FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported) November 13, 1997.
HIGH PLAINS CORPORATION
(Exact name of registrant as specified in its charter)
Kansas #1-8680
(State or other jurisdiction of (Commission File
incorporation)
Number)
200 W. Douglas #48-0901658
Suite #820 (IRS Employer
Wichita, Kansas 67202 Identification No.)
(Address of prinicipal
exeuctive offices)
(316)269-4310
(Registrant's telephone number)
<PAGE>
Item 5 Other Information
High Plains Corporation today announced the execution of a long-term
contract to supply a regional carbon dioxide (CO2) processor with CO2 from
High Plains' York, Nebraska ethanol plant.
At full production, the York, Nebraska ethanol facility produces, as a
byproduct, approximately 300 tons per day of raw carbon dioxide gas (CO2).
This contract, which has an initial term of ten years, provides for the sale
of between 200 and 220 tons per day at a price of $7.00 per ton for the raw
CO2 gas. The estimated completion date for the equipment installation and
the commencement of CO2 processing operations is May 31, 1998. While the
Company anticipates the sale of at least 200 tons per day, the contract
contains a provision that requires, after CO2 plant startup, that a minimum
of 140 tons per day on average will be purchased by the CO2 processor on a
take or pay basis, regardless of futher processing.
High Plains' President, Raymond G. Friend, said, "We have attempted to find
a contract partner for our CO2 byproduct for many years. We are very
pleased to have executed this agreement, since this will provide additional
revenue and net income to the Company without any additional capital or
operating costs. The CO2 processing company will supply all of the
equipment necessary to process the gas and distribute the finished CO2 to
the marketplace. We will continue in our attempt to find markets for the
remaining CO2 produced at our York, Nebraska plant, as well as the 150 tons
per day of CO2 produced at our Colwich, Kansas ethanol facility."
Based in Wichita, Kansas, High Plains Corporation is the only publicly
traded company whose sole business is Ethanol. It is one of the largest
producers of Ethanol with approximately 60 million gallons per year of
current capacity. Clean burning Ethanol reduces pollutants in automotive
gasoline and increases octane levels for better engine performance without
increasing gas pump prices.
"THE SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995. This press release contains forward-looking statements that
involve risks and uncertainties, including but not limited to risks detailed
from time to time in the Company's Securities and Exchange Commission
filings.
Exhibit
10.1 EPCO CO2 Purchase and Sale Agreement with Lease Agreement is filed as
part of this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date November 13, 1997 HIGH PLAINS CORPORATION
s/Raymond G. Friend
President
Exhibit 10.1
CO2 Purchase and Sale
Agreement
WHEREAS, High Plains Corporation (hereinafter referred to as "SELLER")
operates an ethanol production facility in York, Nebraska which produces
as a by-product raw carbon dioxide (CO-2) in gaseous form; and
WHEREAS, EPCO Carbon Dioxide Products, Inc. ("EPCO") will be manufacturing
liquid CO2 at a CO2 Liquefaction Plant to be constructed by EPCO on premises
leased or owned by EPCO in York, Nebraska; and
WHEREAS, EPCO desires to purchase Raw CO-2 gas from SELLER; and
WHEREAS, SELLER desires to sell such CO-2 gas on the terms and conditions
set forth in this agreement;
NOW THEREFORE, in consideration of the foregoing premises, the mutual
covenants set forth below, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows, superceding all prior agreements:
1. Definitions:
(a) EPCO CO2 Plant - The CO2 Liquefaction Plant to be constructed by EPCO
in York, Nebraska;
(b) SELLER'S Facility - The ethanol production facility and related
operations located on the premises of SELLER in York, Nebraska which
produces as a by-product quantities of CO-2 in gas form;
(c) Contract year - shall mean a twelve (12) month period beginning on
the first day of the first month after the EPCO CO2 Plant begins
producing food grade liquid CO2, and every year thereafter for
succeeding periods of twelve (12) months.
(d) Matchpoint - The flange or other point on the necessary services
and process facility conduits into and out of the EPCO CO2 Plant Site
and shown on Exhibit A. Installation costs on the EPCO CO2 Plant side
of the Matchpoint shall be borne by EPCO. Installation costs on the
SELLER'S Facility side of the Matchpoint will be borne by SELLER.
EPCO will fund the costs for SELLER'S improvements and will recover
those costs in the form of deductions from the funds due to SELLER
from the first product sales. Unless agreed otherwise, this
Matchpoint shall be located as near as practicable to the boundary
of the EPCO CO2 Plant Site.
(e) SELLER'S Facility Site - That parcel of land constituting the
entire premises upon which the SELLER'S Facility in York, Nebraska is
located, all as more particularly t out and described on Exhibit B,
attached hereto and made a part hereof.
(f) EPCO CO2 Plant Site - a parcel of land designated by EPCO on which
its CO-2 Plant Site is located all as more particularly set out and
described on Exhibit B, attached hereto and made a part hereof.
2. Term: The primary term of this agreement shall begin on the first day
of operation of the EPCO CO-2 Plant and shall end on the last day of the
tenth contract year thereafter. Provided, however, that this agreement
shall automatically renew for additional term(s) of 5 years each until
either SELLER or EPCO provides written notification of termination to
the other at least six months prior to the end of the primary or any
renewal term. Should SELLER during the initial term of this contract,
or any extension thereto, file a voluntary petition under any chapter
of the United States Bankruptcy code, or if a petition in Bankruptcy
or under any debtors relief law shall be filed against SELLER, or
if SELLER becomes insolvent, or if proceedings are begun by or
against SELLER seeking the appointment of a receiver, or if SELLER
should cease operations for a period of more than thirty consecutive
days, except for events of Force Majeure, then EPCO shall have the
right to terminate this agreement and retain all money owed by it
to SELLER.
3. Quantity and Price: SELLER agrees to supply to EPCO at the Matchpoint
at 6 p.s.i.g. at least 200 tons of CO-2 gas per day. The price for such
CO2 shall be $7.00 per short ton.
4. Take or Pay Minimum: EPCO agrees to Take or Pay ("Take or Pay") for,
whether taken or not, a minimum of 70% of 200 short tons, or 140 short
tons per day, of CO2 during each six month period of this contract.
EPCO's obligation to Take or Pay shall abate in the event of force
majeure or cessation of operation of SELLER'S facility.
5. Measurement: The quantity of CO2 gas purchased by EPCO shall be
measured by the number of tons of liquid CO-2 produced by EPCO's plant,
determined on certified truck and rail scales located on the EPCO Plant
Site. Title to and risk of loss of CO2 gas shall pass from SELLER to
EPCO at the Matchpoint, as defined herein, but the quantity of CO-2
sold and purchased shall nonetheless be measured on the truck and rail
scales stated above. EPCO will furnish certified Bills of Lading to
SELLER, omitting the customer names and addresses, which shall
establish the billable tons of product used by EPCO. EPCO shall not
vent CO2 gas, and shall maximize recovery of condensation gas.
EPCO shall keep a record of daily production, and of each individual
shipment, a copy of which shall be given to SELLER on a daily
basis. SELLER shall have the right to an independent audit of
production and shipment information at SELLER's sole expense.
SELLER is hereby granted a security interest in EPCO's inventory
of all finished product prior to sale, to secure any amounts due
SELLER. SELLER shall be entitled to purchase up to 10 tons of
finished CO2 liquid product per day during the term of this agreement
for $26.50 per ton utilized. High Plains will be furnished copies
of any product quality tests performed by EPCO.
6. Payment and Terms: SELLER shall bill EPCO monthly for the Tons of
Product shipped from the EPCO Facility. EPCO shall pay net thirty (30)
days from billing date.
7. Force Majeure: Neither party shall be liable for failure to perform
or for delay in performing this Agreement, where such failure or delay
is occasioned by events constituting force majeure, and the parties shall
use all reasonable efforts to minimize the duration of any event of force
majeure. For purposes of this agreement force majeure shall include the
following: (a) fire, explosion, strike, lock-out, labor dispute,
casualty, accident or mechanical failure(s); (b) lack or failure in
whole or in part of transportation facilities; (c) storm, flood or
drought; (d) acts of God or of the public enemy, war, riots, police
action, or civil commotion. The party asserting that an event of
force majeure has occurred shall send the other party notice thereof by
cable, telecopy or telex no later than three (3) days after the
beginning of such claimed event setting forth a description of the
event of force majeure, an estimate of its effect upon the party's
ability to perform its obligations under this Agreement and the
duration thereof. The notice shall be supplemented by such other
information or documentation as the party receiving the notice may
reasonably request. As soon as possible after the cessation of any
event of force majeure, the party which asserted such event shall
give the other party written notice of such cessation. Whenever
possible, each party shall give the other party notice of any
threatened or impending event of force majeure, and the parties
shall use all reasonable efforts to minimize the duration of any
event of force majeure.
In the event of force majeure affecting SELLER, EPCO shall have the
right to the first 200 tons of CO2 per day produced by the SELLER'S
Plant.
It is agreed that if the SELLER'S Facility or EPCO's Plant is destroyed
by some force beyond their control, they shall not be required to
rebuild their facility and this Agreement will be terminated without
penalty.
8. Confidentiality and Non-Competition: The parties hereby acknowledge that
in the course of engaging in the sale and purchase of CO-2 gas at the
York, Nebraska location, each will have access to Confidential
Information which includes but is not limited to each other's business,
the identity of customers, the quantity of liquid CO-2 used by such
customers, shipping records, pricing, customer lists, production methods,
technical and non-technical data, formulae, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial
data, information regarding actual and potential customers of each party
and actual and potential suppliers of each party. The parties agree
that all such Confidential Information shall be kept secret and
confidential.
The parties further acknowledge that violation of the provisions of
this Section shall constitute irreparable injury and shall entitle the
non-violating party to temporary preliminary and/or permanent injunctive
relief, in addition to any other remedy at law or in equity.
9. Insurance: Prior to construction of the CO-2 Liquefaction Plant EPCO
shall furnish SELLER Certificates of Insurance with thirty days notice of
cancellation and/or change in coverage clause as evidence of the following
coverages:
1. Worker's Compensation as prescribed by law and Employer's Liability
Insurance with a limit of not less than $1,000,000 per person and
$1,000,000 per accident;
2. Comprehensive Public Liability and Automobile Liability, including
broad form contractual liability provision to cover any liability
assumed by EPCO under this Contract, with a combined single limit
of $5,000,000 Property Damage and Bodily Injury;
3. SELLER shall be named as an additional insured on these policies of
insurance.
10. Assignment: Subject to the terms and conditions set forth herein, no
assignment by the parties of all or part of its rights and obligations
shall be made without the consent of the non-assigning party, which
consent shall not be unreasonably withheld. Notwithstanding the
foregoing, in the event the SELLER sells its Facility in York,
Nebraska EPCO may, at its sole option, terminate this agreement
without any penalty.
11. Entire Agreement: The entire Agreement is contained herein and there
are no oral promises, representations, or other warranties affecting
it. No amendment or modifications of any of the terms and provisions
of this Agreement shall be binding upon either SELLER or EPCO
unless the same be expressed in writing and signed by both
parties.
12. Miscellaneous: This Agreement and the agreements referred to herein
comprise the entire agreement between the parties relating to the
subject matter hereof and there are no agreements, understandings,
conditions, warranties or representations concerning the subject
matter hereof which are not set forth or referred to herein. Headings
are for reference only, and do not affect the meaning of any paragraph.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. The failure of either party to require strict
compliance with any of the terms and conditions of this agreement in
any one situation shall not constitute a waiver of any of the terms
and conditions of this agreement.
13. Notices: Notices and other communications between the parties hereto
shall be in writing (by mail, telex, telecopy or telegraph unless a
particular mode is specified herein), postage or transmission costs
prepaid, and shall be addressed to the parties hereto at the addresses
set forth below:
To SELLER: High Plains Corporation
200 West Douglas, Suite 820
Wichita, Kansas 67202
To EPCO: EPCO Carbon Dioxide Products, Inc.
1500 Lamy Lane
Monroe, Louisiana 71201
Telephone: (318) 361-0870
FAX: (318) 361-0047
All such Notices and communications shall be deemed effective on (i)
the date of transmission, if sent by telecopy or if sent by telex,
with confirmed answer back, or (ii) the date that is five (5) calendar
days after the date on which deposited or sent, if sent by mail or
telegraph. Each party hereto may change its address for purposes
hereof by Notice given to the other party in the manner prescribed
herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, this 6th day of November, 1997.
EPCO CARBON DIOXIDE PRODUCTS, INC.
By: s/Eric P. Wiesemann
President
Attest:
s/Emmett W. Averett
Secretary
HIGH PLAINS CORPORATION
By: s/Christopher G. Standlee
Title: Vice President
Attest:
s/H.T. Ritchie
Secretary
<PAGE>
LEASE AGREEMENT
This Lease Agreement, ("Agreement"), is made and entered into as of the 6th
day of November, 1997, between High Plains Corporation ("High Plains"), with
offices at 200 W. Douglas, Suite 820, Wichita, KS 67202, and EPCO Carbon Dioxide
Products, Inc. ("EPCO"), with offices at 1500 Lamy Lane, Monroe, Louisiana
71201.
WHEREAS, EPCO and High Plains have entered into an agreement whereby High
Plains will sell to EPCO and EPCO will purchase from High Plains raw gaseous
CO2 produced at High Plains ethanol production facility located in York,
Nebraska;
WHEREAS, EPCO desires to lease from High Plains certain land and improvements
thereon, upon which EPCO desires to construct and operate a liquefaction
plant; and
WHEREAS, High Plains desires to lease to EPCO certain land and improvements
thereon and allow EPCO to construct and operate a liquefaction plant on one
of the Properties;
NOW, THEREFORE, in consideration of the foregoing promises, the mutual
covenants set forth below and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS:
(a) CO2 Purchase and Sale Agreement shall mean the CO2 Purchase and Sale
Agreement entered into by High Plains and EPCO, dated November 6, 1997.
(b) Contract Year shall mean a twelve (12) month period beginning on
the first day that EPCO begins to manufacture liquid CO2 and every year
thereafter for succeeding periods of twelve (12) months.
(c) EPCO's Liquefaction Plant shall mean the CO2 liquefaction plant,
owned by EPCO and to be located on Exhibit A Property owned by High Plains
and leased to EPCO.
(d) High Plains' Facility shall mean the ethanol production facility
and related operations located on the premises of High Plains in York,
Nebraska, which produces as a byproduct quantities of CO2 in gaseous form.
2. PROPERTY LEASED: High Plains hereby leases to EPCO and EPCO hereby
leases from High Plains a parcel of land, ("Property"), the location of which
is more particularly described in Exhibit A, attached hereto and made a
part of this Agreement.
3. TERM: The primary term of this Agreement shall begin on the date of
execution of this Agreement and shall end on the close of business of the
last day of the tenth Contract Year. Within 30 days after EPCO begins producing
liquid CO2, EPCO shall provide High Plains written notice of the date on which
EPCO began producing liquid CO2. This Agreement shall automatically renew for
successive five-year terms which shall be concurrent with the Contract Years,
<PAGE>
unless written notice is given by either party of its intent not to renew at
least six (6) months prior to the expiration of the then current term.
4. USE OF THE PREMISES:
(a) High Plains agrees to lease the Property to EPCO only for the
purposes of constructing, operating, maintaining, disassembling, and
removing EPCO's Liquefaction Plant and for transporting EPCO's products
to and from EPCO's Liquefaction Plant as well as parking, storing and
maintaining trucks, trailers and other vehicles used in operating EPCO's
Liquefaction Plant. The adjoining pipeline shall be used only to carry raw
CO2 gas from High Plains' ethanol plant to EPCO's Liquefaction Plant.
(b) EPCO may, at EPCO's sole expense, construct improvements on the
Property. All buildings and any alterations or modifications to the Property
shall comply with OSHA or other applicable regulations or local codes in the
jurisdiction in which the Property is located.
(c) EPCO agrees to obtain from the appropriate governmental agencies, at
EPCO's sole expense, any and all permits, licenses, and the like, required to
permit EPCO to construct the improvements and to otherwise occupy the
Property for the purposes stated in paragraph 4 of this Agreement.
(d) EPCO shall make all repairs and do all acts of maintenance in or upon
the Property as it becomes necessary during the term of this Agreement to
ensure the Property remains in compliance with all applicable regulations or
local codes in the jurisdiction in which the Property is located. EPCO shall
be responsible for fencing the Liquefaction Plant. Existing fencing may be
used, but any relocation or maintenance of fencing shall be the responsibility
of EPCO. All fencing shall remain the property of High Plains upon termination
of this Lease Agreement. EPCO further agrees to purchase from High Plains the
spare truck scale currently located on High Plains facility for the agreed
sum of $20,000.00.
(e) Once construction of any improvement upon the Property has begun by
EPCO, EPCO shall with reasonable diligence prosecute the work to completion.
5. WARRANTIES BY EPCO:
(a) EPCO represents and warrants that EPCO is familiar with and has
knowledge of applicable and relevant environmental, health, and safety
laws, statutes, regulations, and ordinances, whether federal, state, or
local, pertaining to the handling, storage, use, transportation, or other
disposition of gaseous CO2 and liquid CO2. EPCO hereby assumes full
responsibility for handling, storage, use, transportation, or other
disposition of gaseous CO2 and liquid CO2 in compliance with all applicable
and relevant environmental, health, and safety laws, statutes, regulations,
and ordinances, whether federal, state, or local, pertaining to the
handling, storage, use, transportation, or other disposition of gaseous CO2
and liquid CO2.
<PAGE>
(b) EPCO further represents and warrants that EPCO is familiar with and
has knowledge of, applicable and relevant transportation, environmental,
health, and safety laws, statutes, regulations, and ordinances, whether
federal, state, or local, pertaining to the construction and maintenance of
EPCO's Liquefaction Plant. EPCO hereby assumes full responsibility for
constructing and maintaining EPCO's Liquefaction Plant in such a condition
which ensures that EPCO's Liquefaction Plant is in compliance with all
federal, state, and local laws, statutes, and regulations pertaining to
the construction and maintenance of EPCO's Liquefaction Plant. EPCO further
assumes full responsibility for the operation of the Liquefaction Plant in
compliance with all federal, state, and local laws, statutes and regulations
pertaining to the operation of EPCO's Liquefaction Plant.
6. AGREEMENT AND COVENANTS OF EPCO:
(a) EPCO shall under no circumstances cause, suffer, or allow the release
or disposal of any hazardous or nonhazardous wastes, substances, or other
materials on, at, or in the Property and shall be and remain fully responsible
for the ultimate disposition of such materials during and after the term of
this Agreement. EPCO shall comply with any and all past, present, and future
laws, rules, regulations, ordinances and the like, directly or indirectly
relating to environmental protection, conservation, hazardous or non hazardous
waste, substances, or other materials, emissions, discharges, releases, verbal
or written notification or reporting, wildlife, natural resources, permitting,
cleanup or remediation, onsite or offsite transportation, disposal,
reclamation, recycling, or other disposition of such materials to the extent
directly or indirectly relating or applying to EPCO's actions or inactions on,
at, in or near the Property. EPCO shall maintain complete records of all
materials relating to the foregoing during the term of this Agreement.
(b) EPCO shall not use the Property for any disorderly or unlawful
purpose, but only for the purposes stated in paragraph 4 of this Agreement.
7. CONDITIONS OF PREMISES: EPCO acknowledges that EPCO has had full
opportunity to inspect the Properties and is fully informed, independent of
High Plains to the character and construction of the Property. EPCO accepts
the premises as is, and in their present condition.
8. TRADE FIXTURES AND EQUIPMENT: The parties agree that all fixtures and
equipment installed or brought onto the Property shall not become or be deemed
to be a part of the Property, but shall remain EPCO's property and may be
removed from the Property by EPCO at any time during the term of this
Agreement. Subject to the other provisions herein, repairs to EPCO's equipment
shall be at EPCO's sole discretion and expense. High Plains covenants that any
interest High Plains may now or hereafter have in EPCO's property located on
the Property and any rights incident thereto shall be subordinate to the
security interest of any secured party pursuant to a security agreement.
9. ANNUAL RENTAL FEE: EPCO agrees to pay High Plains as rental for the
use and occupancy of the Property, at the times and in the manner provided,
<PAGE>
a rental fee of $1.00 each Contract Year. EPCO will pay any and all taxes
resulting from the equipment or improvements being placed upon the leased
premises, including all personal property taxes on equipment, and any increase
in real property taxes for the leased premises resulting from the equipment
or improvements.
10. PAYMENT OF RENT: The annual rental fee shall be paid in advance on or
before the first day of a Contract Year. If the correct amount is not paid on
or before the first day of a Contract Year, interest on any unpaid amount shall
accrue at the rate of 10% for each Contract Year, and if such default continues
for more than thirty (30) days after written notice from High Plains to EPCO,
High Plains may terminate this Agreement without prejudice to its other
remedies.
11. UTILITIES:
(a) EPCO shall, at its sole cost and expense, cause to be installed in,
on, and about the Property all facilities necessary to supply thereto all
water, sewerage, gas, electricity, telephone, and other services required
in EPCO's operations hereunder; and during the term of this Lease, EPCO
agrees to pay all charges and expenses in connection therewith and to protect
High Plains and the Property therefrom. High Plains represents that such
services are or will be available at or near the perimeter of the Property
before construction of EPCO's Liquefaction Plant is begun.
(b) EPCO shall pay all charges for all utilities, including but not
limited to electricity, gas, fuel, water, sewer charges, telephone services
used in or on the premises, as they become due and payable and to establish
all accounts therefor in EPCO's name at the outset of the term of this
Agreement. EPCO shall reimburse High Plains for the actual charges made
by the City of York for direct wastewater disposal (currently estimated to
be $.50/1,000 gallons), or for High Plains prorated actual costs if wastewater
is treated by High Plains prior to discharge to the City. High Plains agrees
to treat EPCO's waste water only if required by the City of York.
12. RESTORATION OF THE PROPERTY: Within one hundred eighty (180) days
of the termination of this Agreement, EPCO shall, at EPCO's sole expense,
restore the Property and return possession of the Property to High Plains.
Restoration of the Property shall mean the removal of all roads, parking
lots, curbs, above ground structures, pilings, foundations, pipes and other
underground structures placed on the Property by EPCO to at least one (1)
foot below ground level. In the event EPCO fails to remove its personality
from the Property and restore the Property as required in the preceding
sentence, then High Plains may remove, or cause to have removed, EPCO's
personality from the Property and restore the Property or cause to have the
Property restored. EPCO shall reimburse High Plains for any reasonable costs
High Plains may incur for removing EPCO's personality and restoring the
Property. If requested by High Plains within 30 days after termination,
EPCO shall leave certain specific improvements, which are integrally
incorporated into the premises, such as roads, paving, curbs, foundations, etc.
13. INDEMNITY:
<PAGE>
(a) High Plains does not assume any liability for any acts or omissions of
EPCO or EPCO's drivers, agents or employees. EPCO shall fully protect,
indemnify, defend and hold High Plains, its affiliates, and their respective
officers, directors, agents, servants and employees harmless from and against
any and all claims and actions by third parties for personal injury, property
damage or death caused by any liquid CO2 while at EPCO's Liquefaction Plant;
any and all claims and actions by any third parties, against High Plains for
personal injury, property damage or death sustained by anyone, arising out
of or in connection with the maintenance, operation, control or use of the
Property; all loss or damage to the High Plains facility, arising out of
the ownership, maintenance, operations, control or use of the Property by
EPCO; all taxes, penalties, fines, interest, liens or indebtedness or claims
against High Plains property for work performed, or measured by the work
performed, growing out of or incident to EPCO's operations under this
Agreement. Third parties shall include, but not be limited to High Plains
and EPCO employees, contractors and subcontractors. EPCO's duty to protect,
indemnify, defend and hold High Plains harmless shall not extend to any action
for which High Plains is insured through a Worker's Compensation plan.
Additionally, EPCO shall not be held liable for any punitive damages
assessed against High Plains.
14. INSURANCE:
(a) EPCO shall maintain at its own cost and expense such insurance of a
type and in the amounts to insure EPCO's indemnification and other obligations
under this Agreement which will protect High Plains from all claims for damages
to persons and to property which may arise from the operation of the
liquefaction Plant, or from work performed pursuant to this Agreement or any
subcontracts related to this Agreement. EPCO shall maintain during the entire
term of this Agreement insurance policies with minimum limits of coverage,
all as set forth on Exhibit B which is made a part hereof by reference.
(b) Such insurance shall also name High Plains as an additional insured.
15. ASSIGNMENT AND SUBLEASING: Neither party may assign its rights and
obligations under without the consent of the non-assigning party, which
consent shall not be unreasonably withheld.
16. TERMINATION AND DAMAGES:
(a) High Plains and EPCO may terminate this Agreement or any provision
herein by mutual consent upon such terms as they may agree in writing.
(b) If either party breaches any provision of this Agreement, the
nonbreaching party shall provide the breaching party with written notice
of the alleged breach. The notice of alleged breach shall sufficiently
describe the conduct which constitutes the alleged breach, the nonbreaching
party's expectation of remedial action to be taken by the breaching party,
the alleged damages suffered by the nonbreaching party and the time, which
shall not be less than thirty (30) days, within which the breach must
be cured. If the breaching party fails to cure the breach within the time
<PAGE>
specified in the notice of alleged breach; the non-breaching party may
terminate this Agreement.
(c) If High Plains sells High Plains' Facility, EPCO may, at its sole
discretion, terminate this Agreement without penalty assessed to EPCO.
(d) If EPCO fails to have completed, or made substantial progress toward
completion and beginning of operation of the plant on or before May 31, 1998,
High Plains may terminate this agreement.
(e) If the CO2 Purchase and Sale Agreement of even date herewith is terminated
for any reason, then this lease shall also be considered terminated.
17. FORCE MAJEURE:
(a) Neither party shall be liable for failure to perform or for delay
in performing this Agreement, where such failure or delay is occasioned by
(i) fire, explosion, breakdown of plant, failure of machinery, strike,
lock-out, labor dispute, casualty or accident; (ii) storm, flood or drought;
(iii) lack or failure in whole or in part of the sources of supply, labor
raw materials, or power, or other utilities; (iv) acts of God or of the public
enemy, war, riots, police action, or civil commotion; or (v) any law
regulation, ordinance, demand, judgment, injunction, arbitral award, or other
requirement or regulation of any government or governmental agency or
instrumentality; (vi) any other act, whatsoever, whether similar or dissimilar
to those above-enumerated, beyond the reasonable control of the party suffering
such event of force majeure. The party asserting that an event of force
majeure has occurred shall send the other party notice thereof by cable,
telecopy or telex no later than fourteen (14) days after the beginning of
such claimed event, setting forth a description of the event of force majeure,
an estimate of its effect upon the party's ability to perform its obligations
under this Agreement, and the duration thereof. The notice shall be supplemented
by such other information or documentation as the party receiving the
notice may reasonably request. As soon as possible after the cessation
of any event of force majeure, the party which asserted such event shall
give the other party written notice of such cessation. Whenever possible,
each party shall give the other party notice of any threatened or impending
event of force majeure, and the parties shall use all reasonable efforts to
minimize the duration of any event of force majeure.
(b) It is agreed that if High Plains' Facility or EPCO's Liquefaction
Plant is destroyed by some force beyond their control, neither shall be
required to rebuild its facility, and this Agreement will be canceled without
penalty to either party.
18. EMINENT DOMAIN: EPCO agrees that if the Property, or any part thereof,
shall be taken or condemned for public or quasipublic use or purpose by any
competent authority, EPCO shall have no claim against High Plains and shall
not have any claim or right to any portion of the amount that may be awarded
to High Plains as damages or paid as a result of any such condemnation. In the
event that the Property or any substantial part thereof shall be taken or
condemned by an governmental authority, then this Agreement shall terminate
on the date on which EPCO is forced by such taking to cease carrying on the
operation of EPCO's Liquefaction Plant.
19. LEASE SUBORDINATION:
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(a) This lease shall at all times be subject, subordinate, and inferior
to a first mortgage, if any, that may be placed on the land owned by High
Plains; and the recording of such mortgage shall be deemed prior to this
lease, irrespective of the recording date of such mortgage, and EPCO will,
upon demand, without cost, execute any instrument necessary to effectuate
such subordination, and if EPCO, within five (5) days after submission of
such instrument fails to execute the same, High Plains is hereby authorized
to execute same as attorney-in-fact for EPCO.
(b) It is a condition, however, to the foregoing subordination that so
long as EPCO shall faithfully discharge the obligations on its part to be
kept and performed under the terms of this lease, its tenancy will not be
disturbed nor this lease affected by any default under such mortgage or
mortgages; and in the event of foreclosure, or any enforcement of such
mortgage, the right of EPCO hereunder shall expressly survive and not be
cut off, and this lease shall, in all respects, continue in full force and
effect, provided always, however, that EPCO fully performs all of its
obligations hereunder.
20. EASEMENTS AND RESTRICTIONS OF RECORD: This lease is subject to all
statutes, ordinances, and regulations, including, without limitation, those
relating to zoning now or hereafter applicable to the Property, and to all
covenants, easements, reservations, and restrictions of record applicable
to the Property. High Plains agrees to provide EPCO with a survey which
discloses easements and restrictions of record.
21. ENTIRE AGREEMENT: This Agreement comprises the entire agreement
between the parties and there are no oral promises, representations, or
other warranties affecting it. No amendment or modifications of any of the
terms and provisions of this Agreement shall be binding upon either High
Plains or EPCO unless the same be expressed in writing and signed by both
parties.
22. MISCELLANEOUS:
(a) Headings are for reference only and do not affect the meaning of any
paragraph. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(b) Nothing herein shall be construed to create a partnership, joint
venture, or agency relationship between the parties hereto. Neither party
shall have the authority to enter into agreements of any kind on behalf of
the other, nor shall either party have the power or authority to bind or
obligate the other in any manner to any third party.
(c) The failure of either party at any time to require performance by
the other party of any provision of this Agreement shall in no way affect
the right of such party to require performance of that provision. Any waiver
by either party of any breach or any provision of this Agreement shall not
be construed as a waiver of any continuingor succeeding breach of such
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provision, a waiver of the provision itself, or a waiver of any right under
this Agreement.
23. CHOICE OF LAWS: This Agreement shall in all respects be governed by
and construed in accordance with the laws of the State of Nebraska.
24. NOTICES: Notices and other communications between the parties hereto
shall be in writing (by mail, telex, telecopy or telegraph unless a particular
mode is specified herein), postage or transmission costs prepaid, and shall be
addressed to the parties hereto at the addresses set forth below:
To High Plains: High Plains Corporation
200 West Douglas, Suite 820
Wichita, Kansas 67202
To EPCO: EPCO Carbon Dioxide Products, Inc.
1500 Lamy Lane
Monroe, Louisiana 71201
All such Notices and communications shall be deemed effective on (i) the date
of transmission, if sent by telecopy or if sent by telex, with confirmed
answer back, or (ii) the date that is five (5) calendar days after the date
on which deposited or sent, if sent by mail or telegraph. Each party hereto
may change its address for purposes hereof by Notice given to the other party
in the manner prescribed herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, this 6th day of November, 1997.
HIGH PLAINS CORPORATION EPCO CARBON DIOXIDE PRODUCTS, INC.
By: s/Christopher G. Standlee By: s/Eric P. Wiesemann
Title: Vice President Title: President
Attest: H.T. Ritchie Attest: Emmett W. Averett
