Document:

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                                                                    EXHIBIT 10.5

                              CONSULTING AGREEMENT

      THIS CONSULTING AGREEMENT ("AGREEMENT") is made effective as of the 9th
day of July, 2004, by and between Glacial Lakes Energy, LLC a South Dakota
limited liability company ("CONSULTANT"), and Granite Falls Community Ethanol
Plant, LLC, a Minnesota limited liability company ("Granite Falls").

      WHEREAS, Granite Falls, (of which Glacial Lakes is a member) intends to
construct a 40 Million gallon per year "Dry Mill" ethanol plant ("Project") near
Granite Falls, Minnesota; and

      WHEREAS, Granite Falls desires to engage the Consultant to assist Granite
Falls in monitoring the construction and reviewing project plans and documents
as set forth in this Agreement.

      NOW, THEREFORE, the parties agree as follows:

      1.    CONSULTING SERVICES. Granite Falls hereby retains the services of
Consultant, and Consultant agrees to provide such consulting services pursuant
to the terms of this Agreement. The scope of services provided by the Consultant
pursuant to this Agreement are set forth on the attached EXHIBIT A, which is
incorporated herein by this reference. Consultant agrees to faithfully perform
the duties required of it pursuant to this Agreement and to devote the necessary
time and attention to performing such services for Granite Falls. Consultant
shall hire "PROJECT COORDINATOR" and shall be on site and advise Consultant as
to the status of construction at all times. Consultant will employ and direct
the activities of the Project Coordinator. The parties acknowledge that in no
event shall Consultant be liable to Granite Falls or any other Project lender or
third party for the acts or omissions of the Project architects, engineers,
construction managers, and contractors, or for any design and construction
defects, subcontractors, or suppliers consequential damages.

      2.    COMPENSATION. Granite Falls agrees to pay Consultant a fee of
$10,000.00 per month for its consulting services as set forth herein. The fees
shall be paid to Consultant upon receipt of an invoice from Consultant. Granite
Falls shall make payments to Consultant within ten days of the date on each
invoice. The fees shall not be subject to any withholding or payments of income
tax, FICA, FUTA or similar tax and insurance withholding requirements.
Consultant is responsible for the payment of all applicable taxes. Consultant is
an independent contractor and is not an employee of Granite Falls.

      3.    REIMBURSABLE EXPENSES. In addition to the Fee set forth above in
Section 2, Granite Falls agrees to reimburse Consultant as follows:

      Granite Falls agrees to reimburse Consultant for all pre-approved expenses
      reasonably incurred by Consultant in connection with the performance of
      consulting services under this Agreement, to the extent approved in
      advance by Granite Falls, excluding any travel costs back and forth
      between Granite Falls, Minnesota and Watertown, South Dakota.

The reimbursable expenses referenced in this Section 3 shall be included in the
itemized monthly invoice provided by Consultant as set forth in the above
Section 2.

      4.    TERM. This Agreement shall commence as of the date of its execution
and, unless otherwise agreed in writing, shall terminate upon commencement of
the Operating and Management Agreement term, as set forth therein. If the
Project is abandoned, Granite Falls may terminate this Agreement. In such event,
Consultant shall be entitled to receive payment for services rendered and
expenses incurred through the date of termination.

      5.    NO AUTHORITY TO BIND; RELATIONSHIP OF THE PARTIES; 3RD PARTY
BENEFICIARIES. Consultant is merely an advisor to Granite Falls, and, as such,
Consultant shall have no authority to bind Granite Falls on any
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matter. This Agreement does not create a partnership or any other relationship
other than that of an independent contractor relationship between the parties.
There are no intended 3rd party beneficiaries of this Agreement.

      6.    ASSIGNMENT. This Agreement and a party's rights and obligations
hereunder may not be assigned without the written consent of the other party.
Subject to the foregoing, this Agreement shall be binding on the heirs,
successors and assigns of the parties.

      7.    WAIVER. The waiver by either party of a breach of any provision of
this Agreement shall not be deemed a waiver of any other provision or of any
other breach of the same provision. Waivers shall apply only if in writing and
signed by the party against whom the waiver is claimed. No change, modification
or amendment shall be valid unless in writing and signed by both parties.

      8.    ENTIRE AGREEMENT. This Agreement constitutes the entire statement of
agreement between the parties and supersedes all prior discussions and
understandings between the parties pertaining to the subject matter of this
Agreement. The headings have been inserted for convenience only and are not to
be considered when interpreting the provisions of this Agreement.

      9.    SEVERABILITY: If any term or provision of this Agreement is held
invalid and unenforceable to any extent, the remaining terms and provisions of
this Agreement shall not be affected thereby, but each term and provision of the
Agreement shall be valid and enforced to the fullest extent permitted by law.

      10.   APPLICABLE LAW. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Minnesota,
determined without regard to its principles of conflicts of laws. In the event
of a claim arising out of this Agreement the prevailing party shall be entitled
to recover attorney's fees and other collection or enforcement costs.

      11.   NOTICES. All notices or other communications required or permitted
to be given pursuant to the provisions of this Agreement shall be in writing and
shall be considered as properly given if mailed by first class United States
mail, postage prepaid, or by delivering same in person to the intended
addressee, or by prepaid telegram. Notice so mailed shall be effective upon its
deposit. Notice given in any other manner shall be effective only if and when
received by the addressee. For purposes of notice, the addresses of the parties
shall be as follows:

            If to the Consultant: Glacial Lakes Energy, LLC
                                  PO Box 933
                                  Watertown, SD 57201

            To Granite Falls:     Granite Falls Community Etnanol Plant
                                  PO Box 216
                                  Granite Falls, MN 56241

      12.   COUNTERPARTS. This Agreement may be executed in counterparts and on
telecopy counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute but one and the
same agreement.

                     [Remainder of Page Intentionally Blank]

                                      -2-
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      IN WITNESS WHEREOF, the parties sign this Agreement to be effective as of
the date first above written.

                                        GLACIAL LAKES ENERGY, LLC

                                        BY: /s/ Jon T. Anderson
                                           -------------------------------------
                                           President

                                        GRANITE FALLS COMMUNITY ETHANOL
                                        PLANT, LLC

                                        BY: /s/ Paul Enstad
                                           -------------------------------------
                                        NAME: Paul Enstad
                                             -----------------------------------
                                        TITLE: Chairman
                                              ----------------------------------

                                      -3-
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                                    EXHIBIT A

                                       TO

                              CONSULTING AGREEMENT

Scope of Services*

A. Phase I - Written review of project plans and documents affecting viability

      -  Review of safety plans and their implementation.

      -  Review Equipment suitability.

      -  Review Equipment layout.

      -  Review availability of utilities.

      -  Review environmental reports relating to their impact on cost,
         schedule, and constructability.

      -  Review the sufficiency of permitting and approvals.

      -  Review of insurance coverage requirements.

      -  Review of invoice payment, title insurance, and lien waiver procedures.

      -  Summary comment on feasibility.

B. Phase II - Construction Monitoring

      -  Review global project budget and timeline

      -  Manage construction draws as follows:

            1. Serve as collection point for payment invoices and lien waivers.

            2. Assure that lien waivers are provided as per any Loan Agreement,
            Construction Disbursing Agreement or other form of Disbursing
            Agreement, each of which shall be reviewed by Consultant. The form
            of lien waiver shall be as approved by Granite Falls.

            3. Sign-off on payment invoices and provide to Granite Falls for
            approval. (Sign-off includes certification that the related budget
            item is completed, or on schedule to complete and is in accordance
            with specifications and timeline.) The forms of certification shall
            be as approved by Granite Falls.

            4. Report budget item cost overruns to Granite Falls. If outside
            established tolerance (as determined by Granite Falls) obtain
            Granite Falls approval prior to disbursement. Report all cost
            overruns monthly.

            5. Provide monthly report which compares construction draws to the
            item specific project budget.

            6. Forward invoices, lien waivers, and payment recommendations to
            Granite Falls.

      -  Complete on-site inspections monthly or more often as reasonably
         requested.

      -  Provide written recommendation and analysis of change order requests.

      -  Provide monthly review of project manager's weekly status reports.

      -  Provide monthly report to Granite Falls, which includes but is not
         limited to the following:

            1. Construction progress.

            2. Construction budget to actual disbursements.

            3. Environmental & Compliance issues.

            4. Safety issues.

            5. Material and equipment procurement status.

            6. Change order requests, analysis, and recommendation.

            7. Problems or deviations from plan, specifications or budget.

      -  Coordinate and attend monthly meetings with Granite Falls, lenders and
         others as appropriate.

      -  Construction. To direct construction of the Owners (Granite Falls)
         scope of work, pursuant to Owners Board approval, to include bidding
         process, letting of all contracts, approving schedules of work, paying
         progress payments, securing lien waivers, enforcing Owner's contractual
         rights and warranty claims and all other things necessary to bring
         construction of the Facility to substantial completion.

                                      -4-
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      -  Purchasing. To direct the purchase of all equipment and fixtures and
         installation thereof, whether during the construction process or after
         its completion as specified in the plans and specifications for the
         Facility, upon Owners Board approval.

* Granite Falls acknowledges that Consultant is not a licensed architect or
engineer and that Consultant's consulting services do not include professional
design or engineering services, but rather the services relate to construction
monitoring as set forth herein and a review of the plans and specifications to
determine their impact on cost, schedule, constructability and feasibility.

                                      -5-exv10w12

 

EXHIBIT 10.12

CONTRACT

THIS AGREEMENT, made and entered into this 30th day of October, 2004, between
Granite Falls Energy, L.L.C., 15045 Highway 23 SE, Granite Falls, Minnesota,
hereinafter called the “Owner” and MGA Railroad Construction, Inc., hereinafter
called the “Contractor”.

	1.	 	WITNESSETH: That the said Contractor, having been awarded the contract
for

Granite Falls Railroad Track Project

Granite Falls, Minnesota

In accordance with the proposal therefore, which is bound herewith and for and
in consideration of the premises and of the covenants and agreements and of the
payments herein specified to be made and performed by the Owner. The
Contractor hereby covenants and agrees with the Owner to undertake and execute
all of the said work in good, substantial and workman-like manner, and to
furnish all the materials and all tools and labor necessary to properly perform
and complete the work ready for use in strict accordance with the plans and
specifications, and any revisions thereto in effect at the same time of signing
this contract and to accept as full compensation the amount of One Million One
Hundred Fourteen Thousand Eight Hundred and Eighty-Four Dollars in same as the
attached price quote.

	2.	 	The prices named in the Price Quote attached hereto are for the completed
work and include the furnishing of all materials, labor, tools and
expenses, direct and indirect connected with the proper execution of the
work in accordance with plans and/or specifications for the work and
maintaining the same until it is accepted by the Owners.
	 
	3.	 	It is a condition of this contract, that the Contractor and any
subcontractor shall not require any laborer or mechanic employed in
performance contract to work in surroundings under working conditions
which are unsanitary, hazardous, or dangerous to his health or safety, as
determined under construction safety and health standards.
	 
	4.	 	This AGREEMENT may be terminated by either party upon fifteen days within
notice, in the event of substantial failure to perform in accordance with
the terms thereof by one party through no fault of the other party. If
this AGREEMENT is so terminated, the Contractor shall be paid in the
amount, which he has earned up to such date of termination including any
reimbursable or terminal expenses then due under the terms of this
AGREEMENT. Upon termination, the Owner shall become the property of the
Owner. Unless the AGREEMENT shall have been terminated as herein before
provided, it shall terminate on completion of the scope of work as defined
in the plans and specifications and on final payment of all fees under
this AGREEMENT by the Owner.
	 
	5.	 	This contract with all its forms, plans, specifications and provisions,
shall be binding upon heirs, executors, administrators or assigns of said
Contractor and upon the successors or assigns of said Owner as much so as
if each and all of them had been specifically mentioned.

 

 

IN WITNESS WHEREOF: The Contract has been executed on behalf of said owned and
caused the seal of said Owner to be hereto affixed and the contractor has
hereunto set his hand and seal the day and year first written above.

	 	 	 	 	 	 	 
	 	 	 	 	Granite Falls Energy, L.L.C
	 	 	 	 	
 
	(Seal)

	 	 	 	(Owner)	 	 
	 
	 	 	 	 	 	 
	MGA Railroad Construction, Inc.	 	BY:	 	/s/ Tom Branhan
	
 	 	 	 	
 
	(Contractor)	 	 	 	 
	 
	 	 	 	 	 	 
	BY

	 	/s/ Michale G. Arter
	 	TITLE:
	 	CEO/General Manager
	

	 	
 
	 	 	 	
 
	Mike Arter	 	 	 	 
	 
	 	 	 	 	 	 
	TITLE:

	 	President	 	 	 	 
	

	 	
 
	 	 	 	 

Final completion date of
August 15, 2005  JN/MGA

-2-

 

			
	MGA RAILROAD CONSTRUCTION, INC.
	 	September 10, 2004
	47452 210 Street	 	 
	Aurora, SD 57002	 	 
	 	 	 

GLACIAL LAKES

PROJECT: Granite Falls, MN

Track Work

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Item #
	 	Item
	 	Unit
	 	Est. Quantity
	 	Unit Price
	 	Total Est. Price

	1
	 	Track	 	Track Feet	 	 	13,604	 	 	$	71.00	 	 	$	965,884.00	 
	2
	 	No. 9 Turnout	 	Each	 	 	6	 	 	$	24,100.00	 	 	$	144,600.00	 
	3
	 	Derail	 	Each	 	 	2	 	 	$	700.00	 	 	$	1,400.00	 
	4
	 	Wheel Stops	 	Pair	 	 	6	 	 	$	500.00	 	 	$	3,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	Total	 	$	1,114,884.00	 

MATERIALS UTILIZED

New 7” x 8” Hardwood Grade 4 Ties

112 lb. or Heavier Relay Rail

A minimum of 6” of crushed ballast.

Full Depth timber crossings

Switches With E-Z Operating Stands

     Total of All Estimated Prices: One Million, One Hundred Seventy-Seven
thousand, Six Hundred Fourteen Dollars and Forty Cents plus applicable taxes.

* Price includes all tract construction except mainline turnouts, on a prepared
subgrade. Price includes surveying costs to lay out curves, determining top of
rail elevation and location of switches.

NOTE: Instead of a performance bond, “payment to the Contractor will be made
by check or cash, based on monthly estimates for work completed, subject to a
10 percent retainage until final work is completed and accepted by Glacial
Lakes Energy”.

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