August 1, 1996

        Agreement  to Modify Note and Deed of Trust  dated June 6, 1995  wherein
Ukiah  Redevelopment  Agency is named as Trustor  and  Langley et al is named as
Beneficiary in the original amount of $492,872;  and the payoff and reconveyance
of Note and Deed of Trust dated  November 15, 1995 wherein  Ukiah  Redevelopment
Agency is named as  Trustor  and  Langley et al is named as  Beneficiary  in the
original amount of $76,230.00.

        Said note(s) and deed(s) trust have been taken "subject to" by Mendocino
Brewing Company in subsequent sale(s).

         Mendocino  Brewing  Company shall place into escrow the sum of $300,000
cash. Said $76,230.  Note and Deed of Trust + accumulated interest shall be paid
off in full. The balance remaining of said $300,000 shall be paid over to reduce
the  remaining  principal  of the $492,872  Note and Deed of Trust.  The monthly
payment shall be reduced accordingly.

         Cordes et al agrees to subordinate this modified note to a construction
loan from the Savings  Bank of  Mendocino  County in the  approximate  amount of
$2,700,000 and Small Business  Administration insured loan (Creditor to be named
later) in the approximate amount of $1,000,000.

                /s/  Cordes P. Langley
                Cordes P. Langley
                /s/  David C. Dutton
                David C. Dutton, Jr., Trustee
                /s/  Philip G. Langley
                Philip G. Langley
                /s/  Ellen J. Alexander
                Ellen J. Alexander
                /s/  Grey M. Dutton
                Grey M. Dutton, Trustee
                Mendocino Brewing Company
                BY:  /s/  Norman Franks