LEC
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ETS INTERNATIONAL, INC.
- and -
E & C ENGINEERING CORPORATION
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LICENSE AGREEMENT
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A LICENSE AGREEMENT made the ______ day of _________ 1996
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BETWEEN:
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(1) ETS INTERNATIONAL, Inc., whose address is
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇.▇.▇.
("Licensor")
(2) E & C ENGINEERING CORPORATION
19F, No. 77, ▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇.▇.▇.
("Licensee")
RECITALS:
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A. Licensor carries on business as ETS INTERNATIONAL, Inc., and possesses
the Systems Rights in, and the Know-How relating to, the System and is
the proprietor of the Patents.
B. Licensee carries on business as E & C ENGINEERING CORPORATION, has the
ability to use and develop the System, the System Rights, and the
Know-How in connection with such business in the Territory.
C. Licensor has agreed to grant to Licensee the licenses with respect to
the System Rights and the Know-How as set forth below.
D. Words used in these recitals shall have the meaning as described in the
following pages:
1.0 DEFINITIONS
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1.1 In this Agreement, unless otherwise indicated in the text,
"Commencement shall mean the _________ of ______________
Date"
"Date of Sale" shall mean the date on which there is an agreement
between Licensee, or any of its sublicensees, to
contract with any third party for the purchase of a
System;
"Know-How" shall mean the technical information, manufacturing
techniques, specifications, drawings and all other
information appertaining or relating to the System
and the Patents, and including the System Rights;
"License Fee" shall mean the fees payable by Licensee to Licensor
in accordance with the provisions of Part 2 of the
Schedule hereto;
"Nonexclusive shall mean all parts of the world other than as
Area" included in the Territory;
"Patents" shall mean the Patents and applications for such
concerning the System and improvements thereto, and
all rights and benefits thereof accruing to Licensor;
"Person" shall mean natural person, business entity, or
government;
"Royalty Fee" shall mean the fees payable by Licensee to Licensor
calculated in accordance with the provisions of
Section 8 herein;
"Sale Price" shall mean the price charged to a customer for each
individual System including, but not limited to,
detail and design engineering, materials and
fabrication costs, and installation, but excluding
training, shipping, insurance and taxes;
"Schedule" shall mean the multipart appendix attached hereto and
incorporated herein by reference;
"System" shall mean Licensor's system, LEC deSOx system, U. S.
Patent #4,663,136 and #4,764,348 for cleaning air and
other gases including the design and component parts
thereof. Taiwan patent no. not included. ETS will
inform E&C later when this patent right no. obtained.
System components include reactor, material handling
equipment, auxiliary equipment and connections. All
as shown in Figure 1.
"Systems Rights" shall mean the rights and benefits conferred by
Licensor arising from Licensor's patents, copyrights,
and proprietary trade secrets concerning the System;
"Territory" shall mean the named industries within regions,
countries or states listed in Part 1 of the Schedule
hereto.
"Currency" all upfront payments, royalty fees, system sale
price, Licensor engineering hourly rates and
applicable refunds are to be calculated on the basis
of United States dollars (USD). The exchange rate
used will be that in effect on the day of transaction
and/or order received.
2.0 TERM
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2.1 This Agreement shall begin on the Commencement Date and shall continue
thereafter for a period of five (5) year. (unless terminated earlier in
accordance with the provisions hereof).
2.2 The term of this Agreement is set for five (5) years, however at the
end of the third year, both parties shall have the right to evaluate
the progress and status of this agreement and determine whether the
cooperation shall be continued or terminated, termination of the
cooperation must be served with written notice to the other party 90
(ninety) days prior to the end of the third year of the cooperation
period.
3.0 EXCLUSIVE LICENSES
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3.1 Licensor hereby grants to Licensee the exclusive license under the
Patents for the unexpired term of this Agreement thereof, and any
extension thereto, to manufacture, adapt and sell the System and any
parts thereof, or processes or designs relating thereto, within the
Territory and to use and exercise the System Rights within the
Territory.
3.2 Licensor also hereby grants to Licensee the exclusive license to use,
adapt and develop the Know-How within the Territory without any
increase in the License Fee set forth in Part 2 of the Schedule or the
Royalty Fee set forth in Section 8 herein.
3.3 Licensor also hereby grants to Licensee the exclusive license to
distribute, market and sell the System and all developments and
improvements thereto (whether made, discovered or developed by Licensor
or Licensee) within the Territory.
3.4 The expression "Exclusive Licensee" in this Section 3 shall mean that
the grant of such license is to the exclusion of not only all third
parties, but also the exclusion of Licensor's actively soliciting
business in Licensee's Territory. This does not apply when a sale is
made by Licensor outside the Territory for shipment to, or fabrication
within, the Territory. Fees calculated the same as the royalty fee
mentioned in paragraph 8.0 to be shared such that E&C and ETS each
receive one half of whatever royalty is received. An inquiry from the
Territory shall be directed to Licensee.
4.0 NONEXCLUSIVE LICENSES
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4.1 Licensor hereby grants to Licensee the nonexclusive license under the
Patents for the unexpired term thereof, and any extension thereto, to
distribute, market, manufacture, adapt and sell the System, and any
parts thereof or process or designs relating thereto, as well as
improvements thereto, in any part of the Nonexclusive Area where no
exclusive license granted by Licensor to any other person subsists at
that time. Licensee shall be informed by Licensor of its exclusive
licensee arrangement elsewhere for reference.
5.0 SUBLICENSES
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5.1 Licensee shall be entitled to grant sublicenses out of the licenses
hereby granted by Licensor, provided that each proposed Sublicensee
shall have the prior written approval of Licensor and that the area to
which any such sublicense applies shall be within the Territory only.
Such written approval shall not be unreasonably withheld.
5.2 Sublicenses granted by Licensee shall be in similar form to the License
Agreement between the parties hereto. Immediately upon execution of
each sublicense agreement, and amendments thereof, Licensee shall
forward a fully executed copy of same to Licensor.
6.0 PREVIOUS AGREEMENTS
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6.1 This Agreement shall be in substitution for all other and previous
agreements between the parties hereto.
6.2 Both parties undertake that they shall, at their own expense, terminate
prior to the Commencement Date any prior agreements entered into by
either party with third parties, the terms of which conflict with this
Agreement.
7.0 LICENSE FEE
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7.1 At the time of signing, Licensee will be obligated to pay a license fee
of $50,000. The payment will be made in three installments. The
installment and payment schedule is shown in "The Schedule," part 2,
License fee, page 15 of this agreement.
8.0 ROYALTY FEES
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8.1 In consideration of the grant of the licenses referred to above and of
the Licensor's obligations and undertakings herein contained, Licensee
shall pay to Licensor the Royalty Fees.
8.2 The Royalty Fees shall be payable by Licensee for each System or
component part thereof falling within the Patents or the System Rights
or covered by Know-How which is still subject to confidentiality under
Section 12, sold by Licensee or its Sublicensees, and shall be paid to
Licensor within thirty (30) days after final payment by the customer.
In the event customer pays by installment payment, Licensee shall pay
to Licensor the same proportional percentage of the Royalty Fee within
thirty (30) days of receipt of customer's payment.
8.3 A Royalty Fee shall be of five percent (5%) computed On the Sale Price
for each System or component part thereof described as shown in Figure
1 and described in Part 5 of the Schedule.
8.4 Royalty Fee shall be calculated and paid in terms of United States
dollars.
9.0 ACCOUNTS INFORMATION
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9.1 Licensee shall within thirty (30) days after the sale of a System
render to Licensor a statement showing details of the sale and the
calculation of the sum for Royalty Fees due.
9.2 Licensee shall keep proper books of account showing all matters
connected with the manufacture, sale and disposition of Systems and the
amount due in respect of Royalty Fees and shall allow Licensor by its
designated officer or accountant during business hours to inspect same
at Licensee's place of business for the purpose of verifying the
amounts due Licensor. Such inspection may be made notwithstanding
termination of this Agreement while any outstanding claim remains
unsettled in the view of either party. Licensor shall keep all
information confidential.
10.0 LICENSOR'S OBLIGATIONS
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10.1 Licensor shall maintain the Patents and renewals thereof in effect
during the term of this Agreement, and all extensions thereof, for the
maximum period(s) allowed by law.
10.2 Licensor shall provide and make available to Licensee on demand the
Know-How during the life of this Agreement.
10.3 It is intended that Licensor shall provide Licensee, according to the
terms hereof, sufficient information concerning the System and Know-How
to enable Licensee to itself design applications of the System to each
project that Licensee obtains.
10.4 Licensor shall have available at Licensor's premises employees fully
qualified and competent to deal with and perform the obligations of
Licensor as to the provision of technical advice and design services
during the term of this Agreement.
10.5 Licensor shall make available to Licensee, on reasonable demand, all
technical information, techniques, applications and references relating
to the System or any component part thereof. Any improvements
resulting from presently ongoing work or future work performed under
the direction of the Licensor shall become a part of this Agreement and
will be granted to the Licensee at no additional costs. This will
include mechanical or chemical changes. All material will be held
confidential by Licensee pursuant to Section 12, infra.
10.6 Licensor shall provide, at Licensor's premises, engineering and sales
support in the form of engineers, scientists and technicians in
accordance with the following schedule and given reasonable notice (2
weeks) by Licensee:
a. System process engineering, sales training and system detail
design training will be conducted at Licensors headquarters,
Roanoke, Virginia, USA. Training shall take one (1) to two (2)
weeks.
b. Total number of hours provided by Licensor during first year of
agreement for training and engineering assistance: 150. The rate
is calculated based on 70 U.S.D./hr.
c. If Licensee requests more than 150 hours, the rate of additional
assistance will be U.S.$70/hr. If Licensee receives first
purchase order before using up 150 hours, Licensor will refund
part of upfront payment. The amount of refund will be calculated
based on the un-used hours x $70 USD/hr.
d. Licensor will take care of trainee's meals, lodging and
transportation after Licensee's engineers arrive at Roanoke
airport. The international phone calls and private expenses are
not included.
e. If Licensee requests sales assistance from Licensor requiring
travel to Taiwan, Licensor will pay the first two round trip
economic air tickets. Licensee will be responsible for Licensor
employee's meals, lodging and transportation in Taiwan.
f. The maximum number of trainees from Licensee is 4 persons.
11.0 LICENSEE'S OBLIGATIONS
----------------------
11.1 Licensee shall exercise diligence and exert its best efforts to
promote, develop and extend sales of Systems within the Territory.
11.2 Licensee shall forthwith inform Licensor in writing of any infringement
or threatened infringement of any of the patents, the System Rights, or
the Know-How, or the exclusivity of the exclusive licenses hereby
granted which may at any time come to Licensee's knowledge.
11.3 With the respective differences between Licensor and Licensee having
been considered, Licensee shall make available to Licensor, on
reasonable demand, all technical information, techniques, applications
and references relating to the System or any component part thereof.
Any improvements resulting from presently ongoing work or future work
performed under the direction of the Licensee shall become a part of
this Agreement and will be granted to the Licensor at no additional
costs. This will include mechanical or chemical changes. All material
will be held confidential by both parties pursuant to Section 12,
infra.
12.0 CONFIDENTIALITY
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12.1 Licensee covenants that it shall not divulge to third parties
information received from, or on behalf of, Licensor which relates to
technological or proprietary information concerning the System, System
Rights, Patents, or Know-How of Licensor (hereinafter "Information"),
whether received prior to or after execution of this Agreement.
12.2 Excluded from Licensee's obligations imposed under this Section 12 are
the following:
(a) Information in the public domain at the time of its disclosure to
Licensee by Licensor;
(b) Information which thereafter falls into the public domain through
acts other than unauthorized acts of Licensee, its employees and
agents;
(c) Information already legally possessed as a matter of right by
Licensee at the time of its disclosure to Licensee by Licensor;
and
(d) Information which is thereafter disclosed to Licensee by a third
party having the right to do so.
13.0 TERMINATION
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13.1 Notwithstanding any other provisions of this Agreement, this License
Agreement may be terminated forthwith by the aggrieved party if:
(a) The other party is in material breach of any provision of this
Agreement; or
(b) The other party becomes insolvent or has a receiver, liquidator
or trustee in bankruptcy appointed, or otherwise enters into
liquidations, or it makes any composition with its creditors, and
such proceedings have not been dissolved within sixty (60) days;
or
(c) The effect of any current or future governmental regulations,
statutes, or treaties under applicable and enforceable national
or international law would be to prevent or impair in any way the
legal protection or financial benefits provided under this
Agreement.
13.2 Demonstration Unit and Special right of Termination
a. Licensor and Licensee agrees to equally contribute resource and
equally assume the potential risks and profits to build the first
commercialized demo unit.
b. In order to quickly complete the first commercialized demo unit,
the demo unit might have to be built first and collect money
after the system is accepted by the potential client.
c. The size of the first demo unit should be close to 10 MW scale
and the budget of the total cost should be under US$400,000.
Licensor and Licensee shall work out details on how to build the
first demo unit and set all the terms and conditions in another
separate agreement.
d. Selling price and terms of the first demo unit will be determined
according to the negotiation with the potential clients.
e. Once the demo unit is accepted by the client and money is
collected, the profits will be shared equally by Licensor and
Licensee.
f. In case the demo system fails and the money cannot be collected,
Licensor and Licensee shall assume their own loss&
g. If the plan of building first demo unit cannot be executed
because of Licensor's withdraw, Licensee has the right to
terminate the License agreement and Licensor shall return the
total up-front payment paid by Licensee to Licensor within 30
days after receiving Licensee's terminating notice if Licensee
chooses to terminate the agreement.
h. If the plan of building first demo unit cannot be executed not
because of Licensor's faults, Licensee cannot ask Licensor to
return any up-front payment paid by Licensee to Licensor
regardless whether Licensee chooses to continue or terminate the
agreement.
i. Either ETS or E&C has the right to ask the opposite side for
reconsidering whether the proceeding of the Demo-unit project is
necessary or not if an LEC system (8MW or larger) is sold and
proved effective operation in Taiwan before the demonstration
project is initiated.
j. If until the end of the third year after this agreement is
signed, the Demo unit project still cannot be executed because of
faults of neither the Licensor nor the Licensee, then both sides
have the right to ask the opposite side for terminating this
agreement three months before this agreement expired, and the
Licensee cannot ask the Licensor for returning the up-front
payment of this agreement.
k. The sales guarantee includes all the sales conducted by Licensee
regardless the sales destination.
l. The agreement is a five year base, and will be evaluated by both
parties each year from the end of the third year after the
agreement signed.
13.3 Termination pursuant to this Section shall not be exclusive to other
rights in law and equity of either party hereto.
14.0 NON-WAIVER OF ENFORCEMENT
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14.1 Any failure of either party to require strict enforcement of any
provision hereof shall not be deemed a waiver of any rights granted
hereunder, and shall not prevent nor impair either party's right to
enforce every covenant and provision of this Agreement at any time.
14.2 The headings and titles of the parts of this Agreement are for
convenience only, and shall not govern interpretation hereof, nor
prevent enforcement of any provision in this Agreement.
15.0 NOTICES
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15.1 Any notice, agreement, request or consent hereunder may be serviced by
first class certified mail - return receipt requested; or by tested
telex addressed to the other party at the address given herein or at
such other address as may from time to time hereafter be given in
writing by either party to the other. Any such communications shall be
deemed to have been served upon expiration of seventy-two (72) hours
(in the case of notices sent by post), or forty-eight (48) hours (in
the case of notices sent by telex), or upon actual receipt, whichever
is earlier.
16.0 ASSIGNMENT
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16.1 The licenses herein contained are personal to Licensee.
16.2 Neither Licensor nor Licensee shall assign or purport to assign their
rights or obligations under this agreement, or any part of it, without
the prior written consent of Licensee or Licensor (as the case may be).
16.3 Where the context so admits, the expressions "Licensor" and "Licensee"
shall include their respective successors in title.
17.0 NON-COMPETITION
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During the term of this Agreement, and for the period of three years
following the termination of this Agreement for whatever cause or by
whichever party, the licensee and/or any of its affiliates, shall not
sell, distribute or otherwise deal in Specified Products which are
manufactured or distributed by others and which are substantially
similar in design, structure or function.
Neither shall licensee or any of its affiliates, during the term of
this Agreement, and for the period of five years following the
termination of this Agreement for whatever cause or by whichever party,
manufacture products which are duplicates or copies of ETS's Products
or otherwise manufacture and/or distribute products which are
substantially similar in design, structure or function to any of ETS's
Products.
18.0 GOVERNING LAW
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18.1 This agreement shall be governed by and construed in accordance with
the laws applicable in Singapore.
IN WITNESS whereof, the duly authorized representatives of the parties have
signed this Agreement the day and year first above written, and the
undersigned represent that they have actual authority to bind their
respective named principals hereto.
SIGNED by the duly authorized)
representative of ETS, Inc. )
) s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
C.E.O.
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Title
October 22, 1996
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Date
SIGNED by the duly authorized
representative of E & C ENGINEERING
CORPORATION s/▇▇▇▇▇ ▇▇▇ ▇▇▇
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President
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Title
November 20, 1996
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Date
THE SCHEDULE
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PART 1: "Territory"
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Licensee is granted the exclusive right of manufacturing and sales of
the system for gas volumes above 16,500 Nm3/hr. in Taiwan.
PART 2: "LICENSE FEE"
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Licensee shall pay Licensor a License Fee of Fifty Thousand Dollars ($50,000
U.S.) The Licensee Fee will be made in the following three installments:
1. $20,000 U.S. upon signing agreement.
2. $20,000 U.S. before sending engineers to Licensor's headquarters for
training.
3. $10,000 U.S. when Licensee receives first system purchase order.
PART 3: "LICENSOR'S OBLIGATIONS"
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1. Licensor provides the following after receiving the first license fee
installment payment.
a. LEC design parameters and other necessary engineering information
and equipment specification.
b. Sales information and presentation packages
c. System layout.
d. Pilot plant test reports.
The above material will be sent out from Licensor within 30 days from
commencement date of agreement.
2. Patents
a. Licensor shall maintain the patents and renewals thereof in
effect during the term of this Agreement, and all extensions
thereof, for the maximum period(s) allowed by law.
PART 4: "GUARANTEES"
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1. Licensors:
a. Licensor guarantees 90% SO2 removal based on design and operation
conditions predetermined by Licensor.
b. Licensor reserves the right of guaranteeing more than 90% 502
removal. Licensor will only make such guarantees on a project by
project basis.
c. Licensor will take responsibility for the amount of up to royalty
limit (5%) for the faults caused by Licensor.
2. Licensees:
a. Licensor and Licensee agrees to equally contribute resource and
equally assume the potential risks and profits to build the first
commercialized demo unit.
b. In order to quickly complete the first commercialized demo unit,
the demo unit might have to be built first and collect money
after the system is accepted by the potential client.
c. The size of the first demo unit should be close to 10 MW scale
and the budget of the total cost should be under US$400,000.
Licensor and Licensee shall work out details on how to build the
first demo unit and set all the terms and conditions in another
separate agreement.
d. Selling price and terms of the first demo unit will be determined
according to the negotiation with the potential clients.
e. Once the demo unit is accepted by the client and money is
collected, the profits will be shared equally by licensor and
licensee.
f. In case the demo system fails and the money cannot be collected,
Licensor and Licensee shall assume their own loss.
g. If the plan of building first demo unit cannot be executed
because of Licensor's withdraw, Licensee has the right to
terminate the License agreement and Licensor shall return the
total up-front payment paid by Licensee to Licensor within 30
days after receiving Licensee's terminating notice if Licensee
chooses to terminate the agreement.
h. If the plan of building first demo unit cannot be executed not
because of Licensor's faults, Licensee cannot ask Licensor to
return any up-front payment paid by Licensee to Licensor
regardless whether Licensee chooses to continue or terminate the
agreement.
i. Either ETS or E&C has the right to ask the opposite side for
reconsidering whether the proceeding of the Demo-unit project is
necessary or not if an LEC system (8MW or larger) is sold and
proved effective operation in Taiwan before the demonstration
project is initiated.
j. If until the third year after this agreement is signed, the Demo
unit project still cannot be executed because of faults of
neither the Licensor nor the Licensee, then both sides have the
right to ask the opposite side for terminating this agreement
three months before this agreement expired, and the Licensee
cannot ask the Licensor for returning the up-front payment of
this agreement.
k. The sales guarantee includes all the sales conducted by Licensee
regardless the sales destination.
l. The agreement is a five year base, and will be evaluated by both
parties each year from the end of the third year after the
agreement signed.
PART 5: "ROYALTY FEES"
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Licensee shall pay Licensor a five percent (5%) Royalty ▇▇▇ of the
system price charged to the Licensee's customer including, but not
limited to, detail and design engineering, materials and fabrication
costs, and installation, but excluding training, shipping, insurance
and taxes. The system is described in Figure 1.
PART 6: "TERM OF AGREEMENT"
-----------------
The agreement is a five year base, and will be evaluated by both
parties each year.
Figure 1
Plan View
(Figure shows plan view of the LEC deSOx system)
ETS, Inc.
Roanoke, Virginia
Lime Stone Emission Control
FGD System
Figure 1 (continued)
ETS, Inc.
Roanoke, Virginia
Lime Stone Emission Control
FGD System
(Figure shows plan view of the LEC deSOx system)
List of Equipment
ITEM DESCRIPTION
1 Unloading ▇▇▇▇▇▇
2 Feeder to Bucket Elevator
3 Pit & Sump Pump
4 Bucket Elevator
5 Storage Silo
6 Feeder to Belt Conveyor
*7 Belt Conveyor
*8 Bucket Elevator
*9 Belt Conveyor with Tripper
*10 Reactor
*11 Outlet Plenum
*12 Inlet Plenum
13 Duct to Fan
14 Fan and Inlet Damper
15 Fan Stack
16 Reactor Support and Foundation
17 Reactor Inlet Damper
18 Inlet Duct
*19 Twin Screw Conveyors (Series)
*20 Collecting Belt Conveyor
*21 Bucket Elevator
*22 Enclosure
*23 Screen
*24 Recycle Belt
*25 Recycle Belt
*26 Waste Stone Belt
27 Waste Bin
*28 Enclosure for Screen
29 Stairs
*30 Overhead Sprays
* ETS standard scope of supply.
Elevation A-A
Scale
