Document:

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:

  	
   

  	
   

  	
   

  

 

 10Exhibit 4.3

ESCROW AGREEMENT

THIS ESCROW
AGREEMENT (this “Agreement”)
is made this  20th  day of
February, 2007, by and between Highwater Ethanol, LLC a Minnesota limited
liability company (“Highwater Ethanol”) and Minnwest Bank of Redwood Falls,
Minnesota as escrow agent (the “Escrow Agent”).

W I T N E S S E T H:

WHEREAS, Highwater Ethanol proposes to offer a minimum
of 4,500 and a maximum of 6,000 of its Membership Units (the “Units”) at a
price of $10,000 per Unit, in minimum blocks of one (1) Unit in an offering
registered with the Securities and Exchange Commission and in the states of
Florida, Georgia, Illinois, Iowa, Kansas, Louisiana, Minnesota, Missouri, South
Dakota, Wisconsin and possibly offered in other states pursuant to state
securities registration exemptions and under the provisions of the Securities
Act of 1933, as amended (the “Offering”);

WHEREAS, Highwater Ethanol will file a registration
statement to register the Units with the Securities and Exchange Commission,
the states of Florida, Georgia, Illinois, Iowa, Kansas, Louisiana, Minnesota,
Missouri, South Dakota, Wisconsin, and possibly other states;

WHEREAS, Highwater Ethanol will allow investors in the
Offering to deliver the purchase price of the subscribed Units in installments;
and

WHEREAS, Highwater Ethanol desires to comply with the
requirements of federal and state securities laws and regulations, and desires
to protect the investors in the Offering by providing, under the terms and
conditions herein set forth, for the return to subscribers of the money which
they may pay on account of purchases of Units in the Offering if the Minimum
Escrow Deposit (hereinafter defined) is not deposited with the Escrow Agent.

NOW,
THEREFORE, in
consideration of the mutual covenants herein contained and for other good and
valuable consideration, the receipt and sufficiency of which is acknowledged,
the parties agree as follows:

1.             Acceptance of Appointment.  Minnwest Bank of Redwood Falls, Minnesota
hereby agrees to act as Escrow Agent under this Agreement.  The Escrow Agent shall have no duty to
enforce any provision hereof requiring performance by any other party
hereunder.

2.             Establishment of Escrow Account.  An escrow account (the “Escrow Account”) is
hereby established with the Escrow Agent for the benefit of the investors in
the Offering.  Except as specifically
provided in this Agreement, the Escrow Account shall be created and maintained
subject to the customary rules and regulations of the Escrow Agent pertaining
to such accounts.

3.             Ownership of Escrow Account.  Until such time as the funds deposited in the
Escrow Account (the “Deposited Funds”) shall equal the Minimum Escrow Deposit
(as hereinafter defined), all funds deposited in the Escrow Account by
Highwater Ethanol shall not become the property of Highwater Ethanol or be
subject to the debts of Highwater Ethanol or any other person but shall be held
by the Escrow Agent solely for the benefit of the investors who have purchased
Units in the

 1
 

Offering until the Deposited
Funds are released by the Commissioner of the Minnesota Department of Commerce.

4.             Deposit of Proceeds.  All proceeds from sales of Units in the
Offering shall be delivered by Highwater Ethanol to the Escrow Agent, within
forty-eight hours of the receipt thereof from investors, endorsed (if
appropriate) to the order of the Escrow Agent, together with an appropriate
written statement setting forth name, address and social security number of
each person purchasing Units, the number of Units purchased, and the amount
paid by each such purchaser.  Any such
proceeds deposited with the Escrow Agent in the form of uncollected checks
shall be promptly presented by the Escrow Agent for collection through
customary banking and clearing house facilities.  As the proceeds of each sale are deposited
with the Escrow Agent, Highwater Ethanol shall reserve the number of Units
confirmed to the purchaser thereof in connection with such sale.  All such deposited proceeds are referred to
herein as the “Escrow Funds”.

5.             Investment
of Escrow Account.  The Escrow
Funds shall be credited by the Escrow Agent and recorded in the Escrow
Account.  The Escrow Agent shall be
permitted, and is hereby authorized to deposit, transfer, hold and invest all
funds received under this Agreement, including principal and interest, in those
investments directed, in writing by Highwater Ethanol.  The Escrow Agent is hereby authorized to
invest Escrow Funds in the Federated Treasury Obligations Money Market
Mutual Fund for temporary investment without written direction.  Any interest received by the Escrow Agent with
respect to the Escrow Funds shall be paid to Highwater Ethanol, or the
investors, as indicated elsewhere in this Agreement.

6.             Termination of Escrow.  This
Agreement and the Escrow created hereunder shall be terminated as provided in
paragraph 7 hereof or as of the date in calendar year 2007 (the “Termination
Date”), which is one year and one day following the date in calendar year 2006
upon which the Securities and Exchange Commission authorizes the Offering (the “Offering’s
Effective Date”).  Highwater Ethanol
shall notify Escrow Agent of the Offering’s Effective Date within thirty (30)
days of the receipt of notice of the Offering’s Effective Date from the
Securities and Exchange Commission.

7.             Disposition of Escrow Funds.  The Escrow Agent shall have the following
duties and obligations under this Agreement:

A.            The
Escrow Agent shall send a written notice acknowledging the receipt of the
Deposited Funds every seven days to Highwater Ethanol.

B.            The
Escrow Agent shall give Highwater Ethanol prompt written notice when the
Deposited Funds equal $4,500,000 (exclusive of interest).  Following receipt of such notice, Highwater
Ethanol will advise the purchasers of Units to remit to the Escrow Agent the
balance of the purchase price within twenty (20) days.  Thereafter, Escrow Agent shall give Highwater
Ethanol written notice acknowledging the receipt of the Deposited Funds every
seven days.  The Escrow Agent shall give
Highwater Ethanol prompt written notice when the Deposited Funds total
$45,000,000 (exclusive of interest).

C.            At
the time (and in the event) that: (i) the Deposited Funds shall, during the

 2
 

term of this Agreement, equal $45,000,000  in subscription proceeds (exclusive of
interest) (the “Minimum Escrow Deposit”); 
(ii) the Escrow Agent shall have received written confirmation
from Highwater Ethanol that Highwater Ethanol has obtained a written debt
financing commitment for debt financing ranging from a minimum of $$48,320,000 to a maximum of $63,320,000
depending on the amount necessary to fully capitalize the project; (iii) Highwater Ethanol has
affirmatively elected in writing to terminate this Agreement; (iv) Highwater
Ethanol has signed a definitive design build agreement with Fagen, Inc.; (v)
Highwater Ethanol has been issued the environmental permits necessary to
construct the ethanol plant (vi) the
Escrow Agent shall have provided to each state securities department in which
Highwater Ethanol has registered its securities for sale, as communicated to
the Escrow Agent by Highwater Ethanol, an affidavit stating that the foregoing
requirements (i), (ii), (iii), (iv) and (v) of this subsection 7C have been
satisfied and shall have provided to the Commissioner of the Minnesota
Department of Commerce documentation that the foregoing conditions have been
met; and (vii) in each state in which consent is
required, the state securities commissioners have consented to release of the
funds on deposit, provided, however, that none of the Deposited Funds, regardless
of the state of residence of the investor contributing such funds, shall be
released until the Commissioner of the Minnesota Department of Commerce has
authorized the release of the Deposited Funds, then this Agreement shall
terminate, and the Escrow Agent shall promptly disburse the funds on deposit,
including interest, to Highwater Ethanol to be used in accordance with the
provisions set out in Highwater Ethanol’s registration statement.  Highwater Ethanol will deliver a copy of its
registration statement to the Escrow Agent upon execution of this
Agreement.  The Escrow Agent will have no
responsibility to examine the registration statement with regard to the Escrow
Account or otherwise and the registration statement shall contain a provision
to such effect.  Upon the making of such
disbursement, the Escrow Agent shall be completely discharged and released of
any and all further responsibilities hereunder.

D.            In
the event the Deposited Funds do not equal or exceed the Minimum Escrow Deposit
on or before the Termination Date or if Highwater Ethanol has not received a
written debt financing commitment as described herein on or before the
Termination Date, the Escrow Agent shall return to each of the purchasers of
the Units in the Offering, as promptly as possible after such Termination Date
and on the basis of its records pertaining to the Escrow Account:  (i) the sum which each purchaser initially
paid in on account of purchases of the Units in the Offering and (ii) each
purchaser’s portion of the total interest earned on the Escrow Account as of
the Termination Date.  Computation of any
purchaser’s share of the net interest earned will be a weighted average based
on the proportion of such purchaser’s deposit in the Escrow Account from the
Offering to all such purchasers’ deposits held by the Escrow Agent and upon the
length of time in days such deposit was held in the Escrow Account as compared
to all such deposits.  All computations
with respect to each purchaser’s allocable share of net interest shall be made
by the Escrow Agent, which determinations shall be final and conclusive.  Any amount paid or payable to a purchaser
pursuant to this paragraph shall be deemed to be the property of such
purchaser, free and clear of any and all claims of Highwater Ethanol or its
agents or creditors; and the respective purchases of the Units made and entered
into in the Offering shall thereupon be deemed, ipso facto, to be cancelled
without any further liability of the purchasers or any of them to pay for the
Units purchased.  At such time as the
Escrow Agent shall have made all the payments called for in this paragraph, the
Escrow Agent shall be

 3
 

completely
discharged and released of any and all further responsibilities hereunder, and
the Units reserved (as provided in paragraph 5) shall be released from such
reservation, except that Escrow Agent shall be required to prepare and issue a
single IRS Form 1099 to each investor in the event that funds are returned to
investors.

8.             Agreement with Escrow Agent.  To induce Escrow Agent to act hereunder, it
is agreed by Highwater Ethanol that:

A.            The
sole duty of the Escrow Agent, other than as herein specified, shall be to
receive the Escrow Funds and hold them subject to release, in accordance
herewith, and the Escrow Agent shall be under no duty to determine whether
Highwater Ethanol is complying with the requirements of this Agreement in
tendering to the Escrow Agent said proceeds of the sale of said Units.  The Escrow Agent may conclusively rely upon
and shall be protected in acting upon any statement, certificate, notice,
request, consent, order or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties.  The Escrow Agent shall have no duty or
liability to verify any such statement, certificate, notice, request, consent,
order or other document, and its sole responsibility shall be to act only as
expressly set forth in this Agreement. 
The Escrow Agent shall be under no obligation to institute or defend any
action, suit or proceeding in connection with this Agreement unless first
indemnified to its satisfaction.  The
Escrow Agent may consult counsel in respect of any question arising under this
Agreement and the Escrow Agent shall not be liable for any action taken or
omitted in good faith upon advice of such counsel.

B.            Highwater
Ethanol hereby indemnifies and holds harmless the Escrow Agent from and against
any and all loss, liability, cost, damage and expense, including, without
limitation, reasonable counsel fees, which the Escrow Agent may suffer or incur
by reason of any action, claim or proceeding brought against the Escrow Agent
arising out of or relating in any way to this Agreement or any transaction to
which this Agreement relates unless such action, claim or proceeding is the
result of the gross negligence or willful misconduct of the Escrow Agent.

9.             Resignation and Removal of Escrow Agent Successors.  The Escrow Agent may resign upon thirty (30)
days advance written notice to Highwater Ethanol.  If a successor Escrow Agent is not appointed
within the 30-day period following such notice, Escrow Agent may petition any
court of competent jurisdiction to name a successor Escrow Agent.  Any commercial banking institution or trust company
with which Escrow Agent may merge or consolidate, and any commercial banking
institution or trust company to which Escrow Agent transfers all or
substantially all of its corporate trust business shall be the successor Escrow
Agent without further act.

10.           Fees and Expenses of Escrow Agent.  Highwater Ethanol agrees to pay the Escrow
Agent the fees specified in the Escrow Agent’s fee schedule attached hereto as
Exhibit A, in the manner set forth therein, unless otherwise agreed to by the
parties in writing.  The parties further
agree that Highwater Ethanol shall be solely responsible for the payment of
such fees and the Escrow Agent shall not seek payment of the fees from
investors or apply any principal deposited by investors in the escrow account
or interest on the escrow account against such fees..  The fee agreed upon  herein is intended as full consideration for
the Escrow Agent’s services as contemplated by this Agreement;

 4
 

provided, however, that in the event the Escrow
Agent renders any material service not contemplated in this Agreement or there
is any assignment of interest in the subject matter of this Agreement, or any
material modification hereof; or if any material controversy arises hereunder,
or the Escrow Agent is made a party to any litigation pertaining to this
Agreement, or the subject matter hereof, then the Escrow Agent shall be
reasonably compensated for such extraordinary services and reimbursed for all
costs and expenses, including reasonable attorney’s fees, occasioned by any
delay, controversy, litigation or event, and the same shall be recoverable from
Highwater Ethanol, but not from the escrow account.

11.           Notices.  All
notices, requests, demands, and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given (a) on the date of
service if served personally on the party to whom notice is to be given, (b) on
the day of transmission if sent by facsimile transmission to the facsimile
number given below, and telephonic confirmation of receipt is obtained promptly
after completion of transmission, (c) on the next day on which such deliveries
are made in Lamberton, Minnesota, when delivery is to Federal Express or
similar overnight courier or the Express Mail service maintained by the United
States Postal Service, or (d) on the fifth day after mailing, if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, return receipt requested,
to the party as follows:

If to Escrow Agent:

Minnwest Bank of Redwood Falls,
Minnesota

1275 East Bridge, P.O. Box 439

Redwood Falls, MN  56283

Attn: Shannon Hoffbeck

Fax: (507) 637-8377

Phone: (507) 637-5343

 

If to Highwater Ethanol:

Highwater Ethanol, LLC

205 S. Main Street, PO
Box 96

Lamberton, Minnesota 56152

Attn:  Brian Kletscher, Chairman of the Board and President

Fax:  (507) 762-3376

 

with a required copy to:

Brown, Winick, Graves, Gross,
Baskerville and Schoenebaum, P.L.C.

666 Grand Avenue, Suite 2000

Des Moines, IA  50309

Attention:  Harold N. Schneebeck

Fax:  (515) 323-8509

 

12.           Governing Law. 
This Agreement shall be construed, performed, and enforced in accordance
with, and governed by, the internal laws of the State of Minnesota, without
giving effect to

 5
 

the principles of conflict of
laws thereof.

13.           Successors and Assigns.  Except as otherwise provided in this
Agreement, no party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent to the other parties
hereto and any such attempted assignment without such prior written consent
shall be void and of no force and effect. 
This Agreement shall inure to the benefit of and shall be binding upon
the successors and permitted assigns of the parties hereto.

14.           Severability. 
In the event that any part of this Agreement is declared by any court or
other judicial or administrative body to be null, void, or unenforceable, said
provision shall survive to the extent it is not so declared, and all of the
other provisions of this Agreement shall remain in full force and effect.

15.           Further Assurances. 
Each of the parties shall execute such documents and other papers and
take such further actions, as may be reasonably required or desirable to carry
out the provisions hereof and the transactions contemplated hereby.

16.           Amendments. 
This Agreement may be amended or modified, and any of the terms,
covenants, representations, warranties, or conditions hereof may be waived,
only by a written instrument executed by the parties hereto, or in the case of
a waiver, by the party waiving compliance. 
Any waiver by any party of any condition, or of the breach of any
provision, term, covenant, representation, or warranty contained in the
Agreement, in any one or more instances, shall not be deemed to be nor
construed as further or continuing waiver of any such conditions, or of the
breach of any other provision, term, covenant, representation, or warranty of
this Agreement.

17.           Entire Agreement. 
This Agreement contains the entire understanding among the parties
hereto with respect to the escrow contemplated hereby and supersedes and
replaces all prior and contemporaneous agreements and understandings, oral or
written, with regard to such escrow.

18.           Section Headings. 
The section headings in this Agreement are for reference purposes only
and shall not affect the meaning or interpretation of this Agreement.

19.           Counterparts. 
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.

 6
 

IN WITNESS WHEREOF, the parties
hereto have hereunto affixed their signatures as of the day and year first
written above.

	
  HIGHWATER ETHANOL:

  	
   

  	
  ESCROW AGENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HIGHWATER ETHANOL, LLC

  	
   

  	
  MINNWEST BANK OF REDWOOD FALLS, MINNESOTA

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Brian Kletscher

  	
   

  	
  By:

  	
  /s/ Douglas Karsky

  	
   

  	
   

  
	
  Brian Kletscher,

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chairman of the Board and President

  	
   

  	
  Printed Name:

  	
  Douglas Karsky

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Authorized by:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minnesota Department of Commerce

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Patrick Nelson

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Patrick Nelson

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deputy Commissioner of Commerce

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
										

 

 7

Exhibit A

Minnwest Bank of Redwood Falls, Minnesota

Escrow Agent Fee Schedule

Escrow Agreement

Highwater Ethanol, LLC

	
  Administration

  	
   

  	
  $

  	
  2,500.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Transaction Fees

  	
   

  	
   

  	
   

  
	
  Subscriber

  	
   

  	
  $

  	
   

  	
   

  
	
  Disbursement/Each

  	
   

  	
  $

  	
  10.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1099 Filing

  	
   

  	
  $

  	
   

  	
   

  
	
  Subscriber/Filing

  	
   

  	
  $

  	
  10.00

  	
   

  

 

All out of pocket
costs and expenses, including postage, supplies, long distance telephone
charges, wires and reasonable attorney’s fees will be in addition hereto.

We reserve the
right to revise fees, including establishing new minimums, as necessitated by
changing economic conditions.

All fees are
charged in arrears and are quoted on an annualized basis; however we reserve
the right to bill in advance, or on a more frequent basis.

 8

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