FIFTH AMENDMENT
TO
EXTENSION OF TERM OF
NOTES UNDER MASTER LINE OF CREDIT AGREEMENT
This Fifth
Amendment to Extension of Term of Notes under Master Line of Credit
Agreement (this "Amendment") is entered into to be effective as of
August 31, 2005 (the "Effective Date") by and between
Mendocino Brewing Company, Inc. , a California
corporation ("Borrower"), and United Breweries of America,
Inc., a Delaware corporation ("Lender").
RECITALS
A. Borrower and Lender entered into an Extension
of Term of Notes Under Master Line of Credit Agreement dated
February 14, 2002, and amended as of August 15, 2002, March 31,
2003, August 14, 2003, and August 14, 2004 (the "Original
Agreement"), which provides that the terms of certain of the Notes
made by Borrower in favor of Lender shall be extended until August
31, 2005.
B. Subject to the terms and conditions of this
Amendment, the parties now wish to further extend the terms of
certain of the Notes.
C. Any capitalized terms not otherwise defined
herein shall have the meanings set forth in the Original
Agreement.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is
acknowledged, Borrower and Lender agree as follows:
1. Extension of Term . Section 1 of the Original Agreement is
amended to read as follows:
The Notes
provide that Lender has the right, at any time on or after the
respective maturity dates of the Notes, to convert the Notes into
shares of Borrower's common stock. However, Section 3 of the Notes
provides that in the event that Lender has not converted the entire
principal amount of any Note on or before its respective maturity
date, Lender has the right
