Exhibit 10.4
Consortium Agreement
Effective Date: May 27, 1999
This Consortium Agreement (CA) is between Virginia Accelerators Corporation
(VAC), located at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxx, XX, and Southern
Environmental Inc. (SEI), located at 0000 Xxxx Xxxx Xxxx Xxxx, Xxxxxxxxx,
Xxxxxxx. It defines general principles for cooperation between the parties to
design, fabricate, erect and market eSCRUBTM systems in the United States and
South-East Asia. This Agreement also defines a scope of supply of each party for
the first US and the first South-East Asian eSCRUBTM project that fall under
this Agreement. The initial term of this Agreement will be for 5 (five) years.
The Agreement is renewable.
General
VAC specializes in electron scrubbing system engineering and has a patent on the
eSCRUBTM process. VAC also designs and manufactures electron beam equipment for
the e-SCRUBTM air pollution control process that efficiently and
cost-effectively reduces S02, NOx and fine particulate from flue gas. SEI
specializes in air pollution control (APC) systems and has provided wet and dry
electrostatic precipitators, particulate scrubbers, fabric filters, and
mechanical dust collectors for various industrial applications. SEI is widely
recognized for APC engineering; its parent Southern Erectors Inc. is widely
recognized for its fabrication and erection services.
Exclusive Agreement
WHEREAS VAC desires to manufacture, design, build and market e-SCRUBTM air
pollution control systems in the United States and South-East Asia and wishes to
engage SEI in detail designing, fabricating, erecting and marketing e-SCRUBTM
systems;
WHEREAS SEI desires to cooperate with VAC in designing, fabrication, erection
and marketing e-SCRUBTM systems in the United States and South-East Asia and
wishes to provide detail design, fabrication, erecting and marketing services;
NOW, THEREFORE, in consideration of the mutual promises herein contained and for
other valuable consideration, the sufficiency of which is hereby acknowledged,
VAC and SEI agree as follows:
ARTICLE 1. The Parties to this CA will cooperate in designing, fabricating,
erecting and marketing e-SCRUBTM systems in the United States and South-East
Asia. The first eSCRUBTM project in the United States that falls under this
Agreement is called "the Xxxxx City e-SCRUBr10 Project" and the first e-SCRUBTM
project in South-East Asia that falls under this Agreement is called "the
Singapore e-SCRUBTM Project."
ARTICLE 2. The general scope of responsibilities regarding e-SCRUBTM projects in
the United States is as follows:
2.1. VAC is responsible for overall e-SCRUBTM project execution, project
management and system design and may delegate any tasks and sub-tasks
from its scope of responsibilities to SEI or third entities. VAC will make
arrangements for a long-term supply of ammonia and by-product removal. VAC is
responsible for bonding requirements relating to its scope of work. VAC
arranges for e-SCRUBTM performance guarantees.
2.2. SEl is responsible for detailed design, fabrication and erection of various
components of the e-SCRUBTM process. The components may include but are not
restricted to items such as the Spray Dryer, Dry By-product Collector (Dry ESP),
e-Beam Building, Wet ESP, ID Fan, Ammonia Injection System, Byproduct Storage
and Handling System, Ductwork and Foundations. A detailed scope of work for each
project is agreed upon on the case by case basis by parties to this CA. SEl is
responsible for bonding requirements relating to its scope of work. SEl may
subcontract tasks belonging to its scope of supply to third entities ("SEI's
subcontractors"). When subcontracting tasks belonging to its scope of supply to
third entities, SEI will execute a non-disclosure with them in writing. In such
a non-disclosure agreement between SEI and its subcontractors the parties agree
not to use or disclose, or cause to be used or disclosed, any trade secret,
confidential information or proprietary information acquired by them on the
e-SCRUBTM process and technology.
2.3. A detailed scope of work for both parties for the first U.S. e-SCRUBTM
project that falls under this CA is attached to this Agreement as ATTACHMENT 1
and is entitled "The Xxxxx City e-SCRUBTM Project: System Design, Engineering,
Fabrication & Erection Responsibilities." The parties agree to the scope of work
expressed in ATTACHMENT 1 within the framework expressed in items 2.1 and 2.2.
of this Agreement. Parties agree that Southern Erectors Inc. assumes the
responsibility for fabrication and erection for the Xxxxx City e-SCRUBTM Project
unless prevented from doing so by local labor laws or merit shop requirements in
which case SEI may exercise the right provided in the item 2.2 of this
Agreement. Each party to this Agreement is responsible for its own pre-contract
expenses unless otherwise mutually decided.
2.4. The parties agree that the scope of responsibilities expressed in "The
Xxxxx City e-SCRUBTM Project: System Design, Engineering, Fabrication & Erection
Responsibilities" and in the items 2.1. and 2.2. of this Agreement will serve as
a model for cooperation between the parties on subsequent e-SCRUBTM projects in
the United States; however a specific scope of work, schedule and payment terms
for each new e-SCRUBTMproject will be mutually agreed upon on the case by case
basis.
ARTICLE 3. The general scope of responsibilities regarding e-SCRUBTM projects in
South East Asia is the same as it is for the United States as expressed in items
2.1 and 2.2. of this Agreement.
3.1. The scope of work of the parties of this CA for the Singapore e-SCRUBTM
project is attached to this Agreement as ATTACHMENT 2 and it is entitled "The
Singapore e-SCRUBTM Project: System D&E Responsibilities." The parties agree to
the scope of work expressed in ATTACHMENT 2 and in the items 2.1 and 2.2. of
this Agreement for the Singapore e-SCRUBTM project. SEI has the responsibility
for fabrication and will provide a construction advisor to assist BPC in
erection of the e-beam building and the foundations. Each party to this
Agreement is responsible for its own pre-contract expenses unless otherwise
mutually decided.
ARTICLE 4. Limits of Liability are negotiated on contract by contract basis
consistent with the industry standards and/or bonding requirements.
ARTICLE 5. Each party to this Agreement will pursue vigorously marketing and
sales policies and coordinate procedures and efforts to realize the maximum
sales potential for e-SCRUB'n4 systems in the United States and South-East Asia.
ARTICLE 6. SEI, in return for the exclusiveness provided by this Agreement will
perform the cost breakdown for projects on an open book basis. The margin for
each project will be mutually negotiated and agreed upon prior to bidding the
work. In cases where contracts signed by parties to this Agreement make an
allowance for increased costs or expansion of the scope of work, VAC shall have
the right to audit these costs. Adjustments to future project costing, if
warranted, will be made following said review of cost estimates by mutual
agreement between the two parties. VAC will not be responsible to SEI for any
cost over-runs on these projects unless over-runs are attributable to VAC's
incomplete technical data via written documentation.
ARTICLE 7. For each and every e-SCRUBTM project covered by this Agreement SEI
will appoint a point of contact as "Program Manager" and identify him/her in
writing to VAC. SEI will also appoint a point of contact who may be the same
person as "Program Manager" for implementing this Agreement and identify him/her
in writing to VAC.
ARTICLE 8. The Parties to this CA are bound by the Non-Disclosure Agreement
signed by VAC on January 12, 1999. The Non-Disclosure Agreement is attached to
this CA as ATTACHMENT 3.
Further Parties Agree:
ARTICLE 9. The initial term of this Agreement will be for 5 (five) years
commencing on the date the Agreement is signed by both parties. Thereafter,
parties may renew this Agreement in writing.
ARTICLE 10. Each party to this Agreement is considered an independent entity
acting for its own account, and no party to this Agreement is authorized to make
any commitment or representation, expressed or implied, on the behalf of the
other parties unless authorized to do so by other parties in writing.
ARTICLE 11. Each party will be fully responsible for the financial gains or
losses for the scope of work provided by that party. A detailed scope of work
and price Agreement will be executed prior to the start of each project
proposed.
ARTICLE 12. This Agreement is non-transferable and cannot be assigned to any
other company subsidiary or division without the expressed written consent by
the other party.
ARTICLE 13. No new members can be added to this consortium without unanimous
mutual decision in favor of such an addition.
ARTICLE 14. VAC may terminate this Agreement by giving a written notice to SEI
six (6) months prior to the date the termination takes effect; SEI may terminate
this Agreement by giving a written notice to VAC twelve (12) months prior to the
date the termination takes effect. Termination will not release the parties from
the responsibilities and commitments assumed for projects that they bid during
the time this Agreement has been in force.
ARTICLE 15. Neither party will be responsible for delays nor failure of
performance resulting from acts beyond the reasonable control of such party.
Such acts will include, but not be limited to, acts of God, strikes, walkouts,
riots, acts of war, epidemics, power failure(s), earthquakes, or other
disasters.
ARTICLE 16. To the extent that agents, employees or representatives of VAC or
SEI or their customers or contractors enter upon premises occupied by, or under
the control of of either party to this CA, in the course of the performance of
this Agreement, the parties shall take all necessary precautions to prevent the
occurrence of any injury to any persons, or of any damage to any property
arising out of acts or omissions of such persons, and except to the extent that
any such injury or damage is due to the other party's negligence, shall
indemnify the other party, its officers, employees and agents, against any loss,
claim, damages, liability, expense (including reasonable attorneys' fees) and
cause of action, whatsoever arising out of any act or omission of the party, its
agents, or employees.
ARTICLE 17. This Agreement shall be deemed to be a contract made in the State of
Virginia and shall be interpreted in accordance with the laws of the State of
Virginia.
ARTICLE 18. Any dispute relating to the interpretation or performance of this
Agreement will be resolved at the request of either party though binding
arbitration. Arbitration will be conducted in the county of Alexandria located
in the state of Virginia in accordance with the then-existing rules of the
American Arbitration Association. Judgement upon any award by the arbitrators
may be entered by a state or federal court having jurisdiction. VAC and SEI
intend that this Agreement to arbitrate be irrevocable.
ARTICLE 19. In the event any action is brought to enforce this Agreement, the
substantially prevailing party will be entitled to recover its cost of
enforcement including, without limitation, reasonable attorneys' fees and court
costs.
ARTICLE 20. All notices and demands will be in writing and will be served by
personal service or mail at the address of the receiving party set forth in this
Agreement. All notices or demands by mail will be by certified or registered
mail, return receipt requested, or by nationally recognized private express
courier, and will be deemed complete upon receipt.
ARTICLE 21. No waiver, amendment or modification of any provisions of this
Agreement will be effective unless in writing and signed by duly authorized
representatives of the parties to this Agreement.
ARTICLE 22. No failure or delay by either party in exercising any right, power
or remedy under this Agreement, except as specifically provided in this
Agreement, will operate as a waiver of any such right, power or remedy.
Article 23. If any provisions of this Agreement are held by a court of competent
jurisdiction to be invalid under any applicable statute or rule of law, they are
to that extent to be deemed omitted and the remaining provisions of this
Agreement will remain in full force and effect.
ARTICLE 24. This Agreement, including the attached exhibits, constitutes the
entire Agreement between VAC and SEI. This Agreement supersedes, terminates, and
otherwise renders null and void any and all prior or contemporaneous Agreements
or contracts, whether written or oral, entered into between the parties with
respect to the matters expressly set forth in this Agreement. In witness of
this, the parties in this Agreement, by their representatives duly authorized
officers or representatives, have each executed this Agreement, effective as of
the date first written above.
Date: 1 June, 1999
/s./ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, President
Virginia Accelerators Corporation
Date: 27 May, 1999
/s./
Southern Environmental Inc.
(Spreadsheet 5 - 1,2,3,4)
ATTACHMENT 1
The Xxxxx City e-SCRUBTM Project
VAC/SEI System Design, Engineering, Fabrication & Erection Responsibilities
Item System Design Detailed Design Fabrication Erection
1. Spray Dryer (SD)/Xxxxxx Delumper VAC SEI SEI SEI
2. SD Support/Access Steel VAC SEI SEI SEI
3. Air Compressors VAC SEI SEI SEI
4. Compressed Air Piping/Valves VAC - SEI SEI SEI
5. Air Compressor Building VAC SEI SEI SEI
6. Ductwork - SD to ID Fan VAC SEI SEI SEI
7. Expansion Joints - SD to ID Fan VAC SEI SEI SEI
8. Duct Support Steel - SD to ID Fan VAC SEI SEI SEI
9. Dry Product Collector (DESP) VAC SEI SEI SEI
10. DESP Support/Access Steel VAC SEI SEI SEI
11. e-BEAM Equipment VAC VAC VAC SEI
12. e-BEAM Building VAC SEI SEI SEI
13. XXXX VAC SEI SEI SEI
14. XXXX Support/Access Steel VAC SEI SEI SEI
15. XXXX Process Tanks/Pumps VAC SEI SEI SEI
16. XXXX Tank Agitators VAC SEI SEI SEI
17. XXXX Process Piping/Valves VAC SEI SEI SEI
18. Brine Recirculation System VAC SEI SEI SEl
19. Ductwork - to SD VAC SEI SEI SEI
20. Expansion Joints - to SD VAC SEI SEI SEI
21. Duct Support Steel -to SD VAC SEI SEI SEI
22. Ductwork -ID Fan to Stack VAC SEI SEI SEI
23. Expansion Joints - ID Fan to Stack VAC SEI SEI SEI
24. Duct Support Steel - ID Fan to Stack VAC SEI SEI SEI
25. ID Fan/Motor/Fan Dampers VAC SEI SEI SEI
26. ID Fan Motor Control Center VAC SEI SEI SEI
27. Stack VAC SEI SEI SEI
28. ID Fan/Stack Condensate System VAC SEI SEI SEI
29. Ammonia Injection System VAC SEI SEI SEI
30. Ammonia Storage Tank VAC SEI SEI SEI
31. Product Bin(s) VAC SEI SEI SEI
32. Product Bin Support/Access Steel VAC SEI SEI SEl
33. Materials Handling Equipment VAC SEI SEI SEI
34. Process Field Instrumentation VAC VAC VAC SEI
35. Process Automatic Controller VAC VAC VAC SEl
36. Foundations/Earthworks/Sumps SEI SEI SEI SEI
37. Below Grade Grounding Grid SEI SEI SEI SEI
38. Over Grade Grounds - to SD VAC SEI SEI SEI
39. Over Grade Grounds - SD to ID Fan VAC SEI SEI SEI
40. Over Grade Grounds - ID Fan to Stack VAC SEI SEI SEI
41. Cathodic Protection System SEI SEI SEI SEI
42. 480 V Feeder OWNER OWNER OWNER OWNER
43. 480 V Motor Control Centers (1) VAC SEI SEI SEI
44. Low Voltage Wiring & Conduit (2) VAC SEI SEI SEI
45. Area Lighting and Receptacles VAC SEI SEI SEI
46. Accessway - SD to Boilerhouse OWNER OWNER OWNER OWNER
**Item System Desi n Detailed Design Fabrication Erection
47. Communications System VAC SEI S 1 S
48. Emergency Power and Lighting VAC SEI SEI SEI
49. Freeze Protection System VAC SEI SEI SEI
50. Finish Paint VAC SEI SEl SEI
51. Thermal Insulation & Lagging VAC SEI SEI SEI
52. Storm Water Drainage System SEI SEI SEI SEI
53. Process Drains for Tank Cleanout SEI SEI SEI SEI
54. Plumbing Facilities VAC SEI SEI SEI
55. Fire Protection System VAC SEI SEI SEI
56. Acoustical Treatment VAC SEI SEI SEI
57. Makeup Water Supply OWNER OWNER OWNER OWNER
58. Stack CEM System/ Test Access VAC SEI SEI SEI
Notes:
(1) For VAC-supplied electrical equipment only.
(2) For VAC-supplied equipment only. Includes 480 V power distribution, control
wiring and instrumentation wiring.
VAC will be responsible for duties, licenses, taxes, bonds, freight and
insurance policies for items in its scope of supply. VAC will be responsible for
construction supervision for items in its scope of supply.
SEI will be responsible for duties, licenses, taxes, bonds, freight and
insurance policies for items in its scope of supply. SEI will be responsible
site and construction supervision for items in its scope of supply.
**ATTACHMENT 2
The Singapore e-SCRUBTM Project
System Design, Engineering, Fabrication and Erection Responsibilities
Item System Design Detailed Design Fabrication Erection
1. Spray Dryer (SD)/Xxxxxx Delumper VAC SEI SEI BPC
2. SD Support/Access Steel VAC SEI SEI BPC
3. Air Compressors VAC SEI SEI BPC
4. Compressed Air Piping/Valves VAC SEI SEI BPC
5. Air Compressor Building VAC BPC BPC BPC
6. Ductwork - SD to ID Fan VAC SEI SEI BPC
7. Expansion Joints - SD to ID Fan VAC SEI SEI BPC
8. Duct Support Steel - SD to ID Fan VAC SEI SEI BPC
9. Dry Product Collector (DESP) VAC SEI SEI BPC
10. DESP Support/Access Steel VAC SEI SEI BPC
11. e-BEAM Equipment VAC VAC VAC BPC
12. e-BEAM Building VAC BPC BPC BPC
13. XXXX VAC SEI SEI BPC
14. XXXX Support/Access Steel VAC SEI SEI BPC
15. XXXX Process Tanks/Pumps VAC SEI SEI BPC
16. XXXX Tank Agitators VAC SEI SEI BPC
17. XXXX Process Piping/Valves VAC SEI SEI BPC
18. Brine Recirculation System VAC SEI SEI BPC
19. Ductwork - to SD BPC BPC BPC BPC
20. Expansion Joints - to SD BPC BPC BPC BPC
21. Duct Support Steel - to SD BPC BPC BPC BPC
22. Ductwork -ID Fan to Stack BPC BPC BPC BPC
23. Expansion Joints - ID Fan to Stack BPC BPC BPC BPC
24. Duct Support Steel - ID Fan to Stack BPC BPC BPC BPC
25. ID Fan/Motor/Fan Dampers VAC VAC VAC BPC
26. ID Fan Motor Control Center BPC BPC BPC BPC
27. Stack BPC BPC BPC BPC
28. ID Fan Condensate Recovery System VAC VAC VAC BPC
29. Ammonia Injection System VAC SEI SEI BPC
30. Ammonia Storage Tank BPC BPC BPC BPC
31. Product Bin(s) BPC BPC BPC BPC
32. Product Bin Support/Access Steel BPC BPC BPC BPC
33. Materials Handling Equipment BPC BPC BPC BPC
34. Process Field Instrumentation VAC VAC VAC BPC
35. Process Automatic Controller VAC VAC VAC BPC
36. Foundations/Earthworks/Sumps BPC BPC BPC BPC
37. Below Grade Grounding Grid BPC BPC BPC BPC
38. Over Grade Grounds - SD to ID Fan VAC SEI SEI BPC
39. Over Grade Grounds - to SD BPC BPC BPC BPC
40. Over Grade Grounds - ID Fan to Stack BPC BPC BPC BPC
41. Cathodic Protection System BPC BPC BPC BPC
.i2. 480 V Feeder BPC BPC BPC BPC
43. 480 V Motor Control Centers (1) VAC SEI SEI BPC
44. Low Voltage Wiring & Conduit (2) VAC SEI SEI BPC
45. Area Lighting and Receptacles BPC BPC BPC BPC
46. Accessway - SD to Boilerhouse BPC BPC BPC BPC
**Item System Design Detailed Design Fabrication Erection
47. Communications System PC BPC BPC B
48. Emergency Power and Lighting BPC BPC BPC BPC
49. Freeze Protection System BPC BPC BPC BPC
50. Finish Paint BPC BPC BPC BPC
51. Thermal Insulation & Lagging BPC BPC BPC BPC
52. Storm Water Drainage System BPC BPC BPC BPC
53. Process Drain for Tank Cleanout BPC BPC BPC BPC
54. Plumbing Facilities BPC BPC BPC BPC
55. Fire Protection System BPC BPC BPC BPC
56. Acoustical Treatment BPC BPC BPC BPC
57. Makeup Water Supply BPC BPC BPC BPC
58. Stack CEM System/ Test Access BPC BPC BPC BPC
Notes:
(1) For VAC-supplied electrical equipment only. BPC to provide MCC for ID Fan.
(2) For VAC-supplied equipment only. Includes 480 V power distribution, control
wiring and instrumentation wiring.
VAC will be responsible for duties, licenses, taxes, bonds, freight and
insurance policies for items in its scope of supply. VAC will be responsible for
construction supervision for items in its scope of supply.
SEI will be responsible for duties, licenses, taxes, bonds, freight and
insurance policies for items in its scope of supply. SEI will be responsible for
site and construction supervision for items in its scope of supply.
