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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
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  <p style="border:none;margin:0in 0in .0001pt;padding:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
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  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">UNITED
  STATES</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">SECURITIES
  AND EXCHANGE COMMISSION</font></b></p>
  
  <h2 style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;punctuation-wrap:hanging;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Washington, DC 20549</font></b></h2>
  
  <h2 style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;punctuation-wrap:hanging;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></h2>
  
  <h3 style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">FORM&nbsp;8-K</font></b></h3>
  
  <h3 style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;">&nbsp;</font></b></h3>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">CURRENT
  REPORT</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">Pursuant
  to Section&nbsp;13 or 15(d)&nbsp;of the Securities Exchange Act of 1934</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date of Report (Date of earliest event reported): <b>&#160;April&nbsp;24, 2008</b></font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <h1 style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;punctuation-wrap:simple;text-align:center;text-autospace:none;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">HIGHWATER ETHANOL, LLC</font></b></h1>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Exact name of small business issuer as specified in its charter)</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&nbsp;</font></p>
  
  <div align="center">
  
  <table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
   <tr>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Minnesota</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">333-137482</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">20-4798531</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or other jurisdiction of incorporation or
    organization)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Commission File Number)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(I.R.S. Employer <br>
    Identification No.)</font></p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">205 S.
  Main Street, PO Box 96</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Lamberton,
  MN 56152</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Address of
  principal executive offices)</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(507) 752-6160</font></b></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Issuer&#146;s
  telephone number)</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;text-indent:.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Check the appropriate box below if the Form&nbsp;8-K filing is intended
  to simultaneously satisfy the filing obligation of the registrant under any of
  the following provisions (<i>see</i>
  General Instruction A.2. below):</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;punctuation-wrap:hanging;text-align:left;text-autospace:ideograph-numeric ideograph-other;text-indent:.25in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font> Written communications pursuant to Rule&nbsp;425
  under the Securities Act (17 CFR 230.425)</p>
  
  <p align="left" style="margin:0in 0in .0001pt;punctuation-wrap:hanging;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;punctuation-wrap:hanging;text-align:left;text-autospace:ideograph-numeric ideograph-other;text-indent:.25in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font> Soliciting material pursuant to Rule&nbsp;14a-12
  under the Exchange Act (17 CFR 240.14a-12)</p>
  
  <p align="left" style="margin:0in 0in .0001pt;punctuation-wrap:hanging;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;punctuation-wrap:hanging;text-align:left;text-autospace:ideograph-numeric ideograph-other;text-indent:.25in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font> Pre-commencement communications pursuant to Rule&nbsp;14d-2(b)&nbsp;under
  the Exchange Act (17 CFR 240.14d-2(b))</p>
  
  <p align="left" style="margin:0in 0in .0001pt;punctuation-wrap:hanging;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="font-size:10.0pt;margin:0in 0in .0001pt;punctuation-wrap:hanging;text-align:left;text-autospace:ideograph-numeric ideograph-other;text-indent:.25in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font> Pre-commencement communications pursuant to Rule&nbsp;13e-4(c)&nbsp;under
  the Exchange Act (17 CFR 240.13e-4(c))</p>
  
  <p align="left" style="margin:0in 0in .0001pt;punctuation-wrap:hanging;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0in 0in 0in 0in;">
  
  <p style="border:none;margin:0in 0in .0001pt;padding:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  </div>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='',FILE='C:\JMS\Vmeane\08-13078-1\task2906367\13078-1-ba.htm',USER='vmeane',CD='Apr 30 11:24 2008' -->
  
  
  
  <br clear="all" style="page-break-before:always;">
  <div style="font-family:Times New Roman;">
  
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item&nbsp;1.01.
  &#160;Entry into a Material Definitive
  Agreement and Item&nbsp;2.03 Creation of a Direct Financial Obligation or an
  Obligation under an Off-Balance Sheet Arrangement of a Registrant.</font></b></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On April&nbsp;24, 2008,
  we entered into a Construction Loan Agreement (the &#147;Agreement&#148;) with First
  National Bank of Omaha of Omaha, Nebraska (&#147;FNBO&#148;) and certain other financial
  institutions (collectively the &#147;Banks&#148;).&#160;
  Under the Agreement, the Banks have agreed to loan us up to $61,000,000
  for the purpose of partially funding the construction of our 55&nbsp;million
  gallon per year ethanol plant, consisting of a $50,400,000 Construction Loan,
  together with a $5,000,000 Revolving Loan, and $5,600,000 to support the
  issuance of letters of credit by FNBO.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">During the construction
  period, interest on the Construction Loan will be payable on a monthly basis on
  the outstanding principal amount at a variable rate equal to the one&nbsp;month
  LIBOR Rate, in effect from time to time, plus 350 basis points prior to
  maturity.&#160; On the Construction Loan Termination
  Date, the Construction Loan will be converted into the Term Loan and replaced
  by the following term notes:</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Fixed Rate Note</font></u><font size="2" style="font-size:10.0pt;">. A loan in the maximum amount of
    $25,200,000. Interest on the Fixed Rate Note shall accrue at a per annum rate
    equal to the one&nbsp;month LIBOR Rate plus 300 basis points. The Fixed Rate
    Note will mature and terminate on the fifth anniversary of the Construction
    Termination Date.</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Variable Rate Note</font></u><font size="2" style="font-size:10.0pt;">. A loan in the maximum amount of
    $20,200,000 representing the principal balance of the Construction Note less
    the Fixed Rate Note and less the $5,000,000 Long Term Revolving Note.
    Interest on the Variable Rate Note shall accrue at a variable rate equal to
    the one&nbsp;month LIBOR Rate in effect from time to time plus 350 basis
    points. The Variable Rate Note will mature and terminate on the fifth
    anniversary of the Construction Loan Termination Date.</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Long Term Revolving
    Note</font></u><font size="2" style="font-size:10.0pt;">. A loan in
    the maximum amount of $5,000,000. Interest on the Long Term Revolving Note
    shall accrue at a variable rate equal to the one&nbsp;month LIBOR Rate, in
    effect from time to time, plus 350 basis points. The maximum amount available
    under the Long Term Revolving Note shall be reduced by $125,000 on a
    quarterly basis and shall be further reduced by the amount of excess cash
    flow payments as defined in the Agreement. We may borrow, repay and reborrow
    under the Long Term Revolving Loan, without penalty or premium, either the
    full amount of the Long Term Revolving Loan or any lesser sum until termination
    of the Long Term Revolving Note. The Long Term Revolving Note will mature and
    terminate on the fifth anniversary of the Construction Loan Termination Date.</font></p>
    </td>
   </tr>
  </table>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are obligated to repay
  the Term Loan as follows:</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will make monthly
    principal payments on the Fixed Rate Loan ranging from approximately $145,000
    to $197,000 plus accrued interest on the eighth day of every month commencing
    one month immediately following the Construction Loan Termination Date. A
    final balloon payment of approximately $15,184,000 will be due on the
    termination date of the Fixed Rate Loan.</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will make monthly
    payments ranging from approximately $147,000 to $211,000 on the eighth day of
    every month commencing one&nbsp;month immediately following the Construction
    Loan Termination Date which shall be allocated as follows: (i)&nbsp;first to
    accrued and unpaid interest on the Long Term Revolving Note, (ii)&nbsp;next
    to accrued and unpaid interest on the Variable Rate Note, and (iii)&nbsp;next
    to principal on the Variable Rate Note.</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">After the Variable Rate
    Note has been fully paid, such monthly payments shall be allocated first to
    accrued and unpaid interest on the Long Term Revolving Note, and then to
    principal on the Long Term Revolving Note, with reductions in the
    availability thereof.</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">At the end of each
    fiscal year, we must apply an amount equal to 50% of our excess cash flow to
    the maximum availability of the Long Term Revolving Note. Excess cash flow is
    determined as EBITDA less taxes, capital expenditures, allowable
    distributions, and scheduled payments to the Banks and scheduled payments on
    the Bond Debt, as described below.</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.34%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="88%" valign="top" style="padding:0in .7pt 0in .7pt;width:88.88%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Notwithstanding the
    foregoing, all unpaid principal and accrued and unpaid interest for all Term
    Notes shall be due and payable on their respective termination dates, if not
    sooner paid.</font></p>
    </td>
   </tr>
  </table>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>
  
  <div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='2',FILE='C:\JMS\Vmeane\08-13078-1\task2906578\13078-1-bc.htm',USER='vmeane',CD='Apr 30 12:21 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div style="font-family:Times New Roman;">
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Revolving Loan</font></u><font size="2" style="font-size:10.0pt;">.&#160;
  The Revolving Loan consists of a maximum $5,000,000 revolving line of
  credit.&#160; The Revolving Loan shall not
  exceed in the aggregate principal amount the lesser of $5,000,000 or our
  Borrowing Base.&#160; Our Borrowing Base is
  the aggregate of: (i)&nbsp;75% of our corn inventory value, plus (ii)&nbsp;75%
  of our ethanol and distillers grains accounts aged 30&nbsp;days or less plus (iii)&nbsp;75%
  of our finished goods inventory for ethanol and distillers grains, plus (iv)&nbsp;100%
  of the positive balance of our hedging accounts pledged to FNBO, less (v)&nbsp;the
  negative balance of our hedging accounts.&#160;
  Interest on the Revolving Loan shall accrue at a rate equal to the one
  month LIBOR Rate plus 350 basis points until maturity.&#160; The Revolving Loan will mature and terminate
  on April&nbsp;24, 2009.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In connection with the
  Construction Loan Agreement, we executed a mortgage in favor of FNBO creating a
  first lien on our real estate and plant and a security interest in all personal
  property located on the property.&#160; In
  addition, we assigned in favor of FNBO, all rents and leases to our property,
  the design/build contract, our marketing contracts, our risk management
  services contract, and our natural gas, electricity, water service and grain
  procurement agreements.&#160; The above
  described collateral will also secure $15,180,000 of solid waste facilities
  revenue bonds issued by the City of Lamberton, Minnesota.&#160; FNBO and the Trustee, as defined below, have
  a consolidated first priority security interest in the collateral which equally
  and ratably secures each holder in proportion to the amount owed to each as
  either principal or interest.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, during the
  term of the loans, we will be subject to certain financial covenants consisting
  of minimum working capital, minimum net worth, and maximum debt service
  coverage ratios.&#160; After our construction
  phase we will be limited to annual capital expenditures of $1,000,000 without
  prior approval of the Banks.&#160; We will
  also be prohibited from making distributions to our members of greater than 45%
  of our net income during any fiscal year if our debt leverage ratio (combined total
  liabilities to net worth) is greater than or equal to 1.0:1.0.&#160; We must be in compliance with all financial
  ratio requirements and loan covenants before and after any such distributions
  are made to our members.&#160; Our failure to
  comply with the protective loan covenants or maintain the required financial
  ratios may cause acceleration of the outstanding principal balances on the term
  notes and revolving note and/or the imposition of fees, charges or
  penalties.&#160; Any acceleration of the debt
  financing or imposition of the significant fees, charges or penalties may
  restrict or limit our access to the capital resources necessary to continue
  plant construction or operations.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Upon an occurrence of an
  event of default or an event which will lead to our default, FNBO may, upon
  notice, terminate its commitment to loan funds and declare the entire unpaid
  principal balance of the loans, plus accrued interest, immediately due and
  payable.&#160; An event of default includes,
  but is not limited to, our failure to make payments when due, insolvency, any
  material adverse change in our financial condition or our breach of any of the
  covenants, representations or warranties we have given in connection with the
  transaction.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Also on April&nbsp;24,
  2008, we entered into certain financing and credit arrangements with U.S. Bank
  National Association, as trustee (the &#147;Trustee&#148;) and the City of Lamberton,
  Minnesota (the &#147;City&#148;) in order to secure the proceeds from the sale of the
  solid waste facilities revenue bonds, Series&nbsp;2008A (the &#147;Bonds&#148;) issued by
  the City in the aggregate principal amount of $15,180,000 pursuant to a trust
  indenture between the City and the Trustee (&#147;Trust Indenture&#148;).&#160; The City has undertaken the issuance of the
  Bonds to finance the acquisition and installation of certain solid waste
  facilities in connection with our ethanol plant to be located near Lamberton,
  Minnesota.&#160; The Bonds mature on December&nbsp;1,
  2022 and bear interest at a rate of 8.5 %.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We have entered into a
  lease agreement (the &#147;Lease&#148;) with the City, whereby the City has agreed to
  lease to us the solid waste facilities in exchange for a series of lease
  payments to be paid to the Trustee, which will in turn be used to make the
  principal and interest payments on the Bonds.&#160;
  We will make monthly interest payments beginning on December&nbsp;1,
  2008 and monthly principal payments beginning on November&nbsp;25, 2009.&#160; In addition to the monthly principal and
  interest payments, and following our scheduled payment on the FNBO loans, we
  will pay 25% of excess cash flow, as described above, to pay the principal,
  interest and redemption price of the Bonds when due.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Bonds are secured by
  a mortgage on the real property and fixtures constituting our plant and
  security interests in certain tangible personal property located on the
  mortgaged property or used in connection with the plant.&#160; Pursuant to the terms of the intercreditor
  agreement, such mortgage and security interests have been consolidated with the
  mortgage and security interests of FNBO to constitute a single first priority
  lien or security interest on the applicable collateral which ratably and
  equally secures all holders in proportion to the amount owed to the holders as
  either principal or interest.</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>
  
  <div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='3',FILE='C:\JMS\Vmeane\08-13078-1\task2906578\13078-1-bc.htm',USER='vmeane',CD='Apr 30 12:21 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div>
  
  <h2 style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;punctuation-wrap:simple;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></h2>
  
  <h2 style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;punctuation-wrap:simple;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">SIGNATURES</font></b></h2>
  
  <h2 style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;punctuation-wrap:simple;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></h2>
  
  <p align="left" style="margin:0in 0in .0001pt;page-break-after:avoid;punctuation-wrap:simple;text-align:left;text-autospace:none;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to the requirements of the Securities
  Exchange Act of 1934, the Registrant has duly caused this report to be signed
  on its behalf by the undersigned hereunto duly authorized.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
   <tr>
    <td width="6%" valign="top" style="padding:0in .7pt 0in .7pt;width:6.94%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="8%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:8.7%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="28%" valign="top" style="padding:0in .7pt 0in .7pt;width:28.82%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">HIGHWATER
    ETHANOL, LLC</font></p>
    </td>
    <td width="22%" valign="top" style="padding:0in .7pt 0in .7pt;width:22.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="6%" valign="top" style="padding:0in .7pt 0in .7pt;width:6.94%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="8%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:8.7%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="28%" valign="top" style="padding:0in .7pt 0in .7pt;width:28.82%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="33%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:33.22%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="22%" valign="top" style="padding:0in .7pt 0in .7pt;width:22.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">April&nbsp;30, 2008</font></p>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
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    <td width="55%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:55.54%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
    Brian Kletscher</font></p>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date</font></p>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Brian
    Kletscher, Chairman of the Board of Governors</font></p>
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metadata_filer: {"company-data": {"conformed-name": "HIGHWATER ETHANOL LLC", "cik": "0001371451", "assigned-sic": "2860", "irs-number": "000000000"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "333-137482", "film-number": "08790197"}, "business-address": {"street1": "205 MQIN ST P O BOX 96", "city": "LAMBERTON", "state": "MN", "zip": "56152", "phone": "507-762-3376"}, "mail-address": {"street1": "205 MQIN ST P O BOX 96", "city": "LAMBERTON", "state": "MN", "zip": "56152"}}
text: UNITED
  STATES
  SECURITIES
  AND EXCHANGE COMMISSION
  Washington, DC 20549
  FORM 8-K
  CURRENT
  REPORT
  Pursuant
  to Section 13 or 15(d) of the Securities Exchange Act of 1934
  Date of Report (Date of earliest event reported):
  April 24, 2008
  HIGHWATER ETHANOL, LLC
  (Exact name of small business issuer as specified in its charter)
  Minnesota
  333-137482
  20-4798531
  (State or other jurisdiction of incorporation or
    organization)
  (Commission File Number)
  (I.R.S. Employer
  Identification No.)
  205 S.
  Main Street, PO Box 96
  Lamberton,
  MN 56152
  (Address of
  principal executive offices)
  (507) 752-6160
  (Issuer's
  telephone number)
  Check the appropriate box below if the Form 8-K filing is intended
  to simultaneously satisfy the filing obligation of the registrant under any of
  the following provisions (
  see
  General Instruction A.2. below):
  o
  Written communications pursuant to Rule 425
  under the Securities Act (17 CFR 230.425)
  o
  Soliciting material pursuant to Rule 14a-12
  under the Exchange Act (17 CFR 240.14a-12)
  o
  Pre-commencement communications pursuant to Rule 14d-2(b) under
  the Exchange Act (17 CFR 240.14d-2(b))
  o
  Pre-commencement communications pursuant to Rule 13e-4(c) under
  the Exchange Act (17 CFR 240.13e-4(c))
  Item 1.01.
   Entry into a Material Definitive
  Agreement and Item 2.03 Creation of a Direct Financial Obligation or an
  Obligation under an Off-Balance Sheet Arrangement of a Registrant.
  On April 24, 2008,
  we entered into a Construction Loan Agreement (the "Agreement") with First
  National Bank of Omaha of Omaha, Nebraska ("FNBO") and certain other financial
  institutions (collectively the "Banks"). 
  Under the Agreement, the Banks have agreed to loan us up to $61,000,000
  for the purpose of partially funding the construction of our 55 million
  gallon per year ethanol plant, consisting of a $50,400,000 Construction Loan,
  together with a $5,000,000 Revolving Loan, and $5,600,000 to support the
  issuance of letters of credit by FNBO.
  During the construction
  period, interest on the Construction Loan will be payable on a monthly basis on
  the outstanding principal amount at a variable rate equal to the one month
  LIBOR Rate, in effect from time to time, plus 350 basis points prior to
  maturity.  On the Construction Loan Termination
  Date, the Construction Loan will be converted into the Term Loan and replaced
  by the following term notes:
  (a)
  Fixed Rate Note
  . A loan in the maximum amount of
    $25,200,000. Interest on the Fixed Rate Note shall accrue at a per annum rate
    equal to the one month LIBOR Rate plus 300 basis points. The Fixed Rate
    Note will mature and terminate on the fifth anniversary of the Construction
    Termination Date.
  (b)
  Variable Rate Note
  . A loan in the maximum amount of
    $20,200,000 representing the principal balance of the Construction Note less
    the Fixed Rate Note and less the $5,000,000 Long Term Revolving Note.
    Interest on the Variable Rate Note shall accrue at a variable rate equal to
    the one month LIBOR Rate in effect from time to time plus 350 basis
    points. The Variable Rate Note will mature and terminate on the fifth
    anniversary of the Construction Loan Termination Date.
  (c)
  Long Term Revolving
    Note
  . A loan in
    the maximum amount of $5,000,000. Interest on the Long Term Revolving Note
    shall accrue at a variable rate equal to the one month LIBOR Rate, in
    effect from time to time, plus 350 basis points. The maximum amount available
    under the Long Term Revolving Note shall be reduced by $125,000 on a
    quarterly basis and shall be further reduced by the amount of excess cash
    flow payments as defined in the Agreement. We may borrow, repay and reborrow
    under the Long Term Revolving Loan, without penalty or premium, either the
    full amount of the Long Term Revolving Loan or any lesser sum until termination
    of the Long Term Revolving Note. The Long Term Revolving Note will mature and
    terminate on the fifth anniversary of the Construction Loan Termination Date.
  We are obligated to repay
  the Term Loan as follows:
  (a)
  We will make monthly
    principal payments on the Fixed Rate Loan ranging from approximately $145,000
    to $197,000 plus accrued interest on the eighth day of every month commencing
    one month immediately following the Construction Loan Termination Date. A
    final balloon payment of approximately $15,184,000 will be due on the
    termination date of the Fixed Rate Loan.
  (b)
  We will make monthly
    payments ranging from approximately $147,000 to $211,000 on the eighth day of
    every month commencing one month immediately following the Construction
    Loan Termination Date which shall be allocated as follows: (i) first to
    accrued and unpaid interest on the Long Term Revolving Note, (ii) next
    to accrued and unpaid interest on the Variable Rate Note, and (iii) next
    to principal on the Variable Rate Note.
  (c)
  After the Variable Rate
    Note has been fully paid, such monthly payments shall be allocated first to
    accrued and unpaid interest on the Long Term Revolving Note, and then to
    principal on the Long Term Revolving Note, with reductions in the
    availability thereof.
  (d)
  At the end of each
    fiscal year, we must apply an amount equal to 50% of our excess cash flow to
    the maximum availability of the Long Term Revolving Note. Excess cash flow is
    determined as EBITDA less taxes, capital expenditures, allowable
    distributions, and scheduled payments to the Banks and scheduled payments on
    the Bond Debt, as described below.
  (e)
  Notwithstanding the
    foregoing, all unpaid principal and accrued and unpaid interest for all Term
    Notes shall be due and payable on their respective termination dates, if not
    sooner paid.
  2
  Revolving Loan
  . 
  The Revolving Loan consists of a maximum $5,000,000 revolving line of
  credit.  The Revolving Loan shall not
  exceed in the aggregate principal amount the lesser of $5,000,000 or our
  Borrowing Base.  Our Borrowing Base is
  the aggregate of: (i) 75% of our corn inventory value, plus (ii) 75%
  of our ethanol and distillers grains accounts aged 30 days or less plus (iii) 75%
  of our finished goods inventory for ethanol and distillers grains, plus (iv) 100%
  of the positive balance of our hedging accounts pledged to FNBO, less (v) the
  negative balance of our hedging accounts. 
  Interest on the Revolving Loan shall accrue at a rate equal to the one
  month LIBOR Rate plus 350 basis points until maturity.  The Revolving Loan will mature and terminate
  on April 24, 2009.
  In connection with the
  Construction Loan Agreement, we executed a mortgage in favor of FNBO creating a
  first lien on our real estate and plant and a security interest in all personal
  property located on the property.  In
  addition, we assigned in favor of FNBO, all rents and leases to our property,
  the design/build contract, our marketing contracts, our risk management
  services contract, and our natural gas, electricity, water service and grain
  procurement agreements.  The above
  described collateral will also secure $15,180,000 of solid waste facilities
  revenue bonds issued by the City of Lamberton, Minnesota.  FNBO and the Trustee, as defined below, have
  a consolidated first priority security interest in the collateral which equally
  and ratably secures each holder in proportion to the amount owed to each as
  either principal or interest.
  In addition, during the
  term of the loans, we will be subject to certain financial covenants consisting
  of minimum working capital, minimum net worth, and maximum debt service
  coverage ratios.  After our construction
  phase we will be limited to annual capital expenditures of $1,000,000 without
  prior approval of the Banks.  We will
  also be prohibited from making distributions to our members of greater than 45%
  of our net income during any fiscal year if our debt leverage ratio (combined total
  liabilities to net worth) is greater than or equal to 1.0:1.0.  We must be in compliance with all financial
  ratio requirements and loan covenants before and after any such distributions
  are made to our members.  Our failure to
  comply with the protective loan covenants or maintain the required financial
  ratios may cause acceleration of the outstanding principal balances on the term
  notes and revolving note and/or the imposition of fees, charges or
  penalties.  Any acceleration of the debt
  financing or imposition of the significant fees, charges or penalties may
  restrict or limit our access to the capital resources necessary to continue
  plant construction or operations.
  Upon an occurrence of an
  event of default or an event which will lead to our default, FNBO may, upon
  notice, terminate its commitment to loan funds and declare the entire unpaid
  principal balance of the loans, plus accrued interest, immediately due and
  payable.  An event of default includes,
  but is not limited to, our failure to make payments when due, insolvency, any
  material adverse change in our financial condition or our breach of any of the
  covenants, representations or warranties we have given in connection with the
  transaction.
  Also on April 24,
  2008, we entered into certain financing and credit arrangements with U.S. Bank
  National Association, as trustee (the "Trustee") and the City of Lamberton,
  Minnesota (the "City") in order to secure the proceeds from the sale of the
  solid waste facilities revenue bonds, Series 2008A (the "Bonds") issued by
  the City in the aggregate principal amount of $15,180,000 pursuant to a trust
  indenture between the City and the Trustee ("Trust Indenture").  The City has undertaken the issuance of the
  Bonds to finance the acquisition and installation of certain solid waste
  facilities in connection with our ethanol plant to be located near Lamberton,
  Minnesota.  The Bonds mature on December 1,
  2022 and bear interest at a rate of 8.5 %.
  We have entered into a
  lease agreement (the "Lease") with the City, whereby the City has agreed to
  lease to us the solid waste facilities in exchange for a series of lease
  payments to be paid to the Trustee, which will in turn be used to make the
  principal and interest payments on the Bonds. 
  We will make monthly interest payments beginning on December 1,
  2008 and monthly principal payments beginning on November 25, 2009.  In addition to the monthly principal and
  interest payments, and following our scheduled payment on the FNBO loans, we
  will pay 25% of excess cash flow, as described above, to pay the principal,
  interest and redemption price of the Bonds when due.
  The Bonds are secured by
  a mortgage on the real property and fixtures constituting our plant and
  security interests in certain tangible personal property located on the
  mortgaged property or used in connection with the plant.  Pursuant to the terms of the intercreditor
  agreement, such mortgage and security interests have been consolidated with the
  mortgage and security interests of FNBO to constitute a single first priority
  lien or security interest on the applicable collateral which ratably and
  equally secures all holders in proportion to the amount owed to the holders as
  either principal or interest.
  3
  SIGNATURES
  Pursuant to the requirements of the Securities
  Exchange Act of 1934, the Registrant has duly caused this report to be signed
  on its behalf by the undersigned hereunto duly authorized.
  HIGHWATER
    ETHANOL, LLC
  April 30, 2008
  /s/
    Brian Kletscher
  Date
  Brian
    Kletscher, Chairman of the Board of Governors
  4