EXHIBIT 10.22
GASIFICATION VITRIFICATIN CHAMBER
PURCHASE AND LICENSE AGREEMENT
WITH
INTEGRATED ENVIRONMENTAL
TECHNOLOGIES LLC (IET)
CONTENT:
1. EXHIBIT A: COMMERCIAL TERMS AND CONDITIONS
2. EXHIBIT B: TECHNICAL SPECIFICATION
3. EXHIBIT C: Westinghouse Hanford Company Contract
MW6-SBV-35707
4. EXHIBIT D: Low-Level Mixed Waste Thermal Treatment Technical Basis
Report WHC - SD - W242 - ES -003
ATG INC.
1025 BATTLLE BOULEVARD
RICHLAND, WASHINGTON 99352
AUGUST 1997
CERTAIN PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
LET PURCHASE AND LICENSE AGREEMENT
EXHIBIT A
COMMERCIAL TERMS AND CONDITIONS
EXHIBIT A IET/ATG CONFIDENTIAL
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EXHIBIT A
PURCHASE AND LICENSE AGREEMENT
FOR
FURNISHING A GASIFICATION/VITRIFICATION (GASVIT) SYSTEM
This agreement executed between ATG Inc., a California Corporation ("ATG"),
and integrated Environmental Technologies, LLC, a New York Limited Liability
Company ("IET"), covers the design fabrication, testing and delivery of a plasma
energy gasification/vitrifaction (GASVIT) thermal treatment system by IET. IET
agrees to furnish a GASVIT system and deliver it to ATG's facility in Richland,
Washington, in accordance with the terms and conditions described below.
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1. SCOPE
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1.1 APPLICABLE DOCUMENTS. The following attachments are provided with this
agreement, and shall have the same effect as if set forth in the body of
Agreement.
1. Exhibit B: Technical Specification for GASVIT System. Revision B
(hereinafter referred to as "the System")
2. Exhibit C: Westinghouse Hanford Company Contract MW6-SBV-35707
3. Exhibit D: Low-Level Mixed Waste Thermal Treatment Technical Basis
Report-WHC-SD-W242-ES-003.
Exhibit C is for IET's reference only. For the purpose of resolving any
inconsistencies between the requirements set forth within this Agreement
and the attachments, the inconsistencies shall be resolved by first giving
precedence to the language of this Agreement, and then to the Exhibits
noted above in the above order.
1.2 SCOPE OF WORK AND SYSTEM BOUNDARIES. IET shall design,fabricate, assemble,
test, ship and support installation of a system conforming to the
specification set forth herein and in Exhibit B (the "System") for
application to mixed wastes as described in the attached Exhibits. The
System, when fabricated and shop-tested will be assembled together with
other subsystems and installed in building at ATG's facility in Richland,
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EXHIBIT A IET/ATG CONFIDENTIAL
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Washington. ATG will design and construct the building including all of the
necessary interfaces and balance of plant equipment to meet IET's
requirements for installation and operations of the System. The overall
System boundaries and scope of work shall be delineated in the technical
specifications provided in Exhibit B.
1.3 PERFORMANCE. IET shall use its reasonable best effort to deliver a System
that meets required performance included herein, Exhibit B.
1.4 PERMITS. ATG shall be responsible for all permits for construction and
operation of System.
1.5 INSTALLATION. After IET designs, procures, fabricates, and pre-assembles,
where possible, the system components, it shall ship System to ATG for
ATG's installation. IET shall provide support for the installation by ATG
but the actual work of installation shall be ATG's responsibility.
1.6 APPLICABLE CODES AND REGULATIONS. The System will be designed based on the
existing CPG commercial scale design and the design specifications in
Exhibit B.
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2. INTELLECTUAL PROPERTY; PROPROETARY INFORMATION
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2.1 SYSTEM DEFINITION. For protection of intellectual property and proprietary
information purposes System shall mean a collection of the below listed
subsystems. As used herein, "IET Intellectual Property and Proprietary
Information shall consist of any inventions (whether or not patentable or
patented), developments or other information developed by IET.
The parties shall agree upon a Final Design of the System before IET begins
work under this Agreement. The Final Design shall include detail of system
features acceptable to the parties for both Part 1 and Part 11 below.
This procurement is divided into two primary parts,: Part 1 includes the
main GASVIT process chamber with associated feeding, product removal and
controls (comprising primarily IET Intellectual Property and Proprietary
Information), and Part 11 includes the Air Pollution Control (APC) or off-
gas treatment systems and specialized nuclear grade
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PURCHASE AGREEMENT GASIFICATION/VITRIFICATION SYSTEM
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EXHIBIT A IET/ATG CONFIDENTIAL
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equipment components (comprising primarily ATG Intellectual Property and
Proprietary INformation, but potentially IET Intellectual Property and
Proprietary Information also) that may be required. This purchase
agreement covers these two parts separately.
PART I. Controlled Plasma Glassification (CPG) System will be supplied and
include the following components and subsystems. The CPG System is
defined as part of IET's Intellectual Property covered in pending patent
applications and other proprietary information developed by IET.
SUBSYSTEM GV-02-WASTE FEED
. BATCH FEEDER. Feeder for bulk (12" x 12" x 12") material.
. LIQUID FEDER. Feeder for liquid, slurry and sludge material.
. FLUX FEEDER. Melting process flux/chemical feeder unit.
SUBSYSTEM GV-03-PROCESS CHAMBER
. PROCESS CHAMBER. This item includes a refractory lined high
temperature melter.
. PLASMA ARC HEATING SYSTEM. This item includes the process chamber
heating system plus electric transformers, controllers, panels
and special cooling devices.
. PROCESS CHAMBER PRE-HEATER. Pre-heater device to heat-up the
process chamber during the start-up, ramp-up, and idle period.
. FREEZE VALVE. Devices that control the discharges of molten
residue from process chamber.
SUBSYSTEM GV-04-RESIDUE HANDLING
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EXHIBIT A IET/ATG CONFIDENTIAL
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. DISCHARGE MOLD. Containers that receive molten residue discharged
from the process chamber (six sets to be supplied).
. DISCHARGE ENCLOSURE. Environmentally controlled chamber to house
containers and devices that receive, cool and handle molten
material discharged from the process chamber. (note: specialized
nuclear grade filtration systems are not included, but will be
provided under part II of this procurement.
SUBSYSTEM GV-10-GASVIT INSTRUMENTATION AND CONTROLS
. INSTRUMENTATION. All measuring and monitoring instrumentation
including temperature, pressure, weight, density sensing
elements, indicators and controlled devices.
. LOCAL PANELS. All local panels used for the operation of the
system.
Note: OFF-GAS SYSTEM COMPONENTS AND ALL ASSOCIATED
INSTRUMENTATION AND CONTROLS FOR THOSE COMPONENTS AS DESCRIBED IN
PART II OF THIS PROCUREMENT ARE NOT INCLUDED IN THE FIXED PRICE
PROCUREMENT OF PART I.
Part II. All Air pollution Control (APC) and special off-gas treatment
components are not included in IET's base price set forth in Section 3.1.2.
Due to the special considerations and possible changes in the off-gas
system design through the permitting phase of this project, IET will
provide all APC components either on a fixed price or on a cost plus basis
as defined in section 3.1.3 of this agreement. The parties contemplate that
the design of the APC components of Part II will be provided by ATG.
However, IET will be responsible for reviewing and approving the design of
the APC to ensure that it does not unduly impact the performance warrantees
provided by IET for Part I subsystems.
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EXHIBIT A IET/ATG CONFIDENTIAL
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ATG is obligated to make any reasonable changes in the APC design as
requested by IET. IET shall complete a review of ATG's APC design within 15
days after submittal.
SUBSYSTEM GV-02-WASTE FEED
. CONTINUOUS SOLIDS FEEDER. Item includes lock hoppers and loading
flanges for sized material. Feeder system shall be capable of
shredding, including airlock hoppers, loading flanges for un-
shredded material. Dust control and negative ventilation
equipment, which will protect worker health, will be part of the
feeder airlock subsystem.
SUBSYSTEM GV-05-FIRST STAGE SYNGAS PROCESSING UNIT
. This item includes one set of high temperature filters
. Jet pulse feed tanks and controls
. Particulate discharge devices and nitrogen pulsing devices
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EXHIBIT A IET/ATG CONFIDENTIAL
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SUBSYSTEM GV-06-SECOND STAGE SYNGAS PROCESSING UNIT
. Second Stage quench tank and pumps
. Acid gas and volatile metal scrubber
. Scrubber recirculation tanks
. Scrubber recirculation pump
SUBSYSTEM GV-07-THIRD STAGE SYNGAS PROCESSING UNIT
. Redundant induction draft (I.D.) fans
. Syngas converter based on a non-flame oxidizer
. Third stage quench tank and quench water spray nozzles and
redundant pumps
SUBSYSTEM GV-08-SAMPLING AND ANALYSIS
. SYNGAS AUTOMATIC SAMPLING AND ANALYZER. Complete instrumentation
including a gas analyzer for CO, CO2, O2, H2 and CH4
. OTHER SAMPLING POINTS. Other gas and residue sampling points in
the System as needed for complete operation, control and
monitoring of the GASVIT process.
SUBSYSTEM GV-09-GAS PURGING
. Suction fans
. Filters and ducting required for collection and treatment of
fugitive emissions, syngas purging and flushing, and process
inserting function.
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EXHIBIT A IET/ATG CONFIDENTIAL
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2.2 OWNERSHIP OF SYSTEM DESIGN. IET has the exclusive right, title and
interest in, and to, all IET Intellectual Property, including all
patents, copyrights, know-how, drawings, specifications, operations
manuals, design manuals, instruction materials, and other proprietary and
technical information owned, developed or furnished by IET to ATG in
connection with this project. ATG has the exclusive right, title and
interest in and to all ATG Intellectual Property, which consists of the
designs, copyrights, know-how, drawings, specifications, operations
manuals, design manuals, instruction materials and other proprietary and
technical information developed or furnished by ATG and related to off-
gas system and feed subsystems to be incorporated into the overall System
for treating mixed wastes, excluding those components and subsystems
which are based on the public knowledge and off-the shelf material. ATG
and IET agree not to use each other's Intellectual Property on other
projects without the prior written consent from the other party for such
use except as defined in this agreement. (As defined in Sections 2.4 and
2.6)
2.3 IET'S GRANT OF SYSTEM LICENSE. IET hereby grants to ATG a non-exclusive
right and license ("license") to use its CPG system and IET Intellectual
Property provided hereunder, solely in connection with the operation of a
single System provided hereunder for processing of mixed wastes at ATG's
Richland, Washington facility. Mixed waste shall mean waste contaminated
with radionuclides and with RCRA and TSCA compounds as defined in Exhibit
C. The System license shall continue until such time as ATG shall
discontinue its operation of System.
2.4 ATG'S GRANT OF SYSTEM RIGHTS. ATG hereby grants to IET a nonexclusive
royalty free right to make, use and sell its ATG Intellectual Property
solely in connection with the design, sale and operation of systems for
all applications other than where mixed waste (as defined in 2.3 above)
is the system feedstock. In the case of mixed waste paragraph 2.6 of this
document covers future activities.
2.5 PROPRIETARY AND CONFIDENTIAL INFORMATION. The receiving party agrees to
maintain any Proprietary Information disclosed by the other party
(disclosing party) in confidence and not disclose such information to
third parties or use such information for any purpose other than that
purpose contemplated herein, without the written consent of the
disclosing party. ATG shall have the right to include IET Proprietary
Information in facility permitting documents without written consent of
IET provided that ATG takes all available steps to protect the
confidentiality of such information. Each party agrees to mark all
documents containing proprietary information with a legend clearly
stating that such document contains
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"IET (or ATG) Proprietary Information". In the event such disclosures are
made orally or visually, the disclosing party will follow such disclosure
with a written statement clearly setting forth the content of such
disclosure. Acknowledgment of receipt shall be sent within 10 days. The
obligations of confidentiality and non-use shall not apply to any
information which: (a) was already known to the receiving party on or
before the execution date of this agreement, or subsequently becomes
known to the receiving party from a third party not in violation of non-
disclosure obligation of the confidential information; (b) becomes
publicly available through no fault of the receiving party; (c) is
independently created by the receiving party, as evidenced by
contemporaneous written documentary evidence.
The obligations of confidentiality and nonuse shall survive termination
or expiration of this agreement.
2.6 RIGHT OF FIRST REFUSAL. (i) For a period of five (5) years, each party
herein grants to the other party for the first right to participate with
the other party as the technology provider in any instance where the
parties intend to either bid on the sale of or install for their own use
a gasification/vitrification system for the treatment of low level mixed
wastes. If a joint bid is prepared as a technology provider each party
agrees to provide its technology at a reasonable cost. Prior to
submitting a bid or a response to a RFP for such system, the initiating
party shall notify the other party of the particulars of such bid, and
the other party shall have thirty (30) days to provide written
notification to the initiating party that it wishes to participate in
supplying technology for such bid. If the other party does not so notify
the initiating party, the initiating party may team with any third party
to supply such technology. (ii) No license under IET's intellectual
property is granted hereby. However, if ATG does not notify IET that it
wishes to team with IET in a bid initiated by IET under paragraph (i)
above, then IET shall have the right to provide a System using ATG
Intellectual Property under such bid. Such right to use ATG Intellectual
Property shall be solely for the particular bid in which ATG declines to
participate. If a joint bid is issued to a customer and the customer
chooses not to accept either IET's or ATG's portion of the bid, either
IET or ATG, which ever party is accepted, can proceed independent of the
customer rejected party so long as the rejected party's technology is not
used in a re-issued bid.
This section 2.6 shall survive termination of the Agreement under section
7.1 for the term described herein.
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EXHIBIT A IET/ATG CONFIDENTIAL
3. PURCHASE PRICE, LICENSE FEE, AND PAYMENT TERMS
3.1 PURCHASE PRICE FOR WORK ITEMS AND PAYMENT TERMS. ATG shall pay IET for
IET's costs for equivalency tests, design, assembly, and support of
installation of the System as agreed below. Upon signing this agreement,
IET is authorized to proceed only with tasks identified in Work Item I
below, including system design, purchase of necessary materials for
equivalency testing. IET shall coordinate with ATG and allow ATG to
review the design of the prototype system to insure that the prototype
system is identical to the GASVIT system to the extent possible. Both IET
agree, that the following items, which are a part of the GASVIT system
will be incorporated in the prototype system by IET. 1) High temperature
filters, 2) continuous feeder and 3) syngas converter. The design of the
above mentioned items will be jointly done by ATG and IET at no
additional cost to ATG. Once the design is complete ATG will procure and
deliver these components to IET'S Richland, WA facility. IET will use
these items during the test and disassemble and return to ATG when tests
are complete. Contracting with third party contractors for analytical
services in connection with equivalency testing, and performance of
equivalency tests will be directed by ATG. IET shall receive written
authorization before proceeding with tasks identified in Work Items 2 and
3, as set forth in greater detail in Exhibit B. ATG has the sole option
of exercising its rights to purchase and authorize the start of work
described under Work Items 2, and 3 below within three and half years
after execution of this Agreement. Should ATG not exercise its option
within the period of three and a half years from the date of this
agreement, IET shall be under no obligation to perform further under this
Agreement.
3.1.1. WORK ITEM 1-EQUIVALENCY DEMONSTRATION TESTS.
Payment terms for work item I is as follows: All work performed by IET
staff for the equivalency testing and support to ATG for testing support
will be provided as specified below:
Materials & Outside Services Cost Plus [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] %
Engineering: $[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] per hour
Technician: $[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] per hour
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EXHIBIT A IET/ATG CONFIDENTIAL
The total for Work Item 1 will not exceed [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
3.1.2. WORK ITEM 2, PART I - CPG SYSTEM SUPPLY. AS CONSIDERATION FOR PROVIDING
THE CPG SYSTEM SET FORTH IN SECTION 2.1 PART I ABOVE, ATG agrees to pay
IET a fixed price sum of [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] plus applicable
taxes, subject to any changes per provisions of Sec. 1.3. This sum
includes delivery F.O.B. ATG site at Richland, WA.
IET agrees to finance the acquisition and construction of the CPG System
of Section 2.1 Part I, under the following payment terms.
Those components of the CPG System as specified in section 2.1 Part I
will be IET financed with the following terms and conditions. A down
payment of $ [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] from ATG will be due at
commencement of equipment fabrication and a second payment of
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] from ATG will be due 30 days after
System delivery and acceptance. The balance of the procurement will be
financed by IET for a period of 60 months at 2% above the "prime rate" as
published in the Money Rated column in the Wall Street Journal upon date
of delivery. IET's commitment to provide financing shall be subject to
IET approval of ATG's credit rating four (4) months prior to delivery.
ATG is to make 60 equal monthly payments based upon the interest rate as
defined above beginning one month after system delivery and acceptance.
Note: System procurement and fabrication shall proceed only after ATG
review and approval of design and fabrication drawings and specs are
completed.
3.1.3. WORK ITEM 3, PART II APC SYSTEM SUPPLY. The APC system of Section 2.1
Part II will be provided by IET at a cost to ATG as provided in Section
3.1.1 IET will invoice ATG monthly for such costs, and ATG agrees to pay
such invoices net 30 days.
When a detailed design is finalized, IET will provide ATG with a fixed
price bid as an alternative to the cost plus basis.
3.2 LICENSE FEES. No license fee, royalties or other costs shall be paid to
IET for ATG's purchase or use of the System.
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EXHIBIT A IET/ATG CONFIDENTIAL
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3.3 INTEREST DUE ON OVERDUE PAYMENTS. Any payment not actually received by IET
on or before its due date shall be considered overdue. If any payment
required of ATG under this agreement is overdue, ATG shall pay IET, in
addition to the overdue amount, interest on such amount from the date it
became overdue until paid, at an annual rate equal to the highest
applicable rate allowed by law.
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4. CHANGE ORDERS
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4.1 IET INITIATED CHANGES TO IMPROVE SYSTEM'S DESIGN PERFORMANCE. If IET
determines that substantial changes or modifications are required to the
Final Design to improve the throughput capacity or otherwise improve the
performances of System, and such changes are not otherwise required as a
consequence of a change in applicable laws and regulations or concealed or
unforeseen conditions, IET shall notify ATG of the proposed changes or
modifications to System and shall be authorized to make such changes unless
ATG objects in writing to the proposed changes or modifications within 10
days after delivery of IET's change notice. This section places no duty or
obligation on IET to make changes but merely permits IET to initiate such
changes as it deems appropriate.
4.2 ATG REQUESTED CHANGES. Following approval of the Final Design, if ATG
desires any changes in the System, the waste to be processed or the
services to be performed by IET, ATG shall notify IET by submitting to IET
a change order request ( a "Change Order Request"). IET shall have 30 days
after receipt of ATG's Change Order Request to accept or reject the
proposed changes and modifications. If IET accepts the changes or
modifications requested by ATG, IET shall within the 30 day period
specified above submit to ATG a proposal for implementation of the changes,
which proposal shall reflect any necessary revisions to the Project
Schedule and price of the System, and shall submit such proposal for ATG's
approval (a change order). The proposal shall state the basis for any
revisions in the Project Schedule and the basis for compensation, which
shall include cost impacts due to schedule changes with sufficient detail
to permit ATG to make a thorough analysis. ATG and IET shall in good faith
negotiate acceptable compensations to be paid to IET regarding the proposed
changes and modifications. IET shall proceed with
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EXHIBIT A IET/ATG CONFIDENTIAL
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implementing the Change Order Request if the change order is approved in
writing by ATG.
4.3 CHANGES IN LAWS OR REGULATIONS. If IET determines that any change or
modification to any applicable laws and regulations, which is enacted or
revised subsequent to November 10, 1995, requires a change to the Final
Design, ATG shall be notified of the proposed changes or modifications to
the System necessitated by such change in the law. Such notice shall set
forth the change in the applicable law or regulation and a description of
the changes to the final design that is needed in order that the System may
comply with the newly enacted or amended law. The Purchase Price shall be
adjusted to provide IET additional compensation.
4.4 VALIDITY. Any such changes made pursuant to this section shall not
invalidate any agreement between the parties. If the changes result in an
increase or decrease in the time required for completion of the work, IET
shall revise the Project Schedule to reflect the increase or decrease, and
submit such revised Project Schedule to ATG for approval.
4.5 ACCEPTANCE. Upon completion of System fabrication and delivery to ATG's
site, IET shall certify to ATG that the System conforms in all material
respects to the Final Design as agreed to by the parties pursuant to this
Agreement and as in effect on the date of delivery. If, at the end of
forty-five (45) days from delivery and receipt of such certification ATG
shall not have formally rejected the System, the System shall be deemed
accepted ("Acceptance") and ATG shall be subject to all of the continuing
payment obligations in Article 3 hereof Formal rejection must be in writing
and may only be based on Failure of the System to be in material conformity
with the Final Design ("Formal Rejection"). Prior to a Formal rejection,
ATG must notify IET in writing of the specific nature of the claimed
failure or failures of the System to materially conform to the Final
Design. IET shall have a period of forty-five (45) days to remediate or
agree with ATG to a schedule for remediation or achieving conformity, which
agreement will not be unreasonably withheld by ATG. If after twenty (20)
days of recertification of the System by IET, ATG shall not have issued a
Formal Rejection, the System shall be deemed Accepted. If the System is
Formally Rejected, ATG shall cause the System to be delivered to IET at its
premises and ATG shall have no further rights with respect to the System
except for its Intellectual Property rights set out in Article 2 hereof.
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5. ADDITIONAL CONVENANTS
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5.1 DEMONSTRATION OF SYSTEM. ATG shall permit IET to conduct tours of the
System for the purpose of demonstrating the System and operation to other
potential customers of IET and grant access to ATG's premises for such
purpose; provided that such tours are conducted only upon reasonable
advance notice to ATG and that efforts are made to ensure such tours do not
interrupt or interfere with ATG's normal business and operations.
5.2 OTHER CONTRACTORS OF ATG. If any portion or aspect of IET'S work depends
upon proper execution or the results of work performed by any other party
engaged or employed by ATG, IET shall inspect and promptly report to ATG
any apparent discrepancies or defects in such work that may render it
unsuitable for proper execution and results.
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6. WARRANTIES; DISCLAIMERS.
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6.1 WARRANTIES.
6.1.1 IET hereby represents and warrants to ATG as follows: the equipment
that constitutes non-consumable component parts of System will be
free from defects in workmanship and material, for a period of one
year following the date of first commercial operation of System.
This shall be the sole warranty offered by IET covering the System.
6.1.2 ATG agrees to defend and hold harmless IET for any loss, damage or
expenses incurred by IET if such loss, damage or expenses results
from ATG's use of the system provided hereunder.
6.2 REMEDIES. For a breach of the warranty set forth in Section 6.1.1, IET
shall repair or replace any non-consumable component part as hereinafter
defined that fails due to defects in materials or workmanship within one
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year after commercial operation (commercial operation is defined as the
date in which actual customer mixed waste is first processed in GASVIT
process). IET shall use its best efforts to repair or replace the defective
part within a reasonable period of time after notification of failure of
the component part. The costs of labor or engineering support for
installation of any repaired or replaced part shall be borne by ATG. Non-
consumable component parts shall not include (i) consumable parts such as
electrodes, and other like items. (ii) replacement parts such as filters,
belts, oils, and like items, and (iii) items damaged due to use not in
accordance with operating manuals. This shall be the sole remedy for breach
of the warranty set forth in Section 6.1 above.
6.3 SURVIVAL AND LIMITATION OF WARRANTIES. The warranty expressly stated in
section 6.1.1 shall run only to ATG, and may not be assigned.
Notwithstanding anything herein to the contrary, IET's obligation under
6.1.1 for breach of the warranty set forth herein shall not exceed
$1,000,000 in the aggregate. In no event shall IET be liable to any person
for any consequential, special, or incidental damages resulting from any
breach of the warranties related to the System. THE REMEDY SET FORTH IN
THIS SECTION 6.1.1 SHALL REPRESENT IET'S SOLE LIABILITY AND ATG'S EXCLUSIVE
REMEDY FOR BREACH OF ANY WARRANTIES RELATED TO THE SYSTEMS.
6.4 DISCLAIMERS. EXCEPT AS SET FORTH IN THIS SECTION 6, IET MAKES NO OTHER
REPRESENTATIONS OR WARRANTIES REGARDING THE CAPABILITIES OR SPECIFICATIONS
OF THE SYSTEMS AND IET HEREBY EXPRESSLY DISCLAIMS ALL OTHER IMPLIED OR
EXPRESS WARRANTIES INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE.
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7. DEFAULT AND TERMINATION
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7.1 TERMINATION FOR CONVENIENCE.
7.1.1 Subject to the provisions of Section 2.6, ATG may terminate the
performance of Work Items described in Section 3, in whole or in
part, if ATG determines it is in its interest to do so. ATG shall
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terminate by delivering a Notice of Termination specifying the
extent and the date of termination.
7.1.2 After the receipt of a Notice Of Termination, IET shall stop all
work as quickly as practical and place no further subcontracts to
the extent they relate to the canceled portion of the work, transfer
titles to ATG and deliver to ATG fabricated or unfabricated parts,
work in progress, completed work, supplies and other material
produced or acquired for the terminated work.
7.1.3 IET shall submit a final termination settlement invoice to ATG no
later than 4 weeks after the date of termination, and ATG shall pay
such invoice within thirty (30) days after receipt. Such invoice
shall set forth all unreimbursed costs to date, and all costs of
termination, if any, including cost of equipment or supplies, staff
time, and the like.
Termination cost schedule shall be as follows:
Not to exceed 75K before Oct. 1997.
Not to exceed 250K before permit is granted.
7.2 DEFAULT IET shall be in default if this Agreement if IET
7.2.1 Becomes insolvent or makes a general assignment for the benefit of
creditors or files a petition in bankruptcy, or has such a petition
filed against it and consents to it;
7.2.2 Is adjudicated bankrupt, or has a bill in equity or other proceeding
for the appointment of a receiver of IET or other custodian for
IET's business or assets filed against it and consents to it, or has
a receiver or other custodian (permanent or temporary) of IET's
assets or property, or any part thereof, appointed by any court of
competent jurisdiction, or institutes or has instituted against it a
proceeding for a composition with creditors under any state or
federal law; or
7.2.3 Ceases to perform under the terms of this Agreement;
7.2.4 Closes the business and ceases to exist as a firm and entity which
is signatory to this contract unless an entity qualified to perform
under this contract succeeds to the business of IET and assumes all
the obligations of IET hereunder (for example IET goes public).
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7.3 ATG shall be in default of this Agreement if it fails to pay any
amount due within the time period set forth herein, or if it fails to
provide information reasonably necessary for IET to perform its
obligations hereunder.
7.4 OBLIGATIONS UPON DEFAULT. If either party is in default, the other
party shall give notice to the defaulting party describing the reason
for default. The defaulting party shall have 15 days to cure the
default or develop and present a reasonable plan for curing the
default. If the defaulting party does not cure or present a reasonable
plan to cure the default, then the non-defaulting party shall have the
right to terminate this Agreement and all rights granted thereunder.
7.4.1 Upon termination by ATG by reason of an uncured default by
IET, IET agrees to immediately deliver to ATG:
7.4.1(a) All System drawings, specifications, manuals, instructions
and documents completed and in progress as of the date of
termination.
7.4.1(b) Transfer of title to ATG and delivery to ATG's facility in
Richland, Washington, all items including fabricated or
unfabricated parts, work in progress, completed work,
supplies and other material produced or acquired for the
Work Items covered under Agreement and which have been paid
for by ATG (ATG to pay shipping costs); and,
7.4.1(c) A non-exclusive royalty free license to use System in the
intended application solely for the individual unit
delivered or partially delivered to ATG hereunder.
7.4.2 Upon termination by IET by reason of an uncured default by ATG,
ATG agrees to:
7.4.2(a) Immediately deliver to IET: all System drawings,
specifications, manuals, instructions and documents
previously provided to ATG, and all equipment completed by
IET and delivered to ATG.
7.4.2(b) Immediately pay to IET all unpaid invoices and all
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cost of termination.
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8. MISCELLANEOUS PROVISIONS
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8.1 RELATIONSHIP OF THE PARTIES. IET'S status is that of an independent
contractor and neither IET nor any employees of IET, nor any of its
subcontractors or employees of subcontractors, are employees of ATG.
8.2 NOTICES. All notices, requests, demands, and other communications
required or permitted to be given or made shall be in writing and
shall be deemed delivered (a) on the date of personal delivery or
transmission by telegram, cable, telex, or facsimile provided an
acknowledgment is received by sender via facsimile, or (b) on the date
after the date of (1) deposit in the United States mail, postage
prepaid, by registered or certified mail, returned receipt requested,
or (2) delivery to a nationally recognized overnight courier service,
in each case, address as follows, or to such other address, persons or
entity as either party shall designate by notice to the other in
accordance herewith:
If to IET: Integrated Environmental Technologies, LLC (IET):
1935 Butler Loop
Richland, Washington 99352
Attention: Jeff Surma
FAX (509) 946-18l9
If to ATG: Allied Technology Group Inc. (ATG)
47375 Fremont Boulevard
Fremont, California 94538
Attention: Fred Feizollahi
FAX:(510)651-3731
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8.3 EXHIBITS AND TERMS. These Terms and Conditions and the attached
Exhibits A, B, C, & D embody the entire understanding of the parties
hereto regarding its subject matter and supersedes all prior
agreements, correspondence, proposals, arrangements, and
understandings relating to the subject matter hereof. No
representation, promise, inducement, or statement of intention has
been made by any party which has not been embodied in these Terms and
Conditions.
8.4 FORCE MAJEURE. IET shall not be liable for delays in performances due
to strike, lockouts, casualties, acts of god, war, governmental
regulations or control, or other causes beyond its reasonable control,
and in any event any time period for the performance of an obligation
hereunder shall be extended by the amount of time of the delay.
8.5 ALTERNATIVE DISPUTE RESOLUTION-MEDIATION. If any dispute arises out of
or relates to agreements between the parties, or the breach therefore,
and if said dispute cannot be settled through negotiation, the parties
agree first to try in good faith to settle the dispute by mediation
under the Rules of the American Arbitration Association.
8.6 GOVERNING LAW; PERSONAL JURISDICTION; CHOICE OF FORUM.
8.6.1 This agreement between the parties shall be governed by, and shall be
construed and enforced in accordance with, the laws of the State of
Washington, in that regard to the choice of law provisions thereof.
8.6.2 Each of the parties hereby irrevocably consents and submits, generally
and unconditionally, to the jurisdiction of the courts of the State of
Washington or the United States District court for the Eastern
District of Washington, in any action or proceeding arising out of or
related to this agreement and each of the further agrees that it may
be served in any such action with process by certified or registered
United State mail, return receipt requested at the address set forth
herein.
8.6.3 Each of the agrees that the forum for any action sought to be brought
by either party to any extent not resolved by alternative dispute
resolution, shall be in a court of competent jurisdiction in Benton
County or the United States District Court for the Eastern District of
Washington, and each party hereby irrevocably waives
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all questions of personal jurisdiction or venue for the purposes of
carrying out this provision.
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9. SIGNATURES
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ATG and IET representatives affix their signatures below and duly
acknowledge their respective firm's concurrence with the terms and
conditions and other requirements stipulated in the Agreement.
ATG Inc. (ATG), a California Corporation ("ATG")
By: Frank Chiu
Title: Executive Vice President
Signature: /s/ Frank Chiu Date: September 5, 1997
Integrated Environmental Technologies, LLC, a New York Company ("IET")
By: Daniel R. Cohn
Title: President
Signature: /s/ Daniel R. Cohn Date: August 13, 1997
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