Document:

Filed by Bowne Pure Compliance

Exhibit
10.44

APPLICATION FORM

for RISE:

IMMEDIATE OPPORTUNITY PROJECT FUNDING

GENERAL INFORMATION

	 	 	 
	Applicant Name: City or County of

	 	Chickasaw Country
	 

	 	 

	 	 	 	 	 	 	 
	Contact Person:

	Dusten Rolando, PE
	 	Title: 
	County Engineer
	 

	 	 
	 	 	 	 

	 	 
	Complete Mailing Address 

	Courthouse, 8 East Prospect, PO Box 311
	 

	 
	 

	Street Address and/or Box No.

	 	 	 	 	 	 	 	 	 	 	 
	New Hampton

	 	IA
	 	 	50659	 	 	Daytime Phone:
	 	641-394-2100
	 	 	 	 	 
	City

	 	State
	 	Zip
	 	 	 	 Area Code

	If more than one local government is involved in this roadway project, please state the highway authority,
contact person, mailing address, and telephone number of the second agency. (Attach
an additional page if more than two agencies are involved.)

	 	 	 	 	 
	City or County of 

	 	 	Contact Person: 	 
	 

	 
	 	 	 

	 	 	 
	Complete Mailing Address
	 	 
	 

	 	 
	 

	 	Street Address and/or Box No.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Daytime Phone:	 	 
	 	 	 	 	 
	City

	 	State
	 	Zip	 	 	 	 Area Code

	 	 	 	 	 
	Was this application discussed with or reviewed by DOT District Office staff?

	 	þ  Yes
	 	o  No
	 
	 	 	 	 
	Have you applied for funding from the Department of Economic Development?

	 	þ  Yes
	 	o  No

If so, please state amount, purpose, and status. IDED awarded VAAPFAP $400,000 grant, 6% investment tax credit,
sale tax exemption (High Quality Jobs) to help with gap financing and rate of
return

Please complete the following:

The proposed project is on the following type(s) of road:

	 	 	 	 	 	 	 
	 

	 	o  City Street
	 	o  Secondary Road
	 	þ  Primary Road

	 	 	 
	This project involves

	 	o  Development of a New Road (Length in feet:                     )
	 

	 	þ  Improvement of an Existing Road (Length in feet:                     )
	 

	 	o  Both
	This project involves

	 	o  Expanding an Existing Development
	 

	 	þ  Attracting a New Development
	 

	 	o  Retaining an Existing Development

	 	 	 	 	 
	Has any part of this development or roadway project been started?

	 	þ  Yes
	 	o  No

If yes, please explain. Site grading and balancing is expected to begin mid August.

	 	 	 	 	 
	Does the project involve relocation of economic activity from elsewhere in Iowa?

	 	o  Yes
	 	þ  No

If yes, please explain.

This
application is for RISE funding as a       o Loan    þ Grant   o Combination

If this application is for a loan or a combination loan/grant, please state the proposed terms of repayment.
(Include amount of principal to be repaid, proposed interest rate, length of
repayment, etc.)

If this application is for funding for two or three program years, please specify the amount of funding requested for each year:

	 	 	 	 	 
	First year $240,000

	 	Second year $                     
	 	Third year $                    

 

 

 

ROADWAY PROJECT COST INFORMATION

(Please attach an itemized breakdown as Item J.)

	 	 	 	 	 
	RISE funds requested for roadway project
	 	$	240,000	 
	 	 	 	 
	Non-RISE funds available for roadway project
	 	$	70,000	 
	 	 	 	 

List below the source and amount of these non-RISE
roadway funds.

	 	 	 	 	 	 	 	 	 
	Source	 	Amount	 	 	Assured?	 
	 
	1. Company-Homeland
	 	$	70,000	 	 	yes
	2.
	 	 	 	 	 	 	 	 
	3.
	 	 	 	 	 	 	 	 
	4.
	 	 	 	 	 	 	 	 

	 	 	 	 	 
	Total cost of roadway project
	 	$	310,000	 
	 	 	 	 
	(The RISE funds requested and the non-RISE funds available should equal the total cost of roadway
project.)
	 	 	 	 
	 
	 	 	 	 
	TOTAL CAPITAL INVESTMENT INFORMATION
	 	 	 	 
	(For purposes of this application, total capital investment should not include any investment in
the roadway project. Please attach an itemized breakdown as Item I.)
	 	 	 	 
	 
	 	 	 	 
	Capital investment from private sources (non-roadway)
	 	$	223,600,000	 
	 	 	 	 
	 
	 	 	 	 
	Capital investment from public sources (non-roadway)
	 	$	400,000	 
	 	 	 	 
	 
	 	 	 	 
	Total Capital Investment
	 	$	224,000,000	 
	 	 	 	 

ECONOMIC IMPACT INFORMATION

	 	 	 
	The type of development involved is

	 	þ  Industrial/manufacturing
	 

	 	o  Commercial/office/wholesale
	 

	 	o  Park/tourist/recreational
	 

	 	o  Retail
	 

	 	o  Other (specify)

Please state the number of permanent, direct jobs created and/or retained as a result of this project. (Direct jobs created refer to new jobs in firms, developments, or sites
specifically assisted by a RISE project but do not include construction or indirect “multiplier” jobs. Direct jobs retained do not include existing jobs unless there is an
immediate threat the development will be located out-of-state, and documentation is provided.)

	 	 	 	 	 
	Permanent, full-time jobs
at present
	 	                    	 	(Use full-time equivalents if necessary.)
	 
	 	 	 	 
	Initial direct jobs created

	 	40	 	 
	(within first two years)
	 	 	 	 
	 
	 	 	 	 
	Future direct jobs created
	 	 	 	 
	
(beyond first two years)
	 	 	 	 
	 
	 	 	 	 
	Total direct jobs created
	 	40	 	Total direct jobs retained           
                    
                    
          
	 
	 	 	 

 

2

 

DOCUMENTATION INFORMATION

The following documents must be attached to this application. In the upper right-hand corner of
each document, write the letter shown below which the document supports. (Please refer to the
general instructions for an explanation of each item.)

Please check that the following items are attached:

	 	 	 	 	 
	þ

	 	A.
	 	A RESOLUTION or resolutions approved by the participating local governments.
	 
	 	 	 	 
	þ

	 	B.
	 	A NARRATIVE describing the potential economic development.
	 
	 	 	 	 
	þ

	 	C.
	 	A TRANSPORTATION NARRATIVE assessing existing conditions, outlining the proposed
concept of the roadway project, and providing adequate transportation justification.
	 
	 	 	 	 
	þ

	 	D.
	 	A reproducible MAP identifying the general area, the location of the roadway
project, and the location of associated economic development.
	 
	 	 	 	 
	þ

	 	E.
	 	A PLAN and typical CROSS-SECTION of the roadway project.
	 
	 	 	 	 
	þ

	 	F.
	 	A TIME SCHEDULE for the total development, including the roadway project.
	 
	 	 	 	 
	þ

	 	G.
	 	ASSURANCE of at least 20 percent non-RISE financial participation in the project.
	 
	 	 	 	 
	þ

	 	H.
	 	DOCUMENTATION that arrangements have been made for nonroadway factors intrinsic to
the success of the development.
	 
	 	 	 	 
	þ

	 	I.
	 	An ITEMIZED BREAKDOWN of total capital investment (nonroadway).
	 
	 	 	 	 
	þ

	 	J.
	 	An ITEMIZED BREAKDOWN of total roadway project costs. The attached form must be
used.
	 
	 	 	 	 
	þ

	 	K.
	 	A NARRATIVE describing the associated economic development and jobs. The attached
form must be used.
	 
	 	 	 	 
	þ

	 	L.
	 	DOCUMENTATION that the proposed road project and economic development are
consistent with any regional or metropolitan area long-range transportation plans in
effect for the RISE project location.

CERTIFICATION

To the best of my knowledge and belief, all information included in this application is true and
accurate, including the commitment of all physical and financial resources. This application has
been duly authorized by the participating local government(s). I understand the attached
RESOLUTION(S) binds the participating local governments to assume responsibility for adequate
maintenance of any new or improved city streets or secondary roads.

I hereby certify, under penalty of perjury, that any award of RISE funds; any subsequent letting of
contracts for design, construction, reconstruction, improvement or maintenance; or the furnishing
of materials therefore; shall not involve direct or indirect interest, prohibited by Iowa Code
Section 15A.2, 314.2, 362.5 or 331.342, of any state, county, or city official, elective or
appointive. Any award of RISE funding or any letting of a contract in violation of the foregoing
provisions shall invalidate the award of RISE funding and authorize a complete recovery of any
funds previously disbursed.

I understand that, although this information is sufficient to secure a commitment of funds, a firm
contract between the applicant and the Department is required prior to the authorization of funds.

Representing the Chickasaw County

Signed:

	 	 	 
	/s/ Virgil Pickar
	 	8-20-07
	 
	 	 
	Signature in Ink
	 	Date Signed
	 	 	 
	Virgil Pickar, Chair
	 	August 14, 2007
	 
	 	 
	Typed Name and Title
	 	Typed Date

Attested:

	 	 	 
	/s/ Judy A Babcock
	 	8-20-07
	 
	 	 
	Signature in Ink
	 	Date Signed
	 	 	 
	Judy Babcock, Auditor
	 	August 14, 2007
	 
	 	 
	Typed Name and Title
	 	Typed Date

 

3

 

RISE IMMEDIATE OPPORTUNITY APPLICATION

Roadway Project Description and Cost Estimate

(RISE-Eligible Items)

	 	 	 	 	 	 	 
	LEAD APPLICANT NAME: Dusten Rolando, P.E.

	 	Date: August 21, 2007

	 

	 	 
	 	 	 	 

ROAD PROJECT DESCRIPTION:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Location: IA 24 in Sec. 6 T95NR11W & Sec.1 T95NR12W
	 	 	 	 	 
	 

	 	Length (ft.): 1750 +/-
Pavement Width: 28’ & varies
	 	 	 	
ROW Width: Existing

	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	Pavement Type: Hot mix asphalt (HMA)	 	 	 	Depth: 11” w/ special backfill base
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TRAFFIC INFORMATION:	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Present AADT (2006): 2340	 	 	 	 	 	 	 	% Trucks: 12%	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Design Year AADT (2007): 2848	 	 	 	 	 	 	 	% Trucks: 26.7%	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

COST ESTIMATE:

	 	 	 	 	 	 	 
	Item Description	 	Units & Unit Cost	 	Total Cost	 
	Roadway and borrow 
	 	1700 C.Y. @ $20	 	$	34,000	 
	Class 13 3xcavtionh
	 	1000 C.Y. @ $25	 	$	25,000	 
	3” HMA surface course
	 	490 ton @ $75	 	$	36,750	 
	8” HMA base course
	 	1280 ton @ $75	 	$	96,000	 
	6” special backfill
	 	1120 ton @ $30	 	$	33,600	 
	6” granular shoulder
	 	380 ton @ $15	 	$	5,700	 
	Top soil
	 	200 C.Y. @ $25	 	$	5,000	 
	Seeding
	 	0.4 acres @ $3000	 	$	1,200	 
	Pavement markigns
	 	50 STA @ $50	 	$	2,500	 
	Traffic controll
	 	LS	 	$	5,000	 
	 
	 	 	 	 	 	 
	SUBTOTAL
	 	 	 	$	244,750	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Engineering, Legal, Administration
	 	 	 	$	40,250	 
	 
	 	 	 	 	 
	Contingency
	 	 	 	$	25,000	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	GRAND TOTAL
	 	 	 	$	310,000	 
	 
	 	 	 	 	 

			
	Note:	 	If road project is in more than one jurisdiction,
please prepare separate cost estimate forms for
each portion and submit with applications.

Please refer to next page

 

4

 

RISE IMMEDIATE OPPORTUNITY APPLICATION

Road Project-Eligible and Ineligible Items

Examples of RISE-Eligible Items:

Storm Sewer (RISE-eligible costs include the cost of construction of longitudinal and outlet storm
sewers made necessary by highway construction, in the proportion that the roadway right of way
bears to the total drainage area to be served by the proposed sewers.)

Right-of-Way and Appraisal Costs (based on current market value; a qualified appraisal acceptable
to the Office of Right of Way will be requested for approved projects)

Engineering, Legal, Administration

Clearing and Grubbing

Excavation

Removal of Pavement

Removal of Existing Structures

Removal of Drives

Removal of Sidewalk

P.C. Concrete Pavement

P.C. Concrete Drives

P.C. Concrete Sidewalk

Incidental P.C. Concrete

Earth Shoulder Finishing

Stabilized Shoulder Finishing

Rolled Stone Base

Hot-Mix Asphalt, Surface Course

Hot-Mix Asphalt, Intermediate Course

Hot-Mix Asphalt, Base

Primer and Tack Coat Bitumen

Cleaning and Preparation of Base

Granular Surfacing of Shoulders

Granular Surfacing of Road

Manhole

Intake

Apron

Corrugated Metal Pipe Culvert

Concrete Pipe Culvert

Backfill

Seeding

Guard Rail

Traffic Control

Design Services

Contingency

Ineligible Items Include:

Storm Sewer beyond the amount needed to drain the roadway.

Any pre-application costs (except qualifying advance right-of-way costs to protect or preserve a
project corridor).

 

5

 

DESCRIPTION OF ASSOCIATED ECONOMIC DEVELOPMENT AND JOBS—ITEM K

Iowa law requires a number of factors be considered in assessing applications for RISE funding. To
comply with this requirement, it is necessary that applicants provide additional information about
the businesses and jobs that would be assisted by the requested RISE project funds. The following
information must be provided for each business used to justify the project. Please note that all
information supplied to the DOT is public information and cannot be held confidential.

	1.	 	Each business involved should prepare a narrative addressing the following points. The
narrative should be attached to the application as “Item K.”

	 	A.	 	A description and history of the business, including the location of company
headquarters, all current plants (both in- and out-of-state), and the number of full-time
and part-time employees at each location.
	 
	 	B.	 	Data supporting historical and projected growth potential.
	 
	 	C.	 	The hourly wages and turnover rates for each current job classification.
	 
	 	D.	 	The hourly wages, whether full- or part-time, and expected turnover rates for each
future job created.
	 
	 	E.	 	A description of employment conditions, including an itemized list and dollar value per
employee of any job benefits, work environment, safety record, opportunity for advancement,
etc.
	 
	 	F.	 	A list of any civil or criminal violations of state or federal law which the company
has been charged with or convicted of during the last five years. Please include the
violation and date, the agency which charged the violation, the outcome or resolution, and
any penalties or settlement terms.
	 
	 	G.	 	Percentage of in-state suppliers.
	 
	 	H.	 	Iowa companies you expect to sell to which currently buy from non-Iowa companies and
the percentage of your sales that will fall into this category.
	 
	 	I.	 	Expected impact on import substitution. (Import substitution means replacing inputs,
products or services previously provided by out-of-state firms or from out-of-state
locations with Iowa inputs, products or services.)
	 
	 	J.	 	Other Iowa companies that could be considered as your competitors.
	 
	 	K.	 	Required environmental permits.

	2.	 	Briefly answer the following questions in the space provided.

	 	A.	 	Is the company willing to give hiring preference to Iowa residents, or residents within a 30-mile
radius, for the jobs created as a result of this project? Please provide a written plan describing
the company’s hiring procedure and priorities. Homeland will use Iowa Workforce Development to
help with hiring practices. They will seek to give preference to qualified Iowa residents within a
30 mile radius.
	 
	 	B.	 	If the company has, within three years of application for assistance, acquired or merged with an
Iowa corporation or company, has it made and will it continue to make a good-faith effort to hire
the workers of the merged or acquired company?
	 
	 	 	 	This is a new company so this not does apply.
	 
	 	C.	 	What percentage of the company’s total operating expenditures (including wages and salaries) will
be spent within the state of Iowa? It is expected that nearly 95% of the plant’s expenses will be
spent within the state of Iowa. The majority of the expenses are related to raw material (corn),
energy, and wages and benefits.
	 
	 	D.	 	Of the total dollar amount of annual sales, what is the expected percentage of out-of-state sales?

	 
	 	 	 	
90% — DDGS & ethanol may be trucked to Iowa markets but the vast majority will be sent out of state.
	 
	 	E.	 	Are any other state funds being requested for the road or economic development project? If so,
please list the source, amount requested, and purpose of funding. No other funds are being
requested for road improvements. Financial assistance has been received through IDED; Homeland
will be requesting funds for the rail project through the DOT Rail Revolving Loan & Grant Program.

 

6

 

ITEM A

RESOLUTION NO. 08-20-2007-26

RESOLUTION ENDORSING THE APPLICATION FOR THE IOWA

DEPARTMENT OF TRANSPORTATION’S IMMEDIATE OPPORTUNITY RISE

PROJECT FUNDING TO SUPPORT HOMELAND ENERGY SOLUTIONS LLC

WHEREAS, Chickasaw County is pursuing an immediate nonspeculative opportunity and negotiating
with officials of Homeland Energy Solutions LLC; and

WHEREAS, the reconstruction and paving of improvements to Highway 24 is necessary for
appropriate access to the site and for the safety and well being of those traveling on Highway 24;
and

WHEREAS, Homeland Energy Solutions LLC intends to create 40 full time jobs; and

WHEREAS, the Board of Supervisors of Chickasaw County, Iowa, desires to encourage this project
to occur and fully endorses this project; and

WHEREAS, Chickasaw County pledges to provide the funds for the project.

NOW, THEREFORE, IT IS HEREBY RESOLVED by the Board of Supervisors of Chickasaw County, Iowa
that:

1. The County wholeheartedly endorses an application requesting financial assistance from
the Iowa Department of Transportation to improve Highway 24 and assures the financial
participation of the County for 20 percent non-RISE participation in local match for this
industrial development project.

2. The Chair is authorized to sign any and all RISE application documents.

Passed and approved by the Board of Supervisors of Chickasaw County, Iowa, this 20th day of August,
2007.

	 	 	 	 	 
	 	 	 
	 	    /s/ Virgil M. Pickar, Jr.
 	 
	 	Virgil M. Pickar, Jr., Chairman	 
	 	Board of Supervisors 	 

Attested:

	 	 	 
	/s/ Judy A. Babcock
 

Judy A. Babcock, Auditor

	 	 

 

 

 

			
	 	 	 
	Narrative — Economic Development Potential
	 	Item B

Homeland Energy Solutions, LLC (Homeland) intends to build an ethanol plant with a nameplate
capacity of 100 million gallons per year east of new Hampton in Chickasaw County Iowa. This
corn-based grain processing facility will be the first in the world to use coal gasification for
its energy source. Ethanol production has been shown to have a positive impact on rural economies
in many ways.

The plant will create 40 new jobs with wages totaling more than $1.5 M. The benefit package
increases the value (see Item K
– E). A few more construction and permanent jobs may be created
with the coal gasification process being installed. In addition, plants help “create” many jobs
during construction and the multiplier effect creates more spin-off jobs. The Institute for
Decision Making at the University of Northern Iowa completed a study in November 2004 for 100 M
gallon plant in Buena Vista County used IMPLAN software. During construction, many workers are
required to build a facility predicted to cost over $238 M. UNI projected the need for a total of
2661 employees during the 15-18 month time period. That analysis also showed the plant would create
110 indirect jobs and 27 induced new jobs related to operations and another 14 jobs generated from
the income earned by plant employees. 1

Last year, an Iowa State study by economists in the College of Agriculture challenged other
studies.2 Swenson and Ethington’s conservative analysis looked at four ethanol plants in
Iowa using data from 2005. They found a prototypical plant, without local ownership, had this
impact:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Direct	 	 	Indirect	 	 	Induced	 	 	Total	 	 	Multiplier	 
	Output
	 	$	181,584,000	 	 	$	27,145,981	 	 	$	2,520,973	 	 	$	211,250,864	 	 	 	1.16	 
	Value added
	 	$	31,334,326	 	 	$	8,598,854	 	 	$	1,570,476	 	 	$	41,503,655	 	 	 	1.32	 
	Jobs
	 	 	43	 	 	 	71	 	 	 	36	 	 	 	150	 	 	 	3.49	 

They also considered the value of local investment in the economic impact and analyzed different
levels of local impact. Homeland Energy has over 1075 investors and many are from the local area.
If merely 27% of the investment is locally owned, the value is much higher than a plant without
local ownership:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Direct	 	 	Indirect	 	 	Induced	 	 	Total	 	 	Multiplier	 
	Output
	 	$	215,631,008	 	 	$	32,039,446	 	 	$	5,370,682	 	 	$	253,041,136	 	 	 	1.17	 
	Value added
	 	$	30,832,502	 	 	$	11,378,242	 	 	$	3,180,471	 	 	$	45,391,215	 	 	 	1.47	 
	Jobs
	 	 	43	 	 	 	119	 	 	 	75	 	 	 	236	 	 	 	5.49	 

 

	 	 	 
	1	 	UNI, Economic Impact Analysis, November 2004.
	 
	2	 	Swenson, David. “Model Economic Analysis: An Economic
Impact Assessment of an Ethanol Production Facility in Iowa.” Department of
Economics, Iowa State University. July 2006.

 

 

 

ITEM C

EXISTING CONDITIONS, PROPOSED CONCEPT &
TRANSPORTATION JUSTIFICATION

A 100 million gallon per year ethanol plant is proposed in Chickasaw County in the W 1/2 of Sec.
6-T95N-R11W and the East 1/2 of Sec. 1-T95N-R12 W. The proposed site is south of an east – west
railroad main line owned by the Iowa, Chicago and Eastern Railroad. The site is on IA 24 between
New Hampton and Lawler. Access to the plant will be from IA 24, with the main plant access on the
north side of the highway.

Due to the amount of trucks accessing the site, the proposed entrance will warrant the construction
of a minor right turn lane for west-bound traffic. The 2006 average annual daily traffic (AADT) on
IA 24 adjacent to the proposed site is 2, 180 vehicles per day, with trucks comprising 270 vehicles
per day, which is 12 % of the total volume. The proposed project is projected to generate the
following traffic:

	 	 	 	 	 
	Trucks (224x2)
	 	 	448	 truck trips per day
	Employees (30x2)
	 	 	60	 employee trips per day
	 
	 	 	 	 
	Subtotal
	 	 	508	 
	Existing AADT
	 	 	2, 180	 
	 
	 	 	 
	Total Trips with Existing and Proposed Trips
	 	 	2, 688	 
	 
	 	 	 

The proposed improvement will allow the increased west-bound truck traffic to more safely exit the
roadway, providing safer traffic flow into the facility and on IA 24. The minor right turn lane is
warranted based on the Iowa DOT Design Guide, Chapter 6, Section 6-A1.

 

 

 

 

 

 

 

 

 

 

 

 

			
	 	 	 
	Time Schedule
	 	Item F

4th Quarter 2005: Formation of Company after feasibility study was completed

1st Quarter 2006: Completed business plan

4th Quarter 2006: Completed equity drive

3rd Quarter 2007: Site balancing and plant construction begin

2nd Quarter 2008: Begin road work

2nd Quarter 2008: Begin rail work

4th Quarter 2008: Hire Employees and Management

4th Quarter 2008: Begin Operations

 

 

 

			
	 	 	 
	Assurances
	 	Item G

Chickasaw County, by resolution, assures they will provide the required match, no less than 20
percent of the total cost of the roadway project, which is being considered for RISE funding.

 

 

 

			
	 	 	 
	Documentation of Arrangements
	 	Item H

All arrangements have been made to assure this will be a successful project related to nonroadway
factors intrinsic. Funds have been raised. The site design is finished and site grating and
balancing is slated to start this month, August. Water testing has been completed. The rail design
has been approved. Required environmental permits have been issued.

Iowa Workforce Development will help with hiring and the community college will be involved with
job training.

 

 

 

			
	 	 	 
	Total Capital Investment (non-roadway)
	 	Item I

	 	 	 	 	 
	Use of Funds	 	Budget	 
	Land Acquisition
	 	$	2,800,000	 
	Site Preparation
	 	 	7,670,000	 
	Building Construction
	 	 	146,017,200	 
	Other Machinery & Equipment
	 	 	500,000	 
	Computer Hardware
	 	 	75,000	 
	Computer Software
	 	 	100,000	 
	Furniture & Fixtures
	 	 	85,000	 
	Coal Gasification
	 	 	61,877,800	 
	 
	 	 	 
	 
	 	 	 	 
	Total
	 	$	219,125,000	 
	 
	 	 	 

 

 

 

			
	 	 	 
	Associated Economic Development & Jobs
	 	Item K

A. Homeland Energy Solutions LLC (herein, Homeland) was founded by eight individuals from northeast
Iowa, all with substantial experience in various parts of the ethanol industry. Homeland was
founded with the intention of building an ethanol plant within either Chickasaw or Winneshiek
County. Currently headquartered in Riceville, Iowa, Homeland is a start up company with no prior
locations or employees.

B. Ethanol has become a booming industry throughout the country, but particularly in the upper
Midwest where corn production is prevalent. Ethanol production increased 20 percent to 4.86 billion
gallons in 2006, but still fell short of demand which rose 33 percent to 5.4 billion gallons.
Demand is only going to increase as Iowa begins in earnest to implement the Renewable Fuels
Standard (RFS) put in place to have biofuels compose 25 percent of the state’s fuel usage by 2019.

C. This is a new facility. There currently are no jobs.

D. Once the facility becomes operational, it will generate 40 FTE jobs with a total payroll of
$1,520,350 and an average hourly wage of $18.27 – 30 percent higher than the average wage in
Chickasaw County. Turnover is expected to be minimal, as ethanol plants traditionally have a very
low turnover rate.

New Jobs and wages are as follows:

	 	 	 	 	 	 	 	 	 
	General Manager
	 	 	1	 	 	$	85,000	 
	Plant Manager
	 	 	1	 	 	 	80,000	 
	Lab Manager
	 	 	1	 	 	 	60,000	 
	Maintenance Supervisor
	 	 	1	 	 	 	53,000	 
	Quality Assurance Sup.
	 	 	1	 	 	 	50,000	 
	Shift Supervisor
	 	 	3	 	 	 	45,000	 
	Controller
	 	 	1	 	 	 	42,000	 
	Merchandiser
	 	 	1	 	 	 	50,000	 
	Operators 1
	 	 	18	 	 	 	34,500	 
	Operators 2
	 	 	4	 	 	 	27,000	 
	Maintenance Technicians
	 	 	2	 	 	 	36,100	 
	Lab Technician
	 	 	1	 	 	 	35,150	 
	Administrative — Scale
	 	 	2	 	 	 	23,000	 
	Yard Maintenance
	 	 	1	 	 	 	27,000	 
	Administrative Clerk
	 	 	1	 	 	 	27,000	 
	Inventory Clerk
	 	 	1	 	 	 	29,000	 

E. Homeland understands the importance of having a clean and safe working environment. Homeland
will conduct safety and productivity programs which involve both management and general employees.
These programs will have required targets in order to achieve compliance. Jobs are highly
competitive and Homeland will do all they can to retain employees. Promotion, when openings occur,
is commonly done from within as current employees already have a working knowledge of the plant.

 

 

 

			
	 	 	 
	Associated Economic Development & Jobs
	 	Item K

Employee benefits are as follows:

	 	 	 	 	 
	Medical/Health Insurance
	 	$	4,620	 
	Dental Insurance
	 	$	600	 
	Vision Insurance
	 	$	300	 
	Life Insurance
	 	$	360	 
	STD
	 	$	200	 
	LTD
	 	$	540	 

Additionally, the company will contribute 3% of the employee’s salary per year to a 401(k) plan.

F. Homeland is a start-up company; hence they have no previous violations of state or federal law.

G. A good estimate would be that 75-90% of all suppliers will be in-state since the number of
framers selling corn to the plant is expected to be a large number and most of those could be
Iowans.

H. Livestock producers, aka Iowa companies, may be buying feed from out-of-state and they could use
DDGS. Iowa companies buying ethanol cold be buying from a number of sources.

I. Since this is a new firm, no import substitution can take place. Ethanol plants create new
markets for a variety of services and supplies. Often new firms develop close to a plant.

J. Homeland’s main product will be ethanol. There are currently 28 currently producing ethanol
facilities in Iowa, with six more currently under construction. Despite this high number, with
supply still not meeting the increasing demand for ethanol, there will be no direct competition
between these plants.

K. An Air Quality Construction Permit has been issued by the Iowa Department of Natural Resources.

 

 

 

ATTACHMENT L

INRCOG

Iowa Northland Regional Council Of Governments

229 E. Park Avenue

Waterloo, IA 50703

Phone 319-235-0311

Fax 319-235-2891

August 20, 2007

RISE Program: Immediate Opportunity

Iowa Department of Transportation

Office of Systems Planning

800 Lincoln Way

Ames, IA 50010

To Whom it May Concern:

			
	RE:	 	Homeland Energy Solutions LLC

RISE Application

Chickasaw County

As required, the Iowa Northland Regional Transportation
authority (INRTA) has reviewed the above referenced
project to ensure that it is consistent with the goals
and objectives of the INTRTA’s current Long Range
Transportation Plan. Subject to Iowa DOT review, we
concur that the project is consistent with the goals of
the plan as it relates to land use, traffic and the
continued development of an efficient transportation
system.

If you have any questions or require additional
information relating to this project, please contact me
at your earliest convenience
Sincerely,

	 	 	 
	/s/ Kevin Blanshan
 

Kevin Blanshan
Director of Transportation and Data Services

	 	 

			
	cc:	 	Maurice Welsh, Chair, RTA

Rod Larsen, District Planner, Iowa DOTFiled by Bowne Pure Compliance

Exhibit 10.45

Engineering, Procurement, and Construction Agreement

Dated as of December 4, 2007

between

Homeland Energy Solutions, LLC.

and

Cornerstone Energy, LLC.d/b/a Constellation New Energy — CEI, LLC.

for

Homeland Energy Solutions Ethanol Production Facility Fuel Line Project

			
	*	 	Portions omitted pursuant to a request for confidential treatment and filed separately with the SEC.

 

 

 

Natural Gas Pipeline Project

Engineering, Procurement and Construction Agreement

This Engineering, Procurement and Construction Agreement (“Agreement”) is made and
entered into as of December 4, 2007 (the “Effective Date”), by and between
Cornerstone Energy, LLC, d/b/a Constellation NewEnergy — Gas Division CEI, LLC., a Delaware
limited liability company with its principal offices at 11011 Q Street, Suite 106A, Omaha, Nebraska
(“Contractor”), and Homeland Energy Solutions, LLC, an Iowa limited liability company, with
its principal offices at 951 N Linn Ave, New Hampton, Iowa 50659 (Owner).

Recitals

Whereas, Owner desires to enter into an agreement with Contractor to obtain Contractor’s
services for the design, engineering, procurement, construction, installation, testing and
commissioning of a natural gas pipeline to be owned and operated by Owner to be located near New
Hampton, Iowa (together with all related appurtenances thereto, the “Fuel Line”, as further
described in Article 1, below); and

Whereas, Contractor, through itself or through its vendors, suppliers, and subcontractors,
desires to provide Owner with the foregoing design, engineering, procurement, construction,
installation, testing and commissioning of the Fuel Line on a lump sum, Turnkey basis;

Now Therefore, in consideration of the mutual promises and agreements of the Parties herein
expressed, as well as other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Parties, intending to be legally bound hereby, agree as follows:

Article 1

Definitions

The following terms shall have the meanings specified in this Article 1 when capitalized and
used in this Agreement, including the Recitals. The meanings specified are applicable to both the
singular and plural.

“Acceptance Testing” shall mean all testing required to be performed on the Fuel Line
as set forth in Title 49 of the Code of Federal Regulations, Part 192 (“49 C.F.R. Part 192”).

“Affiliate” shall mean any entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with a party.

“Alignment Sheets” shall mean record drawings (but not field mark-ups) of the Fuel
Line showing current and accurate “as-built” conditions.

“Alliance” shall mean Alliance Pipeline.

 

2

 

“Applicable Codes and Standards” shall mean the codes, standards or requirements set
forth in any applicable law, including, without limitation, 49 C.F.R. Part 192, and in Contractor’s
(and, as applicable, subcontractor’s) engineering standards, and which shall govern Contractor’s
performance of the Work. In the event of an inconsistency or conflict between any of the
Applicable Codes and Standards, the highest performance standard shall govern Contractor’s
performance under this Agreement.

“Commissioning” shall mean that, upon completion of the construction and installation
of the Fuel Line or portions thereof, Contractor shall subject the Fuel Line and portions thereof
to Acceptance Testing. These, as well as other necessary pre-tests and trials (collectively
hereinafter called Commissioning), may be performed without operating the Facility for production,
so as to establish the proper function and readiness of the Fuel Line for operation.

“Completion” shall mean that the Fuel Line is mechanically complete, has been
Commissioned, is ready to be placed in service, and that all of Contractor’s other Work and
construction obligations have been satisfied to the satisfaction of Owner, except for minor ‘punch
list’ items of work which the Parties may in their discretion agree in writing may be completed at
a later time.

“Completion Date” shall have the meaning given in Section 5.2.

“Contract Price” shall have the meaning given in Section 6.1.

“Delay Liquidated Damages” shall have the meaning given in Section 12.2.

“Facility” shall mean Owner’s Ethanol production facility located near New Hampton,
IA.

“Facility Site” shall mean the site location of the Facility.

“Force Majeure Event” shall mean, floods, hurricanes, tornados, earthquakes and other
acts of God, wars, acts of terrorism, epidemics or quarantines, unforeseen archeological and
environmental impediments, a delay in completion under Owner’s interconnection agreement with
Kinder Morgan Pipeline which delays the completion of the Town Border Station only to the extent of
such delay, and changes in applicable law to the extent the same prevents the affected party from
performing its obligations under this Agreement. Force Majeure Event shall not include any of the
following: (i) economic hardship, (ii) changes in market conditions, (iii) late delivery or failure
of equipment or materials, unless otherwise caused by Force Majeure Event, (iv) strikes, or other
similar labor actions, and (v) nonperformance or delay by subcontractors, unless otherwise caused
by Force Majeure Event.

“Fuel Line” shall mean a 4-inch diameter steel pipeline approximately seven and 1/4
(7.25) miles long capable of transporting a minimum of 470 Mcfh per hour of natural gas to Owner’s
Facility near New Hampton, IA. The pipeline will be built, at a minimum, in compliance with Title
49 of the Code of Federal Regulations, Part 192 and any other applicable state and federal codes or
regulations (the “Codes”). The pipeline will be designed to transport
pipeline quality natural gas meeting the requirements of the Alliance Pipeline L.P. Tariff section
2. Quality of Gas in effect at the date of this EPC Agreement. The Fuel Line includes the
interstate pipeline “tap” and meter, regulator set at the Town Border Station, regulator set at the
Facility site, and includes Commissioning of the line. The Fuel Line is described in Exhibit
A.

 

3

 

“Good Engineering and Construction Practices” or “GECP” shall mean the
generally accepted practices, methods, techniques and standards employed by the United States of
America natural gas distribution industry with respect to: (a) the design, construction,
commissioning and testing of natural gas pipeline delivery systems, which includes, but is not
limited to, the Applicable Codes and Standards and the standards recommended by the equipment
suppliers and manufacturers of the equipment and (b) personnel and plant safety and environmental
protection reasonably expected at the Facility.

“Hazardous Materials” shall mean any substance that under applicable laws is
considered to be hazardous or toxic or is or may be required to be remediated, including but not
limited to (a) any petroleum or petroleum products, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing polychlorinated biphenyls (“PCBs”) and processes
and certain cooling systems that use chlorofluorocarbons (“CFCs”), (b) any chemicals,
materials or substances which are now or hereafter become defined as or included in the definition
of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,”
“restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” or any words of similar
import pursuant to applicable law, or (c) any other chemical, material, substance or waste,
exposure to which is now or hereafter prohibited, limited or regulated by any part of the
Government of the United States of America, the State of Iowa, Chicasaw County, Iowa (and any other
counties in which the Fuel Line is located), New Hampton, Iowa (and any other municipalities in
which the Fuel Line is located), or which may be the subject of liability for damages, costs or
remediation.

“Inception Date” shall have the meaning given in Section 5.1.

“Interconnect Agreement” shall mean the agreement between Alliance Pipeline Company
and Owner for the construction and implementation of the interconnection between the Fuel Line and
Alliance’s pipeline facilities.

“Natural Gas Agreement” shall mean/have the meaning given in Section 6.2.

“Notice to Proceed” and “Notice to Proceed Date” shall have the meanings
given in Section 5.1.

“Owner Delay” shall mean events of significant interference in the progress of the
Work, significant delay or material failure of performance solely caused by Owner, or their
respective employees or agents, except for those delays caused by Owner’s reasonable response to
Contractor’s non compliance with its obligations under this Agreement.

 

4

 

“Town Border Station” or “TBS” shall mean the piping and related equipment
that constitutes the interconnection between the Alliance interstate natural gas pipeline and the
Fuel Line.

“Turnkey” shall mean that Contractor has all obligations under this Agreement to Owner
and all related responsibilities for the engineering, procurement, construction, and start-up of
the Fuel Line under this Agreement.

“Work” shall have the meaning given in Section 3.1.

Article 2

Relationship Of Owner, Contractor, And Subcontractors

2.1 Status of Contractor. Contractor shall be an independent contractor with respect to the
Work or any part thereof to be performed under this Agreement. Neither Contractor, its
subcontractors, nor their respective employees shall be deemed to be the agents, representatives,
employees, or servants of Owner except as expressly provided herein.

2.2 Subcontractors. Contractor shall have the right to have any of the Work accomplished by a
subcontractor pursuant to a subcontract which is consistent with the terms and conditions of this
Agreement, provided that Contractor shall provide prior written notice to Owner, identifying
subcontractors being awarded subcontracts in excess of one hundred thousand dollars ($100,000) in
the aggregate. Further, all such subcontracts shall be assignable from Contractor to the Owner
upon written notice by Owner. Nothing contained herein shall create any contractual or third party
beneficiary relationship between such subcontractor and Owner, including but not limited to an
obligation to pay or to cause the payment of money to any subcontractors or a right to any recourse
to Owner.

Article 3

Contractor’s Responsibilities

3.1 Scope of Work. Contractor agrees to complete construction of the Fuel Line which shall
include:

A. all services required in connection with the design, engineering, procurement, site
preparation, construction, construction management, installation, testing and commissioning of the
Fuel Line, and to provide all equipment, fabrications, transportation, construction materials,
machinery, tools, labor, construction fuels, chemicals, utilities, and administration, construction
supplies, and storage, required in connection therewith;

 

5

 

B. negotiate for the benefit of Owner all aspects of the Interconnect Agreement between Owner
and Alliance, pay the fee contemplated by that agreement directly to Alliance upon execution
thereof, and administer all aspects of the construction and implementation to be performed by
Alliance thereunder; Contractor will keep Owner fully informed of the progress of the negotiations
of the Interconnect Agreement and will afford Owner the timely opportunity to comment on it before
proposals, responses, and counterproposals are given to Alliance , and will keep Owner fully
informed of the progress of construction of the interconnect; and

C. all other items or tasks that are required to achieve completion of the Fuel Line in
accordance with the requirements of this Agreement;

all of which together shall constitute the “Work” under this Agreement.

3.2 Contractor shall perform the Work in a timely manner consistent with the level of care and
skill ordinarily exercised by other members of Contractor’s professions and in accordance with
GECP, all applicable laws, all Applicable Codes and Standards, all required permits, and all other
terms and provisions of this Agreement. It is understood and agreed that the Work shall include
any incidental work that can reasonably be inferred as required and necessary to complete the Fuel
Line in accordance with GECP, all applicable laws, all Applicable Codes and Standards, all required
permits, and all other terms and provisions of this Agreement, excluding only those items which
Owner has specifically agreed to provide under Article 4 of this Agreement.

3.3 Contractor Project Manager and Key Personnel. Contractor shall designate a person as
Contractor Project Manager in a written notice to Owner. Once designated, Contractor may not
change the Contractor Project Manager without the Owner’s approval, which approval shall not be
unreasonably withheld. The Contractor Project Manager shall have complete authority to act on
behalf of Contractor on all matters pertaining to this Agreement or the Work, including giving
instructions, and implementing approved changes in the Work.

3.4 Subcontractors. Contractor shall be solely responsible for the engagement, management,
and payment of subcontractors in the performance of the Work and shall remove and replace any
subcontractor or any subcontractor personnel for failure to perform their respective obligations.
Contractor shall be responsible for assuring that any work performed by subcontractors meets the
standards set forth in Section 3.2 above.

3.5 Employment of Qualified and Licensed Personnel. Contractor shall not employ or permit any
subcontractor to employ, in connection with its performance under this Agreement, any unfit person
or anyone not skilled or not legally authorized to do the work assigned to such person. Contractor
agrees to promptly remove (or to require any subcontractor to remove) from its services in
connection with the work any employee who does not meet the foregoing requirements.

3.6 Environmental Regulations and Environmental Compliance. Contractor shall perform all
work in an environmentally responsible manner, including, without limitation, the following:

A. Contractor shall, and shall cause its subcontractors to, (i) comply with all applicable
laws including without limitation those applicable laws regarding Hazardous Materials, (ii) comply
with all required environmental permits; and (iii) apply for, obtain, comply with, maintain and
renew all required permits required of Contractor by applicable laws up to and including the
Completion Date (defined in Section 5.2).

 

6

 

B. Contractor shall conduct its activities under this Agreement, and shall cause each of its
subcontractors to conduct its activities, in a manner designed to prevent unlawful pollution of the
environment or any other prohibited release of any Hazardous Materials by Contractor and its
Subcontractors.

C. Contractor shall not, nor shall it cause or allow any subcontractor to, release or dispose
of Hazardous Materials at the Fuel Line right of way, bring Hazardous Materials to the Fuel Line
right of way, or transport Hazardous Materials from the Fuel Line right of way.

3.7 Clean-Up. Upon completion of the Fuel Line, Contractor shall remove, at its own cost, all
of its equipment and materials from the Fuel Line right of way, and shall remove all waste, rubbish
and Hazardous Materials (whether or not released or disposed of in contravention of Section 3.6 C)
generated or brought on the Fuel Line right of way by Contractor or its subcontractors from the
Fuel Line right of way and restore the Fuel Line right of way in accordance with all required
permits and this Agreement. Contractor shall be responsible for all costs associated with such
removal and shall indemnify Owner and its Affiliates against any expense incurred in connection
with such clean-up. Final construction clean-up must be accepted and approved by Owner prior to
the achievement of Completion.

3.8 Safety and Security. Contractor shall be responsible for the safety of all persons and
property which are related to the Work and which are not expressly made the responsibility of the
Owner, and Contractor shall perform the Work in accordance with the safety and health rules and
standards of applicable laws and required permits and Contractor’s safety program. If Owner at any
time observes Contractor, or any of its subcontractors, to be performing the Work in an unsafe
manner, or in a manner that, if continued, may become unsafe, then Owner shall have the right (but
not the obligation) to require Contractor to stop the Work until such time as the manner of
performing the Work has been rendered safe to the satisfaction of Owner; provided, however, that at
no time shall Contractor be entitled to an adjustment of the Contract Price or Completion Date
(defined in Section 5.2) based on such work stoppage. Contractor shall be responsible for the
security, lighting, and supervision of the Fuel Line and associated rights of way until all of the
requirements of Completion have been satisfied.

3.9 Laws and Regulations. Contractor shall, and shall cause all subcontractors and their
respective employees, to comply with all applicable laws, Applicable Codes and Standards, and
required permits that affect or govern Contractor’s performance under this Agreement.

3.10 Required Permits and Interests In Land. Contractor shall timely obtain all interests in
land necessary to build and operate indefinitely the Fuel Line and all permits required for the
performance of the Work. Easements or other permanent land rights granted by third parties shall
be perpetual in duration, run with the land, and assignable, and Contractor shall record all such
easements or other documents evidencing the permanent land rights in the name of Owner. For a
period of three years following Completion, Contractor shall compensate third parties for claims
made during said three year period asserting damages to their property, including but not limited
to crop damage, which damages result from Contractor’s performance of its obligations under this
Agreement. Owner alone shall be responsible for any such damage claims asserted after the
conclusion of said three year period.

 

7

 

3.11 Claims and Liens for Labor and Materials. Contractor shall keep the Fuel Line, the
associated rights of way, and all equipment free and clear of all liens, charges, claims,
encumbrances, and security interests arising from the performance of the Work. Contractor shall
give Owner a lien waiver from itself and all subcontractors as a condition precedent to Owner’s
obligation to make any final payment as set forth in Article 6. Contractor and its subcontractors
shall give Owner lien waivers for all Work previously paid for before becoming entitled to receive
progress payments for the Work which is the subject of a current progress payment. Lien waivers
shall be in the forms included as Exhibit 3.11 or as otherwise reasonably required or
agreed by Owner from time to time.

3.12 Monthly Progress Reports and Meetings. Contractor shall provide to Owner written
progress reports at least monthly or as otherwise agreed. Contractor and Owner shall meet as
mutually agreed to review and discuss the progress reports.

3.13 Inspection/Auditing of the Contractor. The Contractor is subject to audits, inspections,
and witnessing by the Owner to ensure compliance with the requirements of the Specifications
contained in Exhibit A. Exercise of such audits, inspections, or witnessing by the Owner does not
relieve the Contractor of its obligation to comply with the terms and conditions of this Agreement.
The Owner or its representative shall be permitted to examine the Contractor’s construction
records from the time of award of this Agreement and for a period of time up to one year after
final acceptance of Completion of the Work by the Owner.

3.14 Testing. The testing requirements of 49 C.F.R. Part 192 are hereby specified as the
testing requirements for the Fuel Line.

	 	A.	 	General.

	 	1.	 	Test results shall be sent to the Owner.

	 	2.	 	The Contractor’s representative shall witness each step of
tests, record the required information, and initial the test form upon
satisfactory completion of each step. The Contractor shall notify the Owner
and permit an Owner representative to witness final pressure tests, pigging and
Commissioning.

	 	3.	 	Nonconformity to Specification contained in Exhibit A and data
sheets or omission of any test, or lack of properly identified test reports
shall be cause for rejection of the defective portion of the Fuel Line.

	 	B.	 	Weld Procedure and Welder Qualification Tests. Weld tests and welder
qualification tests shall be performed by the Contractor as required by Applicable
Codes and Standards. In accordance with Section 3.13 and 11.2, the Owner may
request to review radiographs at random throughout the Fuel Line construction
period. Any radiographs conducted at the Facility Site shall be coordinated in
advance with the Owner.

 

8

 

3.15 Inspection. 49 C.F.R. Part 192 requires the maintenance of a daily inspector’s log,
which shall be made available by Contractor to Owner upon Owner’s reasonable request.

3.16 Certificates of Compliance. Certificates of Compliance shall clearly state that the
material supplied and the work performed meet all requirements of the Applicable Codes and
Standards.

3.17 Documentation.

	 	A.	 	General.

	 	1.	 	Contractor shall submit to Owner for reference, drawings or
electronic media such as floppy discs, plans, and in general, copies of all
documents necessary according to normal construction practice.

	 	2.	 	When submitting drawings, including those prepared by a
supplier or subcontractor , Contractor shall certify it has fully examined
such drawings and that they comply with the requirements of the
Contract.

	 	3.	 	All drawings, documents and specifications shall form part of
this Agreement and submittal of drawings shall not be construed to mean
relieving Contractor of any of its responsibility for the correctness of its
calculations and drawings, nor for the strict compliance with this Agreement.

	 	4.	 	Every drawing shall carry a title block with Owner’s contract
number and a space shall be made in the title block for incorporating the
project drawing number.

	 	5.	 	Where applicable, drawings shall show a graphic scale key
plan and north arrow. Lettering, notes and title block shall be in the
English language. Dates on drawings shall be spelled out, e.g., 28 February
2006.

	 	B.	 	Alignment Sheets

	 
	 	 	 	Contractor shall provide Alignments Sheets to Owner at the completion of the Fuel
Line.

 

9

 

	 	C.	 	Documentation Required

	 
	 	 	 	The minimum documentation required is listed in the previous sections. All records
listed in the previous sections shall be retained in the Contractor’s file for a
period of 365 days after requirements of manufacture, fabrication, or installation
under this Agreement have been complied with. At the expiration of the 365-day
period, the Owner shall be provided with the option of receipt and/or retention of
all construction records. No construction records shall be destroyed or otherwise
disposed of without written permission from the Owner.

Article 4

Owner’s Responsibilities

4.1 Payment. Subject to the terms hereof, Owner shall timely pay the Contract Price and all
other sums, if any, required to be paid by it to Contractor pursuant to the terms of this
Agreement, and in accordance with the provisions of Article 6 hereof.

4.2 Access to Facility Premises. Subject to the terms hereof, Owner shall provide Contractor
with reasonable access to its Facility Site premises. Such access shall be sufficient to permit
Contractor to fulfill its obligations hereunder, provided that such access is coordinated with
Owner and the schedule of Owner’s other contractors working on site.

4.3 Permits. Owner shall provide information, assistance, and documentation to Contractor as
reasonably requested in connection with the required permits to be obtained by Contractor as set
forth in this Agreement.

4.4 Taxes and Duties.

A. Except as otherwise provided herein, the Contract Price includes, and Contractor shall pay
when due, all import duties, payroll taxes and other taxes associated with the performance of the
Work and Contractor’s income relating to the Work. Owner shall be responsible for any gross
receipts taxes and sales and use taxes imposed on the Work. Contractor shall pay all Iowa sales or
use taxes applicable at the project either directly or through
the respective subcontractor(s) as such sales or use taxes become due. Owner hereby agrees to
reimburse Contractor and its respective subcontractors and vendors for all such sales or use taxes
paid upon receipt of documentation supporting the payment of such taxes. Contractor acknowledges
that as part of the economic incentives provided by various state and local authorities, a rebate
of sales/use tax paid on construction materials may become applicable under Iowa law and various
county tax incentives. For clarification and intent purposes, it is acknowledged, by all parties
herein, that the aforementioned rebates/refunds are the property and an entitlement of Owner and
the Contractor will provide all support reasonably requested by Owner including providing an
itemized list and invoices for all materials purchased at the project. The itemized list will
categorize 100% of purchases into such categories as directed by Owner including a delineation by
asset, of the cost (including sales tax) incurred by the Contractor. An updated list will be
provided at each payment request, for all material purchases incorporated into the billing
statement.

 

10

 

B. The parties shall cooperate to minimize the sales taxes, use taxes, and other taxes payable
by each. Contractor shall promptly provide Owner with invoices to document tax payments which are
reimbursable by Owner under the terms of this Agreement if possible before such payments are due to
the taxation authorities. Failure to supply such documentation shall forfeit Contractor’s right to
reimbursement of such taxes. In addition, Contractor shall provide Owner with clear evidence that
it has paid any and all taxes due by it, even if such taxes are not reimbursable by Owner
hereunder. Contractor further agrees to cooperate and provide assistance to Owner with regard to
any claim by Owner for a refund of taxes and for any action by Owner regarding the assessment for
sales or use taxes, including the assignment to Owner of any rights Contractor may have to the
refund of any sales or use taxes paid by Contractor and reimbursed by Owner.

4.5 Owner must enter into an Interconnect Agreement with Alliance in a substantially similar
form of the agreement attached hereto as Exhibit 4.5 for the construction and
implementation of an interconnect facility. Contractor shall be responsible for performing all of
Owner’s duties under the Interconnect Agreement, including making payments at Contractor’s expense
to Alliance, with respect to the construction of the interconnect.

4.6 Owner must enter into an agreement for the operation and maintenance of the Fuel Line at
least thirty (30) days prior to the Completion Date, and provide Contractor with notice of said
contract. Contractor will be under no obligation to and will not Commission the Fuel Line until
such notice is received.

Article 5

Commencement Of Work; Project Schedule

5.1 Commencement of Work. Owner shall provide Contractor with a date for which Contractor is
permitted to proceed with construction of the Fuel Line (hereinafter “Inception Date”).
Such date will be provided by written notice from Owner to Contractor (hereinafter “Notice to
Proceed”). If Notice to Proceed is not given by October 1, 2007 (the “Notice to Proceed
Date”), then the terms and conditions contained herein
which adversely affect Contractor by the passage of time, including but not limited to price and
payment, may be subject to change through negotiation. Prior to the commencement of any work on
the Facility Site, Contractor shall consult with the Owner regarding the final routing of the Fuel
Line through the Facility Site to the node point and shall coordinate with Owner and its EPC
contractor for the Facility.

5.2 Completion Date. Contractor shall achieve Completion hereunder by October 1, 2008
(“Completion Date”) provided that the Inception Date is on or prior to October 1, 2007. In
the event that the Inception Date is after October 1, 2007, the Completion Date shall be 365 days
after the Inception Date. The Completion Date shall be adjusted only for Owner delays and
unforeseen archeological and environmental impediments. In addition to the foregoing, Contractor
is not responsible for delays caused by Alliance in its fulfillment of the Interconnect Agreement,
unless Contractor’s actions/inactions caused the delay by Alliance.

 

11

 

Article 6

Price And Payment

6.1 Contractor will arrange to provide to Owner said Fuel Line as described in this Agreement
for a total cost of [*] (“Contract Price”). The foregoing Contract Price is subject
to demonstrable adjustments for (i) the cost of right of way in excess of $37.50 per rod (16.5 ft)
(ii) archeological impediments not readily identifiable through customary and reasonable route
reconnaissance, (iii) increased costs resulting from delay as provided in Section 5.1, and (iv)
the difference between the actual cost and estimated cost of $1,315,000 for the Interconnect with
Alliance. In any event, Contractor will make a good faith effort to minimize any and all such
cost adjustments pursuant to this Section 6.1.

6.2 Owner will make progress payments for work done based upon completion of the milestones
and schedule of values included as Schedule 6.2. Contractor will invoice Owner upon completion of
each milestone, and Owner shall pay by wire transfer in immediately available funds at the
direction of the Contractor within fifteen days of receipt of the invoice.

Article 7

Title And Risk Of Loss

7.1 Title.

A. Contractor warrants and guarantees that legal title to and ownership of the Work and the
Fuel Line and necessary interests in land shall be free and clear of any and all liens, claims,
security interests or other encumbrances when title thereto passes to Owner except as expressly
provided for as set forth in this Agreement.

B. Title and ownership of the Fuel Line, the Work and all necessary interest in land, will be
transferred to Owner in their entirety on the Completion Date.

7.2 Risk of Loss. Notwithstanding passage of title as provided for in Section 7.1 of this
Agreement, Contractor shall bear the risk of loss and damage with respect to the Work and the Fuel
Line (including necessary interest in land) until achievement of Completion, at which point all
risk of loss with respect to the Work and all liability associated with the ownership and operation
of the Fuel Line shall transfer to Owner (subject to the warranty and indemnification provisions of
this Agreement).

Article 8

Insurance

8.1 Provision of Insurance. Contractor, itself or through its subcontractors, shall provide
and maintain at all times during the period of this Agreement and until the Completion Date
policies of insurance described in Schedule 8.1 (except that, as indicated in Schedule 8.1,
Owner shall arrange for certain builders risk insurance). All such insurance will be obtained at
Contractor’s or subcontractor’s expense (except builder’s risk insurance which shall be obtained at
Owner’s expense). Contractor will require all subcontractors to provide and maintain insurance
coverage amounts and against such risks as is consistent with this Agreement, Contractor’s
customary practices, and prudent industry practices (in each instance, whichever is more
stringent).

			
	*	 	Portion omitted pursuant to a request for confidential treatment and filed separately with the
Securities and Exchange Commission.

 

12

 

8.2 No Cancellation. All policies providing coverage hereunder shall contain a provision that
no cancellation or material change to any policy shall become effective except on thirty (30) days
written notice thereof to the Owner.

8.3 Obligations Not Relieved. Notwithstanding anything in this Agreement to the contrary, the
failure of Contractor to obtain or maintain for any reason the insurance as set forth in Schedule
8.1 shall in no way relieve Contractor from any of its obligations under this Agreement, and
Contractor shall defend, indemnify and hold Owner and its Affiliates harmless against all losses
which would otherwise have been covered by said insurance.

Article 9

Documentation

9.1 Books, Records and Audits. Contractor shall keep such full and detailed books and records
as is customary or necessary for proper financial management under this Agreement and as required
under applicable law.

9.2 Delivery of Documents. Contractor shall deliver to Owner copies of all the documents as
are customarily generated for construction of natural gas pipelines, including but not limited to
(i) Alignment Sheets, (ii) complete vendor operating and maintenance information/manuals, (iii) all
X-ray inspection records of welds, and (iv) inspector’s log.

9.3 Cost of Operations and Maintenance Manuals. All required manuals, including but not
limited to, O&M Manual, Emergency shut down procedures, Operator Qualification Program, Drug and
Alcohol Test Program (each as defined by applicable DOT codes), etc., will be provided by the third
party O&M provider and will be at Owner’s expense.

9.4 Advice Regarding Third Party O&M Provider. Contractor will provide Owner with a list of
prospective third party O&M contractors and give advice and appropriate recommendations regarding
those listed, including advice and review of the proposed O&M agreements.

Article 10

Completion

10.1 Commissioning. Contractor is responsible for the Commissioning of the Fuel Line in
accordance with all applicable laws and environmental and operating permits, and prudent industry
practices. Until Completion, Contractor shall have custody and control of, and all risk of loss
relating to, the Fuel Line. Upon Completion, Owner shall take possession and control of the Fuel
Line and shall thereafter be responsible for the security, operation, and maintenance thereof.
Owner’s third party O&M provider and Contractor shall cooperate during Commissioning; the O&M
provider will provide reasonable assistance to Contractor and Contractor will provide reasonable
assistance in the training of the O&M provider’s personnel. As used in the previous sentence,
“reasonable assistance” means such aid and advice as can be provided without material cost or
inconvenience to the provider.

 

13

 

10.2 Completion. The Contractor must achieve Completion by the Completion Date as set forth
in Section 5.2. Contractor shall certify by written notice to Owner that all of the requirements
of Completion have occurred. Owner shall notify Contractor whether it accepts or rejects the
Completion certification no later than two (2) weeks following receipt of the Completion notice.
If Owner does not provide written notice of its rejection within two (2) weeks of receiving notice
of Completion, Owner will have waived its rejection. If Owner does not agree that Completion has
occurred, then Owner shall state the basis for its rejection in reasonable detail in a written
notice provided to Contractor. Provided Contractor disputes the Owner’s basis of rejection, the
parties shall thereupon promptly and in good faith confer and make all reasonable efforts to
resolve such issue forming the basis of the rejection of Completion. In the event such issue is
not resolved within one (1) month of the delivery by Owner of its notice, Owner and Contractor
shall resolve the dispute in accordance with the dispute resolution procedures provided for under
Article 16 herein.

Article 11

Inspection And Warranty

11.1 Scope of Warranty. Contractor shall ensure that all work performed hereunder, all
equipment supplied hereunder, and the Fuel Line shall comply with all requirements set forth in
this Agreement. For a period of one year following the date of Completion, Contractor
warrants that the Work, the Fuel Line and the equipment shall be free from defects in materials
and/or workmanship, including, but not limited to, any latent defects that may not be readily
evident. Contractor shall promptly repair or replace, and properly install, at no cost to Owner,
any defective Work and other property which is damaged or affected by defective Work, provided,
however, that Contractor shall not be obligated to repair or replace, and properly install any Work
which is defective solely for defects in materials or workmanship unless such defect appears or
occurs during the twelve (12) month period commencing upon Completion. Owner shall provide
Contractor with access to the Fuel Line sufficient to perform its warranty obligations under this
Agreement, so long as such access does not unreasonably interfere with operation of the Fuel Line
and subject to any reasonable security or safety requirements of Owner. Contractor further
warrants that the Work shall be performed in an environmentally sound manner and shall conform to
GECP, applicable law, Applicable Codes and Standards, required permits, and all other terms and
provisions of this Agreement and that all equipment shall be fabricated, applied, installed,
connected, operated (during Commissioning and Acceptance Testing), cleaned and conditioned and
transported in accordance with the instructions of the applicable vendor, manufacturer, fabricator
or processor.

11.2 Owner’s Right to Inspect.

A. All Work shall be subject to inspection by Owner and its agents at all times to determine
whether the Work conforms to the requirements of this Agreement. Contractor shall furnish Owner
with access to all locations where work is in progress. The Contractor shall provide weekly
notifications to the Owner regarding location of work and percentage completion. If, in the
reasonable judgment of Owner, any Work is defective within the meaning set forth in Section 11.1 of
this Agreement, then Contractor shall, at its own expense, promptly repair or replace the defective
work.

 

14

 

B. Owner’s right to conduct inspections under Sections 11.2(A) shall not obligate it to do so.
Neither the exercise of Owner of any such right, nor any failure on the part of Owner to discover
or reject defective work shall be construed to imply an acceptance of such defective work or a
waiver of such defect.

11.3 Owner’s Remedy. If, after notification of defective work as set forth in Section 11.2 or
a breach of a warranty as set forth in Section 11.1, Contractor fails to commence curative action
within a reasonable period of time or delays in continuing or completing curative action, then
Owner, after written notice to Contractor, may correct such defect(s) in accordance with this
Agreement, and Contractor shall be liable for all costs, charges and expenses incurred by Owner in
connection with such repair or replacement, which shall either be withheld by Owner from amounts
then due to Contractor, or if such amounts are insufficient, Contractor shall pay to Owner an
amount equal to such costs, charges and expenses upon receipt of an invoice from Owner.

11.4 Exclusive Warranty. The warranties set forth in this agreement are exclusive and except
for the warranty of title, all other
warranties (express or implied), including the implied warranties (as they may apply to services
and goods) of merchantability or fitness for a particular purpose, are excluded.

Article 12

Guarantee Of Timely Completion

12.1 Guarantee of Timely Completion. Time is of the essence in the performance of this
Agreement.

12.2 Delay Liquidated Damages. Subject to the provisions of Section 5.2 if Completion occurs
after the Completion Date, Contractor shall pay to Owner an amount equal to one thousand dollars
($1,000.00) per day for each day until Completion occurs (the “Delay Liquidated Damages”).
Payment by the Contractor of Delay Liquidated Damages shall be due and payable weekly. The
liquidated damages payable under this Section shall in no case exceed the maximum of $200,000.

12.3 Liquidated Damages Are Not A Penalty. The parties acknowledge and agree that because of
the unique nature of the Fuel Line, the unavailability of a substitute Fuel Line, it is difficult
or impossible to determine with precision the amount of damages that would or might be incurred by
Owner as a result of Contractor’s failure to achieve Completion in accordance with the terms
hereof. It is understood and agreed by the parties that (a) Owner shall be damaged by failure of
Contractor to meet such obligations, (b) it would be impracticable or extremely difficult to fix
the actual damages resulting therefrom, (c) any sums that would be payable under this Article 12
are in the nature of liquidated damages, and not a penalty, and are fair and reasonable, and
(d) such payment represents a reasonable estimate of fair compensation for the losses that may
reasonably be anticipated from such failure.

 

15

 

12.4 Sole Remedy for Delay. Payment of the Delay Liquidated Damages shall be the Owner’s sole
and exclusive remedy for Contractor’s failure to achieve Completion on or before the Completion
Date; provided, however, that Delay Liquidated Damages are intended only to cover damages suffered
by Owner as a result of delay and shall not be deemed to cover the cost of completion of the work
or any other obligation or remedy specifically set forth in the Agreement, and Owner shall be
entitled to rely on its other remedies under this Agreement for such defaults.

12.5 No Challenge. Each of the parties agrees not to challenge the enforceability of the
liquidated damages provisions contained herein. For greater certainty, “enforceability” as
set forth in the preceding sentence refers to the quantum of such damages and the characterization
of such damages as liquidated damages, and this Section 12.5 does not affect Contractor’s ability
to challenge liability for payment of liquidated damages on the basis that Contractor has fully
performed its obligations under the Agreement.

Article 13

Representations And Warranties

Contractor represents and warrants that:

13.1 Licenses. It is the holder of all consents, licenses, permits, and other authorizations
and required permits required to operate and conduct its business now and as contemplated by this
Agreement.

13.2 Financial Solvency. It is financially solvent, able to pay all debts as they mature and
possesses sufficient working capital to complete the Work and perform its obligations hereunder.

13.3 Qualifications and Approval. It has (a) carefully examined this Agreement, thoroughly
and become familiar with all their respective terms and provisions; (b) investigated to its
satisfaction all applicable laws and it can perform the Work in accordance therewith; (c) a
sufficient understanding of the climate, terrain, and other difficulties that it may encounter in
performing the Work hereunder; (d) by itself and through its subcontractors, the experience,
resources, qualifications, and capabilities to perform the Work in accordance with the terms and
conditions of this Agreement (e) made all investigations and inspections that it deems necessary to
perform the Work in accordance with this Agreement and it is able to complete the Work in
accordance with this Agreement; and (f) reviewed all other documents and information necessary and
available to Contractor in order to ascertain the nature, location, and scope of the Work, the
character and accessibility of the site of the Work, the existence of obstacles to construction,
the availability of facilities and utilities, the location and character of existing or adjacent
work or structures. Contractor represents that all necessary approvals required of its board of
directors, managers, or owners have been obtained and are properly recorded in the corporate
records of Contractor.

 

16

 

Owner represents and warrants that:

13.4 Approval. Owner represents that all necessary approvals required of its board of
directors, managers, or owners have been obtained and are properly recorded in the corporate
records of Owner.

13.5 Financial Solvency. As of the Effective Date, it is financially solvent, able to pay all
debts as they mature and possesses sufficient capital to pay its obligations as they become due
under this contract in a timely fashion.

Article 14

Default, Termination, And Suspension

14.1 Default by Contractor.

A. The following events shall all be considered “Contractor Defaults” under this Agreement:
(i) involuntary bankruptcy liquidation, reorganization or insolvency, (ii) materially false or
misleading representation or warranty, (iii) failure to comply with any material applicable law or
permit, (iv) failure to achieve Completion on or prior to the Completion Date, and (v) failure to
perform or observe any other material provision of this Agreement.

B. In the event of a Contractor Default, then, after Owner serving one week’s written notice
specifying the nature and origin of the alleged default, unless Contractor cures such condition
within such week or if such default can not reasonably be cured within such week, then within six
(6) weeks, provided that Contractor has taken adequate steps to initiate cure and diligently
proceeds to cure such default, Owner, at its option, without voiding the other provisions of this
Agreement and without further notice to any party, may avail itself of any rights and remedies
allowed by law or this Agreement, including but not limited to (i) immediate termination in whole
or part of this Agreement, (ii) performing the Work itself or by contracting a third party, in
which case Contractor shall cooperate and provide all assistance to Owner or Owner’s
representatives necessary for the completion of the Work, (iii) seek specific performance or
interlocutory mandatory injunctive relief requiring performance of Contractor’s obligations, it
being agreed by Contractor that such relief may be necessary to avoid irreparable harm to Owner;
and (iv) exercise of any other remedy Owner may have under this Agreement and/or at law or in
equity, including recovery of damages.

C. In the event that Owner terminates this Agreement in whole or in part for Contractor
Default, then Owner may, at its sole option, (i) enter onto the Fuel Line right of way and take
possession of it, all of the equipment to be included in the Fuel Line and, for the purpose of
completing the Work, all of the materials, tools, supplies, documents, and information of
Contractor, (ii) take assignment of any or all of the Subcontracts, and/or (iii) either itself or
through others, complete the Work. In such an event, Contractor shall provide all assignments and
other documentation that may be reasonably required by Owner.

 

17

 

D. All terms, covenants, conditions, and obligations under this Agreement shall survive the
termination of this Agreement, including but not limited to any claims, demands, obligations,
losses, liens, or causes of action arising out of the Work or the performance of the Work by
Contractor or its subcontractors, warranties, indemnities, insurance coverage and protection,
workmanship, repair obligations and obligations with respect to proprietary and confidential
information.

14.2 Termination for Convenience by Owner or for a Force Majeure Event. Subsequent to
execution of this Agreement, if for any reason Owner discontinues implementation of the Facility or
construction of the Fuel Line, Owner will reimburse Contractor for any and all costs it incurred
associated with the construction of the Fuel Line. These costs may include, but are not limited
to, labor costs, rights of way acquisition, crop damage, material costs, interest rate liquidation,
engineering and design costs, overhead, etc. but such costs will not exceed the actual cost
incurred by Contractor plus 10%. Upon such payment, Owner shall have no further liability
hereunder.

14.3 Suspension of Work. Owner may, for any reason, at any time and from time to time, by
written notice to Contractor, direct Contractor to suspend the work on the Fuel Line, and the
period of such suspension shall be deemed Owner Delay. Owner and Contractor shall negotiate a
change order to address the impact of such suspension on the Completion Date. In the event that
the suspension is for Owner convenience and there is no event of default by Contractor, the
Contract Price shall be adjusted for the reasonable costs (including actual overhead (but not
unabsorbed overhead) and reasonable profit) of such suspension, including demobilization and
remobilization costs, if required, along with appropriate supporting documentation to evidence such
costs, and the Completion Date shall be equitably adjusted to reflect such suspension.

Article 15

Indemnities; Limitations of Liability

15.1 Owner, including its members, managers, Affiliates, directors, officers, agents, lenders
and employees shall be indemnified and held harmless by Contractor against any and all liabilities,
arising out of, relating to or resulting from (i) the inaccuracy of any representation or warranty
made by Contractor including, without limitation, the representation and warranty that the Fuel
Line be built in compliance with the requirements of the Applicable Codes and Standards, (ii) the
breach by Contractor of any of its covenants or agreements, or the construction of the Fuel Line by
Contractor, or (iii) the control and ownership of the Fuel Line by Contractor prior to the date of
title transfer. 

15.2 Contractor or its affiliates, including its directors, officers, agents, and employees
shall be indemnified and held harmless by Owner against any and all liabilities, arising out of,
relating to or resulting from (i) the inaccuracy of any representation or warranty made by Owner,
(ii) the breach by Owner of any of its covenants or agreements, or (iii) the use, control or
ownership of the Fuel Line by Owner following the date of title transfer.

 

18

 

Article 16

Dispute Resolution

16.1 Mutual Consultation In the event any dispute arises between Owner and Contractor arising
out of or relating to this Agreement, the aggrieved party shall promptly notify the other party of
the dispute within five (5) days after such dispute arises. If the parties fail to resolve the
dispute within ten (10) days after delivery of such notice, each party shall, within five (5) days
thereafter, nominate a senior officer of its management to meet at the Facility premises, or at any
other mutually agreed location, to resolve the dispute. If such respective senior officers are
unable to resolve the dispute to their mutual satisfaction within thirty (30) days after such
nomination, the parties may pursue other available legal means for resolving such dispute.

Article 17

Miscellaneous Provisions

17.1 Consequential Damages. Notwithstanding any other provisions of this Agreement to the
contrary, in no event shall Owner or Contractor be liable to each other for any consequential,
incidental, special, punitive, or indirect loss or damage (other than such damages as may be
included as a component of liquidated damages hereunder), including, but not limited to, loss of
profits or revenue, loss of opportunity or use, incurred by either party to the other, or like
items of loss or damage, whether based in tort, contract, strict liability, or otherwise; and each
party hereby releases the other party therefrom. However, this limitation on liability is not to
be construed as affecting Contractor’s obligations to (i) pay any Delay Liquidated Damages which
may become due under this Agreement, (ii) pay indemnification amounts which may become due by
Contractor under this Agreement, (iii) remove all liens or other encumbrances as required pursuant
to this Agreement, or (iv) any other remedy expressly provided for herein.

17.2 Entire Agreement. This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof and shall replace any prior agreements concerning the same
subject matter.

17.3 Amendments. No change, amendment, or modification of this Agreement shall be valid or
binding upon the parties hereto unless such change, amendment, or modification shall be in writing
and duly executed by both parties hereto.

 

19

 

17.4 Notice. Any notice, demand, offer, consent, denial or other written instrument required
or permitted to be given pursuant to this Agreement shall be in writing signed by the party giving
such notice and shall be hand delivered or sent by overnight courier, messenger, facsimile, or
certified mail, return receipt requested, or by E-mail, to the other party at the address as set
forth below.

	 	A.	 	If delivered to Owner:

	 
	 	 	 	Homeland Energy Solutions, LLC

106 West Main

PO Box C

Riceville, IA 50466

	 
	 	 	 	Phone: 641-423-8525

Fax: 641-420-5894

Attn: Steve Dietz

E-mail: sdietz@ggecorn.com

	 
	 	B.	 	If delivered to Contractor:

	 
	 	 	 	Cornerstone Energy, LLC.d/b/a Constellation NewEnergy — CEI, LLC.

1202 Wilson Ave

Cloquet, MN 55720

Tel: 218-878-0675

Fax: 402-829-3997

Attn: Steve Sorenson

E-mail: steve.sorenson@constellation.com

Each party shall have the right to change the place to which notice shall be sent or delivered by
sending a similar notice to the other party in like manner. Notices shall be deemed to have been
duly given when actually delivered to the addressee, except that any notice sent by facsimile or
E-mail shall be deemed given when sent, if sent during regular business hours on a business day,
otherwise, on the first business day after its sending; and, in the case of E-mail, no notice shall
be deemed to have been given unless the addressee provides a personal, ad hoc, confirmation of
receipt in writing, by facsimile, or by E-mail (automatic E-mail responses do not constitute
confirmation).

17.5 Severability. If any non-material part of this Agreement is held unenforceable, the rest
of the Agreement will continue in effect. If a material provision is determined to be
unenforceable and the party which would have been benefited by the provision does not waive its
unenforceability, then the parties shall negotiate in good faith to amend the Agreement to restore
to the party that was the beneficiary of such unenforceable provision the benefits of such
provision. If the parties are unable to agree upon an amendment that restores the parties’
benefits, then the party that was the beneficiary of such unenforceable provision may terminate
this Agreement upon written notice of termination.

 

20

 

17.6 Assignment. This Agreement shall be personal to Contractor and Owner and neither may
assign, delegate or transfer any of its rights or obligations hereunder without written consent of
the other party, and such consent shall not be unreasonably withheld; provided, that Owner may,
without the consent of Contractor, assign any or all of its rights under this Agreement to any
successor owner of the Project or a substantial portion thereof. In order for such assignment to
be effective, assignee shall confirm assumption of all obligations of Owner under this agreement,
including the obligation to demonstrate payment ability. Notwithstanding the foregoing, Owner may
assign its rights and obligations hereunder as collateral security in connection with obtaining
financing for the Facility or to an affiliate that agrees to assume all of the rights and
obligations hereunder. Contractor agrees that it will execute a consent to assignment in favor of
such financing parties and will deliver an opinion of counsel and officer’s certificate relating to
its obligations under this Agreement, in each case on terms and conditions customary to a
non-recourse project financing. Contractor also agrees that it will cooperate with the independent
engineer designated by the financing parties in connection with its review of the administration of
this Agreement and construction of the Fuel Line, including with respect to inspection and
documentation requests of the independent engineer that are customary for a non-recourse project
financing similar to the Fuel Line.

17.7 No Waiver. Any failure of any party to enforce any of the provisions of this Agreement
or to require compliance with any of its terms at any time during the term of this Agreement shall
in no way affect the validity of this Agreement, or any part hereof, and shall not be deemed a
waiver of the right of such party thereafter to enforce any and each such provision.

17.8 Applicable Law. This agreement shall be governed by, construed, and enforced in
accordance with the laws of the state of Iowa, without giving effect to the principles thereof
relating to conflicts of laws.

17.9 Counterparts. This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original instrument, all such counterparts
together shall constitute but one and the same agreement.

 

21

 

In Witness Whereof, the parties have hereto set their hand as of the 4th day of December, 2007.

For Cornerstone Energy, LLC.d/b/a Constellation NewEnergy — CEI, LLC. (Contractor)

	 	 	 	 	 
	 	By:  	/s/ Kenneth C. Graeber
 	 
	 
	 	Name:  	Kenneth C. Graeber 	 
	 
	 	Title:  	Regional Director 	 

For Homeland Energy Solutions, LLC. (Owner)

	 	 	 	 	 
	 	By:  	/s/ Stephen K. Eastman
 	 
	 
	 	Name:  	Stephen K. Eastman 	 
	 
	 	Title:  	President 	 

 

22

 

	 	 	 	 	 

Exhibit A

Detailed description and Specifications of the Fuel Line.

Background

Homeland Energy Solutions, (“Homeland") is currently constructing an Ethanol Production facility
near New Hampton, Iowa. The facility requires a Natural Gas Supply Pipeline sufficient to provide
470 MMBtu’s per hour of natural gas. The purpose of this Technical Scope of Work is to
appropriately describe the natural gas pipeline project and to provide technical direction to the
Contractor in regards to the natural gas pipeline planning, property acquisition, construction, and
commissioning.

General Project Description

Contractor represents and warrants that the pipeline and associated facilities will be constructed,
at a minimum, in compliance with Title 49 of the Code of Federal Regulations, Subpart 192 and any
other applicable state and federal codes or regulations. In addition, Contractor represents and
warrants that it will deliver a complete and operational pipeline system (“turn-key system”)
capable of serving its intended use; namely, to provide the Production Facility up to 470 MMBtu’s
per hour of natural gas at 50 Psig at the production facility. The pipeline facilities include:

	 	1.	 	Construction of an interconnect (metering) facility with Alliance Pipeline. Said
interconnect facility will be constructed by Alliance, but facilitated by Contractor.

	 
	 	2.	 	
 Pressure reducing station at Homeland’s facility.

	 
	 	3.	 	Valves, including block valves and relief valves as required

	 
	 	4.	 	Pipeline pig launcher and receiver

	 
	 	5.	 	Approximately 7.25 miles of 4” diameter steel piping

	 
	 	6.	 	Strainer

	 
	 	7.	 	Pressure reduction station at the plant site

	 
	 	8.	 	All required testing of the facilities

	 
	 	9.	 	A complete installation and operational system.

Specifications (SPECIFICS TO BE ADDED)

Line Pipe: 4-inch nominal O.D. 0.156” wall API 5l-X52-PS2

Line Pipe Coating: 12-18 mils of Fusion Bond Epoxy

Crossing Pipe: 4-inch nominal O.D. 0.237” wall API 5l-X52-PS2 (same coating)

Joint Protection: Pipe joints will have a 3-inch cutback and will be protected with 12-inch shrink
sleeves. Any drilled sections will have “heavy duty” sleeves.

X-ray of Welds: Although CFR 49 Part 192 requires that only a minimum of 10% of welds be x-rayed,
nearly 100% of the welds will be shot. There will be one X-ray rig with two technicians that will
be asked to shoot as many as possible (which generally is 100%).

Depth of Burial: A minimum of 4-feet of cover unless alternate means of protection is provided.

Pig Launcher/Receiver: The launchers will be constructed with 6” full opening ANSI 300 ball valves,
with bypass connection, capable of launching and receiving standard pipeline pigs.

Proposed Route: Reference map. The routing of the Fuel Line from the entry point on the site of
the Facility to the termination point inside the Facility shall be determined by Owner in
consultation with EPC Contractor.

 

23

 

Reg/relief specifications and layout: Subsequent to execution of the EPC, complete drawings of the
regulator and relief stations (at the interconnect and plant site) will be provided.

Pressure Test: Depending when the line is commissioned, either water or nitrogen will be used. If
water is used, the line will be dried to a -40 F dew point. The test duration will be performed
for a minimum of 8-hours at 1.5 times the Maximum Allowable Operating Pressure (MAOP) of 720 psig.

Corrosion
Control (Cathodic Protection): There will be a minimum of three 32-lb magnesium anodes
at each end of the five-mile pipeline and at approximately one-mile intervals along the route. The
leads will be brought above ground and connected after an initial pipe-to-soil survey is performed
to establish the native electrical state of the pipeline.

Easements: All necessary easements will be obtained in the Owner’s name and will be filed as
required.

Drawings/Records: EPC contractor will provide a complete set of “Alignment Sheets” that depict the
route, landownership, materials, test pressure and an elevation survey of the route.

 

24

 

Exhibit 3.11

SUBCONTRACTOR’S PARTIAL RELEASE AND WAIVER OF LIEN

	 	 	 	 	 	 	 	 	 
	TO:

	 	 	 	 	 	 	 	(“Contractor”)
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	FROM:

	 	 	 	 	 	 	 	(“subcontractor”)
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMOUNT:

	 	 	 	 	 	 	 	(“payment”)
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROPERTY IMPROVED:	 	 	 	 	 	(“property”)
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROPERTY OWNER:	 	 	 	 	 	(“owner”)
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PURCHASE ORDER NUMBER:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	DATE:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	or
	 	 	 	 	 	 	 	 
	AGREEMENT TITLE:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	DATE:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	INVOICE NUMBER:

	 	 	 	 
	 	 
	 	 
	 	 	 	 	 	 	 
	DATE:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	AMOUNT:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	DATE OF RELEASE & WAIVER:	 	 	 	 	 	 
	 	 	 	 	 	 	 

The above-named Subcontractor, a                                          organized under the laws of the State of
                                        , hereby acknowledges receipt of the Payment identified above, which amount is
partial payment for the cost of work, materials, and/or equipment payable by Contractor to
Subcontractor under the above Purchase Order or Agreement.

For and in consideration of the Payment, Subcontractor, for itself and its successors and assigns,
waives all rights it may have to claim a lien on the Property which was improved by virtue of the
work, materials, and/or equipment to the extent of the amount of the Payment.

Subcontractor hereby represents that all bills, invoices, statements, claims or other just demands
for payment of Subcontractor’s own subcontractors and suppliers who performed work or furnished
materials for the improvement of the Property have been paid or settled to the extent included in
the sum above. Subcontractor agrees to indemnify and hold harmless Contractor and Owner from any
breach of such representation.

	 	 	 	 	 
	 	ATTEST:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

Subscribed and sworn to me this       day of                     , 200   .

Notary Public

My commission expires                           , 200   

 

25

 

CONTRACTOR’S PARTIAL RELEASE AND WAIVER OF LIEN

	 	 	 	 	 	 	 	 	 
	TO:

	 	 	 	 	 	 	 	(“owner”)
	 	 	 	 	 
	 
	FROM:

	 	 	 	 	 	 	 	(“contractor”)
	 	 	 	 	 
	 
	AMOUNT:

	 	 	 	 	 	 	 	(“payment”)
	 	 	 	 	 
	 
	PROPERTY IMPROVED:	 	 	 	 	 	(“property”)
	 	 	 	 	 	 	 
	 
	PURCHASE ORDER NUMBER:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	DATE:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	or
	 	 	 	 	 	 	 	 
	AGREEMENT TITLE:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	DATE:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	INVOICE NUMBER:

	 	 	 	 
	 	 
	 	 
	 	 	 	 	 	 	 
	DATE:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	AMOUNT:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	DATE OF RELEASE & WAIVER:	 	 	 	 	 	 
	 	 	 	 	 	 	 

The above-named Contractor, a                                          organized under the laws of the State of
                                        , hereby acknowledges receipt of the Payment identified above, which amount is
partial payment for the cost of work, materials, and/or equipment payable by Owner to Contractor
under the above Purchase Order or Agreement.

For and in consideration of the Payment, Contractor, for itself and its successors and assigns,
waives all rights it may have to claim a lien on the Property which was improved by virtue of the
work, materials, and/or equipment to the extent of the amount of the Payment.

Contractor hereby represents that all bills, invoices, statements, claims or other just demands for
payment of Contractor’s subcontractors and suppliers who performed work or furnished materials for
the improvement of the Property have been paid or settled to the extent included in the sum above.
Contractor agrees to indemnify and hold harmless Owner from any breach of such representation.

	 	 	 	 	 
	 	ATTEST:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

Subscribed and sworn to me this       day of                     , 200   .

Notary Public

My commission expires                           , 200   

 

26

 

Schedule 6.2

Milestones, Schedule of Values & Retainage

This schedule sets out milestones, the associated schedule of values, and the corresponding
retainage. Note that “Milestones” may not necessarily be achieved in the order presented.

As milestones are achieved, Owner shall make payments of 90% of the Schedule of Values
amounts, and shall retain 10% until transfer of title on the Completion Date. On the
Completion Date, Owner shall pay Contractor all retained and other outstanding amounts owed,
less any amounts which Contractor and Owner may agree shall be retained by Owner pending
completion of minor ‘punchlist’ items of work.

	 	 	 	 	 	 	 	 	 
	Milestones	 	Schedule of Values	 	 	Retainage (10%)	 
	[*]
	 	$	[*]	 	 	$	[*]	 
	 
	 	 	 	 	 	 	 	 
	[*]
	 	$	[*]	 	 	$	[*]	 
	 
	 	 	 	 	 	 	 	 
	[*]
	 	$	[*]	 	 	$	[*]	 
	 
	 	 	 	 	 	 	 	 
	[*]
	 	$	[*]	 	 	$	[*]	 
	 
	 	 	 	 	 	 	 	 
	[*] (1)
	 	$	[*]	 	 	$	[*]	 
	 
	 	 	 	 	 	 	 	 
	[*]
	 	$	[*]	 	 	$	[*]	 
	 
	 	 	 	 	 	 	 	 
	[*]
	 	$	[*]	 	 	$	[*]	 

	 	 	 
	(1)	 	[*]

			
	*	 	Portion omitted pursuant to a request for confidential treatment and filed separately with the
Securities and Exchange Commission.

 

27

 

Exhibit 4.5

(Interconnect Agreement)

[Not
executed as of our fiscal year ended December 31, 2007.]

 

28

 

 Schedule 8.1

Insurance

	A.	 	Insurance Coverage. During the period of construction of the Fuel Line, (i) Owner
will arrange for Builders All Risk Insurance and Contractor will be named as an additional
insured on the policy; provided that Owner’s arranging for such insurance shall not affect the
allocation of risk of loss of Article 7 and (ii) Contractor shall maintain adequate property
and liability insurance coverage, which as a minimum shall include the following:

	 	1.	 	Commercial General Liability Insurance: Commercial general liability insurance
on an occurrence basis (not claims made) against claims for personal injury (including
bodily injury and death) and property damage, including claims arising due to action or
inaction of any of Contractor’s subcontractors or direct or indirect employees,
representatives or agents. Such insurance shall provide coverage for products-completed
operations, blanket contractual, premises/operation, explosion, collapse and underground
hazard coverage, sudden and accidental pollution, broad form property damage, broad form
contractual liability, personal injury insurance, independent contractors liability,
hostile fire liability and include a severability of interest or cross liability clause.
The policy shall provide for a $1,000,000 minimum limit per occurrence and $2,000,000
minimum limit in the aggregate. Deductibles to be acceptable to the Owner.

	 	2.	 	Automobile Liability Coverage: Automobile liability insurance against claims
for personal injury (including bodily injury and death) and property damage covering all
vehicles owned, leased or non-owned and hired by the Contractor, including loading and
unloading, with a $1,000,000 minimum limit per occurrence. Deductibles to be acceptable to
the Owner.

	 	3.	 	Workers Compensation: Contractor shall (i) maintain workers’ compensation
insurance as required by the law of the jurisdiction where the Work is performed, and (ii)
maintain employers’ liability insurance with a $1,000,000 minimum limit per accident.

	 	4.	 	Excess Liability: Umbrella Coverage: Contractor shall procure and carry excess
liability insurance on an occurrence basis (not claims made) for personal injury (including
bodily injury and death) and property damage and applying in excess of the limits of
insurance prescribed for the general liability, automobile liability and umbrella liability
policies required in this Section. Such insurance shall provide coverage for
products-completed operations, blanket contractual, premises/operation, explosion, collapse
and underground hazard coverage, broad form property damage, broad form contractual
liability, personal injury insurance, independent contractors liability, hostile fire
liability and include a severability of interest or cross liability clause. The policy
shall provide for a $10,000,000 minimum limit per occurrence and a $10,000,000 minimum
limit in the aggregate. Deductibles to be acceptable to the Owner.

 

29

 

	 	5.	 	Professional Liability Coverage: Contractor shall carry or cause the
applicable engineering parties to carry professional liability insurance in accordance with
industry practice and in amounts acceptable to Owner.

	B.	 	Requirements of Contractor’s Insurance:

	 	1.	 	Additional Insured Parties. Except for Professional Liability insurance or where not
legally allowed, Contractor’s Insurance shall include Owner, BioFuel Energy, LLC and their
lenders, and the owners, employees, officers and directors of such entities, as additional
insureds.

	 	2.	 	Wavier of Subrogation. Except for Professional Liability or where not legally allowed,
all policies of Contractor’s Insurance shall include a waiver of subrogation by the
insurers in favor of Owner and Lenders and each of their respective assignees, affiliates,
agents, officers, directors, employees, insurers or policy issuers and a wavier of any
right of the insurers to any set-off or counterclaim, whether by endorsement or otherwise,
in respect of any type of liability of any of the persons insured under any such policies.

	 	3.	 	Primary Insurance. All policies of Contractor’s Insurance shall apply as primary
insurance without right of contribution from any similar policies which may be maintained
by Owner or lenders.

	 	4.	 	Carrier Rating. All insurance required under this section shall be maintained with
carriers authorized to do business in this State and which have an AM Best rating of A- X
or are otherwise acceptable to the Owner.

	C.	 	Responsibility for Deductible Amounts. Contractor shall be responsible for the
payment of all deductible amounts with respect to the policies of Contractor’s Insurance.

 

30

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