CHANGE IN TERMS AGREEMENT


Borrower: Mendocino Brewing Company, Inc.       Lender: SAVINGS BANK OF
          PO Box 400                                    MENDOCINO COUNTY
          Hopland, CA  95449                            MAIN OFFICE
                                                        P.O. Box 3600
                                                        200 North School Street
                                                        Ukiah, CA 95482
                                              

Principal Amount: $2,700,000.00                 Date of Agreement: April 1, 1997

DESCRIPTION OF EXISTING  INDEBTEDNESS.  EXISTING LOAN NUMBER:  8010962256 IN THE
ORIGINAL AMOUNT OF  $2,700,000.00  DATED 9/25/95 WITH AN OUTSTANDING  BALANCE ON
3/28/97 IN THE AMOUNT OF $2,404,313.57, WITH INTEREST PAID TO 4/1/97.

DESCRIPTION OF COLLATERAL. 1. The outstanding obligation continues to be secured
by a  security  interest  in the  property  described  in a Deed of Trust  dated
9/25/97 in Book 2366, Page 544 of Official Records, Mendocino County.

DESCRIPTION OF CHANGE IN TERMS. 1. Final maturity of the loan is hereby extended
to 7/1/97. 2. Interest continues to be payable monthly commencing on 5/01/97 and
monthly thereafter.

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of
the original  obligation or obligations,  including all agreements  evidenced or
securing  the  obligation(s),  remain  unchanged  and in full force and  effect.
Consent by Lender to this  Agreement  does not waive  Lender's right to absolute
performance of the  obligation(s)  as changed,  nor obligate  Lender to make any
future change in terms. Nothing in this Agreement will constitute a satisfaction
of the obligation(s).  It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s),  including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this
Agreement.  If any person who signed the original  obligation does not sign this
Agreement below,  then all persons signing below acknowledge that this Agreement
is  given  conditionally,  based  on  the  representation  to  Lender  that  the
non-signing  party  consents to the changes and  provisions of this Agreement or
otherwise  will not be  released  by it.  This  waiver  applies  not only to any
initial  extension,  modification  or release,  but also to all such  subsequent
actions.

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF  THIS  AGREEMENT.   BORROWER  AGREES  TO  THE  TERMS  OF  THE  AGREEMENT  AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE AGREEMENT.

   BORROWER:
   Mendocino Brewing Company, Inc.

   By: /s/ Michael Laybourn                       By: /s/ Norman Franks
   ---------------------------                    ------------------------------
       Michael Laybourn,                          Norman Franks,
       Chief Executive Officer                    Chief Financial Officer