Document:

Filed by Bowne Pure Compliance

Exhibit 10.42

AGREEMENT FOR PRIVATE DEVELOPMENT

THIS AGREEMENT FOR PRIVATE DEVELOPMENT (hereinafter called “Agreement”) is made on the 18th
day of December, 2007, by and between Chickasaw County, Iowa, a municipality (hereinafter called
the “County”), a public body corporate and Homeland Energy Solutions, LLC (“Developer”), a limited
liability company.

WITNESSETH:

WHEREAS, in furtherance of the objectives of low-a Code Chapters 15 and 15A, the County has
undertaken to assist an economic development project; and

WHEREAS, the County, the Developer and the Iowa Department of Economic Development have
previously entered into a Master Contract and High Quality Jobs Creation Program funding agreement
(attached hereto as Exhibit C); but the County and Developer desire to provide for additional
agreements between themselves; and

WHEREAS, Developer owns certain real property as more particularly described in Exhibit A
hereinafter .referred to as the (“Development Property”); .and

WHEREAS, Developer is willing to cause certain. improvements to be constructed on the
Development Property and will thereafter cause the same to be operated in accordance with this
Agreement; and

WHEREAS, the County believes that the development of the Development Property pursuant to this
Agreement and the fulfillment generally of this Agreement, are in the vital and best interest of
the County and in accord with the public purposes and provisions of the applicable State and local
laws and requirements under which the foregoing project has been undertaken and is being assisted.

NOW THEREFORE, in consideration of the premises and the mutual obligations of the Parties
hereto, each of them does covenant and agree with the other as follows:

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

 

 

ARTICLE I 

DEFINITIONS

SECTION 1.1. DEFINITIONS:

In this Agreement, unless a different meaning clearly appears from the context:

“Agreement” means this Agreement and all appendices hereto, as the same may be from time to
time modified, amended or supplemented.

“Annual Average” shall mean the sum of the number of full time employment units of the
first day of the preceding 12 months, divided by 12.

“Articles and Sections”, mentioned by number only, are the respective Articles and Sections
of this Agreement so numbered.

“Certificate of Completion” means a certificate in the form of the certificate attached
hereto as Exhibit B and hereby made a part of this Agreement, provided to Developer pursuant to
Section 3.3 of this Agreement.

“Code” means the Code of Iowa 2007, as amended.

“County” means the County of Chickasaw, Iowa.

“Developer” means Homeland Energy Solutions, LLC.

“Development Property” means the portion of Chickasaw County, Iowa described in Exhibit A
hereto.

“Event of Default” means any of the events described in Section 9.1 of this Agreement.

“First Mortgage” means any Mortgage or deed of trust granted to secure any loan made
pursuant to either a mortgage commitment obtained by Developer from a commercial lender or other
financial institution, or from one another, to fund any portion of the construction costs and
initial operating capital requirements of the Minimum Improvements, or all such Mortgages as
appropriate.

“Full Time Employment Unit (F.T.E,)” and Created Jobs and Job Obligations have the
same meaning as in the Iowa Department of Economic Development Master Contract.

HQJCP Agreements shall mean the High Quality Jobs Creation Program Funding Agreement and
Master Contract, executed or anticipated to be executed between the Developer, the IDED, and the
County.

			
	 	 	 
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“Minimum Improvement” means the construction of a dry mill, corn processing ethanol plant
facility with the nameplate capacity to produce 100 million gallons per year, constructed on the
Development Property together with all related site improvements.

“Mortgage” means any mortgage, deed of trust or security agreement in which Developer has
granted a mortgage or other security interest in the Development Property, or any portion or parcel
thereof, or any improvements constructed thereon.

“Net Proceeds” means any proceeds paid by an insurer to Developer under a policy or
policies of insurance required to be provided and maintained by Developer, as the case may be,
pursuant to Article V of the Agreement and remaining after deducting all expenses (including fees
and disbursements of counsel) incurred in the collection of such proceeds.

“Parties” means the Developer and the County.

“Party” means either the Developer or the County.

“Project” means the construction and operation of the completed Minimum Improvements on the
Development Property, as described in the Agreement.

“State” means the State of Iowa.

“Termination Date” means the date of termination of this Agreement, as established in
Section 10.7 of this Agreement.

“Unavoidable Delays” means delays resulting from acts or occurrences outside the reasonable
control of the party claiming the delay including but not limited to storms, floods, fires,
explosions or other casualty losses, unusual weather conditions, strikes, boycotts, lockouts or
other labor disputes, delays in transportation or delivery of material or equipment, delays in the
construction of the Minimum Improvements beyond reasonable, commercial control of the Developer,
litigation, commenced by third parties, or the acts of any federal, State or local governmental
unit.

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

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ARTICLE II

REPRESENTATIONS AND WARRANTIES

SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF THE COUNTY:

The County makes the following representations and warranties:

	 	(a)	 	The County is a political subdivision organized under the provisions of the
Constitution and the laws of the States and has the power to enter into the Agreement
and carry out its obligations hereunder.

	 
	 	(b)	 	The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, and the fulfillment of or compliance with the terms
and conditions of this Agreement are not prevented by, limited by, in conflict with,
or result in a breach of, the terms, conditions or provisions of any contractual
restriction, evidence of indebtedness, agreement or instrument of whatever nature to
which the County is now a party or by which it is bound, nor do they constitute a
default under any of the foregoing.

	 
	 	(c)	 	This Agreement has been duly and validly authorized, executed and delivered
by the County and, assuming due authorization, execution and delivery by the
Developer, is in full force and effect and is a valid and legally binding instrument
of the County, enforceable in accordance with its terms.

	 
	 	(d)	 	The County has examined this agreement and has determined that its terms and
provisions are in the best interests of the County and its residents.

SECTION 2.1. REPRESENTATIONS AND WARRANTIES BY THE DEVELOPER:

Developer makes the following representations and warranties:

	 	(a)	 	Developer is a limited liability company duly organized and validly existing
under the laws of the State and has the capacity to enter into this agreement and to
perform its obligations hereunder.

	 
	 	(b)	 	This Agreement has been duly and validly authorized, executed and delivered
by Developer and, assuming due authorization, execution and delivery by the County, is
in full force and effect and is a valid and legally binding instrument of Developer,
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws relating or affecting creditors
‘rights generally.

			
	 	 	 
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	 	(c)	 	The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, and the fulfillment of or compliance with the terms
and conditions of this Agreement are not prevented by, limited by, in conflict with,
or result in a violation or breach of, the terms, conditions or provisions or the
Articles of Organization of Developer, or of any contractual restriction, evidence of
indebtedness, agreement or instrument of whatever nature to which Developer is now a
party or by which it or its properties are bound, nor do they constitute a default
under any of the foregoing.

	 
	 	(d)	 	There are no actions, suits or proceedings pending or threatened against or
affecting Developer in any court or before any arbitrator or before or by any
governmental body in which there is a reasonable possibility of an adverse decision
which could materially adversely affect the business (present or prospective),
financial position or results of operations of Developer or which in any manner raises
any questions affecting the validity of the Agreement or Developer’s ability to
perform its obligations under this Agreement.

	 
	 	(e)	 	Developer has not received any notice from any local, State or federal
official that the activities of Developer with respect to the Development Property may
or will be in violation of any environmental law or regulation (other than those
notices, if any, of which the County has previously’ been notified in writing).
Developer is not currently aware of any State or federal claim filed or planned to be
filed by any party relating

	 
	 	(f)	 	Developer will use its best efforts to obtain, in a timely manner, all
required permits, licenses and approvals, and to meet in a timely manner, all
requirements of all applicable local, State and Federal laws and regulations, which
must be obtained or met before the Minimum Improvements may be lawfully constructed.

	 
	 	(g)	 	Developer expects that, barring Unavoidable Delays, and subject to obtaining
funding for the Project, the Minimum Improvements will be substantially completed by
December 31, 2009.

	 
	 	(h)	 	Developer would not construct the Minimum Improvements and, in the
opinion of the Developer, would not have been economically feasible to
undertake its obligations under this Agreement without the County’s
consideration under Article VII being made to Developer pursuant to this
Agreement.

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

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ARTICLE III 

CONSTRUCTION OF MINIMUM IMPROVEMENTS

SECTION 3.1. CONSTRUCTION OF MINIMUM IMPROVEMENTS:

The Developer agrees that it will construct the Minimum Improvements on the Development
Property in conformance with the construction plans and specifications as the same may be amended,
supplemented or revised from time to time at the Developer’s discretion.

SECTION 3.2. COMMENCEMENT AND COMPLETION OF CONSTRUCTION:

Subject to Unavoidable Delays, the Developer shall complete construction of the Minimum
Improvements no later than December 31, 2009 or by such other date as the parties shall mutually
agree upon in writing. Time lost as a result of Unavoidable Delays shall be added to extend this
date by a number of days equal to the number of days lost as a result of Unavoidable Delays.

SECTION 3.3. CERTIFICATE OF COMPLETION:

Upon written request of Developer, the County will furnish Developer with a Certificate of
Completion in recordable form, in substantially the form set forth in Exhibit B attached hereto.
Such Certificate of Completion shall be a conclusive determination of satisfactory termination of
the covenants and conditions of this Agreement with respect to the obligations of Developer to
cause construction of the Minimum Improvements.

The Certificate of Completion may be recorded in the proper office for the recordation of
deeds and other instruments pertaining to the Development Property at Developer’s sole expense. If
the County shall refuse or fail to provide a Certificate of Completion in accordance with the
provisions of this Section 3.3, the County shall, within twenty (20) days after written request by
Developer provide a written statement indicating in adequate detail in what respects Developer has
failed to complete the Minimum Improvements in accordance with the provisions of this Agreement, or
is otherwise in default under the terms of this Agreement, and what measures or acts it will be
necessary, in the opinion of the County, for Developer to take or perform in order to obtain such
Certificate of Completion.

			
	 	 	 
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ARTICLE IV 

RESTRICTIONS UPON USE OF DEVELOPMENT PROPERTY

Section 4.1. RESTRICTIONS ON USE: The Developer shall:

	 	(a)	 	Use the Development Property for any lawful use; and

	 
	 	(b)	 	Not discriminate upon the basis of race, creed, color, gender, disability or
national origin in the sale, lease, or rental or in the use or occupancy of the
Development Property or any improvements erected or to be erected thereon, or any
part thereof.

ARTICLE V 

INSURANCE

Section 5.1. INSURANCE REQUIREMENTS:

	 	(a)	 	Developer will provide and maintain or cause to he maintained at all times
during the process of constructing the Minimum Improvements payment of premiums on:

	 	(i)	 	Builder’s risk insurance, written on the so-called “builder’s Risk
–Completed Value basis,” in an amount equal to 100 percent of the insurable value
of the Minimum Improvements at the date of completion, and with coverage available
in non-reporting form on the so-called “special risk” form of policy;

	 
	 	(ii)	 	Comprehensive general liability insurance (including operations,

	 
	 	 	 	contingent liability, operations of subcontractors, completed operations
and contractual liability insurance) with limits against bodily injury and
property damage of at least $1,000,000.

	 
	 	(iii)	 	Worker’s compensation insurance, with statutory coverage.

	 	(b)	 	Upon completion of construction of the Minimum Improvements and at all
times prior to the Termination Date, Developer shall maintain, or cause to be
maintained, at its cost and expense (and from time to time at the request of the
County shall furnish proof of the payment of premiums on) insurance as follows:

	 	(i)	 	insurance against loss and/or damage to the Minimum Improvements
under a policy or policies covering such risks as are ordinarily insured against
by similar businesses, including (without limitation the generality of the
foregoing) fire, extended coverage, vandalism and malicious mischief, explosion,
water damage, demolition cost,

			
	 	 	 
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	 	 	 	 debris
removal, and collapse in an amount not less than the full insurable
replacement value of the Minimum Improvements, but any such policy may have a
deductible amount of not more than $1,000,000 or self-insurance up to not
more than $5,000,000. No policy of insurance shall be so written that the
proceeds thereof will produce less than the minimum coverage required by the
preceding sentence, by reason of co-insurance provisions or otherwise,
without the prior consent thereto in writing by the County. The term “full
insurable replacement value” shall mean the actual replacement cost of the
Minimum Improvements (excluding foundation and excavation costs and costs of
underground flues, pipes, drains and other uninsurable items) and equipment,
and the Developer shall allow access to an insurance consultant or insurer
selected an paid for by the County for the purpose of determining the
adequacy of the insurance.

	 
	 	(ii)	 	Comprehensive general public liability insurance, including personal injury
liability for injuries to persons and/or property, including any injuries resulting
from the operation of automobiles or other motorized vehicles on or about the
Development Property, in the minimum amount for each occurrence and for each year of
$1,000,000.

	 
	 	(iii)	 	Such other insurance, including worker’s compensation insurance respecting all
employees of Developer, in such amount as is customarily carried by like organizations
engaged in like activities of comparable size and liability exposure; provided that
Developer may be self-insured with respect to all or any part of its liability for
worker’s compensation.

	 	(c)	 	All insurance required by this Article V to be provided prior to the Termination Date shall
be taken out and maintained in responsible insurance companies selected by Developer, in its
discretion, which are authorized under the laws of the State to assume the risks covered
thereby. Developer will deposit annually with the County copies of policies evidencing all
such insurance, or a certificate or certificates or binders of the respective insurers stating
that such insurance is in force and effect. Unless otherwise provided in this Article V, each
policy shall contain a provision that the insurer shall not cancel or modify it without giving
written notice to Developer and the County at least thirty (30) days before the cancellation
or modification becomes effective. Not less than fifteen (15) days prior to the expiration of
any policy, Developer shall furnish the County evidence satisfactory to the County that the
policy has been renewed or replaced by another policy conforming to the provisions of this
Article V, or that there is no necessity therefore under the terms hereof. In lieu of separate
policies, Developer may maintain a single policy, or blanket or umbrella policies, or a
combination thereof, which provide the total coverage required herein, in which event
Developer shall deposit with the County a certificate or certificates of the respective
insurers as to the
amount of coverage in force upon the Minimum Improvements.

			
	 	 	 
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	 	 	 	Developer agrees to notify the County immediately in the case of damage exceeding
$2,000,000 in amount to, or destruction of, the Minimum Improvements or any portion there
of resulting from fire or other casualty. Net Proceeds of any such insurance shall be paid
directly to Developer, and Developer will forthwith repair, reconstruct and restore the
Minimum Improvements to substantially the same or an improved condition or value as they
existed prior to the event causing such damage. Provided, however, if the Minimum
Improvements are substantially or totally damaged or destroyed by fire or other casualty,
Developer shall, subject to the Terms and Conditions of the First Mortgage, use
commercially reasonable efforts to repair, reconstruct and restore the Minimum
Improvements.

ARTICLE VI

FURTHER CONSIDERATION OF DEVELOPER

Section 6.1. MAINTENANCE OF PROPERTIES:

Developer will maintain, preserve and keep its properties within the County (whether owned in
fee or a leasehold interest), including but not limited to the Minimum Improvements, in good repair
and working order, ordinary wear and tear excepted.

Section 6.2. MAINTENANCE OF RECORDS:

Developer will keep at all times proper books of record and account in which full, true and
correct entries will be made of all dealings and transactions of or in relation to the business and
affairs of Developer in accordance with generally accepted accounting principles, consistently
applied throughout the period involved, and Developer will provide reasonable protection against
loss or damage to such books of record and account.

Section 6.3. COMPLIANCE WITH LAWS:

Developer will comply with all laws, rules and regulations relating to the Minimum
Improvements, including but not limited to environmental laws, rules and regulations, other than
laws, rules and regulations the failure to comply with which or the sanctions and penalties
resulting there from, would not have a material adverse affect on their business, property,
operations, or condition, financial or otherwise.

			
	 	 	 
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Section 6.4. NON-DISCRIMINATION

In operating the Minimum Improvements, Developer shall not discriminate against any applicant,
employee or tenant because of race, creed, color, sex, national origin, age or disability.
Developer shall ensure that applicants, employees and tenants are considered and are treated
without regard to their race, creed, color, sex, national origin, age or disability.

Section 6.5. EMPLOYMENT AND OPERATION:

Developer agrees to comply in all respects with the job creation and maintenance
representations made in any applications filed with the State related to the Project including but
not limited to the HQJC Agreements #P0705M01382 and #07HQJC045, incorporated into this Agreement as
Exhibit C and the Revitalize Iowa’s Sound Economy Program, #RC-0019(72)-9A-19, incorporated as part
of this Agreement as Exhibit D. In addition, the Developer agrees to create and maintain at least
forty (40) F.T.E.s at the Development Property on or before December 31, 2009 and for the life of
the Agreement.

Section 6.6. ANNUAL CERTIFICATION:

To assist the County in monitoring and performance of Developer hereunder, a duly authorized
officer of Developer shall annually provide to the County a list of FTE units, commencing on
December 1, 2009 and ending on the Termination Date. In the event such list is not filed, the
County shall not give less than sixty days written notice to Developer to comply.

Section 6.7. REAL PROPERTY TAXES:

Developer shall pay, when due, all real property taxes and assessments payable with respect to
all and any parts of the Development Property acquired and owned or leased by it.

Section 6.8. ROAD IMPROVEMENTS:

Subject to the County’s application for and receipt of funds under the Iowa Department of
Transportation’s Revitalize Iowa’s Sound Economy (RISE) program, which funds will be used to pay a
portion of the cost of road improvements to Iowa Highway 24 into the Project as specifically
described in the RISE application only, Developer agrees to pay the cost for the road related
improvements incurred by the County not covered by the grant award as outlined in Exhibit D. The
Developer may, at its sole option, construct additional or more extensive roadway improvements at
its expense. The County shall forward notice of all payment requests it receives for the cost of
the road improvements to the Developer within 10 days of receipt by the County along with a
statement showing the share to be paid by the Developer. The Developer shall reimburse their share
to the County within 20 days after it receives said notice.

			
	 	 	 
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ARTICLE VII 

COUNTY’S CONSIDERATION

In consideration of the consideration of Developer as set forth in this Agreement, in
accordance with Chapters 15 and 15A, Code of Iowa, the County agrees:

Section 7.1. FINANCIAL ASSISTANCE PACKAGE:

	 	(a)	 	Subject to the terms of this Agreement and State Agreement Number
P0705M01382 and 071HQJC045, the County agrees, pursuant to Sections 15E.191 through
15E.196 and Section 15.332, Code of Iowa, to exempt from taxation for a period of
twenty years 100% of the actual value of the Minimum Improvements to the
Development Property beginning with calendar year 2009 and the assessed value
placed on the property for taxes payable in FY 2010 and continuing for 20 years
until 2030.

	 	 	 	 	 	 	 	 	 
	Abatement Years - Taxes Payable in Fiscal Year	 	 	Amount of Tax Exempted	 
	2009                               FY 2011 (20 years)
	 	 	 	 	100	%

ARTICLE VIII 

INDEMNIFICATION

Section 8.1. RELEASE AND INDEMNIFICATION COVENANTS:

	 	(a)	 	Except for any willful misrepresentation or any willful or wanton misconduct
or any unlawful act or omission of the indemnified parties, Developer agrees to
protect and defend the County, now or forever, and further agrees to hold the County
harmless from any claim, demand, suit, action or other proceedings whatsoever by any
third person or entity whatsoever arising or purportedly arising from (i) any
violation of any agreement or condition of this Agreement by Developer, including but
not limited to claims for reimbursement by the State of Iowa in connection with the
funding provided under the HQJCP Agreements which are incorporated into this Agreement
as Exhibit C respectively (except with respect to any suit, action, demand or other
proceeding brought by Developer against the County to enforce their rights under this
Agreement), (ii) the acquisition and condition of the Development Property and the
construction, installation, ownership, and operation of the Minimum Improvements or
(iii) any hazardous substance or environmental contamination located in or on the
Development Property.

	 
	 	(b)	 	All covenants, stipulations, promises, agreements and obligations of the
County contained herein shall be deemed to be the covenants, stipulations,
promises, agreements and obligations of the County, and not of any governing body
member, officer, agent, servant or employee of the County in the individual
capacity thereof.

	 
	 	(c)	 	Except in the event of failure by the County to fulfill its obligations hereunder, the
provisions of this Article VIII shall survive the termination of this Agreement.

			
	 	 	 
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ARTICLE IX REMEDIES

Section 9.1. EVENTS OF DEFAULT DEFINED:

The following shall be “Events of Default” under this Agreement and the term “Event of
Default” shall mean, whenever it is used in this Agreement, any one or more of the following
events:

	 	(a)	 	Failure by the Developer to cause the construction of the Minimum Improvements to be
commenced and completed pursuant to the terms, conditions and limitations of Article III of
this Agreement;

	 
	 	(b)	 	Failure by Developer, until the Termination Date, to pay ad valorem taxes on the Development
Property or to substantially observe or perform any other covenant, condition, obligation or
agreement on its part to be observed or performed under this Agreement;

	 
	 	(c)	 	The holder of any Mortgage on the Development Property, or any improvements thereon, or any
portion thereof, commences foreclosure proceedings as a result of any default under the
applicable Mortgage documents;

	 
	 	(d)	 	Failure by either party, until the Termination Date, to substantially observe or perform any
other covenant, condition obligation or agreement on its part to be observed or performed
under this Agreement:

	 
	 	(e)	 	Developer shall:

	 	(i)	 	file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the
United States Bankruptcy Act of 1978, as amended, or under any similar federal or
state law; or

	 
	 	(ii)	 	make an assignment for the benefit of its creditors; or

			
	 	 	 
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	 	(iii)	 	admit in writing its inability to pay its debts generally as they become due;
or

	 
	 	(iv)	 	be adjudicated a bankrupt or insolvent; or if a petition or answer proposing
adjudication as a bankrupt or reorganization under any present or future federal
bankruptcy act or any similar federal or state law shall be filed in any court and
such petition or answer shall not be discharged or denied within ninety (90) days
after the filing thereof; or a receiver, trustee or liquidator of Developer or the
Minimum Improvements, or part thereof, shall be appointed in any proceedings brought
against Developer, and shall not be discharged within ninety (90) days after such
appointment, or if Developer shall consent to or acquiesce in such appointment; or

	 	(f)	 	Any representation or warranty made by Developer in this Agreement, any Exhibit hereto, or
made by Developer in any written statement or certificate furnished by Developer pursuant to
this Agreement, shall prove to have been incorrect, incomplete or misleading in any material
respect on or as of the date of the issuance or making thereof.

	 
	 	(g)	 	Developer fails to comply with any representation made concerning employment levels in
Section 6.5 of this Agreement.

	 
	 	(h)	 	The County shall fail to perform its obligations under Article VII.

	 
	 	(i)	 	The County fails to substantially observe or perform any other covenant, condition,
obligation or agreement- on its part to be observed or performed under this agreement.

Section 9.2. REMEDIES ON DEFAULT:

Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs and is
continuing, the County or Developer may take any one or more of the following actions after (except
in the case of an Event of Default under subsections (d) or (e) of said Section 9.1) the giving of
thirty (30) days’ written notice to party or parties in default and the holder of the First
Mortgage (but only to the extent the County has been informed in writing of the existence of a
First Mortgage and been provided with the address of the holder\ thereof) of the Event of Default,
but only if the Event of Default has not been cured within said thirty (30) days, or if the Event
of Default cannot reasonably be cured within thirty (30) days and the party or parties in default
do not provide assurances reasonably satisfactory to the party giving notice that the Event of
Default will be cured as soon as reasonably possible:

	 	(a)	 	The party giving notice may suspend its performance under this Agreement until it receives
assurances from party or parties in default, deemed adequate by the party giving notice, that
the party or parties in default will cure the default and continue performance under this
Agreement until it receives assurances from party or parties in default, deemed adequate by
the party giving notice, that the party or parties in default will cure the default and
continue performance under this Agreement;

			
	 	 	 
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	 	(b)	 	The party not in default may suspend its performance under this Agreement;

	 
	 	(c)	 	The County may withhold the Certificate of Completion;

	 
	 	(d)	 	The party not in default may take any action, including legal, equitable or administrative
action, which may appear necessary or desirable to enforce performance and observance of any
obligation, agreement, or covenant, under this Agreement;

	 
	 	(e)	 	In the Event of Default by Developer, the County shall be entitled to recover from Developer,
or the County shall withhold from granting the Developer an amount equal to the tax exemption
under Article VII, prorated for that period of time only during which the Developer failed to
perform its obligations under Article VI but Developer shall not repay any tax exemptions it
has received for any prior years.

	 
	 	(f)	 	In the Event of Default by County, the Developer shall be entitled to recover an amount equal
to the present value of any unpaid County Consideration as defined in Article VII hereof.

	 
	 	(g)	 	Subject to the County’s receipt of funds for road improvements for the project under the Iowa
Department of Transportation’s RISE program, if the Developer fails to perform its obligations
under Section 6.7, the County shall be entitled to recover from the Developer and the
Developer shall pay to the County, an amount equal to any reimbursement owed by the County to
the State due to such default.

Section 9.3. NO REMEDY EXCLUSIVE:

Except as otherwise provided herein, no remedy herein conferred upon or reserved to the
parties is intended to be exclusive of any other available remedy or remedies, but each and every
remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such right or power or shall
be construed to be a waiver thereof, but any such right and power may be exercised from time to
time and as often as may be deemed expedient.

			
	 	 	 
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Section 9.4. NO IMPLIED WAIVER:

In the event any agreement contained in this Agreement should be breached by any party and
thereafter waived by any other party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other concurrent, previous or subsequent breach
hereunder.

ARTICLE X

MISCELLANEOUS

Section 10.1. NOTICES AND DEMANDS:

A notice, demand or other communication under this Agreement by any party to the other shall
be sufficiently given or delivered if it is dispatched by registered or certified mail, postage
prepaid, return receipt requested, or delivered personally, and

	 	(a)	 	in the case of Developer to Homeland Energy Solutions, LLC, 106 West Main, PO Box C,
Riceville Iowa 50466, Attn: Chairman;

	 
	 	(b)	 	in the case of the County, Chickasaw County Courthouse, 8 East Prospect, P.O. Box 311, New
Hampton, IA 50659 Attn: Auditor;

or to such other designated individual or officer or to such other address as any party shall have
furnished to the other in writing in accordance herewith.

Section 10.2. TITLES OF ARTICLES AND SECTIONS:

Any titles of the several parts, Articles, and Sections of this Agreement are inserted for
convenience of reference only and shall be disregarded in construing or interpreting any of its
provisions.

Section 10.3. COUNTERPARTS:

This Agreement may be executed in any number of counterparts, each of which shall constitute
one and the same instrument.

Section 10.4. GOVERNING LAW AND VENUE:

This Agreement shall be governed and construed in accordance with the laws of the State of
Iowa. Venue for any dispute between the County and Developer shall be in the District Court in and
for Chickasaw County, Iowa.

Section 10.5. ENTIRE AGREEMENT:

This Agreement and the exhibits hereto reflect the entire agreement between the parties
regarding the subject matter hereof, and supersedes and replaces all prior agreements, negotiations
or discussions, whether oral or written. This Agreement may not be amended except by a subsequent
writing signed by all parties hereto.

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

15

 

Section 10.6. SUCCESSORS AND ASSIGNS:

This Agreement is intended to and shall inure to the benefit of and be binding upon the
Parties and the successors and assigns of such Parties.

Section 10.7. TERMINATION DATE:

This Agreement shall terminate and be of no further force or effect on and after December 31,
2030.

IN WITNESS WHEREOF, the County has caused this Agreement to be duly executed in its name and
behalf by its Chair and its seal to be hereunto duly affixed and attested by its Auditor, and
Developer has caused this Agreement to be duly executed in its name and behalf by its Chair
and Auditor all on or as of the day first above written.

	 	 	 	 	 
	(SEAL) 	CHICKASAW COUNTY, IOWA

 	 
	 	By:  	/s/ Virgil M. Pickar Jr.
 	 

	 	 	 	 	 
	ATTEST:	 	 
	 
	 	 	 	 
	By:

	 	/s/ Judy A. Babcock
 

	 	 

	 	 	 	 	 
	 	HOMELAND ENERGY SOLUTIONS, LLC

 	 
	 	By:  	/s/ Stephen K. Eastman
 	 
	 	 	 	 
	 	Its:  	/s/ President
 	 
	 

			
	Homeland Energy Solutions
	 	2007

 

16

 

	 	 	 	 	 
	ATTEST:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Its:
	 	 	 	 
	 

	 	 

	 	 

	 	 	 
	STATE OF IOWA)
	 	 
	 

	 	) SS
	COUNTY OF CHICKASAW)
	 	 

On this 18 day of December, 2007, before me a Notary Public in and for said
County, personally appeared Virgil M. Pickar, Jr. and Judy Babock to me personally
known, who being duly sworn, did say that they are the Chair and Auditor, respectively of the
Chickasaw County, Iowa, a Municipal Corporation, created and existing under the laws of the State
of Iowa, and that the seal affixed to the foregoing instrument is the seal of said Municipal
Corporation, and that said instrument was signed and sealed on behalf of said Municipal Corporation
by authority and resolution of its Board of Supervisors and said Chair and Auditor acknowledged
said instrument to be the free act and deed of said Municipal Corporation by it voluntarily
executed.

(Notarial Seal)

	 	 	 	 	 	 	 
	PATTI K. ROSAUER
	 	 	 	 	 	 
	Commission Number 72735E

	 	 	 	/s/ Patty Rosauer

	 	 
	My Commission Expires

	 	 	 	Notary Public in and for Chickasaw County, Iowa	 	 
	March 11, 2010
	 	 	 	 	 	 

	 	 	 
	STATE OF IOWA)
	 	 
	 

	 	) SS
	COUNTY
OF MITCHELL)
	 	 

On this 14th day of December, 2007, before me the undersigned, a Notary Public
in and for said County, in said State, personally appeared Stephen K. Eastman and
                    , to me personally know, who, being by me duly sworn, did say that they are the
President and                      of Homeland Energy Solutions, LLC, and that said
instrument was signed on behalf of said LLC; and that the said                      and
                     as such officers acknowledged the execution of said instrument to be voluntary
act and deed of said entity, by them voluntarily executed.

(Notarial Seal)

	 	 	 	 	 	 	 
	LINDA BYRNES 

Commission Number 186841

My Commission Expires 

10-2-08

	 	 
	 	/s/ Linda Byrnes
 

Notary Public in and for Mitchell County, Iowa
	 	 

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

17

 

EXHIBIT A

DEVELOPMENT PROPERTY

The Development Property is described as consisting of all that certain parcel or parcels of
land located generally in Chickasaw County, State of Iowa, more particularly described as follows:

Parcel A: That part of the Southeast Quarter of Section 1 lying southeasterly of railroad in
Township 95 North, Range 12 West of the 5th P.M., Chickasaw County, Iowa, described as follows:

Beginning at the southeast corner of said Section 1;

Thence South 87 degrees 45 minutes 23 seconds West (assumed bearing) along the south line
of the Southeast Quarter of said Section 1 a distance of 1,309.43 feet;

Thence North 02 degrees 14 minutes 37 seconds West 138.88 feet to the north line of Iowa
Highway 24;

Thence South 89 degrees 09 minutes 15 seconds West along said north line 258.77 feet;

Thence westerly 633.13 feet along said northerly line along a tangential curve concave to
the south, having a central angle of 6 degrees 15 minutes 16 seconds, a radius of 5,800.00
feet, and a chord bearing of South 86 degrees 01 minutes 37 seconds West;

Thence North 07 degrees 06 minutes 00 seconds West 32.12 feet to the southeasterly line of
railroad;

Thence North 75 degrees 16 minutes 17 seconds East along said southeasterly line 412.52
feet;

Thence northeasterly 1,859.69 feet along said southeasterly line along a tangential concave
to the northwest, having a central angle of 45 degrees 29 minutes 47 seconds, a radius of
2,342.00 feet, and a chord bearing of North 52 degrees 31 minutes 23 seconds East;

Thence North 29 degrees 46 minutes 30 seconds East along said southeasterly line 348.23
feet;

Thence northeasterly 321.11 feet along said southeasterly line along a tangential curve
concave to the southeast, having a central angle of 4 degrees 54 minutes 51 seconds, a
radius of 3,744.00 feet, and a chord bearing of North 32 degrees 13 minutes 55 seconds East
to the east line of said Southeast Quarter;

Thence South 00 degrees 50 minutes 49 seconds East 1,852.62 feet to the point of beginning.

AND

That part of the Section 1 lying northwesterly of railroad in Township 95 North, Range 12 West of
the 5th P.M., Chickasaw County, Iowa, described as follows:

Beginning at the southwest corner of said Section 1;

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

18

 

Thence North 01 degrees 19 minutes 31 seconds West (assumed bearing) along the west line of
the Southwest Quarter of said Section 1 a distance of 698.77 feet to the south line of Lot
1 shown in Book 127, Page 82 at the Chickasaw County Recorder’s office;

Thence North 89 degrees 57 minutes 11 seconds East along said south line 327.50 feet to the
east line of said Lot 1;

Thence North 01 degrees 20 minutes 33 seconds West along said east line 665.20 feet to the
north line of the South Half of said Southwest Quarter;

Thence North 89 degrees 57 minutes 11 seconds East along said north line 2,372.71 feet to
the east line of the Northeast Quarter of said Southwest Quarter;

Thence North 01 degrees 08 minutes 06 seconds West along said east line 1,384.88 feet to
the north line of said Southwest Quarter;

Thence North 01 degrees 08 minutes 06 seconds West along the west line of the Northeast
Quarter of said Section 1 a distance of 1,719.82 feet to the south line of the north
1,450.00 feet of said Northeast Quarter;

Thence North 89 degrees 24 minutes 17 seconds East along said south line 1,672.51 feet to
the centerline of a waterway;

Thence South 58 degrees 39 minutes 44 seconds East along said centerline 635.40 feet;

Thence southeasterly 297.71 feet along said centerline along a tangential curve concave to
the southwest, having a central angle of 56 degrees 51 minutes 34 seconds, a radius of
300.00 feet, and a chord bearing of South 30 degrees 13 minutes 57 seconds East;

Thence South 01 degrees 48 minutes 10 seconds East along said centerline 441.88 feet;

Thence southeasterly 108.52 feet along said centerline along a tangential curve concave to
the northeast, having a central angle of 62 degrees 10 minutes 42 seconds, a radius of
100.00 feet, and a chord bearing of South 32 degrees 53 minutes 31 seconds East;

Thence South 63 degrees 58 minutes 52 seconds East along said centerline 260.38 feet to the
cast line of said Northeast Quarter;

Thence South 00 degrees 50 minutes 49 seconds East along said east line 502.40 feet to the
north line of the Southeast Quarter of said Section 1;

Thence South 00 degrees 50 minutes 49 seconds East along the east line of said Southeast
Quarter 636.78 feet to the northwesterly line of railroad;

Thence southwesterly 466.32 feet along said northwesterly line along a nontangential curve
concave to the southeast, having a central angle of 6 degrees 57 minutes 02 seconds, a
radius of 3,844.00 feet, and a chord bearing of South 33 degrees 15 minutes 01 seconds
West;

Thence South 29 degrees 46 minutes 30 seconds West along said northwesterly line 348.23
feet;

Thence southwesterly 1,780.28 feet along said northwesterly line along a tangential curve
concave to the northwest, having a central angle of 45 degrees 29 minutes 47 seconds, a
radius of 2,242.00 feet, and a chord bearing of South 52 degrees 31 minutes 23 seconds
West;

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

19

 

Thence South 75 degrees 16 minutes 17 seconds West along said northwesterly line 1,484.67
feet to the south line of the Southwest Quarter of said Section 1;

Thence South 89 degrees 53 minutes 21 seconds West along said south line 2,046.39 feet to
the point of beginning.

Said PARCEL A in Section 1 contains 322.90 acres, more or less, including 6.19 acres of county road
easement across the west 33.00 feet thereof and including Iowa Highway easement across the south
line of the Southeast Quarter thereof, and is subject to other recorded and unrecorded easements,
restrictions and servitudes, if any.

AND

That part of the Northwest Quarter of Section 12 lying northwesterly of railroad in Township 95
North, Range 12 West of the 5th P.M., Chickasaw County, Iowa, described as follows:

Beginning at the northwest corner of said Section 12;

Thence North 89 degrees 53 minutes 21 seconds East (assumed bearing) along the north line
of the Northwest Quarter of said Section 12 a distance of 2,046,39 feet to the
northwesterly line of railroad;

Thence South 75 degrees 16 minutes 17 seconds West along said northwesterly line 2,112.61
feet to the west line of said Northwest Quarter;

Thence North 00 degrees 20 minutes 36 seconds West along said west line 533.16 feet to the
point of beginning.

Said PARCEL A in the Northwest Quarter of Section 12 contains 12.52 acres, more or less, including
0.40 acres of county road easement across the west 33.00 feet thereof, and is subject to other
recorded and unrecorded easements, restrictions and servitudes, if any.

Parcel D: That part of the Southwest Quarter of the Northwest Quarter and that part of the
Northwest Quarter of the Southwest Quarter in Section 6 lying northwesterly of railroad in Township
95 North, Range 11 West of the 5th P.M., Chickasaw County, Iowa, described as follows:

Beginning at the west quarter corner of said Section 6;

Thence North 00 degrees 50 minutes 49 seconds West (assumed hearing) along the west line of
the Northwest Quarter of said Section 6 a distance of 502.40 feet to the centerline of a
waterway;

Thence South 63 degrees 58 minutes 52 seconds East along said centerline 579.51 feet;

Thence South 39 degrees 06 minutes 38 seconds East along said centerline 251.83 feet to the
northwesterly line of railroad;

Thence southwesterly 958.84 feet along said northwesterly line along a nontangential curve
concave to the southeast, having a central angle of 14 degrees 17 minutes 30 seconds, a
radius of 3,844,00 feet, and a chord bearing of South 43
degrees 52 minutes 17 seconds West to the west line of the Southwest Quarter of said
Section 6;

Thence North 00 degrees 50 minutes 49 seconds West along said west line 636.78 feet to the
point of beginning;

Said PARCEL I) contains 9.06 acres, more or less, and is subject to recorded and unrecorded
easements, restrictions and servitudes, if any,

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

20

 

EXHIBIT B

CERTIFICATE OF COMPLETION

WHEREAS, Chickasaw County, Iowa, (the “County”), and Homeland Energy Solutions, LLC, a limited
liability company (“Developer”), did on or about the
 _____ 
day of                     , 2007, make,
execute and deliver, each to the other, an Agreement
for Private Development (the “Agreement”), wherein and whereby Developer agreed, in accordance with
the terms of the Agreement, to develop and maintain certain real property located within the County
and as more particularly described in Exhibit A of the Agreement; and

WHEREAS, the Agreement incorporated and contained certain covenants and restrictions with
respect to the development of the Development Property, and obligated Developer, to construct
certain Minimum Improvements (as defined therein) in accordance with the Agreement; and

WHEREAS, Developer agrees that, to the present date, said covenants and conditions are met
insofar as they relate to the construction of said Minimum Improvements in a manner deemed by the
County to be in conformance with the approved building plans to permit the execution and recording
of this certification.

NOW, THEREFORE, pursuant to Section 3.3 of the Agreement, this is to certify that all
covenants and conditions of the Agreement with respect to the obligations of Developer to construct
the Minimum Improvements on the Development Property have been completed and performed by Developer
and are hereby released absolutely and forever terminated insofar as they apply to the land
described herein. The County Recorder of Chickasaw County is hereby authorized to accept for
recording and to record the filing of this instrument, to be a conclusive determination of the
satisfactory termination of the covenants and conditions of said Agreement with respect to the
construction of the Minimum Improvements on the Development Property. All other provisions of the
Agreement shall otherwise remain in full force and effect until termination as provided therein.

	 	 	 	 	 
	(SEAL) 	CHICKASAW COUNTY, STATE OF IOWA

 	 
	 	By:  	 	 
	 	 	Chair 	 

	 	 	 	 	 
	ATTEST:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 

			
	Homeland Energy Solutions
	 	2007

 

21

 

	 	 	 
	Auditor
	 	 
	 
	 	 
	STATE OF IOWA)
	 	 
	 

	 	) SS
	COUNTY OF CHICKASAW)
	 	 

On this
 _____ 
day of                      (month),                      (year), before me a Notary Public in and for
said County, personally appeared                      and o me personally known, who being
duly sworn, did say that they are the Chair and Auditor, respectively of the Chickasaw County,
Iowa, a Municipal Corporation, created and existing under the laws of the State of Iowa, and that
the seal affixed to the foregoing instrument is the seal of said Municipal Corporation, and that
said instrument was signed and sealed on behalf of said Municipal Corporation by authority and
resolution of its Board of Supervisors and said Chair and Auditor acknowledged said instrument to
be the free act and deed of said Municipal Corporation by it voluntarily executed.

	 	 	 	 	 
	 
	 

	 	 

Notary Public in and for Chickasaw County, Iowa
	 	 

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

22

 

EXHIBIT C

Master Contract and HQJC AGREEMENT

[See
Exhibit 10.43 for Master Contract & HQJC Agreement.]

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

23

 

EXHIBIT D

Road Improvements

The road improvements shall consist of construction of right and left turn lanes on Iowa Highway 24
pursuant to the RISE grant application attached hereto. [See
Exhibit 10.44 for IDOT RISE Grant Application.]

			
	 	 	 
	Homeland Energy Solutions
	 	2007

 

25Filed by Bowne Pure Compliance

Exhibit 10.43

MASTER CONTRACT

BY AND BETWEEN

Homeland Energy Solutions, LLC

AND THE

IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT

CONTRACT NUMBER: P0705M01382

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE 1. MASTER CONTRACT DURATION; FUNDING AGREEMENT DURATION
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 2. FUNDING
	 	 	 	 
	Article 2.1 Funding Sources
	 	 	 	 
	Article 2.2 Reduction, Discontinuance or Alteration of Funding
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 3. CONTRACT STRUCTURE AND DEFINITIONS; DOCUMENTS INCORPORATED BY REFERENCE; ORDER OF
PRIORITY
	 	 	 	 
	Article 3.1 Contract Structure and Definitions
	 	 	 	 
	Article 3.2 Documents Incorporated by Reference
	 	 	 	 
	Article 3.3 Business’s Financial Assistance Application on File
	 	 	 	 
	Article 3.4 Order of Priority
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 4. AWARD
	 	 	 	 
	Article 4.1 Description of the Project and Award Budget
	 	 	 	 
	Article 4.2 Job Obligations
	 	 	 	 
	Article 4.3 Repayment Obligation
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 5. CONDITIONS TO DISBURSEMENT OF FUNDS; DISBURSEMENT TERMS
	 	 	 	 
	Article 5.1 Documents Submitted
	 	 	 	 
	Article 5.2 Prior Costs
	 	 	 	 
	Article 5.3 Cost Variation
	 	 	 	 
	Article 5.4 Suspension of Disbursement
	 	 	 	 
	Article 5.5 Investment of Award Proceeds
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 6. SECURITY; CROSS-COLLATERALIZATION
	 	 	 	 
	Article 6.1 Secured Property
	 	 	 	 
	Article 6.2 Value of Collateral
	 	 	 	 
	Article 6.3 Additional or Substitute Collateral
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 7. REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	Article 7.1 Organization and Qualifications
	 	 	 	 
	Article 7.2 Authority and Validity of Obligations
	 	 	 	 
	Article 7.3 Use of Proceeds
	 	 	 	 
	Article 7.4 Subsidiaries
	 	 	 	 
	Article 7.5 Financial Reports
	 	 	 	 
	Article 7.6 No Material Adverse Change
	 	 	 	 
	Article 7.7 Full Disclosure; Business’s Financial Assistance Application
	 	 	 	 
	Article 7.8 Trademarks, Franchises and Licenses
	 	 	 	 
	Article 7.9 Governmental Authority and Licensing
	 	 	 	 
	Article 7.10 Litigation and Other Controversies
	 	 	 	 
	Article 7.11 Good Title
	 	 	 	 
	Article 7.12 Taxes
	 	 	 	 
	Article 7.13 Other Contracts
	 	 	 	 
	Article 7.14 No Default
	 	 	 	 
	Article 7.15 Compliance with Laws
	 	 	 	 
	Article 7.16 Effective Date of Representations and Warranties
	 	 	 	 

			
	 	 	 
	Contract #P0705M01382
	 	Master updated 8/07

 

- 2 -

 

	 	 	 	 	 
	ARTICLE 8. COVENANTS
	 	 	 	 
	Article 8.1 Maintain Existence in Iowa
	 	 	 	 
	Article 8.2 Job Obligations; Benefits Requirements
	 	 	 	 
	Article 8.3 Performance Obligations
	 	 	 	 
	Article 8.4 Maintenance of Properties
	 	 	 	 
	Article 8.5 Taxes and Assessments
	 	 	 	 
	Article 8.6 Insurance
	 	 	 	 
	Article 8.7 Required Reports
	 	 	 	 
	Article 8.8 Inspection and Audit
	 	 	 	 
	Article 8.9 Compliance with Laws
	 	 	 	 
	Article 8.10 Use of Award Proceeds
	 	 	 	 
	Article 8.11 Changes in Business Ownership, Structure or Control
	 	 	 	 
	Article 8.12 Notice of Meetings
	 	 	 	 
	Article 8.13 Notice of Proceedings
	 	 	 	 
	Article 8.14 Accounting Records
	 	 	 	 
	Article 8.15 Restrictions
	 	 	 	 
	Article 8.16 No Changes in Business Operations
	 	 	 	 
	Article 8.17 Indemnification
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES
	 	 	 	 
	Article 9.1 Events of Default
	 	 	 	 
	Article 9.2 Default Remedies
	 	 	 	 
	Article 9.3 Default Interest Rate
	 	 	 	 
	Article 9.4 Expenses
	 	 	 	 
	Article 9.5 Notice of Default and Opportunity to Cure
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 10. MISCELLANEOUS
	 	 	 	 
	Article 10.1 Timely Performance
	 	 	 	 
	Article 10.2 State of Iowa Recognition
	 	 	 	 
	Article 10.3 Choice of Law and Forum
	 	 	 	 
	Article 10.4 Governing Law
	 	 	 	 
	Article 10.5 Master Contract/Funding Agreement Amendments
	 	 	 	 
	Article 10.6 Notices
	 	 	 	 
	Article 10.7 Headings
	 	 	 	 
	Article 10.8 Final Authority
	 	 	 	 
	Article 10.9 Waivers
	 	 	 	 
	Article 10.10 Counterparts
	 	 	 	 
	Article 10.11 Survival of Representations
	 	 	 	 
	Article 10.12 Severability of Provisions
	 	 	 	 
	Article 10.13 Successors and Assigns
	 	 	 	 
	Article 10.14 Termination
	 	 	 	 
	Article 10.15 Integration
	 	 	 	 

			
	 	 	 
	Contract #P0705M01382
	 	Master updated 8/07

 

- 3 -

 

MASTER CONTRACT

	 	 	 
	BUSINESS:

	 	Homeland Energy Solutions, LLC
	MASTER CONTRACT NUMBER:

	 	P0705M01382
	AWARD DATE:

	 	May 17, 2007

This FINANCIAL ASSISTANCE CONTRACT (the “Master Contract”) is made as of the CONTRACT
EFFECTIVE DATE by and between the Iowa Department of Economic Development (“IDED”), 200 East Grand
Avenue, Des Moines, IA 50309 and Homeland Energy Solutions, LLC an Iowa Limited Liability Company
(“Business”), 106 West Main, P.O. Box C, Riceville, IA 50466.

WHEREAS, the Business submitted an application to IDED requesting financial assistance in the
financing of its Project as more fully described in Exhibit C, Description of the Project and Award
Budget, (the “Project”); and

WHEREAS, the IDED found the Project to meet the requirements established to receive financial
assistance; and

WHEREAS, the IDED and/or the Iowa Department of Economic Development Board (“IDED Board”) have
awarded the Business financial assistance from one or more IDED-administered programs for the
Project, all of which are subject to the terms and conditions set forth herein and collectively
referred to as the “Award”; and

NOW THEREFORE, in consideration of the mutual promises contained herein and intending to be
legally bound, the Business and IDED agree to the following terms:

ARTICLE 1

MASTER CONTRACT DURATION; FUNDING AGREEMENTS DURATION

This Master Contract shall be in effect until all of Business’s obligations and liabilities
under this Master Contract and all of the Funding Agreements executed in connection with this
Master Contract have been satisfied. The duration of each Funding Agreement will be as described in
the Funding Agreement.

ARTICLE 2

FUNDING

2.1 Funding Sources. The sources of funding for this Award are appropriations to IDED
for financial assistance programs administered by the IDED and tax credit programs that IDED is
authorized to administer.

2.2 Reduction, Discontinuance or Alteration of Funding. Any termination, reduction, or
delay of funds available due, in whole or in part, to (i) lack of, reduction in, or a
deappropriation of revenues previously appropriated by the legislature for this Award, or (ii) any
other reason beyond the IDED’s control may, in the IDED’s discretion, result in the termination,
reduction or delay of funds to the Business.

			
	 	 	 
	Contract #P0705M01382
	 	Master updated 8/07

 

- 4 -

 

ARTICLE 3

CONTRACT STRUCTURE AND DEFINITIONS;

DOCUMENTS INCORPORATED BY REFERENCE; AND ORDER OF PRIORITY

3.1 Contract Structure and Definitions.

(a) This Award shall be governed by this Master Agreement and the individual funding
agreements (the “Funding Agreements”) for each source of program assistance for this Award. This
Award has been provided to the Business to fund the Project described in Exhibit C, Description of
the Project and Award Budget. The Articles of this Master Contract apply to each Funding Agreement
unless a Funding Agreement specifically states otherwise.

(b) The following terms apply to this Master Contract and each of the Funding Agreements,
unless otherwise specified in a Funding Agreement:

“Award Date” means the date first stated in this Master Contract and is the date the IDED
and/or the IDED Board approved the awarding of financial assistance to the Business for the
Project.

“Benefits Requirements” means the benefits requirements established by the Department pursuant
to statute or rule for each program that is providing financial assistance or tax credit benefits
for this Project.

“Business’s Employment Base” means the number of jobs as stated in Exhibit D, Job Obligations
that the Business and IDED have established as the job base for this Project. The number of jobs
the Business has pledged to create shall be in addition to the Business’s Employment Base.

“Created Jobs” means the number of new FTE Jobs the Business will add over and above the
Business’s Employment Base.

“Community” means Chickasaw County.

“Eligible Benefits” means all of the following:  medical and dental insurance plans, pension
and profit–sharing plans, child care services, life insurance coverage, vision insurance plan, and
disability coverage.

“Forgivable Loan” means a form of an award made by the IDED to the Business under a Funding
Agreement(s) for which repayment is eliminated in part or entirely if the Business satisfies the
terms of this Contract and the Funding Agreement(s).

“Full-time Equivalent (FTE) Job” means the employment of one person:

	(a)	 	For 8 hours per day for a 5-day, 40-hour workweek for 52 weeks per year, including paid
holidays, vacations and other paid leave, or
	 
	(b)	 	For the number of hours or days per week, including paid holidays, vacations and other paid
leave, currently established by schedule, custom, or otherwise, as constituting a week of
full-time work for the kind of service an individual performs for an employing unit.

“Job Maintenance Period” means the date two (2) years from the Project Completion Date as
stated in Exhibit C, Description of the Project and Award Budget. The Business shall maintain the
Project, and the created/retained jobs through the Job Maintenance Period.

“Job Obligations” means the Business’s Employment Base number and the new jobs to be created
that pay the required wages and benefits, all as outlined in Exhibit D, Job Obligations.

			
	 	 	 
	Contract #P0705M01382
	 	Master updated 8/07

 

- 5 -

 

“Loan” means form of an award made by the IDED to the Business under a Funding Agreement(s)
for which full repayment is expected.

“Project” means the description of the work and activities to be completed by the Business as
outlined in Exhibit C, Description of the Project and Award Budget, Exhibit D, Job Obligations, and
Exhibit A, Business’s Financial Assistance Application.

“Project Completion Date” means the date three (3) years from the Award Date as stated in
Exhibit C, Description of the Project and Award Budget. The Project Completion Date is the date by
which all Project activities shall be satisfactorily completed.

“Qualifying jobs” are those created or retained jobs that meet or exceed the Qualifying Wage
Threshold Requirement established for the programs providing assistance to this Project qualify for
program funding.

“Qualifying Wage Threshold Requirement” means the wage threshold requirement (e.g. 90%, 100%,
130% , 160% of the average county or regional wage rate) established by the Department pursuant to
statute or rule for each program that is providing financial assistance or tax credit benefits for
this Project. The Qualifying Wage Threshold Requirement for each funding source providing
assistance to this Project is outlined in Exhibit D, Job Obligations.

“Retained Job” means an existing job that meets the Qualifying Wage Threshold Requirements and
would be eliminated or moved to another state if the Project did not proceed in Iowa.

3.2 Documents Incorporated by Reference. The following documents are incorporated by
reference and considered an integral part of this Master Contract:

	 	 	 	 	 
	 

	 	Exhibit A -
	 	Business’s Financial Assistance Application, Application #07-HQJC-045
and #07-VAP-019
	 
	 	 	 	 
	 

	 	Exhibit B -
	 	Funding Agreements:
	 
	 	 	 	 
	 

	 	 	 	B2- VAAPFAP Funding Agreement
	 

	 	 	 	B5- HQJCP Funding Agreement
	 
	 	 	 	 
	 

	 	Exhibit C -
	 	Description of the Project and Award Budget
	 
	 	 	 	 
	 

	 	Exhibit D -
	 	Job Obligations

3.3 Business’s Financial Assistance Application on File. Due to its size, Exhibit A
will not be attached to this Master Contract, but will be kept on file at the Iowa Department of
Economic Development. It shall, nevertheless, be considered an incorporated element of this Master
Contract and the Funding Agreements.

3.4 Order of Priority. In the case of any inconsistency or conflict between the
specific provisions of this document and the exhibits, the following order of priority shall
control:

(a) Master Contract, Articles 1-10

(b) Exhibit B
- Funding Agreements

(c) Exhibit C
- Description of the Project and Award Budget

(d) Exhibit D
- Job Obligations

(e) Exhibit A
- Business’s Financial Assistance Application

			
	 	 	 
	Contract #P0705M01382
	 	Master updated 8/07

 

- 6 -

 

ARTICLE 4

AWARD

4.1 Description of the Project and Award Budget. The IDED and/or the IDED Board have
approved an Award to the Business from the programs and in the amounts identified in Exhibit C,
Description of the Project and Award Budget. The Project Budget for this Award is as detailed in
Exhibit C.

4.2 Job Obligations. The IDED and/or the IDED Board have approved an Award to the
Business and the Business’ Job Obligations are outlined in Exhibit D, Job Obligations.

4.3 Repayment Obligation. The obligation to repay the direct financial assistance
components of this Award shall be evidenced by Promissory Notes executed in connection with the
Funding Agreements.

ARTICLE 5

CONDITIONS TO DISBURSEMENT OF FUNDS; DISBURSEMENT TERMS

The obligation of IDED to make, continue or disburse funds under this Master Contract and the
Funding Agreements shall be subject to the following conditions precedent:

5.1 Documents Submitted. IDED shall have received each of the following documents,
properly executed and completed, and approved by IDED as to form and substance:

	 	(a)	 	Master Contract. Fully executed Master Contract.
	 
	 	(b)	 	Funding Agreements. Fully executed Funding Agreements.
	 
	 	(c)	 	Promissory Notes. The Promissory Notes required by the Funding Agreements.
	 
	 	(d)	 	Articles of Incorporation. Copies of the articles of incorporation of the Business,
certified in each instance by its secretary or assistant secretary.
	 
	 	(e)	 	Certificate of Corporate Existence. A certificate of existence for the Business from
the Office of the Secretary of State of Iowa.
	 
	 	(f)	 	Results of Lien and Tax Search. Financing statement, tax and judgment lien search
results, in the Business’s state of incorporation/organization, against the Business and
Secured Property.
	 
	 	(g)	 	Security Documents. The fully executed Security Documents required in Article 6.0.
	 
	 	(h)	 	Other Required Documents. IDED shall have received such other contracts, instruments,
documents, certificates and opinions as the IDED may reasonably request.
	 
	 	(i)	 	Hazardous Waste Audit. To comply with Iowa Code section 15A.1(3)”b,” if the Business
generates solid or hazardous waste, it must either: a) submit a copy of the Business’s
existing in-house plan to reduce the amount of waste and safely dispose of the waste based on
an in-house audit conducted within the past 3 years; or b) submit an outline of a plan to be
developed in-house, or 3) submit documentation that the Business has authorized the Iowa
Department of Natural Resources or Iowa Waste Reduction Center to conduct the audit.
	 
	 	(j)	 	Release Form – Confidential Tax Information. A signed Authorization for Release of
Confidential State Tax Information form to permit IDED to receive the Business’s state tax information
directly from the Iowa Department of Revenue for purposes of annually updating the Iowa Public
Return on Investment Analysis.

			
	 	 	 
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	 	(k)	 	Satisfactory Credit History. Documentation of satisfactory credit history of the
Business and guarantors, as applicable, with no judgments or unsatisfied liens or similar
adverse credit actions.
	 
	 	(l)	 	Project Financial Commitments. The Business shall have submitted documentation
acceptable to IDED from the funding sources identified in Exhibit C committing to the
specified financial involvement in the Project and received the IDED’s approval of the
documentation. The documentation shall include the amount, terms and conditions of the
financial commitment, as well as any applicable schedules.
	 
	 	(m)	 	Requests for Disbursement. All disbursements of Award proceeds shall be subject to
receipt by the IDED of requests for disbursement, in form and content acceptable to IDED,
submitted by the Business. All requests shall include documentation of costs that have been
paid or costs to be paid immediately upon receipt of Award proceeds.
	 
	 	(n)	 	Funding Agreements Disbursement Requirements. Satisfaction of all disbursement
requirements outlined in the specific program Funding Agreements.

5.2 Prior Costs. No expenditures made prior to the Award Date may be included as
Project costs. This restriction applies to the direct financial assistance portions of this Award,
not the tax credit benefits included in this Award.

5.3 Cost Variation. In the event that the total Project cost is less than the amount
specified in the Exhibit C, the Funding Agreements shall be reduced at the same ratio to the total
Project cost reduction as the ratio of the Funding Agreement amount to the total amount of funds
provided by the Business and all funding sources requiring a proportional reduction of their
financial contribution to the Project. Any disbursed excess above the reduced IDED participation
amount shall be returned immediately to IDED.

5.4 Suspension of Disbursement. Upon the occurrence of an Event of Default (as defined
in this Master Contract or any of the Funding Agreements) by the Business, the IDED may suspend
payments and tax credit program benefits to the Business until such time as the default has been
cured to IDED’s satisfaction. Notwithstanding anything to the contrary in this Master Contract or
the Funding Agreements, upon a termination of this Master Contract on account of an Event of
Default by the Business, Business will no longer have the right to receive any disbursements or any
tax credit program benefits after the effective date of default. All Award funds may also be
suspended, in IDED’s sole discretion, in the event the Business experiences a layoff within the
state of Iowa or closes any of its Iowa facilities.

5.5 Investment of Award Proceeds.

(a) In the event that the Award proceeds are not immediately utilized, temporarily idle Award
proceeds held by the Business may be invested provided such investments shall be in accordance with
State law, including but not limited to the provisions of Iowa Code chapter 12C concerning the
deposit of public funds. Interest accrued on temporarily idle Award proceeds held by the Business
shall be credited to and expended on the Project prior to the expenditure of other Award proceeds.

(b) All proceeds remaining, including accrued interest, after all allowable Project costs have
been paid or obligated shall be returned to the IDED within thirty (30) days after the Project
Completion Date. Within ten (10) days of receipt of a written request from IDED, Business shall
inform the IDED in writing of the amount of unexpended Award funds in the Business’s possession or
under the Business’s control,
whether in the form of cash on hand, investments, or otherwise.

			
	 	 	 
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ARTICLE 6

SECURITY; CROSS-COLLATERALIZATION

The Business shall execute in favor of the IDED all security agreements, financing statements,
mortgages, personal and/or corporate guarantees (the “Security Documents”) as required by the IDED.

6.1 Security. This Award shall be secured by:

Irrevocable Letter of Credit in the amount of $200,000 (the “Secured Property”)

6.2 Value of Collateral. The value, as reasonably determined by IDED, of the Secured
Property shall meet or exceed the amount of Award funds disbursed.

6.3 Additional or Substitute Collateral. In case of a decline in the market value of
the Secured Property, or any part thereof, IDED may require that additional or substitute
collateral of quality and value satisfactory to IDED be pledged as Secured Property for this Award.
The Business shall provide such additional or substitute collateral Secured Property within 20 days
of the date of the request for additional or substitute collateral to secure this Award in an
amount equal to or greater than the amount of outstanding Award funds.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

The Business represents and warrants to IDED as follows:

7.1 Organization and Qualifications. The Business is duly organized, validly existing
and in good standing as a corporation under the state of its incorporation. The Business has full
and adequate power to own its property and conduct its business as now conducted, and is duly
licensed or qualified and in good standing in each jurisdiction in which the nature of the business
conducted by it or the nature of the property owned or leased by it requires such licensing or
qualifying, except where the failure to so qualify would not have a material adverse effect on the
Business’s ability to perform its obligations hereunder.

7.2 Authority and Validity of Obligations. The Business has full right and authority
to enter into this Master Contract and the Funding Agreements and to make the borrowings herein
provided for. The person signing this Master Contract and the Funding Agreements has full authority
to:

	 	a)	 	sign this Master Contract and the Funding Agreements, and

	 
	 	b)	 	issue Promissory Notes on behalf of the Business, and
	 
	 	c)	 	secure Business’s obligations under this Master Contract and the Funding
Agreements, and
	 
	 	d)	 	perform each and all of the obligations under the Master Contract and its
Funding Agreements.

The Master Contract and Funding Agreement documents delivered by the Business have been duly
authorized, executed and delivered by the Business and constitute the valid and binding obligations
of the Business and enforceable against it in accordance with their terms. This Master Contract,
the Funding Agreements and related documents do not contravene any provision of law or any
judgment, injunction, order or decree binding upon the Business or any provision of the articles of
organization or operating agreement of the Business, contravene or constitute a default under any
covenant, indenture or contract of
or effecting the Business or any of its properties.

			
	 	 	 
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7.3 Use of Proceeds. The Business hereby agrees to use Award proceeds only for the
Project and for the activities described in Exhibit C, Description of the Project and Award Budget,
this Master Contract and the Funding Agreements. Use of Award proceeds shall conform to the Budget
for the Project as detailed in Exhibit C. The Business represents that there are legally
enforceable commitments in place from the funding sources identified for the Project in Exhibit C.

7.4 Subsidiaries. The Business has no Subsidiaries on the Contract Effective Date.

7.5 Financial Reports. The balance sheet of the Business furnished to IDED as of the
Contract Effective Date, fairly presents its financial condition as at said date in conformity with
GAAP applied on a consistent basis. The Business has no contingent liabilities which are material
to it, other than as indicated on such financial statements or, with respect to future periods, on
the financial statements furnished to IDED.

7.6 No Material Adverse Change. Since the Award Date, there has been no change in the
condition (financial or otherwise) or business prospects of the Business, except those occurring in
the ordinary course of business, none of which individually or in the aggregate have been
materially adverse. To the knowledge of the Business, there has been no material adverse change in
the condition of the Business (financial or otherwise) or the
business prospects of the Business.

7.7 Full Disclosure; Business’s Financial Assistance Application. The statements and
other information furnished to the IDED by Business in its Financial Assistance Application and in
connection with the negotiation of this Master Contract and the Funding Agreements do not contain
any untrue statements of a material fact or omit a material fact necessary to make the material
statements contained herein or therein not misleading. The IDED acknowledges that as to any
projections furnished to the IDED, the Business only represents that the same were prepared on the
basis of information and estimates it believed to be reasonable.

7.8 Trademarks, Franchises and Licenses. The Business owns, possesses, or has the
right to use all necessary patents, licenses, franchises, trademarks, trade names, trade styles,
copyrights, trade secrets, know how and confidential commercial and proprietary information to
conduct its businesses as now conducted, without known conflict with any patent, license,
franchise, trademark, trade name, trade style, copyright or other proprietary right of any other
Person. As used in this Master Contract, “Person” means an individual, partnership, corporation,
association, trust, unincorporated organization or any other entity or organization, including a
government or agency or political subdivision thereof.

7.9 Governmental Authority and Licensing. The Business has received all licenses,
permits, and approvals of all Federal, state, local, and foreign governmental authorities, if any,
necessary to conduct its businesses, in each case where the failure to obtain or maintain the same
could reasonably be expected to have a material adverse effect. No investigation or proceeding
which, if adversely determined, could reasonably be expected to result in revocation or denial of
any material license, permit, or approval is pending or, to the knowledge of the Business
threatened.

7.10 Litigation and Other Controversies. There is no litigation or governmental
proceeding pending, nor to the knowledge of the Business threatened, against the Business which if
adversely determined would result in any material adverse change in the financial condition,
Properties, business or operations of the Business, nor is the Business aware of any existing
basis for any such litigation or governmental proceeding.

7.11 Good Title. The Business has good and defensible title (or valid leasehold
interests) to all of its Property (including, without limitation, the Secured Property) reflected
on the most recent balance sheets furnished to the IDED (except for sales of assets in the ordinary
course business).

			
	 	 	 
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7.12 Taxes. All tax returns required to be filed by the Business in any jurisdiction
have, in fact, been filed, and all taxes, assessments, fees and other governmental charges upon the
Business or upon any of its property, income or franchises, which are shown to be due and payable
in such returns, have been paid, except such taxes, assessments, fees and governmental charges, if
any, as are being contested in good faith and by appropriate proceedings which prevent enforcement
of the matter under contest and as to which adequate reserves established in accordance with GAAP
have been provided. The Business knows of no proposed additional tax assessment against it for
which adequate provisions in accordance with GAAP have not been made on its accounts. Adequate
provisions in accordance with GAAP for taxes on the books of the Business have been made for all
open years, and for their current fiscal period.

7.13 Other Contracts. The Business is not in default under the terms or any covenant,
indenture or contract of or affecting either the Business or any of its properties, which default,
if uncured, would have a material adverse effect on its financial condition, properties, business
or operations.

7.14 No Default. No Default or Event of Default has occurred or is continuing.

7.15 Compliance with Laws. The Business is in compliance with the requirements of
all federal, state and local laws, rules and regulations applicable to or pertaining to the
business operations of the Business and laws and regulations establishing quality criteria and
standards for air, water, land and toxic or hazardous wastes or substances, non-compliance with
which could have a material adverse effect on the financial condition, properties, business or
operations of the Business. The Business has not received notice to the effect that its operations
are not in compliance with any of the requirements of applicable federal, state or local
environmental or health and safety statutes and regulations or are the subject of any governmental
investigation evaluating whether any remedial action is needed to respond to a release of any toxic
or hazardous waste or substance into the environment, which non-compliance or remedial action could
have a material adverse effect on the financial condition, properties, business or operations of
the Business.

7.16 Effective Date of Representations and Warranties. The warranties and
representations of this Article are made as of the Contract Effective Date and shall be deemed to
be renewed and restated by the Business at the time each request for disbursement of funds is
submitted to the IDED.

ARTICLE 8

COVENANTS

8.1 Maintain Existence in Iowa. The Business shall at all times preserve and maintain
its existence as a corporation in good standing and maintain the Project in Iowa. The Business
will preserve and keep in force and affect all licenses, permits, franchises, approvals, patents,
trademarks, trade names, trade styles, copyrights and other proprietary rights necessary to the
proper conduct of its respective business.

8.2 Job Obligations; Benefits Requirements.

(a) Jobs and Wages. By the Project Completion Date, the Business shall create/retain
the number of FTE Created Jobs and Retained Jobs above the Business’s Employment Base and maintain
the jobs through the Job Maintenance Period, all as detailed in Exhibit D. The Business shall pay
the wage rates identified in Exhibit D.

(b) Benefits. The Business shall provide and pay for the eligible benefits described
in Exhibit A, Business’s Financial Assistance Application, with an Average Benefit Value calculated
by IDED and shown in Exhibit D. During the Contract period the Business may adjust the benefit
package provided the Average Benefit Value does not fall below the minimum benefit threshold
requirement (e.g., 80% of medical and dental insurance) for the funding source that is assisting
the Project and provided the benefit package includes eligible benefits.

			
	 	 	 
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8.3 Performance Obligations. By the Project Completion Date, Business shall complete
the Project, make the total investment pledged for the Project and in accordance with the Award
Budget as detailed in Exhibit C and comply with all other performance requirements described in
this Master Contract and the Funding Agreements. The Business shall promptly provide IDED with
written notice of any major changes that would impact the success of the Project.

8.4 Maintenance of Properties. The Business shall maintain, preserve and keep its
properties in good repair, working order and condition (ordinary wear and tear excepted) and will
from time to time make all needful and proper repairs, renewals, replacements, additions and
betterments thereto so that at all time the efficiency thereof shall be fully preserved and
maintained in accordance with prudent business practices.

8.5 Taxes and Assessments. The Business shall duly pay and discharge all taxes, rates,
assessments, fees and governmental charges upon or against it against its properties, in each case
before the same become delinquent and before penalties accrue thereon, unless and to the extent
that the same are being contested in good faith and by appropriate proceedings and adequate
reserves are provided therefore.

8.6 Insurance. The Business shall insure and keep insured in good and responsible
insurance companies, all insurable property owned by it which is of a character usually insured by
Persons similarly situated and operating like properties against loss or damage from such hazards
or risks as are insured by Persons similarly situated and operating like properties; and the
Business shall insure such other hazards and risks (including employers’ and public liability
risks) in good and responsible insurance companies as and to the extent usually insured by Persons
similarly situated and conducting similar businesses. The Business will upon request of the IDED
furnish a certificate setting forth in summary form the nature and extent of the insurance
maintained pursuant to this Article.

8.7 Required Reports.

(a) Review of Disbursement Requests and Reports. The Business shall prepare, sign and
submit disbursement requests and reports as specified in this Master Contract in the form and
content required by IDED. The Business shall review all reimbursement requests and verify that
claimed expenditures are allowable costs. The Business shall maintain documentation adequate to
support the claimed costs.

			
	 	 	 
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(b) Reports. The Business shall prepare, sign and submit the following reports to the
IDED throughout the Contract period:

	 	 	 
	Report       	 	Due Date
	 
	 	 
	Annual Project Status Report
	 	 
	The Annual Project Status Report
will collect information from the
Business about the status of the
project. This report will collect
data such as current employment
levels, number of jobs that meet or
exceed the Qualifying Wage
Threshold Requirements (with and
without benefits), project
expenditures, including amount
spent on research and development,
any changes to the Business’s
benefits, ownership, structure, or
control of the Business and any
other information required by IDED.

	 	July 31st for the period ending June 30th
	 
	 	 
	End of Project Report 
	 	 
	The End of Project Report will
collect information from the
Business about the completed
project such as final employment
levels, number of jobs that meet or
exceed the Qualifying Wage
Threshold Requirements (with and
without benefits), project
expenditures and changes to the
Business’s benefits, ownership,
structure, or control of the
Business and any other information
required by IDED.

	 	Within 30 days of Project Completion Date
	 
	 	 
	End of Job Maintenance Period Report
	 	 
	The End of Job Maintenance Period
Report will collect information
from the Business’s continued
maintenance of employment levels
and Qualifying Wage Threshold
Requirements (with and without
benefits) that were verified at the
Project Completion Date, and
changes to the Business’s benefits,
ownership, structure, or control of
the Business and any other
information required by IDED.

	 	Within 30 days of the end of the Job Maintenance Period

(c) Additional Reports, Financials as Requested by IDED. The IDED reserves the right
to require more frequent submission of any of the above reports if, in the opinion of the IDED,
more frequent submissions would help improve the Business’s Project performance, or if necessary in
order to meet requests from the Iowa General Assembly, the Department of Management or the
Governor’s office. At the request of IDED, Business shall submit its annual financial statements
completed by an independent CPA, or other financial statements including, but not limited to,
income, expense, and retained earnings statements.

8.8 Inspection and Audit. The Business will permit the IDED and its duly authorized
representatives to visit and inspect any of the Business’s properties, corporate books and
financial records of the Business related to the Project, to examine and make copies of the books
of accounts and other financial records of the Business, and to discuss the affairs, finances and
accounts of the Business with,
and to be advised as to the same by, its officers, and independent public accountants (and by
this provision the Business authorizes such accountants to discuss with the IDED and the IDED’s
duly authorized representatives the finances and affairs of the Business) at such reasonable time
and reasonable intervals as the IDED may designate, but at least annually.

			
	 	 	 
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8.9 Compliance with Laws.

(a) The Business will comply in all material respects with the requirements of all federal,
state and local laws, rules, regulations and orders applicable to or pertaining to its properties
or business operations including, but not limited to, all applicable environmental, hazardous waste
or substance, toxic substance and underground storage laws and regulations, and the Business will
obtain any permits, licenses, buildings, improvements, fixtures, equipment or its property required
by reason of any applicable environmental, hazardous waste or substance, toxic substance or
underground storage laws or regulations.

(b) The Business shall comply in all material respects with all applicable federal, state, and
local laws, rules, ordinances, regulations and orders applicable to the prevention of
discrimination in employment, including the administrative rules of the Iowa Department of
Management and the Iowa Civil Rights Commission which pertain to equal employment opportunity and
affirmative action.

(c) The Business shall comply in all material respects with all applicable federal, state and
local laws, rules, ordinances, regulations and orders applicable to worker rights and worker
safety.

(d) The Business shall comply with IDED’s administrative rules for each program funding
source, as identified in the Funding Agreements.

8.10 Use of Award Proceeds. The Business will use the Award proceeds extended under
this Master Contract and the Funding Agreements solely for the purposes set forth in Exhibit C.

8.11 Changes in Business Ownership, Structure and Control. The Business shall not
materially change the ownership, structure, or control of the Business if it would adversely affect
the Project. This includes, but is not limited to, entering into any merger or consolidation with
any person, firm or corporation or permitting substantial distribution, liquidation or other
disposal of Business assets directly associated with the Project. Business shall provide IDED with
advance notice of any proposed changes in ownership, structure or control. The materiality of the
change and whether or not the change affects the Project shall be as reasonably determined by IDED.

8.12 Notice of Meetings. The Business shall notify IDED at least two (2) working days
in advance of all meetings of the board of directors at which the subject matter of this Master
Contract, the Funding Agreements, or the Project is proposed to be discussed. The Business shall
provide IDED with copies if the agenda and minutes of such meetings and expressly agrees that a
representative of IDED has a right to attend those portions of any and all such meetings where the
Project, this Master Contract or the Funding Agreements are discussed.

8.13 Notice of Proceedings. The Business shall promptly notify IDED of the initiation
of any claims, lawsuits, bankruptcy proceedings or other proceedings brought against the Business
which would adversely impact the Project.

8.14 Accounting Records. The Business is required to maintain its books, records and
all other evidence pertaining to this Master Contract and it Funding Agreements in accordance with
generally accepted accounting principles and such other procedures specified by IDED. These
records shall be available to IDED, its internal or external auditors, the Auditor of the State of
Iowa, the Attorney General of the State of Iowa and the Iowa Division of Criminal Investigations at
all times during the Master Contract’s and the Funding Agreements’ duration and any extensions thereof, and for three (3)
full years from the Agreement Expiration Date.

8.15 Restrictions. The Business shall not, without prior written disclosure to IDED
and prior written consent of IDED, which shall not be unreasonably withheld, directly or
indirectly:

(a) Assign, waive or transfer any of Business’s rights, powers, duties or obligations under
this Master Contract or the Funding Agreements.

(b) Sell, transfer, convey, assign, encumber or otherwise dispose of any of the Secured
Property or the Project.

			
	 	 	 
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(c) Place or permit any restrictions, covenants or any similar limitations on the Secured
Property or the Project.

(d) Remove from the Project site or the State all or substantially all of the Secured
Property.

(e) Create, incur or permit to exist any Lien of any kind on the Secured Property.

8.16 No Changes in Business Operations. The Business shall not materially change the
Project or the nature of the Business and activities being conducted, or proposed to be conducted
by Business, as described in the Business’s approved application for funding, Exhibit A of this
Master Contract, unless approved in writing by IDED prior to the change.

8.17 Indemnification. The Business shall indemnify, defend and hold harmless the IDED,
the State of Iowa, its departments, divisions, agencies, sections, commissions, officers, employees
and agents from and against all losses, liabilities, penalties, fines, damages and claims
(including taxes), and all related costs and expenses (including reasonable attorneys’ fees and
disbursements and costs of investigation, litigation, settlement, judgments, interest and
penalties), arising from or in connection with any of the following:

	 	a)	 	Any claim, demand, action, citation or legal proceeding arising out of or resulting
from the Project;
	 
	 	b)	 	Any claim, demand, action, citation or legal proceeding arising out of or resulting
from a breach by the Business of any representation or warranty made by the Business in
this Master Contract or the Funding Agreements;
	 
	 	c)	 	Any claim, demand, action, citation or legal proceeding arising out of or related to
occurrences that the Business is required to insure against as provided for in this Master
Contract or the Funding Agreements; and
	 
	 	d)	 	Any claim, demand, action, citation or legal proceeding which results from an act or
omission of the Business or any of their agents in its or their capacity as an employer of
a person.

ARTICLE 9

EVENTS OF DEFAULT AND REMEDIES

9.1 Events of Default. Any one or more of the following shall constitute an “Event of
Default” hereunder:

(a) Nonpayment. In the event of a missed payment under a Loan or in the event a
Forgivable Loan is not forgiven and all or a portion of the Forgivable Loan must be repaid by the
Business, a default in the payment when due (whether by lapse of time, acceleration or otherwise)
of any principal on the Promissory Note(s), or default in payment for more than ten (10) Business
Days of the due date thereof of any interest
on the Promissory Note(s) or any fee or other obligation payable by the Business shall be an
Event of Default; or

(b) Noncompliance with Covenants. Default in the observance or performance of any
covenant set forth in Article 8, for more than five (5) Business Days; or

(c) Noncompliance with Security Documents. Default in the observance or performance of
any term of any Security Documents beyond any applicable grace period set forth therein; or

(d) Noncompliance with Master Contract. Default in the observance or performance of
any other provision of this Master Contract; or

			
	 	 	 
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(e) Noncompliance with Funding Agreements; Cross-Default. Default in the observance or
performance of any other provision of any of the Funding Agreements, including Events of Default
identified in any of the Funding Agreements; IDED may elect to declare the Business in default of
this Master Contract and any or all of the Funding Agreements if there is a default under any one
of the Funding Agreements; or

(f) Material Misrepresentation. Any representation or warranty made by the Business in
this Master Contract or the Funding Agreements or in any statement or certificate furnished by it
pursuant to this Master Contract or the Funding Agreements, or made in its Financial Assistance
Application, or in connection with any of the above, proves untrue in any material respect as of
the date of the issuance or making thereof; or

(g) Lien Deficiencies. Any of the Security Documents shall for any reason fail to
create a valid and perfected priority Lien in favor of the IDED in any Secured Property pledged by
Business; or

(h) Judgment Over $100,000. Any judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes in an aggregate amount in excess of
$100,000 shall be entered or filed against the Business or against any of its property and remains
unvacated, unbonded or unstayed for a period of 30 days; or

(i) Adverse Change in Financial Condition. Any change shall occur in the financial
condition of the Business which would have a material adverse effect on the ability of the Business
to perform under this Master Contract or the Funding Agreements; or

(j) Bankruptcy or Similar Proceedings Initiated. Either the Business shall (1) have
entered involuntarily against it an order for relief under the United States Bankruptcy Code, as
amended, (2) not pay, or admit in writing its inability to pay, its debts generally as they become
due, (3) make an assignment for the benefit of creditors, (4) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any substantial part of its Property, (5) institute any proceeding seeking to
have entered against it an order for relief under the United States Bankruptcy Code as amended, to
adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, or (6) fail to contest in
good faith any appointments or proceeding described in Article 9.l(k) below; or

(k) Appointment of Officials. A custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for either the Business or any substantial part of any of its
respective property, or a proceeding described in Article 9.1(j) shall be instituted against either
the Business and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for a period of
sixty (60) days; or

(l) Insecurity. IDED shall in good faith deem itself insecure and reasonably
believes, after consideration of all the facts and circumstances then existing, that the prospect
of payment and satisfaction of the obligations under this Master Contract and/or the Funding
Agreements, or the performance of or observance of the covenants in this Master Contract and/or the
Funding Agreements, is or will be materially impaired.

(m) Failure to Submit Required Reports. The Business fails to submit complete reports
by the required due dates as outlined in Article 8.7.

(n) Layoffs, Relocation, or Closure. The Business experiences a layoff within the
state or closes any of its facilities within the state during the term of this Contract.

			
	 	 	 
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9.2 Default Remedies. When an Event of Default has occurred and is continuing, the
IDED may, by written notice to the Business:

(a) terminate this Master Contract, the Funding Agreements and all of the obligations of IDED
under this Master Contract and the Funding Agreements on the date stated in such notice, and

(b) declare the principal and any accrued interest on the outstanding Promissory Notes to be
forthwith due and payable, including both principal and interest and all fees, charges and other
amounts payable under this Master Contract and the Funding Agreements, shall be and become
immediately due and payable without further demand, presentment, protest or notice of any kind.

9.3 Default Interest Rate. If an Event of Default occurs and remains uncured, a
default rate of 6% shall apply to repayment of amounts due under this Master Contract and the
Funding Agreements. The default interest rate shall accrue from the first date Award funds are
disbursed.

9.4 Expenses. The Business agrees to pay to the IDED all expenses reasonably incurred
or paid by IDED including reasonable attorneys’ fees and court costs, in connection with any
Default or Event of Default by the Business or in connection with the enforcement of any of the
terms of this Master Contract and the Funding Agreements.

9.5 Notice of Default and Opportunity to Cure. If IDED has reasonable cause to believe
that an Event of Default has occurred under this Master Contract and/or the Funding Agreements,
IDED shall issue a written Notice of Default to the Business, setting forth the nature of the
alleged default in reasonable specificity, and providing therein a reasonable period time, which
shall not be fewer than thirty (30) days from the date of the Notice of Default, in which the
Business shall have an opportunity to cure, provided that cure is possible and feasible.

ARTICLE 10

MISCELLANEOUS.

10.1 Timely Performance. The parties agree that the dates and time periods specified
in this Master Contract and the Funding Agreements, including the timelines established for the
Project and more fully described in Exhibit C, are of the essence to the satisfactory performance
of this Master Contract and the Funding Agreements.

10.2 State of Iowa Recognition. If the Project involves construction and there is
signage recognizing the financial contributions made to the Project the Business agrees to include
the Iowa
Department of Economic Development on the list of entities providing assistance. . For
example, a sign or plaque indicating that the Project was funded in part by an Award from the State
of Iowa, Iowa Department of Economic Development.

10.3 Choice of Law and Forum.

(a) In the event any proceeding of a quasi-judicial or judicial nature is commenced in
connection with this Master Contract or the Funding Agreements, the proceeding shall be brought in
Des Moines, Iowa, in Polk County District Court for the State of Iowa, if such court has
jurisdiction. If however, such court lacks jurisdiction and jurisdiction lies only in a United
States District Court, the matter shall be commenced in the United States District Court for the
Southern District of Iowa, Central Division.

(b) This provision shall not be construed as waiving any immunity to suit or liability, in
state or federal court, which may be available to the IDED, the State of Iowa or its members,
officers, employees or agents.

			
	 	 	 
	Contract #P0705M01382
	 	Master updated 8/07

 

- 17 -

 

10.4 Governing Law. This Master Contract and the Funding Agreements and the rights and
duties of the parties hereto shall be governed by, and construed in accordance with the internal
laws of the State of Iowa without regard to principles of conflicts of laws.

10.5 Master Contract/Funding Agreement Amendments. Neither this Master Contract nor
any documents incorporated by reference in connection with this Master Contract, including the
Funding Agreements, may be changed, waived, discharged or terminated orally, but only as provided
below:

(a) Writing required. The Master Contract and the Funding Agreements may only be amended if
done so in writing and signed by the Business and IDED; and for those Funding Agreements in which
the Community is a signatory, by the Community, the Business and IDED. Examples of situations
requiring an amendment include, but are not limited to, time extensions, budget revisions, and
significant alterations of existing activities or beneficiaries. No amendment will be valid until
approved in writing by IDED.

(b) IDED review. IDED will consider whether an amendment request is so substantial as to
necessitate reevaluating the IDED’s or IDED Board’s original funding decision. An amendment may be
denied by IDED if it substantially alters the circumstances under which the Project funding was
originally approved.

10.6 Notices. Except as otherwise specified herein, all notices hereunder shall be in
writing (including, without limitation by fax) and shall be given to the relevant party at its
address, e-mail address, or fax number set forth below, or such other address, e-mail address, or
fax number as such party may hereafter specify by notice to the other given by United States mail,
by fax or by other telecommunication device capable of creating a written record of such notice and
its receipt. Notices hereunder shall be addressed:

To the Business:

Homeland Energy Solutions, LLC

Mr. Stephen K. Eastman, President

106 West Main, P.O. Box C

Riceville, IA 50466

E-mail: seastman@hawkeyerec.com

Telephone: 563-547-3801

Facsimile: 563-547-4033

To the IDED at:

Iowa Department of Economic Development

Legal and Compliance

200 East Grand Avenue

Des Moines, Iowa 50309

Attention: Katie Rockey, Project Manager

E-mail: Katie.rockey@iowalifechanging.com

Telephone: 515/ 242-4783

Facsimile: 515/ 242-4832

			
	 	 	 
	Contract #P0705M01382
	 	Master updated 8/07

 

- 18 -

 

Each such notice, request or other communication shall be effective (i) if given by facsimile, when
such facsimile is transmitted to the facsimile number specified in this Article and a confirmation
of such facsimile has been received by the sender, (ii) if given by e-mail, when such e-mail is
transmitted to the e-mail address specified in this Article and a confirmation of such e-mail has
been received by the sender, (iii) if given by mail, five (5) days after such communication is
deposited in the mail, certified or registered with return receipt requested, addressed as
aforesaid or (iv) if given by any other means, when delivered at the addresses specified in this
Article.

10.7 Headings. Article headings used in this Master Contract and the Funding
Agreements are for convenience of reference only and are not a part of this Master Contract or the
Funding Agreements for any other purpose.

10.8 Final Authority. The IDED shall have the authority to reasonably assess whether
the Business has complied with the terms of this Master Contract and the Funding Agreements. Any
IDED determinations with respect to compliance with the provisions of this Master Contract and the
Funding Agreements shall be deemed to be final determinations pursuant to Section 17A of the Code
of Iowa (2005).

10.9 Waivers. No waiver by IDED of any default hereunder shall operate as a waiver of
any other default or of the same default on any future occasion. No delay on the part of the IDED
in exercising any right or remedy hereunder or under the Funding Agreements shall operate as a
waiver thereof. No single or partial exercise of any right or remedy by IDED shall preclude future
exercise thereof or the exercise of any other right or remedy.

10.10 Counterparts. This Master Contract may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.

10.11 Survival of Representations. All representations and warranties made herein or
in any other Master Contract/Funding Agreement document or in certificates given pursuant hereto or
thereto shall survive the execution and delivery of this Master Contract and the Funding Agreements
and the other Master Contract/Funding Agreement documents and shall continue in full force and
effect with respect to the date as of which they were made until all of Business’s obligations or
liabilities under this Master Contract and the Funding Agreements have been satisfied.

10.12 Severability of Provisions. Any provision of this Master Contract or the Funding
Agreements, which is unenforceable in any jurisdiction, shall, as to such jurisdiction, be
ineffective to the
extent of such unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other jurisdiction. All rights,
remedies and powers provided in this Master Contract and or the Funding Agreements or any other
Master Contract document may be exercised only to the extent that the exercise thereof does not
violate any applicable mandatory provisions of law, and all the provisions of this Master Contract
and the Funding Agreements and any other Master Contract document are intended to be subject to all
applicable mandatory provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Master Contract or the Funding Agreements or any other
Master Contract document invalid or unenforceable.

10.13 Successors and Assigns. This Master Contract and the Funding Agreements shall be
binding upon the Business and its respective successors and assigns, and shall inure to the benefit
of the IDED and the benefit of their respective successors and assigns. The Business may not
assign its rights hereunder or under any of the Funding Agreements without the written consent of
the IDED, which consent will not be unreasonably withheld.

10.14 Termination. This Master Contract and any of the Funding Agreements can be
terminated upon mutual, written agreement of the Business and IDED and, for Funding Agreements to
which the Community is a signatory, upon mutual written agreement of the Business, IDED and the
Community.

			
	 	 	 
	Contract #P0705M01382
	 	Master updated 8/07

 

- 19 -

 

10.15 Integration. This Master Contract and the Funding Agreements contains the entire
understanding between the Business and IDED relating to the Project and any representations that
may have been made before or after the signing of this Master Contract and the Funding Agreements,
which are not contained herein, are nonbinding, void and of no effect. None of the Parties have
relied on any such prior representation in entering into this Master Contract and its Funding
Agreement.

IN WITNESS WHEREOF in consideration of the mutual covenants set forth above and for other good
and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby
acknowledged, the parties have entered into this Master Contract and have caused their duly
authorized representatives to execute this Master Contract, effective as of the latest date stated
below (the “Contract Effective Date”).

FOR THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT:

	 	 	 	 	 
	BY:

	 	/s/ Michael L. Tramontina
 

Michael L. Tramontina, Director
	 	 
	 
	 	 	 	 
	 

	 	Date 9-11-07	 	 
	 
	 	 	 	 
	FOR THE BUSINESS:	 	 
	 
	 	 	 	 
	BY:

	 	/s/ Stephen K. Eastman
 

Signature
	 	 
	 
	 

	 	Stephen K. Eastman, President 
	 	 
	 

	 	Typed Name and Title	 	 
	 
	 	 	 	 
	 

	 	Date 9/20/07	 	 

			
	 	 	 
	Contract #P0705M01382
	 	Master updated 8/07

 

- 20 -

 

LIST OF EXHIBITS

	 	 	 	 	 
	 

	 	Exhibit A -
	 	Business’s Financial Assistance Application (on file with IDED),
Application #07-HQJC-045 and 

#07-VAP-019
	 
	 	 	 	 
	 

	 	Exhibit B -
	 	Funding Agreements
	 
	 	 	 	 
	 

	 	 	 	B2-VAAPFAP Funding Agreement
	 

	 	 	 	B5-HQJCP Funding Agreement
	 
	 	 	 	 
	 

	 	Exhibit C -
	 	Description of the Project and Award Budget
	 
	 	 	 	 
	 

	 	Exhibit D -
	 	Job Obligations

			
	 	 	 
	Contract #P0705M01382
	 	Master updated 8/07

 

- 21 -

 

EXHIBIT B - 2

VAAPFAP FUNDING AGREEMENT

	 	 	 
	BUSINESS:

	 	Homeland Energy Solutions, LLC
	COMMUNITY:

	 	Chickasaw County
	 
	 	 
	MASTER CONTRACT NUMBER:

	 	P0705M01382
	FUNDING AGREEMENT NUMBER:

	 	07-VAPIVFGF-019
	 
	 	 
	AWARD TYPE:

	 	Loan, Forgivable Loan
	AMOUNT:

	 	$200,000

THIS VAAPFAP FUNDING AGREEMENT is made by and between the IOWA DEPARTMENT OF ECONOMIC
DEVELOPMENT, 200 East Grand Avenue, Des Moines, Iowa 50309 (“IDED”), the business identified above
(“Business”), and the community identified above, (“Community”), effective as of the effective as
of the latest date stated in the last page of the Master Contract identified above.

WHEREAS, the Business has executed the Master Contract described above with the IDED pursuant
to an Award on the Award Date stated in the Master Contract to the Business for the Project; and

WHEREAS, the Master Contract specifies that for each program funding source the IDED and the
Business shall enter into a Funding Agreement; and

WHEREAS, this Funding Agreement contains additional terms and conditions for the award of
VAAPFAP funds and

NOW, THEREFORE, the Business and Community accept the terms and conditions set forth in this
Funding Agreement and the Master Contract for the funding of the Project. In consideration of the
mutual promises contained in the Master Contract and this VAAPFAP Funding Agreement and other good
and valuable consideration, it is agreed as follows:

1.0 Master Contract. Unless otherwise specified in this VAAPFAP Funding Agreement, the
definitions, terms, conditions, and provisions contained in the Master Contract are applicable to
this VAAPFAP Funding Agreement.

2.0 Definitions. As used in this Agreement, the following terms shall apply:

2.1 Agreement Expiration Date. Expiration of this VAAPFAP Funding Agreement occurs
upon the happening of one of the following events, whichever occurs first:

(a) IDED’s determination that the Business and the Community have fully met the
requirements of the VAAPFAP Funding Agreement, including repayment of all amounts due hereunder,
and IDED closes out this VAAPFAP Funding Agreement.

Revised 8/07

 

 

 

(b) An Event of Default occurs that is not remedied within the time period allowed under
the Master Contract.

(c) If no disbursement of VAAPFAP funds has occurred within twenty-four (24) months of the
Award Date (as defined in the Master Contract).

(d) This VAAPFAP Funding Agreement is terminated upon mutual, written agreement of
the Business, the Community and IDED.

2.2 VAAPFAP. “VAAPFAP” means the Value-Added Agricultural Products and Processes
Financial Assistance Program established in Iowa Code section 15E.111. The source of funding for
this VAAPFAP Funding Agreement is an appropriation by the State legislature.

3.0 Terms of VAAPFAP Award. VAAPFAP funds have been awarded to assist the Business with the
Project. The terms of the VAAPFAP Award are as follows:

3.1 Loan. $100,000, 60 months, 0% interest rate

3.2 Forgivable Loan. $100,000, 60 months

3.3 Terms of Forgiveness. IDED will, in its sole discretion, determine if the
Business has satisfied the terms of this VAAPFAP Funding Agreement, including fulfillment of the
Job Obligations by the Project Completion Date as shown in Master Contract Exhibit D. If IDED
determines that the Business has satisfied said terms and has continued to satisfy said terms
through the Job Maintenance Period, then barring any other default, repayment of principal and
interest which would otherwise have accrued for the time period beginning with the Award Date and
ending with the Project Completion Date shall be permanently waived. If IDED does not waive
repayment, the Forgivable Loan shall be repaid as described in Article 5.2(b) of this VAAPFAP
Funding Agreement.

3.4 Maximum funds available for Project. It is expressly understood and agreed that
the maximum amounts to be paid to the Business by IDED for this VAAPFAP Funding Agreement shall not
exceed the amount stated on page one of this VAAPFAP Funding Agreement.

3.5 Promissory note(s). The obligation of the Business to repay the Loan and
Forgivable Loan shall be evidenced by a Promissory Note(s) executed by the Business.

3.6 Business’s Job Obligations. The Business’s Job Obligations are as described in
Master Contract Exhibit D. These jobs shall be maintained through the Project Maintenance Period.

4.0 Conditions to Disbursement. In addition to the conditions to disbursement described in the
Master Contract, Business shall meet the following conditions before IDED will release VAAPFAP
funds:

4.1 STATE BUILDING CODE BUREAU APPROVAL. Bidding for construction shall not be
conducted prior to the written approval of the final plans by the State Building Code Bureau of the
Iowa Department of Public Safety.

5.0 Community’s Local Commitment. The Community shall provide the local financial assistance for
the Project as described in Master Contract Exhibit C, Project Description and Award Budget.

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-VAPIVFGF-019
	 	Revised 8/07

 

- 2 -

 

6.0 Default; Remedies upon Default.

6.1 The terms of Article 9.0 of the Master Contract (Events of Default and Remedies)
govern this VAAPFAP Funding Agreement. The following are additional Events of Default for this
VAAPFAP Funding Agreement:

a. The Community’s failure to provide the annual local financial assistance pledged for the
Project as described in Master Contract Exhibit C, Project Description.

b. No other specific default events.

6.2 The following are Default Remedies available to IDED in addition to those specified in the
Master Contract:

(a) Repayment of Loan — Failure to Meet Job Obligations. If the Business meets less
that 100% of its Job Obligations, the IDED may require full repayment of the Loan, as permitted
under the Master Contract. IDED may also elect to allow repayment on a pro rata basis as described
below:

If the Business received a Loan at a rate below 6% (the annual interest rate for default set
by the IDED Board), the unpaid principal amount of the Loan may be prorated between the
percentage of FTE Jobs created/retained and the percentage of the shortfall.

The shortfall principal portion may be amortized over the remaining term of the Loan,
beginning at the Project Completion Date, at a default rate of 6% (the annual interest rate
set by the IDED Board). Interest will be charged beginning from the date Loan proceeds were
disbursed to the Community for the Business; interest accrued from this date will be due
immediately. The pro rata portion of the Loan associated with the percentage of FTE Jobs
created will be amortized at the original Loan rate and term.

(b) Repayment of Forgivable Loan — Failure to Meet Job Obligations. If the Business
has fulfilled 50% or more of its Job Obligations, a pro rata percentage will be forgiven for each
new FTE job created/retained at the time the repayment amount is calculated (e.g. at the Project
Completion Date or the date an Event of Default occurred) Any balance (shortfall) will be
amortized over a two (2) year period (beginning at the at the time the repayment amount is
calculated (e.g. at the Project Completion Date or the date an Event of Default occurred) at six
(6%) percent interest per annum with equal monthly payments, and, interest will be charged at six
(6%) percent per annum from the date of the first VAAPFAP disbursement on the shortfall amount with
that amount accrued as of the Project Completion Date being due and payable immediately.

(c) Repayment
— Time Allowed. If the IDED has allowed repayment of the Forgivable
Loan on a pro rata basis as described in paragraph “b” above, that amount is immediately due and
payable. If the Business has a current Loan balance, the amount owed on the Forgivable Loan may be
combined with the amount owed on the Loan to reflect a single monthly payment. This combined loan
shall be repaid over the time period remaining

(d) Example. VAAPFAP Funding Agreement Exhibit B is an example of how these repayment
calculations will be applied.

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-VAPIVFGF-019
	 	Revised 8/07

 

- 3 -

 

(e) Community Default. If the Community fails to provide the pledged financial
assistance for this Project, IDED will issue a written Notice of Default to the Community setting
forth the nature of the alleged Event of Default in reasonable specificity, and providing therein a
reasonable period time, which shall not be fewer than thirty (30) days from the date of the
Notice of Default, in which the Community shall have an opportunity to cure, provided that
cure is possible and feasible. If an Event of Default is not cured within the time allowed, IDED’s
remedies include but are not limited to legal action against the Community for payment of the
amount of local financial assistance pledged but not provided by the Community plus 6% default
interest calculated from the first date Award funds were disbursed by IDED.

7.0 Reports.

6.1 The terms of the Master Contract regarding Required Reports are applicable to this VAAPFAP
Funding Agreement.

8.0 Incorporated documents. The following documents are hereby incorporated by this reference:

	 	1.	 	The Master Contract and its Exhibits.
	 
	 	2.	 	VAAPFAP Funding Agreement Exhibit A1— Forgivable Loan Promissory Note, and
VAAPFAP Funding Agreement Exhibit A2 — Loan Promissory Note
	 
	 	3.	 	VAAPFAP Funding Agreement Exhibit B — Example: Business Job Shortfall
Calculation.

This section left blank intentionally  —  Signature page follows

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-VAPIVFGF-019
	 	Revised 8/07

 

- 4 -

 

IN WITNESS WHEREOF, the parties have executed this VAAPFAP Funding Agreement:

	 	 	 	 	 
	FOR THE BUSINESS:	 	 
	 
	 	 	 	 
	 

	BY: 	/s/ Stephen K. Eastman
 

Signature
	 	 
	 
	 	 	 	 
	 

	 	Stephen K. Eastman President Homeland Energy Solutions, LLC 
	 	 
	 

	 	Typed Name and Title	 	 
	 
	 	 	 	 
	 

	 	Date 9-11-07	 	 
	 
	 	 	 	 
	FOR THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT:	 	 
	 
	 	 	 	 
	 

	BY: 	/s/ Michael L. Tramontina Deputy Director	 	 
	 

	 	 	 	 
	 

	 	Michael L. Tramontina, Director	 	 
	 
	 	 	 	 
	 

	 	Date 9/20/07	 	 
	 
	 	 	 	 
	FOR THE COMMUNITY:	 	 
	 
	 	 	 	 
	 

	BY: 	/s/ Virgil M. Pickar, Jr.	 	 
	 

	 	 	 	 
	 

	 	Signature	 	 
	 
	 	 	 	 
	 

	 	Virgil M. Pickar, Jr. Chairman of the Board of Supervisors, Chickasaw County
 
	 	 
	 

	 	Typed Name and Title	 	 
	 
	 	 	 	 
	 

	 	Date 9-18-2007	 	 

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-VAPIVFGF-019
	 	Revised 8/07

 

- 5 -

 

6/14/2007 Page 1

Homeland Energy Solutions, LLC  

	 	 	 
	Compound period:

	 	Monthly

	 	 	 	 	 
	Nominal Annual Rate:
	 	 	0.000	%
	Effective Annual Rate:
	 	 	0.000	%
	Periodic Rate:
	 	 	0.0000	%
	Daily Rate:
	 	 	0.00000	%
	 
	CASH FLOW DATA
	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Event	 	Start Date	 	 	Amount	 	 	Number Period	 	 	End Date	 
	1 Loan
	 	 	6/14/2007	 	 	 	100,000.00	 	 	 	1	 	 	 	 	 
	2 Payment
	 	 	7/14/2007	 	 	 	1,666.67	 	 	60 Monthly	 	 	 	6/14/2012	 

AMORTIZATION SCHEDULE — Normal Amortization

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Date	 	 	Payment	 	 	Interest	 	 	Principal	 	 	Balance	 
	 	 	 	 	Loan 6/14/07
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	100,000.00	 
	 	1	 	 	 
	 	 	7/14/2007	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	98,333.33	 
	 	2	 	 	 
	 	 	8/14/2007	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	96,666.66	 
	 	3	 	 	 
	 	 	9/14/2007	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	94,999.99	 
	 	4	 	 	 
	 	 	10/14/2007	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	93,333.32	 
	 	5	 	 	 
	 	 	11/14/2007	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	91,666.65	 
	 	6	 	 	 
	 	 	12/14/2007	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	89,999.98	 
	 	 	 	 	2007 Totals
	 	 	 	 	 	 	10,000.02	 	 	 	0.00	 	 	 	10,000.02	 	 	 	 	 
	 
	 	 
	 	7	 	 	 
	 	 	1/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	88,333.31	 
	 	8	 	 	 
	 	 	2/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	86,666.64	 
	 	9	 	 	 
	 	 	3/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	84,999.97	 
	 	10	 	 	 
	 	 	4/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	83,333.30	 
	 	11	 	 	 
	 	 	5/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	81,666.63	 
	 	12	 	 	 
	 	 	6/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	79,999.96	 
	 	13	 	 	 
	 	 	7/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	78,333.29	 
	 	14	 	 	 
	 	 	8/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	76,666.62	 
	 	15	 	 	 
	 	 	9/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	74,999.95	 
	 	16	 	 	 
	 	 	10/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	73,333.28	 
	 	17	 	 	 
	 	 	11/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	71,666.61	 
	 	18	 	 	 
	 	 	12/14/2008	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	69,999.94	 
	 	 	 	 	2008 Totals
	 	 	 	 	 	 	20,000.04	 	 	 	0.00	 	 	 	20,000.04	 	 	 	 	 
	 
	 	 
	 	19	 	 	 
	 	 	1/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	68,333.27	 
	 	20	 	 	 
	 	 	2/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	66,666.60	 
	 	21	 	 	 
	 	 	3/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	64,999.93	 
	 	22	 	 	 
	 	 	4/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	63,333.26	 
	 	23	 	 	 
	 	 	5/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	61,666.59	 
	 	24	 	 	 
	 	 	6/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	59,999.92	 
	 	25	 	 	 
	 	 	7/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	58,333.25	 
	 	26	 	 	 
	 	 	8/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	56,666.58	 
	 	27	 	 	 
	 	 	9/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	54,999.91	 
	 	28	 	 	 
	 	 	10/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	53,333.24	 

 

 

 

6/14/2007 Page 2

Homeland Energy Solutions, LLC  

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Date	 	 	Payment	 	 	Interest	 	 	Principal	 	 	Balance	 
	 	29	 	 	 
	 	 	11/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	51,666.57	 
	 	30	 	 	 
	 	 	12/14/2009	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	49,999.90	 
	 	 	 	 	2009 Totals
	 	 	 	 	 	 	20,000.04	 	 	 	0.00	 	 	 	20,000.04	 	 	 	 	 
	 
	 	 
	 	31	 	 	 
	 	 	1/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	48,333.23	 
	 	32	 	 	 
	 	 	2/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	46,666.56	 
	 	33	 	 	 
	 	 	3/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	44,999.89	 
	 	34	 	 	 
	 	 	4/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	43,333.22	 
	 	35	 	 	 
	 	 	5/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	41,666.55	 
	 	36	 	 	 
	 	 	6/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	39,999.88	 
	 	37	 	 	 
	 	 	7/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	38,333.21	 
	 	38	 	 	 
	 	 	8/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	36,666.54	 
	 	39	 	 	 
	 	 	9/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	34,999.87	 
	 	40	 	 	 
	 	 	10/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	33,333.20	 
	 	41	 	 	 
	 	 	11/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	31,666.53	 
	 	42	 	 	 
	 	 	12/14/2010	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	29,999.86	 
	 	 	 	 	2010 Totals
	 	 	 	 	 	 	20,000.04	 	 	 	0.00	 	 	 	20,000.04	 	 	 	 	 
	 
	 	 
	 	43	 	 	 
	 	 	1/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	28,333.19	 
	 	44	 	 	 
	 	 	2/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	26,666.52	 
	 	45	 	 	 
	 	 	3/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	24,999.85	 
	 	46	 	 	 
	 	 	4/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	23,333.18	 
	 	47	 	 	 
	 	 	5/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	21,666.51	 
	 	48	 	 	 
	 	 	6/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	19,999.84	 
	 	49	 	 	 
	 	 	7/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	18,333.17	 
	 	50	 	 	 
	 	 	8/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	16,666.50	 
	 	51	 	 	 
	 	 	9/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	14,999.83	 
	 	52	 	 	 
	 	 	10/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	13,333.16	 
	 	53	 	 	 
	 	 	11/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	11,666.49	 
	 	54	 	 	 
	 	 	12/14/2011	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	9,999.82	 
	 	 	 	 	2011 Totals
	 	 	 	 	 	 	20,000.04	 	 	 	0.00	 	 	 	20,000.04	 	 	 	 	 
	 
	 	 
	 	55	 	 	 
	 	 	1/14/2012	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	8,333.15	 
	 	56	 	 	 
	 	 	2/14/2012	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	6,666.48	 
	 	57	 	 	 
	 	 	3/14/2012	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	4,999.81	 
	 	58	 	 	 
	 	 	4/14/2012	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	3,333.14	 
	 	59	 	 	 
	 	 	5/14/2012	 	 	 	1,666.67	 	 	 	0.00	 	 	 	1,666.67	 	 	 	1,666.47	 
	 	60	 	 	 
	 	 	6/14/2012	 	 	 	1,666.67	 	 	 	0.20	 	 	 	1,666.67	 	 	 	0.00	 
	 	 	 	 	2012 Totals
	 	 	 	 	 	 	10,000.02	 	 	 	0.20	 	 	 	9,999.82	 	 	 	 	 
	 
	 	 
	 	 	 	 	Grand Totals
	 	 	 	 	 	 	100,000.20	 	 	 	0.20	 	 	 	100,000.00	 	 	 	 	 

Homeland Energy Solutions, LLC      

Last interest amount increased by 0.20 due to rounding.

 

 

 

EXHIBIT B – 5

HQJCP FUNDING AGREEMENT

	 	 	 
	BUSINESS:

	 	Homeland Energy Solutions, LLC
	COMMUNITY:

	 	Chickasaw County
	 
	 	 
	MASTER CONTRACT NUMBER:

	 	P0705M01382
	FUNDING AGREEMENT NUMBER:

	 	07-HQJC-045

THIS HIGH QUALITY JOB CREATION PROGRAM (HQJCP) FUNDING AGREEMENT is made by and among the IOWA
DEPARTMENT OF ECONOMIC DEVELOPMENT, 200 East Grand Avenue, Des Moines, Iowa 50309 (“IDED”), the
business identified above (“Business”), and the community identified above (“Community”),
effective as of the Contract Effective Date stated in the Master Contract identified above.

WHEREAS, the Department has found the Business’ application to be consistent with the
requirements of the Act and the administrative rules adopted by the Department for the HQJCP – 261
Iowa Administrative Code, Chapter 68; and

WHEREAS, the Business has been approved by the Department to receive certain tax incentives
and assistance; and

WHEREAS, the Business has executed the Master Contract described above with the IDED pursuant
to an Award on the Award Date stated in the Master Contract to the Business for the Project; and

WHEREAS, the Master Contract specifies that for each program funding source the IDED and the
Business shall enter into a Funding Agreement; and

WHEREAS, this HQJCP Funding Agreement contains additional terms and conditions for the award
of HQJCP benefits; and

NOW, THEREFORE, the Business and Community accept the terms and conditions set forth in this
HQJCP Funding Agreement and the Master Contract for the funding of the Project. In consideration
of the mutual promises contained in the Master Contract and this HQJCP Funding Agreement and other
good and valuable consideration, it is agreed as follows:

1.0 Master Contract. Unless otherwise specified in this HQJCP Funding Agreement, the
definitions, terms, conditions, and provisions contained in the Master Contract are applicable to
this HQJCP Funding Agreement. The following provisions in the Master Contract do not apply
to this HQJCP Funding Agreement:

	 	 	 
	Article 3.1(b) –
	 	Definition of “Project Completion Date” and “Job Maintenance Period.” [The HQJC
program has different time periods for these activities.]
	 
	 	 
	Article 4.3 –
	 	Repayment obligation. [No promissory note required for tax credits.]

 

 

 

	 	 	 
	Article 5.1(c) –

	 	Promissory Notes. [Execution of note is not a condition precedent to receipt of
tax credit benefits]
	 
	 	 
	Article 5.1(g) –

	 	Security Documents. [Execution of Security Documents is not a condition precedent
to receipt of tax credit benefits].
	 
	 	 
	Article 5.1(m) –

	 	Requests for disbursement. [Not required for tax credit program benefits.]
	 
	 	 
	Article 5.2 –

	 	Prior costs. [Not applicable to tax credit program benefits.]
	 
	Article 5.3 –

	 	Cost variation. [Not applicable to tax credit program benefits.]
	 
	 	 
	Article 5.5 –

	 	Investment of Award Proceeds. [No proceeds in tax credit programs.]
	 
	 	 
	Article 6 –

	 	Security, Cross-collateralization. . [Not applicable to tax credit program benefits.]
	 
	 	 
	Article 9.1(a) –

	 	Nonpayment as an Event of Default. [Not applicable because there are no loan
payments in tax credit programs].
	 
	 	 
	Article 9.1(c) –

	 	Noncompliance with Security Documents as an Event of Default. [Not applicable
because there are no Security Documents required in tax credit programs].
	 
	 	 
	Article 9.1(g) –

	 	Lien Deficiencies as an Event of Default. [Not applicable because there are no
Security Documents required in tax credit programs.]

2.0 Definitions. As used in this HQJCP Funding Agreement, the following terms shall apply:

2.1 Agreement Expiration Date. Expiration of this HQJCP Funding Agreement occurs
upon the happening of one of the following events, whichever occurs first:

(a) IDED’s determination that the Business has fully met the requirements of the HQJCP
Funding Agreement, including meeting its job creation and maintenance requirements, and
IDED closes out this HQJCP Funding Agreement.

(b) An Event of Default occurs that is not remedied within the time period allowed
under the Master Contract.

(c) This HQJCP Funding Agreement is terminated upon mutual, written agreement of the
Business, the Community and IDED.

2.2 HQJCP. “HQJCP” means the High Quality Job Creation Program. The HQJCP is
authorized by 2007 Iowa Code section 15.226 to 15.337.

2.3 HQJCP Award. “HQJCP Award” means IDED’s approval of the Business’s Financial
Assistance Application for the Project. This HQJCP Award authorizes the Business to receive HQJCP
Program benefits.

2.4 “Annual Base Rent”. “Annual Base Rent” means the Business’ annual lease payment
minus taxes, insurance, and operating or maintenance expenses.

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-HQJC-045
	 	Revised 8/07

 

-2-

 

2.5 Project Completion Date. “Project Completion Date” means, for purposes of
reporting to the Iowa Department of Revenue that the Project has been completed, (1) for new
manufacturing facilities, the first date upon which the average annualized production of finished
product for the preceding ninety-day period at the manufacturing facility operated by the Business
is at least fifty percent of the initial design capacity of the facility; or (2) for existing or
non-manufacturing facilities, the date of completion of all improvements necessary for the
start-up, location, expansion or modernization of business. This definition of “Project Completion
Date” is only used for purposes of claiming the refund of sales, service and use taxes or the
corporate tax credit for certain sales taxes paid, if applicable.

3.0 High Quality Job Creation Program Benefits.

3.1 Benefits Available. The following High Quality Job Creation Program benefits are
available to the Business under this HQJCP Funding Agreement:

(a) Investment Tax Credit.

	 	(i)	 	The Business may claim an investment tax credit as provided in Iowa Code section
15.333. An investment tax credit may be claimed of the qualifying expenditures, not to
exceed $10,000,000, as defined below in subparagraph (iv), directly related to new jobs
created by the start-up, location, expansion, or modernization of the approved business
under the program. The credit is to be taken in the year the qualifying asset is placed
in service. Any credit in excess of the tax liability for the tax year may be credited
to the tax liability for the following seven years or until depleted, whichever occurs
first.
	 
	 	(ii)	 	The tax credit shall be amortized equally over a five-year period which the
Department will, in consultation with the eligible business, define. The five-year
amortization period is specified below:

Amortization Schedule

	 	 	 	 	 
	July 1, 2006 – June 30, 2007
	 	$	2,000,000	 
	July 1, 2007 – June 30, 2008
	 	$	2,000,000	 
	July 1, 2008 – June 30, 2009
	 	$	2,000,000	 
	July 1, 2009 – June 30, 2010
	 	$	2,000,000	 
	July 1, 2010 – June 30, 2011
	 	$	2,000,000	 

	 	(iii)	 	HQJCP Funding Agreement Exhibit A, “Investment Tax Credit Amortization Schedule
Examples,” illustrates how the 5-year amortization requirement will be applied.
	 
	 	(iv)	 	The qualifying expenditures eligible for the investment tax credit are:

	 	1.	 	The purchase price of real property and any buildings and
structures
 _____ 

located on the real property.
	 
	 	2.	 	The cost of improvements made to real property which is used in
operation of the Business.

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-HQJC-045
	 	Revised 8/07

 

-3-

 

	 	3.	 	The costs of machinery and equipment, as defined in Iowa Code
section 427A.1(1) “e” and “j,” purchased for use in the operation of the approved
Business and which the purchase price have been depreciated in accordance with
generally accepted accounting principles.
	 
	 	4.	 	The Annual Base Rent paid to a third-party developer by an approved
Business for a period equal to the term of the lease agreement but not to exceed
the maximum term of the agreement, provided the cumulative cost of the base rent
payments for that period does not exceed the cost of the land the third-party
developer’s costs to build or renovate the building for the approved Business.
Annual base rent shall only be considered when the project includes the
construction of a new building or the major renovation of an existing building.
The approved Business shall enter into a lease agreement with the third-party
developer for a minimum of five years.

(b) Refund Of Sales, Service And Use Taxes Paid To Contractors Or Subcontractors. The
Business is eligible for a refund of sales, service and use taxes paid to contractors and
subcontractors as authorized in Iowa Code section 15.331A.

	 	(i)	 	The Business may apply for a refund of the sales and use taxes paid under Iowa
Code chapters 422 and 423 for gas, electricity, water or sewer utility services, goods,
wares, or merchandise, or on services rendered, furnished, or performed to or for a
contractor or subcontractor and used in the fulfillment of a written contract relating
to the construction or equipping of a facility of the approved business.
	 
	 	(ii)	 	Taxes attributable to intangible property and furniture and furnishings shall
not be refunded.
	 
	 	(iii)	 	To receive a refund of the sales, service and use taxes paid to contractors or
subcontractors, the Business must, within one year after Project Completion, make an
application to the Department of Revenue.

(c) Value-Added Property Tax Exemption. The Community has approved an exemption from
taxation all or a portion of the value added by improvements to real property directly related to
new jobs created by the location or expansion of the approved Business and used in the operations
of the approved Business. The amount of the exemption is detailed in HQJCP Funding Agreement
Exhibit B, “Community Resolution Authorizing Property Tax Exemptions.”

3.2 Benefits Not Available. The following High Quality Job Creation Program
benefits are not available to the Business under this agreement:

Additional Research Activities Credit

Refund of Taxes Attributable to Racks, Shelving, and Conveyor Equipment

Corporate tax credit for certain sales taxes paid by third party developer

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-HQJC-045
	 	Revised 8/07

 

-4-

 

4.0 Conditions to Receipt of High Quality Job Creation Program Benefits.

The High Quality Job Creation Program Benefits authorized under this HQJCP Funding
Agreement are available to the Business provided the Business, (and where applicable, the
Community) satisfies each of the following conditions:

4.1 Job Obligations. The Business’s Job Obligations are as detailed in Master Contract Exhibit D,
“Job Obligations.” The
Business shall create the required number of jobs that pay the Qualifying Wage within 5 years] (the
“Job Creation Period”) of the Award Date. The Business shall maintain the Created Jobs in addition
to the Business’s Base Employment for a period of at least two (2) years (the
“Job Maintenance
Period ”) beyond the Job Creation Period, for a total contract duration of 7 years.

4.2 Qualifying Investment. Within five (5) years of the Award Date (as defined in
the Master Agreement), the Business shall make a qualifying investment of $218,440,000. A
“qualifying investment” means an investment in real property including the purchase price of land
and existing buildings and structures; site preparation; improvements to real property; building
construction; long-term lease costs; and/or depreciable assets.

4.3 Required Elements.

(a) Offer a pension or profit sharing plan to full-time employees.

(b) Produce or manufacture high value-added goods or services or be in one of the state’s
targeted industries: Value-added agricultural products.

(c) Provide and pay 80% of the cost of a standard medical and dental insurance plan for all
full-time employees at the facility in which the project will occur.

(d) Have an active productivity and safety improvement program(s) involving management and
worker participation and cooperation. The program(s) shall include benchmarks for gauging
compliance.

4.4 Business Retention. The Business shall have and maintain Project operations
contemplated by this Agreement within the Community at least through the Agreement Expiration Date.

4.5 Local Commitment. The Community shall provide the local financial assistance for
the Project as described in Exhibit C, Project Description.

5.0 Events of Default by the Business; Notice of Default; Repayment Provisions.

5.1 Events of Default. The terms of Article 9.0 ( Events of Default and Remedies) of
the Master Contract , except as noted in Article 5.2 and 5.3 below.

5.2 Notice of Default. The following Notice of Default provisions supersede the Notice
of Default provisions specified in Article 9.5 (Notice of Default and Opportunity to Cure) of the
Master Contract:

(a) From Department. If, through the Annual Project Status Report or other means, the
IDED has reason to believe the Business is in default of the terms of this Agreement, the
IDED will issue a written notice of default to the Business, setting forth the nature of the
default in reasonable specificity, and providing therein a reasonable period of time, which shall
not be less than 30 days from the date of the notice of default, in which the Business shall have
an opportunity to cure, provided that cure is possible and feasible. A copy of any Notice of
Default will also be provided to the Community and Department of Revenue.

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-HQJC-045
	 	Revised 8/07

 

-5-

 

(b) From Community. If, through monitoring, auditing or other means, the Community
has reason to believe the Business is in default of the terms of this Agreement, the Community will
issue a written notice of default to the Business, setting forth the nature of the default in
reasonable specificity, and providing therein a reasonable period of time, which shall not be less
than 30 days from the date of the notice of default, in which the Business shall have an
opportunity to cure, provided that cure is possible and feasible. A copy of any Notice of Default
will also be provided to the IDED and Department of Revenue.

5.3 Repayment Provisions. The following provisions supersede the provisions of Article
9.2 (Default Remedies) of the Master Contract If the Business has received incentives or assistance
under the HQJCP Program and fails to meet and maintain any one of the requirements of the HQJCP
Program, the HQJCP Program Administrative Rules or any term of this HQJCP Funding Agreement, the
Business is subject to repayment of all or a portion of the incentives and assistance that it has
received, as detailed below:

(a) Job Obligations at Project Completion Date and End of Job Maintenance
Period. If the approved Business fails to meet its Job Obligations by the Project
Completion Date or fails to maintain its Job Obligations through the Job Maintenance Period,
both as described in Master Contract Exhibit D , the Business shall repay a percentage of the
tax incentives and assistance that it has received. The repayment percentage will be equal to
the percentage of jobs that the approved Business failed to create or maintain.

(b) Required elements. If the approved Business fails to meet the four required
elements stated in Article 4.3 in any one year, the Business must meet that requirement in the
following year or repay all the tax incentives and assistance that it has received.

(c) Selling, disposing, or razing of property. If, within five years of purchase,
the approved Business sells, disposes of, razes, or otherwise renders unusable all or a part of
the land, building, or other existing structures for which an investment tax credit or insurance
premium tax credit was claimed, the income tax liability of the approved Business for the year
in which all or part of the property is sold, disposed of, razed, or otherwise rendered unusable
shall be increased by one of the following amounts:

	 	(1)	 	One hundred percent of the tax credit claimed if
the property ceases to be approved for the tax credit within one
full year after being placed in service.
	 
	 	(2)	 	Eighty percent of the tax credit claimed if the
property ceases to be approved for the tax credit within two full
years after being placed in service.
	 
	 	(3)	 	Sixty percent of the tax credit claimed if the
property ceases to be approved for the tax credit within three full
years after being placed in service.
	 
	 	(4)	 	Forty percent of the tax credit claimed if the
property ceases to be approved for the tax credit within four full
years after being placed in service.
	 
	 	(5)	 	Twenty percent of the tax credit claimed if the
property ceases to be approved for the tax credit within five full
years after being placed in service.

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-HQJC-045
	 	Revised 8/07

 

-6-

 

(d) Qualifying Investment. If the Business does not meet its Qualifying Investment
requirement described in 4.2, repayment shall be calculated as follows:

	 	(i)	 	If the Business has met 50 percent or less of the requirement,
the Business shall repay the same percentage in benefits as the Business failed
to invest.
	 
	 	(ii)	 	If the Business has met more than 50 percent but not more than
75 percent of the requirement, the Business shall repay one-half of the
percentage in benefits as the Business failed to invest.
	 
	 	(iii)	 	If the Business has met more than 75 percent but not more than
90 percent of the requirement, the Business shall repay one-quarter of the
percentage in benefits as the Business failed to invest.
	 
	 	(iv)	 	If the Business has not met the minimum investment requirement,
the Business shall repay all of the incentives and assistance that it has
received.

(e) Layoffs or closures. If an approved Business experiences a layoff within the
state or closes any of its facilities within the state prior to receiving the tax incentives and
assistance, the Department may reduce or eliminate all or a portion of the tax incentives and
assistance. If an approved Business experiences a layoff within the state or closes any of its
facilities within the state after receiving tax incentives and assistance, the Business may be
subject to repayment of all or a portion of the tax incentives and assistance that it has
received.

(f) Department of Revenue; Community Recovery. Once it has been established,
through the Business’s Annual Project Status Report, monitoring, audit or otherwise, that the
Business is required to repay all or a portion of the incentives received, the Department of
Revenue and the Community shall collect the amount owed. The Community has the authority,
pursuant to the HQJCP Program, to take action to recover the value of taxes not collected as a
result of the exemption provided by the Community to the Business. Department of Revenue has the
authority, pursuant to the HQJCP Program, to recover the value of state taxes or incentives
provided under the HQJCP Program. The value of state incentives provided under the HQJCP
Program includes applicable interest and penalties.

6.0 Final Award Amount.

6.1 Submit Final Numbers Within 12 Months. The approved Business shall, upon
satisfaction of the requirements stated in Article 4.0, submit to the Department information on the
final Job Obligations, including wages and benefit values, and the final qualifying investment.
This submission must be in writing on the form provided by the Department and must be received by
the Department within 12 months of completion of the project and the creation of the jobs. Upon
receipt of the completed form, the Department shall review and confirm the information and shall
prepare the final award amounts based on the final results. Final award amounts may still be
subject to certain limitations put in place when the initial award was made.

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-HQJC-045
	 	Revised 8/07

 

-7-

 

6.2 Repayment If Claimed Credits Exceed Final Award Amount. If, upon receipt of the
final award amount from the Department, the Department of revenue determines that the approved
Business has claimed tax incentives and assistance in amounts that exceed the amounts stipulated in
the final award, the approved Business shall be required to repay any tax credits and refunds it
received in excess of the final award amounts. The Department of Revenue shall have the authority
to collect the amount to be repaid to the state including interest and penalties.

7.0 Event of Default by Community.

7.1 Event of Default. The Community’s failure to provide the annual local financial
assistance pledged for the Project as described in Exhibit C, Project Description and Award Budget
shall be considered an Event of Default by the Community.

7.2 Notice of Default and Opportunity to Cure. If the IDED has reason to believe the
Community is in default of the terms of this Agreement, the IDED will issue a written notice of
default to the Community setting forth the nature of the default in reasonable specificity, and
providing therein a reasonable period of time, which shall not be less than 30 days from the date
of the Notice of Default, in which the Community shall have an opportunity to cure, provided that
cure is possible and feasible. A copy of any Notice of Default will also be provided to the
Business and Department of Revenue.

7.3. Repayment by Community. If an Event of Default is not cured within the time
allowed, IDED’s remedies include but are not limited to legal action against the Community for
payment of the amount of local financial assistance pledged but not provided by the Community plus
6% default interest calculated from the Award Date.

Section left intentionally blank – Signature page follows

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-HQJC-045
	 	Revised 8/07

 

-8-

 

7.0 Incorporated documents. The following documents are hereby incorporated by this reference:

	 	1.	 	The Master Contract number and its Exhibits.
	 
	 	2.	 	HQJCP Funding Agreement Exhibit A, “Investment Tax Credit Amortization Schedule
Examples.”
	 
	 	3.	 	HQJCP Funding Agreement Exhibit B, “Community Resolution Authorizing Property
Tax Exemptions.”

IN WITNESS WHEREOF, the parties have executed this HQJCP Funding Agreement:

	 	 	 	 	 
	BUSINESS:	 	 
	 
	 	 	 	 
	 
	BY: 	/s/ Stephen K. Eastman
 

Signature	 	 
	 
	 	 	 	 
	 

	 	Stephen K. Eastman, President	 	 
	 

	 	Print Name and Title	 	 
	 
	 	 	 	 
	 

	 	Date 9-11-07	 	 
	 
	 	 	 	 
	IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT:
	 
	 	 	 	 
	 
	BY: 	/s/ Michael L. Tramontina Deputy Director	 	 
	 

	 	 	 	 
	 

	 	Michael L. Tramontina, Director	 	 
	 
	 	 	 	 
	 

	 	Date 9/20/07	 	 
	 
	 	 	 	 
	COMMUNITY:	 	 
	 
	 	 	 	 
	 
	BY: 	/s/ Virgil M. Pickar Jr.	 	 
	 

	 	 	 	 
	 

	 	Signature	 	 
	 
	 	 	 	 
	 

	 	
Virgil M. Pickar, Jr.
Chairman Board of Supervisors Chickasaw County

	 

	 	Print Name and Title	 	 
	 
	 	 	 	 
	 

	 	Date 9-18-2007	 	 

			
	 	 	 
	Master Contract #P0705M01382	 	 
	Funding Agreement #07-HQJC-045
	 	Revised 8/07

 

-9-

 

HQJC Funding Agreement Exhibit A

Investment Tax Credit Amortization Schedule Examples

 

 

 

HQJCP Funding

Agreement Exhibit A

Investment Tax Credit Amortization Schedule Examples

Background Information:

Effective July 1, 2005, Investment Tax Credits (or Insurance Premium Tax Credits) awarded to a
Business by the Iowa Department of Economic Development must be amortized equally over a 5-year
period. The Department will determine the amortization schedule and include it in the Business’
funding agreement.

Please note Investment Tax Credits (or Insurance Premium Tax Credits) are earned when the
corresponding asset (e.g. the building, a piece of machinery & equipment, etc.) is placed in
service. “Placed in service” typically corresponds with the point in time when the Business can
start depreciating the asset for tax purposes.

Earned Investment Tax Credits (or Insurance Premium Tax Credits) which cannot be used because of
the amortization schedule or because the credits exceed the Business’ tax liability for that tax
year may be carried forward for up to seven additional tax years.

Example #1

In this example, the Business is eligible to receive an Investment Tax Credit (ITC) in the amount
of $100,000. The ITC is earned on December 15, 2005 and may be carried forward until the tax year
in which December 15, 2012 falls. The Business’ ITC amortization schedule follows:

	 	 	 	 	 
	Fiscal Year 2007 - July 1, 2006 – June 30, 2007
	 	$	20,000	 
	Fiscal Year 2008 - July 1, 2007 – June 30, 2008
	 	$	20,000	 
	Fiscal Year 2009 - July 1, 2008 – June 30, 2009
	 	$	20,000	 
	Fiscal Year 2010 - July 1, 2009 – June 30, 2010
	 	$	20,000	 
	Fiscal Year 2011 - July 1, 2010 – June 30, 2011
	 	$	20,000	 

As the ITC was earned in the first year, the Business may claim up to $20,000 on its tax return for
that tax year. The Business’ tax liability for that tax year is $15,000 therefore; the Business
will carry forward $5,000 of unused credits.

	 	 	 	 	 
	ITC Earned — Total
	 	$	100,000	 
	 
	 	 	 	 
	ITC Available to be Taken based on the Amortization Schedule
	 	$	20,000	(FY 2006)
	Less ITC Claimed on Current Year’s Tax Return
	 	$	15,000	 
	 
	 	 	 
	ITC to be Carried Forward into Future Tax Year
	 	$	5,000	 

The following year the Business may claim up to $25,000 in ITCs on its tax return; $5,000 being
carried forward from last year plus another $20,000 based on the amortization schedule. The
Business’ tax liability for the current tax year is $25,000.

	 	 	 	 	 
	ITC Earned — Total
	 	$	100,000	 
	Less ITC Claimed to Date
	 	$	15,000	 
	 
	 	 	 
	ITC Remaining — Total
	 	$	85,000	 
	 
	 	 	 	 
	ITC Available to be Taken based on the Amortization Schedule
	 	$	20,000	(FY 2007)
	Plus ITC Carried Forward from Previous Year
	 	$	5,000	 
	Less ITC Claimed on Current Year’s Tax Return
	 	$	25,000	 
	 
	 	 	 
	ITC to be Carried Forward into Future Tax Year
	 	$	0	 

September 14, 2005

 

 

 

The Business would be able to continue to take tax credits based on the amortization schedule and
its tax liability each year. If this example were to continue, the tax credits could continue to
be claimed until they are exhausted or until the carry forward period expires in the tax year in
which December 15, 2012 falls.

Example #2

In this example, the Business is eligible to receive an Investment Tax Credit (ITC) in the amount
of $500,000. The ITC is earned on February 15, 2008 and may be carried forward until the tax year
in which February 15, 2015 falls. The Business’ ITC amortization schedule follows:

	 	 	 	 	 
	Fiscal Year 2007 - July 1, 2006 – June 30, 2007
	 	$	100,000	 
	Fiscal Year 2008 - July 1, 2007 – June 30, 2008
	 	$	100,000	 
	Fiscal Year 2009 - July 1, 2008 – June 30, 2009
	 	$	100,000	 
	Fiscal Year 2010 - July 1, 2009 – June 30, 2010
	 	$	100,000	 
	Fiscal Year 2011 - July 1, 2010 – June 30, 2011
	 	$	100,000	 

As the ITC was earned in the third year of the amortization schedule, the Business may claim up to
$300,000 on its tax return for that tax year ($100,000 per year for 3 years). The Business’ tax
liability for that tax year is $50,000 therefore; the Business will carry forward $250,000 of
unused credits.

	 	 	 	 	 
	ITC Earned — Total
	 	$	500,000	 
	 
	 	 	 	 
	ITC Available to be Taken based on the Amortization Schedule
	 	$	300,000	(FY 2006 – FY 2008)
	Less ITC Claimed on Current Year’s Tax Return
	 	$	50,000	 
	 
	 	 	 
	ITC to be Carried Forward into Future Tax Year
	 	$	250,000	 

The following year the Business may claim up to $350,000 in ITCs on its tax return; $250,000 being
carried forward from last year plus another $100,000 based on the amortization schedule. The
Business’ tax liability for the current tax year is $60,000.

	 	 	 	 	 
	ITC Earned — Total
	 	$	500,000	 
	Less ITC Claimed to Date
	 	$	50,000	 
	 
	 	 	 	 
	ITC Remaining — Total
	 	$	450,000	 
	 
	 	 	 	 
	ITC Available to be Taken based on the Amortization Schedule
	 	$	100,000	(FY 2009)
	Plus ITC Carried Forward from Previous Year
	 	$	250,000	 
	Less ITC Claimed on Current Year’s Tax Return
	 	$	60,000	 
	 
	 	 	 	 
	ITC to be Carried Forward into Future Tax Year
	 	$	290,000	 

The following year the Business may claim up to $390,000 in ITCs on its tax return; $290,000 being
carried forward from last year plus another $100,000 based on the amortization schedule. The
Business’ tax liability for the current tax year is $50,000.

	 	 	 	 	 
	ITC Earned — Total
	 	$	500,000	 
	Less ITC Claimed to Date
	 	$	110,000	 
	 
	 	 	 	 
	ITC Remaining — Total
	 	$	390,000	 
	 
	 	 	 	 
	ITC Available to be Taken based on the Amortization Schedule
	 	$	100,000	(FY 2010)
	Plus ITC Carried Forward from Previous Year
	 	$	290,000	 
	Less ITC Claimed on Current Year’s Tax Return
	 	$	50,000	 
	 
	 	 	 	 
	ITC to be Carried Forward into Future Tax Year
	 	$	340,000	 

After FY 2010, the Business is no longer subject to the amortization schedule and therefore, it
would be able to continue to take tax credits based on its tax liability each year. If this
example were to continue, the tax credits could continue to be claimed until they are exhausted or
until the carry forward period expires in the tax year in which February 15, 2015 falls.

September 14, 2005

 

 

 

HQJC Funding Agreement Exhibit B

Community Resolution Authorizing Property Tax Exemptions

 

 

 

RESOLUTION 01-15-2007-3

RESOLUTION TO AUTHORIZE FINANCIAL SUPPORT FOR

HOMELAND ENERGY SOLUTIONS, LLC

WHEREAS, Homeland Energy Solutions, LLC is interested in building a 100,000,000 gallon per
year ethanol plant with coal gasification in Chickasaw County, Iowa; and

WHEREAS, this facility will create 40-50 new high quality jobs and make an investment of more
than $160,000,000 in the County which includes working capital; and

WHEREAS, this project will create an important new market for area agriculture producers
providing them with another revenue source, expand the area’s economy and has allowed area
residents to invest in this effort resulting in a positive economic impact for the County and its
residents; and

WHEREAS, the project intends to apply for grants and loans through various state and federal
programs; and

WHEREAS, Homeland Energy Solutions, LLC is in need of financial assistance in the form of tax
abatements and road improvements and closures in order to make this project a reality.

NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF CHICKASAW COUNTY, IOWA, THAT:

Section 1: The County wholly endorses this project and all applications for state and
federal grant and loan funding; and

Section 2: The County intends to negotiate a development agreement which will provide for
tax abatements at a rate of 100% of the new taxes for a period of 20 years with Homeland
Energy Solutions, LLC.

PASSED AND APPROVED this 15 day of January 2007.

	 	 	 	 	 
	 	                /s/ Virgil M. Pickar, Jr.
 	 
	 	Virgil M. Pickar, Jr., Chairman 	 
	 	 	 
	 	                /s/ John L. Huegel,
 	 
	 	John L. Huegel, Vice-Chairman 	 
	 	 	 
	 	                /s/ Arnie J. Boge
 	 
	 	Arnie J. Boge 	 
	 	 	 
	 	                /s/ James J. Schueth
 	 
	 	James J. Schueth 	 
	 	 	 
	 	                  (Absent)
 	 
	 	 	 
	 	ATTEST:

 	 
	 	/s/ Judy A. Babcock
 	 
	 	Judy A. Babock, County Auditor 	 

 

 

 

DESCRIPTION OF THE PROJECT AND AWARD BUDGET

(EXHIBIT C)

Name of Business: Homeland Energy Solutions, LLC

Contract Number: P0705M01482

PROJECT DESCRIPTION

Homeland Energy Solutions, LLC will construct a 100-million gallon ethanol plant beginning in July
2007 after site work. The plant will manufacture ethanol and distillers grain, and will be the
first facility globally to use coal gasification for its energy source.

AWARD BUDGET

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SOURCE OF FUNDS  	 	Amount	 	 	 	 	  USE OF FUNDS	 	Cost	 
	IDED Programs
	 	 	 	 	 	 	 	 	 	*Land Acquisition	 	$	2,800,000	 
	VAP
	 	$	100,000	 	 	Forgivable Loan	 	*Site Preparation	 	$	7,670,000	 
	VAP
	 	$	100,000	 	 	Loan	 	*Building Acquisition	 	 	 	 
	HQJC Program Benefits
	 	 	 	 	 	1See below	 	*Building Construction	 	$	109,706,788	 
	 
	 	 	 	 	 	 	 	 	 	*Building Remodeling	 	 	 	 
	Stockholders
	 	$	95,280,000	 	 	Equity	 	*Mfg Machinery and Equipment	 	$	36,310,412	 
	Bank
	 	$	142,920,000	 	 	Loan	 	Other Machinery and Equipment	 	$	500,000	 
	 
	 	 	 	 	 	 	 	 	 	Racking, Shelving, etc.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	*Computer Hardware	 	$	75,000	 
	 
	 	 	 	 	 	 	 	 	 	Computer Software	 	$	100,000	 
	 
	 	 	 	 	 	 	 	 	 	Furniture and Fixtures	 	$	85,000	 
	 
	 	 	 	 	 	 	 	 	 	Working Capital	 	$	19,152,800	 
	 
	 	 	 	 	 	 	 	 	 	Research and Development	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Job Training	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Coal Gasification	 	$	62,000,000	 
	SUBTOTAL
	 	$	238,400,000	 	 	 	 	 	 	SUBTOTAL	 	$	238,400,000	 
	 	 	 	 	 	 	* included as capital investment if awarded tax credit program  	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SUB TOTAL
	 	$	0	 	 	 	 	 	 	SUB TOTAL	 	$	0	 
	TOTAL ALL FUNDS
	 	$	238,400,000	 	 	 	 	 	 	 	 	 	 	$	238,400,000	 

	 	 	 
	1	 	$14,289,615 estimated value

Updated 8/07

 

 

 

EXHIBIT D – JOB OBLIGATIONS

Homeland Energy Solutions, LLC

This Project has been awarded benefits from the Value-Added Agricultural Products and Processes
Financial Assistance Program (VAAPFAP), and High Quality Job Creation Program (HQJC), program(s).
The charts below outline the contractual job obligations related to this Project.

Data in the “Employment Base” column has been verified by the Department and reflects the
employment characteristics of the facility receiving funding before this award was made. Jobs to
be retained as a part of this Project must be included in these calculations.

Data in the “Jobs To Be Created” column outlines the new full-time jobs (including their wage
characteristics) that must be added to the employment base and, if applicable, statewide employment
base as a result of this award.

At the Project Completion Date and through the Project Maintenance Date, the Business must achieve
(at a minimum) the numbers found in the “Total Job Obligations” column.

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Total
	 	 	Employment	 	Jobs	 	Job
	HQJC JOB OBLIGATIONS	 	Base	 	To Be Created	 	Obligations
	Project Completion Date: 5/31/12
	 	 	 	 	 	 
	Project Maintenance Date: 5/31/14
	 	 	 	 	 	 
	Total employment at project location
	 	0	 	40	 	40
	Average Wage of total employment at project location
	 	n/a	 	 	 	 
	 
	 	 	 	 	 	 
	Qualifying wage threshold requirement (per hr)
	 	$20.12	 	 	 	 
	Benefit value (per hr)
	 	$3.64	 	 	 	 
	 
	 	 	 	 	 	 
	Number of jobs at or above qualifying wage
	 	n/a	 	n/a	 	n/a
	Average Wage of jobs at or above qualifying wage
	 	n/a	 	 	 	 
	 
	 	 	 	 	 	 
	Number of jobs at or above qualifying wage w/benefits
	 	0	 	31	 	31
	Average wage of jobs at or above qualifying wage w/benefits
	 	0	 	 	 	 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Total
	 	 	Employment	 	Jobs	 	Job
	VAAPFAP JOB OBLIGATIONS	 	Base	 	To Be Created	 	Obligations
	Project Completion Date: 5/31/10
	 	 	 	 	 	 
	Project Maintenance Date: 5/31/12
	 	 	 	 	 	 
	Total employment at project location
	 	0	 	40	 	40
	Average Wage of total employment at project location
	 	n/a	 	 	 	 
	 
	 	 	 	 	 	 
	Qualifying wage (per hr)
	 	$16.35	 	 	 	 
	Benefit value (per hr)
	 	$3.29	 	 	 	 
	 
	 	 	 	 	 	 
	Number of jobs at or above qualifying wage
	 	n/a	 	n/a	 	n/a
	Average Wage of jobs at or above qualifying wage
	 	n/a	 	 	 	 
	 
	 	 	 	 	 	 
	Number of jobs at or above qualifying wage w/benefits
	 	0	 	32	 	32
	Average wage of jobs at or above qualifying wage w/benefits
	 	0	 	 	 	 

Notes re: Qualifying Wages

	1.	 	If the Benefit Value was added to the base wage to meet program wage threshold
eligibility requirements, then any reduction in the Benefit Value during the life of the Contract must
be compensated for with salary to ensure that the Qualifying Wage rates are met.

	2.	 	Bonus or commission payments are not included when calculating the Qualifying Wage
rate.

Revised 8/07

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