Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.33

THIRD SUPPLEMENT

TO MASTER LOAN AGREEMENT

(REVOLVING LINE OF CREDIT LOAN)

THIS THIRD SUPPLEMENT TO MASTER LOAN AGREEMENT (this “Third Supplement”) is made and entered
into as of November 30, 2007, by and between HOME FEDERAL SAVINGS BANK (“Lender”) and HOMELAND
ENERGY SOLUTIONS, LLC, an Iowa limited liability company (“Borrower”), and supplements and
incorporates all of the provisions of that certain Master Loan Agreement, of even date herewith,
between Lender and Borrower (as the same may be amended, modified, supplemented, extended or
restated from time to time, the “MLA”).

1. Definitions. As used in this Third Supplement, the following terms shall have the
following meanings. Capitalized terms used and not otherwise defined in this Third Supplement
shall have the meanings attributed to such terms in the MLA. Terms not defined in either this
Third Supplement or the MLA shall have the meanings attributed to such terms in the Uniform
Commercial Code, as enacted in the State of Minnesota, as amended from time to time.

“Accounts” means all of Borrower’s “Accounts”, as such term is defined in the UCC,
including, without limitation, the aggregate unpaid obligations of customers and other
account debtors to Borrower arising out of the sale or lease of goods or rendition of
services by Borrower on an open account or deferred payment basis.

“Availability Date” shall have the meaning specified in Section 5 of this Third
Supplement.

“Borrowing Base” means, at any time, the lesser of: (a) $6,000,000.00; or (b) the
sum of: (i) seventy-five percent (75%) of the Borrower’s Eligible Accounts Receivable, plus
(ii) seventy-five percent (75%) of the Borrower’s Eligible Inventory.

“Borrowing Base Certificate” means the certificate substantially in the form of
Exhibit A attached hereto properly completed and duly executed by an authorized officer of
Borrower.

“Eligible Accounts Receivable” means all unpaid Accounts, net of any credits, except
that the following shall not in any event be deemed Eligible Accounts Receivable:

	 	(a)	 	that portion of Accounts unpaid thirty (30) days or more after
the invoice date;

	 
	 	(b)	 	that portion of Accounts that is disputed or subject to a claim
of offset or a contra account;

	 
	 	(c)	 	that portion of Accounts not yet earned by the final delivery
of goods or rendition of services, as applicable, by Borrower to the customer;

 

 

	 	(d)	 	Accounts owed by any unit of government, whether foreign or
domestic, except Incentive Payments will be considered a part of Eligible
Accounts Receivable as defined in this Agreement;

	 
	 	(e)	 	Accounts owed by an account debtor located outside the United
States;

	 
	 	(f)	 	Accounts owed by an account debtor that is insolvent, the
subject of bankruptcy proceedings or has gone out of business;

	 
	 	(g)	 	Accounts owed by a guarantor, Affiliate, director, officer,
employee, or member of the Borrower;

	 
	 	(h)	 	Accounts not subject to a duly perfected security interest in
favor of the Lender or which are subject to any lien, security interest or
claim in favor of any Person other than Lender, including any payment or
performance bond;

	 
	 	(i)	 	that portion of Accounts that has been restructured, extended,
amended or modified; and

	 
	 	(j)	 	that portion of Accounts that constitutes advertising, finance
charges, service charges or sales or excise taxes.

“Eligible Inventory” means all Inventory held for ultimate sale or lease, or which
has been or will be supplied under contracts of service, or which are raw materials, or
materials used or consumed in Borrower’s business and that has been specifically identified
and accepted by Lender, excluding all of the following inventory:

	 	(a)	 	covered by documents of title, instruments, or chattel paper
when these documents, instruments and paper are not owned and held by Borrower
or are subject to competing claims, liens or encumbrances;

	 
	 	(b)	 	intended to be sold outside of the ordinary course of business;

	 
	 	(c)	 	consigned, sold or leased to others or held on consignment or
lease from others or subject to a bailment;

	 
	 	(d)	 	subject to a competing claim, lien or encumbrance unless other
than any Permitted Liens;

	 
	 	(e)	 	paid for in advance with progress payments or any other sums to
Borrower in anticipation of the sale and delivery of inventory;

	 
	 	(f)	 	obsolete or unusable in the ordinary course of business;

	 
	 	(g)	 	inventory of work in progress;

 

2

 

	 	(h)	 	Inventory that Lender, in its sole discretion, disqualifies as
Eligible Inventory

“Incentive Payments” means any and all federal or state governmental subsidies,
payments, transfers or other benefits, whether now or hereafter established, received by the
Borrower.

“Maximum Rate” shall have the meaning specified in Section 12 of this Third
Supplement.

“Monthly Payment Date” means the first (1st) day of each calendar month.

“Outstanding Credit” means, at any time of determination, the aggregate amount of
Advances then outstanding under this Supplement and the Revolving Line of Credit Note.

“Outstanding Revolving Advance” means the total Outstanding Credit under this
Supplement and the Revolving Line of Credit Note.

“Request for Advance” shall have the meaning specified in Section 6(a) of this Third
Supplement.

“Revolving Advance” means an advance under this Supplement and the Revolving Line of
Credit Note.

“Revolving Letters of Credit” shall have the meaning specified in Section 7 of this
Third Supplement.

“Revolving Letter of Credit Liabilities” means, at any time, the aggregate maximum
amount available to be drawn under all outstanding Revolving Letters of Credit (in each
case, determined without regard to whether any conditions to drawing could then be met) and
all unreimbursed drawings under Revolving Letters of Credit.

“Revolving Line of Credit Loan” shall have the meaning specified in Section 2 of
this Third Supplement.

“Revolving Line of Credit Commitment” shall have the meaning specified in Section 2
of this Third Supplement.

“Revolving Line of Credit Loan Maturity Date” shall have the meaning specified in
Section 2 of this Third Supplement.

“Revolving Line of Credit Loan Termination Date” shall have the meaning specified in
Section 2 of this Third Supplement.

 

3

 

2. Revolving Line of Credit Commitment. On the terms and conditions set forth in the
MLA and this Third Supplement, Lender agrees to make one or more advances (collectively, the
“Revolving Line of Credit Loan”) to Borrower on a revolving basis, during
the period beginning on the Availability Date (as defined in Section 5 of this Third
Supplement) and ending on the Business Day immediately preceding the Revolving Line of Credit Loan
Maturity Date (as hereinafter defined in this Section 2) (the “Revolving Line of Credit Termination
Date”), in an aggregate principal amount outstanding at any one time not to exceed $6,000,000.00
(the “Revolving Line of Credit Commitment”) provided, however, that at no time shall the
Outstanding Revolving Advance exceed the Borrowing Base. The Revolving Loan Commitment shall
expire at 12:00 noon Central time on the 364th day from the Conversion Date (the “Revolving Line of
Credit Loan Maturity Date”). Subject to Section 13 of this Third Supplement, under the Revolving
Loan Commitment amounts borrowed and repaid or prepaid may be reborrowed at any time prior to and
including the Revolving Line of Credit Termination Date.

3. Purpose. The purposes for which Advances under the Revolving Line of Credit Loan
may be used are for general corporate and operating purposes of Borrower, including closing costs
and fees associated with the Revolving Line of Credit Loan. The Borrower agrees that the proceeds
of the Revolving Line of Credit Loan are to be used only for the purposes set forth in this Section
3.

4. Repayment of the Revolving Line of Credit Loan. The Borrower will pay accrued
interest on the Revolving Line of Credit Loan on the first (1st) day of each month,
commencing on the first (1st) Monthly Payment Date following the date on which the first
Advance is made on the Revolving Line of Credit Loan, and continuing on each Monthly Payment Date
thereafter until the Revolving Line of Credit Loan Maturity Date. On the Revolving Line of Credit
Loan Maturity Date, the amount of the then unpaid principal balance of the Revolving Line of Credit
Loan and any and all other amounts due and owing hereunder or under any other Loan Document
relating to the Revolving Line of Credit Loan will be due and payable. If any payment date is not
a Business Day, then the interest installment then due shall be paid on the next Business Day and
shall continue to accrue interest until paid.

5. Availability. Subject to the provisions of the MLA and this Third Supplement,
during the period commencing on the date on which all conditions precedent to the initial Advance
under the Revolving Line of Credit Loan are satisfied (the “Availability Date”) and ending on the
Revolving Line of Credit Loan Termination Date, Advances under the Revolving Line of Credit Loan
will be made as provided in this Third Supplement.

6. Making the Advances. 

(a) Revolving Advances. Each Revolving Advance shall be made, on notice from Borrower
(a “Request for Advance”) to Lender delivered before 12:00 Noon (Minneapolis, Minnesota time) on a
Business Day which is at least three (3) Business Days prior to the date of such Revolving Advance
specifying the amount of such Revolving Advance, provided that, no Revolving Advance shall be made
while an Event of Default exists or if the interest rate for such LIBOR Rate loan would exceed the
Maximum Rate. Any Request for Advance applicable to a Revolving Advance received after 12:00 Noon
(Minneapolis, Minnesota time) shall be deemed to have been received and be effective on the next
Business Day. The amount so requested from Lender shall, subject to the terms and conditions of
this Third Supplement, be made available to Borrower by: (i) depositing the same, in same day
funds, in an
account of Borrower; or (ii) wire transferring such funds to a Person or Persons designated by
Borrower in writing.

 

4

 

(b) Requests for Advances Irrevocable. Each Request for Advance shall be irrevocable
and binding on Borrower and Borrower shall indemnify Lender against any loss or expense it may
incur as a result of any failure to borrow any Advance after a Request for Advance (including any
failure resulting from the failure to fulfill on or before the date specified for such Advance the
applicable conditions set forth in this Third Supplement and the MLA), including, without
limitation, any loss (including loss of anticipated profits) or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by Lender to fund such Advance when
such Advance, as a result of such failure, is not made on such date.

(c) Minimum Amounts. Each Revolving Advance shall be in a minimum amount equal to
$50,000.00.

(d) Conditions Precedent to All Advances. Lender’s obligation to make each Advance
under the Revolving Line of Credit Note shall be subject to the terms, conditions and covenants set
forth in the MLA and this Third Supplement, including, without limitation, the following further
conditions precedent:

(i) Completion of Project. The Project shall have been completed per the Plans and
Specifications and a Completion Certificate shall have been obtained;

(ii) Repayment of Construction Loan. All obligations of Borrower for the Construction
Loan shall have been paid in full or have been converted to a Term Loan or Revolving Term Loan with
Lender;

(iii) Borrowing Base Certificate. Borrower shall have submitted a Borrowing Base
Certificate as required under Section 14 of this Third Supplement.

(iv) Representations and Warranties. The representations and warranties set forth in
the MLA and this Third Supplement are true and correct as of the date of the request for any
Advance, except as disclosed in writing to Lender, to the same extent and with the same effect as
if made at and as of the date thereof except as disclosed in writing to Lender except to the extent
that they relate solely to an earlier date;

(v) No Defaults. Borrower is not in default under the terms of the MLA, this Third
Supplement, the Related Documents or any other agreement to which Borrower is a party and which
relates to the construction of the Project or the operation of Borrower’s business;

(vi) Government Action. No license, permit, permission or authority necessary for the
construction, operation or use of the Project has been denied, revoked or challenged by or before
any Governmental Authority; and

 

5

 

(vii) Marketing Agreements. Borrower has executed marketing agreements for all ethanol
and DDGS to be produced at the Project and provided Lender with collateral assignments of all such
agreements in form and content which is satisfactory to Lender and its counsel and acknowledged by
the non-Borrower party to all such agreements.

7. Letters of Credit.

Commitment to Issue. The Borrower may request Revolving Advances by Lender, and
Lender, subject to the terms and conditions of this Third Supplement, may, in its sole discretion,
issue letters of credit for any Borrower’s account (such letters of credit, being hereinafter
referred to collectively as the “Revolving Letters of Credit”); provided, however, that:

(i) the aggregate amount of outstanding Letter of Credit Liabilities shall not at any time
exceed the amount of $3,000,000.00;

(ii) the sum of the outstanding Revolving Letters of Credit plus the Outstanding Revolving
Advances shall not at any time exceed the Borrowing Base;

(iii) the expiration date of a Revolving Letter of Credit advanced under the Revolving Line of
Credit Loan shall be no latter than the Revolving Line of Credit Loan Maturity Date.

All Revolving Letters of Credit issued under this Section 7 are subject to the provisions of
Section 2.06 of the MLA.

8. Interest Rate. Subject to the provisions of Sections 2.07 and 2.08 of the MLA and
Section 9 and 12 of this Third Supplement, the Revolving Line of Credit Loan shall bear interest at
a rate equal to the LIBOR Rate plus 325 basis points. The computation of interest, amortization,
maturity and other terms and conditions of the Revolving Line of Credit Loan shall be as provided
in the Revolving Line of Credit Note, provided, however, in no event shall the applicable rate
exceed the Maximum Rate.

9. Default Interest. In addition to the rights and remedies set forth in the MLA:
(i) if Borrower fails to make any payment to Lender when due, then at Lender’s option in each
instance, such obligation or payment shall bear interest from the date due to the date paid at 2%
per annum in excess of the rate of interest that would otherwise be applicable to such obligation
or payment; (ii) upon the occurrence and during the continuance of an Event of Default beyond any
applicable cure period, if any, at Lender’s option in each instance, the unpaid balances of the
Revolving Line of Credit Loan shall bear interest from the date of the Event of Default or such
later date as Lender shall elect at 2% per annum in excess of the rate(s) of interest that would
otherwise be in effect on the Revolving Line of Credit Loan under the terms of the Revolving Line
of Credit Note; (iii) after the maturity of the Revolving Line of Credit Loan, whether by reason of
acceleration or otherwise, the unpaid principal balance of the Revolving Line of Credit Loan
(including without limitation, principal, interest, fees and expenses) shall automatically bear
interest at 2% per annum in excess of the rate of interest that would otherwise be in effect on the
Revolving Line of Credit Loan under the terms of the Revolving Line of Credit Note.
Interest payable at the Default Rate shall be payable from time to time on demand or, if not sooner
demanded, on the last day of each calendar month.

 

6

 

10. Late Charge. If any payment of principal or interest due under this Third
Supplement or the Revolving Line of Credit Note is not paid within ten (10) days of the due date
thereof, Borrower shall, in addition to such amount, pay a late charge equal to five percent (5%)
of the amount of such payment.

11. Changes in Law Rendering Certain LIBOR Rate Loans Unlawful. In the event that any
change in any applicable law (including the adoption of any new applicable law) or any change in
the interpretation of any applicable law by any judicial, governmental or other regulatory body
charged with the interpretation, implementation or administration thereof, should make it (or in
the good-faith judgment of Lender should raise a substantial question as to whether it is) unlawful
for Lender to make, maintain or fund LIBOR Rate loans, then: (a) Lender shall promptly notify each
of the other parties hereto; and (b) the obligation of Lender to make LIBOR Rate loans of such type
shall, upon the effectiveness of such event, be suspended for the duration of such unlawfulness.
During the period of any suspension, Lender shall make loans to Borrower that are deemed lawful and
that as closely as possible reflect the terms of the MLA.

12. Maximum Amount Limitation. Anything in the MLA, this Third Supplement, or the
other Loan Documents to the contrary notwithstanding, Borrower shall not be required to pay
unearned interest on the Revolving Line of Credit Note or any of the Loan Obligations, or ever be
required to pay interest on the Revolving Line of Credit Note or any of the Loan Obligations at a
rate in excess of the Maximum Rate, if any. If the effective rate of interest which would
otherwise be payable under the MLA, this Third Supplement, the Revolving Line of Credit Note, or
any of the other Loan Documents would exceed the Maximum Rate, if any, then the rate of interest
which would otherwise be contracted for, charged, or received under the MLA, this Third Supplement,
the Revolving Line of Credit Note, or any of the other Loan Documents shall be reduced to the
Maximum Rate, if any. If any unearned interest or discount or property that is deemed to
constitute interest (including, without limitation, to the extent that any of the fees payable by
Borrower for the Loan Obligations to Lender under the MLA, this Supplement, the Revolving Line of
Credit Note, or any of the other Loan Documents are deemed to constitute interest) is contracted
for, charged, or received in excess of the Maximum Rate, if any, then such interest in excess of
the Maximum Rate shall be deemed a mistake and canceled, shall not be collected or collectible, and
if paid nonetheless, shall, at the option of the holder of the Revolving Line of Credit Note, be
either refunded to Borrower, or credited on the principal of the Revolving Line of Credit Note. It
is further agreed that, without limitation of the foregoing and to the extent permitted by
applicable law, all calculations of the rate of interest or discount contracted for, charged or
received by Lender under the Revolving Line of Credit Note, or under any of the Loan Documents,
that are made for the purpose of determining whether such rate exceeds the Maximum Rate applicable
to Lender, if any, shall be made, to the extent permitted by applicable laws (now or hereafter
enacted), by amortizing, prorating and spreading during the period of the full terms of the
Advances evidenced by the Revolving Line of Credit Note, and any renewals thereof all interest at
any time contracted for, charged or received by Lender in connection therewith.

 

7

 

13. Mandatory Prepayments or Collateralization. The Borrower shall, within five (5)
days following the earlier of the delivery of each Borrowing Base Certificate hereof or the day
upon which such Borrowing Base Certificate was due, either (i) prepay the Advances in the amount,
if any, by which the Outstanding Credit on the date of prepayment under this Section 13 exceeds the
Borrowing Base at such time, together with accrued interest to the date of such prepayment on the
amount prepaid, or (ii) pledge and assign to Lender additional collateral acceptable to Lender, in
Lender’s sole discretion, and deliver all documentation that Lender, in its sole discretion, may
require in connection with such pledge and assignment and the perfection of a first-priority
security interest in such additional collateral, so that the Borrowing Base plus the value assigned
by Lender, in its sole discretion, to such additional collateral equals or exceeds the Outstanding
Credit.

14. Reporting Requirements. In addition to the reporting requirements under Section
5.01(c) in the MLA, beginning with the first month after the Conversion Date, Borrower will furnish
to Lender as soon as available and in any event within 30 days after the end of each month (or at
such other times or with such greater frequency as is reasonably requested by Lender), a duly
completed Borrowing Base Certificate, setting forth the Borrowing Base as of the last day of such
month based upon collateral value criteria and advance rates which do not exceed those set forth in
the Borrowing Base Certificate, and including such other information, representation and warranties
contemplated therein, certified by the appropriate authorized officer of Borrower.

15. Security. The Borrower’s obligations hereunder and, to the extent related
thereto, the MLA, shall be secured as provided in the MLA and the other Loan Documents.

IN WITNESS WHEREOF, the parties have caused this Third Supplement to the Master Loan Agreement
to be executed by their duly authorized officers as of the date shown above.

	 	 	 	 
	HOMELAND ENERGY SOLUTIONS, LLC, 

an Iowa limited liability company

 	 
	By:  	/s/ Stephen K. Eastman
 	 
	 	Name:  	Stephen K. Eastman  	 
	 	Title:  	President 	 
	 
	HOME FEDERAL SAVINGS BANK,

a federally chartered stock savings bank

organized under the laws of the United States

 	 
	By:  	/s/ Eric Oftedahl
 	 
	 	Eric Oftedahl  	 
	 	Its: Vice President 	 
	 

 

8

 

EXHIBIT A

BORROWING BASE CERTIFICATE

Detailed Calculation

For Period Ending:                                                
              ,                     

Date Prepared:           
                                            
       ,                     

	 	 	 	 	 	 	 	 	 
	1 Accounts Receivable:
	 	 	 	 	 	 	 	 
	___________________ (ethanol)
	 	$	 	 	 	 	 	 
	___________________ (DDGs)
	 	$	 	 	 	 	 	 
	Other
	 	$	 	 	 	 	 	 
	Other
	 	$	 	 	 	 	 	 
	Total
	 	$	 	 	 	 	 	 
	Deduct Ineligible Accounts
	 	$	 	 	 	 	 	 
	(31 days or more from invoice date)
	 	 	 	 	 	 	 	 
	Deduct Ineligible Accounts
	 	$	 	 	 	 	 	 
	(as determined by Bank)
	 	 	 	 	 	 	 	 
	Eligible Accounts Receivable
	 	$	 	 	 	 	 	 
	Multiply by Borrowing Base Factor
	 	 	75.00	%	 	 	 	 
	Accounts Receivable Loan Availability
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	2 DDGS (current value)
	 	 	 	 	 	 	 	 
	Ending Corn Inventory
	 	$	 	 	 	 	 	 
	Ending DDGS & other bi-products Inventory
	 	$	 	 	 	 	 	 
	Total Inventory

	 	 	 	 	 	 	 	 
	Multiply by Borrowing Base Factor
	 	 	75.00	%	 	 	 	 
	Inventory Loan Availability
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	3 Ethanol Inventories (lower of cost or market)

	 	 	 	 	 	 	 	 
	Ending Ethanol Inventory
	 	$	 	 	 	 	 	 
	Ending ______________ Inventory
	 	$	 	 	 	 	 	 
	Other Inventory

	 	 	 	 	 	 	 	 
	Total Inventory
	 	$	 	 	 	 	 	 
	Multiply by Borrowing Base Factor
	 	 	75.00	%	 	 	 	 
	Inventory Loan Availability
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	4 Total Borrowing Base (Totals from #1, #2, & #3)
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	5 Outstanding Loan Balance including outstanding Letters of Credit (as of month end)
	 	$	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	6 Excess or Deficit (Line 4 minus Line 5)
	 	 	 	 	 	$	 	 

			
	*	 	If a Deficit exists, remit amount unless remitted since end of month.

 

9

 

BORROWER REPRESENTS AND WARRANTS:

1. With respect to the information in this Borrowing Base Certificate and any accompanying work
papers related hereto (i) such information is true, complete and correct in all material respects
as of the date set forth above as the Date Prepared; (ii) no information has been omitted which
would make the foregoing misleading; (iii) there has been no significant change in the value of
the items set forth on this Borrowing Base Certificate (the “Borrowing Base Collateral”) since the
date set forth above as the Date Prepared; and (iv) there exists no Event of Default or any event
which with the giving of notice or the passing of time or both would constitute an Event of
Default.

2. The Borrowing Base Collateral and the amounts reflected in this Borrowing Base Certificate (i)
are genuine and in all respects are what they purport to be: (ii) presently are and will continue
at all times to be subject to Lender’s duly perfected, first priority security interest and no
other lien; and (iii) to the best of Borrower’s knowledge comply in all material respects with the
eligibility criteria for any Borrowing Base items, respectively, and to the best of Borrower’s
knowledge comply in all material respects with the representations and warranties contained in the
Security Agreement.

The undersigned certifies that the amounts shown are true and correct from Borrower’s accounts and
records as of the Date Prepared as indicated above, and there have been no material adverse changes
therein since the above date. The information provided in the Borrowing Base Certificate is
consistent with the requirements of the Credit Agreement.

	 	 	 	 	 	 	 
	 	 	Approved and Certified By:	 	 
	 
	 	 	 	 	 	 
	 	 	HOMELAND ENERGY SOLUTIONS, LLC, an

Iowa limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Its:
	 	 

	 	 

 

10Filed by Bowne Pure Compliance

 

Exhibit 10.34

CONSTRUCTION NOTE

			
	 	 	 
	$94,000,000.00
	 	November 30, 2007

1. FOR VALUE RECEIVED, HOMELAND ENERGY SOLUTIONS, LLC, an Iowa limited liability company
(“Borrower”), hereby promises to pay to the order of HOME FEDERAL SAVINGS BANK, a federally
chartered stock savings bank organized under the laws of the United States (“Lender”), the
principal sum of Ninety Four Million and No/100ths ($94,000,000.00) Dollars, or so much thereof as
may be advanced to, or for the benefit of, Borrower and be outstanding, with interest thereon, to
be computed on each advance from the date of its disbursement as set forth herein, and pursuant to
that certain Master Loan Agreement of even date herewith by and between Lender and Borrower (as the
same may be amended, modified, supplemented, extended or restated from time to time, the “MLA”),
and pursuant to that certain First Supplement to the MLA, of even date herewith, by and between
Lender and Borrower (as it may be amended, modified, supplemented, extended or restated from time
to time, the “First Supplement”), and which remains unpaid, in lawful money of the United States
and immediately available funds. This Construction Note (this “Note”) is issued pursuant to the
terms and provisions of the MLA and the First Supplement and is entitled to all of the benefits
provided for in the MLA and the First Supplement. All capitalized terms used and not defined
herein shall have the meanings assigned to them in the MLA and the First Supplement.

2. The outstanding principal balance of this Note shall bear interest at a variable rate
determined by Lender to be 350 basis points above the LIBOR Rate in effect on the date of the first
Advance made to Borrower under this Note. Notwithstanding the foregoing, the rate of interest
under this Note may be adjusted by Lender pursuant to the provisions of the MLA, the First
Supplement and this Note. On the Conversion Date, up to but not more than fifty percent (50%) of
the outstanding principal balance under this Note may, at Borrower’s option, be converted to a
fixed rate of interest at the rate set forth in Section 9 of this Note.

3. “LIBOR Rate” (London Interbank Offered Rate) means the rate (rounded upward to the nearest
sixteenth and adjusted for reserves required on Eurocurrency Liabilities (as hereinafter defined)
for banks subject to FRB Regulation D (as hereinafter defined) or required by any other federal law
or regulation), quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time
two Banking Days (as hereinafter defined) before the commencement of the Interest Period for the
offering of U.S. Dollar deposits in the London interbank market for an Interest Period of one
month, as published by Bloomberg or another major information vendor listed on BBA’s official
website. “Banking Day” shall mean a day on which Lender is open for business, dealings in U.S.
dollar deposits are being carried out in the London interbank market, and banks are open for
business in New York City and London, England. “Eurocurrency Liabilities” has the meaning as set
forth in FRB Regulation D. “FRB Regulation D” means Regulation D as promulgated by the Board of
Governors of the Federal Reserve System, 12 CFR Part 204, as amended from time to time.

4. The rate of interest due hereunder shall initially be determined as of the date hereof and
shall thereafter be adjusted, as and when, the LIBOR Rate changes. All such adjustments to the
rate of interest shall be made and become effective as of the first day of the month following the
date of any change in the LIBOR Rate and shall remain in effect until and including the day
immediately preceding the next such adjustment (each such day hereinafter being referred to as an
“Adjustment Date”). All such adjustments to said rate shall be made and become effective as of the
Adjustment Date, and said rate as adjusted shall remain in effect until and including the day
immediately preceding the next Adjustment Date. Interest hereunder shall be computed on the basis
of a year of three hundred sixty (360) days, but charged for actual days principal is outstanding.

 

 

 

5. Advances may only be made under this Note until the Conversion Date after which no further
Advances may be made hereunder. No amounts may be readvanced under this Note. Any principal
repayment by Borrower will reduce Lender’s commitment on the Construction Loan.

6. Borrower will pay interest on the Construction Loan monthly in arrears on the first day of
each month commencing on the first Monthly Payment Date following the date on which the first
Advance is made hereunder, and continuing on each Monthly Payment Date thereafter until the
Conversion Date. On the Conversion Date, all outstanding accrued interest shall be due and payable
in full.

7. On the Conversion Date, $20,000,000.00 of the outstanding principal balance of this note
shall be converted into the Term Revolving Note pursuant to the MLA and the Second Supplement to
the MLA. The remaining outstanding principal balance of this note shall be converted into a term
loan pursuant to the MLA, the First Supplement and this Note.

8. Subject to the provisions of Section 2.07 and 2.08 of the MLA and Sections 9 and 12 of the
First Supplement, the portion of the Term Loan that has not been converted to a Fixed Rate Loan
pursuant to Section 8(e) of the First Supplement shall bear interest at a rate equal to the LIBOR
Rate plus 325 basis points.

9. As provided in Section 2.05 of the MLA, on the Conversion Date, Borrower shall have the
right to convert up to fifty percent (50%) of the outstanding principal balance of the Term Loan
into a Fixed Rate Loan, with the consent of Lender, which shall bear interest at the five year
LIBOR swap rate, which is in effect on the Conversion Date plus 325 basis points, or another rate
as agreed upon by Lender and Borrower. Borrower shall provide written notice to Lender at least 30
days prior to the Conversion Date of its intention to convert any portion of the Term Loan to a
Fixed Rate Loan. Such written notice shall specify the specific dollar amount that Borrower is
electing to convert to a Fixed Rate Loan. Any amount subject to a fixed rate of interest pursuant
to Section 8(e) of the First Supplement shall not be subject to adjustments under Section 2.07 of
the MLA.

10. Beginning on the first (1st) Monthly Payment Date following the month in which the
Conversion Date occurs and continuing on each succeeding Monthly Payment Date thereafter until the
seventh month after the Conversion Date, Borrower shall make monthly payments of accrued interest
on the Term Loan. Beginning on the first (1st) Monthly Payment Date of the seventh month following
the Conversion Date (the “Amortization Date”), and continuing on each succeeding Monthly Payment
Date thereafter until the Maturity Date, Borrower shall make equal monthly payments of principal in
the amount of $616,666.67 plus accrued interest. The outstanding principal balance of the Term
Note, together with all accrued interest, if not paid sooner, shall be due and payable in full on
the Maturity Date. Following the Conversion Date, and in addition to all other payments of
principal and interest required under the MLA and the First Supplement, Borrower shall annually
remit to Lender the Excess Cash Flow Payment pursuant to Section 11 of the First
Supplement. Any Excess Cash Flow Payment or any other payment from Excess Cash Flow shall not
constitute a prepayment with respect to which a prepayment fee under Section 2.10 of the MLA is
required to be paid.

 

2

 

11. The outstanding principal balance hereof, together with all accrued interest, if not paid
sooner, shall be due and payable in full on the fifth (5th) annual anniversary of the
Conversion Date (the “Maturity Date”).

12. All payments and prepayments shall, at the option of Lender, be applied first to any costs
of collection, second to any late charges, third to accrued interest and the remainder thereof to
principal.

13. Borrower may, at anytime and from time to time, upon thirty (30) days advance written
notice to Lender, prepay the outstanding principal amount of this Note in whole or in part with
accrued interest to the date of such prepayment on the amount prepaid, without penalty or premium,
except as, and to the extent, specifically provided in Section 2.10 of the MLA. This Note is
subject to mandatory prepayment, at the option of Lender, as provided in the MLA.

14. In addition to the rights and remedies set forth in the MLA and the First Supplement: (i)
if Borrower fails to make any payment to Lender when due under this Note, then at Lender’s option
in each instance, such obligation or payment shall bear interest from the date due to the date paid
at 2% per annum in excess of the rate of interest that would otherwise be applicable to such
obligation or payment under this Note; (ii) upon the occurrence and during the continuance of an
Event of Default beyond any applicable cure period, if any, at Lender’s option in each instance,
the unpaid balances under this Note shall bear interest from the date of the Event of Default or
such later date as Lender shall elect at 2% per annum in excess of the rate(s) of interest that
would otherwise be in effect under the terms of this Note; (iii) after the Maturity Date, whether
by reason of acceleration or otherwise, the unpaid principal balance of this Note (including
without limitation, principal, interest, fees and expenses) shall automatically bear interest at 2%
per annum in excess of the rate of interest that would otherwise be in effect under this Note.
Interest payable at the Default Rate shall be payable from time to time on demand or, if not sooner
demanded, on the last day of each calendar month.

15. If Borrower fails to make any payment to Lender within ten (10) days of the due date
thereof, Borrower shall, in addition to such amount, pay a late charge equal to five percent (5%)
of the amount of such payment.

16. This Note is secured by, among other instruments, a Mortgage, Security Agreement and
Financing Statement covering various parcels of real property, fixtures, and personal property
located in Chickasaw County, Iowa (the “Mortgage”). In the event any such security is found to be
invalid for whatever reason, such invalidity shall constitute an event of default hereunder. All of
the agreements, conditions, covenants, provisions, and stipulations contained in the Mortgage, or
any instrument securing this Note are hereby made a part of this Note to the same extent and with
the same force and effect as if they were fully set forth herein. It is agreed that time is of the
essence of this Note.

 

3

 

17. Upon the occurrence at any time of an Event of Default or at any time thereafter, the
outstanding principal balance hereof plus accrued interest hereon plus all other amounts due
hereunder shall, at the option of Lender, be immediately due and payable, without notice or
demand and Lender shall be entitled to exercise all remedies provided in this Note, the MLA, the
First Supplement or any of the Loan Documents.

18. Upon the occurrence at any time of an Event of Default or at any time thereafter, Lender
shall have the right to set off any and all amounts due hereunder by Borrower to Lender against any
indebtedness or obligation of Lender to Borrower.

19. Borrower promises to pay all reasonable costs of collection of this Note, including, but
not limited to, reasonable attorneys’ fees paid or incurred by Lender on account of such
collection, whether or not suit is filed with respect thereto and whether or not such costs are
paid or incurred, or to be paid or incurred, prior to or after the entry of judgment.

20. Demand, presentment, protest and notice of nonpayment and dishonor of this Construction
Note are hereby waived.

21. This Note shall be governed by and construed in accordance with the laws of the State of
Minnesota.

22. Borrower hereby irrevocably submits to the jurisdiction of any Minnesota state court or
federal court over any action or proceeding arising out of or relating to this Note, the MLA and
any instrument, agreement or document related hereto or thereto, and Borrower hereby irrevocably
agrees that all claims in respect of such action or proceeding may be heard and determined in such
Minnesota state or federal court. Borrower hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of such action or
proceeding. Nothing in this Note shall affect the right of Lender to bring any action or
proceeding against Borrower or its property in the courts of any other jurisdiction to the extent
permitted by law.

	 	 	 	 	 
	 	HOMELAND ENERGY SOLUTIONS,
 LLC, an Iowa
limited liability company

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

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]