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 000 X. Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, and EPCO Carbon
Dioxide Products, Inc. ("EPCO"), with offices at 0000 Xxxx Xxxx, Xxxxxx,
Xxxxxxxxx 00000.
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, 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.
(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, 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:
(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 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:
(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 continuing or succeeding breach of such
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
000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx 00000
To EPCO: EPCO Carbon Dioxide Products, Inc.
0000 Xxxx Xxxx
Xxxxxx, Xxxxxxxxx 00000
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/Xxxxxxxxxxx X. Xxxxxxxx By: /s/Xxxx X. Xxxxxxxxx
Title: Vice President Title: President
Attest: /s/X.X. Xxxxxxx Attest: /s/Xxxxxx X. Xxxxxxx
