Exhibit 10.1

 
 

SOUTHWEST IOWA RENEWABLE ENERGY, LLC HAS REQUESTED THAT THE

 PORTIONS OF THIS DOCUMENT DENOTED BY BOXES AND ASTERISKS BE

ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2

 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934.

 

CARBON DIOXIDE PURCHASE AND SALE AGREEMENT

 

THIS CARBON DIOXIDE PURCHASE AND SALE AGREEMENT (this “Agreement”) is made this 2nd day of April, 2013, between Southwest Iowa Renewable Energy, LLC, (“SIRE”) and EPCO Carbon Dioxide Products, Inc. (“EPCO”).  SIRE and EPCO may collectively be referred to herein as the “Parties” or individually as a “Party”.

 

WHEREAS , SIRE operates an ethanol production facility in Council Bluffs, Iowa, Pottawattamie County, Iowa which produces as a by-product raw carbon dioxide in gaseous form; and

 

WHEREAS , it is the intention of the Parties that SIRE provide CO 2 Gas from the ethanol plant for use by EPCO in the EPCO Plant on the terms and conditions set forth in this Agreement.

 

NOW , THEREFORE , in consideration of the forgoing 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, superseding all prior agreements:

 

1.            Definitions:

 

(a)             ETHANOL PLANT - The ethanol production facility and related operations located on the premises at Council Bluffs, Iowa which produces as a by-product quantities of CO 2 Gas;

 

(b)             CO 2 Gas - means the raw carbon dioxide gas produced as a byproduct of the ethanol plant and provided to the EPCO Plant for production of Liquid CO 2 .

 

(c)             Contract Year - Shall mean each twelve (12) month period during the term hereof beginning on the first day of the first month after the EPCO Plant begins producing Liquid CO 2 .

 

(d)             EPCO Plant and Site - The carbon dioxide liquefaction plant to be constructed by EPCO on the Leased Premises.  The Site shall consist of approximately 1-2 acres of land to be leased to EPCO for the construction and operation of its CO 2 plant, storage tanks, and load out equipment.

 

(e)             Flow Rate - The rate of flow of CO 2 Gas from the ethanol plant to the Matchpoint.

 

(f)             Liquid CO 2 - means the finished purified, liquefied product produced by EPCO from the CO 2 Gas supplied by the ethanol plant

 

(g)             Matchpoint - The flange or other point on the necessary services and process facility conduits into and out of the EPCO Plant site and shown on Exhibit A .  The Matchpoint shall be located in a mutually agreed upon location as near as practical to the boundary of the Leased Premises,

 

(h)             Shipped Tons - means those short tons of Liquid CO 2 shipped out of the EPCO Plant by weight.  Shipped Tons shall be determined by certified truck or rail scales located on the EPCO Plant site and EPCO’s bills of lading which will be provided to SIRE on a daily basis and, upon request by SIRE, in a monthly cumulative report.

 

(i)             Specifications - means the minimum (or maximum as the case may be) acceptable specifications for the makeup and contents of the CO 2 Gas as set forth on Exhibit B hereto.

 

(j)                        Downtime - means any time during which the CO 2 plant is not receiving sufficient gas for EPCO to load up its compressors 100% and make a minimum of [*] tons per hour of beverage grade liquid CO 2 for at least 12 hours in any given day.

 

2.            Term:

 

(a)            The initial term of this Agreement shall be for ten (10) years effective on the startup of EPCO’s CO 2 plant.  This agreement shall renew automatically for two (2) additional five (5) year periods thereafter, unless either Party provides written notice of termination to the other within six (6) months prior to the end of the initial term or any renewal period thereafter.

 

3.            Quantity and Price:

 

(a)             SIRE shall be obligated to supply EPCO at the Matchpoint raw CO 2 gas at [*] p.s.i.g. at a consistent Flow Rate sufficient for EPCO to produce [*] tons of Liquid CO 2 per hour ([*] tons/day) as measured pursuant to Section 5 on a consistent basis 350 days per year.  SIRE is allowed [*] days each contract year for scheduled or unscheduled “downtime”.  For SIRE’s downtime over the [*] days allowed, EPCO will receive credit to cover its extra expense incurred to supply its customers.  EPCO’s only remedy in this case is credit against future CO 2 Gas purchases from SIRE.

 

(b)            The base price of CO 2 Gas paid shall be $[*] per ton the first [*] ([*]) years of the agreement and $[*] per ton thereafter.  The final price paid each month shall be the base price plus [*]% of the profits above a [*]% targeted margin.  The base price shall be the floor price.  The calculation will be made by EPCO each month and provided to SIRE.  The sample calculation is as shown in Exhibit C .

 

(c)            EPCO shall meet all applicable legal requirements concerning the release of CO 2 Gas in its possession that are in force during the term and, whether a legal requirement or not, EPCO shall use commercially reasonable efforts to prevent venting of CO 2 Gas and to maximize recovery of condensation.  Any future credits received or taxes imposed on the CO 2 emissions or carbon balance originating from the ethanol plant shall be owned or owed, whichever the case may be, by SIRE.

 

4.            Take or Pay Minimum:

 

(a)            During the first [*] ([*]) years of operation, EPCO agrees to a take or pay obligation of [*]% of [*] tons/day or [*] tons per day.  After the first two years of the agreement the take/pay obligation shall increase to [*]% of capacity ([*] tons) or [*] tons per day.  The price paid per ton for the take or pay obligation shall be the average price paid for the applicable annual contract period.  The take or pay obligation will be “trued” up or determined on an annual basis with any take/pay shortfall being paid within 30 days of the end of the applicable contract period.  The annual tons billed will be the greater of actual tons billed or take or pay tons.

 

(b)            EPCO’s obligation to Take or Pay shall abate for any day that EPCO is ready and able to “take” CO 2 Gas, but is unable to do so because (i) there exists a force majeure event affecting SIRE as defined in Section 8; (ii) the raw CO 2 Gas provided from the source fails to meet the Specifications; (iii) the Flow Rate that can be provided by SIRE to EPCO falls below an amount sufficient for EPCO to produce [*] tons of finished CO 2 per hour as set forth in (a); or ((iv) there exists a force majeure event affecting EPCO, as defined in Section 8.

 

5.            Measurement/Quality:

 

(a)            The quantity of CO 2 Gas purchased by EPCO from SIRE shall be measured by the number of Shipped Tons, as determined on truck and/or rail scales located at the EPCO Plant.  SIRE shall have the right to audit EPCO’s truck and rail scales at its expense.

 

(b)            EPCO Will furnish certified bills of lading or other suitable records of daily production to SIRE on a daily basis which shall provide notes relative to the quality and quantity of CO 2 Gas and, upon request of SIRE, in a monthly cumulative report.  Such records may omit the customer names and addresses but shall establish the number of Shipped Tons.

 

(c)            SIRE represents and warrants that the raw CO 2 feed Gas provided shall meet the Specifications set forth on Exhibit B .  If there is a dispute as to whether the CO 2 gas meets specifications, EPCO will have an independent testing lab test the gas for conformance and their decision will be binding on both parties.  If the test results find that the CO 2 gas is non-conforming, SIRE will be responsible for the independent testing lab charges.  Except as specifically stated herein, SIRE makes no warranties or representations, express or implied, including without limitation, any warranties of merchantability or fitness for a particular purpose.

 

(d)            EPCO agrees to monitor the CO2 Gas quality at its own expense to determine if the CO2 Gas meets Specifications and agrees to promptly inform SIRE if it does not.

 

6.            Payment and Terms:

 

SIRE shall bill EPCO monthly for the amount of CO2 Gas purchased under the terms of this Agreement as measured in accordance with Section 5 hereof.  EPCO shall pay net [*] days from billing date.  Any amounts due hereunder and not paid by the date due shall accrue interest at the rate of one and one-half percent (1.5%) per month or the maximum rate permitted by applicable law, whichever is less, determined and compounded on a daily basis from the date due until the date paid.

 

7.            Utilities

 

EPCO will require approximately 5-10 gpm of potable water for sanitary purposes and 40-65 gpm for process water, all of which will be supplied by SIRE.  The process water will consist of approximately 25-30 gpm for EPCO’s scrubber and 20-35 gpm for its evaporator.  The scrubber water should be potable quality or better (cannot be spent scrubber water from the ethanol process) and the evaporator water should be treated (from SIRE’s cooling tower).  The amount of process water supplied shall be metered by EPCO.  SIRE will take back the spent scrubber water, evaporator water, and condensate from EPCO.  EPCO shall be responsible for the installation of the potable and process lines (supply and return) running to/from the CO 2 plant.

 

EPCO will contract directly with the applicable power company for its power supply. SIRE shall assist EPCO in providing a location as close as possible to the power source.

 

8.            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 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:  (i) fire, explosion, strike, lock-out, labor dispute, casualty, accident or mechanical failure(s); (ii) lack or failure in whole or in part of transportation facilities; (c) storm, flood or drought; (iii) acts of God or of the public enemy, war, riots, police action, or civil commotion; (iv) any law, regulation, ordinance, demand, judgment, injunction, arbitral award, or other requirement or regulation of any federal, state, or local government or government agency; and (v) 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.

 

(b)            The Party asserting that an event of force majeure has occurred shall send or deliver to the other Party prompt written notice thereof 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.  If the event of force majeure continues for a period of twelve (12) months, either party may terminate this agreement.  If SIRE has a force majeure event which lasts for more than ninety (90) days, EPCO shall have the option to terminate this agreement.

 

(c)            It is agreed that if either the SIRE Plant or the EPCO Plant is destroyed by a force majeure event, the affected Party shall not be required to rebuild its facility and this Agreement will be terminated without penalty

 

9.            Delivery of Product.

 

(a)            The pipeline delivering CO 2 Gas from the SIRE PLANT to the EPCO Plant will be installed by EPCO.  EPCO will also pay for and install the blower.  EPCO will also provide a backup blower.  Although EPCO will pay for the upfront capital cost, SIRE shall pay for the cost to operate and maintain the blower.

 

(b)            Title to and risk of loss of CO 2 Gas shall pass from SIRE to EPCO at the Matchpoint, but the quantity of CO 2 Gas sold and purchased hereunder shall nonetheless be measured in accordance with Section 5 hereof.

 

(c)            Each Party will be responsible for any clean-up which is necessary due to a spill or leak from that portion of the pipeline which it is required to maintain.  Notwithstanding the foregoing, if one Party is solely responsible for physical damage to the portion of the pipeline located on the other’s premises, the former shall be liable for damages caused to the pipeline and for other directly related damages, such as, but not limited to, clean-up expenses, and shall take prompt, appropriate, corrective action.

 

10.            Damages/Indemnification/Warranties.

 

(a)            EPCO shall indemnify, defend and hold harmless SIRE from and against any and all claims, loss, costs, expenses, damages, liability (including attorneys’ fees and expenses) arising from EPCO’s violation of any law, rule or regulation (including but not limited to any environmental law, rule or regulation) as well as any use of the Leased Premises, or from the conduct of EPCO’s business (including, but not limited to, any product liability claims arising therefrom or from any activity, work or things done, permitted or suffered by EPCO in or about the Leased Premises, or arising from any negligence of EPCO, or any of EPCO’s customers, invitees, contractors, occupants, or employees, and from and against all loss, damage, liability, costs, attorneys’ fees, costs and expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; and in case any action or proceeding be brought against SIRE by reason of any such claim, EPCO, upon notice from SIRE, shall defend the same at EPCO expense.  EPCO as a material part of the consideration to SIRE, hereby assumes all risk of damage to property or injury to persons, in, upon or about the Leased Premises arising from any cause (other than SIRE reckless, negligent or intentional misconduct).  Notwithstanding the foregoing, EPCO shall have no obligation under this Section 10(a) for property damage or personal injury arising directly or indirectly from the Willful misconduct or negligent acts of SIRE, or its agents, employees or contractors.

 

(b)            SIRE shall be responsible, hold harmless, indemnify and defend EPCO for property damage or personal injury liability caused by the negligence or Willful misconduct of SIRE at the SIRE Plant, provided, however, that SIRE shall have no obligation under this Section 10(b) for property damage or personal injury arising directly or indirectly from the Willful misconduct or negligent acts of EPCO, or its agents, employees or contractors.

 

(c)            EPCO warrants and agrees to comply with any and all state and federal laws including licensing requirements.  EPCO Will undertake, at its sole cost and expense, all actions which may be necessary or required to comply, with all federal, state, and local laws,

 

rules and regulations related to the use, condition, or occupancy of the EPCO Plant Site or the construction of improvements thereon.

 

11.            Confidentiality and Non-Competition:

 

(a)            The Parties hereby acknowledge that in the course of engaging in the sale and purchase of CO 2 Gas contemplated by this Agreement, each Will have access to Confidential Information which includes but is not limited to each other’s business operations, 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.  Notwithstanding the foregoing, the confidentiality obligations of the receiving Party shall not extend to information that:

 

A.

is, as of the time of its disclosure, or thereafter becomes part of the public domain through a source other than receiving Party;

 

B.

was known by the receiving Party as of the time of its disclosure;

 

C.

is independently developed by the receiving Party;

 

D.

is subsequently learned from a third party not under a confidentiality obligation; or

 

E.

is required to be disclosed pursuant to court order or government authority, whereupon the receiving Party shall provide advance notice to the disclosing Party prior to such disclosure.

 

(b)            Notwithstanding the foregoing, the Parties recognize and understand that SIRE will disclose information related to this Agreement pursuant to U.S. Securities and Exchange Commission reporting requirements for material contracts.

 

(c)            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.

 

12.            Insurance:

 

EPCO shall furnish SIRE certificates of insurance with thirty (30) days notice of cancellation and/or change in coverage clause as evidence of the following coverages with respect to the EPCO Plant:

 

(a)            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;

 

(b)            Comprehensive Public Liability and Automobile Liability, including broad form contractual liability provision to cover any liability assumed by EPCO under this Agreement, with a combined single limit of $5,000,000 Property Damage and Bodily Injury,

 

13.            Assignment:

 

Subject to the terms and conditions set forth herein, the Parties agree that this Carbon Dioxide Purchase and Sale Agreement shall be assignable by either party and shall be binding upon the non-assigning Party.  The rights and obligations of this Agreement shall bind and benefit any successors or assigns of the parties.

 

14.            Termination:

 

Either party may, at its option, terminate this Agreement in the event of an uncured material breach of this Agreement by the other party.  Such termination may be effected only through written notice to the breaching party, which notice shall specify the breach on which termination is based.  Following receipt of such notice, the breaching party shall have ninety (90) days to cure such breach.  The Agreement shall terminate, on notice given by the non-breaching party, in the event such cure is not effected by the end of such period, or longer period as determined by the non-breaching party.

 

EPCO agrees to maintain and repair at EPCO’s expense the entirety of the EPCO Plant Site, to keep the entire EPCO Plant Site in good repair and condition and at the termination of this Agreement to deliver the EPCO Plant Site to SIRE in the same condition as at the date hereof, reasonable wear and tear excepted.  EPCO shall have 180 days to relocate the CO 2 Plant and return the Plant Site the same condition as at the date hereof.

 

15.            Entire Agreement:

 

This Agreement and the Lease Agreement contain the entire agreement between the Parties with respect to the subject matter herein, and there are no oral promises, representations, or other warranties affecting them.  No amendment or modifications of any of the terms and provisions of this Agreement shall be binding upon either SIRE or EPCO unless the same be expressed in writing and signed by both Parties.

 

16.            Miscellaneous:

 

(a)            Headings are for reference only, and do not affect the meaning of any paragraph.

 

(b)            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.

 

(c)            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.

 

17.            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 the addresses set forth below:

 

To Southwest Iowa Renewable Energy, LLC:	10868 189th Street Council Bluffs, IA  51503 Telephone:  (712) 366-0392 Fax  (712) 366-0394
TO EPCO:	EPCO Carbon Dioxide Products, Inc. 1811 Auburn Avenue 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.

 

18.            Governing Law, Forum and Jurisdiction.

 

The validity, construction and enforcement of this Agreement shall be determined in accordance with the laws of Iowa, without reference to its conflicts of laws principles, and any action arising under this Agreement shall be brought exclusively in Iowa.  Both parties consent to the personal jurisdiction of the state courts located in Pottawattamie County, Iowa and federal courts located in Iowa.

 

19.            Use of Site, Operation of Plant:

 

Subject to any regulatory requirements or limitations, SIRE shall provide EPCO 24/7 access to the Site for the operation and maintenance of its CO 2 plant and loading and shipping operations for the term of the agreement and any such renewal.  The site shall consist of approximately 1-2 acres for the construction and location of the CO 2 plant, storage and loadout facilities.  The site shall be determined by survey and will be as indicated in Exhibit A .  EPCO will pay SIRE a nominal fee of $100 per year for use of the site during the term of the agreement.  EPCO or its agents will be solely responsible for the production and operation of the CO 2 plant, including loading the Product from the Finished Storage Tanks into trailer vehicles, trucks, and/or railcars.  In addition, EPCO shall be provided sufficient parking for up to seven (7)

 

 

 

Liquid CO 2 bulk truck/trailer transports.  EPCO shall follow the applicable security and safety procedures established by SIRE.  EPCO shall maintain the insurance coverages as indicated in Section 12 during the term of the agreement.  EPCO will allow SIRE personnel access to the CO 2 plant at any time but do request prior notification before entry into the facility unless an emergency situation arises.  The area needed for the CO 2 plant and its operations will be incorporated in the Survey indicated in Exhibit A .  EPCO shall be responsible for any increase in property taxes relating to the real property under lease by EPCO. EPCO will install a fence around the perimeter of its leased site and shall provide for improvements to roadways and entrances necessary to allow ingress and egress to the EPCO plant.

IN WITNESS WHEREOF , the Parties hereto have caused this Agreement to be duly executed, this 5th day of April, 2013.

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT A

 

Survey

 

	EPCO Carbon Dioxide Products, Inc.
Signed:
Date:
	Southwest Iowa Renewable Energy, LLC
Signed:
Date:

EXHIBIT B

 

CO 2 Pricing

 

1.	The base price for CO 2 as measured by Section 5(a) of this agreement shall be as stipulated in Section 3 b.  EPCO shall be billed each month, pursuant to Section 6, at the base price indicated in 3b. the adjustment.

 

2.

The base price above shall be adjusted up , at the end of each month, based on a comparison of EPCO’s “Actual Margin” as compared to the “Calculated Margin”.  This difference shall be split [*]%-[*]% between the parties and will result in an adjustment upwards if required, (payment by EPCO ).  See example below.  The adjusted price shall be subject to the base price indicated in 3b.

 

3.	EPCO will provide Company by the 10th day of the month following the end of the previous month with the calculation of the adjustment, Company will then invoice EPCO with the additional payment if applicable, which shall be due pursuant to-Section 6.

 

Actual Margin is defined as:

“[*].”

Calculated Margin is defined as:

“the average actual selling price for the month multiplied by a factor of [*] or [*]%.

 

Example	Ex. 1		Ex. 2		Ex. 3		Ex. 4		Ex. 5
	$/Ton		$/Ton		$/Ton		$/Ton		$/Ton
Actual Selling Price	60.00		55.00		55.00		50.00		40.00
Actual Delivered Cost	30.00		30.00		35.00		35.00		30.00
Actual Margin	30.00		25.00		20.00		15.00		10.00
Calculated Margin @[ * ]%	[ * ]		[ * ]		[ * ]		[ * ]		[ * ]
Margin Over(Under)	$           [ * ]		$          [*]		$          [ * ]		$           -		$        ([ * ])
Company's Price Adjustment                                                      [ * ]	[ * ]		[ * ]		[ * ]		-		([ * ])
Base CO2-$/Ton	[ * ]		[ * ]		[ * ]		[ * ]		[ * ]
Adjustment	[ * ]		[ * ]		[ * ]		-		([ * ])
Adjusted CO2 Price-$/Ton	[ * ]		[ * ]		[ * ]		[ * ]		[ * ]
Floor Price - $/Ton	[ * ]		[ * ]		[ * ]		[ * ]		[ * ]
Final CO2 Price- $/Ton Greater of Adj. or Floor	$          [*]		$         [ * ]		$          [ * ]		$        [ * ]		$        [ * ]

Exhibit 10.2

 

 

 

 

 

 

 

 

 

 

 

NON-EXCUSIVE CO 2 FACILITY

 

SITE LEASE AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

NON-EXCLUSIVE CO 2 FACILITY SITE LEASE AGREEMENT

 

THIS NON-EXCLUSIVE CO 2 FACILITY SITE LICENSE AGREEMENT (“ Agreement ”) is made as of this 2nd day of April, 2013, by and between Southwest Iowa Renewable Energy, LLC (hereinafter called “ Lessor ”) and EPCO Carbon Dioxide Products, Inc. (hereinafter called “ Lessee ”).  SIRE and EPCO may collectively be referred to herein as the “Parties” or individually as a “Party”.

 

1.            License Site .  Lessor, subject to the terms and conditions hereof, hereby grants a non-exclusive right of entry and license to Lessee to install, maintain and operate Lessee’s CO2 facility (the “ CO 2 Facility ”) at the site described in the site survey attached hereto as Exhibit 1 having a street address of 10868 189 th Street, Council Bluffs, IA (the “ Site ”).  The Site shall consist of approximately 1-2 acres of land to be leased to EPCO for the construction and operation of its CO2 plant, storage tanks, and load out equipment.  Lessor makes no warranty or representation that the Site is suitable for the use described in Paragraph 2 of this Agreement, it being assumed that Lessee has satisfied itself thereof.  Lessor also grants to Lessee the non-exclusive right to develop the land and construct on that land its CO2 Facility, at Lessee’s sole cost and expense, provided that (i) Lessee or such providers will submit construction plans for such development and installation to Lessor; (ii) no construction will take place without Lessor’s prior approval, which approval shall not be unreasonably withheld, delayed or conditioned, but such approval shall not suggest or imply that Lessor has obtained or made independent review of such plans, that Lessor takes any responsibility for the plans or the CO2 Facility after it is constructed, it being understood that all such liability is solely the Lessee’s; and (iii) if any part of Lessor’s facilities or property is damaged as a result of such construction, Lessee, at its sole cost and expense, will promptly repair the damage and restore the damaged portion of the CO2 Facility or facilities to substantially the same condition that it was in prior to the commencement of construction by Lessee.

 

2.            Use of Site .  Subject to the availability thereof, and subject to any regulatory requirements or limitations, Lessee shall use the Equipment to produce, market and sell food grade CO 2 from the CO2 that Lessee purchases from Lessor under that certain Carbon Dioxide Purchase and Sale Agreement between Lessor and Lessee executed contemporaneously with this Agreement, of which this exhibit is attached thereto and incorporated therein by this reference (the “ Purchase and Sale Agreement ”).  The Equipment may be used solely for the purpose of producing, marketing and selling food grade CO 2 .  Lessee’s activities and facilities shall be authorized for this location by any applicable local state or federal governing entity or regulating body.  The legal description of said Site is provided by Lessor and is attached hereto and made a party hereof as Exhibit 2 .

 

3.            License Term .

 

(a)           The term of this Agreement shall be coterminous with the term of the Purchase and Sale Agreement.

 

(b)           This Agreement creates a non-exclusive license only and Lessee acknowledges that Lessee does not and shall not claim at any time any interest or estate of any kind or extent whatsoever in the real property by virtue of this Agreement or Lessee’s use of the Site.

 

However, EPCO shall own all plant equipment and buildings that EPCO attaches to the real property and at no time shall the same become a fixture or part of the realty owned by the Lessor.  In connection with the foregoing, Lessee further acknowledges that in no event shall the relationship between Lessor and Lessee be deemed to be a so-called Lessor-Lessee relationship and that in no event shall Lessee be entitled to avail itself of any rights afforded to Lessees under the laws of the state in which the CO2 Facility is located.

 

4.            License Fees .

 

(a)           Commencing upon the Agreement Commencement Date, Lessee shall pay to Lessor an annual license fee of one hundred and 00/100 Dollars ($100.00) (the “ Annual Fee ”), for each year this Agreement is in effect.

 

(b)           Lessor shall pay any and all property taxes the Site is subject to.

 

(c)           In addition to the Annual Fee, Lessee shall pay any and all use, sales or other tax (excepting income tax) payable or which may become payable by Lessor as a result of Lessee’s use of property covered by the lease.

 

5.            Conditions of License .

 

(a)           Lessee shall install, maintain, repair, operate, and remove its Equipment during the term of this Agreement in compliance with recognized industry standards, with the requirements of any insurance carrier for the CO 2 Facility and with all present and future rules and regulations imposed by any local, state, or federal authority having jurisdiction with respect thereto (including, without limitation, the rules and regulations of the OSHA, EPA, DNR, if applicable).

 

(b)           Upon completion of the installation of the Equipment and prior to conducting any business from within the CO 2 Facility, Lessee shall provide Lessor with “as built” plans showing the location of all Equipment, including all cables and conduit.

 

(c)           All work performed at the Site and/or the CO 2 Facility in connection with the installation, modification, change, and removal of Lessee’s Equipment shall be performed at Lessee’s sole cost and expense in a good, safe and workmanlike manner.  All contractors and subcontractors shall be licensed, bonded and insured.  Lessee shall maintain workmen’s compensation insurance in form and amount as is required by law during all such periods of construction and work.

 

(d)           Lessee shall not use, generate, store or dispose of any Hazardous Substances in or around the CO 2 Facility except in compliance with applicable environmental laws, rules, ordinances, regulations, or rulings nor cause or permit to occur any violation of any environmental law and shall not permit its employees, agents, contractors or invitees to violate any environmental laws.  If Lessor, any authority or any third party demands that a clean-up plan be prepared and that a clean-up be undertaken because of any deposit, spill, discharge, or other release of Hazardous Substances in violation of applicable environmental laws, rules, ordinances, regulations or rulings that occurs as a result of Lessee’s use or occupancy of the Site, then Lessee shall, at Lessee’s own expense, prepare and submit the required plans and all related bonds and

other financial assurances, and Lessee shall carry out all such clean-up plans following their approval by Lessor and all applicable authorities.  Lessee shall promptly provide all information regarding the use, generation, storage, transportation, or disposal of Hazardous Substances that is requested by Lessor.  If Lessee fails to fulfill any duty imposed under this Section 5(d) within ten (10) days (or such shorter time dictated by any event of an emergency nature) of receipt of written notice from Lessor, Lessor may do so and Lessee shall be responsible for costs thereof, if any; and, in such case, Lessee shall cooperate with Lessor in order to prepare all documents necessary or appropriate to determine the applicability of the environmental laws to the Site and Lessee’s use thereof, and for compliance therewith, and Lessee shall execute all documents promptly upon Lessor’s request.  No such action by Lessor and no attempt made by Lessor to mitigate damages under any environmental law shall constitute a waiver of any of Lessee’s obligations under this Section 5(d).  Lessee’s obligations and liabilities under this Section 5(d) shall survive the expiration or early termination of this Agreement.  Lessee shall indemnify, defend, protect and hold harmless Lessor, and its officers, directors, trustees, beneficiaries, shareholders, partners, agents and employees from all fines, suits, procedures, claims, and actions of every kind, and all costs associated therewith (including attorneys’ and consultants’ fees) arising out of or in any way connected with (1) any deposit, spill, discharge, or other release of Hazardous Substances in violation of applicable environmental laws, rules, ordinances, regulations or rulings that arises at any time from Lessee’s, its employees’, agents’, contractors’, or invitees’ use or occupancy of the Site and/or the CO 2 Facility; (2) any failure to provide all information, make all submissions and take all steps required by all authorities under the environmental laws; and (3) Lessee’s, its employees’, agents’, contractors’, or invitees’ breach of this subparagraph, whether or not Lessee has acted negligently with respect to such Hazardous Substances.  As used in this subparagraph, the term “ Hazardous Substances ” means any substance, waste or other material considered hazardous, dangerous or toxic under any state, local or federal law, code, ordinance or regulation.

 

(e)           In no event shall any mechanic’s materialmen’s or other lien be filed against Lessor, the CO2 Facility, the land on which the CO 2 Facility is located (“ Land ”) or Lessee for work claimed to have been done for, or materials claimed to have been furnished to, Lessee.  In the event such lien is nevertheless filed or is threatened, Lessee shall discharge such lien within thirty 30) days thereafter, at Lessee’s sole cost and expense, by the payment thereof or by filing any bond required by law, and Lessee hereby agrees to indemnify and save Lessor harmless from any reasonable legal expenses which Lessor actually incurs as a result of the filing of the lien or notice of intent and/or from any loss or liability incurred as a result of any such lien threatened or filed against Lessor, the CO 2 Facility, the Land.  If Lessee shall fail to discharge any such mechanics’ or materialmen’s lien, Lessor may, at its option, after providing Lessee with ten (10) days prior written notice discharge the same and treat the cost thereof as an additional fee payable with the next installment of the Annual Fee becoming due; it being hereby expressly covenanted and agreed that such discharge by Lessor shall not be deemed to waive or release the default of Lessee in not discharging the same.  It is understood and agreed by Lessor and Lessee that all work performed by or on behalf of Lessee in or around the CO 2 Facility shall be conducted on behalf of Lessee, and Lessor shall have no liability with respect thereto.  It is further understood and agreed that in the event Lessor shall give its written consent to Lessee’s performing of any such work, such written consent shall not be deemed to be an agreement or consent by Lessor to subject Lessor’s interest in the CO 2 Facility or the Land to any mechanics’

 

or materialmen’s liens which may be filed in respect of any such work made by or on behalf of Lessee.

 

6.            Lessee Non-Interference .  Lessor shall provide to Lessee 7day/week, 24 hour access to the Site for the installation, maintenance and operation of the CO 2 Facility. All access to the Site shall be subject to the continuing control of, and reasonable security and safety procedures established by, Lessor.

 

7.            Responsibilities of Lessee .

 

(a)           Lessor shall not provide any equipment or wiring to Lessee.  All expenses for installation, maintenance, operation and removal of the Equipment on Lessee’s side of the matchpoint shall be borne by Lessee.  Any damage caused by Lessee in the installation, maintenance, operation and removal of the Equipment shall be repaired at Lessee’s expense.

 

(b)           Lessee, at its sole cost and expense, shall be responsible for the maintenance of its Equipment and improvements, if any, at the Site and shall keep the Equipment in the Site in good order, repair and condition throughout the term of this Agreement and shall promptly and adequately repair any damage to the Site and/or the CO 2 Facility caused by Lessee or the Equipment by restoring the damaged area(s) to substantially the condition they existed in prior to the damage.  Lessee shall not create any nuisance, interfere with, annoy or disturb any other third party or Lessor.  Lessor shall have no obligation to obtain licenses for Lessee, or to maintain, insure, operate or safeguard Lessee’s Equipment.  The Equipment, and any other personal property at the Site and/or the CO 2 Facility belonging to Lessee, shall be there at the sole risk of Lessee, and Lessor shall not be liable for damage thereto or theft, misappropriation or loss thereof unless caused by the acts or omissions of Lessor, their respective agents, employees, contractors, trustees, shareholders or directors.

 

(c)           Lessee shall keep and maintain in first-class order, condition and repair (including any such replacement, periodic painting, and restoration as is required for that purpose) the Site and the CO2 Facility (collectively, the “Premises”) and every part thereof and any and all appurtenances hereto located, including, but without limitation, the exterior and interior portion of all doors, door checks, windows, all plumbing and sewage facilities within the Premises, fixtures, heating and air conditioning and electrical systems, sprinkler systems, walls, floors and ceilings, and  shall make any repairs required to be made in the Premises due to burglary of the Premises or other illegal acts on the Premises or any damage to the Premises caused by a strike involving the Lessee or its employees.  Lessee shall replace, at its expense, any and all glass in and about the Premises which is damaged or broken from any cause whatsoever except due to the gross negligence or willful misconduct of Lessor, its agents or employees.  Such maintenance and repairs shall be performed with due diligence, lien-free and in a first-class and workmanlike manner, by licensed contractor(s) which are selected by Lessee. In accordance with any applicable local regulations, and at its own expense, Lessee shall: (1) place any rubbish or other matter outside the building or in the Premises only in such containers as are authorized from time to time by Lessor and pay the cost of removal of all of Lessee’s refuse or rubbish.  If Lessor shall provide or designate a service for picking up refuse or garbage, Lessee shall use the same at its sole cost;  (2) see that there are no undue accumulations of garbage and refuse; keep the same in proper containers on the interior of the Premises, until called for collection; remove the same at

Lessee’s expense; (3) keep the outside areas immediately adjoining the Premises clean and free from ice and not place or permit any rubbish, obstructions or merchandise in such areas; and (4) keep the Premises clean, orderly, sanitary and free from objectionable noise, odors, insects, vermin and other pests.  Lessee agrees not to make or permit any objectionable noise or odor to emit from the Premises unless the same is in compliance with all state, federal and local laws and approved in writing in advance by Lessor.

 

(d)           Provided that Lessee is not in default in the performance of its obligations hereunder, at the expiration of this Agreement or earlier termination thereof, Lessee shall remove all of Lessee’s Equipment at Lessee’s sole cost and expense in accordance with the terms of this Agreement.  Any and all removal of Lessee’s Equipment shall be performed (i) by a qualified, licensed and bonded contractor previously approved by Lessor and in accordance with a previously approved removal plan, such approval not to be unreasonably withheld, delayed or conditioned and (ii) in a workmanlike manner, without any interference, damage or destruction to any other equipment, structures or operations of the Lessor, or any other equipment of others thereon.  If Lessee fails to remove such Equipment within 180 days of the expiration or earlier termination of this Agreement, the Lessor may remove and dispose of such Equipment at Lessee’s sole cost and expense.  Any and all interference or damage caused to the Site, Lessor’s equipment or equipment of other Lessees by such removal shall be repaired or eliminated by Lessee at Lessee’s sole cost and expense.  If Lessee fails to make such repairs within ten (10) days after the occurrence of such damage, injury or interference, Lessor may upon ten (10) days prior written perform all the necessary repairs at Lessee’s cost and expense, and such sum shall be immediately due upon the rendering of an invoice as an additional fee hereunder. Upon the termination or expiration of this Agreement, Lessee must deliver the Site to Lessor free of any and all hazardous materials brought onto the Site by Lessee.

 

8.            Lessee Indemnification .  Lessee agrees to indemnify, defend and hold Lessor, its agents, trustees, employees, shareholders, directors, harmless from any and all damages and all costs, including reasonable attorneys’ fees, for any damage done to Lessor as a result of the installation, operation, maintenance, repair or removal of Lessee’s Equipment or other improvements. Lessee hereby assumes the risk of the inability to operate as a result of any structural or power failures at the Site and/or the CO 2 Facility or failure of Lessee or Lessee’s Equipment for any reason whatsoever and agrees to indemnify and hold Lessor harmless from all damages and costs of defending any claim or suit for damages of any kind including business interruption (and attorney’s fees) asserted against Lessor by reason of such failure unless such damages and costs are caused by the acts, or omissions of Lessor, and its respective agents, employees, contractors, trustees, shareholders and directors.  In no event shall Lessor be liable under this Agreement for any consequential, punitive, indirect or other extraordinary damages.

 

9.            Lessee’s Liability if Increases in Assessed Value of License Site .  Lessee shall be responsible for the declaration and payment of any applicable taxes or assessments against the personal property of Lessee located in or around the Site. Lessee hereby acknowledges that the existence of Lessee’s Equipment and other improvements at the Site may result in an increase in the assessed value of the Site.  Lessee agrees to reimburse Lessor, upon receipt of documentation reasonably satisfactory to Lessee showing that Lessee’s Equipment or Lessee’s other improvements caused an increase in the assessed value of the Site, (subject to Lessee having the right to obtain, on Lessor’s behalf, an exemption for the same), for Lessee’s proportionate share

 

of any increases in the real estate taxes payable by Lessor as a consequence of the increase in assessed valuation.  Lessor hereby agrees to cooperate with Lessee, at Lessee’s sole cost and expense, to obtain an abatement of any such increased assessment.

 

10.            Notices .  All notices required to be given hereunder shall be deemed to be duly given in writing either by delivery or by certified or registered mail, return receipt requested, at the following addresses or at such other address as may be designated in writing by either party:

 

 

 

 

 

Notice given by mail shall be deemed given three (3) calendar days after the date of mailing thereof.  If Notice is given by an overnight carrier that maintains records of delivery, then Notice shall be deemed given one business day after delivery to a nationally recognized overnight delivery service ( e.g. Federal Express, Airborne Express, etc. ).

 

11.            Lessee’s Default and Lessor’s Remedies .

 

(a)           Each of the following shall be deemed a breach and default of this Agreement (each of which individually or collectively is referred to as a “ Default ”):  (i) Lessee’s failure to pay the Annual  Fee, any additional fees or other payments or sums due hereunder; (ii) Lessee’s abandonment of either the Equipment or that portion of the Site upon which the Equipment is installed; (iii) any case, proceeding, or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to Lessee, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to Lessee or Lessee’s debts and obligations; (iv) the making by Lessee of any assignment or any other arrangement for the general benefit of creditors under any state statute; (v) the breach of or default under any of the terms, conditions or covenants contained herein required to be performed by Lessee; or (vi) Lessee’s failure to abide by any term of the Purchase and Sale Agreement that the parties execute.

 

(b)           In the case of any Default, Lessor shall be entitled, at Lessor’s option after thirty (30) days written notice to Lessee and Lessee’s continued failure to cure the Default within said period of written notice, to: (i) terminate this Agreement, Lessee shall remain liable for all fees, additional fees and other sums due under this Agreement through the effective date of termination, (ii) remove all of Lessee’s Equipment, improvements or personal property, including, but not limited to, all Equipment located at the Site, at Lessee’s sole cost and expense;

 

or (iii) to disconnect power to the Site and/or to Lessee’s Equipment. Any termination of this Agreement shall terminate the Purchase and Sale Agreement. In addition to and not in lieu of the foregoing or any other remedies, in the event that Lessor, by reason of any Default, incurs any costs or expenses on behalf of Lessee or in connection with Lessee’s obligations hereunder, Lessee shall reimburse Lessor for such sums, as an additional fee due hereunder within thirty (30) days of Lessor’s rendering of an invoice to Lessee.

 

(c)           If Lessee fails to perform any covenant or observe any condition to be performed or observed by Lessee hereunder or fails to make any payment to any third party, Lessor may, but shall not be required to, on behalf of Lessee at Lessee’s cost and expense perform such covenant and/or take such steps as Lessor may deem necessary or appropriate upon ten (10) days prior written notice, and in such case Lessor shall have the right to all costs and expenses incurred by Lessor in so doing, including reasonable attorneys’ fees, which shall be paid by Lessee to Lessor within thirty (30) days of receipt of a written invoice from Lessor, plus interest thereon at the annual rate of eighteen percent (18%).  Lessor’s exercise of its right under this subparagraph shall be in addition to and not in lieu of nor shall in any way prejudice or waive any rights Lessor might otherwise have against Lessee by reason of Lessee’s Default.

 

(d)           Lessor’s rights and remedies set forth in this Agreement are cumulative and in addition to Lessor’s rights and remedies at law or in equity, including those available as a result of any anticipatory breach of this Agreement.  Lessor’s exercise of any right or remedy shall not prevent the concurrent or subsequent exercise of any other right or remedy.  Lessor’s delay or failure to exercise or enforce any of Lessor’s rights or remedies or Lessee’s obligations shall not constitute a waiver of such rights, remedies or obligations.

 

12.            Assignment and Subordination .

 

(a)           Subject to the provisions of this section, Lessor and Lessee reserve the right to assign, transfer, and sublet the property, or any portion thereof, upon which the Site is located and/or its interests in this Agreement.  Any such assignment, transfer, or sublet must be approved in writing by the non-assigning, non-transferring, or non-subletting party, such consent not to be unreasonably withheld.  Notwithstanding the foregoing, it is understood by both parties that Lessor shall be entitled to approve any sublease to a third party in its sole discretion and shall also be entitled to any sublease consideration rendered for use of the property upon which the Site is located, including rents or other types of payment.  Any assignee, transferee, or sublessee shall be subject to the terms of this Agreement.

 

(b)           This Agreement is subject and subordinate at all times to all ground or underlying leases, all mortgages, all covenants, restrictions, easements, and encumbrances that may now or hereafter affect such CO 2 Facility or real property of which the Site forms a part, and all future renewals, modifications, consolidations, replacements and extensions thereof.  This clause shall be self-operative and no further instrument of subordination shall be required by any mortgagee.

 

(c)           Lessee agrees, at any time and from time to time, within thirty (30) days following any written request which Lessor may make from time to time, to execute, acknowledge and deliver to Lessor a written statement containing all information requested by Lessor, including but not limited to (i) certification that this Agreement is unmodified and in full force and effect (or if there have been modifications, that the Agreement is in full

 

 

 

 

 

force and effect as modified and stating the modifications), (ii) a statement regarding the dates to which Lessee has paid license fees and other charges hereunder, and (iii) a statement as to whether, to the best of Lessee’s knowledge, Lessor is in breach or default in the performance of any covenant or condition contained within this Agreement, and, if so, a specification of each such breach or default of which Lessee may have knowledge.

 

13.            Lessor Non-Waiver .  This Agreement is made subject to all local, state and federal laws and regulations now or hereafter in force, and shall not be modified, extended or terminated (other than as set forth herein) except by an instrument duly signed by Lessor and Lessee.  Waiver of a breach of any provision hereof under any circumstances will not constitute a waiver of any subsequent breach of such provision, or of a breach of any other provision of this Agreement.  Neither this Agreement nor any rights hereunder may be assigned, transferred or otherwise encumbered by Lessee without prior written consent of Lessor.

 

14.            Governing Law, Forum and Jurisdiction .  The validity, construction and enforcement of this Agreement shall be determined in accordance with the laws of Iowa, without reference to its conflicts of laws principles, and any action arising under this Agreement shall be brought exclusively in Iowa.  Both parties consent to the personal jurisdiction of the state courts located in Pottawattamie County, Iowa and federal courts located in Iowa.

 

15.            Counterparts .  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document.

 

16.            Integration Clause .

 

(a)           This Agreement, together with the Purchase and Sale Agreement executed by the parties hereto, constitutes the entire Agreement of the parties hereto and shall supersede all prior offers, negotiations and agreements.

 

(b)           No amendment or modification of this Agreement shall be valid unless made in writing and signed by the parties hereto by their respective authorized representatives.

 

17.            No Partnership .  Nothing contained in this Agreement shall be deemed or construed to create a partnership or joint venture of or between Lessor and Lessee, or to create any other relationship between the parties hereto other than that of Lessor and Lessee.

 

18.            Rules and Regulations .  Lessee shall comply with all building rules and regulations, as amended from time to time.

 

19.            Miscellaneous:

 

(a)           Headings are for reference only, and do not affect the meaning of any paragraph.

 

(b)           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.

 

(c)           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.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

 

 

 

 

 

EXHIBIT 1

The Licensed Site Survey

(Please attach diagram/drawings of installation)

 

EXHIBIT 2

 

(Legal description and/or plat of Site)

LEGAL DESCRIPTION

TRACT A

A parcel of land being a portion of the East One Half of Section 31, T74 North, R43 West of the Fifth Principal Meridian, Pottawattamie County, Iowa, more fully described as follows:

Beginning at the North quarter corner of said Sec. 31; thence along the North line of said Sec. 31, South 88 Degrees, 17 Minutes 16 Seconds East, 2270.71 feet to a point on the Westerly right-of-way line of Interstate 29: thence along said Westerly right-of-way line, the following seven (7) courses:

1.  South 00 Degrees 45 Minutes 10 Seconds West, 468.19 feet;

2.  South 00 Degrees 41 Minutes 04 Seconds East, 200.06 feet;

3.  South 00 Degrees 44 Minutes 56 Seconds West, 1964.84 feet;

4.  South 00 Degrees 45 Minutes 02 Seconds West, 1635.16 feet;

5.  South 01 Degree 13 Minutes 56 Seconds West, 593.52 feet;

6.  South 00 Degrees 07 Minutes 12 Seconds East, 353.62 feet;

7.  South 01 Degree 49 Minutes 08 Seconds West, 50.00 feet to a point on the Southerly line of said Sec. 31;

thence along said Southerly line, North 88 Degrees 10 Minutes 52 Seconds West, 2276.52 feet to the South quarter corner of said Sec. 31; thence along the North-South centerline of said Sec. 31, North 00 Degrees 45 Minutes 27 Seconds East, 2629.84 feet to the center of said Sec. 31, thence continuing along said North-South centerline, North 00 Degrees 46 Minutes 14 Seconds East, 2631.10 feet to the point of beginning.

TRACT B-1

Parcel “A” of the SW1/4 SE1/4 of Sec. 19, T74N, R 43W of the 5th Principal Meridian, Pottawattamie County, Iowa, being more fully described as follows:

Commencing at the NW corner of said SW1/4 SE1/4; thence along the North line of said SW1/4 SE1/4, South 88 Degrees 15 Minutes 27 Seconds East a distance of 113.56 feet to the true point of beginning; thence continuing along said North line South 88 Degrees 15 Minutes 27 Seconds East a distance of 200 feet; thence South 12 Degrees 06 Minutes 23 Seconds East a distance of 549.14 feet; thence South 77 Degrees 46 Minutes 56 Seconds West a distance of 204.39 feet; thence South 68 Degrees 35 Minutes 49 Seconds West a distance of 105.34 feet to a point on the East right of way line of Mosquito Creek Drainage District No. 22; thence along said East right of way line, North 01 Degree 34 Minutes 53 Seconds West a distance of 624.94 feet to the true point of beginning.

TRACT B-2

A tract of land located in the SW1/4 SE1/4 in Sec. 18, T74N, R43W of the 5th Principal Meridian, Pottawattamie County, Iowa, more fully described as follows:

Commencing at the SE corner of said Sec. 18; thence South 89 Degrees 44 Minutes 04 Seconds West along the South line of said Sec. 18 a distance of 1,573.21 feet to the point of beginning;