SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-K

                      For Annual and Transition Reports
                   Pursuant to Sections 13 or 15(d) of the
                       Securities Exchange Act of 1934


(Mark One)

[ X ]  Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required).  For the fiscal year ended
June 30, 2000 or

[     ]  Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
  (No Fee Required).  For the transition period from      to     .

Commission File No.  1-8680


                          HIGH PLAINS CORPORATION
           (Exact name of registrant as specified in its charter)


Kansas                                                             48-0901658
(State or other jurisdiction of incorporation                (I.R.S. Employer
or organization)                                          Identification No.)


              200 W. Douglas, Suite #820, Wichita, Kansas  67202
             (Address and zip code of principal executive offices)

                               (316) 269-4310
              (Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12 (b) of the Act:

                                    NONE

Securities Registered Pursuant to Section 12 (g) of the Act:

                        Common Stock, $0.10 par value
                               (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (12) months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past ninety (90) days.

                                YES  X      NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [   ].


<PAGE>


As of August 31, 2000, there were 16,177,344 outstanding shares of common
stock of the Registrant.  As of August 31, 2000, the aggregate market value
of voting stock of High Plains Corporation held by non-affiliates was
approximately $30,891,910, based on the last trade transacted on August 31,
2000.

Documents Incorporated by Reference:

Portions of the Registrant's definitive Proxy Statement for the 2000 Annual
Meeting of Stockholders (the "Proxy Statement"), which is anticipated to be
filed with the Securities and Exchange Commission within 120 days after the
end of the Registrant's fiscal year end, are incorporated by reference in
Part III.


<PAGE>


Part I

Item 1

GENERAL DESCRIPTION OF BUSINESS

High Plains Corporation, a Kansas corporation (the "Company") is engaged in
the production and sale of fuel grade and industrial grade ethanol.  Fuel
grade ethanol is the Company's primary product, while industrial grade
ethanol represents a recent diversification.

In addition, the Company sells distiller's grains (DDG), both wet and dry,
other solubles, and carbon dioxide.  The primary by-product of ethanol
production is distiller's grains.

Founded in 1980, the Company believes it is currently the seventh largest
ethanol producer in the United States.  The Company built its first plant in
1982, located in Colwich, Kansas.  In 1994, the construction of the Company's
second facility was completed in York, Nebraska.  In December 1997, the
Company finalized negotiations with Giant Industries, Inc. to purchase a
previously closed plant in Portales, New Mexico.  The Company re-opened the
Portales, New Mexico plant and began production in February 1998.

In May 2000, the Company entered into a contract (subject to buyer financing) to
sell the Portales, New Mexico facility, while maintaining the rights to market
the ethanol for a three to five year period.  The pending sale of the Portales,
New Mexico facility could reduce the future net sales and revenues reported
by the Company (see note 2 to the financial statements for more details).

<TABLE>

NARRATIVE DESCRIPTION OF BUSINESS

<CAPTION>
For the Years Ended June 30,          2000     1999     1998
(In Millions)
   <S>                                <C>      <C>      <C>
   Ethanol and incentive revenues     $91.5    $79.8    $66.0
   By-product and other sales          17.0     16.9     18.9

   Net sales and revenues             108.5     96.7     84.9

</TABLE>

Principal Products

The Company's principal product, fuel grade ethanol, is sold for blending
with gasoline as a motor fuel.  The market for this product is affected by,
among other things, the Federal excise tax incentive program.  This program,
which was recently extended to September 2007, allows gasoline distributors
who blend ethanol with gasoline to receive a federal excise tax rate
reduction for each blended gallon for which they sell.  Under the recent
extension of the program, the current tax rate reduction equals $.054 per
blended gallon which contains 10% or more ethanol by volume.  However, the
tax rate reduction decreases to $.053, $.052 and $.051 in 2001, 2003 and
2005, respectively.

Fuel grade ethanol prices traditionally have varied directly with the
wholesale price of gasoline.  However fuel grade ethanol typically sells for
a higher price per gallon than wholesale gasoline because of the
aforementioned excise tax incentives.  Historically, fuel grade ethanol
prices have also reflected a premium due to the oxygenate and octane
enhancing properties of this motor fuel.  The pending sale of the
Portales, New Mexico facility could result in a reduction of future revenues
from fuel grade ethanol sales.  The Portales, New Mexico facility's fuel grade
ethanol revenues were $15.3 million and $12.5 million in fiscal 2000 and
fiscal 1999, respectively.


<PAGE>


Since July 1997, the York, Nebraska facility has had the ability to further
refine a portion of its fuel grade ethanol production for sale to markets
such as the industrial grade ethanol market and the food and beverage
markets.  The Company had beverage grade ethanol sales for fiscal years 2000
and 1999, which totaled approximately $9.8 million and $2.4 million,
respectively.  Management's goals for fiscal 2001, include increased sales in
both the food and beverage and industrial grade ethanol markets.  These
markets may include sales for use in cosmetics, perfume, paint thinner and
vinegar.

Since March 1999, the Company has contracted with ICM, Inc. for the exclusive
sale of the Company's DDG production, both wet and dry at its York, Nebraska
and Colwich, Kansas facilities.  This exclusive agreement has an initial term
of two years and automatically renews for successive one-year terms unless
written notice of termination is issued 90 days prior to the end of the then
current term.

In March 1999, the Company began direct marketing the distiller's by-products
from its Portales, New Mexico plant, including wet distiller's grains and
condensed solubles.

The primary markets for the Company's DDG by-products continue to be
manufacturers of animal feed, and direct consumers such as feedlots and
dairies.  Selling prices for DDG generally vary with sorghum (milo) and corn
prices.  For example, as grain prices have increased, the Company's DDG
prices have traditionally increased.  Consequently, throughout fiscal 2000,
as the cost of grain stayed at near record low prices, DDG prices were lower
as well.  During fiscal 2000, the Company experienced a decline in DDG prices
of approximately 8% compared to DDG prices during the fiscal 1999.  If this
trend of low priced alternative feedstocks, such as sorghum or corn, persist,
the Company's DDG revenues could be significantly lower compared to prior
years.  The pending sale of the Portales, New Mexico facility could result in a
reduction of future revenue from DDG by-product sales.  The Portales, New Mexico
facility contributed $4.3 million and $3.7 million in DDG by-product revenues in
fiscal 2000 and fiscal 1999, respectively.

In November 1997, the Company signed an agreement with EPCO Carbon Dioxide
Products, Inc. (EPCO), of Monroe, Louisiana to capture and purchase CO2 gas
produced at the York, Nebraska plant.  EPCO has contracted for the purchase
of the CO2 gases for an initial period of five years.  CO2 sales were
approximately $.2 million for both fiscal 2000 and fiscal 1999.

In March 1999, the Company signed an agreement with EPCO to capture and
purchase CO2 gas produced at the Colwich, Kansas plant.  EPCO has contracted
for the purchase of CO2 gas for an initial period of eight years.  Through
June 30, 2000, CO2 sales were $.03 million, as production got off to a later
than anticipated start in fiscal 2000.

Availability of Raw Materials and Supplies.

The Company's primary raw material is grain feedstock.  Historically, the
Company has maintained sufficient grain supplies on-site at each of its
production facilities for approximately three to five days of continuous
production.  High Plains entered into an exclusive grain supply agreement in
1997 with Centennial Trading, LLC, a grain brokerage company, for the
procurement of all the grain requirements for the Company's three plant
locations.  In May 2000, the Company determined it would be more advantageous
to purchase grain internally, and subsequently terminated the grain supply
agreement with Centennial Trading, LLC. Centennial Trading, LLC continued to
provide grain brokering services, on a limited basis, to the Company through
July 2000.  The Company believes that by establishing internal grain
procurement it can develop better local supply relationships that will
eliminate the need to buy and store grain offsite and better manage its raw
material risk management program.  (Also see the discussion of raw materials
in Item 7 -- Management's Discussion and Analysis.)

The Company requires a substantial uninterrupted supply of natural gas to
maintain continuous production.  Consequently, the Company contracted with
one natural gas provider to supply all or part of the gas requirements at the
Colwich, Kansas and York, Nebraska plants.  Because of its location, the
Company has contracted with a separate gas provider to supply natural gas to
the Company's Portales, New Mexico facility.  If these sources of natural gas
supplies were interrupted, the interruption to the Company's normal
operations would have a significant detrimental impact on Company operations.
However, due to the competitive nature of the natural gas market, the Company
believes no significant risk of long-term interruption exist.


<PAGE>


In fiscal 1999, the Company completed testing of a natural gas supply hook-
up, which connects the Colwich, Kansas plant to a landfill natural gas
production operation.  The Company's natural gas supply from this landfill
provides up to 90% of the Colwich, Kansas facility's natural gas
requirements.  The Company contracted for the landfill gas for an initial
term of 20 years at a per unit cost that is lower than the current spot
market price at the Colwich, Kansas facility.  The landfill gas per unit
price is $1.50/MMBTU for the initial four years of the contract.

During fiscal 1999, the Company experienced a continuation of slow railcar
movement, primarily as a result of a merger between two major railroad
companies.  This caused minor delays in deliveries of the Company's product.
The Company believes that the delays were symptomatic of the railway system
for all shippers at that time.  In fiscal 2000, the Company experienced no
significant shipping delays.  However, the Company remains dependent on rail
transportation to ship its ethanol and DDG to customers.  Any interruption of
this means of transportation due to a rail strike or any other circumstance
would have a significant detrimental effect on the Company's operations.

Seasonal Factors in Business.

Ethanol prices historically strengthen in the Company's second and third
quarters of each fiscal year, which coincide with the wintertime oxygenate
season.  Likewise, plant operations tend to be more efficient in the cooler
months which also coincide with the Company's second and third quarters.
However in fiscal 2000, historically low gasoline prices and excess ethanol
supply suppressed ethanol prices through the second quarter of fiscal 2000.
During the third quarter of fiscal 2000, fuel and ethanol prices rose sharply
in response to higher crude prices and carried their strength through the
fourth quarter of fiscal 2000.  The Company believes that once the crude oil
market dynamics stabilize, the typical seasonal cycles will return, so long
as the wintertime oxygenate programs remain enforce.   (For information
regarding the seasonality of the Company's business, see the "Seasonality"
discussion in Item 7 -- Management's Discussion and Analysis.)

Customers.

For fiscal year ended June 30, 2000, the Company's sales to four customers
represented in the aggregate approximately 38% of the Company's total product
sales and revenues.  The Company's DDG sales to ICM, Inc., which held an
exclusive brokerage agreement throughout fiscal 2000, represents
approximately 30% of the total sales to these four customers.  Remaining
sales were primarily to ethanol customers.  The Company believes that the
loss of any of these customers would not have a material adverse effect on
the Company's sales and revenues due to other available markets for its
products.

Competitive Conditions.

The Company is in direct competition with other ethanol producers.  Archer
Daniels Midland is the largest ethanol producer in the United States with
approximately 856 million gallons of capacity or approximately 43% of the
industry's total capacity of approximately 2 billion gallons.  The Company,
with approximately 68 million gallons of ethanol production capacity, ranks
seventh in size, in the industry.


<PAGE>

<TABLE>

The top ten ranking is estimated to be as follows:
(in millions of gallons)

<CAPTION>

                                        Annual Capacity
                                  Fuel             Industrial
Company                           Grade            Grade
<S>                               <C>              <C>
ADM                               646              210
Williams Energy Ventures           95               35
Minnesota Corn Processors         125                0
Cargill                           100                0
Midwest Grain Products             48               48
New Energy                         80                0
High Plains Corporation            56               12
Grain Processing                    0               60
AE Staley                          40                5
AGP                                30                0

</TABLE>

While the Company has diversified its operation by investing in the
capability to produce industrial and beverage grade ethanol, this segment of
the ethanol industry is also dominated by Archer Daniels Midland as noted in
the table.  However, Archer Daniels Midland and the other large competitors
in the industry, do not appear to have materially affected the demand or
price of either grade of ethanol.  (Also see the discussion of ethanol
production in Item 7 -- Management's Discussion and Analysis.)

Environmental Disclosure.

The Company is subject to extensive environmental regulation at the federal,
state and local levels.  Air quality at the Colwich, Kansas plant is
regulated by the U.S. Environmental Protection Agency and the Division of
Environment of the Kansas Department of Health and Environment (the "KDHE").
The KDHE regulates emission of volatile organic compounds into the air.
Volatile organic compound emissions are tested on a monthly basis at the
Colwich plant, and the Company must submit semi-annual reports to the KDHE
regarding these emissions tests.  The Company is required to obtain an air
operating permit from the KDHE and must obtain KDHE approval to make plant
alterations that could change the emission levels.  The KDHE also regulates
the water usage, wastewater discharge and hazardous waste at the Colwich
plant under Kansas water pollution control and hazardous waste laws.  Water
usage and wastewater effluent quality is tested daily.  Monthly reports
regarding water usage and quality are filed with the KDHE.  The Company is
also required to submit periodic reports pursuant to the Kansas and Federal
Emergency Planning Community Right-to-Know Act.  At the local level, the
Company files semi-annual reports with the Sedgwick County Community Health
Department regarding air quality at the Colwich plant.

The York, Nebraska facility is subject to similar environmental regulations
at the federal, state and local level.  Air quality at the York plant is
regulated by the Environmental Protection Agency and the Nebraska Department
of Environmental Quality (the "NDEQ").  The Company submits various reports
throughout the year concerning emissions of volatile compounds.  The Company
was required to obtain an air operating permit from the NDEQ and must obtain
approval to make any plant alterations that could change the emission levels.
The NDEQ also regulates wastewater discharge at the York plant.  Wastewater
effluent quality is tested daily and monthly reports are filed with NDEQ.
The York facility is also required to submit periodic reports pursuant to the
Nebraska and Federal Emergency Planning Community Right-to-Know Act.


<PAGE>


The Portales, New Mexico facility is subject to similar environmental
regulations at the federal, state and local level.  Air quality at the
Portales plant is regulated by the New Mexico Environmental Department Air
Quality Bureau.  The Company submits various reports throughout the year
concerning emissions of volatile compounds.  The company was required to
obtain an air operating permit from this bureau upon start-up of the plant in
February 1998.  If any plant changes are made that could change the emission
levels, further approval would be required.  The City of Portales regulates
wastewater discharge to the city from the Portales plant.  The Portales
facility is also required to submit periodic reports pursuant to the New
Mexico and Federal Emergency Planning Community Right-to-Know Act.

Number of Employees.

As of June 30, 2000, the Company employed 141 persons, in a full-time
capacity.  These included 37 employees at the Colwich, Kansas plant; 51
employees at the York, Nebraska plant; 39 employees at the Portales, New
Mexico plant and 14 employees in the Wichita, Kansas Corporate office.  The
total number of employees is lower compared to the fiscal year 1999 due to
increased operational efficiency at the facilities while corporate staffing
has grown to facilitate new initiatives implementation.


Item 2                          PROPERTIES

The Company's principal executive offices at 200 W. Douglas, Suite 820,
Wichita, Kansas are leased and cover approximately 5,500 square feet.

The Company presently owns approximately 70 acres of land and improvements
thereon which comprise its Colwich, Kansas plant.  The Company also owns
approximately 142 acres of land and improvements thereon which comprise its
York, Nebraska facility.  During fiscal 1998, the Company acquired
approximately 15 acres of land and improvements thereon which comprise the
Portales, New Mexico facility.

The Company's primary lender holds a mortgage on approximately 59 acres of
land where the York facility is situated, the York ethanol production plant
itself, and both the Colwich, Kansas and Portales, New Mexico land and
production plants, as security for loans to the Company.

Item 3                       LEGAL PROCEEDINGS

As of June 30, 2000, and through the filing of this Form 10-K, the Company is
not a party to any legal proceedings other than those which have arisen in
the course of normal business operations, none of which are expected to have
a material adverse effect on the Company's financial condition.


Item 4                SUBMISSION OF MATTERS TO A VOTE
                            OF SECURITY HOLDERS

No matters were submitted to a vote of the stockholders of the Company during
the fourth quarter of the fiscal year ended June 30, 2000.


<PAGE>


Part II

Item 5           MARKET FOR THE REGISTRANT'S COMMON EQUITY
                    AND RELATED SECURITY HOLDER MATTERS

The Company's Common Stock is traded on the NASDAQ National Market System
under the symbol HIPC.

The number of holders of the Company's common stock as of June 30, 2000, was
approximately 5,627 determined by an examination of the Company's transfer
book and through broker search.

The Company has not declared or paid any cash dividends on its Common Stock
since its organization in 1980.

The Company has no current plans to declare or pay any cash dividends in the
foreseeable future.  The payment and rate of future cash dividends on the
Company's Common Stock, if any, would be subject to review by the Board of
Directors in light of the Company's financial condition, results of
operations, capital requirements and other factors deemed relevant at that
time.

The table below sets forth the range of high and low market prices for the
Company's shares during fiscal 2000 and fiscal 1999.  These prices do not
include retail mark-ups, mark-downs or commissions and may not necessarily
represent actual transactions.

<TABLE>
<CAPTION>
    Fiscal          Price                 Fiscal           Price
     2000       High     Low               1999        High     Low
<S>             <C>      <C>          <S>              <C>      <C>
1st Quarter     1.906    1.375        1st Quarter      2.625    1.563
2nd Quarter     1.906    0.688        2nd Quarter      2.250    1.156
3rd Quarter     4.938    1.750        3rd Quarter      2.563    1.438
4th Quarter     3.750    2.000        4th Quarter      2.625    1.750


Item 6                     SELECTED FINANCIAL DATA


</TABLE>
<TABLE>
                  Five Year Summary Financial Data (Audited)

(In thousands of dollars, except per share data)
<CAPTION>
Year ended June 30          2000      1999      1998       1997       1996
<S>                      <C>        <C>       <C>       <C>        <C>
Income Data
Net Sales and Revenue    $ 108,531  $ 96,730  $ 84,864  $  63,122  $  87,925
Net Earnings (Loss)            160       535    (3,593)     1,733     11,821
Earnings(Loss) Per Share
  Basic                        .01       .03      (.22)       .11        .75
  Assuming Dilution            .01       .03      (.22)       .11        .74

Balance Sheet
Long-term Debt              17,433     9,178    11,703     10,200     14,460
Total Assets             $  85,403  $ 80,613  $ 83,250  $  79,075  $  75,096

</TABLE>


Item 7                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Fiscal 2000 was a good year operationally for High Plains.  Revenues exceeded
$100 million for the first time in the Company's history, and despite
extremely low ethanol prices in the first two fiscal quarters, pre-tax
operating income for the year would have been $5 million if not for the
write-down of the Portales, New Mexico production facility, and unexpectedly
high grain costs recorded in the fourth quarter.  The continued strength
projected for oil and gasoline, the low price of our grain feedstock, and the
forward sales volume already contracted (all discussed in more detail below)
indicate good potential for a stronger fiscal 2001.


<PAGE>


Since July 1997, the York, Nebraska facility has had the capability to
further refine approximately one million gallons per month of existing
ethanol production capacity for sale in additional markets such as the
industrial, food, and beverage industries.  Even more production can be
marketed as a mid-grade product to certain users within these industries.
Sales of these products typically provide greater margins than fuel grade
ethanol, although prices for fuel ethanol during the fiscal third and fourth
quarters of 2000 were higher than normal, to the point that industrial
margins were somewhat less attractive.  Sales of industrial grade ethanol
during fiscal 1999 were approximately 1.7 million gallons, increasing to 6.8
million gallons during fiscal 2000.  Management goals for fiscal 2001 include
continued increased sales efforts for these more refined products, as their
pricing levels rise to compete with higher fuel ethanol pricing.  The York,
Nebraska facility does have the ability to switch between fuel and industrial
production depending on the current market demands.

During fiscal 2000, High Plains derived approximately 82% of its revenues
from the sale of ethanol, with 73% attributed to fuel ethanol sales, and 9%
attributed to industrial/beverage ethanol sales.  Approximately 15% of
revenues were derived from the sale of distiller's grains, solubles, and
carbon dioxide gas, all of which are by-products of the ethanol production
process.  Approximately 3% of revenues were derived from state production
incentive programs.  The sale prices of ethanol (both fuel and to some extent
industrial) tend to vary with the wholesale price of unleaded gasoline,
although fuel ethanol prices tend to track gasoline prices more directly.
Prices for distiller's grains and solubles vary with the cost of grain and
other protein animal feeds in the marketplace.  Carbon dioxide prices
received by the company are set by long-term contracts and vary only with
production volumes.

Under the federal government's excise tax incentive program, gasoline
distributors who blend gasoline with ethanol receive a federal excise tax
rate reduction for each blended gallon, resulting in an indirect pricing
incentive to ethanol.  Originally scheduled to expire in September of 2000,
this excise tax credit has been extended until September 2007, and currently
provides a credit of $.054 per 10% blended gallon, gradually reducing to
$.051 per 10% blended gallon through 2007.  Consequently, the excise tax
credit should continue to enhance the value of fuel grade ethanol and provide
a level of continuity, which supports funding and expansion in the industry.

The ethanol industry also benefits from various state production incentives.
The Company currently receives approximately $.06 per gallon as a production
incentive from the state of Kansas for ethanol produced at its Colwich,
Kansas facility.  This incentive has been previously renewed by the Kansas
legislature, and is currently scheduled to expire in July 2001.  The Company,
along with other Kansas ethanol producers, is currently working to promote
the passage of an extension of this incentive through 2007, corresponding to
the current expiration of the federal excise tax credit for ethanol.  The
Kansas legislature has previously recognized the benefits ethanol provides to
Kansas grain farmers in the form of higher prices resulting from the
significant consumption of local grain, and the Company believes the
incentive has a good chance of being extended by the legislature.

Until recently, the state of Nebraska also provided a production incentive of
$.20 per gallon for the first 25 million gallons of annual ethanol production
at the Company's York, Nebraska facility.  The incentive was available for a
five-year period, and the Company completed its eligibility for benefits
under this program in November of 1999.  Nebraska has adopted a new program,
which grants a significantly smaller incentive payment for new or expanded
gallons produced within the state, but the Company does not currently qualify
to receive any benefits under this new program.  During one year of the
initial incentive program the Company failed to maximize approximately $1.7
million of its allowable annual incentive.  It is possible that some portion
of this amount may still be claimed during fiscal 2001 under a provision of
the original program that allows additional credit for expansions of
production after initial production is established.  Even with the absence of
this incentive during the third and fourth fiscal quarters of 2000, improved
yields and efficiencies at the York facility allowed it to contribute
operational profits to the Company's financial statement.


<PAGE>


Ethanol sales prices also reflect a premium due to ethanol's oxygenate (see
discussion below) and octane enhancing properties.  Demand for ethanol also
affects price.  Ethanol demand is influenced primarily by its cost in
relation to availability and cost of gasoline and other octane enhancing
products, and also by availability of alternative oxygenates (where
oxygenated fuels are required).  The dramatic increase in gasoline prices
subsequent to December 1999 has increased demand for ethanol as a fuel
extender, as the net cost of ethanol to blenders became less than unblended
gasoline.  With oil prices increasing from $10 to over $30 per barrel, and a
corresponding increase in gasoline pricing, ethanol has become a much more
competitive product in the marketplace.  While a similarly dramatic decrease
in the price of oil would have a negative effect on ethanol demand, such a
decrease is not currently anticipated by most industry analysts.  Other
federal programs such as the Reformulated Gasoline (RFG) program also affect
ethanol demand.  Specific designated areas of the country which have poor air
quality or which have elected to be subject to RFG II are required to comply
with RFG II vehicle emission standards.  Phase II of the RFG program (RFG II)
was implemented June 1, 2000, and contains more stringent fuel volatility
requirements than RFG.  Ethanol blending during hotter summer months requires
either the cooperation of refineries in producing a lower vapor pressure
gasoline blendstock, or a change in the way volatility is calculated, in
order to be in compliance.  Ethanol supporters have requested the
Environmental Protection Agency (EPA) and the United States Congress to
consider modification of these volatility restrictions for ethanol blended
fuels due to ethanol's other benefits, including a reduction in ozone forming
carbon monoxide emissions.  These requests are under consideration, but no
rulings or legislation granting such a waiver have been enacted to date.
During the summer of 2000, there was a shortage of this low volatility
blendstock, creating a shortage of RFG II gasoline in some areas.  While the
EPA did grant temporary waivers to certain areas during supply interruption
periods allowing non-compliant fuels to be used, many requested waivers were
refused.  In the absence of one of these solutions, ethanol demand created by
the RFG II program could decrease during hotter summertime months in
comparison to prior years.

Recent negative publicity received by ethanol's competing oxygenate, MTBE, in
California and other states could also affect ethanol demand.  Based on the
discovery of MTBE in local water supplies, California Governor Gray Davis
issued an executive order in March of 1999 calling for the elimination of
MTBE from California gasoline supplies by December 31, 2002.  Several other
states have also legislated restrictions on the use of MTBE on the basis that
the environmental risk of its use outweighs the air quality benefit.  Under
the provisions of the federal 1990 Clean Air Act, gasoline used in certain
air quality "non-attainment" areas must contain a certain oxygen content
during the wintertime months of September through March.  Ethanol and MTBE
are the two most common oxygenates, dividing the market approximately 15% to
85% respectively.  If MTBE use is limited, ethanol demand and usage could be
substantially increased.  However, California and others have requested the
federal government to waive the oxygenate requirements of the Clean Air Act,
and to allow the use of non-oxygenated fuels either locally or nationally.
The ethanol industry and certain agricultural supporters strongly oppose this
requested waiver.  Ethanol has not previously been widely blended in
California because of their more stringent state volatility requirements.
However, California now requires all MTBE blended gasoline pumps to carry
labels stating that MTBE blended gasoline has been determined to be hazardous
to the environment.  The state has also granted ethanol blended gasoline a
year round vapor pressure waiver to facilitate its use within the state.  The
upcoming wintertime oxygenate season should provide a good indication of the
extent to which California blenders will offer ethanol, and how much of this
large additional fuel market ethanol may be able to capture.

Nationally, there is also a movement to eliminate MTBE.  Recently proposed
legislation has focused on a compromise solution which would phase out MTBE
over a four year period, eliminate the oxygen requirement of the Clean Air
Act, and replace it with a renewable fuels content requirement that gradually
increases over the next ten years.  If this solution were adopted, it should
significantly increase the demand for ethanol over this time period.  In
short, current law is favorable to ethanol in that it requires oxygenate
blending.  If MTBE usage is reduced and the law is not changed, or if the
oxygen requirement is replaced with a similar "renewable fuels" requirement,
the ethanol industry stands to see stronger demand and significant benefit.
Conversely, the elimination of the oxygen requirement without adopting a
renewable fuels requirement (or other similar incentive for ethanol
blending), could have a significantly negative impact on both ethanol demand
and pricing.

The Company has sold a majority of its fuel ethanol production based on spot
market conditions and short-term seasonal contracts.  It is now attempting to
make greater use of longer-term contracts to sell fuel ethanol (see note 7 to
the financial statements).  Management believes that this strategy will
provide a better basis for long-term planning, especially in the areas of
production and margin predictability.  As of early September 2000 the Company
had contracted to sell almost all of its ethanol production through March of
2001.  While most of these sales were made on fixed price contracts,
approximately one-third were done on variable price agreements tied to
reported prices of either gasoline or ethanol.  The Company has also
announced an intention to increase its brokering or marketing of ethanol
produced by other manufacturers.  This would be accomplished either by
marketing product of others on a straight commission basis, or by purchasing
product of others to meet existing sales opportunities.  By increasing the
number of gallons it has to sell, management believes that it can be more
competitive in markets not readily available to small producers.  Revenues
for fiscal 2000 included approximately $11.4 million from marketed or
brokered ethanol products, up from $3.7 million in fiscal 1999.


<PAGE>


The Company's primary grain feedstocks during fiscal 2000 were sorghum (also
known as milo) and corn.  Production at the Colwich, Kansas and Portales, New
Mexico facilities relied almost exclusively on sorghum, while the York,
Nebraska plant utilized a mixture of approximately 60% corn and 40% sorghum.
The utilization of sorghum versus corn feedstocks is a function of supply and
cost per bushel.   The cost of these feedstock grains is dependent upon
factors that are generally unrelated to those affecting the price of ethanol.
Sorghum prices generally vary directly with corn prices.  Corn prices
generally vary with regional and worldwide grain supplies, and can be
significantly affected by worldwide weather, storage, planting and carryout
projections, government loan programs, exports, and other national and
international market conditions.

In an effort to reduce the impact of the volatility of these unrelated
markets, management announced in fiscal 1999 its intention to search for an
additional product that could be produced utilizing existing facilities, and
the Company's perceived expertise in fermentation based chemical products.
In fiscal 2000, glycerol was identified as the most promising alternative,
the Company acquired a license to utilize a new patented technology to
extract glycerol from its existing stillage by-product, and pilot plant
testing of the process was initiated in July of 2000.  Glycerol is used
primarily in personal care products and in the manufacturing of pet foods.
It has historically been produced synthetically, primarily as a by-product of
the production of bar soap.  Prices have ranged from $.50 per pound, to the
current market price of approximately $1.00 per pound, compared to the
current value of $.01 to $.03 per pound for the stillage from which it would
be extracted.  Production costs are expected to be between $.15 and $.30 per
pound.  While bar soap production has decreased, demand for glycerol appears
to be increasing, generating the current higher market prices.  Results of
the pilot plant tests are expected to be available for the annual
shareholder's meeting scheduled for November 29, 2000.

The Company also attempts to manage the market risk associated with
fluctuating feedstock and ethanol sales prices by periodically employing
certain strategies including grain futures and forward contracts.
Management's stated objective is to match a certain percentage of contracted
ethanol sales with forward grain positions in an effort to provide an
acceptable margin, while still allowing for some benefit from favorable moves
in one market or the other, and conversely taking some risk of loss from
unfavorable market movement.   When market conditions permit, the Company may
contract for a majority of its ethanol sales and feedstock costs at fixed
prices.  This risk management involves a complex evaluation of oil and
gasoline markets on the ethanol sales side, and of Chicago Board of Trade
(CBOT) grain futures prices and local supply issues on the grain side.

In February and March of 2000, the Company purchased six million bushels of
July corn futures positions on the CBOT at approximately $2.36 per bushel, in
correlation with over 6.0 million bushels of grain purchases for the fourth
quarter.  This position was meant to protect against a possible drought and
resulting price increase, but at the same time it "locked in" a higher price
in the event that grain prices dropped.  Related grain purchases are normally
subject to a cost adjustment relative to the CBOT price that accounts for
local market dynamics, referred to as a "basis" adjustment.  Basis levels at
the time for the Kansas and Nebraska plants were $.30 under the board ($.20
to $.30 under is historically common), and were expected to go even lower if
the drought became reality.  Instead of contracting for the basis adjustment
at a fixed amount, the Company was advised by its outside grain buyer to rely
only on its futures position and the Company expected to be able to contract
for a $.30 basis reduction as grain was delivered.  When the spring and early
summer brought good rains, current and futures grain prices went down, but
basis levels worsened, and the Company was unable to achieve the expected
$.30 basis reduction on grain purchases underlying the futures contracts.
Accordingly, as the Company took grain deliveries in the fourth quarter,
(without the expected basis reductions) and closed out its corresponding
futures positions, the result was grain costs that were $.30 per bushel
higher than expected ($1.8 million in aggregate).  The Company has
subsequently hired experienced grain buying professionals and taken the grain
buying function in-house, with a stricter policy on contracting both futures
and local basis grain pricing.  Grain prices continued to decline into August
of 2000 to 10 year record lows, and despite a slight increase into September
due to dry weather, the Company expects grain prices for fiscal 2001 to
remain at comparatively low levels.  As always, weather, exports, government
programs, and other factors all have potentially major impacts on grain
pricing, and any unexpected changes in those factors could adversely affect
the price which the Company pays for its feedstock.  As of mid-September
2000, the Company had basis contracts to purchase approximately 10 million
bushels of corn and milo for its three plants. The price to the Company for
most of this grain is fixed either by contract or by a combination of futures
and basis contracts.


<PAGE>


Unfortunately, lower grain prices have also brought lower prices for the
Company's feed by-products, wet and dried distiller's grains and solubles
(DGS).  While prices for feed by-products historically rise in the late fall
and winter, they also tend to follow corn prices, and have remained lower
than normal throughout the last fiscal year as a result.  Significant
improvement in these prices is not expected in the near future due to
(anticipated) continuing low grain prices, and an excess of competing protein
feed ingredients in the marketplace.  In an effort to remove some of this
detrimental reliance on corn pricing, the Company has emphasized the
production and marketing of wet rather than dried DGS, particularly at its
Portales, New Mexico and Colwich, Kansas facilities.  Wet DGS has certain
benefits that distinguish it from other competing feed products, and allow
some price premium to be realized in highly competitive markets.  The Company
has included the forward contracting of feed sales in its overall decisions
regarding risk management.

Management's risk management program also includes the oversight of purchases
of natural gas needed to produce steam to run the plants, and fuel to fire
the feed dryers.  Natural gas spot market prices have increased significantly
through the last half of fiscal 2000 and into the first quarter of fiscal
2001.  Fortunately, as of September 2000, although spot gas prices at the
Nebraska and New Mexico plants have almost doubled over this time period,
approximately two-thirds of the Nebraska plant's gas requirements are
contracted through December 2000 at prices lower than current spot market,
and almost all of the gas needs at the Kansas plant are supplied by a long
term (ten year) contract to take gas from the local landfill at prices
significantly reduced from the spot market.

In December 1997 the Company purchased its Portales, New Mexico ethanol
production facility.  The acquisition of the Portales plant added
approximately 13.5 million gallons per year to the Company's fuel grade
ethanol production capacity.  (The Company's production capacity for all
three facilities, including 18 million gallons at the Colwich, Kansas plant
and 36 million gallons at the York, Nebraska plant, totals approximately 67.5
million gallons of ethanol per year.)  However, start-up problems and high
grain prices in the Portales area contributed to significant operating losses
from that plant in fiscal 1998 and 1999.  Although local grain prices had
declined to more manageable levels by December 1999, management believed
continued ownership of that facility did not fit with its long term strategic
plan for the Company.  While products other than fuel grade ethanol were
being produced or planned for the Kansas and Nebraska facilities, higher
grain prices in New Mexico, and the fact that the Company was too large to
take advantage of a small ethanol producer's tax credit that might otherwise
be available for the plant, led to management's decision to sell.  As of
September 2000, the Company had executed a contract to sell the Portales
facility to a third party with closing on that sale expected to occur
sometime in late October or November of 2000.  In connection with the
execution of this contract, the fiscal 2000 financials include a $1.0 million
charge resulting from a write-down of the plant's value to its net realizable
value.


Results of Operations

Comparison of the fiscal years ended June 30, 2000 and June 30, 1999

Revenues

Net sales and revenues were $108.5 million for the fiscal year ended June 30,
2000, an increase of approximately $11.8 million or 12% from the $96.7
million in net sales and revenues for the fiscal year ended June 30, 1999.
The net increase resulted from several factors: increased production,
increased industrial/beverage grade sales volume, increased brokering or
marketing of other manufacture's ethanol, and a 3.8% increase in the average
delivered price of fuel grade ethanol.  The increased production in fiscal
2000 resulted from improved operating efficiencies at York, Nebraska and
Portales, New Mexico facilities.  While the increased industrial/beverage
grade sales volumes were the result of new marketing initiatives.  The
Company sold approximately 73.2 million gallons of fuel grade ethanol, of
which 7.4 million gallons were brokered, at an average price of $ 1.08 per
gallon during fiscal 2000.  During fiscal 1999, the Company sold
approximately 68.0 million gallons of fuel grade ethanol, of which 3.4
million gallons were brokered, at an average price of $ 1.04 per gallon.


<PAGE>


In fiscal 2000 the Company sold approximately 6.8 million gallons of
industrial/beverage grade ethanol, of which 1.9 million gallons were
brokered, at an average price of $1.42 per gallon.  During fiscal 1999, the
Company sold approximately 1.7 million gallons of industrial grade ethanol,
of which none were brokered, at an average price of $1.34 per gallon.  The
increased volume is the direct result of increased marketing efforts under
taken in fiscal 2000.

Included in product sales and revenues for fiscal 2000 and fiscal 1999,
respectively, are $1.3 million and $1.3 million in revenues for ethanol
produced under the Kansas incentive program.  These payments, based on the
Company's ratable share of overall Kansas ethanol production, equated to an
average incentive of $0.07 per gallon and $0.08 per gallon of ethanol
produced for fiscal 2000 and fiscal 1999, respectively.  The Kansas incentive
program has been renewed four times since its inception, most recently in
July 1997. This program is currently scheduled to expire July 1, 2001.
However, the Company maintains on-going efforts to extend the program beyond
the current expiration date. Management believes the Kansas legislature will
continue to support the incentive program in the future due to its economic
and agricultural benefits. Production tax credits from the State of Nebraska
recorded as revenues totaled $1.5 million and $5.2 million for the fiscal
years ended June 30, 2000 and 1999, respectively.  Under the Nebraska
program, the Company received, over a five year period starting in calendar
1995, an incentive in the form of a transferable production tax credit in the
amount of $.20 per gallon of anhydrous ethanol produced.  Not less than two
million gallons and not more than twenty-five million gallons produced
annually, at the York, Nebraska facility, were eligible for the credit.  The
availability of this credit, based upon original production capacity, expired
as of December 31, 1999.  The Nebraska legislature amended this program in
1999 to allow additional credits for new ethanol plants, or for increased
production capacity at current ethanol plants.  The Company is currently
evaluating increasing capacity at the York, Nebraska facility that may be
subject to the additional incentive, but at June 30, 2000 no decision had
been made regarding the increased production.

Currently, the State of New Mexico does not provide any ethanol production
incentives or tax credits.  Operating losses at the Portales plant, which is
located in a region of higher grain feedstock costs, were approximately $0.1
million in fiscal 2000 prior to allocated interest, selling, general and
administrative expenses, and asset impairment write-down. In light of
management's strategic goals of diversification, it was determined the
Portales, New Mexico facility did not complement the Company's portfolio and
was subsequently offered for sale.  In May 2000, the Company agreed to accept
an offer to sell the Portales, New Mexico facility, while maintaining the
rights to market the ethanol for a three to five year period.  The sales
contract price for the plant and other assets is $3,000,000 plus inventory at
85% of fair value at time of closing.  The Company recorded a $1.0 million
loss associated with the write-down of the Portales, New Mexico facility to
its estimated fair value based on the preliminary offer.  See footnote 2 to
the financial statements for additional information.

For the fiscal year ended June 30, 2000 distiller's grain and other by-
products sales increased to $17.1 million from $16.9 million for the fiscal
year ended June 30, 1999.  The increase in distiller's grain and other by-
products revenues is the net effect of lower per unit sales prices and
increased sales volume.  The increased sales volume is a direct result of
increased production at York, Nebraska and Portales, New Mexico.  Distiller's
grain prices vary with the cost of alternative feedstocks for animal
consumption such as grain.  Since grain prices trended down in fiscal 2000 as
previously discussed, distiller's grain prices followed this trend downward.
As noted earlier, significant improvement in distillers grain prices is not
expected in the near future.


<PAGE>


Cost of Products Sold

Cost of products sold, as a percentage of net sales and revenues, was 94.1%
and 95.1% for fiscal 2000 and 1999, respectively.  The fiscal 2000 decrease
in cost of products sold, as a percentage of net sales and revenues was due
to the decline in the average price per bushel for grain feedstocks and
higher average sales prices for ethanol.  However, this decrease was
partially offset by a decline in the average sale price of distiller's grain.
The Company's cost of grain averaged $2.05 per bushel during the fiscal year
ended June 30, 2000 compared to an average cost of $2.15 per bushel for the
fiscal year ended June 30, 1999.

Selling, General and Administrative

Selling, general and administrative expenses were 55% greater in fiscal 2000
than in fiscal 1999.  The increase was the result of increases in
administrative salaries and benefits expense resulting from increased
staffing, stock grants to key management personnel, increased professional
fees resulting from side-stream research and tax planning, increased investor
relations expenses, and increased Board of Directors fees and expenses.


Earnings

For the fiscal year ended June 30, 2000, the Company recorded net income of
approximately $0.2 million compared to net income of approximately $0.5
million for the fiscal year ended June 30, 1999.  Operationally gross profit
percentage increased from 4.9% of net sales and revenues in fiscal 1999 to
5.9% of net sales and revenues in fiscal 2000.  The Company's decrease in net
earnings from fiscal 1999 to fiscal 2000 was the result of the $1.0 million
write-down of the Portales, New Mexico facility to its net realizable value,
increased selling, general, and administrative expenses, and increased net
other expenses.  The $0.4 million increase in net other expenses was due to
decreased other income, which was primarily debt forgiveness recorded in
fiscal 1999, and decreased gains on sale of assets in fiscal 2000 compared to
fiscal 1999.  Income taxes were lower in fiscal 2000 due to reduced earnings
with the balance related to the increase in net deferred tax liabilities
compared to fiscal 1999.


Comparison of the fiscal years ended June 30, 1999 and June 30, 1998


Revenues

Net sales and revenues were $96.7 million for the fiscal year ended June 30,
1999, an increase of approximately $11.8 million or 13.9% from the $84.9
million in net sales and revenues for the fiscal year ended June 30, 1998.
The net increase resulted from several factors: a 8.0% decline in the average
sale price of fuel grade ethanol in fiscal 1999 offset by an increase in
fiscal 1999 production related to the Portales, New Mexico facility.  The
increase in production in 1999 at the Portales facility was due to the
facility being in operation for a full year in fiscal 1999 versus starting up
in March of fiscal 1998.  The Company sold approximately 68.0 million gallons
of fuel grade ethanol with an average price of $ 1.04 per gallon during
fiscal 1999.  During fiscal 1998, the Company sold approximately 48.6 million
gallons of fuel grade ethanol with an average price of $ 1.13 per gallon.

In fiscal 1999 the Company sold approximately 1.7 million gallons of
industrial grade ethanol at an average price of $1.34 per gallon.  During
fiscal 1998, the Company sold approximately 3.5 million gallons of industrial
grade ethanol at an average price of $1.36 per gallon.  Most of the fiscal
1998 business was exporting industrial grade ethanol to Eastern Europe, which
discontinued in fiscal 1999 due to the Eastern Europe economic depression.


<PAGE>


Included in product sales and revenues for fiscal 1999 and fiscal 1998,
respectively, are $1.3 million and $1.2 million in revenues for ethanol
produced under the Kansas incentive program.  These payments, based on the
Company's ratable share of overall Kansas ethanol production, equated to an
average incentive of $0.08 per gallon of ethanol produced for both fiscal
1999 and fiscal 1998.  The Kansas incentive program has been renewed four
times since its inception, most recently in July 1997. This program is
currently scheduled to expire July 1, 2001. However, the Company maintains
on-going efforts to extend the program beyond the current expiration date.
Management believes the Kansas legislature will continue to support the
incentive program in the future due to its economic and agricultural
benefits. Production tax credits from the State of Nebraska recorded as
revenues totaled $5.2 million and $5.1 million for the fiscal years ended
June 30, 1999 and 1998, respectively.  Under the Nebraska program, the
Company receives, over a five year period starting in calendar 1995, an
incentive in the form of a transferable production tax credit in the amount
of $.20 per gallon of anhydrous ethanol produced.  Not less than two million
gallons and not more than twenty-five million gallons produced annually, at
the York, Nebraska facility, are eligible for the credit.  The availability
of this credit, based upon original production capacity, will expire as of
December 31, 1999.  The Nebraska legislature amended this program in 1999 to
allow additional credits for new ethanol plants, or for increased production
capacity at current ethanol plants.  However, the Company has no current
plans to further increase its Nebraska plant capacity beyond the expansions
which it previously completed in 1995 and 1996.

For the fiscal year ended June 30, 1999 distiller's grain and other by-
products sales decreased to $16.9 million from $18.7 million for the fiscal
year ended June 30, 1998.  The decrease in distiller's grain and other by-
products revenues is primarily due to the substantially lower price received
for distiller's grain in fiscal 1999 as compared to fiscal 1998.  Distiller's
grain prices vary with the cost of alternative feedstocks for animal
consumption such as grain.  Since grain prices trended down in fiscal 1999 as
previously discussed, distiller's grain prices followed this trend downward.
As noted earlier, significant improvement in distillers grain prices is not
expected in the near future.

Cost of Products Sold

Cost of products sold, as a percentage of net sales and revenues, was 95.1%
and 99.8% for fiscal 1999 and 1998, respectively.  The fiscal 1999 decrease
in cost of products sold, as a percentage of net sales and revenues was
primarily due to the decline in the average price per bushel for grain
feedstocks.  However, this decline was partially offset by a decline in the
average sale price of ethanol and distiller's grain.  The Company's cost of
grain averaged $2.15 per bushel during the fiscal year ended June 30, 1999
compared to an average cost of $2.58 per bushel for the fiscal year ended
June 30, 1998.

Selling, General and Administrative

Selling, general and administrative expenses, excluding the $0.6 million
management restructuring costs in fiscal 1998, were 14.3% greater in fiscal
1999 than in fiscal 1998.  The increase was primarily due to increased
compensation from additional new staff and management level personnel in
fiscal 1999, customary raises, and severance.

Earnings

For the fiscal year ended June 30, 1999, the Company recorded net income of
approximately $0.5 million compared to a net loss of approximately $3.6
million for the fiscal year ended June 30, 1998.  In addition, the gross
profit percentage increased from less than 1% of net sales and revenues in
fiscal 1998 to 4.9% of net sales and revenues in fiscal 1999.  The Company's
net earnings in fiscal 1999 compared to a net loss in fiscal 1998 is
primarily a result of grain feedstock prices in fiscal 1999 and increased
expenses resulting from increased grain costs, in part from the Company's
grain futures contracts in fiscal 1998.  During the fourth quarter of fiscal
1999, the Company restated its third quarter of fiscal 1999 results in order
to apply a previously reported $0.9 million pre-tax gain on sale of equipment
located at its Portales, New Mexico facility to a reduction in the cost basis
of the Portales plant.  This reduction in the cost basis of the Portales
plant mitigates potential future impairment losses by reducing the carrying
value of the assets subject to impairment write-down under accounting rules.
After the restatement, the third quarter of fiscal 1999 earnings were $0.7
million instead of the $1.3 million earnings originally reported.


<PAGE>


Income Taxes

The Company has recognized income tax expense at the statutory federal rates,
plus applicable state rates, for financial reporting purposes for
substantially all pre-tax earnings reported after June 30, 1998 and expects
to continue to do so.  Most of this tax expense will be in the form of
increased deferred tax liabilities as opposed to currently payable
obligations.  As of June 30, 2000, the Company's deferred tax liabilities
were approximately $16.5 million.  For financial reporting purposes, these
deferred liabilities have been offset by deferred tax assets of approximately
$18.6 million, including net operating loss (NOL) carryforwards and various
tax credit carryforwards.  The deferred liabilities are not subject to
expiration, but the offsetting deferred assets are subject to expiration at
various future dates.  Certain of these deferred tax assets have been
reserved with a $3.5 million allowance, leaving approximately $1.4 million of
net deferred tax liabilities on the Company's balance sheet at June 30, 2000.
The reserve covers portions of federal and state operating loss
carryforwards, Small Ethanol Producer Tax Credits and Nebraska state
investment tax credits in excess of amounts expected to be utilized.  In the
past, the Company has considered tax-planning strategies intended to preserve
as much of the deferred tax assets as possible, however, at June 30, 2000, no
tax planning strategies were in place.  During the fiscal years ending June
30, 1999, and 2000, the Company recognized additional tax expenses from
providing allowances on the assets expected to expire.  At June 30, 2000, the
Company has substantial deferred tax assets subject to expiration, for which
allowances have not been provided.  When, based on available evidence and
management estimates, it becomes more likely than not that amounts of
deferred tax assets will expire before the benefit is realized, additional
allowances will be necessary resulting in the Company recognizing tax
expenses in amounts in excess of the statutory federal rates, plus state
rates.  See Note 8 to the financial statements for additional information,
including scheduled expiration dates of the Company's deferred tax assets.

If changes in the stock ownership of the Company cause the Company to undergo
an "ownership change" as broadly defined in Section 382 of the Internal
Revenue Code (a "Section 382 Event"), utilization of the Company's tax credit
and NOL carryforwards may be subject to an annual limitation.  The Company
does not expect this annual limitation to necessarily limit the total tax
carryforwards ultimately utilized in the future.  However, this annual
limitation could defer the timing of these tax benefits.  The Company does
not believe that a Section 382 Event has occurred during the last three
fiscal years.  However, application of the complex provisions of Section 382
may be subject to differing interpretations by taxing authorities.  The
Company has no current plans, which would be expected to result in a Section
382 Event in the immediate future. However, large purchases of the Company's
stock by a single stockholder could create a Section 382 Event over which the
Company has no control.

Seasonality

Historically, the Company generates higher gross profits during the second
and third fiscal quarters (October through March) of each fiscal year.  This
is due to production efficiencies experienced during the cooler months of the
year and the traditional decrease in grain feedstock prices during and
shortly following the autumn grain harvest.  Historically demand and average
selling prices for ethanol are higher during the winter months due to
federal, state and local governments' oxygenate programs.  However, during
the first and second quarters of fiscal 2000, gross profits were lower than
anticipated due to lower than normal average sale prices of ethanol.  This
was initially due to low oil and unleaded gasoline prices seen from July 1997
through February 1999 coupled with a lag in ethanol responding to increasing
gasoline prices in early fiscal 2000.  Since fuel ethanol replaces gasoline,
ethanol pricing has historically followed gasoline price trends.  With
gasoline prices achieving near 10-year highs, ethanol prices rebounded in the
third quarter, and remained atypically strong in the fourth quarter of fiscal
2000.  With some analysts predicting $25 to $30 per barrel oil and current
ethanol market fundamentals it makes ethanol an ideal gasoline extender.  In
light of these factors, management anticipates strong ethanol prices
throughout the first quarter of fiscal 2001, which is typically a period of
depressed prices, leading into the typically strong oxygenate season that
extends through the second and third quarters.  However, the legislative
issues regarding MTBE and/or RFG II or significant changes in gasoline prices
discussed earlier could have adverse affect on the long-term ethanol demand
and price.


<PAGE>


Liquidity and Capital Resources

The Company obtained funds during the last three fiscal years from several
sources, including cash from operations, exercise of stock options, and
proceeds from various credit facilities.  Cash provided by operating
activities was approximately $5.1 million in fiscal 2000.  Earnings plus non-
cash charges for depreciation and amortization, deferred income tax expense,
and the write-down of Portales, New Mexico facility generated cash flows of
approximately $5.6 million.  In addition to the earnings and non-cash
charges, receipts from notes receivable and increased accounts payable
contributed approximately $3 million to cash flows from operating activities.
These increases were offset by a $4.4 million increase in accounts
receivable.  Cash provided by operating activities was used to upgrade the
Company's facilities; approximately $1.5 million was reinvested in plant
equipment and upgrades.  An additional $1.5 million, of the cash flow, was
applied to debt and capital leases.  In fiscal 1999, cash flow from operating
activities amounted to approximately $4.1 million.

Cash and cash equivalents amounted to approximately $4.6 million as of June
30, 2000, compared to $0.3 million as of June 30, 1999, and $0.7 million as
of June 30, 1998.  As of June 30, 2000, the Company had working capital of
approximately $7.3 million compared to negative working capital of
approximately $(4.4) million as of June 30, 1999, and negative working
capital of $(6.4) million as of June 30, 1998.  The fiscal 2000 working
capital increase was primarily the result of increases in accounts
receivable, cash and cash equivalents, and accounts payable coupled with a
decrease in revolving lines-of-credit.

Liquidity risks have been partially mitigated by the refinancing of the
Company's credit facilities, during fiscal 2000. In December 1999, the
Company was able to refinance its revolving and reducing lines-of-credit with
a bank.  The bank provided the Company with a line-of-credit of up to $8
million and  $20 million of term debt.  The facilities carry interest rate
alternatives equal to the bank's prime rate or a rate based on LIBOR rate,
whichever the Company elects, plus a premium.  The credit facilities have a
term of five years. The Company's financing agreement requires the Company to
maintain certain financial ratios, fulfill certain net worth and indebtedness
tests, and limit the Company's capital expenditures.  At June 30, 2000, the
Company was in compliance with all the covenants.  The Company used the loan
proceeds of $20 million to extinguish its existing $16.9 million revolving
lines-of-credit, pay loan origination and closing cost of approximately $1.0
million, and strengthen its working capital and liquidity situation.   At
August 31, 2000, the Company's $8 million line-of-credit was fully available
and undrawn.  The Company believes it has the liquidity and borrowing
capacity to sustain normal cyclical downturns because of its current
financing arrangements.  However, should the Company experience an increase
in the cost of its feedstocks, a decrease in the demand for ethanol or
related oxygenates, or if instability in the oil markets results in decreased
prices for gasoline, for a sustained period of time then the Company's
liquidity and cash reserves could be inadequate.  If any of these events
should occur and cash reserves proved insufficient, the Company would have to
seek additional funding through additional financing, sale of stock, or the
sale of assets.

Capital expenditures amounted to approximately $1.5 million in fiscal 2000,
compared to $2.2 million in fiscal 1999 and $8.4 million in fiscal 1998.  In
fiscal 2000, approximately $0.8 million and $0.5 million of the capital
expenditures were for process plant equipment at the Colwich, Kansas and
York, Nebraska facilities, respectively, with the balance split between the
corporate office and Portales, New Mexico facility.  In fiscal 1999,
approximately $1.0 million of the capital expenditures were for modifications
to the York, Nebraska facility, with the balance split between the Colwich,
Kansas and Portales, New Mexico plants.  In fiscal 1998, approximately $4.4
million of the capital expenditures were related to the acquisition and
refurbishment of the Portales, New Mexico facility.  Of the remaining balance
of fiscal 1998 expenditures approximately $4.0 million was related to
modifications and upgrades at the York, Nebraska facility.

The Company has approximately $0.5 million committed to acquire capital
assets as of June 30, 2000.  These capital commitments are primarily for
modifications to the process plant equipment at the Colwich, Kansas facility.
In addition to the commitments, the Company is evaluating plans to increase
production capacity at both its Colwich, Kansas and York, Nebraska
facilities.  At this time no decision has been reached regarding the
expansion of either facility.  Also as previously disclosed in various press
releases and other communications, the Company is contemplating the addition
of a glycerol side-stream recovery system at its Colwich, Kansas facility.
The Company is currently in the pilot plant study phase of the project, if
the pilot plant yields the anticipated results the Company plans to move
forward with the fabrication of the recovery system.  At this time the
Company believes the recovery system would cost approximately $15 million
plus start-up costs.


<PAGE>


Item 7a.            QUANTITATIVE AND QUALITATIVE DISCLOSURES
                              ABOUT MARKET RISK


The Company produces ethanol from corn and milo, and as such is sensitive to
changes in the prices of these commodities.  The Company has traditionally
attempted to reduce the market risk associated with fluctuations in the
prices of its grain feedstock by periodically employing certain strategies,
including forward contracting, and transactions in grain futures or options.
As of June 30, 2000, the Company held the equivalent of 500,000 bushels of
grain futures positions, which establish a price ceiling of $1.96 per bushel.
In addition to the futures contracts, the Company had entered into forward
contract arrangements, both for the purchase of grain, and for the sale of
ethanol and related by-products. More details regarding these forward
contracts are included in Note 7 to the financial statements. Additional
information relating to this item is included in Item 7 -- Management's
Discussion and Analysis.

The Company had $19.0 million of debt related to its term debt credit
facility outstanding, as of June 30, 2000.  The debt carries a floating
interest rate, therefore the debt's carrying value approximates fair market
value as of June 30, 2000.  The Company, also entered into an interest rate
swap arrangement in fiscal 2000 to mitigate upside interest rate risk on
approximately fifty percent of the floating rate term debt outstanding.


Item 8            FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                              TABLE OF CONTENTS
                                                                    Page

Independent Auditors' Report                                          1

Financial Statements:

  Balance Sheets                                                      2

  Statements of Operations                                            3

  Statements of Stockholders' Equity                                  4

  Statements of Cash Flows                                            5

  Notes to Financial Statements                                     6 - 25


<PAGE>



                        INDEPENDENT AUDITORS' REPORT


Board of Directors
High Plains Corporation


We have audited the accompanying balance sheets of High Plains Corporation as
of June 30, 2000 and 1999, and the related statements of operations,
stockholders' equity, and cash flows for each of the three years in the
period ended June 30, 2000.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of High Plains Corporation as
of June 30, 2000 and 1999, and the results of its operations and its cash
flows for each of the three years in the period ended June 30, 2000 in
conformity with generally accepted accounting principles.


                                            ALLEN, GIBBS & HOULIK, L.C.


July 28, 2000
Wichita, Kansas

<PAGE>

                            HIGH PLAINS CORPORATION

                                BALANCE SHEETS

                             June 30, 2000 and 1999

                                    ASSETS

<TABLE>
<CAPTION
                                                    2000          1999
<S>                                             <C>           <C>
CURRENT ASSETS
   Cash and cash equivalents                    $ 4,886,011   $   330,672
   Accounts receivable:
      Trade (less allowance of $75,000
        in 2000 and 1999)                        10,026,422     5,081,396
      Production credits and incentives
        (less allowance of $124,222 in 2000
        and 1999)                                   329,829       917,717
   Inventories                                    4,283,561     5,038,199
   Note receivable                                   50,000     1,000,000
   Prepaid expenses                                 487,428       391,590
   Refundable income tax                             30,000            --

      Total current assets                       20,093,251    12,759,574


PROPERTY, PLANT, AND EQUIPMENT
   Land and land improvements                       450,403       450,403
   Ethanol plants                                93,366,635    92,994,900
   Other equipment                                  573,911       573,911
   Office equipment                                 389,446       308,699
   Leasehold improvements                            48,002        48,002
   Construction in progress                         914,586       892,664

                                                 95,742,983    95,268,579
   Less accumulated depreciation                (31,295,936)  (27,563,913)

      Net property, plant, and equipment         64,447,047    67,704,666


OTHER ASSETS
   Deferred loan costs (less accumulated
     amortization of $125,372 and $75,181
     in 2000 and 1999)                              849,244       122,116
   Other                                             13,054        26,578

      Total other assets                            862,298       148,694

                                                $85,402,596   $80,612,934

</TABLE>


<PAGE>

<TABLE>
                    LIABILITIES AND STOCKHOLDERS' EQUITY


<CAPTION>
                                                    2000          1999
<S>                                             <C>           <C>
CURRENT LIABILITIES
   Revolving line-of-credit                     $        --   $ 9,200,000
   Current maturities of long-term debt           2,507,138            --
   Current maturities of capital lease
     obligations                                    561,518       520,168
   Accounts payable                               8,695,216     6,693,746
   Accrued interest                                 295,772        55,342
   Accrued payroll and property taxes               779,199       721,463
   Accrued income tax payable                            --        10,000

      Total current liabilities                  12,838,843    17,200,719

Revolving line-of-credit                                 --     7,700,000
Long-term debt, less current maturities          16,492,860            --
Capital lease obligations, less current
  maturities                                        940,376     1,477,534
Other                                               273,253       426,107
Deferred income tax payable                       1,389,000       945,845

                                                 19,095,489    10,549,486

STOCKHOLDERS' EQUITY
   Common stock, $.10 par value, authorized
     50,000,000 shares; issued 16,453,798 and
     16,410,622 shares of which 276,847 and
     411,178 shares were held as treasury stock,
     respectively                                 1,645,380     1,641,062
   Additional paid-in capital                    37,695,277    37,486,655
   Retained earnings                             14,865,932    14,705,578

                                                 54,206,589    53,833,295

   Less:
     Treasury stock - at cost                      (710,849)     (863,911)
     Deferred compensation                          (27,476)     (106,655)

       Total stockholders' equity                53,468,264    52,862,729

                                                $85,402,596   $80,612,934

</TABLE>

[FN]
                   The accompanying notes are an integral
                     part of these financial statements.
                                       2

<PAGE>
                            HIGH PLAINS CORPORATION

                           STATEMENTS OF OPERATIONS

                   Years Ended June 30, 2000, 1999, and 1998

<TABLE>
<CAPTION>

                                          2000         1999         1998
<S>                                   <C>           <C>          <C>
Net sales and revenues                $108,531,461  $96,729,806  $84,863,782

Cost of products sold                  102,088,325   91,978,197   84,734,820

        Gross profit                     6,443,136    4,751,609      128,962

Selling, general, and administrative
expenses                                 3,249,161    2,096,731    1,834,725
Management restructuring costs                  --           --      600,000
Write down of property, plant, and
  equipment to estimated fair value.     1,022,567           --           --

      Operating income (loss)            2,171,408    2,654,878   (2,305,763)

Other income (expense):
  Interest and other income                179,148      297,135      128,155
  Interest expense                      (1,788,958)  (1,694,430)  (1,535,819)
  Gain on sale of equipment                 31,911      233,143       26,157

                                        (1,577,899)  (1,164,152)  (1,381,507)

      Net earnings (loss)
        before income taxes                593,509    1,490,726   (3,687,270)

Income tax (expense) benefit              (433,155)    (955,845)      94,340

      Net earnings (loss)             $    160,354  $   534,881  $(3,592,930)

Earnings (loss) per share - basic     $        .01  $       .03  $      (.22)

Earnings (loss) per share -
  assuming dilution                   $        .01  $       .03  $      (.22)


</TABLE>

[FN]
                   The accompanying notes are an integral
                     part of these financial statements.
                                       3


<PAGE>
                            HIGH PLAINS CORPORATION

                     STATEMENTS OF STOCKHOLDERS' EQUITY

                   Years Ended June 30, 2000, 1999, and 1998

<TABLE>
<CAPTION>
                                      Common Stock
                                   Number                 Additional
                                     of                    Paid-in       Retained    Treasury    Deferred
                                   Shares       Amount     Capital       Earnings     Stock    Compensation   Total
<S>                              <C>         <C>          <C>          <C>          <C>        <C>         <C>
Balance, June 30, 1997           16,396,622  $ 1,639,662  $37,348,072  $17,763,627  $(863,911) $(231,274)  $55,656,176

Exercise of stock options            14,000        1,400       19,600                                           21,000
Amortization of deferred
  compensation                                                                                    97,406        97,406
Compensation expense on stock
  options granted                                              89,495                                           89,495
Net loss for year                                                       (3,592,930)                         (3,592,930)

Balance, June 30, 1998           16,410,622    1,641,062   37,457,167   14,170,697   (863,911)  (133,868)   52,271,147

Amortization of deferred
  compensation                                                                                    50,564        50,564
Employee stock purchase                                                                          (23,351)      (23,351)
Compensation expense on
  stock options granted                                        29,488                                           29,488
Net earnings for year                                                      534,881                             534,881

Balance, June 30, 1999           16,410,622    1,641,062   37,486,655   14,705,578  (863,911)   (106,655)   52,862,729

Exercise of stock options and
  employee stock purchase plan       43,176        4,318      123,453                                          127,771
Re-issuance of treasury stock to
  employees and directors                                      85,169                153,062                   238,231
Amortization of deferred
  compensation                                                                                    79,179        79,179
Net earnings for year                                                      160,354                             160,354

Balance, June 30, 2000           16,453,798  $ 1,645,380  $37,695,277  $14,865,932 $(710,849)  $ (27,476)   53,468,264

</TABLE>
[FN]

                          The accompanying notes are an integral
                             part of these financial statements
                                             4



<PAGE>

                                    HIGH PLAINS CORPORATION

                                    STATEMENTS OF CASH FLOWS

                           Years Ended June 30, 2000, 1999, and 1998

<TABLE>
<CAPTION>

                                                         2000           1999          1998
<S>                                                 <C>            <C>            <C>
Cash flows from operating activities:
  Net earnings (loss)                               $    160,354   $    534,881   $(3,592,930)
  Adjustments to reconcile net earnings (loss) to
    net cash provided by operating activities:
      Provision for deferred income tax                  443,155        945,845            --
      Depreciation and amortization                    3,995,802      3,801,834     3,484,573
      Provision for uncollectible accounts
        receivable                                        55,165        124,222            --
      Write down of property, plant, and
        equipment to estimated fair value              1,022,567             --            --
      Gain on sale of property, plant, and
        equipment and equipment held for resale          (31,911)      (194,816)      (26,157)
      Amortization of deferred compensation               (1,623)        45,681        46,204
      Compensation expense on stock options granted           --         29,488        89,495
      Payments received on notes receivable            1,000,000         31,307       127,852
      Issuance of notes receivable                       (50,000)            --            --
      Changes in operating assets and liabilities:
        Accounts receivable                           (4,412,303)      (792,907)      336,561
        Inventories                                      753,378      1,413,369    (2,081,449)
        Equipment held for resale                             --        365,614       157,540
        Refundable income tax                            (30,000)        30,000       115,328
        Prepaid expenses                                 (95,838)      (306,422)      224,182
        Accounts payable                               2,001,470     (1,670,328)    3,249,622
        Accrued liabilities                              288,166       (259,888)      103,296
          Net cash provided by operating activities    5,098,382      4,097,880     2,234,117
Cash flows from investing activities:
  Proceeds from sale of property, plant, and equipment    22,000          5,000       167,090
  Acquisition of property, plant, and equipment       (1,476,006)    (2,182,724)   (8,359,325)
  Decrease in other non-current assets                    13,524         39,308        10,349
          Net cash used in investing activities       (1,440,482)    (2,138,416)   (8,181,886)
Cash flows from financing activities:
  Proceeds from long-term debt                        20,000,000             --            --
  Payments on long-term debt                          (1,000,002)            --            --
  Payments on revolving lines-of-credit              (16,900,000)    (2,700,000)   (4,900,000)
  Proceeds from revolving lines-of-credit                     --        900,000     9,700,000
  Payments on capital lease obligations                 (521,893)      (505,773)     (520,923)
  Increase in other non-current assets                  (974,616)       (41,312)      (41,505)
  (Increase) decrease in other non-current liabilities   (72,052)        43,399       (25,667)
  Re-issuance of treasury stock                          238,231             --            --
  Proceeds from exercise of options                      127,771             --        21,000
          Net cash provided by (used in) financing
            activities                                   897,439     (2,303,686)    4,232,905
          Increase (decrease) in cash and cash
            equivalents                                4,555,339       (344,222)   (1,714,864)
Cash and cash equivalents:
  Beginning of year                                      330,672        674,894     2,389,758
          End of year                               $  4,886,011   $    330,672   $   674,894

</TABLE>
[FN]
                                   The accompanying notes are an integral
                                     part of these financial statements.
                                                      5


<PAGE>

                                    HIGH PLAINS CORPORATION

                                NOTES TO FINANCIAL STATEMENTS


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Cash Equivalents - High Plains Corporation (Company) considers all
    highly liquid investments with a maturity of three months or less when
    purchased to be cash equivalents.

    The Company maintains its cash in bank deposit accounts that, at times,
    may exceed federally insured limits.  The Company has not experienced
    any losses in such accounts.  The Company believes it is not exposed to
    any significant credit risk on cash and cash equivalents.

    Inventories - Inventories are stated at the lower of cost (first-in,
    first-out) or market.  During the year ended June 30, 1998, the Company
    hedged certain grain commodity purchasing transactions related to
    anticipated production requirements.  This was done to reduce the risk
    of increased grain feed stock costs due to market price fluctuations.
    Readily marketable exchange-traded futures contracts were the
    designated hedge instruments since there is a high correlation between
    the market value changes of such contracts and the price changes on
    grain commodities.  Gains or losses arising from open and closed
    hedging transactions were included as an adjustment to the value of
    feedstock inventories and reflected in cost of products sold in the
    statements of operations when the underlying grain purchase contracts
    were fulfilled.  At the end of the year ending June 30, 1998, the
    Company stopped purchasing and holding futures contracts as hedge
    instruments, and sold all of its then held positions, resulting in a
    loss of approximately $1,600,000.  During the year ended June 30, 2000,
    the Company again purchased grain futures contracts to hedge grain
    purchasing transactions for the fourth quarter.  In the fourth quarter
    of fiscal 2000, it was determined the grain purchasing contracts
    underlying the futures did not have fixed cost reduction arrangements
    that were expected.  Accordingly, the Company's financial statement for
    the year ended June 30, 2000 includes additional grain costs of
    approximately $1,800,000 related to the absence of locked-in cost
    reductions on grain purchase contracts underlying the hedge
    instruments.  During the fourth quarter of fiscal 2000, the Company
    sold substantially all of its future derivative positions held during
    2000.

    Property, Plant, and Equipment - Property, plant, and equipment are
    recorded at cost.  The cost of internally-constructed assets includes
    direct and allocable indirect costs.  Plant improvements are
    capitalized, while maintenance and repair costs are charged to expense
    as incurred.  Periodically, a plant or a portion of a plant's equipment
    is shut down to perform certain maintenance projects which are expected
    to improve the operating efficiency of the plant over the next year.
    These expenses are generally incurred once a year and thus are
    capitalized and amortized over the future 12-month period benefited.
    Included in prepaid expenses at June 30, 2000 and 1999 were $328,266
    and $281,507, respectively, of these expenditures.

                                 (Continued)
                                      6

<PAGE>
                           HIGH PLAINS CORPORATION

                        NOTES TO FINANCIAL STATEMENTS
                                 (Continued)


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    Provisions for depreciation of property, plant, and equipment are
    computed using the straight-line method over the following estimated
    useful lives:
<TABLE>
<S>              <C>                          <C>
                 Ethanol plants               5 - 40 years
                 Other equipment              5 - 10 years
                 Office equipment             3 - 10 years
                 Leasehold improvements            5 years
</TABLE>
    Impairment of Long-Lived Assets - In accordance with the Financial
    Accounting Standards  Board (FASB) Statement No. 121, "Accounting for
    the Impairment of Long-Lived Assets and for Long-Lived Assets to be
    Disposed Of," the Company evaluates its assets for impairment whenever
    events or changes in circumstances indicate the carrying amount of the
    long-lived asset may not be fully recoverable.  Recoverability of
    assets is measured by a comparison of the carrying amount of an asset
    to the future net cash flows expected to be generated by the asset or
    by comparison of the carrying amount of the asset to the estimated fair
    value of the asset.  If such assets are considered to be impaired, the
    impairment loss recognized is equal to the excess of the carrying value
    of the assets over the fair values.  No such losses were recorded in
    fiscal years 1999 or 1998.  During 2000, events and circumstances
    indicated that long-lived assets associated with the Company's Portales
    facility are impaired.  Based on a preliminary purchase offering price,
    the estimated fair value of the long-lived assets was less than the
    carrying value.  This difference between estimated fair value and the
    carrying value has been recorded as a write down of property, plant,
    and equipment in the Company's fiscal year 2000 statement of
    operations.  Estimates of fair value are subject to revision in the
    future.

    Capitalized Interest - The Company capitalized interest of $46,147 in
    1998 as part of the cost of construction and refurbishing at the
    Portales, New Mexico facility.  No interest was capitalized in 2000 or
    1999.

    Deferred Loan Costs - The Company incurred certain costs in connection
    with obtaining financing.  The Company amortizes these costs over the
    life of the debt.

    Fair Value of Financial Instruments - The fair value of financial
    instruments recorded on the balance sheet are not significantly
    different from the carrying amounts.


                                 (Continued)

                                      7
<PAGE>
                           HIGH PLAINS CORPORATION

                        NOTES TO FINANCIAL STATEMENTS
                                 (Continued)



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    Income Taxes - The Company uses an asset and liability approach to
    financial accounting and reporting for income taxes.  Deferred income
    tax assets and liabilities are computed annually for differences
    between the financial statement and tax bases of assets and liabilities
    that will result in taxable or deductible amounts in the future based
    on enacted tax laws and rates applicable to the periods in which the
    differences are expected to affect taxable income.  Valuation
    allowances are established when considered necessary to reduce deferred
    tax assets to the estimated amount expected to be realized.  Income tax
    expense is the tax payable or refundable for the period plus or minus
    the change during the period in deferred tax assets and liabilities.

    Deferred Compensation - Under the Employee Stock Purchase Plan (Note 9),
    compensation is recognized as an expense in the period in which the
    employee performs the services, which is generally the period over
    which the stock appreciation is vested or earned.  With the exception
    of certain officers, the participating employees must continue to work
    for five years to acquire the full amount of the stock.  Compensation
    expense attributable to future services has been recorded as deferred
    compensation in the equity section of the balance sheets and is
    amortized over the period of future services.  Officers who have 10
    years of continuous service are allowed to prepay their obligation and
    receive the stock immediately and thus, the compensation attributable
    to their election is recognized immediately upon their election to
    participate in the plan.

    Stock-Based Compensation - The Company accounts for stock-based
    compensation for employees using the intrinsic value method prescribed
    in Accounting Principles Board Opinion No. 25, Accounting for Stock
    Issued to Employees, and related Interpretations.  Accordingly,
    compensation cost for stock options is measured as the excess, if any,
    of the quoted market price of the Company's stock at the date of grant
    over the amount an employee must pay to acquire the stock.  However,
    the Company accounts for stock-based compensation for non-employees as
    provided under FASB Statement No. 123, Accounting for Stock-Based
    Compensation.  The fair value of the option grant is estimated on the
    date of grant using the Black-Scholes option pricing model.



                                  (Continued)

                                       8

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)




1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    Recently Issued Accounting Standards - In June 1998, the FASB issued
    Statement No. 133, Accounting for Derivative Instruments and Hedging
    Activities (FAS 133).  FAS 133 establishes the accounting and reporting
    standards for derivative instruments, including certain derivative
    instruments embedded in other contracts, and for hedging activities.
    At June 30, 2000, the Company was not involved in any significant
    derivative activity; however, the Company had used derivatives in the
    past and may do so again in the future.  Accordingly, the impact of
    implementing FAS 133 will depend on the Company's future practices
    regarding derivative or hedging activities.  Other pronouncements
    issued by the FASB with future effective dates are either not
    applicable or not material to the financial statements of the Company.

    Management Restructuring Costs - These costs include severance expenses
    related to management changes during fiscal year ending 1998.

    Estimates - The preparation of financial statements in conformity with
    generally accepted accounting principles requires management to make
    estimates and assumptions that affect: (1) the reported amounts of
    assets and liabilities, (2) disclosures such as contingencies, and (3)
    the reported amounts of revenues and expenses included in such
    financial statements.  Actual results could differ from those
    estimates.

    Contingencies - In the normal course of business, the Company becomes
    party to litigation and other contingencies that may result in loss or
    gain contingencies.  The Company follows FASB Statement No. 5,
    Accounting for Contingencies (FAS 5).  Under FAS 5, loss contingencies
    are accrued if available information indicates that it is probable that
    a loss is incurred and the amount of such loss can be reasonably
    estimated.


                                  (Continued)

                                       9

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)



2.  DESCRIPTION OF BUSINESS

    Ethanol Production Business - The Company operates in one segment, as
    defined by FASB Statement No. 131, Disclosures about Segments of an
    Enterprise and Related Information, and its principal business is the
    operation of three plants in Kansas, Nebraska, and New Mexico for the
    distillation and production of industrial grade and fuel grade ethanol
    for sale to customers concentrated primarily in the western United
    States, primarily for mixture with gasoline to be used as a motor fuel.
    The Company also markets fuel ethanol produced by others.  The
    Company's operations are dependent upon state governmental incentive
    payments.  Kansas production incentive payments recorded as product
    sales and revenues in the accompanying financial statements were
    $1,238,545 for fiscal 1998, $1,336,642 for fiscal 1999, and $1,288,405
    for fiscal 2000.  The Kansas incentive program is currently scheduled
    to expire July 1, 2001.

    The state of Nebraska offered a transferable production tax credit in
    the amount of $.20 per gallon of ethanol produced for a period of 60
    months from date of first eligibility.  The credit was only available
    to offset Nebraska motor fuels excise taxes.  The Company transferred
    these credits to a Nebraska gasoline retailer who then reimbursed the
    Company for the credit amounts less a handling fee.  Not less than
    2 million gallons and not more than 25 million gallons of ethanol
    produced annually at the Nebraska facility were eligible for the tax
    credit.  Based on the Nebraska plant's original production capacity,
    this credit was no longer available after the first quarter of fiscal
    2000.  Nebraska production tax credit amounts recorded as revenues in
    the accompanying financial statements were $5,069,722 in fiscal 1998,
    $5,210,273 in fiscal 1999, and $1,500,470 in fiscal 2000.

    The market for the Company's ethanol product is affected by the federal
    government's excise tax incentive program.  This program, originally
    scheduled to expire in 2000, has been extended to September 30, 2007.
    Under this program, gasoline distributors who blend gasoline with
    ethanol receive a federal excise tax rate reduction for each blended
    gallon, resulting in an indirect pricing incentive to ethanol.  Under
    the recent extension, the current tax rate reduction equals $.054 per
    blended gallon containing 10% or more ethanol by volume.
    Alternatively, blenders may currently claim an income tax credit of
    $.54 per gallon of ethanol blended with gasoline.  However, in 2001,
    the tax rate reduction begins to decrease over the remaining life of
    the program.  The rate decreases to $.053 in 2001, $.052 in 2003, and
    $.051 in 2005.  The market for the Company's product is also affected
    through federal regulation by the Environmental Protection Agency under
    the Clean Air Act and the Reformulated Gasoline Program.


                                  (Continued)

                                       10

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)



2.  DESCRIPTION OF BUSINESS (CONTINUED)

    Portales Plant - In December 1997, the Company acquired an idle ethanol
    production facility in Portales, New Mexico, for $4,000,000.  After
    improvements were made, production began in March 1998.  In March 1999,
    the carbon dioxide (CO2) processing equipment from the Portales plant
    was sold (see Note 3).  The $933,000 difference between the carrying
    amount of the equipment and the sales price was treated as an
    adjustment to the original purchase price allocation.  This was in
    recognition of a change in the estimated fair value of the CO2 equipment
    used at the date of acquisition.  On May 10, 2000, the Company agreed
    to accept an offer for the Portales plant with a proposed purchase
    price of $3,000,000 for the plant and other assets plus inventory at
    approximately 85% of fair value at the time of closing.  The purchase
    was proposed to close within 90 days, subject to the buyer obtaining
    financing.  Based on this preliminary offer, management has revised its
    estimate of the fair value of the plant and other related assets and
    provided for an expense due to impairment of the Portales plant in the
    amount of $1,022,567.  If the plant and related assets are not sold for
    $3,000,000, the Company's estimate of fair value could be subject to
    revision in the future, possibly resulting in additional impairment
    expense.  No provision has been made at June 30, 2000 for a loss, if
    any, on the sale of the Portales inventory.

    The Portales plant recorded sales of $19,566,838, $16,293,795, and
    $3,705,971 and contributed net operating losses before an allocation of
    overhead, interest, and asset impairment write-down expense of
    ($100,831), ($1,833,970), and ($1,347,713) for the years ended June 30,
    2000, 1999, and 1998, respectively, excluding the impairment charge in
    the fourth quarter of fiscal 2000.


 3.  NOTES RECEIVABLE

    In March 1999, the Company disposed of certain CO2 processing equipment
    at the Portales facility in exchange for a $1,000,000 note receivable.
    The note was due in two installments with the final installment due
    August 1, 1999.  The note was paid in full during fiscal year 2000.
    The Company also entered into an agreement to provide carbon dioxide
    from its Colwich, Kansas, plant to the buyer of the equipment (see
    Note 7).


                                  (Continued)

                                       11


<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)



4.  INVENTORIES

    Inventories consisted of:
<TABLE>
<CAPTION>
                                                June 30,
                                           2000         1999
<S>                                     <C>          <C>
         Raw materials                  $1,276,938   $1,280,676
         Work-in-process                   493,064      481,287
         Finished goods                  1,469,053    2,251,228
         Spare parts                     1,044,506    1,025,008

                                        $4,283,561   $5,038,199
</TABLE>


5.  REVOLVING LINE-OF-CREDIT AND LONG-TERM DEBT

    In December 1999, the Company refinanced its revolving, reducing lines-
    of-credit with a credit facility with a bank providing a line of credit
    up to $8,000,000 and term debt of $20,000,000.  The line-of-credit
    carries an interest rate option equal to the bank's prime rate or a
    rate based on the LIBOR rate, whichever the Company elects.  At June
    30, 2000, the Company had not advanced any funds on the fully available
    line.  The term debt, at June 30, 2000, consists of three traunches
    with interest rates ranging from 8.85% to 8.97%.  The principal
    payments are due monthly as follows: $166,667 through December 2000,
    $187,500 from January 2001 through December 2003, $270,834 from January
    2004 through December 2004, and all remaining principal and interest
    due December 31, 2004.  Maturities of long-term debt for the next five
    years are as follows:

<TABLE>
<S>                   <C>               <C>
                      2001              $ 2,507,138
                      2002                2,250,000
                      2003                2,250,000
                      2004                2,749,998
                      2005                9,242,862

                                        $18,999,998
</TABLE>

    Collateral on the facility includes substantially all accounts
    receivables, inventory, general intangibles, property, and equipment
    located at the Company's ethanol facilities, and the Company's rights
    to payments under present or future production incentive contracts from
    the Ethanol Plant Production Credit Agreement with the state of
    Nebraska.

    The financing agreement contains various restrictions, including the
    maintenance of certain financial ratios, fulfilling certain net worth
    and indebtedness tests, and capital expenditure limitations.



                                  (Continued)

                                       12


<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)



6.  LEASES

    Sale - Leaseback Transaction - In 1996, the Company sold certain
    processing equipment for the production of industrial grade ethanol for
    $3,128,676 and concurrently entered into an agreement to lease the
    property back at $54,191 per month through December 12, 2002.  The sale
    of equipment was recorded resulting in a gain of $87,447 that was
    deferred and will be recognized over a period not to exceed the six-
    year term of the lease agreement.  The lease has been classified as a
    capital lease.  The equipment under lease is included in ethanol plants
    totaling $3,128,676, less accumulated depreciation of $572,157, for a
    net book value of $2,556,519 at June 30, 2000.

    Operating Leases - The Company leases 208 railroad cars under operating
    leases expiring in various years through June 30, 2005.  Annual rentals
    approximate $1,299,00 for all 208 cars.  These rail car leases require
    the Company to pay certain executory costs.  Corporate offices are also
    under a five-year lease expiring in 2003 that requires annual rentals
    of $31,159.  The Company also leased an aircraft from a company in
    which an officer of the Company has an ownership interest.  This lease
    was terminated during 2000; it required annual rentals of approximately
    $22,000.  Rent paid during the years ended June 30, 2000, 1999, and
    1998 was $1,484,143, $1,474,387, and $1,213,699, respectively.

    Future Minimum Lease Payments - The following is a schedule of future
    minimum lease payments for capital leases and noncancelable operating
    leases as of June 30, 2000:

<TABLE>
<CAPTION>
                                             Capital         Operating
          Year Ending June 30                Leases           Leases

<S>                                        <C>              <C>
                 2001                      $  656,322       $1,360,171
                 2002                         656,322        1,243,121
                 2003                         331,176          877,362
                 2004                           6,031          581,080
                 2005                           7,539          263,940

      Total minimum lease payments          1,657,390       $4,325,674
      Less amount representing interest       155,496

      Present value of net minimum lease
        payments                            1,501,894
      Less current maturities                 561,518

                                           $  940,376
</TABLE>

                                  (Continued)

                                       13

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)




7.  COMMITMENTS

    Forward Contracts - The Company periodically enters into forward
    contracts with suppliers and customers on both the purchase of grain
    and the sale of ethanol and by-products.  At June 30, 2000, the Company
    had forward contracts as follows:

<TABLE>
<CAPTION>
                                                                    Fixed Price
                                                   Quantity          in Total

<S>                                             <C>                <C>
      Purchase of corn and milo                  2,248,367 bu      $ 4,478,747
      Purchase of corn and milo                  1,310,000 bu         Unpriced
      Sale of dried and wet distillers grains       60,654 tons      2,323,369
      Sale of fuel grade ethanol                14,864,620 gal      17,787,423
      Sale of industrial/beverage grade ethanol    720,000 gal         882,720
      Sale of syrup and other by-products              412 tons          6,103

</TABLE>

    No losses are expected on these contracts because the Company intends
    to convert the grain feedstocks into ethanol and sell the ethanol at
    prices above costs to produce.  However the two commodities are subject
    to selling prices, which vary independently, and there can be no
    assurance that such prices will produce a profit in the future.  The
    Company customarily settles these contracts out by making or taking
    delivery of the product.

    The Company entered into contracts to sell carbon dioxide, a production
    by-product, to another company from its York, Nebraska, and Colwich,
    Kansas, facilities in 1998 and 1999, respectively.  The York, Nebraska,
    facility contract requires the Company to supply a minimum of 200 tons
    per day of carbon dioxide throughout the term of the contract at a
    fixed price of $7 per short ton.  The Colwich, Kansas, facility
    contract requires the Company to supply a minimum of 100 tons per day
    of carbon dioxide.  The Company will receive from $1.96 to $3.12 per
    ton of carbon dioxide produced based on a volume of 100 tons to in
    excess of 150 tons of daily production and other factors.  The
    contracts are scheduled to run through 2008 and 2007 for the York,
    Nebraska, and Colwich, Kansas facilities, respectively.

    Capital Expenditures - As of June 30, 2000, the Company was committed
    to approximately $500,000 of capital expenditures for improved
    replacements of ethanol equipment at the Colwich plant.


                                  (Continued)

                                       14

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)



8.  INCOME TAXES

    For federal and state income tax purposes, the Company has net
    operating loss carryforwards and federal general business tax credit
    carryforwards.  These result in deferred tax assets (operating loss
    carryforwards are computed at 34% and 6% for federal and state taxes,
    respectively), which, if the carryforwards are not used, expire as
    follows:

<TABLE>
<CAPTION>
     Expires in              Operating Loss Carryforwards            Net General
    Fiscal Year                                                     Business Credit
      Ending         Federal    Kansas      Nebraska   New Mexico    Carryforward
<S>   <C>          <C>         <C>         <C>         <C>           <C>
      2001         $  251,000  $155,000    $      --   $       --    $   86,000
      2002          2,186,000   386,000      112,000           --            --
      2003                 --        --      202,000           --            --
      2004            428,000        --       28,000           --            --
      2005                 --        --       23,000           --            --
      2007                 --   139,000           --           --     1,500,000
      2008                 --   220,000           --           --     1,500,000
      2009                 --    43,000           --           --     1,500,000
      2010                 --    55,000           --           --            --
      2012          1,664,000        --           --           --            --
      2013          2,760,000        --           --       37,000            --
      2014            589,000        --           --       19,000            --
      2015            678,000        --           --       22,000            --

                   $8,556,000  $998,000     $365,000      $78,000    $4,586,000
</TABLE>

    The general business credits expiring in fiscal 2001 are investment tax
    credits and the credits expiring in fiscal 2007 - 2009 are small
    ethanol producer tax credits.  In the event these credits would expire,
    the Company would receive an income tax deduction of 50% of the
    investment tax credit and 100% deduction of the small ethanol producer
    credit in the year of expiration.

    The Company also has a Nebraska investment credit carryforward of
    $2,725,000, expiring in fiscal 2009, which may be used to offset taxes
    in the state of Nebraska.


                                  (Continued)

                                       15

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)



8.  INCOME TAXES (CONTINUED)

    The tax net operating loss carryforwards and federal tax credit
    carryforwards discussed above and other matters result in deferred tax
    assets (DTAs) under FAS 109 totaling $18,580,000 at June 30,
    2000.  The book basis of property, plant, and equipment in excess of
    its tax basis results in a deferred tax liability of $16,494,000, and
    the valuation allowance offsets an additional $3,475,000, leaving a net
    deferred tax liability at June 30, 2000 of $1,389,000.

    Income taxes consisted of:

<TABLE>
<CAPTION>
                                                            June 30,
                                                2000          1999           1998
<S>                                         <C>           <C>            <C>
    Current tax (benefit) expense           $  (10,000)   $  10,000      $  (94,340)

    Tax effect of changes in deferred tax
      assets and liabilities:
        Book basis of plant and equipment
          in excess of tax basis               479,000       946,000      1,751,000
        Capital lease liability               (591,000)           --             --
        Nondeductible accrued expenses and
          other                                 66,155       (28,155)       (97,000)
        Increase in net operating loss
          carryforward                        (959,000)     (365,000)    (3,163,000)
        Decrease in tax credits
          carryforward                           7,000     1,263,000          1,000
        Change in Nebraska investment
          credit carryforward                2,336,000      (167,000)      (366,000)
        AMT credit carryforward and other           --       (16,000)      (122,000)
        Change in asset valuation allowance   (895,000)     (687,000)     1,996,000

    Deferred tax expense                       443,155       945,845             --

    Income tax expense (benefit)            $  433,155    $  955,845     $  (94,340)
</TABLE>

                                  (Continued)

                                       16

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)


8.  INCOME TAXES (CONTINUED)

    A reconciliation between the actual income tax expense and income taxes
    computed by applying the statutory federal income tax rate to earnings
    before income taxes is as follows:

<TABLE>
<CAPTION>
                                                                June 30,
                                                    2000          1999           1998
<S>                                             <C>           <C>            <C>
    Computed income tax expense (benefit),
      at 34%                                    $  201,800    $  506,850     $(1,253,672)
    Revised estimates of deferred tax assets    (1,206,000)           --              --
    Increase in valuation allowance, net of
      expired assets                             1,441,000       572,000       1,253,672
    Other, net                                      (3,645)     (123,005)        (94,340)

    Total income tax expense (benefit)          $  433,155    $  955,845     $   (94,340)

</TABLE>

    The Company has deferred income tax liabilities and assets arising from
    the following temporary differences and carryforwards:


<TABLE>
<CAPTION>

                                                       June 30,
                                                 2000           1999
<S>                                           <C>           <C>
    Deferred tax liabilities:
      Book basis of property, plant, and
        equipment in excess of tax basis      $16,494,000   $16,015,000

    Deferred tax assets:
      Net federal and state operating loss
        carryforwards                         $ 9,997,000   $ 9,038,000
      Nebraska investment credit carryforward   2,725,000     5,061,000
      General business credit carryforward      4,586,000     4,593,000
      AMT credit carryforward                     495,000       495,000
      Nondeductible accrued expenses and other    186,000       252,155
      Capital lease liability                     591,000            --

                                               18,580,000    19,439,155
    Less:  Valuation allowance                  3,475,000     4,370,000

                                              $15,105,000   $15,069,155

    Net deferred income tax liability         $(1,389,000)  $  (945,845)

</TABLE>

                                  (Continued)

                                       17

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)




8.  INCOME TAXES (CONTINUED)

    The valuation allowance has been established to reduce deferred tax
    assets as follows:

<TABLE>
<CAPTION>

                                                       June 30,
                                                 2000           1999
<S>                                           <C>           <C>
    Net federal and state operating loss
      carryforwards                           $  346,000    $  406,000
    Nebraska investment credit carryforward    1,724,000     3,871,000
    General business credit carryforward       1,405,000        93,000

                                              $3,475,000    $4,370,000

</TABLE>

    The valuation allowance was reduced during the year ended June 30,
    2000, because Nebraska investment credits carryforward were reduced in
    connection with settlement of certain tax matters with the state.
    Because the loss of these Nebraska income tax credits were previously
    fully provided for through the allowance, their reduction had no impact
    on earnings.  The valuation allowance was also increased to provide for
    partial loss of the Company's general business credit carryforward and
    partial loss of the operating loss carryforward expiring in 2002.  The
    operating loss expiring in 2001 is not provided for in the allowance
    because the Company expects to utilize it with earnings from
    operations.

    Historically, the Company's valuation allowance has been adequate to
    provide for expiring tax assets.  However, low fuel alcohol prices and
    other factors during the last four years have increased the amounts of
    deferred tax assets being carried forward by over 50% and, at the same
    time, significantly reduced the number of years remaining to generate
    taxable income necessary to utilize those assets prior to their
    expiration.

    During the fiscal year ended June 30, 2000, the Company studied the
    feasibility of certain tax planning strategies aimed at preservation of
    the expiring tax assets, and the Company intends to monitor the status
    of its expiring tax assets and the ongoing suitability of tax planning
    strategies.  However, the Company currently has no specific plan to
    implement a tax strategy, and accordingly, the allowance is based on
    the Company's best estimates of utilization of the tax assets through
    generation of future taxable income with no provision for the use of
    tax strategies or the cost thereof.  Accordingly, the Company's
    determination of the allowance for deferred tax assets is based on
    available evidence and is necessarily an estimate that is subject to
    change based on future events.


                                  (Continued)

                                       18

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)



9.  STOCK-BASED COMPENSATION

    The Company has three stock-based compensation plans which are
    described below.  Grants to employees under those plans are accounted
    for following APB Opinion No. 25.  Accordingly, no compensation cost
    has been recognized for options granted to employees in the financial
    statements, except under the employee stock purchase plan where
    compensation expense equals the excess of the fair market value of the
    shares over the exercise price on the grant date.  Grants to non-
    employees under the plans are accounted for under FAS 123.  There were
    no options granted to non-employees during the year ended June 30,
    2000.  For the 50,000 and 64,000 options granted to a non-employee in
    the years ended June 30, 1999 and 1998, $29,489 and $89,495,
    respectively, were recognized as compensation expense.  Had
    compensation cost for all the stock-based compensation plans been
    determined based on the fair value grant date, consistent with the
    provisions of FAS 123, the Company's net earnings and earnings per
    share would have been reduced to the pro forma amounts below:

<TABLE>
<CAPTION>
                                     2000          1999          1998
<S>                               <C>           <C>           <C>
    Net earnings (loss):
      As reported                 $ 160,354     $ 534,881     $(3,592,930)
      Pro forma                     (82,037)      404,382      (3,866,883)
    Earnings (loss) per share:
      As reported                      $.01          $.03           $(.22)
      Pro forma                          --           .02            (.24)

</TABLE>
    Fixed Stock Option Plans - The Company has two fixed option plans under
    which it may grant options to key employees, officers, and directors to
    purchase common stock, with a maximum term of 10 years, at the market
    price on the date of grant.  Options up to 1,200,000 shares may be
    granted under the 1990 plan and options up to 4,000,000 shares may be
    granted under the 1992 plan.  These options typically have a six-month
    vesting period from the date of grant.  The fair value under FAS 123 of
    each option granted is estimated on the date of grant using the Black-
    Scholes option pricing model with the following weighted average
    assumptions for 2000, 1999, and 1998:  dividend rate of 0% for all
    years; price volatility of 48.98%, 45.74%, and 40.91%; risk-free
    interest rates of 6.1%, 4.6%, and 5.7%; and expected lives of 5 years,
    4 years, and 3 years, respectively.


                                  (Continued)

                                       19

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)


9.  STOCK-BASED COMPENSATION (CONTINUED)

    A summary of the status of the two fixed plans at June 30, 2000, 1999,
    and 1998 and changes during the years then ended is as follows:

<TABLE>
<CAPTION>
                                 2000                  1999                 1998
                                     Weighted-             Weighted-            Weighted-
                            Number    Average    Number     Average    Number    Average
                              of      Exercise     of       Exercise     of      Exercise
                            Shares     Price     Shares      Price     Shares     Price
<S>                       <C>         <C>       <C>         <C>       <C>         <C>
    Outstanding and
      exercisable at
      beginning of year   1,918,318   $5.1069   1,795,918   $5.4443   1,818,193   $5.6612
    Granted                 230,000    1.5833     180,000    1.7870     496,325    4.5781
    Exercised               (20,000)   1.6723          --        --     (14,000)   1.5000
    Expired or surrendered   (5,000)   5.6300     (57,600)   5.2500    (504,600)   5.4832

    Outstanding and
      exercisable at
      end of year         2,123,318    4.7563   1,918,318    5.1069   1,795,918    5.4443

    Weighted average
      fair value per
      option of options
      granted during the
      year                            $   .88               $   .72               $   .71

</TABLE>

    The following table summarizes information about the outstanding
    options at June 30, 2000:

<TABLE>
<CAPTION>
                                                 Weighted-    Weighted
                                                  Average      Average
                                    Number       Remaining     Exercise
Range of Exercise Prices          Outstanding       Life        Price
<S> <C>                           <C>               <C>         <C>

    $1.06 to $2.63                  501,000         8.2         $1.85
    $3.13 to $4.81                  442,200         5.0          3.56
    $5.13 to $5.63                  748,118         2.8          5.34
        $8.34                       432,000         3.7          8.34

                                  2,123,318

</TABLE>
                                  (Continued)

                                       20

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)



9.  STOCK-BASED COMPENSATION (CONTINUED)

    The Company's 1990 and 1992 Stock Option Plans were approved for
    modification at the Company's November 1994 annual meeting of
    stockholders.  The approved amendments provide that when optionees
    exercise their options and remit the exercise payment to the Company,
    they may be granted a one-time option to purchase a like quantity of
    Common Shares as those options exercised (Reload Options).  The Reload
    Options shall have an exercise price equal to the closing sales price
    of the Company's Common Stock on the day in which the original options
    were exercised, and shall have an exercise period that extends to the
    later of one year from the date of grant of the Reload Option or the
    expiration date of the originally exercised option.  Options subject to
    reload included in total outstanding options at June 30, 2000 totaled
    1,512,000 shares.  These have a weighted average exercise price of
    $4.902.

    Employee Stock Purchase Plan - In August, 1995 the Company adopted a
    compensatory Employee Stock Purchase Plan, effective for a three-year
    period, to provide employees of the Company with an incentive to remain
    with the Company and an opportunity to participate in the growth of the
    Company.  The plan is administered by the Company's Board of Directors.
    Employees with one year of service are able to elect annually to
    purchase shares of the Company's common stock at a price equal to 50%
    of its lowest market value recorded between May 1 and August 1 of each
    calendar year.  The aggregate number of shares that may be purchased
    under the plan shall not exceed 80,000 as adjusted for stock splits or
    stock dividends.

    Employees must elect to purchase a designated number of shares on or
    before May 15 of each calendar year, except that the election for the
    first year may be made on or before January 31, 1996.  The number of
    shares that may be purchased by each employee is limited to 100 shares
    per year of service.  The shares are paid for by the participating
    employees through payroll deductions ratably over a five-year period
    and prepayment is not permitted.  The employee vests in the shares over
    the same five-year period based on the amounts paid.  Shares are
    transferred to the employee only at the end of the five-year period.
    Compensation cost is measured on August 1 of each year, which is the
    first date that both the purchase price and the number of shares are
    known.  The amount of compensation measured on the measurement date is
    recorded as deferred compensation and charged to expense over the
    periods in which the employee performs the related services, which is
    the same as the vesting period.



                                  (Continued)

                                       21

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)



9.  STOCK-BASED COMPENSATION (CONTINUED)

    The Company also adopted a stock purchase plan for certain key
    management personnel, which is similar to the above plan, except the
    aggregate number of shares available shall not exceed 250,000 and the
    employee is limited to 1,000 shares plus an additional 1,000 shares for
    each year of service.  Vesting is the same as above except that any
    employee who is also an officer of the Company and who has achieved at
    least 10 continuous years of employment shall have the option to prepay
    any balance due for shares purchased under the plan.  At that time, the
    Company will immediately transfer said shares to the employee.  The
    amount of compensation measured for this key management employee plan
    is on the same measurement date as set forth above for the employee
    plan.  Deferred compensation is recorded and charged to expense over
    the five-year vesting period except for those officers eligible to
    prepay.  For those officers, the expense is recognized immediately upon
    the measurement date.

    Employees and key management personnel elected to purchase 67,100
    shares with an exercise price per share of $1.59 through the stock
    purchase plan in 1999.  There was no election in 2000 or 1998.  The
    related deferred compensation recorded at  June 30, 1999 totaled
    $23,351.

    Amortization of the deferred compensation recognized in the income
    statement was ($1,623), $45,681, and $46,204 for the periods ending
    June 30, 2000, 1999, and 1998, respectively.  Forfeitures of shares in
    2000 from employee terminations totaled 54,516 shares.  The fair value
    under FAS 123 of each purchased share is estimated on the date of grant
    using the Black-Scholes option pricing model with the following
    assumptions: expected life of five years, dividend rate of 0%, risk-
    free interest rates of 5.5% to 6.8%, and price volatility of 47% to
    53%.  The weighted average fair value per vested share granted would be
    $2.85 at June 30, 2000.

    In January 2000, the Company's board of directors resolved to terminate
    the Employee Stock Purchase Plan.


                                  (Continued)

                                       22

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)


10.  MAJOR CUSTOMERS

    Sales to individual customers of 10% or more of net sales and revenues
    are as follows:

<TABLE>
<CAPTION>
                                                             Trade Accounts
                                                          Receivable Balance at
                Sales During the Year Ended June 30,            June 30,
    Customer       2000         1999         1998          2000        1999
<S>    <C>     <C>          <C>          <C>          <C>          <C>
       A       $   572,337  $14,127,657  $17,956,247  $       --   $   58,530
       B         7,623,696   16,434,233   15,255,183     757,366      612,850
       C        13,691,936    9,984,620    8,666,195     234,528      229,558
       D         7,256,603    9,196,843    5,633,279   1,063,815      884,916
       E        12,496,316           --       13,091     214,344           --

               $41,640,888  $49,743,353  $47,523,995  $2,270,053   $1,785,854
</TABLE>

11. EARNINGS PER SHARE

    Basic earnings per share is computed by deducting from net earnings or
    adding to net losses the income not available to common stockholders
    and dividing the result by the weighted average number of shares
    outstanding during the period.

    Diluted earnings per share is computed by increasing the weighted
    average shares outstanding by the number of additional shares that
    would have been outstanding if all dilutive potential common shares had
    been issued, unless the effect is to reduce the loss or increase the
    income per common share outstanding.


<TABLE>
<CAPTION>
                                             For the Year Ended 2000
                                         Income       Shares       Per Share
                                       (numerator)  (denominator)   Amount
<S>                                   <C>             <C>          <C>
    Basic EPS:
      Income available to
        common stockholders           $  160,354      16,148,899   $   .01
      Effect of Dilutive Securities
        Stock Options                                     63,531

    Diluted EPS:
      Income available to
        common stockholders plus
        assumed conversions           $  160,354      16,212,430   $   .01

</TABLE>

                                  (Continued)

                                       23

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)



11. EARNINGS PER SHARE (CONTINUED)

    Options outstanding at June 30, 2000 to purchase 2,059,787 shares of
    common stock with a range of exercise prices from $2.19 to $8.34, were
    not included in the computation of diluted EPS because the options'
    exercise prices were greater than the average market price of the
    common shares.  The options expire over a 10-year period.

<TABLE>
<CAPTION>
                                             For the Year Ended 2000
                                         Income       Shares       Per Share
                                       (numerator)  (denominator)   Amount
<S>                                   <C>             <C>          <C>
    Basic EPS:
      Income available to common
        stockholders                  $  534,881      15,999,444   $   .03

      Effect of Dilutive Securities
        Stock Options                                     15,540

    Diluted EPS:
      Income available to common
        stockholders plus assumed
        conversions                   $  534,881      16,014,984   $   .03
</TABLE>

    Options outstanding at June 30, 1999 to purchase 1,902,778 shares of
    common stock with a range of exercise prices from $1.63 to $8.34, were
    not included in the computation of diluted EPS because the options'
    exercise prices were greater than the average market price of the
    common shares.  The options expire over a 10-year period.

<TABLE>
<CAPTION>
                                             For the Year Ended 2000
                                         Income       Shares       Per Share
                                       (numerator)  (denominator)   Amount
<S>                                   <C>             <C>          <C>
    Basic EPS:
      Loss available to common
        stockholders                  $(3,592,930)    16,095,443   $  (.22)

    Diluted EPS:
      Loss income available to common
        stockholders plus assumed
        conversions                   $(3,592,930)    16,095,443   $  (.22)
</TABLE>

    Options outstanding at June 30, 1998 to purchase 1,795,918 shares of
    common stock with a range of exercise prices from $2.37 to $8.34, were
    not included in the computation of diluted EPS because the options'
    exercise prices were greater than the average market price of the
    common shares.  The options expire over a 10-year period.


                                  (Continued)

                                       24

<PAGE>
                            HIGH PLAINS CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                  (Continued)


12.  ADDITIONAL INFORMATION FOR STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                          2000          1999         1998
<S>                                    <C>           <C>          <C>
    Interest paid                      $1,548,528    $1,862,810   $1,656,796
    Income taxes paid                      30,000            --           --

</TABLE>
    The Company had the following non-cash transactions:

<TABLE>
<CAPTION>
                                          2000          1999         1998
<S>                                    <C>           <C>          <C>
    Purchase of plant and equipment
      in exchange for debt             $   26,085    $       --   $    5,000
    Increase in accrued compensation
      costs at implementation of
      employee stock purchase plan             --        23,351           --
    Decrease in deferred compensation
      from employee terminations           80,802         4,883       51,202
    Acceptance of receivable in exchange
      for sale of property, plant,
      and equipment                            --     1,000,000       28,275
</TABLE>

13.  401(k) PLAN

    The Company has a 401(k) Plan whereby all employees who are over the
    age of 19 and have 60 days of continuous service are eligible to
    participate.  Employees may contribute from 1% to 12% of their pay.
    The Company matches 100% of the first 3% of employee salary deferrals
    and 50% of the next 2% of employee salary deferrals.  The Company
    contributions to the Plan for the years ended June 30, 2000, 1999, and
    1998 were $187,169, $58,600, and $37,697, respectively.




<PAGE>


Item 9          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                     ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

Item 10             DIRECTORS AND EXECUTIVE OFFICERS OF
                               THE REGISTRANT

Section 16(a) Beneficial Ownership Reporting Compliance:

Under the securities laws of the United States, the Company's directors,
executive officers, and any persons holding more than ten percent of the
Company's securities are required to report to the Securities and Exchange
Commission and to the NASDAQ National Market System by a specified date his or
her ownership of or transactions in the Company's securities. To the Company's
knowledge, based solely on information filed with the Company, all of these
requirements have been satisfied, except as follows:  1)  David E. Dykstra
failed to timely file one Form 3 and one Form 4, representing one transaction
for the month of November, 1999.  This transaction was an initial option award
granted at the initiation of his employment with the company.  2) Daniel B.
Allison, Gregory D. Heuer, Christopher G. Standlee, and Stephen W. Van Norden,
each failed to timely file one Form 4 for the month of June, 2000.  Each of
these Form 4 reports reflected 4 transactions (6 transactions for Daniel B.
Allison), all of which were scheduled option exercises under the Company's
Employee Stock Purchase Plan.  The Form 3 and 4 reports for David Dykstra were
due December 10, 1999, and were filed February 10, 2000.  The Form 4 reports
for the remaining individuals were due July 10, 2000, and were filed July 12,
2000.

The balance of information relating to this item is hereby incorporated by
reference from the "Directors and Executive Officers" section of the
Company's 2000 Proxy Statement, which is anticipated to be filed with the
Securities and Exchange Commission within 120 days after the end of the
Company's fiscal year ended June 30, 2000.


<PAGE>


Item 11                     EXECUTIVE COMPENSATION

The information relating to this item is hereby incorporated by reference
from the "Executive Compensation" section of the Company's 2000 Proxy
Statement, which is anticipated to be filed with the Securities and Exchange
Commission within 120 days after the end of the Company's fiscal year ended
June 30, 2000.


Item 12             SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                             OWNERS AND MANAGEMENT

The information relating to this item is hereby incorporated by reference
from the "Security Ownership of Certain Beneficial Owners and Management"
section of the Company's 2000 Proxy Statement, which is anticipated to be
filed with the Securities and Exchange Commission within 120 days after the
end of the Company's fiscal year ended June 30, 2000.


Item 13                 CERTAIN RELATIONSHIPS AND RELATED
                                  TRANSACTIONS

The information relating to this item is hereby incorporated by reference
from the "Certain Relationships and Related Transactions" section of the
Company's 2000 Proxy Statement, which is anticipated to be filed with the
Securities and Exchange Commission within 120 days after the end of the
Company's fiscal year ended June 30, 2000.

Part IV

Item 14              EXHIBITS, FINANCIAL STATEMENT SCHEDULES
                           AND REPORTS FILED ON FORM 8-K

(a) Documents Filed as a Part of This Report

(1) Financial Statements

Statements of Income - Years Ended
      June 30, 2000, 1999 and 1998

    Statements of Stockholders' Equity - Years Ended
      June 30, 2000, 1999 and 1998

    Balance Sheets - June 30, 2000 and 1999

    Statements of Cash Flows - Years Ended
      June 30, 2000, 1999 and 1998

    Notes to Financial Statements

    Independent Auditors' Report on Financial Statements


<PAGE>


(2) Financial Statement Schedules

None.

(3) Exhibits

See Index to Exhibits attached hereto and incorporated by
reference herein.

(b) Reports on Form 8-K

During the fourth quarter of the period covered by this report, these
reports on Form 8-K have been filed.

April 17, 2000  Company announced fiscal 2000 third quarter
earnings  (Item 5 of Form 8-K).

May 25, 2000  Company announced pending sale of Portales, New
Mexico  (Item 5 of Form 8-K).


(c) Exhibits

Exhibits are listed in Item 14(a) (3) and filed as part of this report.

All forward-looking statements made in these materials and materials
incorporated herein by reference are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.  Such
statements are identified as including terms such as "may", "will", "should",
"expects", "anticipates", "estimates", "plans", or similar language.
Investors are cautioned that all forward-looking statements involve risks and
uncertainty.  Among the factors that could cause actual results to differ
materially from those anticipated by certain of the above statements are the
following: 1) legislative changes regarding air quality, fuel specifications
or incentive programs; 2) changes in cost of grain feedstock; and 3) changes
in market prices or demand for motor fuels and ethanol.  Additional
information concerning those and other factors is contained in the Company's
Securities and Exchange Commission filings, including but not limited to, its
Proxy Statement, Annual Report, quarterly 10Q filings, and press releases,
copies of which are available from the Company without charge.  The Company
does not undertake to update any forward-looking statement which may be made
from time to time by or on behalf of the Company.


<PAGE>


                                 SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized in Wichita,
Kansas on the _____th day of _________, 2000.

                         HIGH PLAINS CORPORATION

                         /s/Gary R. Smith
                         By: Gary R. Smith
                             President / Chief Executive Officer / Director


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on the behalf of the
Registrant and in the capacities and on the date indicated.


SIGNATURE                         TITLE                   DATE

                                  Chairman of the
                                  Board and
Donald D. Schroeder               Director

H.T. Ritchie                      Director

Daniel O. Skolness                Director

David C. Nesbitt                  Director

Gary R. Smith                     Director

                                  Vice President
                                  General Council
Christopher G. Standlee           Secretary

                                  Vice President
David E. Dykstra                  Sales and Marketing

                                  Vice President
Timothy W. Newkirk                Operations


<PAGE>


Index to Exhibits                                             Page 1 of 4


3-1   Articles of Incorporation, as amended, of the Company,
      (incorporated herein by reference to Exhibits 3.1 through 3.10 to
      the Company's Registration Statement on Form S-1, dated February 9,
      1993).

3-2   Certificate of Amendment to Articles of Incorporation of the
      Company, dated October 14, 1994 (incorporated herein by reference
      to Exhibit 3-7 to the Company's Annual Report on Form 10-K for
      the fiscal year ended June 30, 1995).

3-3   Certificate of Amendment of Articles of Incorporation of the
      Company, dated November 22, 1994 (incorporated herein by
      reference to Exhibit 3-8 to the Company's Annual Report on Form
      10-K for the fiscal year ended June 30, 1995).

3-4   Certificate of Correction of Certificate of Amendment to Articles
      of Incorporation of the Company, dated March 22, 1993,
      (incorporated herein by reference from Exhibit 4-2 to the
      Company's Registration Statement on Form S-8, dated January 16,
      1996).

3-5   Amended Bylaws of the Company, dated January 15, 1981,
      (incorporated herein by reference to Exhibit 3-5 to the Company's
      Annual Report on Form 10-K, dated June 30, 1998).

3-6   Amendment to Article III, Section 1 and 2 of the Amended Bylaws
      of the Company, dated March 6, 1986, (incorporated herein by
      reference to Exhibit 3-6 to the Company's Annual Report on Form
      10-K, dated June 30, 1998).

3-7   Amendment to Article V, of the Amended Bylaws of the Company,
      dated April 6, 1998, (incorporated herein by reference to Exhibit
      3-7 to the Company's Annual Report on Form 10-K, dated June 30,
      1998).

4-1   Form of Common Stock Certificate (incorporated herein by
      reference from Exhibit 4-1 to the Company's Registration
      Statement on Form S-1, dated April 18, 1988).

10-1  Ethanol production credit agreement with the State of Nebraska
      Department of Revenue dated October 9, 1992 (incorporated by
      reference from Exhibit 10-7 to the Company's Annual Report on
      Form 10-K, dated June 30, 1994).

10-2  High Plains Corporation 1990 Stock Option Plan (incorporated by
      reference from Exhibit 10-8 to the Company's Registration
      Statement on Form S-1, dated February 9, 1993).

10-3  High Plains Corporation 1992 Stock Option Plan (incorporated by
      reference from Exhibit 10-14 to the Company's Registration
      Statement on Form S-1, dated February 9, 1993).


<PAGE>


                                                               Page 2 of 4

10-4  Amendment to the Company's 1990 Stock Option Plan, dated November 18,
      1994, increasing the number of shares available under the
      plan and granting of additional options to replace certain
      options when exercised (incorporated by reference from Exhibit
      10-11 to the Company's Annual Report on Form 10-K dated June 30,
      1995).

10-5  Amendment to the Company's 1992 Stock Option Plan, dated November 18,
      1994, increasing the number of shares available under the
      plan and granting of additional options to replace certain
      options when exercised (incorporated by reference from Exhibit
      10-12 to the Company's Annual Report on Form 10-K dated June 30,
      1995).

10-6  Employment Agreement dated April 1, 1995, between the Company and
      Raymond G. Friend, for the continuation of employment through
      July 1, 2000 (incorporated by reference from Exhibit 10-18 to the
      Company's Annual Report on Form 10-K dated June 30, 1995).

10-7  High Plains Corporation 1995 Employee Stock Purchase Plan
      (incorporated herein by reference from Exhibit 4-14 to the
      Company's Registration statement on Form S-8, dated January 22,
      1996).

10-8  High Plains Corporation 1995 Key Management Employee Stock
      Purchase Plan (incorporated herein by reference from Exhibit 4-15
      to the Company's Registration Statement on Form S-8, dated
      January 22, 1996).

10-9  Stanley E. Larson Retirement and Consulting Agreement
      (incorporated herein by reference from Exhibit 10-14 to the
      Company's Annual Report on Form 10-K dated June 30, 1997).

10-10 Agreement between Centennial Trading, LLC, Michael Rowan and the
      Company to purchase feedstock for the Company, (incorporated
      herein by reference from Exhibit 10-14 to the Company's Annual
      Report on Form 10-K dated June 30, 1997).

10-11 Agreement between the Company and EPCO Carbon Dioxide Products,
      Inc., for the sale of raw CO2 for an initial period of five
      years, dated November 6, 1997, (incorporated herein by reference
      to Exhibit 10-11 to the Company's Annual Report on Form 10-K,
      dated June 30, 1998).

10-12 Employment agreement dated March 31, 1998, between the Company
      and Gary R. Smith, for an initial period of three years, expiring
      March 30, 2001, (incorporated herein by reference to Exhibit 10-
      12 to the Company's Annual Report on Form 10-K, dated June 30,
      1998).

10-13 Amendment to employment agreement between the Company and Raymond
      G. Friend, dated June 30, 1998, (incorporated herein by reference
      to Exhibit 10-13 to the Company's Annual Report on Form 10-K,
      dated June 30, 1998).


<PAGE>


                                                                Page 3 of 4

10-14 Lease Agreement between the Company and EPCO Carbon Dioxide
      Products, Inc. for the lease of land relating to CO2 Agreement
      listed under 10-10, (incorporated herein by reference to Exhibit
      10-14 to the Company's Annual Report on Form 10-K, dated June 30,
      1998).

10-15 Lease dated April 17, 1998 between the Company and Center Towers
      L.C. for a five year lease of office space, (incorporated herein
      by reference to Exhibit 10-15 to the Company's Annual Report on
      Form 10-K, dated June 30, 1998).

10-16 Employment agreement dated March 12, 1999, between the Company
      and Roger Hill, for an initial period of three years, expiring
      April 30, 2002, (incorporated herein by reference to Exhibit 10-
      16 to the Company's Annual Report on Form 10-K, dated June 30,
      1999).

10-17 Agreement between the Company and Kolmar Petrochemicals Americas,
      Inc., for the sale of fuel grade ethanol for an initial period of
      one year, dated March 2, 1999, (incorporated herein by reference
      to Exhibit 10-17 to the Company's Annual Report on Form 10-K,
      dated June 30, 1999).

10-18 Amendment to agreement between the Company and Kolmar
      Petrochemicals Americas, Inc., for the sale of fuel grade ethanol
      for an initial period of one year, dated March 10, 1999,
      (incorporated herein by reference to Exhibit 10-18 to the
      Company's Annual Report on Form 10-K, dated June 30, 1999).

10-19 Agreement between the Company and EPCO Carbon Dioxide Products,
      Inc., for the sale of raw CO2 for an initial period of fifteen
      years and dated March 30, 1999, (incorporated herein by reference
      to Exhibit 10-19 to the Company's Annual Report on Form 10-K,
      dated June 30, 1999).

10-20 Agreement between the Company and EPCO Carbon Dioxide Products,
      Inc., for the sale of CO2 Liquefaction Plant assets dated March 30,
      1999, (incorporated herein by reference to Exhibit 10-20 to
      the Company's Annual Report on Form 10-K, dated June 30, 1999).

10-21 Agreement between the Company and EPCO Carbon Dioxide Products,
      Inc., for lease of parcel located at the Company's Colwich,
      Kansas plant for an initial period of fifteen years and dated
      March 30, 1999, (incorporated herein by reference to Exhibit 10-
      21 to the Company's Annual Report on Form 10-K, dated June 30,
      1999).

10-22 Agreement between the Company and ICM, Inc., for sale of Dry
      Distillers Grain and Wet Distiller's Grain from Colwich, Kansas
      and York, Nebraska plants for an initial period of two years and
      dated March 29, 1999, (incorporated herein by reference to
      Exhibit 10-22 to the Company's Annual Report on Form 10-K, dated
      June 30, 1999).


<PAGE>

                                                                Page 4 of 4

10-23 Agreement between the Company and Black Hole Enterprises, Ltd, an
      affiliated entity, for lease of Aztec Airplane for an initial
      period of three years and dated October 20, 1998, (incorporated
      herein by reference to Exhibit 10-23 to the Company's Annual
      Report on Form 10-K, dated June 30, 1999).

10-24 Agreement between the Company and Black Hole Enterprises, Ltd, an
      affiliated entity, terminating the lease of the Aztec Airplane,
      as of November 4, 1999, attached hereto as exhibit 10-24.

10-25 Agreement between the Company and Natural Chem Industries, LLC
      for the sale of the Company's Portales, New Mexico facility dated
      May 10, 2000, attached hereto as exhibit 10-25.

10-26 Lease dated April 7, 2000 between the Company and Center Towers
      L.C. for a 37month lease of office space, attached hereto as
      exhibit 10-26.

11-1  Statement on Computation of Per Share Earnings (Please see note
      11 in the Financial Statements included herein).

23-1  Consent of Allen, Gibbs, and Houlik, L.C., independent certified public
      accountants.

27-1  Financial Data Schedule.


<PAGE>


Exhibit 10-24


                      TERMINATION OF LEASE AGREEMENT

  This Termination of Lease Agreement is made this 4th day of November,
1999 by and between Black Hole Enterprises, Ltd. (Black Hole) and High
Plains Corporation (High Plains).

  For good and valuable consideration, the parties agree as follows:

1. The lease agreement between the parties regarding the 1976
Aztec airplane is hereby terminated, effective on December 1,
1999.  High Plains will have the benefit and use of the
plane prior to termination, and will pay the normal monthly
expenses and the currently scheduled maintenance on the de-
icing system (props and windshield--approximately $3,000
total) and any other normal maintenance required during the
month (none is anticipated). Black Hole will assume the
risk of sale and engine overhaul as of lease termination.
After termination of the lease of the plane, should High
Plains wish to rent the plane, it will be rented at its
normal hourly rate as set by Sabris Corporation.

2.  High Plains shall have no further claims, rights or
responsibilities with respect to the airplane, and Black
Hole shall have all responsibility for ownership,
maintenance and care of the plane.

In witness whereof, the parties have executed this
agreement as of this 4th day of November, 1999.


High Plains Corporation      Black Hole Enterprises, Ltd.


   /s/Gary R. Smith             /s/Christopher G. Standlee
By_______________________    By_______________________
Gary R. Smith, President      Christopher G. Standlee, President



<PAGE>


Exhibit 10-25


                           ASSET PURCHASE AGREEMENT


  THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made effective as of May
10, 2000 between NATURAL CHEM INDUSTRIES, LLC/NEW MEXICO ("Buyer") and HIGH
PLAINS CORPORATION ("Seller").

RECITALS

  A.  Seller is the owner of certain assets located near Portales, New Mexico
which are known as the High Plains Ethanol Plant (the "Portales Plant").  The
Portales Plant includes all necessary machinery, equipment, utilities,
systems, processes, employees and permits to process grain, such as milo, to
produce approximately 14 million gallons per year of fuel-grade ethanol and
approximately 45,000 tons per year (dry weight basis) of various animal feed
products.  The ongoing business and operations of Seller at the Portales
Plant are referred to herein as the "Portales Business."

  B.  Buyer desires to purchase the Portales Plant as a going concern from
Seller and Seller desires to sell the Portales Plant on such basis to Buyer.
After the Closing as provided in this Agreement, the Portales Plant and
Portales Business shall be owned and operated by Buyer.

  In consideration of the foregoing and of the mutual promises, covenants,
representations, warranties and agreements set forth below, and intending to
be legally bound, Buyer and Seller agree to the following:

                                  ARTICLE I

                               THE TRANSACTION

  Section 1.1.  The Purchase Transaction.  On the Closing Date (as defined in
Section 13.1), unless otherwise provided herein, Seller shall sell to Buyer
and Buyer shall purchase from Seller all of the assets of Seller (the
"Portales Assets") used in the Portales Business, whether real, personal or
mixed, and whether tangible or intangible located at the Portales Plant.  The
Portales Assets shall include, without limitation, those assets identified in
the Schedule of Seller's Assets attached as Schedule 1.1 and the following
assets (except as provided in Section 1.2):

      (i)  Facilities.  The parcels of land described in Part (i) of the
Schedule of Seller's Assets (the "Land"), together with the buildings,
structures, fixtures, systems, if any, and other improvements of every kind
and nature erected, installed, located, situated or used on, in or under the
Land (collectively, the "Improvements"), and together with any and all
tenements, hereditaments and appurtenances belonging to the Land or any part
of the Land or in any way appertaining or beneficial to the Land, all
easements and covenants at any time existing or created for the benefit of
the Land, and all other rights, liberties and privileges of whatsoever kind
or character, and reversions, remainders, income, rents, issues and profits
at any time contained in, belonging to, arising from or in any way
appertaining or beneficial to the Land (collectively, the "Appurtenances").
Such Land, Improvements and Appurtenances are referred to in this Agreement
collectively as the "Facilities" or "Portales Plant" and are more
specifically described in Parts (i) and (vii) of the Schedule of Seller's
Assets;


<PAGE>


      (ii)  Inventory.  All of Seller's right, title and interest in and to
Seller's inventories ("Seller's Inventory") used by or in conjunction with or
related to or arising out of or manufactured by the Portales Business
including:

        (a)  Seller's inventory of grain, work-in-process and feed products
including, but not limited to, distillers dried grain (DDG) with solubles;
DDG, thin stillage,  thick stillage, wet cake, whole stillage, and any
mixture of such feed products (such feed products collectively referred to
herein as the "Portales Feed Products");

        (b)  Seller's inventory of undenatured ethanol, denaturant and fuel-
grade ethanol that has not been removed by Seller from the Facilities within
ten (10) days after the Closing;

        (c)  Seller's inventory of chemicals and enzymes including, but not
limited to, alpha amylase, glucoamylase, yeast and fermentation nutrients;

        (d)  Seller's inventories shall include, but are not limited to:

          (1)  all fuel-grade ethanol loaded into rail cars, trucks or other
modes of transportation which has not been removed from the Facilities within
ten (10) days after the Closing Date; and

          (2)  all feed products loaded into rail cars, trucks or other modes
of transportation which have not been moved from the Facilities at the
Closing Date; and

        (e)  Seller's inventories shall be deemed to exclude all of Seller's
fuel-grade ethanol or feed products which are in transit, outside the
Facilities, at the Closing Date.

      (iii)  Equipment and General Intangibles.  To the extent transferable
or assignable by Seller, all of Seller's right, title and interest in and to:

        (a)  the leases, subleases, contracts (excluding ethanol sales
contracts but including, without limitation, purchase orders and sales
orders), deeds, agreements, franchises, trade secrets, technology and know-
how agreements, licenses, permits, easements and rights of way, approvals and
authorizations which are appurtenant to the Portales Assets or used in or
intended for use in the operation of the Portales Assets and the conduct of
the Portales Business, but only insofar as Seller has right to assign the
same to Buyer;


<PAGE>


        (b)  insofar as such items are located at, belong to or are a part of
the Portales Plant, all manufacturing equipment, process control instruments,
test instruments, laboratory, research and development equipment, spare and
other replacement parts relating to or used by, for or in connection with any
and all property, plant, machinery and equipment, tools, supplies and office
equipment and furniture used in connection with or held incident to the
ownership, operation or use of the Portales Assets and the conduct of the
Portales Business;

        (c)  insofar as such items are located at, belong to or are a part of
the Portales Plant, the process, product and equipment licenses, permits,
computer software and systems, and patents, patent applications and
trademarks, if any, which relate to the Portales Assets and the operations of
the Portales Business by Seller;

        (d)  to the extent the following items are in the possession or
control of Seller, engineering drawings, specifications and other
information, whether in printed or electronic format, including general
engineering design, process flow diagrams, site plans, controls, electrical
and instruments, operating and maintenance requirements, heat and material
balances, utilities, structural, geotechnical studies, topographical drawings
and other similar information relating to the original design of the Portales
Plant by Howe-Baker Engineers, Tyler, Texas, and any subsequent modifications
or improvements to the Portales Plant by Seller or prior owners; and

        (e)  all other contracts, agreements and instruments, except those
expressly excluded pursuant to Section 1.2, primarily relating to, or
otherwise material to the conduct of, the Portales Business, including but
not limited to, shop rights, confidentiality and trade secret agreements with
employees and former employees of the Portales Business.

      (iv)  Accounts Receivable.  None;

      (v)  Refundable Deposits.  As listed in Exhibit B to Schedule 1.1, to
be attached hereto within ten (10) days after the execution of this
Agreement;

      (vi)  After-Acquired Assets.  All of the assets, whether real, personal
or mixed, and whether tangible or intangible, acquired by Seller in the
ordinary course of the Portales Business between the date of this Agreement
and the Closing Date and owned by Seller on the Closing Date ("After Acquired
Assets"), other than assets specifically excluded from the sale and purchase
contemplated by this Agreement under Section 1.2.  A true and complete list
of the After Acquired Assets shall be set forth on the Seller's After
Acquired Assets Closing Schedule, a copy of which is attached in blank hereto
as Schedule 1.1(vi), to be delivered by Seller to Buyer at Closing; and

      (vii)  Rights of Action.  Seller's right, title and interest in and to
any and all causes of action, suits, claims and other rights for damages or
other legal or equitable remedies against, involving or related to all
persons, firms, corporations, partnerships or other entities which provided
materials, labor and/or other services to Seller in connection with the
Portales Assets or Portales Business, but specifically excluding any accounts
receivable or rights or claims relating thereto.


<PAGE>


  Section 1.2.  Excluded Assets.  The following assets, as well as those
assets listed on the Schedule of Excluded Assets attached as Schedule 1.2 are
specifically excluded from the assets sold to Buyer pursuant to this
Agreement (the "Excluded Assets"):

      (i)  Books and records that Seller is required to retain pursuant to
any statute, rule, regulation or ordinance, provided that Seller permits
Buyer access to such books and records as provided in Section 7.1.2;

      (ii)  General books of account and books of original entry that
comprise Seller's permanent accounting or tax records, provided that Seller
permits Buyer access to such books as provided in Section 7.1.2;

      (iii)  All Accounts Receivable records for feed product customers;

      (iv)  The equipment described in Schedule 1.2;

      (v)  The inventory described in Schedule 1.2;

      (vi)  All accounts owing by and among the Seller and its Affiliates;

      (vii)  All assets located at the Facilities that are owned by third
parties and listed in Schedule 1.2;

      (viii)  All cash, cash equivalents and marketable securities of the
Portales Business existing at Closing;

      (ix)  Any refund of taxes or claim for refund of taxes, of any kind
relating to any period prior to the Closing Date and any deferred tax assets
of Seller;

      (x)  Any personal property owned by Seller's employees; and

      (xi)  Any property of any kind which is not located at the Portales
Plant, except for property that has been used at the Portales Plant and which
is temporarily off-site for repair or maintenance purposes as of the Closing
Date

                                 ARTICLE II
                            PURCHASE OBLIGATIONS

  Section 2.1.  Purchase Obligation.  The purchase obligation incurred by
Buyer to Seller in exchange for the Portales Assets and Portales Business
shall include:


<PAGE>


    2.1.1  Fixed Assets Purchase Price.  Three million dollars ($3,000,000)
to be paid to Seller on the Closing Date (the "Fixed Assets Purchase Price").
If the closing occurs after June 30, 2000 but on or before July 31, 2000, the
Fixed Assets Purchase Price shall be Three Million One Hundred Thousand
Dollars ($3,100,000).  The Fixed Assets Purchase Price shall include all of
the Portales Assets identified in Section 1.1, including machinery, equipment
and general intangibles, which are not expressly included in any other
provision of this Section 2.1.

    2.1.2.  No Accounts Receivable Purchase.  Buyer is not acquiring any
accounts receivable from Seller.

    2.1.3.  Inventory Purchase Price.  Buyer shall, within five (5) business
days after Buyer's receipt of the Certification of Inventory Price determined
pursuant to Section 3.1.2, pay the inventory purchase price (the "Inventory
Purchase Price") in accordance with Section 2.3.3(ii).

    2.1.4.  Total Purchase Price.  The Fixed Assets Purchase Price and the
Inventory Purchase Price are collectively referred to in this Asset Purchase
Agreement as the "Purchase Price" or "Total Purchase Price."

    2.1.5.  Earnest Money Deposit.  Within three (3) days following the
execution of this Agreement, Buyer shall deliver to Seller an earnest money
deposit (the "Earnest Deposit') in the amount of One Hundred Thousand Dollars
($100,000).  Seller shall, if the transactions contemplated by this Agreement
are not concluded as a result of Buyer's breach of this Agreement, or for any
reason other than Seller's breach of this Agreement, retain the Earnest
Deposit.  If Buyer breaches this Agreement by failing to timely close its
purchase of the Portales Plant or otherwise, Seller's retention of the
Earnest Deposit shall be deemed to be payment of Seller's liquidated damages
arising from such breach and Seller shall have no other claim, cause of
action, right or remedy against Buyer for breach of this Agreement.


<PAGE>


  Section 2.2.  No Accounts Receivable Purchase Price.  Buyer is not
purchasing any accounts receivable from Seller.  No part of the Purchase
Price relates to accounts receivable held by Seller at the Closing Date as a
result of its operation of the Portales Business, including accounts
receivable from customers of the Portales Feed Products to which Buyer will
supply such products after the Closing.

  Section 2.3.  Payment of The Purchase Price.  The Purchase Price shall be
payable as follows:

    2.3.1.  Fixed Assets Purchase Price.  On the Closing Date, Buyer shall
pay to Seller the Fixed Asset Purchase Price, minus the Earnest Deposit, by
wire transfer as provided in Section 2.3.3 (i).

    2.3.2.  Inventory Purchase Price.  On the Closing Date, or as soon
thereafter as Seller has presented required documents pursuant to Section
2.3.3. (ii)(a) and  (b), Buyer shall pay to Seller the Inventory Purchase
Price by wire transfer or letter of credit as provided in Section 2.3.3.(ii).

    2.3.3.  Payment Method.

      (i)  Payment Of Purchase Price  The Fixed Assets Purchase Price, minus
the Earnest Deposit, shall be paid on the Closing Date in cash by wire
transfer of immediately available funds to the account designated by Seller
in writing at least two (2) business days prior to the Closing Date.

      (ii)  Payment Of Inventory Purchase Price.

        (a)  Payment By Wire Transfer.  Buyer shall pay the Inventory
Purchase Price when due in cash by wire transfer of immediately available
funds to the account designated by Seller in writing at least two (2)
business days prior to the Closing Date.  Payment of the Inventory Purchase
Price requires Seller's presentation to Buyer, at Closing or as soon
thereafter as practicable, of the following documents:  (i) Seller's payment
request;  (ii) an original, or duplicate original, of the Inventory
Certificate issued by an independent inventory inspector (the "Inventory
Inspector") in accordance with Section 3.7; and (iii) Seller's Certification
of Inventory Price issued in accordance with Section 3.1.2.

        (b)  Optional Payment By Letter of Credit.  In lieu of payment by
wire transfer as herein provided, Seller may require Buyer to post, at least
five (5) days prior to the Closing Date, an irrevocable commercial letter of
credit  as the method of payment of the Inventory Purchase Price.  In such
case payment of the Inventory Purchase Price under the letter of credit shall
be due three (3) days from presentation by Seller, or Seller's collecting
bank, at the counters of the issuing bank of the following documents:  (i)
Seller's payment draft;  (ii) an original, or duplicate original, of the
Inventory Certificate issued by the Inventory Inspector in accordance with
Section 3.7; and (iii) Seller's Certification of Inventory Price issued in
accordance with Section 3.1.2.


<PAGE>


  Section 2.4.  Allocation of Purchase Price.  The Purchase Price shall be
allocated among the Portales Assets and Portales Business as set forth on the
Purchase Price Allocation Closing Schedule, attached in blank as Schedule
2.4, which Buyer shall deliver to Seller no later than twenty (20) days prior
to Closing.  Seller shall have five (5) days in which to give notice of
objection to Buyer's allocation.  If no notice of objection is given, the
allocation set forth in Buyer's Purchase Price Allocation Schedule shall be
used by Buyer and Seller for purposes of tax accounting and reporting their
respective tax obligations.  If Seller does object, Buyer may use Seller's
book value as the price allocation for any specific asset, to the extent such
book value does not exceed the Purchase Price.

                                 ARTICLE III
                                  INVENTORY

  Section 3.1.  Buyer's Inventory Purchase; Calculation Of Inventory Price.

    3.1.1.  Buyer's Inventory Purchase.  Buyer shall purchase Seller's
inventories on hand at the Portales Plant on the Closing Date in accordance
with the terms of this Article III.

    3.1.2.  Calculation Of Inventory Price; Inventory Valuation.

      (i)  Inventory Price Calculation.  The aggregate purchase price to be
paid by Buyer for Seller's Inventory, as defined in Section 1.1.(ii), on hand
as of the Closing Date shall be calculated by multiplying the quantities of
the various goods comprising the inventories, as set forth on the Inventory
Certificate issued by the Inventory Inspector pursuant to Section 3.7, by the
price for each bushel, CWT, ton, gallon or other unit measure of such
inventories determined pursuant to this Article III.  The number of bushels,
CWT's, tons, gallons or other units, the price per bushel, CWT, ton, gallon
or other units and the aggregate price for all inventories shall be noted in
Seller's Certification of Inventory Price, a form of which is attached in
blank as Certificate 3.1.2.  Seller's Certification of Inventory Price shall
be delivered to Buyer at Closing or as soon thereafter as practicable but not
later than five (5) days after Closing unless extended by mutual agreement of
the parties.

      (ii)  Inventory Valuation Basis.  All of Seller's Inventory, and all
Inventories acquired after the date hereof and before the Closing Date, are
reflected at book value  determined on a first-in, first-out cost basis.

  Section 3.2.  Ethanol and Denaturant Not Removed Within Ten Days After
Closing.  Seller plans to retain title to all ethanol and denaturant located
on-site at the Portales Plant as of the Closing Date.  However, Buyer shall
purchase Seller's inventory of undenatured ethanol, denaturant and fuel-grade
ethanol that has not been removed by Seller from the Portales Plant within
ten (10) days after the Closing.  The per gallon purchase price to be paid to
Seller shall be ninety cents ($0.90) for each gallon of ethanol or fuel-grade
ethanol and Seller's actual cost for each gallon of denaturant.  Gallons
shall be determined on a temperature corrected basis at 60_ F.


<PAGE>


  Section 3.3.  Distillers Dried Grain and Other Portales Feed Products.
Buyer shall purchase Seller's entire inventory of the Portales Feed Products
for cash at a price equal to eighty-five percent (85%) of the contract price,
per applicable unit measure, at which Seller has sold each of the Portales
Feed Products.  The contract price used for each of the Portales Feed
Products shall be the price that is applicable to sales made of such product
during the five (5) day period ending five (5) days prior to the Closing
Date.  The price for any of the Portales Feed Products in Seller's Inventory
that are not under contract by Seller as of the Closing Date shall be
determined by multiplying the total units of such products by eighty-five
percent (85%) of the average price at which Seller sold each unit of such
product on a "spot" basis during the five (5) day period ending five (5) days
prior to the Closing Date.

  Section 3.4.  Grain.  Buyer shall purchase Seller's entire grain inventory
for cash at a price equal to eighty-five percent (85%) of the bushel or CWT
price for "No. 2 Yellow grain sorghum" for the "Portales Area" as set forth
in the Eastern New Mexico Grain report issued by the USDA's New Mexico office
for the nearest Tuesday that is at least five (5) days before the Closing
Date.  If a range of prices is reported, the grain purchase price shall be
the average of the high and low prices per bushel or CWT.

  Section 3.5.  Work-in-Process.  The number of bushels or CWT of grain that
constitute Seller's work-in-process at the Closing Date shall be determined
in accordance with Seller's ordinary accounting procedures.  Buyer shall
purchase the number of bushels or CWT of grain constituting the work-in-
process for cash at a price equal to the per bushel or CWT price for Seller's
inventory of grain determined in accordance with Section 3.4.

  Section 3.6.  Chemicals, Denaturant and Other Goods.  Buyer shall purchase
Seller's entire inventory of chemicals, denaturant, yeast, enzymes, and other
items of inventory, not otherwise expressly provided for herein, for an
amount equal to eighty-five percent (85%) of Seller's actual cost for such
items.  The cost of such items shall be determined in accordance with
Seller's ordinary accounting procedures.

  Section 3.7.  Inventory Certificates.  The number of bushels, CWT, gallons,
bushel equivalents or other units of goods comprising Seller's Inventory, as
defined in Section 1.1.(ii), on hand as of the Closing Date shall be set
forth in an Inventory Certificate  (the "Inventory Certificate") to be issued
by the Inventory Inspector and approved by Seller and Buyer on or before the
Closing Date.  Buyer and Seller shall have one (1) business day to make
written objection to any information contained in the Inventory Certificate.
Such objection shall be given by telefax or hand-delivery to the Inventory
Inspector with a copy to the other party.  If no objection is timely made,
the information contained in the Inventory Certificate shall be conclusively
deemed accurate.  Buyer shall bear the cost of the Inventory Inspector.
Seller and Buyer shall fully cooperate with the Independent Inspector and
shall use their best efforts to cause the Independent Inspector to issue its
Inventory Certificate as of the Closing Date, or as soon thereafter as is
practicable.


<PAGE>


  Section 3.8.  Taking Of Inventory and Adjustments.  During the three (3)
calendar days immediately prior to the Closing Date, the Inventory Inspector
will conduct a physical inventory of (i) Seller's Inventory and (ii) the
Fixed Assets located at the Portales Plant.  Seller and Buyer shall observe
the taking of the physical inventory.  The Inventory Inspector shall prepare
a closing inventory schedule (the "Closing Inventory Schedule") and a fixed
assets schedule (the "Closing Fixed Assets Schedule") which shall provide the
basis for the Inventory Certificates to be issued required under Section 3.7.
If the assets listed on the Closing Fixed Assets Schedule differs from the
assets listed on the Schedule of Seller's Assets (Schedule 1.1), an
adjustment will be made to the Purchase Price based on the fair market value
of the item in question.  Buyer acknowledges that the Portales Plant
Manager's vehicle is not part of the Portales Assets to be sold to Buyer.  If
fixed assets have been acquired by Seller between the date of this Agreement
and the Closing, the value of such fixed assets shall be added to the
Purchase Price, provided Buyer has consented to the purchase of any asset in
excess of $10,000.

                                 ARTICLE IV
                  ASSUMPTION OF CERTAIN LIABILITIES OF SELLER;
                BULK SALES AND PAYMENT OF POST CLOSING INVOICES

  Section 4.1  Assumption Of Certain Of Seller's Liabilities

    4.1.1.  Buyer's Assumption Of Liabilities.  At Closing, Buyer shall
assume Seller's debts, liabilities and obligations, listed below or on
Seller's Schedule Of Liabilities Assumed attached as Schedule 4.1.1., which
have arisen in the ordinary course of Seller's operation of the Portales
Business as follows:

      (i)  for the payment of grain, enzymes, yeast, denaturant and other
goods essential to the operation of the Portales Business which have been
ordered by Seller pursuant to purchase orders issued prior to the Closing
Date, which have not been delivered to the Portales Plant or paid for by
Seller as of the Closing Date and which are to be delivered within ninety
(90) days of the Closing Date; and

      (ii)  under sales contracts between Seller and third parties for the
supply of the Portales Feed Products to be delivered within six (6) months of
the Closing Date.

    4.1.2.  Limited Assumption By Buyer.  Except as otherwise expressly
provided in this Agreement, Buyer is not, and has no intention of acquiring,
discharging, assuming or becoming responsible for the performance or payment
of any debts, liabilities or obligations of Seller that were incurred in
connection with its ownership or operation of the Portales Assets or the
Portales Business.

    4.1.3.  Notice To Third Parties.  At least fifteen (15) days prior to the
Closing Date, Buyer shall give notice to each third party listed on Seller's
Schedule Of Liabilities Assumed of the contemplated sale of the Portales
Assets and Portales Business to Buyer and that, effective as of the Closing
Date, Buyer shall assume Seller's liabilities and obligations under the
agreement between Seller and such third party.  Seller shall provide a copy
of each such notice to Buyer within three (3) days after issuance.  If, prior
to the Closing, any such third party objects to Seller's transfer of its
obligations and liabilities, Buyer shall not be deemed to have assumed
Seller's liabilities and obligations to such third party.


<PAGE>


  Section 4.2  Bulk Sales Laws.  Buyer hereby waives compliance by Seller
with the applicable bulk sales law, if any, of any state; provided, however,
that Seller expressly agrees to indemnify and hold Buyer harmless from any
and all costs, expenses, liabilities, damages, claims, actions, suits or
proceedings incurred in connection with the noncompliance by Seller with any
such bulk sales law.  Five (5) days prior to Closing, Seller shall provide to
Buyer Seller's Schedule Of Major Suppliers and Customers, Schedule 4.2,
excluding Seller's ethanol customers.  Officers of Seller and Buyer shall
thereafter make personal calls upon, or mail announcements to, each person on
such list to identify the status of each of Seller and Buyer resulting from
the transaction contemplated hereby and the continued employment by Buyer of
certain of Seller's key officers and employees.

  Section 4.3.  Post Closing Invoices.  To the extent Seller receives, post
Closing, any bills or invoices for any items relating to both pre-closing and
post-closing periods, Seller shall promptly, and in any event within five (5)
days, send such bill or invoice to Buyer, together with a check payable to
Buyer for all amounts owed by Seller thereunder for periods prior to the
Closing Date.  If necessary to avoid incurring interest, penalties and/or
late charges, Seller shall pay all amounts shown to be due on any bills or
invoices received by Seller relating to both pre-closing and post-closing
periods, and Seller shall invoice Buyer for all amounts owed by Buyer
thereunder for periods following the Closing.  Any payments due from Buyer
under this Section shall be made within fifteen (15) days of the final
determination thereof on an item-by-item basis.


<PAGE>


                                 ARTICLE V
                  REPRESENTATIONS AND WARRANTIES OF SELLER

  Seller hereby represents and warrants to Buyer as follows:

  Section 5.1. Organization and Good Standing.  Seller is a corporation
existing and in good legal standing under the laws of the State of Kansas,
that it has full power and authority to carry on the Portales Business as it
is now being conducted and to own and operate the Portales Assets now owned
and operated by it; (ii) that it is duly qualified to do business and is in
good standing in each and  every jurisdiction where the failure to qualify or
to be in good standing would have a material adverse effect upon Seller's
ability to consummate the transactions contemplated by this Agreement.

  Section 5.2.  Power and Authority.  Seller has full power and authority to
execute, deliver and perform this Agreement and to transfer the Portales
Assets and Portales Business to Buyer. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of Seller, and require no further authorization or consent of Seller.
This Agreement is a valid and binding obligation of Seller, enforceable in
accordance with its terms.

  Section 5.3.  Validity of Contemplated Transactions.  The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) contravene any
provision of the Articles of Incorporation or Bylaws of Seller; or (ii) to
the best knowledge of Seller, subject any property or asset of Seller to any
indenture, mortgage, contract, commitment or agreement, other than as
disclosed in this Agreement.

  Section 5.4.  Taxes; Title; Condition of Portales Assets.

    5.4.1  Taxes.

      (i)  Timely Filing Of Tax Returns.  Except as disclosed on Seller's
Schedule Of Tax Matters, attached hereto as Schedule 5.4, Seller has (i)
timely filed all tax returns required to be filed in connection with,
relating to, or arising out of, the Portales Business; (ii) timely paid in
full all taxes shown to have become due pursuant to such tax returns; and
(iii) paid all other taxes for which a notice of assessment or demand for
payment has been received.  Except as disclosed on Schedule 5.4 hereto, (a)
all tax returns have been prepared in accordance with all applicable laws and
requirements and accurately reflect the taxable income (or other measure of
tax base) of Seller; and (b) all taxes that Seller is required by law to
withhold or collect have been duly withheld or collected and have been timely
paid over to the appropriate tax authority.  None of the Portales Assets is
subject to a lien for taxes and there are no proposed assessments or
adjustments to taxes that could result in any of the Portales Assets being
subject to a lien.


<PAGE>


      (ii)  No Safe Harbor Lease Applicability.  None of the Portales Assets
(i) is property that is required to be treated as owned by another person
pursuant to the "Safe Harbor Lease" provisions of former Section 168(f)(8) of
the Internal Revenue Code (the "Code"); (ii) is "tax exempt use property"
within the meaning of Section 168(h) of the Code or (iii) directly or
indirectly secures any debt the interest on which is tax-exempt under Section
103(a) of the Code.

      (iii)  Taxing Jurisdictions.  Schedule 5.4.1 lists each jurisdiction in
which the Seller has filed income, sales and use, Alcohol Fuel Plant
production, employment or  property federal. tax returns or information
returns with respect to the Portales Business or the Portales Assets during
the last year.

    5.4.2  Title To Portales Assets.  Seller has good, valid and marketable
title to, or valid and subsisting leasehold interests in, all of the Portales
Assets and the Portales Business, none of the Portales Assets or the Portales
Business is owned jointly with any other person, including Affiliates of
Seller, and none of the Portales Assets or Portales Business is subject to
any lien, except as disclosed Seller's Schedule Of Liens, attached as
Schedule 5.4.2, all of which scheduled items (except as specifically noted in
Schedule 5.4.2) shall be removed on or prior to Closing.  At Buyer's option,
and provided required third party approvals or consents are obtained, Buyer
may elect to take title to any of such scheduled items subject to the
disclosed lien.

    5.4.3  Portales Plant's Recent Production Rate and Yield.  The Portales
Assets and Facilities, for the three (3) month period ending April 30, 2000,
have been in sufficiently good repair and condition to permit Seller to
produce fuel-grade ethanol at an annualized rate of approximately fourteen
million (14,000,000) gallons (plus/minus 15%) with a yield of approximately
2.6 gallons of ethanol per bushel of grain (raw material).  During this
period, Seller has maintained daily operating logs for its production of
fuel-grade ethanol and Portales Feed Products.  Seller's Daily Operating
Logs, incorporated herein by reference with an exemplar attached as Schedule
5.4.3, provide accurate information for Seller's production of fuel-grade
ethanol and Portales Feed Products for the indicated period ending April 30,
2000.  During this period, Seller's fuel-grade ethanol and Portales Feed
Products have met industry and customer specifications.  Seller has no
knowledge of any material expenditures, greater than $50,000, required to
maintain the Portales Assets and Facilities in good operating condition and
repair prior to the Closing, with production rates consistent with the rates
during the indicated period ending April 30, 2000.


<PAGE>


    5.4.4.  No Nonconforming Use.  Seller has no knowledge and no reason to
believe that the present use of property, plant or equipment included in the
Portales Assets is dependent on any nonconforming use or other permit not
presently held by Seller for the operation of the Portales Assets and
Portales Business.  Any such nonconforming use shall be corrected and any
necessary permit or permit amendment shall be obtained prior to the Closing.

  Section 5.5.  Environmental Matters and Indemnification.

    5.5.1.  Environmental Matters.  In connection with Seller's ownership and
control of the Portales Assets and Portales Business, and except as set forth
in Seller's Schedule Of Environmental Matters, to be attached hereto as
Schedule 5.5 within ten (10) days after the execution of this Agreement
subject to Buyers approval of such Schedule 5.5:

      (a)  Seller:

        (i) has obtained all permits, licenses, variances, exemptions,
consents, certificates, orders, approvals, registrations or authorizations
which are required to be obtained under all applicable federal, state or
local laws or any regulation, code, plan, order, decree, judgment, notice or
demand letter issued, entered, promulgated or approved thereunder relating to
pollution or protection of the environment ("Environmental Laws"), including
laws relating to emissions, discharges, releases or threatened releases
("Release(s)") (as that term is defined in the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended ("CERCLA") of
pollutants, contaminants, or hazardous or toxic materials or wastes including
petroleum (collectively, "Hazardous Substances") into ambient air, surface
water, ground water, or land or otherwise relating to the manufacture,
processing, distribution, use, operation, recycling, treatment, storage,
disposal, transport, or handling ("Management") of Hazardous Substances by
Seller or its agents ("Approvals"); all such Approvals are in full force and
effect; all such Approvals are listed in Seller's Schedule Of Environmental
Matters (Schedule 5.5): and Seller has made or will make before Closing
timely application for renewals, assignments or replacements of all such
Approvals for which Environmental Laws require that applications must be
filed on or before Closing to maintain the Approvals in full force and
effect;

        (ii) is in compliance with all other terms and conditions of such
required Approvals, and also is in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in applicable Environmental Laws;

        (iii) as of the date hereof, is not aware of nor has received any
notice, citation, summons, order, penalty assessment for, nor, to the
knowledge of Seller, is any pending for any past or present violations of
Environmental Laws or any event, condition, circumstance, activity, practice,
incident, action or plan which is reasonably likely to interfere with or
prevent continued compliance with or which would give rise to any common law
or statutory liability, or otherwise form the basis of any claim, action,
suit or proceeding, against Seller based on or resulting from the Management,
presence, discharge or Release into the environment, of any Hazardous
Substances; and


<PAGE>


        (iv) has taken all actions necessary under applicable Environmental
Laws to register any products or materials required to be registered by
Seller, as applicable (or any of its agents), thereunder.
      (b)  Upon request by Buyer, and to the extent assignable by Seller,
Seller will prepare and file all applications for the transfer of all
Environmental Permits prior to Closing.  Buyer will prepare and file all
other applications with the consent of Seller where necessary, which consent
will not be unreasonably withheld.

      (c)  Neither Seller nor any of its Affiliates has received any request
for information, notice of claim, demand or notification that it or they are
or may be potentially responsible with respect to any investigation or clean-
up of any threatened or actual Release of any Hazardous Substance in
connection with their ownership, operation or control of the Portales Assets
or Portales Business.

      (d)  Neither Seller nor any of its Affiliates has used, generated,
treated, stored for more than ninety (90) days, recycled or disposed of any
Hazardous Substances on any property now or previously owned, operated or
leased by Seller or any of its Affiliates included in the Portales Assets or
Portales Business nor has anyone else treated, stored for more than ninety
(90) days, recycled or disposed of any Hazardous Substance on any property
now, or to Seller's knowledge, previously owned, operated or leased by Seller
or any of its Affiliates.

      (e)  No polychlorinated biphenyls or asbestos-containing materials are
or have been present at any property now or previously owned, operated, or
leased by Seller or any of its Affiliates, nor are there any underground
storage tanks, active or abandoned, at any property now or, to Seller's
knowledge, previously owned by Seller or any of its Affiliates included in
the Portales Assets or Portales Business.

      (f)  No Hazardous Substances generated by Seller or any of its
Affiliates has been recycled, treated, stored, disposed of or transported by
any entity other than those listed in Seller's Schedule Of Environmental
Matters, (Schedule 5.5).

      (g)  No Hazardous Substance managed by Seller or any of its Affiliates
has come to be located at any site, whether on the real property included in
the Portales Assets or not, which is listed or proposed for listing under
CERCLA, the CERCLA Information System ("CERCLIS") or on any similar state
list, or which is the subject of federal, state or local enforcement actions
or other investigations which may lead to claims against Seller or Buyer for
clean-up costs, remedial work, damages to natural resources or for personal
injury claims, including, but not limited to, claims under CERCLA.


<PAGE>


      (h)  No Hazardous Substance has been Released at, on, about or under
any property now or formerly owned, operated or leased by Seller or any of
its Affiliates and included in the Portales Assets.

      (i)  No oral or written notification of a Release or threat of Release
of a Hazardous Substance has been filed by or on behalf of Seller or any of
its Affiliates or in relation to any property now or previously owned,
operated or leased by Seller or any of its Affiliates and included in the
Portales Assets.  No such property is listed or proposed for listing on the
National Priority List promulgated pursuant to CERCLA, on CERCLIS or on any
similar state list of sites requiring investigation or clean-up.

      (j)  There are no environmental liens on any properties owned or leased
by Seller or any of its Affiliates and included in the Portales Assets and no
government actions have been taken or are in process or pending which could
subject any of such properties to such liens.  No deed or other instrument of
conveyance of real property to Seller or any of its Affiliates with respect
to real property owned, operated or leased by Seller or an Affiliate of
Seller contains a notice or restriction relating to the actual or suspected
presence of Hazardous Substances.

      (k)  Seller knows of no facts or circumstances related to environmental
matters concerning real property owned, operated or leased by such Seller or
any business conducted by it that could reasonably be expected to lead to any
future environmental claims against the Portales Assets, the Portales
Business or Buyer under current law.

      (l)  There have been no environmental inspections, investigations,
studies, audits, tests, reviews or other analyses conducted in relation to
any property or business now or previously owned, operated, or leased by
Seller or any of its Affiliates, and included within the Portales Assets and
Portales Business, which have not been provided to Buyer prior to the date
hereof.

      (m)  The term "Hazardous Substance" as used in this Agreement means any
hazardous waste, as defined by 42 U.S.C. 6903(5), any hazardous substances as
defined by 42 U.S.C. 9601(14), any pollutant or contaminant as defined in 42
U.S.C. 9601(33) or any toxic substance or hazardous materials or other
chemicals or substances regulated by any of the Resource Conservation and
Recovery Act, CERCLA, the Superfund Amendments and Reauthorization Act of
1986, the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any applicable federal, state, or local statute,
regulation, ordinance, order or decree relating to health, safety, waste
transportation or disposal, or the environment.


      (n)  The term "Release" as used in this Agreement means any spill,
leak, discharge, disposal, pumping, pouring, emitting, emptying, injecting,
abandoning, leaching, dumping or allowing to escape of any Hazardous
Substance.


<PAGE>


    5.5.2  Environmental Indemnification.  In addition to the foregoing:

      (a)  Seller shall indemnify, defend and hold Buyer and its respective
officers, directors and other Affiliates harmless from and against, and
reimburse Buyer with respect to, any and all losses, claims, demands,
liabilities, obligations, causes of action, damages, costs, expenses, fines
or penalties (including without limitation attorneys' fees and other defense
costs) (hereafter "Claims") asserted against or incurred by Buyer arising out
of or resulting from disclosed or undisclosed environmental conditions in
relation to the Portales Assets or Portales Business first existing or
arising prior to the Closing, including without limitation, the presence of
Hazardous Substances at, on, in or under any Facility included in the
Portales Assets or Portales Business or the Release or threat of Release of
Hazardous Substances at any such Facility or in relation to the Portales
Business whether into any structure or into the air, soil, ground or surface
waters on or off-site or arising from the off-site transportation, storage,
treatment, recycling or disposal of Hazardous Substances generated by Seller
at any Facility included in the Portales Assets or in relation to the
Portales Business or for violation of any Environmental Law ("Pre-Closing
Environmental Condition").

      (b)  Seller shall respond on Buyer's behalf and defend such Claims or,
at Buyer's election, shall pay the costs of Buyer's response and defense.

      (c)  Seller shall not be obligated to indemnify Buyer under this
provision to the extent Seller can prove that the Claims were based on
environmental conditions first occurring at the Portales Plant as a result of
the activities of Buyer subsequent to the Closing hereunder ("Post-Closing
Environmental Claims").

      (d)  Seller hereby waives and releases Buyer from any and all Claims,
known or unknown, foreseen and unforeseen, which exist or may arise in the
future under Environmental Laws, including CERCLA or any other statutes now
or hereafter in effect in relation to Pre-Closing Environmental Conditions.

      (e)  Buyer shall indemnify, defend, and hold Seller harmless from and
against and reimburse Seller with respect to any Post-Closing Environmental
Claims and hereby waives and releases Seller from any and all Claims, known
or unknown, foreseen and unforeseen, which exist or may arise in the future
under Environmental Laws, including CERCLA or any other statutes now or
hereafter in effect related to Post-Closing Environmental Conditions.


    5.5.3  Environmental Indemnification Deductible.  Seller shall not be
obligated to indemnify Buyer pursuant to this Section 5.5 for any damages
resulting from any breaches of representations and warranties in this
Agreement (which breaches and resulting damages shall be determined, solely
for the purposes of this Section 5.5 as though any materiality or knowledge
limitations in such representations and warranties did not exist), unless the
aggregate of all such damages incurred by Buyer exceeds Ten Thousand Dollars
($10,000) (the "Threshold"), in which event Seller shall be liable for all
damages in excess of the Threshold claimed by the respective parties.


<PAGE>


  Section 5.6.  Financial Statements.  The books of account and related
records of Seller fairly reflect in reasonable detail its assets,
liabilities, and transactions.  Included in Seller's Schedule of Financial
Statements, attached hereto as Schedule 5.6, is a copy of the following
financial statement(s) (the "Financial Statements"):  (a) Seller's income
statement for Seller's operation of the Portales Business for the period from
July 1, 1999 through  March 31, 2000 and (b) other Financial Statements
regarding Seller's operation of the Portales Business that may be requested
by Buyer at any time prior to Closing including balance sheets, cash flow
statements, statements of operations.  The Financial Statements: (i) are
correct and complete and in accordance with the books and records of Seller;
(ii) fairly present the financial condition, assets and liabilities of Seller
for the Portales Business as of their respective dates and the results of
Seller's operation of the Portales Business for the periods covered thereby,
and (iii) except as set forth in Schedule 5.6, have been prepared in
accordance with GAAP.

  Section 5.7. Absence of Undisclosed Liabilities.  To the best of Seller's
knowledge, Seller has no liabilities or obligations affecting the Portales
Assets or the Portales Business, except as specifically disclosed on the
Seller's Liabilities Schedule, attached as Schedule 5.7, which Schedule shall
be updated and delivered by Seller to Buyer at Closing pursuant to Section
8.2.3  to reflect those liabilities or obligations existing as of the Closing
Date.

  Sections 5.8.  Contracts.

    5.8.1. Existence of Contracts.  Except as to such contracts specifically
listed on Seller's Contract Schedule, to be attached hereto as Schedule 5.8.1
within ten (10) days after the execution of this Agreement subject to Buyer's
approval of such Schedule, with respect to the Portales Assets and the
Portales Business, Seller is not a party to any written or oral contract not
cancelable within thirty (30) days from the Closing Date relating to the
Portales Business or the Portales Assets or the operation thereof.

    5.8.2.  Full Force and Effect; No Amendments.  All of the contracts and
other agreements described in Schedule 5.8.1 are in full force and effect,
and, prior to the Closing Date, no amendments, changes, or alterations shall
have been made thereto without the written approval of Buyer.


<PAGE>


    5.8.3.  No Defaults.  Seller is not in default under any material
contract to which any of the Portales Assets or Portales Business is subject,
nor has any event occurred which, after the giving of notice or the passage
of time or both, would constitute a default under any such contract.
  Section 5.9.  Compliance With Laws; Litigation; and Labor Matters.

    5.9.1.  Compliance With Laws (OSHA); Litigation.

      (i)  Except as disclosed on Seller's Schedule Of Legal Actions,
attached as Schedule 5.9.1, Seller is in compliance with all applicable laws,
rules, regulations, ordinances, decrees, orders, judgments, permits and
licenses of or from any governmental authorities, including, without
limitation, those relating to the use and operation of the Portales Assets
and the Portales Business, Environmental Laws, laws administered or
promulgated by the BATF and, to the knowledge of Seller, employees, health
and safety, which if not complied with, would have a material adverse effect
upon Seller's ability to consummate the transactions contemplated by this
Agreement or upon Buyer's ownership, use, enjoyment and control of the
Portales Assets and the Portales Business.  There have been no inspections of
Seller's operations or locations by any governmental authority in connection
with any state or federal occupational safety and health laws ("OSHA") and
Seller has not received any notice pertaining to a violation or alleged
violation of  or non-compliance with OSHA.  To the knowledge of Seller,
except as set forth on Schedule 5.9.1, there are no actions, suits,
investigations, proceedings or claims pending or, threatened or reasonably
anticipated by or against or affecting Seller or its assets, at law or in
equity, by or before any court or governmental department, agency or
instrumentality, and there is no basis for any such action, suit,
investigation, proceeding or claim.  There are presently no outstanding
judgments, decrees or orders of any court or any governmental or
administrative agency to which Seller is a party or is bound, that could
adversely affect the right, title or interest of Seller to the Portales
Business, the Portales Assets, or the performance of the obligations of
Seller hereunder, and Seller is not in default in respect of any such order,
decree or ruling.

      (ii)  The term "Environmental Laws" as used in this Agreement means any
Federal, state, or local statutory or common law, regulation, rule, order,
ordinance, guideline, direction, policy or notice, relating to the
environment, public health and safety, and employee health and safety,
including those relating to Hazardous Substances.

    5.9.2  Labor Matters.  Except as set forth in Seller's Schedule Of Labor
Matters, attached as Schedule 5.9.2.:

      (i)  there are no controversies pending or, to the knowledge of Seller,
threatened, between Seller and any of its employees, which controversies have
or could reasonably be expected to have a material adverse effect on Buyer's
purchase, ownership and operation of the Portales Assets or the Portales
Business;


<PAGE>


      (ii)  Seller is not a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by Seller in the
operation of the Portales Business nor does Seller know of any activities or
proceedings of any labor union to organize any such employees;
      (iii)  Seller has no knowledge of any strikes, slowdowns, work
stoppages, lockouts, or threats thereof, by or with respect to any persons
employed by Seller in the operation of the Portales Business;

      (iv)  there is no unfair labor practice charge or labor grievance
pending or, to the knowledge of Seller, threatened against Seller or the
Portales Business; and

      (v)  during Seller's ownership and operation of the Portales Assets and
Portales Business, neither Seller nor the Portales Business has experienced
any work stoppage, dispute or controversy with any group of employees or any
organizational activity.

  Section 5.10.  Insurance.  Seller's Schedule Of Insurance Coverages,
attached as Schedule 5.10, is a complete and correct list of all currently
active policies of insurance covering any of the Portales Assets, the
Portales Business or the employees of the Portales Business, indicating for
each policy the carrier, risks insured, the amounts of coverage, deductible,
premium rate, and expiration date.  All such policies are outstanding and in
full force and effect.  The coverage provided by such policies are reasonable
in both scope and amount, in light of the risk attendant to the Portales
Business and the Portales Assets and are comparable to coverages customarily
maintained by companies in similar lines of business and such insurance is
sufficient in the aggregate to cover all reasonably foreseeable damage to and
liabilities or contingencies relating to the Portales Business and Portales
Assets.  There is no default with respect to any provision contained in any
such policy.  No notice of cancellation under any such policy has been
received by Seller.  Except as disclosed on Schedule 5.10 hereto, all
products liability and general liability policies maintained by or for the
benefit of Seller relating to the Portales Business and the Portales Assets
have been "occurrence" policies and not "claims made" policies.

  Section 5.11.  FIRPTA Withholding.  In accordance with Section 897 and
Section 1445 of the Internal Revenue Code of 1986, Seller has provided or
will provide to Buyer, at least thirty (30) days prior to the Closing Date,
an affidavit in the form of Exhibit 5.11 certifying that Seller is not a
foreign person.

  Section 5.12  BATF Bonds, Etc. Seller's Schedule Of Bonds, attached as
Schedule 5.12, contains a complete list of BATF bonds, standby letters of
credit, security and other deposits relating to the Portales Business.

  Section 5.13.  Employee Benefit Plans.

    5.13.1.  Employee Benefit Plans Disclosure.  Set forth on Seller's
Schedule of Employee Benefit Plans, to be attached hereto as Schedule 5.13
within ten (10) days after the execution of this Agreement subject to Buyer's
approval of such Schedule, is a true and complete list of each of the
following:


<PAGE>


      (i)  "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
(including any "multiemployer plan" as defined in Section 3(37) of ERISA),
offered or provided by Seller to employees of the Portales Business, and

      (ii)  all other pension, retirement, supplemental retirement, deferred
compensation, excess benefit, profit sharing, bonus, incentive, stock
purchase, stock ownership, stock option, stock appreciation right, severance,
salary continuation, termination, change-of-control, health, life,
disability, group insurance, vacation, holiday and fringe benefit plan,
program, contract, or arrangement (whether written or unwritten, qualified or
nonqualified, funded or unfunded and including any that have been frozen)
maintained, contributed to, or required to be contributed to, by Seller, any
affiliate of the Seller or any ERISA affiliate of Seller for the benefit of
any current or former employee of Seller at the Portales Plant or under which
Seller, any affiliate of the Seller or any ERISA affiliate of Seller has any
liability with respect to any current or former employee of Seller at the
Portales Plant (collectively the "Benefit Plans").

    5.13.2.  Copies Of Benefit Plans.  As applicable with respect to each
Benefit Plan, Seller has delivered to Buyer, true and complete copies of (i)
each Benefit Plan, including all amendments thereto, and in the case of an
unwritten Benefit Plan, a written description thereof, (ii) the current
summary plan description and each summary of material modifications thereto,
(iii) the most recent annual report (Form 5500 and all schedules thereto)
filed with the Internal Revenue Service ("IRS"), (iv) the most recent IRS
determination letter and each currently pending application to the IRS for a
determination letter, and (v) all records, notices and filings concerning IRS
or Department of Labor audits or investigations, "prohibited transactions"
within the meaning of Section 406 of ERISA or Section 4975 of the Code and
"reportable events" within the meaning of Section 4043 of ERISA.

    5.13.3.  Material Compliance With Benefit Plans.  The Seller, each
Affiliate of Seller and each ERISA Affiliate are in material compliance in
all respects with the provisions of all laws applicable to the Benefit Plans
including ERISA and the Code.  Each Benefit Plan has been maintained,
operated and administered in material compliance in all respects with its
terms and any related documents or agreements and the applicable provisions
of all laws including ERISA and the Code.

    5.13.4.  Employee Pension Benefit Plans  The Benefit Plans which are
"employee pension benefit plans" within the meaning of Section 3(2) of ERISA
and which are intended to meet the qualification requirements of Section
401(a) of the Code (each a "Pension Plan") now meet, and at all times since
their inception have met the requirements for such qualification, and the
related trusts are now, and at all times since their inception have been,
exempt from taxation under Section 501(a) of the Code.  In connection with
its purchase of the Portales Assets, Buyer assumes no responsibility or
liability with respect of the Benefits Plans.
    5.13.5.  No Multiemployer Plan.  No Benefit Plan is now or at any time
has been subject to Part 3, Subtitle B of Title I of ERISA or Title IV of
ERISA.  No Benefit Plan is now or at any time has been a "multiemployer plan"
(within the meaning of Section 3(37) of ERISA).


<PAGE>


  Section 5.14.  Product Liability and Warranty.  Except as disclosed on
Seller's Schedule of Warranties and Product Specifications, to be attached
hereto as Schedule 5.14 within ten (10) days after the execution of this
Agreement subject to Buyer's approval of such Schedule, there are no:

    (i)  Outstanding liabilities of Seller, fixed or contingent, asserted or
known and unasserted, with respect to any products liability or any similar
claim, including a claim of failure to meet product specifications, that
relates to any product manufactured or sold by Seller in its operation of the
Portales Business to others, or

    (ii)  Outstanding liabilities of Seller, fixed or contingent, asserted or
known and unasserted, with respect to any claim for the breach of any express
or implied product warranty or any other similar claim, including a claim of
failure to meet product specifications, with respect to any product
manufactured or sold by Seller in its operation of the Portales Business to
others other than standard warranty obligations made by the Portales Business
and obligations and implied warranties imposed by the Uniform Commercial Code
or other applicable federal, state, and local laws.  Seller's warranties and
product specifications are disclosed  in Seller's Schedule of Warranties and
Product Specifications, attached as Schedule 5.14.  Disclosed in Schedule
5.14 hereto is a description of each claim in excess of $5,000 that has been
asserted against the Seller, arising from its operation of the Portales
Business, since December 31, 1998, based upon any product liability or
similar claim, or on the breach or alleged breach of any express or implied
product warranty or any other similar claim, including a claim of failure to
meet product specifications, with respect to any product manufactured or sold
by Seller in its operation of the Portales Business to others, including
information regarding (a) the amount of the claim, (b) the basis of the
claim, (c) whether the claim was covered by insurance, (d) how the claim was
resolved, and (e) the amount paid by Seller in relation to the claim.

  Section 5.15.  Disclosure of Material Facts.  No representation or warranty
by Seller in this Agreement, and no exhibit, document, statement, certificate
or schedule furnished or to be furnished to Buyer pursuant hereto, or in
connection with the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.


<PAGE>


  Section 5.16.  All Assets.  Except for the Excluded Assets, the Portales
Assets include all assets and properties of Seller and its Affiliates and all
contracts to which Seller or any of its Affiliates is a party that are
primarily related to, or otherwise required for the conduct of the Portales
Business as presently operated and as presently proposed to be operated.
None of the assets and properties primarily related to, or otherwise material
to or used in the conduct of the Portales Business is owned by any person
other than Seller and all of such assets that are tangible assets are located
at the Portales Plant.  None of the Portales Assets is shared between or
among the Portales Business and Seller and/or any of its Affiliates.

  Section 5.17.  Brokerage.  Seller has not made any agreement or taken any
other action which might cause anyone to become entitled to a broker's fee or
commission as a result of the transactions contemplated hereunder.

  Section 5.18.  No Undisclosed Liabilities.  Seller has no liabilities or
obligations, known or unknown (whether absolute, accrued, contingent or
otherwise), of or relating to the Portales Business or the Portales Assets as
to which Buyer, the Portales Business or the Portales Assets shall have any
obligation or become subject after the Closing, except for the Assumed
Liabilities.

  Section 5.19.  No Pending Litigation or Proceedings.  There are no actions,
suits, investigations, or proceedings pending against or, to the best of
Seller's knowledge, threatened against or affecting Seller or any of its
Affiliates before any court, arbitrator, or governmental authority or
outstanding judgments, decrees, or orders of any court or governmental
authority against Seller which, individually or in the aggregate could affect
the validity of this Agreement or its enforceability against Buyer,
consummation by Seller of the transactions contemplated hereby or compliance
with the terms hereof by Seller.

  Section  5.20.  Schedules.  All of Seller's Schedules attached hereto were
prepared by Seller and shall be deemed to have been prepared as of the date
hereof.  Any supplementary schedules to the schedules attached hereto shall
be signed for identification and delivered by Seller to Buyer at Closing.
Such supplementary schedules will reflect changes, if any, in the schedules
attached hereto through the close of business on the Closing Date.  Upon
execution and delivery of the schedules and supplementary schedules to be
delivered pursuant hereto, each schedule and supplementary schedule shall be
considered to be incorporated herein in full.  Thereafter reference herein to
all of the schedules hereto shall be deemed to include and refer to such
schedules and supplementary schedules delivered in accordance herewith and
reference to any particular schedule attached hereto shall be deemed to
include and refer to such attached schedule and any supplementary schedule
thereto delivered in accordance herewith.

  Section 5.21.  Copies of Organizational Documents.  Copies of Seller's
Articles of Incorporation and Bylaws, certified by Seller through a duly
authorized manager or other officer, shall be delivered within twenty (20)
days after execution of this Agreement to the Buyer and shall be true,
correct and effective as of the date of this Agreement.


<PAGE>


  Section 5.22.  Notice From Suppliers of Raw Material To Seller.  Seller has
not received any notice from any creditors of any third parties who have sold
or who have contracted to sell any grain or denaturant to Seller respecting
any loans by such creditor to such third parties or any liens of such
creditors encumbering any of such grain or denaturant.

                                 ARTICLE VI
                    REPRESENTATIONS AND WARRANTIES OF BUYER

  Buyer hereby represents and warrants to Seller as follows:

  Section 6.1.  Organization and Good Standing.  Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws
of the State of New Mexico, and, as of the Closing Date, Buyer shall be duly
qualified to do business in the State of New Mexico.
  Section 6.2.  Power and Authority.  Buyer has full power and authority to
enter into this Agreement and to perform all of Buyer's covenants and
undertakings contained in this Agreement, including, without limitation, the
full power and authority to purchase and take title to the Portales Assets
and the Portales Business upon the terms and conditions set forth herein; the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of Buyer; and this Agreement is a valid and binding
obligation of Buyer, enforceable in accordance with its terms.

  Section 6.3.  Validity of Contemplated Transaction.  Neither the execution
and delivery of this Agreement nor the consummation of the transactions
contemplated in the manner provided will (i) contravene any provision of the
Articles of Organization or Operating Agreement of Buyer; (ii) violate, be in
conflict with, constitute a default under, cause the acceleration of any
payments pursuant to or otherwise impair the good standing, validity and
effectiveness of any lease, license, permit, authorization or approval
applicable to Buyer; or (iii) violate any provision of law, rule, regulation,
order or permit to which Buyer is subject.

  Section 6.4.  Closing Funds; Liquidated Damages.  Buyer shall use its best
efforts to have available to it readily available funds sufficient to make
any payment when due under the terms of this Agreement as of the Closing Date
or other applicable payment date.  If Buyer should fail to close its purchase
of the Portales Assets and Portales Business, for any reason constituting
breach of this Agreement, including lack of available funds, Seller's sole
remedy shall be to retain Buyer's Earnest Deposit as liquidated damages.


<PAGE>


  Section 6.5.  Continuation of Business.  Buyer shall use its best efforts
to continue the existing operation of the Portales Business.  However, Buyer
shall have sole right after the Closing to make all decisions regarding the
continuation, expansion, closure or modification of the  Portales Business.

  Section 6.6.  Retention of Existing Workforce.  To the extent practicable,
but at the sole discretion of Buyer, Buyer will retain the current employees
of the Portales Business after the Closing Date.  Where the services of a
current employee are redundant due to a change by Buyer in methods or means
of production, Buyer shall use its best efforts to retrain and utilize such
employee in its operation of the Portales Business following the Closing
Date.  This Section  shall not be interpreted to confer any "third party
beneficiary" rights on any of Seller's current employees at the Portales
Business.

  Section 6.7.  Cooperation With Local Organizations.  Buyer shall use its
best efforts to cooperate with state and local boards or committees organized
for the purpose of promoting the ethanol industry or business in general.
Buyer shall use its best efforts to expand its economic activity in the
geographic area near the Portales Plant.

  Section 6.8.  Copies of Organizational Documents.  Copies of Buyer's
Articles of Organization and Operating Agreement, certified by Buyer through
a duly authorized manager or other officer, shall be delivered within twenty
(20) days after execution of this Agreement to the Seller and shall be true,
correct and effective as of the date of this Agreement.

  Section 6.9.  Disclosure of Material Facts.  No representation or warranty
by Buyer in this Agreement, and no exhibit, document, statement, certificate
or schedule furnished or to be furnished to Seller pursuant hereto, or in
connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact, or omits or will omit to
state a material fact necessary in order to make the statements contained
herein or therein not misleading.

  Section 6.10.  Consents.  No consent, approval or authorization of, or
registration or filing with, any person is required in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby by Buyer. other than the approval by the
BATF of Buyer's application for an alcohol fuel producer's permit to produce
fuel-grade ethanol in the operation of the Portales Business.

  Section 6.11.  Brokerage.  Buyer has not made any agreement or taken any
other action which might cause anyone to become entitled to a broker's fee or
commission as a result of the transactions contemplated hereunder.


<PAGE>


  Section 6.12.  No Pending Litigation or Proceedings.  There are no actions,
suits, investigations, or proceedings pending against or, to the best of
Buyer's knowledge, threatened against or affecting Buyer or any of its
Affiliates before any court, arbitrator, or governmental authority or
outstanding judgments, decrees, or orders of any court or governmental
authority against Buyer which, individually or in the aggregate could affect
the validity of this Agreement or its enforceability against Buyer,
consummation by Buyer of the transactions contemplated hereby or compliance
with the terms hereof by Buyer.

                                  ARTICLE VII
                      ACTIVITIES PRIOR TO THE CLOSING DATE

  Section 7.1.  Activities Prior to the Closing Date by Seller.

    7.1.1.  Operation of Portales Business.  Seller, from the execution of
this Agreement through the Closing Date, shall conduct the Portales Business
only in the ordinary course and consistent with past practice, including
billing, shipping and collection practices, keeping of books and records,
inventory transactions and payment of accounts payable.  Seller shall use
commercially reasonable efforts to preserve intact the business organization
of the Portales Business, to keep available the services of its present
employees, and to preserve for Buyer the goodwill of the suppliers, customers
and others having business relations with the Portales Business.  Seller,
during the period prior to Closing, shall:
      (i)  not further amend Seller's Articles of Incorporation or Bylaws if
such Articles of Incorporation or Bylaws, as amended, would prohibit or make
more difficult consummation of the transactions contemplated under this
Agreement;

      (ii)  not make any changes in the management employed by Seller in the
conduct of the Portales Business without the consent of Buyer, which consent
shall not be unreasonably withheld; Buyer and Seller agree that this Section
7.1.1(ii) is not intended to confer any third-party beneficiary rights upon
any officer or employee of Seller;

      (iii)  not solicit any bids, proposals or other offers concerning the
Portales Assets or the Portales Business after Buyer delivers the Earnest
Deposit;

      (iv)  not allow the Portales Business to acquire or agree to acquire
any corporation, association, partnership, joint venture or other entity;

      (v)  except for indebtedness incurred in the ordinary course of
business, not create, incur, assume or guarantee any indebtedness for money
borrowed, create or suffer to exist any mortgage, lien or other encumbrance
on any of the Portales Assets, real or personal, except those in existence on
the date this Agreement is executed, or increase the amount of any
indebtedness outstanding under any loan agreement, mortgage or other
borrowing arrangement in existence on the date this Agreement is executed or,
other than in the ordinary course, enter into any material agreement,
contract or commitment or any contract having a material effect on the
Portales Assets or the Portales Business;

      (vi)  deliver to Buyer as soon as available monthly financial
statements (the Monthly Financial Statements) of Seller for the month of
April, 2000 and for each calendar month thereafter prior to the Closing Date;


<PAGE>


      (vii)  maintain the Facilities and other Portales Assets in good
operating repair, order and condition (reasonable wear and tear excepted) in
accordance with maintenance practices which include the present regular
scheduled maintenance and unscheduled maintenance required to avoid
disruption to the operations of the Portales Business, and notify Buyer
immediately upon any loss of, damage to or destruction of any of the Portales
Assets;

      (viii)  maintain inventories of Seller's grain, denaturant, chemicals,
yeast, enzymes, fuel-grade ethanol and related inventories which are adequate
to maintain normal production operations in the ordinary course of the
Portales Business even if such inventories are less than the inventories
normally maintained by Seller; and

      (ix)  without having obtained the prior written approval of Buyer, not
generate, create or produce Accounts Receivable from customers with whom
Seller has previously dealt who have not paid, within thirty (30) days after
the due date, amounts owed to Seller for the purchase of any of the Portales
Feed Products.

    7.1.2.  Access To Information.  Seller shall cooperate fully with Buyer
and shall provide Buyer and its accountants, counsel and other
representatives, during normal business hours, full access to the books,
records, equipment, Facilities, contracts, insurance policies and other
assets of Seller or relating to the Portales Assets or the Portales Business,
and full opportunity to discuss the Portales Business and Portales Assets
with Seller's employees, independent contractors, customers, agents and
accountants, and furnish to Buyer and its representatives copies of such
documents, records and information with respect to the affairs of Seller as
Buyer or its representatives may reasonably request, so long as Seller's
compliance with its obligations under this Section 7.1.2 will not disrupt or
interfere with Seller's normal operation of the Portales Business. Buyer
shall not, in the exercise of its rights under this Section 7.1.2,
unnecessarily disclose to employees of Seller information contained in this
Agreement or otherwise, whether deemed confidential or not, relating to the
purchase and sale of the Portales Assets and Portales Business.

    7.1.3.  Consents.

      (i)  Seller shall use its best efforts to obtain the consents,
approvals or releases of any and all third parties, including, but not
limited to, the holders of any material indebtedness of Seller, the lessors
of any real or personal property or assets leased by Seller, the parties
(other than Seller) to any other material contract, license, process rights,
commitment or agreement to which Seller is a party, any governmental agency
or body or any other person, firm or corporation which owns or has authority
to grant any franchise, license, permit (including environmental permit),
easement, right or other authorization necessary for the operations of the
Portales Business before and after the Closing Date, and any governmental
body or regulatory agency having jurisdiction over the Buyer or Seller, to
the extent that their consent or approval is required under the pertinent
debt, lease, contract, commitment or agreement or other document or
instrument or under applicable laws, rules or regulations for the
consummation of the transactions contemplated in the manner provided, and for
the operation of the Portales Business by Buyer immediately following the
Closing Date. Buyer shall fully cooperate with Seller in obtaining such
consents.


<PAGE>


      (ii)  If any consents, novations or other agreements described in the
first paragraph of this Section 7.1.3 cannot be obtained by Seller at least
three (3) days prior to the Closing Date, Buyer may elect to extend the
Closing Date under this Agreement by thirty (30) days by notice to Seller on
or before the Closing Date.

    7.1.4.  Notice of Change.  Seller shall promptly notify Buyer of the
existence or happening of any fact, event or occurrence prior to the Closing
Date and of which Seller or any representative of either has knowledge which
may alter the accuracy or completeness of any representation or warranty
contained in this Agreement.

    7.1.5.  Publicity.  Seller shall not issue any press release or press
information regarding this transaction without prior notice, consultation and
agreement with Buyer, which agreement will not be unreasonably withheld.

    7.1.6.  Best Efforts.  Subject to the other provisions of this Agreement,
Seller will use its best efforts and shall fully cooperate with Buyer to
cause the conditions listed in Article VIII to be satisfied on or before the
Closing Date.

  Section 7.2.  Activities Prior to the Closing Date by Buyer

    7.2.1.  Notice of Change.  Buyer shall promptly notify Seller of the
existence or happening of any material fact, event or occurrence prior to the
Closing Date and of which Buyer or any of Buyer's representatives has
knowledge which may alter the accuracy or completeness of any representation
or warranty contained in this Agreement.

    7.2.2.  Publicity.  Buyer shall not issue any press release or press
information regarding this transaction without prior notice, consultation and
agreement with Seller, which agreement will not be unreasonably withheld.


<PAGE>


    7.2.3.  Consents.

      (i)  Buyer shall use its best efforts to obtain the consents, approvals
or releases of any and all third parties, including, but not limited to, the
lessors of any real or personal property or assets leased by Seller, the
parties (other than Seller) to any other material contract, license, process
rights, commitment or agreement to which Seller is a party, any governmental
agency or body or any other person, firm or corporation which owns or has
authority to grant any franchise, license, permit (including environmental
permit), easement, right or other authorization necessary for the operations
of the Portales Business before and after the Closing Date, and any
governmental body or regulatory agency having jurisdiction over the Buyer or
Seller, to the extent that their consent or approval is required under the
pertinent debt, lease, contract, commitment or agreement or other document or
instrument or under applicable laws, rules or regulations for the
consummation of the transactions contemplated in the manner provided, and for
the operation of the Portales Business by Buyer immediately following the
Closing Date. Buyer shall cooperate with Seller in obtaining such consents.

      (ii)  If any consents, novations or other agreements described in
Section 7.2.3 (i) cannot be obtained by Buyer at least three (3) days prior
to the Closing Date, Seller may elect to extend the Closing Date under this
Agreement by thirty (30) days by notice to Buyer on or before the Closing
Date.

    7.2.4.  Best Efforts.  Subject to the other provisions of this Agreement,
Buyer will use its best efforts and shall fully cooperate with Seller to
cause the conditions listed in Article VIII to be satisfied on or before the
Closing Date.

                                   ARTICLE VIII
                       CONDITIONS PRECEDENT TO THE CLOSING

  Section 8.1.  Obligation of Seller To Close.  The obligation of Seller to
consummate the sale to Buyer of the Portales Assets and the Portales Business
on the Closing Date shall be subject to the satisfaction, or waiver by
Seller, of the following conditions on or before the Closing Date:

    8.1.1.  Representations and Warranties; Compliance With Agreement.  The
representations and warranties of Buyer set forth in this Agreement shall be
true and correct as of the date of this Agreement and as of the Closing Date
as though made on the Closing Date, and Buyer shall have delivered to Seller
certificates to such effect, dated the Closing Date and signed by an
authorized representative of Buyer, which certificate shall be in form and
substance satisfactory to Seller and its counsel; and Buyer shall have
performed all covenants and agreements to be performed by it under this
Agreement on or before the Closing Date.


<PAGE>


    8.1.2.  Closing Certificates.  Buyer shall have delivered to Seller a
certificate or certificates dated the Closing Date and signed on behalf of
Buyer by an authorized representative of Buyer to the effect that:  (i)(a)
the copy of Buyer's Articles of Organization and Operating Agreement attached
to the certificate is true, correct and complete, (b) no amendment to the
Buyer's Articles of Organization or  Operating Agreement has occurred since
the date of the last amendment annexed (such date to be specified and a copy
of such amended Articles of Organization or Operating Agreement to be annexed
to such certificate), (c) the approval by the managers and/or members of
Buyer authorizing the actions taken and authorizing the representative of
Buyer to execute all documents and instruments to be executed and delivered
in connection with the purchase of the Portales Assets and the Portales
Business, including the execution and delivery of this Agreement, were duly
and validly given and continue in force and effect (a copy of such approvals
to be annexed to such certificate); (ii) the representative of Buyer
executing this Agreement and the documents executed and delivered pursuant to
or in connection with this Agreement is a current representative of Buyer and
that the specimen signatures on such certificate or certificates are their
genuine signatures; and (iii) Buyer is in good standing in all states in
which Buyer does business  which are relevant to the consummation of the
transactions contemplated by this Agreement.  The certificate referred to
above in (iii) shall attach certificates of good standing certified by the
Secretaries of State or other appropriate officials of such states, dated as
of a date not more than thirty (30) days prior to the Closing Date.

    8.1.3.  Opinion of Counsel of Buyer,  Counsel for Buyer, shall have
delivered to Seller a favorable opinion, dated the Closing Date and in form
and substance satisfactory to Seller and its counsel, with respect to the
matters set forth below.  In rendering such opinion, such counsel may rely if
explicitly stated on certificates of public officials and of representatives
of Buyer as to matters of fact, and, as to any matter which involves other
than federal or New Mexico law, such counsel may rely upon the opinion of
local counsel of established reputation acceptable to counsel for Seller.

      (i)  Buyer is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of New Mexico, and
Buyer has full power and authority to enter into the Agreement and to
purchase and take title to the Portales Assets and the Portales Business upon
the terms and conditions set forth in the Agreement;

      (ii)  Neither the execution and delivery of the Agreement nor the
consummation of the transactions contemplated thereby in the manner therein
provided will:

        (a)  contravene any provision of the Articles of Organization or
Operating Agreement of Buyer;


<PAGE>


        (b)  violate, be in conflict with, constitute a default under, cause
the acceleration of any payments pursuant to or otherwise impair the good
standing, validity, or effectiveness of any agreement, contract, indenture,
lease or mortgage, or subject any properties or assets of Buyer to any
indenture, mortgage, contract, commitment or agreement, other than the
Agreement, to which Buyer is a party or by which Buyer is bound, of which
counsel has knowledge after making inquiry; or

        (c)  violate any provision of law, rule or regulation, or, to the
knowledge of such counsel after making inquiry, violate any order, permit or
license to which Buyer is subject;

      (iii)  After making inquiry, such counsel does not know of any suit,
action, claim, arbitration, administrative or legal or other proceeding or
governmental investigation that is pending or threatened against Buyer which
would adversely affect Buyer's ability to assume and perform the obligations
being assumed by Buyer pursuant to this Agreement;

      (iv)  The execution and delivery of the Agreement and the consummation
of the transactions contemplated thereby have been duly authorized by all
necessary action on the part of Buyer, and the Agreement is a valid and
binding obligation of Buyer, enforceable in accordance with its terms, except
as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, equity of redemption or other similar laws
affecting the enforceability of creditors rights generally and except that
the availability of any particular remedy may be limited by the application
of equitable principles; and

      (v)  Any other matters relating to Buyer's purchase of the Portales
Assets and Portales Business as Seller or Sellers counsel reasonably
requests.

    8.1.4.  Consents.  Buyer shall have obtained all consents, approvals or
releases required to be obtained by it pursuant to Section 7.2.3.

    8.1.5.  No Prohibition of Transaction.  On the Closing Date, no order,
decree or ruling shall have been issued by any court or governmental agency
restraining or prohibiting the transactions contemplated by this Agreement,
and no proceeding shall be pending or threatened before any court or
governmental agency in which it is sought to restrain or prohibit or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby, and no investigation
that might eventuate in any such suit, action or proceeding shall be pending
or threatened; there shall be no labor union strikes or significant labor
disputes in progress or threatened.

    8.1.6 .  Documents.  Buyer shall have executed and delivered to Seller in
form acceptable to Seller on or before the Closing Date the following
documents:

      (i)  this Agreement signed by Buyer;


<PAGE>


      (ii)  an Assignment and Assumption Agreement signed by Buyer  whereby
Seller assigns all of its right, title and interest in and to, and Buyer
assumes all of Seller's debts, liabilities and obligations under, all
contracts and agreements entered into in the ordinary course of Seller's
operation of the Portales Business which are referred to in Section 4.1 and
all other contracts and agreements entered into in the ordinary course of
Seller's operation of the Portales Business which Buyer designates in writing
to Seller to be important to Buyer's continued operation of the Portales
Business and the Portales Assets; and

      (iii)  any other documents which Seller and Seller's counsel in the
exercise of their reasonable judgment determine to be necessary or
appropriate to transfer all of Seller's right, title and interest in and to,
and to vest in and confirm to Buyer good and marketable title to, all of the
Portales Assets and Portales Business.

    8.1.7.  Buyer's Financing.  Buyer shall have obtained sufficient
financing to meet its payment obligations under Article II.  Such financing
must be evidenced by a firm written commitment within seventy-five (75) days
after the execution date of this Agreement.  Closing on such financing must
be provided for within ninety (90) days after execution of this Agreement.
If financing is not available within such time period, Seller and Buyer each
will have the right to terminate this Agreement on five (5) days written
notice.  Upon such termination, Seller shall have the right to retain the
Earnest Deposit as liquidated damages.

  Section 8.2.  Obligation of Buyer To Close.  The obligation of Buyer to
consummate the purchase of the Portales Assets on the Closing Date shall be
subject to the satisfaction, or the waiver by Buyer, of the following
conditions on or before the Closing Date:

    8.2.1.  Representations and Warranties: Compliance With Agreement.  The
representations and warranties of Seller set forth in this Agreement shall be
true and correct as of the date of this Agreement and as of the Closing Date
as though made on the Closing Date.  Seller shall have performed all
covenants and agreements to be performed by it under this Agreement on or
prior to the Closing Date.  Seller shall have delivered to Buyer certificates
to such effect, in form and substance reasonably satisfactory to Buyer's
counsel, dated the Closing Date signed on behalf of Seller by authorized
representatives of Portales.

    8.2.2.  Title Insurance.  Seller shall furnish to Buyer, at Seller's
expense, an owner's title insurance policy (or an irrevocable commitment to
issue an Owner's title insurance policy) issued by a title insurance company
selected by Seller and approved by Buyer on ALTA Form B (the "Title Policy")
naming Buyer as the insured in an amount equal to the purchase price for the
Facilities as set forth on the Purchase Price Allocation Closing Schedule
(Schedule 2.4), which Buyer shall deliver to Seller no later than ten (10)
days prior to Closing Date.  The Title Policy shall insure good and
indefeasible fee simple title to the Facilities in Buyer subject only to the
permitted exceptions (as defined in Section 9.3 hereof).


<PAGE>


    8.2.3.  Closing Certificates.  Seller shall have delivered to Buyer a
certificate or certificates dated the Closing Date and signed on behalf of
Seller by an authorized representative of Seller to the effect that:  (i)(a)
the copy of Seller's Articles of Incorporation and Bylaws attached to the
certificate is true, correct and complete, (b) no amendment to the Seller's
Articles of Incorporation or Bylaws has occurred since the date of the last
amendment annexed (such date to be specified and a copy of such amended
Articles of Incorporation and Bylaws to be annexed to such certificate), (c)
the approval by the Board of Directors of Seller authorizing the actions
taken and authorizing the representative of Seller to execute all documents
and instruments to be executed and delivered in connection with the sale of
the Portales Assets and the Portales Business to Buyer, including the
execution and delivery of this Agreement, were duly and validly given and
continue in force and effect (a copy of such approvals to be annexed to such
certificate); (ii) the representative of Seller executing this Agreement and
the documents executed and delivered pursuant to or in connection with this
Agreement is a current representative of Seller and that the specimen
signatures on such certificate or certificates are their genuine signatures;
and (iii) Seller is in good standing in all states in which Seller does
business which are relevant to the consummation of the transactions
contemplated by this Agreement.  The certificate referred to above in (iii)
shall attach certificates of good standing certified by the Secretaries of
State or other appropriate officials of such states, dated as of a date not
more than thirty (30) days prior to the Closing Date.

    8.2.4.  Opinion of Legal Counsel of Seller.  Legal Counsel for Seller,
shall have delivered to Buyer their favorable opinions, dated the Closing
Date, in form and substance reasonably satisfactory to Buyer and its counsel,
with respect to the matters set forth below.  In rendering such opinion, such
counsel may rely, if explicitly stated, on certificates of public officials
or of officers of Seller as to matters of fact, and as to any matter that
involves other than federal or New Mexico law, such counsel may rely upon the
opinion of local counsel of established reputation acceptable to counsel for
Buyer.

      (i)  Seller is duly qualified to do business and is a corporation in
good standing in the State of New Mexico.

      (ii)  Seller is a corporation existing and in good standing under the
laws of the State of Kansas and has full corporate power and authority to
carry on the Portales Business, as it is now being conducted.

      (iii)  Seller has full corporate power and authority to execute,
deliver and perform its obligations under the Agreement.  The execution,
delivery and performance of the Agreement, and the consummation. of the
transactions contemplated therein, have been duly authorized by all necessary
corporate action on the part of Seller.  The Agreement is a valid and binding
obligation of Seller and is enforceable against Seller except as such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, equity or other similar laws affecting the
enforceability of creditors' rights generally, and except that the
availability of any particular remedy may be limited by the application of
equitable principles.

      (iv)  Neither the execution and delivery of the Agreement nor the
consummation of the transactions contemplated thereby in the manner therein
provided will:

        (a)  contravene any provision of the Articles of Incorporation or
Bylaws of Buyer;

        (b)  violate, be in conflict with, constitute a default under, cause
the acceleration of any payments pursuant to or otherwise impair the good
standing, validity, or effectiveness of any agreement, contract, indenture,
lease or mortgage, or subject any properties or assets of Seller to any
indenture, mortgage, contract, commitment or agreement, other than the
Agreement, to which Seller is a party or by which Seller is bound, of which
counsel has knowledge after making inquiry; or


<PAGE>


        (c)  violate any provision of law, rule or regulation, or, to the
knowledge of such counsel after making inquiry, violate any order, permit or
license to which Seller is subject;

      (v)  Any other matters relating to Seller's sale of the Portales Assets
and Portales Business as Buyer or Buyer's counsel reasonably requests.

    8.2.5.  No Prohibition of Transaction.  On the Closing Date, no order,
decree or ruling shall have been issued by any court or governmental agency
restraining or prohibiting the transactions contemplated by this Agreement,
and no proceeding shall be pending or threatened before any court or
governmental agency in which it is sought to restrain or prohibit or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby; there shall be no labor
union strikes or significant labor disputes in progress or threatened.

    8.2.6.  Consents.  Seller shall have met its obligations regarding the
consents, approvals or releases to be obtained by it pursuant to Section
7.1.3 of this Agreement, and Seller shall have presented evidence thereof in
form and substance reasonably satisfactory to Buyer and Buyer's counsel.

    8.2.7. Buyer's Financing.  Buyer shall have obtained sufficient financing
to meet its payment obligations under Article II.  Such financing must be
evidenced by a firm written commitment within seventy-five (75) days after
the execution date of this Agreement.  Closing on such financing must be
provided for within ninety (90) days after execution of this Agreement.  If
financing is not available within such time period, Seller and Buyer each
will have the right to terminate this Agreement on five (5) days written
notice.  Upon such termination, Seller shall have the right to retain the
Earnest Deposit as liquidated damages.

    8.2.8.  Documents.  Seller shall have executed and delivered to Buyer in
form acceptable to Buyer on the Closing Date the following documents:

      (i)  this Agreement signed by Seller;

      (ii)  a Bill of Sale or Bills of Sale signed by Seller for the Portales
Assets other than real property which transfer, convey and assign title to
such property free and clear of any liens, pledges and encumbrances of any
third party, in form and substance reasonably satisfactory to Buyer and
Buyer's counsel;

      (iii)  any other documents reasonably required by Buyer or its counsel
and necessary to transfer ownership and control of the Portales Assets to
Buyer;


<PAGE>


      (iv)  General Warranty Deeds signed by Seller conveying fee title from
Seller to Buyer with respect to each parcel of real property which is
included in the Portales Assets and described in Schedule 1.1, which convey
title to such real property free and clear of any encumbrances except
permitted title exceptions, approved by Buyer;

      (v)  a FIRPTA Certificate signed by Seller in the form of Exhibit 5.11;

      (vi)  vehicle title certificates transferred by Seller to Buyer for
every vehicle, including, but not limited to, automobiles, forklifts and
tractors, listed in Schedule 1.1;

      (vii)  an Assignment and Assumption Agreement signed by Seller whereby
Seller assigns all of its right, title and interest in and to, and Buyer
assumes all of Seller's debts, liabilities and obligations under, all
contracts and agreements entered into in the ordinary course of Seller's
business which are referred to in Section 4.1 and all other contracts and
agreements entered into in the ordinary course of Seller's business which
Buyer reasonably designates in writing to Seller to be important to Buyer's
continual operation of the Portales Business and the Portales Assets;

      (viii)  daily operating logs, for the period commencing with the
execution date of this Agreement and ending five (5) days before the Closing
Date, of Seller's operation of the Portales Business showing the daily
production of fuel-grade ethanol, Portales Feed Products and the use of
grain, enzymes and utilities; and


<PAGE>


      (ix)  any other documents which Buyer and Buyer's counsel in the
exercise of their reasonable judgment determine to be necessary or
appropriate to transfer all of Seller's right, title and interest in and to,
and to vest in and confirm to Buyer good and marketable title to, all of the
Portales Assets and Portales Business, free and clear of all liabilities,
obligations, liens, encumbrances, easements, restrictions, conditions,
charges or other title exceptions or objections (except liens, claims,
encumbrances and other obligations of Seller specifically assumed or allowed
by Buyer), including, without limitation, UCC termination statements,
mortgage satisfaction releases and judgment releases.

    8.2.9.  Compliance With Laws.  Buyer shall remain satisfied, prior to the
Closing Date, that the operation of the Portales Assets and the Portales
Business has not been cited for a violation of any applicable law, ordinance,
rule, regulation, statute, permit, license or certificate, including, without
limitation, those referred to in Section 5.5.

    8.2.10.  Condition of Portales Assets; Daily Operating Logs. The Portales
Plant shall be staffed and operating and producing fuel-grade ethanol and
Portales Feed Products.  The Portales Plant shall be in the same operating
condition (reasonable wear and tear excepted) as on the date of this
Agreement.  The daily operating logs, for the period described in Section
8.2.8 (viii), shall show production at an annualized capacity of fourteen
million (14,000,000) gallons (plus/minus 15%) of denatured fuel-grade
ethanol.

    8.2.11.  Litigation; Compliance With Laws.  There shall exist no
undisclosed suit, action, claim, arbitration, administrative or legal or
other proceeding against Seller nor any violation of or default with respect
to any order, writ, injunction, judgment or decree of any court or federal,
state or local department, official, commission, authority, board, bureau,
agency or other instrumentality issued or pending or, to Seller's knowledge,
threatened against Seller which might have a material adverse effect on the
Portales Assets or the Portales Business.

    8.2.12.  Contracts, Permits and Licenses.

      (i)  Assignment By Seller.  As requested by Buyer, and to the extent
assignable by Seller, Seller shall have assigned and transferred to Buyer,
effective as of the Closing Date, all contracts, permits and licenses that
are necessary to the ownership of the Portales Assets or the operation of the
Portales Business.  Nothing contained in this Section 8.2.12 or in this
Agreement shall require or obligate Seller to incur any cost, other than
ordinary application fees, for or in connection with the procurement of any
new permits which are necessary for Buyer to continue the operations of the
Portales Assets and the Portales Business after the Closing Date.

      (ii)  Buyer's  Permits and Licenses.  Buyer shall have obtained all
permits, consents, licenses, approvals and other governmental authorizations
("Buyer's Permits") necessary for Buyer to continue the operations of the
Portales Assets and the Portales Business after Closing.  If Buyer has not
obtained  all of the necessary Buyer's Permits by Closing, Buyer may extend
the Closing Date one time for a term  of thirty (30) days ("Extension Term')
upon payment to Seller, within five (5) days after the original Closing Date,
of an extension fee of $10,000.  If Buyer does not close its purchase of the
Portales Assets and Portales Business by the expiration of the Extension
Term, Buyer shall forfeit the Earnest Deposit to Seller.


<PAGE>


     8.2.13.  No Material Changes.  From the date of this Agreement to the
Closing Date, there shall not have been, except as set forth in the Schedules
to this Agreement and approved or waived by Buyer:

      (i)  any material change in the financial or other condition of
Portales  Assets or Portales Business;

      (ii)  any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the Portales Assets or the Portales
Business;

      (iii)  any amendment or termination of any contracts or agreements to
which Seller is a party, which amendments or terminations, either
individually or in the aggregate, are materially adverse to the operations
relating to the Portales Assets or Portales Business;

      (iv)  any increase, in connection with the operation of the Portales
Business, in the salaries or other compensation payable or to become payable
to, or any advance (excluding advances for ordinary business expenses) or
loan to, any of Seller's employees at the Portales Plant ("Portales Employee)
(except normal increases made in the ordinary course of business and
consistent with past practice), or any increase in, or any addition to, other
benefits (including any bonus, profit-sharing, pension or other plan) to
which any Portales Employee may be entitled, or any payments to any pension,
retirement, profit-sharing, bonus or similar plan except payments in the
ordinary course of business and consistent with past practice made pursuant
to the employee benefit plans described on Schedule 5.13 hereto, or any other
payment of any kind to or on behalf of any Portales Employee other than
payment of normal compensation, benefits and reimbursement for reasonable
expenses in the ordinary course of business and consistent with past
practice;

      (v)  any making or authorization of any capital expenditures, affecting
the Portales Assets or Portales Business, by Seller in excess of Fifty
Thousand Dollars ($50,000);

      (vi)  any cancellation or waiver of any right material to the operation
of the Portales Assets or Portales Business, unless approved hereunder or
waived by Buyer;


<PAGE>


      (vii)  any material adverse change or any threat of any adverse change
in the relations of Seller with, or any material loss or threat of material
loss of, the important suppliers, clients, Portales Feed Products customers
or employees of Seller at the Portales Business;

      (viii)  any sale, transfer or other disposition of any assets of
Seller, except sales of Seller's Inventory to customers in the ordinary
course of business consistent with past practice; or

      (ix)  any mortgage, pledge or subjection to lien of any kind of any of
the Portales Assets, tangible or intangible.

  8.2.14.  Seller's Ethanol Purchases.  Seller shall enter into an agreement
with Buyer (the "Ethanol Purchase Agreement") to purchase the entire output
of fuel-grade ethanol produced by Buyer at the Portales Plant for a term of
at least three  (3) years from the Closing Date.  The price for such ethanol
shall be determined pursuant to the terms of the Ethanol Purchase Agreement.
From the proceeds of its sales of the fuel-grade ethanol supplied by Buyer,
Seller will retain one cent ($0.01) per gallon as a transaction fee and the
balance of such proceeds, less freight, insurance, storage and handling,
shall be paid over to Buyer.  Buyer will have the right to terminate, in
whole or part, ethanol sales to Seller  prior to the end of the term
specified in the Ethanol Purchase Agreement, subject to thirty (30) days
prior written notice to Seller of such  termination.

  8.2.15.  Phase I Environmental Site Assessment.  Buyer shall have obtained
a new Phase I Environmental Assessment report,performed in accordance with
ASTM standards, showing no environmental problems with the Land or any of the
Portales Assets or the Portales Plant.   Buyer, at its expense, will obtain
the new Phase I Environmental Assessment report within forty-five (45) days
after the parties have entered into this Agreement.  A copy of the report
will be provided to Seller.  If the report discloses any environmental
problems with the site requiring remediation costing in excess of fifty
thousand dollars ($50,000), Seller may either bear the cost of and undertake
such remediation prior to the Closing Date or terminate this Agreement and
refund the Earnest Deposit to Buyer.  Seller shall bear the cost of any
remediation costing less than fifty thousand dollars ($50,000) either by
direct payment of such cost or by crediting Buyer with the cost of such
remediation against the Purchase Price.  Buyer shall have the right, at its
sole discretion, to waive remediation by Seller beyond the $50,000 cost.  The
Closing Date may be extended by either party sixty (60) days to allow Seller
to complete remediation work.

  8.2.16.  Air Permit From State of New Mexico.  The conduct of the ordinary
business and operations of the Portales Assets and Portales Business, as of
the Closing Date, shall be in full compliance with Air Quality Permit No.
566-M-4 (the "Air Permit") issued to Seller on or about January 10, 2000 by
the Air Quality Bureau of the New Mexico Environment Department.  This permit
must be assignable or transferable to Buyer without any interruption of the
operations of the Portales Plant.  Prior to the Closing Date, Seller shall
file for any modification of the Air Permit that is necessary to permit
uninterrupted continuation of the current operation of the Portales Plant.
The Closing Date may be extended by either party sixty (60) days to allow
Seller to obtain any necessary modification of the Air Permit


<PAGE>


  8.2.17.  No Material Changes In Relevant Laws.  There shall be no material
adverse changes, prior to the Closing Date of any of the laws, rules and
regulations (collectively "laws") governing or affecting the physical
operation or economic viability of the Portales Assets and Portales Business
including, but not limited to, (i) federal laws regulating or mandating the
use of "oxygenates," such as ethanol, at prescribed levels in motor fuels
sold in areas subject to reformulated gasoline requirements or (ii) federal
laws providing tax credits or benefits for the production or use of ethanol
or the ownership of ethanol producing facilities.

                                 ARTICLE IX
                                REAL PROPERTY

  Section 9.1.  Casualty.  If any material portion of the Portales Assets or
Facilities, whether real or personal property, is damaged or destroyed by
fire or any other casualty, Seller shall promptly give notice of the same to
Buyer.  In such event, at Buyer's option, Buyer shall have the right to
terminate this Agreement by giving notice thereof to Seller within the
earlier of fifteen (15) days after receipt of Seller's notice under this
Section 9.1 or one (1) day prior to the Closing Date.  If Buyer terminates
this Agreement pursuant to this Section 9.1, this Agreement shall become null
and void, and Seller and Buyer shall thereupon have no further liabilities or
obligations under this Agreement or otherwise with respect to the Portales
Assets.  In such event, Buyer's Earnest Deposit shall be returned.  If Buyer
elects not to terminate this Agreement pursuant to this Section 9.1, upon
Closing Buyer shall be entitled to the benefits of all insurance proceeds and
claims relating to any such fire or casualty loss (except business
interruption insurance), and Seller shall at or prior to Closing assign to
Buyer all such insurance proceeds and claims.  Seller shall inform Buyer of
any negotiations with respect to insurance claims involving any damaged part
of the Portales Assets or Portales Business, will permit Buyer to take part
therein, and will not settle any such claims without Buyer's prior written
consent.

  Section 9.2.  Condemnation.  If any authority having the right of eminent
domain shall commence negotiations or shall commence legal action for the
damaging, taking or acquiring of any property, real or personal, included in
the Portales Assets or Portales Business, either temporarily or permanently,
by condemnation or by exercise of the right of eminent domain, Seller shall
promptly give notice of the same to Buyer.  If such proceeding threatens to
have a material effect on the Portales Business, Buyer shall have the right
to terminate this Agreement by giving notice thereof to Seller within the
earlier of fifteen (15) days after receipt of Seller's notice under this
Section 9.2 or one (1) day prior to the Closing Date.  If Buyer  terminates
this Agreement pursuant to this Section, this Agreement shall become null and
void, and Seller and Buyer shall thereupon have no further liabilities or
obligations under this Agreement or otherwise.  In such event, Buyer's
Earnest Deposit shall be returned.  If Buyer elects not to terminate this
Agreement pursuant to this Section 9.2, upon Closing Buyer shall be entitled
to the benefits of all awards, claims, settlement proceeds and other proceeds
payable by reason of any such damaging, taking or acquiring, and Seller shall
assign to Buyer all awards, claims, settlement proceeds or other proceeds
payable by reason of any such damaging, taking or acquiring.  In the event of
any negotiations with respect to any asset included in the Portales Assets
with any authority regarding settlement on account of damaging, taking or
acquiring in lieu of condemnation or eminent domain, Seller will inform Buyer
of all such negotiations, will permit Buyer to take part therein and will not
enter into any settlements thereof without Buyer's prior written consent.
Buyer shall be entitled to a decrease in the Purchase Price to the extent the
proceeds are materially less than the fair market value of the affected
Portales Assets (and personal property located thereon) damaged, taken or
acquired.


<PAGE>


  Section 9.3.  Title Objections.  Within fifteen (15) days of the execution
of this Agreement, Seller, at Seller's expense, shall provide Buyer with a
current commitment (the "Title Commitment"), issued by a Title Company
acceptable to Buyer, for the issuance of the Title Policy.  Buyer shall,
within five (5) days after receipt of the Title Commitment, submit to Seller
in writing a list of Buyer's objections to the exceptions set forth in the
Title Commitment.  Any exceptions on the Title Commitment not so objected to
by Buyer shall be deemed acceptable to Buyer (the "Permitted Title
Exceptions").  Seller shall use its best efforts to cure any exception timely
objected to by Buyer; provided, however, that if Seller has not cured all
such objections by the Closing Date, Buyer may, at its option, waive such
objections, extend the time for curing objections by one or more periods of
time not to exceed an aggregate of sixty (60) days, or terminate this
Agreement; and provided, further, that Seller shall not be obligated to cure
such objections if the reasonable estimated cost to cure said obligations
exceeds in the aggregate Ten Thousand Dollars ($10,000).  The standard
printed title exceptions and easements and restrictions of record which do
not and will not adversely affect the current use of the Portales Assets and
the Portales Business shall be deemed Permitted Title Exceptions for purposes
of this Section 9.3.

                                  ARTICLE X
                           CONFIDENTIAL INFORMATION

  Buyer and Seller, and their representatives and agents, at all times prior
to the Closing Date, and at all times after the Closing Date, even if the
Closing does not occur because this Agreement is terminated pursuant to its
terms, shall maintain in strictest confidence and shall not directly or
indirectly disclose to any person, firm, corporation or other entity, or make
any use of, any documents, records and other information ("Confidential
Information") which is learned by such party or disclosed to such party by
another party or other party's representatives or agents in connection with
this Agreement and the transactions contemplated by this Agreement, unless
having obtained the prior written consent of such other party; provided,
however, that the provisions of this Article X shall not apply to any
Confidential Information which is necessary to Buyer's operation of the
Portales Assets or Portales Business, which is or becomes generally publicly
available through no act or failure to act of such party, which was
demonstrably known to such party prior to disclosure by such other party or
other party's representatives or agents, or which was subsequently disclosed
to such party by a third party not having a relationship to such other party
that reasonably would be expected to be confidential with respect thereto.

                                  ARTICLE XI
                                   EXPENSES

  Except as otherwise expressly provided in this Agreement, and regardless of
whether the transaction contemplated by this Agreement closes:  (i)  Seller
shall pay all its costs and expenses, including legal fees, in connection
with its execution, delivery and performance of and compliance with this
Agreement, and all transfer, documentary and similar taxes in connection with
the delivery of the Portales Assets to be made hereunder; and (ii)  Buyer
shall pay all its costs and expenses, including legal fees, of Buyer's
execution, delivery and performance of and compliance with this Agreement.


<PAGE>


                                 ARTICLE XII
                   SURVIVAL OF REPRESENTATIONS, WARRANTIES,
                           COVENANTS AND AGREEMENTS

  Section 12.1.  Survival Of Representations and Warranties.  All
representations, warranties, covenants and agreements of Buyer and Seller
contained in this Agreement or any exhibit or schedule hereto or any
certificate or other document delivered pursuant to this Agreement shall
survive the Closing and shall remain in full force and effect, regardless of
any investigation made or information or knowledge obtained by or on behalf
of either Buyer or Seller, as applicable, at any time; provided that the
representations and warranties of Buyer and Seller contained in this
Agreement shall survive only for the General Survival Period specified in
Section 12.2 and thereafter neither Seller nor Buyer shall have any liability
whatsoever with respect to any such representations or warranties, except for
claims then pending or theretofore asserted in writing by any party in
accordance with the terms and conditions of this Agreement.

  Section 12.2  General Survival Period.  No action or claim for damages by
either party arising out of or resulting from a breach of this Agreement or
of any of the representations and warranties contained herein shall be
brought or made two (2) years or more after the execution date of this
Agreement (the "General Survival Period"); provided, however, that the
foregoing time limitations shall not apply to:  (i) any such action or claims
that have been the subject of a good faith written notice from Buyer to
Seller or from Seller to Buyer, as the case may be, prior to such period,
which notice specifies in reasonable detail the nature and basis for such
claim (which shall survive until the final resolution of such claims) or (ii)
the representations and warranties regarding taxes and environmental matters
contained in Sections 5.4 and 5.5 each of which shall survive until the day
immediately following expiration of the applicable statute of limitations so
long as such period is longer than the General Survival Period.

                                 ARTICLE XIII
                                 THE CLOSING

  Section 13.1.  Time and Place. The closing of the transactions contemplated
hereby ("Closing") shall be held no later than ninety (90) days after the
execution of this Agreement at such time and on such date as Buyer and Seller
may mutually agree to in writing ("Closing Date"), at the offices of Seller
in Wichita, Kansas or other mutually agreeable location.  The Closing Date
may be extended by mutual agreement of the parties.

  Section 13.2.  Deliveries and Proceedings at Closing.  Subject to the terms
and conditions of this Agreement, at the Closing:


<PAGE>


    13.2.1.  Deliveries to Buyer.  Seller will deliver or cause to be
delivered to Buyer:

      (i)  a bill of sale and instrument of assignment to the Portales Assets
and Portales Business, duly executed by Seller, substantially in the form of
Exhibit 13.2.1 (i) hereto;

      (ii)  assignments of all transferable or assignable contracts, real
estate leases, intellectual property, intellectual property agreements,
licenses, permits and warranties relating to the Portales Assets and Portales
Business, each duly executed and, where necessary or desirable, in recordable
form, substantially in the form of Exhibit 13.2.1 (ii) hereto;

      (iii)  the certificates, opinions and other documents required to be
delivered by Seller pursuant to this Agreement;

      (iv)  a receipt for the payment of the Purchase Price duly executed by
Seller; and

      (v)  all such other instruments of conveyance as shall, in the
reasonable opinion of Buyer and its counsel, be necessary to vest in Buyer
good, valid and marketable title to the Portales Assets and Portales
Business.


<PAGE>


    13.2.2.  Deliveries to Seller.  Buyer will deliver or cause to be
delivered to Seller:

      (i)  a wire transfer of immediately available funds in an amount equal
to the Purchase Price;
      (ii)  the certificates, opinions and other documents required to be
delivered by Buyer pursuant to this Agreement; and

      (iii)  an assignment and assumption agreement duly executed by Buyer,
substantially in the form of Exhibit 13.2.2(iii) hereto.

  Section 13.3.  Closing Adjustments.

    13.3.1.  Ad Valorem and Other Taxes Or Assessments.

      (i)  Real Estate Taxes.  Seller shall pay all real estate taxes with
respect to the Portales Assets for all periods prior to the Closing Date.
Seller shall pay its pro rata share of all real estate taxes with respect to
the Portales Assets accruing for 2000 which are not yet due and payable.  The
2000 real estate taxes shall be prorated between Seller and Buyer based upon
the number of days of such year up to the Closing Date.  Any proration of
taxes shall be based upon the current year's tax and shall be adjusted for
and deducted from the amounts to be paid by Buyer to Seller pursuant to
Article II of this Agreement; provided, however, that if on the Closing Date
the current year's mill levy is not fixed and the current year's assessment
is available, taxes will be prorated based upon such assessment and the prior
years mill levy, or if the current year's assessment is not available, then
taxes will be prorated based upon the prior year's tax.

      (ii)  Special And Deficiency Assessments For Improvements.  Seller
shall pay any and all special assessments, or installments of special
assessments, that are due on or before the Closing Date, relating to
improvements by public or quasi public authorities affecting or benefiting
the Portales Assets

    13.3.2.  Transfer and Sales Taxes; Tax Abatements or Exemptions.  Buyer
will pay all federal, state and local transfer and documentary taxes, and all
sales, use or similar taxes pertaining to the sale and transfer of the
Portales Assets and the Portales Business to Buyer.  Buyer, at its
discretion, may apply for any applicable tax abatements or exemptions.
Seller shall assist Buyer as necessary for Buyer to obtain any such tax
abatement or exemption.

    13.3.3.  Other Taxes.  Except as provided in Sections 13.3.1 and 13.3.2
of this Agreement, Seller shall be responsible for all taxes, charges and
governmental assessments on and with respect to the Portales Assets and
attributable to the period ending on the Closing Date and
Buyer agrees to be responsible for all such taxes, charges and governmental
assessments attributable to the period beginning on the Closing Date.


<PAGE>


    13.3.4.  Work Performed; Utilities.  Except as specifically provided in
this Agreement, Seller shall pay promptly all expenses incurred for work
performed, utilities supplied and materials delivered to the Portales Plant
prior to the Closing Date and Buyer shall promptly pay or reimburse Seller
for amounts paid by Seller for work performed, utilities supplied and
materials delivered to the Portales Plant on or after the Closing Date and
for which Seller obtained Buyer's prior written approval.  The parties
anticipate that all utilities will be transferred to Buyer as of the Closing
Date.

    13.3.5.  Prepaid Expenses and Prepayments.  Prepaid expenses (including,
but not limited to, taxes covered by Sections 13.3.1, 13.3.2 or 13.3.3,
rents, contract payments, license and permit fees, and insurance) paid by
Seller with respect to the Portales Assets and relating to the period on and
after the Closing Date, and identified on Seller's Prepaid Expenses Closing
Schedule, attached hereto as Schedule 13.3.5, to be delivered by Seller to
Buyer at Closing, shall be reimbursed at Closing by Buyer to Seller in cash,
but if and only to the extent that the resulting benefits are transferred to
Buyer or Buyer is otherwise able to obtain the corresponding benefits.  With
respect to prepaid expenses not identified on the Prepaid Expenses Closing
Schedule, Buyer shall promptly reimburse Seller for such expenses relating to
the period on and after the Closing Date, but if and only to the extent that
the resulting benefits are transferred to Buyer or Buyer obtains the
corresponding benefits.

    13.3.6.  Security or Refundable Deposits and Third-Party Warranties.  On
the Closing Date, Seller shall pay over to Buyer, and Buyer shall assume
responsibility for, any cash security or refundable deposits held by Seller
under contracts, leases and agreements, if any, which are Portales Assets and
which are identified in Seller's Schedule of Security Deposits, attached
hereto as Schedule 13.3.6.  Schedule 13.3.6 shall be delivered to Buyer at
least ten (10) days prior to the Closing.  Seller will, to the extent
permitted by the terms of any unexpired warranties, liens, security
interests, letters of credit and other security arrangements or agreements
held by Seller with respect to contracts, leases or agreements that are
Portales Assets identified in Schedule 13.3.6, assign and transfer its rights
in any Portales Assets so identified to Buyer.

    13.3.7  Adjustments Based On Post Closing Payments By Buyer;  To the
extent Buyer makes any payment following the Closing with respect to the
items listed below, or items of a similar nature, Seller shall reimburse
Buyer on a per diem basis to the extent such payment relates to Seller's
ownership of the Portales  Assets or conduct of the Portales Business prior
to the Closing:

      (i)  personal, property, real property and other ad valorem taxes;

      (ii)  water, sewer and other similar types of charges and/or taxes or
assessments, and installments on special benefit assessments and any other
assessments payable with respect to the Portales Assets;


<PAGE>


      (iii)  electric, fuel, gas, telephone and other utility charges;

      (iv)  payroll expenses and payroll taxes;

      (v)  reimbursable employee business expenses;

      (vi)  rentals and other charges under leases to be transferred to or
assumed by the Buyer; and

      (vii)  charges under maintenance and service contracts and fees under
licenses or permits to be transferred to or assumed by the Buyer.

  Section 13.4.  Inspection Opportunity.  Provided that Seller has complied
with the provisions of Section 7.1.2 regarding Buyer's access to information
in all respects, on the closing Buyer will be deemed to have acknowledged
that its officers, directors and authorized agents have been given an
opportunity to examine such instruments, documents and other information
relating to the Seller as they have deemed necessary or advisable in order to
make an informed decision relating to the purchase of the Portales Assets and
the Portales Business and its suitability as an investment for Buyer and that
they have been afforded an opportunity to ask questions and to obtain any
additional information necessary in order to verify the accuracy of the
information furnished and that such parties have, in fact, asked all such
questions and reviewed all such instruments, documents and other information
as they have deemed necessary under the circumstances.  Nothing contained in
this Section 13.4 is intended to mean or imply that Buyer does not or will
not rely on the representations and warranties of Seller contained in Article
V of this Agreement.

                                ARTICLE XIV
                               MISCELLANEOUS

  Section 14.1.  Entire Agreement.  This Agreement constitutes the entire
understanding among the Parties with respect to the subject matter contained
herein and supersedes any prior understandings and agreements among them
respecting such subject matter.

  Section 14.2.  Headings.  The headings in this Agreement are for
convenience of reference only and shall not affect its interpretation.


<PAGE>


  Section 14.3.  Gender.  Words of gender may be read as masculine, feminine
or neuter, as required by context.

  Section 14.4.  Number.  Words of number may be read as singular or plural,
as required by context.

  Section 14.5.  Exhibits, Schedules and Missing Exhibits.  Each Exhibit and
Schedule referred to herein is incorporated into this Agreement by such
reference.  Any exhibit or information not included, but intended to be
included in the attachments or exhibits to this Agreement, shall be furnished
by the parties no later than thirty (30) days after the execution date of
this Agreement or as soon thereafter as is practicable.

  Section 14.6.  Calculation of Days.  Any reference to a number of days in
this Agreement shall mean consecutive calendar days unless otherwise
indicated.  References to business days shall mean any day other than a
Saturday, Sunday or a public holiday under the laws of the United States of
America.  For any period referred to in this Agreement of five (5) days or
less, Saturdays, Sundays and  public holidays shall not be counted.

  Section 14.7.  Severability.  If any provision of this Agreement is held
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability will not affect any other provision hereof.  This Agreement
shall, in such circumstances, be deemed modified to the extent necessary to
render enforceable the provisions hereof.

  Section 14.8.  Notices.  All notices, requests, demands, waivers, consents,
approvals or other communications required or permitted hereunder shall be in
writing and shall be deemed to have been given if delivered personally, sent
by telegram or telex or sent by certified or registered mail, postage
prepaid, return receipt requested, to the following addresses:

      If to Buyer:

      Natural Chem Industries, LLC/New Mexico
      Attn:  Robert J. Salazar, President
      4265 San Felipe Road, Suite 1100
      Houston, Texas 77027

      If to Seller:

      High Plains Corporation
      Attn:  Gary R. Smith, President
      200 W. Douglas, Suite 820
      Wichita, Kansas  67202

  Notice of any change in any such address shall also be given in the manner
set forth above. Whenever the giving of notice is required,  required, the
giving of such notice may be waived by the Party entitled to receive such
notice.


<PAGE>


  Section 14.9.  Waiver.  The failure of any Party to insist upon strict
performance of any of the terms or conditions of this Agreement will not
constitute a waiver of any of its rights hereunder.

  Section 14.10.  Successors and Assigns.  This Agreement binds, inures to
the benefit of and is enforceable by the successors and assigns of the
Parties.  Buyer shall have the right to assign this Agreement to any of its
affiliates or to third parties providing all or part of the financing for the
purchase of the Portales Assets and Portales Business.  A company will be
deemed to be an "affiliate" of Buyer if it has at least fifty percent (50%)
common ownership with Buyer.  However, any such   assignment does not release
Buyer from its obligations under this Agreement.

  Section 14.11.  Amendments and Termination.  This Agreement may be amended,
supplemented and terminated only by a written instrument duly executed by the
Parties.

  Section 14.12.  Governing Law.  This Agreement and all documents executed
and delivered hereunder shall be governed by the laws of the State of New
Mexico, excluding any choice of law rules which may direct the application of
the laws of another jurisdiction.

  Section 14.13.  Jurisdiction And Choice Of Forum:  Any dispute between the
parties arising under this Agreement shall be submitted for decision to the
United States District Court for the District of New Mexico, or a New Mexico
state court of competent jurisdiction.  The parties each expressly consent to
jurisdiction over them for all purposes by such courts.

  Section 14.14.  Attorney's Fees:  In the event of litigation arising out of
this Agreement, the prevailing party shall be entitled to recover all costs
and expenses, including reasonable attorney's fees.

  Section 14.15.  Recording:  Buyer may record a memorandum of this Agreement
with the local Clerk and Recorder to give notice of this Agreement to third
parties.  Seller and Buyer shall sign the memorandum in the manner required
for recorded documents affecting title to land.

  Section 14.16.  Counterparts.  This Agreement may be executed in any number
of counterparts and any Party hereto may execute any such counterpart, each
of which when executed and delivered shall be deemed to be an original and
all of which counterparts taken together shall constitute but one and the
same instrument. The execution of this Agreement by any Party hereto will not
become effective until counterparts hereof have been executed by all the
Parties hereto.  It shall not be necessary in making proof of this Agreement
or any counterpart hereof to produce or account for any of the other
counterparts.


<PAGE>


  IN WITNESS WHEREOF, the Parties have executed this Agreement on the date
first above written.

                                    HIGH PLAINS CORPORATION

Attest:
                                    By______________________________
                                      Gary R. Smith
By____________________________        President and Chief Executive Officer
                                      200 W. Douglas, Suite 820
                                      Wichita, Kansas 67202
                                      (316) 269-4310, Fax (316) 269-4008

                                      NATURAL CHEM INDUSTRIES, LLC
                                        New Mexico

Attest:
                                    By______________________________
                                      Robert J. Salazar
By____________________________        President and Chief Executive Officer
                                      4265 San Felipe Road, Suite 1100
                                      Houston, Texas 77027
                                      (713) 524-0500, Fax (713) 524-9955



<PAGE>


County of Harris        )  ss.
State of Texas          )

  The foregoing document was subscribed and sworn to under penalty of perjury
before me this _____ day of May, 2000, by Robert J. Salazar, President and
Chief Executive Officer of Natural Chem Industries, LLC/New Mexico, a New
Mexico limited liability company, on behalf of said company.

  My commission expires:_______________________________________.


                        ___________________________________
                        Notary Public
                        Address:___________________________
                        ___________________________________
                        ___________________________________


County of _____________________)  ss.
State of ______________________)

  The foregoing document was subscribed and sworn to under penalty of perjury
before me this _____ day of May, 2000, by Gary R. Smith, President and Chief
Executive Officer of High Plains Corporation, a Kansas corporation, on behalf
of said corporation.

  My commission expires:_______________________________________.


                        ___________________________________
                        Notary Public
                        Address:___________________________
                        ___________________________________
                        ___________________________________



<PAGE>


Exhibit 10-26



LEASE
4/7/2000


This Lease is entered into on this 7th day of April, 2000 between CENTER
TOWERS L. C., hereinafter called LANDLORD, and HIGH PLAINS CORPORATION
hereinafter called TENANT.


WITNESSETH:


In consideration of the mutual covenants and promises hereinafter contained,
the parties hereby mutually agree as follows:


1. LEASED PREMISES: TENANT will use as office space that portion of the 8th
floor of the O.W. Garvey  Building, which is so indicated on Exhibit "A"
attached hereto (herein the "Leased Premises") and made part hereof,
hereinafter referred to as the Building, Wichita, Sedgwick County, Kansas.,
Tenant leases from Landlord approximately 1504 Rentable Square Feet and will
pay rent based thereon.

Rentable Square Feet means the square footage of the tenant's office space
reflected in Exhibit "A" plus tenant's pro rata share of the common area of
the total square footage of the second floor of the building to which all
tenants have common access thereto.

2. TERM:  The rent paying term of this Lease shall be approximately 37
months, commencing May 1, 2000 and ending May 31, 2003.

3. RENT:
(A) Subject to escalation as provided in paragraph 3 (B) below, TENANT
agrees to pay as Base Rent, the sum of $9.00 multiplied by the Rentable
Square Feet as shown in paragraph 1 herein.  The Annual Base Rent will be
$13,536.00 payable at a rate of $1128.00 per month, with the rent for the
first month payable in advance and payments thereafter to be made on the
first day of each calendar month during the term.  The rent for any
fractional calendar month shall be prorated.


(B) Change of Base Rent Due to Cost of Living.   Base Rent as provided
herein shall be adjusted by adjusting the Base Rent in the same
proportion as the fluctuation in the Consumer Price Index.  The
adjustment provided herein shall be in addition to any scheduled increase
in Base Rent and shall be cumulative from year to year.  See Annual Base
Rent.

   As used in this Article, the term "Consumer Price Index" shall mean the
Consumer Price Index for All Urban Consumers (1982 to 1984 = 100) released by
the United States Department of Labor, Bureau of Labor Statistics, relating
to Consumer Prices, all urban consumers, United States city average.  The
statistical methods used for computing the Consumer Price Index shall be such
as are chosen by the United States Department of Labor for that purpose
irrespective of whether the methods are changed from time to time.  If the
base year selected by the United States Department of Labor shall be changed,
then the resultant Index shall be readjusted so as to reflect the base
initially established under this section.  If the said Index shall no longer
be published or cannot be readjusted, then another Index generally recognized
as authoritative shall be substituted by Landlord.


<PAGE>


   For purposes of this paragraph, the base month will be the month next
preceding the first full month of the term of this Lease, and in the event of
any renewal, the month prior to the first month of such renewal.  Such
proportion shall be computed annually for the first month following the
completion of each twelve (12) months of the Lease, and the new rent derived
from such computation shall be in effect for the next (12) months.  In no
event, however, will an adjustment be made which would reduce the Base Rent
to an amount less than the immediately preceding Lease Year.  The necessary
calculation for the adjustment required herein will be made as quickly as
possible, but in the event a rent paying date occurs before the adjustment
can be calculated, an amount equal to the current unadjusted Base Rent will
be paid by Tenant to Landlord on the rent payment date, and as soon as the
calculation of the adjustment is made, an additional payment will be
immediately paid by Tenant to Landlord.

(C) In addition to the Base Rent specified in paragraph 3 (A), and subject
to the escalation specified in paragraph 3 (B) above, Tenant shall pay as
additional rent, its proportionate share of any increase in the real
property taxes as provided for in paragraph twenty-one (21).


4. LATE FEE: In the event any installment of the rent is not paid within
fifteen days after it becomes due, a late fee of ten percent of the monthly
installment will be charged.  In addition, TENANT shall be responsible for
any attorney's fees incurred by LANDLORD in connection with the collection of
late fees, which sums shall be deemed additional rent.  The payment of any
late fee shall not cure or excuse any default by TENANT under this Lease.

5. IMPROVEMENT OF THE LEASED PREMISES: TENANT agrees to accept the Leased
Premises in its present condition, subject to improvements, alterations and
decorations to be made by the LANDLORD as set forth in Exhibit B to this
Lease which is attached hereto and made a part hereof.  No alterations,
additions or improvements to the Leased Premises (including signs), except
those as specifically set forth in Exhibit B, shall be made without first
having the written consent of the LANDLORD.  Any improvements, additions or
alterations made to the Leased Premises shall become a part of the realty and
shall not thereafter be removed from the premises by the TENANT, with the
sole exception that TENANT shall have the right to install trade fixtures
which may be removed by the TENANT upon payment to LANDLORD of the cost for
repairing any damage caused by the removal of said trade fixtures.  Any
mechanics or materialmen's lien filed against the Leased Premises for work
claimed to have been done for, or for materials claimed to have been
furnished to TENANT, shall be discharged by TENANT within ten days
thereafter, at TENANT'S expense, by filing the bond required by law or
otherwise.

6. USE OF PROPERTY: TENANT shall occupy the Leased Premises only as a
business office and shall use it in a careful, safe and proper manner.
TENANT shall not use the Leased Premises for any unlawful purpose or for any
purpose deemed extra hazardous by the fire insurance company that has
coverage on the premises.  LANDLORD shall have the right to enter the Leased
Premises at reasonable hours of the day to examine the same, or to make such
repairs and alterations ad may be necessary.

7. UTILITIES AND MAINTENANCE: LANDLORD agrees to furnish, during ordinary
business hours, except Sundays and holidays, such heat, water, electricity,
air conditioning, elevator service and cleaning service as in LANDLORD'S sole
judgement is necesssary for the comfortable use and occupancy of said Leased
Premises by TENANT; all at LANDLORD'S cost and expense.  TENANT agrees that
the LANDLORD shall not be liable for failure to supply any such heat, water,
electricity, air conditioning, elevator service and cleaning service
resulting from causes beyond the control of LANDLORD.  Should any equipment
or machinery fail to function properly, LANDLORD shall use reasonable
diligence to repair same promptly, but TENANT shall have no claim for rebate
of rent or damages on account of any interruption in service occasioned
thereby or resulting therefrom.  TENANT shall be responsible for all damage
to the Leased Premises caused by TENANT'S use, other than damage caused by
ordinary wear and tear and for all redecorating, remodeling and alteration
required by it during the term of this Lease.

8. AFTER HOURS H.V.A.C.: For the purpose hereof, the term "ordinary hours"
shall mean 7:00a.m.until 7:00p.m. Monday through Saturday.  Sundays and
holidays shall not constitute ordinary business hours.  Ordinary business
hours may be modified from time to time.  The furnishing of  heating,
ventilation and air conditioning during other than normal business hours,
holidays and Sundays may be available at a rate to be established by
LANDLORD, but at a rate that will be known prior to said furnishing by
LANDLORD.


<PAGE>


9. POSSESSION: If LANDLORD is unable to give TENANT possession at the
beginning of the lease term, then rent shall abate until occupancy is
available to TENANT, which abatement in rent shall be accepted by TENANT as
full settlement of all damages occasioned by such delay. If the Leased
Premises is not ready for occupancy within three months after the
commencement date specified in Section 2, TENANT may cancel this Lease by
giving written notice to LANDLORD.  TENANT may have access to the Leased
Premises prior to the commencement date for the purpose of installing office
equipment, services and other necessary items.

10. UNIFORM RULES AND REGULATIONS: LANDLORD shall have the right to
prescribe, and TENANT agrees to abide by, uniform rules and regulations for
the "Building" as LANDLORD may reasonably deem necessary, advisable and
appropriate.

11. CASUALTY DAMAGE: If the Leased Premises is partially damaged by fire, the
elements or other casualty, then LANDLORD shall promptly repair all damage
and restore the Leased Premises to its prior condition.  If TENANT is
deprived of the use of any substantial portion of the Leased Premises, either
by reason of said damage or during restoration, the rent shall be
proportionately reduced according to the extent to which TENANT is deprived
of such use.  If the Leased Premises is damaged by fire, the elements or
other casualty to the extent of 50% or more of the replacement cost thereof,
LANDLORD may terminate the Lease as of the date of the damage by written
notice to TENANT within sixty days after said date of the damage.

12. LIABILITY INSURANCE:

(a) TENANT shall procure a comprehensive general liability insurance
policy, at TENANT'S cost, for the Leased Premises, covering bodily injury
of at least $100,000 to each person and $300,000 for each accident, and
property damage of at least $100,000.

(b) TENANT agrees to bring itself within the elective provisions of the
Workman's Compensation Law and to carry insurance covering its liability
under said law at TENANT'S expense.

(c) Any and all insurance held by TENANT shall be with insurance companies
acceptable to LANDLORD.  TENANT shall furnish LANDLORD with certificates
of insurance evidencing said coverage, with each certificate bearing
acknowledgment by the insurance company agreeing to give LANDLORD ten days
notice before cancellation of such policy.  Each of such comprehensive
general liability policies shall name Center Towers L.C. as an insured
thereunder.

13. INDEMNITY: LANDLORD shall not be liable for any injury, loss or damage to
persons or property resulting from fire, theft, explosion, steam, gas,
electricity, water, rain or snow or leaks from any part of the Building or
any cause of whatever nature unless caused by or due to the negligence of
LANDLORD or its employees.  TENANT will indemnify and hold harmless LANDLORD
from all liability for damages, claims or expenses which TENANT may be
assessed on account of injuries or damage to the person or property of any
other tenant of the Building or to any other person rightfully in the
Building where the injuries or damages are caused by misconduct or negligence
of TENANT, its agents, employees or guests.

14. CONDEMNATION: In the event that the whole or part of the Leased Premises
should be condemned or seized by any governmental authority, or any transfer
in lieu thereof, the rent specified in this Lease shall be abated to the
extent that the Leased Premises is no longer available for use by the TENANT.
This Lease shall not otherwise be affected by such condemnation or seizures,
and the TENANT agrees that it is to receive no part of any damages or rentals
which may be awarded as a result of such condemnation or seizure.

15. TERMINATIONS: LANDLORD shall have the right to terminate this Lease in
the event of bankruptcy, insolvency or receivership of TENANT or an
assignment by TENANT for the benefit of the creditors of the TENANT.


<PAGE>


16. DEFAULT: The occurrence of any of the following shall constitute a
default under this Lease by the TENANT:

(a) Failure by TENANT to pay any money as rent or taxes due when the same
becomes payable in accordance with this Lease and the continuation of such
failure for a period of ten days after written notice thereof from LANDLORD
to TENANT.

(b) Default by TENANT in the due, prompt and complete performance or
observance of any other covenant, agreement or obligation of TENANT contained
in this Lease and the continuation of such default for a period of thirty
days after written notice thereof from LANDLORD to TENANT specifying the
nature of such default, except that if such default cannot reasonably be
cured within such thirty day  period.  TENANT shall not be deemed to be in
default if it shall within such period commence such cure and thereafter
diligently prosecute the same to completion.

(d) TENANT'S abandonment of the Leased Premises.

17. TERMINATION OF LEASE AND REMOVAL OF TENANT: In the event of TENANT'S
breach of and default under this Lease as provided in Section 18 above,
LANDLORD  may, at LANDLORD'S option, and without limiting LANDLORD in the
exercise of any other right or remedy LANDLORD may have on account of such
breach and default, and without further demand or notice:

(a) Re-enter the Leased Premises, with or without process of law, and
remove all persons therefrom, and without terminating this Lease at any
time and from time to time, relet the Leased Premises or any part or parts
thereof for the account of TENANT or otherwise; receive and collect the
rents therefore, applying the same first to the payment of such expenses
as LANDLORD may have paid, assumed or incurred in recovering possession of
the Leased Premises, including costs, expenses and attorney's fees, and
for placing the same in good order and condition, or repairing or altering
the same for reletting and all other expenses, commissions and charges
paid, assumed or incurred by LANDLORD in or about reletting the Leased
Premises, and then to the fulfillment of the agreements of TENANT
hereunder.  Any such reletting, as provided herein, may be for such term
or terms (which may be for a term extending beyond the term of this Lease)
and at such rental or rentals and upon such other terms and conditions ad
LANDLORD, in its sole discretion, may deem advisable.  In any event, and
whether or not the Leased Premises or part thereof is relet, TENANT shall
pay to LANDLORD all such sums required to be paid by TENANT up to the time
of re-entry by LANDLORD and, thereafter, TENANT shall, if required by
LANDLORD, pay to LANDLORD, until the end of the term of this Lease, the
equivalent of the amount of all rent and other charges required to be paid
by TENANT under the terms hereof, less the avails of such reletting, if
any, after payment of the expenses of LANDLORD as aforesaid.

(b) Terminate this Lease and re-enter the Leased Premises, with or without
process of law, and remove all persons therefrom, and LANDLORD shall
thereupon be entitled to recover from TENANT all damages it may incur by
reason of such breach, including the cost of recovery of the Leased
Premises.

18. ACCELERATION OF RENT: In any action for rent, or in any case where the
TENANT has abandoned the Leased Premises and fails to pay rent, the total
sums due for the balance of the notwithstanding any other duty imposed by law
upon TENANT.

19. NO ACCEPTANCE OF SURRENDER: Notwithstanding anything to the contrary set
forth herein, LANDLORD'S reentry to perform acts of maintenance or
preservation of, or in connection with efforts to relet, the Leased Premises
or any portion thereof, or the appointment of a receiver upon LANDLORD'S
initiative to protect LANDLORD'S interest under this Lease shall not
terminate TENANT'S right to possession of the Leased Premises or any portion
thereof and, until LANDLORD does elect to terminate this Lease, this Lease
shall continue in full force and LANDLORD may pursue all of its remedies
hereunder including, without limitation, the right to recover from TENANT as
they become due hereunder all rent, additional rent and other charges
required to be paid by TENANT under the terms hereof.


<PAGE>


20. ATTORNEY'S FEES: In the event of any litigation between LANDLORD and
TENANT to enforce any of the provisions of this Lease or any right of either
party hereto, the unsuccessful party to such litigation agrees to pay to the
successful party all costs and expenses, including reasonable attorney's
fees, incurred therein by the successful party, all of which shall be
included in and as a part of the judgment rendered in such litigation.  If
LANDLORD engages the services of an attorney for the purpose of collecting
any rent, or other sums due from TENANT hereunder, having first given the
TENANT five days' notice of its intention of doing so, TENANT shall pay the
reasonable fees of such attorney regardless of the fact that no legal
proceeding or action may have been commenced.


21. REAL PROPERTY TAXES: LANDLORD agrees to pay all real property taxes on
the Building, with possible reimbursement by TENANT of a portion thereof as
hereafter provided.  For the purpose of this paragraph, the tax year 2000 is
hereinafter referred to as the Base Year.  If the real property taxes for the
Building for any tax year exceed the real property taxes for the Base Year,
then TENANT shall reimburse LANDLORD for TENANT'S share of such excess,
provided LANDLORD requests such reimbursement not later than sixty days after
the delinquent date for such taxes.  TENANT'S share shall be a fraction of
such excess, the numerator of which fraction shall be the total number of
rentable square feet of TENANT, and the denominator of which shall be the
total number of rentable square feet in the Building.  TENANT shall reimburse
LANDLORD within thirty days after receipt of satisfactory evidence of
LANDLORD'S payment of such taxes and the amount due from TENANT.

22. HOLDING OVER: If TENANT remains in possession of the Leased Premises
after the expiration of this Lease, such continued possession shall create a
month-to-month tenancy on the same terms specified herein and said tenancy
may be terminated at any time by either party providing to the other party a
thirty day written notice of termination.

23. RIGHT TO SHOW PREMISES: LANDLORD may, at any time within sixty days of
the expiration of this Lease, enter the Leased Premises at all reasonable
hours for the purpose of offering and showing the premises for lease.

24. ASSIGNMENT: TENANT may not assign this Lease or sub-lease the Leased
Premises or any part thereof without the written consent of LANDLORD.  Such
consent shall not be unreasonably withheld.

25. RECAPTURE OF ASSIGNMENT OR LEASE PROFIT: If the rental reserved in any
lease or assignment of all or any part of the Leased Premises exceeds the
rental or prorated portion of the rental, as the case may be, for such space
reserved in the Lease, TENANT shall pay LANDLORD each month, as additional
rent, at the same time as the monthly installments of rent become due
hereunder, one-half of the excess of the rental reserved in the lease or
assignment over the rental reserved in this Lease.

26. CONSTRUCTION OF LEASE: The terms and provisions of this Lease shall be
construed in accordance with laws of the State of Kansas.

27. ENTIRE AGREEMENT AND MODIFICATIONS: This Lease contains the entire
agreement between the parties hereto, and no agent, representative, salesman
or officer of the parties hereto has authority to make, or has made, any
statement, representation or agreement, oral or written, which modifies, adds
to, or changes the terms of this Lease.  No modifications of any of the terms
and conditions of this Lease shall be effective unless reduced to writing and
executed by the parties hereto.

28. FIRST RIGHT OF REFUSAL: TENANT shall have a continuous right of first
offer on all space which becomes, or is vacant on the 8th floor of the O.W.
Garvey Building during the term of this Lease.  Upon presentation of a bona
fide third party offer acceptable to LANDLORD from a prospective tenant to
lease space on the 8th floor, TENANT will be notified in writing of such offer
and shall have three (3) business days after receipt of such notice within to
exercise its right to either accept or refuse to lease the applicable space
upon the same terms of the lease so offered, except that such lease shall be
coterminous with this Lease.


<PAGE>


This Lease shall be binding on the heirs, executors, administrators and
successors of the parties hereto.

IN WITNESS HEREOF, the parties hereto have caused this Lease to be executed
the day and year first above written.


CENTER TOWERS L.C.
LANDLORD                                         ATTEST:


By:

Larry Weber
Executive Vice President


HIGH PLAINS CORPORATION
TENANT                                           ATTEST:


By:

Gary Smith
President




<PAGE>




                 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
High Plains Corporation


We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (nos. 33-00339 and 33-80832), of our report, dated
July 28, 2000, relating to the financial statements of High Plains
Corporation, included in the annual report on Form 10-K, as of and for the
year ended June 30, 2000.



                                    ALLEN, GIBBS & HOULIK, L.C.



September 27, 2000
Wichita, Kansas