Exhibit
10.1


 


COMMODITY RISK MANAGEMENT CONSULTING AGREEMENT


 


This
agreement is between JOHN STEWART & ASSOCIATES, MINNESOTA BRANCH (“JS&A”),
whose address is: 2353 Rice Street, Suite 125, Roseville, MN 55113, and
HIGHWATER ETHANOL, LLC (“HIGHWATER”), whose address is: P.O. Box 96,
Lamberton, MN 56152.


 


WHEREAS: HIGHWATER wishes to engage JS&A as a
consultant to provide advice regarding the purchase and sale of commodities
and,


 


WHEREAS: JS&A wishes to provide the services
outlined below in exchange for compensation specified herein,


 


THE PARTIES AGREE AS FOLLOWS:


 


1.              JS&A agrees to provide HIGHWATER with advice
regarding commodities owned or expected to be owned by HIGHWATER, in an effort
to control the price risk of commodity ownership and achieve satisfactory
operating margins.


 


2.              In addition, JS&A will make available to
HIGHWATER its proprietary resources for price forecasting, regional S/D’s,
basis analysis, and margin management and analysis.


 


3.              JS&A does not view risk management in a
processing environment as a function of picking the highs and lows of
individual commodity prices at any given point in time. Rather, JS&A seeks
to maximize the expected margin between commodity input costs and revenue from
the finished products in a given time period.


 


4.              JS&A will avail itself to HIGHWATER’s Board of
Directors and Executive Staff, regarding the rationale for any proposed
positions, its risk parameters, and an estimate of the capital required to
establish and maintain hedge positions.


 


5.              In exchange for the above services, HIGHWATER will
pay JS&A a consulting fee of $2,500.00 (Two Thousand-Five Hundred Dollars)
per month. The consulting fee will commence on May 1, 2009. JS&A will
invoice fees monthly with payment terms of Net due within fifteen days of invoice.


 


6.              HIGHWATER will pay a brokerage commission on
futures, options and OTC contracts made in its JOHN STEWART &
ASSOCIATES brokerage account with ADM Investor Services. The rate for Chicago
Board of Trade Exchange traded futures and options transactions will be $15.00
(Fifteen Dollars) per contract round turn (purchase and sale). Commissions are
charged on a half-in, half-out basis. Commission rates may be changed by mutual
agreement between the parties without affecting any other provisions of this agreement.


 


7.              This agreement does not preclude or limit JS&A
from conducting its normal course of business with other customers of JS&A.


 


8.              Except as required by any governmental agency, court
or tribunal of competent jurisdiction, JS&A shall not disclose to any third
party any confidential information obtained as a result of 


 

















 


the
business relationship between HIGHWATER and JS&A.


 


9.              This agreement shall remain in effect for no less
than one (1) year following the date of JS&A’s first invoice. After one
(1) year elapses, this agreement shall remain in force on a month-to-month
basis thereafter, and may not be terminated, unless either party notifies the
other, in writing, thirty (30) days notice of its desire to terminate this
agreement.


 


10.       Each party will indemnify and hold the other and its
directors, officers, employees, and agents harmless from losses, claims,
liability, damages or expenses, including attorney fees and other litigation
expenses, suffered as a result of gross negligence, willful misconduct,
misrepresentation or breach of a warranty, covenant or agreement between the
parties. This provision shall survive the termination or expiration of this
Agreement.


 


11.       HIGHWATER
acknowledges that commodity trading involves high levels of risk. There is no
guarantee that trades recommended by JS&A will achieve their intended
purpose. HIGHWATER further acknowledges that trading futures, options and OTC
contracts may result in losses in excess of its initial investment.


 


If
the foregoing correctly sets forth the understanding of HIGHWATER and JS&A,
please sign below.


 


 


	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
  John
  Stewart & Associates, MN Branch

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Philip J. Coffin

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signed:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Philip J. Coffin

  
	
   

  	
   

  	
   

  
	
  AGREED
  AND ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HIGHWATER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Mark Peterson

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mark
  Peterson - CFO

  	
   

  	
  4/28/2009

  
	
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