<PAGE>   1
                          LOAN MODIFICATION AGREEMENT

     THIS LOAN MODIFICATION AGREEMENT ("Agreement") is made and entered into as
of the 30th day of March, 1998 by and among FIRST UNION NATIONAL BANK, successor
by merger to Signet Bank (the "Bank"), BLUE II, LLC (the "Borrower"), Frederick
Brewing Co. ("FBC"), Edward D. Scott ("Scott"), Robert Schuerholz
("Schuerholz"), Nicholas P. Foris ("Foris") and Vishnampet S. Jayanthimath
("Jayanthimath"). Scott, Schuerholz, Foris and Jayanthimath are hereafter
collectively referred to as the "Guarantors." The Borrower, FBC and the
Guarantors are sometimes collectively referred to as the "Obligors."
<PAGE>   2

                                    RECITALS

     R-1.  The Bank is the owner and holder of a Promissory Note dated July 19,
1996 in the original principal amount of $3,000,000.00 executed by the Borrower
(as amended, modified, supplemented, extended, renewed or restated from time to
time, the "Note").

     R-2.  The Note was issued in connection with a Loan and Financing Agreement
dated July 19, 1996 by and among the Bank, the Borrower, FBC and Maryland
Economic Development Corporation (as amended, modified, supplemented, extended,
renewed or restated from time to time, the "Loan Agreement").

     R-3.  The Borrower's obligations under the Note and the Loan Agreement are
secured by, inter alia, the following (collectively, the "Collateral"): (a) Deed
of Trust dated July 19, 1996 (the "Deed of Trust") recorded among the land
records of Frederick County, Maryland at liber 2207, folio 0857 encumbering
certain real estate and improvements described therein (the "Property"); and (b)
Assignment of Leases and Rents dated July 19, 1996 (the "Assignment of Rents")
recorded among the land records of Frederick County, Maryland at liber 2207,
folio 0903.

     R-4.  The Borrower's obligations under the Note and the Loan Agreement are
guaranteed by the Guarantors pursuant to the terms of a Guaranty (Deficiency)
dated July 19, 1996 (the "Guaranty"). The Guaranty is secured by, inter alia, an
Irrevocable Standby Letter of Credit issued on July 19, 1996 by FCNB Bank (the
"Letter of Credit").

     R-5.  The Maryland Industrial Development Financing Authority ("MIDFA")
insures a portion of the Obligations (as hereafter defined) pursuant to the
terms of an Insurance Agreement dated July 19, 1996 (the "Insurance Agreement").

     R-6.  The terms of the Loan Agreement were modified pursuant to the terms
of a Forbearance Agreement dated February 27, 1997 and a letter agreement dated
January 9, 1998 (collectively, the "Modification Documents").

     R-7.  The Loan (as hereafter defined) matures on July 1, 2006 (the
"Maturity Date").

     R-8. As of March 27, 1998, there was due and owing under the Note a total
of $2,872,412.97 (consisting of principal in the amount of $2,857,142.88 and
accrued interest in the amount of $15,270.09), plus attorneys' fees and
expenses. In addition, interest continues to accrue from March 27, 1998 at the
per diem rate of $589.97.

     R-9. The Obligors' obligations under the Note, the Loan Agreement, the
Guaranty and the other Loan Documents (as hereafter defined) are hereafter
collectively referred to as the "Obligations." The Note, the Loan Agreement, the
Guaranty, this Agreement and all documents previously, now or hereafter executed
and delivered to evidence, secure, guarantee or in connection with the
Obligations, as the same may from time to time be amended, modified,
supplemented, extended, renewed or restated, are hereafter collectively referred
to as the "Loan Documents." The loan evidenced by the Loan Documents is
hereafter referred to as the "Loan."

     R-9. The Obligors have requested that certain of the terms of the Loan
Documents be modified in accordance with the terms and conditions of this
Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     1. RECITALS.

          The recitals to this Agreement are true and correct, and are
     incorporated into and made a substantive part of this Agreement.
<PAGE>   3

     2. CONFIRMATION AND RATIFICATION OF LOAN DOCUMENTS

          The Obligors, individually and collectively, agree that the Loan
     Documents are in full force and effect and that each Loan Document shall
     remain in full force and effect unless and until modified or amended in
     writing in accordance with its terms. The Obligors confirm and ratify their
     obligations under the Loan Documents, and agree that the execution and
     delivery of this Agreement shall not in any way diminish or invalidate any
     of their obligations under the Loan Documents. All parties hereto consent
     to the execution and delivery of this Agreement, and to all the provisions
     of this Agreement to the extent that such provisions may modify the terms
     and provisions of any of the Loan Documents.

     3. CONFIRMATION AND RATIFICATION OF GUARANTY.

          The Guarantors, individually and collectively, for good and valuable
     consideration, the receipt and sufficiency of which are hereby
     acknowledged, hereby consent to and join in this Agreement and hereby
     declare to and agree with that the Guaranty is and shall continue in full
     force and effect for the benefit of the Bank, that there are no offsets,
     claims or defenses of the Guarantors with respect to the Guaranty nor, to
     the Guarantors' knowledge, with respect to the Obligations, that the
     Guaranty is not released, diminished or impaired in any way by this
     Agreement or the transactions contemplated hereby, and that the Guaranty is
     hereby confirmed and ratified in all respects. The Guarantors hereby
     reaffirm all of the representations and warranties set forth in the
     Guaranty. The Guarantors acknowledge that, without this consent and
     reaffirmation, the Bank would not execute this Agreement or otherwise
     consent to its terms.

     4. MODIFICATION OF MATURITY DATE.

          The Loan shall mature on April 1, 1999 (the "Amended Maturity Date").
     On the Amended Maturity Date, all of the Obligations, including all
     outstanding principal, accrued interest, outstanding late charges,
     outstanding fees and all other amounts due under the Loan Documents, shall
     be due and payable in full. The Bank shall have no obligation to consider
     or grant any extension of the Amended Maturity Date.

     5. MODIFICATION OF INTEREST RATE.

          Effective as of April 30, 1998, the Obligations shall bear interest at
     a variable rate equal to the Bank's Prime Rate (as hereafter defined), plus
     one and one-half percent (1 1/2%) per annum. As used herein, "Prime Rate"
     means the rate of interest established by the Bank from time to time as its
     "prime rate." Such rate is set by the Bank as a general reference rate of
     interest, taking into account such factors as it may deem appropriate, and
     the Borrower understands that it is not necessarily the lowest or best rate
     actually charged to any customer, that it may not correspond with future
     increases or decreases in interest rates charged by other lenders or market
     rates in general, and that the Bank may make various commercial or other
     loans at rates of interest having no relationship to the Prime Rate.
     Without notice to the Borrower or anyone else, the Prime Rate shall
     automatically fluctuate upward and downward as and in the amount by which
     the Bank's prime rate fluctuates.

     6. MODIFICATION OF FINANCIAL COVENANTS.

             6.1 Current Ratio (Loan Agreement Section 5.4(b)).  FBC shall
        maintain a ratio of current assets to current liabilities of not less
        than 1.0 to 1 as the calendar quarter ending March 31, 1998 and each
        calendar quarter thereafter.

             6.2 Cash Flow to Debt Service Ratio (Loan Agreement Section
        5.4(e)).  The Bank shall waive any default arising from FBC's failure to
        comply with the cash flow to debt service ratio for the calendar
        quarters ending March 31, 1998, June 30, 1998 and September 30, 1998.
        This waiver is a one-time waiver and is expressly limited to any default
        arising from FBC's failure to comply with the cash flow to debt service
        ratio for the calendar quarters ending March 31, 1998, June 30, 1998 and
        September 30, 1998. Notwithstanding anything to the contrary herein,
        this waiver shall not constitute a waiver of any other default or event
        of default under any of the Loan Documents
<PAGE>   4

        (whether declared, undeclared or known or unknown), including, without
        limitation, any default or event of default based on FBC's failure to
        comply with any other financial covenant set forth in the Loan
        Documents. FBC shall maintain a cash flow to debt service ratio of not
        less than 1.0 to 1 as of the calendar quarter ending December 31, 1998
        and each calendar quarter thereafter. For purposes of calculating the
        cash flow to debt service ratio: (a) "cash flow" shall mean the net
        income plus depreciation and amortization expense of the Borrower, and
        shall be measured based on the last ninety (90) days of the calendar
        quarter annualized by a factor of four (4); and (b) "debt service" shall
        mean, for each period during which cash flow is measured, the current
        maturities of long term debt of the Borrower (including, without
        limitation, the current portion of capital lease obligations) due and/or
        paid during such period.

     7. FEES AND EXPENSES.

          The Obligors shall be responsible for all fees and expenses, including
     all attorneys' fees and expenses, incurred by the Bank in connection with
     the negotiation and preparation of this Agreement and with the enforcement
     of the Bank's rights under the Loan Documents, which fees and expenses
     shall be considered part of the Obligations.

     8. REPLACEMENT FINANCING.

          The Borrower shall use best efforts to secure debt and/or equity
     financing in an amount sufficient to pay in full the Obligations prior to
     the Amended Maturity Date. The Borrower shall provide to the Bank such
     written reports as the Bank may from time to time request regarding the
     status of the Borrower's efforts to secure replacement financing.

     9. OBLIGORS' REPRESENTATIONS AND WARRANTIES.

          As inducement to enter into this Agreement, the Obligors hereby
     represent and warrant to the Bank as follows:

             9.1. Authorization and Validity.  The execution and delivery of
        this Agreement and any related documents by the Obligors and the
        performance of their obligations hereunder have been duly authorized,
        and this Agreement constitutes the legal, valid and binding obligation
        of the Obligors in accordance with its terms.

             9.2. Compliance With Other Instruments.  The Obligors are not in
        default under any provision of their articles of incorporation, by-laws
        or other organizational documents, if applicable, or of any existing
        judgment, decree, law, governmental order, rule or regulation applicable
        to them, or of any agreement or other instrument to which they are a
        party or by which their assets are bound. The execution and delivery by
        the Obligors of this Agreement and related documents, the consummation
        of the transactions herein and therein contemplated, and the compliance
        with the terms and provisions hereof and thereof, (a) has not and will
        not constitute or result in a breach of their articles of incorporation,
        by-laws or other organizational documents, if applicable, any presently
        existing applicable law, order, writ, injunction or decree of any court
        or governmental department, commission, board, bureau, agency or
        instrumentality, or (b) conflict or be inconsistent with or result in
        any breach of any of the terms, covenants, conditions or provisions
        thereof, or constitute a default under any indenture, mortgage, deed of
        trust, lease, sublease, instrument, document, agreement or contract of
        any kind to which the Obligors are a party or by which the Obligors may
        be bound or subject.

             9.3. Benefit.  The Obligors have each derived direct or indirect
        benefit from this Agreement and the transactions contemplated hereby.

             9.4. Engagement of Counsel.  The Obligors have each engaged (or
        have had the opportunity to engage) independent legal counsel of their
        choice to review this Agreement and any related documents. The Obligors
        each acknowledge that they are executing and delivering this Agreement
<PAGE>   5

        and any related documents voluntarily, without coercion or duress of any
        kind, and with full understanding of its content and meaning.

             9.5. Truth of Representations.  Any and all documents, reports,
        certificates and statements provided to the Bank by or on behalf of any
        or all of the Obligors in connection with the transactions contemplated
        hereby are true, correct and complete, do not contain any untrue
        statements of material fact and do not omit any facts to make
        information contained therein not misleading.

             9.6. Litigation.  There is no litigation, at law or in equity, nor
        any proceeding before any federal, state or other governmental or
        administrative agency or any arbitrator pending or to the knowledge of
        the Obligors threatened against the Obligors, except as has been
        disclosed to the Bank in writing.

     10. RELEASE OF BANK.

          The Obligors, individually and collectively, hereby RELEASE and
     FOREVER WAIVE and RELINQUISH all claims, demands, obligations, liabilities
     and causes of action of whatsoever kind or nature, whether known or
     unknown, which all or any of them has, may have, or might have or assert
     now or in the future against the Bank and/or its current or former
     directors, officers, employees, representatives, insurers, attorneys,
     agents, successors or assigns, or any affiliates, subsidiaries or related
     entities of the Bank and/or their directors, officers, employees,
     representatives, insurers, attorneys, agents, successors or assigns
     (collectively, the "Bank Group"), directly or indirectly, arising out of,
     based upon or in any manner connected with any Prior Related Event. As used
     herein, the term "Prior Related Event" means any transaction, event,
     circumstance, action, failure to act or occurrence of any sort or type,
     whether known or unknown, arising out of or related in any way to the Loan,
     the Obligations, all or any of the Loan Documents, the Collateral, the
     Property, the Deed of Trust, the Assignment of Rents, the Guaranty, the
     Letter of Credit, MIDFA, the Insurance Agreement, the Modification
     Documents and/or the relationship among all or any of the Obligors and the
     Bank Group which occurred, existed, was taken, permitted or begun prior to
     the execution of this Agreement. The execution of this Agreement by the
     Bank shall not constitute an acknowledgement or admission by the Bank of
     any liability for any matter or precedent upon which any liability may be
     asserted.

     11. GENERAL PROVISIONS.

          11.1. Headings. The headings and subheadings in this Agreement are
     intended for convenience only and shall not be used or deemed to limit or
     diminish any of the provisions hereof.

          11.2. Construction. Unless the context requires otherwise, singular
     nouns and pronouns used in this Agreement shall be deemed to include the
     plural, and pronouns of one gender shall be deemed to include the
     equivalent pronoun of the other gender.

          11.3. Further Assurances and Corrective Instruments. The parties to
     this Agreement shall execute, acknowledge and deliver, or cause to be
     executed, acknowledged and delivered, from time to time, such supplements
     hereto and such further instruments and documents as may be required to
     facilitate the carrying out of the intentions of the parties to this
     Agreement.

          11.4. Survival: Successors and Assigns. All covenants, agreements,
     representations and warranties made herein, and in the documents executed
     in connection with this Agreement, shall continue in full force and effect.
     Whenever in this Agreement any of the parties hereto is referred to, such
     reference shall be deemed to include the successors and assigns of such
     party.

          11.5. Waiver of Jury Trial. All parties to this Agreement agree that
     any suit, action or proceeding brought or instituted by any party hereto or
     any successor or assign of any party which in any way relates, directly or
     indirectly, to the Loan, the Obligations, all or any of the Loan Documents,
     the Collateral, the Property, the Deed of Trust, the Assignment of Rents,
     the Guaranty, the Letter of Credit, MIDFA, the Insurance Agreement, the
     Modification Documents and/or the relationship among all or any of the
     Obligors and the Bank Group shall be tried only by a court and not a jury.
     EACH PARTY HEREBY
<PAGE>   6

     EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
     PROCEEDING. The Obligors represent, acknowledge and agree that this
     provision is a specific and material aspect of this Agreement between the
     parties and that the Bank would not agree to the terms of this Agreement if
     this waiver of jury trial provision were not a part of this Agreement. The
     Obligors represent, acknowledge and agree that this waiver is knowingly,
     intelligently and voluntarily made, that neither the Bank nor any person
     acting on behalf of the Bank has made any representations to induce this
     waiver of trial by jury, that the Obligors have each been represented (or
     have had the opportunity to be represented) in the signing of this
     Agreement and in the making of this waiver by independent legal counsel
     selected by the Obligors and that the Obligors have had the opportunity to
     discuss this waiver with counsel.

          11.6. Modification. No modification of any provision of this
     Agreement, or of any document executed in connection with this Agreement,
     shall in any event be effective unless the same is in writing, and then
     such modification shall be effective only in the specific instance or for
     the purpose for which given.

          11.7. Waiver.  Neither any failure nor any delay on the part of any of
     the parties in exercising any right, power or remedy under this Agreement,
     any documents executed in connection with this Agreement or under
     applicable law shall operate as a waiver thereof, nor shall a single or
     partial exercise thereof preclude any other or further exercises thereof or
     the exercise of any other right, power or remedy.

          11.8. Severability.  If any term, provision or condition, or any part
     thereof, of this Agreement, or any of the documents executed in connection
     with this Agreement, shall for any reason be found or held to be invalid or
     unenforceable by any court or governmental agency of competent
     jurisdiction, such invalidity or unenforceability shall not affect the
     remainder of such term, provision or condition or any other term, provision
     or condition, and this Agreement, and all documents executed in connection
     with this Agreement, shall survive and be construed as if such invalid or
     unenforceable term, provision or condition had not been contained therein.

          11.9. Merger and Integration.  This Agreement, and the documents
     executed in connection with this Agreement, contain the entire agreement of
     the parties hereto with respect to the matters covered and the transactions
     contemplated hereby, and no other agreement, statement or promise made by
     any party hereto, or any employee, officer, agent or attorney of any party
     hereto, shall be valid or binding.

          11.10. No Release or Discharge.  Except as expressly provided herein,
     nothing contained in this Agreement is intended to or shall act to nullify,
     discharge or release any obligations or to release any collateral. Except
     to the extent of any express conflict with this Agreement, each and every
     of the terms and conditions of the Loan Documents shall remain in full
     force and effect.

          11.11. Notices.  Any notices required or permitted by this Agreement
     shall be in writing and shall be deemed delivered if delivered by hand, by
     overnight mail or by certified mail, return receipt requested, as follows,
     unless such address is changed by written notice hereunder:

<TABLE>
<S>                     <C>
If to the Bank:         First Union National Bank
                        1970 Chain Bridge Road
                        7th Floor, South Tower
                        McLean, Virginia 22120
                        ATTN: Mr. David A. Dix, Vice President

with a copy to:         Richard M. Kremen, Esquire
                        Piper & Marbury L.L.P.
                        Charles Center South
                        36 South Charles Street
                        Baltimore, Maryland 21201
</TABLE>
<PAGE>   7
If to the Borrower:     Blue II, LLC
                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------
with a copy to:
                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------

If to FBC:              Frederick Brewing Co.
                        4607 Wedgewood Boulevard
                        Frederick, Maryland 21703
                        ATTN: Mr. Kevin E. Brannon, Chairman
                        and Chief Executive Officer
with a copy to:

                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------

If to Scott:            Edward D. Scott

                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------

with a copy to:

                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------

If to Schuerholz:       Robert Schuerholz

                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------

with a copy to:

                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------

If to Foris:            Nicholas P. Foris

                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------

with a copy to:

                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------

If to Jayanthimath:     Vishnampet S. Jayanthimath

                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------
<PAGE>   8

with a copy to:

                        --------------------------------------------

                        --------------------------------------------

                        --------------------------------------------

          11.12. Applicable Law.  The performance, construction and enforcement
     of this Agreement and the documents executed in connection with this
     Agreement shall be governed by the laws of the State of Maryland.

          11.13. Time of Essence.  Time is of the essence.

          11.14. Counterparts.  This Agreement may be executed in any number of
     counterparts, each of which shall be deemed original, but all of which
     shall constitute one and the same agreement.

          11.15. Binding Effect.  This Agreement shall have no effect unless and
     until it has been executed by all parties.

     IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed, this Agreement under seal as of the day and year first written above.

WITNESS/ATTEST:




--------------------------------------------

FIRST UNION NATIONAL BANK,
  successor by merger to Signet Bank

By:                                    (SEAL)
    -----------------------------------
Name:
     ---------------------------------------
Title:
      --------------------------------------
<PAGE>   9

WITNESS/ATTEST:                         BLUE II, LLC

-------------------------------         By:                            (SEAL)
                                           ----------------------------
                                        Name:
                                             --------------------------------
                                        Title:
                                              -------------------------------


WITNESS/ATTEST:                         FREDERICK BREWING CO.

-------------------------------         By:                            (SEAL)
                                           ----------------------------
                                        Name:
                                             --------------------------------
                                        Title:
                                              -------------------------------

WITNESS/ATTEST:                         EDWARD D. SCOTT
                                                                       (SEAL)
-------------------------------         -------------------------------



WITNESS/ATTEST:                         ROBERT SCHUERHOLZ
                                                                       (SEAL)
-------------------------------         -------------------------------



WITNESS/ATTEST:                         NICHOLAS P. FORIS
                                                                       (SEAL)
-------------------------------         -------------------------------



WITNESS/ATTEST:                         VISHNAMPET S. JAYANTHIMATH
                                                                       (SEAL)
-------------------------------         -------------------------------





































<PAGE>   10

STATE OF __________________________________)
                                           ) ss:
CITY/COUNTY OF  ___________________________)

     I HEREBY CERTIFY that on this      day of March, 1998, before me, the
subscriber, a notary public of the above state and city/county, personally
appeared                               , known to me or satisfactorily proven to
be the person whose name is subscribed to the foregoing Loan Modification
Agreement, who acknowledged himself/herself to be the
of First Union National Bank, and that he/she being authorized to do so,
executed the foregoing Loan Modification Agreement for the purposes therein
contained.

                                          --------------------------------------
                                          Notary Public

My commission expires: ________________

STATE OF __________________________________)
                                           ) ss:
CITY/COUNTY OF  ___________________________)

     I HEREBY CERTIFY that on this      day of March, 1998, before me, the
subscriber, a notary public of the above state and city/county, personally
appeared                               , known to me or satisfactorily proven to
be the person whose name is subscribed to the foregoing Loan Modification
Agreement, who acknowledged himself/herself to be the
of Blue II, LLC, and that he/she being authorized to do so, executed the
foregoing Loan Modification Agreement for the purposes therein contained.

                                          --------------------------------------
                                          Notary Public

My commission expires: ________________
<PAGE>   11

STATE OF __________________________________)
                                           ) ss:
CITY/COUNTY OF  ___________________________)

     I HEREBY CERTIFY that on this      day of March, 1998, before me, the
subscriber, a notary public of the above state and city/county, personally
appeared                               , known to me or satisfactorily proven to
be the person whose name is subscribed to the foregoing Loan Modification
Agreement, who acknowledged himself/herself to be the
of Frederick Brewing Co., and that he/she being authorized to do so, executed
the foregoing Loan Modification Agreement for the purposes therein contained.

                                          --------------------------------------
                                          Notary Public

My commission expires: ________________

STATE OF __________________________________)
                                           ) ss:
CITY/COUNTY OF  ___________________________)

     I HEREBY CERTIFY that on this      day of March, 1998, before me, the
subscriber, a notary public of the above state and city/county, personally
appeared Edward D. Scott, known to me or satisfactorily proven to be the person
whose name is subscribed to the foregoing Loan Modification Agreement, who
executed the foregoing Loan Modification Agreement for the purposes therein
contained.

                                          --------------------------------------
                                          Notary Public

My commission expires: ________________
<PAGE>   12

STATE OF __________________________________)
                                           ) ss:
CITY/COUNTY OF  ___________________________)

     I HEREBY CERTIFY that on this      day of March, 1998, before me, the
subscriber, a notary public of the above state and city/county, personally
appeared Robert Schuerholz, known to me or satisfactorily proven to be the
person whose name is subscribed to the foregoing Loan Modification Agreement,
who executed the foregoing Loan Modification Agreement for the purposes therein
contained.

                                          --------------------------------------
                                          Notary Public

My commission expires: ________________

STATE OF __________________________________)
                                           ) ss:
CITY/COUNTY OF_____________________________)

     I HEREBY CERTIFY that on this      day of March, 1998, before me, the
subscriber, a notary public of the above state and city/county, personally
appeared Nicholas P. Foris, known to me or satisfactorily proven to be the
person whose name is subscribed to the foregoing Loan Modification Agreement,
who executed the foregoing Loan Modification Agreement for the purposes therein
contained.

                                          --------------------------------------
                                          Notary Public

My commission expires: ________________
<PAGE>   13

STATE OF __________________________________)
                                           ) ss:
CITY/COUNTY OF  ___________________________)

     I HEREBY CERTIFY that on this      day of March, 1998, before me, the
subscriber, a notary public of the above state and city/county, personally
appeared Vishnampet S. Jayanthimath, known to me or satisfactorily proven to be
the person whose name is subscribed to the foregoing Loan Modification
Agreement, who executed the foregoing Loan Modification Agreement for the
purposes therein contained.

                                          --------------------------------------
                                          Notary Public

My commission expires: ________________
<PAGE>   14

                         CONSENT OF MARYLAND INDUSTRIAL
                        DEVELOPMENT FINANCING AUTHORITY

     The Maryland Industrial Development Financing Authority ("MIDFA") hereby
acknowledges and consents to the foregoing Loan Modification Agreement by and
among First Union National Bank, successor by merger to Signet Bank (the
"Bank"), Blue II, LLC (the "Borrower"), Frederick Brewing Co., Edward D. Scott,
Robert Schuerholz, Nicholas P. Foris, Vishnampet S. Jayanthimath.

     MIDFA reaffirms to the Bank MIDFA's obligations under the Insurance
Agreement dated July 19, 1996 between MIDFA and the Bank relating to the
$3,000,000.00 loan to the Borrower.

WITNESS/ATTEST:                         MARYLAND INDUSTRIAL DEVELOPMENT
                                        FINANCING AUTHORITY

                                        By:                             (SEAL)
-------------------------                  -----------------------------
                                        Name:
                                             ---------------------------
                                        Title:
                                              --------------------------
STATE OF __________________________________ )
                                            ) ss:
CITY/COUNTY OF  ___________________________ )

     I HEREBY CERTIFY that on this      day of March, 1998, before me, the
subscriber, a notary public of the above state and city/county, personally
appeared                               , known to me or satisfactorily proven to
be the person whose name is subscribed to the foregoing Loan Modification
Agreement, who acknowledged himself/herself to be the
of Maryland Industrial Development Financing Authority, and that he/she being
authorized to do so, executed the foregoing Loan Modification Agreement for the
purposes therein contained.

                                          --------------------------------------
                                          Notary Public

My commission expires: ________________