Document:

exv10w2

 

GUARANTEE

     FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and in connection with
that certain funding agreement (the “Funding Agreement”), entered into by and between Principal
Life Insurance Company, an Iowa insurance company (“Principal Life”), and Principal Life Income
Fundings Trust 2006-71, a New York common law trust (the “Trust”), relating to the notes (the
“Notes”) issued by the Trust, Principal Financial Group, Inc., a Delaware corporation and the
indirect parent company of Principal Life (the “Guarantor”), hereby furnishes to the Trust its full
and unconditional guarantee of the Guaranteed Amounts (as hereinafter defined) as follows:

     1. Guarantee.

          (a) The Guarantor hereby fully, irrevocably, absolutely and unconditionally guarantees, as a
guarantee of payment and not merely as a guarantee of collection, immediate payment when due to the
Trust any payments required to be made by Principal Life to the Trust under the Funding Agreement
which shall become due and payable regardless of whether such payment is due at maturity, on an
interest payment date or as a result of redemption or otherwise (the “Scheduled Payments”) but
shall be unpaid by Principal Life (the “Guaranteed Amounts”). Notwithstanding anything to the
contrary contained herein, in no event shall the Guaranteed Amounts exceed the Deposit (as defined
in the Funding Agreement) of the Funding Agreement, plus accrued but unpaid interest and any other
amounts due and owing under the Funding Agreement, less any amounts paid by Principal Life to the
Trust.

          (b) In the event that Principal Life fails to make a Scheduled Payment in full when due (the
“Payment Notice Date”), then the Trust or Citibank, N.A., as indenture trustee for the benefit of
the holders of the Notes (the “Indenture Trustee”), pursuant to the indenture (the “Indenture”)
between the Trust and the Indenture Trustee, may present the Guarantor with notice (each, a
“Payment Notice”) of such failure in writing on or after the Payment Notice Date. The Payment
Notice shall identify (1) the Funding Agreement, (2) the Trust, (3) the Payment Notice Date and (4)
the amount of the Scheduled Payments not paid by Principal Life to the Trust as of the Payment
Notice Date. Upon receipt of such Payment Notice, the Guarantor will immediately pay the
Guaranteed Amounts pursuant to Section 7.

          (c) In the event that, after receipt of a Payment Notice from the Trust, the Guarantor fails
to make immediate payment to the Trust or the Indenture Trustee of the Guaranteed Amounts, then
the Trust and the Indenture Trustee may enforce the obligations of the Guarantor under this
Guarantee, including by immediately bringing suit directly against the Guarantor (without first
bringing suit against Principal Life) for the Guaranteed Amounts not paid to the Trust as of the
Payment Notice Date.

          (d) This Guarantee is an unsecured, unsubordinated and contingent obligation of the Guarantor
and ranks equally with all other unsecured and unsubordinated obligations of the Guarantor.

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     2. Termination. This Guarantee is a continuing and irrevocable guarantee of the
Guaranteed Amounts now or hereafter existing and shall terminate and be of no further force and
effect with respect to the Funding Agreement and the Notes upon the full payment of the Scheduled
Payments or upon the earlier extinguishment of the obligations of Principal Life under the Funding
Agreement.

     3. Amendments. Subject to the trust agreement relating to the Trust and the Indenture, no
provision of this Guarantee may be waived, amended, supplemented or modified, except by a written
instrument executed by the Trust and the Guarantor.

     4. Assignment; Governing Law. This Guarantee shall inure to the benefit of the Trust and its
successors, assigns and pledgees. This Guarantee shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to conflict of law principles.

     5. Notices. All notices given pursuant to this Guarantee shall be in writing, and shall
either be delivered, mailed or telecopied to the locations listed below or at such other address or
to the attention of such other persons as such party shall have designated for such purpose in a
written notice complying as to delivery with the terms of this Section 5. Each such notice shall
be effective (i) if given by telecopy, when transmitted to the applicable number so specified in
this Section 5 (such notice shall also be sent by mail, with first class postage prepaid), (ii) if
given by mail, three days after deposit in the mails with first class postage prepaid, or (iii) if
given by any other means, when actually delivered at such address.

If to the Guarantor:

Principal Financial Group, Inc.

711 High Street

Des Moines, Iowa 50392

Attention: General Counsel

Telephone: (515) 247-5111

Facsimile: (515) 248-3011

With a copy to:

Principal Life Insurance Company

711 High Street

Des Moines, Iowa 50392

Attention: Jim Fifield

Telephone: (515) 248-9196

Facsimile: (866) 496-6527

If to the Trust:

Principal Life Income Fundings Trust (followed by the number of the Trust specified in this Guarantee)

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c/o U.S. Bank Trust National Association

100 Wall Street, 16th Floor

New York, New York 10005

Attention: Thomas E. Tabor

Telephone: (212) 361-6184

Facsimile: (212) 809-5459

With a copy to:

Citibank, N.A.

Citibank Agency and Trust

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Nancy Forte

Telephone: (212) 816-5685

Facsimile: (212) 816-5527

     6. Representations and Warranties. The Guarantor represents and warrants that: (i) it is duly
organized and in good standing under the laws of the jurisdiction of its organization and has full
capacity and right to make and perform this Guarantee, and all necessary authority has been
obtained; (ii) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors’ rights and general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law; (iii) the making and performance of this
Guarantee does not and will not violate the provisions of any applicable law, regulation or order,
and does not and will not result in the breach of, or constitute a default under, any material
agreement, instrument or document to which it is a party or by which it or any of its property may
be bound or affected, except to the extent disclosed in the registration statement registering the
issuance of this Guarantee and the Funding Agreement, as amended, supplemented or modified from
time to time (the “Registration Statement”), and to the extent that any such violation, breach or
default does not result in a material adverse effect on the Guarantor; and (iv) all consents,
approvals, licenses and authorizations of, and filings and registrations with, any governmental
authority required under applicable law and regulations for the making and performance of this
Guarantee have been obtained or made and are in full force and effect, except to the extent
disclosed in the Registration Statement and to the extent that the failure to acquire any such
consent, approval, license, authorization, filing or registration does not result in a material
adverse effect on the Guarantor.

     7. Notice of, and Consent to, Security Interest. The Trust hereby notifies the Guarantor that
it has granted to the Indenture Trustee, on behalf of the holders of the Notes, a security interest
in the Collateral (as defined in the Indenture), including, but not limited to, any and all payment
to be made by the Guarantor to the Trust under this Guarantee. The Trust hereby notifies the
Guarantor that it has collaterally assigned to the Indenture Trustee, for the benefit of the
holders of the Notes, this Guarantee. The Guarantor, by executing this Guarantee, hereby (i)
affirms that it has made or simultaneously will make changes to its books and records to reflect
such security interest and collateral assignment, (ii) consents to the security interest

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granted, and collateral assignment made, by the Trust to the Indenture Trustee of this
Guarantee, (iii) agrees to make all payments due under this Guarantee to the Collection Account (as
defined in the Indenture) or any other account designated in writing to the Guarantor by the
Indenture Trustee and (iv) agrees to comply with all orders of the Indenture Trustee with respect
to this Guarantee without any further consent from the Trust.

     8. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE
GUARANTOR WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING
OUT OF THIS GUARANTEE. THIS GUARANTEE REPRESENTS THE FINAL AGREEMENT BETWEEN THE GUARANTOR AND THE
TRUST AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS AMONG SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

	 	 	 
	PRINCIPAL FINANCIAL GROUP, INC.
	 
	 	 
	By:

	 	/s/ Elizabeth D. Swanson
	 

	 	 
	 
	 	 
	Name:

	 	Elizabeth D. Swanson
	 

	 	 
	 
	 	 
	Title:

	 	Counsel
	 

	 	 
	 
	 	 
	Date:

	 	The Effective Date (as defined in the Funding
	 

	 	Agreement)

Acknowledged and Agreed:

	 	 	 	 	 
	THE PRINCIPAL LIFE INCOME FUNDINGS
	TRUST DESIGNATED IN THIS GUARANTEE
	 
	 	 	 	 
	By:	 	U.S. Bank Trust National Association,
	 	 	not in its individual capacity, but solely in its
	 

	 	capacity as trustee	 	 
	 
	 	 	 	 
	By:	 	Bankers Trust Company, N.A.,
	 	 	under Limited Power of Attorney, dated February 16, 2006
	 
	 	 	 	 
	By:

	 	/s/ Diana L. Cook	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Name:

	 	Diana L. Cook	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:

	 	Vice President	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Date:	 	The Effective Date (as defined in the Funding
	 

	 	Agreement)	 	 

 4exv4w2

 

EXHIBIT 4.2

HOMELAND ENERGY SOLUTIONS, LLC

SUBSCRIPTION AGREEMENT

Limited Liability Company Membership Units

$1,000 per Unit

Minimum Investment of 25 Units ($25,000)

5 Unit Increments Thereafter ($5,000)

The undersigned subscriber (“Subscriber”), desiring to become a member of Homeland Energy
Solutions, LLC (“Homeland Energy”), an Iowa limited liability company, with its principal place of
business at 951 North Linn Avenue, New Hampton, Iowa 50659 hereby subscribes for the purchase of
membership units of Homeland Energy, and agrees to pay the related purchase price, identified
below.

A. SUBSCRIBER INFORMATION. Please print your individual or entity name and address. If we accept
your subscription, the units will be titled in the name of the subscriber as it appears below.
Joint subscribers should provide both names. Your name and address will be recorded exactly as
printed below. Please provide your home, business and/or mobile telephone number. If desired,
please also provide your e-mail address.

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.	 	 	Subscriber’s Printed Name	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	2.	 	 	Title, if applicable	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.	 	 	Subscriber’s Address
	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.	 	 	
               Street	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	               City, State, Zip Code	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.	 	 	E-mail Address (optional)	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.	 	 	Home Telephone Number	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.	 	 	Business Telephone Number	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.	 	 	Mobile Telephone Number	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

B. NUMBER OF UNITS PURCHASED. You must purchase at least 25 units. Your ownership interest may not
exceed 49% of our outstanding membership units. We currently have 2,850 units outstanding.
Accordingly, assuming that we sell the minimum number of 55,000 units in this offering, you may not
purchase more than 26,950 units. The maximum number of units to be sold in the offering is
110,000.

          units

C. PURCHASE PRICE. Indicate the dollar amount of your investment (minimum investment is
$25,000).

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	1. Total Purchase Price	 	 	=	 	2. 1st Installment	 	+	 	 	3. 2nd Installment	 
	 	($1,000 per unit multiplied	 	 	 	 	(10% of Total Purchase Price)	 	 	 	 	(90% of Total Purchase Price)	 
	 	by number of units)	 	 	 	 	 	 	 	 	 	 	 
	 
	nbsp;	 	nbsp;	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	=
	 	 	 	+	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

D. GENERAL INSTRUCTIONS FOR SUBSCRIBERS:

You should read the Prospectus dated [DATE OF EFFECTIVENESS] (the “Prospectus”) in its entirety
including the exhibits for a complete explanation of an investment in Homeland Energy.

INSTRUCTIONS IF YOU ARE SUBSCRIBING PRIOR TO THE COMPANY’S RELEASE OF FUNDS FROM ESCROW:
If you are subscribing prior to the Company’s release of funds from escrow, you must follow the
instructions contained in paragraphs 1 through 5 below:

     1. Complete all information required in this Subscription Agreement, and date and sign the
Subscription Agreement on page 6 and the Member Signature Page to our Operating Agreement attached
to this Subscription Agreement as Exhibit A.

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     2. Immediately provide a personal (or business) check for the first installment of ten percent
(10%) of your investment amount. The check should be made payable to “Home Federal Savings Bank,
escrow agent for Homeland Energy Solutions, LLC.” You will determine this amount in box C.2 on
page 1 of this Subscription Agreement.

     3. Execute the Promissory Note and Security Agreement on page 7 of this Subscription Agreement
evidencing your commitment to pay the remaining ninety percent (90%) due for the units. The
Promissory Note and Security Agreement is attached to this Subscription Agreement and grant
Homeland Energy, LLC a security interest in your units.

     4. Deliver the original executed documents referenced in paragraphs 1 and 3 of these
instructions, together with a personal or business check as described in Paragraph 2 of these
instructions to:

Homeland Energy Solutions, LLC

951 North Linn Avenue

New Hampton, Iowa 50659

     5. Within 20 days of written notice from Homeland Energy that your subscription has been
accepted, you must remit an additional personal (or business) check for the second installment of
ninety percent (90%) of your investment amount made payable to “Home Federal Savings Bank, escrow
agent for Homeland Energy Solutions, LLC” in satisfaction of the Promissory Note and Security
Agreement. You will determine this amount in box C.3 on page 1 of this Subscription Agreement.
You must deliver this check to the same address set forth above in paragraph 4 within twenty (20)
days of the date of Homeland Energy’s written notice. If you fail to pay the second installment
pursuant to the Promissory Note and Security Agreement, Homeland Energy shall be entitled to retain
your first installment and to seek other damages, as provided in the Promissory Note and Security
Agreement. This means that if you are unable to pay the 90% balance of your investment amount
within 20 days of our notice, you may have to forfeit the 10% cash deposit.

     Your funds will be placed in Homeland Energy’s escrow account at Home Federal Savings Bank.
The funds will be released to Homeland Energy or returned to you in accordance with the escrow
arrangements described in the Prospectus. Homeland Energy may, in its sole discretion, reject or
accept any part or all of your subscription. If Homeland Energy rejects your subscription, your
Subscription Agreement and investment will be promptly returned to you, plus nominal interest,
minus escrow fees. Homeland Energy may not consider the acceptance or rejection of your
subscription until a future date near the end of this offering.

INSTRUCTIONS IF YOU ARE SUBSCRIBING AFTER THE COMPANY’S RELEASE OF FUNDS FROM ESCROW: If
you are subscribing after the Company’s release of funds from escrow, you must follow the
instructions contained in paragraphs 1 through 3 below:

     1. Complete all information required in this Subscription Agreement, and date and sign the
Subscription Agreement on page 6 and the Member Signature Page to our Operating Agreement attached
to this Subscription Agreement as Exhibit A.

     2. Immediately provide your personal (or business) check for the entire amount of your
investment (as determined in box C.1 on page 1) made payable to “Homeland Energy Solutions, LLC.”

     3. Deliver the original executed documents referenced in paragraph 1 of these instructions,
together with your personal or business check as described in paragraph 2 to:

Homeland Energy Solutions, LLC

951 North Linn Avenue

New Hampton, Iowa 50659

     If you are subscribing after we have released funds from escrow and we accept your investment,
your funds will be immediately at-risk as described in the Prospectus. Homeland Energy may, in its
sole discretion, reject or accept any part or all of your subscription. If Homeland Energy rejects
your subscription, your Subscription Agreement and investment will be returned to you promptly,
plus nominal interest, minus escrow fees. Homeland Energy may not consider the acceptance or
rejection of your subscription until a future date near the end of this offering.

     You may direct your questions to either of our directors listed below or to Homeland Energy at
(641)985-2147.

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	NAME	 	POSITION	 	PHONE NUMBER
	Stephen Eastman

	 	President and Director
	 	(641) 985-2147
	James Boeding

	 	Vice President and Director
	 	(563) 382-3000
	Pat Boyle

	 	VP Project Development and Director
	 	(563) 547-3801
	Bernard Retterath

	 	Treasurer and Director
	 	(641) 737-2398
	Steve Dietz

	 	Secretary and Director
	 	(641) 423-3965
	Chad Kuhlers

	 	Director
	 	(641) 423-8500
	Steven Core

	 	Director
	 	(507) 261-2946

E. Additional Subscriber Information. Subscriber, named above, certifies the following under
penalties of perjury:

	 	1.	 	Form of Ownership. Check the appropriate box (one only) to indicate form of
ownership. If the subscriber is a Custodian, Corporation, Partnership or Trust, please
provide the additional information requested.

	 	 	o Individual
	 
	 	 	o Joint Tenants with Right of Survivorship (Both signatures must appear on page 6.)
	 
	 	 	o Corporation, Limited Liability Company or Partnership (Corporate
Resolutions, Operating Agreement or Partnership Agreement 
     must be enclosed.)
	 
	 	 	o Trust
	 
	 	 	          Trustee’s Name:        
                      
                   
                     
                
      
	 
	 	 	          Trust Date:                                                                     
                                     
	 
	 	 	o Other: Provide detailed information in the space immediately below.
	 
	 	 	                                                                                
                                                                 

	 
	 	 	                                                                                
                                                                 

	 	2.	 	Subscriber’s Taxpayer Information. Check the appropriate box if you are a
non-resident alien, a U.S. Citizen residing outside the United States, and/or subject
to backup withholding. All individual subscribers should provide their Social Security
Numbers. Trusts should provide the trust’s taxpayer identification number. Custodians
should provide the minor’s Social Security Number. Other entities should provide the
entity’s taxpayer identification number.

	 	 	 	o Check box if you are a non-resident alien
	 
	 	 	 	o Check box if you are a U.S. citizen residing outside of the United States
	 
	 	 	 	o Check this box if you are subject to backup withholding
	 
	 	 	 	Subscriber’s Social Security No.            
                    
                   
                   
      
                    
	 
	 	 	 	Joint Subscriber’s Social Security No.             
                     
                     
                    
           
	 
	 	 	 	Taxpayer Identification No.               
                    
                    
                    
                    
         

	 	3.	 	Member Report Address. If you would like duplicate copies of member reports
sent to an address that is different than the address identified in section A, please
complete this section.

	 	 	 	Address:            
     
          
           
       
              
     
              
     
                
        

	 
	 	 	         
                                                                         
                               

	 	4.	 	State of Residence.

	 	 	 	State of Principal Residence:               
                    
                    
                    
                    
            
	 
	 	 	 	State where driver’s license is issued:             
                    
                    
                      
                
	 
	 	 	 	State where resident income taxes are filed:             
                     
                     
                          

State(s) in which you have maintained your principal residence during the past three years:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	     	 
	 

	 	 	 a.
	 	 	b.
	 	 	c.	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	     	 

	 	5.	 	Suitability Standards. You cannot invest in Homeland Energy unless you meet
one of the following suitability tests (a or b) set forth below. Please review the
suitability tests and check the box next to the

3

 

	 	 	following suitability test that you meet. For husbands and wives purchasing
jointly, the tests below will be applied on a joint basis.

	 	a. o	 	I (We) have annual income from whatever source of at least
$45,000 and a net worth of at least $45,000, exclusive of home,
furnishings and automobiles; or
	 
	 	b. o	 	I (We) have a net worth of at least $100,000, exclusive of
home, furnishings and automobiles;
	 
	 	c. o	 	I (We) have a net worth of $150,000, exclusive of home, home
furnishings, and automobiles;
	 
	 	d. o	 	I (We) reside in Iowa and I (we) have a net worth of $60,000
(exclusive of home, auto and furnishings) and annual income of $60,000 or, in
the alternative, a net worth of $150,000 (exclusive of home, auto and
furnishings); or
	 
	 	e. o	 	I (We) reside in Kansas and I (we) have a net worth of $60,000
(exclusive of home, auto and furnishings) and annual income of $60,000 or, in
the alternative, a net worth of $225,000 (exclusive of home, auto and
furnishings).

	 	6.	 	Agricultural Producer. Please indicate below whether the subscribing person
or entity meets the following definition of an Agricultural Producer: Persons or
entities, including farmers, ranchers, loggers, agricultural harvesters and fishermen,
that engage in the production or harvesting of an agricultural product. Producers may
or may not own the land or other production resources, but must have majority ownership
interest in the agricultural product to which value is added as a result of the
project. Examples of agricultural producers include but are not limited to: a cattle
or hog feeder that has a majority interest in the livestock that is fed, slaughtered
and sold as beef or pork products or corn grower that has a majority interest in the
corn produced that is then converted into corn meal.

	 	a. o	 	I (we) qualify as an Agricultural Producer based on the above
definition.
	 
	 	b. o	 	I (we) do not qualify as an Agricultural Producer based on the
above definition.

	 	7.	 	Subscriber’s Representations and Warranties. You must read and certify your
representations and warranties by placing your initials where indicated and by signing
and dating this Subscription Agreement. Joint subscribers are also required to
initial and sign as indicated.

(Initial here) (Joint initials) By signing below the subscriber represents and warrants to Homeland
Energy that he, she or it:

					
	 
	 	 	 	a. has received a copy of Homeland Energy’s Prospectus dated [DATE OF EFFECTIVENESS] and the exhibits thereto
or has received notice that this sale has been made
pursuant to a registration statement in which a final
prospectus would have been required to have been
delivered in the absence of Rule 172;
	 

	 	 	 
	 

	 	 	 
	 
	 

	 	 	 	 
b. has been informed that the units of Homeland Energy are offered and sold in reliance upon a federal
securities registration; state registrations in
Florida, Illinois, Iowa, Kansas, Minnesota, Missouri,
South Dakota and Wisconsin; and exemptions from
securities registrations in various other states, and
understands that the units to be issued pursuant to
this subscription agreement can only be sold to a
person meeting requirements of suitability;
	 

	 	 	 
	 

	 	 	 
	 
	 
	 	 	 	 
	 

	 	 	 	c. has been informed that the securities purchased pursuant to this Subscription Agreement have not been
registered under the securities laws of any state
other than Florida, Illinois, Iowa, Kansas, Minnesota,
Missouri, South Dakota and Wisconsin and that Homeland
Energy is relying in part upon the representations of
the undersigned Subscriber contained herein;
	 

	 	 	 
	 

	 	 	 
	 
	 
	 	 	 	 
	 

	 	 	 	d. has been informed that the securities subscribed for have not been approved or disapproved by the SEC, or
the Florida, Illinois, Iowa, Kansas, Minnesota,
Missouri, South Dakota and Wisconsin Securities
Departments or any other regulatory authority, nor has
any regulatory authority passed upon the accuracy or
adequacy of the Prospectus;
	 

	 	 	 
	 

	 	 	 
	 
	 

	 	 	 	 
e. intends to acquire the units for his/her/its own account without a view to public distribution or
resale and that he/she/it has no contract,
undertaking, agreement or arrangement to sell or
otherwise transfer or dispose of any units or any
portion thereof to any other person;
	 

	 	 	 
	 

	 	 	 

4

 

	 	 	 	 	 
	 

	 	 	 	f. understands that there is no present market for Homeland Energy’s membership units, that the
membership units will not trade on an exchange or
automatic quotation system, that no such market is
expected to develop in the future and that there are
significant restrictions on the transferability of the
membership units;
	 

	 	 	 
	 

	 	 	 
	 
	 	 	 	 
	 
	 

	 	 	 	g. has been encouraged to seek the advice of his legal counsel and accountants or other financial advisers
with respect to investor-specific tax and/or other
considerations relating to the purchase and ownership
of units;
	 

	 	 	 
	 

	 	 	 
	 
	 	 	 	 
	 
	 

	 	 	 	h. has received a copy of the Homeland Energy Operating Agreement, dated March 9, 2006, and understands that
upon closing the escrow by Homeland Energy, the
subscriber and the membership units will be bound by
the provisions of the Operating Agreement which
contains, among other things, provisions that restrict
the transfer of membership units;
	 

	 	 	 
	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	 	 	i. understands that the units are subject to substantial restrictions on transfer under certain tax and
securities laws along with restrictions in the
Homeland Energy Operating Agreement, and agrees that
if the membership units or any part thereof are sold
or distributed in the future, the subscriber shall
sell or distribute them pursuant to the terms of the
Operating Agreement, and the requirements of the
Securities Act of 1933, as amended, and applicable tax
and securities laws;
	 

	 	 	 
	 

	 	 	 
	 
	 
	 	 	 	 
	 

	 	 	 	j. meets the suitability test marked in Item E.5 above and is capable of bearing the economic risk of this
investment, including the possible total loss of the
investment;
	 

	 	 	 
	 

	 	 	 
	 
	 	 	 	 
	 
	 

	 	 	 	k. understands that Homeland Energy will place a restrictive legend on any certificate representing any
unit containing substantially the following language
as the same may be amended by the Directors of
Homeland Energy in their sole discretion:
	 

	 	 	 
	 
	 

	 	 	 

THE TRANSFERABILITY OF THE MEMBERSHIP UNITS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED. SUCH UNITS MAY NOT BE SOLD, ASSIGNED,
OR TRANSFERRED, AND NO ASSIGNEE, VENDEE, TRANSFEREE OR ENDORSEE
THEREOF WILL BE RECOGNIZED AS HAVING ACQUIRED ANY SUCH UNITS FOR
ANY PURPOSES, UNLESS AND TO THE EXTENT SUCH SALE, TRANSFER,
HYPOTHECATION, OR ASSIGNMENT IS PERMITTED BY, AND IS COMPLETED IN
STRICT ACCORDANCE WITH, APPLICABLE FEDERAL AND STATE LAW AND THE
TERMS AND CONDITIONS SET FORTH IN THE OPERATING AGREEMENT OF THE
COMPANY, AS AMENDED FROM TIME TO TIME.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
OFFERED FOR SALE OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
UNDER APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
UNDER APPLICABLE STATE SECURITIES LAWS.

	 	 	 	 	 
	 

	 	 	 	l. understands that, to enforce the above legend, Homeland Energy may place a stop transfer order with
its registrar and stock transfer agent (if any)
covering all certificates representing any of the
membership units;
	 

	 	 	 
	 

	 	 	 
	 
	 
	 	 	 	 
	 

	 	 	 	m. may not transfer or assign this Subscription Agreement, or any of the subscriber’s interest herein
without the prior written consent of Homeland Energy;
	 

	 	 	 
	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	 	 	n. has written his, her, or its correct taxpayer identification number under Item E.2 on this
Subscription Agreement;
	 

	 	 	 
	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	 	 	o. is not subject to back up withholding either because he, she or it has not been notified by the Internal
Revenue Service (“IRS”) that he, she or it is subject
to backup withholding as a result of a failure to
report all interest or dividends, or the IRS has
notified him, her or it that he is no longer subject
to backup withholding (Note this clause (p) should be
crossed out if the backup withholding box in Item E.2
is checked);
	 

	 	 	 
	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	 	 	p. understands that execution of the attached Promissory Note and Security Agreement will allow Homeland Energy
or its assigns to pursue the obligor for payment of
the amount due thereon by any legal means, including,
but not limited to, acquisition of a judgment against
the
	 

	 	 	 
	 
	 

	 	 	 

5

 

	 	 	 	 	 
	 

	 	 	 	obligor in the event that the subscriber defaults on that Promissory Note and Security Agreement; and
	 
	 	 	 	 
	 

	 	 	 	q. acknowledges that Homeland Energy may retain possession of certificates representing subscriber’s units to perfect its security interest in those units.
	 

	 	 	 
	 

	 	 	 
	 

	 	 	 	 	 	 	 	 	 
	Signature of Subscriber/Joint Subscriber:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Individuals:	 	 	 	Entities:	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Name of Individual Subscriber (Please Print)	 	 	 	Name of Entity (Please Print)	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Signature of Individual	 	 	 	Print Name and Title of Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Name of Joint Individual Subscriber (Please Print)	 	 	 	Signature of Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Signature of Joint Individual Subscriber	 	 	 	 	 	 

ACCEPTANCE OF SUBSCRIPTION BY HOMELAND ENERGY SOLUTIONS, LLC:

Homeland Energy Solutions, LLC hereby accepts Subscriber’s subscription for ___units.

Dated this ___day of                                         , 200___.

	 	 	 	 	 
	HOMELAND ENERGY SOLUTIONS, LLC	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Its:
	 	 	 	 
	 

	 	 	 	 

6

 

PROMISSORY NOTE AND SECURITY AGREEMENT

     Date of Subscription Agreement:                                                             , 200___.

$1,000 per Unit

Minimum Investment of 25 Units ($25,000); Units Sold in 5 Unit Increments Thereafter ($10,000 each)

	 	 	 
	 

	 	Number of Units Subscribed
	 

	 	 
	 
	 	 
	 

	 	Total Purchase Price ($1,000 per unit multiplied by number of units subscribed)
	 

	 	 
	 
	 	 
	(                     )
 

	 	Less Initial Payment (10% of Principal Amount) 
	 
	 	 
	 

	 	Principal Balance
	 

	 	 

FOR VALUE RECEIVED, the undersigned hereby promises to pay to the order of Homeland Energy
Solutions, LLC, an Iowa limited liability company (“Homeland Energy”), at its principal office
located at 951 North Linn Avenue, New Hampton, Iowa 50659, or at such other place as required by
Homeland Energy, the Principal Balance set forth above in one lump sum to be paid without interest
within 20 days following the call of the Homeland Energy Board of Directors, as described in the
Subscription Agreement. In the event the undersigned fails to timely make any payment owed, the
entire balance of any amounts due under this full recourse Promissory Note and Security Agreement
shall be immediately due and payable in full with interest at the rate of 12% per annum from the
due date and any amounts previously paid in relation to the obligation evidenced by this Promissory
Note and Security Agreement may be forfeited at the discretion of Homeland Energy.

The undersigned agrees to pay to Homeland Energy on demand, all costs and expenses incurred to
collect any indebtedness evidenced by this Promissory Note and Security Agreement, including,
without limitation, reasonable attorneys’ fees. This Promissory Note and Security Agreement may
not be modified orally and shall in all respects be governed by, construed, and enforced in
accordance with the laws of the State of Nebraska.

The provisions of this Promissory Note and Security Agreement shall inure to the benefit of
Homeland Energy and its successors and assigns, which expressly reserves the right to pursue the
undersigned for payment of the amount due thereon by any legal means in the event that the
undersigned defaults on obligations provided in this Promissory Note and Security Agreement.

The undersigned waives presentment, demand for payment, notice of dishonor, notice of protest, and
all other notices or demands in connection with the delivery, acceptance, performance or default of
this Promissory Note and Security Agreement.

The undersigned grants to Homeland Energy, and its successors and assigns (“Secured Party”), a
purchase money security interest in all of the undersigned’s membership units of Homeland Energy
now owned or hereafter acquired. This security interest is granted as non-exclusive collateral to
secure payment and performance on the obligation owed Secured Party from the undersigned evidenced
by this Promissory Note and Security Agreement. The undersigned further authorizes Secured Party to
retain possession of certificates representing such membership units and to take any other actions
necessary to perfect the security interest granted herein.

Dated:                    , 200___.

	 	 	 	 	 	 	 	 	 	 	 
	OBLIGOR/DEBTOR:	 	 	 	JOINT OBLIGOR/DEBTOR:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Printed or Typed Name of Obligor	 	 	 	Printed or Typed Name of Joint Obligor	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	(Signature)
	 	 	 	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Officer Title if Obligor is an Entity	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	Address of Obligor	 	 	 	 	 	 	 	 

7

 

Exhibit A

MEMBER SIGNATURE PAGE

ADDENDUM TO THE

OPERATING AGREEMENT

OF HOMELAND ENERGY SOLUTIONS, LLC

     The undersigned does hereby warrant, represent, covenant and agree that: (i) the undersigned,
as a condition to becoming a Member in Homeland Energy Solutions, LLC, has received a copy of the
Operating Agreement dated March 9, 2006, and, if applicable, all amendments and modifications
thereto; (ii) the undersigned shall be subject to and comply with all terms and conditions of such
Operating Agreement in all respects, as if the undersigned had executed said Operating Agreement on
the original date thereof; and (iii) the undersigned is and shall be bound by all of the provisions
of said Operating Agreement from and after the date of execution of this Addendum.

	 	 	 	 	 	 	 	 	 
	Individuals:	 	 	 	Entities:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Date	 	 	 	Date	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Name of Individual Member (Please Print)	 	 	 	Name of Entity (Please Print)	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Signature of Individual	 	 	 	Print Name and Title of Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Name of Joint Individual Member (Please Print)	 	 	 	Signature of Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Signature of Joint Individual Member	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Agreed to and accepted on behalf of the

Company and its Members:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	HOMELAND ENERGY SOLUTIONS, LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

8

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