Document:

Exhibit
10.12

OPTION TO
PURCHASE REAL ESTATE

The undersigned,
Arden Imker and Lester Imker, general partners of Imker Farms, a general
partnership under the laws of the State of Minnesota, of Lamberton, Minnesota,
hereinafter referred to as seller, hereby acknowledges receipt of Five Thousand
and no/100 dollars ($5,000.00) from the Lamberton EDA of Lamberton, Minnesota,
hereinafter referred to as purchaser.  In
consideration of such payment, seller hereby gives and grants to purchaser the
exclusive option to purchase for the price and on the terms and conditions
hereinafter set forth, part of the real property of seller situated in the
Township of Lamberton, County of Redwood, State of Minnesota, and particularly
described as follows:

All that part of the Southeast Quarter (SE1/4) of Section Twenty-one
(21), Township One Hundred Nine (109) North, Range Thirty-seven (37) West
located north of the north right-of-way line of the railroad; subject to
easements, road easements, and railroad right-of-way, and further subject to
the terms of this agreement,

Hereinafter referred to as the property.

1.  The full purchase price for the property is
Seven Thousand and no/100 Dollars ($7,000.00) per acre.

If this option is
not exercised, the $5,000.00 paid by the purchaser shall be retained by the
seller, in consideration of the option. 
If the option is exercised the $5,000.00 paid by the purchaser shall be
considered part of the purchase price.

2.  The purchaser agrees to cooperate with the
seller in completing a like kind exchange under Section 1031 of the Internal
Revenue code so as to enable seller to acquire replacement property with the
proceeds of the purchase.

3.  This option may be exercised by written
notice of such exercise delivered to seller at Imker Farms, c/o Arden Imker,
24794 120 Street, Lamberton, County of Redwood, State of Minnesota, on or
before 12:00 p.m. on December 31, 2006, or such extension of such period as
seller may grant in writing within the original period of the option.  Notice shall be deemed effective if deposited
in the United States mail on or before 12:00 p.m. December 31, 2006.

4.  Seller shall convey to purchaser or his
nominee good and marketable title to the property herein described, subject
only to: highway, utility and drainage easements of record.  Seller shall furnish abstract of title,
certified to date, to include proper searches covering bankruptcies and state
and federal judgment and liens.  If any objections
are made by the purchaser, seller shall be allowed 120 days to make such title
marketable.  Pending correction of title,
payments required hereunder shall be postponed, but upon correction of the
title, and within 10 days after notice to purchaser, the parties shall perform
this agreement according to its terms.

Conveyance of
title and transfer of possession to purchaser or its nominee shall be executed
within sixty (60) days after exercise of the option.  During such period, title may be examined by
purchaser or its nominee by any method selected. The purchase price shall be
paid

 

in cash at the time of
closing.  At the time of closing the
seller agrees to convey the property to the purchaser by a general Warranty
Deed conveying to the purchaser marketable title to the property.

The Seller
reserves for itself and its assigns the right to farm the tillable acres
undeveloped on the property after closing, until the purchaser sells the
property, or until Arden Imker, a partner of Imker Farms, Inc. shall no longer
be farming, or until December 31, 2009, whichever occurs first.  The Seller will pay to the purchaser cash
rent of $105 for each acre of tillable land. 
The right reserved by the seller to farm the tillable acres undeveloped
on the property after closing shall not be assignable by the seller.

If the purchaser
fails to exercise the option with the period provided hereinbefore, this
agreement shall be void and of no further force and effect.

5.  Ad valorem taxes against the property for the
year in which the sale is consummated, whether or not a lien, and whether or
not assessed, shall be prorated between the parties as to the date of delivery
of title.  If such taxes are not
ascertainable at such time, the base of proration shall be the amount of the ad
valorem taxes for the previous year.  All
existing special assessments, if any, shall be prorated by the parties as of
the date of closing.

6.  The purchaser shall reimburse the sellers
and/or their lessee(s) for the actual crop loss sustained if the sellers and/or
their lessee(s) have growing crops on the property at the time this Option is
exercised and construction has begun.  If
the property is sold after the crop is planted, any destroyed crop will be
reimbursed for the cost of material (seed, fertilizer, etc.), rent and labor.

7.  All rights of the purchaser hereunder are
assignable, but written notice of any assignment by Purchaser, and of each
subsequent assignment or nomination to take title, shall be given in writing to
seller at the address set forth below. 
Seller is not restricted from conveying the above described real estate
prior to the exercise of this option provided, however, that seller in such
event agrees to convey said real estate subject to the terms and conditions of
this option.

8.  This agreement shall be binding on the heirs,
successors and assigns of the parties and the terms and conditions herein shall
survive a sale if completed.

9.  This agreement shall constitute the entire
contract between the parties hereto, and no modification hereof shall be
binding unless endorsed hereon in writing.

Dated this 27th day of October, 2005.

	
  

  	
  IMKER FARMS

  
	
   

  	
   

  
	
  

  	
  By:

  	
  /s/ Arden Imker

  	
   

  
	
   

  	
  Arden Imker, General Partner

  

 

 

	
  

  	
  By:

  	
  /s/ Lester Imker

  
	
   

  	
  Lester Imker, General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LAMBERTON EDA of Lamberton, Minnesota

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven
  Krinke

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gwen
  Batalden

  

 

 

	
  STATE OF MINNESOTA

  	
  )

  
	
   

  	
  ) SS.

  
	
  COUNTY OF
  REDWOOD

  	
  )

  

 

The foregoing
instrument was acknowledged before me this 27th day of October, 2005, by Arden Imker
and Lester Imker, General Partners of Imker Farms, a general partnership under
the laws of the State of Minnesota, on behalf of the partnership.

 

	
  [KATHERYN R. WILLE]

  	
   

  	
  /s/ Katheryn R.
  Wille

  
	
  [NOTARY
  PUBLIC-MINNESOTA]

  	
   

  	
  Notary Public

  
	
  [My Commission
  Expires 1-31-2008]

  	
   

  	
   

  

 

 

	
  STATE OF MINNESOTA

  	
  )

  
	
   

  	
  ) SS.

  
	
  COUNTY OF
  REDWOOD

  	
  )

  

 

On this 19th day of October, 2005,
before me, a Notary Public within and for said County and State, personally
appeared Steven Krinke and Gwen Gatalden, the President and Secretary of
Lamberton EDA, Lamberton, Minnesota, to me known to be the persons described in
and who executed the foregoing instrument, and acknowledged, each of them, that
they executed the same as their free act and deed on behalf of the Lamberton
EDA, Lamberton, Minnesota.

	
  

  	
   

  	
  /s/ Barbara J. Anderson

  
	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [BARBARA J. ANDERSON]

  
	
   

  	
   

  	
  [NOTARY PUBLIC-MINNESOTA]

  
	
   

  	
   

  	
  [My Commission Expires 1-31-2008]Exhibit
10.13

ASSIGNMENT
OF OPTION TO PURCHASE REAL ESTATE

WHEREAS, Imker
Farms has entered into an Option to Purchase Real Estate (as seller) with
Lamberton EDA of Lamberton, Minnesota (as buyer), said Option to Purchase Real
Estate dated October 27, 2005, and

Lamberton EDA of
Lamberton, Minnesota, desires to sell and assign all of its rights (as buyer)
therein to Highwater Ethanol, LLC.

NOW, THEREFORE,
the undersigned parties agree as follows:

1.             Lamberton EDA of Lamberton,
Minnesota, hereby assigns all of its rights, title, interest and obligations in
and to said Option to Purchase Real Estate (including its right to purchase
said real estate) to Highwater Ethanol, LLC.

2.             Highwater Ethanol, LLC will pay
Lamberton EDA of Lamberton, Minnesota, Five Thousand and no/100 Dollars
($5,000.00) in order to obtain this assignment.

3.             Imker Farms, a general partnership
under the laws of the State of Minnesota, hereby consents and agrees to said
assignment to Highwater Ethanol, LLC (but acknowledge that pursuant to paragraph
7 of said Option, that such is freely assignable by Lamberton EDA, without any
consent by Imker Farms).

4.             Imker Farms hereby agrees to
cooperate, including, but not limited to executing ay and all applications or
documents necessary, so that Highwater Ethanol, LLC can proceed to rezone
and/or obtain any permission or approvals necessary so Highwater Ethanol, LLC
can proceed to develop and then construct an ethanol facility on or adjoining
the real estate covered by said Option to Purchase Real Estate.

5.             This Assignment shall be binding on
the heirs, successors and assigns of the parties hereto and constitutes the
entire contract between the parties hereto and no modification hereof shall be
binding unless endorsed in writing by the party to be affected.

	
  Dated: August 9, 2006

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ASSIGNOR:

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
  LAMBERTON EDA

  	
  HIGHWATER ETHANOL, LLC

  
	
  LAMBERTON, MINNESOTA

  	
   

  

 

 

 

	
  By:

  	
  /s/ Steve Krinke

  	
   

  	
  By:

  	
  /s/ Brian
  Kletscher

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  EDA President

  	
   

  	
   

  	
  Its: 

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gwen E.
  Batalden

  	
   

  	
  By:

  	
  /s/ David G.
  Moldan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Secretary

  	
   

  	
   

  	
  Its: 

  	
  director

  	
   

  
													

 

The undersigned
hereby consents to the terms contained herein, specifically including the “cooperation”
clause contained herein.

	
  

  	
  IMKER FARMS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Arden Imker

  	
   

  
	
   

  	
   

  	
  Arden Imker, a general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lester Imker

  	
   

  
	
   

  	
   

  	
  Lester Imker, a general partner

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