EXHIBIT 10.1


                                      LEASE


        THIS LEASE (the "Lease") is made as of March 29, 1999, by and between
GOPHER STATE ETHANOL, LLC, a Delaware limited liability company, having its
principal office at 882 West Seventh Street, St. Paul, Minnesota 55102
("Landlord"), and MINNESOTA BREWING COMPANY, a Minnesota corporation, having its
principal office at 882 West Seventh Street, St. Paul, Minnesota 55106
("Tenant").

1.      Lease of Premises:

        Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
upon and subject to the conditions and for the term hereinafter specified, the
following:

        (a) The real estate situated in Ramsey County, Minnesota, legally
described and depicted on Exhibit A hereto, and the buildings and site
improvements situated thereon (collectively, the "Leased Premises"), which may
be amended to conform to the final renovations and construction of Landlord's
adjoining ethanol production facilities and may include as Leased Premises a
site for the production of carbon dioxide and will provide reasonable ingress
and egress to the Brew House; and in no event will the Leased Premises include
any real property integral to the ethanol production operation; and

        (b) The Equipment described on Exhibit B (the "Equipment"). Tenant
agrees that it has selected each item of the Equipment based on its own judgment
and disclaims any reliance upon any statements or representations made by
Landlord. LANDLORD MAKES NO EXPRESS OR IMPLIED WARRANTY WITH RESPECT TO THE
EQUIPMENT AND SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE AND ANY LIABILITY FOR CONSEQUENTIAL DAMAGES ARISING OUT
OF THE USE OR INABILITY TO USE THE EQUIPMENT. Tenant agrees to pay the rent
required under this Lease without regard to the condition of the Equipment.
Unless otherwise stated, the Tenant will cause the Equipment to be located on
the Leased Premises.

2.      Title and Condition:

        The Leased Premises and Equipment are leased subject to all title
matters of public record and to all applicable laws, regulations, restrictions,
rules and ordinances. Tenant accepts the Leased Premises and Equipment in their
present condition AS IS and without warranty or representation of any kind with
respect thereto.

3.      Quiet Enjoyment:

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        If and so long as Tenant shall pay the Rent and additional rent reserved
under this Lease whenever the same shall become due, and keep all of the
covenants and agreements required by it to be kept during this Lease, and shall
perform all of its other obligations hereunder, Tenant shall have, hold and
enjoy peaceful and quiet occupation and enjoyment of the Leased Premises and
Equipment.

4.      Use of Leased Premises and Equipment:

        (a) Subject to the terms of this Lease, Tenant shall use and occupy the
Leased Premises and Equipment for the purpose of operating a brewery and
purposes reasonably related thereto and any other purpose not inconsistent with
the operation of a brewery. Tenant shall also have the right to operate other
businesses, including the production of energy or the production of carbon
dioxide or any other business that does not interfere with the production of
ethanol.

        (b) Tenant shall not use or occupy the Leased Premises or Equipment, or
permit the Leased Premises or Equipment to be used or occupied contrary to any
statute, rule, order, ordinance, requirement or regulation applicable thereto.

        (c) Tenant shall comply with all laws and regulations relating to the
Equipment and its use and shall promptly pay when due all sales, use, property,
excise and other taxes and all license and registration fees now or hereafter
imposed by any governmental body or agency upon the Equipment or its use or the
rentals hereunder. Upon request by Landlord, Tenant shall prepare and file all
tax returns relating to taxes for which Tenant is responsible under this Lease
which Tenant is permitted to file under the laws of the applicable taxing
jurisdiction.

5.      Term; Extension; Rights of Termination:

        (a) This Lease shall be for a term of ten (10) years commencing on the
date hereof (the "Commencement Date"). Whenever used herein the word "Term"
shall mean said ten (10) year term and any extended term.

        (b) Tenant shall have the option to extend this Lease on the terms and
conditions contained herein for three (3) consecutive additional terms of ten
(10) years each (each referred to as the "Renewal Term"). If Tenant desires to
exercise such option, Tenant shall give written notice to Landlord of Tenant's
exercise of such option to extend this Lease at any time subsequent to January
1, 2009, but no later than 180 days prior to the expiration of the initial
ten-year term of this Lease. The Lease for the extended term shall be on the
same terms, covenants and conditions contained in this Lease except the Rent
shall be determined as provided in paragraph 6(c) hereof, and except that there
shall be no further option to extend the term.

6.      Rent:

        (a) Tenant covenants to pay to Landlord, at Landlord's address set forth
above or at such place or places or to such person or persons as Landlord from
time to time may designate in writing, the following rent (the "Rent"):

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                (1)     The Annual Base Rent for the Leased Premises the sum of
                        Three Hundred Thousand and No/100 Dollars ($300,000.00)
                        payable in advance on or before the first day of each
                        month in equal monthly installments of Twenty-five
                        Thousand and No/100 Dollars ($25,000.00). Annual Base
                        Rent for any period during the term which is less than a
                        month shall be a pro-rata portion of the monthly
                        installment; and

                (2)     Any rent, tax payment or other amount due under this
                        Lease which is not paid when due, shall bear interest
                        equal to the rate of interest from time to time
                        published or announced by Norwest Bank Minnesota, N.A.
                        as its "prime rate," plus 400 basis points, from the due
                        date thereof until paid in full.

        (b) Tenant shall also pay and discharge during the term hereof, when the
same shall become due, as additional rent, subject to the provisions of
paragraph 20 hereof, all other amounts, liabilities and obligations which Tenant
assumes or agrees to pay or discharge pursuant to this Lease.

        (c) If Tenant exercises its option to extend this Lease, the Annual Base
Rent shall be adjusted to the amount determined by multiplying the Annual Base
Rent for the immediately preceding Term by the percentage increase, if any, in
the Consumer Price Index for the period from the Commencement Date to the first
day of such Renewal Term, as the case may be. The Consumer Price Index is the
CPI for Urban Wage Earners and Clerical Workers, All-Items, Minneapolis-St.
Paul, Minnesota (1982-84 = 150), as maintained by the U.S. Department of Labor.
If said index is not maintained as of the first day of the Renewal Term, a
similar index shall be used.

        (d) So long as the Lease is in effect, Tenant shall provide Landlord
with all Landlord's steam and electricity requirements at Tenant's cost. If
Tenant enters the energy business in the future and produces steam or
electricity, Tenant and Landlord will negotiate in good faith with respect to
Landlord's purchase of steam and electricity.

7.      Option to Purchase Leased Premises and Equipment:

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        (a) Tenant shall have the option to purchase the portion of the Leased
Premises depicted on Exhibit C-1 and all of the Equipment from Landlord. So long
as exercising the option does not violate the terms of the Landlord's mortgage
and other financing commitments, the option may be exercised at any time during
the Lease Term while this Lease is in effect and there is no default by the
Tenant hereunder by Tenant's giving Landlord at least thirty (30) days prior
written notice of its exercise of such option. Tenant's purchase price for the
Equipment and the Leased Premises shall be the fair market value of the Leased
Premises and Equipment as determined at the time the option is exercised, which
shall be determined by a licensed qualified appraiser(s) selected by the
parties' mutual agreement. If Tenant elects to exercise the option, the Tenant
shall continue to lease the portion of the Leased Premises not included in the
option, which is depicted on Exhibit C-2. Notwithstanding the foregoing, the
option shall not include any real property or Equipment that is integral to the
Landlord's ethanol production operation.

        (b) Within a reasonable time of receiving Tenant's written notice of its
exercise of the purchase option, Landlord shall deliver to Tenant a commitment
(the "Commitment") for an ALTA (1992) Owner's Policy of Title Insurance insuring
title to the Leased Premises issued by a title company selected by Landlord
("Title"). The Commitment will commit Title to insure title to the Tenant's
interest in the Leased Premises subject only to the so-called standard
exceptions to coverage.

        (c) Within thirty (30) days of receiving the Commitment, a closing shall
be held and Landlord shall execute and/or deliver to Tenant the following:

                (1)     Warranty Deed. A Warranty Deed conveying Landlord's
                        interest in the Leased Premises to Tenant, subject to
                        all encumbrances, reservations, and rights of record.

                (2)     Bill of Sale. A Bill of Sale conveying Landlord's
                        interest in the Equipment to Tenant, subject to all
                        encumbrances, reservations, and rights of record.

                (3)     Other Documents. All other documents reasonably
                        determined by the parties to be necessary to transfer
                        the Landlord's interest in the Leased Premises to Tenant
                        in the manner specified herein.

        (d) Tenant acknowledges for Tenant, and its successors and assigns that
Tenant has been given a reasonable opportunity to inspect and investigate the
Leased Premises and Equipment, either independently or through agents of
Tenant's choosing and that Tenant has occupied the Leased Premises and used the
Equipment, and that in purchasing the Leased Premises and Equipment Tenant is
not relying upon any representations of Landlord as to the fitness for any
particular use, or the condition or safety of the Leased Premises or Equipment
including, but not limited to, its electrical, mechanical and structural
components. Tenant acknowledges and agrees that Landlord has not made, does not
make and specifically negates and disclaims any representations, warranties,
promises, covenants, agreements of any kind whether expressed or implied, oral
or written, past, present or future relating to or arising from (a) the value,
nature, quality or condition of the Leased Premises or Equipment including,

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without limitation, the environmental condition of the Leased Premises; (b) the
income to be derived from the Leased Premises or Equipment; (c) the suitability
of the Leased Premises or Equipment for any and all activities and uses to which
the Tenant may want the Leased Premises or Equipment; (d) the existence of any
defective materials, equipment or component or part of the Leased Premises or
Equipment and the existence of any environmental hazards or conditions of
hazardous substances or materials; and (e) the compliance of or by the Leased
Premises or Equipment with any laws, rules, ordinances or regulations of any
applicable governmental authority. To the maximum extent permitted by law, the
sale of the Leased Premises and Equipment is provided for herein is made on a
"as-is", "where-is" condition and basis with all faults.

8.      Net Lease; Non-Terminability:

        (a) This Lease is a net lease, and the Rent, additional rent and all
other sums payable hereunder to or on behalf of Landlord, shall be paid without
notice or demand, and without setoff, counterclaim, abatement, suspension,
deduction or defense.

        (b) Except as otherwise expressly provided in paragraphs 3, 15 and 17
hereof, this Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease or be entitled to the abatement of any rent or any
reduction thereof, nor shall the obligations hereunder of Tenant be otherwise
affected, by reason of any damage to or the destruction of all or any part of
the Leased Premises or Equipment from whatever cause, the taking of the Leased
Premises or Equipment or any portion thereof by condemnation or otherwise, or
the prohibition, limitation or restriction of Tenant's use of the Leased
Premises or Equipment.

9.      Taxes and Other Charges:

        (a) Tenant agrees, subject to paragraphs 9(c) and 20 hereof, to pay to
Landlord, as additional rent, at least fifteen (15) days before the same shall
become due and payable without penalty, all real estate taxes, personal property
taxes, business and occupation taxes, occupational license taxes, installments
of special assessments and all other governmental taxes, impositions and charges
of every kind and nature.

        (b) Tenant will pay or cause to be paid when due all charges for gas,
water, sewer, electricity, light, heat, power, telephone, and other utilities
and services used, rendered or supplied to, upon or in connection with the
Leased Premises or Equipment.

        (c) It is expressly understood and agreed that Tenant shall not be
required to pay, or reimburse Landlord for any local, state or federal capital
levy, franchise tax, revenue tax, income tax or profits tax of Landlord or any
tax or impost charged or levied upon or with respect to the Rent.

        (d) If Tenant is in default of the payment of any of the governmental,
utility or other charges described in this paragraph 9 for five (5) calendar
days after such charges shall have become payable as provided in this Lease,
Landlord may pay the same, and the amount so paid,

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with interest thereon at the Default Rate, shall be deemed additional rent
payable by Tenant to Landlord under the provisions of this Lease, and shall on
demand be forthwith paid by Tenant to Landlord.

10.     Compliance with Law:

        Tenant shall at its sole cost and expense comply with all federal,
state, county, municipal and other statutes, charters, laws, rules, orders,
regulations and ordinances affecting the Leased Premises or Equipment and the
occupancy, operation or use thereof.

11.     Liens:

        Subject to paragraph 20 hereof, Tenant will not create or permit to be
created or to remain, and will discharge, any lien, encumbrance or charge (other
than a lien, encumbrance or charge created by Landlord) upon the Leased Premises
or Equipment, or any part thereof or upon Tenant's leasehold interest therein.

12.     Indemnification:

        To the fullest extent permitted by law, Tenant agrees to pay, and to
protect, indemnify and save harmless Landlord from and against, any and all
liabilities, damages, costs, expenses (including any and all attorneys fees and
expenses of Tenant and any and all attorneys' fees and expenses of Landlord),
causes of action, suits, claims, demands or judgments of any nature whatsoever
arising from (i) any work or thing done during the term of this Lease in, on or
about the Leased Premises or Equipment, or any part thereof, (ii) injury to, or
the death of, persons or damage to Leased Premises or Equipment during the term
of this Lease on the Equipment or Leased Premises or upon adjoining sidewalks
streets, alleys, curbs, vaults, spaces or ways, or in any manner growing out of
or connected with the use, non-use, conditions, possession, operation,
maintenance, management or occupation of the Equipment or Leased Premises or
resulting from the condition thereof or of adjoining sidewalks, streets, alleys,
curbs, vaults, spaces or ways, (iii) any negligence on the part of Tenant or any
of its agents, contractors, servants, employees, licensees or invitees, and (iv)
violation of any agreement or condition of this Lease and of conditions,
agreements, restrictions, statutes, charters, laws, rule, ordinances or
regulations affecting the Equipment or Leased Premises or the ownership,
occupancy or use thereof.

13.     Maintenance and Repair:

        (a) Tenant will keep and maintain the Leased Premises and Equipment,
including any altered, rebuilt, additional or substituted improvements, in good
repair and appearance during the term of this Lease, ordinary wear and tear
excepted. All repairs made by Tenant shall be at least equal to the original
work in class and quality. Repairs shall include structural repairs, and
maintenance of parking, plumbing and HVAC.

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        (b) Tenant shall put, keep and maintain the Equipment and all portions
of the Leased Premises and the sidewalks, curbs and passageways adjoining the
same in a clean and orderly condition, free of dirt, rubbish, snow, ice and
unlawful obstructions.

        (c) Tenant hereby assumes and shall bear the entire risk of loss and
damage to the Equipment from any and every cause whatsoever except normal wear
and tear resulting from proper use during the period from and during the
delivery of the Equipment to Tenant until it is returned to Landlord. In the
event any item of Equipment shall become lost, stolen, destroyed, damaged beyond
repair or rendered permanently unfit for any reason or, in the event of
condemnation or seizure Tenant shall promptly pay Landlord the sum of the
following:

                (1) all rent and other amounts payable by Tenant hereunder which
        are due but unpaid at the time of computation;

                (2) the present value of all unpaid rent for the balance of the
        initial Lease term at the time of the computation computed using a
        discount rate of 8% per annum and assuming that the production during
        the remainder of the term will be at the same level as the production
        has been in the six months prior to the time the Equipment becomes lost,
        stolen, destroyed, damaged or rendered permanently unfit;

                (3) the anticipated fair market value of such items of Equipment
        at the expiration of the Lease term which Landlord and Tenant agree
        shall be conclusively deemed for this purpose to be equal to 100% of the
        original cost of such Equipment;

                (4) any tax loss suffered by Landlord relating to such
        Equipment;

                (5) any set up costs relating to such Equipment that Landlord
        has not yet amortized;

                (6) any expenses incurred by Landlord in enforcing its rights
        under this Agreement; and

                (7) interest on any past due amounts as provided elsewhere in
        this Agreement.

                Any insurance proceeds received by Landlord on insurance
        purchased by Tenant shall be credited to Tenant's obligation under this
        paragraph and Tenant shall be entitled to any surplus.

        (d) In the event any of the Equipment is damaged or destroyed and Tenant
desires to replace such Equipment, the Landlord, upon the written request from
Tenant, shall purchase such replacement equipment and lease such equipment to
Tenant, amortizing 100 percent of the cost of such equipment on a straight-line
basis over the taxable depreciable life of such equipment at the applicable
Treasury rate plus 200 basis points. At the expiration of such period, the
Landlord will continue to own the replacement equipment.

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        (e) If Tenant fails to comply with the provisions of this paragraph 13,
Landlord may give Tenant written notice of such failure to comply, specifying
the maintenance or repairs to be made by Tenant. If the maintenance or repairs
are not completed by Tenant within thirty (30) days after said notice, Landlord
may have the work done at Tenant's expense, and the cost thereof shall become
additional rent due hereunder payable by Tenant to Landlord upon written demand
from Landlord.

        (f) In addition to the foregoing requirements, Tenant shall comply with
all applicable environmental laws, rules and regulations.

14.     Alterations and Additions:

        Tenant may, at any time and from time to time during the term of this
Lease and at its sole cost and expense, make additions to, alterations of,
substitutions and replacements to the Leased Premises and Equipment. If Tenant
estimates that any such addition, alteration, substitution or replacement will
cost more than $10,000.00, Tenant shall give to Landlord notice of its intention
to undertake the same and shall obtain Landlord's prior written approval of the
plans and specifications. Title to all alterations, additions, installments,
changes and improvements made by Tenant, except trade fixtures, shall become the
property of Landlord at the termination of this Lease. Tenant shall discharge,
subject to paragraph 20 hereof, any and all liens filed against the Leased
Premises or Equipment, and any improvements thereon arising out of such
additions, alterations, substitutions, replacements or removals, and upon the
request of Landlord shall deposit with Landlord a surety bond or other security
satisfactory to Landlord to assure the completion of any such additions,
alterations, substitutions, replacements or removals.

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15.     Condemnation:

        If the whole of the Leased Premises is taken under power of eminent
domain or is sold to any entity having the power of eminent domain under threat
of condemnation, this Lease shall terminate on the day on which the condemnor or
buyer takes possession thereof. In the event of such a taking or sale of only a
part of the Leased Premises which shall substantially interfere with Tenant's
use or occupancy thereof and shall reduce the usable square footage of the land
or building comprising the Leased Premises by twenty-five percent (25%) or more,
Tenant may terminate this Lease by giving Landlord written notice thereof not
more than ten (10) days after the condemnor or buyer takes possession of the
part taken or sold. If a partial taking or sale shall not substantially
interfere with Tenant's use or occupancy of the Leased Premises and shall not
reduce the usable square footage of the land or building comprising the Leased
Premises by twenty-five percent (25%) or more, or if Tenant does not terminate
the Lease as hereinbefore provided, then on the day on which the condemnor or
buyer takes possession of the part taken or sold, the Rent thereafter accruing
shall be equitably reduced to account for that portion of the Leased Premises so
taken or sold, and Landlord shall to the extent practicable restore the
remaining Leased Premises to their condition prior to such partial taking or
sale, anything elsewhere in this Lease regarding repair or replacement to the
contrary notwithstanding. Such abatement in Rent shall be based on the before
and after values of the Leased Premises as determined by, or as agreed to in,
such condemnation proceedings, such that a percentage reduction in value shall
result in an equal percentage reduction in Rent. Tenant shall not be entitled to
any part of the award made or sales price received for such taking or sale of
all or any part of the Leased Premises and will assign, and does hereby assign,
any and all award or sale price received for such taking or sale and will
execute any assignments or other documents necessary to affect the transfer of
such award or sales price to Landlord; provided, however, Tenant shall be
entitled to receive such relocation expenses as Tenant may be entitled to
receive under applicable Minnesota statutes.

16.     Insurance:

        Landlord shall carry comprehensive public liability insurance and fire
and extended coverage on the Leased Premises and Equipment in amounts Landlord
deems reasonably necessary and name Tenant as an additional insured. Tenant
shall pay its share of the cost of such insurance policies within ten (10) days
of receiving the premium receipts with respect to such insurance from Landlord.
Every insurance policy shall contain to the extent obtainable, an agreement by
the insurer that it will not cancel such policy except upon thirty (30) days
prior written notice to all parties and to any mortgagee and that any loss
otherwise payable thereunder shall be payable notwithstanding any act of
negligence of Landlord or Tenant which might, absent such agreement, result in a
forfeiture of all or part of such insurance payment.

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17.     Fire and Casualty Loss:

        (a) If the Leased Premises or Equipment, or any part thereof are damaged
or destroyed by fire or any casualty covered by the insurance required under the
provisions of paragraph 16 hereof, all insurance proceeds from said insurance
shall be the property of Landlord (except insurance proceeds for Tenant's
fixtures and personal property which proceeds shall belong to Tenant), and,
subject to subparagraphs (b) and (c) of this paragraph 17 and the terms of any
mortgage on the Leased Premises or Equipment, Landlord shall repair the Leased
Premises or Equipment as soon as reasonably possible and this Lease shall
continue in full force and effect. Landlord shall have no obligation to repair
or replace any of Tenant's fixtures, personal property or leasehold
improvements. Landlord shall in good faith proceed with and consummate the
settlement of the insurance claim. Pending repair or restoration, Rent shall
abate following such damage or destruction in proportion to the interference
with Tenant's use of the Leased Premises or Equipment. If the Leased Premises or
Equipment shall be so slightly injured that no part thereof is rendered unfit
for occupancy, then Landlord shall repair the same with reasonable promptness,
and in that case Rent shall not be abated during such repair period.

        (b) Notwithstanding anything to the contrary herein, if the damage or
destruction described in this paragraph 17 occurs within six (6) months of the
end of the term of this Lease and more than twenty-five percent (25%) of the
building improvements on the Leased Premises or Equipment are damaged or
destroyed, this Lease shall automatically terminate. If more than twenty-five
percent (25%) of the building improvements on the Leased Premises or Equipment
are damaged or destroyed prior to the period six (6) months before the end of
the term of this Lease, Landlord shall have the option to terminate this Lease
or repair the building in accordance with subparagraph (a) of this paragraph 17,
which option shall be exercised by written notice to Tenant within forty-five
(45) days after the damage if Landlord elects to terminate this Lease. In the
event of termination under this paragraph 17, all advance Rent paid to Landlord,
which has not accrued prior to termination, shall be refunded to Tenant.

        (c) Subject to the foregoing provisions of this paragraph 17, including
those relating to rent abatement, if at any time during the term hereof the
Leased Premises or Equipment are damaged, and such damage was caused by a
casualty not covered under an insurance policy required to be maintained
pursuant to paragraph 16, Landlord may at Landlord's option either (i) repair
such damage as soon as reasonably possible at Landlord's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Tenant within thirty (30) days after the date of the occurrence of such
damage of Landlord's intention to cancel and terminate this Lease as of the date
of the occurrence of such damage. In the event Landlord elects to give such
notice of Landlord's intention to cancel and terminate this Lease, Tenant shall
have the right within twenty (20) days after the receipt of such notice to give
written notice to Landlord of Tenant's intention to repair such damage at
Tenant's expense, without reimbursement from Landlord, in which event this Lease
shall continue in full force and effect, and Tenant shall proceed to make such
repairs as soon as reasonably possible. If Tenant does not give such notice
within such twenty-day period this Lease shall be canceled and terminated as of
the date of the occurrence of such damage.

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        (d) Notwithstanding any other provision in this Lease to the contrary,
Landlord and Tenant hereby release one another from any and all liability or
responsibility (to the other or anyone claiming through or under them by way of
subrogation or otherwise) for any loss or damage coverable by an "all risk"
policy of casualty insurance even if such loss or damage shall have been caused
by the fault or negligence of the other party, or anyone for whom such party may
be responsible. Tenant agrees immediately to give each insurance company which
has issued policies of fire and extended coverage insurance, written notice of
the terms of the mutual waiver as contained in this paragraph, and to have the
insurance policies properly endorsed, if necessary, to prevent the invalidation
of the insurance coverage by reason of the mutual waivers contained in this
paragraph.

18.     Assignment and Subletting:

        Tenant may not assign, transfer, mortgage or encumber this Lease or
sublet or rent or permit occupancy or use of the Leased Premises or Equipment,
or any part thereof by any third party (any of the foregoing being hereinafter
referred to as an "Assignment") without the prior written consent of the
Landlord which consent shall not be unreasonably withheld. Landlord hereby
consents to the continued subleasing of the basement of the Bottle House to the
third party.

19.     Permitted Contests:

        Tenant shall not be required to pay, discharge or remove any tax,
assessment, levy, fee or charge referred to in paragraph 9 of this Lease, or any
lien referred to in paragraph 11 or 14 of this Lease, so long as Tenant shall
contest in good faith at its own expense the amount or the validity thereof by
appropriate proceedings which shall operate to prevent the collection of, or
realization upon, the tax, assessment, levy, fee, charge or lien so contested
and the sale of the Leased Premises or any part thereof to satisfy the same, and
pending any such proceedings Landlord shall not have the right to pay, remove,
or cause to be discharged the tax, assessment, levy, fee, charge or lien thereby
being contested. Tenant shall give prompt written notice to Landlord of the
commencement of any contest referred to in this paragraph 19. In the event of
such contest Tenant shall furnish reasonable security as may be required by
Landlord to insure payment thereof and prevent any sale, foreclosure or
forfeiture of the Leased Premises by reason of such contest. Tenant further
agrees that such contest shall be prosecuted to a final conclusion diligently;
that it will pay, and save Landlord harmless against, any and all losses,
judgments, decrees and costs (including all attorneys' fees and expenses) in
connection therewith; and that it will, promptly after the final determination
of such contest, fully pay and discharge the amounts which shall be levied,
assessed, charged or imposed or be determined to be payable therein, together
with all penalties, fines, interest, cost and expenses resulting from such
contest.

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20.     Events of Default:

        (a) Any of the following occurrences or acts shall constitute an event
of default under this Lease (an "Event of Default"): (i) if Tenant, at any time
during the term of this Lease (and regardless of the pendency of any bankruptcy,
receivership, insolvency or other proceedings, at law, in equity, or before any
administrative tribunal, which have or might have the effect of preventing
Tenant from complying with the terms of this Lease), shall (A) fail to make
payment of any installment of Rent or additional rent when due, or (B) fail to
observe or Perform any of Tenant's other covenants, agreements or obligations
hereunder, and if any such non-monetary default shall not be cured within
fifteen (15) calendar days after Landlord shall have given to Tenant notice
specifying such default or defaults, or (ii) if Tenant shall file a petition in
bankruptcy or shall be adjudicated a bankrupt or insolvent or shall make an
assignment for the benefit of its creditors or shall admit in writing its
inability to pay its debts generally as they become due, or if a petition or
answer proposing the adjudication of Tenant as a bankrupt shall not be
discharged or denied within sixty (60) calendar days after the date of filing
thereof, or (iii) if a receiver, trustee or liquidator of Tenant or of all or
substantially all of the property of Tenant or of the Leased Premises or
Equipment or any material portion thereof shall be appointed in any proceeding
brought by Tenant, or if any such receiver, trustee or liquidator shall be
appointed in any proceeding brought against Tenant and if such receiver, trustee
or liquidator shall not be discharged within sixty (60) calendar days after such
appointment, or (iv) if the Leased Premises or Equipment shall have been
abandoned or left unoccupied for thirty (30) calendar days, or (v) Tenant shall
default in any other lease of, or agreement relating to, any part or all of the
Leased Premises or Equipment, to which lease or agreement Tenant is a party.
Notwithstanding the foregoing provisions of this paragraph, if any strike, war,
governmental regulation, act of God, or other cause beyond Tenant's reasonable
control (except for payments to be made by Tenant) delays the curing of any
Event of Default referred to in clause (b) of this paragraph 20(a), the fifteen
day period after notice of such default shall be extended by the length of such
delay, if Tenant gives Landlord written notice within said fifteen-day period of
the cause of the delay, such cause in fact exists, and Tenant commences the cure
and diligently prosecutes the same to completion as soon as reasonably possible.

        (b) If any Event of Default shall have happened and be continuing,
Landlord shall have the right at its election then or at any time thereafter
while any such Event of Default shall continue, to give Tenant notice of
Landlord's intention to terminate the term of this Lease on a date specified in
such notice, and on the date specified in any such notice all right, title and
interest of Tenant thereunder shall thereupon expire as fully and completely as
if the date specified in such notice were the date specifically fixed herein for
the expiration of the term of this Lease, and Tenant shall then peaceably and
quietly quit the Leased Premises and Equipment and surrender the same to
Landlord, but Tenant shall remain liable as hereafter provided. In the event any
such notice is given, Landlord shall have the immediate right of reentry and
possession of the Leased Premises and Equipment and the right to remove all
persons and property therefrom. Should Landlord elect to reenter as herein
provided or should Landlord take possession pursuant to legal proceedings or
pursuant to any notice provided by law, Landlord may from time to time, but
shall not be obligated to, relet the Leased Premises or Equipment or any part
thereof for such term or terms and such rental or rentals, including rent
concessions or

<PAGE>


free rent, and upon such terms and conditions as Landlord may deem advisable,
with the right to make alterations in and repairs to the Leased Premises or
Equipment.

        (c) If Landlord shall reenter and obtain possession of the Leased
Premises or Equipment by reason of or following an Event of Default, whether or
not this Lease shall have terminated, Landlord shall have the right, without
notice, to repair or alter the Leased Premises or Equipment in such manner as to
Landlord may deem necessary or advisable so as to put the Leased Premises or
Equipment in good order and to make the same rentable, and shall have the right,
at Landlord's option, to relet the Leased Premises or Equipment or any part
thereof, and Tenant agrees to pay to Landlord on demand all expenses incurred by
Landlord in obtaining possession, and in altering, repairing and putting the
Leased Premises or Equipment in good order and condition and in reletting the
same, including fees of attorneys, architects, and other experts, and also any
other legitimate expenses or commissions, and Tenant further agrees to pay to
Landlord upon the first day of each month in each year following such reentry
until the end of the term of this Lease the sums of money which would have been
payable by Tenant as Rent hereunder if Landlord had not reentered and resumed
possession of the Leased Premises or Equipment, deducting only the net amount of
rent, if any, which Landlord shall actually receive in the meantime from and by
any reletting of the Leased Premises or Equipment, and Tenant hereby agrees to
be and remain liable for all sums aforesaid, as well as for any deficiency
aforesaid, and Landlord shall have, from time to time, the right to begin and
maintain successive actions or other legal proceedings against Tenant for the
recovery of such deficiency or damages or for a sum equal to any installment or
installments of Rent or additional rent and any other sums payable hereunder,
and to recover the same upon the liability of Tenant herein provided, which
liability it is expressly covenanted shall survive any action to secure
possession of the Leased Premises or Equipment. Nothing herein contained shall
be deemed to require Landlord to wait to begin such action or other legal
proceedings until the date when this Lease would have expired by limitation had
there been no such default by Tenant. At Landlord's option at any time after
such termination or repossession, whether or not Landlord shall have collected
any current damages, Landlord shall be entitled to recover from Tenant, and
Tenant shall pay to Landlord on demand, as and for liquidated and agreed final
damages for Tenant's default, an amount equal to the then present value of the
excess of the Rent and other sums or charges reserved under this Lease from the
day of such termination or repossession for what would be the then unexpired
term if the same had remained in effect, over the then net fair rental value of
the Leased Premises or Equipment for the same period, said present value to be
arrived at on the basis of a discount rate equal to the prime rate of Norwest
Bank Minnesota, N.A., then in effect, less two hundred basis points.

        (d) If under any of the preceding provisions of this paragraph 20
Landlord shall be entitled to give Tenant a notice of termination of the term of
this Lease, Landlord without giving such notice of termination and
notwithstanding the continuance of the term of this Lease shall have, to the
extent permitted by law, all the rights, powers and remedies given to Landlord
by the preceding provisions of this paragraph 20, and Tenant shall have the
obligations imposed upon it by such provisions.

<PAGE>


        (e) No such reentry or taking of possession of the Leased Premises or
Equipment by Landlord shall be construed as an election on Landlord's part to
terminate the term of this Lease unless a notice of such intention be given to
Tenant or unless the termination hereof be decreed by a court of competent
jurisdiction.

21.     Additional Rights:

        (a) No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and every right
and remedy of Landlord shall be cumulative and in addition to any other right or
remedy given Landlord hereunder, or now or hereafter existing at law or in
equity or by statute.

        (b) If Tenant shall be in default in the performance of any of its
obligations under this Lease, and regardless of whether an action shall be
brought for the enforcement thereof, Tenant shall pay to Landlord all expenses
incurred by Landlord in connection therewith, including Landlord's attorneys'
fees.

22.     Notices, Demands and Other Instruments:

        All notices, demands, requests, consents, approvals, undertakings and
other instruments required or permitted to be given pursuant to the terms hereof
shall be in writing and shall be deemed to have been properly given (a) when
served personally upon the party to whom the notice is addressed or (b) when
sent by certified United States mail, postage prepaid, return receipt requested,
addressed to such party at its address first above set forth. Landlord and
Tenant shall, from time to time, have the right to specify as the proper address
for the purposes of this Lease any other address in the United States upon
giving ten (10) days notice thereof to the other party. Landlord and Tenant
shall each have the right to add two additional parties to whom any such notice
shall be given upon giving ten (10) days notice thereof to the other party.

<PAGE>


23.     Estoppel Certificates:

        At any time and from time to time, each party hereto, as requested by
the other party upon not less than ten (10) days prior notice, will execute,
acknowledge and deliver to the other a statement (i) certifying that this Lease
is unmodified and in force and effect (or if there have been modifications,
stating all such modifications and certifying that this Lease, as so modified,
is in force and effect), (ii) certifying the amount of Rent, the dates to which
Rent has been paid and whether Tenant is then paying Rent in accordance with
this Lease and stating whether or not, to the best knowledge of the signer, the
other party is in default in performance of any of its obligations under this
Lease and, if so, specifying each such default of which the signer may have
knowledge, it being intended that any such statement delivered pursuant to this
paragraph 24 may be relied upon by others with whom the party requesting such
certificate may be dealing, (iii) certifying the space then subject to this
Lease, (iv) certifying whether any option of Tenant hereunder has expired
without exercise, and, if so, certifying to such expiration, and (v) certifying
as to such other matters concerning this Lease as the requesting party may
reasonably request.

24.     No Merger:

        There shall be no merger of this Lease or of the leasehold estate hereby
created with the fee estate in the Leased Premises or any part thereof by reason
of the fact that the same person may acquire or hold, directly or indirectly,
this Lease or the leasehold estate hereby created or any interest in this Lease
or in such leasehold estate as well as the fee estate in the Leased Premises or
any interest in such fee estate.

        Title to the Equipment shall at all times remain in Landlord, and Tenant
shall protect and defend the title of Landlord and keep it free from all claims
and liens other than those of Tenant under this Lease, or liens created by
Landlord. Tenant agrees to execute such financing statements and other documents
as Landlord may reasonably require to evidence Landlord's title to the
Equipment.

25.     Surrender; Holding over:

        (a) Upon the expiration or sooner termination of this Lease, Tenant
shall peaceably and quietly leave, yield up and surrender the Leased Premises
and Equipment to Landlord in the good condition and repair, ordinary wear and
tear excepted, but clean, orderly and free of occupants. Tenant shall remove
from the property prior to such expiration or sooner termination all property
situated thereon which is not owned by Landlord, and Tenant shall, at its sole
cost and expense, repair any damage caused by such removal. Property not so
removed shall become the property of Landlord, which may thereafter cause such
property to be removed from the Leased Premises and disposed of, but the cost of
any such removal shall be borne by Tenant.

        (b) In the event of Tenant's holding over after the expiration or
termination of this Lease, the holdover shall be a tenancy at will, and all of
the terms and provisions of this Lease shall be applicable thereto, except that
Tenant shall pay Landlord as rental for the period of such holdover an amount
equal to one and one half the Rent which would have been payable by

<PAGE>


Tenant had the holdover period been a continuation of the term of this Lease.
Tenant agrees to vacate and deliver the Leased Premises and Equipment to
Landlord upon Tenant's receipt of written notice from Landlord to vacate. The
rental payable during the holdover period shall be payable to Landlord on
demand. No holding over by Tenant, with or without consent of Landlord, shall
operate to extend this Lease except as otherwise expressly provided.

26.     Separability:

        Each and every covenant and agreement contained in this Lease shall be
for all purposes construed to be a separate and independent covenant and
agreement and the breach of any covenant or agreement contained herein by
Landlord shall in no way or manner discharge or relieve Tenant from Tenant's
obligation to perform each and every covenant and agreement contained herein. If
the application of any term or provision of this Lease to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Lease, or the application of such term or provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each term and provision of this Lease shall be
valid and shall be enforced to the fullest extent permitted by law.

27.     Binding Effect:

        This Lease does not create the relationship of principal and agent or of
partnership or of joint venture or of any association between Landlord and
Tenant, the sole relationship between Landlord and Tenant being that of landlord
and tenant. All of the covenants, conditions and obligations herein contained
shall be binding upon and inure to the benefit of the parties hereto and,
subject to the restrictions and limitations herein contained, their respective
heirs, legal representatives, successors and assigns to the same extent as if
each such successor and assign were in each case named as a party to this Lease.
This Lease may not be changed, modified or discharged except by a writing signed
by Landlord and Tenant. This is a Minnesota contract and shall be construed
according to the laws of Minnesota.

28.     Headings and Terms:

        The table of contents preceding this Lease and the headings to the
various paragraphs of this Lease have been inserted for reference only and shall
not in any manner be construed as modifying, amending or affecting in any way
the express terms and provisions hereof. The term "person" when used in this
Lease shall mean any individual, corporation, partnership, firm, trust, joint
venture, business association, syndicate, combination, organization or any other
person or entity.

<PAGE>


29.     Right to Enter:

        Landlord and Landlord's agents shall have the right to enter the Leased
Premises at any and all reasonable times during the term of this Lease for the
purpose of inspecting and repairing the Leased Premises or Equipment or for the
purpose of showing them to prospective purchasers or tenants, and to display
rental (during the last six (6) months of the term hereof) and "For Sale" signs
on the Leased Premises or Equipment. The foregoing provision does not, and shall
not be construed so as to, impose liability on Landlord to inspect or repair the
Leased Premises or Equipment.

30.     Subordination:

        For the purposes of this paragraph 30, the term "Mortgage" shall mean at
any time, any mortgage of record now or hereafter placed against the Leased
Premises or Equipment, any increase, amendment, extension, refinancing or
recasting of a Mortgage and, in the case of a sale or lease and leaseback by
Landlord of all or any part of the Leased Premises or Equipment, the lease
creating the leaseback. For the purposes hereof, a Mortgage shall be deemed to
continue in effect after foreclosure thereof and during the period of redemption
therefrom. This Lease is subject and subordinate to the lien of any Mortgage
which may now or hereafter encumber the Leased Premises or Equipment or any
development of which the Leased Premises or Equipment are a part. In
confirmation of such subordination, Tenant shall, at Landlord's request from
time to time, promptly execute any certificate or other document requested by
the holder of the Mortgage. Tenant agrees that in the event that any proceedings
are brought for the foreclosure of any Mortgage, Tenant shall immediately and
automatically attorn to the purchaser at such foreclosure sale, as the landlord
under this Lease, and Tenant waives the provisions of any statute or rule of
law, now or hereafter in effect, which may give or purport to give Tenant any
right to terminate or otherwise adversely affect this Lease or the obligations
of Tenant hereunder in the event that any such foreclosure proceeding is
prosecuted or completed. Neither the holder of the Mortgage (whether it acquires
title by foreclosure or by deed in lieu thereof) nor any purchaser at
foreclosure sale shall be liable for any act or omission of Landlord, subject to
any offsets or defenses which Tenant might have against Landlord or bound by any
prepayment by Tenant of more than one month's installment of Rent and additional
rent or by any modification of this Lease made subsequent to the granting of the
Mortgage. Notwithstanding anything to the contrary in this paragraph 31, so long
as Tenant is not in default under this Lease, this Lease shall remain in full
force and effect and the holder of the Mortgage and any purchaser at foreclosure
sale thereof shall not disturb Tenant's possession hereunder.

<PAGE>


31.     Exculpation:

        The term "Landlord", as used in this Lease, shall mean only the owner or
owners at the time in question of the fee title to the Leased Premises or
Equipment, and in the event of any transfer of such title or interest, Landlord
herein named (and in case of any subsequent transfers the then grantor) shall be
relieved from and after the date of such transfer of all liability as respects
Landlord's obligations thereafter to be performed, provided that any funds in
the hands of Landlord, or the then grantor at the time of such transfer, in
which Tenant has an interest, shall be delivered to the grantee. The obligations
contained in this Lease to be performed by Landlord shall, subject as aforesaid,
be binding on Landlord's successors and assigns, only during their respective
periods of ownership.

32.     Additional Action:

        Tenant will promptly execute and deliver to Landlord such further
documents and take such further action as Landlord may reasonably request in
order to more effectively carry out the intent and purpose of this Lease,
including the execution and delivery of financing statements to fully protect
Landlord's interest hereunder in accordance with the Uniform Commercial Code or
other applicable law.

33.     Labeling:

        Tenant shall keep all Equipment free from any marking or labeling which
might be interpreted as a claim or ownership thereof by Tenant or any party
other than Landlord or anyone so claiming through Landlord. If Landlord
requests, Tenant shall cause the Equipment to be plainly marked or tagged to
indicate Landlord's interest in the Equipment.

        IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed as of the date and year first hereinabove written.


                                        LANDLORD:

                                        GOPHER STATE ETHANOL, LLC


                                        By
                                           --------------------------------
                                        Its:



                                        TENANT:

                                        MINNESOTA BREWING COMPANY


                                        By
                                           --------------------------------
                                        Its:

<PAGE>


                                    EXHIBIT A

               Legal Description and Depiction of Leased Premises


PARCEL 1:      Intentionally deleted.

PARCEL 2:      Intentionally deleted.

PARCEL 3:      Intentionally deleted, except as may be included as a site for
               the production of ethanol.

PART OF PARCEL 4 (in areas depicted on attached diagram):

Lots One (1) and Two (2) and that part of Lots Three (3), Four (4), Five (5),
Six (6), Eighteen (18), Nineteen (19) and Twenty (20) lying Southeasterly of
West Seventh Street, Block Seventeen (17), Stinson, Brown and Ramsey's Addition
to St. Paul, Ramsey County, Minnesota, together with so much of Palace Street
vacated, which accrued to Lots One (1) and Twenty (20) in said Block 17 by
reason of the vacation thereof and together with so much of Oneida Street
vacated, which accrued to Lots 1, 2, 3, 4, 5 and 6 in said Block 17 by reason of
the vacation thereof, according to the plat thereof on file and of record in the
office of the Register of Deeds within and for said county.

PART OF PARCEL 5 (in areas depicted on attached diagram):

Lots One (1), Two (2), Three (3), Four (4), Five (5), Six (6), Seven (7), Eight
(8), Nine (9), Ten (10), Eleven (11), Twelve (12), Thirteen (13), Fourteen (14),
Fifteen (15), Sixteen (16), Seventeen (17), Eighteen (18), Nineteen (19) and
Twenty (20), Block Twenty-six (26), A. V. Brown's Subdivision of Blocks Nineteen
(19), Twenty-four (24) and East half of Twenty-six (26), in Stinson, Brown and
Ramsey's Addition to St. Paul, Ramsey County, Minnesota, together with that part
of Palace Street vacated as accrued to said Lots 10 and 11 by reason of the
vacation thereof, and together with that part of Webster Street vacated lying
North of James Avenue and South of the Southeasterly line of West Seventh Street
as opened, extended, which accrued to said Lots 11, 12, 13, 14, 15, 16, 17, 18,
19 and 20 aforesaid, and together with that part of Oneida Street vacated as
accrued to said Lots 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10 in said Block 26, by
reason of the vacation thereof. Subject to Railroad Easements. According to the
plat thereof on file and of record in the office of the Register of Deeds within
and for said county.

PART OF PARCEL 6 (in areas depicted on attached diagram):

Lots One (1), Two (2), Three (3), Four (4), Five (5), Six (6), Seven (7), Eight
(8), Nine (9), Ten (10), Eleven (11), Twelve (12), Thirteen (13), Fourteen (14),
Fifteen (15), Sixteen (16), Seventeen (17), Eighteen (18), Nineteen (19), Twenty
(20), Twenty-one (21), Twenty-two (22), Twenty-three (23), Twenty-four (24),
Twenty-five (25), Twenty-six (26) and Twenty-seven (27)


                                       1
<PAGE>


and that part of Lot Twenty-eight (28) lying Westerly of the West line of Lot 27
extended in a straight line Northerly across said Lot 28, Block One (1), Stinson
and Ramsey's Sub-division of the West half of Block Sixteen (16) of Stinson,
Brown and Ramsey's Addition to St. Paul, Ramsey County, Minnesota, together with
that part of Cascade Street vacated as accrued to said Lots 17and 18 by reason
of the vacation thereof, and together with that part of Oneida Street vacated as
accrued to Lots 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17 in said Block 1, by
reason of the vacation thereof, and subject to rights acquired by City of St.
Paul for widening of West Seventh Street, according to the plat thereof of file
and of record in the Register of Deeds within and for said county.

NOTE:  Lot 3, Block 1 above described is Torrens Property as evidenced by
       Certificate of Title No. 358494.

PART OF PARCEL 7 (in areas depicted on attached diagram):

That part of Block Twenty-seven (27), Stinson, Brown and Ramsey's Addition to
St. Paul, Ramsey County, Minnesota, bounded by Cascade Street, James Street,
Oneida Street and Erie Street, also so much of Cascade Street, Erie Street and
Oneida Street vacated, as accrued to said property by reason of the vacation
thereof, according to the plat thereof on file and of record in the office of
the Register of Deeds within and for said county.

PART OF PARCEL 8 (in areas depicted on attached diagram):

A triangular piece of land in the East half of Block Thirty (30), Stinson, Brown
and Ramsey's Addition to St. Paul, Ramsey County, Minnesota, described as
follows: Commencing at a point on the North line of Randolph Street 50 feet
Easterly of the intersection of said North line of Randolph Street with the East
line of Webster Street running thence Easterly along the North line of Randolph
Street a distance of 40 feet, running thence Northerly parallel with the East
line of Webster Street 24 1/2 feet, running thence in a Southwesterly direction
to the place of beginning. Together with that part of the East 160 feet of the
East half of said Block 30 lying Southerly of a line extended form a point on
the East line of said East half of Block 30 distant 128 feet Southerly from the
Northeast corner thereof to a point on the West line of said East 160 feet of
East half of Block 30 distant 165 feet Southerly from the Northwest corner
thereof, subject to Railroad Easement, Agreements and Leases, excepting those
parts of aforedescribed lands lying in the Southerly 38 feet of said Block 30
acquired by City of St. Paul for Randolph Avenue widening.

PART OF PARCEL 9 (in areas depicted on attached diagram):

That part of Block Thirty (30), Stinson, Brown and Ramsey's Addition to St.
Paul, Ramsey County, Minnesota, which lies East of Webster Street as opened
under the Order of the Common Council and recorded in Volume 5, page 65 printed
records Common Council and North of Chicago, Milwaukee, St. Paul and Pacific
Railroad Company's right-of-way.

PART OF PARCEL 10 (in areas depicted on attached diagram):


                                       2
<PAGE>


That part of Block Twenty-seven (27), Stinson, Brown and Ramsey's Addition to
St. Paul, Ramsey County, Minnesota, lying Northerly of James Street as shown in
Book 4 of Street Openings, page 11 and lying Southeasterly of a line which is 50
feet Southeasterly of, as measured at right angles and parallel to the following
described line: Beginning at a point on the East line of said Block 27, 133.46
South of the Northeast corner thereof; thence Southwesterly to a point in the
Easterly line of Erie Street as shown in Book 3 of Street Openings, page 19, a
distance of 252.28 feet South of its intersection with the North line of said
Block 27 and there terminating.

PART OF PARCEL 11 (in areas depicted on attached diagram):

That part of Block Twenty-seven (27), Stinson, Brown and Ramsey's Addition to
St. Paul, Ramsey County, Minnesota, lying Easterly of Erie Street as shown in
Book 3 of Street Openings, page 19, and lying Northerly of a line described as
follows: Beginning at a point on the East line of said Block 27, 133.46 feet
South of the Northeast corner thereof; thence Southwesterly to a point on the
East line of said Erie Street, 252.28 feet South of its intersection with the
North line of said Block 27 and there terminating, together with that part of
Erie Street vacated as accrued to said parcel.


                                       3