Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.21

FOR RECORDER’S USE ONLY

Prepared By: Bradley Krehbiel, Executive Vice President, Home Federal Savings Bank, 1016
Civic Center Dr NW Suite 300, Rochester, MN 55901, (507) 252-7163

ADDRESS TAX STATEMENT:

Home Federal Savings Bank, Business Banking, 1016 Civic Center Dr NW Suite 300, Rochester,
MN 55901

RECORDATION REQUESTED BY:

Home Federal Savings Bank, Business Banking, 1016 Civic Center Dr NW Suite 300, Rochester,
MN 55901

WHEN RECORDED MAIL TO:

Home Federal Savings Bank, Business Banking, 1016 Civic Center Dr NW Suite 300, Rochester,
MN 55901

MORTGAGE

NOTICE: This Mortgage secures credit in the amount of $3,517,572.00. Loans and advances up to
this amount, together with interest, are senior to indebtedness to other creditors under
subsequently recorded or filed mortgages and liens.

The names of all Grantors (sometimes “Grantor”) can be found on page 1 of this Mortgage. The names
of all Grantees (sometimes “Lender”) can be found on page 1 of this Mortgage. The property address
can be found on page ___ of this Mortgage. The legal description can be found on page 2 of this
Mortgage.

THIS MORTGAGE dated March 23, 2007, is made and executed between Homeland Energy Solutions, LLC, an
Iowa Limited Liability Company (referred to below as “Grantor”) and Home Federal Savings Bank,
whose address is 1016 Civic Center Dr NW Suite 300, Rochester, MN 55901 (referred to below as
“Lender”).

GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants
to Lender a security interest in all of Grantor’s right, title, and interest in and to the
following described real property, together with all existing or subsequently erected or affixed
buildings, improvements and fixtures; rents and profits; all easements, rights of way, and
appurtenances; all water,
water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation
rights); and all other rights, royalties, and profits relating to the real property, including
without limitation all minerals, oil, gas, geothermal and similar matters, (the “Real
Property”) located in Chickasaw County, State of Iowa:

 

 

 

MORTGAGE

					
	Loan No: 3787
	 	(Continued)
	 	Page 2

See Exhibit A, which is attached to this Mortgage and made a part of this
Mortgage as if fully set forth herein.

CROSS-COLLATERALIZATION. In addition to the Note, this Mortgage secures all
obligations, debts and liabilities, plus interest thereon, of Grantor to Lender, or any one or more
of them, as well as all claims by Lender against Grantor or any one or more of them, whether now
existing or hereafter arising, whether related or unrelated to the purpose of the Note, whether
voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined,
absolute or contingent, liquidated or unliquidated, whether Grantor may be liable individually or
jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and
whether recovery upon such amounts may be or hereafter may become barred by any statute of
limitations, and whether the obligation to repay such amounts may be or hereafter may become
otherwise unenforceable.

Grantor presently assigns to Lender all of Grantor’s right, title, and interest in and to all
present and future leases of the Property and all Rents from the Property. In addition, Grantor
grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents.
The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and
not just in the event of default.

FUTURE ADVANCES. In addition to the Note, this Mortgage secures all future advances made
by Lender to Grantor whether or not the advances are made pursuant to a commitment. Specifically,
without limitation, this Mortgage secures, in addition to the amounts specified in the Note, all
future amounts Lender in its discretion may loan to Grantor, together with all interest thereon.

THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND
PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY
AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS
GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:

PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay
to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of
Grantor’s obligations under this Mortgage.

POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor’s possession and
use of the Property shall be governed by the following provisions: None of the collateral for the
Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to
purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa
Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1); or
(3) Property used for an agricultural purpose as defined in Iowa Code Section 570.4.1 (2). Grantor
represents and warrants that: (1) There are not now and will not be any wells situated on the
Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3)
There are not now and there will not be any hazardous wastes on the Property; (4) There are not now
and there will not be any underground storage tanks on the Property.

Possession and Use. Until the occurrence of an Event of Default, Grantor may (1)
remain in possession and control of the Property; (2) use, operate or manage the Property; and
(3) collect the Rents from the Property.

Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly
perform all repairs, replacements, and maintenance necessary to preserve its value.

Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During
the period of Grantor’s ownership of the Property, there has been no use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any Hazardous
Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of,
or reason to believe that there has been, except as previously disclosed to and acknowledged by
Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use,
generation, manufacture, storage, treatment, disposal, release or threatened release of any
Hazardous Substance on, under, about or from the Property by any prior owners or occupants of
the Property, or (c) any actual or threatened

 

 

 

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	Loan No: 3787
	 	(Continued)
	 	Page 3

litigation or claims of any kind by any person relating to such matters; and (3) Except as
previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any
tenant, contractor, agent or other authorized user of the Property shall use, generate,
manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or
from the Property; and (b) any such activity shall be conducted in compliance with all
applicable federal, state, and local laws, regulations and ordinances, including without
limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the
Property to make such inspections and tests, at Grantor’s expense, as Lender may deem
appropriate to determine compliance of the Property with this section of the Mortgage. Any
inspections or tests made by Lender shall be for Lender’s purposes only and shall not be
construed to create any responsibility or liability on the part of Lender to Grantor or to any
other person. The representations and warranties contained herein are based on Grantor’s due
diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases
and waives any future claims against Lender for indemnity or contribution in the event Grantor
becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify,
defend, and hold harmless Lender against any and all claims, losses, liabilities, damages,
penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from
a breach of this section of the Mortgage or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release occurring prior to Grantor’s
ownership or interest in the Property, whether or not the same was or should have been known to
Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify
and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance
of the lien of this Mortgage and shall not be affected by Lender’s acquisition of any interest
in the Property, whether by foreclosure or otherwise.

Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or
suffer any stripping of or waste on or to the Property or any portion of the Property. Without
limiting the generality of the foregoing, Grantor will not remove, or grant to any other party
the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil,
gravel or rock products without Lender’s prior written consent.

Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real
Property without Lender’s prior written consent. As a condition to the removal of any
Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements of at least equal value.

Lender’s Right to Enter. Lender and Lender’s agents and representatives may enter upon the Real
Property at all reasonable times to attend to Lender’s interests and to inspect the Real
Property for purposes of Grantor’s compliance with the terms and conditions of this Mortgage.

Compliance with Governmental Requirements. Grantor shall promptly comply with all laws,
ordinances, and regulations, now or hereafter in effect, of all governmental authorities
applicable to the use or occupancy of the Property, including without limitation, the Americans
With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation
and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor
has notified Lender in writing prior to doing so and so long as, in Lender’s sole opinion,
Lender’s interests in the Property are not jeopardized. Lender may require Grantor to post
adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender’s
interest.

	 	 	Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor
shall do all other acts, in addition to those acts set forth above in this section, which
from the character and use of the Property are reasonably necessary to protect and preserve
the Property.

DUE
ON SALE - CONSENT BY LENDER. Lender may, at Lender’s option, declare immediately due and
payable all sums secured by this Mortgage upon the sale or transfer, without Lender’s prior written
consent, of all or any part of the Real Property, or any interest in the Real Property. A “sale or
transfer” means the conveyance of Real Property or any right, title or interest in the Real
Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by
outright sale, deed, installment sale contract, land contract, contract for deed, leasehold
interest with a term greater than three (3) years, lease-option contract, or by sale, assignment,
or transfer of any beneficial interest in or to any land trust holding title to the Real Property,
or by any other method of conveyance of an interest in the Real Property. If any Grantor is a
corporation, partnership or limited liability company, transfer also includes any change in
ownership of more than twenty-five percent (25%) of the voting stock, partnership interests or
limited liability company interests, as the case may be, of such Grantor. However, this option shall not be
exercised by Lender if such exercise is prohibited by federal law or by Iowa law.

 

 

 

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	Loan No: 3787
	 	(Continued)
	 	Page 4

TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part
of this Mortgage:

Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll
taxes, special taxes, assessments, water charges and sewer service charges levied against or on
account of the Property, and shall pay when due all claims for work done on or for services
rendered or material furnished to the Property. Grantor shall maintain the Property free of any
liens having priority over or equal to the interest of Lender under this Mortgage, except for
those liens specifically agreed to in writing by Lender, and except for the lien of taxes and
assessments not due as further specified in the Right to Contest paragraph.

Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection
with a good faith dispute over the obligation to pay, so long as Lender’s interest in the
Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor
shall within fifteen (15) days after the lien arises or, if a lien is filed, within fifteen (15)
days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by
Lender, deposit with Lender cash or a sufficient corporate surety bond or other security
satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and
attorneys’ fees, or other charges that could accrue as a result of a foreclosure or sale under
the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse
judgment before enforcement against the Property. Grantor shall name Lender as an additional
obligee under any surety bond furnished in the contest proceedings.

Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence
of payment of the taxes or assessments and shall authorize the appropriate governmental official
to deliver to Lender at any time a written statement of the taxes and assessments against the
Property.

Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before
any work is commenced, any services are furnished, or any materials are supplied to the
Property, if any mechanic’s lien, materialmen’s lien, or other lien could be asserted on account
of the work, services, or materials. Grantor will upon request of Lender furnish to Lender
advance assurances satisfactory to Lender that Grantor can and will pay the cost of such
improvements.

PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are
a part of this Mortgage:

Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with
standard extended coverage endorsements on a replacement basis for the full insurable value
covering all Improvements on the Real Property in an amount sufficient to avoid application of
any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall
also procure and maintain comprehensive general liability insurance in such coverage amounts as
Lender may request with Lender being named as additional insureds in such liability insurance
policies. Additionally, Grantor shall maintain such other insurance, including but not limited
to hazard, business interruption and boiler insurance as Lender may require. Policies shall be
written by such insurance companies and in such form as may be reasonably acceptable to Lender.
Grantor shall deliver to Lender certificates of coverage from each insurer containing a
stipulation that coverage will not be cancelled or diminished without a minimum of ten (10)
days’ prior written notice to Lender and not containing any disclaimer of the insurer’s
liability for failure to give such notice. Each insurance policy also shall include an
endorsement providing that coverage in favor of Lender will not be impaired in any way by any
act, omission or default of Grantor or any other person. Should the Real Property be located in
an area designated by the Director of the Federal Emergency Management Agency as a special flood
hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for
the full unpaid principal balance of the loan and any prior liens on the property securing the
loan, up to the maximum policy limits set under the National Flood Insurance Program, or as
otherwise required by Lender, and to maintain such insurance for the term of the loan.

 

 

 

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	Loan No: 3787
	 	(Continued)
	 	Page 5

Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to
the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of
the casualty. Whether or not Lender’s security is impaired, Lender may, at Lender’s election,
receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the
Indebtedness, payment of any lien
affecting the Property, or the restoration and repair of the Property. If Lender elects to apply
the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed
Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such
expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or
restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been
disbursed within 180 days after their receipt and which Lender has not committed to the repair or
restoration of the Property shall be used first to pay any amount owing to Lender under this
Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the
principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the
Indebtedness, such proceeds shall be paid to Grantor as Grantor’s interests may appear.

Grantor’s Report on Insurance. Upon request of Lender, however not more than once a
year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1)
the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property
insured, the then current replacement value of such property, and the manner of determining that
value; and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an
independent appraiser satisfactory to Lender determine the cash value replacement cost of the
Property.

LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially
affect Lender’s interest in the Property or if Grantor fails to comply with any provision of this
Mortgage or any Related Documents, including but not limited to Grantor’s failure to discharge or
pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related
Documents, Lender on Grantor’s behalf may (but shall not be obligated to) take any action that
Lender deems appropriate, including but not limited to discharging or paying all taxes, liens,
security interests, encumbrances and other claims, at any time levied or placed on the Property and
paying all costs for insuring, maintaining and preserving the Property. All such expenditures
incurred or paid by Lender for such purposes will then bear interest at the rate charged under the
Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such
expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on
demand; (B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any applicable
insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment
which will be due and payable at the Note’s maturity. The Mortgage also will secure payment of
these amounts. Such right shall be in addition to all other rights and remedies to which Lender may
be entitled upon Default.

WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the
Property are a part of this Mortgage:

Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to
the Property in fee simple, free and clear of all liens and encumbrances other than those set
forth in the Real Property description or in any title insurance policy, title report, or final
title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b)
Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender,
and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa
Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself
and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to
a lien of the type contemplated by Chapter 575 or any other chapter of the Code of lowa and
further waives all notices and rights pursuant to said law with respect to the liens hereby
granted, and represents and warrants that it is the sole party entitled to do so and agrees to
indemnify, defend, and hold harmless Lender from any loss, damage, and costs, including
reasonable attorneys’ fees, threatened or suffered by Lender arising either directly or
indirectly as a result of any claim of the applicability of said law to the liens hereby
granted.

Defense of Title. Subject to the exception in the paragraph above, Grantor warrants
and will forever defend the title to the Property against the lawful claims of all persons. In
the event any action or proceeding is commenced that questions Grantor’s title or the interest
of Lender under this Mortgage, Grantor shall defend the action at Grantor’s expense. Grantor may
be the nominal party in such proceeding, but Lender shall be entitled to participate in the
proceeding and to be represented in the proceeding by counsel of Lender’s own choice, and
Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request
from time to time to permit such participation.

Compliance With Laws. Grantor warrants that the Property and Grantor’s use of the
Property complies
with all existing applicable laws, ordinances, and regulations of governmental authorities.

 

 

 

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	Loan No: 3787
	 	(Continued)
	 	Page 6

Survival of Representations and Warranties. All representations, warranties, and
agreements made by Grantor in this Mortgage shall survive the execution and delivery of this
Mortgage, shall be continuing in nature, and shall remain in full force and effect until such
time as Grantor’s Indebtedness shall be paid in full.

CONDEMNATION. The following provisions relating to condemnation proceedings are a part of
this Mortgage;

Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify
Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the
action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender
shall be entitled to participate in the proceeding and to be represented in the proceeding by
counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such
instruments and documentation as may be requested by Lender from time to time to permit such
participation.

Application of Net Proceeds. If all or any part of the Property is condemned by eminent
domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its
election require that all or any portion of the net proceeds of the award be applied to the
Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall
mean the award after payment of all reasonable costs, expenses, and attorneys’ fees incurred by
Lender in connection with the condemnation.

IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following
provisions relating to governmental taxes, fees and charges are a part of this Mortgage:

Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such
documents in addition to this Mortgage and take whatever other action is requested by Lender to
perfect and continue Lender’s lien on the Real Property. Grantor shall reimburse Lender for all
taxes, as described below, together with all expenses incurred in recording, perfecting or
continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and
other charges for recording or registering this Mortgage.

Taxes. The following shall constitute taxes to which this section applies: (1) a
specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by
this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct
from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of
Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all
or any portion of the Indebtedness or on payments of principal and interest made by Grantor.

Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the
date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender
may exercise any or all of its available remedies for an Event of Default as provided below
unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as
provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient
corporate surety bond or other security satisfactory to Lender.

SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this
Mortgage as a security agreement are a part of this Mortgage:

Security Agreement. This instrument shall constitute a Security Agreement to the
extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a
secured party under the Uniform Commercial Code as amended from time to time.

Security Interest. Upon request by Lender, Grantor shall take whatever action is
requested by Lender to perfect and continue Lender’s security interest in the Rents and Personal
Property. In addition to recording this Mortgage in the real property records, Lender may, at
any time and without further authorization from Grantor, file executed counterparts, copies or
reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all
expenses incurred in perfecting or continuing this security interest. Upon default, Grantor
shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor
shall assemble any Personal Property not affixed to the Property in a manner and at a place
reasonably convenient to Grantor and Lender and make it
available to Lender within three (3) days after receipt of written demand from Lender to the
extent permitted by applicable law.

 

 

 

MORTGAGE

					
	Loan No: 3787
	 	(Continued)
	 	Page 7

Fixture Filing. From the date of its recording, this Mortgage shall be effective as a
financing statement filed as a fixture filing with respect to the Personal Property and for this
purpose, the name and address of the debtor is the name and address of Grantor as set forth on
the first page of this Mortgage and the name and address of the secured party is the name and
address of Lender as set forth on the first page of this Mortgage.

Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from
which information concerning the security interest granted by this Mortgage may be obtained
(each as required by the Uniform Commercial Code) are as stated on the first page of this
Mortgage.

FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further
assurances and attorney-in-fact are a part of this Mortgage:

Further Assurances. At any time, and from time to time, upon request of Lender,
Grantor will make, execute and deliver, or will cause to be made, executed or delivered, to
Lender or to Lender’s designee, and when requested by Lender, cause to be filed, recorded,
refiled, or rerecorded, as the case may be, at such times and in such offices and places as
Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds,
security agreements, financing statements, continuation statements, instruments of further
assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary
or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor’s
obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and
security interests created by this Mortgage as first and prior liens on the Property, whether
now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees
to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred
in connection with the matters referred to in this paragraph.

Attorney-in-Fact. If Grantor fails to do any of the things referred to in the
preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor’s expense.
For such purposes, Grantor hereby irrevocably appoints Lender as Grantor’s attorney-in-fact for
the purpose of making, executing, delivering, filing, recording, and doing all other things as
may be necessary or desirable, in Lender’s sole opinion, to accomplish the matters referred to
in the preceding paragraph.

FULL PERFORMANCE. If Grantor pays all the Indebtedness, including without limitation all
future advances, when due, and otherwise performs all the obligations imposed upon Grantor under
this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage
and suitable statements of termination of any financing statement on file evidencing Lender’s
security interest in the Rents and the Personal Property. Grantor will pay, if permitted by
applicable law, any reasonable termination fee as determined by Lender from time to time.

EVENTS OF DEFAULT. Each of the following, at Lender’s option, shall constitute an Event
of Default under this Mortgage:

Payment Default. Grantor fails to make any payment when due under the Indebtedness.

Default on Other Payments. Failure of Grantor within the time required by this
Mortgage to make any payment for taxes or insurance, or any other payment necessary to prevent
filing of or to effect discharge of any lien.

Other Defaults. Grantor fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Mortgage or in any of the Related Documents or to comply
with or to perform any term, obligation, covenant or condition contained in any other agreement
between Lender and Grantor.

Default in Favor of Third Parties. Should Grantor default under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Grantor’s property or Grantor’s
ability to repay the Indebtedness or Grantor’s ability to perform Grantor’s obligations under
this Mortgage or any related document.

False Statements. Any warranty, representation or statement made or furnished to Lender by
Grantor or on Grantor’s behalf under this Mortgage or the Related Documents is false or
misleading in any
material respect, either now or at the time made or furnished or becomes false or misleading at
any time thereafter.

 

 

 

MORTGAGE

					
	Loan No: 3787
	 	(Continued)
	 	Page 8

Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full
force and effect (including failure of any collateral document to create a valid and perfected
security interest or lien) at any time and for any reason.

Death or Insolvency. The dissolution of Grantor’s (regardless of whether election to continue is
made), any member withdraws from the limited liability company, or any other termination of
Grantor’s existence as a going business or the death of any member, the insolvency of Grantor,
the appointment of a receiver for any part of Grantor’s property, any assignment for the benefit
of creditors, any type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Grantor.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help, repossession or any other method, by any creditor of
Grantor or by any governmental agency against any property securing the Indebtedness. This
includes a garnishment of any of Grantor’s accounts, including deposit accounts, with Lender.
However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to
the validity or reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding
and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an
amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between
Grantor and Lender that is not remedied within any grace period provided therein, including
without limitation any agreement concerning any indebtedness or other obligation of Grantor to
Lender, whether existing now or later.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity
of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its
option, may, but shall not be required to, permit the guarantor’s estate to assume
unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,
and, in doing so, cure any Event of Default.

Adverse Change. A material adverse change occurs in Grantor’s financial condition, or Lender
believes the prospect of payment or performance of the Indebtedness is impaired.

Insecurity. Lender in good faith believes itself insecure.

Right to Cure. If any default, other than a default in payment is curable and if
Grantor has not been given a notice of a breach of the same provision of this Mortgage within the
preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from
Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if
the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in
Lender’s sole discretion to be sufficient to cure the default and thereafter continues and
completes all reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.

RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any
time thereafter, Lender, at Lender’s option, may exercise any one or more of the following rights
and remedies, in addition to any other rights or remedies provided by law:

Accelerate Indebtedness. Lender shall have the right at its option to declare the
entire Indebtedness immediately due and payable, including any prepayment penalty which Grantor
would be required to pay without notice, except as may be expressly required by applicable law.

UCC Remedies. With respect to all or any part of the Personal Property, Lender shall
have all the rights and remedies of a secured party under the Uniform Commercial Code.

Collect Rents. Lender shall have the right, without notice to Grantor, to take
possession of the Property and collect the Rents, including amounts past due and unpaid, and
apply the net proceeds, over and above Lender’s costs, against the Indebtedness. In furtherance
of this right, Lender may require any tenant or other user of the Property to make payments of
rent or use fees directly to Lender. If the
Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor’s
attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and
to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in
response to Lender’s demand shall satisfy the obligations for which the payments are made,
whether or not any proper grounds for the demand existed. Lender may exercise its rights under
this subparagraph either in person, by agent, or through a receiver.

 

 

 

MORTGAGE

					
	Loan No: 3787
	 	(Continued)
	 	Page 9

Appoint Receiver. Lender shall have the right to have a receiver appointed to take
possession of all or any part of the Property, with the power to protect and preserve the
Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from
the Property and apply the proceeds, over and above the cost of the receivership, against the
Indebtedness. The receiver may serve without bond if permitted by law. Lender’s right to the
appointment of a receiver shall exist whether or not the apparent value of the Property exceeds
the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person
from serving as a receiver.

Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor’s
interest in all or any part of the Property.

Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure
pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified,
amended or replaced.

Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for
any deficiency remaining in the Indebtedness due to Lender after application of all amounts
received from the exercise of the rights provided in this section.

Tenancy at Sufferance. If Grantor remains in possession of the Property after the
Property is sold as provided above or Lender otherwise becomes entitled to possession of the
Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the
purchaser of the Property and shall, at Lender’s option, either (1) pay a reasonable rental for
the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This
paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the
Property during a redemption period.

Other Remedies. Lender shall have all other rights and remedies provided in this
Mortgage or the Note or available at law or in equity.

Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and
all right to have the Property marshalled. In exercising its rights and remedies, Lender shall
be free to sell all or any part of the Property together or separately, in one sale or by
separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the
Property.

Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public
sale of the Personal Property or of the time after which any private sale or other intended
disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at
least ten (10) days before the time of the sale or disposition. Any sale of the Personal
Property may be made in conjunction with any sale of the Real Property.

Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage,
Lender may, at Lender’s sole option, elect to reduce the period of redemption pursuant to Iowa
Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be
then applicable and provided by law.

Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any
other remedy, and an election to make expenditures or to take action to perform an obligation of
Grantor under this Mortgage, after Grantor’s failure to perform, shall not affect Lender’s right
to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall
be construed so as to limit or restrict the rights and remedies available to Lender following an
Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed
directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or
to proceed against any other collateral directly or indirectly securing the Indebtedness.

 

 

 

MORTGAGE

					
	Loan No: 3787
	 	(Continued)
	 	Page 10

Attorneys’ Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms
of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge
reasonable as attorneys’ fees at trial and upon any appeal. Whether or not any court action is
involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in
Lender’s opinion are
necessary at any time for the protection of its interest or the enforcement of its rights shall
become a part of the Indebtedness payable on demand and shall bear interest at the Note rate
from the date of the expenditure until repaid. Expenses covered by this paragraph include,
without limitation, however subject to any limits under applicable law, Lender’s attorneys’ fees
and Lender’s legal expenses, whether or not there is a lawsuit, including attorneys’ fees and
expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services, the cost of
searching records, obtaining title reports (including foreclosure reports), surveyors’ reports,
and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also
will pay any court costs, in addition to all other sums provided by law.

NOTICES. Any notice required to be given under this Mortgage, including without limitation any
notice of default and any notice of sale shall be given in writing, and shall be effective when
actually delivered, when actually received by telefacsimile (unless otherwise required by law),
when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the
holder of any lien which has priority over this Mortgage shall be sent to Lender’s address, as
shown near the beginning of this Mortgage. Any party may change its address for notices under this
Mortgage by giving formal written notice to the other parties, specifying that the purpose of the
notice is to change the party’s address. For notice purposes, Grantor agrees to keep Lender
informed at all times of Grantor’s current address. Unless otherwise provided or required by law,
if there is more than one Grantor, any notice given by
Lender to any Grantor is deemed to be notice given to all Grantors.

FACSIMILE AND COUNTERPART. This document may be signed in any number of separate copies, each of
which shall be effective as an original, but all of which taken together shall constitute a single
document. An electronic transmission or other facsimile of this document or any related document
shall be deemed an original and shall be admissible as evidence of the document and the signer’s
execution.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage:

Amendments. This Mortgage, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this Mortgage. No
alteration of or amendment to this Mortgage shall be effective unless given in writing and
signed by the party or parties sought to be charged or bound by the alteration or amendment.

Annual Reports. If the Property is used for purposes other than Grantor’s residence, Grantor
shall furnish to Lender, upon request, a certified statement of net operating income received
from the Property during Grantor’s previous fiscal year in such form and detail as Lender shall
require. “Net operating income” shall mean all cash receipts from the Property less all cash
expenditures made in connection with the operation of the Property.

Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are
not to be used to interpret or define the provisions of this Mortgage.

Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the
extent not preempted by federal law, the laws of the State of Iowa without regard to its
conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa.

No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage
unless such waiver is given in writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such right or any other right. A
waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of
Lender’s right otherwise to demand strict compliance with that provision or any other provision
of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and
Grantor, shall constitute a waiver of any of Lender’s rights or of any of Grantor’s obligations
as to any future transactions. Whenever the consent of Lender is required under this Mortgage,
the granting of such consent by Lender in any instance shall not constitute continuing consent
to subsequent instances where such consent is required and in all cases such consent may be
granted or withheld in the sole discretion of Lender.

 

 

 

MORTGAGE

					
	Loan No: 3787
	 	(Continued)
	 	Page 11

Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be
illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the
offending provision illegal, invalid, or unenforceable as to any other circumstance. If
feasible, the offending provision shall be
considered modified so that it becomes legal, valid and enforceable. If the offending provision
cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise
required by law, the illegality, invalidity, or unenforceability of any provision of this
Mortgage shall not affect the legality, validity or enforceability of any other provision of
this Mortgage.

Merger. There shall be no merger of the interest or estate created by this Mortgage with any
other interest or estate in the Property at any time held by or for the benefit of Lender in any
capacity, without the written consent of Lender.

Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of
Grantor’s interest, this Mortgage shall be binding upon and inure to the benefit of the parties,
their successors and assigns. if ownership of the Property becomes vested in a person other than
Grantor, Lender, without notice to Grantor, may deal with Grantor’s successors with reference to
this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor
from the obligations of this Mortgage or liability under the Indebtedness.

Time is of the Essence. Time is of the essence in the performance of this Mortgage.

Release of Rights of Dower, Homestead and Distributive Share. Each of the undersigned hereby
relinquishes all rights of dower, homestead and distributive share in and to the Property and
waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the
Property, that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving
such rights.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when used
in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts
shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed
to such terms in the Uniform Commercial Code:

Borrower. The word “Borrower” means Homeland Energy Solutions, LLC and includes all co-signers
and co-makers signing the Note and all their successors and assigns.

Default. The word “Default” means the Default set forth in this Mortgage in the section titled
“Default”.

Environmental Laws. The words “Environmental Laws” mean any and all state, federal and local
statutes, regulations and ordinances relating to the protection of human health or the
environment, including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”),
the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”), the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or
federal laws, rules, or regulations adopted pursuant thereto.

Event of Default. The words “Event of Default” mean any of the events of default set forth in
this Mortgage in the events of default section of this Mortgage.

Grantor. The word “Grantor” means Homeland Energy Solutions, LLC.

Guaranty. The word “Guaranty” means the guaranty from guarantor, endorser, surety, or
accommodation party to Lender, including without limitation a guaranty of all or part of the
Note.

Hazardous Substances. The words “Hazardous Substances” mean materials that, because of their
quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a
present or potential hazard to human health or the environment when improperly used, treated,
stored, disposed of, generated, manufactured, transported or otherwise handled. The words
“Hazardous Substances” are used in their very broadest sense and include without limitation any
and all hazardous or toxic substances, materials or waste as defined by or listed under the

Environmental Laws. The term “Hazardous Substances” also includes, without limitation, petroleum
and petroleum by-products or any fraction thereof and asbestos.

Improvements. The word “Improvements” means all existing and future improvements, buildings,
structures, mobile homes affixed on the Real Property, facilities, additions, replacements and
other construction on the Real Property.

 

 

 

MORTGAGE

					
	Loan No: 3787
	 	(Continued)
	 	Page 12

Indebtedness. The word “Indebtedness” means all principal, interest and late fees, and other
amounts, costs and expenses payable under the Note or Related Documents, together with all
renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or
Related Documents and any amounts expended or advanced by Lender to discharge Grantor’s
obligations or expenses incurred by Lender to enforce Grantor’s obligations under this Mortgage,
together with interest on such amounts as provided in this Mortgage. Specifically, without
limitation, Indebtedness includes the future advances set forth in the Future Advances provision,
together with all interest thereon and all amounts that may be indirectly secured by the
Cross-Collateralization provision of this Mortgage.

Lender. The word “Lender” means Home Federal Savings Bank, its successors and assigns.

Mortgage. The word “Mortgage” means this Mortgage between Grantor and Lender.

Note. The word “Note” means the promissory note dated March 23, 2007, in the original principal
amount of $3,517,572.00 from Grantor to Lender, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of, and substitutions for the promissory note
or agreement. The maturity date of this Mortgage is March 23, 2008.

Personal Property. The words “Personal Property” mean all equipment, fixtures, and other articles
of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed
to the Real Property; together with all accessions, parts, and additions to, all replacements of,
and all substitutions for, any of such property; and together with all proceeds (including
without limitation all insurance proceeds and refunds of premiums) from any sale or other
disposition of the Property.

Property. The word “Property” means collectively the Real Property and the Personal Property.

Real Property. The words “Real Property” mean the real property, interests and rights, as further
described in this Mortgage.

Related Documents. The words “Related Documents” mean all promissory notes, credit agreements,
loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, security deeds, collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Indebtedness.

Rents. The word “Rents” means all present and future rents, revenues, income, issues, royalties,
profits, and other benefits derived from the Property.

 

 

 

MORTGAGE

					
	Loan No: 3787
	 	(Continued)
	 	Page 13

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO
ITS TERMS.

GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING
TO THIS DEBT.

	 	 	 	 	 
	GRANTOR:	 	 
	 
	 	 	 	 
	HOMELAND ENERGY SOLUTIONS, LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/ Steven K. Eastman
	 	 
	 

	 	 

Steve Eastman, President of Homeland Energy Solutions
LLC
	 	 
	 
	 	 	 	 
	By:

	 	/s/ Bernard Retterath	 	 
	 

	 	 

Bernard Retterath, Treasurer of Homeland Energy
Solutions, LLC
	 	 

LIMITED LIABILITY COMPANY ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF Iowa

	 	)	 	 
	 

	 	)SS

	COUNTY OF  Chickasaw

	 	)	 	 

On this  23rd  day of March, A.D., 2007, before
me, the undersigned Notary Public in said County and State, personally appeared Steve Eastman,
President; Bernard Retterath, Treasurer of Homeland Energy Solutions, LLC, to me
personally known, who being by me duly sworn, did say that they are one of the members or
designated agents of said limited liability company, and that the instrument was signed and sealed
on behalf of the limited liability company by authority of the limited liability company and the
members or designated agents acknowledged the execution of the instrument to be the voluntary act
and deed of the limited liability company by it and by the members or designated agents voluntarily
executed.

	 	 	 	 	 
	 

	 	/s/ Willis M. Hansen	 	 
	 

	 	 

Notary Public in the State of
	 	 

	 	 	 	 	 	 	 
	 

	 	 	 	WILLIS M. HANSEN	 	 
	 

	 	[SEAL]
	 	Commission Number 101768
	 	 
	 

	 	 	 	My Comm. Exp. 02-18-08	 	 

 

 

 

EXHIBIT A

All that part of the Northwest Quarter lying North of the Chicago, Milwaukee and St. Paul
Railroad right-of-way in Section 12, Township 95 North, Range 12 West of the 5th P.M.,
Chickasaw County, Iowa

Parcel A in the Northeast Fractional Quarter as shown on a plat of survey dated January 30, 2007 by
Daryl Eiffler and filed for record in Document No. 2007-0335 in the office of the Chickasaw County
Recorder also described as the South 104.63 acres of the Northeast Fractional Quarter and the
Northwest Quarter of the Southeast Quarter, and all that part of the East Half of the Southeast
Quarter lying North of the Chicago, Milwaukee, St. Paul and Pacific Railroad, all in Section 1,
Township 95 North, Range 12 West of the 5th P.M. in Chickasaw County, Iowa

The Southwest Quarter of the Southeast Quarter of Section 1 (except Railroad right of way and
except that part thereof deeded to State of Iowa by warranty deed recorded in Book 70 at Page 407)
in Township 95 North, Range 12 West of the 5th P.M., Chickasaw County, Iowa

The South Half of the Southwest Quarter (except Railroad right-of-way and except Lot 1 of the
Southwest Quarter of the Southwest Quarter) of Section 1, Township 95 North, Range 12 West of the
5th P.M., Chickasaw County, Iowa

All that part of the East Half of Southeast Quarter lying South of the Chicago, Milwaukee and St.
Paul Railroad right of way in Section 1, Township 95 North, Range 12 West of the 5th
P.M., Chickasaw County, IowaFiled by Bowne Pure Compliance

 

Exhibit 10.22

PROMISSORY NOTE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal

$3,517,572.00
	 	Loan Date

03-23-2007
	 	Maturity

03-23-2008
	 	Loan No

3787
	 	Call / Coll

2200
	 	Account	 	Officer

242
	 	Initials
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.

	 	 	 	 	 	 	 	 	 
	Borrower:

	 	Homeland Energy Solutions, LLC (TIN:

48-1200438)

106 W Main, PO Box C

Riceville, IA 50466
	 	 	 	Lender:
	 	Home Federal Savings Bank
Business Banking

1016 Civic Center Dr NW Suite 300

Rochester, MN 55901

					
	 	 	 	 	 
	Principal Amount: $3,517,572.00
	 	interest Rate: 8.250%
	 	Date of Note: March 23, 2007

PROMISE TO PAY. Homeland Energy Solutions, LLC (“Borrower”) promises to pay to Home Federal
Savings Bank (“Lender”), or order, in lawful money of the United States of America, the principal
amount of Three Million Five Hundred Seventeen Thousand Five Hundred Seventy-two & 00/100 Dollars
($3,517,572.00), together with interest at the rate of 8.250% per annum on the unpaid principal
balance from March 23, 2007, until paid in full. The interest rate may change under the terms and
conditions of the “INTEREST AFTER DEFAULT” section.

PAYMENT. Borrower will pay this loan in one principal payment of $3,517,572.00 plus interest on
March 23, 2008. This payment due on March 23, 2008, will be for all principal and all accrued
interest not yet paid. In addition, Borrower will pay regular monthly payments of all accrued
unpaid interest due as of each payment date, beginning April 23, 2007, with all subsequent
interest payments to be due on the same day of each month after that. Unless otherwise agreed or
required by applicable law, payments will be applied first to any unpaid collection costs; then
to any late charges; then to any accrued unpaid interest; and then to principal. The annual
interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the
annual interest rate over a year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding. Borrower will pay
Lender at Lender’s address shown above or at such other place as Lender may designate in writing.

PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges are earned fully
as of the date of the loan and will not be subject to refund upon early payment (whether voluntary
or as a result of default), except as otherwise required by law. Except for the foregoing,
Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation
to continue to make payments under the payment schedule. Rather, early payments will reduce the
principal balance due. Borrower agrees not to send Lender payments marked “paid in full”, “without
recourse”, or similar language, If Borrower sends such a payment, Lender may accept it without
losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay any
further amount owed to Lender. All written communications concerning disputed amounts, including
any check or other payment instrument that indicates that the payment constitutes “payment in full”
of the amount owed or that is tendered with other conditions or limitations or as full satisfaction
of a disputed amount must be mailed or delivered to: Home Federal Savings Bank, Business Banking,
1016 Civic Center Dr NW Suite 300, Rochester, MN 55901.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the unpaid
portion of the regularly scheduled payment.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest
rate on this Note shall be increased by 3.000 percentage points. However, in no event will the
interest rate exceed the maximum interest rate limitations under applicable law.

DEFAULT. Each of the following shall constitute an event of default (“Event of Default”) under
this Note:

Payment Default. Borrower fails to make any payment when due under this Note.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Note or in any of the related documents or to comply
with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.

Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other agreement, in favor
of any other creditor or person that may materially affect any of Borrower’s property or
Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any
of the related documents.

False Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Note or the related documents is false or
misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.

Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue
is made), any member withdraws from Borrower, or any other termination of Borrower’s existence
as a going business or the death of any member, the insolvency of Borrower, the appointment of
a receiver for any part of Borrower’s property, any assignment for the benefit of creditors,
any type of creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help, repossession or any other method, by any creditor
of Borrower or by any governmental agency against any collateral securing the loan. This
includes a garnishment of any of Borrower’s accounts, including deposit accounts, with Lender.
However, this Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Lender written notice of the creditor or
forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or
forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an
adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the indebtedness or any guarantor,
endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes
the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.
In the event of a death, Lender, at its option, may, but shall not be required to, permit the
guarantor’s estate to assume unconditionally the obligations arising under the guaranty in a
manner satisfactory to Lender, and, in doing so, cure any Event of Default.

Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect of payment or performance of this Note is impaired.

 

 

PROMISSORY NOTE

					
	Loan No: 3787
	 	(Continued)
	 	Page 2

Insecurity. Lender in good faith believes itself insecure.

Cure Provisions. If any default, other than a default in payment is curable and if Borrower
has not been given a notice of a breach of the same provision of this Note within the
preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from
Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2)
if the cure requires more than fifteen (15) days, immediately initiates steps which Lender
deems in Lender’s sole discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient to produce compliance as
soon as reasonably practical.

LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this
Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower will pay Lender that amount, This includes, subject to any limits
under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there
is a lawsuit, including without limitation all attorneys’ fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or injunction), and
appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition
to all other sums provided by law,

GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent
not preempted by federal law, the laws of the State of Iowa without regard to its conflicts of
law provisions. This Note has been accepted by Lender in the State of Iowa.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender {whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted
by applicable law, to charge or setoff all sums owing on the indebtedness against any and all
such accounts.

COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the
security instruments listed herein:

(A) a Mortgage dated March 23, 2007, to Lender on real property located in Chickasaw
County, State of Iowa.

(B) deposit accounts and certificates of deposit described in Assignments of Deposit
Accounts dated March 23, 2007.

FACSIMILE AND COUNTERPART. This document may be signed in any number of separate copies, each of
which shall be effective as an original, but all of which taken together shall constitute a
single document. An electronic transmission or other facsimile of this document or any related
document shall be deemed an original and shall be admissible as evidence of the document and the
signer’s execution.

COLLECTION FROM DEPOSIT ACCOUNT. Lender may collect principal, interest, fees, charges, and other
amounts due under this Note by charging Borrower’s primary deposit account as specified in the
“Disbursement Request and Authorization” executed by Borrower in connection with this Note for
such amounts as they become due, or such other deposit account of Borrower as Borrower may
otherwise designate, Should there be insufficient funds in said account to pay such sums when
due, the full unpaid amount of such sums shall be immediately due and payable by Borrower.

ADDITIONAL SECURITY. Notwithstanding anything to the contrary in this or any related agreement, to
further secure the indebtedness and obligations of the Note and related loan documents, Borrower
pledges and grants to Lender a contractual right of offset and security interest in Borrower’s
accounts with Lender and Borrower’s accounts with any Home Federal Savings Bank Affiliate, whether
checking, savings, investment, or some other account, including without limitation, accounts held
jointly with others and accounts opened in the future, excluding however all IRAs, Keogh accounts,
and trust accounts to the extent a security interest would be invalid or prohibited by law. As used
herein, “Home Federal Savings Bank Affiliate” means any present or future subsidiary of MIN
Financial, Inc. or Home Federal Savings Bank, and any subsidiary thereof, and any successors of
such financial service companies.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s
heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender
and its successors and assigns,

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if
we report any inaccurate information about your account(s) to a consumer reporting agency. Your
written notice describing the specific inaccuracy{ies) should be sent to us at the following
address: Home Federal Savings Bank Business Banking PO Box 6947 Rochester, MN 55903.

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest
of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note
without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly stated in writing, no party who
signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lender’s security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree
that Lender may modify this loan without the consent of or notice to anyone other than the party
with whom the modification is made. The obligations under this Note are joint and several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE.
BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS
RELATING TO THIS DEBT.

BORROWER:

HOMELAND ENERGY SOLUTIONS, LLC

	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Stephen K. Eastman
	 	 	 	By:
	 	/s/ Bernard Retterath
	 

	 	 
	 	 	 	 	 	 
	 

	 	Steve Eastman, President of Homeland Energy
Solutions, LLC
	 	 	 	 	 	Bernard Retterath, Treasurer of Homeland Energy
Solutions, LLC

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