Document:

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                   -------------------------------------
                           AMENDED AND RESTATED
                            OPERATING AGREEMENT

                                    OF

                        GOPHER STATE ETHANOL, LLC
                   A DELAWARE LIMITED LIABILITY COMPANY
                   -------------------------------------

THE MEMBERSHIP INTERESTS REPRESENTED BY THIS OPERATING AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR UNDER ANY OTHER
APPLICABLE SECURITIES LAWS.  SUCH INTERESTS MAY NOT BE SOLD, ASSIGNED,
PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION
UNDER SUCH ACT AND LAWS OR AN EXEMPTION THEREFROM, AND COMPLIANCE WITH THE
OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH OR REFERRED TO HEREIN.

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<TABLE>
<CAPTION>

     TABLE OF CONTENTS
<S>                                                                        <C>
ARTICLE I

     FORMATION                                                             2
     Section 1.01  Formation                                               2
     Section 1.02  Purpose of the Company                                  2
     Section 1.03  Office                                                  2
     Section 1.04  Effective Date; Term                                    2
     Section 1.05  Authorization of this Agreement                         2
     Section 1.06  Foreign Company Filings; Other Certificates             2
     Section 1.07  Registered Agent; Registered Office                     3

     Section 1.08  Limited Liability                                       3
     Section 1.09  Recapitalization, Acquisitions, Restructuring and
                   Mergers                                                 3
     Section 1.10  Right to Convert to Corporate Form                      3

ARTICLE II

     DEFINITIONS                                                           3
     Section 2.01  Definitions                                             3

ARTICLE III

     RELATIONSHIP OF THIS AGREEMENT
     TO OTHER PROVISIONS OR AGREEMENTS                                     7
     Section 3.01  Relationship Between Agreement and LLC Act              7
     Section 3.02  Relationship Between Agreement and Certificate of
                   Formation                                               7
     Section 3.03  Relationship Between Agreement and Contribution
                   Agreement                                               8

ARTICLE IV

     CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS                               8
     Section 4.01  Initial Contributions; Capital Accounts                 8
     Section 4.02  Loans from Members                                      8
     Section 4.03  No Right of Company to Require Additional Contributions 8
     Section 4.04  Capital Call                                            8
     Section 4.05  Conditions Precedent                                    9

ARTICLE V

     CLASS A FINANCIAL MEMBERS                                             9
     Section 5.01  Class A Financial Rights                                9
     Section 5.02  Percentage Class A Financial Interests                  9

ARTICLE VI

     CLASS B FINANCIAL MEMBERS                                             10
     Section 6.01  Class B Financial Rights                                10
     Section 6.02  Company's Redemption Right                              10
     Section 6.03  Percentage Class B Financial Interests                  11

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     Section 6.04  Restrictions Upon Guaranteed Payments and Redemption    11

ARTICLE VII

     CAPITAL ACCOUNTS; CAPITAL STRUCTURE:
     PROFITS, LOSSES AND DISTRIBUTIONS                                     11
     Section 7.01  Capital Accounts                                        11
     Section 7.02  Allocation of Profits and Losses                        12
     Section 7.03  Interest                                                12
     Section 7.04  Tax Distributions                                       13
     Section 7.05  Tax Allocations; Section 704(c) of the Code             13
     Section 7.06  Effect on Capital Account                               13
     Section 7.07  Distributions Upon Termination of the Company           13
     Section 7.08  Distributions in Kind                                   13
     Section 7.09  Distributions Subject to Set-Off by the Company         14
     Section 7.10  Tax Credits                                             14

ARTICLE VIII

     TAX MATTERS                                                           14
     Section 8.01  Tax Characterization and Returns                        14
     Section 8.02  Accounting Decisions                                    14
     Section 8.03  Tax Matters Partner                                     15
     Section 8.04  Accounting                                              15
     Section 8.05  Books of Account                                        15
     Section 8.06  Contents and Location of Required Records; Access to
                   Accounts                                                15

ARTICLE IX

     GOVERNANCE: BOARD OF MANAGERS                                         15
     Section 9.01  General                                                 15
     Section 9.02  Board of Managers                                       16
     Section 9.03  Duties of Managers                                      17

ARTICLE X

     ACTS OF GOVERNING MEMBERS AND MEMBER MEETINGS                         18
     Section 10.01  Percentage Governing Interest                          18
     Section 10.02  Act of the Members                                     18
     Section 10.03  Annual Meeting                                         18
     Section 10.04  Special Meetings                                       19

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     Section 10.05  Notice of Meetings                                     19
     Section 10.06  Location and Conduct of the Meetings; Adjournments     19
     Section 10.07  Waiver of Notice                                       19
     Section 10.08  Proxies                                                20
     Section 10.09  Quorum                                                 20
     Section 10.10  Alternative Forms of Action                            20
     Section 10.11  Membership Interest                                    20

ARTICLE XI

     ADMISSION OF ADDITIONAL MEMBERS; SALE,
     TRANSFER, ASSIGNMENT OR OTHER DISPOSITION                             21
     Section 11.01  Admission of New Members                               21
     Section 11.02  Assignment of Membership Interest                      21
     Section 11.03  Limitations on Transfer; Purchase Options              21
     Section 11.04  Rights of Holders of Financial Rights                  23
     Section 11.05  Transfer During Taxable Year                           24
     Section 11.06  Manner of Exercising Option                            24
     Section 11.07  Determination of Purchase Price                        24
     Section 11.08  Terms of Payment                                       24
     Section 11.09  Closing of Purchase                                    25
     Section 11.10  No Resignation                                         25
     Section 11.11  Securities Laws                                        25

ARTICLE XII

     DISSOLUTION, WINDING UP AND TERMINATION                               26
     Section 12.01  Events of Dissolution                                  26
     Section 12.02  Winding Up                                             26
     Section 12.03  Termination                                            28
     Section 12.04  Claims of Member                                       28

ARTICLE XIII

     INDEMNIFICATION                                                       28
     Section 13.01  Indemnification                                        28
     Section 13.02  Advances                                               28
     Section 13.03  Insurance                                              28

ARTICLE XIV

     MISCELLANEOUS                                                         29
     Section 14.01  Confidential Information                               29
     Section 14.02  Entire Agreement; Waiver; Modifications                29
     Section 14.03  Assignment; Successors                                 29
     Section 14.04  Notice                                                 30
     Section 14.05  Counterparts                                           31
     Section 14.06  Interpretation                                         31
     Section 14.07  Severability                                           31
     Section 14.08  Equitable Remedies                                     32
     Section 14.09  Expenses                                               32
     Section 14.10  Arbitration                                            32

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     Section 14.11  Governing Law                                          33
     Section 14.12  Trademarks and Trade Names                             33
     Section 14.13  Further Assurances                                     33
     Section 14.14  Non-Compete                                            33
     Section 14.15  No Impairment                                          33
     Section 14.16  Survival                                               34
     Section 14.17  Amendment                                              34

</TABLE>

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                             AMENDED AND RESTATED
                             OPERATING AGREEMENT

                                      OF

                           GOPHER STATE ETHANOL, LLC

              ORGANIZED UNDER THE DELAWARE LIMITED LIABILITY ACT
                   [DELAWARE CODE SECTIONS 18-101, ET SEQ.]

     This Amended and Restated Operating Agreement (the "Agreement") is made
as of this 20th day of July, 1999, by and between Minnesota Brewing Limited
Partnership, a Minnesota limited partnership (the "Partnership"), Minnesota
Brewing Company, a Minnesota corporation (the "Brewery"), Bruce E. Hendry
("Hendry"), and GDN Properties, LLC, a Minnesota limited liability company
("GDN").

                                  RECITALS

     WHEREAS, the Brewery, the Partnership, Mobius Asset Management; LLC
("Mobius") and GSE Equity, LLC ("GSEE") (collectively the "Original Members")
entered into a Contribution Agreement dated March 29, 1999 (the "Contribution
Agreement") and an Operating Agreement dated March 29, 1999 (the "Operating
Agreement") in order to form Gopher State Ethanol, Llc (the "Company") and
engage in the business of producing, selling and distributing ethanol and any
other business reasonably related to the production of ethanol (the
"Business");

     WHEREAS, GSEE and Mobius failed to contribute assets to the Company as
required by the Contribution Agreement and the Operating Agreement and
therefore do not possess rights as Members of the Company, as evidenced by
the Settlement Agreement dated June __, 1999 by and between the Company,
GSEE, Mobius and H. Ronald Berg.

     WHEREAS, GDN and Hendry desire to serve as substitutes for GSEE and
Mobius upon the terms and conditions contained in this Agreement and the
amended and restated contribution agreement dated even herewith (the "Amended
and Restated Contribution Agreement");

     WHEREAS, the Partnership, the Brewery, Hendry and GDN wish to set forth
their agreement and understanding relating to the operation of the Company;

NOW THEREFORE, it is agreed as follows:

                              ARTICLE IFORMATION

SECTION 1.01  FORMATION

The Members agree to organize and associate themselves as members in a
Delaware limited liability company to be known as Gopher State Ethanol, LLC
(the "Company") in accordance with the LLC Act, this Agreement, the
Contribution Agreement and the Company's Certificate of Formation.  The
Members hereby authorize, ratify and approve the execution and delivery by
Thomas G. Lovett IV, Esq., Lindquist & Vennum, P.L.L.P., of the Certificate

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of Formation and its filing with the Delaware Secretary of State.

SECTION 1.02  PURPOSE OF THE COMPANY

The Company is formed for the purpose of engaging in its Core Business and
any other business its Members choose to pursue.  In connection therewith,
the Company  may enter into and perform all contracts and other undertakings,
and engage in all activities and transactions, as the Board or Members may
deem necessary or advisable to the carrying out of the foregoing objects and
purposes.  The Company shall not engage in any business other than its Core
Business without the unanimous written consent of the Members.

SECTION 1.03  OFFICE

The principal place of business of the Company shall be located at 882 West
Seventh Street, Saint Paul, Minnesota 55102, or at such other place as the
Members may from time to time determine.  At such principal place of
business, the Company shall keep a copy of this Agreement and all other
necessary records, including without limitation, all records required to be
maintained pursuant to Section 6.06 hereof.

SECTION 1.04  EFFECTIVE DATE; TERM

The Company shall commence on the date of filing of the Company's Certificate
of Formation with the Delaware Secretary of State (the "Effective Date") and
shall continue perpetually until terminated in accordance with this
Agreement.

SECTION 1.05  AUTHORIZATION OF THIS AGREEMENT

This Agreement is made under the Delaware Limited Liability Company Act as
set forth in Delaware Code Sections 18-101, ET SEQ. (the "LLC Act").

SECTION 1.06  FOREIGN COMPANY FILINGS; OTHER CERTIFICATES

The officers of the Company shall, from time to time, register the Company as
a foreign limited liability company in such jurisdictions as the Board
considers necessary or appropriate.  The officers of the Company shall, from
time to time, file or cause to be filed such certificates of amendment,
certificates of cancellation or other certificates as the Board deems
reasonably necessary under the LLC Act or under the laws of any jurisdiction
in which the Company is doing business to establish and continue the Company
as a limited liability company or to protect the limited liability of the
Members.

SECTION 1.07  REGISTERED AGENT; REGISTERED OFFICE

The initial registered agent of the Company is The Corporation Trust Company.
The address of the initial registered office of the Company is The
Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, City
of Wilmington, County of New Castle, Delaware 19801.  The registered agent
and registered office may be changed from time to time by action of the
officers of the Company following approval by the Board in accordance with
the LLC Act.

SECTION 1.08  LIMITED LIABILITY

Except as otherwise provided by the LLC Act and under this Agreement, the
debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Member, member of the Board, committee or
officer of the Company shall be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Member, or
acting as a member of the Board or committee or as an officer of the Company.

SECTION 1.09  RECAPITALIZATION, ACQUISITIONS, RESTRUCTURING AND MERGERS

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The Company may participate in or be a party to any recapitalization,
acquisition, restructuring or merger or in accordance with and as allowed by
the LLC Act.

SECTION 1.10  RIGHT TO CONVERT TO CORPORATE FORM

The Company may be converted into a corporation or other business form which
conversion shall be effected by a merger or by such other form of transaction
as may be available under applicable law.

                               ARTICLE II DEFINITIONS

SECTION 2.01  DEFINITIONS

For purposes of this Agreement, unless the language or context clearly
indicates that a different meaning is intended, the words, terms and phrases
defined in this Section have the following meanings:

     (a)  "Act of the Members" shall mean any act described in Section 10.02.

     (b)  "Affiliate" shall mean, as to any Person, any other Person that,
directly or indirectly, controls, is under common control with or is
controlled by that Person.  For purposes of this definition, "control"
(including the terms "controlled by" and "under common control with") as used
with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise, except that with respect to any
corporation the voting securities of which are traded on any securities
exchange or established trading market, the term "control" shall mean the
possession, directly or indirectly, of the power to elect a majority of that
corporation's board of directors or similar governing body through beneficial
ownership of a MAJORITY of the voting securities of such corporation.

     (c)  "Agreement" shall mean this Amended and Restated Operating
Agreement, as amended or modified from time to time in accordance with
Section 14.02.

     (d)  "Bankruptcy" shall mean the application for or consent to the
appointment of a receiver, custodian, trustee or liquidator for all or a
substantial part of the assets of the applicant or consenting party;
admission in writing of its inability to pay its debts generally as they
mature; making a general assignment for the benefit of its creditors;
adjudication as a bankrupt; submission of a petition or an answer seeking an
arrangement with creditors; taking advantage of any insolvency law;
submission of an answer admitting the material allegations of a petition in
bankruptcy or insolvency proceeding; entry of an order, judgment or decree by
any court of competent jurisdiction approving a petition seeking its
organization or appointment of a receiver, custodian, trustee or liquidator
over it, or for all or a substantial part of any of its assets and such
order, judgment or decree shall continue unstayed and in effect for any
period of sixty (60) consecutive days; or filing a voluntary petition in
bankruptcy; or failing to timely controvert an involuntary petition in
bankruptcy filed against it.

     (e)  "Board of Managers" or "Board" shall mean the Board established
pursuant to Article VII in order to manage and control the Company's business.

     (f)  "Capital Account" shall mean the account described in Section 7.01
hereof.

     (g)  "Class A Financial Members" shall mean Financial Members who own a
Percentage Class A Financial Interest."

     (h)  "Class B Financial Members" shall mean Financial Members who own a
Percentage Class B Financial Interest.

     (i)  "Class A Financial Rights" shall mean the rights of a Class A
Financial Member to share in Net Income, Net Loss and distributions in the
Company as described in Article VII, and the limited right to assign such

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rights, in accordance with the terms of this Agreement.

     (j)  "Class B Financial Rights" shall mean the right of a Class B
Financial Member to receive guaranteed payments and to redeem their
Percentage Class B Financial Interest as described in Section 6.01, and the
limited right to assign such rights, in accordance with the terms of this
Agreement.

     (k)  "Closing Date" shall mean the date specified in or contemplated by
Section 1.05 of the Contribution Agreement.

     (l)  "Code" shall mean the Internal Revenue Code of 1986, as amended,
and any successor to that Code enacted by the government of the United
States.

     (m)  "Company" shall mean Gopher State Ethanol, LLC, a Delaware limited
liability company, organized under the Delaware Limited Liability Company Act.

     (n)  "Contribution Agreement" shall mean the amended and restated
contribution agreement among the parties dated July 20, 1999, which is
incorporated herein by reference.

     (o)  "Core Business" shall mean the Company's business of (i) producing,
selling and distributing ethanol; and (ii) any activity whereby similar
production processes are undertaken to convert corn or other products into
ethanol; and (iv) any other businesses reasonably related to the production
of ethanol.

     (p)  "Effective Date" shall mean the date specified in Section 1.05
unless the context indicates otherwise.

     (q)   "Financial Member" shall mean the owner of a Percentage Class A
Financial Interest or a Percentage Class B Financial Interest.

     (r)  "Fiscal Year" shall mean the period specified in Section 8.04.

     (s)  "GAAP" shall mean United States generally accepted accounting
principles.

     (t)  "Governance Rights" shall mean all rights associated with a
Membership Interest in the Company other than Financial Rights, including,
without limitation, the right to vote, receive notices and attend meetings of
Members.

     (u)  "Governing Member" means the owner of a Percentage Governing
Interest.

     (v)  "Initial Contribution" shall mean any contribution described in
Section 4.01 and any amounts contributed to the Company by a new Financial
Member in consideration for that new Financial Member's Membership Interest.

     (w)  "Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien, restriction on use or transfer, voting agreement, adverse
claim or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement), any
lease in the nature thereof, and the filing of or any agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction or
similar law.

     (x)  "Limited Liability Company Act" or "LLC Act" shall mean the
Delaware Limited Liability Company Act as set forth in Delaware Code Sections
18-101, ET SEQ.

     (y)  "Manager" shall mean a Person designated as a member of the Board
of Managers under Article IX to manage the business of the Company, as well
as any Person who serves in an interim capacity under that Article.

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     (z)  "Member" means a person or entity reflected in the records of the
Company as the owner of a Percentage Governing Interest, a Percentage Class A
Financial Interest or a Percentage Class B Financial Interest of the Company
who has signed this Agreement, and such person's heirs, executors,
administrators, personal representatives and successors and any assigns of a
Membership Interest.  The term "Member" may refer to either a Financial
Member or a Governing Member, depending upon the context.

     (aa) "Membership Interest" shall mean, as to any Member, such Member's
Governing Rights and/or Financial Rights in the Company.

     (ab) "Net Income" shall mean the net income of the Company determined in
accordance with GAAP.

     (ac) "Net Loss" shall mean the net loss of the Company determined in
accordance with GAAP.

     (ad) "Outside Manager" shall mean a Manager who is not (i) a current
employee or officer of the Company; (ii) a Member; (iii) a current employee
or officer of a Member; or (iv) a current employee or officer of an Affiliate
of (x) a Member or (y) the Company.

     (ae) "Percentage Class A Financial Interest" shall mean the portion of
the Company's Class A Financial Rights owned by a Class A Financial Member
expressed as a percentage of the whole.  Each such Class A Percentage
Financial Interest consists of Class A Financial Rights.

     (af) "Percentage Class B Financial Interest" shall mean the portion of
the Company's Class B Financial Rights owned by a Class B Financial Member
expressed as a percentage of the whole.  Each such Class B Percentage
Financial Interest consists of Class B Financial Rights.

     (ag)  "Percentage Governing Interest" shall mean the portion of the
Company's Governance Rights owned by a Governing Member expressed as a
percentage of the whole.  Each such Percentage Governing Interest consists of
the right to vote as set forth in this Agreement, and the right to assign
such rights, in accordance with the terms of this Agreement.

     (ah) "Person" shall include any natural Person, domestic or foreign
limited liability company, corporation, partnership, limited partnership,
joint venture, association, business trust, estate, trust, enterprise, or any
other legal or commercial entity.

     (ai) "Prime Rate" shall mean the prime commercial lending rate of
interest as publicly announced from time to time by Stearns Bank National
Association as in effect from time to time.  The Prime Rate is not
necessarily the lowest rate charged by Stearns Bank National Association for
commercial loans nor is it implied that it will be the lowest rate.  All
interest computations shall be based on a 360 day year and the actual number
of days involved.

     (aj) "Required Records" shall mean those records specified in Section
8.06.

     (ak) "Section" shall mean sections of this Agreement, unless stated
otherwise.

     (al) "Stearns Loan" shall mean the loan agreement and related documents
entered into by and between the Company and Stearns Bank National Association
on March 29, 1999, as such agreements may be amended from time to time.

     (am) "Subsidiary" shall mean, with respect to any Person, any other
Person of which securities or other interests having the power to elect a
majority of that other Person's board of directors or similar governing body
or otherwise having the power to direct the business and policies of that
other Person are held by such Person or one or more of its Subsidiaries,
except that with respect to any corporation, the voting securities of which
are traded on a securities exchange or established trading market, a
Subsidiary shall mean any other Person of which more than fifty percent (50%)
of the outstanding voting securities are owned, directly or indirectly, by
such Person.

     (an)      "Tax Credits" shall mean credits against tax under the Code
relating to the Core Business of the

<PAGE>

Company.

     (ao) "Transfer" includes an assignment, conveyance, lease, mortgage,
security interest, deed, encumbrance, and gift.

     (ap) "Treasury Regulations" shall mean regulations promulgated by the
United States Treasury Department under the Code.

     (aq)      "Unrecovered Contribution" shall mean the Initial Contribution
less any amount paid to a Member by the Company as a reduction of the
Member's Initial Contribution.

     ARTICLE III RELATIONSHIP OF THIS AGREEMENTTO OTHER PROVISIONS OR
AGREEMENTS

SECTION 3.01  RELATIONSHIP BETWEEN AGREEMENT AND LLC ACT

Where this Agreement is inconsistent with a provision or rule set forth in
the LLC Act ("Rules"), the following construction shall be given:

     (a)  if any provision of this Agreement conflicts with the Rules, the
provision of this Agreement controls and the Rules are modified or negated
accordingly, and

     (b)  if it is necessary to construe the Rules as modified or negated in
order to effectuate any provision of this Agreement, the Rules are modified
or negated accordingly.

SECTION 3.02  RELATIONSHIP BETWEEN AGREEMENT AND CERTIFICATE OF FORMATION

Where this Agreement is inconsistent with a provision of the Company's
Certificate of Formation, then to the extent allowed by law, this Agreement
shall govern.

SECTION 3.03  RELATIONSHIP BETWEEN AGREEMENT AND CONTRIBUTION AGREEMENT

Where this Agreement is inconsistent with the Contribution Agreement, then to
the extent allowed by law, this Agreement shall govern.

                 ARTICLE IV CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS

SECTION 4.01  INITIAL CONTRIBUTIONS; CAPITAL ACCOUNTS

On the Closing Date (as that term is defined in the Contribution Agreement),
the Members shall each contribute (or cause to be contributed) to the Company
the items specified in or contemplated by the Contribution Agreement.

SECTION 4.02  LOANS FROM MEMBERS

Loans from Members to the Company shall not be considered capital
contributions. If any Member shall advance funds to the Company, the making
of such advances shall not result in any increase in the amount of the
Capital Account of such Member nor entitle it to any increase in its shares
of distributions from the Company.  The amount of any such advances shall be
a debt of the Company to such Member and shall be payable or collectible in
accordance with the terms and conditions upon which such advances are made
and the other Members shall not be personally obligated to repay any part
thereof.

<PAGE>

SECTION 4.03  NO RIGHT OF COMPANY TO REQUIRE ADDITIONAL CONTRIBUTIONS

Except as provided herein, the Company has no right to require any Member to
make additional capital contributions beyond the Initial Contribution.  This
Section does not release any Member from any obligation or promise of future
performance that the Company accepted as a contribution.

SECTION 4.04  CAPITAL CALL

If the Company seeks additional capital, other than in the form of debt, it
shall first provide written notice to the Members stating the amount and
terms of the additional capital required ("Total Capital Requirement").
After receipt of notice, each Member shall have a 30-day period in which to
notify the Company in writing of its intent to contribute additional capital
to the Company in an amount not greater than the Member's Percentage Class A
Financial Interest multiplied by the Total Capital Requirement set forth in
the notice.  A Member's failure to provide notice of its intent to contribute
additional capital shall waive the Member's right to contribute.  At the end
of the 30-day period, the Company shall provide a second written notice to
the Members setting forth the amount agreed to be contributed by the Members
and the additional capital needed, if any (the "Remaining Capital
Requirement"). Each Member who agreed to contribute in the first 30-day
period shall have 15 days after receipt of the second notice to notify the
Company in writing of its intent to contribute additional capital in a sum no
greater than the Member's Percentage Class A Financial Interest multiplied by
the Remaining Capital Requirement.  If after such 15-day period the Total
Capital Requirement has not been raised, the Company may seek contributions
for the Remaining Capital Requirement without providing anti-dilution
protection to the Members, provided however, that the Company has complied
with the provisions of Section 11.01.  If a Member fails to pay when due all
or any portion of any capital contribution, the Board shall request the
nondefaulting Members to pay the unpaid amount of the defaulting Member's
Capital Contribution (the "Unpaid Contribution").  To the extent that any
Unpaid Contribution is contributed by any other Member, the nonpaying
Member's Percentage Class A Financial Interest shall be reduced and the
Percentage Class A Financial Interest of the Members who made up the Unpaid
Contribution shall be increased in the same ratio that each Member's Capital
Account increases or decreases as a result of such capital contribution.  A
similar adjustment shall be made to each Member's Percentage Governing
Interest. This remedy is in addition to any other remedies allowed by law or
by this Agreement.

SECTION 4.05  CONDITIONS PRECEDENT

The obligations of any Member to make its Initial Contribution shall be
subject to and contingent upon the performance of any and all obligations
required of the other Members pursuant to this Agreement and the satisfaction
of the conditions precedent set forth in Article III of the Contribution
Agreement. The termination of the Contribution Agreement pursuant to Article
V thereof, shall terminate this Operating Agreement.

                         ARTICLE V CLASS A FINANCIAL MEMBERS

SECTION 5.01  CLASS A FINANCIAL RIGHTS

Class A Financial Members shall be entitled to share in the Net Income and
the Net Loss and distributions of the Company as set forth below.

SECTION 5.02  PERCENTAGE CLASS A FINANCIAL INTERESTS

Upon receipt by the Company of the Initial Contribution, the Class A
Financial Members shall have the following respective undivided interests in
the Class A Financial Rights of the Company, expressed as a percentage of the
whole (each, a "Percentage Class A Financial Interest"):

<TABLE>
<CAPTION>

    CLASS A FINANCIAL MEMBER                PERCENTAGE CLASS A FINANCIAL INTEREST
<S>                                           <C>
          Partnership                                       48.7%

<PAGE>

          Brewery                                           28.5%
          Hendry                                            11.4%
          GDN                                               11.4%

                 Total                                      100%
</TABLE>

The Board may grant a Class A Financial Interest or Class A Financial
Interests in the Company up to 3.5% of the total Class A Financial Interests
to Managers, officers, consultants and such other individuals as the Board
shall unanimously agree upon in.  In such event, the Percentage Class A
Financial Interests set forth above shall be ratably reduced.

                        ARTICLE VI CLASS B FINANCIAL MEMBERS

SECTION 6.01  CLASS B FINANCIAL RIGHTS

Class B Financial Members shall be entitled to the following rights:

     (a)  GUARANTEED PAYMENT.  Class B Financial Members shall be entitled to
receive an annual guaranteed payment equal to 15% of such Member's
Unrecovered Contribution.  Such guaranteed payment shall be prior to and in
preference to any distribution made to Class A Financial Members or any tax
distributions. The Company shall pay the guaranteed payments quarterly on the
tenth day following the last day of such quarter based upon the average
Unrecovered Contribution of each Class B Financial Member during such quarter.

     (b)  REDEMPTION RIGHTS.  Upon written demand, Each Class B Financial
Member shall have the right to demand that the Company redeem his Percentage
Class B Financial Interest and the Company shall thereupon redeem such
interest in accordance with the following schedule:

          On or after December 31, 2001      one quarter of the Percentage Class
                                                  B Financial Interest

          On or after December 31, 2002      an additional one quarter of the
                                                  Percentage Class B Financial
                                                  Interest

          On or after December 31, 2003      an additional one quarter of the
                                                  Percentage Class B Financial
                                                  Interest
          On or after December 31, 2004      the remaining quarter of the
                                                  Percentage Class B Financial
                                                  Interest

The redemption price for the Percentage Class B Financial Interest shall be
equal to $65,000 per 1% of Percentage Class B Financial Interest redeemed
(the "Redemption Price"), plus any accrued but unpaid guaranteed payments.
In the event all or a portion of a Member's Percentage Class B Financial
Interest is redeemed, a debit shall be made to such Member's Capital Account
in the amount of the total Redemption Price paid by the Company.

SECTION 6.02   COMPANY'S REDEMPTION RIGHT

At any time after the execution of this Agreement, the Company shall have the
right to redeem all or a portion of the Percentage Class B Financial
Interests at the Redemption Price.  In the event all or a portion of a
Member's Percentage Class B Financial Interest is redeemed, a debit shall be
made to such Financial Member's Capital Account in the amount of the total
Redemption Price paid by the Company.

SECTION 6.03  PERCENTAGE CLASS B FINANCIAL INTERESTS

<PAGE>

Upon receipt by the Company of the Initial Contribution, the Class B
Financial Members shall have the following respective undivided interests in
the Class B Financial Rights of the Company, expressed as a percentage of the
whole (each, a "Percentage Class B Financial Interest"):

<TABLE>
<CAPTION>

     CLASS B FINANCIAL MEMBER           PERCENTAGE CLASS B FINANCIAL INTEREST
<S>                                      <C>
               Hendry                             50%
               GDN                                50%

               Total                              100%
</TABLE>

SECTION 6.04  RESTRICTIONS UPON GUARANTEED PAYMENTS AND REDEMPTION

Notwithstanding the foregoing, the guaranteed payments described in Section
6.01(a) shall not be paid and the redemption rights described in Section
6.01(c) shall not be exercised  if such action would cause the Company to
violate the conditions or covenants of the Stearns Loan or any other
financing obligation of the Company.  In the event the Company is unable to
make any required payments pursuant Section 6.01(a) as a result of the
conditions or covenants of the Stearns Loan or any other financing obligation
of the Company, then the unpaid amounts shall cumulate without interest.  The
guaranteed payments shall be paid and the redemption rights shall be
exercisable as soon as permitted under the Stearns Loan and the Company's
other financing obligations.

        ARTICLE VII CAPITAL ACCOUNTS; CAPITAL STRUCTURE: PROFITS, LOSSES AND
                                DISTRIBUTIONS

SECTION 7.01 CAPITAL ACCOUNTS

Separate Capital Accounts shall be maintained by the Company for each Class A
Financial Member and Each Class B Financial Member.  The Capital Account of
each Financial Member shall be credited and debited as the case may be with
the amount of Net Income or Net Loss of the Company for each fiscal year as
described in Section 7.02 and shall be further debited by the amount of any
distributions made by the Company to such Member to the extent such
distributions are determined to be made from the income of the Company and
not as a return of capital.  The payments described in Section 6.01(a) shall
be treated as guaranteed payments paid to the Class B Members in
consideration of the Company's right to use the capital contributed by such
Member's rather than as a distribution from income.  As a result, the
guaranteed payments shall not result in a debit to the Capital Account of the
Member.  A Member shall not be entitled to withdraw any part of its Capital
Account, or to receive any distribution from the Company by reason of said
Capital Accounts, except as specifically provided in this Agreement.
Additional capital contributions shall be made by each Member in such amounts
and upon such terms as may, from time to time, be unanimously agreed upon by
the Members.

SECTION 7.02  ALLOCATION OF PROFITS AND LOSSES

Subject to Section 7.06 hereof, or under Section 704 of the Class A Code, for
bookkeeping and all other purposes including Sections 702 and 704 of the
Code, in the event the Company recognizes a Net Loss in a given year (after
the payment of the Class B Financial Member guaranteed payment), the Net Loss
will be allocated to the Financial Members based upon the ratio of each
Financial Member's Capital Account to the total of all Class A Financial
Member and Class B Financial Member Capital Accounts.  If the Company
realizes Net Income in a given year (after the payment of the Class B
Financial Member guaranteed payment), the Net Income shall be allocated to
the Financial Members based upon the ratio of each Financial Member's Capital
Account to the total of all Class A Financial Member and Class B Financial
Member Capital Accounts until the Net Loss previously allocated the Financial
Members has been restored.  After all Net Loss has been restored, Net Income,
and any tax distributions described in Section 7.05, will be allocated in a
manner which will cause each Class A Financial Member's Capital

<PAGE>

Account, expressed as a percentage of the total of all Class A Financial
Member's Capital Accounts, to equal the Percentage Class A Financial
Interests of the applicable Class A Financial Member.  Once each Class A
Financial Member's Capital Account, expressed as a percent of the total of
all Class A Financial Member's Capital Accounts, is equal to the Percentage
Class A Financial Interests of the applicable Class A Financial Member, Net
Income, and tax distributions described in Section 7.05, will be allocated
based upon each Financial Member's Percentage Class A Financial Interest.

SECTION 7.03  INTEREST

No Member shall have the right to receive any interest on its Capital Account.

SECTION 7.04  TAX DISTRIBUTIONS

The Board may, to the extent it, in its sole discretion, determines that the
Company has adequate cash balances on hand, distribute cash on a quarterly
basis to the Members in an amount up to the Estimated Member Tax Liability
for such fiscal quarter, but only to the extent such a distribution is
legally permitted pursuant to Section 18-607 of the LLC Act and does not
result in a default under the Stearns Loan.  For purposes of the foregoing,
the term "Estimated Member Tax Liability" shall mean the taxable income of
the Company allocable to each Member for the fiscal quarter in question,
multiplied by the highest marginal federal and Minnesota state individual
income tax rate then in effect.  In making a decision, the Board may consider
the guaranteed payments made to Class B Financial Members described in
Section 6.01(a).

SECTION 7.05  TAX ALLOCATIONS; SECTION 704(c) OF THE CODE

In accordance with Section 704(c) of the Code, income, gain, loss and
deduction with respect to any property contributed to the Company shall,
solely for tax purposes, be allocated among the Capital Accounts of the
Members so as to take account of any variation between the adjusted basis of
such property to the Company for income tax purposes and its book value, in
the same manner as such variations are treated under Section 704(c) of the
Code.  The Company shall use the "Traditional Method" of making these
allocations as described in Treasury Regulation Section 1.704-3(b).  Any
elections or other decisions related to such allocations shall be made by the
Board in any manner that reasonably reflects the purpose and intention of
this Agreement.  Allocations pursuant to this Section 7.04 are solely for
purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Member's Capital Account or share
of income, gain, loss or deduction pursuant to any provision of this
Agreement.

SECTION 7.06  EFFECT ON CAPITAL ACCOUNT

Except as otherwise explicitly set forth in this Agreement, the allocation of
each Member's share of the profit or loss of the Company shall be reflected
by an appropriate adjustment to such Member's Capital Account in the Company.
Except as provided in this Article 7, no adjustments shall be made to the
Member's Capital Account in the Company.

SECTION 7.07  DISTRIBUTIONS UPON TERMINATION OF THE COMPANY

Upon dissolution and winding up of the Company, distributions, if any, shall
be made in accordance with Article XIII.

SECTION 7.08  DISTRIBUTIONS IN KIND

Except as provided in Section 7.11, no Member has a right to demand and
receive any distribution in any form other than money, which shall be in the
form of United States currency for its capital contributions to the Company,
in writing, to the distribution in kind.

<PAGE>

SECTION 7.09  DISTRIBUTIONS SUBJECT TO SET-OFF BY THE COMPANY

All distributions are subject to set-off by the Company:

     (a)  in the case of a Member, for any past-due obligation of the Member
to make capital contribution to the Company; and

     (b)  in the case of an assignee of Financial Rights, for any past-due
obligation owed to the Company by the Member who originally owned the
Financial Rights.

SECTION 7.10  TAX CREDITS

As a producer of ethanol, the Company will generate Tax Credits.  The Company
will attempt to maximize the return of any Tax Credit with respect to the
production of ethanol and will distribute these Tax Credits to its Members.
The Company shall allocated Tax Credits in the same ratio that Net Income and
Net Loss are allocated among the Members pursuant to Section 7.02.

                             ARTICLE VIII TAX MATTERS

SECTION 8.01  TAX CHARACTERIZATION AND RETURNS

While this Agreement remains in effect, the Board will cause to be delivered
to each Person who was a Member at any time during such Fiscal Year (i) a
Schedule K-1, (ii) the balance sheets of the Company as of the end of each
such Fiscal Year, and (iii) statements of income and changes in financial
condition of the Company for such Fiscal Year all prepared in accordance with
GAAP and accompanied by a report thereon of the Company's accounting firm
together with a statement as to each Member's share of the Member's taxable
income and those items of income, deduction or credit required to be taken
separately into account, in sufficient detail to enable each Member to
prepare its federal, state and local tax returns as well as such statements
as may be necessary as to permit each Member to comply with its respective
filing or disclosure requirements, within ninety (90) days after the end of
each Fiscal Year.

SECTION 8.02  ACCOUNTING DECISIONS

     (a)  The Board will make all decisions as to accounting matters, and

     (b)  The Board may cause the Company to make whatever elections the
Company may make under the Code, including the election referred to in
Section 754 of the Code to adjust the basis of Company assets.

SECTION 8.03  TAX MATTERS PARTNER

The Brewery shall act on behalf of the Company as the "Tax Matters Partner"
within the meaning of Section 6231(a)(7) of the Code and analogous provisions
of state law.

SECTION 8.04  ACCOUNTING

The fiscal year of the Company shall commence on January 1 of each year (the
"Fiscal Year") except the year of inception, and end on December 31 of each
year.

<PAGE>

SECTION 8.05  BOOKS OF ACCOUNT

True and accurate books of account of the Company shall be kept and
maintained at all times at its principal offices unless an alternative
location shall be approved in writing by the Members.  The books of account
of the Company shall be maintained on an accrual basis in accordance with
GAAP.

SECTION 8.06  CONTENTS AND LOCATION OF REQUIRED RECORDS; ACCESS TO ACCOUNTS

The Company will maintain at its principal place of business, or at some
other location chosen by the Board, the records that Delaware Code Section
18-305 requires the Company to maintain.  In addition to the requirements of
Delaware Code Section  18-305, the Company shall afford to each of the
Members and their respective counsel, accountants and other representatives,
access to all properties of the Company, books, records and other documents
of the Company and shall furnish to each of the Members such information
concerning the Company and copies of such documents as each of the Members in
their respective reasonable judgment may request.  Each Member shall be
entitled, at its own expense, to have an independent certified public
accountants designated by it, or its own internal accounting personnel,
review all properties, books, records and other documents of the Company as
well as all accountant's work papers with respect to any audit of the
Company.

                      ARTICLE IX GOVERNANCE: BOARD OF MANAGERS
                               SECTION 9.01  GENERAL

The management and control of the business of the Company shall be vested in
the Board of Managers established hereunder, and no Member has the authority
to make any contracts, to act or enter into any transactions, or make any
commitments on behalf of the Company, whether or not in the ordinary course
of the business of the Company, unless specifically authorized by this
Agreement or the Board.

SECTION 9.02  BOARD OF MANAGERS

     (a)  NUMBER AND TERM.  The Board of the Company shall consist of three
(3) Managers, or such other number as is established by the Board.  The
Managers shall be designated in the manner set forth below.  Each Manager
shall serve until such Manager resigns or is otherwise removed or replaced in
accordance with the provisions of this Section 9.02.

     (b)  DESIGNATION OF BOARD.  The Managers of the Company shall be
designated by the Partnership, the Brewery and the Governing Members in the
following manner:

          (i)  The Partnership shall be entitled to designate one (1) Manager
     to the Board (the "Partnership Manager"), the Brewery shall be entitled to
     designate one (1) Manager to the Board (the "Brewery Manager"), and the
     Governing Members shall be entitled to designate one (1) Manager to the
     Board by an Act of the Governing Members, as defined in Section 10.02 (the
     "Member Manager"); and

          (ii) Each Manager shall hold office until his successor is appointed.

     (c)  PROCEDURE.  The Partnership Manager, the Brewery Manager and the
Member Manager shall be those individuals appointed by the Partnership, the
Brewery and the Governing Members, respectively, from time to time, by
written notice to the other Members.  The Partnership, the Brewery and the
Governing Members may each designate by notice to the other Members such
number of alternate Partnership Managers, Brewery Managers and

<PAGE>

the Member Managers, respectively, of the Board as they may be entitled to
designate.  An alternate Partnership Manager, Brewery Manager or the Member
Manager may in all respects act on behalf of an absent Partnership Manager,
Brewery Manager or the Member Manager as the case may be.

     (d)  NOTICE.  The Managers calling a special meeting or, in the case of
annual Meetings of the Board, the presiding officer of the Company, shall
give written notice to each Manager of the Company, including the time, place
and purpose of such meeting.  Notices shall be given to Managers in the
manner provided in Section 14.04 at least seven (7) days before the date of
the meeting.  A written waiver of notice, signed by the Manager entitled to
such notice, whether before or after the time of the meeting stated therein,
or presence of a Manager at the meeting without objection to the lack of
notice, shall be deemed equivalent to notice.  Each notice of meeting shall
be accompanied by an agenda with all items to be brought before the meeting.
An item which is not on the agenda shall not be voted on unless all Managers
present at a meeting agree, in writing, to waive the agenda or agree, in
writing, to discuss any item not on the agenda.  The Managers shall elect a
presiding officer for the purpose of distributing notices as aforesaid.

     (e)  QUORUM.  At all meetings of the Board, the presence in person of
two of the designated Managers shall constitute a quorum for the transaction
of business.  If a quorum shall not be present at any meeting of the Board, a
new meeting shall be called in accordance with provisions of the preceding
paragraph (d).

     (f)  ACTION OF THE BOARD.  The vote of a majority of the Managers
present in person shall be required for approval of any action taken at a
meeting of the Board at which a quorum is present in person.

     (g)  ALTERNATIVE FORMS OF ACTION.  Any action required or permitted to
be taken at any meeting of the Board, or of any committee thereof, may be
taken without a meeting, if all Managers (or alternates) of the Board or any
such committee, as the case may be, consent thereto in writing, by letter,
telex, telegram or facsimile.  Any one or more Managers may participate in
any meeting thereof by means of a conference telephone or similar
communications equipment by means of which all Persons participating in the
meeting can hear each other, and participation in a meeting by such means
shall constitute presence in person at such meeting.

     (h)  OTHER COMMITTEES.  The Board may establish committees from time to
time as it deems necessary.

     (i)  VACANCIES.  Vacancies in the office of any Manager may be filled at
any time by appointment in accordance with Section 9.02(b).

     (j)  EXPENSES.  The Company shall bear the reasonable travel expenses of
the Managers and the officers of the Company incurred in connection with
Company business.

     (k) BUSINESS EFFORTS.  The Managers are not obligated to devote all of
their time or business efforts to the affairs of the Company.  The Managers
shall devote whatever time, effort and skill as they deem appropriate for the
operation of the Company.

SECTION 9.03  DUTIES OF MANAGERS

     (a)  Each Manager must discharge his or her duties in good faith, with
the care an ordinarily prudent person in a like position would exercise under
similar circumstances, and in a manner the Manager reasonably believes to be
in the best interests of the Company.

     (b) The Managers may delegate the authority to run the day-to-day
affairs of the Company to officers or other individuals as they may from time
to time designate.

     (c)  A Manager may rely on information received from other Persons if
that reliance is reasonable and consistent with the Manager's duties under
Section 9.03(a).

<PAGE>

     (d)  The Board shall cause to be prepared, within 45 days prior to the
first day of each Fiscal Year, a budget for the Company's operations (the
"Budget").  The Budget shall cover a one (1) year period and shall include,
among other things, anticipated revenues, capital expenditures, operating
expenses, and net income for the budget period.

               ARTICLE X ACTS OF GOVERNING MEMBERS AND MEMBER MEETINGS

SECTION 10.01  PERCENTAGE GOVERNING INTEREST

     (a)  Upon the execution of this Agreement, the Governing Members shall
have the following respective undivided interests in the Governing Rights of
the Company, expressed as a percentage of the whole (each, a "Percentage
Governing Interest"):

<TABLE>
<CAPTION>

          GOVERNING  MEMBER                   PERCENTAGE GOVERNING INTEREST
<S>                                           <C>
          Partnership                                  30.9%
          Brewery                                      18.1%
          Hendry                                       25.5%
          GDN                                          25.5%

                Total                                 100%
</TABLE>

To the extent that Percentage Class A Financial Interests have been granted
by the Board to Managers, officers or other individuals pursuant to Section
5.02, those individual shall also be entitled to receive Percentage Governing
Interests up to 3.5% of the total Percentage Governing Interests.  In such
event, the Percentage Governing Interests of the Partnership and the Brewery,
as set forth above, shall be ratably reduced.

     (b)  Upon the redemption of all the outstanding Percentage Class B
Financial Interests, the Percentage Governing Interest of each Member shall
be equal to such Member's Percentage Class A Financial Interest.

SECTION 10.02  ACT OF THE MEMBERS

Except to the extent that the LLC Act or the Certificate of Formation require
otherwise, an Act of the Members consists of either:

     (a)  vote of the Governing Members who own a Percentage Governing
Interest representing more than fifty percent (50%) of the Governance Rights
of the Governing Members present at a properly called meeting of the Members,
when a quorum is present, or

     (b)  written action without a meeting, as provided in Section 10.10.

SECTION 10.03  ANNUAL MEETING

The Governing Members will meet at least once every year.  The Board will
give notice of this annual meeting, complying with Section 10.05.

SECTION 10.04  SPECIAL MEETINGS

     (a)  A special meeting of the Governing Members may be called for any
purpose or purposes at any time by an Act of the Board, or by any two or more
Managers, or by one or more Governing Members owning a Percentage Governing
Interest representing at least ten percent (10%) of the Governing Rights of
all Governing Members.

     (b)  For any special meeting not called by an Act of the Board, those
Persons who are demanding the special meeting must give written notice to the
Chief Executive Officer or the Chief Financial Officer of the

<PAGE>

Company specifying the purposes of the meeting. Within thirty (30) days after
either officer receives a demand under this paragraph, the Board must call a
special meeting of the Governing Members. If the Board fails to call the
special meeting as required by this paragraph, the Person or Persons making
the demand may, at the expense of the Company, call the meeting by giving the
notice described in Section 10.05.

SECTION 10.05  NOTICE OF MEETINGS

Written notice of each meeting of the Governing Members, stating the date,
time, and place and, in the case of a special meeting, the purpose or
purposes, must be given to every Governing Member at least seven (7) days and
not more than sixty (60) days prior to the meeting.  The business transacted
at a special meeting of Governing Members is limited to the purposes stated
in the notice of the meeting.

SECTION 10.06  LOCATION AND CONDUCT OF THE MEETINGS; ADJOURNMENTS

     (a)  Each meeting of the Members will be held at the Company's principal
place of business or at some other suitable location as designated by the
Board.

     (b)  The Board will select a Manager to chair each meeting of the
Members.

     (c)  Any meeting of the Members may be adjourned from time to time to
another date and time and, subject to Section 10.06(a), to another place.  If
at the time of adjournment the Person chairing the meeting announces the
date, time, and place at which the meeting will be reconvened, it is not
necessary to give any further notice of the reconvening.

SECTION 10.07  WAIVER OF NOTICE

     (a)  A Governing Member may waive notice of the date, time, place, and
purpose or purposes of a meeting of Members.  A waiver may be made before,
at, or after the meeting, in writing, orally, or by attendance.

     (b)  Attendance by a Governing Member at a meeting is a waiver of notice
of that meeting, unless the Governing Member objects at the beginning of the
meeting to the transaction of business because the meeting is not properly
called or convened, or objects before a vote on an item of business because
the item may not properly be considered at that meeting and does not
participate in the consideration of the item at that meeting.

SECTION 10.08  PROXIES

     (a)  A Governing Member may cast or authorize the casting of a vote by
filing a written appointment of a revocable proxy with the Chief Executive
Officer of the Company at or before the meeting at which the appointment is
to be effective.  The Governing Member may sign or authorize the written
appointment by telegram, cablegram, or other means of electronic transmission
stating, or submitted with information sufficient to determine, that the
Governing Member authorized the transmission.  Any copy, facsimile,
telecommunication, or other reproduction of the original of either the
writing or the transmission may be used in lieu of the original, if it is a
complete and legible reproduction of the entire original.  Any holder of a
proxy must agree to maintain in confidence information acquired in connection
with his or her activities as a proxy.

     (b)  A Governing Member may not grant or appoint an irrevocable proxy.

SECTION 10.09  QUORUM

For any meeting of the Members, a quorum consists of the owners of a
Percentage Governing Interest representing a majority of the Governing Rights
owned by all Governing Members.  If a quorum is present when a properly
called meeting is convened, the Governing Members present may continue to
transact business until adjournment, even though the departure of Governing
Members originally present leaves less than the proportion otherwise required
for a quorum.

<PAGE>

SECTION 10.10  ALTERNATIVE FORMS OF ACTION

Any action required or permitted to be taken at any meeting of the Members,
may be taken without a meeting by written action signed by all the Governing
Members.  The written action is effective when signed by all Governing
Members unless a different effective time is provided in the written action.
Any one or more Members may participate in any meeting thereof by means of a
conference telephone or similar communications equipment by means of which
all Persons participating in the meeting can hear each other, and
participation in a meeting by such means shall constitute presence in person
at such meeting.

SECTION 10.11  MEMBERSHIP INTEREST

A Membership Interest shall for all purposes be personal property.  No Member
shall have any interest in specific Company assets or property; including any
assets or property contributed to the Company by such Member in connection
with the Contribution Agreement.

  ARTICLE XI ADMISSION OF ADDITIONAL MEMBERS; SALE,TRANSFER, ASSIGNMENT OR
                             OTHER DISPOSITION
                 SECTION 11.01  ADMISSION OF NEW MEMBERS

Except as provided to the contrary in this Agreement, new or additional
Members may be admitted from time to time only with the consent of the owners
of a majority of all Governing Interests.  Each such admission of an
additional Member shall be evidenced by a supplemental written agreement
amending this Agreement, containing the written consent of the additional
Member to be bound by the provisions of this Agreement and such other terms
and conditions as may be agreed upon by the parties.

SECTION 11.02  ASSIGNMENT OF MEMBERSHIP INTEREST

Except as provided in this Article XI, no assignment of a Member's Membership
Interest, or any part thereof, shall be effective unless the consent required
by this Article XI is obtained or, in the case of Financial Rights, the
assignment is made in accordance with Section 11.03(b).  If any purported
assignment or attempted assignment of a Membership Interest is ineffective
for failure to obtain such consent, then except as provided in Section
11.03(d) hereof (i) the purported assignment is ineffective in its entirety;
and (ii) any assignment of Financial Rights that accompanied the purported or
attempted assignment is void.

SECTION 11.03  LIMITATIONS ON TRANSFER; PURCHASE OPTIONS

Except as otherwise provided herein, no Member shall encumber, sell,
transfer, assign, give or otherwise dispose of his or its Membership Interest
or a part thereof to any Person, whether voluntarily, by operation of law or
otherwise (a "Transfer"), without the prior written consent of all of the
Members and any attempt to do so shall be void.   Any Transfer of a
Membership Interest under this Article XI shall not be effective until the
transferee has been admitted as a Member of the Company which shall be when
the transferee has executed a counterpart to this Agreement.  No Transfer of
a Membership Interest in violation of this Article XI shall be valid or
effective, and neither the Company nor the Members shall recognize the same
for the purpose of making allocations or distributions.  Neither the Company
nor the Members shall incur any liability as a result of refusing to make any
such allocations or distributions with respect to a Transfer in violation of
this Article XI.

     (a)  TAG ALONG RIGHTS.  Except for (i) the purchase of any Membership
Interest by the Company or the other Members pursuant to Section 11.03(c) or
11.03(d) below, or (ii) a Permitted Transfer described in Section 11.03(b)
below, if any Member ("Selling Member") proposes to transfer in a bona fide
arm's-length transaction or a series of transactions to any third party or
parties ("Buyer"), all or any portion of its Membership Interest, such Member
shall so notify the other Members in writing (the "Tag Along Notice"),
describing in such notification the material terms of the proposed transfer.
Each Member shall have the option (the "Tag Along Option"), exercisable
<PAGE>
by giving written notice to the Selling Member within thirty (30) days after
the Member's receipt of the Tag Along Notice, to participate in such
transaction by selling all or a portion of such Member's Membership Interest
(the "Tag Along Interests") to the Buyer on the same terms and conditions as
the Selling Member. If a Tag Along Option is exercised by one or more
Members, the Selling Member shall not proceed with such transaction unless
each of the Members who have exercised Tag Along Options is given the right
to sell his or its Tag Along Interests pro rata in proportion to the
Membership Interests proposed to be sold by the Selling Member and all
Members exercising the Tag Along Option.

     (b)  PERMITTED TRANSFERS .  The following shall be "Permitted Transfers"
for the purposes of this Agreement and may be made without compliance with
the provisions of Section 11.03(a) above:

         (i)  A Member that is not an individual may transfer its Membership
     Interest to any Affiliate, including without limitation its shareholders,
     members, partners or beneficiaries; and

         (ii) A Member that is an individual may transfer its Membership
     Interest to such Member's spouse or lineal descendants outright or in
     trust.

Any transfer made pursuant to this Section 11.03(b) may only be made if (i)
the transferring Member gives ten (10) days prior written notice of such
transfer to the Company and the other Members, and (ii) the transferee shall
agree in writing to comply with all provisions of this Agreement and the
Membership Interests so transferred shall be subject to the provisions of
this Agreement.

     (c)  RIGHTS OF FIRST REFUSAL.  Except for (i) a sale pursuant to the
exercise of Tag Along Rights, or (ii) a Permitted Transfer, a Member shall
not sell, exchange, pledge, hypothecate or otherwise transfer any interest in
any Membership Interest, including, without limitation, transfer by gift,
(collectively "transfer"), unless the Member (the "Proposing Member") offers
to sell the Membership Interest first to the other Members and second to the
Company as provided in this Section 11.03(c).  Any such offer (the "Offer
Notice") shall (i) be made in writing to the other Members and the Company,
and (ii) specify the portion of the Membership Interest which the Proposing
Member desires to transfer (the "Offered Interest") and the terms and
conditions under which the Proposing Member is willing to sell such Offered
Interest.  If any Member (other than the Proposing Member) desires to
purchase the Offered Interest, such Member shall have the right for a period
of sixty (60) days after receipt of the Offer Notice (the "Member Exclusivity
Period") to purchase such Offered Interest from the Proposing Member on the
terms and conditions specified in the Offer Notice; provided the transferee
consents to be bound by the terms of this Agreement.  If more than one Member
elects to purchase the Offered Interest, the Members desiring to purchase the
Offered Interest shall purchase their proportionate share of the Offered
Interest or as otherwise mutually agreed by the Members desiring to purchase
the Offered Interest.  The proportionate share of each Member desiring to
purchase the Offered Interest shall be a fraction, the numerator of which is
the Percentage Interest owned by such Member and the denominator of which is
the aggregate Percentage Interest owned by all Members desiring to purchase
such Offered Interest. If the Member Exclusivity Period expires without any
exercise by the Members with respect to the Offered Interest, the Company
shall have the exclusive right to purchase the Offered Interest which is the
subject of the Offer Notice during the thirty (30) days (the "Company
Exclusivity Period") immediately following the expiration of the Member
Exclusivity Period.  If the Offered Interest is not sold to other Members or
the Company pursuant to their rights of first refusal under this Section
11.03(c), then the Proposing Member may proceed to sell the Offered Interest
within sixty (60) days after the expiration of the Company Exclusivity Period
on terms and conditions no more favorable to the purchaser than as set forth
in the Offer Notice.  If such sixty (60) day period expires or the Proposing
Member desires to sell on terms more favorable to the purchaser than as set
forth in the Offer Notice, then the Proposing Member shall comply with the
terms of this Section 11.03 before making any transfer of his or its
Membership Interest.

     (d)  INVOLUNTARY TRANSFERS.  Upon any involuntary transfer of all or any
part of the Membership Interest of a Member (the "Transferred Interest")
pursuant to a levy of execution, foreclosure of pledge, garnishment,
attachment, divorce decree, bankruptcy or other legal process (other than a
Permitted Transfer), the transferee or transferees of the Transferred
Interest or any successor in title to the Transferred Interest shall, within
thirty (30) days after such transfer, offer such Transferred Interest at the
Fair Market Value (as determined in accordance with Section 11.07

<PAGE>

below) thereof at the end of the month immediately preceding such transfer
for sale first to the other Members and second to the Company under this
Section 11.03.  Such offer shall be made in writing to the Company and the
other Members (the "Transfer Notice") and shall disclose the terms and
conditions of the acquisition of the Transferred Interest by the transferee
or transferees of, or the successor in title to, the Transferred Interest.
Upon receipt of the Transfer Notice, the Company shall have the Fair Market
Value of the Transferred Interest determined in accordance with Section 11.07
and shall promptly notify the Members and the person giving the Transfer
Notice of the Fair Market Value of such Transferred Interest (the "Appraisal
Notice").  The Members (other than the Members whose Membership Interest was
subject to the transfer by legal process) shall have the right to purchase
some or all of the Transferred Interest at such Fair Market Value by giving
written notice to such transferee or transferees within thirty (30) days
after receipt of the Appraisal Notice.  If more than one Member elects to
purchase the Transferred Interest, the electing Members shall each purchase
their proportionate share (as provided in Section 11.03(c)) of the
Transferred Interest) or otherwise as such electing Members mutually agree.
If the other Members do not purchase all of the Transferred Interest, the
Company shall have the right to purchase all or some of the Transferred
Interest at such Fair Market Value by giving written notice to such
transferee or transferees or successor in title within forty-five (45) days
after the Company's receipt of the Transfer Notice.  In the event a
transferee fails to provide Transfer Notice to the Members and the Company, a
Member or the Company receiving notice of a transfer of a Membership Interest
by legal process or otherwise may give written notice to the Members and the
Company of the facts and circumstances of such transfer as known by such
person, including the name and address of any such transferee, transferees or
successor in title and such notice shall be considered the Transfer Notice
for the purposes of this Section 11.03(d).

SECTION 11.04  RIGHTS OF HOLDERS OF FINANCIAL RIGHTS

No holder of Financial Rights shall have the right to become a substitute or
additional Member except upon admission to the Company as a Member pursuant
to the provisions of Section 11.01.  An assignment of Financial Rights shall
only transfer to the assignee thereof the assignor's right to the profits,
losses, distributions and capital of the Company with respect to the related
Membership Interest and shall not transfer to such assignee any interest in a
Member's governance rights or any other rights hereunder.

SECTION 11.05  TRANSFER DURING TAXABLE YEAR

In the case of the transfer of a Member's Membership Interest (or portion
thereof or interests therein) at any time other than the end of a Fiscal
Year, all of the various items of the Company's income, gain, loss,
deduction, credit or allowance, (other than from sale of real property) shall
be pro rated.  The effective date of a transfer shall be (a) in the case of
voluntary transfer, the effective date stated in the assignment or such other
date as is mutually agreed between transferor and transferee or (b) in the
case of an involuntary transfer, the date of the operative event, but, unless
the transferor, transferee and the Company otherwise agree, such effective
date shall not affect any distribution made by the Company to the transferor
or contributions made by the transferor to the Company prior to the date of
notice to the Company of such transfer.

SECTION 11.06  MANNER OF EXERCISING OPTION

The exercise of any option pursuant to this Agreement, or the giving or
denial of any consent required by Article XI, shall be by written notice to
the Company and each Member.

SECTION 11.07  DETERMINATION OF PURCHASE PRICE

     (a)  In the case of an involuntary transfer under Section 11.03(d), the
purchase price shall be the lesser of the amount stated in the Transfer
Notice or the amount determined under Section 11.07(c), below.

     (b)  The term "Fair Market Value" as used in this Article XI, shall be
the value of the Membership Interest determined, without regard to discounts
for lack of marketability of the Membership Interest or the minority position
of the Member or its transferees, within a sixty (60) day period following
the completion of an audit of the Company's financial statements and records.
The determination of Fair Market Value shall be made by a firm of

<PAGE>

independent certified public accountants or qualified appraisers (the
"Independent Appraiser") that is mutually acceptable to the parties.  In the
event that the parties are unable to agree on the choice of an Independent
Appraiser, each party will nominate an Independent Appraiser who will
together select a qualified Independent Appraiser to perform the valuation.
The expense of determining the Fair Market Value of a Membership Interest
shall be borne by the Company.

     (c)  Notwithstanding anything in this Agreement to the contrary, all of
the Members may, at any time and from time to time, determine the Fair Market
Value or the purchase price of each Member's Membership Interest as used in
this Article XI by executing and filing with the Company an instrument
wherein such determination is set forth, whereupon, for the period of time
stated in that instrument, the Fair Market Value or the purchase price so
agreed upon shall be the Fair Market Value or the purchase price for purposes
of Section 11.07.

SECTION 11.08  TERMS OF PAYMENT

     (a)  Unless the Membership Interest is being purchased at the same price
and on the same terms and conditions as a proposed involuntary transfer under
Section 11.03(d), the entire amount of the purchase price shall be paid in
cash on the date of purchase.

     (b)  Except as otherwise provided in Section 11.03(c), the purchasing
Member or Members shall deduct from the purchase price any amounts owed by
the selling Member to the Company and shall pay such withheld amounts to the
Company in satisfaction of the selling Member's debts to the Company.  If the
amount owed by such selling Member to the Company is in excess of that due to
such selling Member, the selling Member agrees and promises to pay such
excess to the Company on the date of purchase.

SECTION 11.09  CLOSING OF PURCHASE

     (a)  Except as otherwise provided in Section 11.09(b), the purchase and
sale of any Membership Interest, or portion thereof or interest therein,
shall be consummated within forty-five (45) days after the later of the date
the price is determined or the relevant option was exercised at such
particular time and place as the purchasing party and selling party may
agree, or, if they cannot agree, at the principal offices of the Company at
10:00 a.m. local time on the forty-fifth day (or next succeeding business day
if the forty-fifth day is not a business day).  At such closing, the selling
party shall execute and deliver such instruments of conveyance as would
reasonably be required to vest good and clear record and marketable title to
the Membership Interest, or portion thereof or interest therein, in the
purchasing party and the purchasing party shall pay the purchase price
therefor in cash or as otherwise permitted pursuant to the last paragraph of
Section 11.08.

     (b)  The Company shall fix a date for the consummation of repurchase by
the Company of the Membership Interest (the "Repurchase Date"); provided,
however, that a minimum of ten percent (10%) of the purchase price is paid to
the Member in accordance with Section 11.09(a).  The unpaid portion of the
purchase price, if any, will accrue interest at the Prime Rate from the date
the purchase price is determined until paid.  The closing shall be at such
particular time and place as the Company and the Member or its transferees
may agree, or, if they cannot agree, at the principal offices of the Company
at 10:00 a.m. local time on the Repurchase Date.  At such closing, the Member
or its transferees shall execute and deliver such instruments of conveyance
as would reasonably be required to vest good and clear record and marketable
title to the Membership Interest, or portion thereof or interest therein, in
the Company and the Company shall pay the purchase price therefor in cash or
as otherwise permitted pursuant to the last paragraph of Section 11.08.

SECTION 11.10  NO RESIGNATION

Except as otherwise provided in this Agreement, no Member shall resign or
withdraw from the Company prior to the dissolution and winding up of the
Company.  A Member shall cease to be a Member at the time such Member ceases
to own any Membership Interest.

SECTION 11.11  SECURITIES LAWS

<PAGE>

     (a)  Each Member understands and hereby represents and warrants that (i)
the issuance of the Membership Interests has not been and may not be
registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon Section 4(2) of the Securities Act or under any state
securities or blue sky laws, and (ii) as a result, each Member must hold its
Membership Interest indefinitely, unless such Membership Interest is
transferred in a transaction registered under the Securities Act or such
laws, or an opinion from counsel is rendered that an exemption from
registration is available with respect to the transfer of such Membership
Interest.

     (b)  Each Member hereby represents and warrants that it is acquiring its
Membership Interest pursuant to this Agreement for its own account and not
with the view to, or for resale in connection with, any distribution or
public offering thereof within the meaning of the Securities Act.  Each
Member is a sophisticated investor for purposes of the Securities Act and has
such knowledge and experience in financial and business matters that is
capable of evaluating the merits and risks of the Membership Interest being
acquired pursuant to this Agreement.

                ARTICLE XII DISSOLUTION, WINDING UP AND TERMINATION

SECTION 12.01  EVENTS OF DISSOLUTION

The Company shall be dissolved and its affairs shall be wound up upon the
occurrence of any of the following events:

     (a)  Any order of court of competent jurisdiction requiring dissolution;

     (b)  The consent of Members holding 66% of the Percentage Class A
Financial Interests;

     (c)  A merger or exchange in which the Company is not the surviving or
acquiring company.

SECTION 12.02  WINDING UP

In the event that the Company is dissolved:

     (a)  No further business shall be done in the Company's name except the
completion of incomplete transactions and the taking of such action as may be
necessary to wind up the affairs of the Company.

     (b)  The affairs of the Company shall be wound up in accordance with the
following provisions:

          (i)    A full and general accounting of the Company's financial
     affairs shall be prepared.

          (ii)   The Company shall attempt to collect all of its accounts
     receivable.

          (iii)  The Company shall pay or provide for all debts and liabilities
     to creditors of the Company, including debts from advances by Members in
     order of priority as provided by law.

          (iv)    If a Member shall have any obligation to the Company as of the
     effective date of the dissolution, such obligation shall promptly be paid
     to the Company.  In lieu of such payment, the Company shall be entitled to
     offset any such obligation against any payment or distribution to be made
     to such Member hereunder.

          (v)      If the Members deem it reasonably necessary, a reserve shall
     be set up for any contingent or unforeseen liabilities or obligations of
     the Company arising out of or in connection with the Company's business.
     Such reserve shall be paid over to an escrow agent selected by the Members
     for such period of time as the Members shall reasonably determine, to be
     held for the purpose of disbursing such reserve in payment of any such
     contingencies.  At the expiration of such period the balance of such funds
     shall be

<PAGE>

     distributed in the manner provided in Section 12.02.

A reasonable time as determined by the Members, not to exceed twelve (12)
months, shall be allowed for the orderly winding up of affairs of the
Company, including the liquidation or distribution of its assets and the
discharge of its liabilities to creditors, so as to enable the Company to
minimize any losses attendant upon such liquidation.  Each Member shall be
furnished with a statement setting forth the assets and liabilities of the
Company as of the date of dissolution and the manner in which the assets of
the Company are to be distributed.

     (c)  The assets of the Company shall be applied in the following order:

          (i)   to the payment of the debts and liabilities of the Company
     owing to creditors of the Company in the order of priority as provided
     by law;

          (ii)   to the payment of the debts and liabilities of the Company
     owing to the Members other than with respect to their Capital Accounts,
     including amounts owing to Class B Financial Members pursuant to Section
     6.01(a);

          (iii)  to the payment of the amounts shown in the Capital Accounts of
     the Class A Financial Members.

The surplus, if any, of the assets remaining shall be divided among the
Members in the same proportion as that used in determining their share in the
Net profit and Net Loss of the Company pursuant to Article VII.  Any gains or
losses on disposition of the Company's properties in the process of
liquidation shall be credited or charged to the Members in the same
proportion as that used in determining their share in the net profits and net
losses of the Company pursuant to Article VII.

     (d)  In winding up the affairs of the Company, the Members may either
sell the Company's assets and distribute the net proceeds therefrom, after
the payment of the Company's liabilities, or distribute the Company's assets
to the Members in kind.

SECTION 12.03  TERMINATION

The Company shall terminate when all of the assets of the Company, after
payment, or due provision for all debts, liabilities and obligations, of the
Company shall have been distributed to the Members in the manner provided for
in this Article XII and the Certificate of Formation shall have been canceled
in the manner required under the LLC Act.

SECTION 12.04  CLAIMS OF MEMBER

The Members and former Members shall look solely to the Company's assets for
the return of their respective Capital Accounts, and if the assets of the
Company remaining after payment of all debts, liabilities and obligations of
the Company are insufficient to return such Capital Accounts, the Members and
former Members shall have no recourse against the Company or any other Member.

                           ARTICLE XIII INDEMNIFICATION

SECTION 13.01  INDEMNIFICATION

     The Company will indemnify its Managers, Members, officers and other
parties to the fullest extent permitted under Section 18-108 of the LLC Act.

<PAGE>

SECTION 13.02  ADVANCES

If a Person is made or threatened to be made a party to a proceeding, the
Person is entitled, upon written request to the Company, to payment or
reimbursement by the Company of reasonable and verifiable expenses, including
attorney's fees and disbursements, incurred by the Person in advance of the
final disposition of the proceeding, upon receipt by the Company of a written
affirmation by the Person of a good faith belief that indemnification is
proper under Section 12.01 and Section 18-108 of the LLC Act and a written
undertaking by the Person to repay all amounts so paid or reimbursed by the
Company, if it is ultimately determined that indemnification was not proper.

SECTION 13.03  INSURANCE

The Company may purchase and maintain insurance on behalf of a Person in that
Person's official capacity against any liability asserted against and
incurred by the Person in or arising from that capacity, whether or not the
Company would have been required to indemnify the Person against the
liability under the provisions of this Article.

                             ARTICLE XIV MISCELLANEOUS

SECTION 14.01  CONFIDENTIAL INFORMATION

At all times during the Term of this Agreement and for a period of two (2)
years thereafter, each Member shall keep strictly confidential and not
disclose, use, divulge, publish or otherwise reveal, directly or through
another Person, any matters or affairs or the business of the Company or any
other Member including, but not limited to, documents and/or information
regarding customers, costs, profits, markets, sales, products, product
development, key personnel, pricing policies, operational methods,
technology, know-how, technical processes, formulae, or plans for future
development of or concerning the Company or any other Member or their
respective Affiliates (collectively "Confidential Information") except as may
be necessary for the Managers, employees or agents to perform their
respective obligations under this Agreement or in connection with filings
with governmental agencies or courts or otherwise required under applicable
law.  To the extent that such Confidential Information is revealed, each
party shall use its best efforts to have the Persons receiving such
information retain it in confidence.  Upon termination of this Agreement,
each Member shall return to the other all memoranda, notes, records, reports
and other documents (including all copies thereof) relating to such
Confidential Information which such Member may then possess or have under its
control.

SECTION 14.02  ENTIRE AGREEMENT; WAIVER; MODIFICATIONS

This Agreement, as may be supplemented by the Contribution Agreement,
constitutes the complete statement of all of the arrangements among the
parties as of the date hereof with respect to the transactions contemplated
hereby and all other prior or contemporaneous agreements of the parties with
respect to such subject matter, including the Operating Agreement entered
into on March 29, 1999,  are hereby superseded by this Agreement.  No
modification, discharge or waiver in whole or in part, of any of the
provisions hereof shall be valid unless in writing and signed by the party
against whom the same is sought to be enforced.  The failure or omission of
either party hereto to insist, in any instance, upon strict performance by
the other party of any term or provision of this Agreement or to exercise any
of its rights hereunder shall not be deemed to be a modification of any term
or provision hereof or a waiver or relinquishment of the future performance
of any such term or provision by such party nor shall such failure or
omission constitute a waiver of the right of such party to insist upon future
performance by the other party of any such term or provision or any other
term or provision of this Agreement.

SECTION 14.03  ASSIGNMENT; SUCCESSORS

This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and any Person that acquires a  Membership Interest as
permitted by the terms hereof.  Otherwise, a Membership Interest is not
assignable.

<PAGE>

SECTION 14.04  NOTICE

All notices and other communications hereunder shall be in writing and shall
be given, transmitted and delivered by facsimile, telex, or telegram, and a
copy thereof shall be mailed (by Certified Mail (Airmail) if to a destination
in a foreign country from the point of mailing), postage prepaid, return
receipt requested, to the parties at the following addresses (or such other
address as shall be specified by such party by like notice), and such notice
shall be deemed given on the date on which so delivered by messenger, or on
the next business day following the date on which so transmitted by
facsimile, telex, or telegram from the date of transmission.

     If to the Brewery:

          Minnesota Brewing Company
          882 West Seventh Street
          St. Paul, Minnesota  55102

          Attention: John J. Lee

          Telephone: (651) 290-8232
          Facsimile:  (651) 290-8211

     With a copy to:

          Lindquist & Vennum P.L.L.P.
          4200 IDS Center
          80 South Eighth Street
          Minneapolis, Minnesota 55402

          Attention: Thomas G. Lovett, Esq.
          Telephone: (612) 371-3211
          Facsimile:  (612) 371-3207

<PAGE>

     If to the Partnership or Hendry:

          Minnesota Brewing Limited Partnership
          c/o Dougherty Summit Securities, L.L.C.
          90 South Seventh Street, Suite 4400
          Minneapolis, Minnesota 55402

          Attention:  Bruce E. Hendry

          Telephone: (612) 376-4000
          Facsimile:  (612) 376-7092

     With a copy to:

          Maun & Simon PLC
          801 Nicollet Mall
          Minneapolis, Minnesota 55402-2534

          Attention: Albert A. Woodward

          Telephone: (612) 904-7408
          Facsimile:  (612) 904-7424

SECTION 14.05  COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed an original and all of which taken together
shall constitute one and the same instrument.

SECTION 14.06  INTERPRETATION

Titles of Articles and Sections are for convenience only and shall be given
no effect in the construction or interpretation of this Agreement.  Unless
the context otherwise requires the singular includes the plural, and the
plural includes the singular.

SECTION 14.07  SEVERABILITY

In the event that any provision of this Agreement is declared by a court of
competent jurisdiction to be void or unenforceable, the remainder of this
Agreement shall not be affected thereby and shall remain in full force and
effect to the extent feasible in the absence of the void and unenforceable
provision.  The parties furthermore agree to execute and deliver such
amendatory contractual provisions to accomplish lawfully as nearly as
possible the goals and purposes of the provision so held to be void or
unenforceable.

<PAGE>

SECTION 14.08  EQUITABLE REMEDIES

The rights and remedies of the Members under this Agreement shall not be
mutually exclusive i.e., the exercise of one or more of the rights under this
Agreement shall not preclude the exercise of rights under any other
provision. Each Member acknowledges that no adequate remedy of law would be
available for a breach of this Agreement, and that a breach of this Agreement
by one would irreparably injure the other and accordingly agrees that in the
event of a breach of any provision, the respective rights and obligations of
the parties hereunder shall be enforceable by specific performance,
injunction or other equitable remedy (without bond or security being
required), and each Member waives the defense in any action and/or proceeding
brought to enforce this Agreement that there exists an adequate remedy or
that the other Member is not irreparably injured.  Nothing herein contained,
however, is intended to, nor shall it, limit or affect any rights at law or
by statute or otherwise of any Member as against the other for a breach of
any provision, it being the intention of this Section 14.08 to make clear the
agreement of the Members that the respective rights and obligations of the
Members shall be enforceable in equity as well as at law or otherwise.

SECTION 14.09  EXPENSES

The Company shall reimburse all parties for their out-of-pocket expenses,
including but not limited to fees and expenses of attorneys and accountants
incurred in connection with the negotiation and execution of this Agreement.

SECTION 14.10  ARBITRATION

Without prejudice to the rights of the parties to seek and obtain provisional
or ancillary remedies (such as injunctive relief, attachment or the
appointment of a receiver) in any appropriate court of law having
jurisdiction over the matter and the parties, persons or entities involved,
all claims, disputes or disagreements arising under or in connection with
this Agreement shall at the request of any party be finally resolved in
non-binding arbitration in accordance with the current procedural rules of
the American Arbitration Association ("AAA"), to the extent that the
Arbitration Rules do not conflict with this Section 14.10, and in accordance
with the following:

     (a)  The arbitration shall be held before arbitrators knowledgeable in the
          general subject matter of the dispute, controversy or claim, one
          arbitrator will be selected by each party to the controversy and one
          (or two if necessary to produce an odd number of arbitrators)
          arbitrator(s) will be selected by the arbitrators already selected.
          Notwithstanding the foregoing, the parties may agree upon the
          appointment of a single arbitrator to resolve any dispute, controversy
          or claim arising out of or in connection with this Agreement;

     (a)  The arbitrators shall apply the law (including the procedural law)
          specified in Section 14.11 of this Agreement;

     (a)  The arbitration shall be held in Minneapolis, Minnesota, USA or at any
          such other location agreed upon by the parties;

     (a)  Any award, order or judgment made pursuant to arbitration shall be
          deemed final and may be entered by any court having jurisdiction over
          the enforcement of the award, order or judgment.  Each of the parties
          agrees to submit to the jurisdiction of any court for purposes of the
          enforcement of the award, order or judgment; and

     (a)  The arbitrators shall award all legal fees and costs (including
          administrative expenses and arbitrators' fees and legal fees incurred
          in connection with the arbitration) to the party prevailing in the
          proceeding and such party shall also be entitled to receive all legal
          fees and costs in connection with the enforcement of the award, order
          or judgment of the arbitrator including the costs and expenses of
          appeals.

<PAGE>

SECTION 14.11  GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the
internal law of the State of Delaware without regard to its conflict of law
principles.

SECTION 14.12  TRADEMARKS AND TRADE NAMES

The name of the Company and any trademarks or trade names used in connection
with the Core Business shall be the property of the Company.

SECTION 14.13  FURTHER ASSURANCES

Each Member shall perform all other acts and execute and deliver all other
documents as may be necessary or appropriate to carry out the purposes and
intent of this Agreement and the Contribution Agreement.

SECTION 14.14  NON-COMPETE

No Member shall, without the written consent of the Company and all the other
Members, directly or indirectly own, manage, operate, control, lend money to,
endorse the obligations of, be a creditor of, or participate or be connected
as an officer, Manager, 20% or more stockholder of a publicly-held company,
security holder of a closely-held company, employee, member, partner,
consultant or otherwise with any enterprise or individual engaged in the
business of developing, processing, manufacturing or marketing products or
services that have been, are being or are planned to be developed or provided
by the Company in connection with its Core Business and will not in any
manner, either directly or indirectly, take any action which is designed,
intended or might reasonably be anticipated to compete with the Company in
such business.  The obligations imposed by this Section 14.14 shall terminate
when such Member ceases to retain a Membership Interest in the Company.

SECTION 14.15  NO IMPAIRMENT

Nothing in this Agreement is intended to impair or lessen the fiduciary
duties of the Members to each other as they may exist at law or in equity.

SECTION 14.16  SURVIVAL

In the event that a Member ceases to be a Member in the Company, the terms
and provisions of this Agreement shall apply for a period of ten (10) years
unless, by the express provisions of this Agreement, an obligation or
covenant of a Member is intended to terminate on an earlier date.

SECTION 14.17  AMENDMENT

Any amendment to this Agreement shall be adopted and be effective as an
amendment hereto if approved by the unanimous vote of the Members.

     IN WITNESS WHEREOF, the parties hereto intending to be legally bound,
have caused this Agreement to be duly executed as of the day and year first
above written.

                              MINNESOTA BREWING COMPANY

                              By:
                                 ----------------------------
                                Its:
                                    -------------------------
                                Printed Name:
                                             ----------------

<PAGE>

                              MINNESOTA BREWING LIMITED PARTNERSHIP

                              By: MINNESOTA BREWING MANAGEMENT  COMPANY, its
                              General Partner

                              By:
                                  ----------------------------
                              Bruce E. Hendry, Chief Executive Officer

                              BRUCE E. HENDRY

                              ------------------------------------
                              Bruce E. Hendry

                              GDN PROPERTIES, LLC

                              By:
                                 ----------------------------
                                Its:
                                    -------------------------
                                Printed Name:
                                             ----------------<PAGE>

                           CREDIT AND SECURITY AGREEMENT

                             Dated as of April 15, 1999

          MINNESOTA BREWING COMPANY, a Minnesota corporation (the
"Borrower"), and WELLS FARGO BUSINESS CREDIT, INC., a Minnesota corporation
(the "Lender"), hereby agree as follows:

                                      1  ARTICLE

                                      DEFINITIONS

1.1   Section  DEFINITIONS.  For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:

1.2
     "Accounts" means the aggregate unpaid obligations of customers and other
account debtors to the Borrower arising out of the sale or lease of goods or
rendition of services by the Borrower on an open account or deferred payment
basis, whether now existing or hereafter arising.

     "Advance" has the meaning given in Section

     "Book Net Income" or "Book Net Loss", as the case may be,  means the
Borrower's year-to-date net income or loss, determined in accordance with
GAAP except for the exclusion of extraordinary items.

     "Borrowing Base" means, at any time and subject to change from time to
time in the Lender's sole discretion, the lesser of:

(a)            the Maximum Line; or
(b)
(c)            the sum of:
(d)
               (i)       75% of Eligible Accounts, plus

               (ii)      60% of Eligible Raw Material Inventory, plus

               (iii)     60% of Eligible Packaged Finished Goods Inventory, plus

               (iv)      50% of Eligible Keg Inventory, plus

               (v)       25% of Eligible Packaging Inventory;

provided, however, that the Borrowing Base component for Eligible Packaging
Inventory shall be limited to $400,000 from February through July of each
year and to $200,000 from August to January of each year, and further
provided that the Borrowing Base component for the sum of all types of
Eligible Inventory shall be limited to $1,200,000 from February through July
of each year and to $900,000 from August to January of each year.

     "Collateral" has the meaning given in Section .

     "Default Rate" means an annual rate equal to 2% over the Floating Rate,
which rate shall change when and as the Floating Rate changes.

     "Eligible Accounts" means all unpaid Accounts, net of any credits,
except the following shall not in any event be deemed Eligible Accounts:

<PAGE>

     (1)       That portion of Accounts over 90 days past invoice date;

     (1)       That portion of Accounts that are disputed or subject to a claim
     of offset or a contra account;

     (1)       That portion of Accounts not yet earned by the final delivery of
     goods or rendition of services, as applicable, by the Borrower to the
     customer;

     (1)       Accounts owed by any unit of government, whether foreign or
     domestic (provided, however, that there shall be included in Eligible
     Accounts that portion of Accounts owed by such units of government for
     which the Borrower has provided evidence satisfactory to the Lender that
     (A) the Lender has a first priority perfected security interest and
     (B) such Accounts may be enforced by the Lender directly against such unit
     of government under all applicable laws);

     (1)       Accounts owed by an account debtor located outside the United
     States which are not backed by a bank letter of credit assigned to the
     Lender, in the possession of the Lender and acceptable to the Lender in all
     respects, in its sole discretion;

     (1)       Accounts owed by an account debtor that is the subject of
     bankruptcy proceedings, has gone out of business;

     (1)       Accounts owed by a shareholder, subsidiary, affiliate, officer or
     employee of the Borrower;

     (1)       Accounts not subject to a duly perfected security interest in
     favor of the Lender or which are subject to any lien, security interest or
     claim in favor of any Person other than the Lender;

     (1)       That portion of Accounts that have been restructured, extended,
     amended or modified;

     (1)       That portion of Accounts that constitutes finance charges,
     service charges or sales taxes;

     (1)       Accounts owed by an account debtor, regardless of whether
     otherwise eligible, if 10% or more of the total amount due under Accounts
     from such debtor is ineligible under clauses (1), (2) or (9) above; and

     (1)       Accounts, or portions thereof, otherwise deemed ineligible by the
     Lender in its sole discretion.

     "Eligible Inventory" means all Inventory of the Borrower, at the lower
of cost or market value as determined in accordance with GAAP; provided,
however, that the following shall not in any event be deemed Eligible
Inventory:

     (1)       Inventory that is:  in-transit; located at any warehouse or other
     premises not approved by the Lender in writing; located outside of the
     states, or localities, as applicable, in which the Lender has filed
     financing statements to perfect a first priority security interest in such
     Inventory; covered by any negotiable or non-negotiable warehouse receipt,
     bill of lading or other document of title; on consignment from any Person;
     on consignment to any Person or subject to any bailment unless such
     consignee or bailee has executed an agreement with the Lender located at
     job sites;

     (1)       Work-in-process Inventory;

     (1)       Inventory that is slow moving, damaged, obsolete or not currently
     saleable in the normal course of the Borrower's operations, including but
     not limited to product greater than 180 days old;

     (1)       Inventory that the Borrower has returned, has attempted to
     return, is in the process of returning or intends to return to the vendor
     thereof;

     (1)       Inventory that is subject to a security interest in favor of any
     Person other than the Lender;

     (1)       Sample Inventory, syrups, returnable bottles, pallets, contract
     packaging, brews-in-process , gift shop materials point of sale materials,
     proprietary bottle pads, partitions, cartons, trays, slip sheets, dust
     covers, keg bung and caps;

     (1)       Inventory not located at Borrower's premises in St. Paul,
     Minnesota;

                                       2
<PAGE>

     (1)       Inventory purchased or manufactured pursuant to a license
     agreement not owned by the Borrower: and

     (1)       Inventory otherwise deemed ineligible by the Lender in its sole
     discretion.

     "Eligible Keg Inventory" means Eligible Inventory consisting of empty
kegs.

     "Eligible Packaged Finished Goods Inventory" means Eligible Inventory
consisting of packaged finished goods.

     "Eligible Packaging Inventory" means Eligible Inventory consisting of
proprietary packaging materials.

     "Eligible Raw Material Inventory" means Eligible Inventory consisting of
raw materials.

     "Event of Default" has the meaning specified in Section .

     "Floating Rate" means an annual rate equal to the sum of the Prime Rate
plus one and one-half  percent (1.5%) which annual rate shall change when and
as the Prime Rate changes.

     "GAAP" means generally accepted accounting principles, applied on a
basis consistent with the accounting practices applied in the financial
statements described in Section .

     "Guarantor" means any person guaranteeing payment of the Note or any of
the other Obligations and any person executing any liquidation support
agreement in favor of the Lenders.

     "Inventory" means all of the Borrower's inventory, as such term is
defined in the UCC, whether now owned or hereafter acquired.

     "Loan Documents" means this Agreement, the Note, the Disclosure, the
Security Documents and any and all other related instruments, agreements and
documents executed by the Borrower, any Guarantor or any other party and
delivered to the Lender.

     "Maximum Line" means $3,000,000.

     "Note" means the Borrower's revolving promissory note, payable to the
order of the Lender in form and content satisfactory to Lender.

     "Obligations" means each and every debt, liability and obligation of
every type and description which the Borrower may now or at any time
hereafter owe to the Lender,  including all indebtedness arising under this
Agreement, the Note or any other loan or credit agreement or guaranty between
the Borrower and the Lender, whether now in effect or hereafter entered into.

     "Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.

     "Prime Rate" means the rate of interest publicly announced from time to
time by Wells Fargo Bank, N.A. as its "prime rate" or, if such bank ceases to
announce a rate so designated, any similar successor rate designated by the
Lender.

     "Security Documents" means the Collateral Account Agreement and the
Lockbox Agreement, each of even date herewith and by and among the Borrower,
the Lender and Norwest Bank Minnesota, National Association, and any and all
other documents, instruments and agreements executed by the Borrower or any
other party and delivered to the Lender as amended from time to time, as
security for the Obligations.

     "Security Interest" has the meaning given in Section .

     "Termination Date" has the meaning given in Section .

     "UCC" means the Uniform Commercial Code as in effect from time to time
in the State of Minnesota.

                                 2    ARTICLE

                                       3
<PAGE>

                       AMOUNT AND TERMS OF THE CREDIT FACILITY

3.1            Section  REVOLVING ADVANCES .  The Lender may, in its sole
discretion, make advances to the Borrower from time to time from the date this
Agreement is signed and delivered to the Termination Date, on the terms and
subject to the conditions herein set forth (each an "Advance").  The Lender
shall not consider any request for an Advance if, after giving effect to such
requested Advance, the sum of the outstanding and unpaid Advances would exceed
the Borrowing Base.  The Borrower's obligation to pay the Advances shall be
evidenced by the Note.  Within the limits set forth in this Section , the
Borrower may request Advances, prepay, and request additional Advances.  The
Borrower shall make each request for an Advance to the Lender before 11:00 a.m.
(Minneapolis time) of the day of the requested Advance.  Requests may be made in
writing or by telephone.
3.2
3.3            Section  INTEREST; DEFAULT INTEREST.
3.4
(a)            REVOLVING NOTE.  Except as set forth in Sections  and  the
outstanding principal balance of the Advances shall bear interest at the
Floating Rate.  All interest shall be payable monthly in arrears on the first
day of the month and on demand.
(b)
(c)            MINIMUM INTEREST CHARGE.  Notwithstanding the interest payable
pursuant to Section , the Borrower shall pay to the Lender interest of not less
than $80,000 per year during the term of this Agreement and on each anniversary
of the execution of this Agreement, the Borrower shall pay any deficiency
between such minimum interest charge and the amount of interest otherwise
calculated under Sections  and .
(d)
(e)            DEFAULT INTEREST RATE.  From the first day of any month during
which Borrower is not in compliance with its agreements set forth in this
Agreement or the Note, in the Lender's discretion and without waiving any of its
other rights and remedies, the outstanding principal balance of the Advances
shall bear interest at the Default Rate.
(f)
3.5            Section  FEES.
3.6
(a)            CLOSING FEE.  The Borrower agrees to pay the Lender a closing fee
of $ 30,000 upon the execution of this Agreement.
(b)
(c)            MONITORING FEES.  The Borrower agrees to pay the Lender
collateral monitoring fees for the expense of  auditors (not to exceed the then
current standard applicable rate, which on the date of this Agreement is $75.00
per hour per auditor, plus out-of-pocket expenses).
(d)
3.7            Section  DISCRETIONARY NATURE OF CREDIT FACILITY; AUTOMATIC
RENEWAL.  THE LENDER MAY AT ANY TIME AND FOR ANY REASON REFUSE TO MAKE AN
ADVANCE AND/OR DEMAND PAYMENT OF THE ADVANCES AND TERMINATE THIS AGREEMENT
WHETHER BORROWER IS OR IS NOT IN COMPLIANCE WITH THIS AGREEMENT.  The Lender
need not show that an adverse change has occurred in the Borrower's condition,
financial or otherwise, in order to refuse to make any requested Advance or to
demand payment of the Advances.  Unless terminated by the Lender at any time or
by the Borrower pursuant to Section , this Agreement shall remain in effect
until the three-year anniversary of the date of this Agreement and, thereafter,
shall automatically renew for successive one year periods.  Each such
anniversary date is herein referred to as a "Termination Date".
3.8
3.9            Section  TERMINATION BY BORROWER.
3.10
(a)            TERMINATION BY BORROWER.  The Borrower may terminate this
Agreement at any time subject to payment and performance of all Obligations, may
obtain any release or termination of the Security Interest to which the Borrower
is otherwise entitled by law by  giving at least 30 days' prior written notice
to the Lender of the Borrower's intention to terminate this Agreement, and
 paying the Lender a prepayment fee in accordance with Section  if the Borrower
terminates this Agreement effective as of any date other than a Termination
Date.
(b)
(c)            PREPAYMENT FEE.   (a)   If the Borrower desires to terminate this
Agreement  as of a Termination Date but without giving at least 30 days' prior
written notice thereof, or if the Borrower desires to terminate this Agreement
as of any  date other than a Termination Date upon giving at least 30 days'
prior written notice to the Lender of the Borrower's intention to do so,
Borrower shall  pay to the Lender a prepayment fee of the greater of (i) during
the first year of this Agreement, 3% of the Maximum Line, during the

                                       4
<PAGE>

second year of this Agreement, 2% of the Maximum Line and during the third or
later year of this Agreement, 1% of the Maximum Line, or (ii) the Minimum
Interest Charge pursuant to subsection 2.2(b) above less the amount of
interest actually paid by the Borrower during the then current year of this
Agreement; provided that (i) no prepayment penalty shall be due if the
Borrower shall prepay the Obligations solely from cash flow generated from
the Borrower's operations in the ordinary course and (ii) no prepayment fee
shall be required if the prepayment is wholly made pursuant to a refinancing
with another "Wells Fargo" affiliated entity.
(d)
(e)            (b)  Lender shall have the right of first refusal with regard
to a revolving credit facility with  Borrower's affiliate Gopher State
Ethanol, LLC, which revolving credit facility would be cross-defaulted and
cross-collateralized with this Agreement.  If Lender declines to provide such
revolving credit facility to Gopher States Ethanol and Borrower obtains a
revolving credit facility with another lender, this Agreement shall be
terminated and all amounts owing shall be prepaid prior to or concurrently
with the closing of such revolving credit facility and the prepayment fee set
forth in (a) above shall be due, provided that if such termination and
repayment occurs during the first three months following the closing of this
Agreement, then in lieu of the prepayment fee set forth in (a) above,
Borrower shall pay to the Lender a prepayment fee of 1.5% of the average loan
balance calculated from the date of this Agreement to the prepayment date.
(f)
3.11           Section  MANDATORY PREPAYMENT/NON-USAGE PERIOD.  Without notice
or demand, if the outstanding principal balance of the Advances shall at any
time exceed the Borrowing Base, the Borrower shall immediately prepay the
Advances to the extent necessary to eliminate such excess.
3.12
3.13           Section  ADVANCES WITHOUT REQUEST.  The Borrower hereby
authorizes the Lender, in its discretion, at any time or from time to time
without the Borrower's request, to make Advances to pay accrued interest, fees,
uncollected items that have been applied to the Obligations, and other
Obligations due and payable from time to time.
3.14
          Section 2.8    USE OF PROCEEDS.  The Borrower shall use the proceeds
of Advances for ordinary working capital purposes or the first Advance hereunder
shall be used to pay off the Borrower's existing working capital account with
that portion of its line with Minnesota Brewing Limited Partnership in excess of
$1,000,000, provided that the Borrower shall have minimum excess Borrowing Base
availability of at least $100,000 prior to the initial Advance.

                               3    ARTICLE

                              SECURITY INTEREST

3.1            Section  GRANT OF SECURITY INTEREST .  The Borrower hereby grants
to the Lender a security interest (the "Security Interest") in the following
collateral (the "Collateral"), as security for the payment and performance of
the Obligations:

INVENTORY:  All inventory of Borrower, as such term is defined in the UCC,
whether now owned or hereafter acquired, whether consisting of whole goods,
spare parts or components, supplies or materials, whether acquired, held or
furnished for sale, for lease or under service contracts or for manufacture
or processing, and wherever located; and

ACCOUNTS AND OTHER RIGHTS TO PAYMENT:  Each and every right of Borrower to
the payment of money, whether such right to payment now exists or hereafter
arises, whether such right to payment arises out of a sale, lease or other
disposition of goods or other property, out of a rendering of services, out
of a loan, out of the overpayment of taxes or other liabilities, or otherwise
arises under any contract or agreement, whether such right to payment is
created, generated or earned by Borrower or by some other person who
subsequently transfers such person's interest to Borrower, whether such right
to payment is or is not already earned by performance, and howsoever such
right to payment may be evidenced, together with all other rights and
interests (including all liens and security interests) which Borrower may at
any time have by law or agreement against any account debtor or other obligor
obligated to make any such payment or against any property of such account
debtor or other obligor; all including all of Borrower's rights to payment in
the form of all present and future accounts, contract rights, loans and
obligations receivable, chattel papers, bonds, notes and other debt
instruments, tax refunds and rights to payment in the nature of general
intangibles; and

EQUIPMENT:  All of the Borrower's goods and equipment, as such term is
defined in the UCC whether now or hereafter owned, including all present and
future machinery, vehicles, furniture, fixtures, manufacturing equipment,
shop equipment, office and recordkeeping equipment, parts, tools, supplies,
and including specifically the goods described in any equipment schedule or
list herewith or hereafter furnished to the Lender by the Borrower;

INVESTMENT PROPERTY: All of the Borrower's investment property, as such term
is defined in the UCC, including without limitation securities, securities
accounts, securities entitlements, financial assets and certificates of
deposit of the Borrower and all

                                       5
<PAGE>

funds of the Borrower on deposit with and all property in the possession of
the Lender or any depository institution, each whether now owned or hereafter
acquired EXCEPT FOR approximately $500,000 in United States Treasury
obligations held as collateral by the Federal Reservie Bank of Minneapolis
for the benefit of the Bureau of Alcohol, Tobacco and Firearms; and

GENERAL INTANGIBLES:  All of the Borrower's general intangibles, as such term
is defined in the UCC, whether now owned or hereafter acquired, including all
present and future contract rights, patents, patent applications, copyrights,
trademarks, trade names, trade secrets, customer or supplier lists and
contracts, manuals, operating instructions, permits, franchises, the right to
use the Borrower's name, and the goodwill of Borrower's business; and

PROCEEDS: Together with all substitutions and replacements for and products
of any of the foregoing property and together with proceeds of any and all of
the foregoing property and, in the case of all tangible property, together
with all accessions and together with (i) all accessories, attachments,
parts, equipment and repairs now or hereafter attached or affixed to or used
in connection with any such tangible property, and (ii) all warehouse
receipts, bills of lading and other documents of title now or hereafter
covering such tangible property.

3.1            Section  NOTIFICATION OF ACCOUNT DEBTORS AND OTHER OBLIGORS.  The
Lender may at any time (either before or after the occurrence of an Event of
Default) notify any account debtor or other person obligated to pay the amount
due that such right to payment has been assigned or transferred to the Lender
for security and shall be paid directly to the Lender.  The Borrower will join
in giving such notice if the Lender so requests.  At any time after the Borrower
or the Lender gives such notice to an account debtor or other obligor, the
Lender may, but need not, as the Borrower's agent and attorney-in-fact, notify
the United States Postal Service to change the address for delivery of the
Borrower's mail to any address designated by the Lender, otherwise intercept the
Borrower's mail, and receive, open and dispose of the Borrower's mail, applying
all Collateral as permitted under this Agreement and holding all other mail for
the Borrower's account or forwarding such mail to the Borrower's last known
address.
3.2
3.3            Section  OCCUPANCY.
3.4
(a)            The Borrower hereby irrevocably grants to the Lender the right to
take possession of each premises where Borrower conducts its business and has
any rights of possession (the "Premises") at any time after the occurrence and
during the continuance of an Event of Default.
(b)
(c)            The Lender may use the Premises only to hold, process,
manufacture, sell, use, store, liquidate, realize upon or otherwise dispose of
goods that are Collateral and for other purposes that the Lender in good faith
considers related.
(d)
(e)            The Lender's right to hold the Premises shall terminate upon the
earlier of payment in full of all Obligations, or final sale or disposition of
all goods constituting Collateral and delivery of all such goods to purchasers.
(f)
(g)            The Lender shall not be obligated to pay or account for any rent
or other compensation for the possession or use of any of the Premises;
provided, however, that if the Lender does pay or account for any rent or other
compensation for the possession or use of any of the Premises, the Borrower
shall reimburse the Lender promptly for the full amount thereof.
(h)
3.5            Section  LICENSE/MAINTENANCE OF INTELLECTUAL PROPERTY.  The
Borrower hereby grants to the Lender a non-exclusive, worldwide and royalty-free
license to use or otherwise exploit all trademarks, franchises, trade names,
copyrights and patents owned by or licensed to the Borrower for the purpose of
selling, leasing or otherwise disposing of any or all Collateral following an
Event of Default.  The Borrower shall not sell, transfer, assign (by operation
of law or otherwise), exchange, lease, license, allow to go abandoned or
otherwise dispose of all or any portion of said intellectual property and shall
maintain and protect all of such property in accordance with all applicable
state, federal and foreign laws.
3.6
3.7            Section  FILING A COPY.  A carbon, photographic, or other
reproduction of this Agreement or of a financing statement signed by Borrower is
sufficient as a financing statement.
3.8
                                   4    ARTICLE

                               CONDITIONS OF LENDING

          In view of the fact that Advances may be made in the sole discretion
of the Lender, this Agreement does not set forth conditions precedent to
Advances.  The Lender will advise the Borrower of the Lender's documentation and
other requirements

                                       6
<PAGE>

before considering any Advance.

                                 3    ARTICLE

                        REPRESENTATIONS AND WARRANTIES

          The Borrower represents and warrants to the Lender as follows:

3.1            Section  NAME; LOCATIONS; TAX ID NO., SUBSIDIARIES.  During
its existence, the Borrower has done business solely under its corporate name
as set forth herein and under such trade names and such other corporate names
as disclosed to Lender in writing before this Agreement is signed and
delivered. The address of Borrower's chief executive office and principal
place of business and its federal tax identification number are set forth
below its signature to this Agreement.  All Inventory is located at that
location or at one of the other locations disclosed to Lender in writing
before this Agreement is signed and delivered.  The Borrower has no
subsidiaries except as disclosed to Lender in writing before this Agreement
is signed and delivered.  The Borrower owns 27.5% of Gopher State Ethanol,
LLC, a Delaware limited liability company.

3.1            Section  FINANCIAL CONDITION; NO ADVERSE CHANGE.  Before this
Agreement was signed and delivered, the Borrower furnished the Lender certain of
its unaudited financial statements certified by the Borrower.  Those statements
fairly present the Borrower's financial condition as the dates indicated therein
and the results of its operations for the period ended December 31, 1998 and
were prepared in accordance with generally accepted accounting principles.
Since December 31, 1998, there has been no material adverse change in the
business, properties or condition (financial or otherwise) of the Borrower.
3.2

                                 4    ARTICLE

                    AFFIRMATIVE COVENANTS OF THE BORROWER

          So long as the Advances or any other obligations shall remain
unpaid, the Borrower will comply with the requirements in this Article,
unless the Lender shall otherwise consent in writing.

3.1            Section  REPORTING REQUIREMENTS.  The Borrower will deliver to
the Lender each of the following in form and detail acceptable to the Lender:
3.2
(a)            as soon as available, and in any event within ninety (90) days
after the end of each fiscal year of the Borrower, the Borrower's audited
financial statements prepared in accordance with GAAP;
(b)
(c)            as soon as available and in any event within twenty (20) days
after the end of each month, an unaudited/internal balance sheet and statement
of income and retained earnings of the Borrower as at the end of and for such
month and for the year to date period then ended, prepared in accordance with
GAAP, subject to year-end audit adjustments, together with a completed
compliance certificate in the form attached hereto;
(d)
(e)            within twenty (20) days after the end of each month, agings of
the Borrower's accounts receivable, together with a certificate of ineligible
accounts, and agings of the Borrower's accounts payable, each as of the end of
such month;
(f)
(g)            not later than twenty (20) days after each month end or more
frequently if requested by the Lender, inventory certifications and a detailed
inventory report by the Borrower, each in form acceptable to the Lender, for
such month and/or other period, as applicable;
(h)
(i)            as soon as available, and within twenty (20) days of receipt
thereof,  a copy of the bank  account statements of the Borrower from each bank
with which Borrower maintains an account;
(j)
(k)            from time to time, with reasonable promptness, any and all
receivables schedules, collection reports, deposit records, equipment schedules,
copies of invoices to account debtors, shipment documents and delivery receipts
for goods sold, and such other material, reports, records or information as the
Lender may request;
(l)
(m)            within three (3) days of Borrower's payment of or deposit for
taxes, including but not limited to payroll taxes, proof of such payment in form
acceptable to the Lender;
(n)
(o)            at least thirty (30) days before the beginning of each of
Borrower's fiscal years, projections of Borrower's monthly

                                       7
<PAGE>

balance sheets and income statements for such fiscal year;
(p)
(q)            immediately after the commencement thereof, notice in writing of
all litigation and of all proceedings before any governmental or regulatory
agency affecting the Borrower or which seek a monetary recovery against the
Borrower in excess of $50,000;
(r)            immediately after Borrower's knowledge thereof, notice in writing
of all disputes and claims in excess of $15,000 individually; and
(s)
(t)            within (3) days of Borrower's payment of state beverage and
alcohol taxes, proof of such payment in form acceptable to the Lender.
(u)
3.3            Section  INSPECTION.  Upon the Lender's request, the Borrower
will permit any officer, employee, attorney, agent or accountant for the Lender
to audit, review, make extracts from or copy any and all records of the Borrower
and to inspect the Collateral at all times during ordinary business hours.
3.4
3.5            Section  ACCOUNT VERIFICATION.  The Borrower will at any time and
from time to time upon request of the Lender send requests for verification of
Accounts or notices of assignment to account debtors and other obligors.  The
Borrower authorizes the Lender to verify Accounts directly with account debtors
or other obligors from time to time, including on a daily basis (and the
Borrower understands the Lender intends to do so by telephone and/or in
writing).
3.6
3.7            Section  NO OTHER LIENS.  The Borrower will keep all Collateral
free and clear of all security interests, liens and encumbrances except the
Security Interest, purchase money security interests in equipment, and  those
security interests (if any) evidenced by the following UCC-1 Financing
Statements filed with the Secretary of State of Minnesota:   File No. 1656153,
filed March 8, 1995; File No. 1874860, filed September 3, 1996; File No.
1988133, filed November 12, 1997; and File No. 2052896, filed July 14, 1998.
3.8
3.9            Section  INSURANCE .  The Borrower will at all times keep all
tangible Collateral insured against risks of fire (including so-called extended
coverage), theft, collision (for Collateral consisting of motor vehicles) and
such other risks and in such amounts as the Lender may reasonably request, with
a lender's loss payable clause in favor of Lender to the extent of its interest.
3.10
3.11           Section  LOCKBOX; COLLATERAL ACCOUNT.  The Borrower has provided
the Lender with agreements regarding a lockbox and a collateral account in
connection with the collection of Accounts.
3.12
3.13           Section  MINIMUM BOOK NET INCOME.  The Borrower will at all times
maintain during each period described below, a Book Net Income (bracketed
figures indicate maximum Book Net Loss):
3.14

<TABLE>
<CAPTION>
          Month                    Minimum Year-to-Date Book Net Income
          -----                    ------------------------------------
<S>                                <C>
          April 1999                              < $795,000 >
          May 1999                                < $895,000 >
          June 1999                               < $795,000 >
          July 1999                               < $895,000 >
          August 1999                             < $995,000 >
          September 1999                          < $1,095,000 >
          October 1999                            < $1,195,000 >
          November 1999                           < $1,295,000 >
          December 1999                           < $1,440,000 >
</TABLE>

     The Lender has the right to adjust the Minimum Book Net Income covenant
levels based upon Borrower's fiscal year-end results.  Failure by Borrower
and Lender  to establish covenant levels for fiscal year 2000 by April 30,
2000 shall be an Event of Default.

3.1            Section  NO SALE OR TRANSFER OF COLLATERAL AND OTHER ASSETS .
The Borrower will not sell, lease, assign, transfer or otherwise dispose of
(i) the stock of any subsidiary, (ii) all or a substantial part of its
assets, or (iii) any Collateral or any interest therein (whether in one
transaction or in a series of transactions) to anyone other than the sale of
Inventory in the ordinary course of business or the sale or other disposal of
obsolete equipment.

                                       8
<PAGE>

3.2
3.3            Section  PLACE OF BUSINESS; NAME .  The Borrower will not change
the location of its chief executive office or principal place of business from
that disclosed pursuant to Section .  The Borrower will not permit any tangible
Collateral to be located in any state or area in which, in the event of such
location, a financing statement covering such Collateral would be required to
be, but has not in fact been, filed in order to perfect the Security Interest.
The Borrower will not change its name without at least thirty (30) days prior
written notice to the Lender.
3.4
3.5            Section CAPITAL EXPENDITURE LIMITATIONS.    The Borrower will not
expend or contract to expend more than  $100,000 for any item or $350,000 in the
aggregate during any calendar year  for fixed assets, including Equipment,
whether by way of purchase, capital lease or otherwise, and whether payable
currently or in the future.
3.6
3.7            Section PROHIBITION ON DISTRIBUTIONS.  The Borrower will not
purchase or redeem any shares of Borrower's stock or declare or pay any
dividends (other than dividends payable in capital stock) or make any
distribution to stockholders of any assets of Borrower or make any distribution
which would result in an Event of Default.
3.8
3.9            Section  LOANS TO AFFILIATE.   The Borrower will not permit any
amount to be owing to Borrower Gopher States Ethanol as a result of any
borrowings, purchases, investments, advances or other transactions or events in
excess of the amount owing on the date hereof.
3.10
3.11           Section  MANAGEMENT CHANGE.  The Borrower will not make any
substantial change in the present management of Borrower without the prior
written approval of Lender.

                                3    ARTICLE

                   EVENTS OF DEFAULT, RIGHTS AND REMEDIES

3.1            Section  EVENTS OF DEFAULT .  An "Event of Default" as used
herein shall mean any of the following:
3.2
(a)            Failure to pay the Note when demanded, and in this connection
Borrower hereby waives presentment, notice of dishonor and protest;

(a)            A petition shall be filed by or against the Borrower or any
Guarantor under the United States Bankruptcy Code naming the Borrower or such
Guarantor as debtor;
(b)
(c)            Default in the performance, or breach, of any covenant or
agreement of the Borrower, any Guarantor or any other related party contained in
this Agreement or any other Loan Document, including, without limitation, any
support agreement.
(d)
(e)            Default in the performance, or breach, of any covenant or
agreement of Gopher States Ethanol contained in any agreement with Lender.
(f)
3.2            Section  RIGHTS AND REMEDIES.  As provided in Section , the
Lender may, at any time and for any reason, refuse to make any requested Advance
or demand payment of the Advances.  Upon such demand or upon the occurrence of
an Event of Default or at any time thereafter, the Lender may exercise any or
all of the following rights and remedies:
3.3
(a)            The Lender may exercise and enforce any and all rights and
remedies available upon default to a secured party under the UCC, including the
right to take possession of Collateral, or any evidence thereof, proceeding
without judicial process or by judicial process (without a prior hearing or
notice thereof, which the Borrower hereby expressly waives) and the right to
sell, lease or otherwise dispose of any or all of the Collateral, and in
connection therewith, the Borrower will on demand assemble the Collateral and
make it available to the Lender at a place to be designated by the Lender which
is reasonably convenient to both parties;
(b)
(c)            The Lender may exercise any other rights and remedies available
to it by law or agreement; and
(d)
(e)            The Lender may demand an appraisal of the Borrower's tradenames
and trademarks at Borrower's expense.
(f)
(g)  The remedies provided hereunder are cumulative.
3.4            Section  CERTAIN NOTICES.  If notice to the Borrower of any
intended disposition of Collateral or any other intended

                                       9
<PAGE>

action is required by law in a particular instance, such notice shall be
deemed commercially reasonable if given (in the manner specified in Section )
at least 10 calendar days before the date of intended disposition or other
action.
3.5
                                   4    ARTICLE

                                   MISCELLANEOUS

3.1            Section  ADDRESSES FOR NOTICES, ETC .  Except as otherwise
expressly provided herein, all notices, requests, demands and other
communications provided for hereunder shall be in writing and shall be (a)
personally delivered, (b) sent by first class United States mail, (c) sent by
overnight courier of national reputation, or (d) transmitted by telecopy, in
each case addressed or telecopied to the party to whom notice is being given
at its address or telecopy number as set forth below its signature to this
Agreement.

3.1            Section  COSTS AND EXPENSES .  The Borrower agrees to pay on
demand all costs and expenses (including legal fees) incurred by the Lender
in connection with the Loan Documents, and any other document or agreement
related thereto, and the transactions contemplated hereby, including wire
transfer and ACH charges, the cost of credit reports, overadvance fees, the
expense of any auditors (not to exceed the then current standard applicable
rate, which on the date of this Agreement is  $75.00 per hour per auditor,
plus out of pocket expenses), and fees and expenses in enforcing this
Agreement.

3.1            Section  INDEMNITY.  In addition to the payment of expenses
pursuant to Section , the Borrower agrees to indemnify, defend and hold harmless
the Lender, and any of its participants, parent corporations, subsidiary
corporations, affiliated corporations, successor corporations, and all present
and future officers, directors, employees, attorneys and agents of the foregoing
(the "Indemnitees") from and against any of the following (collectively,
"Indemnified Liabilities"):
3.2
(a)            any and all transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the execution and
delivery of this Agreement and the other Loan Documents or the making of the
Advances;
(b)
(c)            any and all liabilities, losses, damages, penalties, judgments,
suits, claims, costs and expenses of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel) in
connection with any investigative, administrative or judicial proceedings,
whether or not such Indemnitee shall be designated a party thereto, which may be
imposed on, incurred by or asserted against any such Indemnitee, in any manner
related to or arising out of or in connection with the making of the Advances,
this Agreement and the other Loan Documents or the use or intended use of the
proceeds of the Advances; and
(d)
(e)            any claim, loss or damage to which any Indemnitee may be
subjected as a result of any violation of any federal, state, local or other
governmental statute, regulation, law, or ordinance dealing with the protection
of human health and the environment, in any manner related to or arising out of
or in connection with the making of the Advances, this Agreement and the other
Loan Documents or the use or intended use of the proceeds of the Advances.
(f)
(g)  If any investigative, judicial or administrative proceeding arising from
any of the foregoing is brought against any Indemnitee, the Borrower, or counsel
designated by the Borrower and satisfactory to the Indemnitee, will resist and
defend such action, suit or proceeding to the extent and in the manner directed
by the Indemnitee.  Each Indemnitee will use its best efforts to cooperate in
the defense of any such action, suit or proceeding.  If the foregoing
undertaking to indemnify, defend and hold harmless may be held to be
unenforceable because it violates any law or public policy, the Borrower shall
nevertheless make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law.
The Borrower's obligation under this Section  shall survive the termination of
this Agreement and the discharge of the Borrower's other obligations hereunder.
(h)
3.3            Section  BINDING EFFECT; ASSIGNMENT; SHARING OF INFORMATION .
The Loan Documents shall be binding upon and inure to the benefit of the
Borrower and the Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights thereunder or any
interest therein without the prior written consent of the Lender.   Without
limitation of the Lender's right to share information regarding the Borrower and
its Affiliates with Lender's participants, accountants, lawyers and other
advisors, the Lender may share at any time with Wells Fargo Corporation, and all
direct and indirect subsidiaries of Wells Fargo Corporation, any and all
information the Lender may have in its possession regarding the Borrower and its
Affiliates, and the Borrower waives any right of confidentiality it may have
with respect to such sharing of information.
3.4
3.5            Section  GOVERNING LAW; JURISDICTION, VENUE; WAIVER OF JURY
TRIAL.  This Agreement and the Note shall be governed by and construed in
accordance with the laws (other than conflict laws) of the State of
Minnesota.  Each party consents to

                                       10
<PAGE>

the personal jurisdiction of the state and federal courts located in the
State of Minnesota in connection with any controversy related to this
Agreement, waives any argument that venue in any such forum is not convenient
and agrees that any litigation initiated by any of them in connection with
this Agreement shall be venued in either the District Court of Hennepin
County, Minnesota located in Minneapolis, Minnesota, or the United States
District Court, District of Minnesota, Fourth Division.  THE PARTIES WAIVE
ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING
TO THIS AGREEMENT.
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
                              [SIGNATURE PAGE FOLLOWS]

                                       11
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have signed this Agreement
as of the date first above written.

WELLS FARGO BUSINESS CREDIT, INC.          MINNESOTA BREWING COMPANY

By                                         By
   --------------------------------           --------------------------------
   Doug Wall                                  John Lee
   Its Assistant Vice President               Its Chief Executive Officer

Address:                                   Address:
Norwest Center                             882 West 7th Street
Sixth Street and Marquette Avenue          St. Paul, MN 55102
Minneapolis, Minnesota 55479-0152
                                           Telecopy No. (651) 290-8220
Telecopy No. (612) 341-2472                Federal Tax I.D. No. 41-1707599
Federal Tax ID No. 41-1712687

                 [Signature Page to Credit and Security Agreement]

                                       12
<PAGE>

                               COMPLIANCE CERTIFICATE

To:       Doug Wall
     Wells Fargo Business Credit, Inc.

Date:                            , 199
        -------------------------     ---
Subject:       Minnesota Brewing Company
     Financial Statements

          In accordance with our Credit and Security Agreement dated as of
April 15, 1999 (the "Credit Agreement"), attached are the financial
statements of Minnesota Brewing Company  (the "Borrower") as of and for
________________, 19___ (the "Reporting Date") and the year-to-date period
then ended (the "Current Financials").  All terms used in this certificate
have the meanings given in the Credit Agreement.

          I certify that the Current Financials have been prepared in
accordance with GAAP, subject to year-end audit adjustments, and fairly
present the Borrower's financial condition as of the date thereof.

          EVENTS OF DEFAULT.  (Check one):

     / /  The undersigned does not have knowledge of the occurrence of a Default
     or Event of Default under the Credit Agreement.

/ /  The undersigned has knowledge of the occurrence of a Default or Event of
     Default under the Credit Agreement and attached hereto is a statement of
     the facts with respect to thereto.

          REPRESENTATION AND WARRANTIES. (Check one):

     / /  The undersigned hereby reaffirms the representations and warranties as
     set forth in the Credit Agreement, each of which are true and correct as of
     the date hereof.

     / /  The undersigned hereby reaffirms the representations and warranties
     set forth in the Credit Agreement, each of which are true and correct as of
     the date hereof except as described in the statement attached hereto.

          FINANCIAL COVENANTS.  I further hereby certify as follows:

1         .    MINIMUM BOOK NET INCOME  Pursuant to Section of the Credit
Agreement, as of the Reporting Date, the Borrower's Book Net Income was
$____________, which / / satisfies / / does not satisfy the requirement that
such amount be not less than $_____________ on the Reporting Date as set
forth in table below (bracketed numbers indicate maximum Book Net Loss):

<TABLE>
<CAPTION>
          Month                             Minimum Book Net Income
          -----                             ------------------------
<S>                                         <C>
          April 1999                              < $795,000 >
          May 1999                                < $895,000 >
          June 1999                               < $795,000 >
          July 1999                               < $895,000 >
          August 1999                             < $995,000 >
          September 1999                          < $1,095,000 >
          October 1999                            < $1,195,000 >
          November 1999                           < $1,295,000 >
          December 1999                           < $1,440,000 >
</TABLE>

                                       13
<PAGE>

          Attached hereto are all relevant facts in reasonable detail to
evidence, and the computations of the financial covenants referred to above.
These computations were made in accordance with GAAP.

                         MINNESOTA BREWING COMPANY

                         By
                            -------------------------------------------------
                              Michael C. Hime
                              Its Chief Financial Officer

                                       14

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