Document:

exv10w9

 

EXHIBIT 10.9

OPTION

THIS OPTION TO PURCHASE granted this 5th day of May, 2006, by Richard Vrzak, a
single person and Rodney Vrzak, a single person, party of the first part, to Homeland Energy
Solutions, LLC an Iowa Limited Liability Company, having its principal place of business at 951
North Linn Avenue, New Hampton, Iowa 50659, party of the second part.

WITNESSETH that in consideration of the agreements and conditions herein contained, and the sum of
one thousand two hundred fifty dollars ($1,250.00) which is consideration for the option only, paid
by the said party of the second part to the said party of the first part, the receipt whereof is
hereby acknowledged, the party of the first part hereby grants unto the party of the second part
the exclusive right, at the option of the party of the second part, for and during the period until
April 1, 2007, to purchase the following tract or parcel of land, or a portion thereof (hereinafter
referred to as “the premises”), situated in the County of Winneshiek, State of Iowa, to-wit:

All that part of the southwest Quarter of the Northwest Quarter, the West half of
the Southwest Quarter and the Southeast Quarter of the Southwest Quarter lying
South of the river in Section 30, Township 96 North, Range 10 West of the
5th P.M., containing 100 acres, more or less, the exact description and
acreage to be determined by engineering survey.

All of the foregoing is subject to a legal description based on an actual site survey. Said site
survey shall be obtained at the sole cost and expense of the party of the second part.

It is understood and agreed that the party of the first part upon the signing of this Option, does
immediately grant the party of the second part the right and privilege without liability, to enter
upon the premises herein described, by foot and/or vehicle, to obtain soil borings, samples, and
make other tests, land and archaeological surveys, as said party of the second part deems necessary
to determine the suitability of the premises for the use and type of construction proposed. All
such operations shall be conducted so as to cause the least interference with farming operations
being conducted on the premises.

In the event of the exercise of this Option, the party of the second part shall have the right to
purchase the premises for $7,500.00 per acre plus $48,775.00 for the three existing buildings. The
purchase price, less the amount of any additional payments made for the extension of the Option
shall be payable, in cash, upon the exercise of this Option. Party of the second part shall move
and erect the grain bin to a location designated by party of the first part.

	 	 	 
	  

	 	R.V.

	  

	 	R.V.

It is further understood that in the event that party of the second part exercises its option to
purchase the property that the party of the second part, in addition to payment of the purchase
price specified herein, shall make all relocation payments and render all relocation assistance to,
for, or on behalf of the party of the first part as may be required, if such be the case, by
federal or state law.

This transaction shall be closed no later than 90 days after the date upon which the party of the
second part gives written notice to the party of the first part of its election to exercise this
option to purchase. This transaction will be closed at the office of the Buyer’s attorney or at
such other date or place that is mutually agreeable to the parties.

This option is governed by the laws of the State of Iowa, and any court action which may be taken
by either party as a result of this Option shall be resolved within the jurisdiction of Chickasaw
County, Iowa.

All notices to either party hereunder shall be effective only when made in writing and deposited,
postage and/or feeds prepaid, in the U.S. Mail, via certified or registered mail, return receipt
requested, and addressed to the party as follows:

 

 

	 	 	 
	If for the party of the first part:	 	If for the party of the second part:
	 
	Richard Vrzak
	 	Homeland Energy Solutions, LLC
	3378 Highway 24
	 	951 North Linn Avenue
	Waucoma, IA 52171
	 	New Hampton, IA 50659

The party of the first part hereby agrees to execute an affidavit and/or memorandum of this option
to purchase upon request and as may be determined reasonably necessary by the party of the second
part, and further consents to the recording of such instrument with the county recorder.

The party of the first part, upon exercise of the Option and payment of the balance of the purchase
price, agrees to execute and deliver to the party of the second part a Warranty Deed, conveying the
premises free and clear of all liens and encumbrances, except public roads, restrictions of record
and taxes not due and payable to the party of the second part. This agreement shall be binding
upon the parties hereto, their heirs, executors, administrators, successors, and assigns.

In the event that this Option is not exercised, then the party of the first part shall retain all
payments made by the party of the second part as liquidated damages, and the party of the second
part shall remove all its facilities from the premises and restore the surface to as near as
possible its pre-disturbed condition.

Party of the second part shall pay party of the first part for damages to crops, fences, and other
physical improvements damages as a result of its exploratory work on the premises. In the event
that the Option is exercised and possession is required by party of second part prior to crop
harvest, then party of second part shall pay party of the first part for standing crops.

Said option may be extended by said party of the second part for two successive periods of one year
upon the additional payment of the sum of twelve thousand five hundred ($12,500.00) for each year,
prior to the expiration of the option. In the event of the exercise of the Option, the additional
payments made for extension of the Option shall be applied to the purchase price of the premises.

In the event the party of the first part wishes to utilize a tax-free exchange pursuant to Section
1031 of the Internal Revenue Code, party of the second part agrees to cooperate and execute
whatever documents may be necessary for purposes of the tax free exchange.

IN WITNESS WHEREOF, the party of the first part have hereunto set their hands and seals the day and
year first above written.

	 	 	 	 	 	 	 
	/s/ Richard Vrzak

	 	 	 	/s/ Rodney Vrzek
	 	 
	 

	 	 	 	 	 	 
	Richard Vrzak

	 	 	 	Rodney Vrzak	 	 

INDIVIDUAL ACKNOWLEDGEMENT

STATE OF MINNESOTA, COUNTY OF WINNESHIEK, ss:

     On this  5TH  day of May, 2006, before me personally appeared Richard
Vrzak, a single person and Rodney Vrzak, a single person, to me known to be the persons named in
and who executed the foregoing instrument and acknowledged that they executed the same as their
voluntary act and deed.

	 	 	 	 	 
	 

	 	/s/ Christopher F. O’Donohoe
	 	 
	 

	 	 	 	 
	 

	 	Notary Public in the State of Minnesota	 	 
	 

	 	My Commission Expires 11/4/07exv10w10

 

EXHIBIT 10.10

PROJECT DEVELOPMENT FEE AGREEMENT

     THIS PROJECT DEVELOPMENT FEE AGREEMENT (“Agreement”) is entered into as of this  28
day of  June , 2006 (“Effective Date”), by and between Pat Boyle, an individual
(“Boyle”), and Homeland Energy Solutions, LLC (“Company”), an Iowa limited liability Company.

     WHEREAS, Boyle is a member of the Board of Directors of the Company and serves as the Vice
President of Project Development for the Company, which was organized for the purpose of
developing and operating a 100 million gallon dry mill ethanol plant near New Hampton, Iowa (the
“Project” or “Ethanol Plant”);

     WHEREAS, Boyle has provided project development services to the Company in the past and
intends to provide such services in the future;

     WHEREAS, the Company has agreed to pay a development fee to Boyle in exchange for his efforts
to assist in development of the Ethanol Plant; and

     WHEREAS, the Company’s Board of Directors (the “Board”) desires to memorialize that agreement
and set forth the manner in which the development fee shall be distributed.

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

1. DEVELOPMENT SERVICES. Company hereby retains Boyle for the purpose of providing
developmental services with respect to the Project (“Development Services”). Development Services
shall include all services performed on behalf of the Company by Boyle to date and all services
performed on behalf of and at the reasonable request of the Company through the termination of
this Agreement. Boyle’s duties shall include, but not be limited to, assumption of responsibility
for public relations, on-site development issues, and timely completion of the Project. Boyle
shall apprise the Board of the status of the Project and of any material events, shall assist the
Company’s Board in developing policies regarding construction of the Project, and shall perform
his duties at the direction of the Board. Development Services shall not include effecting or
attempting to effect purchases or sales of the Company’s securities.

2. DEVELOPMENT FEE AND PAYMENT TERMS. In consideration for the Development Services to be
provided to Company, Company shall pay Boyle a development fee equal to $40,000 (“Development
Fee”). The first twenty-five percent (25%) of the Development Fee shall be payable to Boyle on the
date of Financial Closing, which shall mean the actual closing (execution and delivery of all
required documents) by the Company with its project lender(s) providing for all debt financing
including senior and subordinated debt which is required by the project lender(s) or which is
deemed necessary or prudent in the sole discretion of the Board. The next twenty-five percent
(25%) of the Development Fee shall be payable to Boyle on the date on which concrete is first
poured at the plant site, and the final fifty percent (50%) of the Development Fee shall be
payable to Boyle on a date that will be mutually agreed upon by the Board and Boyle.

3. EXPENSES. Company shall reimburse Boyle for all reasonable, ordinary and necessary
expenses incurred by Boyle in performance of his duties hereunder, including without limitation,
reimbursement for hotel expenses, business meals, travel expenses, educational expenses, and
automobile mileage at a rate per mile as periodically set by the Internal Revenue Service.

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4. TERM AND TERMINATION OF AGREEMENT. The term of this Agreement shall commence as of the
Effective Date and shall terminate upon the earlier of any of the events enumerated below
(“Termination Event”).

(a) Payment in full of the Development Fee;

(b) Dissolution, bankruptcy or insolvency of the Company, or the inability or failure of the
Company generally to pay debts as they become due, or an assignment by the Company for the
benefit of creditors, or the commencement of any case or proceeding in respect of the
Company under any bankruptcy, insolvency or similar laws;

(c) Boyle’s voluntary resignation as a member of the Board; and

(d) Mutual written agreement of the parties.

For purposes of this Agreement, death or disability shall not terminate this Agreement.

5. INDEMNIFICATION. Company shall indemnify, defend against and advance to Boyle all
expenses actually and reasonably incurred in connection with the defense of any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative (a “Proceeding”), in which Boyle is made a party by reason of
performing services for Company or acting in any manner pursuant to this Agreement, except that
Company shall have no obligation to indemnify and defend Boyle or his agents for their act or
omission that involves gross negligence, intentional misconduct or a known violation of the law.
Boyle shall indemnify and defend Company and its employees, members, directors, officers and
agents against expenses actually and reasonably incurred in connection with the defense of any
Proceeding in which Company and/or its employees, members, directors, officers or agents are made
a party by reason of Boyle committing an act or omission that involves gross negligence,
intentional misconduct or a known violation of the law.

6. DEFAULT. In the event of the failure of either of the parties to comply with any of the
terms and provisions of this Agreement, or in the event either party has violated any of the
warranties and representations made herein by that party, then such party shall be deemed to be in
default hereunder and the other party shall be given written notice of such noncompliance and
shall give the defaulting party thirty (30) days from the date of such notice within which to
correct such noncompliance. If such default has not been corrected, or an arrangement satisfactory
to the complaining party has not been made by the end of the notice period, then the complaining
party may take whatever action is necessary, and exercise all remedies available in order to
protect the complaining party’s rights under the terms and conditions of this Agreement. The
parties agree that the remedies set forth in this Section 7 shall not be exclusive, but they shall
be cumulative with all other rights and remedies available, at law or in equity, to the parties.
In the event of any dispute between the parties resulting from this Agreement or any provisions
hereunder, the prevailing party in any such dispute shall be entitled to recover reasonable
attorneys’ fees and related costs and such other costs incurred therewith.

7. SUCCESSORS AND ASSIGNS BOUND. This Agreement shall be binding upon the Company, Boyle,
their respective heirs, executors, administrators, successors in interest or permitted assigns,
including without limitation, any partnership, corporation or other entity into which the Company
may be merged or by which it may be acquired (whether directly, indirectly or by operation of
law), or to which it

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may assign its rights under this Agreement.

8. RELATIONSHIP OF THE PARTIES. The parties understand that Boyle is an independent
contractor with respect to Company, and not an employee of the Company. Company will not provide
fringe benefits, including health insurance benefits, paid vacation, or any other employee
benefits for the benefit of Boyle. Notwithstanding the above, should the Company’s Board
establish a board of directors’ compensation policy, Boyle, as a director of the Company, may
receive reasonable compensation for his services as a director and may be reimbursed for his
expenses in attending Board meetings. However, in no event shall Boyle receive compensation for
services he performs as a member on any committee established by the Board.

9. AUTHORITY. Each of the signatories hereto certifies that such party has all necessary
authority to execute this Agreement.

10. AMENDMENTS. This Agreement sets forth the entire understanding of the parties and
supersedes any prior agreements, oral or written, as to the subject matter hereof. This Agreement
may be amended or modified by, and only by, a written instrument executed by the parties hereto.

12. ASSIGNMENT. This Agreement shall not be assigned by any party hereto except as
permitted by its express terms or upon the written consent of the other party. Nothing in this
Agreement, express or implied, its intended to confer upon any other person any rights or remedies
under or by reason of this Agreement.

13. SEVERABILITY. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement, or affecting the validity or enforceability of any of the terms
or provisions of this Agreement in any other jurisdiction.

14. WAIVER. The failure of any party hereto to insist in any one of more instances upon
performance of any term or condition of this Agreement shall not be construed as a waiver of
future performance of any such term, covenant or condition, but the obligation of such party with
respect thereto shall continue in full force and effect.

15. CAPTIONS. The captions herein are inserted for convenience of reference only and shall
be ignored in the construction or interpretation hereof.

16. NOTICES. Any notice required to be given hereunder shall be in writing and shall be
deemed to be sufficiently served by either party on the other party if such notice is delivered
personally or is sent by certified or first class mail addressed as follows:

	 	 	 	 	 
	 

	 	To Boyle:
	 	Pat Boyle
	 

	 	 	 	14707 Mill Road
	 

	 	 	 	Lime Springs, Iowa 52155
	 
	 	 	 	 
	 

	 	To Company:
	 	Homeland Energy Solutions, LLC
	 

	 	 	 	Attention: Steve Eastman
	 

	 	 	 	951 North Linn Avenue
	 

	 	 	 	New Hampton, Iowa 50609

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	 	Copy to:
	 	Brown, Winick, et al.
	 

	 	 	 	Attention: Valerie D. Bandstra 666
	 

	 	 	 	Grand Avenue, Ste. 2000 Des Moines,
	 

	 	 	 	Iowa 50309

17. GOVERNING LAW. This Agreement shall be governed and construed in accordance with the
law of the State of Iowa, without reference to its conflict of law rules. Each of the parties
hereto irrevocably submits to the jurisdiction of any state or federal court sitting in the State
of Iowa in any action or proceeding brought to enforce or otherwise arising out of or relating to
this Agreement.

18. INTERPRETATION. The parties agree that each has had an opportunity to negotiate fully
the terms of this Agreement and that this Agreement shall not be interpreted in favor of or against
the party drafting the Agreement.

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Homeland Energy Solutions, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	     /s/ Pat Boyle

	 	 	 	By:
	 	  /s/ Stephen Eastman	 	 
	 

Pat Boyle, individually

	 	 	 	 	 	 

Stephen Eastman
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:
	 	President	 	 
	 

	 	 	 	 	 	 	 	 

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