Exhibit
10.5


 


HIGHWATER
ETHANOL, LLC


 


PHASE 1
MASS GRADING AND


DRAINAGE
AGREEMENT


 


THIS
AGREEMENT is made this 28th day of November, 2007 by and between
HIGHWATER 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 estate
more 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 for
phase one (1) of certain improvements to the Project Site which involves
mass grading and drainage activities (“Phase 1 Site Work”); and


 


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


 


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


 


AGREEMENT


 


NOW, THEREFORE, in
consideration of the mutual terms, provisions, covenants, conditions, and
agreements set forth herein, the adequacy and sufficiency of which are hereby
acknowledged, Owner and Contractor (collectively the “Parties”) agree as
follows:


 


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


 


2.       Specifications.  The Contractor will furnish all of the
materials and perform all of the work shown on the drawings and described in
the specifications included with Fagen Engineering, LLC’s letter to bidders
dated 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 this
Agreement and the General Conditions hereto, a copy of which are attached
hereto as Exhibit “D”, in return for payment as provided herein.


 


3.       Completion Date.  The work to be performed under this Agreement
will be completed as soon as reasonably possible after the Contractor receives
written notice from Owner to commence work, premised on Contractor using a
reasonable amount of manpower and equipment based upon the size of the project
and working conditions at the site.  The
parties acknowledge that there are no liquidated damages; however, Contractor
promises to proceed with due diligence and in good faith to complete the scope
of work as soon as reasonably possible.


 


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


 


1

















 


5.       Performance Bond.  The Contractor will not be required to
provide a performance bond unless the Owner determines that a performance bond
is necessary and Owner notifies Contractor of the same prior to Contractor’s
commencement of work at the Project Site.


 


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


 


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


 


8.       Contractor’s Liability
Insurance.  The
Contractor will obtain prior to commencement of work to be performed under this
Agreement, and maintain throughout the duration of the project, insurance
coverage commensurate with the requirements referenced in the Invitation to
Bid, unless the Owner establishes different insurance requirements and Owner
notifies Contractor of the same prior to Contractor’s commencement of work at
the Project Site.


 


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


 


10.    Assignment.  Neither party to the Agreement will assign
the 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 any
portion of the work contemplated by this Agreement without the written
permission 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 limits
indicated by this Agreement and any applicable law, ordinances, and permits,
and will not otherwise unreasonably encumber the Project Site or public rights
of way with its tools, equipment, or materials. 
If any part of the project is completed and ready for use, the Owner
may, by written and mutual consent, without prejudice to any of its rights or
the rights of the Contractor, enter in and make use of such completed parts of
the project.  Such occupancy will in no
case be construed as an acceptance of any work or materials.


 


13.    Cleaning Up.  The Contractor will, periodically or as
directed by the Engineer during the progress of the Phase I Work, remove and
legally dispose of all surplus excavated material and debris, and keep the
Project Site and public rights of way reasonably clear.  Upon completion of the work, Contractor will
remove all temporary construction facilities, debris and unused materials it
provided for the work.


 


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


 


2

















 


(a)            At the end of each month
during 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 retainage
until the project is completed.


 


(b)           Once 50% of the contract
price has been paid to the Contractor, the Engineer may, at their discretion,
upon satisfactory completion of the work, reduce the retainage down from 10% to
5%.


 


(c)            The Owner will make all such
payments within fifteen (15) days of its receipt of a requisition for the same
from Contractor.


 


15.          Additional/Surcharges.  Notwithstanding any other terms
in this contract to the
contrary, the parties agree as follows:


 


(a)          Owner will pay Contractor the additional cost of fuel above $2.23 per
gallon, based upon the gallons delivered to the project and fuel used in
licensed vehicles hauling material (i.e.: 
dirt, granular and gravel) to and from the project site.  Such additional cost (to be paid by Owner to
Contractor) shall also include any additional cost to provide blended or
treated 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)         There
shall be further/additional charges for granular material as follows:  Any cost for sand shall be an additional
charge by Contractor to Owner.  The
parties 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 poor
materials.  Again, this price shall be in
addition to the backfill number in those areas that require such additional
granular material (sand).  For
example:  Item #7 — Back-Fill
Over-Excavated Areas shall be $1.65 + $4.95 (for any loose volume sand
delivered to said area) = $6.60 total cost for such sand as delivered to the
project site.


 


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


 


IN
WITNESS 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

















 


EXHIBIT “A”


HIGHWATER ETHANOL, LLC


LEGAL DESCRIPTIONS


 


PARCEL
1:


All
that part of the Southeast Quarter (SE 1⁄4) of Section Twenty-one (21),
Township One 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, subject to Trunk Highway 14
right-of-way and EXCEPTING THEREFROM the following described parcel:


 


That
part of Tract A described below:


 


Tract A.                                                        The Northwest
Quarter of the Southeast Quarter of Section 21, Township 109 North, Range
37 West, Redwood County, Minnesota;


 


which
lies 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 feet
southerly of the northwest corner thereof; thence run easterly for 345.6 feet
along a line that intersects the easterly boundary of the Southeast Quarter of
said Section 21, distant 64.4 feet southerly of the northeast corner
thereof and there terminating;


 


containing:
0.27 acres, more or less;


 


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


 


together
with all hereditaments and appurtenances belonging thereto.  Subject to mineral rights and utility
easements of record, if any.


 


PARCEL 2:


 


That
part of the Southwest Quarter (SW 1⁄4) of Section Twenty-one (21), Township
One 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 A
described below:


 


Tract
A:  The North Half of the Southwest
Quarter of Section 21, Township 109 North, Range 37 West, Redwood County,
Minnesota


 


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


 

















 


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


 


“Line 1”: 
Beginning at the intersection of the easterly right-of-way line of said
township road with a line run parallel with and distant 180 feet southerly on
“Line 2” described below; thence northeasterly to a point distant 50 feet
southerly (measured at right angles) of a point on said “Line 2”, distant 167.4
feet 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 run
northeasterly at an angle of 92°05’00” (as measured from south to east) from
said west line for 1,521.8 feet; thence deflect to the right at an angle of
01°03’00” for 1,100 feet and there terminating.


 


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


 


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


 
















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 SEND
OUT THIS PACKAGE OF INFORMATION REGARDING THE (HWE) PHASE 1 MASS GRADING AND
DRAINAGE PORTION OF WORK TO BE PERFORMED STARTING LATE MARCH TO EARLY
APRIL 2007 FOR THE PROPOSED HWE ETHANOL FACILITY IN LAMBERTON, MINNESOTA.


 


ATTACHED YOU WILL FIND:


 


·                  LIST OF CONTRACTORS BIDDING
ON PROJECT


·                  BID TABULATION SHEET SHOWING
QUANTITIES


·                  GEOTECHNICAL REPORT


·                  SET OF DRAWINGS


 


THERE WILL BE A PRE-BID MEETING FOR THIS PROJECT
FRIDAY 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 QUESTIONS
YOU 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 SPEAK
WITH TERRIN TORVIK.


 


TODD H. HAY, P.E.


CIVIL ENGINEER


FAGEN ENGINEERING, LLC


 


1

















PROSPECTIVE HWE DIRT
BIDDERS/CONTACTS


 


	
  OWNER

  Highwater Ethanol LLC  

  205 S. Main Street  

  PO Box 96

  Lamberton, MN 56152  

  Attn: Brian Kletscher  

  507-762-3376
  

  507-762-3376 FAX

  “Brian 

  Kletscher”<bk3376@redred.com>

  	
   

  	
  ENGINEER

  Fagen Engineering LLC  

  501 West Highway 212  

  PO Box 159  

  Granite Falls, MN 56241  

  Attn: Todd Hay
  

  320-564-4573
  

  320-564-4861 FAX  

  thay@fageneng.com

  
	
   

  	
   

  	
   

  
	
  CONTRACTOR

  R & G Construction

  2694 County Road 74  

  Marshall, MN 56258  

  Attn: Gregg Mathiowetz  

  507-537-1473
  

  507-537-0513 FAX

  gmathiowetz@randgconstruction.com

  	
   

  	
  CONTRACTOR

  Schmidt Construction  

  30103 US Highway 71

  Redwood Falls, MN 56283  

  Attn: Jeff Schmidt  

  507-644-5596
  

  507-644-5907 FAX

  schmidtconstructioninc@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 FAGEN
ENGINEERING OFFICE AT 10:00 A.M. FRIDAY MORNING, MARCH 2.


 


2

















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

  	
   

  	
  PER  AC

  	
   

  	
  $

  	
   

  	
  $

  



 


3

















EVERYONE
MUST BID THE NUMBERS LISTED ABOVE!!


 


ANY
CONTRACT MODIFICATION WILL BE DONE BY USING UNIT PRICES LISTED ON THE BID-TAB
SHEET.


 


ROADWAY
AGGREGATE QUANTITIES ARE BASED OF ASSUMED UNIT WEIGHTS AND ARE USED FOR BIDDING
PURPOSES; THE CONTRACTOR SHALL BE PAID ACCORDING TO DELIVERY WEIGHT TICKETS.


 


PLEASE
LIST ON THE BID TAB SHEET:


 


·                  CONTRACTORS EARLIEST POSSIBLE START DATE


·                  ESTIMATED DURATION TO COMPLETE THE PROJECT


 


A
PROJECT OF THIS SIZE TYPICALLY TAKES BETWEEN 7 AND 9 WEEKS TO COMPLETE (WEATHER
PERMITTING).


 


AFTER
THE CONTRACT HAS BEEN AWARDED AN ELECTRONIC FILE CAN BE SUPPLIED FOR TAKE-OFFS
AND SURVEYING PURPOSES.


 


THE
CONTRACT WILL BE BETWEEN HIGHWATER ETHANOL AND THE SUCCESSFUL BIDDER.


 


HIGHWATER
ETHANOL IS NOT OBLIGATED TO SELECT THE LOW BIDDER.


 


HIGHWATER
ETHANOL WILL RETAIN THE SERVICE THE SERVICE OF A TESTING FIRM (TERRACON).  FOR SOIL TESTING AND SITE OBSERVATION AS
REQUIRED.


 


HIGHWATER
ETHANOL SHALL RETAIN THE SERVICES OF A SURVEYOR TO:


 


·                  LAYOUT PROJECT CONTROL


·                  GENERAL LAYOUT AND GRADE STAKING (CULVERT
ENDS, ETC.)


·                  STAKE THE ROADWAY ALIGNMENT AT THE
APPROPRIATE TIME


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


 


THE
CONTRACTOR WILL BE RESPONSIBLE FOR MAINTAINING GENERAL DAY TO DAY CUT/FILL
STAKING.


 


4

















THERE
WILL BE NO BOND REQUIRED UNLESS DETERMINED BY HIGHWATER ETHANOL


 


TYPICAL
INSURANCE REQUIREMENTS UNLESS HWE REQUIRES SOMETHING ELSE:


 


·                  GENERAL LIABILITY


$2,000,000.00
GENERAL AGGREGATE


$1,000,000.00
PRODUCTS AGGREGATE


$1,000,000.00
PERSONAL INJURY


$1,000,000.00
EACH OCCURRENCE


$500,000.00
FIRE DAMAGE


$5,000.00
MEDICAL EXPENSE


·                  AUTO AND EQUIPMENT LIABILITY


$1,000,000.00
COMBINED VEHICLE LIMIT


·                  EXCESS LIABILITY (UMBRELLA)


$2,000,000.00
EACH OCCURRENCE


$1,000,000.00
AGGREGATE


·                  WORKMEN’S COMPLENSATION AND
EMPLOYERS LIABILITY


$1,000,000.00
EACH ACCIDENT


$1,000,000.00
POLICY LIMIT


$1,000,000.00
EACH EMPLOYEE


 


BID
DUE DATE: 12 PM, FRIDAY, MARCH 23, 2007


 


AWARD
DATE: 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

  



 


5
















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

  	
   

  	
  PER  AC

  	
   

  	
  $

  	
  190.00

  	
   

  	
  $

  	
  4,427.00

  



 


R
and G Construction Co.


Highway
59 South


2694
County Rd. 6


Marshall,
MN 56258


 


1

















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


 


Additional
Work


 


	
  Rail
  Quantities

  	
   

  	
  Fill

  	
   

  	
  54,600

  	
   

  	
  x

  	
   

  	
  $1.65=$90,090

  
	
   

  	
   

  	
  Excavation

  	
   

  	
  44,000

  	
   

  	
   

  	
   

  	
   

  



 


Notes


 


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


                2.  Testing and Surveying not included.


                3.  Will have GPS operated equipment onsite to
help minimize surveying.


 


Any
questions give us a call.


 


	
  Gregg
  Mathiowetz

  	
   

  	
  Larry
  Swann

  
	
  Vice
  President

  	
   

  	
  Estimator

  



 


2
















EXHIBIT D


 


HIGHWATER ETHANOL, LLC


 


PHASE 1
MASS GRADING AND


DRAINAGE
AGREEMENT


 


GENERAL CONDITIONS


 


1.       Definitions.  Unless the context otherwise
specifies or requires, the terms defined in this section will, for the purposes
of this Agreement, have the meanings herein specified. Certain other
capitalized terms used herein are defined elsewhere in this Agreement.


 


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


 


(b)           “Drawings and
Specifications” means the drawings and geotechnical reports attached to this
Agreement 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 with
the Contractor, labor, or labor and materials, or labor and equipment.


 


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


 


(e)            “Extra Work” means such
additional labor, materials, equipment, and other incidentals as are required
to complete this Agreement for the purpose for which it was intended but was
not shown on the Drawings and Specifications, or is desired by the Owner in
addition to the Work called for in the Drawings and Specifications.


 


2.       Design, Drawings and
Instructions.  The Owner will
furnish Drawings and Specifications which adequately represent the requirements
of the Work and all such Drawings and Specifications will be consistent with
this Agreement.  It is agreed that the
Owner will be responsible for the adequacy of design and sufficiency of the
Drawings and Specifications.  The
Engineer may, during the term of this Agreement, and in accordance with the
section entitled Changes in the Work under General Conditions,
issue additional instructions by means of Drawings and Specifications or other
media necessary to illustrate changes in the work.


 


All Drawings and
Specifications, and copies thereof, furnished by the Owner or Engineer shall
not 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 the
completion of the Phase I Work.


 


3.       Surveys.  The Owner shall provide a
surveyor for the project to: (a) provide layout project control; (b) provide
general layout and grade staking (culvert ends, etc.); (c) stake the
roadway alignment at the appropriate time; and (d) to verify final
elevations at the end of the Phase I Work.


 


The
Contractor will be responsible for maintaining general day-to-day cut/fill
staking.  The Contractor will carefully
preserve bench marks, reference points and stakes, and will be responsible for
any mistakes that may be caused by their unnecessary loss or disturbance.


 


 


1

















4.       Changed Conditions.  The Contractor will
promptly, and before such conditions are disturbed, notify the Owner of: (a) subsurface
or latent physical conditions at the Project Site differing materially from
those indicated in this Agreement; or (b) previously unknown physical or
other conditions at the Project Site of an unusual nature or differing
materially from those ordinarily encountered and generally recognized as
inherent in work of the character provided for in this Agreement.


 


The
Engineer will promptly investigate the conditions, and if he finds that such
conditions materially differ and cause an increase in the costs of, or the time
required for, performance of this Agreement, an equitable adjustment will be
made and this Agreement will be modified in writing accordingly as provided in
the section entitled: Changes in the Work under
General Conditions.


 


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


 


6.       Engineer’s Status.  The Engineer will perform
technical inspection of the work and has authority to stop all work whenever
such stoppage may be necessary to insure proper performance of this
Agreement.  He will also have authority
to reject all work and materials which do not conform to this Agreement and to
decide questions which arise in the performance of the Work.


 


7.       Rights of Various
Interests.  The Owner, or
its agents, will have the right, at any time during the construction of the
project, to enter the same for the purpose of conducting any necessary work, or
for any other purposes in connection with the work being completed on the
Project Site, it being mutually understood and agreed, however, that the
Contractor and the Owner will labor to mutual advantage and general harmony
with each other. In the event the Owner occupies certain finished portions of
the Project Site before final acceptance, the Owner will assume all responsibility
for its damage to the work.  Such
occupancy will in no case be construed as an acceptance of any work or
materials.


 


8.       Other Contracts.  The Owner reserves the right
to let other contracts in connection with the Project Site.  The Contractor will afford other contractors
reasonable opportunity for the introduction and storage of their materials and
the execution of their work, and will properly connect and coordinate his work
with theirs.  If the proper execution or
results of any part of the Contractor’s work depends upon the work or any other
contractor, the Contractor will inspect and promptly report to the Engineer any
defects in such work that render it unsuitable for such proper execution and
results.


 


9.       Changes in the Work.  Owner reserves the right to change the scope of the Work
or make changes in the Drawings and Specifications or scheduling of this
Agreement 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 at
the time of ordering such change), unless the Parties expressly agree
otherwise.  If such changes add to or
deduct from the Contractor’s cost of the work, this Agreement will be adjusted
accordingly.


 


 


2

















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


 


If
applicable unit prices are contained in the Agreement (established as a result
of either a unit price bid or a supplemental schedule of unit prices) the Owner
or the Engineer may order the Contractor to proceed with desired changes in the
work, the value of such changes to be determined by the measured quantities
involved and the applicable unit prices specified in this Agreement.


 


Each
change order will include in its final form:


 


(a)           A detailed description of
the Extra Work;


 


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


 


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


 


(d)         The statement that all work
involved in the change will be performed in accordance with the terms of this
Agreement 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 temporary
devices and take all necessary precautions for the protection and safety of the
public.  It assumes full responsibility
for the Work and any Extra Work.


 


Until
its final acceptance, the Contractor will continuously maintain adequate
protection of all Work from damage, and will take all reasonable precautions to
protect the Owner’s property from injury or loss arising in connection with
this Agreement.  The Contractor will also
adequately protect adjacent private and public property, as provided by law and
this Agreement.


 


The
Contractor 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); and
Contractor will reimburse Owner for any damage, injury or loss to the Work and
to 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 or
employees of the Owner.


 


Prior
to entering any adjacent private property during the course of the Phase I
Work, Contractor will obtain the consent of the owner thereof.  Any work, existing structures (except those
which are to be replaced or removed), or adjacent public or private property
damaged by the Contractor, and subcontractor or their forces will be repaired
or replaced at the Contractor’s expense.


 


The
Contractor will protect carefully all land monuments and property marks until
the Engineer has witnessed or otherwise referenced their location and will not
remove them until directed.


 


 


3

















11.    Care of Work.  In an emergency
affecting the safety of life or property, including adjoining property, the
Contractor, without special instructions or authorization from the Owner or the
Engineer, is authorized to act at his discretion to prevent such threatened
loss or injury, and it will so act. Contractor will likewise act if instructed to
do so by the Owner or the Engineer. Any compensation claimed by the Contractor
on account of such emergency work will be determined as provided in the section
entitled: Changes in the Work under General Conditions.


 


12.    Extension of Time.  Extension of time stipulated
in this Agreement for completion of the work will be made when changes in the
work occur, as provided in the section entitled: Changes in
the Work under General Conditions; when the work is suspended as
provided in the section entitled: Owner’s Suspension and
Delay of Work under General Conditions; or when the Work is delayed
on account of conditions which could not have been foreseen, or which were
beyond the control of Contractor or its Subcontractor, and which were not the
result of their fault or negligence. 
Extension of time for completion will also be allowed for any delays in
the progress of the Work or Extra Work caused by any act (except as provided
elsewhere in these General Conditions) or neglect of the Owner or of its
employees or by other contractors employed by the Owner, or by any delay in the
furnishing of Drawings and Specifications or other necessary information by the
Engineer, or due to events described in the section entitled:  Force
Majeure under General Conditions.


 


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


 


13.    Owner’s Suspension and
Delay of Work.  The Owner may
suspend 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 notice
to the Contractor which will fix the date on which work will be resumed.  The Contractor will resume that work on the
date so fixed.  The Contractor will be
allowed an increase in the Bid Amount or an extension of the time, or both,
directly attributable to any suspension, as provided for in the section
entitled: Changes in the Work under General Conditions.


 


14.    Owner’s Right to Terminate
Contract.  If the Contractor should be adjudged
bankrupt, or if it should make a general assignment for the benefit of
creditors, or if a receiver should be appointed on account of its insolvency,
or if it should persistently or repeatedly refuse or should fail, except in
cases for which extension of time is provided, to supply enough properly
skilled workmen or proper materials, or if it should fail to make prompt
payment to subcontractors for material or labor, or persistently disregard
laws, and ordinances, or otherwise be guilty of a substantial violation of any
provision of the Agreement, then the Owner may, without prejudice to any other
right or remedy and after giving the Contractor ten (10) days written
notice, terminate the employment of the Contractor and take possession of the
Project Site and of all materials, tools and appliances thereon and finish the
work by whatever method it may deem expedient. 
In such case, the Contractor shall not be entitled to receive any
further payment until the work is finished. 
If the unpaid balance of the Bid Amount shall exceed Owner’s expense of
finishing the Work, including compensation for additional engineering,
managerial and administrative services, such excess shall be paid to the
Contractor.  If such expense shall exceed
such unpaid balance, the Contractor shall pay the difference to the Owner.


 


 


4

















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


 


16.    Force Majeure.  Notwithstanding anything in this Agreement to the contrary, if the
Contractor is prevented from performing any obligation arising under this
Agreement 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 in
breach of this Agreement, to carry out such obligation within the appropriate
time period after the cessation of such cause.


 


17.    Claims for Extra Cost.  If the
Contractor claims that any changes to the original project scope involve extra
cost or extension of time, it will, within five (5) days after the receipt
of such instructions, and in any event before proceeding to execute the work,
except in emergency endangering life or property, submit his protest thereto in
writing to the Engineer, stating clearly and in detail the basis of its
objections.  No such claim will be
considered unless so made.


 


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


 


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


 


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


 


19.    Field Office.  Contractor is not required
to maintain a field officer under this Agreement.


 


20.    Employees.  The Contractor will at all
times enforce strict discipline and good order among his employees, and will
seek to avoid employing on the Project Site any unfit person or anyone not
skilled in the work assigned to him.  The Owner and Engineer reserve the right
to have any Contractor’s employee removed from the site.


 


21.    Subcontractors. The Contractor
will, as soon as practicable after signing of this Agreement, notify the
Engineer in writing of the names of Subcontractors, if any, proposed for the
Work.  The Contractor will be responsible
for the proper fitting of all work and for the coordination of the operations
of all trades, subcontractors, or material men engaged by it 


 


5

















pursuant to this Agreement.  The
Contractor agrees that it is as fully responsible to the Owner for the acts and
omissions of its subcontractors and of persons either directly or indirectly
employed by them, as it is for the acts and omissions of persons directly
employed by it.  Nothing contained in
this Agreement will create any contractual relation between any Subcontractor
and the Owner or Engineer.


 


22.    Sanitary Regulations.  The Contractor will furnish,
install, and maintain ample sanitary facilities for its workmen in accordance
with state and local sanitary codes.  When
no longer required, they will be removed from the site, and the contents will
be removed and disposed of in a satisfactory manner, as the occasion
requires.  The Contractor will rigorously
enforce the use of said sanitary facilities.


 


Drinking
water will be provided from an approved source, so piped or transported as to
keep it safe and fresh and served from single service containers or
satisfactory types of sanitary drinking stands or fountains.


 


All
such facilities and services will be furnished in strict accordance with
existing and governing health regulations.


 


23.    Environmental Requirements.  The Contractor will be
responsible for providing any necessary temporary erosion and sedimentation
control devices required for in compliance with all Federal, State and local
environmental protection requirements. 
The Contractor will not dispose of any excess materials on lands
designated or classified as wetlands by any Federal, State or local agencies.


 


24.    Statutory Requirements in
General.  The Contractor will at all
times observe and comply with, and will cause all its agents and employees to
observe and comply with, all existing and future State and Federal laws and
municipal ordinance and regulations in any manner affecting those engaged or
employed in the Work, or the materials used or employed in the Work, or in any
way affecting the conduct of the Work.


 


25.    Removal of Equipment.  In the case of termination
of 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 its
equipment and supplies from the property of the Owner.  In addition, after the Contractor has
completed the Phase I Work and any Extra Work and the Engineer has accepted
such work or issued a certificate of substantial completion, Contractor will
promptly remove any part or all of its equipment and supplies from the property
of the Owner.  Should Contractor fail to
do so, Owner shall have the right to remove such equipment and supplies at the
expense of the Contractor.


 


26.    Insurance.  Certificates of Insurance of the types and in
the amounts required will be delivered to the Owner prior to the commencement
of any work by the Contractor or entity working at the direction or under
control of the Contractor.  The
Contractor will assume the obligation and responsibility to confirm insurance
coverage for all sub-contractors or lower tier Contractors who will participate
in the project.  Such policies will name
the Owner as an additional insured thereunder, be in a form and content
satisfactory to the Owner and be kept in good standing until all of
Contractor’s work is completed. The Certificate of Insurance and the 


 


6

















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


 


27.    Indemnification.  Contractor
shall 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 judgments
recovered from or asserted against Indemnitees on account of injury or damage
to any person (including without limitation, workers’ compensation and death
claims), or property loss or damage of any kind whatsoever, to the extent any
damage or injury may be incident to, arise out of, be caused by, or be in any
way connected with, either proximately or remotely, wholly or in part, to:  (a) the Contractor’s activities at the
Project Site; (b) the performance of this Agreement; and (c) any act
or omission, negligence, or misconduct on the part of the Contractor, or any of
its agents, servants, employees, contractors, patrons, guests, licensees,
invitees, or other persons entering upon the Project Site pursuant to this
Agreement, whether authorized with the expressed or implied invitation or
permission of Contractor (collectively called “Contractor’s Invitees”);
including any injury or damage resulting, proximately or remotely, from the
violation by Contractor or Contractor’s Invitees of any law, ordinance, or
governmental order of any kind, including any injury or damage in any other way
arising from or out of any activity on the Project Site or from the Project
Site itself by any person, whether authorized to be present on the Project
Site.


 


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


 


28.    Inspection of Work.  The Owner will provide
sufficient competent personnel, working under the supervision of the Engineer,
for the inspection of the work, soil testing, and observations as required
while such work is in progress to ascertain that the completed Work will comply
in all respects with the standards and requirements set forth in this
Agreement.  Owner will complete all required sampling, testing,
inspections, and certifications of the Work. Notwithstanding such
inspections, the Contractor will be held responsible for the acceptability of
the finished Work.  The Engineer will at
all times have access to the Work whenever it is in preparation or
progress.  To prevent all disputes and
litigation the Parties agree that the Engineer will, in all cases, determine
the 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 to
be done under this Agreement to see that the same corresponds to the
Specifications and Drawings included herewith.


 


29.    Final Inspection.  When the work contemplated
by this Agreement is substantially completed, the Contractor will provide the
Engineer five (5) days written notice that the work will be ready for
final inspection on a definite date.  The
Owner or the Engineer will complete a final inspection on said date.


 


 


7

















30.    Acceptance and Final
Payment.  Upon receipt
of notice from Contractor that the work is substantially completed or ready for
final inspection and acceptance, the Engineer will promptly make such
inspection, and when he finds the Work acceptable under this Agreement and this
Agreement fully performed or substantially completed he will promptly issue a
certificate stating that the work required by this Agreement has been completed
or substantially completed and is accepted by him under the terms and
conditions hereof, and the entire balance found to be due the Contractor,
including any retainage, if any, less a retention based on the Engineer’s estimate
of the fair value of the claims against the Contractor and the cost of
completing the incomplete or unsatisfactory items of work with specified
amounts for each incomplete or defective item of work, is due and payable.  The date of substantial completion of the
Work or specified area of the Work is the date when the construction is
sufficiently completed in accordance with this Agreement, as modified by any
change orders agreed to by the Parties, so that the Owner can make use of the
project for which it was intended.


 


Before
issuance of final payment, the Contractor, if requested will certify in writing
to the Engineer that all payrolls, material bills, and other indebtedness
connected with the work have been paid, or otherwise satisfied, except that in
case of disputed indebtedness or liens, if this Agreement does not include a
payment bond, the Contractor may submit in lieu of certification of payment a
surety bond in the amount of the disputed indebtedness or liens, guaranteeing
payment of all such disputed amounts, including all related costs and interest
in connection with said disputed indebtedness or liens which the Owner may be
compelled to pay upon adjudication.


 


If
after the work has been substantially completed, full completion thereof is
materially delayed through no fault of the Contractor, and the Engineer so
recommends, the Owner will, upon recommendation of the Engineer and without
terminating this Agreement make payment of the balance due for that portion of
the work fully completed and accepted. 
Such payment will be made under the terms and conditions governing final
payment, except that it will not constitute a waiver of claims by Owner.


 


31.    Miscellaneous.


 


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


 


(b)        Time
is of the Essence.  Time will be of the essence
in the performance of this Agreement.


 


(c)         Notice.  Any notice required or
permitted by this Agreement is deemed delivered when personally delivered in
writing or three (3) days after notice is deposited with the U.S. Postal
Service, postage prepaid, certified with return receipt requested, and
addressed as follows:


 


 


8

















	
   

  	
  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

  



 


 


The
Parties may, from time to time, change their respective addresses listed above
to any other location in the United States. A party’s change of address is
effective when notice of the change is provided to the other party in
accordance with this section.


 


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


 


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


 


(f)            No Waiver. No waiver of any provision of this
Agreement will be deemed or constitute a waiver of any other provision, nor
will it be deemed or constitute a continuing waiver unless expressly provided
for by a written amendment to this Agreement executed by the Parties
hereto.  No waiver of any breach or
default under this Agreement will be deemed a waiver of any subsequent defaults
of the same type.  The failure at any
time to enforce this Agreement or any covenant by either of the Parties,
whether any violations thereof are known, does not constitute a waiver or
estoppel of their right to do so.


 


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


 


9

















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


 


(h)         Pronouns.  All pronouns and any
variations 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 this
Agreement are for convenience only and are not to be considered a part of this
Agreement and do not in any way define or affect the meaning, construction or scope of any of the provisions this
Agreement.


 


(j)             Governing Law.  This Agreement, the rights and obligations of
the Parties hereto, and any claims or disputes relating thereto, will be governed
by and construed in accordance with the laws of the State of Minnesota, and
jurisdiction and venue of any such claims or disputes will be in the state
courts of Redwood County, Minnesota.


 


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


 


(l)             Entire
Agreement.  This Agreement and all
attached schedules constitute the entire agreement between the Parties
regarding the subject matter hereof and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties and there are no warranties, representations or other
agreements between the Parties in connection with the subject matter of this
Agreement save and except as specifically set forth herein.


 


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


 


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Page Intentionally Blank]


 


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