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 set 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 xxxxx 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 xxxx 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
000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx 00000
To EPCO: EPCO Carbon Dioxide Products, Inc.
0000 Xxxx Xxxx
Xxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
FAX: (000) 000-0000
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/Xxxx X. Xxxxxxxxx
President
Attest: /s/Xxxxxx X. Xxxxxxx
HIGH PLAINS CORPORATION
By: /s/Xxxxxxxxxxx X. Xxxxxxxx
Title: Vice President
Attest: /s/X.X. Xxxxxxx
