Document:

Exhibit 10.2

 

GRANT OF
EASEMENT AND RIGHT OF WAY

 

This Agreement made this 05 day of April,
2005, between the State of Kansas, by and through the Kansas Department of
Wildlife and Parks, hereinafter referred to as GRANTOR, and in favor of East
Kansas Agri-Energy, LLC, hereinafter refereed to as GRANTEES.

 

WITNESSETH: 
In consideration of ONE DOLLAR ($1.00) and other good and valuable
consideration paid by Grantee, the receipt and sufficiency of which is hereby
acknowledged, Grantor does, subject to its interest in the within described
real property, hereby grant to the Grantee, its successors, and assigns, a
perpetual alienable easement and right of way with the right to erect,
construct, install, lay and thereafter us, operate, inspect, repair, maintain, replace
and remove a railroad spur line for as long as said railroad spur is operated
and/or maintained, over and across said property owned by Grantor in Anderson
County, Kansas, described as follows:

 

Commencing at 1/2” rebar at the Southeast
Corner of the Southwest Quarter of Section 30, Township 20 South, Range 20
East of the Sixth Principal Meridian, City of Garnett, Anderson County, Kansas;
THENCE North 02 degrees 14 minutes 48 seconds West for a distance of 798.23
feet along the East line of said Southwest Quarter; THENCE North 70 degrees 59
minutes 38 seconds West for a distance of 51.33 feet to the East line of the
Rail Road Depot as described in Deed Book 16, Page 605 the POINT OF
BEGINNING; THENCE North 70 degrees 59 minutes 38 seconds West for a distance of
301.01 feet to the West line of said Rail Road Depot; THENCE North 12 degrees
22 minutes 55 seconds East for a distance of 60.40 feet along said West line;
THENCE South 70 degrees 59 minutes 38 seconds East for a distance of 305.09
feet to the east line of said Rail Road Depot; THENCE South 16 degrees 15
minutes 12 seconds West for a distance of 60.06 feet to the POINT OF
BEGINNING.  Together with and subject to
covenants, easements, and restrictions of record.  Said property contains18182.9 square feet
more or less in Anderson County, Kansas, as shown on survey by Taylor Design
Group, P.A., dated March, 2005.

 

1.                                       Said
grant is for the benefit of the Grantee, its successors an assigns, and
includes the right to ingress or egress over and across any state property
adjacent to the easement to cut, trim, and /or control any weeds, trees,
shrubbery, or brush that may endanger the use of the railroad spur or the
safety of persons utilizing the Rail Trail that crosses the easement, which
ingress and egress shall require the advance permission of the state park
manager, which permission shall not be unreasonably withheld.

 

2.                                       The
Grantor herein retains the right to use said lands for nay and all other
purposes, including as a recreational area.

 

	
   

  	
  [STATE OF KANSAS

  
	
   

  	
  SS:

  	
   

  
	
   

  	
  COUNTY OF ANDERSON

  
	
   

  	
  This instrument was filed for

  
	
   

  	
  record on the 7th day of April,

  
	
   

  	
  2005, at 3:40 o’clock p.m., and

  
	
   

  	
   duly recorded in Book 77 of MCL

  
	
   

  	
  at page 59.

  
	
   

  	
  /s/ Sandra J. Baugher

  	
   

  
	
   

  	
  Register of Deeds

  
	
   

  	
   

  	
   

  
	
   

  	
  Deputy

  
	
   

  	
  Fees, $24.00

  
	
   

  	
   

  
	
   

  	
  Entered in Transfer Record in my

  
	
   

  	
  Office this       day of           
  2005.

  
	
   

  	
   

  	
   

  
	
   

  	
  County Clerk

  
	
   

  	
  Stamped: Register of Deeds]

  
					

 

3.                                       Grantee
by acceptance of this easement hereby acknowledges and agrees that Grantee
shall notify Grantor by written notice fourteen days in advance of routine
maintenance to occur within the easement area.

 

4.                                       Grantee
shall maintain such easement in a state of good repair and efficiency so that
no unreasonable damages will result from its use of Grantor’s premises.

 

 

5.                                       The
Grantee shall repair any damages due to construction, operation, maintenance,
or removal of all roads, trail, structures, fences, driveways, and vegetation.

 

6.                                       All
construction that effects a temporary change in grade or otherwise creates any
situation that could result in injury to persons or property shall be
barricaded properly to prohibit access to the construction area. Should the
Trail Crossing be closed for construction or maintenance, an alternative
crossing, approved by Grantor shall be made available by the Grantee working in
conjunction with Grantor or its authorized representatives.

 

7.                                       No
construction debris shall be stored on Grantor’s property without prior written
authorization, no trash or other construction debris shall be burned on-site,
and all rock unearthed during construction shall be removed from the premises.

 

8.                                       The
trail crossed by the Right of Way shall be leveled back and returned to its
original condition. At the location where the railroad spur crosses the Rail
Trail, the crossing shall be on grade level, and the crossing shall be
compliant with the requirements of the Americans With Disabilities Act. The
crossing shall consist of pre-cast concrete with a non-slip surface acceptable
to the Grantor. Grantee shall install and maintain audible and visible signs on
Grantor’s property to alert Rail Trail users of an oncoming train, which signs
shall be constructed in accordance with detailed plans under seal of an
engineer licensed to practice in Kansas, and shall be approved by Grantor
before commencement of the installation of signage. Grantor shall provide
electrical power to operate these signs.

 

9.                                       Grantee
agrees, as a part of the consideration for this easement, to re-route access to
the west side of the Rail Trail, and to provide parking spaces to replace those
spaces that will be lost due to the railroad spur easement passing across the
parking lot east of the Rail Trail. Grantee has prepared preliminary plans
showing the re-routing of an access road and the relocation of parking spaces
which preliminary plans are incorporated herein, provided, however, that prior
to the actual construction of these improvements, Grantee will submit detailed
plans for the construction of such improvements, together with the construction
of the rail spur, under seal of an engineer licensed to practice in Kansas,
which plans shall be subject to the approval of the Grantor prior to
commencement of construction, which approval shall not be unreasonably
withheld. In no case shall construction commence until Grantor has approved the
detailed construction plans so submitted. The plans shall reflect that Grantee
will place no above ground structures or improvements upon the easement except
for markers at property lines, fence lines, and road crossings. The plans shall
further provide for Grantee to construct a fence of materials approved by the
Grantor in an easterly and westerly direction along the north and south
boundaries established by the easement’s crossing State Park Property for the
purpose of impeding any person’s approach to the railroad track itself from the
adjoining State Park property.

 

10.                                 The
Grantee shall provide 60 days written notice to the Grantor prior to the
commencement of construction, installation, or substantial repairs within the
easement, which written notice shall include detailed plans for the
construction, installation, or repairs, to include an engineer’s seal of an
engineer licensed to practice in Kansas. In no case shall construction commence
until Grantor has approved the detailed construction plans so submitted.

 

11.                                 In
the event of a bona fide emergency,
the Grantee may make such repairs deemed immediately necessary by the Grantee
to alleviate or mitigate the emergency situation without Grantor’s prior written consent.  When any such emergency action shall be taken
by Grantee without Grantor’ s written consent, Grantee shall make an immediate
report to Grantor, explaining the nature of such emergency, together with a
request for written consent for further or permanent repair or maintenance
work. At all times Grantee shall take reasonable steps to protect Grantor’s
property, including improvements, fixtures, and trail surface within the
Easement Area and insure the safety of patrons using the trail.

 

 

12.                                 If
the railroad spur is not operated or maintained by Grantee or its successors or
assigns for a period of one calendar year after its first use, the easement
interest in the lands covered by this Easement shall be deemed abandoned and
shall automatically revert to the Grantor or then owner of said lands and shall
merge with Grantor’s ownership. In the case of such abandonment of the
Easement, Grantee hereby agrees, if so requested, to execute an instrument in
recordable form evidencing such abandonment and reversion to Grantor.

 

13.                                 This
grant shall not be assigned, sold, transferred, leased, or otherwise conveyed
to a third party without first obtaining the written consent of Grantor, which
consent shall not be unreasonably withheld. In the event one of Grantee’s
lenders institutes foreclosure proceedings against Grantee, Grantor shall be
advised of such proceedings and its consent obtained before said lender conveys
Grantee’s assets to a third party.

 

14.                                 The
parties acknowledge that the subject property is property that has been rail
banked pursuant to 16 U.S.C. 1247(d), that Grantor does not have fee simple
title to the property; that Grantor is, by this Agreement, authorizing the use
of the property by Grantee for so long as Grantor remains in possession and
control of the property; that rail banked property is subject to being returned
to rail service; and that in the event this property is returned to rail
service, Grantee will be required to deal with the carrier that reestablishes
rail service in order to continue making use of this easement.

 

15.                                 The
easement has been reviewed and cleared by the Kansas State Historic
Preservation Officer, however, should any historical artifacts be uncovered
during the construction phase, work will immediately cease and notification
will be provided to the Grantor of such findings. Work may not resume until
further clearance is afforded from the Kansas Historical Preservation Officer.

 

16.                                 If
there is a substantial change in the use of the trail or of the railroad spur
that impacts the safety of persons using the trail, sixty (60) days written
notice of such change shall be provided to the other party, together with a
proposal for modifications to this Easement to address the changed usage and
safety issues created thereby, and the parties will thereafter negotiate in
good faith for the purpose of modifying the easement to address the issues so
raised. Any modifications must be mutually approved in writing, which approval
shall not be unreasonably withheld by either party.

 

17.                                 Grantor
shall provide written notice to Grantee if it deems the Grantee to be in
non-compliance with any of the terms of this Agreement. Grantee shall have 30
days after receipt of this notice to commence correcting the default, which
work shall continue without interruption until it is completed. If Grantee
fails to comply to the stated provision after thirty days, Grantee shall be
deemed to have abandoned said easement interest. In the case of such
abandonment of the Easement, Grantee, its successors, assigns, lessees,
affiliates, or agents, hereby agree, if so requested, to execute an instrument
in recordable form evidencing such abandonment and reversion to Grantor.

 

18.                                 Grantee
agrees to comply with all State and Federal law relating to the exercise of
rights herein granted.

 

19.                                 Equal
opportunity to participate in and benefit from programs described herein is
available to all individuals without regard to their race, color, religion,
national origin or ancestry, sex, age or disability. Complaints of discrimination
should be sent to the Office of the Secretary, Kansas Department of Wildlife &
Parks, 1020 S. Kansas, Suite 200, Topeka, Kansas 66612.

 

20.                                 The
provisions found in Contractual Provisions Attachment (for DA-146a), identified
as Attachment 1, are hereby incorporated in this Agreement. In the event any of
the provisions of this Permit are deemed to be invalid or unenforceable, the
same shall be deemed severable from the remainder of the Permit. If such
provision shall be deemed invalid due to its scope and breadth, such provision
shall be deemed valid to the

 

 

extent of the scope and breadth permitted by
law.

 

Grantee agrees to indemnify and hold Grantor
harmless from and against all third party claims which may result from the
construction, operation and maintenance of said railroad spur by Grantee, its
agents, assigns or subcontractors, including but not limited to, injuries or
deaths of persons, animals, court costs and attorneys’ fees.

 

21.

Address for written notice:

 

Grantor:                                                     Regional
Park Supervisor

Kansas Department of Wildlife and Parks

300 SW Wanamaker

Topeka, Kansas 66606

 

Grantee:                                                    East
KansasAgri-Energy, LLC

William R. Pracht,

Chairperson 121 1/2 East

Fourth Avenue P.G. Box 225

Garnett, Kansas 66032

 

It is agreed that the foregoing is the entire
agreement between the parties hereto, and that this written agreement is
complete in all its terms and provisions. The term of this agreement shall
constitute covenants running with the land and shall be binding upon and inure
to the benefit of the parties hereto, their successors, assigns, lessees,
affiliates or agents. This easement and right-of-way shall be effective upon
acceptance by the Grantee (as evidenced by the signatures below) and the filing
of the easement in the official records of the Anderson County Register.of
Deeds.

 

IN WITNESS WHEREOF, said Grantor has executed
this instrument this
           day of April,
2005.

 

	
   

  	
  STATE OF KANSAS, by and through,

  
	
   

  	
  KANSAS DEPARTMENT OF WILDLIFE AND PARKS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J Michael Haden

  	
   

  
	
   

  	
   

  	
  J. Michael Hayden, Secretary

  
	
  STATE OF
  KANSAS        )

  	
   

  	
   

  
	
  )SS:

  	
   

  	
   

  
	
  COUNTY OF SHAWNEE)

  	
   

  	
   

  

 

BE IT REMEMBERED, that on this 5 day of
April, 2005, before me, the undersigned, a Notary Public, in and for the county
and state aforesaid, came J. Michael Hayden, who in his capacity as Secretary
of the Kansas Department of Wildlife and Parks is personally known to be the
same person who executed the within instrument of writing in such capacity and
such person duly acknowledged the execution on behalf of the State of Kansas,
by and through the Kansas Department of Wildlife and Parks.

IN WITNESS WHEREOF, I have hereunto set my
hand and affixed my notarial seal the day and year last above written.

 

	
  Term Expires:

  	
   

  
	
   

  	
   

  
	
  [Notary Stamp: Donna L. Eberly

  	
  /s/ Donna L. Eberly

  	
   

  
	
  Notary Public, State of Kansas, My Appt.
  Exp.

  	
  04-05-05

  	
  ]

  	
   Notary Public

  
					

 

 

ACCEPTANCE OF RIGHT OF WAY
EASEMENT

 

The East Kansas Agri-Energy, LLC, Board of
Directors authorizes the below signatory to accept on behalf of such limited
liability company the foregoing easement and to bind such limited liability
company to the provisions and covenants therein.  East Kansas Agri-Energy, LLC, hereby accepts
the foregoing easement and agrees to be bound by the provisions and covenants
therein.

 

	
   

  	
  EAST KANSAS AGRI-ENERGY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Pracht

  	
   

  
	
   

  	
             William
  R. Prafcht, ChairpersonExhibit 10.3

 

CONTRACT FOR SALE OF EQUIPMENT

 

[Hand crossed off and written:  May 10]

This Agreement is entered into on April    , 2005, by and between ICM, Inc.
(Seller) and East Kansas Agri-Energy, LLC (Buyer).

 

Recitals

 

1.     ICM.  ICM, Inc., is a
Kansas corporation with its principal place of business in Colwich,
Kansas.  It is an engineering firm
engaged in the design of fuel ethanol plants.

 

2.     East
Kansas Agri-Energy.  East Kansas Agri-Energy, LLC is a Kansas
limited liability company.  It is engaged
in the business of owning and operating a fuel ethanol plant.

 

3.     The
Design/Build Contract.  Seller and Buyer are parties to an Agreement
between Owner and Design/Builder on the basis of a stipulated price, dated August 9,
2004 (the Design/Build Contract). 
Pursuant to the Design/Build Contract, Seller has designed and is
building for Buyer a dry mill fuel-grade ethanol plant located in or near
Garnett, Kansas (the Garnett Ethanol Plant).

 

4.     Purpose
of Agreement. 
The purpose of this Agreement is to set forth the terms and conditions
pursuant to which Seller will provide and install, for the benefit of Buyer and
as part of the Garnett Ethanol Plant, a steam turbine electric generator, as
more fully described below.

 

Terms and Conditions

 

5.     The
Equipment.  As
part of the Garnett Ethanol Plant being constructed pursuant to the
Design/Build Contract, Seller will provide and install a Tuthill Energy Systems
Murray steam turbine electric generator, the specifications for which are more
fully described in the attached Exhibit A (the Equipment).

 

6.     Time
of Performance. 
Seller will provide and install the Equipment so that it will be in
place and operational on the Substantial Completion date set forth in the
Design/Build Contract.

 

7.     Purchase
Price.  The
Purchase Price for the Equipment, which includes the costs of installation of
the Equipment, is $1,760,274.  Buyer will
pay the Purchase Price to Seller in accordance with the terms of the attached
Promissory Note and Security Agreement attached as Exhibit B, which will
be executed by Buyer at the time of execution of this Agreement.

 

8.     Express
Warranties. Seller makes to Buyer the
following express warranties regarding the Equipment:

 

a.                                       Conformance
Warranty. The Equipment will conform to the description and specifications
set forth in Exhibit A.

 

 

b.                                      Title
Warranty,. Seller warrants that Buyer will receive title to the Equipment
free and dear of all liens and encumbrances arising by, through or under
Seller.

 

c.                                       Performance
Warranty. Seller warrants to Buyer that the Equipment will provide an
output of 1,250 kilowatts of electricity when the Garnett Ethanol Plant is
operated at a production rate of 35GPY (35 million gallons per year of
denatured fuel-grade ethanol) and at a steam production rate of 45,900 lbs.lhr
(45,900 pounds per hour of steam), and provided that Buyer is operating the
Garnett Ethanol Plant and Equipment in compliance with the following:

 

(1)                                  the
Equipment is properly serviced and maintained in good working condition;

 

(2)                                  Buyer
complies with all of the droner requirements of the DesignBuild Contract;

 

(3)                                  Buyer
follows the training and operational recommendations provided by Seller
to Buyer pursuant to Exhibit G of the Design/Build Contract;

 

(4)                                  Buyer
follows the standard operating procedures for the plant provided by Seller to
Buyer; and

 

(5)                                  Buyer
follows the manufacturer’s recommendations and instructions for maintenance and
operation of the Equipment.

 

The Buyer will also receive the benefit of the warranty for the
Equipment provided by the ,manufacturer of the goods. Seller shall
assign to Buyer all manufacturer warranties for the Equipment.

 

These express warranties are provided by Seller to Buyer in lieu of any
and all other express or implied warranties that might otherwise arise from the
sale of the Equipment. There are no warranties which extend beyond the face
hereof.

 

9.     Title
to Equipment. Title to the Equipment (which
is now located at the Garnett Ethanol Plant), and all risk of loss to the
Equipment, shall pass to Buyer upon execution of this Agreement. Buyer shall
maintain insurance covering the Equipment as required by the terms of the
Design/Build Contract, including builders risk and property insurance. The
provisions of sections 5.04, 5.05, 5.06, 5.07 and 5.08 (relating to insurance)
of the Design/Build Contract are incorporated by reference into this Agreement
by reference.

 

10.  Waiver
of Incidental and Consequential Damages.
Seller and Buyer hereby waive the right to claim or recover from each other any
incidental or consequential damages that might otherwise be recoverable upon a
breach of this Agreement.

 

11.  Limitation
of Buyer’s Remedies. In the event of an
alleged breach of this Agreement by Seller, Buyer shall notify Seller of the
specific nature of the alleged breach, and after receipt of such notification
Seller shall have a reasonable amount of time to repair, replace or otherwise
cause the Equipment to comply with the terms and conditions of this Agreement.
In the event that Seller is unable to remedy a breach of this

 

 

Agreement within a reasonable amount of time, Buyer’s remedy shall be limited
as follows: upon delivery of possession and title to the Equipment to Seller,
Buyer shall be entitled to recover from Seller all amounts paid by it toward
the purchase price of the Equipment, less the reasonable value of Buyer’s use
of the Equipment through the date possession and title to the Equipment is
delivered to Seller.

 

12.  Security
Interest. Buyer shall grant to Seller a
perfected purchase money security interest in the Equipment in order to secure
payment of the Purchase Price, all as more fully set forth in the attached
Promissory Note and Security Agreement.

 

13.  Proprietary
Property. It is agreed that Seller’s means
and methods of installation and incorporation of the Equipment into the Garnett
Ethanol Plant are Proprietary Property covered by Exhibit F of the Design/Bu
..d Contract.

 

14.  Notices.
All notices required or permitted to be given under this Agreement shall be in
writing and given as follows:

 

If to Seller:                                       Jerry
Jones

Chief Financial Officer ICM, Inc.

310 N. First Street

Colwich, Kansas

 

If to Buyer:                                    Bill
Pracht

Chairman

East Kansas Agri-Energy, LLC 210 ‘Y2 E.

4th Avenue

Garnett, Kansas 66032

 

15.  Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective legal representatives, successors and assigns;
provided, that neither this Agreement nor any rights under it may be assigned
by either party without the express written consent of the other party.

 

16.  Indemnification.
Buyer shall defend, indemnify and hold harmless Seller from any and all claims
that may arise from Seller’s use of the Equipment.

 

17.  Use and Location of Equipment.
Until such time as the Purchase Price has been paid in full, Buyer will not
alter the Equipment or move the Equipment from the location within the Garnett
Ethanol Plant at which it is installed by Seller.

 

18.  Entire Agreement.
This Agreement embodies the entire agreement of the parties with respect to its
subject matter and supersedes all prior agreements. This Agreement may be
amended, and any of its provisions waived, only in a writing signed by both
parties.

 

19.  Counterparts.
Two originals of this Agreement shall be executed, one to be given to Seller
and one to be given to Buyer.

 

20.  Severability.
The invalidity or unenforceability of any particular provision of this
Agreement

 

 

shall not affect the remaining provisions. In
the event of a binding finding that a provision of this Agreement is invalid or
unenforceable, the parties hereby agree that this Agreement shall be reformed
to replace such provision with a valid and enforceable provision that comes as
close as possible to expressing the intention of the stricken provision.

 

21.  Governing Law.
This Agreement shall be governed, construed and enforced according to the laws
of the State of Kansas.  The parties
agree that any dispute that might arise under this Agreement shall be resolved
in the manner provided for resolution of disputes under the Design/Build
Contract.  This Agreement has been
drafted by the combined efforts of Seller and Buyer.

 

 

	
  SELLER:

  	
  ICM, Inc.

  	
  BUYER:

  	
  East Kansas Agri-Energy, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ David Vander Griend

  	
   

  	
   

  	
  By:

  	
  /s/ Bill Pracht

  	
   

  
	
  Name: David Vander Griend

  	
   

  	
  Name: Bill Pracht

  
	
  Title: President

  	
   

  	
  Title: Chairman

  
									

 

 

EXHIBIT A

 

Equipment Specifications

 

TURBINE OPERATING CONDITIONS & PERFORMANCE

 

PERFORMANCE DATA

 

	
  Operating
  Condition

  	
   

  	
  Part Load

  	
   

  	
  Maximum Flow

  
	
  Inlet Pressure (PSIG)

  	
   

  	
  120

  	
   

  	
  120

  
	
  Inlet Temperature (Deg F)

  	
   

  	
  350 (D&S)

  	
   

  	
  350 (D&S)

  
	
  Exhaust Pressure (PSIG)

  	
   

  	
  (Atmos.)

  	
   

  	
  (Atmos.)

  
	
  Exhaust Temperature (Deg F)

  	
   

  	
  212

  	
   

  	
  212

  
	
  Exhaust Moisture Content

  	
   

  	
  6.0%

  	
   

  	
  7.0%

  
	
  Steam Flow (LB/HR)

  	
   

  	
  32,000

  	
   

  	
  53,310

  
	
  Turbine Speed (RPM)

  	
   

  	
  6,000

  	
   

  	
  6,000

  
	
  Generator Speed (RPM)

  	
   

  	
  1,800

  	
   

  	
  1,000

  
	
  Generator Output (KW)

  	
   

  	
  834

  	
   

  	
  1,597

  

 

Note: 
The turbine will be designed to withstand continuous operation at inlet
steam temperature up to 500 Deg F.

 

TURBINE
DATA

 

	
  Turbine Frame

  	
   

  	
  KD2

  
	
  Number of Stage

  	
   

  	
  Two

  
	
  Inlet Valves

  	
   

  	
  Single

  
	
  Inlet Size / Flange Rating

  	
   

  	
  8” / 300#

  
	
  Inlet Location

  	
   

  	
  Left Side

  
	
  Extraction / Bleed Openings

  	
   

  	
  None

  
	
  Exhaust Size / Flange Rating

  	
   

  	
  24”/ 125#

  
	
  Exhaust Location

  	
   

  	
  Up

  
	
  Thrust Bearings

  	
   

  	
  Tilting – Pad

  
	
  Radial Bearings

  	
   

  	
  Sleeve

  
	
  Shaft Seals

  	
   

  	
  Carbon ring

  
	
  Trip Valve

  	
   

  	
  Posi-Seal

  
	
  Turbine Governor

  	
   

  	
  Digital Electronic

  

 

* Viewed from governor end of turbine.

 

 

TURBINE
FEATURES AND ACCESSORIES

 

•                                          High-performance butterfly trip valve, limit
switch, 80-120 PSI air to open, spring to close

 

•                                          Removable stainless steel steam strainer
around the governor valve

 

•                                          Single inlet valve controlled by governor

 

•                                          Manual hand valve for part load economy

 

•                                          PLC based turbine control include in turbine
control panel. The PLC will give NEMA class D control and will have
capabilities similar to a Woodward DG-505 governor.

 

•                                          Electro-hydraulic actuator for governor

 

•                                          Mechanical bolt type overspeed governor with
back-up overspeed trip accomplished through the turbine control system

 

•                                          Stainless steel nozzles and blades

 

•                                          Stainless steel diaphragm vanes

 

•                                          Built-up rotor construction

 

•                                          Sleeve type journal bearings

 

•                                          Kinsbury tilt pad type thrust bearing

 

•                                          Carbon ring gland seals sprayed shaft in end
gland carbon ring zones

 

•                                          Sentinel warning valve mounted on exhaust
casing

 

•                                          Blanket Insulation around high temperature
portions of turbine

 

•                                          Solenoid trip mechanism

 

 

TURBINE
FEATURES AND ACCESSORIES

 

•                  Removable thrust
collar

 

•                  Free standing
pedestal type gag-board with 3 steam pressure gages, (steam inlet, steam ring
and exhaust steam) and tachometer indicator noted below.

 

•                  Electronic
tachometer with digital indicator

 

•                  7 probe Bently
Nevada system including probes, transmitters, cable and junction box for 2
vibration probes in each journal bearing, 2 axial displacement probes and one
key phasor.  Monitoring to be done by OPLC
in turbine generator control panel.

 

•                  2 temperature
sensors in thrust bearing and one temperature sensors in each journal bearing
(RTD—platinum).  Temperature sensor
monitoring to be done by PLC in turbine generator control panel.

 

•                  Drain line sight
flow indicators and dial type thermometer for each radial bearing and thrust
bearing drain line.

 

•                  Manifold carbon
steel supply and carbon steel drainpipe with welded fittings and ASA flanges,
terminating at the coupling end of the turbine.

 

•                  Gland leak-off
arranged for piping to sewer at atmospheric pressure

 

•                  One common air
connection to supply-air for the bearing seal purge system, including all
necessary filters, regulators and tubing. 
Air supply @ 80-120 psig, instrument qualify, by others.

 

•                  Turbine outline
Drawing and 6 sets instruction manuals

 

•                  Factory test
performed and document test as required by NEMA Standard SM-24

 

REDUCTION GEAR

 

	
  Type

  	
   

  	
  Single reduction, double helical

  
	
  Input Shaft Speed

  	
   

  	
  6000 rpm

  
	
  Output Shaft Speed

  	
   

  	
  1800 rpm

  
	
  AGMA SF

  	
   

  	
  Minimum of 1.3

  
	
  Lubrication

  	
   

  	
  Forced Lubrication

  
	
  Accessories:

  	
   

  	
  Shaft driven main oil pump

  
	
   

  	
   

  	
  One pressure gauge with isolation valve in oil spray pipe.

  
	
   

  	
   

  	
  4 dial type thermometers, 1 each bearing

  
	
   

  	
   

  	
  One RTD in each radial bearing

  

 

 

COUPLINGS

 

Non-lubricated coupling between turbine and gear with guard

Grease-packed, gear type coupling between gear and generator with guard

 

BASEPLATE

 

Fabricated steel baseplate under turbine, gear and generator

Lifting Lugs

Horizontal Positioning Screws for turbine, gear, and generator

Vertical Positioning Screws for turbine, gear, and generator

 

LUBRICATING OIL SYSTEM

 

Lube system console, reservoir mounted equipment including the
following

 

•                  Main oil pump
driven by gear shaft and included in gear scope

•                                AC
motor driven auxiliary oil pump including pump, motor piping

•                                Dual
25 micron absolute (10 micron nominal) oil filters with transfer valve

•                                Single
shell and tube type oil cooler. 
Stainless steel tubes.

•                                Carbon
steel reservoir with 3 minute retention time

•                                4
relief valves:  2 fore individual pump
protection, 1 for control oil, 1 for lube oil

•                  2 Ashcroft
Thermometers, 1 before and 1 after cooler

•                                Flanged
and welded schedule 80 carbon steel piping

•                                Oil
temperature control valve

•                                Low
oil pressure alarm switch

•                                Low
oil pressure trip switch

•                                Aux.
oil pump switch

 

GENERATOR DESCRIPTION

 

	
  Type

  	
   

  	
  Horizontal Synchronous

  
	
  Excitation

  	
   

  	
  Brushless

  
	
  Location

  	
   

  	
  Indoor

  
	
  Enclosure

  	
   

  	
  Open drip-proof with sound attenuation

  
	
  Noise Level

  	
   

  	
  90-92 dBA at 3 feet

  
	
  Duty

  	
   

  	
  Continuous

  
	
  Terminal

  	
   

  	
  wye connection

  
	
  KW

  	
   

  	
  2,000

  
	
  KVA

  	
   

  	
  2,353 at elevations up to 5000 feet above sea level

  
	
  Voltage

  	
   

  	
  4160

  
	
  Frequency

  	
   

  	
  60hase

  
	
  Insulation Class

  	
   

  	
  F

  
	
  Temperature

  	
   

  	
  80 Deg C rise by resistance above a 40 Deg C ambient

  
	
  Leads

  	
   

  	
  6

  

 

 

GENERATOR ELECTRICAL FEATURES

 

Damper windings

Insulation system to be VIP complete stator

Field suitable for excitation from brushless exciter

Six (6) leads for differential protection

 

GENERATOR MECHANICAL FEATURES

 

Two (2) pressure lubricated (bracket mounted) sleeve bearings

One RTD per radial bearing

Mechanical rotor balance per NEMA standards

Generator to be capable of 125% over-speed without mechanical injury

Open drip-proof construction with sound attenuation.

Ambient air to be clean and within a temperature range of 60-100 Deg F.

 

GENERATOR ACCESSORIES

 

Six (6) stator temperature detectors, RTD type, 3 wire, 100 ohm
platinum

Space heaters

Main terminal box

Brushless exciter

Permanent magnet alternator (PMA)

 

STATIC VOLTATGE REGULATOR SYSTEM

 

Static voltage regulator

K125-10B, 3 Phase Sensing, +/- 1% Voltage Regulation

 

GENERATOR CONTROL PANEL / SWITCHGEAR

 

Turbine and Generator Controls

 

PLC- Allen Bradley Logix5000

•                  CompactLogix CPU
with analog and discrete I/O as described below

•                  Controller will
interact with the electronic governor to start, auto-synchronize, soft-load the
generator and engage process control such as inlet or exhaust pressure control,
kW limiting, kW control, power import/export control

•                  PLC includes
lube system control logic

 

HMI – Panel Plus 10 inch color operator interface

•                  Machine
monitoring

•                  Monitoring and
display of all control and operating parameters including shaft vibration data,
bearing, stator, lube oil and process temperatures, process and lube oil
pressures

•                  Display of
electrical data

 

 

•                  Real-time
trending of turbine and electronical data

•                  Display and
setting of system variables such as:

•                  Control modes

•                  Setpoints with
range limits as desired to prevent operator error

•                  Alarms and
shutdowns with sequence of events and time stamping

•                  Last 999 alarms
are stored in a buffer and can be viewed

 

Communications and Data Archiving

•                  Communications

•                  The system
features communication between the PLC and other devices as may be required for
this application.

•                  Additional
communications options including Profibus, Industrial Ethernet (Modbus over
Ethernet), TCP/IP over Ethernet, DataHighway Plus and others are
available.  These networks can be use dot
connect the controls to the plant DCS or LAN. 
Please consult factory for pricing.

•                  Data Archiving

•                  Data such as
temperatures, pressures, vibration, electrical metering, system status, etc can
be archive either to a Compact Flash card located in the panel, or to a
networked server or PC.

 

Machinery Monitoring

•                  Vibration

•                  X-Y Vibration In
Turbine Journal Bearings and Two Axial Displacement Probes (6 Channels)

•                  Bearing and
Generator Stator Temperature

•                  Bearing RTD’s in
Thrust and Journal Bearings (10 Channels)

•                  Generator Stator
Temperature (3 Channels)

•                  Steam Parameters

•                  Inlet Steam
Pressure

•                  Exhaust Pressure

•                  Exhaust Steam
Temperature

•                  Lube Oil

•                  Lube Oil
Pressure

•                  Lube Oil
Temperature

•                  Other

•                  Delta Phase
Angel transmitter and Delta Frequency Transmitter for synchronizing

•                  Speed

•                  Discrete Inputs—The base system includes switch inputs in
addition to internal inputs.  Additional
inputs are available as an option.  The
inputs will be monitored and displayed on the HMI.

•                  Trip Valve
Position

•                  Emergency Trip
Pushbutton

•                  Turbine
Overspeed Trip from tachometer (supplied by TG manufacture)

•                  Low Lube Oil
Pressure Tip

•                  Generator
Protection Relay Lockout

 

 

•                  Generator
Circuit Breaker Position

•                  Generator
Circuit Breaker Lockout

•                  Local Trip
Button On Turbine Skid

•                  Remote Trip

•                  High Exhaust
Pressure Alarm and/or Trip

•                  High Oil
Temperature Alarm and/or Trip

•                  High Oil Filter
Differential Pressure Alarm and/or Trip

•                  Voltage
Regulator Status

•                  PF Controller
Status

•                  Other switches
as may be required

 

•                  Discrete Outputs—The base system includes 8 switch outputs
in addition to internal outputs. 
Additional outputs are available as an option.  The outputs will be monitored and displayed
on the HMI.

•                  Circuit Breaker
Open (Trip)

•                  Circuit Breaker
Close (Trip)

•                  Turbine Trip

•                  Aux oil pump
start

•                  Emergency oil
pump start

•                  Common alarm

•                  Common Trip

 

Other Door Mounted Components

•                  Digital voltage
Regulator with auto voltage matching (supplied by generator manufacturer)

•                  Circuit Breaker
Position Lights

•                  Emergency Stop
mushroom head maintain position switch

 

Synchronizing

•                  PLC controlled
fully automatic synchronizing including voltage and frequency matching

•                  Delta frequency
transmitter

•                  Synchscope

•                  Scynch check
function active in both auto and manual synchronizing

•                  Pistol grip, two
position, spring-return-to-center switches for:

•                  Circuit Breaker
Control

•                  Raise/Lower
Frequency (speed)

•                  Auto/Manual
Synch Mode

 

Electronic Governor

 

The system
includes a Woodward 2301D0ST digital governor. 
The electronic governor will receive commands from the PLC and the PLC
will handle all process control (such as exhaust pressure control) and
synchronizing but the electronic governor will perform the final valve control.
The governor includes the following functions:

•                  Speed Control

•                  Start Valve Ramp

 

 

•                  Overspeed
Protection

•                  Shutdown Logic
Alarm Logic Platform Diagnostics

•                  Manual Start,
Semi-Automatic Start,

•                  Automatic Start
option

•                  Self Powered
Actuator option

•                  Critical Speed
Avoidance logic

•                  Remote
Speed/Load set point

•                  Droop/Isoch
Control

 

Electronic Metering

•                  Multi-function
power monitor, Electro Industries DMMS 300+ or equal, 0.5% accuaracy, for
measurement of:

•                  Voltage, per
phase average, L-L an L-N

•                  Current, per
phase average

•                  Power (kW)

•                  kWh

•                  kVAR

•                  kVA

•                  Frequency

•                  Power Factor

•                  Three-line,
bright LED display and can display voltage, current and power values
simultaneously.

•                  Other
measurements are available by using keypad.

•                  Min/Max readings
are available for all measured parameters.

•                  Utility revenue
grade construction

 

Generator Protection

•                  SEL 300G utility
grade multifunction generator protection relay, with the following
functions.  Relay settings by others.

•                  100% Stator
Ground

•                  Phase (optional)
or Ground Differential

•                  Volts/Hertz

•                  Reverse or Low
Forward Power

•                  Backup
Overcurrent Protection

•                  Negative-Sequence
Overcurrent

•                  Loss-of-Field

•                  Six Levels of
Over-or Under Frequency, Plus Time Accumulators

•                  Over-/Undervoltage

•                  Loss-of-Potential

•                  Sychronism Check

•                  Out-of-Step (1
or 2 blinder schemes)

•                  Full Event
Reports and Sequential Events Records (SER)

•                  Breaker Monitor
and Battery Monitor

•                  High Accuracy
Metering

 

 

5 kV Circuit Breaker Circuit Breaker

•                  GE Switchgear 5
kV, 250 MVA, tin plated copper, 1200 amp

•                  Indoor enclosure
with side access

•                  Drawout vacuum
circuit breaker, 5-cycle close, with auxiliary contacts.  Control power is 125 VDC (by others).

•                  Metering and
relaying current transformers, 6 in enclosure, 6 shipped loose, GE/ITI Model
780

•                  Metering and
relaying potential transformers, drawout, fused, quantity 3

•                  SEL 587
transformer protection relay

•                  Breaker
trip/close switch and indicating lights

 

Skid Terminal Box

System I/O and turbine generator skid wiring in a terminal box designed
to be mounted on the skid.  This will
drastically reduce field wiring between the skid and the controls.  Skid could be up to 1000 feet from the
control panel.  Wiring between skid
terminal box I/O and the control panel will be one communication cable.  Safety wiring such as turbine trip and
emergency stop will be “hard” wired.

 

Auxiliary Control Station

Auxiliary Control Station with:

•                  HMI for control
and display of monitoring data

•                  Emergency stop
switch, red mushroom head

•                  Alarm horn

•                  Approximate
dimensions:  24 x 30 x 10 inches

 

Neutral Grounding Resistor

Neutral grounding resistor manufactured by IPC

	
  •

  	
   

  	
  Volts (l-L)

  	
  :

  	
  4160

  
	
  •

  	
   

  	
  Volts (L-N)

  	
  :

  	
  2400

  
	
  •

  	
   

  	
  Amps

  	
  :

  	
  40

  
	
  •

  	
   

  	
  Ohms

  	
  :

  	
  6

  
	
  •

  	
   

  	
  Duty

  	
  :

  	
  10 Seconds

  
	
  •

  	
   

  	
  Temp. Rise

  	
  :

  	
  760o C

  
	
  •

  	
   

  	
  Resistor

  	
  :

  	
  Stainless steel edgewound elements, individually insulated and
  supported on aluminum frames with 

  
	
   

  	
   

  	
  stainless steel inner-connections.

  
	
  •

  	
   

  	
  C.T.

  	
  :

  	
  5kV @ 400:5 ratio, T200 relay accuracy, 60 Hz enclosed with and wired
  to the resistor.

  
	
  •

  	
   

  	
  Enclosure

  	
  :

  	
  NEMA 3R outdoor rated with a solid top, removable solid front, rear
  and side covers, and a 

  
	
   

  	
   

  	
  screened bottom, Steel construction with mill galvanized finish. No
  paint.

  
	
  •

  	
   

  	
  Dimensions

  	
  :

  	
  48” W x 32” D x 37” H.

  
	
  •

  	
   

  	
  Weight

  	
  :

  	
  500 lbs. (approximate)

  
	
  •

  	
   

  	
  Bushings

  	
  :

  	
  None. Both the neutral and ground connections via bottom entry access
  to insulated 250 MCM 

  
	
   

  	
   

  	
  compression lugs.

  

 

 

EXHIBIT B

 

Promissory Note and Security Agreement

 

 

PROMISSORY NOTE AND SECURITY AGREEMENT

 

	
   

  	
   

  	
   

  	
  [Hand crossed out and written: May 10]

  
	
  $1,760,274

  	
   

  	
  Colwich, Kansas

  	
  April 
        , 2005

  
					

 

FOR VALUE RECEIVED, East Kansas Agri-Energy,
LLC (Buyer) PROMISES to pay order of ICM, Inc.,
310 N. First Street, Colwich, Kansas (Seller), the sum of One Million Seven-Hundred Sixty Thousand Two Hundred Seventy Four
Dollars ($1,760, 274), together with interest form the date of this
note at a rate of 1 percent per annum above the Prime Rate as most recently published
by the Wall Street Journal (Eastern Edition)(1),
with the interest rate changing quarterly on the first day of January, April, July and
October during the term of this note, payable in the following
installments:

 

	
  Payment Date

  	
   

  	
  Payment Amount

  
	
  October 1, 2005

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  January 1, 2006

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  April 1, 2006

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  July 1, 2006

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  October 1, 2006

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  January 1, 2007

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  April 1, 2007

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  July 1, 2007

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  October 1, 2007

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  January 1, 2008

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  April 1, 2008

  	
   

  	
  $146,689.50 in principal plus all accrued interest on the entire
  balance of the note to the date of payment.

  
	
  July 1, 2008

  	
   

  	
  the entire remaining balance of principal and interest due on the
  note

  

 

All payments
shall first be applied to accrued interest, and then to the principal of this
note.

 

 

(1)   If the Wall Street Journal is not published or the Prime Rate is
not stated in that publication on the effective date of any interest rate
change, then the Prime Rate in the most recently published edition of that publication
shall be used.

 

Having executed this note, and in order to secure payment, Buyer
pledges as Collateral the following items of personal property (the
Collateral):

 

The Tuthill Energy Systems Murry steam turbine electric generator

Installed at the Garnett Ethanol Plant having an address of 210 1⁄2 E.

4th Avenue, Garnett, Kansas, as more fully described in the
attached

Contract for Sale of Equipment.

 

Now, in the event of default of payment of the note, Buyer gives to
Seller full power and authority to sell and to do all necessary acts to
transfer the Collateral, or any part or portion of it, at public or private
sale, at the option of the holder of this note, on the nonperformance of the
above promise, or at any time thereafter, and without advertising that same or
otherwise giving to Buyer any notice, and apply the proceeds to the payment of
this note and the costs of sale and transfer. 
Buyer agrees to make good and deficit of the proceeds of such sale
should not be sufficient to pay this note. 
Any surplus will be paid to Buyer.

 

Buyer agree that this Note and Security Agreement is subject to the
Uniform Commercial Code, and all the following additional provisions:

 

1.     Names For This Agreement:  The maker of the note shall be called Buyer
and the holder of the note shall be called Seller.

 

2.     Title:  Except for the security interest granted to
Seller and a blanket security interest in favor of Home Federal Saving Bank
which shall be subordinate to Seller’s security interest, the Collateral is or
will be owned by Buyer free form any lien, security interest or encumbrance of
any kind; Buyer will defend its title and the Collateral against all adverse
claims of title, lein, security or other interest of any character.  Buyer will not sell, encumber, transfer or
dispose of the Collateral or any par of it without prior written consent of
Seller.

 

3.     Insurance:
Buyers will at all times keep the Collateral insured as provided in the
attached Contract For Sale of Equipment. Al such policies shall provide losses
payable to the Seller and Buyer as their interests appear. Copies of the
insurance policy or policies shall be provided to the Seller by the Buyer.
Evidence of payment of insurance premiums shall be provided to the Seller.

 

4.     Location of Collateral: Buyer will
maintain the Collateral at the Garnett Ethanol Plant.

 

5.     Perfection:
Buyer hereby irrevocably authorizes Seller at any time and from time to time to
file in any jurisdiction any initial financing statements and amendments
thereto that (a) describe the Collateral as set forth above, and (b) contain
any other information required by the UCC for the sufficiency or filing office
acceptance of any financing statement or

 

 

amendment. It
is agreed that the Equipment will remain readily removable from the Garnett
Ethanol Plant property and is therefore not a “fixture” within the meaning of
Q.S.A. 84-9-102(41), notwithstanding any protective fixture filing that might
be made by Seller.

 

6.     Maintenance:
Buyer will timely pay any and all taxes, assessments, license fees, or other
proper charges arising from the ownership, use or operation of the Collateral.
Buyer will keep the Collateral free from any adverse lien, other than a blanket
security interest in favor of Home Federal Saving Bank which shall be subordinate
to Seller’s security interest, and in good order and repair, will not modify,
waste or destroy the Collateral or any part of it. Buyer will not use the
Collateral in violation of any applicable law, statute, ordinance or policy of
insurance. All accessions to the Collateral shall be subject to this Agreement.
The Collateral may be examined and inspected by Seller at any reasonable time
or times wherever it may be located.

 

7.     Future Advances: At his
option, Seller may pay any taxes, liens, charges, encumbrances or assessments
at any time levied against the Collateral; may place and pay for insurance on
it; may order and pay for repair, maintenance, restoration, recovery, and
preservation of it; and pay any transfer, recording or filing fees. Buyer agrees
to reimburse Seller for any such payments or expenses made or incurred. Any
insurance premiums paid by Seller shall be refunded to Seller in the event of
cancellation. Seller shall give Buyer reasonable notice of intent to perform
under this paragraph and then allow Buyer a reasonable time to perform the
requisite act. Upon failure of Buyer to perform and to make payments or incur
expenses, such amount may be added to the debt. Within a reasonable time after
advancing any such sums, Seller shall in writing advise Buyer of the amount of
sums advanced, charges and any revised payment schedule occasioned by
these advances. In the event any insurance is so purchased, Seller will deliver
to Buyer a proper certificate or notice of insurance. Seller may make a finance
charge for sums so advanced at a rate not in excess of the interest rate
specified in this note.

 

8.     Default: Any of the
following events shall constitute a default: (1) the failure of Buyer to
timely perform any of the duties and meet any of the obligations specified in
this note; (2) any warranty, representation or statement made or f mashed
to Seller by or on behalf of Buyer which induced Seller to make the loan and
this Agreement which is false in any material respect; (3) the loss,
theft, substantial damage, destruction, material alteration, sale, or
encumbrance to or of the Collateral, or any part of it, unless insurance
proceeds covering such Collateral are applied to payment on this note; or (4) the
dissolution, termination of existence, insolvency, business failure,
appointment of a receiver of any part of the property, assignment for the
benefit of creditors, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Buyer. Waiver of an act of default
shall not be nor constitute waiver of any other default in the future.

 

9.     Remedies Upon Default / Acceleration of Payment:
Upon default by the Buyer, Seller, at its option, may declare all obligations
to be immediately due and payable (subject to Buyer’s right to cure default in
payment) and shall have the right to demand and take immediate possession of
the Collateral. Buyer, upon demand, shall make the Collateral available to
Seller. When Collateral is in Seller’s possession, Seller shall have no
obligation except to use reasonable care in the custody and physical
preservation of the Collateral. The risks of accidental loss or damages are on
the Buyer to the extent of any deficiency in any effective insurance coverage.
Expenses of retaking, holding, restoring, preparing for sale, selling, etc.,
shall be paid

 

 

from the sale of Collateral proceeds, including Seller’s reasonable
attorney’s fees to the extent permitted by law.

 

10.   Successors:
All rights of the Seller shall inure to the benefit of its successors and assigns.
All obligations and rights of Buyer shall bind and inure to the benefit of its
legal representatives, successors and assigns.

 

IN WITNESS
WHEREOF, the Buyer subscribed its name effective on the date first above
written.

 

	
   

  	
  EAST KANSAS A GM-ENERGY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill Pracht

  	
   

  
	
   

  	
  Name: Bill Pracht

  
	
   

  	
  Title: Chairman

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