On August 8, 2022, Highwater Ethanol, LLC, (the Company) and Compeer Financial, PCA f/k/a AgStar Financial Services, PCA, as administrative agent, (Compeer), executed a Second Amendment to the Third Amended and Restated Credit Agreement (the "Amendment"), which amends the Third Amended and Restated Credit Agreement dated March 15, 2021. The Amendment extends the maturity date of the Term Revolving Loan from January 22, 2023 to November 1, 2027. The Amendment also extends the maturity date of the Revolving Line of Credit Loan from January 22, 2023 to November 1, 2023.

The Amendment provides that the maturity date of the Revolving Line of Credit Loan may be extended for up to four additional one year terms upon written request of the Company which will be deemed automatically granted by Compeer upon receipt of the request and written certification that there is no event of default. The Amendment also amends certain financial covenants that restrict distributions and require minimum debt service coverage and working capital requirements. The Amendment provides that the Company is allowed to make distributions to members as frequently as monthly in an amount equal to 75% of net income if working capital is greater than or equal to $9,000,000, or an unlimited amount if working capital is greater than or equal to $12,000,000.

The Amendment eliminates the requirement to maintain a minimum debt service coverage ratio and raises the minimum working capital requirement from $8,250,000 to $9,000,000, which is calculated as current assets plus the amount available for drawing under the Term Revolving Loan and undrawn amounts on outstanding letters of credit, less current liabilities, and is measured quarterly.