Exhibit 4.2


HIGHWATER
ETHANOL, LLC


SUBSCRIPTION AGREEMENT


Limited Liability Company Membership Units


$10,000 per
Unit


Minimum Investment of 1 Unit
($10,000)

1 Unit Increments Thereafter ($10,000)


The undersigned subscriber (“Subscriber”), desiring to
become a member Highwater Ethanol, LLC (“Highwater Ethanol”), a Minnesota
limited liability company, with its principal place of business at 205 S. Main
Street, PO Box 96, Lamberton, Minnesota 56152 hereby subscribes for the
purchase of membership units of Highwater Ethanol, and agrees to pay the
related purchase price, identified below.


A.            SUBSCRIBER
INFORMATION.   Please print your individual or entity name and address.  If we accept your subscription, the units
will be titled in the name of the subscriber as it appears below.  Joint subscribers should provide both
names.  Your name and address will be
recorded exactly as printed below. 
Please provide your home, business and/or mobile telephone number.  If desired, please also provide your e-mail
address.


	
  1.

  	
  Subscriber’s Printed Name

  	
   

  
	
  2.

  	
  Title, if applicable

  	
   

  
	
  3.

  	
  Subscriber’s Address

  	
   

  
	
   

  	
  Street

  	
   

  
	
   

  	
  City, State, Zip
  Code

  	
   

  
	
  4.

  	
  E-mail Address

  	
   

  
	
  5.

  	
  Home Telephone Number

  	
   

  
	
  6.

  	
  Business Telephone Number

  	
   

  
	
  7.

  	
  Mobile Telephone Number

  	
   

  



 


B.            NUMBER OF UNITS PURCHASED. You must purchase at least
1 unit.  The minimum number of units to
be sold is 4,500 and the maximum number of units to be sold in the offering is
6,000.




	
                  Unit(s)

  






 


C.                                     PURCHASE PRICE.  Indicate the dollar amount of your investment
(minimum investment is $10,000).




	
  1. Total Purchase Price

  	
  =

  	
  2. 1st
  Installment

  	
  +

  	
  3. 2nd
  Installment

  
	
  ($10,000 per unit multiplied

  	
   

  	
  (10% of Total
  Purchase Price)

  	
   

  	
  (90% of Total
  Purchase Price)

  
	
  by number of units)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  =

  	
   

  	
  +

  	
   

  






 


D.            GENERAL
INSTRUCTIONS FOR SUBSCRIBERS:


You
should read the Prospectus dated [DATE OF EFFECTIVENESS] (the “Prospectus”)
in its entirety including the exhibits for a complete explanation of an investment
in Highwater Ethanol.


INSTRUCTIONS IF YOU ARE
SUBSCRIBING PRIOR TO THE
COMPANY’S RELEASE OF FUNDS FROM ESCROW:  If you are subscribing prior to the Company’s
release of funds from escrow, you must follow the instructions contained in
paragraphs 1 through 5 below:


1.             Complete
all information required in this Subscription Agreement, and date and sign the
Subscription Agreement on page 6 and the Member Signature Page to our Member
Control Agreement attached to this Subscription Agreement as Exhibit A.



 1
 









 


2.             Immediately
provide a personal (or business) check for the first installment of ten percent
(10%) of your investment amount.  The
check should be made payable to “Minnwest Bank, Redwood
Falls, MN, escrow agent for Highwater Ethanol, LLC.”  You will determine this amount in box C.2 on
page 1 of this Subscription Agreement.


3.            Execute the Promissory Note and
Security Agreement on page 7 of this Subscription Agreement evidencing your
commitment to pay the remaining ninety percent (90%) due for the units.  The Promissory Note and Security Agreement is
attached to this Subscription Agreement and grants Highwater Ethanol, LLC a
security interest in your units.


4.             Deliver the original executed
documents referenced in paragraphs 1 and 3 of these instructions, together with
a personal or business check as described in Paragraph 2 of these instructions
to:


Highwater Ethanol, LLC

205 S. Main Street, PO Box 96

Lamberton, Minnesota 56152


5.            Within 20 days of written notice
from Highwater Ethanol that your subscription has been accepted, you must remit
an additional personal (or business) check for the second installment of ninety
percent (90%) of your investment amount made payable to “Minnwest
Bank, Redwood Falls, MN, escrow agent for Highwater Ethanol, LLC” in
satisfaction of the Promissory Note and Security Agreement.  You will determine this amount in box C.3 on
page 1 of this Subscription Agreement. 
You must deliver this check to the same address set forth above in
paragraph 4 within twenty (20) days of the date of Highwater Ethanol’s written
notice. If you fail to pay the second installment pursuant to the Promissory
Note and Security Agreement, Highwater Ethanol shall be entitled to retain your
first installment and to seek other damages, as provided in the Promissory Note
and Security Agreement.  This means that
if you are unable to pay the 90% balance of your investment amount within 20
days of our notice, you may have to forfeit the 10% cash deposit.


Your funds will be placed in Highwater Ethanol’s
escrow account at Minnwest Bank, Redwood Falls, MN.  The funds will be released to Highwater
Ethanol or returned to you in accordance with the escrow arrangements described
in the Prospectus.  Highwater Ethanol
may, in its sole discretion, reject or accept any part or all of your
subscription.  If Highwater Ethanol
rejects your subscription, your Subscription Agreement and investment will be
promptly returned to you, plus nominal interest, minus escrow fees.  Highwater Ethanol may not consider the
acceptance or rejection of your subscription until a future date near the end
of this offering.


INSTRUCTIONS IF YOU ARE
SUBSCRIBING AFTER THE
COMPANY’S RELEASE OF FUNDS FROM ESCROW:  If you are subscribing after the Company’s release
of funds from escrow, you must follow the instructions contained in paragraphs
1 through 3 below:


1.             Complete
all information required in this Subscription Agreement, and date and sign the
Subscription Agreement on page 6 and the Member Signature Page to our Member
Control Agreement attached to this Subscription Agreement as Exhibit A.


2.             Immediately
provide your personal (or business) check for the entire amount of your
investment (as determined in box C.1 on page 1) made payable to “Highwater Ethanol, LLC.”


3.             Deliver the original executed documents
referenced in paragraph 1 of these instructions, together with your personal or
business check as described in paragraph 2 to:


Highwater Ethanol, LLC

205 S. Main Street, PO Box 96

Lamberton, Minnesota 56152


If you are
subscribing after we have released funds from escrow and we accept your
investment, your funds will be immediately at-risk as described in the
Prospectus.  Highwater Ethanol may, in its sole discretion, reject or accept any part
or all of your subscription.  If
Highwater Ethanol rejects your subscription, your Subscription Agreement and
investment will be returned to you promptly, plus nominal interest, minus
escrow fees.  Highwater Ethanol may not
consider the acceptance or rejection of your subscription until a future date
near the end of this offering.


You may direct your questions to any of our governors
listed below or to Highwater Ethanol at (507) 752-6160.



 2
 









 


	
  NAME

  	
   

  	
  POSITION

  	
   

  	
  PHONE NUMBER

  
	
  Brian D. Kletscher

  	
   

  	
  President and
  Governor

  	
   

  	
  507-762-3376

  
	
  John Michael Schueller

  	
   

  	
  Vice President
  and Governor

  	
   

  	
  507-342-5621

  
	
  Jason Ray Fink

  	
   

  	
  Treasurer and
  Governor

  	
   

  	
  507-637-4355

  
	
  Timothy James Van Der Wal

  	
   

  	
  Secretary and
  Governor

  	
   

  	
  507-342-5187

  



 


E.             Additional
Subscriber Information.  Subscriber,
named above, certifies the following under penalties of perjury:


1.                                       Form of Ownership.  Check the appropriate box (one only) to
indicate form of ownership. If the subscriber is a Custodian, Corporation,
Partnership or Trust, please provide the additional information requested.




	
  o

  	
  Individual

  
	
  o

  	
  Joint Tenants with Right of Survivorship (Both
  signatures must appear on page 6.)

  
	
  o

  	
  Corporation, Limited Liability Company or
  Partnership (Corporate Resolutions, Operating Agreement or Partnership
  Agreement must be enclosed.)

  
	
  o

  	
  Trust

  
	
   

  	
  Trustee’s Name: 

  	
   

  
	
   

  	
  Trust Date: 

  	
   

  
	
  o

  	
  Other: Provide detailed information in the space
  immediately below.

  
	
   

  	
   

  
	
   

  	
   

  






 


2.                                       Subscriber’s Taxpayer Information.  Check the appropriate box if you are a
non-resident alien, a U.S. Citizen residing outside the United States, and/or
subject to backup withholding.  All
individual subscribers should provide their Social Security Numbers.  Trusts should provide the trust’s taxpayer
identification number.  Custodians should
provide the minor’s Social Security Number. 
Other entities should provide the entity’s taxpayer identification
number.




	
  o

  	
  Check box if you are a non-resident alien

  
	
  o

  	
  Check box if you are a U.S. citizen residing outside
  of the United States

  
	
  o

  	
  Check this box if you are subject to backup
  withholding

  
	
   

  	
   

  
	
  Subscriber’s
  Social Security No.

  	
   

  
	
  Joint
  Subscriber’s Social Security No.

  	
   

  
	
  Taxpayer
  Identification No.

  	
   

  
			






 


3.                                       Member Report Address.  If you would like duplicate copies of member
reports sent to an address that is different than the address identified in
section A, please complete this section.




	
  Address:                

  	
   

  
	
   

  	
   

  






 


4.                                       State of Residence.




	
  State of Principal Residence:

  	
   

  
	
  State where driver’s license is issued:

  	
   

  
	
  State where resident income taxes are filed:

  	
   

  






 


State(s) in which
you have maintained your principal residence during the past three years:




	
  a.

  	
  b.

  	
  c.

  






 


5.                                       Suitability Standards and Confidential Investor
Information.  You cannot
invest in Highwater Ethanol unless you meet one of the following suitability
tests (a or b or the heightened standards for Iowa and Kansas investors set
forth in c and d) set forth below. 
Please review the suitability tests and check the box next to the
following suitability test that you meet. 
For husbands and wives purchasing jointly, the tests below will be
applied on a joint basis.



 3
 









 




	
  a.

  	
  o

  	
  I (We) have annual income from whatever source of at
  least $45,000 and a net worth of at least $45,000, exclusive of home,
  furnishings and automobiles; or

  
	
   

  	
   

  	
   

  
	
  b.

  	
  o

  	
  I (We) have a net worth of at least $150,000,
  exclusive of home, furnishings and automobiles.

  
	
   

  	
   

  	
   

  
	
  c.

  	
  o

  	
  I (We) reside in Iowa
  and I (We) have a net worth of $60,000 (exclusive of home, auto and
  furnishings) and annual income of $60,000 or, in the alternative, a net worth
  of $150,000 (exclusive of home, auto and furnishings); or

  
	
   

  	
   

  	
   

  
	
  d.

  	
  o

  	
  I (We) reside in Kansas
  and I (We) have a net worth of $60,000 (exclusive of home, auto and
  furnishings) and annual income of $60,000 or, in the alternative, a net worth
  of $225,000 (exclusive of home, auto and furnishings).

  






 


If you reside in Minnesota please
complete the following request for additional information:


I.              Employment Information




	
  A.

  	
  Name and Address of Employer:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Nature of Employer’s Business:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
  Dates of Employment:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
  Current Position or Title and Responsibilities:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
  Age:

  	
   

  
							






 


II.                                     Educational
Background




	
  SCHOOL

  	
   

  	
  MAJOR

  	
   

  	
  DEGREE(S)

  	
   

  	
  YRS. ATTENDED

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  






 


III.                                 Do
you have such knowledge and experience in financial and business matters that
you are capable of evaluating the merits and risks of an investment in the
Company? [Minnesota subscribers should NOT respond to this
question]


o            Yes                                         o            No


IV.                                 Do you understand the nature of an investment in
the Company and the risks associated with such an investment? [Minnesota subscribers should NOT respond to this question]


o            Yes                                         o            No


V.                                     Do you understand that there is no guarantee of any
financial return on this investment and that you run the risk of losing your
entire investment? [Minnesota subscribers
should NOT respond to this question]


o            Yes                                         o            No



 4
 









 


VI.           This investment provides limited
liquidity since the Units are not freely transferable and the Members have
limited rights to withdraw capital from or to withdraw as Members of the
Company, is this an acceptable limitation on your ownership of Units? [Minnesota subscribers should NOT respond to this question]


o            Yes                                         o            No


VII.                             Do you have adequate means of providing for your
current needs and personal contingencies in view of the fact that this
investment provides limited liquidity? [Minnesota
subscribers should NOT respond to this question]


o            Yes                                         o            No


VIII.        If the investor is not a natural person:


A.            Was
the investing entity formed for the purpose of investing in the Company?


o            Yes                                         o            No


B.                                     Did the shareholders, partners, members, or
grantors of the investing entity, as the case may be, contribute additional
capital to such entity for the purpose of purchasing Units?


o            Yes                                         o            No


C.                                     Does the undersigned’s investment in the Company,
together with its interests in all other corporations, partnerships, trusts or
associations represent more than ten percent of the undersigned’s total assets?


o            Yes                                         o            No


IX.                                Have you ever invested in securities?


o            Yes                                         o            No


X.                                    Have you ever invested in investment partnerships,
venture capital funds, or other non-marketable or restricted securities?


o            Yes                                         o            No


XI.                                Indicate the frequency of your investments in
non-marketable securities:


o  Often                                o  Occasional                                      o  Seldom


Financial
Information


	
  Net worth (exclusive of home, home furnishings and
  automobiles): 

  	
   

  	
  Cash and cash equivalents and liquid securities
  (includes stocks, bonds, government obligations, etc., at fair market value):
  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Under $50,000

  	
   

  	
  o

  	
  Under $50,000 

  
	
  o

  	
  $50,000 - $250,000

  	
   

  	
  o

  	
  $50,000 - $74,999 

  
	
  o

  	
  $250,000 - $500,000

  	
   

  	
  o

  	
  $75,000 - $99,999 

  
	
  o

  	
  $500,000 - $1,000,000

  	
   

  	
  o

  	
  Over $100,000

  
	
  o

  	
  Over $1,000,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Investments in closely-held companies, personal
  business and/or real estate: 

  	
   

  	
  Equity in all real estate, net of mortgages: 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Under $25,000 

  	
   

  	
  o

  	
  Under $50,000 

  
	
  o

  	
  $25,000 - $49,999 

  	
   

  	
  o

  	
  $50,000 - $74,999 

  
	
  o

  	
  $50,000 - $74,999 

  	
   

  	
  o

  	
  $75,000 - $99,999 

  
	
  o

  	
  Over $75,000

  	
   

  	
  o

  	
  Over $100,000

  



 



 5















 


	
  Other investments: 

  	
   

  	
  Annual gross income: 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Under $25,000 

  	
   

  	
  2003

  
	
  o

  	
  $25,000 - $49,999 

  	
   

  	
  o

  	
  Under $100,000

  
	
  o

  	
  $50,000 - $74,999 

  	
   

  	
  o

  	
  Over $100,000 

  
	
  o

  	
  Over $75,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  2004 

  
	
   

  	
   

  	
   

  	
  o

  	
  Under $100,000 

  
	
   

  	
   

  	
   

  	
  o

  	
  Over $100,000 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  2005 

  
	
   

  	
   

  	
   

  	
  o

  	
  Under $100,000

  
	
   

  	
   

  	
   

  	
  o

  	
  Over $100,000

  



 


6.                                       Subscriber’s Representations and Warranties.  You must read and certify your
representations and warranties by placing your initials where indicated and by
signing and dating this Subscription Agreement. 
Joint subscribers are also required to initial and sign as indicated.


(Initial here)
(Joint initials) By signing below the subscriber represents and warrants to
Highwater Ethanol that he, she or it:


	
  _________

  	
   

  	
  _________

  	
   

  	
  a.  has
  received a copy of Highwater Ethanol’s Prospectus dated [DATE OF
  EFFECTIVENESS] and the exhibits thereto or has received notice that this sale
  has been made pursuant to a registration statement in which a final
  prospectus would have been required to have been delivered in the absence of
  Rule 172;

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  b.  has been
  informed that the units of Highwater Ethanol are offered and sold in reliance
  upon a federal securities registration; state registrations in Florida,
  Georgia, Illinois, Iowa, Kansas, Louisiana, Minnesota, Missouri, South
  Dakota, and Wisconsin; and exemptions from securities registrations in
  various other states, and understands that the units to be issued pursuant to
  this subscription agreement can only be sold to a person meeting requirements
  of suitability [Minnesota subscribers should NOT initial
  this subsection];

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  c.  has been
  informed that the securities purchased pursuant to this Subscription
  Agreement have not been registered under the securities laws of any state
  other than Florida, Georgia, Illinois, Iowa, Kansas, Louisiana, Minnesota,
  Missouri, South Dakota, and Wisconsin and that Highwater Ethanol is relying
  in part upon the representations of the undersigned Subscriber contained
  herein [Minnesota subscribers should NOT initial this
  subsection];

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  d.  has been
  informed that the securities subscribed for have not been approved or
  disapproved by the SEC, or the Florida, Georgia, Illinois, Iowa, Kansas,
  Louisiana, Minnesota, Missouri, South Dakota, and Wisconsin Securities
  Departments or any other regulatory authority, nor has any regulatory
  authority passed upon the accuracy or adequacy of the Prospectus [Minnesota subscribers should NOT initial this subsection];

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  e.  intends to
  acquire the units for his/her/its own account without a view to public
  distribution or resale and that he/she/it has no contract, undertaking,
  agreement or arrangement to sell or otherwise transfer or dispose of any
  units or any portion thereof to any other person;

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  f.  has been
  informed that there is no present market for Highwater Ethanol’s membership
  units, that the membership units will not trade on an exchange or automatic
  quotation system, that no such market is expected to develop in the future
  and that there are significant restrictions on the transferability of the
  membership units;

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  g.  has been
  encouraged to seek the advice of his legal counsel and accountants or other
  financial advisers with respect to investor-specific tax and/or other
  considerations relating to the purchase and ownership of units [Minnesota subscribers should NOT initial this subsection];

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  h.  has
  received a copy of the Highwater Ethanol Member Control Agreement, dated May
  4, 2006, and understands that upon closing the escrow by Highwater Ethanol,
  the subscriber and the membership units will be bound by the provisions of
  the Member Control Agreement which contains, among other things, provisions
  that restrict the transfer of membership units;

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  i.  has been
  informed that the units are subject to substantial restrictions on transfer
  under certain tax and securities laws along with restrictions in the
  Highwater Ethanol Member Control Agreement, and agrees that if the membership
  units or any part thereof are sold or distributed in the future, the
  subscriber shall sell or distribute them pursuant to the terms of the Member 

  



 



 6
 









 


	
  

  	
   

  	
   

  	
   

  	
  Control Agreement, and the requirements of the
  Securities Act of 1933, as amended, and applicable tax and securities laws;

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  j.  meets the
  suitability test marked in Item E.5 above;

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  k.  is capable
  of bearing the economic risk of this investment, including the possible total
  loss of the investment [Minnesota subscribers
  should NOT initial this subsection];

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  l.  has been
  informed that Highwater Ethanol will place a restrictive legend on any
  certificate representing any unit containing substantially the following
  language as the same may be amended by the Governors of Highwater Ethanol in
  their sole discretion:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  THE TRANSFERABILITY OF
  THE COMPANY UNITS REPRESENTED BY THIS DOCUMENT IS RESTRICTED. SUCH UNITS MAY
  NOT BE SOLD, ASSIGNED, OR TRANSFERRED, NOR WILL ANY ASSIGNEE, VENDEE,
  TRANSFEREE, OR ENDORSEE THEREOF BE RECOGNIZED AS HAVING ACQUIRED ANY SUCH
  UNITS FOR ANY PURPOSES, UNLESS AND TO THE EXTENT SUCH SALE, TRANSFER,
  HYPOTHECATION, OR ASSIGNMENT IS PERMITTED BY, AND IS COMPLETED IN STRICT
  ACCORDANCE WITH, THE TERMS AND CONDITIONS SET FORTH IN THE MEMBER CONTROL
  AGREEMENT AND AGREED TO BY EACH MEMBER.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  THE UNITS REPRESENTED
  BY THIS CERTIFICATE MAY NOT BE SOLD, OFFERED FOR SALE, OR TRANSFERRED IN ABSENCE
  OF AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
  AND UNDER APPLICABLE STATE SECURITIES LAWS.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  m.  has been
  informed that, to enforce the above legend, Highwater Ethanol may place a
  stop transfer order with its registrar and stock transfer agent (if any)
  covering all certificates representing any of the membership units;

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  n.  may not
  transfer or assign this Subscription Agreement, or any of the subscriber’s
  interest herein without the prior written consent of Highwater Ethanol;

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  o.  has
  written his, her, or its correct taxpayer identification number under Item
  E.2 on this Subscription Agreement;

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  p.  is not
  subject to back up withholding either because he, she or it has not been
  notified by the Internal Revenue Service (“IRS”) that he, she or it is
  subject to backup withholding as a result of a failure to report all interest
  or dividends, or the IRS has notified him, her or it that he is no longer
  subject to backup withholding (Note this clause (p) should be crossed out if
  the backup withholding box in Item E.2 is checked);

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  q.  has been
  informed that execution of the attached Promissory Note and Security
  Agreement will allow Highwater Ethanol or its assigns to pursue the obligor
  for payment of the amount due thereon by any legal means, including, but not
  limited to, acquisition of a judgment against the obligor in the event that
  the subscriber defaults on that Promissory Note and Security Agreement; and

  
	
  _________

  	
   

  	
  _________

  	
   

  	
  r.  acknowledges
  that Highwater Ethanol may retain possession of certificates representing
  subscriber’s units to perfect its security interest in those units.

  



 



 7
 









 


Signature of Subscriber/Joint Subscriber:


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Individuals:

  	
   

  	
  Entities:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of Individual Subscriber (Please Print)

  	
   

  	
  Name of Entity (Please Print)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of Individual

  	
   

  	
  Print Name and Title of Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of Joint Individual Subscriber (Please Print)

  	
   

  	
  Signature of Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of Joint Individual Subscriber

  	
   

  	
   

  



 


ACCEPTANCE
OF SUBSCRIPTION BY HIGHWATER ETHANOL, LLC:


 


Highwater Ethanol,
LLC hereby accepts Subscriber’s subscription for             
units.


 


Dated this             
day of                                                 
, 200  .


 


	
  HIGHWATER ETHANOL, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  



 



 8
 









 


PROMISSORY
NOTE AND SECURITY AGREEMENT


Date of Subscription
Agreement:                                                 ,
200  .


$10,000 per
Unit


Minimum Investment of 1 Unit
($10,000); Units Sold in 1 Unit Increments Thereafter ($10,000 each)


 




	
  

  	
   

  	
  Number of Units Subscribed

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total Purchase Price ($10,000 per unit multiplied by
  number of units subscribed)

  
	
   

  	
   

  	
   

  
	
  (                           )

  	
   

  	
  Less Initial Payment (10% of Principal Amount)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Principal Balance

  






 


FOR VALUE RECEIVED, the undersigned hereby promises to
pay to the order of Highwater Ethanol, LLC, a Minnesota limited liability
company (“Highwater Ethanol”), at its principal office located at 205 S. Main
Street, PO Box 96, Lamberton, Minnesota 56152, or at such other place as required by Highwater
Ethanol, the Principal Balance set forth above in one lump sum to be paid
without interest within 20 days following the call of the Highwater Ethanol
Board of Governors, as described in the Subscription Agreement.  In the event the undersigned fails to timely
make any payment owed, the entire balance of any amounts due under this full
recourse Promissory Note and Security Agreement shall be immediately due and
payable in full with interest at the rate of 12% per annum from the due date
and any amounts previously paid in relation to the obligation evidenced by this
Promissory Note and Security Agreement may be forfeited at the discretion of
Highwater Ethanol.


The undersigned agrees to pay to Highwater Ethanol on
demand, all costs and expenses incurred to collect any indebtedness evidenced
by this Promissory Note and Security Agreement, including, without limitation,
reasonable attorneys’ fees.  This
Promissory Note and Security Agreement may not be modified orally and shall in
all respects be governed by, construed, and enforced in accordance with the
laws of the State of Minnesota.


The provisions of this Promissory Note and Security
Agreement shall inure to the benefit of Highwater Ethanol and its successors
and assigns, which expressly reserves the right to pursue the undersigned for
payment of the amount due thereon by any legal means in the event that the
undersigned defaults on obligations provided in this Promissory Note and
Security Agreement.


The undersigned waives presentment, demand for
payment, notice of dishonor, notice of protest, and all other notices or
demands in connection with the delivery, acceptance, performance or default of
this Promissory Note and Security Agreement.


The undersigned grants to Highwater Ethanol, and its
successors and assigns (“Secured Party”), a purchase money security interest in
all of the undersigned’s membership units of Highwater Ethanol now owned or
hereafter acquired. This security interest is granted as non-exclusive
collateral to secure payment and performance on the obligation owed Secured
Party from the undersigned evidenced by this Promissory Note and Security
Agreement. The undersigned further authorizes Secured Party to retain
possession of certificates representing such membership units and to take any
other actions necessary to perfect the security interest granted herein.


Dated:                                                  
, 200  .


 


	
  OBLIGOR/DEBTOR:

  	
   

  	
  JOINT OBLIGOR/DEBTOR:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Printed or Typed Name of Obligor

  	
   

  	
  Printed or Typed Name of Joint Obligor

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  (Signature)

  	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Officer Title if Obligor is an Entity

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address of Obligor

  	
   

  	
   

  	
   

  



 



 9
 









 


Exhibit A


MEMBER
SIGNATURE PAGE


ADDENDUM TO THE

AMENDED AND RESTATED MEMBER CONTROL AGREEMENT

OF HIGHWATER ETHANOL, LLC


The undersigned does hereby warrant, represent,
covenant and agree that:  (i) the
undersigned, as a condition to becoming a Member in Highwater Ethanol, LLC, has
received a copy of the Amended and Restated Member Control Agreement dated
February 26, 2007, and, if applicable, all amendments and modifications
thereto; (ii) the undersigned shall be subject to and comply with all terms and
conditions of such Member Control Agreement in all respects, as if the
undersigned had executed said Member Control Agreement on the original date
thereof; and (iii) the undersigned is and shall be bound by all of the
provisions of said Member Control Agreement from and after the date of
execution of this Addendum.


 


	
  Individuals:

  	
   

  	
  Entities:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of Individual Member (Please Print)

  	
   

  	
  Name of Entity (Please Print)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of Individual

  	
   

  	
  Print Name and Title of Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of Joint Individual Member (Please Print)

  	
   

  	
  Signature of Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of Joint Individual Member

  	
   

  	
   

  



 


	
  Agreed to and accepted on behalf of the

  Company and its Members:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HIGHWATER ETHANOL, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  



 



 10