Exhibit 10.5


 


BILL OF
SALE


 


This Bill of Sale dated  as of April 25, 2008 from HIGHWATER
ETHANOL, LLC, a Minnesota limited liability company (the “Company”) to the CITY
OF LAMBERTON, MINNESOTA, a political subdivision of the State of Minnesota (the
“City”).


 


RECITALS


 


A.            The Company desires to transfer its
interest in and the City desires to acquire the Assets (as defined below) for
and in consideration of (i) the financing provided by of the City’s Solid
Waste Facilities Revenue Bonds (Highwater Ethanol, LLC Project), Series 2008A,
(ii) the execution and delivery of that certain Lease Agreement, dated as
of April 1, 2008 (the “Lease Agreement”), between the City and the
Company, and (iii) other good and valuable consideration.


 


B.            All capitalized terms used herein and not
otherwise defined have the meanings ascribed to them in the Lease Agreement.


 


C.            This Bill of Sale conveys an after-acquired
interest.


 


AGREEMENT


 


NOW, THEREFORE, in consideration of the
premises and for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:


 


SECTION 1: SALE OF ASSETS


 


Company does hereby BARGAIN, SELL ASSIGN AND
TRANSFER unto the City, its successors and assigns, all its estate, right,
title and interest in and to the buildings and all materials, supplies,
equipment, apparatus and other items of personal property now owned or
hereafter acquired by the Company which are described in Exhibit A, and
all replacements and substitutions thereof (the “Assets”). The Assets are
located or to be located on the Land legally described in Exhibit B.


 


TO HAVE AND TO HOLD all the said property
described herein unto the City, its successors and assigns, to its own use and
benefit forever.


 


SECTION 2: TITLE


 


Company agrees that it is the owner of the
Assets, that the Assets are free from all encumbrances (except the Lease and
Permitted Encumbrances as defined in the Lease Agreement) and that the Company
has the right to sell and convey the Company’s interest in the Assets to the
City. The  Company agrees to warrant and
defend the sale of the Assets to the City against any and all person(s) who
claim title to any of the Assets, subject only to the Lease and Permitted
Encumbrances. This Bill of Sale shall bind the Company and benefit the City and
its successors and assigns.


 

















 


SECTION 3: LESSOR LIENS


 


The Company warrants that it is conveying
title to the Assets to the City free and clear of all liens except those
permitted under the terms of the Lease Agreement.


 


SECTION 4:  NO WARRANTIES


 


The foregoing sale, transfer, conveyance and
assignment of the Assets is made “as is,” where is, with all faults, without
any warranties, express or implied, including but not limited to warranties of
fitness, merchantability or fitness for a particular purpose, and without any
recourse to the Company for any reason whatsoever, except as provided in
Sections 2 and 3 hereof.


 


SECTION 5:  ASSIGNMENT OF WARRANTIES


 


The Company hereby bargains, sells, assigns,
transfers and sets over to and for the benefit of the City all right, title and
interest of the Company, if any, in, to and under any and all contracts to
which the Company is a party relating to the procurement, design, manufacture,
construction, installation or testing of the Assets (the “Facility Contracts”)
including, without limitation, all claims for damages arising under the
representations, indemnities, warranties, guarantees and agreements made to or
for the benefit of the Company by the parties (other than the Company) to the
Facility Contracts (other than the Company, the “Facility Contractors”), and
the right to compel performance of the terms of the Facility Contracts. The
Company agrees at the request of the City and at the City’s expense, to use
commercially reasonable efforts to preserve and protect the City’s rights under
any warranty, covenant or representation made by each Facility Contractor with
respect to the Assets.


 


SECTION 6:  MISCELLANEOUS


 


This Bill of Sale shall be governed by and
construed and interpreted in accordance with the laws of the State of Minnesota.
The terms and provisions of the Bill of Sale shall be binding upon and inure to
the benefit of the respective parties hereto, and their respective successors
and assigns.


 


This Bill of Sale may be executed in multiple
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.


 


2

















 


IN WITNESS WHEREOF, the City and the Company
have caused this Bill of Sale to be executed by their duly authorized officers.


 


	
   

  	
  CITY OF LAMBERTON, MINNESOTA

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
          /s/
  Craig Wetter

  
	
   

  	
   

  	
  Its Mayor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
          /s/
  Steven Flaig

  
	
   

  	
   

  	
  Its City Administrator

  



 


Bill of Sale dated as of April 25, 2008, between the City of
Lamberton, Minnesota and Highwater Ethanol, LLC


 


3

















 


	
   

  	
  HIGHWATER ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
          /s/
  Brian D. Kletscher

  
	
   

  	
   

  	
  Brian D. Kletscher

  
	
   

  	
   

  	
  Its President

  



 


Bill of Sale dated as of April 25, 2008, between the City of
Lamberton, Minnesota and Highwater Ethanol, LLC


 


4

















 


EXHIBIT A


 


Description of
Equipment


 


	
  Centrifuge System

  
	
  Boiler or Thermal Oxidizer

  
	
  Evaporator System

  
	
  Dryer System

  
	
  Methanator

  



 


A-1

















 


EXHIBIT B


 


Location of
the Plant


 


PARCEL I
(PROJECT SITE)


 


TRACT A:  That part of the Southwest Quarter of Section 21,
Township 109 North, Range 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 said Tract A which lies northwesterly of “Line 1”
described below, southerly of a line run parallel with and 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, said
exception containing 0.20 acres more or less.


 


“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 of “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 degrees 05 minutes
00 seconds (as measured from south to east) from said west line of 1521.8 feet;
thence deflect to the right at an angle of 01 degree 03 minutes 00 seconds for
1100 feet and there terminating.


 


Also Excepting
that part of said 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; said exception containing 0.37 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.


 


AND ALSO


 


PARCEL II
(PROJECT SITE)


 


All that part
of the Southeast Quarter of Section 21, Township 109 North, Range 37 West,
Redwood County, Minnesota, lying north of the northerly right-of-way line of
the Dakota Minnesota & Eastern Railroad, subject to Highway 14 right-of-way.


 


Excepting
therefrom that part of said Southeast Quarter which lies within a distance of
35 feet southerly of the following described line:  Beginning at a point on the westerly boundary
of said


 


B-2

















 


Southeast
Quarter, 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.


 


Also Excepting
therefrom that part of the Northeast Quarter of the Southeast Quarter of Section 21,
Township 109 North, Range 37 West, Redwood County, Minnesota, described as
follows:  Commencing at the northeast
corner of said Southeast Quarter; thence southerly on a Minnesota State Plane
Grid Azimuth from north of 181 degrees 50 minutes 35 seconds along the east
line of said Southeast Quarter 102.21 feet; thence westerly 270 degrees 48
minutes 42 seconds azimuth 665.31 feet to the point of beginning; thence
continue westerly 270 degrees 48 minutes 42 seconds azimuth 400.00 feet; thence
southerly 180 degrees 48 minutes 42 seconds azimuth 200.00 feet; thence
easterly 90 degrees 48 minutes 42 seconds azimuth 400.00 feet; thence northerly
00 degrees 48 minutes 42 seconds azimuth 200.00 feet to the point of beginning.


 


Containing
0.27 acres, more or less.


 


AND ALSO


 


PARCEL III
(LAMBERTON ECONOMIC DEVELOPMENT AUTHORITY PARCEL)


 


That part of
the South Half (S1⁄2) of Section Twenty-two (22), Township One Hundred Nine
(109) North, Range Thirty-seven (37) West, Redwood County, Minnesota, lying
northerly of the northerly right-of-way line of the Dakota Minnesota &
Eastern Railroad, and southerly of the following described line:  Commencing at a point on the west line of the
Southwest Quarter (SW1⁄4) of said Section Twenty-two (22) where said line
intersects the northerly right-of-way line of the Dakota Minnesota and Eastern
Railroad, said right-of-way line being 50 feet northerly of and parallel with
the center line of the tracks; thence northerly along said west line on an
assumed azimuth of 01 degrees 50 minutes 35 seconds 145.69 feet to the point of
beginning of the line to be described; thence easterly 84 degrees 21 minutes 14
seconds azimuth 388.43 feet; thence 85 degrees 21 minutes 11 seconds azimuth
900.66 feet; thence easterly 83 degrees 46 minutes 16 seconds azimuth 896.53
feet; thence easterly 81 degrees 30 minutes 37 seconds azimuth 193.47 feet;
thence easterly 78 degrees 15 minutes 04 seconds 396.89 feet; thence easterly
80 degrees 37 minutes 13 seconds 299.78 feet; thence easterly 77 degrees 40
minutes 49 seconds 199.61 feet; thence easterly 80 degrees 37 minutes 44
seconds azimuth 200.67 feet; thence easterly 77 degrees 47 minutes 42 seconds
azimuth 316.70 feet to the southerly right-of-way line of Trunk Highway No. 14;
thence easterly 90 degrees 48 minutes 42 seconds azimuth along said southerly
right-of-way line 619.24 feet to its intersection with said northerly
right-of-way line of said Dakota Minnesota and Eastern Railroad and there
terminating.


 


B-3

















 


AND ALSO


 


PARCEL IV
(ERICKSON WELL SITE PARCEL)


 


The East
2040.20 feet of the North 128.10 feet of the Northwest Quarter of Section 14,
Township 108 North, Range 37 West, Cottonwood County, Minnesota. Said tract
subject to a 33.00 foot township road right-of-way easement. Said tract
contains 6.00 acres more or less, including 1.55 acres of township road
right-of-way.


 


AND ALSO


 


PARCEL V
(GEIS WELL SITE PARCEL)


 


The East
1188.00 feet of the South 220.00 feet of the Southeast Quarter of the Southwest
Quarter of Section 29, Township 109 North, Range 37 West, Redwood County,
Minnesota. Said tract subject to a 33.00 foot township road right-of-way
easement. Said tract contains 6.00 acres more or less, containing 0.90 acres of
township road right-of-way.


 


B-4