Document:

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                                                                    EXHIBIT 10.4

                       OPERATING AND MANAGEMENT AGREEMENT

      THIS OPERATING AND MANAGEMENT AGREEMENT ("Agreement") is made effective as
of the ______ day of _________, 2004, by and between GLACIAL LAKES ENERGY, LLC,
a South Dakota limited liability company ("Manager"), and GRANITE FALLS
COMMUNITY ETHANOL PLANT, LLC, a Minnesota limited liability company ("Owner").

                              Background Statements

      Owner and the Manager (as a Member of Owner) have entered into certain
agreements, of even date herewith, which will provide for sufficient capital to
construct and thereafter operate a 40 million gallon per year dry mill ethanol
plant on property owned by Owner (the "Facility"). Owner desires to contract
with Manager for operating and management services for the Facility. Manager
desires to provide these services having provided similar services in the
construction and operation of such facilities in the past. This Agreement sets
forth the responsibilities of the parties with respect to the Facility and its
operation and management.

                             Statement of Agreement

      NOW THEREFORE, in consideration of the mutual promises set forth in this
Agreement, the parties hereto agree as follows:

                                    ARTICLE 1

                                Duties of Manager

      During the term of this Agreement Owner hereby grants to Manager, subject
to the terms and conditions hereof, the sole right and authority to supervise
and direct the management and operation of the Facility. Manager hereby accepts
such responsibility and agrees, subject to the supervision and direction of
Owner's Board of Governors, to perform all services necessary for the
construction, equipping, start up and thereafter operation of the Facility in
accordance with highest industry standards. Manager's duties shall include, but
not be limited to the following:

      (a)   Maintenance and Operation. Upon completion of construction, to
direct the maintenance and operation of the Facility. In connection therewith:

            i.    Manager shall, at all times, do all things necessary to obtain
                  permits and licenses required for the construction and/or
                  operation of the Facility. Thereafter Manager shall continuous
                  ensure compliance with all regulatory matters to which the
                  Facility or its operations may be subject.

            ii.   Manager shall, at all times, hire, promote, discharge and
                  supervise the work of all employees necessary to operate the
                  Facility, and arrange for payment of all employee wages,
                  salaries and benefits as established from time to time by
                  Owner. Notwithstanding, the parties understand and agree that
                  all employees shall, except for the CEO/General Manager, the
                  Commodities Manager, and the Environmental, Health and Safety
                  Manager, and the Chief Finance Officer (the "CFO") be
                  employees of Owner.

            iii.  Manager shall direct all audit and accounting functions with
                  respect to the Facility and its operation and, in connection
                  therewith, shall upon approval of Owners Board secure the
                  services, at competitive rates, of accountants, auditors,
                  lawyers or other professionals as reasonably necessary to
                  carry out such functions.

            iv.   Subject to the limitations and policies as established, from
                  time to time by Owner's Board of Governors, Manager shall
                  direct contracting for purchase or sale of goods and
<PAGE>
                  services, for the purchase of equipment and fixtures, to
                  arrange for necessary repairs, renewals, additions and/or
                  improvements to the Facility, all in such amounts as may be
                  within Owner's budget and/or as may authorized by the Board of
                  Governors from time to time. It is understood and agreed by
                  the parties that, except as otherwise provided by the Board of
                  Governors, Manager will not enter into any agreement or
                  commitment to utilize the credit of Owner or to borrow money
                  in the name of the Owner unless approved in writing in advance
                  by Owner, except for purchase of goods and services and other
                  items on credit as are in the ordinary course and are
                  customary and consistent with the day to day operation of
                  Owner.

            v.

                  (a)   Managers shall collect income and pay expenses of Owner
                        in accordance with the terms set forth herein and as
                        provided, from time to time by Owners Board of
                        Governors.

                  (b)   Manager shall deposit in banking institution or
                        institutions as may be designated from time to time by
                        Owner, as soon as possible after collection, all monies
                        or other income received by Manager in operation of the
                        Facility and disburse and pay from the same, on behalf
                        of and in the name of Owner, such amounts and at such a
                        time as required to be disbursed or paid pursuant to
                        this Agreement. The parties agree that Owner shall
                        approve any proposed appointee of Manager as a person
                        designated as one authorized to withdraw funds from any
                        such account. Such person shall be insured by a Fidelity
                        Bond or insurance policy in a form as approved by Owner.

                  (c)   In connection with all income collected and deposited,
                        Manager shall segregate funds necessary for paying
                        ordinary and necessary expenses into a working capital
                        account which shall not, without Owner's advance
                        consent, have a balance in excess of $_____________.
                        Funds in excess of such amount shall be held on deposit
                        or in investments as determined, from time to time by
                        Owner.

                  (d)   With respect to disbursements, Manager shall cause to be
                        paid all obligations incurred in the ordinary course in
                        the operation and management of the Facility from the
                        working capital account. Payment for expense outside of
                        the ordinary course of business shall require Owner's
                        advance written consent.

            vi.   Manager shall prepare, for approval by Owner, an annual budget
                  prior to each 12 months operation of the Facility. Said budget
                  shall contain all anticipated expenses, both ordinary and
                  extraordinary for the coming year. Manager shall report on a
                  monthly basis the results of actual operation as compared to
                  the Annual Budget. Payment of any unbudgeted items, or items
                  exceeding the budgeted allowance shall require Owner's advance
                  consent.

            vii.  Manager shall direct all grain purchasing and risk management
                  with respect to the same, and as may be necessary to operate
                  the Facility in accordance with reasonable business practices
                  and in accordance with any agreements or contracts entered
                  into by Owner with respect to the same.

            viii. Manager shall direct the marketing of all product produced at
                  the Facility and use Manager's best efforts to secure the
                  highest rate of return for Owner and its members.

            ix.   Manager shall recommend to Owner and shall assist Owner in
                  procuring and keeping in force such property, public liability
                  and workman's' compensation insurance and such other insurance
                  for risk and causality as are customarily insured against with
                  respect to

                                      -2-
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                  operations similar to that of the Facility and in such an
                  amounts and on such terms as may be customary in the industry.

            x.    Manager shall maintain books and records in accordance with
                  GAAP, and shall cause to be prepared and delivered to Owner
                  regular financial and operational reports as directed by Owner
                  from time to time and which shall include a monthly profit and
                  loss statement, annual balance sheet and related statement of
                  profit and loss for each fiscal year together with statement
                  showing assets employed in the operation of the Facility and
                  liabilities incurred in connection therewith.

            xi.   Manager shall direct the preparation of all tax returns, SEC
                  and other filings which may be required of Owner and arrange
                  for payment of all taxes, fees, licenses and assessments
                  related to the Facility and its operations. In addition,
                  Manager shall arrange and give proper notice of annual
                  meetings of Owner.

            xii.  Manager shall attend all meetings, prepare such reports, and
                  shall otherwise manage, supervise and conduct the day-to-day
                  affairs of the Company, including, without limitation, the
                  daily operations of financial management, government reports,
                  board and member reports, tax reporting and filing,
                  maintenance and service of the plant, (subject to Article
                  I(a)(iii) above) hiring of legal counsel and auditors and
                  accountants, public relations, buying and selling goods and
                  services and all other things necessary and desirable for the
                  operation of the plant, and as may be requested from time to
                  time by Owner. At all times Managers shall follow policies and
                  procedures as may, from time to time, be announced by Owner's
                  Board of Governors.

            xiii. To hire and dismiss such employees of the Owner and
                  independent contractors as the Manager shall deem reasonably
                  necessary to the operation of the facility.

            xiv.  Within the scope of Owner's Board authorization to purchase or
                  otherwise obtain the right to use equipment, supplies,
                  hardware and software technology associated with the facility.

            xv.   Under the direction of Owner's Board, to institute, prosecute,
                  defend, settle, compromise and dismiss lawsuits or other
                  judicial or administrative proceedings brought on or in behalf
                  of, or against, the Owner, the Members or the Manager in
                  connection with activities arising out of or incidental to
                  this Agreement, and to engage counsel or others in connection
                  therewith.

            xvi.  To carry on any other activities necessary to, in connection
                  with, or incidental to any of the foregoing or the day-to-day
                  operations of the Owner.

            xvii. Manager shall perform start-up and operational monitoring and
                  reporting; review physical performance compared to plan and
                  compared to vendor guarantees; and certification of issues
                  surrounding completion as defined in Credit and other
                  Agreements (close out).

            xviii. Owner's Board shall, promptly upon execution hereof and upon
                   this Agreement becoming effective announce, in advance, to
                   Manager its policies and procedures as related to the duties
                   of Manager as described above; and shall thereafter review
                   the same, at least annually with Manager. Manager shall be
                   entitled to rely on the policies and procedures of Owner
                   until such time as Owner's Board advises Manager, in writing,
                   of a change with respect to the same. Further, in
                   establishing its policies and procedures Owner's Board shall
                   give due consideration to the format and effectiveness of
                   Manager's existing operational authority for other ethanol
                   plants managed by it.

                                      -3-
<PAGE>
      (b)   Indemnity of Manager. Except for Wrongful Conduct (as defined below)
by Manager, Owner will indemnify, defend and hold Manager harmless from and
against any and all costs, liabilities, losses, and expenses (and reasonable
attorney's fees and other legal costs) resulting from any claim, suit, action,
or proceeding brought by any third party against Manager arising out of or
related to this Agreement. Further, except for Wrongful Conduct, Owner shall
have no cause of action against Manager for Manager's actions and conduct under
the terms of the Agreement. The term "Wrongful Conduct" used herein shall be
defined as any and all acts or conduct by Manager which: (1) is willful, wanton,
intentional, knowing, reckless, or grossly negligent misconduct; (2) constitutes
self dealing and/or gives rise to improper profit on the part of Manager in
breach of fiduciary duty or duty of loyalty that Manager owes to Owner
hereunder; or (3) in nature, violates any state or federal criminal law unless
Manager reasonably believes, at the time of such act or conduct, that such act
or conduct will not violate the same, or has no reasonable cause to believe the
conduct unlawful. In the event of any third party claim against Manager, Manager
shall give Owner notice of any third party claims against Manager and Owner may,
at its option, take over the defense of such claim at its own expense.

      (c)   Damages. In the event Manager earns or acquires improper profit in
breach of fiduciary duty or duty of loyalty that Manager owes to Owner
hereunder, Owner is entitled to, in addition to any other remedies that Owner
may have under applicable law and equity, the maximum amount of such improper
profit plus interest at the maximum rate applicable under applicable law.

                                    ARTICLE 2

                            Right to Replace Manager

2.1   Material Breach. Upon a material breach of the Agreement by Manager, Owner
shall have the right to replace Manager as operator during the Term by
terminating this Agreement under Article 6 hereof, after notice of such breach
of Manager.

      (a)   A material breach of this Agreement by Manager shall mean: (i)
Managers failure to comply with applicable laws or regulations; (ii) Managers
breach of a material term of this Agreement, or (iii) any and all acts or
conduct by Manager which is willful, wanton, intentional, knowing, reckless, or
grossly negligent misconduct, or which constitutes self dealing and/or gives
rise to improper profit on the part of Manager in breach of fiduciary duty or
duty of loyalty that Manager owes to Granite Falls hereunder.

      (b)   Notwithstanding any other terms to the contrary hereof or of any
other agreement between the parties, in the event Owner replaces Manager for
cause pursuant to the terms and conditions hereof, neither Manager nor any
individual member, employee, agent of Manager, notwithstanding as a Governor or
Owner, may participate in the vote that may result in the replacement of Manager
or termination of this Agreement, or otherwise exercise voting power, right, or
privilege granted to Manager or to such individual hereunder or elsewhere in
connection with such replacement or termination. Such decision to terminate
shall require the affirmative vote of seventy-five percent (75%) of the
remaining Governors.

                                    ARTICLE 3

                                Fees and Expenses

3.1   Fee. (A) Upon commencement of the term of this Agreement, Manager shall
receive, for its compensation for the services rendered hereunder, $35,000.00
per month. (B) In addition, Manager shall receive additional compensation in the
amount of 3% of net income, payable annually. For purposes of this net income
calculation, gifts received by the Owner, grants, government payments or
subsidies, tax credits (such as Jobz) and the like shall be excluded.

3.2   Terms of Payment. Each month, Manager shall deliver to Owner an invoice
indicating the sum due Manager from Owner for the operating and management
services provided to Owner during the previous month, which invoice shall be
paid within 10 days. The fee based upon net income shall be paid within 20 days
of completion of the Owner's fiscal year and annual audit.

                                      -4-
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3.3   Inflationary Adjustment. Upon the three year anniversary of the
commencement of the term of this Agreement, the monthly fee of $35,000 shall be
adjusted to correspond to changes in the Consumer Price Index from the date of
this Agreement to the date of the three year anniversary of the contract term.

                                    ARTICLE 4

                             Relationship of Parties

4.1   Services Provided by Manager. At all times during the Term, Manager and
its employees shall be considered independent contractors with respect to Owner.
Any person engaged by Manager to perform services at the facility shall do so
solely as servant or agent of Manager. Manager shall pay all salaries and fringe
benefits, withhold payroll taxes, and make any other payments normally made to,
or for the benefit of such persons. Manager shall provide all appropriate
payroll administration services with respect to such persons.

4.2   Services Provided by Owner. At all times during the Term, Owner and its
employees shall be considered independent contractors with respect to Manager.
Any person engaged by Owner to perform services at the facility shall do so
solely as servant, agent or employee of Owner. Owner shall pay all salaries and
fringe benefits, withhold payroll taxes, and make any other payments normally
made to, or for the benefit of such persons. Owner shall provide all payroll
administration services with respect to such persons.

4.3   The Independent Contractors to be Provided by Manager. It is intended that
Manager will provide the following independent contractors: CEO/General Manager,
CFO, Commodities Manager to monitor/handle grain procurement and grain risk and
Environment, Health and Safety Manager. These individuals will not be full-time,
but shall divide time between Watertown and Granite Falls. Manager shall also
provide the part-time services of a CFO to provide oversight on financial
records and reports, an employee to provide assistance to the Plant Manager to
be hired by Owner, and an employee to provide assistance to the Maintenance
Manager hired by Owner. All other persons will be employees of the Owner, except
for services that may be provided by independent contractors (other than
Manager) on a case by case basis. All other persons will be employees of the
Owner, except for services that may be provided by independent contractors
(other than Manager) on a case by case basis.

4.4   Insurance. Manager, at its own cost and expense, during the full term of
this Agreement, shall carry and maintain Workers' Compensation insurance at
statutory limits and Employer's Liability Insurance and General Commercial
Liability Insurance with a limit of not less than ___________________
($____________). Evidence of such insurance shall be furnished to Owner upon
written request therefore.

                                    ARTICLE 5

                                 Confidentiality

      Each party will treat as confidential all information designated by the
other party in writing as confidential which is not otherwise lawfully known to
it or already in the public domain, shall not disclose such information to any
third party (except its attorneys, accountants or other advisors (who shall be
similarly bound by this Confidentiality Clause), or unless such disclosure is
required by law) without the prior written consent of the other party, shall
return such information promptly to the other party upon request, and shall keep
such information confidential both during and following the expiration of the
Term of this Agreement.

                                    ARTICLE 6

                            Termination of Agreement

6.1   Termination. Anything in this Agreement to the contrary notwithstanding,
this Agreement may be terminated prior to the end of the Term set forth in
Article 11 hereof upon any of the following events:

                                      -5-
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      (a)   By mutual written consent of Manager and Owner;

      (b)   Upon written notice from either party to the other if such other
party is subject to proceedings under any law relating to bankruptcy, or the
relief of debtors, other than an involuntary petition in bankruptcy which is
dissolved within sixty (60) days after the commencement thereof.

      (c)   As provided at Article 2 hereof.

      (d)   Upon written notice from either party to the other party if the
other party has failed to make any payment due hereunder which is not reasonably
in dispute within twenty (20) days after delivery of written notice that such
amount is past due; or

      (e)   Upon written notice from either party to the other if such other
party has breached any material term of this Agreement that is not excused by
Force Majeure and such other party does not commence curative action with
reasonable diligence to cure the breach as soon as practicable within twenty
(20) days following the delivery of written notice to such other party
specifying such breach.

      (f)   Upon the dissolution or liquidation of either party or the inability
of either party to carry on its business.

6.2   Effect of Termination. Upon termination of this Agreement for any reason,
all obligations of the parties hereunder shall terminate, except confidentiality
obligations hereunder, and the obligations which may become due and payable in
respect to any services provided pursuant to this Agreement prior to
termination. Nothing in this Section 6.2 shall affect the right of either party
to bring an action against the other party for a breach occurring prior to the
termination or for a wrongful termination, and to recover damages resulting
therefrom. No failure or delay on the part of the parties hereto to exercise any
right, power or privilege hereunder shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege.

                                    ARTICLE 7

                                  Force Majeure

      Except as otherwise provided herein, the performance of a party shall be
excused due to Force Majeure, including any event, action or circumstance which
is beyond the reasonable control of the party claiming Force Majeure and
adversely and directly renders the performance of the party impossible in whole
or in part. In the event a party is responsible for an action, event, or
circumstance pursuant to this Agreement, then such action, event, or
circumstance shall be deemed beyond the reasonable control of the other party,
by such other party, except as otherwise provided herein. Where such
impossibility of performance is in part due to Force Majeure, the said party
shall not be relieved of the performance of that party which is not so rendered
impossible. Any party prevented from performing due to an event of Force Majeure
shall be obligated to use all reasonable efforts to remedy such condition as
soon as reasonably possible. Either party may terminate this Agreement upon not
less than thirty (30) days prior written notice if an event of Force Majeure has
occurred that will prevent either party from performing its obligations
hereunder for more than ninety (90) days.

                                    ARTICLE 8

                                     Notices

      All notices pertaining to this Agreement shall be given in writing to the
representatives indicated below (or as may otherwise be designated in writing by
either party) delivered personally or sent by express or certified mail, postage
prepaid, or faxed with a hard copy mailed at the following addresses:

            Owner:
                        -------------------------------
                        Granite Falls Community Ethanol Plant, LLC

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<PAGE>
            Manager:
                        -------------------------------
                        Glacial Lakes Energy, LLC

                                    ARTICLE 9

                          Entire Agreement; Amendments

9.1   Entire Agreement. Except as otherwise agreed to in a writing signed by
both parties, represent the entire agreement between the parties concerning
provisions of operating and maintenance service for the Ethanol Plant and
supersedes all prior negotiations and representations whether written or oral.

9.2   Amendment. This Agreement may be amended or modified only by a written
instrument signed by the respective authorized representatives of the parties.

                                   ARTICLE 10

                                Term of Agreement

10.1  Initial Term. The term of this Agreement shall commence six months prior
to the estimated start-up date of the facility and shall continue until the
fifth anniversary thereof.

10.2  Renewal Term. Thereafter, this Agreement shall be automatically renewed
for successive periods of one (1) year each, provided, however, that this
Agreement may be terminated by either party upon one-hundred eighty (180) days
written notice prior to the beginning of any such renewal period.

                                   ARTICLE 11

                                  Miscellaneous

11.1  Severability. If any provision of this Agreement or any remedy provided
herein is found to be invalid, illegal, or unenforceable in part or in whole
under any applicable law, such provision or remedy, or portion thereof, shall be
inapplicable and deemed omitted from this Agreement, but the remaining
provisions shall continue in full force and effect.

11.2  Counterparts. Any number of counterparts to this Agreement may be executed
and each shall have the same force and effect as the original.

11.3  Governing Law. This agreement shall be governed by and interpreted under
the laws of the State of Minnesota.

11.4  Successors and Assigns. This Agreement shall not be assigned by either
party without the prior written consent of the other party, which consent shall
not be unreasonably withheld. This Agreement shall be binding upon and shall
inure to the benefit of the parties' successors and assigns.

11.5  Inspection of Records. Upon reasonable prior notice, each party shall
allow the other to inspect the records supporting the calculations determined
under this Agreement (which relate to the performance of this Agreement) which
may be required by law or this Agreement to be maintained by either party. Where
and when reasonable to do so, either party may install its own temporary or
permanent measuring device at its own expense to verify any measurement made by
the other party pursuant to this Agreement.

11.6  Arbitration. Any controversy or claim arising out of or relating to this
Agreement or the breach thereof shall be settled by arbitration in Yellow
Medicine County, Minnesota in accordance with the rules then existing of the
American Arbitration Association, and judgment upon the award rendered may be
entered in any court having jurisdiction thereof. The arbitrator or arbitrators
under this provision shall decide who shall pay the expenses of

                                      -7-
<PAGE>
arbitration. Any decision made by an arbitrator or arbitrators under this
provision shall be enforceable as final and binding as if it were a final
decision or decree of a court of competent jurisdiction.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the date first above written.

Owner:                                       Manager:

GRANITE FALLS COMMUNITY ETHANOL              GLACIAL LAKES ENERGY, LLC
PLANT, LLC

                                             By:
                                                --------------------------------
                                             Printed Name:
                                                          ----------------------
By:                                          Title:
    -------------------------------                -----------------------------
Printed Name:
             ----------------------
Title:
      -----------------------------

                                      -8-<PAGE>
                                                                    EXHIBIT 10.5

                              CONSULTING AGREEMENT

      THIS CONSULTING AGREEMENT ("AGREEMENT") is made effective as of the ______
day of ___________, 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.
________________ shall act as Consultant's "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
<PAGE>
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:

            To Granite Falls:

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

                                        GLACIAL LAKES ENERGY, LLC

                                        BY:
                                           -------------------------------------

                                        GRANITE FALLS COMMUNITY ETHANOL
                                        PLANT, LLC

                                        BY:
                                           -------------------------------------
                                        NAME:
                                             -----------------------------------
                                        TITLE:
                                              ----------------------------------

                                      -3-
<PAGE>
                                    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-
<PAGE>
      -  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-

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