregoing,  National  shall be  entitled  to  receive  the
commission  contemplated by this Section 4(b) as Warrant solicitation agent only
if: (i) the current  market  value per share of Common Stock (as  determined  in
accordance  with Section 4(c) hereof) is greater than the Purchase  Price,  (ii)
National has provided actual services in connection with the solicitation of the
exercise of a Warrant(s) by a Registered  Holder,  (iii) the  Registered  Holder
exercising a Warrant(s) affirmatively designates in writing on the exercise form
on the  reverse  side of the  Warrant  Certificate  that  the  exercise  of such
Registered  Holder's  Warrant(s) was solicited by National,  (iv) at the time of
solicitation  of the  exercise  of the  Warrant(s),  National is a member of the
NASD,  (v) the  Warrant(s)  is not  held in a  discretionary  account,  (vi) the
solicitation of the exercise of the Warrant(s) is not in violation of Rule 10b-6
(as  such  rule or any  successor  rule  may be in  effect  as of  such  time of
exercise)  promulgated  under the Exchange Act and (vii)  National  provides the
Warrant  Agent  with a  certificate  certifying  as to the  truth  of the  items
contained in subsections (i) through (vi) above within seven business days after
the Warrant Agent has notified National of the exercise of any Warrants.

              (c) The Company shall not be required to issue  fractional  shares
on the exercise of Warrants. Warrants may only be exercised in such multiples as
are required to permit the issuance by the Company of one or more whole  shares.
If one or more Warrants shall be presented for exercise in full at the same time
by the same  Registered  Holder,  the  number  of whole  shares  which  shall be
issuable upon such exercise thereof shall be computed

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on the basis of the aggregate  number of shares  purchasable  on exercise of the
Warrants  so  presented.  If any  fraction  of a  share  would,  except  for the
provisions  provided  herein,  be  issuable  on the  exercise of any Warrant (or
specified  portion  thereof),  the Company  shall pay an amount in cash equal to
such fraction  multiplied by the then current  market value of a share of Common
Stock, determined as follows:

              (1) If the Common Stock is listed, or admitted to unlisted trading
privileges on a national securities  exchange,  or is traded on Nasdaq, the then
current  market value of a share of Common Stock shall be the closing sale price
of the  Common  Stock  at the end of the  regular  trading  session  on the last
business  day prior to the date of exercise of the Warrants on whichever of such
exchanges or Nasdaq had the highest  average daily trading volume for the Common
Stock on such day; or

              (2) If the Common  Stock is not  listed or  admitted  to  unlisted
trading privileges on any national  securities  exchange,  or listed,  quoted or
reported for trading on Nasdaq,  but is traded in the  over-the-counter  market,
the current  market value of a share of Common Stock shall be the average of the
last reported bid and asked prices of the Common Stock  reported by the National
Quotation Bureau, Inc. on the last business day prior to the date of exercise of
the Warrants; or

              (3) If the  Common  Stock  is not  listed,  admitted  to  unlisted
trading privileges on any national  securities  exchange,  or listed,  quoted or
reported for trading on Nasdaq, and bid and asked prices of the Common Stock are
not reported by the National Quotation Bureau, Inc., the current market value of
a share of Common Stock shall be an amount, not less than the book value thereof
as of the end of the most  recently  completed  fiscal  quarter  of the  Company
ending

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prior  to the  date of  exercise,  determined  by the  members  of the  Board of
Directors of the Company  exercising  good faith and using  customary  valuation
methods.

         SECTION 5. Reservation of Shares; Listing; Payment of Taxes; etc.

              (a) The Company  covenants  that it will at all times  reserve and
keep  available out of its  authorized  Common Stock,  solely for the purpose of
issue upon exercise of Warrants,  such number of shares of Common Stock as shall
then be issuable  upon the  exercise of all  outstanding  Warrants.  The Company
covenants  that all shares of Common Stock which shall be issuable upon exercise
of the  Warrants  shall,  at the time of delivery  thereof,  be duly and validly
issued and fully paid and  nonassessable and free from all preemptive or similar
rights,  taxes,  liens and charges with respect to the issue  thereof,  and that
upon issuance such shares shall be listed on each securities  exchange,  if any,
on which the other  shares of  outstanding  Common Stock of the Company are then
listed.

              (b) The Company  covenants  that if any  securities to be reserved
for the purpose of exercise of Warrants hereunder require  registration with, or
approval of, any governmental  authority under any federal securities law before
such securities may be validly issued or delivered upon such exercise,  then the
Company will file a registration  statement under the federal securities laws or
a  post-effective  amendment,  use its best  efforts to cause the same to become
effective  and to keep  such  registration  statement  current  while any of the
Warrants are  outstanding  and deliver a prospectus  which complies with Section
10(a)(3) of the Act, to the Registered Holder exercising the Warrant (except, if
in the opinion of counsel to the  Company,  such  registration  is not  required
under the federal  securities  law or if the Company  receives a letter from the
staff of the Commission stating that it would not take any enforcement action if
such  registration  is not  effected).  The Company will use its best efforts to
obtain appropriate 

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approvals or  registrations  under state "blue sky" securities laws with respect
to any such securities.  However, Warrants may not be exercised by, or shares of
Common  Stock  issued  to,  any  Registered  Holder in any  state in which  such
exercise would be unlawful.

              (c) The Company shall pay all documentary,  stamp or similar taxes
and other governmental  charges that may be imposed with respect to the issuance
of  Warrants,  or the  issuance or  delivery of any shares of Common  Stock upon
exercise of the Warrants;  provided, however, that if shares of Common Stock are
to be  delivered in a name other than the name of the  Registered  Holder of the
Warrant  Certificate  representing  any Warrant  being  exercised,  then no such
delivery  shall be made  unless the person  requesting  the same has paid to the
Warrant Agent the amount of transfer taxes or charges incident thereto, if any.

              (d) The  Warrant  Agent is hereby  irrevocably  authorized  as the
Transfer Agent to requisition from time to time certificates representing shares
of Common Stock or other securities required upon exercise of the Warrants,  and
the Company will comply with all such requisitions.

         SECTION 6. Exchange and Registration of Transfer.

              (a)  Warrant  Certificates  may be  exchanged  for  other  Warrant
Certificates  representing  an equal  aggregate  number of  Warrants of the same
class or may be  transferred  in whole or in part.  Warrant  Certificates  to be
exchanged  shall be  surrendered  to the Warrant Agent at its Corporate  Office,
and, upon  satisfaction  of the terms and provisions  hereof,  the Company shall
execute and the Warrant Agent shall  countersign,  issue and deliver in exchange
therefor the Warrant  Certificate or  Certificates  which the Registered  Holder
making the exchange shall be entitled to receive.

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              (b) The Warrant Agent shall keep,  at its office,  books in which,
subject to such  reasonable  regulations as it may prescribe,  it shall register
Warrant  Certificates  and the transfer  thereof in  accordance  with  customary
practice.  Upon due  presentment  for  registration  of  transfer of any Warrant
Certificate  at such office,  the Company  shall  execute and the Warrant  Agent
shall  issue  and  deliver  to  the  transferee  or  transferees  a new  Warrant
Certificate or Certificates  representing an equal aggregate  number of Warrants
of the same class.

              (c)  With  respect  to  all  Warrant  Certificates  presented  for
registration  of  transfer,  or for exchange or exercise,  the  subscription  or
exercise form, as the case may be, on the reverse thereof shall be duly endorsed
or be  accompanied  by a written  instrument  or  instruments  of  transfer  and
subscription,  in form  satisfactory to the Company and the Warrant Agent,  duly
executed  by  the  Registered  Holder  thereof  or  his  attorney-in-fact   duly
authorized in writing.

              (d) A service  charge may be imposed by the Warrant  Agent for any
exchange or registration of transfer of Warrant Certificates.  In addition,  the
Company may require  payment by any exchanging or  transferring  Holder of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
connection therewith.

              (e) All  Warrant  Certificates  surrendered  for  exercise  or for
exchange in case of mutilated Warrant Certificates shall be promptly canceled by
the Warrant Agent and thereafter retained by the Warrant Agent until termination
of this Agreement.

              (f) Prior to due presentment for registration of transfer thereof,
the Company and the Warrant  Agent may deem and treat the  Registered  Holder of
any Warrant  Certificate  as the  absolute  owner  thereof  and of each  Warrant
represented  thereby  (notwithstanding  any  notations  of  ownership or writing
thereon  made by anyone other than a

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duly  authorized  officer of the Company or the Warrant  Agent) for all purposes
and shall not be affected by any notice to the contrary.

         SECTION 7. Loss or  Mutilation.  Upon  receipt by the  Company  and the
Warrant Agent of evidence satisfactory to them of the ownership of and the loss,
theft,  destruction or mutilation of any Warrant Certificate and (in the case of
loss,  theft or destruction) of indemnity  satisfactory to them, and (in case of
mutilation) upon surrender and cancellation  thereof,  the Company shall execute
and the Warrant Agent shall (in the absence of notice to the Company  and/or the
Warrant  Agent that a new Warrant  Certificate  has been acquired by a bona fide
purchaser)  countersign  and deliver to the Registered  Holder in lieu thereof a
new Warrant  Certificate of like tenor representing an equal aggregate number of
Warrants. Applicants for a substitute Warrant Certificate shall also comply with
such other reasonable  regulations and pay such other reasonable  charges as the
Warrant Agent may prescribe.

         SECTION 8.  Adjustment of Purchase Price and Number of Shares of Common
Stock Deliverable.

              (a)  Except as  hereinafter  provided,  in the  event the  Company
shall,  at any time or from time to time after the date  hereof and prior to the
Warrant  Expiration  Date,  issue or sell  any  shares  of  Common  Stock  for a
consideration  per share  less than the  Purchase  Price or issue any  shares of
Common Stock as a stock dividend to the holders of Common Stock, or subdivide or
combine the  outstanding  shares of Common Stock into a greater or lesser number
of shares (any such issuance,  subdivision or combination  being herein called a
"Change of Shares"),  then, and  thereafter  upon each further Change of Shares,
the Purchase Price for the Warrants (whether or not the same shall be issued and
outstanding)  in effect  immediately  prior to such  Change  of Shares  shall be
changed to a price (including any applicable fraction of a cent

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to the nearest cent)  determined by dividing (i) the sum of (a) the total number
of  shares of  Common  Stock  outstanding  immediately  prior to such  Change of
Shares,  multiplied by the Purchase  Price in effect  immediately  prior to such
Change of Shares and (b) the consideration, if any, received by the Company upon
such sale,  issuance,  subdivision or  combination,  by (ii) the total number of
shares of Common  Stock  outstanding  immediately  after such  Change of Shares;
provided,  however,  that in no event  shall  the  Purchase  Price  be  adjusted
pursuant to this  computation  to an amount in excess of the  Purchase  Price in
effect  immediately  prior  to  such  computation,  except  in  the  case  of  a
combination of outstanding shares of Common Stock.

         For the purposes of any  adjustment to be made in accordance  with this
Section 8(a), the following provisions shall be applicable:

              (A) In case of the  issuance or sale of shares of Common Stock (or
of other  securities  deemed hereunder to involve the issuance or sale of shares
of Common  Stock) for a  consideration  part or all of which shall be cash,  the
amount of the cash  portion of the  consideration  therefor  deemed to have been
received by the Company shall be (i) the subscription price, if shares of Common
Stock are offered by the Company for  subscription,  or (ii) the public offering
price (before  deducting  therefrom any compensation paid or discount allowed in
the sale,  underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection  therewith),
if such  securities  are sold to  underwriters  or dealers  for public  offering
without a  subscription  offering,  or (iii) the gross  amount of cash  actually
received by the Company for such securities, in any other case.

              (B) In case of the issuance or sale  (otherwise than as a dividend
or other  distribution  on any stock of the Company,  and otherwise  than on the
exercise of options, rights

                                       15


<PAGE>
<PAGE>


or  warrants  or the  conversion  or exchange  of  convertible  or  exchangeable
securities) of shares of Common Stock (or of other  securities  deemed hereunder
to involve the issuance or sale of shares of Common  Stock) for a  consideration
part or all of which shall be other than cash,  the amount of the  consideration
therefor  other than cash deemed to have been  received by the Company  shall be
the value of such  consideration  as  determined  in good  faith by the Board of
Directors of the Company,  using customary valuation methods and on the basis of
prevailing market values for similar property or services.

              (C) Shares of Common  Stock  issuable  by way of dividend or other
distribution  on any stock of the  Company  shall be deemed to have been  issued
immediately  after the opening of business on the day  following the record date
for the determination of shareholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.

              (D) The  reclassification  of securities of the Company other than
shares of Common Stock into securities including shares of Common Stock shall be
deemed  to  involve  the   issuance  of  such  shares  of  Common  Stock  for  a
consideration  other than cash immediately prior to the close of business on the
date fixed for the  determination  of security  holders entitled to receive such
shares,  and the value of the  consideration  allocable to such shares of Common
Stock shall be determined as provided in subsection (B) of this Section 8(a).

              (E)  The  number  of  shares  of  Common  Stock  at any  one  time
outstanding  shall be deemed to include the aggregate  maximum  number of shares
issuable  (subject to readjustment  upon the actual  issuance  thereof) upon the
exercise of options,  rights or warrants and upon the  conversion or exchange of
convertible or exchangeable securities.

                                       16

<PAGE>
<PAGE>


              (b) Upon each  adjustment of the Purchase  Price  pursuant to this
Section 8, the number of shares of Common Stock purchasable upon the exercise of
each Warrant shall be the number derived by multiplying  the number of shares of
Common Stock  purchasable  immediately  prior to such adjustment by the Purchase
Price in effect prior to such adjustment and dividing the product so obtained by
the applicable adjusted Purchase Price.

              (c) In case the  Company  shall at any time after the date  hereof
issue  options,  rights or warrants to subscribe for shares of Common Stock,  or
issue any  securities  convertible  into or  exchangeable  for  shares of Common
Stock,  for a consideration  per share  (determined as provided in Sections 8(a)
and  8(b)  and as  provided  below)  less  than the  Purchase  Price  in  effect
immediately prior to the issuance of such options,  rights or warrants,  or such
convertible or exchangeable securities,  or without consideration (including the
issuance of any such securities by way of dividend or other  distribution),  the
Purchase  Price for the  Warrants  (whether  or not the same shall be issued and
outstanding) in effect immediately prior to the issuance of such options, rights
or warrants, or such convertible or exchangeable securities, as the case may be,
shall be reduced to a price  determined by making the  computation in accordance
with the provisions of Sections 8(a) and 8(b) hereof, provided that:

              (A) The aggregate maximum number of shares of Common Stock, as the
case may be, issuable or that may become issuable under such options,  rights or
warrants  (assuming  exercise in full even if not then currently  exercisable or
currently  exercisable in full) shall be deemed to be issued and  outstanding at
the time such options, rights or warrants were issued, for a consideration equal
to the minimum purchase price per share provided for in such options,  rights or
warrants at the time of issuance,  plus the  consideration,  if any, received by
the Company for such options, rights or warrants;  provided,  however, that upon
the expiration

                                       17


<PAGE>
<PAGE>

or other termination of such options,  rights or warrants,  if any thereof shall
not have been  exercised,  the  number of  shares of Common  Stock  deemed to be
issued and outstanding  pursuant to this subsection (A) (and for the purposes of
subsection  (E) of Section 8(a) hereof) shall be reduced by the number of shares
as to which options,  warrants and/or rights shall have expired, and such number
of shares  shall no longer be  deemed  to be  issued  and  outstanding,  and the
Purchase  Price then in effect shall  forthwith be readjusted  and thereafter be
the price that it would have been had  adjustment  been made on the basis of the
issuance only of the shares actually issued plus the shares  remaining  issuable
upon the exercise of those options,  rights or warrants as to which the exercise
rights shall not have expired or terminated unexercised.

              (B) The  aggregate  maximum  number  of  shares  of  Common  Stock
issuable  or that  may  become  issuable  upon  conversion  or  exchange  of any
convertible or exchangeable  securities (assuming conversion or exchange in full
even if not then currently  convertible or exchangeable in full) shall be deemed
to be issued and outstanding at the time of issuance of such  securities,  for a
consideration  equal  to the  consideration  received  by the  Company  for such
securities,  plus the minimum  consideration,  if any, receivable by the Company
upon the  conversion  or  exchange  thereof;  provided,  however,  that upon the
termination of the right to convert or exchange such convertible or exchangeable
securities (whether by reason of redemption or otherwise),  the number of shares
of Common Stock deemed to be issued and outstanding  pursuant to this subsection
(B) (and for the purposes of  subsection  (E) of Section  8(a) hereof)  shall be
reduced by the number of shares as to which the  conversion  or exchange  rights
shall have expired or terminated unexercised, and such number of shares shall no
longer be deemed to be issued and  outstanding,  and the Purchase  Price then in
effect shall  forthwith be readjusted  and thereafter be the price that it would
have been had adjustment been made on

                                       18

<PAGE>
<PAGE>
 

the basis of the  issuance  only of the shares  actually  issued plus the shares
remaining   issuable  upon  conversion  or  exchange  of  those  convertible  or
exchangeable  securities as to which the conversion or exchange rights shall not
have expired or terminated unexercised.

              (C) If any change shall occur in the price per share  provided for
in any of the options,  rights or warrants referred to in subsection (A) of this
Section  8(c),  or in the  price  per  share or ratio  at which  the  securities
referred  to  in  subsection  (B)  of  this  Section  8(c)  are  convertible  or
exchangeable, such options, rights or warrants or conversion or exchange rights,
as the case may be, to the extent not theretofore exercised,  shall be deemed to
have expired or terminated  on the date when such price change became  effective
in  respect  of shares  not  theretofore  issued  pursuant  to the  exercise  or
conversion or exchange  thereof,  and the Company shall be deemed to have issued
upon such date new options,  rights or warrants or convertible  or  exchangeable
securities.

              (d) In case  of any  reclassification  or  change  of  outstanding
shares of Common Stock  issuable  upon  exercise of the  Warrants  (other than a
change in par value,  or from par value to no par value, or from no par value to
par value or as a result of a  subdivision  or  combination),  or in case of any
consolidation or merger of the Company with or into another  corporation  (other
than a merger with a  subsidiary  of the Company in which  merger the Company is
the continuing corporation) and which does not result in any reclassification or
change of the then  outstanding  shares of Common Stock or other  capital  stock
issuable  upon  exercise of the Warrants  (other than a change in par value,  or
from par value to no par value, or from no par value to par value or as a result
of subdivision or  combination)  or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, then, as a condition of such reclassification,  change, consolidation,

                                       19


<PAGE>
<PAGE>

merger,  sale or  conveyance,  the  Company,  or such  successor  or  purchasing
corporation,  as the case may be,  shall  make  lawful  and  adequate  provision
whereby the Registered  Holder of each Warrant then  outstanding  shall have the
right  thereafter  to receive on exercise of such Warrant the kind and amount of
securities  and  property   receivable  upon  such   reclassification,   change,
consolidation,  merger,  sale  or  conveyance  by a  holder  of  the  number  of
securities  issuable  upon  exercise of such Warrant  immediately  prior to such
reclassification,  change,  consolidation,  merger, sale or conveyance and shall
forthwith file at the Corporate  Office of the Warrant Agent a statement  signed
by  its  Chief  Executive  Officer,  President  or a Vice  President  and by its
Treasurer or an Assistant  Treasurer or its Secretary or an Assistant  Secretary
evidencing  such  provision.   Such  provisions  shall  include   provision  for
adjustments  which shall be as nearly  equivalent as may be  practicable  to the
adjustments  provided for in Sections 8(a), (b) and (c). The above provisions of
this Section 8(d) shall  similarly  apply to  successive  reclassifications  and
changes of shares of Common  Stock and to  successive  consolidations,  mergers,
sales or conveyances.

              (e)  Irrespective  of any  adjustments  or changes in the Purchase
Price or the number of shares of Common Stock  purchasable  upon exercise of the
Warrants,  the Warrant  Certificates  theretofore  and thereafter  issued shall,
unless the Company shall  exercise its option to issue new Warrant  Certificates
pursuant to Section  2(e)  hereof,  continue to express the  Purchase  Price per
share and the number of shares purchasable  thereunder as the Purchase Price per
share and the number of shares  purchasable  thereunder  were  expressed  in the
Warrant Certificates when the same were originally issued.

              (f) After each  adjustment of the Purchase  Price pursuant to this
Section  8, the  Company  will  promptly  prepare  a  certificate  signed by the
Chairman, Chief Executive

                                       20


<PAGE>
<PAGE>

Officer or  President,  and by the  Treasurer or an  Assistant  Treasurer or the
Secretary or an  Assistant  Secretary,  of the Company  setting  forth:  (i) the
Purchase  Price as so  adjusted,  (ii) the  number of  shares  of  Common  Stock
purchasable upon exercise of each Warrant,  after such  adjustment,  and (iii) a
brief statement of the facts  accounting for such  adjustment.  The Company will
promptly file such  certificate with the Warrant Agent and cause a brief summary
thereof to be sent by ordinary first class mail to each Registered Holder at his
last address as it shall appear on the registry books of the Warrant  Agent.  No
failure to mail such  notice nor any defect  therein or in the  mailing  thereof
shall  affect the validity  thereof  except as to the holder to whom the Company
failed  to mail  such  notice,  or  except as to the  holder  whose  notice  was
defective.  The affidavit of an officer of the Warrant Agent or the Secretary or
an Assistant Secretary of the Company that such notice has been mailed shall, in
the absence of fraud, be prima facie evidence of the facts stated therein.

              (g) No adjustment of the Purchase  Price shall be made as a result
of or in  connection  with (A) the  issuance  or sale of shares of Common  Stock
pursuant to options,  warrants,  stock purchase  agreements  and  convertible or
exchangeable  securities  outstanding or in effect on the date hereof and on the
terms  described  in  the  final  prospectus  relating  to the  public  offering
contemplated  by the  Underwriting  Agreement;  or (B) the  issuance  or sale of
shares of Common Stock if the amount of said adjustment shall be less than $.10,
provided,  however,  that in such case, any adjustment  that would  otherwise be
required then to be made shall be carried  forward and shall be made at the time
of and together with the next subsequent adjustment that shall amount,  together
with  any  adjustment  so  carried  forward,  to at  least  $.10.  In  addition,
Registered  Holders shall not be entitled to cash  dividends paid by the Company
prior to the exercise of any Warrant or Warrants held by them.

                                       21


<PAGE>
<PAGE>

         SECTION 9. Redemption.

              (a) Commencing on the Initial Warrant Redemption Date, the Company
may, on 30 days' prior written notice, redeem all, but not less than all, of the
Warrants at ten cents ($0.10) per Warrant,  provided,  however,  that before any
such call for  redemption of Warrants can take place,  the closing bid price for
the Common  Stock as reported by Nasdaq,  if the Common  Stock is then traded on
the Nasdaq (or the closing sale price, if the Common Stock is then traded on the
Nasdaq National Market or on a national securities exchange) shall have equalled
or exceeded $16.50 per share for any twenty (20) trading days within a period of
thirty (30)  consecutive  trading days ending on the fifth  trading day prior to
the date on which the notice  contemplated  by subsections  (b) and (c) below is
given  (subject to  adjustment in the event of any stock splits or other similar
events as provided in Section 8 hereof).

              (b) In case the Company shall  exercise its right to redeem all of
the  Warrants,  it shall  give or cause to be  given  notice  to the  Registered
Holders  of the  Warrants,  by mailing  to such  Registered  Holders a notice of
redemption,  first class, postage prepaid, at their last address as shall appear
on the records of the Warrant  Agent.  Any notice mailed in the manner  provided
herein shall be conclusively presumed to have been duly given whether or not the
Registered  Holder  receives  such notice.  Not less than five (5) business days
prior to the mailing to the Registered  Holders of the Warrants of the notice of
redemption,  the Company  shall  deliver or cause to be  delivered to National a
similar notice  telephonically  and confirmed in writing together with a list of
the  Registered  Holders  (including  their  respective  addresses and number of
Warrants  beneficially owned) to whom such notice of redemption has been or will
be given.

                                       22


<PAGE>
<PAGE>

              (c) The notice of  redemption  shall  specify  (i) the  Redemption
Price,  (ii) the  Redemption  Date,  which shall in no event be less than thirty
(30) days after the date of mailing of such  notice,  (iii) the place  where the
Warrant  Certificate  shall be delivered and the redemption price shall be paid,
(iv) if National is engaged as a Warrant solicitation agent, that National shall
receive the  commission  contemplated  by Section 4(b) hereof,  and (v) that the
right to exercise the Warrant  shall  terminate at 5:30 p.m.  (New York time) on
the business day immediately preceding the date fixed for redemption. No failure
to mail such  notice nor any  defect  therein or in the  mailing  thereof  shall
affect the validity of the proceedings for such redemption except as to a holder
(a) to whom  notice  was not  mailed  or (b)  whose  notice  was  defective.  An
affidavit of the Warrant  Agent or the  Secretary or Assistant  Secretary of the
Company  that  notice of  redemption  has been mailed  shall,  in the absence of
fraud, be prima facie evidence of the facts stated therein.

              (d) Any right to exercise a Warrant  shall  terminate at 5:30 p.m.
(New York time) on the business day immediately  preceding the Redemption  Date.
The Redemption  Price payable to the Registered  Holders shall be mailed to such
persons at their addresses of record.

              (e) The Company shall indemnify  National and each person, if any,
who  controls  National  within the  meaning of Section 15 of the Act or Section
20(a) of the Exchange Act against all loss, claim, damage,  expense or liability
(including  all  expenses  reasonably  incurred in  investigating,  preparing or
defending  against any claim whatsoever) to which any of them may become subject
under the Act,  the  Exchange Act or  otherwise,  arising from the  registration
statement  or  prospectus  referred to in Section 5(b) hereof to the same extent
and with the same effect  (including the provisions  regarding  contribution) as
the provisions pursuant

                                       23


<PAGE>
<PAGE>

to which the Company has agreed to indemnify  National contained in Section 7 of
the Underwriting Agreement.

         SECTION 10. Concerning the Warrant Agent.

              (a) The Warrant Agent acts hereunder as agent and in a ministerial
capacity for the Company and National, and its duties shall be determined solely
by the provisions hereof. The Warrant Agent shall not, by issuing and delivering
Warrant  Certificates  or by any  other  act  hereunder,  be  deemed to make any
representations  as to the  validity  or value or  authorization  of the Warrant
Certificates or the Warrants  represented  thereby or of any securities or other
property delivered upon exercise of any Warrant or whether any stock issued upon
exercise of any Warrant is fully paid and nonassessable.

              (b) The  Warrant  Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Purchase  Price or the  Redemption  Price provided in this
Agreement,  or to  determine  whether any fact exists which may require any such
adjustments,  or with  respect to the nature or extent of any such  adjustments,
when made,  or with respect to the method  employed in making the same. It shall
not (i) be liable for any recital or statement of fact  contained  herein or for
any  action  taken,  suffered  or  omitted  by it in  reliance  on  any  Warrant
Certificate or other  document or instrument  believed by it in good faith to be
genuine and to have been  signed or  presented  by the proper  party or parties,
(ii) be  responsible  for any  failure on the part of the Company to comply with
any of its  covenants  and  obligations  contained  in this  Agreement or in any
Warrant  Certificate,  or (iii) be liable for any act or omission in  connection
with  this  Agreement  except  for its own  negligence,  bad  faith  or  willful
misconduct.

                                       24


<PAGE>

<PAGE>

              (c)  The  Warrant  Agent  may at any  time  consult  with  counsel
satisfactory  to it (who may be counsel  for the  Company or for  National)  and
shall incur no liability or  responsibility  for any action  taken,  suffered or
omitted by it in good  faith in  accordance  with the  opinion or advice of such
counsel.

              (d) Any notice, statement,  instruction, request, direction, order
or demand of the Company shall be sufficiently evidenced by an instrument signed
by the Chairman of the Board of Directors, Chief Executive Officer, President or
any  Vice  President  (unless  other  evidence  in  respect  thereof  is  herein
specifically  prescribed).  The Warrant Agent shall not be liable for any action
taken,  suffered or omitted by it in  accordance  with such  notice,  statement,
instruction, request, direction, order or demand reasonably believed by it to be
genuine.

              (e)  The  Company  agrees  to pay  the  Warrant  Agent  reasonable
compensation  for its services  hereunder and to reimburse it for its reasonable
expenses  hereunder;  the Company  further agrees to indemnify the Warrant Agent
and  save  it  harmless  from  and  against  any and all  losses,  expenses  and
liabilities,  including judgments,  costs and counsel fees, for anything done or
omitted by the Warrant Agent in the execution of its duties and powers hereunder
except  losses,  expenses  and  liabilities  arising as a result of the  Warrant
Agent's negligence, bad faith or willful misconduct.

              (f) The Warrant Agent may resign its duties and be discharged from
all further duties and liabilities  hereunder (except  liabilities  arising as a
result of the Warrant Agent's own negligence,  bad faith or willful misconduct),
after  giving 30 days' prior  written  notice to the  Company.  At least 15 days
prior to the date such  resignation  is to become  effective,  the Warrant Agent
shall cause a copy of such notice of  resignation to be mailed to the Registered
Holder  of  each  Warrant  Certificate  at  the  Company's  expense.  Upon  such

                                       25


<PAGE>
<PAGE>

resignation, or any inability of the Warrant Agent to act as such hereunder, the
Company shall appoint in writing a new warrant agent.  If the Company shall fail
to make such  appointment  within a period of 15 days after it has been notified
in writing of such resignation by the resigning  Warrant Agent, then the Warrant
Agent or any Registered Holder may apply to any court of competent  jurisdiction
for the  appointment  of a new warrant  agent.  Any new warrant  agent,  whether
appointed  by the Company or by such a court,  shall be a bank or trust  company
having a  capital  and  surplus,  as shown by its last  published  report to its
stockholders,  of not less than $10,000,000 or a stock transfer  company.  After
acceptance in writing of such  appointment  by the new warrant agent is received
by the  Company,  such new warrant  agent shall be vested with the same  powers,
rights, duties and responsibilities as if it had been originally named herein as
the Warrant Agent, without any further assurance,  conveyance,  act or deed; but
if for any reason it shall be  necessary or expedient to execute and deliver any
further  assurance,  conveyance,  act or  deed,  the  same  shall be done at the
expense of the Company and shall be legally and validly  executed and  delivered
by the resigning  Warrant  Agent.  Not later than the effective date of any such
appointment  the Company shall file notice  thereof with the  resigning  Warrant
Agent  and  shall  forthwith  cause a copy of such  notice  to be  mailed to the
Registered Holder of each Warrant Certificate.

              (g) Any  corporation  into  which  the  Warrant  Agent  or any new
warrant agent may be converted or merged,  any  corporation  resulting  from any
consolidation  to which the Warrant  Agent or any new  warrant  agent shall be a
party,  or any  corporation  succeeding to the corporate  trust  business of the
Warrant Agent or any new warrant agent shall be a successor  warrant agent under
this  Agreement  without any further  act,  provided  that such  corporation  is
eligible for  appointment as successor to the Warrant Agent under the provisions
of the preceding


                                       26

<PAGE>
<PAGE>
  

paragraph.  Any such successor  warrant agent shall promptly cause notice of its
succession  as warrant  agent to be mailed to the Company and to the  Registered
Holders of each Warrant Certificate.

              (h) The Warrant Agent, its subsidiaries and affiliates, and any of
its or their  officers or directors,  may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effect as though it were not Warrant Agent.
Nothing  herein  shall  preclude  the  Warrant  Agent  from  acting in any other
capacity for the Company or for any other legal entity.

              (i) The Warrant  Agent shall retain for a period of two years from
the date of exercise any Warrant Certificate received by it upon such exercise.

         SECTION 11. Modification of Agreement.

         The Warrant Agent and the Company may by  supplemental  agreement  make
any  changes  or  corrections  in  this  Agreement  (i)  that  they  shall  deem
appropriate  to cure any ambiguity or to correct any  defective or  inconsistent
provision or manifest mistake or error herein  contained;  or (ii) that they may
deem  necessary or desirable and which shall not adversely  affect the interests
of the holders of Warrant Certificates;  provided,  however, that this Agreement
shall not otherwise be modified,  supplemented  or altered in any respect except
with the consent in writing of the Registered Holders representing not less than
66-2/3% of the Warrants then outstanding;  provided,  further, that no change in
the number or nature of the  securities  purchasable  upon the  exercise  of any
Warrant, or to increase the Purchase Price therefor or to accelerate the Warrant
Expiration  Date, shall be made without the consent in writing of the Registered
Holder of the Warrant  Certificate  representing  such Warrant,  other than such
changes as are presently specifically prescribed by this Agreement as originally

                                       27


<PAGE>
<PAGE>


executed.  In  addition,  this  Agreement  may  not  be  modified,   amended  or
supplemented  without the prior written consent of National,  other than to cure
any ambiguity or to correct any provision which is  inconsistent  with any other
provision  of this  Agreement  or to make any such change that is  necessary  or
desirable  and which shall not  adversely  affect the  interests of National and
except as may be required by law.

         SECTION 12. Notices.

         All  notices,  requests,  consents and other  communications  hereunder
shall be in  writing  and shall be deemed  to have been made when  delivered  or
mailed first-class registered or certified mail, postage prepaid, as follows: if
to the Registered Holder, at the address of such holder as shown on the registry
books  maintained  by  the  Warrant  Agent;  if to  the  Company  at 1  Galleria
Boulevard, Suite 912, Metairie,  Louisiana 70001, Attention: James L. Ake, Chief
Operating  Officer,  or at such other address as may have been  furnished to the
Warrant  Agent in writing by the Company;  and if to the Warrant  Agent,  at its
Corporate  Office.  Copies of any notice  delivered  pursuant to this  Agreement
shall also be delivered to National Securities Corporation,  1001 Fourth Avenue,
Suite 2200, Seattle,  Washington 98154-1100,  Attention:  General Counsel, or at
such other  address as may have been  furnished  to the  Company and the Warrant
Agent in writing.

         SECTION 13. Governing Law; Jurisdiction.

         This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of New York  without  giving  effect to conflicts of laws.
All actions and proceedings brought by the parties to this Agreement relating to
or arising from,  directly or indirectly,  this Agreement  shall be litigated in
courts located within the State of New York.

                                       28

<PAGE>
<PAGE>

         SECTION 14. Binding Effect.

         This  Agreement  shall be binding  upon and inure to the benefit of the
Company, National, the Warrant Agent and their respective successors and assigns
and the  holders  from  time to time of  Warrant  Certificates  or any of  them.
Nothing in this  Agreement  is intended or shall be construed to confer upon any
other person any right,  remedy or claim, in equity or at law, or to impose upon
any other person any duty, liability or obligation.

         SECTION 15. Termination.

         This Agreement  shall terminate at the close of business on the Warrant
Expiration Date or such earlier date upon which all Warrants have been exercised
or redeemed, except that the Warrant Agent shall account to the Company for cash
held  by it  and  the  provisions  of  Section  10  hereof  shall  survive  such
termination.

         SECTION 16. Counterparts.

         This  Agreement  may be executed in several  counterparts,  which taken
together shall constitute a single document.

                                       29


<PAGE>
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

[SEAL]

                                           AMERICAN CRAFT BREWING
                                           INTERNATIONAL LIMITED

                                           By: /s/ Peter W. H. Bordeaux
                                              ----------------------------------
                                              Peter W.H. Bordeaux
                                              Chairman

Attest:

By: /s/ James L. Ake
    ----------------
    James L. Ake
    Secretary


                                           THE BANK OF NEW YORK,
                                           As Warrant Agent

                                           By: /s/ Joseph Varca
                                              ----------------------------------
                                           Name:  Joseph Varca
                                           Title: Vice President


                                           NATIONAL SECURITIES CORPORATION

                                           By: /s/ Steven A. Rothstein
                                              ----------------------------------
                                               Steven A. Rothstein
                                               Chairman


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                                                             EXHIBIT A
                                                             ----------

No. W                                              VOID AFTER SEPTEMBER 11, 2001
      ----------

                                                           ___________ WARRANTS

                        REDEEMABLE WARRANT CERTIFICATE TO
                       PURCHASE ONE SHARE OF COMMON STOCK

                  AMERICAN CRAFT BREWING INTERNATIONAL LIMITED

                                                          CUSIP G02702 11 9

THIS CERTIFIES THAT, FOR VALUE RECEIVED

or registered  assigns (the  "Registered  Holder") is the owner of the number of
Redeemable  Warrants (the "Warrants")  specified above.  Each Warrant  initially
entitles the Registered Holder to purchase,  subject to the terms and conditions
set  forth  in  this  Certificate  and the  Warrant  Agreement  (as  hereinafter
defined),  one fully paid and  nonassessable  share of Common  Stock,  par value
$0.01 per share,  of American  Craft Brewing  International  Limited,  a Bermuda
company  (the  "Company"),  at any time  between  March 11,  1997 (the  "Initial
Warrant Exercise Date"),  and the Expiration Date (as hereinafter  defined) upon
the presentation and surrender of this Warrant Certificate with the Subscription
Form on the reverse hereof duly executed, at the corporate office of The Bank of
New York, as Warrant Agent, or its successor (the "Warrant Agent"),  accompanied
by payment of $6.875,  subject to adjustment (the "Purchase  Price"),  in lawful
money of the United  States of  America in cash or by check made  payable to the
Warrant Agent for the account of the Company.

         This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are  subject in all  respects  to the terms and  conditions  set
forth in the Warrant  Agreement (the "Warrant  Agreement"),  dated September 11,
1996, by and among the Company, National Securities Corporation ("National") and
the Warrant Agent.

         In the  event of  certain  contingencies  provided  for in the  Warrant
Agreement,  the Purchase  Price and the number of shares of Common Stock subject
to purchase upon the exercise of each Warrant  represented hereby are subject to
modification or adjustment.

         Each Warrant  represented  hereby is  exercisable  at the option of the
Registered  Holder,  but no fractional  interests will be issued. In the case of
the exercise of less than all the Warrants represented hereby, the Company shall
cancel this Warrant  Certificate upon the surrender hereof and shall execute and
deliver a new Warrant  Certificate or Warrant  Certificates of like tenor, which
the Warrant Agent shall countersign, for the balance of such Warrants.

                                      A-1

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         The term  "Expiration  Date"  shall  mean 5:30 p.m.  (New York time) on
September  11,  2001.  If each  such  date  shall in the  State of New York be a
holiday or a day on which the banks are authorized to close, then the Expiration
Date shall mean 5:30 p.m. (New York time) on the next following day which in the
State of New York is not a holiday  or a day on which  banks are  authorized  to
close.

         The Company shall not be obligated to deliver any  securities  pursuant
to the  exercise  of this  Warrant  unless a  registration  statement  under the
Securities Act of 1933, as amended (the "Act"),  with respect to such securities
is effective or an exemption thereunder is available. The Company has covenanted
and  agreed  that  it will  file a  registration  statement  under  the  Federal
securities laws, use its best efforts to cause the same to become effective, use
its best efforts to keep such registration  statement current, if required under
the Act,  while any of the  Warrants are  outstanding,  and deliver a prospectus
which  complies  with  Section  10(a)(3)  of the  Act to the  Registered  Holder
exercising  this Warrant.  This Warrant shall not be exercisable by a Registered
Holder in any state where such exercise would be unlawful.

         This Warrant Certificate is exchangeable,  upon the surrender hereof by
the Registered  Holder at the corporate  office of the Warrant Agent,  for a new
Warrant Certificate or Warrant  Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered  Holder at the
time of such  surrender.  Upon due  presentment  and payment of any tax or other
charge imposed in connection  therewith or incident thereto, for registration of
transfer of this Warrant  Certificate at such office, a new Warrant  Certificate
or Warrant Certificates  representing an equal aggregate number of Warrants will
be issued to the  transferee in exchange  therefor,  subject to the  limitations
provided in the Warrant Agreement.

             Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.

         Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed  at the  option  of the  Company,  at a  redemption  price of $0.10 per
Warrant,  at any time commencing after March 11, 1998, provided that the closing
bid price for the Common Stock as reported by the Nasdaq SmallCap Market, if the
Common  Stock is then traded on the Nasdaq Small Cap Market (or the closing sale
price,  if the Common  Stock is then traded on the Nasdaq  National  Market or a
national securities exchange),  shall have equalled or exceeded $16.50 per share
for any twenty (20)  trading  days  within a period of thirty  (30)  consecutive
trading days ending on the fifth trading day prior to the Notice of  Redemption,
as defined  below  (subject to  adjustment  in the event of any stock  splits or
other similar events).  Notice of redemption (the "Notice of Redemption")  shall
be given not later than the thirtieth day before the date fixed for  redemption,
all as  provided  in the  Warrant  Agreement.  On and after  the date  fixed for
redemption,  the  Registered  Holder  shall have no rights  with  respect to the
Warrants  except to receive the $0.10 per Warrant upon surrender of this Warrant
Certificate.


                                      A-2


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         Under  certain  circumstances  as set forth in the  Warrant  Agreement,
National  may be entitled to receive an  aggregate  of five  percent (5%) of the
Purchase Price of the Warrants represented hereby.

         Prior to due  presentment  for  registration  of transfer  hereof,  the
Company and the Warrant  Agent may deem and treat the  Registered  Holder as the
absolute owner hereof and of each Warrant  represented  hereby  (notwithstanding
any  notations of  ownership or writing  hereon made by anyone other than a duly
authorized  officer of the Company or the Warrant  Agent) for all  purposes  and
shall not be affected by any notice to the  contrary,  except as provided in the
Warrant Agreement.

         This  Warrant  Certificate  shall  be  governed  by  and  construed  in
accordance  with the laws of the  State of New York  without  giving  effect  to
conflicts of laws.

         This  Warrant  Certificate  is not valid  unless  countersigned  by the
Warrant Agent.

         IN WITNESS WHEREOF,  the Company has caused this Warrant Certificate to
be duly executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.

Dated:

                                           AMERICAN CRAFT BREWING
                                              INTERNATIONAL LIMITED

[SEAL]

                                           By:
                                              ----------------------------------
                                              Peter W.H. Bordeaux
                                              Chairman

                                           By:
                                              ----------------------------------
                                              James L. Ake
                                              Secretary

COUNTERSIGNED:

THE BANK OF NEW YORK,
  as Warrant Agent

By:
   ----------------------------
   Authorized Officer


                                      A-3


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                                SUBSCRIPTION FORM
                                -----------------

                     To Be Executed by the Registered Holder
                          in Order to Exercise Warrants

         The undersigned Registered Holder hereby irrevocably elects to exercise
_________ Warrants represented by this Warrant Certificate,  and to purchase the
securities  issuable  upon the  exercise of such  Warrants,  and  requests  that
certificates for such securities shall be issued in the name of

                          PLEASE INSERT SOCIAL SECURITY
                           OR OTHER IDENTIFYING NUMBER

                         ______________________________

                         ______________________________

                         ______________________________

                         ______________________________
                     (please print or type name and address)

and be delivered to
                         ______________________________

                         ______________________________

                         ______________________________

                         ______________________________
                     (please print or type name and address)

and if such number of Warrants  shall not be all the Warrants  evidenced by this
Warrant  Certificate,  that a new  Warrant  Certificate  for the balance of such
Warrants be registered in the name of, and delivered to, the  Registered  Holder
at the address stated below.


                                      A-4


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                    IMPORTANT: PLEASE COMPLETE THE FOLLOWING:

             1.      The exercise of this Warrant was solicited by

                     National Securities Corporation.        [ ]

             2.      The exercise of this Warrant was solicited by

                     _______________________.                [ ]


             3.      The exercise of this Warrant was not

                     solicited.                              [ ]

Dated: _________________                        X_______________________________

                                                ________________________________

                                                ________________________________
                                                             Address


                                                ________________________________
                                                  Social Security or Taxpayer
                                                     Identification Number


                                                ________________________________
                                                     Signature Guaranteed



                                                ________________________________

                                      A-5

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                                   ASSIGNMENT

                     To Be Executed by the Registered Holder
                           in Order to Assign Warrants

         FOR VALUE  RECEIVED,  ____________________,  hereby sells,  assigns and
transfers unto

                        PLEASE INSERT SOCIAL SECURITY OR
                            OTHER IDENTIFYING NUMBER

                         _______________________________

                         _______________________________

                         _______________________________

                         _______________________________
                     (please print or type name and address)


____________________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints ___________________
Attorney to transfer this Warrant Certificate on the books of the Company,  with
full power of substitution in the premises.

Dated:_____________________________               X_____________________________
                                                       Signature Guaranteed

                                                  ______________________________


THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION  FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT  CERTIFICATE IN EVERY  PARTICULAR,
WITHOUT  ALTERATION  OR  ENLARGEMENT  OR  ANY  CHANGE  WHATSOEVER  AND  MUST  BE
GUARANTEED BY AN ELIGIBLE GUARANTOR  INSTITUTION (BANKS,  STOCKBROKERS,  SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.


                                      A-6

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