EXHIBIT 1.2
January 31, 2000
Gifford Broderick
Vice President
RJM Corporation
10 Roberts Lane
Ridgefield CT 06877
Re: NOx Reduction Assets Purchase Agreement
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Dear Giff:
The following constitutes an agreement between Clean Diesel Technologies, Inc.
("CDT") and RJM Corporation ("RJM") for the purchase by RJM from CDT of certain
assets or receipt of certain services relating to CDT's "ARIS(TM) 2000" System
(the "System"). This agreement is separate from but is ancillary to the License
Agreement between CDT and RJM of today (the "License"). If you are in accord,
kindly sign below where indicated.
1. Assets Transfer. RJM hereby purchases from CDT and CDT hereby sells to RJM,
all of the equipment, inventory, including injectors and modules whether in the
possession of CDT or AMBAC International, Inc.("AMBAC"), work in process and
contracts on CDT's books, as of the date hereof associated with the System and
set forth on Schedule A attached hereto and made a part hereof at CDT's cost on
CDT's books as of the date hereof in the amount of $99,600.00, receipt of which
is hereby acknowledged. Excluded from this sale and transfer is CDT's contract
of 17 December 1997 with AMBAC.
2. MAETEP Project. As, if and when RJM shall effect delivery to Advanced Energy
Systems Management Company, Inc. ("MAETEP") pursuant to a proposal or contract
between MAETEP and Fuel Tech, Inc. or MAETEP and RJM, for the MAETEP project
which is the subject of a Fuel Tech, Inc. July 22, 1999 proposal (the
"Project"), RJM shall pay CDT the amount of $25,000 on account of CDT's
completed engineering costs on the Project and RJM shall in addition pay CDT a
royalty of fifteen percent (15%) of the cost to RJM of the injectors delivered
to MAETEP for the Project.
3. Personnel. (a) CDT approves of and shall encourage CDT's employees Messrs.
Knapper and Tarabulski (the "Employees") to accept the offers of employment RJM
has made to them. CDT has agreed with the Employees that their currently
outstanding stock options for purchase of CDT stock shall be 100% exercisable by
them otherwise according to their terms not later than the first anniversary of
this agreement, provided that the Employees shall be in RJM's employ at such
time. The parties also mutually acknowledge that the Employees are with respect
to both of our respective businesses subject to the terms of confidentiality and
non-use agreements as to matters not the subject of the License.
(b) In the event that (i) the Employees do not accept employment with RJM, then
CDT shall continue the Employees in CDT's employ and furnish their services for
technical transfer under the License to RJM for a period of one year or the
completion of technical transfer, whichever shall be less (the "Transfer
Period"), or, (ii) the Employees, not having accepted employment with RJM, also
do not continue in CDT's employ, then CDT shall furnish to RJM the equivalent
services of persons knowledgeable in the technology relating to the System for
the Transfer Period. In case of either (i) or (ii) above, RJM shall for the
Transfer Period, reimburse CDT not less often than monthly and within fifteen
(15) days of CDT's invoice, for the salary and benefits of the Employees or such
other persons, as the case may be, but only up to amounts which would have been
paid to the Employees by RJM, if the the Employees had accepted employment with
RJM.
4. Further Instruments. CDT undertakes at RJM's election from time to time to
execute and deliver to RJM such further instruments of transfer and assignment
as shall be sufficient to document and perfect the transfers herein.
5. Sales and Use Tax. RJM shall be responsible for procuring and furnishing to
CDT Connecticut sales and use tax exemption certificates with respect to the
foregoing transfers or services to evidence their exemption from such tax. If
any such transfer or service shall not be exempt from such tax, RJM shall pay
the applicable tax, if any, to CDT and CDT shall remit the same to the
Connecticut Department of Revenue Services and provide evidence to RJM of such
remittance.
6. Miscellaneous. The provisions of Article XI of the License are incorporated
by reference herein and shall be applicable to this agreement as if fully set
forth herein.
In Witness Whereof, the parties have signed this agreement as of the date first
above written.
Clean Diesel Technologies, Inc. RJM Corporation
By:/s/ James M. Valentine By:/s/ R. Gifford Broderick
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Name: James M. Valentine Name: R. Gifford Broderick
Title: Chief Operating Officer Title: Vice President
Schedule A
Clean Diesel Technologies, Inc.
ARIS 2000 Inventory
For the RJM Agreement
11 ARIS 2000 Stationary units @ $5,500 $60,500
1 ARIS 2000 Demo Stationary @ 50% $ 2,750
9 injectors (AMBAC)* $10,665
25 Coils (AMBAC) $ 1,500
Estimated Spare Parts (AMBAC & CDTI) $ 2,785
6 control boxes ($500) & 12 driver sets ($3,000) $ 6,000
4 pump motors ($300 & 6 micropumps ($200) $ 2,400
4 Demo stands (3 Caterpillar & 1 Cummins) $11,000
3 Demo injectors (2 Caterpillar & 1 Cummins) $ 1,500
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TOTAL Inventory $99,100
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2 IBM Laptops (3 years old) $ 200
1 printer (4 years old) $ 50
1 Fax machine (1 year old) $ 50
Drill set (Purchased in December) $ 200
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Total Physical Assets $ 500
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Total Payable to CDTI $99,600
*Injectors 26,27,28,37,39,41,45,49,50
NOTE:
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Excludes proposed AMBAC contract engineering for multiple injectors of $8,000.
Excludes Demo ARIS systems at SwRI and CDTI Office.
Cell Phones remain at CDTI.