Document:

<PAGE>

                             SECURED PROMISSORY NOTE

$200,000.00                                                    DECEMBER 27, 2005

     FOR VALUE RECEIVED, MENDOCINO BREWING COMPANY, INC., A(N) CALIFORNIA
CORPORATION AND RELETA BREWING COMPANY LLC, A DELAWARE LIMITED LIABILITY COMPANY
(individually and collectively "Borrower"), promises to pay to BFI BUSINESS
FINANCE, a California corporation ("Lender"), or order, at Lender's place of
business at 1655 The Alameda, San Jose, CA 95126, or at such other place as may
be designated in writing to Borrower by the holder of this Secured Promissory
Note (this "Note"), the principal sum of TWO HUNDRED THOUSAND AND 00/100 DOLLARS
($200,000.00) OR SO MUCH OF SAID AMOUNT AS SHALL HAVE BEEN ADVANCED HEREUNDER
(as such amount shall change from time to time the "Loan Amount"), which shall
be subject to and disbursed under the terms and conditions of that certain
EQUIPMENT SECURITY AGREEMENT DATED MAY 5, 2005 (as amended the "Security
Agreement"), together with interest from the date hereof on the unpaid principal
balance at a rate (the "Rate") of THREE AND THREE QUARTERS PERCENTAGE POINT(S)
(3.75%) PER ANNUM over and above the rate announced as the "prime" rate in the
Western Edition of the Wall Street Journal which is in effect from time to time
(the "Prime Rate"); provided that the Prime Rate shall at all times be deemed to
be not less than FIVE AND THREE QUARTERS PERCENT (5.75%) PER ANNUM (the "Deemed
Prime Rate"). In the event that the Prime Rate is changed, the adjustment in the
interest rate charged shall be made on the day such change occurs. The Prime
Rate is a rate used by certain financial institutions as one of their index
rates and serves as a basis upon which effective rates of interest are
calculated for loans making reference thereto and may not be the lowest of such
financial institutions' index rates. Upon the occurrence of a default or an
event of default under this Note, the rate of interest on the Note shall be
increased at the option of Lender to an additional three percent (3.0%) in
excess of the then applicable interest rate. Interest shall be computed on the
basis of a 360-day year and shall be charged to Borrower's account on the first
day of the following month, and, if not so paid, it shall thereafter bear like
interest as the principal.

1.      Lender may, at its option, charge Borrower's account for the principal,
interest, and fees hereunder, which are due and payable on the dates and in the
manner that follows:

        (a)     Interest payments will be due and payable in arrears commencing
on the first day of the first month following disbursement and continuing on the
first day of each month thereafter while amounts hereunder are due and owing;

        (b)     Principal payments will be due and payable commencing on JANUARY
6, 2006, and continuing on each Friday of each of the next consecutive
TWENTY-EIGHT (28) weeks thereafter, each in the amount of SIX THOUSAND SIX
HUNDRED SIXTY-FIVE AND 00/100 DOLLARS ($6,665.00) One final installment of
principal in the amount of SIX THOUSAND SEVEN HUNDRED FIFTEEN AND 00/100 DOLLARS
($6,715.00) shall be due and payable at maturity;

        (c)     A loan fee of THREE PERCENT (3.00%) of $$165,000.00 which equals
the sum of FOUR THOUSAND NINE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($4,950.00), (the "Loan Fee") shall be charged at the time of the execution
hereof and based on the then outstanding Loan Amount --------N/A--------
thereafter;

        (d)     An administrative fee of FOUR TENTHS OF ONE PERCENT (0.40%) per
month of the average daily outstanding balance during the preceding month, (the
"Administrative Fee") shall be charged on the first day of each month following
disbursement and monthly thereafter while amounts hereunder are due and owing;

        (e)     An appraisal fee of SEVEN HUNDRED FIFTY DOLLARS ($750.00) per
day per appraiser, plus out-of-pocket expenses (the "Appraisal Fee") shall be
charged for each appraisal of the Collateral performed by Lender or its agents.
Provided that no Event of Default has occurred, Lender shall not charge Borrower
more than $750.00 plus out-of-pocket expenses incurred by Lender per year for
such appraisal fees;

                                  Page 1 of 5

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        (f)     On the first day of each month, Lender will transfer all loan
payments due under this Note, including all accrued interest and Administrative
Fees, to the accounts receivable line of credit extended to Borrower pursuant to
that certain LOAN AND SECURITY AGREEMENT dated MAY 5, 2005, between Borrower and
Lender and all of the riders and amendments thereto, (hereinafter collectively
referred to as the "Loan Agreement");

        (g)     Borrower shall pay all fees and legal and other costs incurred
by Lender in connection with the negotiation and preparation of the Note and the
documents executed in connection herewith and the perfection of any security
interest in any collateral granted by Borrower or any third party to Lender in
connection with this Note, including but not limited to attorneys' fees and
legal and other costs, which Lender shall charge to Borrower's account at the
time of the execution hereof;

        (h)     On JULY 28, 2006 (the "Maturity Date"), the entire principal
balance hereof, together with any and all unpaid and/or accrued interest, loan
fees, monthly Administrative Fees, and attorneys' fees and legal and other costs
due hereunder, shall be paid in full;

        (i)     Interest not paid when due shall bear interest at the same rate
as principal. All payments hereunder are to be applied first to the payment of
accrued interest and the balance remaining applied to the payment of principal.
All principal and interest due hereunder is payable in lawful money of the
United States of America; and

        (j)     In no event shall the interest rate or rates payable under this
Note, plus any other amounts paid in connection herewith, exceed the highest
rate permissible under any law that a court of competent jurisdiction shall, in
a final determination, deem applicable. Borrower and Lender intend legally to
agree upon the rate or rates of interest (and the other amounts paid in
connection herewith) and manner of payment stated within this Note; provided,
however, that anything contained herein to the contrary notwithstanding, if said
interest rate or rates of interest (or other amounts paid in connection
herewith) or the manner of payment exceeds the maximum allowable under
applicable law, then, IPSO FACTO as of the date of this Note, Borrower is and
shall be liable only for the payment of such maximum as allowed by law, and
payment received from Borrower in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of this Note to the
extent of such excess.

2.      Voluntary prepayments of the principal balance of this Note shall be
permitted at any time; provided that each such prepayment shall be accompanied
by all interest and any Administrative Fees that have accrued and remain unpaid
with respect to the amount of principal being repaid and a prepayment fee equal
to the following:

        (a)     --------N/A-------- percent (------N/A------%) of the amount
prepaid with respect to any prepayments made during the 11 months following the
first principal payment on --------N/A--------.

        (b)     --------N/A-------- percent (------N/A------%) of the amount
prepaid with respect to any prepayments made on or after --------N/A--------,
and prior to --------N/A--------.

Amounts repaid or prepaid with respect to this Note may not be reborrowed.
Partial prepayments of principal shall be applied to scheduled payments of
principal in the inverse order of their maturity.

3.      If any installment of principal, interest, or Administrative Fee
hereunder is not paid when due, the holder shall have the following rights in
addition to the rights set forth herein, in the Loan Agreement, the Security
Agreement, and under law:

        (a)     the right to compound interest and the Administrative Fee by
adding the unpaid interest and/or Administrative Fee to principal, with such
amount thereafter bearing interest and the Administrative Fee at the rates
provided in this Note; and

        (b)     if any installment is more than ten (10) days past due, the
right to collect a charge equal to the greater of FIFTEEN DOLLARS ($15.00) OR
FIVE PERCENT (5%) of the late payment for each month in which it is late. This
charge is a result of a reasonable endeavor by Borrower and the holder to
estimate the holder's added legal and other costs and damages resulting from
Borrower's failure to make timely payments under this Note; hence

                                   Page 2 of 5

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Borrower agrees that the charge shall be presumed to be the amount of damage
sustained by the holder since it is extremely difficult to determine the actual
amount necessary to reimburse the holder for damages.

4.      Borrower expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
the benefit of any exemption under the homestead exemption laws, and all other
notices and demands in connection with the delivery, acceptance, performance, or
enforcement of this Note. Borrower agrees that Lender may release, surrender,
exchange, or substitute any collateral now held or which may hereafter be held
as security for the payment of this Note, and may extend the time for payment or
otherwise modify the terms of payment of any part or the whole of the debt
evidenced hereby. Borrower irrevocably waives the right to direct the
application of all payments at any time hereafter received by Lender on behalf
of Borrower, and Borrower agrees that Lender shall have the continuing exclusive
right to apply any such payments against the then due and owing obligations of
Borrower to Lender as Lender may deem advisable.

5.      It is expressly agreed that if a default or breach occurs in the payment
of any principal or interest, as provided above, or in the payment or
performance of any other of Borrower's Obligations (as that term is defined in
the Loan Agreement and/or the Security Agreement), at Lender's option, the
unpaid principal balance of this Note, together with interest accrued thereon,
shall forthwith be due and payable. In the event the accounts receivable line of
credit extended to Borrower under the Loan Agreement is paid in full, this Note
shall also be due, owing, and payable.

6.      This Note is made subject to the terms and conditions of and is secured
by security interests granted by Borrower in favor of Lender, and all covenants,
conditions, and agreements contained in the Loan Agreement, the Security
Agreement, --------N/A--------, all of which are hereby incorporated and made a
part hereof. All capitalized terms used herein, unless otherwise defined herein,
shall have the meanings ascribed to them in the Loan Agreement and the Security
Agreement.

7.      Borrower hereby consents to any and all renewals, replacements, and/or
extensions of time for payment of this Note before, at, or after maturity. This
Note shall be binding upon all legal representatives, successors, and assigns of
Borrower. However, Borrower may not assign this Note or any rights hereunder
without Lender's prior written consent. No such consent by Lender shall release
Borrower or any guarantor of any Obligation or indebtedness hereunder. Lender
reserves the right to sell, assign, transfer, negotiate, or grant participations
in all or any part of, or any interest in, Lender's rights and benefits under
each of the documents executed herewith or hereafter. In connection therewith,
Lender may disclose all documents and information which Lender now has or may
hereafter acquire relating to any credit extended by Lender to Borrower, or
about Borrower or its business, any guarantor or the business of any guarantor,
or any Collateral required hereunder. Any waiver of any rights under this Note,
the Loan Agreement, the Security Agreement, or under any other agreement,
instrument, or paper signed by Borrower is neither valid nor effective unless
made in writing and signed by Lender. No delay or omission on the part of the
Lender in exercising any right shall operate as a waiver thereof or of any other
right.

8.      Borrower promises to pay all legal and other costs and expenses of
collection of this Note and to pay all reasonable attorneys' fees incurred in
such collection or in any suit or action to collect this Note or any appeal
thereof. This Note shall be governed by, construed under, and enforced in
accordance with the laws of the State of California.

9.      Any collateral pledged to secure any obligation of Borrower shall also
secure any other obligation of Borrower except that any real property pledged to
secure any obligation of Borrower shall only secure any other obligation of
Borrower if Lender specifically so agrees in writing.

10.     An Event of Default under this Note, the Loan Agreement, or the Security
Agreement shall be an Event of Default under each of such loan documents, and
vice versa.

11.     In the event any one or more of the provisions contained in this Note is
held to be invalid, illegal or unenforceable in any respect, then such provision
shall be ineffective only to the extent of such prohibition or invalidity, and
the validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

                                  Page 3 of 5

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12.     This Note may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if all signatures were upon the
same instrument. Delivery of an executed counterpart of the signature page to
this Note by telefacsimile shall be effective as delivery of a manually executed
counterpart of this Note, and any party delivering such an executed counterpart
of the signature page to this Note by telefacsimile to any other party shall
thereafter also promptly deliver a manually executed counterpart of this Note to
such other party, provided that the failure to deliver such manually executed
counterpart shall not affect the validity, enforceability, or binding effect of
this Note.

13.     This is an integrated Note and supersedes all prior agreements or
negotiations regarding the subject matter hereof. This Note may only be amended
in writing. This Note amends, supercedes, and replaces that certain Secured
Promissory Note dated JUNE 28, 2005.

        This Note is subject to the terms and conditions set forth in ADDENDUM A
attached hereto and made a part hereof by this reference.

        IN WITNESS HEREOF, this Note has been executed and delivered on the date
first set forth above.

                                 MENDOCINO BREWING COMPANY, INC,

                                 /s/ N Mahadevan
                                 -----------------------------------------------
                                 By:     Narayanan Mahadevan
                                 Title:  Chief Financial Officer & Secretary

                                 RELETA BREWING COMPANY LLC
                                                           ---------------------

                                 /s/ N Mahadevan
                                 -----------------------------------------------
                                         MENDOCINO BREWING COMPANY, INC., MEMBER
                                 By:     Narayanan Mahadevan
                                 Title:  Chief Financial Officer & Secretary

                                  Page 4 of 5

<PAGE>

                                   ADDENDUM A

Pursuant to this Addendum A to Secured Promissory Note executed by and between
MENDOCINO BREWING COMPANY, INC. and Releta Brewing Company LLC (individually and
collectively, "Borrower") and BFI Business Finance, (this "Addendum"), the
foregoing Secured Promissory Note (the "Note") is hereby amended and/or
supplemented by the following terms and conditions, which are incorporated by
this reference in the Note as the following additional paragraphs to the Note.

14.     It shall be a condition subsequent that within fifteen (15) days of the
funding of this Note that Borrower shall provide Lender with evidence of cleared
final payment to Golden Gate Distributing, due in connection with that certain
settlement agreement dated October 27, 2004 between Borrower and Golden Gate
Distributing.

                                  Page 5 of 5<PAGE>

                             SECURED PROMISSORY NOTE

$289,937.70                                                        APRIL 5, 2006

        FOR VALUE RECEIVED, MENDOCINO BREWING COMPANY, INC., A(N) CALIFORNIA
CORPORATION AND RELETA BREWING COMPANY LLC, A DELAWARE LIMITED LIABILITY COMPANY
(individually and collectively "Borrower"), promises to pay to BFI BUSINESS
FINANCE, a California corporation ("Lender"), or order, at Lender's place of
business at 1655 The Alameda, San Jose, CA 95126, or at such other place as may
be designated in writing to Borrower by the holder of this Secured Promissory
Note (this "Note" ), the principal sum of TWO HUNDRED EIGHTY-NINE THOUSAND NINE
HUNDRED THIRTY-SEVEN AND 70/100 DOLLARS ($289,937.70) OR SO MUCH OF SAID AMOUNT
AS SHALL HAVE BEEN ADVANCED HEREUNDER (as such amount shall change from time to
time the "Loan Amount"), which shall be subject to and disbursed under the terms
and conditions of that certain Loan and Security Agreement dated May 5, 2005 (as
amended the "Loan Agreement"), together with interest from the date hereof on
the unpaid principal balance at a rate (the "Rate") of THREE AND SEVENTY-FIVE
ONE HUNDREDTHS PERCENTAGE POINT(S) (3.75%) PER ANNUM over and above the rate
announced as the "prime" rate in the Western Edition of the Wall Street Journal
which is in effect from time to time (the "Prime Rate"); provided that the Prime
Rate shall at all times be deemed to be not less than FIVE AND SEVENTY FIVE ONE
HUNDREDTHS PERCENT (5.75%) PER ANNUM (the "Deemed Prime Rate"). In the event
that the Prime Rate is changed, the adjustment in the interest rate charged
shall be made on the day such change occurs. The Prime Rate is a rate used by
certain financial institutions as one of their index rates and serves as a basis
upon which effective rates of interest are calculated for loans making reference
thereto and may not be the lowest of such financial institutions' index rates.
Upon the occurrence of a default or an event of default under this Note, the
rate of interest on the Note shall be increased at the option of Lender to an
additional three percent (3.0%) in excess of the then applicable interest rate.
Interest shall be computed on the basis of a 360-day year and shall be charged
to Borrower's account on the first day of the following month, and, if not so
paid, it shall thereafter bear like interest as the principal.

1.      Lender may, at its option, charge Borrower's account for the principal,
interest, and fees hereunder, which are due and payable on the dates and in the
manner that follows:

        (a)     Interest payments will be due and payable in arrears commencing
on the first day of the first month following disbursement and continuing on the
first day of each month thereafter while amounts hereunder are due and owing;

        (b)     Principal payments will be due and payable commencing on APRIL
14, 2006, and continuing each Friday of the next consecutive seventeen (-17-)
weeks thereafter, each in the amount of THREE THOUSAND THREE HUNDRED THIRTY-FIVE
AND 00/100 DOLLARS (53,335.00) Continuing each Friday of the next consecutive
twenty-two (-22-) weeks, principal installments in the amount of TEN THOUSAND
AND 00/100 DOLLARS ($10,000.00) shall be due and payable. One final installment
of principal in the amount of NINE THOUSAND NINE HUNDRED SEVEN AND 70/100
DOLLARS ($9,907.70) shall be due and payable on the Maturity Date;

        (c)     A loan fee of THREE PERCENT (3.00%) of $281,490.00 which equals
the sum of EIGHT THOUSAND FOUR HUNDRED FORTY FOUR AND 70/100 DOLLARS
($8,444.70), (the "Loan Fee") shall be charged at the time of the execution
hereof and based on the then outstanding Loan Amount --------N/A--------
thereafter;

        (d)     An administrative fee of FOUR TENTHS OF ONE PERCENT (0.40%) per
month of the average daily outstanding balance during the preceding month, (the
"Administrative Fee") shall be charged on the first day of each month following
disbursement and monthly thereafter while amounts hereunder are due and owing;

        (e)     An appraisal fee of SEVEN HUNDRED FIFTY DOLLARS ($750.00) per
day per appraiser, plus out-of-pocket expenses (the "Appraisal Fee") shall be
charged for each appraisal of the Collateral performed by Lender or its agents.
Provided that no Event of Default has occurred, Lender shall not charge Borrower
more than $750.00 plus out-of-pocket expenses incurred by Lender per year for
such appraisal fees;

                                   Page 1 of 4

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        (f)     Or the first day of each month, Lender will transfer all loan
payments due under this Note, including all accrued interest and Administrative
Fees, to the accounts receivable line of credit extended to Borrower pursuant to
that certain LOAN AND SECURITY AGREEMENT dated MAY 5, 2005, between Borrower and
Lender and all of the riders and amendments thereto, ( hereinafter collectively
referred to as the "Loan Agreement");

        (g)     Borrower shall pay all fees and legal and other costs incurred
by Lender in connection with the negotiation and preparation of the Note and the
documents executed in connection herewith and the perfection of any security
interest in any collateral granted by Borrower or any third party to Lender in
connection with this Note, including but not limited to attorneys' fees and
legal and other costs, which Lender shall charge to Borrower's account at the
time of the execution hereof;

        (h)     On JANUARY 19, 2007 (the "Maturity Date"), the entire principal
balance hereof, together with any and all unpaid and/or accrued interest, loan
fees, monthly Administrative Fees, and attorneys' fees and legal and other costs
due hereunder, shall be paid in full;

        (i)     Interest not paid when due shall bear interest at the same rate
as principal. All payments hereunder are to be applied first to the payment of
accrued interest and the balance remaining applied to the payment of principal.
All principal and interest due hereunder is payable in lawful money of the
United States of America; and

        (j)     In no event shall the interest rate or rates payable under this
Note, plus any other amounts paid in connection herewith, exceed the highest
rate permissible under any law that a court of competent jurisdiction shall, in
a final determination, deem applicable. Borrower and Lender intend legally to
agree upon the rate or rates of interest (and the other amounts paid in
connection herewith) and manner of payment stated within this Note; provided,
however, that anything contained herein to the contrary notwithstanding, if said
interest rate or rates of interest (or other amounts paid in connection
herewith) or the manner of payment exceeds the maximum allowable under
applicable law, then, IPSO FACTO as of the date of this Note, Borrower is and
shall be liable only for the payment of such maximum as allowed by law, and
payment received from Borrower in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of this Note to the
extent of such excess.

2.      Voluntary prepayments of the principal balance of this Note shall be
permitted at any time; provided that each such prepayment shall be accompanied
by all interest and any Administrative Fees that have accrued and remain unpaid
with respect to the amount of principal being repaid and a prepayment fee equal
to the following:

        (a)     --------N/A-------- PERCENT (--------N/A--------%) of the amount
prepaid with respect to any prepayments made during the I 1 months following the
first principal payment on APRIL 14, 2006.

        (b)     --------N/A-------- PERCENT (--------N/A--------%) of the amount
prepaid with respect to any prepayments made on or after --------N/A-------- ,
and prior to JANUARY 19, 2007.

Amounts repaid or prepaid with respect to this Note may not be reborrowed.
Partial prepayments of principal shall be applied to scheduled payments of
principal in the inverse order of their maturity.

3.      If any installment of principal, interest, or Administrative Fee
hereunder is not paid when due, the holder shall have the following rights in
addition to the rights set forth herein, in the Loan Agreement, and under law:

        (a)     the right to compound interest and the Administrative Fee by
adding the unpaid interest and/or Administrative Fee to principal, with such
amount thereafter bearing interest and the Administrative Fee at the rates
provided in this Note; and

        (b)     if any installment is more than ten (10) days past due, the
right to collect a charge equal to the greater of FIFTEEN DOLLARS ($15.00) OR
FIVE PERCENT (5%) of the late payment for each month in which it is late. This
charge is a result of a reasonable endeavor by Borrower and the holder to
estimate the holder's added legal and other costs and damages resulting from
Borrower's failure to make timely payments under this Note; hence

                                   Page 2 of 4

<PAGE>

Borrower agrees that the charge shall be presumed to be the amount of damage
sustained by the holder since it extremely difficult to determine the actual
amount necessary to reimburse the holder for damages.

4.      Borrower expressly waives presentment, demand. protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
the benefit of any exemption under the homestead exemption laws, and all other
notices and demands in connection with the delivery, acceptance, performance, or
enforcement of this Note. Borrower agrees that Lender may release, surrender,
exchange, or substitute any collateral now held or which may hereafter be held
as security for the payment of this Note, and may extend the time for payment or
otherwise modify the terms of payment of any part or the whole of the debt
evidenced hereby. Borrower irrevocably waives the right to direct the
application of all payments at any time hereafter received by Lender on behalf
of Borrower, and Borrower agrees that Lender shall have the continuing exclusive
right to apply any such payments against the then due and owing obligations of
Borrower to Lender as Lender may deem advisable.

5.      It is expressly agreed that if a default or breach occurs in the payment
of any principal or interest, as provided above, or in the payment or
performance of any other of Borrower's Obligations (as that term is defined in
the Loan Agreement), at Lender's option, the unpaid principal balance of this
Note, together with interest accrued thereon, shall forthwith be due and
payable. In the event the accounts receivable line of credit extended to
Borrower under the Loan Agreement is paid in full, this Note shall also be due,
owing, and payable.

6.      This Note is made subject to the terms and conditions of and is secured
by security interests granted by Borrower in favor of Lender, and all covenants,
conditions, and agreements contained in the Loan Agreement, --------N/A--------,
all of which are hereby incorporated and made a part hereof. All capitalized
terms used herein, unless otherwise defined herein, shall have the meanings
ascribed to them in the Loan Agreement.

7.      Borrower hereby consents to any and all renewals, replacements, and/or
extensions of time for payment of this Note before, at, or after maturity. This
Note shall be binding upon all legal representatives, successors, and assigns of
Borrower. However, Borrower may not assign this Note or any rights hereunder
without Lender's prior written consent. No such consent by Lender shall release
Borrower or any guarantor of any Obligation or indebtedness hereunder. Lender
reserves the right to sell, assign, transfer, negotiate, or grant participations
in all or any part of, or any interest in, Lender's rights and benefits under
each of the documents executed herewith or hereafter. In connection therewith,
Lender may disclose all documents and information which Lender now has or may
hereafter acquire relating to any credit extended by Lender to Borrower, or
about Borrower or its business, any guarantor or the business of any guarantor,
or any Collateral required hereunder. Any waiver of any rights under this Note,
the Loan Agreement, or under any other agreement, instrument., or paper signed
by Borrower is neither valid nor effective unless made in writing and signed by
Lender. No delay or omission on the part of the Lender in exercising any right
shall operate as a waiver thereof or of any other right.

8.      Borrower promises to pay all legal and other costs and expenses of
collection of this Note and to pay all reasonable attorneys' fees incurred in
such collection or in any suit or action to collect this Note or any appeal
thereof. This Note shall be governed by, construed under, and enforced in
accordance with the laws of the State of California.

9.      Any collateral pledged to secure any obligation of Borrower shall also
secure any other obligation of Borrower except that any real property pledged to
secure any obligation of Borrower shall only secure any other obligation of
Borrower if Lender specifically so agrees in writing.

10.     An Event of Default under this Note or the Loan Agreement shall be an
Event of Default under each of such loan documents, and vice versa.

11.     In the event any one or more of the provisions contained in this Note is
held to be invalid, illegal or unenforceable in any respect, then such provision
shall be ineffective only to the extent of such prohibition or invalidity, and
the validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

                                   Page 3 of 4

<PAGE>

12.     This Note may.' be signed in any number of counterparts. each of which
shall be an original, with the same effect as if all signatures were upon the
same instrument. Delivery of an executed counterpart of the signature page to
this Note by telefacsimile shall be effective as deiivery of a manually executed
counterpart of this Note, and any party delivering such an executed counterpart
of the signature page to this Note by telefacsimile to any other party shall
thereafter also promptly deliver a manually executed counterpart of this Note to
such other party, provided that the failure to deliver such manually executed
counterpart shall not affect the validity, enforceability, or binding effect of
this Note.

13.     This is an integrated Note and supersedes all prior agreements or
negotiations regarding the subject matter hereof. This Note may only be amended
in writing. This Note amends, supercedes, and replaces that certain Secured
Promissory Note dated --------N/A--------.

        IN WITNESS HEREOF, this Note has been executed and delivered on the date
first set forth above.

                                MENDOCINO BREWING COMPANY, INC.

                                /s/ Yashpal Singh
                                ------------------------------------------------
                                By:     Yashpal Singh
                                Title:  President & CEO

                                RELETA BREWING COMPANY LLC

                                /s/ Yashpal Singh
                                ------------------------------------------------
                                By:      MENDOCINO BREWING COMPANY, INC., MEMBER
                                By:      Yashpal Singh
                                Title:   President & CEO

                                  Page 4 of 4

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