<PAGE>


                         MENDOCINO BREWING COMPANY, INC.







                          CODE OF BUSINESS CONDUCT AND
                         STATEMENT OF ETHICAL STANDARDS








                            ADOPTED AS OF APRIL, 2004

<PAGE>

           CODE OF BUSINESS CONDUCT AND STATEMENT OF ETHICAL STANDARDS



       This Code of Business Conduct and Statement of Ethical Standards (this
"CODE") has been adopted by the Board of Directors of Mendocino Brewing Company,
Inc. (the "COMPANY") in order to provide to the Company's officers, directors,
employees, and consultants ("COMPANY PERSONNEL") a generally applicable
statement of the basic standards and expectations that the Company holds
applicable to all Company Personnel in the conduct of the Company's business and
affairs. This Code is intended to qualify as a "code of ethics" within the
meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules
promulgated thereunder. All Company Personnel are expected to read and become
familiar with this Code and the standards it sets forth, and may be required,
from time to time, to affirm their adherence to these standards by signing a
Compliance Certificate.

I.     COMPLIANCE WITH LAWS, RULES AND REGULATIONS

       It is the policy of the Company to comply with all laws and regulations
that are applicable to the Company's business and other activities. All Company
Personnel must obey the law when acting within the scope of their duties or
otherwise on the Company's behalf. Specifically, the Company is committed to
compliance with all applicable laws, whether in the United States or abroad,
that are related to the conduct of the Company's business, including but not
limited to laws and regulations relating to:

       1.     Brewing practices and all related health and safety laws and
              regulations;

       2.     Maintaining a safe and healthy work environment;

       3.     Maintaining a workplace that is free from all improper forms of
              discrimination or harassment;

       4.     Competition, marketing, and disclosure practices, including laws
              relating to labeling of contents, unfair restraints of trade, and
              other unfair trade practices;

       5.     Environmental laws and standards;

       6.     Illegal payments to any government officials or political party
              representatives of any country; and

       7.     State and federal corporate and securities laws.

       All Company Personnel are prohibited from trading in the securities of
the Company or any other company while in possession of material nonpublic
information about the Company or such other company. In addition, Company
Personnel are strictly prohibited from recommending, "tipping," or suggesting
that anyone else trade in the securities of the Company or any other company on
the basis of material nonpublic information. Violation of insider trading

                                       1
<PAGE>

laws can result in fines and criminal penalties, in addition to disciplinary
action by the Company.

II.    CONFLICTS OF INTEREST; CORPORATE OPPORTUNITIES

       No Company Personnel should be involved in any activity which creates or
gives the appearance of a conflict of interest between their own personal
interests and the interests of the Company or its shareholders. In particular,
no Company Personnel may, without disclosure to and the explicit prior consent
of the Company's Board of Directors, as provided in Section VI, below:

       1.     Be a consultant to, or an officer, director, or employee of, or
              otherwise operate or have a material financial interest in, any
              outside business that manufactures or markets products or services
              in competition with the current or anticipated products and
              services of the Company (a "Competitor"), supplier, customer, or
              business partner of the Company;

       2.     Seek or accept any personal loan or services from any Competitor,
              supplier, customer, or business partner of the Company;

       3.     Be a consultant to, or an officer, director, or employee of, or
              otherwise operate, an outside business if doing so would
              materially interfere with his or her responsibilities to the
              Company;

       4.     Use the Company's property, information, or position for personal
              gain; or

       5.     Pursue a business opportunity that is in the Company's line of
              business without first presenting the opportunity to the Company.

       All Company Personnel shall notify the Company's Chief Executive Officer
or Chief Financial Officer of the existence of any actual or potential conflict
of interest.

III.   CONFIDENTIALITY; PROTECTION AND PROPER USE OF THE COMPANY'S ASSETS

       All Company Personnel shall maintain the confidentiality of information
entrusted to them by the Company (including by other Company Personnel) or by
its suppliers, customers, or business partners, unless such disclosure has been
duly authorized by the Company or is legally required and an appropriate officer
of the Company has been previously notified that such disclosure has been
requested by an authorized person or governmental agency.

       Information coming within the limitations expressed above includes all of
the following, whether such information relates solely to the Company or whether
it relates to any Company customer, supplier, or business partner:

       1.     Information marked "Confidential," "Private," "For Internal Use
              Only," or with similar legends;

                                       2
<PAGE>

       2.     Technical or scientific information, and the results of any
              inspections, tests, or surveys, relating to past, current, or
              anticipated products, techniques, services, or research;

       3.     Business or marketing plans, results, or projections;

       4.     Earnings and other internal financial and production data;

       5.     Confidential personnel information of every kind;

       6.     Information about or relating to suppliers and customers,
              including but not limited to price lists and lists of products and
              services obtained, bid on, or requested; and

       7.     Other non-public information that, if disclosed, might be (a) of
              use to competitors, (b) harmful to the Company or to its
              suppliers, customers, or other business partners, or (c) of use to
              investors in making a decision to buy, hold, or sell the Company's
              securities.

       All Company Personnel are personally responsible for protecting those
Company assets that are entrusted to them and for helping to protect the
Company's assets in general. To ensure the protection of the Company's assets,
all Company Personnel should:

       1.     Exercise reasonable care to prevent theft, damage, or misuse of
              Company property;

       2.     Promptly report the actual or suspected theft, damage, or misuse
              of Company property to a supervisor; and

       3.     Safeguard all electronic programs, data, communications, and
              written materials from inadvertent access by others.

IV.    GOOD FAITH AND FAIR DEALING

       The Company is committed to conducting its business with integrity and in
an honest and fair manner, and to sustaining a work environment that fosters
mutual respect, openness, and individual integrity. Company Personnel are
expected to deal honestly and fairly with the Company's customers, suppliers,
Competitors, business partners, and other third parties. To this end, no Company
Personnel shall:

       1.     Make false or misleading statements about the Company or its
              Competitors to customers, suppliers, business partners, or other
              third parties;

       2.     Solicit or accept from any person that does business with the
              Company, or offer or extend to any such person, cash in any amount
              or gifts, meals, or entertainment that could influence or
              reasonably give the appearance of influencing the Company's

                                       3
<PAGE>

              business relationship with that person or go beyond common
              courtesies usually associated with accepted business practice;

       3.     Solicit or accept any fee, commission, or other compensation for
              referring customers to third-party vendors; or

       4.     Otherwise take unfair advantage of the Company's customers or
              suppliers, or other third parties, through manipulation,
              concealment, abuse of privileged information, or any other
              unfair-dealing practice.

V.     ACCURATE AND TIMELY PERIODIC REPORTS AND OTHER PUBLIC COMMUNICATIONS

       Securities laws and Company policy require the prompt disclosure of
accurate and complete information regarding the Company's business, financial
condition, and results of operations. To this end, all Company Personnel should
promptly report evidence of improper financial reporting, which may include:

       1.     Financial results that seem inconsistent with the performance of
              underlying business transactions;

       2.     Inaccurate Company records, such as overstated expense reports, or
              erroneous time sheets or invoices; and

       3.     Requests to circumvent ordinary review and approval procedures.

       The Company's senior officers and accounting employees have a special
responsibility to ensure that all of the Company's financial disclosures are
full, fair, accurate, timely, and understandable. Such Company Personnel must:

       1.     Maintain a system of internal accounting controls that will ensure
              that all transactions are properly recorded and that material
              information about the Company is made known to management;

       2.     Maintain books and records that accurately and fairly reflect the
              Company's transactions;

       3.     Prohibit the establishment of any undisclosed or unrecorded funds
              or assets; and

       4.     Comply with generally accepted accounting principles and all
              standards, laws, and regulations for accounting and financial
              reporting of transactions, estimates, and forecasts.

VI.    REPORTING AND EFFECT OF VIOLATIONS

       All Company Personnel must report, in person or in writing, any known or
suspected violations of this Code or of any applicable laws to the Company's
Chief Executive Officer or Chief Financial Officer. The Company strictly

                                       4
<PAGE>

prohibits any retaliation against any Company Personnel who act in good faith in
reporting any such violation.

       The Company's Chief Financial Officer, or if so directed a Special
Committee of the Board of Directors, will investigate any reported violations of
this Code or of any applicable laws, and will oversee an appropriate response,
including proposing and implementing corrective action and preventative
measures. Company Personnel who violate any laws, governmental regulations, or
this Code will face appropriate, case specific, disciplinary action, which may
include demotion or discharge.

       The provisions of this Code may be waived only in extraordinary
circumstances and on a case-by-case basis:

       1.     For directors or executive officers, only by a resolution of the
              Company's Board of Directors or a committee of the Board
              authorized to make such determinations; and

       2.     For all other Company Personnel, only by the Chief Financial
              Officer or a committee of the Board authorized to make such
              determinations.

       Any waiver of this Code granted to a director or executive officer will
be publicly disclosed as required by the securities exchange or association on
which the Company's securities are listed for trading, as and to the extent
required by the rules of such exchange or association. Any change in or waiver
of this Code for senior financial officers will be publicly disclosed as
required by the Securities Exchange Commission (the "SEC"), as and to the extent
required by the rules of the SEC.

VII.   ADMINISTRATION

       The Board of Directors has the primary responsibility for setting the
Company's standards of business and ethical conduct, for drafting and
implementing the Code, and for reviewing them from time to time as the Board
deems appropriate in light of ongoing changes in the Company's legal and
regulatory environment, evolving business practices in the industry, and
applicable business and ethical standards in the United States and abroad. While
the Board of Directors has primary responsibility for administering the Code,
all Company Personnel are personally responsible for their individual compliance
with the Code.



                                       5
<PAGE>

                             COMPLIANCE CERTIFICATE


       I have read, and I understand, the Company's Code of Business Conduct and
Statement of Ethical Standards (the "CODE"), and I agree to adhere to the
standards of conduct set forth in the Code with respect to all of my activities
in connection with and on behalf of the Company. Further, I understand and agree
that (a) I am personally responsible to make sure that I am aware of and in
compliance with the Code and (b) any violation of the Code will subject me to
appropriate disciplinary action, up to and including demotion or discharge.

       By signing this Certificate, I intend to certify to the Company that,
except to the extent noted in the signed Statement of Exceptions attached to
this Compliance Certificate, I am not in violation of the Code.



Dated:  _________, 20__




                                                 _______________________________
                                                 Please Sign Above

                                                 _______________________________
                                                 Please Print Your Name Above

                                                 _______________________________
                                                 Please Indicate Your Title
                                                 or Position Above



Please check one of the following boxes:


       / /   A Statement of Exceptions is attached.


      / /    No Statement of Exceptions is attached.