Common use of Agreements with Subcontractors Clause in Contracts

Agreements with Subcontractors. The Company has entered into agreements with three machinery manufacturing, engineering and designing firms located in Quebec. Two of such firms have accepted unregistered and restricted shares of Company's Common Stock in payment of part of their fees. The following is a discussion of the principal terms of the subcontractor agreements: Agreement with Fedico, Inc. In January of 1997, the Company entered into an agreement (the "Fedico Agreement") with Fedico, Inc. of St-▇▇▇▇▇▇, Quebec ("Fedico"), a machinery design firm located in Quebec. Prior thereto, Fedico had provided consulting and other design engineering services to the Company since the spring of 1996. Pursuant to the terms of the Fedico Agreement, Fedico will act as the project leader, guiding the over-all design and engineering of the TCS-1 System. In addition to supervising the over-all assembly and start-up procedures of the first full-scale production model of the TCS-1 System, Fedico will design, engineer, and fabricate certain peripheral equipment. The term of the Fedico Agreement is for seven years, retroactively effective as of September, 1996. The Agreement provides further that Fedico will: