**Exhibit 10.21****FOR RECORDER’S USE ONLY****Prepared By: Bradley Krehbiel, Executive Vice President, Home Federal Savings Bank, 1016Civic Center Dr**NW Suite 300, Rochester, MN **55901, (507) 252-7163****ADDRESS TAX STATEMENT:****Home Federal Savings Bank, Business Banking, 1016 Civic Center Dr**NW Suite 300, Rochester,MN **55901****RECORDATION REQUESTED BY:****Home Federal Savings Bank, Business Banking, 1016 Civic Center Dr**NW Suite 300, Rochester,MN **55901****WHEN RECORDED MAIL TO:****Home Federal Savings Bank, Business Banking, 1016 Civic Center Dr**NW Suite 300, Rochester,MN 55901**MORTGAGE****NOTICE: This Mortgage secures credit in the amount of $3,517,572.00. Loans and advances up tothis amount, together with interest, are senior to indebtedness to other creditors undersubsequently recorded or filed mortgages and liens.**The names of all Grantors (sometimes “Grantor”) can be found on page 1 of this Mortgage. The namesof all Grantees (sometimes “Lender”) can be found on page 1 of this Mortgage. The property addresscan be found on page ___ of this Mortgage. The legal description can be found on page 2 of thisMortgage.**THIS MORTGAGE dated March 23, 2007, is made and executed between Homeland Energy Solutions, LLC, anIowa Limited Liability Company (referred to below as “Grantor”) and Home Federal Savings Bank,whose address is 1016 Civic Center Dr NW Suite 300, Rochester, MN 55901 (referred to below as“Lender”).****GRANT OF MORTGAGE. For valuable consideration, Grantor**mortgages and conveys to Lender and grantsto Lender a security interest in all of Grantor’s right, title, and interest in and to thefollowing described real property, together with all existing or subsequently erected or affixedbuildings, improvements and fixtures; rents and profits; all easements, rights of way, andappurtenances; all water,water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigationrights); and all other rights, royalties, and profits relating to the real property, includingwithout limitation all minerals, oil, gas, geothermal and similar matters, **(the “RealProperty”) located in Chickasaw County, State of Iowa:**
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 2****See Exhibit A, which is attached to this Mortgage and made a part of thisMortgage as if fully set forth herein.****CROSS-COLLATERALIZATION.**In addition to the Note, this Mortgage secures allobligations, debts and liabilities, plus interest thereon, of Grantor to Lender, or any one or moreof them, as well as all claims by Lender against Grantor or any one or more of them, whether nowexisting or hereafter arising, whether related or unrelated to the purpose of the Note, whethervoluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined,absolute or contingent, liquidated or unliquidated, whether Grantor may be liable individually orjointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, andwhether recovery upon such amounts may be or hereafter may become barred by any statute oflimitations, and whether the obligation to repay such amounts may be or hereafter may becomeotherwise unenforceable.Grantor presently assigns to Lender all of Grantor’s right, title, and interest in and to allpresent and future leases of the Property and all Rents from the Property. In addition, Grantorgrants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents.The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage andnot just in the event of default.**FUTURE ADVANCES.**In addition to the Note, this Mortgage secures all future advances madeby Lender to Grantor whether or not the advances are made pursuant to a commitment. Specifically,without limitation, this Mortgage secures, in addition to the amounts specified in the Note, allfuture amounts Lender in its discretion may loan to Grantor, together with all interest thereon.**THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS ANDPERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANYAND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE ISGIVEN AND ACCEPTED ON THE FOLLOWING TERMS:****PAYMENT AND PERFORMANCE.**Except as otherwise provided in this Mortgage, Grantor shall payto Lender all amounts secured by this Mortgage as they become due and shall strictly perform all ofGrantor’s obligations under this Mortgage.**POSSESSION AND MAINTENANCE OF THE PROPERTY.**Grantor agrees that Grantor’s possession anduse of the Property shall be governed by the following provisions: None of the collateral for theIndebtedness constitutes, and none of the funds represented by the Indebtedness will be used topurchase: (1) Agricultural products or property used for an agricultural purpose as defined in IowaCode Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1); or(3) Property used for an agricultural purpose as defined in Iowa Code Section 570.4.1 (2). Grantorrepresents and warrants that: (1) There are not now and will not be any wells situated on theProperty; (2) There are not now and will not be any solid waste disposal sites on the Property; (3)There are not now and there will not be any hazardous wastes on the Property; (4) There are not nowand there will not be any underground storage tanks on the Property.**Possession and Use.**Until the occurrence of an Event of Default, Grantor may (1)remain in possession and control of the Property; (2) use, operate or manage the Property; and(3) collect the Rents from the Property.**Duty to Maintain.**Grantor shall maintain the Property in tenantable condition and promptlyperform all repairs, replacements, and maintenance necessary to preserve its value.**Compliance With Environmental Laws.**Grantor represents and warrants to Lender that: (1) Duringthe period of Grantor’s ownership of the Property, there has been no use, generation,manufacture, storage, treatment, disposal, release or threatened release of any HazardousSubstance by any person on, under, about or from the Property; (2) Grantor has no knowledge of,or reason to believe that there has been, except as previously disclosed to and acknowledged byLender in writing, (a) any breach or violation of any Environmental Laws, (b) any use,generation, manufacture, storage, treatment, disposal, release or threatened release of anyHazardous Substance on, under, about or from the Property by any prior owners or occupants ofthe Property, or (c) any actual or threatened
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 3**litigation or claims of any kind by any person relating to such matters; and (3) Except aspreviously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor anytenant, contractor, agent or other authorized user of the Property shall use, generate,manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about orfrom the Property; and (b) any such activity shall be conducted in compliance with allapplicable federal, state, and local laws, regulations and ordinances, including withoutlimitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon theProperty to make such inspections and tests, at Grantor’s expense, as Lender may deemappropriate to determine compliance of the Property with this section of the Mortgage. Anyinspections or tests made by Lender shall be for Lender’s purposes only and shall not beconstrued to create any responsibility or liability on the part of Lender to Grantor or to anyother person. The representations and warranties contained herein are based on Grantor’s duediligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releasesand waives any future claims against Lender for indemnity or contribution in the event Grantorbecomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify,defend, and hold harmless Lender against any and all claims, losses, liabilities, damages,penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting froma breach of this section of the Mortgage or as a consequence of any use, generation,manufacture, storage, disposal, release or threatened release occurring prior to Grantor’sownership or interest in the Property, whether or not the same was or should have been known toGrantor. The provisions of this section of the Mortgage, including the obligation to indemnifyand defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyanceof the lien of this Mortgage and shall not be affected by Lender’s acquisition of any interestin the Property, whether by foreclosure or otherwise.**Nuisance, Waste.**Grantor shall not cause, conduct or permit any nuisance nor commit, permit, orsuffer any stripping of or waste on or to the Property or any portion of the Property. Withoutlimiting the generality of the foregoing, Grantor will not remove, or grant to any other partythe right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil,gravel or rock products without Lender’s prior written consent.**Removal of Improvements.**Grantor shall not demolish or remove any Improvements from the RealProperty without Lender’s prior written consent. As a condition to the removal of anyImprovements, Lender may require Grantor to make arrangements satisfactory to Lender to replacesuch Improvements with Improvements of at least equal value.**Lender’s Right to Enter.**Lender and Lender’s agents and representatives may enter upon the RealProperty at all reasonable times to attend to Lender’s interests and to inspect the RealProperty for purposes of Grantor’s compliance with the terms and conditions of this Mortgage.**Compliance with Governmental Requirements.**Grantor shall promptly comply with all laws,ordinances, and regulations, now or hereafter in effect, of all governmental authoritiesapplicable to the use or occupancy of the Property, including without limitation, the AmericansWith Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulationand withhold compliance during any proceeding, including appropriate appeals, so long as Grantorhas notified Lender in writing prior to doing so and so long as, in Lender’s sole opinion,Lender’s interests in the Property are not jeopardized. Lender may require Grantor to postadequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender’sinterest.  **Duty to Protect.**Grantor agrees neither to abandon or leave unattended the Property. Grantorshall do all other acts, in addition to those acts set forth above in this section, whichfrom the character and use of the Property are reasonably necessary to protect and preservethe Property.**DUEON SALE - CONSENT BY LENDER.**Lender may, at Lender’s option, declare immediately due andpayable all sums secured by this Mortgage upon the sale or transfer, without Lender’s prior writtenconsent, of all or any part of the Real Property, or any interest in the Real Property. A “sale ortransfer” means the conveyance of Real Property or any right, title or interest in the RealProperty; whether legal, beneficial or equitable; whether voluntary or involuntary; whether byoutright sale, deed, installment sale contract, land contract, contract for deed, leaseholdinterest with a term greater than three (3) years, lease-option contract, or by sale, assignment,or transfer of any beneficial interest in or to any land trust holding title to the Real Property,or by any other method of conveyance of an interest in the Real Property. If any Grantor is acorporation, partnership or limited liability company, transfer also includes any change inownership of more than twenty-five percent (25%) of the voting stock, partnership interests orlimited liability company interests, as the case may be, of such Grantor. However, this option shall not beexercised by Lender if such exercise is prohibited by federal law or by Iowa law.
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 4****TAXES AND LIENS.**The following provisions relating to the taxes and liens on the Property are partof this Mortgage:**Payment.**Grantor shall pay when due (and in all events prior to delinquency) all taxes, payrolltaxes, special taxes, assessments, water charges and sewer service charges levied against or onaccount of the Property, and shall pay when due all claims for work done on or for servicesrendered or material furnished to the Property. Grantor shall maintain the Property free of anyliens having priority over or equal to the interest of Lender under this Mortgage, except forthose liens specifically agreed to in writing by Lender, and except for the lien of taxes andassessments not due as further specified in the Right to Contest paragraph.**Right to Contest.**Grantor may withhold payment of any tax, assessment, or claim in connectionwith a good faith dispute over the obligation to pay, so long as Lender’s interest in theProperty is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantorshall within fifteen (15) days after the lien arises or, if a lien is filed, within fifteen (15)days after Grantor has notice of the filing, secure the discharge of the lien, or if requested byLender, deposit with Lender cash or a sufficient corporate surety bond or other securitysatisfactory to Lender in an amount sufficient to discharge the lien plus any costs andattorneys’ fees, or other charges that could accrue as a result of a foreclosure or sale underthe lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adversejudgment before enforcement against the Property. Grantor shall name Lender as an additionalobligee under any surety bond furnished in the contest proceedings.**Evidence of Payment.**Grantor shall upon demand furnish to Lender satisfactory evidenceof payment of the taxes or assessments and shall authorize the appropriate governmental officialto deliver to Lender at any time a written statement of the taxes and assessments against theProperty.**Notice of Construction.**Grantor shall notify Lender at least fifteen (15) days beforeany work is commenced, any services are furnished, or any materials are supplied to theProperty, if any mechanic’s lien, materialmen’s lien, or other lien could be asserted on accountof the work, services, or materials. Grantor will upon request of Lender furnish to Lenderadvance assurances satisfactory to Lender that Grantor can and will pay the cost of suchimprovements.**PROPERTY DAMAGE INSURANCE.**The following provisions relating to insuring the Property area part of this Mortgage:**Maintenance of Insurance.**Grantor shall procure and maintain policies of fire insurance withstandard extended coverage endorsements on a replacement basis for the full insurable valuecovering all Improvements on the Real Property in an amount sufficient to avoid application ofany coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shallalso procure and maintain comprehensive general liability insurance in such coverage amounts asLender may request with Lender being named as additional insureds in such liability insurancepolicies. Additionally, Grantor shall maintain such other insurance, including but not limitedto hazard, business interruption and boiler insurance as Lender may require. Policies shall bewritten by such insurance companies and in such form as may be reasonably acceptable to Lender.Grantor shall deliver to Lender certificates of coverage from each insurer containing astipulation that coverage will not be cancelled or diminished without a minimum of ten (10)days’ prior written notice to Lender and not containing any disclaimer of the insurer’sliability for failure to give such notice. Each insurance policy also shall include anendorsement providing that coverage in favor of Lender will not be impaired in any way by anyact, omission or default of Grantor or any other person. Should the Real Property be located inan area designated by the Director of the Federal Emergency Management Agency as a special floodhazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, forthe full unpaid principal balance of the loan and any prior liens on the property securing theloan, up to the maximum policy limits set under the National Flood Insurance Program, or asotherwise required by Lender, and to maintain such insurance for the term of the loan.
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 5****Application of Proceeds.**Grantor shall promptly notify Lender of any loss or damage tothe Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days ofthe casualty. Whether or not Lender’s security is impaired, Lender may, at Lender’s election,receive and retain the proceeds of any insurance and apply the proceeds to the reduction of theIndebtedness, payment of any lienaffecting the Property, or the restoration and repair of the Property. If Lender elects to applythe proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyedImprovements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of suchexpenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair orrestoration if Grantor is not in default under this Mortgage. Any proceeds which have not beendisbursed within 180 days after their receipt and which Lender has not committed to the repair orrestoration of the Property shall be used first to pay any amount owing to Lender under thisMortgage, then to pay accrued interest, and the remainder, if any, shall be applied to theprincipal balance of the Indebtedness. If Lender holds any proceeds after payment in full of theIndebtedness, such proceeds shall be paid to Grantor as Grantor’s interests may appear.**Grantor’s Report on Insurance.**Upon request of Lender, however not more than once ayear, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1)the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the propertyinsured, the then current replacement value of such property, and the manner of determining thatvalue; and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have anindependent appraiser satisfactory to Lender determine the cash value replacement cost of theProperty.**LENDER’S EXPENDITURES.**If any action or proceeding is commenced that would materiallyaffect Lender’s interest in the Property or if Grantor fails to comply with any provision of thisMortgage or any Related Documents, including but not limited to Grantor’s failure to discharge orpay when due any amounts Grantor is required to discharge or pay under this Mortgage or any RelatedDocuments, Lender on Grantor’s behalf may (but shall not be obligated to) take any action thatLender deems appropriate, including but not limited to discharging or paying all taxes, liens,security interests, encumbrances and other claims, at any time levied or placed on the Property andpaying all costs for insuring, maintaining and preserving the Property. All such expendituresincurred or paid by Lender for such purposes will then bear interest at the rate charged under theNote from the date incurred or paid by Lender to the date of repayment by Grantor. All suchexpenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable ondemand; (B) be added to the balance of the Note and be apportioned among and be payablewith any installment payments to become due during either (1) the term of any applicableinsurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon paymentwhich will be due and payable at the Note’s maturity. The Mortgage also will secure payment ofthese amounts. Such right shall be in addition to all other rights and remedies to which Lender maybe entitled upon Default.**WARRANTY; DEFENSE OF TITLE.**The following provisions relating to ownership of theProperty are a part of this Mortgage:**Title.**Grantor warrants that: (a) Grantor holds good and marketable title of record tothe Property in fee simple, free and clear of all liens and encumbrances other than those setforth in the Real Property description or in any title insurance policy, title report, or finaltitle opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b)Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender,and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the IowaCode Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itselfand all persons claiming by, through or under Grantor, agrees that it claims no lien or right toa lien of the type contemplated by Chapter 575 or any other chapter of the Code of lowa andfurther waives all notices and rights pursuant to said law with respect to the liens herebygranted, and represents and warrants that it is the sole party entitled to do so and agrees toindemnify, defend, and hold harmless Lender from any loss, damage, and costs, includingreasonable attorneys’ fees, threatened or suffered by Lender arising either directly orindirectly as a result of any claim of the applicability of said law to the liens herebygranted.**Defense of Title.**Subject to the exception in the paragraph above, Grantor warrantsand will forever defend the title to the Property against the lawful claims of all persons. Inthe event any action or proceeding is commenced that questions Grantor’s title or the interestof Lender under this Mortgage, Grantor shall defend the action at Grantor’s expense. Grantor maybe the nominal party in such proceeding, but Lender shall be entitled to participate in theproceeding and to be represented in the proceeding by counsel of Lender’s own choice, andGrantor will deliver, or cause to be delivered, to Lender such instruments as Lender may requestfrom time to time to permit such participation.**Compliance With Laws.**Grantor warrants that the Property and Grantor’s use of theProperty complieswith all existing applicable laws, ordinances, and regulations of governmental authorities.
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 6****Survival of Representations and Warranties.**All representations, warranties, andagreements made by Grantor in this Mortgage shall survive the execution and delivery of thisMortgage, shall be continuing in nature, and shall remain in full force and effect until suchtime as Grantor’s Indebtedness shall be paid in full.**CONDEMNATION.**The following provisions relating to condemnation proceedings are a part ofthis Mortgage;**Proceedings.**If any proceeding in condemnation is filed, Grantor shall promptly notifyLender in writing, and Grantor shall promptly take such steps as may be necessary to defend theaction and obtain the award. Grantor may be the nominal party in such proceeding, but Lendershall be entitled to participate in the proceeding and to be represented in the proceeding bycounsel of its own choice, and Grantor will deliver or cause to be delivered to Lender suchinstruments and documentation as may be requested by Lender from time to time to permit suchparticipation.**Application of Net Proceeds.**If all or any part of the Property is condemned by eminentdomain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at itselection require that all or any portion of the net proceeds of the award be applied to theIndebtedness or the repair or restoration of the Property. The net proceeds of the award shallmean the award after payment of all reasonable costs, expenses, and attorneys’ fees incurred byLender in connection with the condemnation.**IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES.**The followingprovisions relating to governmental taxes, fees and charges are a part of this Mortgage:**Current Taxes, Fees and Charges.**Upon request by Lender, Grantor shall execute suchdocuments in addition to this Mortgage and take whatever other action is requested by Lender toperfect and continue Lender’s lien on the Real Property. Grantor shall reimburse Lender for alltaxes, as described below, together with all expenses incurred in recording, perfecting orcontinuing this Mortgage, including without limitation all taxes, fees, documentary stamps, andother charges for recording or registering this Mortgage.**Taxes.**The following shall constitute taxes to which this section applies: (1) aspecific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured bythis Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deductfrom payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type ofMortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on allor any portion of the Indebtedness or on payments of principal and interest made by Grantor.**Subsequent Taxes.**If any tax to which this section applies is enacted subsequent to thedate of this Mortgage, this event shall have the same effect as an Event of Default, and Lendermay exercise any or all of its available remedies for an Event of Default as provided belowunless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax asprovided above in the Taxes and Liens section and deposits with Lender cash or a sufficientcorporate surety bond or other security satisfactory to Lender.**SECURITY AGREEMENT; FINANCING STATEMENTS.**The following provisions relating to thisMortgage as a security agreement are a part of this Mortgage:**Security Agreement.**This instrument shall constitute a Security Agreement to theextent any of the Property constitutes fixtures, and Lender shall have all of the rights of asecured party under the Uniform Commercial Code as amended from time to time.**Security Interest.**Upon request by Lender, Grantor shall take whatever action isrequested by Lender to perfect and continue Lender’s security interest in the Rents and PersonalProperty. In addition to recording this Mortgage in the real property records, Lender may, atany time and without further authorization from Grantor, file executed counterparts, copies orreproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for allexpenses incurred in perfecting or continuing this security interest. Upon default, Grantorshall not remove, sever or detach the Personal Property from the Property. Upon default, Grantorshall assemble any Personal Property not affixed to the Property in a manner and at a placereasonably convenient to Grantor and Lender and make itavailable to Lender within three (3) days after receipt of written demand from Lender to theextent permitted by applicable law.
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 7****Fixture Filing.**From the date of its recording, this Mortgage shall be effective as afinancing statement filed as a fixture filing with respect to the Personal Property and for thispurpose, the name and address of the debtor is the name and address of Grantor as set forth onthe first page of this Mortgage and the name and address of the secured party is the name andaddress of Lender as set forth on the first page of this Mortgage.**Addresses.**The mailing addresses of Grantor (debtor) and Lender (secured party) fromwhich information concerning the security interest granted by this Mortgage may be obtained(each as required by the Uniform Commercial Code) are as stated on the first page of thisMortgage.**FURTHER ASSURANCES; ATTORNEY-IN-FACT.**The following provisions relating to furtherassurances and attorney-in-fact are a part of this Mortgage:**Further Assurances.**At any time, and from time to time, upon request of Lender,Grantor will make, execute and deliver, or will cause to be made, executed or delivered, toLender or to Lender’s designee, and when requested by Lender, cause to be filed, recorded,refiled, or rerecorded, as the case may be, at such times and in such offices and places asLender may deem appropriate, any and all such mortgages, deeds of trust, security deeds,security agreements, financing statements, continuation statements, instruments of furtherassurance, certificates, and other documents as may, in the sole opinion of Lender, be necessaryor desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor’sobligations under the Note, this Mortgage, and the Related Documents, and (2) the liens andsecurity interests created by this Mortgage as first and prior liens on the Property, whethernow owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agreesto the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurredin connection with the matters referred to in this paragraph.**Attorney-in-Fact.**If Grantor fails to do any of the things referred to in thepreceding paragraph, Lender may do so for and in the name of Grantor and at Grantor’s expense.For such purposes, Grantor hereby irrevocably appoints Lender as Grantor’s attorney-in-fact forthe purpose of making, executing, delivering, filing, recording, and doing all other things asmay be necessary or desirable, in Lender’s sole opinion, to accomplish the matters referred toin the preceding paragraph.**FULL PERFORMANCE.**If Grantor pays all the Indebtedness, including without limitation allfuture advances, when due, and otherwise performs all the obligations imposed upon Grantor underthis Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgageand suitable statements of termination of any financing statement on file evidencing Lender’ssecurity interest in the Rents and the Personal Property. Grantor will pay, if permitted byapplicable law, any reasonable termination fee as determined by Lender from time to time.**EVENTS OF DEFAULT.**Each of the following, at Lender’s option, shall constitute an Eventof Default under this Mortgage:**Payment Default.**Grantor fails to make any payment when due under the Indebtedness.**Default on Other Payments.**Failure of Grantor within the time required by thisMortgage to make any payment for taxes or insurance, or any other payment necessary to preventfiling of or to effect discharge of any lien.**Other Defaults.**Grantor fails to comply with or to perform any other term, obligation,covenant or condition contained in this Mortgage or in any of the Related Documents or to complywith or to perform any term, obligation, covenant or condition contained in any other agreementbetween Lender and Grantor.**Default in Favor of Third Parties.**Should Grantor default under any loan, extension ofcredit, security agreement, purchase or sales agreement, or any other agreement, in favor of anyother creditor or person that may materially affect any of Grantor’s property or Grantor’sability to repay the Indebtedness or Grantor’s ability to perform Grantor’s obligations underthis Mortgage or any related document.**False Statements.**Any warranty, representation or statement made or furnished to Lender byGrantor or on Grantor’s behalf under this Mortgage or the Related Documents is false ormisleading in anymaterial respect, either now or at the time made or furnished or becomes false or misleading atany time thereafter.
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 8****Defective Collateralization.**This Mortgage or any of the Related Documents ceases to be in fullforce and effect (including failure of any collateral document to create a valid and perfectedsecurity interest or lien) at any time and for any reason.**Death or Insolvency.**The dissolution of Grantor’s (regardless of whether election to continue ismade), any member withdraws from the limited liability company, or any other termination ofGrantor’s existence as a going business or the death of any member, the insolvency of Grantor,the appointment of a receiver for any part of Grantor’s property, any assignment for the benefitof creditors, any type of creditor workout, or the commencement of any proceeding under anybankruptcy or insolvency laws by or against Grantor.**Creditor or Forfeiture Proceedings.**Commencement of foreclosure or forfeiture proceedings,whether by judicial proceeding, self-help, repossession or any other method, by any creditor ofGrantor or by any governmental agency against any property securing the Indebtedness. Thisincludes a garnishment of any of Grantor’s accounts, including deposit accounts, with Lender.However, this Event of Default shall not apply if there is a good faith dispute by Grantor as tothe validity or reasonableness of the claim which is the basis of the creditor or forfeitureproceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceedingand deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in anamount determined by Lender, in its sole discretion, as being an adequate reserve or bond for thedispute.**Breach of Other Agreement.**Any breach by Grantor under the terms of any other agreement betweenGrantor and Lender that is not remedied within any grace period provided therein, includingwithout limitation any agreement concerning any indebtedness or other obligation of Grantor toLender, whether existing now or later.**Events Affecting Guarantor.**Any of the preceding events occurs with respect to any guarantor,endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser,surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validityof, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at itsoption, may, but shall not be required to, permit the guarantor’s estate to assumeunconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and, in doing so, cure any Event of Default.**Adverse Change.**A material adverse change occurs in Grantor’s financial condition, or Lenderbelieves the prospect of payment or performance of the Indebtedness is impaired.**Insecurity.**Lender in good faith believes itself insecure.**Right to Cure.**If any default, other than a default in payment is curable and ifGrantor has not been given a notice of a breach of the same provision of this Mortgage within thepreceding twelve (12) months, it may be cured if Grantor, after receiving written notice fromLender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) ifthe cure requires more than fifteen (15) days, immediately initiates steps which Lender deems inLender’s sole discretion to be sufficient to cure the default and thereafter continues andcompletes all reasonable and necessary steps sufficient to produce compliance as soon asreasonably practical.**RIGHTS AND REMEDIES ON DEFAULT.**Upon the occurrence of an Event of Default and at anytime thereafter, Lender, at Lender’s option, may exercise any one or more of the following rightsand remedies, in addition to any other rights or remedies provided by law:**Accelerate Indebtedness.**Lender shall have the right at its option to declare theentire Indebtedness immediately due and payable, including any prepayment penalty which Grantorwould be required to pay without notice, except as may be expressly required by applicable law.**UCC Remedies.**With respect to all or any part of the Personal Property, Lender shallhave all the rights and remedies of a secured party under the Uniform Commercial Code.**Collect Rents.**Lender shall have the right, without notice to Grantor, to takepossession of the Property and collect the Rents, including amounts past due and unpaid, andapply the net proceeds, over and above Lender’s costs, against the Indebtedness. In furtheranceof this right, Lender may require any tenant or other user of the Property to make payments ofrent or use fees directly to Lender. If theRents are collected by Lender, then Grantor irrevocably designates Lender as Grantor’sattorney-in-fact to endorse instruments received in payment thereof in the name of Grantor andto negotiate the same and collect the proceeds. Payments by tenants or other users to Lender inresponse to Lender’s demand shall satisfy the obligations for which the payments are made,whether or not any proper grounds for the demand existed. Lender may exercise its rights underthis subparagraph either in person, by agent, or through a receiver.
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 9****Appoint Receiver.**Lender shall have the right to have a receiver appointed to takepossession of all or any part of the Property, with the power to protect and preserve theProperty, to operate the Property preceding foreclosure or sale, and to collect the Rents fromthe Property and apply the proceeds, over and above the cost of the receivership, against theIndebtedness. The receiver may serve without bond if permitted by law. Lender’s right to theappointment of a receiver shall exist whether or not the apparent value of the Property exceedsthe Indebtedness by a substantial amount. Employment by Lender shall not disqualify a personfrom serving as a receiver.**Judicial Foreclosure.**Lender may obtain a judicial decree foreclosing Grantor’sinterest in all or any part of the Property.**Nonjudicial Foreclosure.**Lender may exercise the right to non-judicial foreclosurepursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified,amended or replaced.**Deficiency Judgment.**If permitted by applicable law, Lender may obtain a judgment forany deficiency remaining in the Indebtedness due to Lender after application of all amountsreceived from the exercise of the rights provided in this section.**Tenancy at Sufferance.**If Grantor remains in possession of the Property after theProperty is sold as provided above or Lender otherwise becomes entitled to possession of theProperty upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or thepurchaser of the Property and shall, at Lender’s option, either (1) pay a reasonable rental forthe use of the Property, or (2) vacate the Property immediately upon the demand of Lender. Thisparagraph is subject to any rights of Grantor, under Iowa law, to remain in possession of theProperty during a redemption period.**Other Remedies.**Lender shall have all other rights and remedies provided in thisMortgage or the Note or available at law or in equity.**Sale of the Property.**To the extent permitted by applicable law, Grantor hereby waives any andall right to have the Property marshalled. In exercising its rights and remedies, Lender shallbe free to sell all or any part of the Property together or separately, in one sale or byseparate sales. Lender shall be entitled to bid at any public sale on all or any portion of theProperty.**Notice of Sale.**Lender shall give Grantor reasonable notice of the time and place of any publicsale of the Personal Property or of the time after which any private sale or other intendeddisposition of the Personal Property is to be made. Reasonable notice shall mean notice given atleast ten (10) days before the time of the sale or disposition. Any sale of the PersonalProperty may be made in conjunction with any sale of the Real Property.**Shortened Redemption.**Grantor hereby agrees that, in the event of foreclosure of this Mortgage,Lender may, at Lender’s sole option, elect to reduce the period of redemption pursuant to IowaCode Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may bethen applicable and provided by law.**Election of Remedies.**Election by Lender to pursue any remedy shall not exclude pursuit of anyother remedy, and an election to make expenditures or to take action to perform an obligation ofGrantor under this Mortgage, after Grantor’s failure to perform, shall not affect Lender’s rightto declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shallbe construed so as to limit or restrict the rights and remedies available to Lender following anEvent of Default, or in any way to limit or restrict the rights and ability of Lender to proceeddirectly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/orto proceed against any other collateral directly or indirectly securing the Indebtedness.
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 10****Attorneys’ Fees; Expenses.**If Lender institutes any suit or action to enforce any of the termsof this Mortgage, Lender shall be entitled to recover such sum as the court may adjudgereasonable as attorneys’ fees at trial and upon any appeal. Whether or not any court action isinvolved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that inLender’s opinion arenecessary at any time for the protection of its interest or the enforcement of its rights shallbecome a part of the Indebtedness payable on demand and shall bear interest at the Note ratefrom the date of the expenditure until repaid. Expenses covered by this paragraph include,without limitation, however subject to any limits under applicable law, Lender’s attorneys’ feesand Lender’s legal expenses, whether or not there is a lawsuit, including attorneys’ fees andexpenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay orinjunction), appeals, and any anticipated post-judgment collection services, the cost ofsearching records, obtaining title reports (including foreclosure reports), surveyors’ reports,and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor alsowill pay any court costs, in addition to all other sums provided by law.**NOTICES.**Any notice required to be given under this Mortgage, including without limitation anynotice of default and any notice of sale shall be given in writing, and shall be effective whenactually delivered, when actually received by telefacsimile (unless otherwise required by law),when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in theUnited States mail, as first class, certified or registered mail postage prepaid, directed to theaddresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from theholder of any lien which has priority over this Mortgage shall be sent to Lender’s address, asshown near the beginning of this Mortgage. Any party may change its address for notices under thisMortgage by giving formal written notice to the other parties, specifying that the purpose of thenotice is to change the party’s address. For notice purposes, Grantor agrees to keep Lenderinformed at all times of Grantor’s current address. Unless otherwise provided or required by law,if there is more than one Grantor, any notice given byLender to any Grantor is deemed to be notice given to all Grantors.**FACSIMILE AND COUNTERPART.**This document may be signed in any number of separate copies, each ofwhich shall be effective as an original, but all of which taken together shall constitute a singledocument. An electronic transmission or other facsimile of this document or any related documentshall be deemed an original and shall be admissible as evidence of the document and the signer’sexecution.**MISCELLANEOUS PROVISIONS.**The following miscellaneous provisions are a part of this Mortgage:**Amendments.**This Mortgage, together with any Related Documents, constitutes the entireunderstanding and agreement of the parties as to the matters set forth in this Mortgage. Noalteration of or amendment to this Mortgage shall be effective unless given in writing andsigned by the party or parties sought to be charged or bound by the alteration or amendment.**Annual Reports.**If the Property is used for purposes other than Grantor’s residence, Grantorshall furnish to Lender, upon request, a certified statement of net operating income receivedfrom the Property during Grantor’s previous fiscal year in such form and detail as Lender shallrequire. “Net operating income” shall mean all cash receipts from the Property less all cashexpenditures made in connection with the operation of the Property.**Caption Headings.**Caption headings in this Mortgage are for convenience purposes only and arenot to be used to interpret or define the provisions of this Mortgage.**Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to theextent not preempted by federal law, the laws of the State of Iowa without regard to itsconflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa.****No Waiver by Lender.**Lender shall not be deemed to have waived any rights under this Mortgageunless such waiver is given in writing and signed by Lender. No delay or omission on the part ofLender in exercising any right shall operate as a waiver of such right or any other right. Awaiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver ofLender’s right otherwise to demand strict compliance with that provision or any other provisionof this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender andGrantor, shall constitute a waiver of any of Lender’s rights or of any of Grantor’s obligationsas to any future transactions. Whenever the consent of Lender is required under this Mortgage,the granting of such consent by Lender in any instance shall not constitute continuing consentto subsequent instances where such consent is required and in all cases such consent may begranted or withheld in the sole discretion of Lender.
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 11****Severability.**If a court of competent jurisdiction finds any provision of this Mortgage to beillegal, invalid, or unenforceable as to any circumstance, that finding shall not make theoffending provision illegal, invalid, or unenforceable as to any other circumstance. Iffeasible, the offending provision shall beconsidered modified so that it becomes legal, valid and enforceable. If the offending provisioncannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwiserequired by law, the illegality, invalidity, or unenforceability of any provision of thisMortgage shall not affect the legality, validity or enforceability of any other provision ofthis Mortgage.**Merger.**There shall be no merger of the interest or estate created by this Mortgage with anyother interest or estate in the Property at any time held by or for the benefit of Lender in anycapacity, without the written consent of Lender.**Successors and Assigns.**Subject to any limitations stated in this Mortgage on transfer ofGrantor’s interest, this Mortgage shall be binding upon and inure to the benefit of the parties,their successors and assigns. if ownership of the Property becomes vested in a person other thanGrantor, Lender, without notice to Grantor, may deal with Grantor’s successors with reference tothis Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantorfrom the obligations of this Mortgage or liability under the Indebtedness.**Time is of the Essence.**Time is of the essence in the performance of this Mortgage.**Release of Rights of Dower, Homestead and Distributive Share.**Each of the undersigned herebyrelinquishes all rights of dower, homestead and distributive share in and to the Property andwaives all rights of exemption as to any of the Property. If a Grantor is not an owner of theProperty, that Grantor executes this Mortgage for the sole purpose of relinquishing and waivingsuch rights.**DEFINITIONS.**The following capitalized words and terms shall have the following meanings when usedin this Mortgage. Unless specifically stated to the contrary, all references to dollar amountsshall mean amounts in lawful money of the United States of America. Words and terms used in thesingular shall include the plural, and the plural shall include the singular, as the context mayrequire. Words and terms not otherwise defined in this Mortgage shall have the meanings attributedto such terms in the Uniform Commercial Code:**Borrower.**The word “Borrower” means Homeland Energy Solutions, LLC and includes all co-signersand co-makers signing the Note and all their successors and assigns.**Default.**The word “Default” means the Default set forth in this Mortgage in the section titled“Default”.**Environmental Laws.**The words “Environmental Laws” mean any and all state, federal and localstatutes, regulations and ordinances relating to the protection of human health or theenvironment, including without limitation the Comprehensive Environmental Response,Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”),the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”), theHazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the ResourceConservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state orfederal laws, rules, or regulations adopted pursuant thereto.**Event of Default.**The words “Event of Default” mean any of the events of default set forth inthis Mortgage in the events of default section of this Mortgage.**Grantor.**The word “Grantor” means Homeland Energy Solutions, LLC.**Guaranty.**The word “Guaranty” means the guaranty from guarantor, endorser, surety, oraccommodation party to Lender, including without limitation a guaranty of all or part of theNote.**Hazardous Substances.**The words “Hazardous Substances” mean materials that, because of theirquantity, concentration or physical, chemical or infectious characteristics, may cause or pose apresent or potential hazard to human health or the environment when improperly used, treated,stored, disposed of, generated, manufactured, transported or otherwise handled. The words“Hazardous Substances” are used in their very broadest sense and include without limitation anyand all hazardous or toxic substances, materials or waste as defined by or listed under the**Environmental Laws.**The term “Hazardous Substances” also includes, without limitation, petroleumand petroleum by-products or any fraction thereof and asbestos.**Improvements.**The word “Improvements” means all existing and future improvements, buildings,structures, mobile homes affixed on the Real Property, facilities, additions, replacements andother construction on the Real Property.
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 12****Indebtedness.**The word “Indebtedness” means all principal, interest and late fees, and otheramounts, costs and expenses payable under the Note or Related Documents, together with allrenewals of, extensions of, modifications of, consolidations of and substitutions for the Note orRelated Documents and any amounts expended or advanced by Lender to discharge Grantor’sobligations or expenses incurred by Lender to enforce Grantor’s obligations under this Mortgage,together with interest on such amounts as provided in this Mortgage. Specifically, withoutlimitation, Indebtedness includes the future advances set forth in the Future Advances provision,together with all interest thereon and all amounts that may be indirectly secured by theCross-Collateralization provision of this Mortgage.**Lender.**The word “Lender” means Home Federal Savings Bank, its successors and assigns.**Mortgage.**The word “Mortgage” means this Mortgage between Grantor and Lender.**Note.**The word “Note” means the promissory note dated March 23, 2007, **in the original principalamount of $3,517,572.00**from Grantor to Lender, together with all renewals of, extensions of,modifications of, refinancings of, consolidations of, and substitutions for the promissory noteor agreement. The maturity date of this Mortgage is March 23, 2008.**Personal Property.**The words “Personal Property” mean all equipment, fixtures, and other articlesof personal property now or hereafter owned by Grantor, and now or hereafter attached or affixedto the Real Property; together with all accessions, parts, and additions to, all replacements of,and all substitutions for, any of such property; and together with all proceeds (includingwithout limitation all insurance proceeds and refunds of premiums) from any sale or otherdisposition of the Property.**Property.**The word “Property” means collectively the Real Property and the Personal Property.**Real Property.**The words “Real Property” mean the real property, interests and rights, as furtherdescribed in this Mortgage.**Related Documents.**The words “Related Documents” mean all promissory notes, credit agreements,loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds oftrust, security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing, executed in connection with the Indebtedness.**Rents.**The word “Rents” means all present and future rents, revenues, income, issues, royalties,profits, and other benefits derived from the Property.
 
 

 
**MORTGAGE****Loan No: 3787** **(Continued)** **Page 13****GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TOITS TERMS.****GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATINGTO THIS DEBT.**     **GRANTOR:**       **HOMELAND ENERGY SOLUTIONS, LLC**       **By:** /s/ Steven K. Eastman     **Steve Eastman, President of Homeland Energy SolutionsLLC**       **By:** /s/ Bernard Retterath     **Bernard Retterath, Treasurer of Homeland EnergySolutions, LLC**  **LIMITED LIABILITY COMPANY ACKNOWLEDGMENT**     **STATE OF**Iowa **)**    **)SS****COUNTY OF**  Chickasaw **)**  On this  23rd  day of March, A.D., 2007, beforeme, the undersigned Notary Public in said County and State, personally appeared **Steve Eastman,President; Bernard Retterath, Treasurer of Homeland Energy Solutions, LLC,**to mepersonally known, who being by me duly sworn, did say that they are one of the members ordesignated agents of said limited liability company, and that the instrument was signed and sealedon behalf of the limited liability company by authority of the limited liability company and themembers or designated agents acknowledged the execution of the instrument to be the voluntary actand deed of the limited liability company by it and by the members or designated agents voluntarilyexecuted.       /s/ Willis M. Hansen     **Notary Public in the State of**             WILLIS M. HANSEN    [SEAL] Commission Number 101768      My Comm. Exp. 02-18-08  
 
 

 
EXHIBIT AAll that part of the Northwest Quarter lying North of the Chicago, Milwaukee and St. PaulRailroad right-of-way in Section 12, Township 95 North, Range 12 West of the 5th P.M.,Chickasaw County, IowaParcel A in the Northeast Fractional Quarter as shown on a plat of survey dated January 30, 2007 byDaryl Eiffler and filed for record in Document No. 2007-0335 in the office of the Chickasaw CountyRecorder also described as the South 104.63 acres of the Northeast Fractional Quarter and theNorthwest Quarter of the Southeast Quarter, and all that part of the East Half of the SoutheastQuarter lying North of the Chicago, Milwaukee, St. Paul and Pacific Railroad, all in Section 1,Township 95 North, Range 12 West of the 5th P.M. in Chickasaw County, IowaThe Southwest Quarter of the Southeast Quarter of Section 1 (except Railroad right of way andexcept that part thereof deeded to State of Iowa by warranty deed recorded in Book 70 at Page 407)in Township 95 North, Range 12 West of the 5th P.M., Chickasaw County, IowaThe South Half of the Southwest Quarter (except Railroad right-of-way and except Lot 1 of theSouthwest Quarter of the Southwest Quarter) of Section 1, Township 95 North, Range 12 West of the5th P.M., Chickasaw County, IowaAll that part of the East Half of Southeast Quarter lying South of the Chicago, Milwaukee and St.Paul Railroad right of way in Section 1, Township 95 North, Range 12 West of the 5thP.M., Chickasaw County, Iowa