Exhibit 10-15
EXCLUSIVE GRAIN SUPPLY AGREEMENT
AGREEMENT made this 1st day of January, 1997, by and between
▇▇▇▇ ▇▇▇▇▇, an individual resident of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ "Rowan" and High Plains Corporation, a Kansas corporation
with its principal offices at ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, "High Plains".
WHEREAS, High Plains is a purchaser of grain for use at its
Colwich, Kansas and York, Nebraska plants, and Rowan has expertise
in the grain and feed business; and
WHEREAS, both Rowan and High Plains desire to enter into an
exclusive supply agreement for the procurement of grain by Rowan
for High Plains for use at High Plains' Colwich, Kansas and York,
Nebraska, plants.
NOW, THEREFORE, in consideration of the mutual agreements and
other good and valuable consideration hereinafter set forth, the
parties agree as follows:
1. SALE OF PRODUCTS. This Agreement applies to all grain
purchased by High Plains for use at its Colwich, Kansas and York,
Nebraska, plants (the "Grain"). High Plains agrees to buy all of
its requirements of Grain through Rowan, who will contract for
High Plains as an independent contractor, during the term of this
Agreement. Rowan agrees to sell or acquire for the benefit of
High Plains, subject to availability, such Grain to High Plains
for the term of this Agreement. Rowan and High Plains agree that
such purchases will be at terms, conditions and price as agreed
upon. Title and risk of loss for grain shall pass to High Plains
upon unloading of the grain at High Plains plant. Rowan shall
provide grain in quantities as necessary to permit High Plains to
maintain its usual production schedule.
2. FORECAST INFORMATION. Rowan agrees to provide High Plains
with regular feedgrain analyses and other forecast information
available from third-parties to assist High Plains in its purchase
decisions. However, regardless of any price or purchase
recommendations or forecasts provided by Rowan, High Plains
remains solely responsible for its purchasing decisions and any
gains or losses resulting from those decision. Rowan PROVIDES NO
WARRANTY AS TO ANY PRICING PROJECTIONS, FORECASTS OR PURCHASE
RECOMMENDATIONS. Rowan further agrees to provide the following
additional services to High Plains during the term of this
agreement at his own cost and expense: a) continually monitor,
arrange and adjust scheduling of grain shipments to meet High
Plains needs; b) responsibility for truck and rail transportation
needs, including price management techniques such as back-hauls
and arbitrage arrangements; c) sourcing of alliances with third
parties for storage and execution backstops as needed; d)
accounting and auditing for transportation, grain taxes, cash flow
management, etc.; e) assist High Plains in lobbying efforts in
grain and feed areas; f) assist in implementation and monitoring
of appropriate risk management procedures relating to High Plains
grain needs; and g) communicate and cooperate with designated High
Plains personnel in determining grain needs, sourcing, scheduling
and pricing grain, and coordinating the other services Rowan
agrees to perform for High Plains pursuant to this agreement.
3. PRICE. Rowan agrees to supply grain to High Plains at a
fixed price, F.O.B. Colwich, Kansas or York, Nebraska. Rowan will
absorb the costs of all freight, transportation, inventory carry
charges, and all state or other grain taxes prior to delivery of
grain. Rowan will use his best efforts to obtain the lowest
possible total grain cost for High Plains under prevailing market
conditions. High Plains shall pay Rowan the amount actually paid
by Rowan to his supplier for the grain, plus actual freight
incurred (crediting reductions for backhaul or arbitrage
arrangements), plus grain taxes paid , plus a fee in the amount of
$.0175 per bushel. The parties may also agree to enter into
certain hedging, or other futures agreements from time to time, in
which event all costs of such hedging, including margin calls and
commissions, will be the responsibility of High Plains. Rowan
agrees to back up all contracts for delivery of grain to High
Plains with either futures or trades on the Chicago Board of
Trade, or with individual supply contracts from farmers, local
elevators, or other legitimate sources, and shall provide evidence
of this backup to High Plains upon request. All such futures or
contracts shall be executed on behalf of, and transacted in the
name of High Plains by Rowan, upon approval of High Plains. Rowan
shall keep complete and accurate records of all transactions made
for the benefit of High Plains, and High Plains shall have the
right to audit and copy all records in any way relating to grain
or futures contracts purchased, or to expenses incurred in
connection with said transactions, upon reasonable notice to
Rowan, and at the sole expense of High Plains. The parties agree
that after the first 90 days of the term of this agreement has
passed, they will cooperate in attempting to establish a mutually
agreeable method for measuring Rowan's effectiveness as a grain
purchasing agent, with the idea that if Rowan's performance under
this contract can be effectively measured, and his efforts have
resulted in significant savings to High Plains, then Rowan's fee
arrangement may be restructured to include a performance bonus
provision agreeable to both parties.
4. PAYMENT. Payment for purchases under this Agreement are
due daily, and shall be made by drafting an account of High
Plains' choice on the first business day following delivery to
High Plains. The weight of Raw Grains delivered by Rowan to High
Plains shall be established by weight certificates. High Plains
shall obtain truck weights on the scales at the High Plains
Plants, which shall be maintained by High Plains as required by
applicable laws, rules and regulations, and rail weights will be
obtained on any certified railroad scales. Whenever High Plains
truck scales are unavailable or inoperable, any certified scales
may be used, at High Plains expense, until High Plains scales are
restored. The inbound weight certificates shall be determinative
of the quantity of Raw Grains for which High Plains is obligated
to pay pursuant to Section 3 hereof.
5. TERM. This Agreement shall commence on January 31, 1997
and continue for one year. After the first year, the Agreement
shall automatically renew for one-year terms. However, either
party may terminate this Agreement at any time upon giving the
other party thirty (30) days notice of termination in writing.
This Agreement may be terminated immediately by either party if
(i) the other party's financial responsibility becomes impaired,
(ii) the other party makes an assignment or arrangement for
benefit of creditors or (iii) files a petition in bankruptcy or
has such petition filed against it.
Upon expiration, termination, or cancellation of this Agreement,
neither party shall have any rights or obligations or liability to
the other party with respect to this Agreement except for (a) the
obligation to make full payment of any outstanding monetary
obligations owed to the other party which monetary obligation was
incurred prior to the date of such expiration, termination or
cancellation, and (b) obligations under any Grain or futures
contract which existed prior to such expiration, termination or
cancellation of this Agreement.
6. EMPLOYEES. The parties agree that Rowan is not an employee
of High Plains, and that his relationship is that of an
Independent contractor only. Each party shall be solely
responsible for the acts and inactions of its own employees acting
within the course and scope of their employment by such party and
each party shall be solely responsible for the salary, wages and
payroll taxes for its employees and shall maintain Workers'
Compensation Insurance on its employees as required by applicable
state law. The parties shall have no joint employees as a result
of this Agreement and neither party shall incur any responsibility
or liability whatsoever with respect to, or for the acts or
inactions of, the employees of the other party as a result of this
Agreement.
7. INDEMNIFICATION. Rowan shall indemnify and hold High
Plains, and its affiliates, subsidiaries, parents, directors,
officers, employees and agents harmless from and against any and
all claims, losses, awards, judgements, settlements, fines,
penalties, liabilities, damages, costs or expenses (including
attorneys' fees) alleged or incurred on account of any injury or
death of persons or damages to property or any other claim to the
extent caused by or arising out of the negligent acts or omissions
of Rowan, its officers, agents or employees, or any breach by
Rowan, its officers, agents or employees, of any of the terms of
this Agreement, or any representations by Rowan which are not
authorized pursuant to the Agreement or pursuant to specific
instructions given to Rowan by High Plains.
High Plains shall indemnify and hold Rowan, and its affiliates,
subsidiaries, parents, directors, officers, employees and agents
harmless from and against any and all claims, losses, awards,
judgements, settlements, fines, penalties, liabilities, damages,
costs or expenses (including attorneys' fees) alleged or incurred
on account of any injury or death of persons or damages to
property or any other claim to the extent caused by or arising out
of the negligent acts or omissions of High Plains, its officers,
agents or employees, or any breach by High Plains, its officers
agents, or employees, of any of the terms of this Agreement, or
any representations by High Plains which are not authorized
pursuant to this Agreement or pursuant to specific instructions
given to High Plains by Rowan.
8. FORCE MAJEURE. Neither party shall be liable for failure
to perform or for delay in performing this Agreement, other than
for an existing debt, where such failure or delay is occasioned by
(a) fire, explosion, breakdown of plant, failure of machinery,
strike, lock-out, labor dispute, casualty or accident, or lack or
failure in whole or in part of transportation facilities, (b)
storm, flood or drought, (c) lack or failure in whole or in part
of the sources of supply (other than Grain), labor, or power or
other utilities, (d) acts of God or the public enemy, war, riots,
police action, or civil commotion, (e) any law, regulation,
ordinance, demand, judgment, injunction, arbitral award, or other
requirement or regulation of any government or government agency
or instrumentality or (f) 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 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 os such cessation.
Whenever possible, each party shall give the other party notice of
any threatened or impending event of force majeure.
9. ALTERNATE DISPUTE RESOLUTION. This contract is subject to
the National Grain and Feed Association Grain Trade Rules and
Arbitration Rules. Any controversy arising out of, or relating
to, the Agreement between the parties or any modification or
extension thereof, including any claim for damages or rescission,
or both, shall be settled by arbitration in accordance with those
rules unless the parties should agree otherwise in writing. The
parties further agree that arbitration proceedings must be
instituted within one year after the occurrence of the claimed
breach, and that the failure to institute arbitration proceedings
within such time period shall constitute an absolute bar to the
institution of any proceedings and a waiver of all claims. All
fees for such arbitration will be divided equally between the
parties except that each party shall pay its own attorney's fees
and the costs associated with producing documents and other
information.
10. NOTICES. All notices, consents and other communications
under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person or deposited in the
United States mail (registered or certified), postage prepaid or
deposited with a reputable overnight delivery service, with
delivery charges prepaid, in each case addressed or transmitted to
the appropriate address as follows (or as otherwise designated by
a party as to itself by notice to the other party given in
accordance with this section):
If to Rowan: ▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to High Plains: High Plains Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Friend
11. INSURANCE. During the term of this Agreement, Rowan shall,
at his sole cost and expense, maintain in force Statutory Worker's
Compensation and Employer's Liability Insurance in compliance with
the laws of the states where the work is being performed;
comprehensive General Liability Insurance, which shall include
property damage and personal liability insurance under which Rowan
and High Plains shall be named as coinsureds; and coverage for
contractual liability under this agreement. Such insurance policy
or policies shall be maintained in a minimum amount of One Million
Dollars per occurrence, and Rowan shall deliver to High Plains a
copy of each insurance policy, showing High Plains as a named
insured thereon. The insurance requirements set forth herein are
minimum coverage requirements and are not to be construed in any
was as a limitation on liability under this agreement.
12. WARRANTIES.
Rowan understands that High Plains intends to utilize the Raw
Grains purchased from Rowan as primary base stock for ethanol
production and for production of a dried distillers grain cattle
feed, and that said Raw Grains are subject to minimum quality
standards for such use. Rowan agrees and warrants that all grain
contracts and deliveries negotiated by Rowan for High Plains shall
contain provisions requiring, and Rowan shall use his best efforts
to insure that:
a. Raw Grains delivered to High Plains shall not be adulterated
or misbranded within the meaning of the Federal Food, Drug and
Cosmetic Act and that said Raw Grains may lawfully be introduced
into interstate commerce pursuant to the provisions of the Act.
Raw Grains shall fully comply with any applicable state laws
governing quality, naming and labeling of Raw Grains.
b. Raw Grains delivered to High Plains shall be free and clear
of liens and encumbrances.
▇. ▇▇▇▇▇ agrees and warrants that Raw Grains delivered to the
Plants shall be acceptable in the feed trade under current
industry standards and shall be of merchantable quality.
c. Raw Grains that are deemed to be of non-merchantable quality
shall not be delivered to either plant unless both parties agree
in writing in advance of delivery that the quality of the grain
will not effect the quality of the cattle feed or other by-
products of High Plains' plants.
13. ASSIGNMENT. This Agreement shall not be assigned by either
party without the written consent of the other party, and any
attempted assignment without such consent shall be ineffective.
14. ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties and supersedes all previous
agreements either oral or written, between the parties hereto, and
no modifications hereof shall be valid unless made in writing and
signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and
seals the day and year above written.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
HIGH PLAINS CORPORATION ▇▇▇▇ ▇▇▇▇▇
By:s/▇▇▇▇▇▇▇ ▇. Friend s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
ADDENDUM TO EXCLUSIVE
GRAIN SUPPLY AGREEMENT
This Addendum to Exclusive Grain Supply Agreement is made this
7th day of January, 1997, by and between ▇▇▇▇ ▇▇▇▇▇, an individual
resident of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ "Rowan"; High
Plains Corporation, a Kansas corporation with its principal
offices at ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, "High
Plains"; and Centennial Trading, LLC, a Limited Liability Company
with its principal offices at Kansas City Board of Trade, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, "Centennial".
WHEREAS, High Plains and Rowan entered into an Exclusive Grain
Supply Agreement (the "Agreement") dated and effective January 1,
1997; and,
WHEREAS, all parties hereto wish to amend said Agreement so that
Centennial assumes all of the rights and responsibilities of Rowan
thereunder.
NOW, THEREFORE, in consideration of the mutual agreements of the
parties and other good and valuable consideration hereinafter set
forth, the parties agree as follows:
1. Rowan hereby assigns, and Centennial accepts and assumes,
all of the rights and responsibilities of Rowan under the
Agreement referenced above, effective immediately. Rowan shall
continue to be personally responsible for the performance by
Centennial of its obligations under the agreement.
2. By its signature below, High Plains consents to the above
assignment to Centennial on the terms set forth herein.
IN WITNESS WHEREOF, the parties hereto have set their hands and
seals effective as of the day and year above written.
HIGH PLAINS CORPORATION ▇▇▇▇ ▇▇▇▇▇
By:s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
CENTENNIAL TRADING, LLC
By:s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Member
By:s/ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, Member
