Golden West Brewing Company, Inc. (Form: 8-K, Received: 03/14/2008 12:08:18)

SECURITY AGREEMENT

THIS SECURITY AGREEMENT is entered into as of this 12th day of March, 2008, by and among Golden West Brewing Company, a California corporation d/b/a Blue Marble Brewing (" Debtor "), and Peter Hirshburg (" Secured Party ").

Recitals

Debtor has agreed to borrow from the Secured Party, and the Secured Party has agreed to lend to Debtor the sum of $50,000 (the " Loan ");

As of the date hereof, Debtor has executed and delivered to the Secured Party a secured promissory note in the principal amount of $50,000, (the " Note "); and

As a condition to the obligation of the Secured Party to loan such amount to Debtor, Debtor is required to enter into this Security Agreement and to grant to the Secured Party a security interest in the Collateral (as hereinafter defined).

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

Agreement

SECURITY

1.1

Grant of Security Interest . As security for all of the Obligations (as defined in Section 1.2 ), Debtor hereby grants to the Secured Party, a continuing security interest (as that term is defined in the Uniform Commercial Code as in effect in California on the date hereof (the " Uniform Commercial Code ")), in, and assigns and pledges to the Secured Party all of the Debtor's right, title and interest in and to the following, whether now owned or hereafter acquired (by operation of law or otherwise), and whether now or hereafter existing, owned by Debtor or in which Debtor otherwise has any rights (collectively, the " Collateral "):

(a)

The Debtor's inventory and accounts receivable associated with the Debtor’s distribution agreement with Cost Plus World Market covering the manufacture and sale of Blue Marble craft beers;

1.2

Obligations . The security interest created hereby in the Collateral constitutes a continuing security interest for all of the following obligations, indebtedness and liabilities, whether now existing or hereafter incurred or arising (collectively, the " Obligations "):

(a)

The payment and performance by Debtor, as and when due and payable, of all amounts from time to time owing by it under or with respect to, whether for principal, interest, fees, expenses or otherwise, and the performance of all other obligations of Debtor under, the Notes, this Agreement or any other document or instrument now or hereafter delivered in connection with or as security for the Notes (collectively, the " Loan Documents ");

(b)

All loans and future advances made by Secured Party to Debtor evidenced by, and all other debts, obligations and liabilities of every kind and character of Debtor arising from, the Note, or hereafter arising in favor of Secured Party, whether such debts, obligations or liabilities be direct or indirect, primary or secondary, joint or several, fixed or contingent, and whether originally payable to Secured Party or to a third party and subsequently acquired by Secured Party and whether such debts, obligations or liabilities are evidenced by notes, open account, overdraft, endorsement, security agreement, guaranty, or otherwise (it being contemplated that Debtor may hereafter become indebted to one or more Secured Party in further sum or sums, but Secured Party shall have no obligation to extend further indebtedness by reason of this Agreement);

(c)

All expenditures made or incurred by Secured Party to protect and maintain the Collateral and to enforce the rights of Secured Party under this Agreement;

(d)

The due performance and observance by Debtor of all of its other obligations and undertakings from time to time existing under or with respect to the Loan Documents or any other document or instrument now or hereafter delivered in connection with or as security for any of the Loan Documents; and

(e)

All renewals, extensions, amendments, modifications, supplements or restatements of or substitutions for any of the foregoing.

Notwithstanding anything to the contrary contained in this Agreement, the Obligations are not intended to include, and the Collateral is not intended to secure, amounts owing from the Debtor to Secured Party under any promissory note (other than the Note, which is intended to be secured hereby) made by the Debtor in favor of Secured Party before the date of this Agreement.

1.3

Certain Rights of Secured Party . The Secured Party shall have the right, but not the obligation, to pay any taxes or levies on the Collateral or any costs to repair or to preserve the Collateral, which payment shall be made for the account of Debtor and shall constitute a part of the obligations owed to the Secured Party and secured pursuant to this Agreement.

1.4

Financing Statements . At the request of the Secured Party, Debtor will execute such financing statements, continuation statements, and other documents with respect to the Collateral pursuant to the Uniform Commercial Code and otherwise as Secured Party may request, in form satisfactory to the Secured Party, and Debtor will pay the cost of filing the same in all public offices where filing is reasonably necessary (including, without limitation, the cost of filing in the office of the California Secretary of State and the United States Patent and Trademark Office).

1.5

No Release . No injury to, or loss or destruction of, any item of the Collateral shall relieve Debtor of any obligation under this Agreement or under any of the other Loan Documents.

REPRESENTATIONS AND WARRANTIES OF DEBTOR

In order to induce Secured Party to enter into this Agreement and to make the Loan, Debtor hereby makes the following representations and warranties to Secured Party:

2.1

Organization; Due Authorization; Enforceability . Debtor is a corporation duly organized, validly existing and in good standing under the laws of the State of California. The execution, delivery and performance by Debtor of this Agreement and all transactions contemplated herein are within Debtor's corporate powers and have been duly authorized by all necessary action on the part of Debtor, corporate and otherwise. This Agreement has been duly executed and delivered by Debtor and constitutes the valid and binding obligation of Debtor, enforceable against Debtor in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity.

2.2

No Conflicts or Consents . Neither the ownership nor the intended use of the Collateral by Debtor, nor the grant of the security interest by Debtor to Secured Party herein, nor the exercise by Secured Party of any rights and remedies hereunder, does or will (i) conflict with or violate any provision of the certificate of incorporation, bylaws or other governing documents of Debtor, (ii) conflict with or violate any applicable domestic or foreign law, statute, rule or regulation applicable to or binding upon Debtor, (iii) conflict with or violate any agreement, judgment, license, order or permit applicable to or binding upon Debtor, or (iv) result in or require the creation of any lien, charge or Encumbrance (as defined below) upon any assets or properties of Debtor except as expressly contemplated by this Agreement. Except for filings of financing statements to be made in favor of Secured Party and filing a copy of this Agreement with the United States Patent and Trademark Office, no consent, approval, authorization or order of, and no notice to or filing with, any court, governmental authority or third party is required in connection with the grant by Debtor of the security interest herein or the exercise by Secured Party of any rights and remedies hereunder.

2.3

Security Interest . Debtor has and will have at all times full right, power and authority to grant a security interest in the Collateral to Secured Party in the manner provided herein, free and clear of any lien, security interest, adverse claims or other charges or encumbrances except for liens of record. This Agreement creates a valid and binding security interest in favor of Secured Party in the Collateral securing the Obligations. The filing of the financing statements and other instruments of registration delivered concurrently herewith by Debtor to Secured Party will perfect, and establish the first priority of, Secured Party's security interests hereunder in the Collateral securing the Obligations. No further or subsequent filing, recording, registration, other public notice or other action is necessary or desirable to perfect or otherwise continue, preserve or protect such security interest, except for continuation statements or filings.

2.4

Title to Assets . As of the date hereof, Debtor has good, valid, and marketable title to all of its properties and assets (whether real or personal), and there exists no mortgage, lien, security interest, reservation, covenant, restriction or other encumbrance (each of the foregoing hereinafter referred to as an " Encumbrance ") of any nature upon, or with respect to, Debtor or any of its properties or assets, including, without limitation, the Collateral, except for liens of record and the security interests created by this Agreement .

2.5

Taxes . Debtor has filed all tax returns and reports required by any governmental authority to be filed by Debtor, and such returns and reports are true and correct. Debtor has paid all taxes, assessments, and other government charges imposed upon it or its income, profits or properties, or upon any part thereof, other than those presently payable without penalty or interest.

2.6

No Default . No Event of Default (as defined in Section 6.1 hereof), and no event which with notice, lapse of time, or both would constitute an Event of Default, has occurred and is continuing as of the date hereof.

2.7

Patents . The Patents are valid and subsisting and have not been adjudged invalid or unenforceable, either in whole or in part. The Patents specifically described on Schedule 1.1 constitute all of the patents and patent applications now owned by Debtor, and said Patents constitute all patents and patent applications necessary or desirable to conduct Debtor's business as it is currently being conducted.

AFFIRMATIVE COVENANTS OF DEBTOR

Until all of the Obligations of Debtor are paid and performed in full, Debtor hereby covenants and agrees that it shall, unless the Secured Party otherwise consents in advance in writing:

3.1

Payment of Note . Punctually pay the principal of and interest on the Note and all other amounts that may be due thereunder at the times and places and in the manner specified therein, except to the extent of any principal or interest that is converted into common stock of the Debtor according to the terms of the Note.

3.2

Corporate Existence . Preserve, maintain, and keep in full force and effect its corporate existence in the jurisdiction of its incorporation.

3.3

Taxes, Charges, and Obligations . Pay and discharge all taxes, assessments, and governmental charges or levies imposed upon it or upon its income, profits, properties or any part thereof, prior to the date on which penalties or interest attach thereto, as well as all claims which, if unpaid, might become an Encumbrance upon any properties of Debtor, and pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all of the indebtedness and other obligations of whatever nature of Debtor; provided, however , that Debtor shall not be required to pay any such tax, assessment, charge, levy, claim, indebtedness or obligation so long as (a) the validity thereof is being diligently contested by Debtor in good faith and by proper proceedings, (b) Debtor sets aside on its books adequate reserves therefor in accordance with generally accepted accounting principles, (c) during the period of such contest the enforcement of any contested item is effectively stayed, and (d) in the case where any such tax, assessment, charge, claim or levy might become an Encumbrance upon any item of the Collateral or any part thereof, Debtor makes arrangements acceptable to the Secured Party to secure the payment thereof.

3.4

Maintenance of Property . Keep all property used or useful in its business, including, without limitation, the Collateral, in good repair, working order, and condition, and from time to time make all necessary or desirable repairs, renewals, and replacements thereof.

3.5

Preservation of Patents . Prosecute diligently any patent application pertaining to the Patents, now or hereafter pending, file and prosecute opposition, cancellation, reissue, reexamination, protest, public use, concurrent use and similar proceedings relating to the Patents, and preserve and maintain all rights in all Patents. Any expenses incurred in connection with the foregoing shall be borne by Debtor.

3.6

Notice and Defense of Actions . Provide Secured Party with immediate notice of any opposition, cancellation, reissue, reexamination, protest, public use, concurrent use or

similar proceeding relating to the Patents or any part thereof, and shall diligently defend its rights in any such action or proceeding.

3.7

Collateral . Execute, deliver, and file, or cause the execution, delivery, and filing of, any and all documents (including, without limitation, financing statements and continuation statements) that Secured Party deem necessary or desirable to create, perfect, preserve, validate, or otherwise protect a first priority lien and security interest in the Collateral; immediately upon learning thereof, report to the Secured Party any reclamation, return or repossession of any goods forming a part of the Collateral, any claim or dispute asserted by any debtor or other obligor owing an obligation to Debtor, and any other matters affecting the value or enforceability or collectibility of any of the Collateral; defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein adverse to the Secured Party, and pay all costs and expenses (including attorneys' fees and expenses) incurred in connection with such defense; indemnify and protect the Secured Party against any liability, loss or expense arising from any such claims, demands, or disputes or out of any such reclamation, return or repossession of goods forming a part of the Collateral; provided , however , that if the Secured Party shall so elect, the Secured Party shall have the right at all times to settle, compromise, adjust or litigate all claims and disputes directly with the debtor or other obligor owing an obligation to Debtor upon such terms and conditions as the Secured Party deems advisable, and all costs and expenses thereof (including attorneys' fees and expenses) shall be made for the account of Debtor and shall constitute a part of the Obligations owed to the Secured Party and secured pursuant to this Agreement.

3.8

Notice of Default and Loss . Give immediate notice to the Secured Party upon the occurrence of any Event of Default or event which with notice or lapse of time or otherwise would constitute an Event of Default and of any loss or damage to any of the Collateral.

3.9

Information . Furnish Secured Party any information that any Secured Party may from time to time reasonably request concerning any covenant, provision or representation contained in this Agreement or any other matter in connection with the Collateral or Loan Documents.

NEGATIVE COVENANTS OF DEBTOR

Until all of the Obligations of Debtor are paid and performed in full, Debtor hereby covenants and agrees that it shall not, unless the Secured Party otherwise consents in advance in writing:

4.1

Fundamental Changes . Amend its Certificate of Incorporation or bylaws by any amendment which would adversely affect Debtor's ability to perform or comply with any of the terms, conditions or agreements to be performed or complied with by Debtor hereunder or under any of the Loan Documents or to perform any of the transactions contemplated hereby or thereby, change its name, consolidate or merge with any other corporation or other entity, or purchase, lease or otherwise acquire all or substantially all of the assets of any other entity, including shares of stock of other corporations, except that Debtor may own notes and other receivables acquired in the ordinary course of business. Debtor shall not take any action described in this Section 4.2 unless and until Debtor has taken all action requested by Secured Party to further perfect or protect Secured Party's security interests in the Collateral.

4.2

Transfer of Assets . Sell, lease, assign (by operation of law or otherwise), pledge or otherwise dispose of any of its properties or assets (including, without limitation, the Collateral), whether now owned or hereafter acquired, except for sales of properties and assets other than the Patents and Licenses in the ordinary course of business and for fair market value. Debtor shall not enter into any agreement relating to any Patent or License other than licensing agreements in the ordinary course of business, which are not inconsistent with the terms hereof and which do not have a material adverse effect on Debtor.

4.3

Impairment of Security Interest . Debtor shall not take or fail to take any action that it has the right to do, or authorize any licensee or third party to take or omit to take any action, that may result in a material change to or the abandonment, invalidation, unenforceability, avoidance, availability or diminution in the value of the Patents if such abandonment, invalidation, unenforceability, avoidance, availability or diminution in value would have a material adverse effect on the operations or financial condition of Debtor, or would in any manner otherwise impair the value or enforceability of Secured Party's security interest in any Patent.

POWERS AND AUTHORIZATIONS

5.1

New or Additional Patents . If, before the Obligations shall have been satisfied in full, Debtor shall obtain rights to any new or additional patents or applications therefor, Debtor shall give to Secured Party prompt notice thereof in writing. Any such new patents and applications therefor shall, without any further action on behalf of Debtor, automatically become subject to the terms of this Agreement and shall be deemed to be Patents for the purposes of this Agreement. Debtor will amend Schedule 1.1 to include any new or additional patents and applications therefor, but such new or additional patents and applications therefor shall constitute Collateral hereunder whether or not Debtor so amends Schedule 1.1 ; and Debtor agrees to execute such additional security agreements, financing statements, instruments of registration and related documents as may be reasonably requested by Secured Party to perfect Secured Party’s security interest in such patents and applications therefor.

5.2.

Power of Attorney . Debtor hereby irrevocably appoints Secured Party as Debtor's attorney-in-fact and proxy, with full authority in the place and stead of Debtor and in the name of Debtor or otherwise, in such Secured Party's discretion, at any time upon the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument which such Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including without limitation (i) to obtain and adjust insurance required to be paid to any Secured Party under the Loan Documents, (ii) to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral, (iii) to receive, endorse and collect any drafts or other instruments, documents and chattel paper in connection with clause (i) or clause (ii) above, (iv) to file any claims or take any action or institute any proceedings that such Secured Party may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of Secured Party with respect to any of the Collateral, and (v) to execute and file one or more financing or continuation statements, and amendments thereto, relating to the Collateral. Secured Party shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges, and options expressly or implicitly granted to Secured Party in this Agreement, and shall not be responsible for any failure to do so or any delay in doing so. Secured Party shall not be liable for any act or omission or for any error of judgment or any mistake of fact or law in their individual capacity or in their capacity as attorney-in-fact except acts or omissions resulting from such Secured Party's willful misconduct or gross

negligence. This power of attorney is conferred on Secured Party solely to protect, preserve and realize upon the security interests in the Collateral. Secured Party shall not be responsible for any decline in the value of the Collateral and shall not be required to take any steps to preserve rights against prior parties or to protect, preserve or maintain any security interest or lien given to secure the Collateral. The powers granted herein are coupled with an interest and shall be irrevocable from the date hereof and so long as any part of the Obligations is outstanding.

5.3

Performance by Secured Party . If Debtor fails to perform any agreement or obligation contained herein, Secured Party may itself, at its option and in its sole discretion, perform, or cause performance of, such agreement or obligation, and the expenses of such Secured Party incurred in connection therewith shall be payable by Debtor on demand; provided, however, that nothing herein shall impose any obligation of any kind whatsoever on Secured Party to perform any obligation or agreement of Debtor.

EVENTS OF DEFAULT AND REMEDIES

6.1

Events of Default . The occurrence of any one or more of the following events shall constitute an " Event of Default " hereunder:

(a)

any action or event that is an " Event of Default " under the Note; (b) Debtor shall fail to pay or perform the Obligations when due; (c) any representation or warranty made by or on behalf of Debtor herein or in any other Loan Document shall prove to have been incorrect in any material respect on or as of any date as of which made; (d) Debtor shall at any time fail to observe, satisfy or perform any of the covenants or agreements contained in Sections 3.1, 3.2, 4.1, or 4.5 of this Agreement; (e) Debtor shall at any time fail to observe, satisfy or perform any of the covenants or agreements contained in Sections 3 or 4 (other than in Sections 3.1, 3.2, 4.1 or 4.5) of this Agreement, except that no failure to observe any of such covenants or agreements hereof shall constitute an Event of Default hereunder unless such default shall continue unremedied for a period of twenty (20) business days after written notice of the existence of such default shall have been received by Debtor from Secured Party; or (f) Debtor shall default in the payment of principal of or interest on any Indebtedness (other than the Notes) of Debtor or any such Indebtedness shall be accelerated or otherwise become due and payable prior to its stated maturity.

6.2

Rights and Remedies of the Secured Party . Upon the occurrence of any Event of Default, or at any time thereafter, in addition to all other rights, powers and remedies herein conferred, conferred in the other Loan Documents or conferred by operation of law, Secured Party may declare the Obligations due, payable and performable or to become due, payable and performable to such Secured Party immediately, including all principal and interest remaining unpaid on the Note payable to Secured Party and all other amounts with respect to Secured Party secured hereby or thereby, all without demand, presentment or notice, all of which are hereby expressly waived; and from time to time in its discretion, without limitation and without notice except as expressly provided below, Secured Party may:

(a)

Exercise with respect to the Collateral all the rights and remedies of a secured party on default under the Uniform Commercial Code (whether or not the Uniform Commercial Code applies to the affected Collateral);

(b)

Require Debtor to, and Debtor hereby agrees that it shall at its expense and upon request of Secured Party forthwith, assemble all or part of the Collateral and the

documentation relating to the Collateral as directed by such Secured Party and make it available to such Secured Party at a place to be designated by such Secured Party which is reasonably convenient to both parties;

(c)

Reduce its claim to judgment or foreclose or otherwise enforce, in whole or in part, the security interest created hereby by any available judicial procedure;

(d)

Dispose of, at its office, on the premises of Debtor or elsewhere, all or any part of the Collateral, as a unit or in parcels, by public or private proceedings, and by way of one or more contracts (it being agreed that the sale of any part of the Collateral shall not exhaust Secured Party's power of sale, but sales may be made from time to time, and at any time, until all of the Collateral has been sold or until the Obligations have been paid and performed in full), and at any such sale it shall not be necessary to exhibit any of the Collateral;

(e)

Buy the Collateral, or any portion thereof, at any public sale;

(f)

Buy the Collateral, or any portion thereof, at any private sale if the Collateral is of a type customarily sold in a recognized market or is of a type that is the subject of widely distributed standard price quotations;

(g)

Apply by appropriate judicial proceedings for appointment of a receiver for the Collateral, or any part thereof, and Debtor hereby consents to any such appointment; and

(h)

At its discretion, retain the Collateral in satisfaction of the Obligations whenever the circumstances are such that Secured Party is entitled to do so under the Uniform Commercial Code or otherwise.

Debtor agrees that, to the extent notice of sale shall be required by law, five (5) calendar days' notice to Debtor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

6.3

Application of Proceeds . Upon the occurrence of any Event of Default, or at any time thereafter, Secured Party may in its discretion apply any cash held by Secured Party as Collateral, and any cash proceeds received by any Secured Party with respect to any sale of, collection from, or other realization upon all or any part of the Collateral, to any or all of the following in such order as Secured Party may elect:

(a)

To the repayment of the reasonable out-of-pocket costs and expenses, including attorneys' fees and legal expenses, incurred by Secured Party in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights of Secured Party hereunder; or (iv) the failure of Debtor to perform or observe any of the provisions hereof;

(b)

To the payment or other satisfaction of any liens and other encumbrances upon any of the Collateral;

(c)

To the reimbursement of Secured Party for the amount of any obligations of Debtor paid or discharged by Secured Party pursuant to the provisions of this Agreement or the other Loan Documents, and of any expenses of Secured Party payable by Debtor hereunder or under the other Loan Documents;

(d)

To the satisfaction of any other Obligations;

(e)

By holding the same as Collateral;

(f)

To the payment of any other amounts required by applicable law; and

(g)

By delivery to Debtor or to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.

Unless the Secured Party otherwise agrees, all proceeds received by Secured Party from the sale of, collection from, or other realization upon any Collateral (net of the actual unreimbursed out-of-pocket costs incurred by Secured Party in connection with such sale, collection or other realization) and all payments to Secured Party to reimburse it for certain expenses as provided herein if Debtor can not pay 100% of the demanded expense amounts shall be distributed to Secured Party.

6.4

Deficiency . In the event that the proceeds of any sale, collection or realization of or upon the Collateral by Secured Party are insufficient to pay all amounts to which Secured Party is legally entitled, Debtor shall be liable for the deficiency, together with interest thereon as provided in the governing Loan Documents or (if no interest is so provided) at such other rate as shall be fixed by applicable law, together with the costs of collection and the fees and expenses of any attorneys employed by Secured Party to collect such deficiency.

6.5

Non-Judicial Remedies . In granting to Secured Party the power to enforce its rights hereunder without prior judicial process or judicial hearing, Debtor expressly waives, renounces and knowingly relinquishes any legal right which might otherwise require Secured Party to enforce its rights by judicial process. In so providing for non-judicial remedies, Debtor recognizes and concedes that such remedies are consistent with the usage of trade, are responsive to commercial necessity, and are the result of a bargain at arm's length. Nothing herein is intended to prevent Secured Party or Debtor from resorting to judicial process at any party's option.

6.6

Remedies Not Exclusive . All rights, powers and remedies herein conferred are cumulative, and not exclusive, of (i) any and all other rights and remedies herein conferred or provided for, (ii) any and all other rights, powers and remedies conferred or provided for in the Loan Documents, and (iii) any and all rights, powers and remedies conferred, provided for or existing at law or in equity, and Secured Party shall, in addition to the rights, powers and remedies herein conferred or provided for, be entitled to avail itself of all such other rights, powers and remedies as may now or hereafter exist at law or in equity for the collection of and enforcement of the Obligations and the enforcement of the warranties, representations, covenants, indemnities and other agreements contained the Loan Documents. Each and every such right, power and remedy may be exercised from time to time and as often and in such order as may be deemed expedient by Secured

Party and the exercise of any such right, power or remedy shall not be deemed a waiver of the right to exercise, at the same time or thereafter, any other right, power or remedy. No delay or omission by Secured Party or other person or entity in the exercise of any right, power or remedy will impair any such right, power or remedy or operate as a waiver thereof or of any other right, power or remedy then or thereafter existing.

MISCELLANEOUS PROVISIONS

7.1

Additional Actions and Documents . Debtor shall take or cause to be taken such further actions, shall execute, deliver, and file or cause to be executed, delivered, and filed such further documents and instruments, and shall obtain such consents as may be necessary or as the Secured Party may reasonably request in order fully to effectuate the purposes, terms, and conditions of this Agreement and the other Loan Documents, whether before, at or after the closing of transactions contemplated hereby and thereby or the occurrence of an Event of Default hereunder.

7.2

Notification . All notices, requests, instructions or other communications to be given in writing hereunder shall be addressed as follows:

If to Debtor :

Name:

Golden West Brewing Company

Address:

945 West 2 ^nd Street

Chico, California 95928

Fax:

(707) 448-7842

Attention:

Brian Power

with a copy, which shall not constitute notice, to:

Address:

Clifford L. Neuman, P.C.

Temple-Bowron House

1507 Pine Street

Boulder, Colorado 80302

Fax:

(303) 449-1045

Attention:

Clifford L. Neuman

If to the Secured Party:

Peter Hirshburg

Address:

471 N. Curtis Road

Boise, Idaho 83706

Fax:

208-377-4218

Written communications shall be deemed given, when addressed to the other party as set forth above, three days after sent by registered or certified mail, one day after sent by overnight courier of national repute or on the same day when delivered in person or when sent by facsimile to the facsimile number as set forth above, provided that the sending party can provide written evidence of the communication's successful transmission to such facsimile number. The notification

information of any party may be changed by notifying the other parties of such change in accordance with this Section 7.2 . Notice by e-mail shall not be effective for any purpose under this Agreement.

If Secured Party receives from a third party any notice or other written communication relating to the Collateral or any other right or obligation of the Secured Party under this Agreement, it shall forward promptly a copy of such notice or written communication to the Borrower, unless it is clear from the face of the notice or written communication that the Borrower has received or will receive the same notice or written communication from that third party.

7.3

Expenses . Debtor shall (a) reimburse the Secured Party and save the Secured Party harmless against liability for the payment of all out-of-pocket expenses arising in connection with enforcement of, or the preservation or exercise of any rights (including the right to collect and dispose of the Collateral) under, this Agreement or any of the other Loan Documents, including, without limitation, the fees and expenses of counsel to the Secured Party arising in such connection; and (b) pay, and hold the Secured Party and subsequent holders of the Note harmless from and against, any and all present and future stamp taxes or similar document taxes or recording taxes and any and all charges with respect to or resulting from any delay in paying, or failure to pay, such taxes.

7.4

Severability . If fulfillment of any provision of the Loan Documents or performance of any transaction related thereto, at the time such fulfillment or performance shall be due, shall involve transcending the limit of validity prescribed by law, then the obligation to be fulfilled or performed shall be reduced to the limit of such validity; and if any clause or provision contained in any Loan Document operates or would operate prospectively to invalidate any Loan Document, in whole or in part, then such clause or provision only shall be held ineffective, as though not herein or therein contained, and the remainder of the Loan Documents shall remain operative and in full force and effect.

7.5

Waivers . No waiver by the Secured Party of, or consent by the Secured Party to, a variation from the requirements of any provision of the Loan Documents shall be effective unless made in a written instrument duly executed on behalf of Secured Party, and any such waiver shall be limited solely to those rights or conditions expressly waived.

7.6

Rights Cumulative . The rights and remedies of the Secured Party described in any of the Loan Documents are cumulative and not exclusive of any other rights or remedies which the Secured Party or the then holder of the Note otherwise would have at law or in equity or otherwise. Except as otherwise provided herein, notice to or demand on Debtor in any case shall not entitle Debtor to any other notice or demand in similar or other circumstances.

7.7

Entire Agreement; Modification; Benefit . This Agreement, the exhibits hereto, and the other Loan Documents constitute the entire agreement of the parties hereto with respect to the matters contemplated herein, supersede all prior oral and written agreements with respect to the matters contemplated herein, and may not be modified, deleted or amended except by written instrument executed by the parties. All terms of this Agreement and of the other Loan Documents shall be binding upon, and shall inure to the benefit of and be enforceable by, the parties hereto and their respective successors and permitted assigns; provided , however , that no Secured Party may assign or transfer any of its rights or obligations hereunder except in connection with the transfer or assignment of a Note, which is permitted by the terms thereof. Debtor shall not have the

right to assign or transfer any of its rights or obligations hereunder without the prior written consent of each Secured Party.

7.8

Termination . This Agreement shall terminate upon the earlier of payment and performance in full of all Obligations or conversion of all amounts payable under the Note into the common stock of the Debtor as set forth therein.

7.9

Construction . This Agreement and the other Loan Documents, the rights and obligations of the parties hereto, and any claims or disputes relating thereto shall be governed by and construed in accordance with the laws of the State of California (excluding the choice of law rules thereof). Each party hereto hereby acknowledges that all parties hereto participated equally in the negotiation and drafting of this Agreement and that, accordingly, no court construing this Agreement shall construe it more stringently against one party than against the other.

7.10

Pronouns . All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or entity may require.

7.11

Headings . Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

7.12

Payments . If any payment or performance of the Note or of any of the other obligations under this Agreement or any of the other Loan Documents becomes due on a day other than a Business Day, the due date shall be extended to the next succeeding Business Day, and interest thereon (if applicable) shall be payable at the then applicable rate during such extension. For the purposes of this Agreement, " Business Day " means a day other than a Saturday, Sunday or other day on which commercial banks in California are authorized by law to close.

7.13

Execution . To facilitate execution, this Agreement and any of the other Loan Documents may be executed in as many counterparts as may be required; and it shall not be necessary that the signatures of, or on behalf of, each party, or the signatures of all persons required to bind any party, appear on each counterpart; but it shall be sufficient that the signature of, or on behalf of, each party, or the signatures of the persons required to bind any party, appear on one or more of the counterparts. All counterparts shall collectively constitute a single agreement. It shall not be necessary in making proof of this Agreement or any other Loan Document to produce or account for any particular number of counterparts; but rather any number of counterparts shall be sufficient so long as those counterparts contain the respective signatures of, or on behalf of, all of the parties hereto.

IN WITNESS WHEREOF , the undersigned have duly executed this Security Agreement, or have caused this Security Agreement to be duly executed on their behalf, as of the day and year first hereinabove set forth.

DEBTOR :

LENDER :

GOLDEN WEST BREWING COMPANY ,

/s/ Peter Hirschburg__________

a California corporation, d/b/a Blue Marble

Peter Hirschburg

Brewing

By: /s/ John C. Power_______________

John C. Power

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (this “ Guaranty ”) dated as of the 12 ^th day of March, 2008, is from JOHN C. POWER , individually (“ Guarantor ”), to and for the benefit of PETER HIRSHBURG (“ Lender ”).

Recitals

Lender has agreed to lend to Golden West Brewing Company, a California corporation doing business as Blue Marble Brewing (the “ Borrower ”), $50,000 (“ Loan ”).

The Loan has been advanced and evidenced by a secured promissory note (the " Note ").

As security for the amounts loaned to Borrower by Lenders as described above, Borrower has executed a Security Agreement of even date herewith.

Guarantor acknowledges that Guarantor will benefit from Lender making the Loan to Borrower.

This Guaranty is executed and delivered to Lender by Guarantor to induce Lender to advance the Loan. Guarantor acknowledges and agrees that Lender would not advance the Loan unless Guarantor executed and delivered this Guaranty.

As security for Guarantor’s obligations hereunder, Borrower has entered into a security agreement with Lender of even date herewith (the “ Security Agreement ”).

Agreement

IN CONSIDERATION of Lender advancing the Loan to Borrower and the benefits to be derived by Guarantor from the Loans and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

Guarantee .

(a)

Guarantor unconditionally guarantees to Lender the full and prompt payment, in lawful money of the United States, upon demand when due, whether at maturity or by acceleration or otherwise, of all of Borrower’s currently advanced and future indebtedness, including, without limitation, all of Borrower’s present and future obligations under the Note and the Security Agreement (collectively, the “ Loan Documents ”) (and all modifications, amendments, restatements, extensions and renewals thereof), whether for principal, interest or otherwise, and whether absolute or contingent, primary or secondary, direct or indirect, voluntary or involuntary, liquidated or unliquidated, including, without limitation, all increases in the principal amount of such obligations above the current amount (the “ Obligations ”).

(b)

In addition, Guarantor agrees to pay Lender any and all expenses, including, without limitation, reasonable attorneys’ fees, court costs and related legal expenses incurred by Lender in connection with the enforcement of this Guaranty.

Obligations Absolute . The obligations of the Guarantor hereunder are primary, absolute and unconditional and are intended as a continuing guaranty of payment and performance by Borrower. Lender’s rights of recovery shall exist notwithstanding any right or power of Borrower or anyone else to assert any claim or defense as to the genuineness, regularity, validity or enforceability of any of the Obligations, any collateral security therefor, any guaranty thereof or any of the Loan Documents.

No Impairment of Liability . Guarantor agrees that Guarantor’s liability hereunder will not be released, reduced, impaired or affected by any one or more of the following events: (a) the assumption of liability by any other person (whether as guarantor or otherwise) for payment or performance under the Loan Documents; (b) the release, surrender, exchange, loss, termination, waiver or other discharge of the collateral securing payment or performance under the Loan Documents; (c) the subordination, relinquishment or discharge of Lenders’ rights relating to the Loan Documents or any collateral described therein; (d) the foreclosure upon any collateral given to secure any liability of Borrower by judicial or non-judicial sale; (e) the loss or impairment of any right of subrogation of Guarantor; (f) the full or partial release from liability of Borrower or any other person now or hereafter liable for payment of performance under the Loan Documents; (g) the insolvency, bankruptcy, reorganization, discharge, waiver or other exoneration of Borrower or any other person now or hereafter liable for payment or performance under the Loan Documents; (h) the renewal, consolidation, extension, modification, rearrangement or amendment from time to time of the Note or of the terms of any one or more of the Loan Documents, including, without limitation, the extension of the maturity date of the Note; (i) the failure, delay, waiver or refusal by Lenders to exercise any right or remedy held by Lenders under the Loan Documents; (j) Lenders’ application of any monies available to Lenders in payment or reduction of any of the Obligations in such manner and such amounts and at such times and in such order of priority as Lenders may see fit to the payment or reduction of such portions of the Obligations as Lenders may elect; (k) the sale, encumbrance, transfer or other modification of the ownership of Borrower or Borrower’s assets, or the change in the financial condition or management of Borrower; (l) the invalidity, unenforceability or insufficiency of any one or more of the Loan Documents or any collateral securing payment or performance thereunder; or (m) the failure of Guarantor to receive notice of any one or more of the foregoing actions or events.

Guarantor specifically acknowledges and agrees that Lender may, at his option and without notice to or further consent of Guarantor, take any of the foregoing actions and that if Lender elects to take any of the foregoing actions or any of the foregoing events occur, that such actions or events shall in no way reduce, affect, impair or limit the liability of Guarantor hereunder.

Waivers by Guarantor . Guarantor hereby expressly waives (a) diligence, presentment, protest, notice of dishonor, demand for payment, notice of nonpayment or nonperformance; (b) notice of the acceptance of this Guaranty; (c) notice of the existence or creation of all or any part of the Obligations; (d) notice of termination as to future liability given by any other guarantor; (e) notice of demand, advertisement or notice of time or place of sale of any collateral securing any of the Obligations; (f) all presentments, demands for performance, notices of nonperformance, protests and all other notices whatsoever; (g) any right to require Lender to proceed against Borrower or any security held in relation to the Obligations or to pursue any other right or remedy in Lender’s power; (h) any right to contest the enforcement of this Guaranty by virtue of any statute of limitations or other law varying the terms of this Guaranty; (i) any other defense available to Guarantor in law or in equity; and (j) the right to interpose counterclaims or setoffs of any kind or description in any litigation arising under this Guaranty.

No Reliance by Guarantor . Guarantor acknowledges and agrees that Guarantor has performed its own independent investigation of the financial condition of Borrower and has not relied upon Lender for such investigation. Guarantor hereby waives and agrees not to assert or take advantage of any duty on the part of Lender to disclose to Guarantor any facts it may now or hereunder know about Borrower or any collateral for the Loan, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of the financial condition of Borrower and of all circumstances bearing on the risk of nonpayment of any indebtedness hereby guaranteed.

Remedies .

(a)

Lender may, at Lender’s option, upon the occurrence of an Event of Default (as such term is defined in the Security Agreement), proceed to enforce this Guaranty directly against Guarantor (and any collateral pledged by Guarantor securing performance of the Loan) without first proceeding against Borrower or any other person liable for payment or performance under the Loan Documents and without first proceeding against or exhausting any collateral now or hereafter held by Lender to secure payment or performance under the Loan Documents.

(b)

Upon the occurrence of an Event of Default, Guarantor agrees to pay to Lender, upon demand, the full amount that would be payable hereunder as if all Obligations were then due and payable. Guarantor further agrees that this Guaranty shall continue to be effective or be reinstated, as the case may be, if payment, or any part thereof, of the Obligations is rescinded or must otherwise be returned by Lender upon the insolvency, bankruptcy or reorganization of Borrower, Guarantor or any other person or otherwise, all as though such payment to Lenders had not been made.

(c)

Upon the occurrence of an Event of Default, Lender shall be entitled to file any claims or take any action or institute any proceedings which Lender may deem necessary or desirable for the enforcement of this Guaranty or otherwise to enforce the rights of Lender. In addition, Lender shall be entitled to exercise any and all other remedies available to Lender under any applicable law.

(d)

No delay or neglect on the part of Lender in the exercise of any right or remedy existing under law or by virtue of this Guaranty shall operate as a waiver thereof, but such rights and remedies shall continue in full force and effect until specifically waived or released by an instrument in writing executed by Lender and designated as a waiver or release; and no single or partial exercise by Lender of any right or remedy shall preclude further exercise thereof or the exercise of any other right or remedy.

(e)

Nothing herein contained will limit Lender in exercising any rights held under any one or more of the Loan Documents. In the event of any default under the Loan documents, Lender will be entitled to selectively and successively enforce any one or more of the rights held by Lender and such action will not be deemed a waiver of any other right held by Lender. All of the remedies of Lender under this Guaranty and the Loan Documents are cumulative and not alternative.

Waiver of Subrogation . Until the Obligations are paid in full, Guarantor hereby irrevocably waives any claims or other rights which it may now or hereafter acquire against Borrower that arise from the existence or performance of Guarantor’s obligations under this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy Lender has against Borrower or any collateral which Lender now or hereafter acquires, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, by any payment made hereunder or otherwise including,

without limitation, the right to take or receive from Borrower, directly or indirectly, in cash or other property or setoff or in any other manner, payment or security on account of such claim or other rights. Any agreement between Guarantor and Borrower which is in any respect contrary to the foregoing shall be null and void and of no force or effect. If any amount shall be paid to Guarantor in violation of the preceding sentences and the Obligations shall not have been paid in full, such amount shall be deemed to have been paid to Borrower for the benefit of Lender and shall be held in trust for Lender’s benefit and shall forthwith be paid to Lender to be held and/or credited and applied to the Obligations, whether matured or unmatured. Guarantor hereby indemnifies Lender against any and all costs, claims, losses or liabilities, including reasonable attorneys’ fees, which he may at any time sustain or incur as result of preference claims in bankruptcy on behalf of Borrower’s bankruptcy estate. This Guaranty shall be continuing, and, if Lender is required by applicable bankruptcy or other law to disgorge any monies previously paid to him by Borrower, Guarantor shall be liable according to the terms hereof, notwithstanding that the books and records of Lender may previously have shown the obligations to have been fully repaid or that Lender may have informed Guarantor or taken other affirmative actions to release this Guaranty. Lender shall have no obligation to release any collateral pledged by Guarantor to secure the Loan until all applicable preference periods relating to any bankruptcy by Borrower or Guarantor shall have expired. To the extent Lender releases any collateral pledged by Guarantor to secure the Loan and Lender is required by applicable bankruptcy or other law to disgorge any monies previously paid to it by Borrower, Lender shall be considered to have retained its lien in such collateral, and to the extent necessary, Guarantor shall repledge such collateral to Lenders, or if such collateral is no longer owned by Guarantor, Guarantor shall pledge substitute collateral to Lender which is reasonably acceptable to Lender. Guarantor appoints Lender as an attorney in fact to execute any security agreements, deeds of trust, mortgages, pledge agreements or financing statements necessary to effectuate such pledge of collateral. Lender is entitled to specific performance of Guarantor’s obligations of the provisions of this Guaranty, including, but not limited to, the provisions of this Section 7 .

Amendments . No provision or term of this Guaranty may be amended, modified, revoked, supplemented, waived or otherwise changed except by a written instrument duly executed by Guarantor and Lender and designated as an amendment, supplement or waiver.

Transfer of Assets . Guarantor will not voluntarily or involuntarily transfer title to any material assets or take any other action or suffer the same to be done, which would have a material adverse effect on Guarantor’s ability to fulfill its obligations to Lender hereunder.

10.

Notices . Any notice given to any party in connection with this Guaranty shall be in writing, shall be (a) hand delivered, (b) sent by registered or certified mail, return receipt requested, postage prepaid, or (c) sent by Federal Express or other nationally recognized overnight courier service, and if hand delivered shall be deemed received when delivered, if mailed shall be deemed received three days after having been deposited in the United States mail, postage prepaid, and if sent by Federal Express or other nationally recognized overnight courier service shall be deemed received one business day after having been deposited with Federal Express or other nationally recognized overnight courier service if designated for next day delivery, addressed as follows:

If to Guarantor:

John C. Power

P O Box 114

Sea Ranch, CA 95497

with a copy, which shall not constitute notice, to:

Clifford L. Neuman PC

1507 Pine Street

Boulder, CO 80302

If to Lenders:

Peter Hirschburg

471 N. Curtis Road

Boise, Idaho 83706

Any party may change its address for the giving of notice by notice hereunder.

11.

Captions and Pronouns . The captions and headings of the various sections of this Guaranty are for convenience only, and are not to be construed as confining or limiting in any way the scope or intent of the provisions hereof.

12.

Binding Effect . This Guaranty shall be binding on Guarantor, his heirs, personal representatives, successors and permitted assigns, and shall inure to the benefit of Lender and all heirs, personal representatives, successors and permitted assigns of Lender.

13.

Rights Cumulative . Each right, power and remedy of Lenders under this Guaranty and the Loan Documents are cumulative and in addition to every other right, power or remedy existing or implied, given now or hereafter existing, at law or in equity, and each and every right, power and remedy set forth herein or otherwise so existing may be exercised from time to time as often and in such order as may be deemed expedient by Lender, and the exercise or the beginning of the exercise of one right, power or remedy shall not be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy; and no delay or omission of Lender in the exercise of any right, power or remedy accruing hereunder or arising otherwise shall impair any such right, power or remedy, or be construed to be a waiver of any default or acquiescence therein.

14.

Waiver . Lender shall not be deemed to have waived any provision of this Guaranty or any Loan Document unless such waiver is in writing and is signed by Lender.

15.

Provisions Several/Illegality . The unenforceability or invalidity of any provision or provisions hereof shall not render any other provision or provisions herein contained unenforceable or invalid and in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Guaranty a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

16.

Choice of Law . This Guaranty has been negotiated, executed and delivered in California, and is intended to be construed in accordance with the laws of the State of California (excluding the choice of law doctrines thereof).

IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the date first above written.

/s/ John C. Power

JOHN C. POWER


Delaware	_000-51808	90-0158978
(State or other jurisdiction of incorporation)	Commission File Number	(I.R.S. Employer Identification number)


	(c)	Exhibit

	Item	Title

	99.1	Promissory Note dated March 12, 2008
	99.2 99.3	Security Agreement dated March 12, 2008 Personal Guaranty dated March 12, 2008


___	Written communications pursuant to Rule 425 under the Securities Act
___	Soliciting material pursuant to Rule 14a-12 under the Exchange Act
___	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
___	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act


ITEM 2.03	CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBGLIATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT


	Golden West Brewing Company, Inc.

Date: March 13, 2008	By: _ /s/ Mark Simpson__________ Mark Simpson President