**Exhibit10.5**

** **

**HIGHWATERETHANOL, LLC**

 

**PHASE 1MASS GRADING AND**

**DRAINAGEAGREEMENT**

 

THISAGREEMENT is made this 28th day of November, 2007 by and betweenHIGHWATER ETHANOL, LLC, a Minnesota limited liability company (hereinafter“Owner”), and R and G Construction Co., a Minnesota corporation (hereinafter“Contractor”).

 

**RECITALS**

 

A.      WHEREAS, Owner owns certain real estatemore particularly described on the attached Exhibit “A”, (“Project Site”),and intends to construct an ethanol production facility at said location; and

 

B.      WHEREAS, Owner has requested bids forphase one (1) of certain improvements to the Project Site which involvesmass grading and drainage activities (“Phase 1 Site Work”); and

 

C.      WHEREAS, Contractor is in the business ofproviding grading, excavating, and earth moving services; and

 

D.      WHEREAS, Owner has accepted Contractor’sbid for the Phase 1 Site Work to the Project Site (“Contractor’s Bid”).

 

**AGREEMENT**

 

NOW, THEREFORE, inconsideration of the mutual terms, provisions, covenants, conditions, andagreements set forth herein, the adequacy and sufficiency of which are herebyacknowledged, Owner and Contractor (collectively the “Parties”) agree asfollows:

 

**1.      ****Incorporation of Recitals andExhibits**.  The recitals set forth above and Exhibits “A”through “D” attached hereto are hereby fully incorporated herein and are trueand correct.

 

**2.       Specifications.**  The Contractor will furnish all of thematerials and perform all of the work shown on the drawings and described inthe specifications included with Fagen Engineering, LLC’s letter to biddersdated February 27, 2007, a copy of which is attached hereto as Exhibit “B”(“Invitation to Bid”), Contractor’s Bid, a copy of which is attached hereto as Exhibit “C”,and the Contractor covenants that it will do everything required by thisAgreement and the General Conditions hereto, a copy of which are attachedhereto as Exhibit “D”, in return for payment as provided herein.

 

**3.       Completion Date.**  The work to be performed under this Agreementwill be completed as soon as reasonably possible after the Contractor receiveswritten notice from Owner to commence work, premised on Contractor using areasonable amount of manpower and equipment based upon the size of the projectand working conditions at the site.  Theparties acknowledge that there are no liquidated damages; however, Contractorpromises to proceed with due diligence and in good faith to complete the scopeof work as soon as reasonably possible.

 

**4.       Payment.**  The Owner will pay the Contractor for itsperformance under this Agreement the Unit Price or Amount stipulated inContractor’s Bid to be paid as provided in Section 14 herein.

 

1

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**5.       Performance Bond.**  The Contractor will not be required toprovide a performance bond unless the Owner determines that a performance bondis necessary and Owner notifies Contractor of the same prior to Contractor’scommencement of work at the Project Site.

 

**6.      ****Guarantee.** The Contractor will guarantee its work against any defects inworkmanship and materials for a period of one year from the date of the Owner’sissuance of a certificate of substantial completion of the Phase I Site Work.

 

**7.       Permits and Licenses.**  Permits and licenses necessary for theprosecution of the work, except those relating to Contractor’s transportationof its equipment to the Project Site, will be secured and paid by the Owner.

 

**8.       Contractor’s LiabilityInsurance.**  TheContractor will obtain prior to commencement of work to be performed under thisAgreement, and maintain throughout the duration of the project, insurancecoverage commensurate with the requirements referenced in the Invitation toBid, unless the Owner establishes different insurance requirements and Ownernotifies Contractor of the same prior to Contractor’s commencement of work atthe Project Site.

 

**9.       Liens.**  Neither the final payment nor any part of theretainage will become due until the Contractor, if required, delivers to theOwner a complete release of all liens arising out of this Agreement, orreceipts in full in lieu thereof and, if required in either case, an affidavitthat so far as it has knowledge of information the releases and receiptsinclude all the labor and material for which a lien could be filed.  If any lien, originating from Contractor’sactivities, remains unsatisfied after all payments are made, the Contractorwill fully cooperate with Owner to release any such remaining liens.

 

**10.    Assignment.**  Neither party to the Agreement will assignthe Agreement or sublet it as a whole without the written consent of the other,nor will the Contractor assign any moneys due or to become due to it hereunder,without the prior written consent of the Owner.

 

**11.    Subcontracts.**  The Contractor will not subcontract anyportion of the work contemplated by this Agreement without the writtenpermission of the Owner.

 

**12.    Use of Premises.**  The Contractor will confine its tools,equipment, the storage of materials and the operation of its workers to limitsindicated by this Agreement and any applicable law, ordinances, and permits,and will not otherwise unreasonably encumber the Project Site or public rightsof way with its tools, equipment, or materials. If any part of the project is completed and ready for use, the Ownermay, by written and mutual consent, without prejudice to any of its rights orthe rights of the Contractor, enter in and make use of such completed parts ofthe project.  Such occupancy will in nocase be construed as an acceptance of any work or materials.

 

**13.    Cleaning Up.**  The Contractor will, periodically or asdirected by the Engineer during the progress of the Phase I Work, remove andlegally dispose of all surplus excavated material and debris, and keep theProject Site and public rights of way reasonably clear.  Upon completion of the work, Contractor willremove all temporary construction facilities, debris and unused materials itprovided for the work.

 

**14.    Payment.**  The Owner will make payments to Contractorfor Contractor’s performance under this Agreement as follows:

 

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(a)            At the end of each monthduring the term of this Agreement, Owner shall pay Contractor 90% of the value,based on the amount of work completed; with the remaining 10% being held as retainageuntil the project is completed.

 

(b)           Once 50% of the contractprice has been paid to the Contractor, the Engineer may, at their discretion,upon satisfactory completion of the work, reduce the retainage down from 10% to5%.

 

(c)            The Owner will make all suchpayments within fifteen (15) days of its receipt of a requisition for the samefrom Contractor.

 

**15.          Additional/Surcharges**.  Notwithstanding any other termsin this contract to thecontrary, the parties agree as follows:

 

(a)          Owner will pay Contractor the additional cost of fuel above $2.23 pergallon, based upon the gallons delivered to the project and fuel used inlicensed vehicles hauling material (i.e.: dirt, granular and gravel) to and from the project site.  Such additional cost (to be paid by Owner toContractor) shall also include any additional cost to provide blended ortreated fuel due to cold weather conditions. (The parties acknowledge that the original bid was made in March, 2007,premised on work occurring during warm weather.)

 

(b)         Thereshall be further/additional charges for granular material as follows:  Any cost for sand shall be an additionalcharge by Contractor to Owner.  Theparties agree that any additional charges for sand shall be at the rate of$4.95 L.V. (loose volume) per cubic yard of sand hauled in to supplement poormaterials.  Again, this price shall be inaddition to the backfill number in those areas that require such additionalgranular material (sand).  Forexample:  Item #7 — Back-FillOver-Excavated Areas shall be $1.65 + $4.95 (for any loose volume sanddelivered to said area) = $6.60 total cost for such sand as delivered to theproject site.

 

(c)          Any other unbid materials that become necessary or any increase in thecost of materials as previously bid shall be resolved on a case-by-case basisby negotiations between Owner and Contractor.

 

INWITNESS WHEREOF, the Owner and Contractor have executed this Agreement as of the date first written above.

 
| **Owner:  Highwater Ethanol, LLC** |                 | **Contractor:  R and G Construction Co.** |
|------------------------------------|----------------------|-------------------------------------------|
|                               |                 |                                      |   |   |
| By:                                | /s/ Brian  Kletscher |                                      | By: | /s/ Reinhold Mathiowetz |
|                               |                 |                                      |   |   |
|                               |                 |                                      |   |   |
| Its:                               | President            |                                      | Its: | President |
|                               |                 |                                      |   |   |
|                               |                 |                                      |   |   |
| By:                                | /s/ Tim Van Der  Wal |                                      | By: | /s/ Gregg  Mathiowetz |
|                               |                 |                                      |   |   |
|                               |                 |                                      |   |   |
| Its:                               | Secretary            |                                      | Its: | Vice-President |

 

3

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**EXHIBIT “A”**

**HIGHWATER ETHANOL, LLC**

**LEGAL DESCRIPTIONS**

 

PARCEL1:

Allthat part of the Southeast Quarter (SE 1⁄4) of Section Twenty-one (21),Township One Hundred Nine (109) North, Range Thirty-seven (37) West, RedwoodCounty, Minnesota, lying north of the northerly right-of-way line of theDakota, Minnesota & Eastern Railroad, subject to Trunk Highway 14right-of-way and EXCEPTING THEREFROM the following described parcel:

 

Thatpart of Tract A described below:

 

Tract A.                                                        The NorthwestQuarter of the Southeast Quarter of Section 21, Township 109 North, Range37 West, Redwood County, Minnesota;

 

whichlies within a distance of 35 feet southerly of the following described line:Beginning at a point on the westerly boundary of said Tract A, distant 40 feetsoutherly of the northwest corner thereof; thence run easterly for 345.6 feetalong a line that intersects the easterly boundary of the Southeast Quarter ofsaid Section 21, distant 64.4 feet southerly of the northeast cornerthereof and there terminating;

 

containing:0.27 acres, more or less;

 

togetherwith all right of access, being the right of ingress to and egress from thatpart of Tract A hereinbefore described not acquired herein, to the abovedescribed strip; except that the abutting owner shall retain the right ofaccess to the westerly 34.5 feet of said Tract A.

 

togetherwith all hereditaments and appurtenances belonging thereto.  Subject to mineral rights and utilityeasements of record, if any.

 

PARCEL 2:

 

Thatpart of the Southwest Quarter (SW 1⁄4) of Section Twenty-one (21), TownshipOne Hundred Nine (109) North, Range Thirty-seven (37) West, Redwood County,Minnesota, lying north of the northerly right-of-way line of the Dakota,Minnesota & Eastern Railroad EXCEPTING THEREFROM that part of Tract Adescribed below:

 

TractA:  The North Half of the SouthwestQuarter of Section 21, Township 109 North, Range 37 West, Redwood County,Minnesota

 

which lies northwesterly of “Line 1” describedbelow, and southerly of a line run parallel with an distant 50 feet southerlyof “Line 2” described below, and easterly of the easterly 

 

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right-of-way line of Township Road T-190, as nowlocated and established.

 

“Line 1”: Beginning at the intersection of the easterly right-of-way line of saidtownship road with a line run parallel with and distant 180 feet southerly on“Line 2” described below; thence northeasterly to a point distant 50 feetsoutherly (measured at right angles) of a point on said “Line 2”, distant 167.4feet easterly of its point of beginning, and there terminating.

 

“Line 2”: Beginning at a point on the west line of the Northwest Quarter of Section 21,distant 1.0 foot north of the southwest corner thereof; thence runnortheasterly at an angle of 92°05’00” (as measured from south to east) fromsaid west line for 1,521.8 feet; thence deflect to the right at an angle of01°03’00” for 1,100 feet and there terminating.

 

Together with that part of Tract A hereinbeforedescribed, which lies within a distance of 35 feet southerly of a line runparallel with and distant 50 feet southerly of the following described line:Beginning at a point on “Line 2” hereinbefore described, distant 484.4 feetwesterly of its point of termination; thence easterly on said “Line 2” for484.4 feet and there terminating; containing 0.57 acres more or less

 

Subject to township road right-of-way over thewesterly 33 feet of said Southwest Quarter; also subject to Trunk Highway 14right-of-way.

 

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EXHIBIT B

 

FAGEN ENGINEERING LLC

 

February 27, 2007

 

HIGHWATER ETHANOL, LLC

PROPOSED ETHANOL PRODUCTION FACILITY

LAMBERTON, MINNESOTA

 

 

 

ATTENTION BIDDERS,

 

HIGHWATER ETHANOL LLC HAS GIVEN ME DIRECTION TO SENDOUT THIS PACKAGE OF INFORMATION REGARDING THE (HWE) PHASE 1 MASS GRADING ANDDRAINAGE PORTION OF WORK TO BE PERFORMED STARTING LATE MARCH TO EARLYAPRIL 2007 FOR THE PROPOSED HWE ETHANOL FACILITY IN LAMBERTON, MINNESOTA.

 

ATTACHED YOU WILL FIND:

 

·                  LIST OF CONTRACTORS BIDDINGON PROJECT

·                  BID TABULATION SHEET SHOWINGQUANTITIES

·                  GEOTECHNICAL REPORT

·                  SET OF DRAWINGS

 

THERE WILL BE A PRE-BID MEETING FOR THIS PROJECTFRIDAY MORNING, MARCH 2, AT 10 AM (CENTRAL STANDARD TIME).

 

THE BIDS WILL BE DUE FRIDAY, MARCH 23, BY 12 PM(CENTRAL STANDARD TIME).

 

PLEASE LOOK OVER THE PLANS AND HAVE ANY QUESTIONSYOU MAY HAVE READY FOR THE PRE-BID PHONE CONFERENCE.  I CAN BE REACHED VIA EMAIL AT(thay@fageneng.com), BY PHONE AT 320-564-4573 OR BY FAX AT 320-564-4861.  IF I AM UNABLE TO BE REACHED, PLEASE SPEAKWITH TERRIN TORVIK.

 

TODD H. HAY, P.E.

CIVIL ENGINEER

FAGEN ENGINEERING, LLC

 

1

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**PROSPECTIVE HWE DIRTBIDDERS/CONTACTS**

 
| **OWNER**Highwater Ethanol LLC205 S. Main StreetPO Box 96Lamberton, MN 56152Attn: Brian Kletscher507-762-3376507-762-3376 FAX“Brian   Kletscher”<bk3376@redred.com> | ** ** | **ENGINEER**Fagen Engineering LLC501 West Highway 212PO Box 159Granite Falls, MN 56241Attn: Todd Hay320-564-4573320-564-4861 FAXthay@fageneng.com            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                                                                                                                                                                          | ** ** | ** **                                                                                                                                                   |
| **CONTRACTOR**R & G Construction2694 County Road 74Marshall, MN 56258Attn: Gregg Mathiowetz507-537-1473507-537-0513 FAXgmathiowetz@randgconstruction.com                   | ** ** | **CONTRACTOR**Schmidt Construction30103 US Highway 71  Redwood Falls, MN 56283Attn: Jeff Schmidt507-644-5596507-644-5907 FAXschmidtconstructioninc@yahoo.com |
| ** **                                                                                                                                                                          | ** ** | ** **                                                                                                                                                   |
| **CONTRACTOR** Mathiowetz Construction Co.   30676 County Road 24   Sleepy Eye, MN   Attn: Mike Langer   507-794-6953   507-794-3514 FAX   bradommodt@mathiowetzconst.com      |       |                                                                                                                                                         |

 

 

THE PLAN IS TO HAVE EVERYONE AT THE FAGENENGINEERING OFFICE AT 10:00 A.M. FRIDAY MORNING, MARCH 2.

 

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GRADING AND DRAINAGE PACKAGE BID SHEET

 

HWE, INC. — LAMBERTON, MINNESOTA

 

(REVISION 0, 02/26/2007)

 
| **NO.** | ** ** | **ITEM**                                                                                                                            | ** ** | **QUAN.**     | ** ** | **UNITS** | ** ** | **UNIT PRICE** | ** ** | **AMOUNT** |
|---------|------------|-------------------------------------------------------------------------------------------------------------------------------------|------------|---------------|------------|-----------|------------|----------------|------------|------------|
| 1A      |       | MOBILIZATION                                                                                                                        |       | 1             |       | LS        |       | $              |       | $          |
| 1B      |       | CLEAR AND GRUB TREES, BRUSH, STUMPS AND DEBRIS                                                                                      |       | 1             |       | LS        |       | $              |       | $          |
| 2A      |       | EROSION CONTROL MEASURES: PERIMETER AND DITCH SILT FENCE AS SHOWN ON  PLANS DWG 202                                                 |       | 9,323         |       | LF        |       | $              |       | $          |
| 2B      |       | EROSION CONTROL MEASURES: NYLOPLAST ADVANEDGE SILT BARRIER AT BASIN  INTAKES                                                        |       | 4             |       | EA        |       | $              |       | $          |
| 3       |       | STRIP THE SITE OF 24” TOPSOIL AND STOCKPILE AS PER DRAWING                                                                     |       | 136,270       |       | CY        |       | $              |       | $          |
| 4A      |       | OVER-EXCAVATE SITE AS PER DRAWING 215                                                                                               |       | 31,938        |       | CY        |       | $              |       | $          |
| 4B      |       | BACK-FILL OVER-EXCAVATED AREAS WITH  ON-SITE LVC OR GRANULAR (CALCULATED TO 2’ BELOW FINISHED FLOOR OR TO SUBGRADE  ELEVATION) |       | 52,984        |       | CY        |       | $              |       | $          |
| 5       |       | EXCAVATE (CUT) THE SITE TO ELEVATIONS AS PER DRAWINGS                                                                               |       | 17,010        |       | CY        |       | $              |       | $          |
| 6       |       | COMPACT FILL TO ELEV AS PER DWGS AND SPECS (COMPACTION NOT CALCULATED)                                                              |       | 244,910       |       | CY        |       | $              |       | $          |
| 7A      |       | CONSTRUCT ROADWAYS AS PER DWG 212 (TENSAR BX1100 GEOGRID OR  EQUIVALENT)                                                            |       | 32,770        |       | SQ.YD.    |       | $              |       | $          |
| 7B      |       | CONSTRUCT ROADWAYS AS PER DWG 212  (15” — MNDOT CLASS V)(TOTAL TONS ARE BASE ON 130#/CF)                             |       | 23,963        |       | TON       |       | $              |       | $          |
| 8A      |       | INSTALL CULVERTS AND INTAKE BASINS AS SHOWN ON DWGS 203, 204 205 AND  206 (INCLUDING APRONS AND RODENT GUARDS)                      |       | 9 CULV’S |       | LS        |       | $              |       | $          |
| 8B      |       | STORM DETNETION BASIN INTAKE STRUCTURE WITH 8” DISCHARGE PIPE AND GATE  VALVE SHOWN ON DWG 206 (CULVERT C-10)                  |       | 1             |       | LS        |       | $              |       | $          |
| 9       |       | RIPRAP AREAS (CULVERTS C-3, C-4, C-5, C-6, C-8, C-9 AND C-10) (SHOWN  ON DWGS 203, 204, 205, 206)                                   |       | 7             |       | EA        |       | $              |       | $          |
| 10A     |       | CONSTRUCTION LAYDOWN AREAS(TENSAR EX1100 GEOGRID OR EQUIVALENT)                                                                     |       | 18,305        |       | SQ.YD     |       | $              |       | $          |
| 10B     |       | CONSTRUCTION LAYDOWN AREAS  (12” — MNDOT CLASS V)(TOTAL TONS ARE BASED ON 130#/CF)                                   |       | 10,708        |       | TONS      |       | $              |       | $          |
| 11      |       | RESPREAD 6” TOPSOIL IN SEEDING AREAS SEE DWG 212 (ASSUMING 40%  SHRINKAGE)                                                     |       | 26,315        |       | CY        |       | $              |       | $          |
| 12      |       | PERMANENT SEEDING OF STORM POND AND EXTERIOR DITCHES (TYP LOCAL COUNTY  MIX SPEC W/MULCH) SHOWN ON DWG 212                          |       | 23.3          |       | PERAC     |       | $              |       | $          |

 

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**EVERYONEMUST BID THE NUMBERS LISTED ABOVE!!**

 

ANYCONTRACT MODIFICATION WILL BE DONE BY USING UNIT PRICES LISTED ON THE BID-TABSHEET.

 

ROADWAYAGGREGATE QUANTITIES ARE BASED OF ASSUMED UNIT WEIGHTS AND ARE USED FOR BIDDINGPURPOSES; THE CONTRACTOR SHALL BE PAID ACCORDING TO DELIVERY WEIGHT TICKETS.

 

PLEASELIST ON THE BID TAB SHEET:

 

·                  CONTRACTORS EARLIEST POSSIBLE START DATE

·                  ESTIMATED DURATION TO COMPLETE THE PROJECT

 

APROJECT OF THIS SIZE TYPICALLY TAKES BETWEEN 7 AND 9 WEEKS TO COMPLETE (WEATHERPERMITTING).

 

AFTERTHE CONTRACT HAS BEEN AWARDED AN ELECTRONIC FILE CAN BE SUPPLIED FOR TAKE-OFFSAND SURVEYING PURPOSES.

 

THECONTRACT WILL BE BETWEEN HIGHWATER ETHANOL AND THE SUCCESSFUL BIDDER.

 

HIGHWATERETHANOL IS NOT OBLIGATED TO SELECT THE LOW BIDDER.

 

HIGHWATERETHANOL WILL RETAIN THE SERVICE THE SERVICE OF A TESTING FIRM (TERRACON).  FOR SOIL TESTING AND SITE OBSERVATION ASREQUIRED.

 

HIGHWATERETHANOL SHALL RETAIN THE SERVICES OF A SURVEYOR TO:

 

·                  LAYOUT PROJECT CONTROL

·                  GENERAL LAYOUT AND GRADE STAKING (CULVERTENDS, ETC.)

·                  STAKE THE ROADWAY ALIGNMENT AT THEAPPROPRIATE TIME

·                  VERIFY FINAL ELEVATIONS AT THE END OF THEPHASE 1 GRADING PACKAGE

 

THECONTRACTOR WILL BE RESPONSIBLE FOR MAINTAINING GENERAL DAY TO DAY CUT/FILLSTAKING.

 

4

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THEREWILL BE NO BOND REQUIRED UNLESS DETERMINED BY HIGHWATER ETHANOL

 

TYPICALINSURANCE REQUIREMENTS UNLESS HWE REQUIRES SOMETHING ELSE:

 

·                  GENERAL LIABILITY

$2,000,000.00GENERAL AGGREGATE

$1,000,000.00PRODUCTS AGGREGATE

$1,000,000.00PERSONAL INJURY

$1,000,000.00EACH OCCURRENCE

$500,000.00FIRE DAMAGE

$5,000.00MEDICAL EXPENSE

·                  AUTO AND EQUIPMENT LIABILITY

$1,000,000.00COMBINED VEHICLE LIMIT

·                  EXCESS LIABILITY (UMBRELLA)

$2,000,000.00EACH OCCURRENCE

$1,000,000.00AGGREGATE

·                  WORKMEN’S COMPLENSATION ANDEMPLOYERS LIABILITY

$1,000,000.00EACH ACCIDENT

$1,000,000.00POLICY LIMIT

$1,000,000.00EACH EMPLOYEE

 

BIDDUE DATE: 12 PM, FRIDAY, MARCH 23, 2007

 

AWARDDATE: AS SOON AS PERMITS ALLOW.

 
|   | BIDS  MUST BE FAXED TO BOTH NUMBERS LISTED BELOW OR DROPPED OFF  AT THE HIGHWATER ETHANOL OFFICE AND FAXED TO THE FAGEN  ENGINEERING OFFICE:

 

HIGHWATER  ETHANOL LLC

205  S. MAIN STREET

PO  BOX 96

LAMBERTON,  MN 56152

ATTN:  BRIAN KLETSCHER

507-762-3376

FAX:  (507) 762-3376

 

FAGEN  ENGINEERING, LLC

ATTN:  TODD HAY

501  WEST HWY 212

GRANITE  FALLS, MN 56241

320-564-4573

FAX:  (320) 564-4861 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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EXHIBIT C

 

GRADING AND DRAINAGE PACKAGE BID SHEET

HWE, INC. — LAMBERTON, MINNESOTA

(REVISION 0, 02/26/2007)

 
| **NO.** | ** ** | **ITEM**                                                                                                                            | ** ** | **QUAN.**     | ** ** | **UNITS** | ** ** | **UNIT PRICE** | ** ** | **AMOUNT** |
|---------|------------|-------------------------------------------------------------------------------------------------------------------------------------|------------|---------------|------------|-----------|------------|----------------|------------|------------|
| 1A      |       | MOBILIZATION                                                                                                                        |       | 1             |       | LS        |       | $              | 4,000.00   |       | 4,000.00 |
| 1B      |       | CLEAR AND GRUB TREES, BRUSH, STUMPS AND DEBRIS                                                                                      |       | 1             |       | LS        |       | $              | 500.00     |       | $ | 500.00 |
| 2A      |       | EROSION CONTROL MEASURES: PERIMETER AND DITCH SILT FENCE AS SHOWN ON  PLANS DWG 202                                                 |       | 9,323         |       | LF        |       | $              | 1.80       |       | 16,781.40 |
| 2B      |       | EROSION CONTROL MEASURES: NYLOPLAST ADVANEDGE SILT BARRIER AT BASIN  INTAKES                                                        |       | 4             |       | EA        |       | $              | 900.00     |       | $ | 3,600.00 |
| 3       |       | STRIP THE SITE OF 24” TOPSOIL AND STOCKPILE AS PER DRAWING                                                                     |       | 136,270       |       | CY        |       | $              | .75        |       | $ | 102,202.50 |
| 4A      |       | OVER-EXCAVATE SITE AS PER DRAWING 215                                                                                               |       | 31,938        |       | CY        |       | $              | 1.00       |       | $ | 31,938.00 |
| 4B      |       | BACK-FILL OVER-EXCAVATED AREAS WITH  ON-SITE LVC OR GRANULAR (CALCULATED TO 2’ BELOW FINISHED FLOOR OR TO SUBGRADE  ELEVATION) |       | 52,984        |       | CY        |       | $              | 1.65       |       | $ | 87,423.60 |
| 5       |       | EXCAVATE (CUT) THE SITE TO ELEVATIONS AS PER DRAWINGS                                                                               |       | 17,010        |       | CY        |       | $              | 1.00       |       | $ | 17,010.00 |
| 6       |       | COMPACT FILL TO ELEV AS PER DWGS AND SPECS (COMPACTION NOT CALCULATED)                                                              |       | 244,910       |       | CY        |       | $              | 1.65       |       | $ | 404,101.50 |
| 7A      |       | CONSTRUCT ROADWAYS AS PER DWG 212 (TENSAR BX1100 GEOGRID OR  EQUIVALENT)                                                            |       | 32,770        |       | SQ.YD.    |       | $              | 2.70       |       | $ | 88,479.00 |
| 7B      |       | CONSTRUCT ROADWAYS AS PER DWG 212  (15” — MNDOT CLASS V)(TOTAL TONS ARE BASE ON 130#/CF)                             |       | 23,963        |       | TON       |       | $              | 7.25       |       | $ | 173,731.75 |
| 8A      |       | INSTALL CULVERTS AND INTAKE BASINS AS SHOWN ON DWGS 203, 204 205 AND  206 (INCLUDING APRONS AND RODENT GUARDS)                      |       | 9 CULV’S |       | LS        |       | $              | 65,021.00  |       | $ | 65,021.00 |
| 8B      |       | STORM DETNETION BASIN INTAKE STRUCTURE WITH 8” DISCHARGE PIPE AND GATE  VALVE SHOWN ON DWG 206 (CULVERT C-10)                  |       | 1             |       | LS        |       | $              | 3,000.00   |       | $ | 3,000.00 |
| 9       |       | RIPRAP AREAS (CULVERTS C-3, C-4, C-5, C-6, C-8, C-9 AND C-10) (SHOWN  ON DWGS 203, 204, 205, 206)                                   |       | 7             |       | EA        |       | $              | 450.00     |       | $ | 3,150.00 |
| 10A     |       | CONSTRUCTION LAYDOWN AREAS(TENSAR EX1100 GEOGRID OR EQUIVALENT)                                                                     |       | 18,305        |       | SQ.YD     |       | $              | 2.70       |       | $ | 49,423.50 |
| 10B     |       | CONSTRUCTION LAYDOWN AREAS(12” — MNDOT CLASS V)(TOTAL TONS ARE BASED ON 130#/CF)                                     |       | 10,708        |       | TONS      |       | $              | 7.25       |       | $ | 77,633.00 |
| 11      |       | RESPREAD 6” TOPSOIL IN SEEDING AREAS SEE DWG 212 (ASSUMING 40%  SHRINKAGE)                                                     |       | 26,315        |       | CY        |       | $              | 1.15       |       | $ | 30,262.25 |
| 12      |       | PERMANENT SEEDING OF STORM POND AND EXTERIOR DITCHES (TYP LOCAL COUNTY  MIX SPEC W/MULCH) SHOWN ON DWG 212                          |       | 23.3          |       | PERAC     |       | $              | 190.00     |       | $ | 4,427.00 |

 

Rand G Construction Co.

Highway59 South

2694County Rd. 6

Marshall,MN 56258

 

1

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R and G Construction Co.

Highway 59 South
| TelePhone  507-537-1473 |   | 2694 Co. Rd. 74 |   | FAX  507-537-0513 |
|-------------------------|--------|-----------------|--------|-------------------|

Marshall, MN  56258

 

EQUAL OPPORTUNITY EMPLOYER

 

**Project:Highwater Ethanol Plant**

 

AdditionalWork

 
| Rail  Quantities |   | Fill       |   | 54,600 |   | x      |   | $1.65=$90,090 |
|------------------|--------|------------|--------|--------|--------|--------|--------|---------------|
|             |   | Excavation |   | 44,000 |   |   |   |          |

 

**Notes**

 

                1.  The grading is based on there being enoughsuitable material onsite to build the embankments.

                2.  Testing and Surveying not included.

                3.  Will have GPS operated equipment onsite tohelp minimize surveying.

 

Anyquestions give us a call.

 
| Gregg  Mathiowetz |   | Larry  Swann |
|-------------------|--------|--------------|
| Vice  President   |   | Estimator    |

 

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**EXHIBIT D**

** **

**HIGHWATER****ETHANOL, LLC**

 

**PHASE 1MASS GRADING AND**

**DRAINAGEAGREEMENT**

 

**GENERAL CONDITIONS**

 

**1.       Definitions. **Unless the context otherwisespecifies or requires, the terms defined in this section will, for the purposesof this Agreement, have the meanings herein specified. Certain othercapitalized terms used herein are defined elsewhere in this Agreement.

 

(a)            “Engineer” means FagenEngineering, LLC, acting personally or through duly authorized assistants.

 

(b)           “Drawings andSpecifications” means the drawings and geotechnical reports attached to thisAgreement as part of the Invitation to Bid (see Exhibit “B”).

 

(c)            “Subcontractor” means anyone(other than the Contractor) who furnishes at the site, under an agreement withthe Contractor, labor, or labor and materials, or labor and equipment.

 

(d)           “Work” means the furnishingof all labor, materials, equipment, and other incidentals necessary to thesuccessful completion of this Agreement.

 

(e)            “Extra Work” means suchadditional labor, materials, equipment, and other incidentals as are requiredto complete this Agreement for the purpose for which it was intended but wasnot shown on the Drawings and Specifications, or is desired by the Owner inaddition to the Work called for in the Drawings and Specifications.

 

**2.       Design, Drawings andInstructions. **The Owner willfurnish Drawings and Specifications which adequately represent the requirementsof the Work and all such Drawings and Specifications will be consistent withthis Agreement.  It is agreed that theOwner will be responsible for the adequacy of design and sufficiency of theDrawings and Specifications.  TheEngineer may, during the term of this Agreement, and in accordance with thesection entitled *Changes in the Work under General Conditions*,issue additional instructions by means of Drawings and Specifications or othermedia necessary to illustrate changes in the work.

 

All Drawings andSpecifications, and copies thereof, furnished by the Owner or Engineer shallnot be reused on other work, and, with the exception of the signed Contract,sets are to be returned to the Owner or Engineer upon request, at thecompletion of the Phase I Work.

 

**3.       Surveys. **The Owner shall provide asurveyor for the project to: (a) provide layout project control; (b) providegeneral layout and grade staking (culvert ends, etc.); (c) stake theroadway alignment at the appropriate time; and (d) to verify finalelevations at the end of the Phase I Work.

 

TheContractor will be responsible for maintaining general day-to-day cut/fillstaking.  The Contractor will carefullypreserve bench marks, reference points and stakes, and will be responsible forany mistakes that may be caused by their unnecessary loss or disturbance.

 

 

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**4.       Changed Conditions. **The Contractor willpromptly, and before such conditions are disturbed, notify the Owner of: (a) subsurfaceor latent physical conditions at the Project Site differing materially fromthose indicated in this Agreement; or (b) previously unknown physical orother conditions at the Project Site of an unusual nature or differingmaterially from those ordinarily encountered and generally recognized asinherent in work of the character provided for in this Agreement.

 

TheEngineer will promptly investigate the conditions, and if he finds that suchconditions materially differ and cause an increase in the costs of, or the timerequired for, performance of this Agreement, an equitable adjustment will bemade and this Agreement will be modified in writing accordingly as provided inthe section entitled: *Changes in the Work underGeneral Conditions.*

 

**5.       Discrepancies. **If the Contractor, in thecourse of the work, finds any discrepancy between the Drawings andSpecifications and the physical conditions of the Project Site, or any errorsor omissions in Drawings or in the layout as given by survey points andinstructions, it will immediately inform the Engineer, in writing, and theEngineer will promptly verify the same. Any work done after such discovery, until authorized, will be done atthe Contractor’s risk.

 

**6.       Engineer’s Status. **The Engineer will performtechnical inspection of the work and has authority to stop all work wheneversuch stoppage may be necessary to insure proper performance of thisAgreement.  He will also have authorityto reject all work and materials which do not conform to this Agreement and todecide questions which arise in the performance of the Work.

 

**7.       Rights of VariousInterests. **The Owner, orits agents, will have the right, at any time during the construction of theproject, to enter the same for the purpose of conducting any necessary work, orfor any other purposes in connection with the work being completed on theProject Site, it being mutually understood and agreed, however, that theContractor and the Owner will labor to mutual advantage and general harmonywith each other. In the event the Owner occupies certain finished portions ofthe Project Site before final acceptance, the Owner will assume all responsibilityfor its damage to the work.  Suchoccupancy will in no case be construed as an acceptance of any work ormaterials.

 

**8.       Other Contracts. **The Owner reserves the rightto let other contracts in connection with the Project Site.  The Contractor will afford other contractorsreasonable opportunity for the introduction and storage of their materials andthe execution of their work, and will properly connect and coordinate his workwith theirs.  If the proper execution orresults of any part of the Contractor’s work depends upon the work or any othercontractor, the Contractor will inspect and promptly report to the Engineer anydefects in such work that render it unsuitable for such proper execution andresults.

 

**9.      ****Changes in the Work. **Owner reserves the right to change the scope of the Workor make changes in the Drawings and Specifications or scheduling of thisAgreement at any time by a written order. All such Extra Work will be performed under the terms of this Agreement(except that any claim for extension of time caused thereby will be adjusted atthe time of ordering such change), unless the Parties expressly agreeotherwise.  If such changes add to ordeduct from the Contractor’s cost of the work, this Agreement will be adjustedaccordingly.

 

 

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Ingiving instructions, the Engineer will have authority to make minor changes inthe work not involving extra cost, and not inconsistent with the purpose of thework, but otherwise, except in an emergency endangering life or property,Contractor will make no change in the materials used, the Drawings andSpecifications, or in the manner of constructing the improvements beyond thatactually required for performing under this Agreement unless approved by a writtenchange order from the Owner or the Engineer. No claim for payment in addition to the Bid Amount will be valid unlessthe Extra Work was so ordered.

 

Ifapplicable unit prices are contained in the Agreement (established as a resultof either a unit price bid or a supplemental schedule of unit prices) the Owneror the Engineer may order the Contractor to proceed with desired changes in thework, the value of such changes to be determined by the measured quantitiesinvolved and the applicable unit prices specified in this Agreement.

 

Eachchange order will include in its final form:

 

(a)           A detailed description ofthe Extra Work;

 

(b)          The Contractor’s proposal(if any) or a conformed copy thereof;

 

(c)           A definite statement as tothe resulting change in the contract price and/or time; and

 

(d)         The statement that all workinvolved in the change will be performed in accordance with the terms of thisAgreement except as modified by the change order.

 

**10.    Protection of Public,Protection of Work, Restoration of Property. **The Contractor will provide and maintain all necessary temporarydevices and take all necessary precautions for the protection and safety of thepublic.  It assumes full responsibilityfor the Work and any Extra Work.

 

Untilits final acceptance, the Contractor will continuously maintain adequateprotection of all Work from damage, and will take all reasonable precautions toprotect the Owner’s property from injury or loss arising in connection withthis Agreement.  The Contractor will alsoadequately protect adjacent private and public property, as provided by law andthis Agreement.

 

TheContractor will be responsible for any damage to or destruction of the Work(except for damage caused by Owner as referenced in the section entitled: *Rights of Various Interests under General Conditions*); andContractor will reimburse Owner for any damage, injury or loss to the Work andto the Project Site resulting from lack of reasonable protective precautions,except such as may be due to errors in the Agreement, or caused by agents oremployees of the Owner.

 

Priorto entering any adjacent private property during the course of the Phase IWork, Contractor will obtain the consent of the owner thereof.  Any work, existing structures (except thosewhich are to be replaced or removed), or adjacent public or private propertydamaged by the Contractor, and subcontractor or their forces will be repairedor replaced at the Contractor’s expense.

 

TheContractor will protect carefully all land monuments and property marks untilthe Engineer has witnessed or otherwise referenced their location and will notremove them until directed.

 

 

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**11.   ****Care of Work. **In an emergencyaffecting the safety of life or property, including adjoining property, theContractor, without special instructions or authorization from the Owner or theEngineer, is authorized to act at his discretion to prevent such threatenedloss or injury, and it will so act. Contractor will likewise act if instructed todo so by the Owner or the Engineer. Any compensation claimed by the Contractoron account of such emergency work will be determined as provided in the sectionentitled: *Changes in the Work under General Conditions.*

 

**12.    Extension of Time. **Extension of time stipulatedin this Agreement for completion of the work will be made when changes in thework occur, as provided in the section entitled: *Changes inthe Work under General Conditions*; when the work is suspended asprovided in the section entitled: *Owner’s Suspension andDelay of Work under General Conditions*; or when the Work is delayedon account of conditions which could not have been foreseen, or which werebeyond the control of Contractor or its Subcontractor, and which were not theresult of their fault or negligence. Extension of time for completion will also be allowed for any delays inthe progress of the Work or Extra Work caused by any act (except as providedelsewhere in these General Conditions) or neglect of the Owner or of itsemployees or by other contractors employed by the Owner, or by any delay in thefurnishing of Drawings and Specifications or other necessary information by theEngineer, or due to events described in the section entitled:  *ForceMajeure under General Conditions.*

 

The Contractor will give written notice to the Engineer of any incidentor condition which it feels warrants any extension of time within five (5) daysof the occurrence of such conditions. The Engineer will acknowledge receipt of the Contractor’s notice withinfive (5) days of its receipt. Failure to provide such notice will constitute a waiver by theContractor of any claim.

 

**13.    Owner’s Suspension andDelay of Work. **The Owner maysuspend the work or any portion thereof for a period of not more than ninety (90)days, or such further time as agreed upon by the Contractor, by written noticeto the Contractor which will fix the date on which work will be resumed.  The Contractor will resume that work on thedate so fixed.  The Contractor will beallowed an increase in the Bid Amount or an extension of the time, or both,directly attributable to any suspension, as provided for in the sectionentitled: *Changes in the Work under General Conditions*.

 

**14.   ****Owner’s Right to TerminateContract.**  If the Contractor should be adjudgedbankrupt, or if it should make a general assignment for the benefit ofcreditors, or if a receiver should be appointed on account of its insolvency,or if it should persistently or repeatedly refuse or should fail, except incases for which extension of time is provided, to supply enough properlyskilled workmen or proper materials, or if it should fail to make promptpayment to subcontractors for material or labor, or persistently disregardlaws, and ordinances, or otherwise be guilty of a substantial violation of anyprovision of the Agreement, then the Owner may, without prejudice to any otherright or remedy and after giving the Contractor ten (10) days writtennotice, terminate the employment of the Contractor and take possession of theProject Site and of all materials, tools and appliances thereon and finish thework by whatever method it may deem expedient. In such case, the Contractor shall not be entitled to receive anyfurther payment until the work is finished. If the unpaid balance of the Bid Amount shall exceed Owner’s expense offinishing the Work, including compensation for additional engineering,managerial and administrative services, such excess shall be paid to theContractor.  If such expense shall exceedsuch unpaid balance, the Contractor shall pay the difference to the Owner.

 

 

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**15.    Contractor’s Right to StopWork or Terminate Agreement. **If the workshould be stopped under an order of any court, or other public authority, for aperiod of more than ninety (90) days, through no act or fault of the Contractoror of anyone employed by him, or if the Owner should fail to issue any paymentwithin fifteen (15) days after it is due, then the Contractor may, upon ten (10) dayswritten notice to the Owner and the Engineer, stop work or terminate thisAgreement and recover from the Owner payment for all work executed, plus anyloss sustained plus reasonable profit and damages.

 

**16.   ****Force Majeure. **Notwithstanding anything in this Agreement to the contrary, if theContractor is prevented from performing any obligation arising under thisAgreement by reason of strikes or other labor disturbances, civil disturbance,restrictive government laws, regulations or directives, acts of public enemy,war, riots, sabotage, crime, lightning, earthquake, fire, hurricane, tornado,flood, explosion, or other act of God, then it is entitled, without being inbreach of this Agreement, to carry out such obligation within the appropriatetime period after the cessation of such cause.

 

**17.   ****Claims for Extra Cost. **If theContractor claims that any changes to the original project scope involve extracost or extension of time, it will, within five (5) days after the receiptof such instructions, and in any event before proceeding to execute the work,except in emergency endangering life or property, submit his protest thereto inwriting to the Engineer, stating clearly and in detail the basis of itsobjections.  No such claim will beconsidered unless so made.

 

Claimsfor additional compensation for Extra Work, due to alleged errors in groundelevations, contour lines, or bench marks, will not be recognized unlessaccompanied by certified survey data, made prior to the time the originalground was disturbed, clearly showing that errors exist which resulted, orwould result, in handling more material, or performing more work, than would bereasonable estimated from the Drawings and Specifications provided by Owner.

 

If,on the basis of the available evidence, the Owner and Engineer determine thatan adjustment of the Contractor’s Bid or an extension of time is justifiable,the procedure will be as provided in the section entitled: *Changes inthe Work under General Conditions.*

 

**18.    Superintendence. **The Contractor will keep onthe Project Site, during the progress of the Phase I Work, a competentsuperintendent and any necessary assistants. The superintendent will represent the Contractor, and all directionsgiven to him will be binding as if given to the Contractor.  The Contractor will also provide an adequatestaff for the proper coordination and expediting of his work.

 

**19.    Field Office. **Contractor is not requiredto maintain a field officer under this Agreement.

 

**20.    Employees. **The Contractor will at alltimes enforce strict discipline and good order among his employees, and willseek to avoid employing on the Project Site any unfit person or anyone notskilled in the work assigned to him.  The Owner and Engineer reserve the rightto have any Contractor’s employee removed from the site.

 

**21.    Subcontractors.**The Contractorwill, as soon as practicable after signing of this Agreement, notify theEngineer in writing of the names of Subcontractors, if any, proposed for theWork.  The Contractor will be responsiblefor the proper fitting of all work and for the coordination of the operationsof all trades, subcontractors, or material men engaged by it 

 

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pursuant to this Agreement.  TheContractor agrees that it is as fully responsible to the Owner for the acts andomissions of its subcontractors and of persons either directly or indirectlyemployed by them, as it is for the acts and omissions of persons directlyemployed by it.  Nothing contained inthis Agreement will create any contractual relation between any Subcontractorand the Owner or Engineer.

 

**22.    Sanitary Regulations. **The Contractor will furnish,install, and maintain ample sanitary facilities for its workmen in accordancewith state and local sanitary codes.  Whenno longer required, they will be removed from the site, and the contents willbe removed and disposed of in a satisfactory manner, as the occasionrequires.  The Contractor will rigorouslyenforce the use of said sanitary facilities.

 

Drinkingwater will be provided from an approved source, so piped or transported as tokeep it safe and fresh and served from single service containers orsatisfactory types of sanitary drinking stands or fountains.

 

Allsuch facilities and services will be furnished in strict accordance withexisting and governing health regulations.

 

**23.   ****Environmental Requirements. **The Contractor will beresponsible for providing any necessary temporary erosion and sedimentationcontrol devices required for in compliance with all Federal, State and localenvironmental protection requirements. The Contractor will not dispose of any excess materials on landsdesignated or classified as wetlands by any Federal, State or local agencies.

 

**24.   ****Statutory Requirements inGeneral. **The Contractor will at alltimes observe and comply with, and will cause all its agents and employees toobserve and comply with, all existing and future State and Federal laws andmunicipal ordinance and regulations in any manner affecting those engaged oremployed in the Work, or the materials used or employed in the Work, or in anyway affecting the conduct of the Work.

 

**25.    Removal of Equipment. **In the case of terminationof this Agreement before completion from any cause whatsoever, the Contractor,if notified to do so by the Owner, will promptly remove any part or all of itsequipment and supplies from the property of the Owner.  In addition, after the Contractor hascompleted the Phase I Work and any Extra Work and the Engineer has acceptedsuch work or issued a certificate of substantial completion, Contractor willpromptly remove any part or all of its equipment and supplies from the propertyof the Owner.  Should Contractor fail todo so, Owner shall have the right to remove such equipment and supplies at theexpense of the Contractor.

 

**26.    Insurance**.  Certificates of Insurance of the types and inthe amounts required will be delivered to the Owner prior to the commencementof any work by the Contractor or entity working at the direction or undercontrol of the Contractor.  TheContractor will assume the obligation and responsibility to confirm insurancecoverage for all sub-contractors or lower tier Contractors who will participatein the project.  Such policies will namethe Owner as an additional insured thereunder, be in a form and contentsatisfactory to the Owner and be kept in good standing until all ofContractor’s work is completed. The Certificate of Insurance and the 

 

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policies of insurance will include a thirty (30) day notice to theOwner of cancellation, non-renewal or material change in coverage or form.

 

**27.    Indemnification. **Contractorshall fully indemnify, save, and hold harmless Owner, its officers, employees,and agents (collectively called “Indemnitees”) from, and against, all claims,demands, actions, damages, losses, costs, liabilities, expenses, and judgmentsrecovered from or asserted against Indemnitees on account of injury or damageto any person (including without limitation, workers’ compensation and deathclaims), or property loss or damage of any kind whatsoever, to the extent anydamage or injury may be incident to, arise out of, be caused by, or be in anyway connected with, either proximately or remotely, wholly or in part, to:  (a) the Contractor’s activities at theProject Site; (b) the performance of this Agreement; and (c) any actor omission, negligence, or misconduct on the part of the Contractor, or any ofits agents, servants, employees, contractors, patrons, guests, licensees,invitees, or other persons entering upon the Project Site pursuant to thisAgreement, whether authorized with the expressed or implied invitation orpermission of Contractor (collectively called “Contractor’s Invitees”);including any injury or damage resulting, proximately or remotely, from theviolation by Contractor or Contractor’s Invitees of any law, ordinance, orgovernmental order of any kind, including any injury or damage in any other wayarising from or out of any activity on the Project Site or from the ProjectSite itself by any person, whether authorized to be present on the ProjectSite.

 

Contractor covenants and agrees that if the Owner orany other Indemnitee is made a party to any litigation against the Contractoror any litigation commenced by any party, other than Contractor, relating tothis Agreement, Contractor shall, upon receipt of reasonable notice regardingcommencement of litigation, at its own expense, investigate all claims anddemands, attend to their settlement or other disposition, defend the Owner inall actions with counsel acceptable to the Owner, and pay all charges ofattorneys and all other costs and expenses of any kind arising from anyliability, damage, loss, claims, demands, and actions.

 

**28.    Inspection of Work. **The Owner will providesufficient competent personnel, working under the supervision of the Engineer,for the inspection of the work, soil testing, and observations as requiredwhile such work is in progress to ascertain that the completed Work will complyin all respects with the standards and requirements set forth in thisAgreement.  Owner will complete all required sampling, testing,inspections, and certifications of the Work. Notwithstanding suchinspections, the Contractor will be held responsible for the acceptability ofthe finished Work.  The Engineer will atall times have access to the Work whenever it is in preparation orprogress.  To prevent all disputes andlitigation the Parties agree that the Engineer will, in all cases, determinethe amount and quantity of the various classes of work under this Agreement,and that the Engineer will review all materials to be furnished and all work tobe done under this Agreement to see that the same corresponds to theSpecifications and Drawings included herewith.

 

**29.    Final Inspection****. **When the work contemplatedby this Agreement is substantially completed, the Contractor will provide theEngineer five (5) days written notice that the work will be ready forfinal inspection on a definite date.  TheOwner or the Engineer will complete a final inspection on said date.

 

 

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**30.    Acceptance and FinalPayment.**  Upon receiptof notice from Contractor that the work is substantially completed or ready forfinal inspection and acceptance, the Engineer will promptly make suchinspection, and when he finds the Work acceptable under this Agreement and thisAgreement fully performed or substantially completed he will promptly issue acertificate stating that the work required by this Agreement has been completedor substantially completed and is accepted by him under the terms andconditions hereof, and the entire balance found to be due the Contractor,including any retainage, if any, less a retention based on the Engineer’s estimateof the fair value of the claims against the Contractor and the cost ofcompleting the incomplete or unsatisfactory items of work with specifiedamounts for each incomplete or defective item of work, is due and payable.  The date of substantial completion of theWork or specified area of the Work is the date when the construction issufficiently completed in accordance with this Agreement, as modified by anychange orders agreed to by the Parties, so that the Owner can make use of theproject for which it was intended.

 

Beforeissuance of final payment, the Contractor, if requested will certify in writingto the Engineer that all payrolls, material bills, and other indebtednessconnected with the work have been paid, or otherwise satisfied, except that incase of disputed indebtedness or liens, if this Agreement does not include apayment bond, the Contractor may submit in lieu of certification of payment asurety bond in the amount of the disputed indebtedness or liens, guaranteeingpayment of all such disputed amounts, including all related costs and interestin connection with said disputed indebtedness or liens which the Owner may becompelled to pay upon adjudication.

 

Ifafter the work has been substantially completed, full completion thereof ismaterially delayed through no fault of the Contractor, and the Engineer sorecommends, the Owner will, upon recommendation of the Engineer and withoutterminating this Agreement make payment of the balance due for that portion ofthe work fully completed and accepted. Such payment will be made under the terms and conditions governing finalpayment, except that it will not constitute a waiver of claims by Owner.

 

**31.    Miscellaneous.**

 

(a)         AdditionalActions and Documents.  Each of the Parties hereto will take or causeto be taken such further actions and will execute, acknowledge, deliver andfile, or cause to be executed, acknowledged, delivered and filed, such furtherdocuments and instruments, and to use all reasonable efforts to obtain suchconsents, as may be necessary or as may be reasonably requested in order tofully effectuate the purposes, terms and conditions of this Agreement.

 

(b)        Timeis of the Essence.  Time will be of the essencein the performance of this Agreement.

 

(c)         Notice.  Any notice required orpermitted by this Agreement is deemed delivered when personally delivered inwriting or three (3) days after notice is deposited with the U.S. PostalService, postage prepaid, certified with return receipt requested, andaddressed as follows:

 

 

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|   | i.     | To  Owner:      |   | Highwater  Ethanol, LLC      |
|--------|--------|-----------------|--------|------------------------------|
|   |   |            |   | 205  S. Main Street          |
|   |   |            |   | P.O. Box  96            |
|   |   |            |   | Lamberton,  MN 56152         |
|   |   |            |   | Attn:  Brian Kletscher       |
|   |   |            |   |                         |
|   | ii.    | To  Engineer:   |   | Fagen  Engineering, LLC      |
|   |   |            |   | 501  West Highway 212        |
|   |   |            |   | P.O. Box  159           |
|   |   |            |   | Granite  Falls, MN 56241     |
|   |   |            |   | Attn:  Todd Hay              |
|   |   |            |   |                         |
|   | iii.   | To  Contractor: |   | R  and G Construction Co.    |
|   |   |            |   | Highway  59 South            |
|   |   |            |   | 2694  County Road 6          |
|   |   |            |   | Marshall,  MN 56258          |
|   |   |            |   | Attn:  Gregg Mathiowetz |

 

 

TheParties may, from time to time, change their respective addresses listed aboveto any other location in the United States. A party’s change of address iseffective when notice of the change is provided to the other party inaccordance with this section.

 

(d)         Severability.  The invalidity, unenforceability, orillegality of any one or more provisions of this Agreement will not affect theremaining portions of this Agreement; and in the event that one or more of theprovisions contained herein should be invalid, unenforceable, illegal, or shouldoperate to render this Agreement invalid, this Agreement will be construed asif such invalid provisions had not been included as part hereof.  The remaining provisions of this Agreementwill not be affected thereby and will be valid and enforceable to the fullestextent permitted by law.

 

(e)          Survival.  It is the express intentionand agreement of the Parties that all covenants, agreements, statements,representations, warranties and indemnities made in this Agreement will survivethe execution and delivery of this Agreement.

 

(f)            No Waiver. No waiver of any provision of thisAgreement will be deemed or constitute a waiver of any other provision, norwill it be deemed or constitute a continuing waiver unless expressly providedfor by a written amendment to this Agreement executed by the Partieshereto.  No waiver of any breach ordefault under this Agreement will be deemed a waiver of any subsequent defaultsof the same type.  The failure at anytime to enforce this Agreement or any covenant by either of the Parties,whether any violations thereof are known, does not constitute a waiver orestoppel of their right to do so.

 

(g)         Binding Effect.  The execution and delivery of this Agreementand the performance of the transactions contemplated thereby have been dulyauthorized by all necessary corporate action of each of the Parties.  This Agreement has been duly executed anddelivered by each party, and constitutes a legal, valid, and binding obligationof each party enforceable in accordance with the terms.  This Agreement will be binding upon 

 

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and will inure to thebenefit of the Parties and their respective successors and permitted assigns.

 

(h)         Pronouns.  All pronouns and anyvariations thereof will be deemed to refer to the masculine, feminine, neuter,singular or plural, as the identity of the person or party may require.

 

(i)             Headings.  Headings utilized in thisAgreement are for convenience only and are not to be considered a part of thisAgreement and do not in any way define or affect the meaning, construction or scope of any of the provisions thisAgreement.

 

(j)             Governing Law.  This Agreement, the rights and obligations ofthe Parties hereto, and any claims or disputes relating thereto, will be governedby and construed in accordance with the laws of the State of Minnesota, andjurisdiction and venue of any such claims or disputes will be in the statecourts of Redwood County, Minnesota.

 

(k)          Attorney’sFees. If either party sues to enforce the terms of this Agreement, theprevailing party, plaintiff or defendant, is entitled to recover its costs,including reasonable attorney’s fees and costs associated with prosecuting suchclaims.

 

(l)             EntireAgreement.  This Agreement and allattached schedules constitute the entire agreement between the Partiesregarding the subject matter hereof and supersede all prior and contemporaneousagreements, understandings, negotiations and discussions, whether oral orwritten, of the Parties and there are no warranties, representations or otheragreements between the Parties in connection with the subject matter of thisAgreement save and except as specifically set forth herein.

 

(m)       Counterparts,Facsimile Signatures.  To facilitate execution, this Agreement maybe executed in as many counterparts as may be required.  It will not be necessary that the signaturesof, or on behalf of, each party, or that the signatures of all Persons requiredto bind any party, appear on each counterpart; but it will be sufficient thatthe signature of, or on behalf of, each party, or that the signatures of thePersons required to bind any party, appear on one or more of the counterparts.All counterparts will collectively constitute a single agreement. It will notbe necessary in making proof of this Agreement to produce or account for morethan a number of counterparts containing the respective signatures of, or onbehalf of, all of the Parties hereto.  Facsimilesignatures are acceptable to the Parties.

 

[*Remainder ofPage Intentionally Blank*]

 

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