EXHIBIT 10.37

                                       TO

                       REGISTRATION STATEMENT ON FORM SB-2



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



      TRI-ELECTION RIDER TO EQUIPMENT LEASE WITH FINOVA CAPITAL CORPORATION



TRI-ELECTION  RIDER  TO  EQUIPMENT  LEASE  BETWEEN  FINOVA  CAPITAL  CORPORATION
("LESSOR") AND MENDOCINO BREWING COMPANY, INC. ("LESSEE") Dated

Master  Lease  No.  5754300  Schedule  No.  5754300  (the  Master  Lease and all
Schedules thereto is hereafter the "Lease")

1.  Notwithstanding  any  provision  contained  in the  Lease  to the  contrary,
including,  but not limited to, the section of the Schedule  entitled "Option to
Purchase.,  upon  expiration  of the term of the Schedule  (the  "Initial  Lease
Term") and  payment by Lessee of all  rentals and other sums due as set forth in
the  Schedule,  and provided  that no Event of Default (as defined in the Lease)
shall have occurred and be continuing,  Lessee, at its option,  may purchase all
of Lessor's  right,  title and interest in and to all, but not less than all, of
the equipment  described in and covered by the Schedule (the  "Equipment") for a
purchase  price equal to the  greater of (a) the then Fair  Market  Value of the
Equipment  determined as hereinafter  provided not to exceed thirty (30%) of the
actual Equipment Cost, or (b) twenty-five  (25%) percent of the original cost of
the Equipment to Lessor.  In order to exercise such option,  Lessee shall notify
Lessor in writing of Lessee's  intention  to  exercise  such option at least one
hundred  twenty (120) days prior to the expiration of the Initial Lease Term and
shall deliver to Lessor,  on or before the expiration of the Initial Lease Term,
an  appraisal  and  payment  of the  purchase  price.  For the  purpose  of this
Paragraph,  the "Fair Market Value" of the  Equipment  shall be determined by an
independent  third-party  appraiser selected by Lessee and reasonably acceptable
to Lessor.  The  appraiser's  report shall be in writing and delivered to Lessor
prior to the  expiration of the Initial Lease Term. All fees and expenses of the
appraiser shall be paid by Lessee.

2. If the Lessee for any reason does not  purchase the  Equipment in  accordance
with  Paragraph  1 hereof,  the  Initial  Lease  Term set forth in the  Schedule
applicable to the Equipment  shall  automatically  be extended for an additional
term of twelve (12) months (the  "Extended  Term") at a monthly rental factor of
 .0220 times the actual  Equipment  Cost which the parties  acknowledge to be the
fair market rental value of the  Equipment,  the first such rental being due and
payable  by  Lessee on the  expiration  date of the  Initial  Lease  Term.  Upon
expiration  of the Extended  Term,  in  accordance  with the terms of the Lease,
Lessee shall either return the Equipment to Lessor or purchase the Equipment for
its fair market value in  accordance  with the section of the Schedule  entitled
"Option to Purchase".

3. Except as amended hereby, the Lease shall remain in full force and effect and
are, in all respects, hereby ratified and affirmed.

4.  Notwithstanding  anything to the contrary contained in the Lease, the Lessee
shall have no obligation to make any indemnity  payments pursuant to the section
entitled "Tax  Indemnity" to the extent that such  indemnity  obligations  arise
solely from the acts or omissions of the Lessor.  For purposes of this provision
however, the following shall not be deemed to be a Lessor's act or omission: (i)
those  acts or  omissions  taken by the  Lessor  while the  Lessee is in default
pursuant  to the  term of the  Lease;  (ii)  those  acts or  omissions  that are
required,  permitted  or  contemplated  by the  Lease or any  document  relating
thereto;  (iii) the execution,  negotiation,  overall  structuring 


EXHIBIT 10.37



and documents relating to the transactions  contemplated  hereby and thereby; or
(iv) those acts or omissions taken with the consent of the Lessee.

IN WITNESS  WHEREOF,  the  parties  hereto have  caused  this  instrument  to be
executed  by their duly  authorized  officers as of the day and year first above
written.

LESSOR:

FINOVA CORPORATION

BY
PRINTED NAME:  PAM MARCHANT
TITLE:  V.P.
DATE:

LESSEE:

MENDOCINO BREWING COMPANY, INC.

BY:  /s/  Norman Franks
PRINTED NAME:  NORMAN FRANKS
TITLE:  V.P.

DATED:  9/5/96



EXHIBIT 10.37
                                      - 2 -